Title: Ginsberg v. McIntire

State: maryland

Issuer: Maryland Supreme Court

Document:

Stephen P. Ginsberg et al. v. Virginia A. McIntire et al., No. 52, September Term, 1997.
[Shareholder's Derivative Action - Review of sufficiency of evidence - Circuit court judge
testified under subpoena as fact witness to events occurring when witness was a practicing
lawyer.  Held:  No error in permitting jury to be told current occupation of witness and,
under circumstances, in references by all parties to witness as "judge."]
Circuit Court for Montgomery
County Case # Civil 121545
IN THE COURT OF APPEALS OF MARYLAND
No. 52
September Term, 1997
_________________________________________
STEPHEN P. GINSBERG
et al.
v.
VIRGINIA A. McINTIRE
et al.
_________________________________________
Bell, C.J.
Eldridge
Rodowsky
Chasanow
Raker
Wilner
  
Karwacki, Robert L.
 (retired, specially assigned), 
JJ. 
_________________________________________
Opinion by Rodowsky, J.
Eldridge, J., concurs in the result only
_________________________________________
Filed: January 23, 1998
We granted certiorari on our own motion in this appeal, prior to its consideration by
the Court of Special Appeals, primarily to consider the following, somewhat argumentatively
phrased, issue:
"Did the trial court commit reversible error by permitting appellee to
call a sitting Maryland state court judge as a witness on an irrelevant issue and
to trumpet continually his judicial status before the jury, thereby allowing
appellee to stamp her case with the imprimatur of a sitting judge?"
The appeal also raises sufficiency of the evidence issues, embellished by the parties'
disagreement over who are parties appellant and what damages are included in the final
judgment. 
Kensington Professional Center, Inc. (KPC) developed a relatively small (13,127 s.f.),
three-story office building at 10901 Connecticut Avenue in Montgomery County.  Formed
in November 1984 under Maryland law by Stephen P. Ginsberg, an ophthalmologist and one
of the appellants, and by John N. McIntire, the owner of a chain of hardware stores, a
builder, and a non-practicing lawyer, KPC was their vehicle for the construction, leasing, and
operation of the then contemplated office building.  Dr. Ginsberg owned fifty percent of the
KPC stock and John McIntire placed his fifty percent of KPC stock in his living trust.  Dr.
Ginsberg's objective in the venture seems to have been to secure a suitable and stable
location for his practice, while John McIntire's objective seems to have been investment.
John McIntire died before the building was completed.  On his death his widow, Virginia A.
McIntire, one of the appellees, became beneficial owner of his KPC stock.  When the
building was completed Dr. Ginsberg occupied the second floor and managed the building
for KPC.  In the litigation now before us Virginia McIntire alleges, inter alia, that Dr.
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Ginsberg violated his duty of loyalty to KPC in a number of ways, including particularly by
unilaterally reducing the second floor rent that had been agreed upon with John McIntire. 
Inasmuch as the verdicts of the fact finders were in favor of the appellees, plaintiffs
below, we shall present the facts most favorable to the plaintiffs.  Before doing so, however,
we point out that there are at least three different leases that appear in the evidence for Dr.
Ginsberg's medical offices on the second floor of the KPC building.  Each of these leases is
to Stephen P. Ginsberg, M.D., P.A., Dr. Ginsberg's professional association (the P.A.).  Each
lease and any addendum are signed for KPC by Dr. Ginsberg, each lease and any addendum
are signed for the P.A. by Dr. Ginsberg, and Dr. Ginsberg admits that he prepared each of
the leases.  Specifically the leases are:  
a lease dated February 21, 1987, at an annual rent of $108,200 or $20 per
square foot, for an initial term of five years with four additional five-year
extensions at the option of the P.A. (PX 21);
a lease dated September 1, 1987, at an annual rent of $86,560 or $16 per
square foot, for an initial term of five years with four additional five-year
extensions at the option of the P.A., and containing an addendum exercising
the first renewal option as of September 1, 1987 (PX 18); and
a lease dated September 1, 1987, at an annual rent of $86,560 or $16 per
square foot, for an initial term of ten years together with four additional five-
year extensions at the option of the P.A. (PX 19).
Each lease dated September 1, 1987, bears a legend typed at the top of the first page
and reading, "This lease takes precedence over the earlier lease between same parties dated
February 21st, 1987."
-3-
At KPC's organizational meeting Dr. Ginsberg was elected president and a director,
John McIntire vice president and a director, Dr. Ginsberg's wife, Ruth Ginsberg, one of the
appellants, secretary and treasurer, and John McIntire's longtime accountant, Glenn M.
Hendrickson (Hendrickson), assistant secretary-treasurer.  John McIntire's stock in KPC was
issued to his living trust in consideration of his having contributed the land to the venture,
valued at $36,000, and in consideration of services rendered and to be rendered in managing
the project.  Dr. Ginsberg executed a demand note to the order of KPC in the amount of
$125,000 in consideration of his stock.  KPC also obtained a construction loan from Citizens
Savings Bank, F.S.B. (Citizens) for $1,344,000 that closed October 3, 1986, and was
repayable in five years from that date.  The McIntires and the Ginsbergs personally
guaranteed that loan.
By November 1986 John McIntire had been stricken with cancer that was so painful
that his wife administered shots to him approximately every two and one-half hours.
Nevertheless, McIntire was able, through a real estate broker, to acquire Merrill Lynch
Realty/Chris Coile, Inc. (Merrill Lynch) as the tenant for the first floor of the building.  The
lease to Merrill Lynch, dated February 4, 1987, was for a term of ten years commencing on
October 1, 1987, at an annual rent of $120,494.04 or $22 per square foot. 
John McIntire died in Florida on February 25, 1987, of a heart attack following an
automobile accident.  He and Virginia McIntire had left for Florida on Sunday, February 22,
1987.  On the day before their departure, Saturday, February 21, 1987, there was a luncheon
at the McIntire home attended by their children and grandchildren who anticipated that John
-4-
McIntire would not return alive from Florida because of his cancer.  After John McIntire's
death Dr. Ginsberg assumed the business direction of KPC.
