The property at issue was 3143 Elmora Avenue. Monica D.
Allen filed suit against Hard Assets and Jay Dackman on behalf of her minor
children, Monica Allen and Shantese Thomas. They claimed negligence and
violations of the Maryland Consumer Protection Act.
The plaintiffs moved into the property in 1999, where the
childrens' grandmother, Tracy Allen, had been residing. According to the
grandmother, she had been residing at the property pursuant to a lease she
entered into with Mildred Thompkins, the record title holder at the time. After
the plaintiffs moved into the property, Hard Assets acquired the property from
Ms. Thompkins, but was not aware that Ms. Thompkins had leased the property to
plaintiffs. When Hard Assets obtained title, it intended to sell it.
Once Hard Assets became aware that the plaintiffs were
residing at the property, Hard Assets commenced ejectment proceedings. In
October 2000, plaintiffs and the grandmother were forcibly removed from the
property and Hard Assets finally sold the property, pursuant to its original
business plan, in March 2001. During the one-year period in which Hard Assets
held title to the property Hard Assets never received rent nor did it file
collections for rent from the plaintiffs or the grandmother. Furthermore,
plaintiff Monica Allen did not know of Hard Assets or Mr. Dackman.
While residing at the property, the minor children allegedly
suffered elevated blood lead levels. Some of their elevated blood levels
occurred prior to Hard Assets' acquisition of the property, while their highest
blood lead levels occurred while Hard Assets held legal title to the property.
The plaintiffs filed suit claiming negligence and violations to the Consumer
Protection Act.
Mr. Dackman filed a motion for summary judgment arguing that
he could not be personally liable as a matter of law. The Circuit Court for
Baltimore City granted that motion for summary judgment and the Court of Special
Appeals affirmed. The intermediate appellate court found that Mr. Dackman could
not be held liable for negligence because he was not the "owner" or "operator"
of the property, as defined by the Baltimore City Housing Code. Furthermore, the
intermediate appellate court found that Mr. Dackman could not be held liable
under the Consumer Protection Act because neither he nor Hard Assets executed
the lease with the plaintiffs or their family.
The Court of Appeals of Maryland granted certiorari and
determined that the lower courts were incorrect in granting and affirming
summary judgment in favor of Mr. Dackman. The Court held that Mr. Dackman "could
be held liable for petitioners' injuries because a reasonable trier of fact
could find he was an "owner" of the property as the Housing Code defined that
term, and could find that he personally committed, conspired, or participated in
the tort alleged in the case." The Baltimore City Code defines owner as:
Any person, firm, corporation. . . .who. . . .owns, holds,
or controls the whole or any part of the freehold or leasehold title to any
dwelling or dwelling unit, with or without accompanying actual possession
thereof.
See Balt. City Code, Art. 13, § 105(jj). At issue in this
case is § 702 of the Housing Code which requires that every building used or
occupied as a dwelling be kept in good repair and safe condition, one of which
is a requirement that all walls, ceilings, woodwork, doors and windows be kept
clean and free of flaking, loose or peeling paint and paper.
Mr. Dackman first argued that he could not be an owner of
the property as defined in the Housing Code. Mr. Dackman pointed to evidence
that he personally had no ability to purchase and sell the property or that he
could affect or change the condition. The Court disagreed and found that
evidence could support a reasonable finding that he was an owner as he had the
ability to change or affect the title to the property purchased in the name of
Hard Assets. Because the facts show that Mr. Dackman was responsible for the
day-to-day affairs of Hard Assets when the property was acquired and that he
sold the property, the trier of fact could find enough evidence to show that he
controlled the property and could be considered an owner. Additionally, Mr.
Dackman executed the deed of certification when Hard Assets acquired the
property, and he signed the complaint seeking removal of the plaintiffs. He also
signed a deed when Hard Assets sold the property.
Even if Mr. Dackman can be considered an owner, Mr. Dackman
argued that he cannot be liable because his involvement with the property was
through Hard Assets, the entity that owned the property. A member of an LLC is
generally not liable for torts committed by the LLC. The Court expanded
corporate officer liability to members of limited liability companies under the
City Housing Code § 301(b), which provides that "individual directors, officers,
agents or a corporation" can be held personally liable. A member of an LLC may
be liable for torts when he or she personally commits, conspires, or
participates in the tort, not because she is a member of the LLC, but because he
or she is committing the wrong.
Here, the trier of fact could conclude that Mr. Dackman was
personally liable for the plaintiffs' injuries as he managed Hard Assets on a
daily basis. Negligent maintenance of the property is alleged here, it is
possible that Mr. Dackman may have personally directed another person to inspect
or not inspect the property. That could be sufficient basis for the trier of
fact to conclude that the respondent, Mr. Dackman, committed, conspired, or
participated in a tort. That could support personal liability.
Lastly, Mr. Dackman argued that he could not be held liable
to the plaintiffs because he owed them no duty. There are two bases for this
argument. First, Mr. Dackman argues that the Housing Code imposes no duty upon
him because the plaintiffs did not have a right to possess the property. He
points to the lower court's decision that the plaintiffs were wrongfully in
possession. The Court disagreed and found that the plaintiffs need only show a
violation of the Code and that the violation proximately caused their injuries.
At that point, the case would go to the trier of fact. The Housing Code
specifically protects occupants of dwellings, being those who actually use or
possess the premises. See Balt. City Code, Art. 13, Section 105(gg).
Accordingly, it is of no consequence that the plaintiffs were found to be in
wrongful possession because they were still in actual possession of the
premises. The plaintiffs were within the class of persons that the Housing Code
was intended to protect.
Second, Mr. Dackman argues that the Housing Code did not
impose a duty on him because he did not execute the lease of the property.
Again, the Court emphasizes that the Housing Code applies to any person who is
an owner or operator of the property.
Any owner or operator shall be liable for violations of the
Code, regardless of whether they intended to leave the property. Thus, Mr.
Dackman could be found personally liable for the alleged violations of the
Baltimore City Housing Code, despite the fact that he did not execute the lease
with the plaintiffs.
Accordingly, the Court underscores that the Baltimore City
Housing Code's intent is to protect the safety of occupants and dwellings.
Owners and operators have the duty to keep dwellings in a safe condition.
Although Mr. Dackman did not hold title to the property personally, a trier of
fact could find he controlled the property enough to warrant personal tort
liability. The case was remanded to the Circuit Court for Baltimore City.
The Honorable Judge Harrell dissented, in which The
Honorable Judge Adkins joined. They agreed with the majority opinion that the
determination as to whether Mr. Dackman qualified as an owner fell under the
City Housing Code definition of owner which is the ability to change or affect
the title of the property. As Mr. Dackman did not have, in his individual
capacity, an ability to change or affect the title, the dissenting opinion finds
that Mr. Dackman was not and could not have been an owner of the property. The
facts show that Mr. Dackman executed the deed of certification, signed the deed
when Hard Assets sold the property, acting in his capacity as a member of Hard
Assets, LLC. As such, those facts cannot support the conclusion that Mr. Dackman
had, in his individual capacity, the ability to change or affect title to the
property.
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