author: NAZARIAN, J.

text:
    130 A.3d 1171
    Robert SHENKER, et al. v. Bernice POLAGE, et al.
    No. 2620,
    Sept. Term, 2014.
    Court of Special Appeals of Maryland.
    Feb. 1, 2016.

      Richard S. Gordon (Martin E. Wolf, Gordon, Wolf & Carney Chtd., Baltimore, MD. James S. Notis, Meagan Farmer, Gar-dy & Notis, LLP, New York, NY), all on the brief, for Appellant.
    David A.P. Brower (Brian C. Kerr, Brower, Piven, New York, NY. Charles J. Piven, Yelena Trepetin, Brower Piven, Stevenson, MD. Lee D. Rudy, Michael C. Wagner, J. Daniel Albert, Justin O. Reliford, Kessler, Topaz, Metzler & Check, LLP, Radnor, PA.) Adam S. Hobson (William Savitt, Andrew J.H. Cheung, Wachtell, Lipton, Rosen & Katz, New York, NY. G. Stewart Webb, Jr., Maria E. Rodriguez, Venable, LLP, Baltimore, MD. Scott H. Marder, Laurie B. Goon, Duane Morris, LLP, Baltimore, MD. Rebecca M. Lamberth, Duane Morris LLP, Atlanta, GA), all on the briefs, for Appellee.
    Panel: WRIGHT, NAZARIAN, HOTTEN, JJ.

       Michele D. Hotten, J., participated in the hearing of this appeal while still an active member of this Court but did not participate in either the preparation or adoption of this opinion.

   NAZARIAN, J.

This appeal arises from the Circuit Court for Baltimore City’s approval of a class action settlement of claims against Cole Real Estate Investments, Inc. (“CREI”), American Realty Capital Properties, Inc. (“ARCP”), and both companies’ directors and officers, relating to their February 2014 merger. Certain CREI shareholders brought derivative and class action claims alleging that the CREI board breached its fiduciary duties in negotiating and completing due diligence for the merger. The parties reached a settlement that the circuit court approved preliminarily, but before the circuit court conducted its settlement approval hearing, ARCP announced that certain financial results had been misstated and that others were not (yet) reliable. After further negotiations, the parties agreed to an amended settlement that, among other things, released CREI’s officers and directors from future liability, but carved the officers and directors of ARCP out of the release. Five class members, including Robert Shenker, objected to the amended settlement, arguing that the release was overbroad because it precluded the objecting shareholders from bringing federal securities claims against CREI’s officers and directors. The circuit court held a hearing and approved the amended settlement. Mr. Shenker appeals and we affirm.

I. BACKGROUND

CREI is incorporated in Maryland and maintains its principal executive offices in Phoenix, Arizona. CREI was previously known as Cole Credit Property Trust III (“CCPT III”) and operated as a non-traded real estate investment trust that acquired commercial retail properties throughout the country. Christopher H. Cole is chairman of CREI and was CEO of CCPT III until the first merger (which we describe in greater detail below) in April 2013. Mark Nemer became CEO and President of CREI after the first merger.

ARCP is a Maryland corporation that maintains its principal offices in New York City. It became a public company in September 2011. ARCP acquires and owns single-tenant freestanding commercial real estate, principally subject to medium-term net leases.

A. The First Merger: CCPT III Acquires Its Subsidiary.

In early 2013, ARCP approached CCPT III with a proposal to merge, but a special committee of CCPT Ill’s board decided not to pursue a merger with ARCP at that time. Instead, on March 6, 2013, CCPT III announced that its board had unanimously approved the acquisition of one of CCPT Ill’s subsidiaries, Cole Holdings Corporation. The combined company would be called CREI. As consideration for the acquisition, CCPT III would make upfront payments of $20 million in cash, subject to adjustment, as well as 10,711,225 shares of CCPT III common stock, plus 2,142,245 shares of common stock after listing on the New York Stock Exchange. Additional shares of common stock were potentially payable in 2017 as an earn-out, contingent on the new company’s financial success.

During March 2013, CCPT III shareholders filed, in the Circuit Court for Baltimore City, three separate putative derivative and class action lawsuits challenging the proposed acquisition. These suits were ultimately consolidated; two federal securities claims were filed as well in the United States District Court for the District of Arizona. Opposing shareholder Bernice Polage also served what came to be known as “The Polage Demand” on CCPT Ill’s board in April 2013. She alleged that CCPT III directors breached their fiduciary duties to shareholders by pursuing the internalization merger rather than merging with ARCP. CCPT Ill’s board formed a special committee to investigate these allegations, as well as the opposing shareholders’ demands: disgorgement of the cash and shares that Defendant CEO Mr. Cole received in connection with the transaction; rescission of Mr. Cole and Mr. Nemer’s employment agreements entered into in connection with the transaction, and damages to compensate shareholders for losses sustained as a result of the transaction.

The acquisition ultimately closed in April 2013, and the circuit court dismissed the actions challenging it after the parties reached a settlement that reduced the contingent payments to Messrs. Cole, Nemer, and other CREI executives. The shareholders filed a Notice of Appeal in this Court, and the appeal was dismissed on July 31, 2014 after the defendant executives agreed to reimburse $100,000 to the shareholder plaintiffs.

B. The Second Merger: ARCP Acquires CREI.

In late August or September 2013, ARCP’s CEO again approached Messrs. Cole and Nemer and expressed interest in a potential merger. CREI retained Goldman Sachs to advise the Board about ARCP’s business, to review ARCP’s financial results and financial projects, and to review the terms of the merger proposal. CREI also retained the law firm Morris Manning & Martin LLP to conduct due diligence on ARCP’s real estate investments, including leases and portfolio information, as well as environmental, tax and litigation issues; the law firm Venable to advise the Board on the applicable law in Maryland; and the accounting firm Deloitte & Touche LLP to conduct a financial and accounting due diligence investigation of ARCP. The companies announced a merger agreement on October 23, 2013, under which ARCP would exchange 1.0929 shares of ARCP common stock or $13.82 in cash for each share of CREI common stock (the cash option was available for up to 20% of CREI’s outstanding shares). The transaction was valued at $11.2 billion.

In response to the announcement, eight new class action and derivative complaints — including one action by Ms. Po-lage — were filed in the Circuit Court for Baltimore City between October 30, 2013 and November 14, 2013. These lawsuits alleged that CREI’s directors breached their fiduciary duties to the stockholders and sought, among other things, an order enjoining the transaction. The court consolidated these actions as Polage v. Cole on December 12, 2013, and a few days later, the Polage plaintiffs filed a consolidated complaint that, again, asserted both derivative and class action claims challenging the merger. Several federal securities class action complaints were also filed in the United States District Court for the District of Arizona in October and November 2013.

The parties also engaged in negotiations regarding a possible settlement, and on January 10, 2014 — the day of the injunction hearing — the plaintiff shareholders and CREI directors entered into a Memorandum of Understanding containing the material terms of a settlement. Among other things, the agreement permitted the plaintiff shareholders to engage in additional discovery to confirm that the settlement was fair and adequate. The CREI stockholders voted to go through with the merger at a special meeting on January 23, 2014, and the merger closed in February of that year.

The parties submitted a settlement agreement for approval to the circuit court on August 18, 2014. As consideration for dismissing the claims against them, the CREI directors and executives agreed to relinquish $50 million in personal payments, and to establish a $14 million settlement fund for distribution to class members. In addition, the CREI executives agreed to provide shareholders with previously undisclosed material Information concerning the merger via a Form 8-K they would file with the Securities and Exchange Commission (“SEC”). The CREI defendants also agreed not to oppose the plaintiff shareholders’ application for $7 million in attorney’s fees and reimbursement of expenses, and the settlement released both CREI and ARCP from future liability. The court issued a preliminary approval of the settlement on August 25, 2014, preliminarily certified the class, and ordered that notice be distributed to CREI’s shareholders.

C. The October Surprise.

On October 29, 2014, ARCP announced that it had overstated the operating funds and understated the net losses it reported in its first and second quarter 2014 financial results. According to ARCP, financial information as far back as 2013 could no longer be relied upon. The announcement spurred an investigation by the SEC, and the company’s stock price dropped from $12.38 per share to $7.85 per share within two trading days.

The announcement also spurred a series of federal securities lawsuits against ARCP in the United States District Court for the Southern District of New York. The consolidated class action complaint alleges that ARCP director defendants prepared, reviewed, and disseminated false and misleading proxy statements in order to get shareholder approval for the merger with CREI, and in violation of § 14(a) and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. § 78n(a), in addition to alleging that ARCP officers and directors fraudulently induced class members to purchase ARCP stock for artificially inflated prices in violation of § 10(b), 15 U.S.C. § 78j(b). It also asserts claims under § 11 of the Securities Act, 15 U.S.C. § 77k, alleging that statements and prospectuses issued in connection with ARCP’s stock offerings contained material misstatements and omissions about ARCP’s financial statements; under § 12(a)(2), 15 U.S.C. § 771(a)(2), alleging that ARCP officers and directors who assisted in the sale of those securities to class members did so for personal gain, including direct payments; and under § 15, 15 U.S.C. § 77o, asserting that ARCP officers and directors who controlled the content of those prospectuses should be held jointly and severally liable for the underlying § 11 and § 12(a)(2) violations. The complaint asserts that the defendant-directors’ wrongful conduct inflated ARCP securities prices and resulted in the subsequent decline in value of those securities when the fraud was revealed.

The parties resumed their negotiations, and agreed in November 2014 to amended settlement language that carved ARCP’s director and officers out of the release. As in the original settlement, the amended settlement language still released CREI’s officers:

“Released Claims” means ... [any] claims, demands, rights, actions, causes of action, liabilities, damages, losses, obligations ... against any Released Persons, relating to or based upon the ARCP Announcement or ARCP Financials except that nothing in this clause (ii) shall impair the completeness of the release of any of the Director Defendants, former CREI officers or outside advisors to CREI and/or to the Director Defendants for conduct occurring before the Merger closed on February 7, 201k to the extent such Director Defendants, former officers or outside advis-ors were acting in their capacity as directors or officers of CREI....

