author: Moylan, J.,

text:
    THELMA DANZ, Personal Representative of the Estate of Jean Rita Winters v. CHARLES E. SCHAFER et ux.
    [No. 1505,
    September Term, 1979.)

      Decided November 6, 1980.

    The cause was argued before Moylan and Wilner, JJ., and Irving H. Fisher, Associate Judge of the District Court of Maryland for District 5, specially assigned.

      Joseph L. Evans, with whom was Michael E. Marr on the brief, for appellant.

      Timothy J. Martin for appellees.
   Moylan, J.,

The issue squarely before us on this appeal is the standard for reviewing a verdict rendered by a trial judge sitting without a jury on the basis of an agreed statement of facts. If it is standard A, we shall affirm; if it is standard B, we shall reverse. The issue could not be more cleanly joined.

The appellant, Thelma Danz, is the Personal Representative of the Estate of the late Jean Rita Winters. She sued the appellees, Nora P. Schafer and Charles E. Schafer, wife and husband, for approximately $8,000 allegedly owed by the Schafers to Mrs. Winters. Mrs. Winters had been Nora Schafer’s aunt. The Schafers, defendants below, had defended on the theory that they had received the money from Mrs. Winters as a gift. The case came on for trial before Judge Edward A. DeWaters, Jr., in the Circuit Court for Baltimore County. No witnesses were called and counsel for both sides elected to proceed on an agreed statement of facts. That statement was as follows:

"[0]n October 2nd, 1973, Jean Rita Winters established an account, savings account in the Baltimore County Savings and Loan Association, Incorporated, at Belair and Joppa Roads, Baltimore, Maryland 21236, which account was numbered 3336. The account was established in trust for the defendant, Nora Patricia Schafer, joint owners, subject to the order of either, balance at the death of either to belong to the survivor. I have a copy of that particular account. I have the passbook in question. I will offer, with no objection of counsel, a copy of the account. No objection.
* * *
MR. MARR: Immediately after the account was opened, the passbook in question was surrendered and submitted to the defendant, Nora Patricia Schafer. Thereafter, of course, there were additional payments made into the account by the plaintiff, Jean Rita Winters, or the then, the former plaintiff in this case, Jean Rita Winters, who, as the record should show, the aunt of the defendant, Nora Patricia Schafer. Thereafter, on September the 30th, 1974, Jean Rita Winters withdrew from the account seven thousand two hundred dollars, and gave those funds to the defendant, Nora Patricia Schafer. It should be noted, at this point, that the withdrawal was made with the execution of the signatures of both Jean Rita Winters and Nora Patricia Schafer. Thereafter, Jean Rita Winters asked that the funds in question be returned to the account, and the defendant, along with her husband, Charles E. Schafer, executed, on Thursday, July 3rd, 1975, an instrument which reads as follows:
"On September 30th, 1974, Mrs. Jean Winters withdrew from Baltimore County Savings and Loan Association, Incorporated, account number 3336, in the name of Jean Rita Winters, in trust for Nora Patricia Schafer, the sum of seventy-two hundred dollars, for the purpose of a personal loan to incorporate and pay loans iii the name of Charles E. and Nora P. Schafer.
We do hereby promise to pay Mrs. Jean R. Winters the principal amount of seventy-two hundred dollars and interest at annual rate of six and one-quarter per cent on the balance due to account number 3336, in portions as soon as our finances enable us to do so.
In the event of our death, the estate is to pay to the account the full balance remaining of the said amount. Signed, Charles E. Schafer and Nora P. Schafer.”
I would like to make this notarized copy, I might add, I would like to make that Exhibit 2.” Before the execution of this document, and, in fact, the copy of the passbook, which your Honor has before you, reflects this: On June 10, 1975, the defendant placed one hundred dollars in the account; On June 27, 1975, an additional one hundred dollars into the account, and on the day that the instrument in question was executed by the defendant and her husband, she placed an additional eighty dollars into the account. Thereafter on August the 14th, 1975, an additional one thousand dollars was taken from the account by Jean Rita Winters, and given to Nora P. Schafer, the defendant herein. Subsequent to that time, Jean Rita Winters has made demand for the payment of the eighty-two hundred dollars plus interest, and we are submitting the matter to your Honor for a determination of the rights and liabilities of the parties herein. I might add that as Exhibit 3, I would like to present to the Court the check that was drawn on August 14th, 1975, from this account, and endorsed, and showing it was deposited to the account of Nora P. Schafer, the defendant herein. That will be Exhibit 3, and that would conclude the statement of facts.”

Let it be noted that although in this case there is no dispute as to any of the first-level facts such as who said what to whom and where and when (and the credibility of witnesses has, therefore, no bearing on the decision), there yet remains a fact-finding issue to be resolved — the high-level fact finding of what to make of those first-level facts. From those arguably ambiguous first-level facts, the fact finder must come up with an ultimate, second-level fact. Does one infer from the undisputed physical phenomena and the undisputed conduct of the parties that Mrs. Winters made a gift of the money to her niece or does one infer that she made a loan? Even observing the same event, reasonable minds might read into it different significances. Judge DeWaters, for his part, recognized that two contrary meanings could be drawn from the undisputed evidence:

"The primary issue before this Court is whether the transaction between the parties was in the nature of a loan and thereby created an indebtedness, or a valid inter vivos gift thereby extinguishing the Plaintiffs claim.”

Judge DeWaters went on correctly to outline the essential elements for a valid inter vivos gift as spelled out by the Court of Appeals in Rogers v. Rogers, 271 Md. 603, 319 A.2d 119. Against that standard, he measured the undisputed facts in the instant case and the inferences (here is the critical area of dispute) that might fairly be drawn therefrom and rendered his ultimate opinion (a blend of the undisputed events and the disputed inferences) as follows:

"The facts stipulated to clearly reveal that there was a 'delivery of the subject of the gift ($7,200.00) that completely divested the donor of dominion and control’ Brooks v. Mitchell, 163 Md. 1, 161 A. 261, 84 A.L.R. 547 (1932), and that there was an 'acceptance by the donee and an exercise of dominion and control over the subject of the gift’, Pomerantz v. Pomerantz, 179 Md. 436, 19 A.2d 713 (1941). The court must now determine whether the facts as stipulated to evidence 'a clear and unmistakable intention on the part of the donor to make a gift’ Burleigh v. Miller, 209 Md. 57, 120 A.2d 378 (1956), on September 30, 1974. In making its determination the court must weigh the facts and surrounding circumstances of the case. The facts indicate that: first, Mrs. Winters approached Mrs. Schafer and suggested that they make a withdrawal of Seven Thousand Two Hundred Dollars ($7,200.00) from their joint banking account; secondly, on September 30, 1974 the $7,200.00 was withdrawn under both Mrs. Winters’ and Mrs. Schafer’s signatures; thirdly, on that same date the $7,200.00 was transferred from the dominion and control of both Mrs. Winters and Mrs. Schafer to the sole dominion and control of Mrs. Schafer with the written consent of Mrs. Winters, evidenced by her signature on the withdrawal slip. It is of fundamental importance to emphasize that at no time, during the delivery and acceptance of the $7,200.00 on September 30, 1974, did Mrs. Winters indicate that she expected any form of monetary reimbursement. It is this court’s opinion that on September 30, 1974 there was a gratuitous delivery by Mrs. Winters of title and possession of $7,200.00, and there was an unequivocal acceptance by Mrs. Schafer of title and possession of $7,200.00. The facts and circumstances surrounding the case demonstrate a clear and unmistakable present intention on the part of Mrs. Winters to make a gift of the $7,200.00.”

Following the critical day of September 30, 1974, there did, to be sure, occur some very significant actions on the part of the Schafers. They signed a promissory note indicating that ten months earlier the delivery to them of $7,200.00 had been a personal loan. They did, moreover, make several deposits into the joint bank account. These actions could, in the view of a particular observer, indicate that the original intention of Mrs. Winters even as of September 30, 1974 had been to make a loan. Some other observer, however, in his prerogative, might choose to view the gestures as calculated merely to placate a loved one — or, more cynically, perhaps, a potential Santa Claus or potential Daddy Warbucks — and thereby avoid the possible loss of possible future largess. For his part, Judge DeWaters gave little significance to the events post-September 30, 1974:

"It is important to understand that the later disagreement between the parties and the subsequent signing of a promissory note on July 8, 1975, cannot invalidate Mrs. Winters’ clear intention to give the $7,200.00 to the Schafers ten months prior. Concerning the additional One Thousand Dollars ($1,000.00) claimed due and payable by the Defendants to the Plaintiffs, the court refers to the factual stipulation wherein it is stated that on August 14, 1975 Mrs. Winters made a withdrawal of One Thousand Dollars ($1,000.00) and gave same to the Schafers. The wording of the stipulation clearly evidences: (1) an unequivocal intention by Mrs. Winters to give the $1,000.00 to the Schafers, (2) a delivery of the $1,000.00 by Mrs. Winters, and (3) an acceptance of the $1,000.00 by the Schafers.”

