FRIEDMAN, J.
As a minor, Appellant Tyron White participated in a lead reduction treatment study facilitated by Appellee Kennedy Krieger Institute. White alleges that while enrolled in the study, and as a result of the tortious conduct of Kennedy Krieger Institute, he was exposed to harmful levels of lead that caused irreparable brain injuries. The trial court dismissed several of White's claims on motions and the jury rejected those that survived. On appeal from the Circuit Court for Baltimore City, White raises three issues that we have reordered and reworded:
For the reasons that follow, we shall affirm the judgments of the circuit court.
This case arises out of a research study conducted by Kennedy Krieger Institute ("KKI") in Baltimore City in the 1990s called the Treatment of Lead-Exposed Children Study, which was known as the "TLC Study." The TLC Study originated as a partnership between the National Institute of Environmental Health Sciences ("NIEHS"), the Office of Research and Minority Health of the National Institutes of Health, and four separate Clinical Centers in separate cities managed by different entities. KKI oversaw and managed the TLC Study at the Baltimore City Clinical Center. The TLC Study was designed to study methods of addressing the high incidence of lead poisoning in inner cities. The TLC Study involved two components: (1) to evaluate the effects of the oral chelating agent, succimer,
Once a child was referred to the TLC Study, a KKI investigator would review the TLC Study pre-enrollment informed consent form ("pre-enrollment consent form") with the parents of the eligible child. The relevant sections of the pre-enrollment consent form are as follows:
The pre-enrollment consent also described what the pre-enrollment process entailed:
Specifically, the pre-enrollment consent forms explained how KKI would conduct an initial assessment of the child's home at the pre-enrollment stage as part of the environmental component.
If KKI determined that a child was eligible for the study, the pre-enrollment consent form explained that KKI would arrange for trained workers to return to the child's house and "[v]acuum and wet-wash floors, window sills, window wells and other surfaces ... to remove as much lead dust and loose chips of paint as possible, [m]ake some repairs, if the owner has special approval for a loan, [and p]rovide you with information on how you can reduce lead exposure in the home." Assessment guidelines were governed by the TLC Protocol. KKI used the same standardized home assessment forms that were used at all Clinical Centers. Depending on the results of the assessment, the home was either professionally cleaned to remove existing lead dust and paint chips, or parents were provided with information on relocating to "lead safe" housing.
Upon completion of the pre-enrollment screening stage, KKI representatives would then provide parents with the TLC Study enrollment informed consent form ("enrollment consent form") to complete the child's enrollment in the study. For our purposes, the relevant portions are set out below.
The enrollment consent form also highlighted the various benefits that KKI expected all children participating in the TLC Study to receive. Specifically, KKI told parents that it would inspect the home for the presence of lead dust and chipped paint, "clean-up the lead dust in your home," provide the child with vitamins and minerals, provide regular medical checkups for the child, check the child's blood lead levels "regularly and carefully," and test the child's thinking and development.
In the medical treatment component of the study, KKI sought to determine whether succimer, which had previously been used only for children with extremely elevated blood lead levels (in excess of 44 mcg/dL), could also be used to treat children with moderately elevated blood lead levels between 20 and 44 mcg/dL. All
The medical treatment component of the TLC Study was "double blind," meaning that neither KKI nor the parents of the children knew whether the child was given the placebo or the succimer until the completion of the treatment period. To maintain the double blind nature of the TLC Study, blood test results were reviewed by a separate physician who did not have any contact with the parents during the treatment period. That physician did not report the results to KKI, but rather to the central TLC Data Coordinating Center run by the Harvard School of Public Health in Boston.
If, after the first round of succimer treatment, a participant child's blood lead level remained above 15 mcg/dL, the Data Coordinating Center was required to advise KKI to conduct a retreatment for both placebo and succimer recipients (to maintain the double blind nature of the study). According to the TLC Study Protocol, there were two circumstances where the Data Coordinating Center was required to notify KKI of an individual child's blood test result. First, if the child's blood lead level was 45 mcg/dL or higher, the Data Coordinating Center was required to direct KKI to retest the child's blood within three days. If the child's blood lead level measured 45 mcg/dL or higher after the retesting, the child's participation in the TLC Study treatment would have paused, and the child would have been treated in accordance with KKI's normal protocol for children with lead levels above 44 mcg/dL, including succimer treatment. Second, if the child's blood lead level measured above 60 mcg/dL, participation in the TLC Study would have ended immediately and the child would have been treated according to KKI's treatment protocols for children with lead levels above 60 mcg/dL.
Ultimately, in 2001 the results of the TLC study were published. The researchers found that:
Walter J. Rogan, MD et al., The Effect of Chelation Therapy with Succimer on Neuropsychological Development in Children Exposed to Lead, 344 New Eng. J. Med. No. 19, 1421 (2001). The researchers ultimately concluded that because "lead poisoning [is] entirely preventable, our inability to demonstrate effective treatment lends further impetus to efforts to protect children from exposure to lead in the first place." Id. at 1426.
Appellant Tyron White ("White") was two years old when a blood test revealed that he had a blood lead level of 43 mcg/dL. His physician at East Baltimore Medical Center then referred White's mother, Carolyn Riddick, to the TLC Study. In August of 1995, Ms. Riddick met with KKI research investigator, Dr. Cecilia Davoli, who reviewed the pre-enrollment consent form with Ms. Riddick and explained the objectives and the process of the study.
After receiving the test results, Ms. Riddick scheduled White for another pre-enrollment visit that was conducted on August 21, 1995. At that time, Ms. Riddick signed another pre-enrollment consent form that was identical to the first. White was retested and his blood lead level measured 39 mcg/dL, which was within the TLC Study eligibility range. White's rental home at 1107 Gorsuch Avenue was then inspected by KKI on August 23, 1995, but it was determined not to be cleanable because of its poor condition and high levels of lead contamination. As a result, White remained ineligible for the TLC study.
Ms. Riddick relocated to 3215 Tinges Lane in October of 1995. She contacted KKI and a KKI inspector determined the new property to be cleanable. At this point, White was eligible for enrollment in the TLC Study. Ms. Riddick signed the enrollment consent form on October 3, 1995, thus completing White's enrollment. KKI hired a contractor to perform a "lead clean" of the Tinges Lane property shortly thereafter.
