Non-disparagement clauses now illegal in Maryland- mostly.

When an American's expectation of "free speech" overlaps commercial relationships, things get weird. The First Amendment of the U. S. Constitution gives you the absolute right to stand before the White House and shout your grievances across the south lawn toward the Oval Office, but the contract you signed to purchase a thing to be tossed after it breaks can force you to keep negative opinions about the retailer to yourself. Post your negative review on the internet, and you may well face civil penalties and a lawsuit.

The First Amendment restricts your government from silencing your speech, but contracts may have language preventing you from disparaging a company or a product. Can you Imagine getting sued for something you post on Yelp, Facebook or Amazon about something you purchased? It happens, and is mostly legal.

Maryland is just the second State to pass a law to make illegal and unenforceable anti-disparagement clauses in contracts for consumer products. California is the other state, having passed Assembly Bill 2365 in 2014.A federal bill called the Consumer Review Freedom Act passed through the U. S. Senate in 2015, but has not made it through the House of Representatives to the President's desk. It is extremely unlikely that the newly elected administration and legislature will pass the measure into law.You are a "consumer" when you are the "actual or a prospective purchaser, lessee or recipient of consumer goods or services. "
"Consumer goods" are defined as "goods or services that are primarily for personal, household or family purposes." The introductory language to the bill says that this definition is intended to mirror the definitions found in the Consumer Protection Act, where consumer goods are broadly defined to include credit, debts, obligations, goods and real property.
Any business that seeks your promise to keep silent with a non-disparagement clause now commits a false and deceptive trade practice under the Consumer Protection Act. A violation of the Consumer Protection Act further exposes the business to your claim for damages and attorney fees.
Because the new law does not apply to contracts made before October 1, 2016, you must rely on traditional contract analysis to beat a non-disparagement clause in a contract made before that date.  For example, a consumer's silence may not have been purchased for real or adequate consideration-- they are often buried in long documents, they seem unconnected with the subject of the contract, and there is no extra money paid for the promise. The promise may also reside in what a court would call a "contract of adhesion" where the consumer has so little bargaining power that it is patently unfair to include the restriction. And there are other available contract defenses, depending on your specific situation.
Other types of non-disparagement clauses will remain legal and widely used. The restriction routinely appears in settlement agreements where money is paid in exchange for silence and no admission of liability for specific claims. Where silence is a material object of the agreement, the term will be readily enforced. The clause also routinely appears in documents where business people share proprietary information while negotiating a deal, but the deal is never made. The parties then agree to walk away without disparaging each other or their products.
The Maryland law makes good sense, particularly in this age of on-line reviews and websites that aggregate product and service recommendations and reviews. An informed consumer needs all the information-- both positive and negative-- before making an informed decision. The courts have for years reminded us that the market place is governed by "caveat emptor," the principle that the buyer alone is responsible for checking the quality and suitability of goods before a purchase is made. This new law simply assures that the consumer will have more information. After all, if a business provides for customer reviews on its Facebook, Amazon or Yelp page, then it should be prepared to receive both negative and positive reviews. Anything less presents an incomplete and perhaps dishonest portrayal of the entity's products and services.
The consumer bears some responsibility for making honest and accurate reviews. The false accusations of bad service or poor quality can haunt a business for some time. State laws punishing libel and slander, coupled with rules for the imposition of injunctions,  remain available to the business to curtail the most extreme behavior.
Use your newly enhanced powers wisely!




Maryland H.B 131 became law in 2016 and applies to contracts made after October 1, 2016. It makes illegal and unenforceable contract provisions that bar disparaging public comments and social media postings by a "consumer."

Bow-riding-- a reckless practice that is already illegal in Maryland.

Maryland's boating community saw several serious accidents in 2016 where boat propellers caused injury and death to passengers. It has spurred two ambitious State legislators to cobble together additional regulations to curb the practice of "bow-riding."

On July 30, 2016 a passenger doves off the bow of a ski boat and was cut by the boat's propeller. The accident was reported as follows:

...Eckenrode was with a party of seven people aboard a 24-foot Moomba power boat when he jumped from the bow of the boat into the water in the area of McHenry Cove without the knowledge of the other boat occupants. Informal instructions were reportedly being given to a new skier in the group at that time.