(Emphasis added.) As a condition for releasing CREI’s officers from liability, the parties agreed that the plaintiff shareholders could take discovery to ensure that they had no knowledge of or role in ARCP’s preparation of its misstated financial statements. To that end, the plaintiffs deposed CREI’s former CEO, Mr. Nemer, on December 2, 2014, and examined him regarding the steps CREI’s board took to ensure that ARCP’s financials were solid and that its stock was worth the market price. Stated generally, Mr. Nemer responded that CREI retained and relied on outside advisors, including Goldman Sachs and Deloitte, to conduct CREI’s due diligence for the ARCP merger and to advise CREI’s board and officers.

Five shareholders, including Mr. Shenker, objected to the amended settlement. They argued that because CREI’s officers made false statements about ARCP’s finances in the Joint Proxy to shareholders, those officers, and especially Mr. Nemer, should not be released from future liability for claims arising from ARCP’s financial fraud.

The circuit court held an all-day settlement hearing on December 12, 2014, then issued a written order approving the amended settlement, including the modified release language:

The Court has closely reviewed and considered each objection, cited legal authorities, and the entire arguments offered by the parties and objectors on December 12, 2014, in view of the nature, issues, context, and circumstances of the litigation. The Court has also carefully reviewed and considered the terms and disclosures of the Joint Proxy (filed December 28, 2013); timing, terms and conditions of the Memorandum of Understanding (“MOU”) dated January 10, 2014; the Transaction closing date on February 7, 2014, the ARCP Forms 8-K and 10-K, with a filing date on February 27, 2014 (for the Fourth Quarter and the Fiscal Year that ended December 31, 2013); the Court’s August 25, 2014 Order and preliminary approval of the settlement terms reached on August 14, 2014; the motion papers with Amended Stipulation and Release and Agreement of Compromise and Settlement; and the December 2, 2014 deposition testimony of CREI Director Marc Nemer.

(Footnote omitted.)

The court found the amended settlement fair, adequate, and reasonable, and that “the scope of the revised Release, in the aftermath of ARCP’s announcement, reasonably ‘carve[d] out’ potential claims against ARCP directors and officers arising out of or relating to” ARCP’s October 2014 announcement. Moreover, the court concluded that the amended settlement language “d[id] not and need not address any such claims against Cole directors and officers.” The court cited “the chronological sequence of CREI and advisors’ examination of ARCP financial disclosures and certain audited reports in advance of the Joint Proxy, in advance of the MOU, and in advance of the Transaction date” in deciding to approve the settlement. Mr. Shenker filed a timely notice of appeal.

II. DISCUSSION

Mr. Shenker’s three appellate contentions (which we will address in a slightly different order) boil down to a core complaint that the amended settlement was unfair to the class. First, he argues that the court failed to make adequate factual findings or articulate the standard of reasonableness on which it based its conclusions. Second, he contends that the settlement’s release of potentially valuable claims against CREI’s officers, particularly Mr. Nemer, render the settlement unfair and inadequate. And third, in his view, those same defects demonstrate that the settlement violated the class’s due process rights.

Unlike most settlements of civil actions, class action settlements must be approved by the court. See Md. Rule 2-231(h) (“A class action shall not be dismissed or compromised without the approval of the court.”). Our Rule does not state a specific standard for the court to apply. See Boyd v. Bell Atlantic-Md., 390 Md. 60, 70-71, 887 A.2d 637 (2005) (acknowledging that Rule 2-231 does not articulate any standards against which a court should evaluate the fairness and adequacy of a settlement proposal). But “[w]hen interpreting a Maryland Rule that is similar to a federal rule of Civil Procedure, we may look to federal decisions construing the corresponding federal rule for guidance.” Bond v. Slavin, 157 Md.App. 340, 358 n. 30, 851 A.2d 598 (2004) (quoting Pleasant v. Pleasant, 97 Md.App. 711, 732, 632 A.2d 202 (1993)). And Federal Rule of Civil Procedure 23(e), the federal analogue to Rule 2-231(h), does set forth a process for evaluating class action settlements and requires the court, as part of that review, to find the settlement “fair, adequate, and reasonable”:

Settlement, Voluntary Dismissal, or Compromise. The claims, issues, or defenses of a certified class may be settled, voluntarily dismissed, or compromised only with the court’s approval. The following procedures apply to a proposed settlement, voluntary dismissal, or compromise:
(1) The court must direct notice in a reasonable manner to all class members who would be bound by the proposal.
(2) If the proposal would bind class members, the court may approve it only after a hearing and on finding that it is fair, reasonable, and adequate.
(3) The parties seeking approval must file a statement identifying any agreement made in connection with the proposal.
(4) If the class action was previously certified under Rule 23(b)(3), the court may refuse to approve a settlement unless it affords a new opportunity to request exclusion to individual class members who had an earlier opportunity to request exclusion but did not do so.
(5) Any class member may object to the proposal if it requires court approval under this subdivision (e); the objection may be withdrawn only with the court’s approval.

Unlike Maryland Rule 2-231(h), Federal Rule 23(e) has been applied and analyzed thoroughly in reported decisions of Maryland’s federal district courts and the Fourth Circuit, as well as nationally. See, e.g., Berry v. Schulman, 807 F.3d 600 (4th Cir.2015); In re Jiffy Lube Securities Litig., 927 F.2d 155 (4th Cir.1991); Flinn v. FMC Corp., 528 F.2d 1169 (4th Cir.1975); In re Mid-Atlantic Toyota Antitrust Litig., 564 F.Supp. 1379 (D.Md.1983); In re Montgomery Cty. Real Estate Antitrust Litig., 83 F.R.D. 305 (D.Md.1979). Not surprisingly, then, the parties’ arguments follow Federal Rule 23’s analytical path, and we will do the same.

The federal courts evaluate proposed class action settlements in two steps: first, by evaluating the procedural fairness of the settlement process, and second, by evaluating the settlement’s substantive fairness and adequacy. When reviewing a trial court’s decision to approve a class action settlement, “there is a strong presumption in favor of finding a settlement fair.” Decohen v. Abbasi, LLC, 299 F.R.D. 469, 479 (D.Md.2014). We afford the trial court’s decision substantial deference, and reverse only upon clear showing that the court abused its discretion. See Berry, 807 F.3d at 614 (quoting Flinn, 528 F.2d at 1172); Jiffy Lube, 927 F.2d at 158.

A. The Circuit Court Sufficiently Articulated Its Reasoning.

Mr. Shenker argues that the court did not make adequate factual findings or articulate any standard for determining that the settlement was reasonable. He characterizes the court’s approval of the settlement as conclusory, and contends that the court “failed to carefully assess the facts and law as required.” It’s true that the court did not state, in so many words, which particular standard it used to evaluate the amended settlement and release language, nor did the court undertake the step-by-step analysis for settlement approval that we explain below and that appears in the federal cases analyzing Federal Rule 23(e). Ultimately, though, we disagree that the court’s decision was conclusory or preordained, and we discern an appropriately thorough analysis from the court’s written order and the transcript of the full-day fairness hearing.

Although a trial court may not give a settlement boilerplate approval, it need not “turn the settlement hearing into a trial or a rehearsal of the trial, nor need it reach any dispositive conclusions on the admittedly unsettled legal issues in the case.” Flinn, 528 F.2d at 1172-73 (footnotes, internal citations, and quotations omitted).

So long as the record before it is adequate to reach an intelligent and objective opinion of the probabilities of ultimate success should the claim be litigated and form an educated estimate of the complexity, expense, and likely duration of such litigation, and all other factors relevant to a full and fair assessment of the wisdom of the proposed compromise, it is sufficient.

Id. at 1173 (footnote and internal citations omitted). As a procedural matter, this settlement complied both with Md. Rule 2-231(h) and the process outlined in Federal Rule 23. Notice of the proposed settlement was sent to all class members; the parties filed and the court reviewed briefs in support of and against the revised settlement; and the court heard objections from opposing class members, both in writing and at a hearing (without subject or temporal limitation) designed to address the settlement’s reasonableness, fairness, and adequacy.

The court’s written decision approving the settlement is not lengthy, and only a portion of the court’s memorandum analyzes the substantive merits of the settlement. For that reason, our appellate task would be easier if the court had, either from the bench or in its written order, undertaken a full-blown, step-by-step Rule 23-style analysis, as the federal courts typically do. Then again, our review of numerous (although many unreported) cases from the federal trial courts reveals that they undertake the analogous Rule 23(e) analysis in widely varying levels of detail, depending on the facts and circumstances of each case. See, e.g., Boyd v. Coventry Health Care, Inc., 299 F.R.D. 451, 460-61 (D.Md.2014). Above all, our task is to determine whether the circuit court was well-informed to determine the fairness and adequacy of the settlement, and that it reached a well-reasoned decision. And in this case, we can see from the written memorandum and from the transcript of the fairness hearing that the circuit court considered and analyzed this settlement in a manner consistent with the requirements of Federal Rule 23(e), and reached its ultimate conclusion that the settlement was fair, reasonable, and adequate on a fully informed basis. See United States v. North Carolina, 180 F.3d 574, 581 n. 5 (4th Cir.1999) (holding that the district court abused its discretion by refusing to approve the settlement, but declining to base its decision on the fact that the district court did not explicitly go through the step-by-step analysis articulated in Flinn v. FMC Corp.).