In January of 1996, only four months later, Ms. Riddick decided to move again. She testified at trial that a KKI social worker not involved with the TLC Study, Kristy Council, provided her with a list of "lead safe" properties and drove Ms. Riddick around to view the homes. From the list provided, Ms. Riddick selected a property at 642 Gorsuch Avenue. Ms. Council assisted Ms. Riddick to obtain $375 to pay for the security deposit.
A KKI inspector looked at the Gorsuch property in February 1996 and determined that it qualified for TLC Study purposes. KKI hired a contractor to perform a "lead clean" of the 642 Gorsuch Avenue property in April of 1996. According to KKI records, lead dust sampling conducted by KKI before and after the professional cleaning revealed that after the professional cleaning, lead dust levels actually increased in four of the seven sampled areas.
On July 13, 2011, White filed suit against numerous defendants, including KKI, alleging that he suffered significant brain injury as a result of toxic lead exposure. In his complaint against KKI, White alleged that he suffered toxic lead exposure resulting from KKI's tortious design and implementation of the TLC Study. In Counts 40-42, White alleged that KKI negligently and intentionally misrepresented the lead-based paint hazards in his home during the time that he was in the
The trial court granted judgment in favor of KKI pursuant to Md. Rule 2-519 at the close of plaintiff's case in White's claims of negligent and intentional misrepresentation (Counts 40-42), and violation of the CPA (Count 44). The only issue presented to the jury was whether KKI negligently failed to properly review and oversee the TLC Study. On April 29, 2014, after a lengthy trial, the jury returned a verdict in favor of KKI, finding that KKI did not act negligently in planning and implementing the TLC Study. This appeal followed.
Although lead paint cases are not new to Maryland courts, this case is rather unique in light of White's claims against KKI and, as a result, his heavy reliance on the Court of Appeals's decision in Grimes v. Kennedy Krieger Institute, 366 Md. 29, 782 A.2d 807 (2001), to inform much of his argument. To our knowledge, the applicability of the Grimes decision has not been revisited in depth by a Maryland court since the Court of Appeals denied reconsideration of its Grimes decision in October 2001. Because of the central role that the Grimes opinion plays in the case at hand, we begin our discussion with an in-depth look at the facts of that case and the conclusions reached by the Court of Appeals.
The facts giving rise to the Grimes litigation arose from another research study facilitated by KKI in the 1990s — the Evaluation of Efficacy of Residential Lead Based Paint Repair and Maintenance Interventions, ("R & M Study") — that sought to test the effectiveness of varying levels of lead abatement procedures in rental housing units in Baltimore City. Grimes, 366 Md. at 36, 782 A.2d 807. The R & M Study aimed to find cheap, yet effective, environmental lead clean-up interventions that would still protect children but be economically feasible for landlords of low income rental housing units. Id. at 51, 782 A.2d 807.
The R & M Study consisted of five test groups of homes with varying levels of lead and lead intervention. Id. at 50, 782 A.2d 807. Groups 1 through 3 were homes with known lead paint contamination that received different levels of repair and maintenance. Id. at 53, 782 A.2d 807. Group 4 consisted of fully abated homes that required no additional repair or maintenance, and Group 5 homes were constructed after 1980 and did not have any lead paint. Id. at 54, 782 A.2d 807.
To measure the success of the various abatement levels, KKI needed families with young children to live in the R & M Study homes, and consent to routine blood lead level tests for their small children for a period of two years. Id. at 37, 49-50, 782 A.2d 807. In some instances, KKI helped landlords receive federal funding for the abatements, and then encouraged or required the landlords to rent partially abated homes to families with young, otherwise healthy children. Id. at 36-37, 782 A.2d 807. "It was anticipated that the children, who were the human subjects in the program, would, or at least might, accumulate lead in their blood from the dust, thus helping the researchers to determine the extent to which the various
Id. at 44-45, 782 A.2d 807. The Court of Appeals concluded that the rights of each individual child unknowingly subjected to dangerous conditions outweighs any interests of the researcher in promoting the public good. Id. at 104, 782 A.2d 807.
The Court of Appeals in Grimes was particularly outraged by what it understood to be KKI's failure to warn parents of the risks of participating in the R & M Study both at the informed consent stage, and as risks became known or foreseeable during the study. Id. at 99, 782 A.2d 807. The consent forms signed by the parents did not explain that the success of the various levels of abatement was to be measured, in part, by the extent to which their children's blood was contaminated with lead. Id. at 38, 782 A.2d 807. Additionally, KKI failed to warn parents during the study that their children's blood lead levels were increasing. In the case of Ericka Grimes, appellant and one of the child subjects, KKI tested her home for the presence of lead after performing a partial abatement. Id. at 58, 782 A.2d 807. However, KKI did not reveal the results of the test that identified several lead "hot spots" until nine months later, after Ericka Grimes had already been lead poisoned. Id. at 59, 782 A.2d 807.
The central legal question addressed by the Court of Appeals was what duty of care a researcher owes to the study participants. The Court specifically limited its holding to a nontherapeutic research study, which it defined as one that "generally utilizes subjects who are not known to have the condition the objectives of the research are designed to address ... [and] is not designed to directly benefit the subjects utilized in the research, but, rather... the public at large." Id. at 36 n. 2, 782 A.2d 807. In addressing the scope of the researcher's duty to research subjects in such a nontherapeutic study, the Court of Appeals in Grimes reached several conclusions:
Id. at 113-14, 782 A.2d 807. The Court of Appeals reversed the trial court's grant of summary judgment and remanded based on the grounds that there were material facts in dispute as to whether a special relationship existed which would have imposed certain duties on KKI. Id. at 48, 782 A.2d 807.
Judge Irma Raker concurred in the result only. Judge Raker criticized the "mixed message" sent by the Grimes majority "as to whether the existence of a tort duty arising from a special relationship existed is a question of law for the court or a question to be determined by the trier of fact." Id. at 115-16, 782 A.2d 807. Specifically, Judge Raker highlighted the following two self-contradictory pronouncements of the Court: (1) "We hold that informed consent agreements in nontherapeutic research projects ... can, as a matter of law [as determined by the trial judge], constitute `special relationships' giving rise to duties;" and (2) "The determination as to whether a special relationship exists, if properly pled, lies with the trier of fact [in this case, the jury]." Id. at 113-114, 782 A.2d 807. The majority did not clarify this aspect of the decision in response to Judge Raker's criticism.
