O'Brien & Gere Eng'rs. v. City of Salisbury , 447 Md. 394 ( 2016 )

O’Brien & Gere Engineers, Inc. v. City of Salisbury, No. 53, September Term, 2015,
Opinion by Adkins, J.
BREACH OF CONTRACT — LITIGATION PRIVILEGE — WAIVER OF
PRIVILEGE IN SETTLEMENT AGREEMENT: When a party brings a claim for
breach of contract based on statements that allegedly violate a non-disparagement clause,
the opposing party may avail itself of the litigation privilege for statements made by that
party’s counsel and witnesses in a judicial proceeding. In determining whether a party may
have waived that privilege by entering a contract with a non-disparagement clause, we
apply a rebuttable presumption against waiver in light of the important policies underlying
the privilege. A review of the contract in this case, a settlement agreement, shows that the
City of Salisbury did not waive the litigation privilege.
Circuit Court for Wicomico County
Case No.: 22-C-12-001782
Argued: January 11, 2016
IN THE COURT OF APPEALS
OF MARYLAND
No. 53
September Term, 2015
O’BRIEN & GERE ENGINEERS, INC.
v.
CITY OF SALISBURY
Barbera, C.J.
Greene
Adkins
McDonald
Watts
Harrell, Glenn T., Jr. (Retired,
Specially Assigned)
Wilner, Alan M. (Retired,
Specially Assigned),
JJ.
Opinion by Adkins, J.
Harrell, J. concurs and dissents.
Filed: April 26, 2016
The litigation privilege immunizes a party for statements made in a judicial
proceeding and is fundamental to the courts’ truth-finding mission. We have previously
analyzed this privilege only in the defamation context. Today we address two distinct
questions that arise out of a dispute between a city and a design engineer’s settlement
agreement to, among other things, not disparage one another. Can the litigation privilege
immunize a party from a claim for breach of a non-disparagement clause? If so, can a party
waive that privilege? We examine these questions to determine whether a trial court
correctly granted a motion to dismiss a complaint for failure to state a claim for breach of
contract.
FACTS AND LEGAL PROCEEDINGS
The Maryland Department of the Environment required the City of Salisbury (“the
City”) to upgrade its wastewater sewage treatment plant (“WWTP”). The City then
embarked on an $80 million large public works project by hiring O’Brien & Gere
Engineers, Inc. (“OBG”) as its design engineer and Construction Dynamics Group
(“CDG”) as its construction manager. The project failed because the WWTP did not work
as expected and required.
Believing it did not get what it bargained for, the City sued OBG and CDG, among
others, for various torts and breach of contract (“the WWTP Litigation”).
With the advice of their respective attorneys, the City and OBG settled their dispute
pursuant to an agreement (“the Settlement Agreement”) in June 2012. In pertinent part,
OBG agreed to pay the City $10 million in exchange for the City’s promise to release OBG
from all claims relating to the WWTP.
The City also made promises to OBG in the Settlement Agreement so that “OBG
[would] not hav[e] to expend any further monies in connection with” the WWTP Litigation
and would be protected “from any liability and expense associated with any [of the City’s]
claims” relating to the WWTP. First, the City agreed to defend, indemnify, and hold OBG
harmless if any party (whether in the WWTP Litigation or in any future claim the City
might bring) were to sue OBG “relating to the design or construction of or equipment
supplied for [the WWTP].” Second, the City agreed to indemnify and hold OBG harmless
if any such party obtained a judgment against OBG. Third, the City agreed that it would
reduce any damages it recovered if OBG was “determined to be a joint tortfeasor” because
of any final judgment. In exchange for these promises, OBG agreed to release the City
from all of its WWTP claims.
OBG and the City also agreed not to disparage one another about the WWTP
upgrade. The non-disparagement clause states:
The City and OBG mutually agree that they will not
make, or cause or encourage other persons or entities to make,
any disparaging remarks or comments about each other
relating to any matter having occurred prior to the effective
date of this Settlement Agreement or in the future relating
directly or indirectly to the Salisbury wastewater treatment
plant through any means, including without limitation, oral,
written or electronic communications, or induce or encourage
others to publicly disparage the other settling party. For
purposes of this paragraph, the term “disparaging” means any
statement made or issued to the media, or other entities or
persons that adversely reflects on the other settling party’s
personal or professional reputation and/or business interests
and/or that portrays the other settling party in a negative light.
2
The parties agreed that, in the event of a breach of this provision, the non-breaching party
“shall be” entitled to injunctive relief and reasonable attorney’s fees. OBG believes that
the City committed such a breach.
After the City released OBG from all claims relating to the WWTP Litigation, the
City pursued a claim for breach of contract against CDG (“the CDG Lawsuit”).1
On November 1, 2012, in his opening remarks to the jury, the City’s trial counsel,
Howard Goldberg, explained that “[the City] hired [CDG], and over the next three and a
half years paid them $2,786,462.43. And the City just simply didn’t get what they paid
for.” As to CDG’s obligations to the City, Goldberg stated: “[CDG was] to advise [the
City] of deficiencies which are discovered or suspected by the construction manager
[CDG] which involve the design of the project.” As to the deficiencies, Goldberg said:
“[M]ost of the problems were design problems created by the design engineer, [OBG].
And they [CDG] should have been advising the City of those problems.”2
1
Both the City of Salisbury (“the City”) and O’Brien & Gere Engineers, Inc.
(“OBG”) knew that the City would maintain a suit against CDG (“the CDG Lawsuit”) after
they executed their agreement (“the Settlement Agreement”). At the hearing on the City’s
motion to dismiss (“Amended Motion to Dismiss”), OBG’s counsel acknowledged: “So,
did we [OBG] know that the case was going to continue against CDG? Absolutely, we
did.”
2
To bolster the argument that CDG failed to perform its contractual duties,
Goldberg contended that CDG had a conflict of interest. That is, prior to contracting to
serve as the City’s construction manager, CDG had entered into an agreement with OBG
to secure another job in the District of Columbia. In Goldberg’s words, “they were in bed,
partners with the very engineering firm they were supposed to watch.”
3
CDG used its opening statements to establish that it was not responsible under its
contract to the City for any of the design issues at the WWTP.3 CDG averred that it caused
no harm to the City “because the project was built on time, on budget, and there were no
construction deficiencies.”
Also on the first day of trial, the City used its first witness, Dr. Enos Stover (“Dr.