From all of the above, he rendered his final judgment:

"Thus, the above stated facts are in compliance with the requisites and essential elements necessary to create a valid inter vivos gift. The September 30, 1974 transfer of $7,200.00 has been determined to be a gift, therefore, the issue before this court concerning the promissory note has become moot.”

Shall we affirm or shall we reverse? It all depends upon the standard of review. Maryland Rule 1086, setting forth the appropriate standard of appellate review in a non-jury case, provides quite simply:

"When an action has been tried by the lower court without a jury, this Court will review the case upon both the law and the evidence, but the judgment of the lower court will not be set aside on the evidence unless clearly erroneous and due regard will be given to the opportunity of the lower court to judge the credibility of the witnesses.”

If the clearly erroneous standard is the pertinent one in a case submitted to the court on an agreed statement of facts, we shall affirm. The facts that were agreed upon were sufficiently ambiguous to permit a reasonable mind to infer that there had been a perfected gift. By the same token, such an inference would be permitted but would not be compelled. A reasonable mind might also decline to draw such inference. It is to resolve just such ambiguities that we have fact finders, be they judges or be they jurors. Either to infer a loan or to infer a gift would fall within the legitimate range of fact-finding prerogative. What we three appellate judges might infer from the same undisputed facts, were we the fact finders, is beside the point. To choose one resolution of the ambiguity from within a range of legitimate resolutions would not be an error on the part of the fact-finding trial judge, whether we would have made the same choice or not. If, then, this be the standard, we shall affirm the judgment of Judge DeWaters for the judgment rests upon a finding of fact that is not clearly erroneous. Mulfinger v. Mulfinger, 114 Md. 463, 79 A. 1089; Milholland v. Whalen, 89 Md. 212, 43 A. 43.

Initially disturbing, however, is the fact that both the appellant and, more remarkably, the appellee urge upon us a quite different standard of review. They both look to Burleigh v. Miller, 209 Md. 57, 120 A.2d 378, and extract from the language of that case a conclusion that we are not bound by the "clearly erroneous” standard in the present evidentiary posture but are at liberty to set aside the fact finding of the trial judge and to substitute our own fact finding. In Burleigh v. Miller, the Court of Appeals said at 209 Md. 68:

"Of course, where the trial judge actually has the opportunity to see the witnesses and observe their manner of testifying, his finding of facts from their testimony is not set aside by this Court on appeal unless such finding was clearly erroneous. This rule does not apply where he does not see or hear the witnesses. Schneider v. Menaquale, 187 Md. 202, 204, 49 A.2d 330; Donigan v. Donigan, 208 Md. 511, 119 A.2d 430. Here, the trial judge had no greater opportunity to judge of their credibility than does this Court.” (Emphasis supplied).

In his brief, the appellee cites Burleigh v. Miller and concludes, "this court is free to substitute its judgment on the facts for that of the trial judge . . . but it must consider only those facts which were before the trial judge.” At oral argument, both the appellant and appellee talked to this Court as if to a jury. They attempted to persuade us as if we were making our own de novo fact finding. They, furthermore, did this quite openly and candidly, urging such a fact finding responsibility upon us.

This Court has considered such an interesting, albeit unusual, possibility. We have put our heads together as fact finders and agreed that if we were looking de novo at the undisputed but ambiguous factual predicate here, we would give greater significance than did judge DeWaters to the events that occurred after September 30,1974. On the basis largely of that hindsight, we would infer that the original intent of Mrs. Winters had been to make a loan. Let it be unmistakably clear, however, that this does not remotely suggest that we think Judge DeWaters was wrong, let alone clearly wrong. It is no more the case that he is wrong and we are right than that we are wrong and he is right. The very nature of the fact-finding process is such that there is a range for divergent but equally legitimate conclusions, none of which are wrong. We cannot say, as a matter of law, that our finding of an intention to make a loan is compelled by clear and decisive evidence that permits no other conclusion. We simply aver that in a close case that could reasonably tilt either way, our personal and idiosyncratic tilt is in one direction. We would defend vigorously, however, the legitimate prerogative of others reasonably to tilt in a different direction. If we are at liberty, therefore, to undertake de novo fact finding, we should reverse.

As exotically beguiling as the proposition suggested by Burleigh v. Miller may be, however, it simply cannot be the state of the law. A reading of Burleigh v. Miller in full context strongly indicates that the evidence in that case was legally insufficient and that the decision of the trial judge was, as a matter of law, clearly erroneous. Under the circumstances, the descriptive language about the trial judge not having observed the witnesses and about the appellate court’s equally good vantage point for viewing the evidence can be seen as an additional makeweight tossed in by the opinion writer to make the strongest possible case in support of the decision.

The point here raised remains a perplexing one, however, for such language from Burleigh v. Miller cannot be dismissed as a mere solitary aberration. That language from Burleigh v. Miller built, in its turn, upon equally suggestive language that had cropped up earlier in Donigan v. Donigan, 208 Md. 511, 521, 119 A.2d 430, and in Schneider v. Menaquale, 187 Md. 202, 204, 49 A.2d 330. In Donigan v. Donigan, the Court of Appeals modified an award of alimony and explained its justification for doing so in the following terms,, at 208 Md. 521:

"The award of alimony generally is a question of judgment on facts not in dispute and it is peculiarly the kind of determination which an appellate court feels freer to make than it does in matters which depend upon credibility, where the appearance and demeanor of the witnesses are important and the determination of disputed facts controls the case. Undoubtedly, this is the reason why this Court sometimes has changed the award of alimony, without expressly saying (as necessarily was implicit in the decision) that the chancellor was clearly wrong. In the case before us the chancellor did not see the witnesses and decided the case from the record, even as do we, without the benefit of oral argument which we have enjoyed, so that his opportunity for a sound exercise of judgment was not as great as ours.”

In the last analysis, however, it is only the language of Donigan v. Donigan that gives us pause and not its holding. After seeming to wander away verbally from the "clearly erroneous” standard, the Court returned to the faith in announcing its holding:

"We think the chancellor was clearly wrong in refusing alimony.”

The wellspring for the confusing ambivalence of Burleigh v. Miller is found all the way back in Schneider v. Menaquale, at 187 Md. 204:

"As the chancellor, who decided the case, did not see and hear the witnesses, the rule that his finding will not be disturbed unless the evidence clearly demonstrates error, does not apply here. However, in every appeal to a court of superior jurisdiction, it is necessary for the appellant to point out that the trial court erred.”

That, of course, is an absurdity. The reasoning contradicts itself without a pause for breath. The first sentence giveth; the second sentence taketh away. The first sentence tells us that the appellate court is free, in a case tried on a record, to substitute its judgment for that of the trial judge, even where he is not clearly wrong. The next sentence is equally absolute that such judgment will not be reversed unless the trial court has committed error. "We will not affirm the judge simply because he is free from error, but neither will we reverse him unless he has committed error.” The only way the two diametric notions can be reconciled is to blend them into the arrogant conclusion that, even within a legitimate range of choices, to choose other than as the appellate court would choose is, ipso facto, error. The seeming deference is but illusion.

Such a conclusion, of course, would subvert the essential appellate mission of correcting trial error. It would transmute the reviewing function into a de novo viewing function whenever a dispute as to first-level facts should not be involved. De novo conclusion drawing rather than error finding would become the appellate role not simply where, as here, a trial proceeded on an agreed statement of facts but also, by the samé rationale, whenever first-level facts were not in dispute, whatever the mechanism for establishing such undisputed facts might be. This would be the situation, as in Schneider v. Menaquale, whenever one judge arrived at a verdict on a record made by a predecessor judge. This would be the situation whenever a chancellor arrived at a verdict on the basis of fact finding made by a master, auditor, examiner or referee. Wenger v. Wenger, 42 Md. App. 596, 402 A.2d 94. This would be the situation whenever basic physical facts produced by a stipulation as to testimony (or, for that matter, as produced by a live witness) were not in dispute, although dispute might yet remain as to the significance of those facts. This would be the situation, civilly or criminally, whenever circumstantial evidence was not disputed, although the outcome might yet pivot on what to deduce from that circumstantial predicate.