Costs of the project exceeded the construction loan, and it was necessary for KPC to
borrow an additional $200,000 from Citizens that was secured by a second mortgage dated
July 31, 1987.  Dr. Ginsberg, Mrs. Ginsberg, and Virginia McIntire personally guaranteed
the second mortgage.  The discussions between Dr. Ginsberg and Virginia McIntire
concerning cost overruns and the additional mortgage financing were the first discussions
that she had with Dr. Ginsberg concerning the KPC project after John McIntire's death.  
In the late summer of 1987, Dr. and Mrs. Ginsberg came to Virginia McIntire's home
and explained that additional funds were needed to meet the cost of the building.  Mrs.
McIntire advanced $120,000. 
Merrill Lynch moved into the first floor space in August or September of 1987, and
the P.A. occupied the second floor beginning in October of that year.  The P.A. paid rent at
the rate of $16/s.f.  The amount that Dr. Ginsberg and John McIntire had agreed upon as
KPC's contribution to improving leased space for particular tenants, called "tenant
improvements" or "build-outs," was $8/s.f. (the tenant standard).  The cost of Merrill Lynch's
build-outs were at the tenant standard.  Dr. Ginsberg's medical offices, however, were much
more expensive.  The build-out for the P.A. totaled approximately $145,000 or $26.62/s.f.
No part of the third floor was rented until March 1989.  That floor consisted of 2240 s.f., 800
s.f. of which were leased in 1989 to a physical therapist for $18/s.f., with four months free
rent in lieu of tenant improvements.
-5-
The rents generated from the two or three tenants were insufficient to meet the
expenses of the building so that the stockholders of KPC regularly advanced monies to offset
the negative cash flow.  It appears that the building broke even in 1993 and had a slightly
positive cash flow in 1994.  To the time of trial in February 1996, Mrs. McIntire had loaned
roughly $300,000 to the venture, and the Ginsbergs had loaned about $370,000.
The repeated calls for stockholder loans to KPC prompted Mrs. McIntire to ask her
son-in-law, Richard Michael Powell (Powell), to advise her concerning KPC.  Powell had
business experience, principally in government-assisted, equity syndication of central city
real estate ventures.  Following a meeting with Dr. Ginsberg in August of 1988, Dr. Ginsberg
sent Powell copies of the respective leases for the first and second floors.  The document
transmitted as the lease for the second floor was PX 19, a lease with an initial term of ten
years at a rental of $16/s.f. 
The notation on the top of the first page of PX 19 prompted Powell to inquire of Dr.
Ginsberg about the February 21, 1987 lease referred to therein.  Dr. Ginsberg told Powell
that the February 21, 1987 lease had been lost but that its terms were the same as the lease
dated September 1, 1987, and that the latter lease had been constructed to replace the lost
lease of February 21.  
Powell explored refinancing the KPC building to reduce expenses, but his efforts were
unsuccessful because the cash flow was insufficient.  Powell concluded that relief for Mrs.
McIntire could not be obtained through refinancing in view of the deal that had been struck
-6-
     The work up for the Board of Directors of Citizens recommending the extension of the
1
(continued...)
between John McIntire and Dr. Ginsberg as evidenced by the lease dated September 1, 1987
(PX 19). 
The first and second trust loans to Citizens were due December 1, 1992.  The loans
would have to be refinanced, but Mrs. McIntire took the position that she would not execute
any guarantees.  By September 1992 both Dr. Ginsberg and Mrs. McIntire had engaged
counsel.  A meeting was held in October 1992 attended by the Ginsbergs, Powell, who then
held a power of attorney to act for Mrs. McIntire, and their respective counsel.  In the course
of the meeting counsel for Mrs. McIntire asked Dr. Ginsberg if he had a copy of the February
21 lease, and Dr. Ginsberg replied that he did not.  Counsel asked why the September 1 lease
had been constructed, and Dr. Ginsberg replied that the February lease had been lost.
Counsel asked if the terms and conditions of the September lease were identical to those of
the February lease, and Dr. Ginsberg replied that they were one and the same. 
In the fall of 1992 Dr. Ginsberg had again sent to Powell, at his request, operating
statements for KPC and copies of the leases, including the new lease for part of the third
floor.  The lease for the second floor furnished on this occasion, PX 18, differed from the
copy previously received by Powell, PX 19, in that PX 18 was for an initial term of five
years and contained an addendum exercising the first five-year renewal option. 
By December 9, 1992, Citizens agreed with the Ginsbergs to extend its loans for three
years, on personal guarantees.   Mrs. McIntire, however, would not agree, and Citizens
1
-7-
     (...continued)
1
KPC loans utilized $16/s.f. as the rent paid by the P.A.
proceeded with foreclosure.  Ultimately, at the foreclosure sale on May 11, 1993, Mrs.
McIntire agreed to the loan extension and signed the guarantee, but only after a prospective
buyer whom she knew decided not to bid on the property.
In September 1993, Powell received from a Florida attorney who was representing the
estate of John McIntire copies of financial statements and correspondence that had been
transmitted to that attorney by Hendrickson in September 1987.  Included in the material was
a letter of July 20, 1987, to Citizens from the appraiser who had valued the KPC property
for the first trust construction loan.  That appraisal contained synopses of the Merrill Lynch
and P.A. leases and reported the latter to be at $20/s.f.  Powell had previously asked
Hendrickson for a copy of the February 21 lease but Hendrickson said he did not have it and
that Dr. Ginsberg "had everything."  Powell then engaged counsel, Durke Thompson, Esq.
(Thompson), to determine if the February 21 lease could be located.  
Thompson, utilizing Maryland Rule 2-404, "Perpetuation of Evidence," deposed
Citizens for the purpose of requiring it to produce its records concerning the loans to KPC.
That deposition took place on February 9, 1994.  Among the documents produced at that
deposition was a copy of the February 21, 1987, $20/s.f. lease to the P.A.  Also produced at
the deposition was a copy of a September 1, 1987 lease to the P.A. at $16/s.f., PX 26, which
is identical to PX 18, a lease that the representatives of Mrs. McIntire had previously
obtained from Dr. Ginsberg. 
-8-
     No issue has been raised before us as to the propriety, under Maryland practice, of trying
2
to a jury a stockholder's derivative claim on behalf of a corporation against its director and/or
officer.