After the Grimes opinion was issued, KKI filed a motion for reconsideration, which was supported by a joint amicus brief from the Association of American Medical Colleges, the Association of American Universities, the University of Maryland Medical System, and Johns Hopkins University. Appellee's Br. in Supp. of Mot. to Recons., Grimes, 366 Md. 29, 782 A.2d 807 (2001), recons. denied (Oct. 11, 2001), available at <http://perma.cc/WJ82-9NHV>; Br. of Amici Curiae Assoc. of Am. Med. Coll., Ass'n of Am. Univ., Johns Hopkins Univ., and Univ. of Md. Med. Sys. Corp. in Supp. of Appellee's Mot. for Recons., Grimes, 366 Md. 29, 782 A.2d 807 (2001) recons. denied (Oct. 11, 2001), available at <http://perma.cc/ET6Z-GUVQ>. The research community was concerned that the Grimes decision would effectively prohibit any research involving children even if the research institution complied with all applicable federal regulations regarding research using children. Id.; Anna C. Mastoianni and Jeffrey P. Kahn, Risk and Responsibility: Ethics, Grimes v. Kennedy Krieger, and Public Health Research Involving Children, 92 Am. J. Pub. Health 1073, 1074 (Jul.2002). This concern stemmed from the Grimes majority's apparent conclusion "that parents in the state of Maryland could not consent to their minor children's participation in research that posed even a minimal risk of harm if it offered no prospect of direct
Two months after issuing the opinion in Grimes, and in light of the various concerns raised on reconsideration, the Court of Appeals denied the motion, albeit with a large caveat. In denying the motion, the Grimes Court claimed that "the only conclusion that we reached as a matter of law was that, on the record currently before us, summary judgment was improperly granted." Grimes, 366 Md. at 119, 782 A.2d 807. Further, the Court clarified:
Grimes at 120, 782 A.2d 807. Judge Raker dissented from the denial of the motion for reconsideration both restating the concerns she raised in her original concurring opinion, as well as noting her opposition to the majority's "declaration[s] of public policy that, in the posture of this case, are best left to the General Assembly." Id.
The first issue that we address is whether the trial court erred by refusing to provide White's requested jury instructions. White asked the trial court to instruct the jury on two issues regarding KKI's duty of care: (1) the duty of care imposed by the execution of a consent form in a research study under Grimes; and (2) on the evidence of negligence arising from the violation of federal regulations. Regarding the former, White frames his argument in large part using dicta from Grimes, and asks us to find that Court of Appeals's discussion of a researcher's duty to the research subject in Grimes is both the applicable law in Maryland, and applicable to the facts of this case, thereby mandating that the trial court provide his requested jury instruction. The latter are based on the federal regulations pertaining to informed consent in research studies. For the reasons that follow, we affirm the ruling of the trial court and hold that the jury instructions requested by White were not compelled.
There are "three components that must be met to include a proposed jury instruction in the ultimate charge to the jury: `(1) the instruction is a correct statement of law; (2) the instruction is applicable to the facts of the case; and (3) the content of the instruction was not fairly covered elsewhere in instructions actually given.'" Wood v. State, 436 Md. 276, 293, 81 A.3d 427 (2013) (quoting Dickey v. State, 404 Md. 187, 197-98, 946 A.2d 444 (2008)); see also Gunning v. State, 347 Md. 332, 348, 701 A.2d 374 (1997) (same). We review the denial of a proposed jury instruction under the highly deferential abuse of discretion standard, and we will hold that the trial court was within its discretion to exclude all of White's proposed instructions. See id. at 292, 81 A.3d 427.
Proposed instruction 36 dealt with the duty owed by a researcher to a subject under Grimes, in particular the duty of the researcher to warn of known and foreseeable
White argues that proposed instruction 36 was necessary to adequately explain to the jury the scope of the researcher's duties under Grimes.
In denying White's instructions on the duty of care owed under Grimes, the trial court stated, "I'm willing to describe the duty, as Grimes sets forth in here, based on their special relationship as researcher and study participant. I'm just not willing to define that duty, and I don't think Grimes does either, based on — based on what's in the consent form." Instead, the jury instructions given at trial were:
The trial court also provided the same instructions to the jury by way of a typewritten verdict sheet. The jury specifically concluded that although Kennedy Krieger owed a duty to White, there was no breach of that duty.
As described above, we must determine whether White's proposed Grimes instruction was a correct statement of law, applicable to the facts of the case, and not otherwise fairly covered by the given instructions. Wood, 436 Md. at 293, 81 A.3d 427. For the reasons that follow, we conclude that the trial court did not abuse its discretion by refusing to provide White's requested jury instruction.
We begin our analysis by discussing whether the instruction was a correct statement of the law. As we stated above in our discussion of Grimes, the only enduring holding in that case was that on the facts of the case before it, the trial court's
Even if we were to incorporate the pre-reconsideration "holdings" of the Grimes Court, White's proposed instruction 36 was still not required by law because Grimes did not definitively specify the scope of a researcher's duty. The duty to warn identified by White in his proposed instruction 36 is discussed by the principal Grimes opinion in dicta, and within the limited context of a factual finding that a special duty may be created when a researcher is in a superior position to identify risks. To this point, the Grimes court explained:
Grimes, 366 Md. at 102, 782 A.2d 807 (emphasis supplied). Thus, at most, pre-reconsideration Grimes stood for the proposition that in certain circumstances, a duty may exist between the researcher and research subject. In the context of a special relationship resulting from the execution of an informed consent agreement (the context in which White frames his proposed jury instruction), Grimes did not define the scope of the duties owed by the researcher. Id. at 113, 782 A.2d 807. Instead, the Grimes majority found generally that under such circumstances, a special relationship may exist "giving rise to duties, out of the breach of which a negligence action may arise." Id. Therefore, even considering the prior holdings and dicta of Grimes, White's proposed jury instruction 36 misses the mark because the duty he identifies — to provide full, detailed, prompt, and continuing warnings — is contingent on the factual finding of the existence of a special relationship arising from the researcher's superior position of knowledge. The duty identified by White is not, as he asserts, a broad, over-arching duty that automatically attaches; rather, it only arises in a limited context. For this reason, White's proposed instruction does not accurately reflect the law, and is therefore not required under the first prong of the Wood analysis.