If such were the law, there would be no reason for the appellate court not to second guess the fact-finding judge (or, for that matter, the fact-finding jury) whenever the hinge of decision was whether to draw a permitted inference from an undisputed predicate fact. If it were agreed that a defendant had been, without explanation, in possession of a diamond ring that had been stolen two days earlier, a fact-finding trial judge would presumably be at liberty 1) to infer that the defendant was the thief, 2) to infer that the defendant was a receiver of stolen goods, or 3) to draw neither inference and set the defendant free (or rule that such person, as a state witness, needed no corroboration). Brewer v. Mele, 267 Md. 437, 449, 298 A.2d 156. Could it be argued that because his ability to view the witnesses had not been superior to our own, we should not forbear to second guess his choice? Such a proposition would follow logically from Schneider v. Menaquale and Burleigh v. Miller. Simply to think through its implications, however, is to recognize that the mischief would be boundless. It not only is not, but cannot, be the state of the law.

The taproot of analysis is that the deference paid by the appellate reviewing court to the fact finding and evidence-based verdict rendering of a trial judge unless he is clearly erroneous, is not predicated upon the fact that he alone saw the witnesses and observed their demeanor. That is a peripheral characteristic, not a cause. The deference is not even predicated upon the additional factor that the trial court "is not only the judge of a witness’ credibility, but is also the judge of the weight to attach to the evidence.” Knowles v. Binford, 268 Md. 2, 298 A.2d 862. The deference rather rests fundamentally upon the core difference between the trial function and the appellate function. One is to decide cases; the other is to screen out trial error.

The aberrational nature of the false eddy of Schneider v. Menaquale and Burleigh v. Miller becomes cléar when we return to the mainstream of Court of Appeals analysis on the appropriate standard of review, the true course of which runs in quite the opposite direction. In Sewell v. Sewell, 218 Md. 63, 145 A.2d 422, Chief Judge Bruñe addressed the issue squarely, concluding at 218 Md. 71:

"Where he has not seen and heard the witnesses, the concluding portion of Rule 886a of the Maryland Rules requiring that due allowance be made for the opportunity of the witnesses is not applicable, and the written testimony is as available to us as to the Chancellor; but the fact that he did not have the witnesses before him does not vitiate the first portion of that Rule which requires this Court to review a case tried by the court without a jury on both the law and the evidence, and prohibits setting aside the judgment of the lower court on the evidence unless clearly erroneous.”

See also Oliver v. Oliver, 217 Md. 222, 229-230, 140 A.2d 908; Chalkley v. Chalkley, 236 Md. 329, 333, 203 A.2d 877; and Bartell v. Bartell, 278 Md. 12, 23, 357 A.2d 343.

Judge Smith came to grips with the same general issue, albeit in a slightly different factual posture, in R.E.C. Management v. Bakst Serv., 265 Md. 238, 254, 289 A.2d 285:

"The mandate of Maryland Rule 886 that when an action is heard by the trial court without a jury 'the judgment of the lower court will not be set aside on the evidence unless clearly erroneous’ is applicable notwithstanding the fact that the judge did not have the opportunity to see and hear the witnesses.”

See also Dorf v. Skolnik, 280 Md. 101, 117-118, 371 A.2d 1094. In the context of a child custody case, Judge Digges thoroughly analyzed Maryland Rule 886 (and, thereby, its counterpart, Maryland Rule 1086, applicable to this Court) and its predecessor provisions in Davis v. Davis, 280 Md. 119, 372 A.2d 231. He pointed out explicitly, at 280 Md. 123, "Nothing in Rule 886 indicates that it does not apply to all cases tried without a jury.” (Emphasis in original.) He went on, at 280 Md. 124:

"The words of the rule itself make plain that an appellate court cannot set aside factual findings unless they are clearly erroneous, and this is so even when the chancellor has not seen or heard the witnesses.”

The current of analysis in this Court has consistently run parallel to that mainstream. In Stefanowicz Corp. v. Harris, 36 Md. App. 136, 373 A.2d 54, Judge Thompson applied the general principle even to the issue of extracting meaning from the words of a written contract, saying at 147, n.3:

"3. We note that when construing the language of a written document, as opposed to oral testimony, where the trial judge has the most advantageous opportunity to judge the credibility of the witnesses, we are still bound by the clearly erroneous rule, even though the document can be interpreted by this Court as well as the trial judge.”

The full measure of appellate deference was articulated by us even more recently in Wenger v. Wenger, supra, where we said, at 42 Md. App. 602:

"A given set of facts does not lead mechanically to a single, automatic disposition but may support a range of discretionary dispositions. When an appellate court, absent clear error, defers to a trial court, it defers not only to the fact-finding but to any legitimate verdict, disposition or judgment emanating from that fact-finding.”

And so, we affirm the judgment of Judge DeWaters in this case because we hold that his findings of ultimate fact from out of the agreed statement of facts were not clearly erroneous, Maryland Rule 1086, even though we, had we been he, would have found otherwise. His verdict based upon those findings, therefore, was not wrong as a matter of law.

Judgment affirmed; costs to be paid by appellant

      . The irony that cannot escape the thoughtful observer is that appellate language about the clearly erroneous standard of review, for all of its ritual and repetitive incantation, is seldom put to the test of its principles. Most affirmances that intone their deference to the trial judge unless clearly wrong and which disclaim substituting their own findings for his, would have arrived at the same findings. Conversely, most reviewing courts that would arrive at different findings somehow conclude that the trial judge’s findings were clearly wrong. Only when our subjective vision diverges from our objective vision is there a true test of objectivity.

      . Which makes his mistake one of law and not of fact, for to be clearly erroneous is to have reached a decision on the basis of facts that are not legally sufficient to support the decision. In this regard, see the scholarly and painstaking analysis of Judge Orth in Williams and McClelland v. State, 5 Md. App. 450, 247 A.2d 731.


source: Caselaw Access Project

author: PER CURIAM Gilbert, C. J.,

license: Public Domain

text:
    RUTH T. SMITH et al. v. COUNTY EXECUTIVE OF ANNE ARUNDEL COUNTY, MARYLAND et al.
    [No. 1092,
    September Term, 1980.]

      Per Curiam Order October 3, 1980.

      Opinion Filed November 6, 1980.

      The cause was argued before Gilbert, C. J., and Morton and Melvin, JJ.

      Christopher L. Beard for appellants.

      Frederick C. Sussman, Assistant County Solicitor for Anne Arundel County, for appellees.
   PER CURIAM

ORDER

This cause having been advanced for argument before this Court by Order dated 2 October 1980, pursuant to Maryland Rule 1045 c. and counsel heard and arguments considered, it is this 3rd day of October, 1980, by the Court of Special Appeals of Maryland, ORDERED, for reasons to be stated in an opinion to be hereafter filed, that appellees’ Motion to Dismiss is denied; and,

IT IS FURTHER ORDERED, that the Order of the Circuit Court for Anne Arundel County filed September 30, 1980, dismissing the above captioned case be and is hereby reversed, inasmuch as the trial court lacked jurisdiction to

enter the Order, an appeal to the Court en banc having been entered on September 26, 1980, thereby divesting the trial court of jurisdiction. Mandate to issue forthwith. Costs to be paid by appellees.

Gilbert, C. J.,

delivered the opinion of the Court.

This is an unorthodox appeal, in an unorthodox case, brought in an unorthodox manner from an unorthodox series of rulings in the Circuit Court for Anne Arundel County.

On October 3, 1980, we reversed an order of that court which dismissed a petition for a writ of mandamus and ancillary relief that had been filed by the appellant, Ruth T. Smith. We took that action in a per curiam order issued the same day. We shall now explain why we acted as we did.

From the record it is learned that on August 18, 1980, a petition containing the purported signatures of 11,186 registered voters of Anne Arundel County was filed with the County Executive. The petition proposed the amendment of the County Charter by adding a section to be known as "Section 723.” The proposed new section would have required "that the full faith and credit of the County shall not, except in emergency, be pledged for debt or construction of internal improvement without the prior approval of the voters of the County.”

The County Executive transmitted the petition to the Administrator of the Board of Supervisors of Elections for Anne Arundel County (Board). Pursuant to Md. Ann. Code art. 33, § 16-4 (b) (1980 Cum. Supp.), "the form and arrangement of the ... ballots to be used in the election ... [ was] prepared by the board and made available for inspection by any registered voter.” The ballot was, we were told, posted in the window of the building in which the Board is housed. The posting occurred on August 29, 1980.

Apparently a review by the Board of the signatures on the petition resulted in the Board’s reducing the number of valid signatures from the 11,186 to 9,924, a total fewer than the number necessary to place a question on the ballot. Subsequently, the County Executive was notified by the Administrator of the Board of the shortage of valid signatures on the petition.