The instant action was filed July 7, 1994, and was tried on a second amended
complaint.  The plaintiffs are Mrs. McIntire and The John N. McIntire Trust (the Trust) by
and through its trustees, Mrs. McIntire and her daughter, Susan Lawrence.  At least two of
the counts of the three-count complaint asserted derivative claims on behalf of KPC which
is joined as a nominal defendant.  Count I alleged breaches by Dr. and Mrs. Ginsberg of their
duties of loyalty to KPC.  Count II claims on behalf of KPC against the P.A. for non-
payment of rent, with late charges and interest, based on the February 21, 1987 lease.  Count
III of the second amended complaint sounded in deceit and can be read as a claim by Mrs.
McIntire in her own right against Dr. Ginsberg only.  The plaintiffs demanded a jury trial
which the defendants successfully opposed as to Count II, the rent claim, because the
preprinted provisions in the form utilized for all of the leases to KPC contained a waiver of
jury trial.  Counts I and III, however, were tried to a jury.   Dr. Ginsberg and Mrs. Ginsberg
2
had separate counsel.
By the time this action came to trial in February and March of 1996, the claims
asserted under Count I included, in addition to unpaid rent, claims based on the unpaid stock
acquisition note, unpaid tenant improvements, unpaid passthroughs to the tenants of
landlord's expenses, and the payment by KPC of allegedly excess interest costs on refinanced
loans.
-9-
The claims for compensatory damages against Dr. and Mrs. Ginsberg on Count I were
submitted to the jury on special interrogatories, and the jury found against each defendant,
awarding compensatory damages to KPC totaling $1,049,852.87.  Prior to submission of the
case to the jury, Count III, the fraud count, was the subject of extended discussion between
court and counsel.  With the consent of the plaintiffs, Count III was submitted to the jury as
a claim on behalf of KPC.  It was submitted against Mrs. Ginsberg as well as against Dr.
Ginsberg.  The jury found in favor of KPC against Dr. Ginsberg on Count III and awarded
the identical damages that had been awarded under Count I.  On Count III the jury found in
favor of Mrs. Ginsberg.  The docket entry of March 5, 1996, reads, "Verdict:  As to breach
of fiduciary duty and fraud in favor of the plaintiff," followed by an entry reading simply,
"Verdict sheet, filed."  The clerk's file contains the four verdict sheets described above which
itemize, but do not total, the damages and which identify the defendant against whom the
damages are assessed.
The jury trial resumed the next day to consider punitive damages.  The docket entry
of March 6, 1996, reads, "Verdict on punitive damages in favor of the plaintiff against the
defendant Stephen Ginsberg," followed by the entry, "Verdict sheet, filed."  The verdict sheet
asked, "Is there an award for punitive damages against Stephen Ginsberg?" to which the jury
replied, "Yes," awarding $360,000.  
On March 8, 1996, the court, sitting non-jury, considered Count II and awarded KPC
$196,853.25 in damages, $36,980 in attorney's fees, and $2,979.27 in expenses against the
P.A.  
-10-
On March 13, 1996, the clerk noted on the docket the entry in the judgment index of
the $360,000 punitive damages judgment as one "in favor of the plaintiff Virginia A.
McIntire against the defendant Stephen P. Ginsberg."  That same day the clerk noted on the
docket the entry in the judgment index of the judgment on Count II in favor of KPC against
the P.A. in the amounts set forth above.  
Dr. Ginsberg, Mrs. Ginsberg, and the P.A. filed post-trial motions on March 18, 1996.
Present appellate counsel for the appellees entered his appearance on May 30, 1996.  A
hearing was held on the motions on June 11, 1996.  The motions were denied, and the docket
so noted that day. 
On August 8, 1996, the clerk docketed an order denying the defendants' post-trial
motions and made an entry, "Judgment Entered."  On August 19, 1996, the clerk made a
docket entry that judgment was entered in favor of KPC against Dr. Ginsberg in the amount
of $1,049,852.87, and made a separate docket entry that judgment in the same amount had
been entered in favor of KPC against Mrs. Ginsberg.  In order to clarify that the judgments
against Dr. and Mrs. Ginsberg were joint and several, appellants moved on August 19, 1996,
further to amend the judgment, and, by order signed and docketed August 29, 1996,
judgment was entered in favor of KPC against Dr. and Mrs. Ginsberg, jointly and severally,
in the amount of $1,049,852.87.  
The order for appeal was filed September 6, 1996.  In relevant part the notice of
appeal reads as follows:
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"Dr. Stephen Ginsberg and Ruth Ginsberg, Defendants, hereby notice
an appeal from the final judgment entered in this case on August 29, 1996 (by
Order vacating the judgment of August 8, 1996 and entering a revised
judgment), and from all adverse interlocutory orders and partial judgments."
I
We begin by addressing appellate procedural issues.  Appellants contend that the
entire final judgment is that entered on August 29, 1996, and that it does not include either
the punitive damages awarded against Dr. Ginsberg or the breach of contract damages
awarded against the P.A.  Appellees point out that on March 13, 1996, the jury's $360,000
punitive damage verdict and the court's awards totaling $236,812.52 were entered on the
docket as judgments and indexed.  
The issue is governed by Maryland Rule 2-601, prior to its amendment effective
October 1, 1997, and by Maryland Rule 2-602.   The entry of judgment requires an entry on
the file jacket or on the docket.  Maryland Rule 2-601(b).  Under Rule 2-602(a), 
"an order or other form of decision ... that adjudicates fewer than all of the
claims in an action ... or that adjudicates less than an entire claim, or that
adjudicates the rights and liabilities of fewer than all the parties to the action:
"(1)
is not a final judgment;
"(2)
does not terminate the action as to any of the claims or any of
the parties; and
"(3)
is subject to revision at any time before the entry of a judgment
that adjudicates all of the claims by and against all of the parties."
Under Rule 2-602(a) judgment in this action became final on August 29, 1996, when
the final adjudications on the claims asserted in Counts I and III were entered, but the
-12-
document signed by the court and entered on the docket on August 29 did not embrace all
of the adjudications that became final judgments on that date.  Following the return of the
jury verdicts on the claims in Count I and on the compensatory damages part of the claims
in Count III, the clerk did not effectively enter judgment on the verdict.  The docket entry of
March 5, 1996, did not identify the party or parties against whom the verdicts were rendered,
and the mere docket notation that the verdict sheet was filed in the court file did not docket
the amount of the judgment or identify the parties.  The intent of Rule 2-601 at the time of
the subject proceedings was for the judgment to be discernable from the docket, without the
necessity of examining papers in the court file.  See Estep v. Georgetown Leather Design,
320 Md. 277, 577 A.2d 78 (1990).  Judgment, however, was effectively entered on Count
II by the docketing of the court's order of March 8, 1996, and judgment on that part of the
claim in Count III seeking punitive damages was effectively entered on March 13, 1996, by
the docketing as a judgment of that verdict.  But because the adjudication of all of the claims
as to all of the parties had not been docketed, all of the adjudications remained interlocutory
until August 29, 1996.  See Quartertime Video & Vending Corp. v. Hanna, 321 Md. 59, 580
A.2d 1073 (1990) (per curiam); Planning Bd. v. Mortimer, 310 Md. 639, 530 A.2d 1237
(1987).  