The boat, operated by Brian P. Morel, 36, of Sewickley, Pennsylvania, was placed in gear to navigate out of the area when the victim was struck by the boat's propeller. http://www.times-news.com/news/local_news/pennsylvania-man-seriously-injured-on-deep-creek-lake/article_c75dad60-6eb0-5c55-85cd-4ff4e9f0554b.html (last checked 12/8/2016).

Also on July 30, 2016, at the other side of the state, another propeller injury:

When officers arrived at the scene in Isle of Wight Bay at about 4 p.m., seven people were in the water around a rental pontoon boat that had run aground. One man was bleeding profusely from a gash on his arm created by the boat's propeller and another passenger was hanging onto a nearby moving boat.....the operator of the boat, was arrested after he failed field sobriety tests.  http://www.wrdetv.com/index.cfm?ref=60200&ref2=4898 (last checked 12/8/2016)

On August 17, 2016, a boy lost his  life, as reported:

Frederick was sitting on the edge of a pontoon boat in Sinepuxent Bay near Ocean City,  with his legs dangling over the side when he was hit by a propeller, according to the Natural Resources Police in Maryland.

 Natural Resources Police Spokeswoman Candy Thomson said after Frederick fell, the operator couldn’t stop and the propeller hit the boy. She added that it’s illegal in Maryland to dangle in front of a moving boat. http://nj1015.com/howell-boy-dies-in-maryland-boating-accident/ (last checked 12/8/2016)

A website that compiles statistics for pontoon propeller injuries across the country notes 198 serious injuries between 1964-2016. Maryland's cluster of accidents (not all pontoons) make up a minor percentage of reported incidents across the country over 52 years. Lawsuits arising from propeller related injury are similarly spread consistently across the years. Anecdotally, then, we can agree that propeller related injuries are a regular occurrence. And of that group, a much smaller subset arise from the practice of "bow-riding" where a passenger is allowed to ride the bow with limbs dangling, or to otherwise ride the gunwales while underway.

Two Maryland legislators have felt compelled to address the situation, announcing soon-to-be-published regulations to ban the practice of "bow-riding" while a boat is underway:

Last week, [Sen. James] Mathias and [Del. Mary Beth] Carozza, along with DNR and NRP officials, met with the state’s Boat Act Advisory Committee to discuss changes to the regulations that would prohibit bow-riding. Out of that meeting came a proposed regulation change that could put a new law on the books in advance of recreational boating season next spring.

Mathias said this week the meeting with the Boat Act Advisory Committee was productive and a new regulation prohibiting bow-riding could be posted in the Maryland Registry as soon as mid-January. Following the requisite public comment period, the new regulation could become effective as soon as March 27 [, 2017].  https://www.mdcoastdispatch.com/2016/12/08/proposed-reg-would-ban-bow-riding-in-state-waters-change-likely-to-take-effect-before-summer/ (last checked 12/8/2016).

The human reaction to tragedy is understandable--do something-- but there is already an adequate remedy in place. Actually, there are two statutes in place to address dangerous boating operation. One is federal, enforced by the USCG:

            46 U.S. Code Sec. 2302 

(a)A person operating a vessel in a negligent manner or interfering with the safe operation of a vessel, so as to endanger the life, limb, or property of a person is liable to the United States Government for a civil penalty of not more than $5,000 in the case of a recreational vessel, or $25,000 in the case of any other vessel.

(b)A person operating a vessel in a grossly negligent manner that endangers the life, limb, or property of a person commits a class A misdemeanor. 

(c) An individual who is under the influence of alcohol, or a dangerous drug in violation of a law of the United States when operating a vessel, as determined under standards prescribed by the Secretary by regulation—

(1) is liable to the United States Government for a civil penalty of not more than $5,000; or

(2) commits a class A misdemeanor.