Two days later, September 8, 1980, the Chairman of the County Council wrote to Mrs. Betty G. Eby, the Board’s Administrator, to the effect that the Board should consider that the proposed amendment lacked the requisite number of valid signatures and, therefore, could not be on the ballot.

The next day, September 9, 1980, the Board posted the Council Chairman’s letter in the same window of the building. We infer it was the same window in which the "form and arrangement” of the ballot had been or was displayed.

Whenever or however the appellants learned that the Board believed the petitions failed for want of necessary signatures is not clear from the record. It is clear, however, that the appellants filed their suit in the circuit court on the 24th day of September 1980. A judge of that court issued a temporary injunction that required the County to advertise the amendment as if it had the required number of valid signatures. The law necessitates that amendments be published at least once a week for the five weeks immediately preceding the election. Hence, had the judge not issued the injunction, the appellants, even if the trial on the merits proved them to be right, would be left with an empty victory because of their inability to comply with the advertising requirements. They would have been in the position of a fighter who scored a knockout after the final bell had sounded, with the result that his opponent won the decision.

The County promptly moved to dissolve the injunction, citing Md. Ann. Code art. 33, § 16-4 (b), which provides in pertinent part:

"Following five days of public display, a court may not entertain a suit or grant injunctive relief to any party seeking to challenge the form or arrangement of the ballots or the wording of a constitutional amendment or question on a ballot.”

The County reasoned that after the letter from the Chairman of the County Council to the Board was posted in the window for public display on September 9, 1980, the appellants had to bring their action within five days from that date. The suit, however, was not filed until September 24, 1980. Thus, the County argued, and the circuit court agreed, because of the lateness of the filing of the suit, the court was without jurisdiction to hear and decide it. On September 26, 1980, the court dissolved the temporary injunction it had issued two days earlier.

The appellants, in accordance with Md. Rule 510, elected to have the judge’s decision "reserved for the consideration of the court en banc.. . .” Accordingly, the hearing judge certified the "Reservation and Exception” relative to dissolving the injunction as "accurate” and transmitted the matter to the en banc court. Four days later, September 30, 1980, an order was filed by the hearing judge that dismissed the appellant’s case totally.

When the matter was heard en banc on October 1, 1980, that court was advised of the hearing judge’s dismissal of the case. The en banc court, having determined that the matter of the dismissal was not reserved, did not decide the question of the dissolving of the injunction, but terminated it on the ground that the issue had been rendered moot by the order of dismissal filed by the hearing judge.

Appellants promptly noted an appeal to this Court from the hearing judge’s orders of September 26 and 30, respectively.

On motion filed simultaneously with the appeal, we advanced oral argument to the succeeding day. Counsel for appellants conceded on oral argument that the issue of the dissolving of the injunction was not before us since it had been reserved for an en banc decision. Rather, the appellants asserted that the question for us to resolve was the hearing court’s dismissal on jurisdictional grounds of their petition for mandamus.

Article IV, § 22 of the Maryland Constitution provides:

"Where any Term is held, or trial conducted by less than the whole number of said Circuit Judges, upon the decision or determination of any point, or question, by the Court, it shall be competent to the party, against whom the ruling or decision is made, upon motion, to have the point, or question reserved for the consideration of the three Judges of the Circuit, who shall constitute a court in banc for such purpose; and the motion for such reservation shall be entered of record, during the sitting, at which such decision may be made; and the several Circuit Courts shall regulate, by rules, the mode and manner of presenting such points, or questions to the Court in banc, and the decision of the said Court in banc shall be the effective decision in the premises, and conclusive, as against the party, at whose motion said points, or questions were reserved; but such decision in banc shall not preclude the right of Appeal, or writ of error to the adverse party, in those cases, civil or criminal, in which appeal, or writ of error to the Court of Appeals may be allowed by Law. The rjght of having questions reserved shall not, however, apply to trials of Appeals from judgments of Justices of the Peace, nor to criminal cases below the grade of felony, except when the punishment is confinement in the Penitentiary; and this Section shall be subject to such provisions as may hereafter be made by Law.” (Emphasis supplied.)

Through Md. Rule 510, the Court of Appeals has set out the procedure for invoking the constitutionally permitted en banc hearing. The rule is applicable to all the State except Baltimore City. Md. Rule 510 (d).

Some reasons for invocation of Art. IV, § 22 and Rule 510 are that it allows a case to be decided faster and more economically than an appeal to the Court of Special Appeals.

Patently, the constitutional provision and the rule authorize a procedure that operates in the same manner as an appeal. Indeed, it has been said to be a substitute for an appeal. See Buck v. Folkers, 269 Md. 185, 187, 304 A.2d 826, 827 (1973); State Roads Commission v. Smith, 224 Md. 537, 540, 168 A.2d 705, 707 (1968). The judgment of the en banc court is just as final as if it had been decided by the Court of Appeals. Thus, the decision of the en banc court, as to the party initiating that procedure, is of greater effect than a judgment of this Court. This is true because even if an appellant loses in this Court, he or she still has the right to seek certiorari to the Court of Appeals. There is no certiorari, however, from a circuit court sitting en banc.

Generally, when an appeal is noted to this Court, or in the case of the invocation of the death penalty, to the Court of Appeals, the appellate court is immediately vested with jurisdiction over the case. The trial court’s jurisdiction, except in purely ministerial matters, is divested and that court, with the noted exception, is powerless in the case. We see no reason why Rule 510, once triggered, should not, since it operates as an appeal, oust the trial court of jurisdiction over the case and vest it in the en banc panel. To hold otherwise would undercut the very purpose of the rule. If, as here, a plaintiff could invoke Rule 5Í0 and, after having done so, a defendant then prevails upon the trial court to dismiss the plaintiffs case, the result would be that Md. Const. Art. IV, § 22 and Rule 510 are meaningless unless all parties agree to its use.

We are certain that the framers of our constitution and the Standing Committee on Rules of Practice and Procedure as well as the Court of Appeals never intended for Rule 510 to be a sterile act, unilaterally brought into play by one party and just as singularly rendered nugatory by the other. See generally, Washabaugh v. Washabaugh, 285 Md. 393, 404 A.2d 1027 (1979).

We think it manifest that the constitutionally permitted circuit en banc court is a higher tribunal than is the county circuit court. Washabaugh v. Washabaugh, supra at 402, 404 A.2d at 1032. It follows, therefore, that the county circuit or lower court could not dismiss a case over which the higher or en banc court had obtained jurisdiction. To do so was error. For the en banc court to dismiss the case because the county circuit court had done so simply compounded the error.

      . Mrs. Smith is but one of 150 individuals who, along with Barbara Ritch and Petition Committee for Bond Referendum, Inc., are parties to this case. Whenever the name "Smith” or the word "appellant” is used herein, it is to be construed as including all appellants.

      . The effect of the amendment would be to divest the County Executive and the County Council of the power to commit the taxpayers of the County to certain fiscal obligations.

      . The appellants could have proceeded directly to this Court. See Md. Cts. & Jud. Proc. (1980 Repl. Vol.) Code Ann. § 12-303 (c) (1).

      . "En Banc” (in the bench) is interchangeably used in the following forms: "in bank,” "in banco,” "in banc.”and "en banke.”

      . With respect to criminal causes en banc, see Md. Rule 761.

      . "[Ills commonly recognized nickname [is] ... 'the poor person’s appeal. . . .’ ” Washabaugh v. Washabaugh, 285 Md. 393, 396, 404 A.2d 1027, 1029 (1979).

      . Of course, the adverse party, that is, the party who did not invoke Rule 510, may appeal to this Court from the action of the en banc court. It is only the party who invokes or triggers the en banc hearing that is estopped from further appellate review. See Md. Const. Art. IV, § 22.

      . State v. McCray, 267 Md. 111, 297 A.2d 265 (1972); Housing Equity Corp. v. Joyce, 265 Md. 570, 290 A.2d 769 (1972); Stacy v. Burke, 259 Md. 390, 269 A.2d 837 (1970); Bullock v. Director of Patuxent Institution, 231 Md. 629, 190 A.2d 789 (1963); Collier v. Collier, 182 Md. 82, 32 A.2d 469 (1943); Link v. Link, 35 Md. App. 684, 371 A.2d 1146 (1977); Rosenbloom v. Electric Motor Repair Co., 31 Md. App. 711, 358 A.2d 617 (1976).


author: Moore, J.,

text:
    AMERICAN HOME ASSURANCE COMPANY v. RONALD OSBOURN, Ind. & t/a O & B, Inc. d/b/a Central Avenue Sunoco RONALD OSBOURN, Ind. & t/a O & B, Inc. d/b/a Central Avenue Sunoco v. HAY BROTHERS INSURANCE AGENCY, INC.
    [No. 22,
    September Term, 1980.]