Moreover, under the second prong of the Wood analysis, proposed instruction 36 was not required by the facts of the case. We conclude that the benefits provided by KKI to all research participants in the TLC Study are sufficient to remove the TLC Study from the purview of Grimes. In Grimes, the Court addressed the potential existence of a special relationship in the limited context of a nontherapeutic research study "that promises no medical benefit to the child whatsoever." Grimes, 366 Md. at 120, 782 A.2d 807. The particular situation addressed by Grimes involved "researchers recruit[ing] people,
We hold that the TLC Study at issue in this case was a therapeutic rather than nontherapeutic study. We come to this conclusion in large part because the TLC Study sought "to directly help or aid a patient who is suffering from a health condition the objectives of the research are designed to address." Grimes, 366 Md. at 36 n. 2, 782 A.2d 807 (comparing and contrasting therapeutic and nontherapeutic research studies). Although White's counsel characterizes the TLC Study as nontherapeutic, he does not dispute the underlying facts that demonstrated that it was therapeutic, thus distinguishing the TLC Study from the R & M Study.
First, while the R & M Study took otherwise healthy children and placed them in potentially hazardous conditions, the TLC Study recruited only children who already exhibited elevated blood lead levels. In Grimes, "[i]t was anticipated that the children ... would, or at least might, accumulate lead in their blood from the dust, thus helping the researchers to determine the extent to which the various partial abatement methods worked." Grimes, 366 Md. at 38, 782 A.2d 807. In contrast, in the TLC Study, KKI either cleaned homes in which the children were already living, or provided them with information on how to relocate to safer housing. No research subjects in the TLC Study were placed in more harmful conditions than they were already experiencing.
Second, one of the main goals of the TLC Study was to reduce every participant's further exposure to lead, and every participating child was provided with a number of benefits designed to improve health and reduce the effects of existing elevated blood lead levels. All participating children received vitamin and mineral supplements, regular medical check-ups, their homes were professionally cleaned, their parents were taught how to further reduce lead exposure in the home through regular cleaning, and their parents were provided with special cleaning materials and cleaning instructions to further reduce lead dust exposures.
Third, in counter-distinction to the R & M Study, we note that under the TLC Study Protocol, if blood tests revealed that a child's blood lead level had increased beyond 44 mcg/dL, parents would be notified and KKI would begin individualized treatment of the child. Participants in the TLC Study would benefit from the early detection of severely elevated blood lead levels resulting from their increased access to medical screenings.
For all of these reasons, we hold that the TLC Study is different from the R & M Study in meaningful ways that make it a therapeutic study, thereby taking it out of the factual scope of Grimes. Therefore, White's requested jury instruction under Grimes is not factually applicable in the present context of a therapeutic study.
White's proposed instruction 36 is also factually inapplicable to the TLC Study because the researchers in the TLC Study lacked the special knowledge that Grimes explained may give rise to special duties. Even if White's proposed instruction 36 properly reflected the holding of the Grimes Court (that a special relationship may be created by the researcher's special knowledge that in turn gives rise to a duty to warn), it would still fail on the facts of the TLC Study. In Grimes, the special knowledge that the researchers had — but that the parents lacked — was knowledge of the child subjects' elevated blood lead levels. Here, however, the TLC Study was double blind, and pursuant to the TLC Study Protocol, KKI was not notified of the results of an individual child's blood lead levels unless the child's blood lead level went above 44 mcg/dL.
Proposed instruction 36 was also covered, although imperfectly, by the negligence instruction provided by the trial court in satisfaction of the third prong of the Wood analysis. In fact, the trial court instructed the jury that if they found that White was a participant in a human research study, they must find that KKI
Proposed instructions 33-33D pertained to guidelines for adequate informed consent under federal law, particularly the Federal Food Drug and Cosmetic Act, 21 CFR § 50 et seq. White argues that the federal regulations pertaining to the adequacy of informed consent are relevant because, under Grimes, the informed consent process is the source of the duty of care owed to the research subject. See Grimes, 366 Md. at 113, 782 A.2d 807. ("[I]nformed consent agreements in nontherapeutic research projects, under certain circumstances can constitute contracts;... that, under certain circumstances ... can, as a matter of law, constitute `special relationships' giving rise to duties."). Therefore, White argues that any breach of the federal regulations regarding informed consent is evidence of a breach of that duty.
The trial court rejected White's proposed federal regulation instructions 33-33D primarily on the ground that they were inapplicable to the remaining negligence claim being presented to the jury. Because the only count that went to the jury was whether KKI negligently oversaw the TLC study, the trial court asked "what is the duty of the researcher towards [the subject] while they're study participants[?]... Because that's what we have ... I mean the consent has really no applicability here." The trial court further then elaborated, "Grimes does say ... duty can be created by statute ... it seemed to me the only thing that will be applicable in this case would be some statute or reg[ulation] that would govern how a researcher is supposed to deal with their study participants." The trial court then declined to provide instructions 33-33D.
We turn briefly to the legal sufficiency of White's proposed jury instructions 33-33D under the first prong of the Wood analysis. Proposed instruction 33 generally explained that White was "enrolled into an FDA Drug Research Clinical Trial [g]overned in part by the Federal Food Drug and Cosmetic Act" and also subject to the legal requirements of the Baltimore City Code. Therefore, White requested that the jury be instructed that "[v]iolations of the provisions of that law which are designed to protect people enrolled in drug studies is evidence of [n]egligence on the part of ... KKI." Instructions 33A-33D are taken directly from 21 CFR §§ 50.20, 50.23, 50.55, & 46.11 respectively, and pertain to the federal requirements for informed consent when an entity solicits the participation of children in a research study. Neither party challenges that these proposed instructions accurately reflect the federal requirements for informed consent, but rather the dispute lies with their applicability to the facts of the underlying case. Having determined that the requested instructions accurately reflect the federal regulations as they pertain to informed consent, we now turn to the second prong of the Wood analysis.
