Court Opinion

ID: 2967402
Source: CourtListenerOpinion
Date Created: 2015-09-22 02:31:03.363889+00
Date Added: 2024-06-11T12:48:49.784426
License: Public Domain

FILED: April 18, 2001

                            PUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT

UNITED PACIFIC INSURANCE COMPANY,       
                 Plaintiff-Appellant,
                 v.
DEBORAH S. EAST,
               Defendant-Appellee,
                and
DEWEY EAST EXCAVATING COMPANY,
INCORPORATED,

                                        
                      Defendant,
                                                   No. 00-1851
JOSEPH GREENWALD AND LAAKE, PA;
BURNS LAW FIRM; CITIZENS NATIONAL
BANK; ESTATE OF DEWEY FRANK
EAST, JR., Deborah Sue East,
Personal Representative of the
Estate of Dewey Frank East, Jr.;
DEBORAH SUE EAST, Personal
Representative of the Estate of
Dewey Frank East, Jr.; PAINE
WEBER, INCORPORATED,
                         Garnishees.
                                        
           Appeal from the United States District Court
            for the District of Maryland, at Greenbelt.
                 Peter J. Messitte, District Judge.
                         (CA-99-311-PJM)

                      Argued: February 28, 2001

                       Certified: April 18, 2001
2                    UNITED PACIFIC INS. v. EAST
    Before WIDENER, NIEMEYER, and LUTTIG, Circuit Judges.

Certification Order, entered by Judge Niemeyer with the concurrence
of Judge Widener and Judge Luttig.

                             COUNSEL

ARGUED: Edward Graham Gallagher, WICKWIRE GAVIN, P.C.,
Vienna, Virginia, for Appellant. John Douglas Burns, THE BURNS
LAW FIRM, Greenbelt, Maryland, for Appellee.

                              ORDER

To the Honorable Chief Judge and Judges of the Court of Appeals of
Maryland:

                     CERTIFICATION ORDER

   Acting under Maryland Code Annotated, Courts and Judicial Pro-
ceedings Article §§ 12-603, 12-605, and 12-606, this court certifies to
the Court of Appeals of Maryland for answer the following two ques-
tions:

      I. Whether money paid to and held by a widow’s attor-
         neys in settlement of a malpractice claim that the
         widow filed on behalf of her husband is "money pay-
         able" so as to be exempt from execution under Md.
         Code Ann., Cts. & Jud. Proc. § 11-504(b), exempting
         from execution on a judgment "[m]oney payable in the
         event of sickness, accident, injury, or death of any per-
         son, including compensation for loss of future earn-
         ings."

     II. Whether the exemption statute’s inclusion of "compen-
         sation for loss of future earnings" violates Article III,
                     UNITED PACIFIC INS. v. EAST                    3
         § 44, of the Maryland Constitution, which reads, "Laws
         shall be passed by the General Assembly, to protect
         from execution a reasonable amount of the property of
         the debtor."

This court acknowledges that the Court of Appeals of Maryland may
reformulate these questions.

   The facts from which these questions arise are not in dispute. Deb-
orah East’s husband died on December 10, 1996, while in a hospital
in Prince George’s County, Maryland. Following routine surgery on
his neck, he experienced internal bleeding in his neck, which caused
increased pressure on his throat and airway and ultimately caused his
death. East filed a medical malpractice claim against several health-
care providers. Count I was a wrongful death claim, and Count II a
survivorship claim filed by her husband’s Estate for pain and suffer-
ing. The case was settled on December 16, 1999, for $1,000,000, and
the Prince George’s County Circuit Court allocated $975,000 to
East’s wrongful death claim and $25,000 to the Estate’s claim. After
attorneys fees were paid, East’s lawyers held for East the remaining
funds from the $975,000. The firm of Joseph, Greenwald and Laake,
P.A., held $356,909.60, and The Burns Law Firm, L.L.C., held
$265,779.75. The parties agree that these funds include compensation
for loss of future earnings.