      Decided November 7, 1980.

      The cause was argued before Morton, Moore and Weant, JJ.

      Alan R, Siciliano, with whom were O’Malley, Miles, Farrington & McCarthy on the brief, for appellant American Home Assurance Company. Edward P. Camus for appellant Ronald Osbourn.

      Richard C. Burch, with whom were Weinberg & Green on the brief, for appellee Hay Brothers Insurance Agency, Inc. Edward P. Camus on the brief for appellee Osbourn.
   Moore, J.,

delivered the opinion of the Court.

Two separate actions are before us in this consolidated appeal: in one, the insured sought a declaratory judgment and an awárd of expenses and settlement payments against his insurer which had disclaimed liability and declined to defend; in the other, filed the same day, the insured sued his insurance broker for breach of warranty and negligence because of alleged failure to procure complete insurance coverage for his business. The insured prevailed in the first case and the insurer has appealed. In the second case, the court granted summary judgment for the broker on the ground that the insured’s claim was barred by limitations, and the insured has appealed. We reverse the judgment in the first case and affirm the judgment in the second.

I

Each case had its origin in an incident on April 24, 1974 at the Capital Centre in Largo, Prince George’s County, where Mr. Frank Sinatra was performing and the guests included then Vice-President Spiro Agnew and then Secretary of State Henry Kissinger. Nine private cars were improperly parked in a fire lane, described in testimony as an "escape route” for Messrs. Sinatra, Agnew and Kissinger. The Maryland Park Police ordered the vehicles towed away and impounded. This service was duly performed, pursuant to a contractual agreement, by appellant-appellee, Ronald Osbourn, the operator since 1969 of Central Avenue Sunoco, in nearby Seat Pleasant.

Eight of the car owners ("Colby” et al.), later united in a declaration against Mr. Osbourn and his company seeking compensatory and punitive damages aggregating $4,040,000 for alleged trespass and conversion. The ninth owner ("Varasano”) filed a separate suit for $550,000 alleging negligence, malicious prosecution and false imprisonment.

At the time these cases were filed, Osbourn was insured under a "package” Service Station Policy by the appellant, American Home Assurance Company (hereinafter "American Home”), effective January 6, 1972 to January 6, 1975. Osbourn purchased the policy through Hay Brothers Insurance Agency, Inc., insurance brokers. American Home provided representation for Osbourn in the Varasano case. The record is unclear as to the ultimate disposition of the Varasano case and it is not involved in this appeal.

In the Colby case, the company first notified Osbourn by letter dated August 14, 1974 that it would present a defense on his behalf but that he might also engage counsel of his choice because the suit was in excess of policy limits and there was no coverage for punitive damages under the policy. Shortly thereafter, by letter dated September 11, 1974, American Home retracted and advised Osbourn that there was no coverage because of an exclusion in the policy for "intentional acts.” Therefore, it disclaimed liability and declined to provide a defense. Osbourn then retained private counsel. The case was ultimately settled for $3,000 in December 1977.

On September 25, 1978, Osbourn instituted two suits in the Circuit Court for Prince George’s County. One was a declaratory judgment action against American Home, with a demand for a jury trial, seeking a determination that American Home should have defended Osbourn in the Colby case and recovery of the settlement costs in that proceeding as well as reimbursement of attorneys’ fees, costs, and expenses incurred in both the Colby suit and the declaratory judgment action. The other lawsuit was filed against Hay Brothers Insurance Agency, Inc. on grounds of negligence and breach of warranty for not procuring complete insurance coverage. The broker raised the issue of limitations by a special plea.

The cases were consolidated for trial. The court granted Hay Brothers’ motion for summary judgment, holding that the action was not brought within three years of the time it accrued and was therefore barred by limitations.

In the declaratory judgment action, upon the conclusion of the evidence and denial of motions for a directed verdict, the following "special issue”, was submitted to the jury over objection by American Home:

"If any property damage resulted in the Colby case, was it caused intentionally by or at the direction of Mr. Osbourn or his employees?”

The court instructed briefly and defined "intentional.” After 19 minutes’ deliberation, the jury returned with a negative response to the issue presented. The trial court then rendered an opinion finding that American Home was under a duty to defend Osbourn in the Colby case pursuant to the policy coverage. The question of damages was heard at a later date. At that time, the court awarded Osbourn a judgment of $22,250.10, plus interest, representing $10,419.05 in legal fees and costs in the Colby case as well as the $3,000 paid in settlement, and $8,831.05 in legal fees and costs in the declaratory judgment action.

II

We shall address first the issues raised in the appeal of American Home. Its primary contention is that the court erred in declaring that American Home should have defended Osbourn in the Colby case and that a totally irrelevant issue was submitted to the jury. It also complains that the court improperly awarded Osbourn legal fees and costs in the prosecution of the declaratory judgment action.

With respect to the principal assignment of error, our analysis begins with the policy itself, particularly the provisions of Section II, Part I pertaining to liability and the insurer’s duty to defend:

"Coverage C — Liability — The Company agrees to pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury or property damage caused by an occurrence and arising out of the service station operations hazard; and the Company shall have the right and the duty to defend any suit against the Insured seeking damage payable under the terms of this policy, even if any of the allegations of the suit are groundless, false or fraudulent; but the Company may make such investigation and settlement of any claim or suit as it deems expedient.” (Emphasis added.)
"Service Station Operations Hazard — The ownership, maintenance or use of the premises for the purposes of a gasoline service station, and all operations necessary or incidental thereto, herein called 'service station operations,’ including the automobile hazard defined as follows:
(a) The ownership, maintenance or use of any automobile for the purpose of service station operations, and the occasional use for other business purposes and the use for non-business purposes of any automobile owned by or in charge of the Named Insured and used principally in service station operations. ..

Under "definitions,” the word "occurrence” as used in Section II, Part I means:

"An accident or continuous or repeated exposure to conditions which results in bodily injury or property damage during the policy period, provided all damages arising out of such exposure to substantially the same general conditions existing at or emanating from each premises location of the Named Insured shall be considered as arising out of one occurrence.” (Emphasis added.)

Turning to the question of whether American Home was under a contractual obligation to defend Osbourn in the Colby suit, the applicable Maryland law was set forth by Judge Eldridge in Brohawn v. Transamerica Insurance Co., 276 Md. 396, 347 A.2d 842 (1975):

"The obligation of an insurer to defend its insured under a contract provision such as here involved is determined by the allegations in the tort actions. If the plaintiffs in the tort suits allege a claim covered by the policy, the insurer has a duty to defend.. .. Even if a tort plaintiff does not allege facts which clearly bring the claim within or without the policy coverage, the insurer still must defend if there is a potentiality that the claim could be covered by the policy.” (Citations omitted.) (Emphasis in original.)

Id. at 407-08, 347 A.2d at 850. Of course, every fact necessary to establish coverage need not be alleged. As the Court of Appeals held in the case of United States Fidelity and Guaranty Co. v. National Paving and Contracting Co., 228 Md. 40, 178 A.2d 872 (1962), the allegations actually made may be sufficient "to indicate a potentiality” that the injury in question was caused by some act or omission "covered by the terms of the contract.” (Emphasis added.) Id. at 54-55, 178 A.2d at 879. Moreover, under the language of the liability provision previously quoted, even if the allegations of the suit are "groundless, false, or fraudulent,” the insurer must defend any suit against the insured seeking damages payable under the terms of the policy if the injury claimed is covered.

"This language [groundless, false, or fraudulent allegations] means that the insurer will defend the suit, if the injured party states a claim, which, qua claim, is for an injury 'covered’ by the policy; it is the claim which determines the insurer’s duty to defend;”

Brohawn, supra at 408, 347 A.2d at 850 quoting Chief Judge Learned Hand in Lee v. Aetna Casualty & Surety Co., 178 F.2d 750, 751-52 (2nd Cir. 1949).

Here, the amended declaration of the eight aggrieved car owners contained, in Count I, a claim for intentional, wilful trespass. It was alleged that the removal of the automobiles from the Capital Centre parking lot was "without the consent or authority” of the plaintiffs; and that the defendants "deflated the tires . .. and disabled the vehicle[s] on defendant’s premises in a locked, enclosed area. .. .” Count II alleged conversion in that the vehicles were "wrongfully and unlawfully detained.” As a result of the trespass and conversion, plaintiffs claimed to have suffered damages by "loss of use” of their family vehicles, "loss of and interruption in their normal activities, embarrassment, and money losses for the recovery of their vehicle[s]. . ..” None of the counts in the thirty-two count declaration alleged negligence. More importantly, no count alleged facts which fall — even potentially — within the meaning of "occurrence” as defined in the policy.