A peculiarity in the instant matter has to do with the parties in whose favor judgment
is entered on Count III.  The August 29, 1996 order in effect merges the amounts of the
judgments for compensatory damages against Dr. Ginsberg on Count III and on Count I into
a single judgment.  That judgment, consistent with the verdict sheet, is in favor of KPC and
-13-
treats the claim for compensatory damages on Count III as a derivative claim.  The judgment
for punitive damages on Count III, however, is docketed as a judgment in favor of Mrs.
McIntire.  No appellant has raised any issue in this Court concerning that discrepancy.
Consequently, our only concern is whether the discrepancy prevents the adjudications of the
claims in Count III from constituting a final judgment.  We hold that the judgment on Count
III is final, and that it became appealable when judgment in the action became final and
appealable on August 29, 1996.  An adjudication which clearly determines an entire claim
as to all parties is a final judgment, even if it is or might be in error.
The appellees contend that the P.A. is not a party to this appeal because of the way
in which the order for appeal was phrased.  The consequence, appellees say, is that the
judgment on Count II is final but not appealed so that it operates as issue preclusion against
the only appellants, Dr. and Mrs. Ginsberg, as to the determination that the lease calling for
$20/s.f. rent was the lease agreed upon between Dr. Ginsberg and Mr. McIntire.
  
We need not decide whether the P.A. is a party to this appeal and whether Dr. and
Mrs. Ginsberg are precluded from contesting the jury's finding, implicit in the judgment on
Count I against Dr. Ginsberg, that the operative lease was that at $20/s.f.  This is because we
hold in Part II of this opinion that there was sufficient evidence to support the verdict on
Count I against Dr. Ginsberg and our reversal of the judgment on Count I against Mrs.
Ginsberg, discussed in Part III of this opinion, recognizes the $20/s.f. lease as the operative
lease.  
-14-
II
Dr. Ginsberg contends before us that his motion for judgment at the conclusion of all
of the evidence should have been granted.  His brief focuses only on two claims, the one
based on the payment of $16/s.f. as opposed to $20/s.f. in rent to KPC, and a claim that a
reduction from $125,000 to $50,000 of his note to KPC for stock was unauthorized.  Dr.
Ginsberg testified that he agreed with John McIntire that the market value rental of the
second floor was $16/s.f.  According to Dr. Ginsberg, the lease reciting a rent of $20/s.f. was
prepared and signed at the request of John McIntire for his use in obtaining the second trust
additional financing from Citizens.  Similarly, Dr. Ginsberg testified that his stock purchase
obligation was reduced by agreement with John McIntire when the latter realized that,
because of his cancer, he would be unable to render the anticipated amount of services to
KPC so that the $75,000 reduction would equalize the contributions between the
corporation's two founders.  Dr. Ginsberg's position concerning these two claims was
substantially supported by the testimony of Hendrickson who was called as a witness for the
defense.  Because Hendrickson and Dr. Ginsberg were the only two living people who had
personal knowledge of the agreements between Dr. Ginsberg and John McIntire, Dr.
Ginsberg submits that his motion for judgment should have been granted.
The argument fails both procedurally and substantively.  Procedurally, Dr. Ginsberg's
motions for judgment at the end of all of the evidence and at the conclusion of the plaintiffs'
case did not challenge the sufficiency of the evidence.  At the end of the entire case Dr.
Ginsberg sought judgment as a matter of law by arguing that limitations had run on all of the
-15-
claims, and he sought to have Count III dismissed as duplicative of Count I.  In arguing that
motion for judgment, counsel for Dr. Ginsberg renewed arguments that he had made at the
end of the plaintiffs' case in support of his motion for judgment, but the arguments made
earlier had not attacked the general sufficiency of the evidence. 
In any event Dr. Ginsberg's argument rests on credibility and not on the lack of
sufficient evidence.  He argues that no reasonable juror could fail to believe Dr. Ginsberg's
position because it was fully corroborated by Hendrickson.  The short answer, of course, is
that the jury need not have believed either Dr. Ginsberg or Hendrickson.  Further, the claims
on which Dr. Ginsberg focuses are supported by sufficient evidence.  John McIntire is said
by Dr. Ginsberg to have agreed to the $16/s.f. rental and to a $50,000 payment for stock, but
there is no writing signed by John McIntire that corroborates the alleged agreements. 
Another major credibility issue in the case involved when the leases were signed.  Dr.
Ginsberg testified that the February 21 and September 1 leases were signed by him in Mr.
McIntire's presence at a meeting between only those two persons in McIntire's office,
beginning at 10:00 a.m. on Saturday, February 21, 1987.  Members of the McIntire family
testified that Mr. McIntire was at home that morning and too ill to leave home by himself.
Although Dr. Ginsberg argues that the claims against him rest on speculation and not
evidence, if the jury found that Dr. Ginsberg had misrepresented that the February 21 lease
was lost and had misrepresented that it was identical to the September 1 lease, then the jury
properly could infer that the February 21 lease was the true lease.  Further, if the jury
disbelieved Dr. Ginsberg and Hendrickson concerning the reduction in the stock purchase
-16-
obligation, the stock purchase claim is supported by Dr. Ginsberg's note to KPC for
$125,000. 
III
Mrs. Ginsberg contends that her motion for judgment should have been granted.  We
agree.  
Mrs. Ginsberg did not testify at the liability, compensatory damages phase of this trial.
Her activities, vis-a-vis KPC, are described principally by Mrs. McIntire and by
Hendrickson.  The testimony by Mrs. McIntire concerning Mrs. Ginsberg did not involve any
claim on which the jury found against Mrs. Ginsberg.  Mrs. McIntire described Mrs.