Mr. Shenker argues that the circuit court failed to take proper account of Mr. Nemer’s testimony on the extent of CREI’s due diligence (or the lack thereof). But in the course of the fairness hearing, the circuit court demonstrated that it had carefully reviewed and considered all of the evidence, including Mr. Nemer’s deposition and the “ ‘reverse due diligence’ undertaken by outside advisors” in association with the merger. Moreover, this complaint is really more a complaint about the relative weight the court afforded that piece of evidence, and that point of view, over any other. As we explain next, the circuit court’s conclusions as to the settlement’s substantive fairness and adequacy are supported by the record.

B. The Circuit Court Did Not Abuse Its Discretion By Approving The Settlement.

Mr. Shenker argues next that the amended settlement releasing CREI officers from future liability is unfair and inadequate because it releases valuable claims shareholders have against those officers under Section 14(a) of the Securities Act — claims worth far more, he says, than the value of the settlement itself. The circuit court’s job in assessing the settlement was to weigh the relief awarded to class members against the claims they give up in exchange, thereby protecting “class members whose rights may not have been given adequate consideration during the settlement negotiations.” In re Jiffy Lube, 927 F.2d at 158. Mr. Shenker contests the circuit court’s decision on both fairness and adequacy grounds, but we see no abuse of the circuit court’s discretion in its decision to approve the amended settlement.

1. Fairness

Mr. Shenker argues that the settlement, and more specifically the release, was unfair to class members because it was rushed after ARCP announced the accounting irregularities. He claims that post-settlement discovery was too limited and too hurried to ensure a fair settlement, and that the rush to settle left the circuit court unable to determine the strength of the plaintiffs’ case. Keeping in mind that the release the parties settled on releases claims only against CREI’s officers, and not against the ARCP officers that actually committed the accounting fraud, we conclude that the circuit court made no error in finding the terms of the settlement fair.

In approving a settlement, the court must ascertain that it was reached “as a result of good faith bargaining at arm’s length.” Id. at 159. To determine if the proposed terms are fair, the court should consider factors tending to show “the presence or absence of collusion among the parties.” In re Mid-Atl. Toyota, 564 F.Supp. at 1383 (quoting Montgomery Cty., 83 F.R.D. at 315). That is, “the posture of the case at the time settlement is proposed, the extent of discovery that has been conducted, [and] the circumstances surrounding the negotiations and the experience of counsel.” Id. at 1383-84 (quoting Montgomery Cty., 83 F.R.D. at 315); see also Carson v. American Brands, Inc., 654 F.2d 300, 301 (4th Cir.1981) (en banc) (per curiam); Flinn, 528 F.2d at 1173 (articulating the fairness factors as “the extent of discovery that has taken place, the stage of the proceedings, the want of collusion in the settlement, and the experience of counsel who may have represented the plaintiffs in the negotiation”).

There is no allegation here that the settlement is the product of collusion. Rather, Mr. Shenker complains that the settlement was reached too soon after ARCP’s announcement, without enough discovery to allow a full evaluation of the potential culpability of CREI insiders under the federal Securities Acts. Beyond a general complaint that more depositions weren’t taken and new searches for documents or email weren’t made, though, nothing in the record indicates that the information available to the court, most importantly Mr. Nemer’s testimony, was inadequate to assess the merits of the potential claims against CREI’s officers. To the contrary, the record allowed the objectors to argue about the evidence that wasn’t there, i.e., the absence of evidence of more extensive due diligence. And in any event, the circuit court accounted for the timing of the amended settlement as well as the contents of Mr. Nemer’s deposition in its conclusion that the settlement was fair.

2. Adequacy

Under the amended settlement, the class members relinquished the right to bring suit against CREI officers for any false statements made on the Joint Proxy, in exchange for the ability to bring claims against ARCP’s officers (claims that were released in the original settlement), a $14 million cash payment, and the relinquishment by Messrs. Cole and Nemer of $50 million in personal payments. In evaluating the adequacy of a proposed settlement, the trial court should “ ‘weigh the likelihood of the plaintiffs recovery on the merits against the amount offered in settlement.’ ” In re Mid-Atl. Toyota, 564 F.Supp. at 1384 (quoting Montgomery Cty., 83 F.R.D. at 315). In so doing, the court should consider: “ ‘(1) the relative strength of the plaintiffs’ case on the merits, (2) the existence of any difficulties of proof or strong defenses the plaintiffs are likely to encounter if the case goes to trial, (3) the anticipated duration and expense of additional litigation, (4) the solvency of the defendants and the likelihood of recovery on a litigated judgment, and (5) the degree of opposition to the settlement.’ ” Id. (quoting In re Montgomery Cty., 83 F.R.D. at 316).

As for “the relative strength of the plaintiffs’ case on the merits,” In re Mid-Atl. Toyota, 564 F.Supp. at 1384, the record before the circuit court revealed a theoretical, but highly uncertain, claim against CREI’s officers under § 14(a) of the federal Securities Act. 15 U.S.C. § 78n(a). Mr. Shenker argues that Mr. Nemer’s testimony proves that CREI “failed to conduct a meaningful assessment of ARCP’s financial controls, processes or reporting practices.” However, there is nothing in the record to indicate the value of the potential Securities Act claims, nor does Mr. Shenker attempt to estimate one. The parties argue vigorously over the scienter requirement for a § 14(a) claim, but even if we assume, as Mr. Shenker argues, that a plaintiff need only prove negligence, the record makes it far from clear that these claims would survive that low threshold. In addition to testifying that he could not recall whether CREI’s accountants reviewed ARCP’s financial controls, Mr. Nemer also testified that CREI retained several outside financial and legal advisors to review the terms of the merger and ARCP’s financial statements, and we see no abuse of discretion in the circuit court’s decision to credit that testimony for its purposes.

More to the point, though, and even assuming that the class could readily prove liability against the CREI directors under § 14(a), it is not unreasonable for the court to wonder if those claims have any marginal damages value given the class’s ability to bring the same claims against ARCP and its directors and officers. Damages in § 14(a) claims are measured by market loss, see, e.g., Maldonado v. Flynn, 477 F.Supp. 1007, 1009 (S.D.N.Y.1979), and it appears that the same market loss at issue here could be recovered from a successful claim against the CREI defendants — the alleged misstatements were communicated to CREI’s shareholders through ARCP’s section of the joint proxy, and, as the CREI directors point out, “the merger agreement requires ARCP to indemnify CREI’s former officers and directors for any such liability, [so] the CREI defendants would not even provide a potential source of recovery separate and distinct from ARCP.” In re Mid-Atl. Toyota, 564 F.Supp. at 1384 (directing courts to consider the likelihood of recovery on a litigated judgment).

We don’t purport to resolve these disputed securities law questions definitively. It is enough for our purposes that the record and competing legal arguments before the circuit court raised serious uncertainties about the likelihood of success on the merits of any claims the objectors might have had against the released CREI parties, or the marginal value of those claims in light of the claims that survived the release. And as such, the circuit court did not abuse its discretion in finding that the settlement consideration — most notably, the reinstatement of the class’s claims against ARCP and its directors and officers — was adequate under the circumstances.

C. Approval of the Amended Settlement Agreement Poses No Due Process Violation.

Finally, Mr. Shenker seems to argue, based on a repackaging of the claims discussed above, that the amended settlement violated the due process rights of the absent class members, whom he argues were not adequately represented by the plaintiff class members’ counsel. He relies on Matsushita Elec. Indus. Co., Ltd. v. Epstein, for the proposition that “a court may permit the release of a claim based on the identical factual predicate as that underlying the claims in the settled class action, even though the claim was not presented and might not have been presentable in the class action.” 516 U.S. 367, 376-77, 116 S.Ct. 873, 134 L.Ed.2d 6 (1996) (citation and quotation omitted). He argues that Matsushita should have prevented the circuit court from releasing the potential Securities Act claims against CREI officers and directors because the facts underlying those claims did not arise from the same operative facts as those asserted in the current action.

Putting aside the defendants’ arguments that Mr. Shenker failed to preserve this issue in the circuit court, the argument fails for the same reasons as his other arguments. Moreover, Mr. Shenker’s reliance on Justice Ginsburg’s concurrence in Matsushita is misplaced. While there may be a due process problem if the class representatives are willing to “release federal securities claims within the exclusive jurisdiction of the federal courts for a meager return to the class members,” id. at 388, 116 S.Ct. 873 that is not what happened here. Beyond the terms of the original settlement, the amended settlement gave class members the ability to bring Securities Act claims against ARCP officers and directors, who otherwise would have been released, and it was entirely reasonable on this record for the circuit court to conclude that this trade-off was fair, especially considering the uncertainty of any federal claims against CREI officers.

The dispositive question in a due process challenge to a class action settlement is whether class counsel adequately represented the interests of the class. Md. Rule 2-231(a)(4). The trial court explicitly found that “Plaintiffs and their counsel are adequate representatives of the class,” and indeed, produced a fair and adequate amended settlement. We see no abuse of discretion in the court’s finding in this regard, or in any element of its decision to approve this settlement.

JUDGMENT OF THE CIRCUIT COURT FOR BALTIMORE CITY AFFIRMED. COSTS TO BE PAID BY APPELLANT.

      . These federal cases were stayed in February 2014 pending a ruling from the circuit court on settlement of the state class actions.

      . In addition to Mr. Shenker, four other shareholders objected: Simon Abadi, Jill B. Carter, Gary Wunsch, and the California Public Employees' Retirement System. Only Mr. Shenker appealed to the circuit court’s settlement approval, however.

      . Mr. Shenker phrased the issues as follows in his brief:
      1. Is the Settlement unfair and inadequate where it releases defendants and their agents and affiliates from liability of valuable unrelated federal claims that arose after a preliminary settlement, based on limited discovery, and without adequate consideration?
      2. Did the Circuit Court fail to conduct a careful assessment of the facts and a thorough analysis of applicable law by concluding the Release is "reasonable” without making factual findings, articulating any standard for determining reasonableness or considering the merits or value of released claims?
      3. Does the Settlement violate Due Process because it released individual defendants from liability for federal claims that are not based on the same factual predicate as the Settlement's underlying state claims and did so for meager consideration?


source: Caselaw Access Project

license: Public Domain

text:
    130 A.3d 1183
    CUMBERLAND INSURANCE GROUP v. DELMARVA POWER, d/b/a Delmarva Power & Light Co.
    No. 72,
    Sept. Term, 2015.
    Court of Special Appeals of Maryland.
    Feb. 1, 2016.