Under the second prong of the Wood test, we must determine whether the proposed instructions were required by the
Principally, proposed instruction 33B is derived from the federal guidelines on nontherapeutic research studies, and for the reasons discussed above, we have held, and the parties do not seriously contest, that the TLC Study was therapeutic for all participants.
For all these reasons, we find no error in the trial court's discretionary decision to exclude White's requested jury instructions.
White's second challenge concerns whether an infant can maintain an action in tort for fraudulent or negligent misrepresentation in the absence of direct, personal reliance on the false statement. White complains that the trial court erred in dismissing his misrepresentation claims on the grounds that White failed to demonstrate the necessary element of reliance to sustain the action. For the reasons that follow, we uphold the judgment of the trial court, albeit on different grounds.
White alleges that KKI is liable for negligent misrepresentation (Count 40) and fraudulent misrepresentation (Count 42) by making five specific misrepresentations regarding the premises at which White resided during his participation in the TLC Study. In particular, White alleges that KKI misrepresented that: (1) the premises were "lead safe"; (2) the premises were in habitable condition; (3) the premises would be maintained in a habitable condition during White's tenancy; (4) the premises were in compliance with all applicable statutes, codes, and regulations pertaining to rental properties at the inception of White's tenancy; and (5) that the premises were safe for White's residence. In Count 41, White also alleges that KKI negligently misrepresented the risk of harm to White from his participation in the TLC Study. Specifically, White claims that KKI knew that White's property contained lead dust hazards and that White was at risk for lead poisoning if he remained in the property, but told White's mother that there was no risk of harm from his continued participation in the TLC Study.
At the close of evidence, the trial court granted KKI's motion for judgment as to all claims of fraudulent and negligent misrepresentation. The trial court's ruling was based solely on the grounds that White failed to establish the element of reliance, which is required for both fraudulent and negligent misrepresentation claims:
The trial court did note that in Maryland, a third party may successfully bring a misrepresentation action so long as the third party can demonstrate individual reliance. White's claim failed, according to the trial court, because, due to his infancy, he could not demonstrate individual reliance on any misrepresentations made to his mother.
The question before us then is whether parental reliance may be imputed to an infant in the context of misrepresentation
We address fraudulent and negligent misrepresentation in turn, beginning with fraudulent misrepresentation. To prevail on a claim for fraud, a plaintiff must prove by clear and convincing evidence that "(1) the defendant made a false representation to the plaintiff, (2) the falsity of the representation was either known to the defendant or the representation was made with reckless indifference to its truth, (3) the misrepresentation was made for the purpose of defrauding the plaintiff, (4) the plaintiff relied on the misrepresentation and had the right to rely on it, and (5) the plaintiff suffered compensable injury as a result of the misrepresentation." Hoffman, 385 Md. at 29, 867 A.2d 276 (emphasis supplied). The key question we must address is what constitutes adequate reliance.
Reliance at its core is the action or inaction of a party that results from the misrepresentation of another. Nails v. S & R, Inc., 334 Md. 398, 416-17, 639 A.2d 660 (1994) (holding that reliance exists if "the misrepresentation substantially induced the plaintiff to act"). Reliance can either be direct or indirect, in part depending on whether the misrepresentation was directly made to the individual seeking relief. Maryland courts have recognized that third parties can successfully bring a misrepresentation claim "even when the allegedly fraudulent statement at issue was not made to him or her directly," so long as the individual can demonstrate direct or indirect reliance on the false statement. Exxon Mobil Corp. v. Albright, 433 Md. 303, 335-36, 71 A.3d 30 (2013).
Id. at 366, 71 A.3d 30 on reconsideration in part, 433 Md. 502, 71 A.3d 150 (2013) (citing Diamond Point Plaza Ltd. P'ship v. Wells Fargo Bank, 400 Md. 718, 929 A.2d 932 (2007)) (internal citations omitted).
The Court of Appeals has further elaborated that a party is liable to another who indirectly relies only in circumstances where the party either intended or expected the other to act or refrain from acting as a result of the fraudulent misrepresentation. Diamond Point Plaza Ltd. P'ship, 400 Md. at 741-42, 929 A.2d 932 (finding that liability extended to Diamond Point because they had reason to expect borrowers in the secondary market would consider, and be influenced by, the fraudulent loan documents); see also Hill v. Brush Engineered Materials, Inc., 383 F.Supp.2d 814, 820-21 (D.Md.2005) ("`Maryland law has long allowed plaintiffs to sue for injuries caused by fraudulent misrepresentations made to third parties,' so long as the plaintiff could reasonably have been expected to act or refrain from action in reliance upon the misrepresentation.") (quoting Maryland Nat. Bank v. Resolution Trust Corp., 895 F.Supp. 762, 772 (D.Md.1995)). In sum, the sufficiency of indirect reliance depends on whether the individual took action as a result of the misrepresentation, and whether the party making the false statement reasonably foresaw or intended the individual to take such action.
In this case, White's theory is that the alleged misrepresentations were made by KKI to Ms. Riddick to secure the participation of White in the TLC Study. As an infant, White's actions were governed by his parent. Ms. Riddick's decision to relocate or remain in a property naturally resulted in White staying or moving. Similarly, it was foreseeable that White's actions would be determined by his mother's decision to provide informed consent on his behalf. Indeed, this was the entire purpose of the informed consent process. If she consented, he would participate. If she didn't, he wouldn't. We hold that Ms. Riddick's reliance may be imputed to White, the infant, and may constitute a form of indirect reliance by inducing White to participate in the TLC Study.
We do not, as KKI claims, risk extending "virtually unlimited" liability to any party making a misrepresentation by eliminating the requirement of reliance for recovery in fraud. We are, in fact, not eliminating that element at all. The concept of indirect reliance is already well established in Maryland and we do not depart from it.
The objective of tort law is both to compensate victims, and deter unwanted societal behavior by increasing the cost to benefit ratio in the form of liability exposure. Schaefer v. Miller, 322 Md. 297, 332, 587 A.2d 491 (1991) (noting that the traditional purpose of civil tort law is to compensate
We therefore follow the law to its logical conclusion, and hold that parental reliance can be imputed to the infant as a form of indirect reliance when the misrepresentation is designed to cause actions by, or on behalf of, the infant. In doing so, we conclude that White generated a jury question about whether he demonstrated reliance by virtue of his participation in the TLC Study, which was precipitated by the alleged misrepresentations made to his mother, Ms. Riddick. However, for reasons we will discuss fully below, we hold that White is, nonetheless, not entitled to a new trial.