Stover”), to explain to the jury the design problems that plagued the WWTP. On the second
day of trial, the City used its second witness, John Jacobs (“Jacobs”), to establish CDG’s
obligations to the City, specifically, to report issues relating to OBG’s design work. (“The
construction manager is to overview any design issues, they’re not to solve the design issue,
but at least raise the issue to the City so that we can resolve it.”).
When OBG caught wind of the City’s statements in the CDG Lawsuit through a
newspaper article, OBG sent a “cease and desist” letter to the City, but it was not assured,
in its view, that the City would comply with the non-disparagement clause. OBG then filed
a complaint against the City for injunctive and monetary relief. The City filed a motion to
dismiss for failure to state a claim. The Circuit Court for Wicomico County denied OBG
injunctive relief without issuing a ruling on the City’s motion to dismiss. The City later
filed an amended motion to dismiss (“the Amended Motion to Dismiss”), which the Circuit
Court granted.
3
CDG’s counsel contended that its contract with the City required the City to “enter
into a separate agreement with one or more engineers” to provide “design services for the
project. And that’s [OBG]. And it says, the [construction manager], that’s CDG, shall not
be responsible for architectural or engineering design.”
4
Following OBG’s timely notice of appeal,4 the Court of Special Appeals affirmed.
O’Brien & Gere Eng’rs, Inc. v. City of Salisbury, 222 Md. App. 492, 530 (2015). The
intermediate appellate court reasoned that the proper inquiry was “whether immunity from
liability is consistent with and will serve the public policy objectives of the [litigation]
privilege.” Id. at 522. Analyzing the facts in light of the public policy objectives, the
intermediate appellate court concluded that “[t]he administration of justice would be served
(and was served) by applying the absolute litigation privilege to immunize the City from
liability for breaching the non-disparagement agreement by introducing evidence and
making arguments to the trier of fact that included negative information about OBG’s
design of the plant upgrade.” Id. at 526. In pertinent part, the court determined that
“[e]vidence about flaws in OBG’s design for the plant upgrade and any cause and effect
between flaws in the design and the plant upgrade failure was indispensable to an informed
factual resolution of the City’s contract claim against CDG.” Id. at 524–25. Judge
Nazarian dissented.
Following OBG’s appeal, we granted its Petition for Writ of Certiorari to address
the following questions:
1. Whether the Court of Special Appeals erred in expanding
the scope of the “litigation privilege” and finding that, as an
absolute matter of law and without regard to the parties’
intentions, no claim can stand for a deliberate and voluntary
breach of a binding non-disparagement agreement when the
disparaging statements are made in legal proceedings (even
when the agreement contains no exception for statements
4
This appeal was consolidated with OBG’s timely notice of appeal of the denial of
its complaint for injunctive relief. O’Brien & Gere Eng’rs, Inc. v. City of Salisbury, 222
Md. App. 492, 505 (2015).
5
made in legal proceedings, and the breaching party is not
compelled by subpoena or other compulsory process or
circumstance to make the disparaging statements).
2. Whether the Court of Special Appeals erred in deciding the
case on a preliminary Motion to Dismiss, without resolving
or allowing any exploration and litigation of important
factual questions (related to the parties’ expectations and
intentions) bearing on the scope and effect of the non-
disparagement clause, including whether it waived the
litigation privilege.
We think both questions presented are so intertwined as to warrant a unified discussion,
and we conclude, as to the second question, that the Court of Special Appeals correctly
affirmed the judgment of the Circuit Court. We explain, however, that whether the
litigation privilege applies to a breach of contract claim turns in a particular case on whether
applying the litigation privilege advances the policies favoring the privilege.
STANDARD OF REVIEW
In reviewing a motion to dismiss a complaint for failure to state a claim, we “must
determine whether the trial court was legally correct, examining solely the sufficiency of
the pleading.” Ricketts v. Ricketts, 393 Md. 479, 492 (2006).5 Our review of the pleading
may extend to “its incorporated supporting exhibits, if any.” Id. at 491 (citations and
internal quotation marks omitted). As we stated in Allied Investment Corp. v. Jasen, when
a trial or appellate court reviews a motion to dismiss for failure to state a claim, it is
necessary to “assume the truth of all well-pleaded, relevant, and material facts in the
5
The City’s assertion notwithstanding, because the parties did not present factual
allegations to the Circuit Court “beyond those contained in the complaint,” we do not
convert the City’s Amended Motion to Dismiss into a motion for summary judgment.
Nickens v. Mount Vernon Realty Group, LLC, 429 Md. 53, 62–63 (2012).
6
complaint and any reasonable inferences that can be drawn therefrom. ‘Dismissal is proper
only if the alleged facts and permissible inferences, so viewed, would, if proven,
nonetheless fail to afford relief to the plaintiff.’” 354 Md. 547, 555 (1999) (citations
omitted).
DISCUSSION
OBG and the City dispute whether the City violated the non-disparagement clause
in the Settlement Agreement because of the City’s statements during the CDG Lawsuit.
Conceding that the litigation privilege is absolute with respect to “defamation and other
torts arising from statements made in legal proceedings,” OBG argues that we should adopt
a different approach with respect to its breach of contract claim. Because of the public
policy favoring settlements, OBG contends, parties can waive the litigation privilege by
contract. OBG views the proper question, then, as whether “the intentions and expectations
of the parties or the particular factual context of the case” reveal a waiver of the litigation
privilege. Remand is necessary, in OBG’s view, because the Circuit Court granted the
City’s Amended Motion to Dismiss without a sufficient record to answer this question.
The City contends that OBG’s focus is off because the nature of the claim—tort or
contract—does not matter. In reading our defamation case law, the City deduces that
“Maryland has always ‘struck heavily in favor of the free disclosure of information during
a judicial proceeding’” because of strong public policy reasons, which are just as relevant
to OBG’s breach of contract claim. (Quoting Imperial v. Drapeau, 351 Md. 38, 45 (1998)).
Moreover, the City argues that the Circuit Court committed no error because the available
facts supported the court’s grant of the Amended Motion to Dismiss: (1) all allegedly
7
disparaging statements were made in a courtroom and (2) the Settlement Agreement did
not forbid the City from discussing OBG’s design of the WWTP in the CDG Lawsuit.
MOOTNESS
Before we address these substantive arguments, we first consider the City’s position
that this case is moot. “This Court does not give advisory opinions; thus, we generally
dismiss moot actions without a decision on the merits.” Dep’t of Human Res., Child Care
Admin. v. Roth, 398 Md. 137, 143 (2007) (citation omitted). “‘A case is moot when there
is no longer an existing controversy between the parties at the time it is before the court so
that the court cannot provide an effective remedy.’” Clark v. O’Malley, 434 Md. 171, 192
n.11 (2013) (citations omitted).