Ginsberg's accompanying her husband when he sought loans from Mrs. McIntire to KPC.
No claim, however, was based on advances made during the construction period or on the
advances   made monthly during the years when KPC had a negative cash flow.  Hendrickson
testified that when the building was completed Mrs. Ginsberg took over paying the bills and
running the checkbook.  She deposited the rent checks but had no role in determining rent.
She had no role in preparing financial statements, which Hendrickson continued to do.  Mrs.
McIntire also expressed disappointment that, when she offered to assist Mrs. Ginsberg in
maintaining the checkbook for KPC, Mrs. Ginsberg advised that she did not need any help.
Against the foregoing background, we consider the evidence concerning the specific claims
comprising the Count I judgment as that evidence bears on Mrs. Ginsberg.
There is no evidence that Mrs. Ginsberg had knowledge of the $20/s.f. lease any
earlier than did Mrs. McIntire.  
-17-
Dr. Ginsberg bases the reduction in his obligation to KPC for stock on a memorandum
of special meeting of stockholders of KPC dated February 13, 1987, which is signed by Dr.
Ginsberg and was prepared for signature by John McIntire or by his wife, but is unsigned.
There is no evidence that Mrs. Ginsberg should have questioned those unsigned minutes any
earlier than did Mrs. McIntire.  
There was evidence that Mrs. Ginsberg accompanied Hendrickson to the builder's
offices to review and verify the builder's cost figures for the improvements to the medical
suite on the second floor.  Hendrickson testified that there was an agreement between Dr.
Ginsberg and Mr. McIntire under which Dr. Ginsberg would receive the $8/s.f. tenant
standard allowance and that, in addition, Dr. Ginsberg would personally expend up to
$100,000.  If the build-out of the medical suite exceeded the combined amount, as it did by
$45,632.77, then, as Hendrickson described the agreement, KPC would carry the amount as
an open account until Dr. Ginsberg could pay.  Thereafter, when Mrs. McIntire did not make
loans to KPC to the same extent as did Dr. Ginsberg, the latter credited his excess
"advances" against his obligation for excess build-out.  Those credits were carried until 1994
when, on the advice of counsel, they were reversed.
Mrs. McIntire's position in the trial court did not challenge that there was a special
arrangement concerning Dr. Ginsberg's build-out, but she did question the length of time the
$45,632.77 obligation to KPC remained outstanding and the lack of any interest payments
while KPC was carrying this loan to Dr. Ginsberg.  Mrs. McIntire claimed that the principal
-18-
     No issue concerning the computation of damages is presented in this appeal.
3
amount should have been paid by January 1, 1990.  The jury agreed and awarded $45,632.77
to KPC with interest from January 1, 1990, compounded at eight percent per annum.   
3
Appellees' position in this Court is that Mrs. Ginsberg should have collected the debt
due to KPC from her husband.  But the evidence is that Dr. Ginsberg was paying on the debt
by crediting the excess of his advances over those of the other fifty percent stockholder and
that by this method the principal was reduced to about $24,000.  The record does not inform
us of the reason why counsel advised reversing those credits in 1994, and there is no basis
in the evidence for considering that Mrs. Ginsberg should have anticipated that advice.
Consequently, there is insufficient evidence to hold Ms. Ginsberg liable on the claim for
non-payment of the excess build-out.
The jury also found Mrs. Ginsberg liable for the failure to collect passthroughs from
the P.A. and from the other tenants.  Dr. Ginsberg testified that early in 1988 he and Mrs.
McIntire agreed to split the passthroughs, that is, each of the two owners would absorb the
expenses that otherwise could be passed on to the tenants as additional rent.  Dr. Ginsberg
said that the agreement recognized that Merrill Lynch was paying a very high rent, and the
owners did not want to increase that rent by charging the passthroughs as well.  With respect
to the second floor, he said that the agreement recognized his services in managing the
building.  
-19-
Mrs. McIntire testified in rebuttal that there was no agreement to forego passthroughs,
and the jury believed Mrs. McIntire.  There is no direct evidence as to what explanation, if
any, was given to Mrs. Ginsberg with respect to the non-payment of passthroughs.  Mrs.
McIntire chose not to call Mrs. Ginsberg as an adverse witness in order to explore Mrs.
Ginsberg's knowledge of the details of KPC's business.  On the record before us the jury
could only speculate whether Mrs. Ginsberg was knowingly aiding and abetting Dr. Ginsberg
in violating the rights of the other shareholder or whether Mrs. Ginsberg in good faith
believed that the arrangement between her husband and Mrs. McIntire was as described by
him in his testimony.
The core of Mrs. McIntire's argument for liability of Mrs. Ginsberg on the claims
reviewed above is that Mrs. Ginsberg had a duty to collect monies due to the corporation.
Here, a determination of whether monies were due to KPC involved a credibility
determination adverse to Mrs. Ginsberg's husband.  She was thus in a position of conflicting
interests, but she was put in that position with the approval of John McIntire, acting as one
of the two directors of KPC.  This divided loyalty does not in and of itself constitute a breach
of duty by Mrs. Ginsberg as treasurer.  Compare Goldman v. Rubin, 292 Md. 693, 708, 441
A.2d 713, 722 (1982) (appointment as personal representatives by testator of four of the five
directors of the corporation founded by testator caused personal representatives to deal with
themselves as directors "as inexorably as if the will had expressly so directed").  Further,
Mrs. Ginsberg was not in a position, acting alone, to bring an action in the name of the
-20-
     The motion was made by counsel for Mrs. Ginsberg, but, inasmuch as the motion, if
4
granted, would benefit all defendants, we consider that all non-nominal defendants joined
in the motion.
corporation or to cause the corporation to sue its president, sole surviving director, and fifty
percent stockholder.  
The judgment against Mrs. Ginsberg also includes a claim that KPC paid an amount
of interest on its refinanced loans that was beyond that supportable by a proper business
judgment, and the claim includes interest on that excess interest.  There is no evidence that
Mrs. Ginsberg negotiated those loans, or recommended them to the corporation, or had the
authority to commit the corporation to those loans.
For the foregoing reasons, the judgment against Mrs. Ginsberg will be reversed.