Maryland has its own prohibition against negligent and reckless boating:

          Natural Resources Sec. 8-738.2:

In General 
(a) A person may not:(1) Operate a vessel recklessly or in a manner that may endanger another or the property of another on a bay, creek, lake, river, or stream in the State; or(2) Come into a wharf or bathing shore recklessly or in a manner that may endanger a person or property.
Fines and penalties
(b) A person who violates this section is guilty of a misdemeanor and on conviction is subject to: (1) For a first conviction, imprisonment not exceeding 30 days or a fine of not less than $25 and not exceeding $200 or both; and(2) For a second or subsequent conviction, imprisonment not exceeding 60 days or a fine not exceeding $500 or both.

The Maryland Department of Natural Resources even publishes a pamphlet reciting examples of negligent or reckless boating practices to be avoided. Not surprisingly, "bow-riding" is one express example of negligent or reckless boating in the pamphlet. It is not a stretch to say boat operators understand bow-riding to be a negligent and reckless practice.

Maryland does not need another regulation or statute to remind boaters to the keep arms and legs of their passengers in the boat while underway. The USCG and Maryland's DNR are both well equipped to enforce the laws already in place. It is a waste of resources, and causes confusion to selectively define and separately penalize subsets of behavior already covered by existing law.

For want of a staple, a lawsuit was filed.

“For the want of a nail the shoe was lost,

For the want of a shoe the horse was lost,

For the want of a horse the rider was lost,

For the want of a rider the battle was lost,

For the want of a battle the kingdom was lost,

And all for the want of a horseshoe-nail.”

- Benjamin Franklin

On September 29, 2016 the Maryland Court of Special Appeals decided that the lack of a staple connecting a signature page to the remainder of a Will does not render the Will invalid.

The case of Castruccio v. Estate of Castruccio was an otherwise common Will contest. The twist was the disgruntled heir's reliance on an almost 90 year old case that nullified a Will for lack of an attached signature page. The heir challenged the Castruccio Will because the original filed in the courthouse consisted of six unconnected pages- none were stapled together. 

For lack of the traditional two-pronged metal fastener, long used to demonstrate the unity of a document, the disgruntled heir sought to undo the testamentary wishes of her relative.

For her proof, the heir's lawyer obtained a copy of the original Will with an affidavit stating that the court's scanner was precise enough to detect the absence of staple holes in the document. This evidence grounded the claim that the Will could not be valid because the signature page was disconnected from the prior pages. 

This opinion came pretty close to containing the phrase "poppy cock."  The appellate court declared that the ancient case law was not to be read in a way that would create an "engine of destruction" for commonly unified documents. For example, the use of a paper clip to secure the pages in a way that does not leave a mark on the page would have also nullified the Will under the heir's analysis. Only the tried and true staple for her!

Lawyers use word processing programs that are often formatted to keep signature pages separate, allowing minor revisions without disrupting pre-drafted signature blocks. Documents are scanned, and the "original" my now only reside on a hard-drive as a .pdf file. In fact, most of our courts now require electronically filed documents, with the electronic signatures. There are no "staples" to speak of.  For that matter, there is very little physical mail exchanged among lawyers, any more.

The Maryland Court of Special Appeals reconciled modern practices with some of the oldest legal principles, dating from the 1700's. It recognized that the "single document" requirement for Wills sought to assure witnesses were acknowledging documents that were continuous in content, and complete in form. Physical attachment was often the easiest means to identify a document as unified. But that is just not true, anymore.

Investigation of the Baltimore City Police Department - The complete Department of Justice Report

Don't rely on political filters, read this important report.

President Obama's speech to the Democratic National Convention speech on July 27, 2016.

Trust the words of Medal of Honor recipient.

Medal of Honor recipient on Clinton: "As president, she will reform the VA" https://t.co/sTUTkGSAIN #DemsInPhilly https://t.co/b0TkFCDyDy

— CNN (@CNN) July 29, 2016

The Coast Guard Doesn't Need A Warrant.

May 21-27, 2016 is National Safe Boating Week. Coming one year after a record number of injuries and fatalities on the Chesapeake Bay, the United States Coast Guard has been actively boarding and inspecting small boats early in this boating season. Social media contains a steady stream of questions about Coast Guard authority to board and inspect small boats without probable cause or a warrant. The concept of probable cause and the Fourth Amendment to the United States Constitution are familiar to us from daily news reports about searches conducted of cars, homes and “suspects.” But every discussion thread includes some very bad information. The Coast Guard’s authority to search every nook and cranny of your boat is not the result of the misperceived government expansion in to our daily lives. The Coast Guard has simply never been restricted by the U.S. Constitution. It has operated as America’s most powerful police force for more than 200 years.