      Philip A. Davolos (de Luca Levine, LLC, Blue Bell, PA), on the brief, for Appellant.
    Lisa C. McLaughlin (Phillips, Goldman & Spence PA, Wilmington, DE), on the brief, for Appellee.
    Panel: HOTTEN, BERGER, and NAZARIAN, JJ.

       Michele D. Hotten, while still a member of this Court, participated in the hearing of this appeal and approved the contents of this opinion but did not participate in the decision to publish the opinion.

   NAZARIAN, J.

David Wickwire’s house in Hurlock, Maryland sustained major damage from a fire. His homeowner’s insurer, Cumberland Insurance Group (“Cumberland”), paid his claim, and came to believe that the fire was caused by faulty wiring in the house’s electric meter box. Cumberland seeks subrogation from Delmarva Power (“Delmarva”), Mr. Wickwire’s electric company, but the Circuit Court for Dorchester County granted Delmarva’s motion for summary judgment on the ground that Cumberland destroyed the fire scene, which deprived Delmarva of the opportunity to investigate or defend the claim. Cumberland appeals, and we affirm.

I. BACKGROUND

Mr. Wickwire insured his home with Cumberland, and Delmarva provided his electric service. A fire broke out at the house on the morning of May 5, 2013, and local fire department personnel responded and put out the fire. Delmarva also responded by sending a lineman, Jeff Willoughby, to disconnect the power supply to the house, evidently at the request of the fire department. Mr. Willoughby did not serve in any investigative capacity that day; his job was to “make things safe” — ie., to “[m]ake sure the wire was dead going to the house” — so he “[w]ent to the transformer, figured out which wire went to that house, [and] disconnected it in the transformer ...”

Thomas Harr, a Senior Deputy State Fire Marshal, investigated the fire, and noted significant smoke and water damage throughout the interior of the house. The worst fire damage was in the utility room: “[t]he ceiling was down and the remains of the rafters were exposed. The roof was consumed above this room extending up to the peak. The wires in this are[a] suffered heavy fire damage.” The Fire Marshal concluded that the fire originated in the meter box. He based his conclusion on burn patterns, witness statements, and the heavy fire damage to the meter box (which showed that the contact lugs in the box were loose at the point where they connected with the wire). He removed the meter and meter box from the scene.

Cumberland retained a fire cause and origin expert, Timothy Hattwick, who inspected the property on May 8, 2013, three days after the fire. He walked through the house and took pictures, but he did not take any evidence from the scene. He reasoned from what he saw “that the fire had moved in from the exterior[, and at] that point combining that knowledge or that observation with what I observed on the exterior, I refocused my examination on the exterior as the area of origin.” Mr. Hattwick concluded that the fire “originated in the area of the meter.” He contacted Fire Marshal Harr and asked him to return to the scene to bring with him the remains of the meter. The Fire Marshal was unavailable, but the two spoke about the investigation. On May 24, 2013, Cumberland’s electrical engineering expert, Michael Wald, also inspected the house and examined the remains of the meter and meter box (or, as he put it, a “paper bag with remains of electrical devices in it”).

As the Cumberland investigation proceeded, it does not appear that Delmarva sent any personnel to inspect the property. Nonetheless Cumberland got an estimate for demolition of the property and issued a check to Mr. Wickwire on May 30, 2013, that appeared to include the cost of demolition. The house and its contents were demolished on July 3, 2013. We will discuss in greater detail below what Delmarva knew, and when Delmarva knew anything, about its potential liability and the eventual destruction of the scene. Delmarva concedes in its brief that “Delmarva knew about the fire on May 5, 2013, and knew as early as May 29, 2013 that a claim may at some point be made against it.” Beyond that, though, the parties dispute when, if at all, Cumberland notified Delmarva about the fact that the house was to be demolished, and that question underlay Delmarva’s motion for summary judgment (the “Motion”).

Delmarva filed the Motion in December 2014. Delmarva argued, among other things, that Cumberland destroyed the fire scene and irreversibly crippled Delmarva’s ability to mount a meaningful defense. The trial court held a hearing on January 22, 2015; we will detail the dialogue below, but it will suffice for now that the court ruled from the bench after argument and granted the Motion:

We’re here on a motion in limine and a motion to compel and a motion for summary judgment. After reviewing the motions, the exhibits attached thereto and the — considering the arguments of Counsel there is — the Court is going to grant the motion for summary judgment. Specifically without addressing all of the various arguments the argument that the Court is going to grant summary judgment on ... the destruction of the house.
The Court finds that based on the factors in Clumpt v. Krongberg, [sic] which talk[s] about an act of destruction, discoverability of the evidence, an intent to destroy the evidence an occurrence of the act at a time when the filing of a lawsuit is fairly perceived as imminent that [Delmarva] in this case will not have the opportunity or did not have the opportunity to adequately prepare a defense. Their experts did not have an opportunity to review or to examine the house. [Cumberland’s] position of we preserved what we thought caused the fire and took a bunch of pictures I’m not persuaded that that actually is fair to [Delmarva] in the preparation and their experts’ preparation of their case. Further I don’t find that there was — that in effect what was a constructive notice argument to [Delmarva] carries weight especially in light of the fact that the demolition had commenced not even sixty days after the fire. If we were six months out maybe my feelings would be different, but I think due to the close nature I think due to the fact that there was no correspondence provided that actually in effect what I would say put [Delmarva] on the clock as to the fact that demolition was contemplated within a soon to be time period. And that, you know, there was correspondence that put them on notice I guess in effect that at some point litigation was being contemplated or that liability was contemplated which is one of the factors. So there was the idea that a lawsuit was imminent but no effort to preserve the evidence that the other side would need to be able to review to have a fair trial and a fair proceeding.
So for those reasons the Court grants the motion for summary judgment in favor of Delmarva Power.

(Emphasis added.)

The court entered a written order on January 22, 2015. Cumberland moved for reconsideration on January 30, 2015, and the trial court denied the motion on March 6, 2015. Cumberland filed a timely notice of appeal.

II. DISCUSSION

The doctrine of spoliation is grounded in fairness and symmetry. Stated simply, a party should not be allowed to support its claims or defenses with physical evidence that it has destroyed to the detriment of its opponent. In this case, Cumberland controlled the fire scene and informed Delmarva for the purpose of pursuing its subrogation claim, but never told Delmarva of the fire scene’s impending destruction. And as a practical matter, this prevented Delmarva (and, perhaps more to the point, its experts) from assessing the causes of the fire first-hand. Cumberland says, correctly, that it preserved the meter box, which was the culprit in its view. But this case is not just about the meter box — it’s about the cause of the fire, and specifically whether the cause, whatever it was, was attributable to Delmarva. And the destruction of the scene deprived Delmarva of the opportunity to test Cumberland’s hypothesis or establish the possibility that the fire was caused by anything else.

A. Standard Of Review.

Delmarva moved for summary judgment on a variety of grounds, and the circuit court granted the motion as a discovery sanction, so we review its decision through that lens. See Erie Insurance Exch. v. Davenport Insulation, Inc., 659 F.Supp.2d 701, 702 (D.Md.2009) (granting summary judgment based on spoliation and dismissing case). We are bound by a trial court’s factual findings in the context of discovery sanctions unless we find them to be “clearly erroneous,” Md. Rule 8—131(c); see also Klupt, 126 Md.App. at 192-93, 728 A.2d 727. The trial court has broad discretion to impose sanctions for discovery violations, “and the decision whether to invoke the ‘ultimate sanction’ [of dismissal] is left to the discretion of the trial court.” Valentine-Bowers v. Retina Grp. of Washington, P.C., 217 Md.App. 366, 378, 92 A.3d 634 (2014).

Sanctions may be justified even without “ ‘willful or contumacious behavior’ ” by a party. Warehime v. Dell, 124 Md.App. 31, 44, 720 A.2d 1196 (1998) (quoting Beck v. Beck, 112 Md.App. 197, 210, 684 A.2d 878 (1996)). We explained in Sindler v. Litman that “[o]ur review of the trial court’s resolution of a discovery dispute is quite narrow; appellate courts are reluctant to second-guess the decision of a trial judge to impose sanctions for a failure of discovery.” 166 Md.App. 90, 123, 887 A.2d 97 (2005).

B. The Spoliation Doctrine.

The spoliation doctrine is well-established in Maryland. See Klupt v. Krongard, 126 Md.App. 179, 728 A.2d 727 (1999). Klupt lays out the elements of spoliation (and we look at those elements next), albeit in the context of a willful destruction of documents and recordings unlike anything that occurred here. We have concluded in other contexts that destruction of evidence is not an independent tort that itself gives rise to a cause of action. See Goin v. Shoppers Food Warehouse Corp., 166 Md.App. 611, 613, 619, 890 A.2d 894 (2006) (affirming dismissal of plaintiffs claim and declining to recognize a separate cause of action for “[n]egligent and/or reckless spoliation” by the defendant’s employee). And we have affirmed a spoliation instruction that permits an adverse inference even without a showing of bad faith. See Anderson v. Litzenberg, 115 Md.App. 549, 560, 694 A.2d 150 (1997) (permitting a jury instruction stating that “ ‘destruction of evidence by a person gives rise to an inference or presumption unfavorable to [the] spoiler, and ... if the intent was to conceal the nature of the defect the destruction must be inferred to indicate a weakness in the case’ ”).