   Following her husband’s death, East continued to operate her hus-
band’s excavating business, Dewey East Excavating Company, Incor-
porated, of which she became president and the sole stockholder. In
order to obtain performance and payment bonds for public works
projects, East was required to execute an indemnity agreement in
favor of the bonding company, United Pacific Insurance Company.
She signed the indemnity agreement as president of Dewey East
Excavating Company and individually. When United Pacific Insur-
ance was required to pay substantial losses, it brought this action
against East and her company under the indemnity agreement and
obtained a summary judgment against them on July 22, 1999, in the
amount of $304,454.01, plus interest.

  Union Pacific Insurance sought to enforce its judgment against
East and her company by garnishing the sums held by Joseph, Green-
4                     UNITED PACIFIC INS. v. EAST
wald and Laake, P.A. and the Burns Law Firm, L.L.C. The writs of
garnishment were served on the firms in January 2000 and April
2000, respectively. East thereupon invoked the exemption provided
by Md. Code Ann., Cts. & Jud. Proc. § 11-504(b), and filed a motion
to release these proceeds from levy pursuant to Federal Rule of Civil
Procedure 69 and Maryland Rule 2-643.

   By order dated May 31, 2000, the United States District Court for
the District of Maryland granted East’s motions, dissolved the writs
of garnishment, and declared the proceeds held by the law firms
exempt from judgment. The court reasoned that these proceeds consti-
tuted "[m]oney payable in the event of sickness, accident, injury, or
death of any person" and thus were exempt from judgment under Md.
Code Ann., Cts. & Jud. Proc. § 11-504(b). United Pacific Insurance
appealed the judgment to this court.

   On appeal before this court, United Pacific Insurance contends that
because the malpractice claim settlement proceeds were paid to and
held by East’s representatives, the monies have already been paid and
therefore do not constitute "money payable" within the meaning of
the Maryland exemption statute. In the alternative, United Pacific
Insurance argues that the exemption of compensation for lost future
earnings violates Article III, § 44, of the Maryland Constitution,
which reads, "Laws shall be passed by the General Assembly, to pro-
tect from execution a reasonable amount of the property of the
debtor." East, on the other hand, contends that the money held by her
attorneys is "money payable" and that to give the term "payable" the
meaning ascribed to it by United Pacific Insurance would defeat the
exemption altogether. She also argues that the proceeds protected by
the statutory exemption are reasonable and that the statute therefore
does not violate the Maryland Constitution. Because we are unaware
of any controlling decisions of the Maryland state courts on these
determinative questions, we believe that they are properly subject to
review by the Maryland Court of Appeals on certification. See Md.
Code Ann., Cts. & Jud. Proc. § 12-603.

    The names and addresses of counsel of record for the parties are:

      Counsel for United Pacific Insurance
      Edward G. Gallagher, Esquire
                     UNITED PACIFIC INS. v. EAST                    5
    Wickwire Gavin, P.C.
    8100 Boone Boulevard, Suite 700
    Vienna, Virginia 22182

    Counsel for East
    John Douglas Burns, Esquire
    The Burns Law Firm, L.L.C.
    6303 Ivy Lane, Suite 102
    Greenbelt, Maryland 20770

   Accordingly, pursuant to the privilege made available by the Mary-
land Uniform Certification of Questions of Law Act, it is hereby
ORDERED:

    (1) That the questions stated above be, and the same
        hereby are, certified to the Court of Appeals of Mary-
        land for answer; and

    (2) That the clerk of this court forward to the Court of
        Appeals of Maryland, under the official seal of this
        court, a copy of this order, together with the original
        or copies of the record before this court to the extent
        requested by the Court of Appeals of Maryland; and

    (3) That any request for all or part of the record be ful-
        filled by the clerk of this court simply upon notifica-
        tion from the clerk of the Court of Appeals of
        Maryland.

This Order is entered by Judge Niemeyer, with the concurrences of
Judge Widener and Judge Luttig.

                           United States Court of Appeals for the
                           Fourth Circuit

                              by /s/ Paul V. Niemeyer
                                            for the Court

Dated: April 18, 2001