The Settlement Agreement states that, in the event of a breach of the non-
disparagement clause, “the non-breaching party shall be entitled to equitable relief.” The
City argues that, even if it breached the non-disparagement clause, we cannot grant OBG
the injunctive relief it sought because “the acts sought to be enjoined have ceased.”
(Quoting State v. Ficker, 266 Md. 500, 507 (1972)).
Without a doubt, injunctive relief is unavailable. OBG sought injunctive relief to
prevent the City from making negative statements about OBG during the CDG Lawsuit.
That lawsuit is over, with a verdict favorable to the City. As the City is no longer making
negative statements about OBG that we could enjoin, injunctive relief is off the table. Yet,
as OBG contends, “any mootness in regard to the claim for injunctive relief (arising from
the termination of the WWTP Litigation) has no bearing” on OBG’s claims for money
damages and attorney’s fees.
8
Not so fast, the City responds. In its view the Settlement Agreement precludes OBG
from pursuing money damages. In pertinent part the Settlement Agreement states:
The parties agree that, in the event of any breach of this non-
disparagement provision, damages/actual losses will be
difficult or impossible to prove with requisite precision, and
that an adequate remedy at law will not exist. Accordingly, in
the event of a breach of this provision, the non-breaching party
shall be entitled to equitable relief . . . . Further, the non-
breaching party shall be entitled to an award of reasonable
attorney’s fees and other litigation costs and expenses
associated with enforcement of this provision against the
breaching party.
(Emphasis added.) The City avers that “money damages may not be awarded” because the
Settlement Agreement states that “an adequate remedy at law will not exist.” OBG
disagrees, construing the same language as “a necessary predicate to obtaining injunctive
relief.”
The Supreme Court of the United States “has repeatedly held that the basis for
injunctive relief in the federal courts has always been irreparable injury and the inadequacy
of legal remedies.” Weinberger v. Romero-Barcelo, 456 U.S. 305, 312 (1982). Although
such a basis is not now required in our state courts, it once was. Compare Maryland Rule
15-502(c) (“The court may not deny an injunction solely because the party seeking it has
an adequate remedy in damages . . . .”), and Seci, Inc. v. Chafitz, Inc., 63 Md. App. 719,
725 (1985) (“[A]lthough the law was once to the contrary, it is clear now that an injunction
need not be denied merely because the party seeking it has an adequate remedy at law.”),
with Musch v. Underwood, 179 Md. 455, 459 (1941) (“The doctrine is well settled in this
state that where a party has a certain, complete and adequate remedy at law, he cannot sue
9
in equity.”), and Anne Arundel Cnty. v. Whitehall Venture, 39 Md. App. 197, 200 n.2
(1978) (“Traditionally, the non-existence of an adequate remedy at law was a prerequisite
to injunctive relief.”).6
In reviewing the above provision in the Settlement Agreement, we note that the
language focuses precisely on the adequacy of a legal remedy, not on its availability. By
no means does the Settlement Agreement state, as the City contends, that money damages
shall not be awarded, or, shall not be available as a legal remedy.7 See Lasco Enters., Inc.
v. Kohlbrand, 819 So. 2d 821, 825 (Fla. Dist. Ct. App. 2002) (rejecting argument that
money damages were unavailable because the contract language “did not place a limitation
upon their available remedies, but instead, simply provided that the Kohlbrands ‘may’
6
Professor Dan B. Dobbs explains that “[a]n old tradition said that the injunction
would not be issued if other remedies were ‘adequate.’” Dan. B. Dobbs, Law of Remedies
§ 1.1, at 6 (2d ed. 1993). Although Professor Dobbs acknowledges that “[t]his rule has
come upon heavy attack today and its existence has been called into doubt,” id. § 2.5, at
86, he also notes that “[c]ourts do in fact sometimes deny injunctions when they believe
damages to provide a sufficient remedy,” id. § 1.1, at 6. See also Richard A. Lord,
Williston on Contracts § 67:8, at 210 (4th ed. 2002) (“[B]efore specific performance may
be decreed for breach of a contract for the purchase and sale of tangible personal property,
the remedy at law, that is, damages, must first have been determined to be incomplete and
inadequate to accomplish substantial justice.”); cf. W. Page Keeton et al., Prosser & Keeton
on Torts § 88A, at 631–32 (5th ed. 1984) (“There is an older tradition that once a nuisance
is established and it is shown that damages do not furnish an adequate remedy, an
injunction must issue.”).
7
See Importers Serv. Corp. v. GP Chem. Equity, LLC, 652 F. Supp. 2d 1292, 1302–
03 (N.D. Ga. 2009) (“[T]he Agreement provides that after termination, Defendant may
repurchase NovaRes from Plaintiff and that Defendant’s repurchase of the product and
Plaintiff’s right to sell NovaRes ‘shall constitute ISC’s sole remedy for the termination or
nonrenewal of this Agreement . . . .’”); Poley v. Sony Music Entm’t, Inc., 619 N.Y.S.2d
923, 926–27 (N.Y. Sup. Ct. 1994) (finding no claim of breach of contract available where
the contract stated “Your only remedy for failure by CBS to release an Album will be
termination in accordance with this paragraph.”).
10
proceed in equity to enforce its rights or ‘may’ elect to receive the return of earnest money
deposit. The provision does not state that the Kohlbrands ‘shall’ limit themselves to such
remedies.”).8 Reviewing our case law, we discern that the parties must at least use clear
language to show their agreement to limit available remedies. See Mass. Indem. & Life
Ins. Co., 269 Md. 364, 369–70 (1973) (rejecting the argument that the contract prohibited
injunctive relief and explaining that “‘[a] contract will not be construed as taking away a
common-law remedy unless that result is imperatively required’”) (citation omitted). We
cannot agree with the City that this contract language shows the parties’ intention to limit
available relief. Rather, our research and the relevant language indicate an attempt by the
parties merely to ensure the availability of injunctive relief. We conclude that the dispute
over the meaning of the non-disparagement clause is not moot.