But Maryland appellate courts have not established how to apply the spoliation doctrine in the context of a situation, like this one, where the physical object (or in this case, the building) that was destroyed is itself the subject of the case. We look below at how other jurisdictions have applied the doctrine in that context, and we conclude that it is appropriate to balance the degree of fault (or, in some instances, intent) on the part of the spoliator, on the one hand, with the level of prejudice that inures to the defense because the evidence has been destroyed, on the other. If a trial court finds that this balance favors imposing some sort of sanction, the question then becomes what remedy is appropriate and whether a remedy less drastic than dismissal can cure the prejudice to the defendant. See Adkins v. Wolever, 554 F.3d 650, 652 (6th Cir.2009) (“[A] proper spoliation sanction should serve both fairness and punitive functions.”); Vodusek v. Bayliner Marine Corp., 71 F.3d 148, 156 (4th Cir.1995) (fashioning a sanction to serve the “purpose[s] of leveling the evidentiary playing field and ... sanctioning the improper conduct”). It also recognizes the common-sense principle that “one does not ordinarily -withhold evidence that is beneficial to one’s case.” Anderson, 115 Md.App. at 562, 694 A.2d 150.

1. Klupt — Establishing when spoliation takes place.

There is no suggestion in this case that Cumberland behaved anything like Mr. Klupt in Klupt v. Krongard. That case related to Mr. Klupt’s invention of a disposable videocassette and its licensing and production by other companies. 126 Md.App. at 184, 728 A.2d 727. A number of corporations and counsel became embroiled in the litigation, and several of Mr. Klupt’s one-time business partners sought a declaratory judgment against him and his corporation, claiming that they were defrauded into investing in the manufacture and distribution of his product. Id. at 184-85, 728 A.2d 727. Mr. Klupt filed a separate action claiming that the plaintiffs and others had conspired to deprive him of the value of the invention, and the actions were consolidated, with Mr. Klupt’s claim designated as a counterclaim. Id. at 185, 728 A.2d 727.

In the course of discovery, the plaintiffs sought all documents between the parties, including any records of phone conversations. It was discovered later that Mr. Klupt had recorded a number of conversations with some of the plaintiffs, but destroyed the tapes — along with memoranda he had written to memorialize their contents — early on in the litigation and after the plaintiffs had sought them in discovery. Id. at 188, 728 A.2d 727. To make matters worse, he did not admit to the destruction until his deposition three years into the litigation, and after he attempted on numerous occasions to obstruct discovery and evade answering questions seeking such information. Id. at 189-90, 728 A.2d 727.

The plaintiffs moved to dismiss Mr. Klupt’s counterclaim based on “discovery abuse and contempt of court”:

The motion alleged [that] Klupt made surreptitious recordings of telephone conversations from which he made memo-randa; he intentionally destroyed the tape recordings; he created dummy versions from the original memoranda; he withheld both the original and dummy memoranda; he falsely affirmed in his deposition that he had produced all documents.

Id. at 190, 728 A.2d 727. The trial court granted the motion and Mr. Klupt appealed. We began our review of the law by noting that Maryland’s discovery rules do not deal separately with the destruction of evidence, but do permit dismissal based on failure to respond to discovery requests. We pointed out that destruction of evidence would render meaningless a discovery request, or render moot an order to compel:

If dismissal is permissible in those cases, it would seem to be a fortiori permissible in a case of destruction of discoverable evidence. Cf. White v. Office of the Public Defender for the State of Md., 170 F.R.D. 138, 148 n. 8 (D.Md.1997) (“A party who has removed any possibility of warnings by destroying evidence before a court order can be issued cannot in fairness thereby immunize herself from the ultimate sanction of dismissal.”).

Id. at 194, 728 A.2d 727. We concluded first that the Maryland discovery rules would permit sanctions for destruction of evidence. Id. at 195-96, 728 A.2d 727. But we also looked to cases interpreting analogous federal rules, and found “inherent authority” for the court to regulate discovery. Id. at 196-97, 728 A.2d 727 (citing Turner v. Hudson Transit Lines, Inc., 142 F.R.D. 68, 72 (S.D.N.Y.1991)).

From there, Klupt looked at whether the court could impose the sanction of dismissal or was limited to the less severe sanction of permitting the fact-finder to “draw a negative evidentiary inference or presumption against the spoliator.” Id. at 197, 728 A.2d 727. We opted for the former for two reasons. First, we pointed out that the court (as opposed to a subsequent trier of fact) was in charge of the discovery process, and therefore best suited to fashion a remedy to address a discovery violation, rather than leaving it for a jury at trial. Second, we noted that the spoliation doctrine was “flexible and versatile,” so it could be perfectly appropriate to permit a sanction of dismissal when such an issue was addressed during discovery, “while the same offense may raise only an evidentiary presumption when dealt with during trial.” Id. at 198, 728 A.2d 727.

We ultimately adopted the test laid out in White v. Office of the Public Defender, 170 F.R.D. 138, 147-48 (D.Md.1997), for determining whether spoliation had occurred:

(1) An act of destruction;
(2) Discoverability of the evidence;
(3) An intent to destroy the evidence;
(4) Occurrence of the act at a time after suit has been filed, or, if before, at a time when the filing is fairly perceived as imminent.

Id. at 199 (quoting White, 170 F.R.D. at 147). We approved the trial court’s finding that Mr. Klupt had destroyed the tapes, which were discoverable. The trial court found that Mr. Klupt had destroyed them intentionally, although we pointed out that constructive knowledge could also suffice to satisfy this element. Id. at 200. Mr. Klupt also destroyed the tapes not just after suit was filed, but possibly months after they had been requested in the course of discovery. We concluded that the trial court’s findings were not clearly erroneous, and then addressed the sanction of dismissal. Given that Mr. Klupt acted not just willfully but “contumaciously,” deliberately concealing the existence of the tapes, and given the timing of the destruction, we found no abuse of discretion in the trial court’s decision to dismiss Mr. Klupt’s counterclaims. Id. at 203.

2. Fault on the part of the spoliating party.

From there, Klupt moved on to analyze the appropriate remedy, and held that dismissal was appropriate given Mr. Klupt’s behavior, which fell at the far end of the spectrum, where he wasn’t just at fault but acted intentionally, with bad faith and ill-will. Id. Most plaintiffs probably aren’t as brazen as he was — he concealed and lied about the tapes, then destroyed them with a hammer. But intent to destroy isn’t a prerequisite to a finding of spoliation — courts look as often to fault. So, for example, in Silvestri v. Gen. Motors Corp., 271 F.3d 583 (4th Cir.2001), the United States Court of Appeals for the Fourth Circuit affirmed the District Court’s dismissal of a plaintiff’s claim against General Motors, noting that “a court must find some degree of fault to impose sanctions.” Id. at 590. The court noted that bad faith need not be present, and that “even when conduct is less culpable, dismissal may be necessary if the prejudice to the defendant is extraordinary, denying it the ability to adequately defend its case.” Id. (emphasis added). As the court explained,

sometimes even the inadvertent, albeit negligent, loss of evidence will justify dismissal because of the resulting unfairness: “The expansion of sanctions for the inadvertent loss of evidence recognizes that such physical evidence often is the most eloquent impartial ‘witness’ to what really occurred, and further recognizes the resulting unfairness inherent in allowing a party to destroy evidence and then to benefit from that conduct or omission.”

Id. at 593 (quoting Kirkland v. New York City Housing Auth., 236 A.D.2d 170, 666 N.Y.S.2d 609, 611 (1997)). Silvestri balanced the nature of the conduct and the effect of that conduct — a lack of intent could yet be trumped by a high degree of prejudice and still support dismissal. And in the specific context of preservation of a fire scene, the second half of that balancing test becomes more important, i.e., where the defendant’s ability to mount a defense can be obliterated by the spoliation of the scene.

Indeed, in Erie Insurance Exchange v. Davenport Insulation, Inc., 659 F.Supp.2d 701 (D.Md.2009), the United States District Court for the District of Maryland applied Silvestri in a situation similar to this case. After a house fire, the insurer of the home, Erie Insurance Exchange, sued the homebuilder, Builder Services Group (“BSG”), for negligently installing a fireplace. Erie destroyed all physical evidence three months after the fire took place — fully seventeen months before it notified BSG of its subrogation claim. Id. at 706. The court read Silvestri to impose a two-part “either/or test” that warrants dismissal if (1) “the spoliator’s conduct was so egregious as to make forfeiture of its claim an apt remedy” or (2) “if the loss of the evidence is so prejudicial that it substantially denies the defendant the ability to defend the claim,” id. at 707, and the court found both prongs satisfied. First, it noted that Erie’s conduct justified forfeiture of its claim because it had reports about a viable subrogation claim within weeks of the incident, saw the fireplace as the likely cause, and still did not try to preserve the scene or notify the targets, decisions that could “only be characterized as negligent.” Id. Second, the court noted that BSG would have conducted a different, and more exhaustive, search of the scene to identify the safety strip that allegedly was responsible for the fire, and that it also was deprived of the chance to investigate other potential defenses either within the fireplace or outside of it, such that BSG “can neither rule out nor advance an electrical theory of causation.” Id. at 708.

The court also concluded that there was no appropriate sanction short of dismissal. It reasoned that permitting a jury instruction on spoliation still wouldn’t “level the playing field,” because the record was compiled almost exclusively by Erie. And limiting Erie only to the evidence that survived the fire was “tantamount to a dismissal,” because Erie would be left with no expert to support its claim. Id.