IV
Prior to opening statements the defense moved in limine "that if [Thompson] testifies
that there be no reference to his present occupation in his testimony."   The expressed
4
concern was that this would prejudice the jury.  The court denied the motion, observing that
"[a]ll witnesses who come and take the stand bring with them whatever history, background
or the like they have."  Appellants contend that the ruling was erroneous and that the
resulting repeated references to Thompson as Judge Thompson so improperly prejudiced the
jury that a new trial is required.  
Mrs. McIntire's threshold response is that a motion in limine does not preserve the
issue for appeal.  She contends that it was necessary for the defendants to object at the time
-21-
the references to Judge Thompson were made.  We do not agree.  That which the motion
contemplated would happen did in fact happen.  Inasmuch as the court had already ruled that
it would not prevent the jury from learning that Thompson had become a judge of the Circuit
Court for Montgomery County, there was no need for the defense to insist on the court's
reiterating the same ruling when Thompson was referred to as a judge, unless counsel
considered that the particular circumstances created some special prejudice.
In opening statement counsel for Mrs. McIntire referred to Judge Thompson.  By way
of example we set forth the following passage: 
"[Powell], after the aborted foreclosure sale, hires a lawyer in
Montgomery County named Durke Thompson.  Durke Thompson is now a
Circuit Court judge, as is Judge Beard [the trial judge].  Judge Thompson is
going to testify in this trial.  
"And Judge Thompson, then Mr. Thompson, is saying to the bank,
everybody is saying to Ginsberg and their lawyers, where is the lease?  Do not
know, does not matter, same terms.  
"Thompson is saying to the bank and the bank's lawyers, do you have
a copy of this lease?  This lease here?  The bank is saying, no, we do not have
anything like that.  And ultimately, Judge Thompson was suspicious, as was
Mr. Powell."
In the opening statement on behalf of Dr. Ginsberg, his counsel said: 
"At which point, Durke Thompson, who is now a Judge, but was then
an attorney, files a petition to take a deposition at the bank.  Everybody knows
in advance that the lease is coming up at this deposition.
"It is in the files.  It is not someone who walks in with it at the last
minute.  It is not a surprise.  We knew exactly what we were doing when we
went there to get this deposition."
-22-
After Mrs. McIntire and Powell had testified, Thompson took the stand.  The
introductory portion of his testimony is set forth below: 
"[Mrs. McIntire's Counsel]:  I call Judge Durke Thompson.
....
"Q
Judge Thompson, good afternoon.  
"A
Good afternoon.
"Q
Are you employed, sir?
"A
Yes, I am.
"Q
How are you employed?
"A
I am a judge here in the Circuit Court for Montgomery County.
"Q
The same court that we are in, like Judge Beard?
"A
Yes.
"Q
All right.
"A
Right upstairs, in fact.
"Q
And how long have you been a Circuit Court judge?
"A
It will be two years this minute [sic].
"Q
Prior to your appointment as a Circuit Court judge in the Circuit
Court for Montgomery County, did you have occasion to represent Mrs.
Virginia McIntire?
"A
Yes, I did.
"Q
... You are here pursuant to subpoena?  Is that accurate?
"A
That is correct.
-23-
"Q
And it is your order to be here just like anybody else?
"A
That is correct."
With but one exception there was no objection to the substance of Thompson's
testimony on direct.  The objection was sustained to Thompson's statement that it struck him
as "unusual" that the February 21, 1987 lease was not with the other documents in Citizens'
file.
On cross-examination, the first words from Dr. Ginsberg's counsel were, "Judge
Thompson."  On cross by counsel for Mrs. Ginsberg, the first words were, "Two questions.
Judge, good afternoon." 
A principal defense in this case was limitations.  The trial court submitted that issue
to the jury, instructing that damages could not be awarded for wrongs that could reasonably
have been discovered before June 1991. 
In the opening phase of final arguments for the plaintiffs, Mrs. McIntire's counsel
argued that the lease dated September 1, 1987, was not in fact prepared until after John
McIntire's death.  In the course of that argument counsel submitted: 
"[H]ow willing [was Dr. Ginsberg] to answer just a simple question [with] a
simple answer, yes, no, I do not know, as opposed to a story which was
completely motivated by Durke Thompson's discovery of this document, Judge
Thompson?
"If Judge Thompson had not discovered this document, [Dr. Ginsberg]
would have gotten away with it.  Now, not only that, but his story on this
transaction on the 21st is impossible.  It could not have happened that way."
Further: 
-24-
     These rules effect a 180-degree alteration from the early common law.  6 Wigmore,
5
Evidence § 1909, at 761 (Chadbourn rev. 1976), states:  "That a judge may give testimony
as a witness in a trial before a court of which he is a member seems in the classical English
practice not to have been doubted, though the precedents are scanty." 
"Never once, ever, until this dispute started, after Durke Thompson had
discovered that document, did [Dr. Ginsberg] ever talk about a $16 ... lease to
the outside world, never once and never once."
Counsel for Mrs. Ginsberg made the summation on behalf of all defendants.  Of
relevance to the restrictions sought by the motion in limine is the following passage from that
argument: 
"The plaintiff called Judge Thompson, and I have no disagreement with
what that man did.  Judge Thompson inquired of the bank to see if they had
any leases other than this $16 lease, and I do not think they would respond to
him. 
....
"So Judge Thompson was a lawyer.  He took a records deposition.  ...
"He succeeded where the doctor did not.  Judge Thompson did the right
thing.  He found the document.  It is the same document that Dr. Ginsberg was
looking for.  Remember, he signed it.  He gave it to Mr. McIntire.  He did not
know what happened to it, and it has been seven years." 
The prohibition which the defendants sought by their motion in limine is well
removed from the central prohibitions against judicial testimony.  Maryland Rule 5-605
states flatly that "[t]he judge presiding at the trial may not testify in that trial as a witness.
No objection need be made in order to preserve the point."  See also Fed. R. Evid. 605.5
Maryland Rule 16-813, the Maryland Code of Judicial Conduct, Canon 2 B, in part provides:
"A judge should not use the prestige of judicial office to advance the private interests of
-25-
others ....  A judge should not testify voluntarily as a character witness."  The commentary
to Canon 2 B points out that, "[t]he testimony of a judge as a character witness injects the
prestige of judicial office into the proceeding in which a judge testifies and may be
misunderstood to be an official testimonial."
Canon 2, in its various manifestations in our sister states, has been used as the starting
point for analysis of issues concerning testimony by judges.  For example, in Fuller v.