First, however, we turn to whether White is precluded from a successful claim of negligent misrepresentation because of a lack of personal reliance. We will conclude that the trial court erred in granting judgment in favor of KKI on the issue of reliance. The following elements are required to assert a claim for negligent misrepresentation: "(1) the defendant, owing a duty of care to the plaintiff, negligently asserts a false statement; (2) the defendant intends that his statement will be acted upon by the plaintiff; (3) the defendant has knowledge that the plaintiff will probably rely on the statement, which, if erroneous, will cause loss or injury; (4) the plaintiff, justifiably, takes action in reliance on the statement; and (5) the plaintiff suffers damage proximately caused by the defendant's negligence." Lloyd v. Gen. Motors Corp., 397 Md. 108, 135-36, 916 A.2d 257 (2007) (emphasis added). For the following reasons, we will hold that the trial court's insistence that White demonstrate direct, personal reliance is not required when the negligent misrepresentation creates a risk of physical harm as opposed to claims for pecuniary loss only.
Where a negligent misrepresentation is alleged to create a threat or risk of physical harm, Maryland courts appear to have adopted the position of Section 311 of the Restatement (Second) of Torts, which provides that:
Restatement (Second) of Torts § 311 (1965) (emphasis supplied). Thus, § 311 establishes that an actor may be liable in tort to a third party who neither hears, nor directly relies on any misrepresentation by the actor. Instead, the element of reliance necessary for a negligent misrepresentation claim can be satisfied indirectly by the reliance of the "other" who acts in reliance on the misrepresentation of the actor. The commentary to § 311 of the Restatement (Second) notes that the rule applies in limited settings where physical harm is at issue and:
Id. On two separate occasions the Court of Appeals of Maryland appears to have endorsed § 311's treatment of negligent misrepresentation. Lloyd v. Gen. Motors Corp., 397 Md. 108, 137, 916 A.2d 257 (2007) (acknowledging that under § 311 economic losses constitute cognizable injury); Village of Cross Keys v. Gypsum, 315 Md. at 754, 556 A.2d 1126 (noting in dicta the "rule" of § 311 that "negligent misrepresentation involving the risk of physical harm represents a somewhat broader liability than the rule relating to liability for pecuniary loss resulting from negligent misrepresentation"). Based on these decisions, limited though they are, we hold that § 311 has been adopted in Maryland and squarely applies to the facts of this case.
Under § 311, liability attaches when an actor negligently provides false information to a party who, acting in reliance on that information, causes physical harm to a third party. As Comment B points out, it is especially applicable when it is the actor's profession to provide information "upon which the safety of a ... third person depends." Restatement (Second) of Torts § 311 cmt. b. In essence, § 311 acknowledges a form of indirect reliance unique to negligent misrepresentations involving a risk of physical harm. That is exactly the situation presented to us now. In the context of securing White's participation in the TLC Study through the informed consent process, KKI should have expected that White was at risk of harm from any negligent misrepresentations it might have made to his mother. Therefore, under § 311, we hold that White has generated a jury question regarding the element of reliance.
Fowler v. Harper et al., The Law of Torts § 7.6 (2d ed.1996) (internal quotations and citation marks omitted). The kind of liability set out by § 311 that recognizes that the potential range of physical harm is significantly more narrow than economic harm is "commonly stated and, presumably, widely supported." Id. at § 7.6 n. 2. In sum, it is well recognized that when the misrepresentation results in a physical harm, and it was foreseeable that such a harm would result, a different rule is warranted, one that permits indirect reliance.
In tort law, foreseeability has always been the linchpin of liability. Board of
We conclude that requiring direct, personal reliance of the infant would constitute an unreasonable bar to the infant from recovery for tortious negligent misrepresentations made to their parents who gave informed consent on their behalf. For these reasons, the trial court erred in dismissing White's claims of negligent misrepresentation on the grounds that White failed to demonstrate reliance.
Having determined that White's infancy does not automatically preclude a claim of fraudulent or negligent misrepresentation, we now turn to KKI's alternative argument that White failed to meet his burden of proof in regard to the remaining elements of his misrepresentation claims. As the claims of fraudulent or negligent misrepresentation were dismissed by the trial court on KKI's motion for judgment, we review the sufficiency of the evidence de novo, and in the light most favorable to White. Gales v. Sunoco, Inc., 440 Md. 358, 102 A.3d 371 (2014). Evidence is legally sufficient if "reasonable jurors, applying the appropriate standard of proof, could find in favor of the plaintiff on the claims presented." Hoffman, 385 Md. at 16, 867 A.2d 276. We conclude that based on the evidence before the trial court, no reasonable jury could find that KKI made a misrepresentation, either negligently or fraudulently, to Ms. Riddick. Absent this prima facie element of both torts, White's fraudulent and negligent misrepresentation claims must fail.
We hold that these claims must fail despite the fact that the trial court denied KKI's initial motion for judgment on the grounds that at that point in the trial, White had presented sufficient evidence of misrepresentation to allow the claim to go to the jury:
As described above, the only specific finding that the trial court made when granting KKI's later, renewed motion for judgment was that White's fraudulent and negligent misrepresentation claims failed for lack of reliance. The sufficiency of the remaining elements was not revisited at that time. Thus, while we affirm the dismissal of fraudulent and negligent misrepresentation claims, we do so on different grounds than those relied on by the trial court.
We will briefly review the alleged negligent and fraudulent misrepresentations that comprise counts 40-42: (1) the premises were lead safe; (2) the premises were in habitable condition; (3) the premises would be maintained in a habitable condition during White's tenancy; (4) the premises were in compliance with all applicable statutes, codes, and regulations pertaining
The facts provided by White to support the aforementioned claims of misrepresentation are insufficient under the clear and convincing standard required in fraud claims, and also fail under the less stringent preponderance of the evidence standard for negligent misrepresentations. Even taken in the light most favorable to White, Ms. Riddick failed to demonstrate that KKI falsely represented to her that she and White would be provided with housing free from lead paint hazards by virtue of their participation in the TLC Study. In both the pre-enrollment consent
(emphasis supplied). The enrollment consent included similar language
(Emphasis supplied). At trial, Ms. Riddick testified that Dr. Davoli explained to her that regular cleaning was necessary to assure reduced lead levels in the home, and that someone from KKI explained to her how properly clean. Ms. Riddick was also given a bucket, mop, detergent, and instructions on how to wipe down surfaces in the home daily to keep the lead dust levels low.