3. Prejudice to the defendant.

Erie raises a good question — what puts a case in the dismissal-as-remedy camp versus the jury-instruction-as-remedy camp? The courts that have affirmed dismissals have zeroed in either on a high degree of fault that carries with it intent (Mr. Klupt, for example, bashing the evidence with a hammer and then lying about it) or on a high degree of prejudice (the legal impossibility of mounting a defense where the evidence that has been destroyed lies at the core of the case). See, e.g., In re Wechsler, 121 F.Supp.2d 404, 428 (D.Del.2000) (“[T]he spoliation inference cannot serve as a substitute for actual evidence.” (citations omitted)). In this context, the party seeking sanctions must be able to demonstrate that the destroyed information is truly relevant to its case. See, e.g., Sampson v. City of Cambridge, 251 F.R.D. 172, 183 (D.Md.2008) (denying motion for sanctions because the movant couldn’t show that the emails in question “would have produced evidence which a reasonable factfinder could conclude supported her claims”). And prejudice has degrees, ranging “along a continuum from an inability to prove claims or defenses to little or no impact on the presentation of proof.” Rimkus Consulting Grp., Inc. v. Cammarata, 688 F.Supp.2d 598, 613 (S.D.Tex.2010).

4. The remedy of dismissal.

As Wechsler pointed out, the sanction of imposing an adverse inference at trial “possesses no punitive or deterrent value.” 121 F.Supp.2d at 428. And while the sanction of an adverse inference or jury instruction is an alternative, Klupt never suggested that it was an exclusive remedy in any particular factual circumstance. The trial court is vested with broad discretion, and Klupt tells us that dismissal is available as a sanction. Courts have not hesitated to dismiss a case when nothing less will do, see, e.g., Robertet Flavors, Inc. v. Tri-Form, Const., Inc., 203 N.J. 252, 1 A.3d 658 (2010); Ihli v. Lazzaretto, 864 N.W.2d 483 (N.D.2015), even when the destruction was simply neglectful, without bad faith. Fines v. Ressler Enters., Inc., 820 N.W.2d 688 (N.D.2012); but see Wechsler, 121 F.Supp.2d 404 (D.Del.2000) (entering “interlocutory finding of liability” against spoliating party attempting to defend a claim, due to prejudice that stemmed from destruction of boat that caused marina fire).

C. The Trial Court Properly Applied Klupt And Did Not Abuse Its Discretion By Granting Summary Judgment.

1. Cumberland “destroyed discoverable evidence.”

Although the factual circumstances of this case differ from Klupt, we look there first to determine whether Cumberland’s actions led to the destruction of discoverable evidence. First, there’s no doubt that there was an act of destruction. Second, the evidence was unquestionably discoverable. Third, there was an “intent to destroy the evidence,” Klupt, 126 Md.App. at 199, 728 A.2d 727 — we’ll talk below about who intended it, but no one mistakenly demolished the fire scene. And finally, the destruction took place “when the filing [of suit was] fairly perceived as imminent.” Id. On that point, the trial court pointed to several factors, most obviously the fact that this suit involved an experienced insurance company that had an expert appear on the scene within days of the fire. See Allstate Insurance Co. v. Sunbeam Corp., 865 F.Supp. 1267, 1278 (N.D.Ill.1994), aff'd, 53 F.3d 804 (7th Cir.1995) (noting that the doctrine was “especially applicable” to a subrogee insurance company “since it all along intended to proceed in a subrogation suit”). The parties obviously disagree about the degree of discoverability of the “fire scene,” and the trial court framed the issue well in the following exchange with counsel for Cumberland:

[Counsel for Cumberland]: Your Honor, the really major and sole piece of evidence in this case is the meter and the meter box. And that’s preserved. And—
THE COURT: Well, as it relates to your case.

(Emphasis added.)

So although Cumberland sees its case as centering on the meter and the meter box, the destruction of the scene deprived Delmarva of any opportunity to look to other possible causes. See Hoffman v. Ford Motor Co., 587 N.W.2d 66, 71 (Minn.App.1998) (“[A] fire scene itself is the best evidence of the origin and the cause of a fire,” and the fire scene is of “unquestionable relevancy.”). That comes up shortly, when we look at the degree of prejudice to Delmarva. But first, we examine the degree of fault on the part of Cumberland.

2. Cumberland was at fault for allowing demolition to go forward.

Cumberland was at fault for the destruction of the fire scene, and it cannot defend on the basis that Delmarva had notice. Cumberland points to what were really no more than notices of the loss and a potential claim, and it attempts to transform them into notices about destruction of the property. And an important preliminary point came out at oral argument — counsel for Delmarva explained that the notice it first received, through the employee it dispatched to the fire, informed the company that the Fire Marshal believed the fire to have started in the meter box. As counsel explained, and as nobody disputes, the meter box is the customer’s property and is installed by the customer (presumably through the services of a private electrician). This is distinct from the meter itself, which plugs into the meter box and is the only property of Delmarva’s at the home or element that Delmarva controlled. See COMAR 20.50.01.03 (defining “electric distribution plant” as “all electric company plant used to distribute electricity to its customers, including covers and protective structures and excluding customer meters and meter enclosures”). This distinction matters, because it means that Delmarva had no reason to believe that it faced liability for the fire based on that report from the scene.

But even putting aside the meter v. meter box distinction, there is no evidence to suggest that Delmarva had reason to think that the property was at risk of destruction until it was too late. Cumberland points to two letters it sent notifying Delmarva of its intention to assert a claim, but these miss an important point: these notices said nothing about the fire scene’s impending demolition, nor did any of the evidence to which Cumberland pointed in the circuit court. The Fire Marshal, Mr. Wickwire, and Cumberland had identified Delmarva as a potential target of liability — Delmarva doesn’t dispute that it knew of the possibility of a claim as early as May 29, 2013. But knowing that a claim could potentially be filed didn’t give Delmarva any reason to think anything one way or the other about the (non)preservation of the scene. And the only Delmarva employee at the scene, Mr. Willough-by, simply turned off the electrical supply to the house.

Cumberland also pointed to notes memorializing some conversation between the homeowner and Delmarva, but these also are silent about the imminent demolition of the property. While Delmarva does have one record suggesting that Mr. Wickwire asked about demolition — that he “needed info on demo” — the circuit court correctly declined to surmise anything from this about the schedule for the demolition. And although another Delmarva note says that “claimant wants to turn garage into new living space but with no cost due to our fault,” it would take a tremendous inferential leap for Delmarva to conclude from there that destruction of the property was imminent.

Cumberland’s counsel’s written correspondence did not even hint at destruction of the scene. The primary purpose of the June 4, 2013 letter appears to have been to put Delmarva on notice that it could be responsible for the fire and, ironically, to ensure that Delmarva not destroy any items relating to the scene:

We wish to cooperate with your company in the investigation of this loss, and especially regarding preserving and inspecting all items retained from the scene. It is in this connection that I am contacting you, and looking for your company and/or its insurance company to likewise cooperate in the investigation process. Furthermore, to the extent that your company is in possession of, or is otherwise aware of, any items retained from this scene, or otherwise potentially relevant to this matter (including physical materials as well as electronic and hardcopy documents), I must insist that such items/ materials/documents be preserved unaltered so that my client’s representatives may examine and/or test them.

(Emphasis added.)

If anything, Cumberland knew that demolition was imminent — the check it issued to Mr. Wickwire covered an estimate for demolition. And then, once demolition had begun, Cumberland sent a second letter on July 3, 2013, in which it casually mentioned that demolition had begun:

We advised that we intended to pursue recovery from the parties responsible for the subject fire. We believe that your company is responsible for the subject fire and the resultant damages. You failed to respond to our prior correspondence, in which we offered to make the subject premises available for your inspection. While you waived your rights to inspect the premises (demolition has begun) we have preserved those items identified as the cause and origin of the subject fire. If we do not receive a response to this letter within fourteen (14) days of the above date, then we will be left with no choice but to take appropriate action without further notice.

(Emphasis added.) And while it’s true that Cumberland did not directly engineer the demolition, it was heavily involved in, aware of, and financed the process that Mr. Wickwire put into place. The circuit court did not resolve a dispute of fact — it found, from the undisputed paper trail, that Delmarva did not have an opportunity to prepare a defense.

3. Delmarva’s defenses were fatally prejudiced, and dismissal was the appropriate remedy.

Delmarva’s two defense experts, Christoph Flaherty and Walter Rothfuss, prepared a report dated October 5, 2014, that opined that the fire “originated in the attic and was electrical.” When Cumberland’s expert, Michael Wald, responded to the October 5 Report in his deposition, he attacked their opinions as “speculation and conjecture,” thereby (if unwittingly) highlighting the prejudice to Delmarva:

Q. What opinions do you have in response to the defense report?
A. Where do I ... start? That report appears to be a fire report, a fire origin and cause report. It opines at the end on the area of origin and the cause. In no place in that report does it state that either Mr. Rothfuss or Mr. Flaherty examined any of the site, examined any of the components other than the ones that are in the possession of Mr. Wald.
It opines that there was a circuit, a branch circuitry failure in the attic. Yet it does not say what branch circuit or where it failed. The attic is pretty big on that house in those terms. It doesn’t say what caused the failure. It doesn’t list a specific point of origin. Because they did not get an opportunity or did not examine the area below the meter outside the house, their theory of drop down is just a hypothesis. It does not stand up to questioning.
So there are many factors in that report that are speculation or conjecture. Therefore, they cannot make a definitive origin and cause determination. They can certainly offer one idea as to what happened, but that would not be a definitive origin and cause report that met the [applicable] standards.
Q. And why is that?
A. For everything I just said. They did not examine the physical evidence, except for the meter. They did not go to the scene. They have a theory that the fire damage on the exterior was caused by drop down, yet they did not examine the area beneath the soffit, which I did; and as I characterized earlier, it did not have a fuel load or a fuel package that was consistent with the damage that we saw on the exterior or with the ability to set that fire at the back of the house — or I’m sorry, to have done that damage to the meter.
At the same time, they did not examine, to my knowledge, the branch circuits, with the exception of looking at photographs. In one particular area I think Mr. Rothfuss, if I’m correct, makes the statement that the wires are pulled, which is the result of resistance heating. I don’t know how he can make that statement because the wires could have done that from heating from the fire as well. So it could be external fire. Again, they do not offer succinct facts for their conclusions. They offer speculation and conjecture.
Q. In your experience if an expert doesn’t review the physical evidence but only photographs, is his opinion not compliant with 921?
A. That’s not always the case. There are times when a— the body of physical evidence may be such that a case review could allow an investigator to render an opinion. In this particular instance, I don’t believe that is the case.
Q. Why is that?
A. They simply do not have enough to review. They would have had to have been at the site. They would have had to have looked at the ground, the damage to the rear.
In addition to examining the interior of the panel box, he makes the statement that the breakers tripped because of short circuiting. You can’t know that without examining the breakers. Heat can cause the breakers to trip as well, which is most likely what happened in this instance.