NON-DISPARAGEMENT CLAUSE AS WAIVER OF LITIGATION PRIVILEGE
Preservation of OBG’s Argument
The City contends that OBG never argued to the Circuit Court its primary argument
here—“that the City waived its right to rely on the absolute litigation privilege because it
agreed to the non[-]disparagement provision contained in the Settlement Agreement.” In
the City’s view, OBG’s argument to the Circuit Court was “that the public policy favoring
8
Cf. Kaufman Bros. v. Home Value Stores, Inc., 279 P.3d 157, 159–62 (Mont. 2012)
(reviewing a provision for contract enforcement “or” termination, and explaining that the
petitioners “could do one or the other, but not both”); Edge Grp. WAICCS LLC v. Sapir
Grp. LLC, 705 F. Supp. 2d 304, 322–23 (S.D.N.Y. 2010) (“[D]efendant’s contention that
plaintiff is barred by the amended Option Agreement from seeking specific performance
plainly fails because the contract contains not a shred of language that might suggest, much
less explicitly provide, that receipt of the one-million dollar deposit was plaintiff’s only
available remedy.”).
11
enforcement of settlement agreements should prevail over the public policy underlying the
absolute litigation privilege.”
The City’s non-preservation argument belies its own presentation of the issue to the
Circuit Court at the hearing on the Amended Motion to Dismiss, in which it stated:
“effectively the issue today is whether or to what extent or what effect the non-
disparagement contract between the City of Salisbury and O’Brien & Gere has in relation
to the absolute privilege in judicial proceedings that Maryland recognizes.” (Emphasis
added). When OBG argues in this appeal that the non-disparagement clause constitutes a
waiver of the litigation privilege it raises the same issue—whether the City gave up its
litigation privilege by signing the non-disparagement clause.
Moreover, at the same hearing, and in its Opposition to the Amended Motion to
Dismiss, OBG relied on Wentland v. Wass, 25 Cal. Rptr. 3d 109 (Cal. Ct. App. 2005). In
Wentland, the California intermediate appellate court concluded, in part, that the litigation
privilege “should not apply in this breach of contract case” because “one who validly
contracts not to speak . . . has [] waived the protection of the litigation privilege.” Id. at
116.
Although OBG did not quote this exact language from Wentland before the Circuit
Court, it made a similar point when it stated that the non-disparagement clause represented
the City’s “clear, unqualified, and unlimited” promise not to portray OBG in a negative
light. The issue of whether the City waived its right to rely on the litigation privilege when
it entered into the Settlement Agreement was argued in the Circuit Court, and is therefore
preserved for our review. See Maryland Rule 8-131(a) (“Ordinarily, the appellate court
12
will not decide any other issue unless it plainly appears by the record to have been raised
in or decided by the trial court . . . .”).
Nature and History of Litigation Privilege
We begin by examining the established contours of the litigation privilege, which
accords the putative tortfeasor absolute immunity from civil liability. The litigation
privilege dates back 500 years to the English Court of Queen’s Bench. See Beauchamps
v. Croft, 73 Eng. Rep. 639 (Q.B. 1497) (“[N]o punishment was ever appointed for a suit in
law, however it be false and for vexation. And in the case above, it is indifferent to say
that it is false or true[.]”). The privilege rests on the vital public policy of the “free and
unfettered administration of justice.” Adams v. Peck, 288 Md. 1, 5 (1980) (citation and
internal quotation marks omitted). Expounding on the importance of this policy, we said
in Adams:
The ultimate purpose of the judicial process is to determine the
truth. The investigation, evaluation, presentation and
determination of facts are inherent and essential parts of this
process. If this process is to function effectively, those who
participate must be able to do so without being hampered by
the fear of private suits for defamation.
Id.“For witnesses, parties, and judges, we employ the ‘English’ rule, which provides
that the putative tortfeasor enjoys absolute immunity from civil liability, even if the
statement is wholly unrelated to the underlying proceeding.” Norman v. Borison, 418 Md.
630, 650 (2011). Norman also instructs that “[f]or attorneys whose appearances are entered
in a case, however, we follow the majority American rule and require that the defamatory
13
statement have some rational relation to the matter at bar before unfurling the umbrella of
absolute privilege.” Id. The litigation privilege has been described as “more of an
immunity for litigators, by contrast to a qualified privilege.” Paul T. Hayden,
Reconsidering the Litigator’s Absolute Privilege to Defame, 54 Ohio St. L.J. 985, 992
(1993).9
The litigation privilege is long-standing in Maryland, dating back to the 1880s. See
Maulsby v. Reifsnider, 69 Md. 143 (1888) (involving statements made by an attorney in
the course of a judicial proceeding); Hunckel v. Voneiff, 69 Md. 179 (1888) (involving
statements made by witnesses). Although the disputes in Maulsby and Hunckel involved
libel and slander, we have since observed that “[p]rivilege is not confined in the law of
torts to matters of defamation.” Walker v. D’Alesandro, 212 Md. 163, 169 (1957); see
Carr v. Watkins, 227 Md. 578, 583 (1962) (“We find it clear that if there was immunity
from liability for defamation, there was immunity from liability for the other alleged torts
claimed by the declaration to have been committed.”); Fowler V. Harper et al., Harper,
James and Gray on Torts § 6.3, at 342–43 (3d ed. 2006) (“Although such situations are
rarely litigated, it seems clear that persons participating in judicial, legislative, or executive
proceedings enjoy the same privilege in disparagement cases as in defamation.”).
The Restatement of the Law of Torts explains: “The privilege stated in this Section
is based upon a public policy of securing to attorneys as officers of the court the utmost
9
This article advocates for changes which would narrow the scope of the litigation
privilege.
14
freedom in their efforts to secure justice for their clients. Therefore the privilege is
absolute.” Restatement (Second) of Torts § 586 cmt. a (1977).10
The meaning of “absolute” in this context should not be amplified beyond its
intended use. “Absolute” simply relates to the speaker’s motive. It does not mean that
there are “no exceptions” to the privilege, as the City contends. Norman teaches that the
absolute privilege is not available to attorneys for all statements they make in judicial
proceedings. Rather, the statements must “have some rational relation to the matter at bar.”
Norman, 418 Md. at 650. When a privilege is absolute, “the court will not permit an inquiry
into motive or purpose, since this could result in subjecting the honest person to harassing
litigation and claims.” W. Page Keeton et al., Prosser and Keeton on Torts 4.16, at 109
(5th ed. 1984). By contrast, when a privilege is qualified, “the defendant is justified so
long as he was acting in good faith.” Id.; see also Harper et al., James and Gray on Torts
§ 6.3, at 343 (“Because of the absolute—as distinguished from qualified—privilege, malice
becomes irrelevant here.”).
10
The Restatement formulates the privilege as follows:
An attorney at law is absolutely privileged to publish
defamatory matter concerning another in communications
preliminary to a proposed judicial proceeding, or in the
institution of, or during the course and as a part of, a judicial
proceeding in which he participates as counsel, if it has some
relation to the proceeding.