The Revolutionary war ended in 1783. The revolt had cost $400 Million in soldier’s wages, alone, and with no taxing authority the new country was deeply in debt to foreign nations. Six years later, in 1789, the first Congress imposed duties and tariffs on goods brought to the United States to retire the debt. However, the new nation had no means to enforce payment. The lack of domestic policing permitted smugglers to land goods easily along the American coast.

In 1790, the first Congress created the Revenue Cutter Service specifically to collect tariffs and duties on all imported goods. The authority of the RCS was broadly stated:

[I]t shall be lawful for all collectors, and the officers of the revenue cutters herein after mentioned, to go on board of ships or vessels in any part of the United States, or within four leagues [about 12 miles] of the coast thereof, if bound to the United States, whether in or out of their respective districts, for the purposes of demanding the manifests aforesaid, and of examining and searching the said ships or vessels; and the said officers respectively shall have free access to the cabin, and every other part of a ship or vessel 

Under this law, the RCS could board, search, seize and forfeit vessels. When you consider that the Fourth Amendment to the U.S. Constitution was written one year before creation of the RCS, on September 25, 1789, this is a remarkable grant of policing authority. Even after the Fourth Amendment was ratified on December 15, 1791, the RCS authority to board, search and seize remained unchanged for the next seventy five years. 

In 1866, a new law was passed, but only to further strengthen RCS authority to prevent smuggling. It made the powers to board, search and seize even broader by eliminating the “four leagues” geographic limitation. It also gave the RCS broader authority to address "any breach or violation of the laws of the United States." And it authorized, for the first time, the arrest of persons who violated the laws of the United States. The Fourth Amendment was not seen as a limitation on this incredibly broad grant of enforcement power. 

In 1915, the RCS was combined with another agency to form the modern Coast Guard. The new law declared that "[a]ll duties now performed by the Revenue-Cutter Service and Life-Saving Service shall continue to be performed by the Coast Guard.” This included the rights to board, search, seize vessels, and arrest persons found in violation. 

In 1936, Congress adopted what has become the modern grant of authority for Coast Guard searches of your boat. 14 USC 89 (a) now reads: 

The Coast Guard may make inquiries, examinations, inspections, searches, seizures, and arrests upon the high seas and waters over which the United States has jurisdiction, for the prevention, detection, and suppression of violations of laws of the United States. For such purposes, commissioned, warrant, and petty officers may at any time go on board of any vessel subject to the jurisdiction, or to the operation of any law, of the United States, address inquiries to those on board, examine the ship’s documents and papers, and examine, inspect, and search the vessel and use all necessary force to compel compliance. When from such inquiries, examination, inspection, or search it appears that a breach of the laws of the United States rendering a person liable to arrest is being, or has been committed, by any person, such person shall be arrested or, if escaping to shore, shall be immediately pursued and arrested on shore, or other lawful and appropriate action shall be taken; or, if it shall appear that a breach of the laws of the United States has been committed so as to render such vessel, or the merchandise, or any part thereof, on board of, or brought into the United States by, such vessel, liable to forfeiture, or so as to render such vessel liable to a fine or penalty and if necessary to secure such fine or penalty, such vessel or such merchandise, or both, shall be seized.

 Your boat’s size, or its dedication to recreational use are not factors in whether the Coast Guard will board and search your boat. And more importantly, the Coasties do not require probable cause. 

In 2008, the Department of Homeland Security published its “Small Vessel Security Strategy,” which describes the joint efforts of many enforcement agencies, including the Coast Guard, to identify and limit the threat to maritime infrastructure and military vessels posed by terrorists in small boats. Small vessels are considered high risk delivery systems for contraband, including explosives, because they move so freely among our waterways, and close to sensitive infrastructure. It is no wonder we are at greater risk for unwanted, and unwarranted boarding and inspection. Of course, nobody complains when the Coast Guard renders aid in an emergency.