(Emphasis added.)

Mr. Hattwick’s testimony proves the point. Delmarva’s experts’ theory was flawed because they did not perform a thorough investigation of the fire scene. But they didn’t perform a thorough investigation because they couldn’t do so once the house had been demolished. On the other hand, Mr. Hattwick had the opportunity to take in the full scene and draw his own independent conclusions about the area of origin. The defense, and especially its experts, never had the opportunity affirmatively to rule in or rule out the other parts of the house as the area of origin, which irreparably prejudiced their ability to defend, and which made dismissal altogether appropriate.

We disagree that Charter Oak Fire Insurance Co. v. Marlow Liquors, LLC, 908 F.Supp.2d 673 (D.Md.2012), compels a different result. There, the insurer-subrogee filed suit against an electrician (among many others) claiming that his installation of undersized meter conductors caused a fire in several businesses in a shopping center. Id. at 677. The electrician sought summary judgment based on various parties’ failure to preserve circuit breaker panels from the fire. The trial court denied the motion, applied the Silvestri analysis, and found that certain parties had “willfully discarded” relevant evidence. Id. at 683-84. But when it came to the electrician’s ability to prepare a defense, his spoliation motion broke down:

[The electrician] can defend this case without the missing evidence. As noted, his expert ... opined that the most likely cause of the fire was an electrical failure in [the power company’s] metering equipment. [The expert] does not rely on the [destroyed evidence]. [A second expert] also points to an electrical fault within the meter base and cabinet [and] identified multiple potential sources of this electrical fault, all of which exculpate [the electrician], and none of which requires the [destroyed evidence] in order to be persuasive.

Id. at 685 (emphasis added). The same can’t be said here, where the experts were left with no evidence to rule out or rebut any of Cumberland’s theories. And importantly, that the trial court in Charter Oak reached a different, more lenient result does not mean that the trial court abused its discretion for deciding not to fashion that same result.

JUDGMENT OF THE CIRCUIT COURT FOR DOR-CHESTER COUNTY AFFIRMED. COSTS TO BE PAID BY APPELLANT.

      . He testified at his deposition to that effect: “I'm not a professional in fires. I don’t know where the fire started, how it started.”

      . Ironically, he noted why he did not take the electrical distribution panel away: "That would have been premature at that point in time. It would have spoliated the scene.”

      . Everyone agrees that the trial court was referring to Klupt v. Krongard, 126 Md.App. 179, 728 A.2d 727 (1999).

      . Cumberland presented the issues — all revolving around the issue of spoliation — in its brief as follows:

        1. Did the lower Court err by granting appellee’s motion for summary judgment based on Klupt v. Krongard, 126 Md.App. 179, 728 A.2d 727 (1999) for the alleged "spoliation” of evidence?
      2. Did the lower Court abuse its discretion by granting appellee's motion for summary judgment based on Klupt v. Krongard, 126 Md.App. 179, 728 A.2d 727 (1999) for the alleged "spoliation” of evidence?
      3. Did the lower Court abuse its discretion in determining that "spoliation” occurred, where, as here: (1) appellee had knowledge of the existence of the evidence; (2) the evidence was a badly damaged building that could not be preserved indefinitely; (3) appellee inspected the evidence; (4) appellee was on notice of the potential claims against it; (5) appellee had a statutory duly to investigate and report the on the evidence to the PSC; (6) appellee was notified that the evidence (a fire damaged building) would be demolished; (7) certain evidence was removed from the fire scene and preserved by the Fire Marshal as part of the investigation, and subsequently preserved by appellant for use in this litigation; (7) [sic] the evidence was not destroyed by appellant; (8) appellant’s subrogor notified appellee before demolition work began at the subject property; and (9) there is no showing of bad faith and/or intentional destruction of evidence by appellant?
      4. Did the lower Court abuse its discretion by granting summary judgment rather than imposing some lesser sanction, if any, under the circumstances presented by this case?

      . In addition to responding to the substance of Cumberland’s brief, Delmarva filed a motion to strike portions of Cumberland’s brief. Delmarva cites Md. Rule 8-504 and argues that Cumberland failed to cite to any part of the record or record extract in its Statement of the Case. We agree that the brief is non-compliant, but opt not to reach this question in light of the outcome on the merits, and we deny the Motion to Strike as moot.

      . Cumberland might say the evidence goes merely to the box, but its own pretrial motions suggest that there were other theories at play. It filed motions in limine to bar information to the effect that a firefighter told a witness that the fire started in the attic, and also to bar testimony that Mr. Wickwire had run all the electricity to the house on his own.

      . The fact that Cumberland sent the June 4 letter to five different corporate addresses doesn’t cure the problem, i.e., that the letters never mention the possibility or timing of the demolition.

      . We don't address here whether fault would still be imputed to Cumberland had it not been so closely involved in that process.

      . While barring the testimony of a plaintiff’s expert could conceivably be considered a “more lenient” sanction than dismissal, it would have the same result here. Barring Cumberland's experts would have left it with nothing to establish the elements of its claim in any event, and would be "tantamount to a dismissal” of Cumberland’s case. See Erie, 659 F.Supp.2d at 708; Unigard Sec. Insurance Co. v. Lakewood Eng’g & Mfg. Corp., 982 F.2d 363, 369 (9th Cir.1992) (granting summary judgment following exclusion of experts given spoliation of relevant evidence); see also Schmid v. Milwaukee Elec. Tool Corp., 13 F.3d 76, 79 (3d Cir.1994) (where circular saw case involved allegation of a design defect — which would have been inherent in all saws of a particular model — rather than a manufacturing defect — which would have been present only in the saw at issue — the prejudice to defendant was not extreme because the "need for immediate access to the particular saw involved in the accident was greatly diminished”).


author: MEREDITH, J.

text:
    132 A.3d 342
    Dameron SMALLWOOD v. STATE of Maryland.
    No. 2627,
    Sept. Term, 2012.
    Court of Special Appeals of Maryland.
    Feb. 24, 2016.
    Rachel Simmonsen (Paul B. DeWolfe, Public Defender, on the brief), Baltimore, MD, for appellant.

      Brenda Gruss (Douglas F. Gansler, Atty. Gen., on the brief), Baltimore, MD, for appellee.
    Panel: MEREDITH, LEAHY, and ANDREW L. SONNER (Retired, Specially Assigned), JJ.
   MEREDITH, J.

In 2009, the Maryland General Assembly enacted a statute that permits a convicted person to file a petition for a “writ of actual innocence” based upon a claim of newly discovered evidence. Maryland Code (2001, 2008 Repl. Vol., 2009 Supp.), Criminal Procedure Article (“CP”), § 8-301. In 2011, the Court of Appeals of Maryland adopted Maryland Rule 4-332, which provides, in pertinent part, that each petition for writ of actual innocence “shall state: ... that the conviction sought to be vacated is based on an offense that the petitioner' did not commit.” Rule 4-332(d)(9). Dameron Smallwood, appellant, urges us to hold that the Court of Appeals erred in construing CP § 8-301 to limit the availability of a writ of actual innocence to persons who assert that they did not commit the offense of which they have been convicted. We are not persuaded that the Court of Appeals erred in its interpretation of CP § 8-301. We shall therefore affirm the ruling of the Circuit Court for Baltimore County denying Smallwood’s application for writ of actual innocence.

BACKGROUND

In 1985, Smallwood was convicted of committing a brutal murder. He was tried upon an agreed statement of facts. He does not dispute that, on the morning of October 22, 1984, when he was 15 years old, he knocked on the door of a stranger at an apartment complex in Baltimore County, and told the 76-year-old occupant that he had a package that she needed to sign for. When she opened the door, Smallwood stabbed her ten times in the chest and abdomen and arms. He then fled, and was observed disposing of items of clothing and a bloody, brown paper bag. The victim of the stabbing died later that day.

After Smallwood was indicted for first degree murder and related offenses, his attorneys moved for a reverse waiver to juvenile court. At the reverse waiver hearing, Smallwood’s attorneys called a psychiatrist, a psychologist and a psychiatric social work expert to testify that it would be appropriate for Smallwood to be tried as a juvenile because he would be amenable to treatment if the reverse waiver was granted, and, in the view of these experts, it would be preferable to commit Smallwood to an institution rather than incarcerate him. None of the psychological experts expressed an opinion that Smallwood was not criminally responsible for the fatal stabbing of the victim. The circuit court denied the request to waive the case to the juvenile court.

Smallwood entered a plea of not guilty, but agreed to a lengthy statement of facts, which included grisly details such as:

Mrs. Gibson went to answer the door____ The defendant was the person knocking on her door. With the door shut, Mrs. Gibson asked who was there and what they wanted. The defendant said that he had a package to deliver. She told him to leave the package outside her door. The defendant told her that she had to sign for the package.... Believing what the defendant said, the victim began to open the door. The defendant pushed the door open and forcibly entered the apartment, pushing the victim back inside. Armed with a knife, the defendant stabbed Mrs. Gibson ten times. During the struggle with the defendant, Mrs. Gibson cried out to her daughter-in-law, [who was] still on the phone, “Barbara, call the police.” Barbara Gibson heard the struggle and [heard] the defendant yell, “Bitch, son of a bitch.” Lastly, she heard Mrs. Gibson cry, “Oh, my God.”