Because the policy defines an occurrence as an "accident” or a "continuous or repeated exposure to conditions,” those terms must be considered separately. "Accident” is defined in Webster’s Third New International Dictionary (unabr. ed. 1966) as "1 a: an event or condition occurring by chance or arising from unknown or remote causes . .. b: lack of intention or necessity.” Black’s Law Dictionary 31 (rev. ed. 1968) states that in the context of accident insurance contracts, "[a]n accident ... is an event happening without any human agency, or, if happening through such agency, an event which, under circumstances, is unusual and not expected by the person to whom it happens.” As for the second meaning of occurrence, i.e., a "continuous or repeated exposure to conditions,” the appellant presented the testimony of an expert in the field of underwriting, who cited as an example the discharge of fumes from a pipe over a period of time.

In the instant case it cannot seriously be asserted that the trespass and conversion even remotely alleged an accident. In this connection, we observe that the trial testimony made it abundantly clear that in the process of towing the vehicles from Largo to Seat Pleasant there was no improper driving, no mishaps occurred and there was no resulting damage to either persons or property. Clearly, there was no "occurrence” insofar as the policy defined occurrence as "an accident.” Furthermore, a one-time towing operation does not fall within the "continuous or repeated exposure to conditions” language of the definition of occurrence. Plainly, the second meaning of "occurrence” is not alleged. See Steyer v. Westavo Corp., 450 F. Supp. 384 (D. Md. 1978).

It is settled law that insurance contracts must be interpreted like other contracts, according to the sense and meaning of the terms, John Hancock Life Insurance Co. of Boston v. Plummer, 181 Md. 140, 142, 28 A.2d 856, 857 (1942), and if an ambiguity exists it will be resolved against the draftsman of the policy. United States Fidelity and Guaranty Co. v. National Paving and Contracting Co., 228 Md. 40, 50, 178 A.2d 872, 877 (1962). In the instant case there was no ambiguity. There was nothing resembling an "occurrence” alleged in the declaration which would trigger appellant’s duty to defend under the liability provisions of the policy.

Osbourn’s position, as we understand it, is that the liability section of the policy must be read in conjunction with the paragraph which immediately follows, entitled "Service Station Operations Hazard.” We agree. However, the appellee seeks to apply the hazard provision in isolation, independently of the immediately preceding provision (Coverage C-Liability) of the policy. Appellee overlooks the conjunctive "and” after the word "occurrence.” There must first be an "occurrence” as defined in the policy; and it must arise out of the service station operations hazard. We have already concluded that there was no "occurrence” under the facts and circumstances of this case.

Finally, it is apparent that improper reliance was placed below upon one of the exclusions in the insurance policy which provided that the insuring clause contained in Section II did not apply "to bodily injury or property damage caused intentionally by or at the direction of the insured.” Osbourn here contends that "it was for the jury to determine whether the facts of this case as revealed by the evidence, fit within the exclusions of the policy. The jury declared that they did not.” We disagree. It is plain that the court submitted to the jury an irrelevant issue. The exclusion was inapplicable for the reason that there was no language in Section II, Part I, the liability provision, which afforded coverage to the appellee in the first place under the facts alleged. "An exclusionary clause generally cannot be said to create coverage where none existed before.” 13 Appleman, Insurance Law and Practice § 7387 (1976) at 179 (footnote omitted). In Simkins Industries, Inc. v. Lexington Insurance Co., 42 Md. App. 396, 401 A.2d 181 (1979), Judge Thompson stated in language appropriate here:

"[Alppellant is trying to use an exclusion to extend coverage when the policy plainly on its face shows which perils were covered and which were not. We do not think language found only in an exclusionary clause can be reasonably construed as adding additional coverage.. . .”

Id. at 406, 401 A.2d at 187. Accord, LeDoux v. Iowa National Mutual Insurance Co., 262 N.W.2d 418 (Minn. 1978); State Farm Fire & Casualty Co. v. Voiding, 426 S.W.2d 907 (Tex. Ct. Civ. App. 1968).

Ill

American Home next contends that the trial court erred in awarding the appellee legal fees and costs in the pursuit of the declaratory judgment action. We agree.

The general rule in Maryland pertaining to the award of attorneys’ fees in a declaratory judgment action was most recently applied in Bankers and Shippers Insurance Co. of New York v. Electro Enterprises, 287 Md. 641, 415 A.2d 278 (1980). There, the test as articulated by the Court was couched in terms of an insurer’s breach of its contractual duty to defend. The Court stated:

"With respect to similar policy provisions, this Court has held that an insurer is liable for the damages, including attorneys’ fees, incurred by an insured as a result of the insurer’s breach of its contractual obligation to defend the insured against a claim potentially within the policy’s coverage, and this is so whether the attorneys’ fees are incurred in defending against the underlying damage claim or in a declaratory judgment action to determine coverage and a duty to defend. .. . Therefore, whenever an insured must conduct his own defense at his own expense as a result of an insurer’s breach of a contractual duty to defend its insured, the insured may recover the expenses of that defense from the insurer.” (Citations omitted.) (Emphasis added.)

Id. at 648, 415 A.2d at 282. Accord, Cohen v. American Home Assurance Co., 255 Md. 334, 258 A.2d 225 (1969); Anderson v. The Maryland Casualty Co., 123 Md. 67, 90 A. 780 (1914).

Speaking for this Court in Maryland Automobile Insurance Fund v. Sparks, 42 Md. App. 382, 400 A.2d 26 (1979), Judge Lowe stated the rule in the following terms:

"Ordinarily counsel fees are not awarded in a declaratory judgment action,. .. however, such fees and costs may be recoverable where an insurer has unjustifiably refused to defend its insured.” (Citations omitted.)

Id. at 395, 400 A.2d at 33. We think the rule in Electro and Sparks is plain. If an insurer breaches its contractual duty to defend a claim that falls within or potentially falls within the policy’s coverage, then the insurer is liable for attorneys’ fees incurred in the underlying defense of that claim as well as in a declaratory judgment action which determines the coverage and duty to defend.

The lower court awarded attorneys’ fees after it concluded, albeit erroneously, that American Home was in breach of its contractual duty to defend Osbourn in the Colby case. However, in light of our above holding that American Home had no obligation to defend Osbourn, it was justified in abstaining from that litigation and the award of attorneys’ fees to Osbourn in the declaratory judgment action was therefore erroneous.

IV

On September 25, 1978, the same day that Osbourn filed his declaratory judgment action, he also instituted suit in the Circuit Court for Prince George’s County against his insurance broker, Hay Brothers, alleging breach of warranty and negligence in failing to procure complete insurance coverage for his service station. Hay Brothers filed a motion for summary judgment based upon the statute of limitations. The lower court granted the motion and Osbourn appealed. The issue of limitations is now before us.

The parties are in agreement that the applicable statute of limitations is found in Md. Cts. & Jud. Proc. Code Ann. § 5-101 which states:

"A civil action at law shall be filed within three years from the date it accrues unless another provision of the Code provides a different period of time in which an action shall be commenced.”

The issue presented for our consideration is when did the cause of action accrue. The general rule applicable in Maryland is that the statute of limitations begins to run from the date of the alleged wrong and not from the time the wrong is discovered. See generally Harig v. Johns-Manville Products Corp., 284 Md. 70, 394 A.2d 299 (1978); Leonhart v. Atkinson, 265 Md. 219, 289 A.2d 1 (1972); Poffenberger v. Risser, 46 Md. App. 600, 421 A.2d 90 (1980). However, in cases of professional malpractice, the Court of Appeals has adopted the "discovery rule” which alleviates the harsh consequences resulting from the application of the general rule. E.g., Watson v. Dorsey, 265 Md. 509, 290 A.2d 530 (1972) (attorney malpractice); Hahn v. Claybrook, 130 Md. 179, 100 A. 83 (1917) (medical malpractice).

In recent years, the application of the discovery rule by the Court of Appeals has reached well beyond the traditional "learned” professions and now applies in diverse professional settings: Mattingly v. Hopkins, 254 Md. 88, 253 A.2d 904 (1969) (civil engineer); Steelworkers Holding Co. v. Menefee, 255 Md. 440, 258 A.2d 177 (1969) (architect and contractor); Leonhart v. Atkinson, 265 Md. 219, 289 A.2d 1 (1972) and Feldman v. Granger, 255 Md. 288, 257 A.2d 421 (1969) (accountant). See Callahan v. Clemens, 184 Md. 520, 41 A.2d 473 (1945) (wall construction).