Author and Chesapeake Bay sailor Carolyn Sienkiewicz wrote a piece that appeared on Cruising World’s website in 2011 describing how her boat was boarded by the Coast Guard. She was sailing the Chesapeake Bay with her husband on their 42 foot sailboat when hailed by the Coast Guard for a safety inspection. She was understandably unnerved by the 25’ Defender Class boat, with machine gun mounted on the foredeck. She later interviewed an Officer from the Coast Guard station: 

A boarding usually sends two officers onto the other vessel. The rest of the crew remains on the response boat, which moves off to a safe distance. Once aboard, the boarding officers quickly assess the situation (number, size, and strength of people; weapons aboard), then proceed with the safety inspection while the other two officers aboard the Coast Guard vessel assure the overall security of the scene. 

Boardings typically fall into one of three categories,” says [Petty Oficer 2nd Class David] Carrier. “A response to a marine incident, such as a tanker grounding or a boating accident. A boat operating in an unsafe fashion. And preventive, in which we check for safety equipment and compliance with U.S. Coast Guard rules and regulations.”… The boardings can be of any type of vessel, whether recreational, commercial (say, a passenger-carrying vessel or workboat), and yes, even dinghies and kayaks. The Coast Guard won’t hesitate to stop or board a sailboat that’s under full sail.

 The Coasties Are Coming, Carolyn Sienkiewicz, posted March 21, 2011 (http://www.cruisingworld.com/how/coasties-are-coming)(last checked 5/19/2016) 

Your boat may feel like home, and it may feel like a very private oasis. But in reality, you have far less Constitutional protection against government intrusion on your boat than you do walking along a sidewalk in downtown Baltimore. The government has long reserved to itself absolute entitlement to board and inspect every nook and cranny of your boat, without reasonable suspicion of a crime, and without a warrant.

So stay sober, wear your life jacket, and keep your other safety gear up to date, and happy boating!

Maryland doubles down to permanently cap Vessel Excise Tax.

The Gambler’s Fallacy is the mistaken belief that if a coin-flip comes up “heads” ten times in a row, then it is more likely to come up “tails” on the eleventh flip.  It is a trap that ignores how probability operates. Our legislature is falling victim to a similar fallacy this session, as it works to make permanent the $15,000 cap on Maryland’s Vessel Excise Tax ("VET"). As of this writing, the bill has passed all hurdles in the legislature and is well on its way to becoming law by June.

The cap operates as a subsidy on vessel purchases over $300,000. The cap has no direct impact on the majority of Maryland boaters who buy and sell, as our boats are much less expensive. It will directly benefit a slim number of wealthy boaters.  This issue has been hotly debated among many sectors of the State’s marine industry since 2005. Supporters argue the cap will promote increased spending by the wealthiest boaters, and thus benefit the entire industry. Detractors say the cap will simply deplete income needed to support the Waterway Improvement Fund (“WIF”) and that the cap is a poor bet on an uncertain economic return.

Excise taxes are as old as our Country. Ten years after the British surrender at Yorktown, and only two years after the United States Constitution was adopted, the Congress passed the Distilled Spirits Tax of 1791, an excise tax on whiskey. The federal government had assumed war debt of the thirteen states and sought to offset the burden by taxing grain and spirits. The tax was unpopular, as whiskey was often used for direct trading, like currency. Larger distillers could easily pass the tax to consumers, but smaller distillers and frontier grain producers were directly burdened by the cash payment that could be as much as thirteen cents per gallon. Over three years simmering revolt roiled the frontier, particularly in southwestern Pennsylvania where tax collectors were attacked. President Washington dispatched a militia of close to 13,000 men, including many Marylanders, to preserve order and enforce the tax.

Maryland has collected a vehicle excise tax since 1933, largely without incident. Since 1966, the WIF has been the recipient of the 5% VET collected on the value of watercraft purchased or used in Maryland waters, and a smaller tax on all motor fuels. Through the WIF, our government improves and maintains the infrastructure necessary for safe public boating. The necessity and benefit of the WIF is not disputed by either side of the cap debate. Today, the WIF is funded solely by the VET. A cap on the tax is described as either revenue neutral, or a downright revenue drain. Only one side can be correct.