Restatement (Second) of Torts § 586 (1977).
15
Application of Litigation Privilege in Breach of Contract Action
We are tasked with resolving the question, novel to Maryland, of whether the City
can raise the litigation privilege as a defense to a claim not in tort, but for breach of contract.
The City argues that “the doctrine of absolute privilege is not limited to defamation actions
and should be equally applicable to a claim of breach of a non-disparagement clause in a
contract.”11
Many other jurisdictions have approved the use of the litigation privilege as a
defense to claims sounding in breach of contract. See Kimmel & Silverman, P.C. v. Porro,
53 F. Supp. 3d 325, 343–44 (D. Mass. 2014) (applying Massachusetts law); Johnson v.
Johnson & Bell, Ltd., 7 N.E.3d 52, 56 (Ill. App. Ct. 2014); Vivian v. Labrucherie, 153 Cal.
Rptr. 3d 707, 715 (Cal. Ct. App. 2013); Rain v. Rolls-Royce Corp., 626 F.3d 372, 377–78
(7th Cir. 2010) (applying Indiana law); Rickenbach v. Wells Fargo Bank, N.A., 635 F.
Supp. 2d 389, 401–02 (D.N.J. 2009) (applying New Jersey law); Crockett & Myers, Ltd. v.
Napier, Fitzgerald & Kirby, LLP, 440 F. Supp. 2d 1184, 1195–97 (D. Nev. 2006) (applying
Nevada law); Arts4All, Ltd. v. Hancock, 773 N.Y.S.2d 348, 351 (N.Y. App. Div. 2004);
Kelly v. Golden, 352 F.3d 344, 350 (8th Cir. 2003) (applying Missouri law);12 cf. Ellis v.
11
OBG does not squarely address the City’s position but instead jumps ahead to its
waiver argument.
12
OBG incorrectly states that the non-disparagement clause in Kelly v. Golden
“contained explicit exceptions for ‘privileged’ statements.” (Emphasis omitted.) Rather,
the clause containing exceptions for privileged statements was the confidentiality clause,
which required the parties “not [to] discuss, disclose, or release any information related to
the [agreements referenced].” Kelly v. Golden, 352 F.3d 344, 348 (8th Cir. 2003).
16
Kaye-Kibbey, 581 F. Supp. 2d 861, 879–81 (W.D. Mich. 2008) (applying Michigan law);13
but see Bardin v. Lockheed Aeronautical Sys. Co., 82 Cal. Rptr. 2d 726, 731 (Cal. Ct. App.
1999).14
These courts have explained that the privilege would be “valueless” or
“meaningless” if the opposing party could bar application of the privilege just by drafting
the claim with a non-tort label. Kimmel & Silverman, P.C., 53 F. Supp. 3d at 343; Johnson,
7 N.E.3d at 56; see Rickenbach, 635 F. Supp. 2d at 401 (“If the policy, which in defamation
actions affords an absolute privilege or immunity to statements made in judicial and quasi-
13
Ellis v. Kaye-Kibbey, 581 F. Supp. 2d 861, 880 (W.D. Mich. 2008), unlike this
case, involved subpoenaed testimony. But Ellis suggested that it might have protected
other communications as well:
[T]his court holds that the Michigan Supreme Court would
likely follow the same reasoning to preclude breach-of-
contract liability [sic] one who gives testimony or produces
information in a judicial proceeding—at least to the extent that
such action was necessary to comply with a subpoena or other
order (and perhaps even if the communication was made in
court in a judicial proceeding but not required by any
subpoena or court order).
Id. at 881 (emphasis added). In any event, the court in Kimmel & Silverman, P.C. v. Porro
applied the litigation privilege even though the allegedly impermissible statements were
made voluntarily. 53 F. Supp. 3d 325, 342 n.3 (D. Mass. 2014) (“This court recognizes
that . . . the defendants were not compelled by the ethical rules to file the challenged
documents . . . .”).
14
Bardin v. Lockheed Aeronautical Sys. Co., 82 Cal. Rptr. 2d 726, 731 (Cal. Ct.
App. 1999) prohibited the use of the litigation privilege in the face of a breach of contract
claim. But Bardin is at odds with other California cases in which that state’s appellate
courts determine whether to apply the privilege by analyzing the policy implications on a
case-by-case basis. See, e.g., Vivian v. Labrucherie, 153 Cal. Rptr. 3d 707, 715 (Cal. Ct.
App. 2013) (and cases cited therein). The court in Bardin did not consider whether
application of the privilege would further the underlying policies. 82 Cal. Rptr. 2d at 731.
17
judicial proceedings, is really to mean anything then we must not permit its circumvention
by affording an almost equally unrestricted action under a different label.”) (citations and
internal quotation marks omitted). Indeed, to refuse to consider applying the privilege
when the claim is not labeled as a tort is to ignore the possibility that the alleged harm
derives from tortious conduct. See Rain, 626 F.3d at 378 (“[A]ppellants’ breach of contract
claim is largely indistinguishable from a tort claim alleging injury flowing from statements
made in a judicial proceeding. While appellants technically seek liquidated damages under
the settlement agreement, any damages they suffered were caused solely by the fact that
the statements were (allegedly) tortious.”).
We agree with the reasoning of these jurisdictions and conclude that the litigation
privilege can apply as a defense to claims sounding in contract.
Litigation Privilege Applied to These Facts
We now examine whether the City may rely on the litigation privilege to defend
itself against OBG’s claim of breach in this case. We have found only a handful of cases
involving non-disparagement clauses and the privilege. These cases have generally
focused on whether the application of the privilege would further the privilege’s public
policy reasons. See, e.g., Rain, 626 F.3d at 377; Wentland, 25 Cal. Rptr. 3d at 114.15
15
See also Vivian, 153 Cal. Rptr. 3d at 716 (“Application of the privilege under
these circumstances promotes full and candid responses to a public agency, which is very
much the purpose of the privilege and in the public interest. Denying application of the
privilege would have exactly the opposite effect.”); Crockett & Myers, Ltd. v. Napier,
Fitzgerald & Kirby, LLP, 440 F. Supp. 2d 1184, 1195–97 (D. Nev. 2006) (“The absolute
privilege grants attorneys the utmost freedom in their efforts to obtain justice for their
clients, and that encompasses an attorney’s advice to his client that she can fire co-counsel
under the applicable retainer agreement.”).
18
Drawing from these courts, we now inquire “whether applying the litigation privilege in
this case would promote the due administration of justice and free expression by
participants in judicial proceedings.” Rain, 626 F.3d at 378. Two cases with contrary
outcomes are instructive as we undertake this step in our discussion.