The initial inquiry, therefore, is whether the insurance broker, Hay Brothers, falls within the ambit of the discovery rule. We believe it does. Our decision is based upon the cases above cited which have extended the discovery rule well beyond its initial application to medical doctors in Hahn v. Claybrook, supra; and upon the underlying rationale of the rule, that a tort in professional malpractice cases "may go unnoticed for years, because the plaintiff is unqualified to ascertain the initial wrong and could not reasonably be expected to know of the tort until actual injury is experienced.” Harig v. Johns-Manville Products Corp., 284 Md. 70, 76-77, 394 A.2d 299, 303 (1978). The insurance broker, in our judgment, was engaged in a professional endeavor.

The critical question, then, is the date when Osbourn knew or should have known that his insurance broker sold him an insurance policy which was inadequate because it afforded incomplete coverage. Under the discovery rule, the plaintiff would have three years from that time in which to file suit. Here, the appellant would have us rule that no damages were incurred in the defense of the Colby suit until the case was settled in December 1977 and, therefore, his cause of action did not "accrue” at least until that time. Osbourn also argues that the pendency of the declaratory judgment action against American Home postponed the running of the statute because he could not know whether his policy provided coverage in the Colby suit until the declaratory judgment case was decided. The appellee, on the other hand, argues that the cause of action accrued on September 11, 1974, the date of American Home’s letter to Osbourn stating there was no coverage and declining to provide a defense.

Contrary to appellant’s contention, a showing of the precise amount of damages at the time of discovery of the wrong is not required although, of course, there must be some evidence of legal harm. In Feldman v. Granger, 255 Md. 288, 257 A.2d 421 (1969), Judge Finan stated for the Court of Appeals:

"[A]s in the Mattingly case, and as in other tort cases, the exact amount of damages sustained may not be known at the time of the discovery of the wrong. However, in our opinion this is not a sufficiently sound reason to postpone the accrual of the action or toll the running of limitations when other reasons grounded in public policy are considered.”

Id. at 296, 257 A.2d at 426-27. See Mattingly v. Hopkins, supra. In our view, the statute of limitations in this case began to run on September 11, 1974 — the day Osbourn discovered that American Home would not defend. Osbourn knew then that he had to engage his own counsel in the Colby suit. We recognize that incurring the expense of counsel fees does not ordinarily constitute sufficient legal harm, in and of itself, to satisfy the "damage” requirement of the discovery rule. In the instant case, however, the cost of defending the Colby suit was a direct result of Hay Brothers’ alleged malpractice in failing to procure adequate insurance coverage, one benefit of which would have been complete legal representation of Osbourn.

The effect of the declaratory judgment action on the application of the discovery rule need not detain us. Suffice to say, appellant could have filed his action against Hay Brothers within the requisite three year time period and the action could have been stayed pending the outcome of the declaratory judgment suit. See Feldman v. Granger, supra, 255 Md. at 294-95, 257 A.2d at 424-25.

Judgment against American Home Assurance Company reversed; judgment against Ronald Osbourn Ind., t/a O & B, Inc., d/b/a Central Avenue Sunoco affirmed; costs to be paid by Osbourn, et al.

      . Police regulations governed the towing of vehicles by private service station operators under specified criteria. Osbourn and other operators were assigned certain geographical areas from which they would tow vehicles to their own stations at the direction of the police.

      . Though not relevant to the issues before us, Osbourn impleaded Maryland-National Capital Park and Planning Commission for "any and all acts of conversion alleged to have occurred.” The trial court granted the Commission’s motion under Rule 323 (b) raising preliminary objection on grounds of governmental immunity and Osbourn appealed. The Court of Appeals affirmed. O & B, Inc. v. Maryland-Nat’l Capital Park, etc., 279 Md. 459, 369 A.2d 553 (1977).

      . The lower court rejected any theory of estoppel or waiver in favor of Osbourn because of the Varasano matter and a 1972 case where American Home had provided a defense in a proceeding arising out of a towing operation. Osbourn concedes that the question of estoppel or waiver is not before us.

      . The $4,040,000 compensatory and punitive damages originally claimed in the Colby case were reduced in an amended declaration to $48,000.

      . Under the exclusion, the liability provisions of the policy did not extend "to bodily injury or property damage caused intentionally by or at the direction of the Insured....” As noted infra, we do not decide the insurer’s appeal on the basis of this exclusion.

      . Lesser contentions, which we need not consider, relate to alleged errors injury instructions and in refusing to grant the insurer’s motion for a directed verdict.

      . In United States Fidelity and Guaranty Co. v. National Paving and Contracting Co., potential coverage under the policy which provided coverage to National for operations performed by an independent contractor, was found by the Court on the basis of an allegation that the accident resulted from the negligence of the driver and that the driver was "the agent, servant and employee” of both Sudbrook (the independent contractor) and National Paving. See generally Annot., 50 A.L.R.2d 458 (1956).

      . The remaining thirty counts alternated between trespass and conversion.

      . At the service station, the air was released from one tire of each of the vehicles to prevent their being driven away. None of the cars was damaged.

      . Had the liability provision been written in the disjunctive, appellee’s argument might have possessed some merit.

      . The court also awarded Osbourn $10,419.05 in legal fees and costs in the Colby case. Because of this Court’s ruling that American Home was under no duty to defend Osbourn in that suit, the awarding of those legal fees and costs is, of course, negated.

      . The record is silent as to the trial court’s reasoning in support of its action in granting appellee’s motion for summary judgment.

      . Other issues raised by the appellant involve improper pleading of limitations and revival of an action already barred. We find no merit in these contentions.

      . Under the discovery rule, the statute begins to run from the time of the discovery of the alleged injury or when it should have been discovered by the exercise of due diligence.

      . Osbourn, as appellant, does not dispute the status of the broker as a "professional” but argues on other grounds that the action was not barred.


author: Thompson, J.,

text:
    BALTIMORE COUNTY, MARYLAND v. MARYLAND DEPARTMENT OF ASSESSMENTS AND TAXATION et al.
    |No. 32,
    September Term, 1980.]

      Decided November 7, 1980.

    The cause was argued before Morton, Thompson and Liss, JJ.

      Phyllis C. Friedman, Deputy County Solicitor for Baltimore County, with whom was Leonard S. Jacobson, County Solicitor for Baltimore, on the brief, for appellant.
    ■ Peter W. Taliaferro, Assistant Attorney General, with whom was Stephen H. Sachs, Attorney General, for appellee Maryland Department of Assessments and Taxation. K. Donald Proctor, with whom were David E. Bushong and Miles & Stockbridge on the brief, for appellee/intervenor Black & Decker.
   Thompson, J.,

delivered the opinion of the Court.

In this opinion we consider the availability of the declaratory judgment remedy in a case which is within the jurisdiction of the Maryland Tax Court.

THE LAW

Maryland’s Declaratory Judgment Act, set forth in Md. Cts. and Jud. Proc. Code Ann. §§ 3-401 — 3-415 (1974 Repl. Vol.) permits courts of record to declare rights, status and other legal relationships between persons if such declaration will terminate the controversy or remove an uncertainty, providing there is an actual controversy between the contending parties and the claims presented indicate imminent and inevitable litigation. Further limitation on the right to use this proceeding is contained in § 3-409 (b):

"Special form of remedy provided by statute — If a statute provides a special form of remedy for a specific type of case, that statutory remedy shall be followed in lieu of a proceeding under this subtitle.”

Under Md. Ann. Code, Art. 81, the legislature has set out a detailed statutory remedy for disputes involving the assessment of tangible personal property by the Department of Assessments and Taxation. The procedure is set forth in Art. 81, § 258 as follows:

"Any taxpayer, any city, the county commissioners of any county, or the Attorney General on behalf of the State, claiming to be aggrieved because of any final action taken by the Department with respect to ordinary taxes assessable by it in assessing or refusing to assess or in reassessing or refusing to reassess, classifying or refusing to classify, any property or computing any tax, or increasing, reducing or abating any assessment, may appeal to the Maryland Tax Court as provided in § 229 of this article. Such appeal shall be taken within thirty days from the date of the order, action or refusal to act of the Department complained of, or if an address shall have been filed as provided in § 257 of this article, then within thirty days after the date of delivery or mailing (whichever is earlier) of a copy of such order, action or refusal to act to such address.”