In 2011, excise taxes generated $15.4 Million for the WIF. In 2012, this declined to $14.2 Million. By 2013, the State Legislature adopted a temporary cap on the VET, with the bald hope of increased registration of high valued boats. In August 2015, the University of Maryland Environmental Finance Center issued an analysis of the cap, with only one concrete conclusion- the cap resulted in $588,000 of lost revenue over 2013 and 2014.

The analysis is coupled with several “may have” conclusions, which amount to little more than wishful thinking:

• The cap “may have” lead to increased registration of vessels worth $350,000 to $399,999, although “the net impact on VET revenue is estimated to be negative.”
• The increase in registration of vessels worth $400,000 or more “is likely due” to the cap, but “was not enough to offset the loss in VET revenue.” The increase is attributed to 60 additional registrations in this category.

The cap is justified largely for its claimed trickle down economic effect- it “may have” generated $1 Million in direct spending in the overall economy (citing a survey of “high valued” boat owners who averaged 25 trips per season), with a multiplier effect of $2.5 Million over two years. Instead of reading the data as a general negation of the benefits attributed to the cap, our Legislature has simply doubled down on the initial bet, making the cap permanent on the assurance that good things “may have” resulted from the temporary cap, and they may happen in the future.

With annual VET receipts between $14 Million and $15 Million, it is indisputable that the bulk of WIF revenue is derived from the purchase and registration activities involving vessels well below the $300,000 cap threshold. The cap can only be reasonably construed as a tax break for the wealthiest of boaters who already bear the least economic responsibility for maintaining our waterways. Meanwhile, the loss of revenue intended for the protection of public boating facilities and infrastructure will continue to decline, and the majority of State boaters will suffer.

On your next visit to play the slots, kindly nudge the legislator on the stool next to you. Suggest that it is time for him to go home-he’s playing with your money in a game where the odds remain unreasonably long.

Trial Reporter, 2016, Journal of the Maryland Association for Justice, Inc.

This Special Issue, 2016, includes Mr. Valkenet's article on use of limited scope engagements in Maryland civil court cases and administrative actions.

Call us with questions. 410-323-0900.

Freddie Gray documents available for you to read!

The 400+ page record extract is available to the public. It is part of the States appeal of orders refusing to compel an officer to testify against others.

Follow this link to the appellate court website.

Your loan modification can erase bank mistakes in the documents.

Distressed homeowners who enter loan modifications with their lenders may be wiping away past mistakes made by the bank. These mistakes my be simple clerical errors, but sometimes they can assist a defaulted homeowner in defending a foreclosure.

In a recent case handled by this office the homeowner relied upon inconsistent dates in her documents to defend against a foreclosure. She made motions to the court attacking the legitimacy of the documents, and the claimed lien on her property, based on the inconsistencies--the transactions and loan dates did not match the dates of the instruments. Her argument was that the loan she took was not secured to her real property, and thus the bank should not be allowed to foreclose.

However, the borrower had already modified her loan once. The foreclosure was triggered by her inability to meet the terms of the modified loan. This, too, is common.

Her motion to prevent the foreclosure failed. The judge found language in the loan modification demonstrated the borrower's acknowledgement that any mistaken dates in the original documents were merely the result of clerical error, and that she ratified the existing lien. As a result, the bank was allowed to foreclose.

I can't think of a clearer example of a later contract being used to clean up the ambiguities and mistakes in drafting the prior contract.

Dissolve your partnership? It takes more than a little bit of water.

We answer questions posted on AVVO. But space limitations don't always permit a full answer to interesting questions. Here's a very common issue- One business partner is "so over it" and wants to split away from the other partner (or multiple partners). How does he get out of the business relationship?








First, the original AVVO question, as it was posted by a non-lawyer, much as if the prospective client were sitting at our conference room table, over coffee:

Q: What is the exiting/minority owner entitled to when he/she leaves the business?: A partnership where the minority owner decides to leave the business. There is no prior 'record' as to what would happen or a buy/sell agreement in the event the partnership dissolves. If the remaining majority owner of the business wants the exiting partner officially removed from the business what can the remaining partner do with the exiting (minority) partner's percentage of ownership?