Rain v. Rolls-Royce Corp.
In Rain, the U.S. Court of Appeals for the Seventh Circuit held that the litigation
privilege protected a manufacturer from its competitors’ claim for breach of a non-
disparagement clause arising out of a settlement agreement. 626 F.3d at 375, 378. 16 The
competitors averred that the manufacturer breached the non-disparagement clause by,
among other things, “including certain allegations in [a] complaint” against third parties
filed after the parties executed the settlement agreement. Id. at 376. The complaint alleged
that the competitors had conspired with others “to obtain and use [its] proprietary
information.” Id. at 375. The Seventh Circuit reasoned that the manufacturer could defend
itself against the breach of contract claim because
application of the privilege here allows [the manufacturer] to
pursue its claims against third parties without fear of future
legal liability arising out of its efforts to protect its intellectual
property rights. By contrast, the failure to apply the privilege
would frustrate the underlying policy by discouraging [the
manufacturer] from exercising its fundamental right to resort
to the courts to protect its rights.
Id. at 378.
16
Although tasked with applying Indiana state law, the U.S. Court of Appeals for
the Seventh Circuit looked to the law in other jurisdictions because “[n]o Indiana court
ha[d] addressed whether the absolute privilege precludes not only tort liability, but also
contractual liability.” Rain v. Rolls-Royce Corp., 626 F.3d 372, 377 (7th Cir. 2010).
19
Here, the City pursued its already pending claim of breach of contract against CDG,
a third party, as contemplated by the parties to the Settlement Agreement. In his opening
statements, the City’s trial counsel stated that “[CDG was] to advise the [City] of
deficiencies which are discovered or suspected by [CDG] which involve the design of the
project.” In order to persuade the jury that CDG breached its contract with the City, the
City needed to establish that OBG had defectively designed the WWTP, that CDG was
obligated to advise the City of such issues, and that CDG failed to do so. This is precisely
what the City did through its witnesses, Jacobs and Dr. Stover.17 As in Rain, application
of the litigation privilege allows the City to pursue its claims and protect its rights without
fear of future legal liability.
OBG raises several unpersuasive arguments to distinguish Rain. First, it argues that,
unlike this case, the non-disparagement clause in Rain had no definition of “disparage,”
saying simply that “none of the Parties will disparage the other.” This distinction is
meaningful to OBG because, with such a clear definition of the term, “there could be no
finding in this case that the statements at issue did not constitute ‘disparaging’ comments
within the meaning of the Settlement Agreement.” We fail to see how this distinction has
any bearing on our policy discussion or the policy discussion in Rain.
17
Specifically, Jacobs testified that “[t]he construction manager [CDG] is to
overview any design issues, they’re not to solve the design issue, but at least raise the issue
to the City so we can resolve it.” And when asked to explain what components of the
wastewater sewage treatment plant (“WWTP”) did not work and why, Dr. Stover testified
again and again that defective design caused the problems: (1) “Those [pump stations] did
not work properly. Those were design issues.”; (2) “The next component that did not work
is the ultraviolet disinfection system. . . . I’d say that was a design problem.”; and (3) “[Q:]
Would you agree that this design was likely to fail? [A:] It did fail.”
20
Second, OBG argues Rain is distinguishable because that court never considered
the policy argument favoring enforcement of contracts. OBG is incorrect. Even though
the Rain court stated that the policy argument was waived, the court went on to explain
that the policy argument was unpersuasive because: “the agreement’s enforceability is not
at issue. Rather, the question is whether to impose liability for a violation of that
agreement.” Rain, 626 F.3d at 378.18
Wentland v. Wass
In Wentland, a California intermediate appellate court held that the litigation
privilege did not apply because the underlying policies would not be furthered by its
application. 25 Cal. Rptr. 3d at 111, 116. Two partners brought an action for an accounting
of three partnerships. Id. at 111. Through their attorney’s statements and a declaration,
these two partners explained that an audit of the books was just and reasonable because
audits of other partnerships, including the Parkview Terrace partnership, had revealed self-
dealing by the managing partner. Id. The managing partner filed a cross-complaint
alleging that the other two partners had breached an agreement to “make no accusation or
comment [which] alleged wrongdoing” by him concerning Parkview Terrace. Id.According to the cross-complaint, all three partners had entered into this agreement after
the two partners began asserting—not in court—that the managing partner had
misappropriated assets from Parkview Terrace. Id. at 112.
18
We later address the question of whether the City violated the Settlement
Agreement in our analysis of the non-disparagement clause.
21
Although the trial court in Wentland dismissed the cross-complaint on the basis of
the litigation privilege, the intermediate appellate court reversed, explaining that the
policies underlying the privilege were not advanced through its application. First, the
privilege did not promote “access to the courts, truthful testimony or zealous advocacy”
because “[t]his cause of action [was] not based on allegedly wrongful conduct during
litigation . . . . it [was] based on breach of a separate promise independent of the litigation.”
Id. at 116. Second, the privilege did not promote finality because the two partner’s
comments about the managing partner “invite[d] further litigation as to their accuracy”
when the agreement “presumably” ended the matter of the managing partner’s conduct. Id.To be sure, as in Wentland, OBG’s claim relates to breach of a separate promise
independent of litigation. But importantly, application of the privilege to the City’s
statements still promotes access to the courts, truthful testimony, and zealous advocacy.
As we discussed earlier, those statements were essential to the City’s case that CDG
breached its contract with the City. We also recognize that the City’s statements caused
further litigation, as in Wentland. But, as we shall explain infra, we do not view the City’s
statements as inviting further litigation because they were made in the mutually anticipated
court proceedings in which both parties clearly contemplated that OBG’s work would be
discussed.
OBG argues that Wentland is analogous because, in both cases, the application of
the litigation privilege would frustrate the purpose of the agreements. We disagree. We
begin by setting forth what OBG said, in relevant part, to the Circuit Court:
22
[W]hat their [the City’s] position requires is actually reading
into that settlement agreement language that doesn’t exist
there, to read into it an exception for statements made in court,
would have completely frustrated the purpose of the clearly
stated indemnification clause, hold harmless and defend
clause, which was very broad in its terms and very clear in its
terms, that if anybody in the wastewater treatment plant
litigation took issue, whether by third-party complaint or some
other kind of claim, took issue with our design, the City, these
lawyers, were going to come into court and actually defend
O’Brien & Gere.