The right of further appeal to the Circuit Court and thereafter to this Court is set forth in Art. 81, § 229 (m) and (p). In Maryland-National Capital Park and Planning Commission v. Washington National Arena, 282 Md. 588, 386 A.2d 1216 (1978), the Court carefully reviewed these statutes saying in part:

"Thus, with certain notable exceptions not relevant here, we have repeatedly held that where a speciñc statutory remedy is available, it is mandatory for the court to dismiss the suit for declaratory judgment and remit the plaintiff to the alternative forum.” Id. at 595. (citations omitted) (emphasis added).
"When read together, the foregoing statutory provisions manifest a clear legislative intent to limit the jurisdiction of the tax agencies primarily to the review of decisions concerning the assessment, valuation and classification of real and personal property for tax purposes. Presumably, in enacting such an intricate and comprehensive mechanism for the review of property tax determinations, the General Assembly sought to afford the taxpaying public a systematic and efficient method of fact-finding and policy-formation in an area where many of the day-to-day problems of administration either lie beyond the conventional competence of the courts because of the technical complexity of the subject matter or, because of their routine nature, are not properly suited for resolution in formal adjudicatory proceedings. See Sawejka v. Morgan, 56 Wis. 2d 70, 201 N.W.2d 528, 533 (1972).
"Thus, with rare exception, we have insisted that taxpayers pursue their statutory remedies under Article 81 whenever they attempt to challenge a decision as to the amount of an assessment, the valuation of property, or the applicability of the tax statutes to a particular parcel of land or to improvements thereon.” Id. at 597-98.

In State Department of Assessments and Taxation v. Clark, 281 Md. 385, 403-04, 380 A.2d 28 (1977), the Court stated:

"We have indicated, supra, that when an administrative remedy is provided by statute, relief provided under those statutory provisions must be exhausted before a litigant may resort to the courts. That is, such a remedy is exclusive, and the administrative body must not be by-passed by pursuing other remedies. * * * The law on the matter was made clear in Poe [v. Baltimore City, 241 Md. 303, 216 A.2d 707 (1966).] It declared that where there is full opportunity for a property owner to protest an assessment to administrative agencies and adequate provisions for judicial review of the agencies’ action, a court shall not take jurisdiction unless the administrative remedies have been exhausted.”

Two exceptions to the rule requiring exhaustion of administrative remedies have” been recognized. The first exception permits an aggrieved party to seek judicial relief prior to the exhaustion of his administrative remedies where the constitutionality of the statute under which the administrative agency is acting is challenged. See, State Dept. of Assessments & Taxation v. Clark, supra; Pressman v. State Tax Commission, 204 Md. 78, 102 A.2d 821 (1954). As the Court made clear in Clark, this exception is applicable only where the constitutionality of the statute as a whole, as opposed to the constitutionality of the statute as applied to a particular situation, is challenged. The second exception permits a party to eschew administrative resolution of a dispute where there exists no administrative remedy or where the administrative remedy provided is inadequate. See, Soley v. State Commission on Human Relations, 277 Md. 521, 356 A.2d 254 (1976); Poe v. Baltimore City, 241 Md. 303, 216 A.2d 707 (1966) and State Dept. of Assessments & Taxation v. Clark, supra.

FACTS

Md. Ann. Code, Art. 81, § 9A (d) (1) provides an exemption from county and city taxation for "raw materials and manufactured products in the possession of a manufacturer....” Prior to 1979, the State Department of Assessment & Taxation (SDAT) construed this exemption so as to include only raw materials and manufactured products, in the hands of a manufacturer which were actually manufactured in the county in which the exemption was sought. Accordingly, in certifying assessments of personal property to county governments pursuant to Md. Ann. Code, Art. 81, § 22, the SDAT included in such certifications assessments of raw materials and manufactured products in the hands of a manufacturer which had not been manufactured or were not used in manufacturing in the county in which they were situated.

In Perdue Farms, Inc. v. State Department of Assessments and Taxation, Md. Tax Court, Case Nos. TP-C 448 and TP-C 452 (1978), the Maryland Tax Court held that the language of Article 81, § 9A (d) (1) compelled the conclusion that it applied to all raw materials and manufactured products in the hands of a manufacturer, regardless of the place of manufacture. The SDAT appealed the decision to the Circuit Court for Dorchester County, Civil Law No. 3990 (1979), which affirmed the Tax Court’s ruling.

As a result of the Perdue Farms, Inc. decision, SDAT revised its interpretation of Article 81, § 9 A (d), and for the 1979-80 tax year, decided not to certify to Baltimore County any raw materials or manufactured products in the hands of a manufacturer, regardless of the place of manufacture. Baltimore County (the County) thereafter received assessment certifications which no longer included assessments for raw materials and manufactured products in the hands of a manufacturer which were manufactured outside of Baltimore County, and the County, on October 29, 1979, appealed the SDAT action to the Maryland Tax Court. Baltimore County v. State Department of Assessments and Taxation and Black & Decker Manufacturing Company, Md. Tax Court No. TP-C 492 and Baltimore County v. State Department of Assessments and Taxation and McCormick & Co., Inc., Md. Tax Court No. TP-C 491. Those appeals to the Maryland Tax Court presented the same issue as this appeal, to wit: the scope of the exemption for raw materials and manufactured products in the possession of a manufacturer. In the case of Baltimore County v. State Department of Assessments and Taxation and Black & Decker Manufacturing Company, the SDAT filed a motion to dismiss on the ground that the appeal was not timely taken.

On October 31, 1979, the County filed a Petition for Declaratory, Ex-Parte, Interlocutory and Permanent Injunctive Relief in the Circuit Court for Baltimore County. The court by order dated December 19, 1979, declined to adopt the County’s interpretation of the manufacturer’s exemption, and instead issued a declaration that the exemption applies to all raw materials and manufactured products situated in Baltimore County in the hands of a manufacturer. Prior to the issuance of this order, one of the appellees, Black & Decker Manufacturing Company, had been permitted to intervene.

THE APPLICATION OF THE LAW

In our view, the chancellor should have dismissed the County’s bill of complaint because of its failure to exhaust its administrative remedies. From the above discussion, it is clear that an appeal to the Maryland Tax Court is intended as the exclusive remedy for one aggrieved by a decision of the SDAT concerning the assessment and classification of property for tax purposes.

The County argues that this administrative remedy is inadequate because, with respect to the assessment for the intervenor Black & Decker, one of the appellees, the period of limitations within which an appeal to the Tax Court must be filed had expired prior to the County’s discovery that the SDAT assessment for Black & Decker did not include inventory manufactured outside Baltimore County. We disagree. Under Md. Ann. Code, Art. 81, § 45,* 12 the County can determine what property the SDAT has assessed and the manner in which the SDAT arrived at its assessment. The failure of the County to promptly investigate the assessment does not make the administrative remedy inadequate.

As the County has not challenged the constitutionality of the statute which the SDAT applies, that exception to the requirement of exhaustion of administrative remedies is inapplicable as well. We find that:

"The overriding public interest in the speedy and orderly collection of revenues demands that there be finality upon failure of an aggrieved party to exercise the statutory right of appeal from allegedly illegal or erroneous tax assessments and that collateral attack by way of a declaratory judgment suit be prohibited.” Md.-National Capital Park and Planning Commission v. Washington National Arena, 282 Md. at 598.

The County’s suit for declaratory judgement, etc., should have been dismissed.

Decree reversed.

Case remanded for passage of an order in accordance with this opinion.

Appellant to pay the costs.

      . Although the Court was referring to assessments of real estate, similar views are applicable to the assessment of personal property.

      . We are advised by the briefs that the Tax Court has dismissed the appeal on this ground.

      . Art. 81, § 45 (b) and (d) provide as follows:
      "(b) Record of assessments of personal property. — The record of assessments of personal property, by whatever nature, shall be arranged in alphabetical order according to owner by county, election district, taxing district, or assessment area, and the nature of the property shall be briefly stated, and the taxable value shall be shown. However, the details thereof shall not be open to inspection except by the taxpayer or by officers of the State, city or county affected thereby.
      "(d) Data which shall not be open to public inspection. — Assessment worksheets or cards, or correspondence containing private appraisal information, building costs, rental data or business volume, which may have been assembled for consideration by assessors in estimating property values, shall not be open to public inspection, except by the taxpayer concerned, or officers of the State and/or city or county affected thereby. However, assessment worksheets or cards for other comparable residential property shall be furnished to a taxpayer if:
      (1) The taxpayer has filed a timely protest to his assessment and that protest is pending; and
      (2) The taxpayer specifically identifies, by address, the property for which he is requesting the assessment worksheets or cards; and
      (3) The taxpayer pays a reasonable fee, to be set by the Department of Assessments and Taxation, for copies of the assessment worksheets or cards.”