A: Thomas’s answer: It must be valued and paid. Absent a written agreement, the code and case law will control. This could drift to a lawsuit for dissolution if folks cannot agree.

Maryland's business code fills in the gaps when business partners don't have their paperwork  in order.  For example, with so much "self help" available to entrepreneurs the documents you think control how your business operates might not adequately address your business relationships and goals. They usually are very deficient in addressing how to dissolve or wind up your business.

Consider the code your default operating agreement.  It may not provide you with a perfect solution, but when coupled with the rules of court, it does provide the mechanisms to separate you from a bad business arrangement.

We most often see broken relationships where partners have stopped effectively communicating with each other, usually after an argument over goals or finances.  It is less often, but just as ordinary that we see one partner complain that the other has committed outright fraud or theft of shared business assets-- like money or opportunities. We have all heard about former business partners competing against each other. That competition might have started even while they were in business together!

Filing a lawsuit to separate partners by dissolving the business entity is costly. It also takes time.  Where partners can no longer communicate the court may appoint a receiver to take control of business assets. There will be depositions, forced mediation in the court, written discovery, document exchanges and expert analysis performed to determine the final accounting between partners.

And there is always the risk that you may owe money, even where you started the case thinking that others would pay money to you. You might even owe a hefty tax bill to Uncle Sam.

But where there is legitimate dispute, the court provides powerful tools to claw back misappropriated assets, and to bar others from profiting from use of partnership opportunities.

After working through contentious partner disputes for almost three decades, I assure it is always less expensive to to tighten up your basic business documents before the first argument, when everyone is still in like with each other. When disputes arise, as they most certainly will, talk, negotiate and settle without court intervention. And if that doesn't work, be ready to take time from your busy schedule to sit for deposition, where only the coffee is free.

Visit our website for more info about Young & Valkenet.

Easements by plat in Maryland, a real thing if you look hard enough.

On January 27, 2016 the Maryland Court of Appeals further clarified our law of easements. In particular, when an easement is deemed to be expressly stated in a record plat, and whether the lower appellate court correctly decided the issue. A short discussion of the lower appellate court decision, with a link to the earlier decision can be found here.

The case involved an homeowner's association seeking to deny access to a homeowner's lot for lack of a recorded easement. The homeowner sought access as it was drawn in a plat, which is not recorded like a deed in the same indices examined during traditional title searching.

Emerald Hills v. Peters allowed the highest Maryland court to examine the statute of frauds, and declare that a record plat sufficient in detail to satisfy the statute of frauds may describe express easements. A simple statement of law, but not one that will limit the amount of future litigation over this very issue.

After acknowledging that the preferred manner of creating express easements is through a deed or other instrument recorded in the land records, the court turned to the record plat at issue in the case.The plat did not contain traditional words used to create or pass interests in land, such as

• grant
• convey
• transfer
• assign

But the court confirmed that a record plat that otherwise complies with the Statute of Frauds will be enough to create an easement.

I'll leave it for another day to describe the Statute of Frauds, but know that this case expands your risk, as a purchaser of real estate.  Your investigation into whether easements burden your property must now extend beyond what is recorded in the land records, but to record plats that may be filed with County government, but which are not otherwise to be found in the land records.

It also multiplies your risk of litigation as each element of the Statute of Frauds is subject to bona fide dispute-- smart lawyers often differ over whether the elements are satisfied by a particular document. The debate now extends to whether the language of a plat satisfies the Statute, and then to what extent your property is burdened.

Of course, if you buy property in Baltimore City you will already be searching outside the land records to determine proposed condemnation zones- they aren't easements, but they will certainly impact your ownership of the property.

And so, this recent ruling merely confirms that your investigation into a piece of real property must extend well beyond the land records. If it doesn't, you risk buying something with encumbrances that can severely restrict your use and enjoyment of the property.


Visit our website at www.youngandvalkenet.com

Contemplating the sailing log canoe, a wake and the wet judge.

The winter months provide us time for vessel repairs, and reflection on how to become better boaters. As a lawyer, I tend to focus on risk-- the chance my activities might inconvenience or injure others and their property, or how the activities of others might impact me. Vessel operation has been widely discussed in the news over the last year, as Maryland set new records for boating fatalities and accidents.