OBG hones in on the provisions of the Settlement Agreement wherein the City promised
to defend, indemnify, and hold OBG harmless “from any claim asserted (previously or at
any time in the future) by any other party to the Lawsuit.” (Emphasis added.) CDG,
however, has not asserted any claim against OBG. As Judge Eyler, writing for the Court
of Special Appeals, aptly noted, CDG has merely raised OBG’s defective design as a
defense.19 But CDG’s defense is “not a claim or suit against OBG.” O’Brien & Gere
Eng’rs, 222 Md. App. at 526 n.20. In other words, there is no inconsistency between the
indemnification clause and the City’s breach of contract claim. Thus, we are not persuaded
19
During his opening statements, counsel for CDG said:
Again, this is the contract between CDG and the City. And it
says, the City shall enter into a separate agreement with one or
more engineers, hereinafter referred to as the engineer, to
provide architectural and engineering design services for the
project. And that’s O’Brien & Gere. And it says, the CM,
that’s CDG, shall not be responsible for architectural or
engineering design.
And during cross-examination of Dr. Stover, CDG’s counsel asked, among other things:
“[Q]: Would you agree that in the design of the plant O’Brien & Gere ignored commonly
known and understood limitations on the equipment that it specified for the plant? [A]: I
would agree with that.”
23
that applying the litigation privilege would frustrate the purpose of the Settlement
Agreement.
Waiver of Privilege by Terms of Non-Disparagement Clause
We now turn to OBG’s argument that the City waived its litigation privilege by the
terms of the Settlement Agreement. Tracking OBG’s argument, we approach this issue in
two steps. First, we examine whether the litigation privilege is waivable.
The City argues that the “Maryland public policy underlying the Absolute Litigation
Privilege is logically inconsistent with OBG’s waiver argument.” The City reasons that
“OBG’s argument asks the Court to support a contractual interpretation that would impede
Maryland Courts and juries from ascertaining vital and important facts during the trial of a
case.” (Emphasis in original.) For support, the City points to United States v. Mezzanatto,
in which the United States Supreme Court acknowledged that “[t]here may be some
evidentiary provisions that are so fundamental to the reliability of the factfinding process
that they may never be waived without irreparably ‘discredit[ing] the federal courts.’” 513
U.S. 196, 204 (1995) (emphasis omitted).
We recognize the fundamental importance of the fact-finding process. Indeed, that
is in part why we have affirmed the litigation privilege for so many years. See Imperial,
351 Md. at 45 (“As a matter of public policy, the balance is struck heavily in favor of the
free disclosure of information during a judicial proceeding.”). It is also why we decide
today that non-disparagement contracts should be construed with a rebuttable presumption
against waiver of the litigation privilege. Cf. Bollack v. Bollack, 169 Md. 407, 409–11
(1936) (challenging party must provide evidence of undue influence to rebut the
24
presumption that the instrument was voluntarily executed); Hovnanian Land Inv. Grp.,
LLC v. Annapolis Towne Ctr. at Parole, LLC, 421 Md. 94, 123 (2011) (“The party alleging
waiver must show an intent to waive both the contract provision at issue and the non-waiver
clause.”).
But we do not go quite as far as the City in declaring a ban against any and all waiver
of that privilege (or the intermediate appellate court in elevating privilege over waiver as a
matter of law). There may be situations in which there are good reasons to uphold a clear
waiver of the litigation privileges—but that is a question for another day.
In previously affirming the litigation privilege in the tort context, we have
acknowledged that our analysis “involves a matter of public policy in which the public
interest in free disclosure must be weighed against the harm to individuals who may be
defamed.” Adams, 288 Md. at 5. In the context of breach of a settlement contract, the
inquiry changes. We weigh not only the public policy of administration of justice against
the individual harm defamation poses, but also consider the favorable policy of
encouraging settlement agreements. See Sisson v. Mayor & City Council of Balt., 51 Md.
83, 95–96 (1879) (“The law always favors compromises and amicable adjustments of
disputes . . . .”). When we encourage parties to settle on their terms, the administration of
justice is also served. Weighing the important policy concerns both parties raise, we
conclude that, even if the litigation privilege can be waived by contract, in construing a
non-disparagement clause, we will apply a rebuttable presumption against waiver of that
privilege.
25
Applying Rebuttable Presumption, Could This Be A Waiver?
OBG argues that the Circuit Court improperly granted the City’s Amended Motion
to Dismiss because the “intended effect of the non-disparagement agreement” upon the
CDG Lawsuit was an “unresolved and critical dispute.” Moreover, OBG avers, “whether
the parties intended to waive the litigation privilege in the Agreement” could not “properly
have been decided on a pre-answer motion to dismiss.” OBG contends that it negotiated
the non-disparagement clause to ensure that the City would not portray it in a negative
light. It sought this assurance because, OBG argues, “it would no longer be a party to the
City’s continuing WWTP Litigation” and “no longer have the ability or be in a position to
effectively defend itself against aspersions cast upon it by the City.” OBG avers that the
promise not to disparage “was clear, unqualified, and unlimited.”
“We have defined waiver as ‘the intentional relinquishment of a known right.’”
Smith v. State, 394 Md. 184, 201 (2006) (attorney-client privilege) (citations omitted); see
Harrison v. State, 276 Md. 122, 137 (1975) (“[T]he intent to waive [the attorney-client
privilege] must, however, be expressed either by word or act, or omission to speak out.”).
Keeping in mind our rebuttable presumption just discussed, we apply the rules of
construction of contracts in interpreting a settlement agreement. See Clark v. Ezra, 286
Md. 208, 219 (1979) (“As long as the basic requirements to form a contract are present,
there is no reason to treat such a settlement agreement differently than other contracts
which are binding.”). “The fundamental rule in the construction and interpretation of
contracts is that the intention of the parties as expressed in the language of the contract
controls the analysis.” Ford v. Antwerpen Motorcars, Ltd., 443 Md. 470, 477 (2015)
26
(citation and internal quotation marks omitted). To discern the parties’ intentions, we look
at “the contents of the document itself and not by consideration of the provisions
separately.” Wheaton Triangle Lanes, Inc. v. Rinaldi, 236 Md. 525, 530–31 (1964). We
follow the “objective interpretation principle,” that is, “[i]f the language of the contract is
unambiguous, we give effect to its plain meaning and do not delve into what the parties
may have subjectively intended.” Ford, 443 Md. at 477 (citation and internal quotation
marks omitted).