Wolters, 119 Idaho 415, 807 P.2d 633 (1991), relied upon by Dr. Ginsberg, the Canon stated
that "'[e]xcept in a proceeding involving him personally or in response to an official
summons, a judge shall not testify as witness in any court proceeding.'"  Fuller, 807 P.2d at
639.  In that case the trial court had prohibited two judges who were under subpoena for the
defense in a legal malpractice case from testifying as to their opinion of the competence of
the attorney who was sued.  Id.  The trial court was held not to have abused its discretion
because it had 
"correctly considered the danger of unfair prejudice which could result if a
judge testifies.  A judge brings the authority of his office to the stand, and
jurors might be likely to give greater weight to his testimony than to the
testimony of other witnesses.  Furthermore, the trial court reached his
conclusion 'with consideration that other competent experts who are not sitting
judges may be called by counterdefendant's attorneys to assist the jury in
issues they must decide.'" 
Id.
It has also been held to be "prejudicial to one party for a judge to testify as an expert
witness on behalf of the other party with respect to matters that took place before him in his
judicial capacity."  Merritt v. Reserve Ins. Co., 34 Cal. App. 3d 858, 883, 110 Cal. Rptr. 511,
-26-
528 (1973) (bad faith failure to settle).  In reliance on Merritt, Cornett v. Johnson, 571
N.E.2d 572 (Ind. Ct. App. 1991), held that a judge who heard the action underlying a legal
malpractice action should not testify in the subsequent suit.  Id. at 575.  Similarly, McCool
v. Gehret, 657 A.2d 269 (Del. 1995), held that, at the trial of a severed claim for tortious
interference, based on witness intimidation, the judge who presided over a prior proceeding
should not testify that, in the judge's opinion, the witness was very effective at the prior
proceeding.  Id. at 278-81.  Similarly, in an action for legal malpractice in defending a
prosecution,  the judge who presided over the criminal trial and who was to testify that the
government's case was weak, was properly excluded as a witness.  See Battle v. Thornton,
646 A.2d 315, 325 (D.C. 1994).  Relying on the commentary to Canon 2 B, the court in State
v. Grimes, 235 N.J. Super. 75, 561 A.2d 647, cert. denied, 118 N.J. 222, 570 A.2d 976
(1989), held that a judge could not be an expert witness on an issue of local law, even if that
testimony were otherwise admissible.  Grimes, 561 A.2d at 649-50.
In Joachim v. Chambers, 815 S.W.2d 234 (Tex. 1991), a legal malpractice case, the
court held that "[a] judge who testifies as an expert witness for a private litigant provides
more than evidence; the judge also confers the prestige and credibility of judicial office to
that litigant's position, just as a judge who testifies to the litigant's character."  Id. at 238.  In
a bad faith failure to settle case the Supreme Court of Appeals of Virginia spoke of the "air
of unfairness [that] crept into the trial below" when the United States district judge who had
heard the underlying action testified for the plaintiff and advised the jury that he had been
-27-
appointed by the President of the United States and confirmed by the United States Senate.
Aetna Cas. & Sur. Co. v. Price, 206 Va. 749, 760, 146 S.E.2d 220, 227 (1966).  
Reversing a judgment for the defendant in a legal malpractice case, the court in
Helmbrecht v. St. Paul Ins. Co., 117 Wis. 2d 74, 343 N.W.2d 132 (Ct. App. 1983), aff'd in
part and rev'd in part on other grounds, 122 Wis. 2d 94, 362 N.W.2d 118 (1985), referred
to the danger that the jury would give undue weight to the testimony of the judge who had
tried the underlying action.  Helmbrecht, 343 N.W.2d at 135.  The court concluded that
judges should not be permitted to testify as expert witnesses because judges should be
impartial but expert witnesses frequently appear to be advocates.  Id.  
When a judge is subpoenaed as a fact witness, however, the prohibitions are not
nearly as stringent.  An example is United States v. Frankenthal, 582 F.2d 1102 (7th Cir.
1978), where the Government called in rebuttal the judge who had previously been assigned
to the case but who had recused after a longtime family friend of the defendants engaged the
judge in conversation about the case.  Id. at 1105-06.  The friend testified for the defense
and, on cross-examination, admitted telling the judge that a trial of the case, as scheduled,
would hurt the defendants' business, but the witness denied discussing the outcome of the
trial.  Id. at 1105.  On rebuttal the judge testified that the witness was concerned about the
effect of a conviction on the business.  Id. at 1106.  Rejecting an argument that the probative
value of the judge's testimony was outweighed by the unfair prejudice derived from the
authority and prestige of the judge's office, the court pointed out that the judge gave only
factual testimony and emphasized that the judge, "possessed factual knowledge that was
-28-
highly pertinent to the jury's task, and he was the only possible source of testimony on that
knowledge."  Id. at 1108.  Nevertheless, the court did agree with the defendants "to the
extent that calling a judge to give testimony in any proceeding is a very delicate matter."  Id.
at 1107.
Other cases considering testimony by a judge concerning earlier proceedings over
which the judge had presided also have cautioned against calling a judge as a witness.  The
Colorado intermediate court in People v. Drake, 841 P.2d 364 (Colo. Ct. App. 1992),
articulated a standard of necessity, saying:
"[T]here is no statutory or ethical prohibition in Colorado preventing a judge
from testifying as a witness in a case not on trial before that judge about
matters arising in a former trial over which that judge presided.  Nevertheless,
given the weight to which a jury might accord such evidence and given the
judge's other duties, we view the practice of doing so as one which should be
sparingly used and only when the proponent of the evidence shows that the
judge's testimony is not only relevant but also necessary to prove a material
element of the case."