It was an excessive wake case that caught my attention. I am less interested in the many reported cases involving intoxicated operators, perhaps because I see that as an intentional act of impairment that is readily avoided. But the excessive wake case falls in the category of bad things that can easily arise from innocent operational error. I know that I will not operate a boat while intoxicated, but I might certainly slip up and generate an excessive wake once in awhile. Aside from incurring the anger of nearby boaters, is there a greater risk?

Chesapeake Bay Log Canoes

In a widely reported case, a 58 foot cabin cruiser allegedly raced through a log canoe race course on the Chester River last July. A wake of two to four feet caused two log canoes to capsize- one of which belonged to a retired judge (read this Coastal Living article to learn about Chesapeake Bay log canoe sailing). The canoe reportedly suffered $1,800 in damage. The judge’s call to the State’s Attorney triggered an investigation by the DNR, which ticketed of the cabin cruiser’s operator. The operator hired a lawyer and took the case to trial in December, where he was found guilty of negligent operation and fined $320. After trial, he was offered probation before judgment—a deferred judgment that is not a conviction. 

The State’s Attorney issued a press release trumpeting the victory, not because it was such an important case in the grand scheme of criminal law, but because of the infrequency of trials on such issues. Or maybe that’s how to announce conclusion of a case involving a wet judge. The operator reportedly defended the case by claiming no knowledge of the race in progress, or the presence of the canoes in the area. A race tender had blasted a horn and signaled, but the operator claimed to have misinterpreted the signals, and simply made a slight course correction. But what if the case involved more than a capsized canoe, and the dunking of a retired judge? What if the 58 foot cabin cruiser had caused serious bodily injury or death? Imagine if the crew of the two canoes had drowned? 

There are at least two statutes for that situation. A vessel operator who causes death can face charges of manslaughter by vehicle or vessel, and criminally negligent manslaughter by vehicle or vessel. They sound very similar, but they are very different. 

The crime of manslaughter by vehicle or vessel requires proof of “gross negligence.” To obtain a conviction, the prosecution must show that the vessel operator was conscious of the risk to human life posed by his conduct, and he acted with “wanton or reckless disregard for human life.” This law has been around since 1941, and was extended to cover operation of boats in 1949. It is a felony and can be punished by up to 10 years in prison and a $5,000 fine. 

Criminally negligent manslaughter by vehicle or vessel requires proof of “criminal negligence.” The prosecution must show that the operators conduct created a “substantial and unjustifiable risk” to human life and that the failure to perceive that risk was a “gross deviation” from the standard of care that a reasonable person would exercise. This is a relatively new law, adopted in 2011. It is a misdemeanor and can be punished by 3 years in prison and a $5,000 fine. 

You can see that ordinary manslaughter is the more serious crime. It is more serious because it is charged where the operator is conscious of the risk posed by his boating operation. The criminal negligence statute does not require this recognition. It requires only that the operator should have perceived the risk, and that his conduct was far outside the boundaries of safe behavior, and thus the lesser penalty of 3 years. The operator convicted of criminal negligence also avoids the “felon” label, and retains the right to vote and to bear arms under the Second Amendment. 

We now turn back to the case of the wet judge and his sunken canoe. If the operator of the 58 foot cabin cruiser had no appreciation for the risk created by his four foot wake, it is unlikely he could have been prosecuted for ordinary manslaughter. But if the testimony at his trial revealed an exclamation like “I don’t care, let’s tear this up,” or words to that effect, then a four foot wake that capsized a canoe to cause a drowning would certainly support an ordinary manslaughter charge. I would estimate that the operator of the cabin cruiser spent at least $1,500 or more to defend the negligent vessel operation case, in addition to the $320 fine. Defense of a case involving death will cost you exponentially more, including your reputation and standing in the community. It really is much easier to throttle back, take in the sights, and give your neighbors a friendly wave.


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The lasting impact of Dr. King

On a day when Dr. King's legacy is debated and celebrated, we share the full text of his "I have a dream" speech, as maintained in the National Archives--Only six pages long, but of lasting importance.