In light of our rebuttable presumption, the non-disparagement clause here does not
prohibit the statements that OBG challenges. The term “disparaging” does not expressly
reach the CDG Lawsuit. See Harrison, 276 Md. at 138 (“[T]he intent to waive [the
privilege] must, however, be expressed either by word or act, or omission to speak out.”).20
The term, as defined in the Settlement Agreement, focuses instead on statements “made or
issued to the media, or other entities or persons.” Identifying this audience does not suggest
that the City knew the Settlement Agreement would circumscribe the statements it could
make in court. Smith, 394 Md. at 201 (citations omitted) (“Intrinsic to the definition of
‘waiver’ is the recognition that the client must be informed of both the scope and nature of
the right being relinquished as well as the consequences of so doing.”).
20
See also Vivian, 153 Cal. Rptr. 3d at 715 (holding that the litigation privilege
barred the breach of contract claim in part because “the agreement on which plaintiff relies
does not clearly prohibit the conduct that plaintiff challenges”) (emphasis added). The
court in Vivian also applied the litigation privilege because, unlike here, some of the
challenged conduct was “expressly removed from the scope of the agreement.” Id.
27
Indeed, OBG’s counsel acknowledged at the hearing on the Amended Motion to
Dismiss that it knew the City’s pending case was against CDG.21 Furthermore, not only
did OBG know about the pending litigation and its subject matter, but it promised to
“produce Mr. Meinert and Ms. Knox for the completion of their depositions in the pending
case at no expense to the City.” (Emphasis added.)
Although OBG knew that the City had a pending suit against CDG, and although
OBG expected that its role in the WWTP upgrade would come up during the CDG Lawsuit,
the Settlement Agreement includes no language restricting the legal issues that the City
could raise or the legal strategy that the City could take. Instead, OBG sought, above all
else, to protect itself “from any liability and expense associated with any claims” relating
to the WWTP. (Emphasis added.) OBG accomplished this purpose by: (1) requiring the
City to defend, indemnify, and hold OBG harmless in the event anyone related to the
WWTP Litigation were to sue OBG or were to obtain a judgment against OBG; and (2)
requiring the City to reduce any damages it recovered if OBG were “determined to be a
joint tortfeasor” as a result of any claims. OBG succeeded in accomplishing as much
because, as it repeatedly asserts, “the City dismissed its professional negligence and other
tort claims against CDG, and reduced its prayer for damages as to CDG from $60 million
to $4 million” in order to “prevent a contribution claim by CDG against OBG, which would
have triggered the City’s indemnification obligations under the Settlement Agreement.”
21
“So, did we [OBG] know that the case was going to continue against CDG?
Absolutely, we did.”
28
But OBG nowhere precluded the City from discussing OBG’s design work in the CDG
Lawsuit.22
If we review the CDG Lawsuit transcripts (which OBG referred to in its complaint),
then the only reasonable inference is that, as Judge Eyler wrote below, “the facts material
to whether CDG breached its contract with the City were interrelated with the facts material
to whether OBG’s design was flawed.” O’Brien & Gere Eng’rs, Inc., 222 Md. App. at
524. This close interdependence causes us to conclude that the only reasonable
interpretation of the Settlement Agreement is that the parties contemplated that OBG’s
design work would not only come into play during the CDG Lawsuit but also likely be
bandied back and forth as the parties tried to hold each other responsible for overseeing
OBG. Absent some express language in the Settlement Agreement that prohibited the City
from making or encouraging others to make disparaging statements about OBG in the CDG
Lawsuit, as a matter of law, and utilizing the presumption against waiver, we will not permit
such inference.
CONCLUSION
In sum, there is nothing in the Settlement Agreement addressing whether the City
could discuss OBG’s design work or portray OBG in a negative light in the CDG Lawsuit,
22
We recall OBG’s argument that it wanted the non-disparagement clause because
it would “no longer have the ability or be in a position to effectively defend itself against
aspersions cast upon it by the City.” The problem, as we see it, is OBG’s use of the word
“defend.” As our discussion illustrates, the Settlement Agreement ensured OBG no longer
had to defend itself against claims relating to the WWTP. For OBG to assert that it could
no longer defend itself against aspersions the City might cast upon it in court is a different
matter entirely, and one that, as we have explained, involves broad and fundamental policy
considerations underlying the litigation privilege.
29
litigation the parties clearly anticipated. Applying a rebuttable presumption against waiver
of the litigation privilege, we conclude that the City did not waive the litigation privilege
in the non-disparagement clause, and the Circuit Court correctly granted the City’s
Amended Motion to Dismiss.
JUDGMENT OF THE COURT OF
SPECIAL APPEALS AFFIRMED. COSTS
TO BE PAID BY PETITIONER.
30
Circuit Court for Wicomico County
Case No.: 22-C-12-001782
Argued: January 11, 2016
IN THE COURT OF APPEALS
OF MARYLAND
No. 53
September Term, 2015
O’BRIEN & GERE ENGINEERS, INC.
v.
CITY OF SALISBURY
Barbera, C.J.
Greene
Adkins
McDonald
Watts
Harrell, Glenn T., Jr. (Retired,
Specially Assigned)
Wilner, Alan M. (Retired,
Specially Assigned),
JJ.
Concurring and Dissenting
Opinion by Harrell, J.
Filed: April 26, 2016
Although I agree with the Majority opinion’s determinations that: (1) the case is not
moot (Maj. Slip op. at 8-11); (2) the City’s non-preservation argument is without merit
(Maj. Slip op. at 11-13); (3) the litigation privilege is not absolute (Maj. Slip op. at 15-16;
(4) the litigation privilege may apply to causes of action sounding in contract (Maj. Slip
op. at 16-18); and, (5) the litigation privilege may be waived, which analysis is undertaken
with a rebuttable presumption of non-waiver as a threshold (Maj. Slip op. at 24-26), I
dissent from the judgment that the Court of Appeals’s affirmance of the trial court’s grant
of the City’s motion to dismiss was correct as a matter of law.
I agree with the reasoning of Judge Nazarian’s dissent in the Court of Special
Appeals wherein he concluded ultimately that
[t]he outcome of [this case] depends in the first instance on what the parties
intended the non-disparagement clause to cover. The circuit court erred in
dismissing the case in the face of that looming factual dispute, and I would
reverse and remand on that basis. From there, I would hold that the City could
well have agreed to limit its litigation positions in the ongoing litigation,
whether viewed as a positional or tactical decision or as a waiver of the
litigation privilege, and direct the circuit court on remand to address OBG’s
claims against that backdrop.
O’Brien & Gere Eng’rs, Inc. v. City of Salisbury, 222 Md. App. 492, 541, 113 A.3d
1129, 1158 (2015).