Similarly, providing Ms. Riddick with a list of "lead safe" housing units, even taking the evidence in the light most favorable to White, was not a misrepresentation. White alleges that Ms. Riddick chose 642 Gorsuch Avenue off the list of
The final issue presented for our review is whether a party may be liable under the Maryland Consumer Protection Act for misrepresentations made to a consumer in the absence of a direct consumer transaction between the parties. As we discuss in more detail below, Maryland law extends potential liability under the CPA to a party who is not the direct seller when that party plays an "integral role" in the transaction and the misrepresentation sufficiently "infects" the sale or offer for sale. Nevertheless, in light of the facts presented to the trial court, we affirm the trial court's dismissal of White's CPA claim.
In Count 44 of the original complaint, White alleged that KKI violated the CPA by holding out certain properties as "lead safe," yet "failing to properly repair and abate the property before [White] moved
In granting KKI's motion as to Count 44, the trial court did not further elaborate on its reasoning other than to say "[m]aybe the Court of Special Appeals will deal with this relatively interesting issue."
We review the trial court's application of Maryland law de novo, and hold that the trial court erred in requiring proof of a direct consumer transaction between White and KKI for liability to attach under the CPA. See Baltimore Cnty. v. Aecom Servs., Inc., 200 Md.App. 380, 397, 28 A.3d 11 (2011) (citing Powell v. Breslin, 195 Md.App. 340, 6 A.3d 360 (2010)).
The CPA was enacted by the General Assembly for the purpose of providing "strong protective and preventive steps to investigate unlawful consumer practices, to assist the public in obtaining relief from these practices, and to prevent these practices from occurring in Maryland." Md. Com. Law ("CL") Ann.Code § 13-102(b)(3). The CPA prohibits an individual from engaging in:
CL § 13-303. An unfair or deceptive trade practice is defined in relevant part as a "[f]alse ... or misleading ... representation of any kind which has the capacity, tendency, or effect of deceiving or misleading consumers," including a representation that "[c]onsumer goods, consumer realty, or consumer services have a characteristic ... or quantity which they do not have." CL § 13-301(1)-(2)(i). "The gravamen of an `unfair or deceptive trade practice' under the Consumer Protection Act is whether the false or misleading statements or representations have the capacity, tendency, or effect of deceiving or misleading consumers.'" MRA Prop. Mgmt., Inc. v. Armstrong, 426 Md. 83, 110-11, 43 A.3d 397 (2012), (quoting the CPA) (internal citations omitted). The CPA squarely applies to leases and is designed in part "to protect consumers from unfair or deceptive trade
The Court of Appeals has held that "in limited circumstances, liability under the Consumer Protection Act may extend to one who is not the direct seller." MRA Prop. Mgmt., Inc., 426 Md. at 109, 43 A.3d 397 (quoting Hoffman, 385 Md. at 32, 867 A.2d 276); Morris v. Osmose Wood Preserving, 340 Md. 519, 541, 667 A.2d 624 (1995) ("It is quite possible that a deceptive trade practice committed by someone who is not the seller would so infect the sale or offer for sale to a consumer that the law would deem the practice to have been committed `in' the sale or offer for sale.") (internal quotations omitted). Liability has only been extended to third parties under the CPA in limited instances where the third party's actions were so integral that the sale of consumer goods would not have proceeded without their involvement. Hoffman, 385 Md. at 32, 867 A.2d 276, (finding that misleading appraisals directly infected the sale of property because the sale would not have proceeding to closing absent the appraisals); MRA Prop. Mgmt., Inc. 426 Md. at 109, 43 A.3d 397 (finding that a statutory obligation to provide materials to prospective buyers injected MRA and the Association into the sales transaction as central participants because a failure to provide the materials would have rendered the sale unenforceable). We hold that a third party's conduct may so infect a consumer transaction to expose that party to liability even where there is no direct commercial transaction between the third party and the consumer. Therefore, if the party making the misrepresentation to the consumer is not the direct seller, the fact-finder must determine whether the misrepresentation was sufficiently integral to infect the sale or lease of consumer goods.
We hold that the trial court erred to the extent that it required "White to show a direct consumer transaction between White and KKI for liability to attach under the CPA. Instead, the proper inquiry is whether KKI's actions regarding the leased properties were sufficiently integral to "so infect the sale or offer for sale" that a claim of consumer fraud under the CPA can survive a motion for judgment. Hoffman, 385 Md. at 32, 867 A.2d 276. Whether a party's involvement is sufficiently integral to a sale of consumer goods to bring it within the purview of the CPA is a determination based on the specific factual circumstances of each case.
Our holding reflects the prior holdings of the Court of Appeals, as well as the underlying purpose of the CPA to provide a broad remedy for consumers who are fraudulently induced into sale or lease transactions. CL § 13-102(b)(3). As was the situation in Hoffman, discussed supra at III.1, with the fraudulent appraisal scheme, circumstances may exist where the misrepresentations of a third party are a necessary component in a larger conspiracy to induce a consumer to buy or lease consumer goods. Such fraudulent practices fall squarely within the scope of behavior the CPA was designed to prohibit.
Additionally, applicability of the CPA to one who is not the direct seller does not risk overextension of liability in light of the clear limitations articulated by the Court of Appeals. We highlight that liability has only extended to a third party when the third party's misrepresentation was a necessary component in the sale or lease. In other words, it must be the case that the consumer transaction would not have proceeded absent the third party's misrepresentation. See MRA Prop. Mgmt., Inc., 426 Md. at 109, 43 A.3d 397. As stated by the Court of Appeals, and echoed now by
Having determined the legal standard for liability under the CPA, we now apply it to the case at hand to determine whether White introduced sufficient facts at the time of the motion for judgment to allow for the CPA claim to proceed to the jury. We will hold that White failed to demonstrate that KKI engaged in an unfair or deceptive trade practice, therefore we affirm the dismissal of his CPA claim.