Id. at 368.  There, in a prosecution for perjury of a witness at a prior trial, the state called the
judge who presided over that trial to testify as to the material issues.  Id. at 367.  Because
those issues could have been proved by other evidence, the appellate court concluded that
there had been no necessity to call the judge.  Id. at 368.  This was not plain error, however,
inasmuch as the defense was duress.  Id.  Drake's standard was quoted favorably in Battle,
646 A.2d at 325.
Much the same approach has been taken by the Supreme Court of Connecticut.  In
Gold v. Warden, State Prison, 222 Conn. 312, 610 A.2d 1153 (1992), a prisoner petitioning
-29-
for habeas corpus relief contended that he was incompetent at the time of his conviction,
Gold, 610 A.2d at 1154, and the state called the judge who had presided over the criminal
trial to testify as to the petitioner's demeanor at that trial.  Id. at 1156.  The court recognized
that "[a] judge is not disqualified and is a competent witness to testify at a new trial or
collateral proceeding to observed facts that occurred before him or her at a former trial or
proceeding," id. at 1157, and that "an examination of the mental processes of a judge in
arriving at a judicial decision should not be permitted."  Id. n.11.  Further, the court said that
"[w]e do not encourage the calling of a judge as a witness in subsequent proceedings in a
case over which the judge presided.  Where there is a compelling need for a judge's
testimony as to observed facts in order that justice be done, however, a judge is a competent
witness and should not be precluded from testifying."  Id. at 1157 (citation omitted).
Because the judge-witness had been afforded "a unique opportunity to observe the
petitioner's demeanor throughout the entire trial," there was a "compelling need" for the
judge to testify in the habeas corpus proceeding.  Id.
More analogous factually to the case now before us is People v. Jordan, 205 Ill. App.
3d 116, 562 N.E.2d 1218 (1990), appeal denied, 136 Ill. 2d 549, 567 N.E.2d 337 (1991).
Jordan was a prosecution for the rape and murder of an eleven-year-old child.  Jordan, 562
N.E.2d at 1219.  The accused had confessed to a prosecuting attorney who became a circuit
court judge before the criminal case came to trial.  Id. at 1220.  By motion in limine the
accused unsuccessfully sought to prevent the jury from being told that the former prosecutor-
-30-
witness was employed as a judge.  Id. at 1221.  This denial was affirmed on appeal on the
following rationale:
"In the present case, we cannot say that the trial court manifestly abused
its discretion in denying defendant's motion in limine.  Certainly, the jury was
entitled to know that [the former prosecutor] was now employed as an
associate judge in Du Page County.  The reason for this is that the witness'
occupation and related background is of value to the jury in determining the
credibility of the witness and his testimony."
Id.
Although the motion in limine in Jordan was denied, the trial court instructed the state
not to refer to the witness as judge.  Id.  During direct examination of the witness the state
referred to him as "judge" nine times and in final argument referred to the witness as judge
four times.  Id.  On appeal the defendant argued that the cumulative effect of these references
was improperly prejudicial.  Id.  This argument was not successful because the jury knew the
witness's occupation and because the defense had also referred to the witness as a judge.  Id.
at 1222.
In the instant matter the testimony elicited from witness Thompson did not concern
any judicial activity of Judge Thompson.  His testimony was limited to factual matters that
were relevant to the case and that occurred while he was practicing law.  The evidence,
however, that the $20/s.f. lease was first obtained on a records deposition to perpetuate
evidence was available from sources other than Thompson.  Indeed, the deponent, the
custodian of records at Citizens, testified to the same facts, but this does not mean that the
evidence given by and through Thompson was unnecessary and that he should not have been
-31-
called.  The principal defense in this case was the statute of limitations, inasmuch as Dr.
Ginsberg had been paying $16/s.f. rent since 1987.  There was evidence that Hendrickson
annually reviewed the general ledger with Mrs. McIntire, but Mrs. McIntire did not sue until
1994.  Faced with a serious limitations problem, Mrs. McIntire was not required to try her
case in a sterile fashion.  She was entitled to present the evidence through the attorney who
was hired to search for the February 21 lease and thus emphasize the difficulty of the
investigation as a justification for the delay.  The fact that the attorney had become a judge
in the interim did not preclude this tactic. 
Inasmuch as Mrs. McIntire had a right to call her former attorney as a fact witness,
the jury was entitled to hear that the witness was, at the time of testifying, a circuit court
judge in Montgomery County.  It is simply a part of the customary, preliminary background
examination of any fact witness.  What we said in Baltimore v. Zell, 279 Md. 23, 367 A.2d
14 (1977), is apropos here:
"It is a routine practice in trials for an attorney to ask his witness certain
preliminary questions which may not be relevant to the issues being litigated,
which may go beyond mere identification and which are designed to show that
the witness will be somewhat credible or not biased in favor of the side calling
him.  For example, the educational background or professional status or
employment position of a non-expert witness may be asked, or the witness's
lack of prior contact with the side who has called him may be brought out.
These questions give the jury some knowledge of the individual and a more
complete perspective in considering his testimony."
Id. at 28, 367 A.2d at 17.
We point out that the issue under review is the denial of the defendants' motion in
limine.  During opening statements, the eliciting of evidence, and final argument, both sides
-32-
repeatedly referred to "Judge" Thompson, but the defendants did not object to any of these
references by Mrs. McIntire.  Thus, the defendants did not consider that the particular
circumstances surrounding the use of the title, "judge," on any particular occasion caused the
use of the title to be any more prejudicial than had been indicated in the argument in support
of the motion in limine.  
V
We summarize.  
CJudgment against Dr. Ginsberg for compensatory damages of $1,049,852.87 on
Count I in favor of KPC and for punitive damages of $360,000 on Count III in favor of Mrs.
McIntire are affirmed.  
CJudgment against Mrs. Ginsberg on Count I is reversed.
CJudgment against the P.A. for compensatory damages of $236,812.52 (including
$36,980 in attorney's fees and $2,979.27 in expenses) in favor of KPC on Count II is
affirmed.  The extent to which any satisfaction of the judgment against the P.A., in whole
or in part, operates as satisfaction of the judgment against Dr. Ginsberg is not ripe.
JUDGMENTS OF THE CIRCUIT COURT FOR
MONTGOMERY 
COUNTY 
AGAINST
APPELLANTS,  STEPHEN P. GINSBERG AND
STEPHEN P. GINSBERG, M.D., P.A., ARE
AFFIRMED. 
 
JUDGMENT 
AGAINST
APPELLANT, 
RUTH 
GINSBERG, 
IS
-33-
REVERSED.  COSTS TO BE PAID SIXTY-SIX
AND TWO-THIRDS PERCENT BY THE
APPELLANTS, STEPHEN P. GINSBERG AND
STEPHEN P. GINSBERG, M.D., P.A., AND
THIRTY-THREE AND ONE-THIRD PERCENT
BY VIRGINIA A. McINTIRE, ONE OF THE
APPELLEES.
Judge Eldridge concurs in the result only.
-34-