White alleges that KKI engaged in a deceptive trade practice by representing to Ms. Riddick that certain properties were "lead safe," thus inducing her to enter into lease agreements. For the reasons we discussed at length above in Section III regarding Fraudulent and Negligent Misrepresentation, we hold that no reasonable jury could have found that KKI misrepresented to Ms. Riddick that "lead safe" meant that the property was completely free from lead hazards, and would remain free from lead hazards. Rather, KKI accurately described the presence of lead in the home. We, therefore, affirm the trial court and conclude that White's CPA claim was properly dismissed.
For the foregoing reasons, we affirm the judgments of the trial court.
One common critique is with the Grimes Court's characterization of the R & M Study as not being designed to benefit the study participants:
David R. Buchanan & Franklin G. Miller, Justice and Fairness in the Kennedy Krieger Institute Lead Paint Study: the Ethics of Public Health Research on Less Expensive, Less Effective Intervention, 96 Am. J. Pub. Health 781, 785 (May 2006).
Another frequently noted criticism is that, despite the Court of Appeals's efforts to clarify its original opinion, the medical research community remains unsure whether the clarification on the motion for reconsideration brought the majority opinion within the already existing federal guidelines on medical research studies, or if it stands for a more strict standard than required by federal law. Loretta M. Kopelman, Pediatric Research Regulations Under Legal Scrutiny: Grimes Narrows Their Interpretation, J. Law, Med. & Ethics 38, 41 (2002). ("From one point of view, Grimes and the federal regulations are entirely compatible, Grimes could be understood as focusing narrowly on the issue of negligence.... From another point of view, Grimes seemed to be a broadside assault on investigators' customary practices"); Roger L. Jansson, Researcher Liability for Negligence in Human Subject Research: Informed Consent and Researcher Malpractice Actions, 78 Wash. L.Rev. 229, 230 (2003) ("It remains unclear whether this definition sets a higher standard of care than the federal regulations, or merely interprets allowable risk under the regulations.").
Additionally, critics have noted that:
Diane D. Hoffmann & Karen H. Rothenburg, Whose Duty is it Anyway, supra at 16 at 111. Despite all of these criticisms, Grimes remains the law of Maryland and we are duty-bound to follow its holding as clarified by the supplemental opinion issued in response to the motion for reconsideration. Grimes, 366 Md. at 120, 782 A.2d 807.
Restatement (Second) of Torts § 310 (1965) (emphasis supplied). Though cited to in passing by the Court of Appeals in a small number of cases, § 310 has not been expressly adopted by Maryland courts. But see Gourdine v. Crews, 405 Md. 722, at 791 n. 14, 955 A.2d 769 (2008) (recognizing that although the plaintiff attempted to make a claim under Section 310, the plaintiff failed to establish the element of duty required to sustain that claim); see also Virginia Dare Stores v. Schuman, 175 Md. 287, 292, 1 A.2d 897 (1938) (referencing § 310 when noting that "the weight of authority in other jurisdictions" allowed for tort actions based on negligent misrepresentations). Section § 310 was likewise noted by the parties in this case only in passing.
In Angeletti, the Court of Appeals reversed a class certification for plaintiffs who claimed that they should be excused from proving reliance on an individual basis for their misrepresentation-based claims. Id. at 689, 752 A.2d 200. The Court noted that the plaintiffs, who alleged harm from cigarette smoke, appeared to be advancing a theory of "per se" fraud whereby defendants' inclusion of nicotine in cigarette products, a known addictive substance, allegedly demonstrated that defendants intended to addict cigarette smokers so that smokers would continue to purchase cigarette products. Id. at 752 n. 29, 752 A.2d 200. Plaintiffs asserted that evidence of personal reliance was therefore excusable under this "per se" fraud theory. Id. The Court denied class certification, in part, because reliance on a misrepresentation by a plaintiff, on an individual basis, is essential to a civil claim of misrepresentation. Id. Angeletti stands for the principle that a plaintiff must show reliance as an element of misrepresentation claims, but is silent on whether that individual reliance must be direct or, as here, indirect.
KKI also asserts that indirect third party reliance has been routinely rejected by Maryland courts for both fraudulent and negligent misrepresentation. However, with the exception of Angeletti, supra n. 17, the cases cited to by KKI do not deal with misrepresentations where a risk of physical harm is involved. See Green v. H & R Block, 355 Md. 488, 735 A.2d 1039 (1999) (dealing with a tax preparation company's duty to disclose its beneficial relationship with various lending institutions to which it refers customers); Sheets v. Brethren Mut. Ins. Co., 342 Md. 634, 679 A.2d 540 (1996) (involving negligent misrepresentations of the workable condition of a septic system, but not dealing with a risk of physical harm). As we will discuss in more detail in the following pages, courts adopt different rules depending on whether the misrepresentation involves a physical, as opposed to economic, resulting harm. While the cases cited by KKI correctly describe the element of reliance as it relates to situations where a plaintiff has suffered pecuniary harm, they fail to advance KKI's position in the present context where the harm to White is physical harm.
Md.Code Ann., Envir. § 6-801 (2012) (emphasis supplied). Thus, according to current Maryland law, a property need not be lead free to be considered lead safe. Further, the statute clarifies that:
Id. at § 6-815. The Code of Maryland Regulations specifies that a house may be considered "lead safe" even if it has lead-contaminated dust up to the following levels:
COMAR 26.16.02.02. The United States Department of Housing and Urban Development also uses the term "lead safe" to refer to housing that meets certain federal lead clearance standards, but not necessarily absolutely free from lead. Clearance, U.S. Dept. of Housing and Urban Dev., available at <http://perma.cc/RGD2-SMXV> (last visited Jan. 21, 2015). Thus, the term, at least now, has a clearly accepted meaning that a property need not be lead free but may contain lead dust within certain thresholds. In our view, this is consistent with what KKI represented at the time of the TLC Study.
The argument presented by White on appeal appears to be a more sophisticated legal argument, but rests on the same legal foundation offered at trial: that KKI's involvement brought it within the scope of the CPA despite the lack of a direct consumer transaction between KKI and Appellants. We hold that White sufficiently preserved his claim that KKI was integral to the lease transaction.