Smallwood was found guilty of all counts, and was sentenced to imprisonment for life.

Twenty-five years later, a psychiatrist who had testified as a defense expert at the reverse waiver hearing in 1985 — Dr. Ellen McDaniel — indicated to Smallwood’s attorneys that she was now willing to revise the opinions she had expressed at the reverse waiver hearing, and was now willing to testify that Smallwood was not criminally responsible for killing Mrs. Gibson in 1984. Smallwood’s attorneys filed a petition for writ of actual innocence in which they asserted that Dr. McDaniel’s revised opinion as to criminal responsibility was newly discovered evidence that would now support a plea of not criminally responsible, and, they posited, this newly discovered evidence created a substantial or significant possibility of a different result for Smallwood, namely, a verdict finding him guilty but not criminally responsible.

The Circuit Court for Baltimore County conducted an evidentiary hearing on Smallwood’s petition for writ of actual innocence. The court received deposition testimony of Dr. McDaniel (who had passed away prior to the hearing), and the court heard testimony from a clinical psychiatrist called by the State who disputed the psychiatric basis for Dr. McDaniel’s revised opinion. Smallwood did not argue that he was not the person who killed Mrs. Gibson.

The circuit court denied Smallwood’s petition for writ of actual innocence for three independent reasons. First, the court ruled that a writ of actual innocence was not available to Smallwood because he “is not claiming, and cannot claim that he is actually innocent. Rather, he is maintaining that he is actually guilty, but not criminally responsible for the act of murder.” After reviewing legislative history of CP § 8-301, the circuit court observed: “Nothing about the legislative history of the provision suggests that it was intended to include a claim made decades after a conviction that a defendant was guilty of the crime, but not criminally responsible for its commission.”

Second, the circuit court ruled that, “even if it is determined that a Petition for Writ of Actual Innocence can be used by a defendant who is guilty [but not criminally responsible], it is also important to determine if Dr. McDaniel’s new opinions constitute ‘newly discovered evidence’ within the meaning of Section 8-301.” The circuit court concluded that the revised opinions would not constitute newly discovered evidence, noting: “There was no change between 1984 and the present in the facts of this case. No new or different fact was unearthed or otherwise discovered suggesting that the Petitioner’s trial was unfair in 1984.”

Finally, the circuit court explained that, even if a revised expert’s opinion might qualify as newly discovered evidence, the court found Dr. McDaniel’s revised testimony to be entitled to “virtually no weight.” The court elaborated on its analysis:

Moreover, Dr. McDaniel failed utterly to convince the undersigned that she could not have made the same diagnoses in 1984 as she made in 2011; or that she could not have reached the same conclusion concerning the lack of criminal responsibility in 1984 as she purported to reach in 2011. She did not persuade the undersigned that the DSM-III contained material mistakes or errors in 1984 that, if changed, would have affected her opinion as to criminal responsibility in 1984. Her 2011 analysis was illogical, and her conclusions were unreliable as a matter of the application of ordinary common sense.

The Court is simply not convinced that Dr. McDaniel’s new series of “opinions” constitute credible evidence which would form the basis for the proper granting of a new trial 26 years after the fact.

Smallwood noted a timely appeal from the circuit court’s ruling.

QUESTIONS PRESENTED

Appellant presents the following questions for our review:

Did the lower court err in denying the petition for writ of actual innocence? Specifically,

A. Does § 8-301 of the Criminal Procedure Article contemplate relief for an individual who was not criminally responsible for committing the underlying offense?

B. Does an expert’s opinion about criminal responsibility, revised many years after trial, constitute “newly discovered evidence” under § 8-301?

C. Does the revised expert opinion that Mr. Smallwood was not criminally responsible create a substantial or significant possibility that the result may have been different?

Because we answer “no” to sub-question A., we need not address sub-questions B. and C. We will affirm the judgment of the Circuit Court for Baltimore County.

DISCUSSION

Smallwood makes no contention that his conviction was “based on an offense that [he] did not commit,” as required by Rule 4 — 332(d)(9). But he asserts that CP § 8-301 contains no such prerequisite for seeking a writ of actual innocence. He states in his brief:

Mr. Smallwood also acknowledges that Maryland Rule 4-332, which took effect after he filed his petition, requires a petitioner to assert “that the conviction sought to be vacated is based on an offense that [he] did not commit.” Md. Rule 4-332(d)(9). The procedural requirements of the rule, however, cannot override the substance of § 8-301. See 38 Md. Reg. 476 (Apr. 8, 2011) (noting that Rule 4-332 implements § 8-301). See also Md. Rule 4-101 (explaining that the Rules in Title 4 govern procedure, not substance). Because the plain language of the statute does not require petitioner to allege or prove that he did not commit the underlying offense, Rule 4-332’s requirement to the contrary is a nullity.

Smallwood is correct in his observation that CP § 8-301 does not specifically state that a writ of actual innocence is available only to a petitioner who claims factual innocence; the statute does not expressly mandate that a petition for a writ of actual innocence include a statement asserting that the conviction was based upon an offense that the petitioner did not commit. CP § 8-301 provides, in pertinent part:

(a) A person charged by indictment or criminal information with a crime triable in circuit court and convicted of that crime may, at any time, file a petition for writ of actual innocence in the circuit court for the county in which the conviction was imposed if the person claims that there is newly discovered evidence that:

(1) creates a substantial or significant possibility that the result may have been different, as that standard has been judicially determined; and

(2) could not have been discovered in time to move for a new trial under Maryland Rule 4-331.

(b) A petition filed under this section shall:

(1) be in writing;

(2) state in detail the grounds on which the petition is based;

(3) describe the newly discovered evidence;

(4) contain or be accompanied by a request for hearing if a hearing is sought; and

(5) distinguish the newly discovered evidence claimed in the petition from any claims made in prior petitions.

(f) (1) In ruling on a petition filed under this section, the court may set aside the verdict, resentence, grant a new trial, or correct the sentence, as the court considers appropriate.

(2) The court shall state the reasons for its ruling on the record.

(g) A petitioner in a proceeding under this section has the burden of proof.

(Emphasis added.)

Despite the absence of an express requirement in CP § 8-301 for the petitioner to claim factual innocence and include an averment that the conviction is based on an offense the petitioner did not commit, the appellate courts of Maryland have, on several occasions, interpreted the statute to include such a requirement. Even though Rule 4-332 was not formally adopted by the Court of Appeals until September 8, 2011, with an effective date of October 1, 2011 — i.e., a few days after Smallwood filed his petition on August 29, 2011 — the Court of Appeals recognized in Douglas v. State, 423 Md. 156, 31 A.3d 250 (2011), that new Maryland Rule 4-332 “applies to actions commenced on or after [the effective] date, ‘and, insofar as practicable, to all actions then pending[.]’ ” 423 Md. at 182 n. 14, 31 A.3d 250 (quoting 38 Md. Reg. 1195 (September 23, 2011)).

But more important than any question regarding the direct applicability of the rule to Smallwood’s petition is the precedent established by Rule 4-332 as a judicial interpretation of CP § 8-301 by the highest court of this State. As the Court of Appeals recently noted in Bonilla v. State, 443 Md. 1, 115 A.3d 98 (2015), “the Maryland Rules ‘have the force of law.’ ” Id. at 7, 69 A.3d 1186 (quoting Dotson v. State, 321 Md. 515, 523, 583 A.2d 710 (1991)). The Court of Appeals adopted Rule 4-332 for the specific purpose of fleshing out the prerequisites for pursuing a writ of “actual innocence.” In Douglas, the Court had observed: “C.P. § 8-301 provides a defendant an opportunity to seek a new trial based on newly discovered evidence that speaks to his or her actual innocence, as evident from the title of the statute itself.” 423 Md. at 176, 31 A.3d 250. Indeed, not only the title of CP § 8-301, but also the text of the statute, describes the remedy as a writ of “actual innocence.”

In Yonga v. State, 446 Md. 183, 130 A.3d 486 (2016), the Court of Appeals addressed the question of whether a person who had entered a guilty plea was eligible to be granted a writ of actual innocence. The Court stated that it “acknowledge[d] that the statute is silent on the issue,” 446 Md. at 194, 130 A.3d 486, but nevertheless concluded that a writ of actual innocence is not available to attack a conviction that was entered following a plea of guilty. Recognizing the lack of express language in the statute addressing the availability of the writ for a person who had entered a guilty plea, the Court said: “The history of the legislation, our implementation through our Rules as well as our understanding of what ‘actual innocence’ means, juxtaposed against what a guilty plea involves, however, inform our conclusion that a person who has pled guilty may not later avail himself or herself of the relief afforded by the Petition for a Writ of Actual Innocence.” Id. In the final paragraph of the opinion, the Court again stated that its interpretation of CP § 8-301 was supported by “the history of the legislation, our implementation through our Rules as well as our understanding of what ‘actual innocence’ means.” 446 Md. at 216, 130 A.3d 486.

In affirming the judgment of our Court — which had been reported at Yonga v. State, 221 Md.App. 45, 108 A.3d 448 (2015) — the Court of Appeals adopted the portion of Judge Charles Moylan’s analysis that juxtaposed a guilty plea with a claim of newly discovered evidence. See Yonga, 446 Md. at 216-217, 130 A.3d 486, and Yonga, 221 Md.App. at 68-69, 108 A.3d 448. The Court of Appeals affirmed this Court’s conclusion that “a person who has pled guilty may not later avail himself or herself of the relief afforded by the Petition for a Writ of Actual Innocence.” 446 Md. at 217, 130 A.3d 486. Because that aspect of Judge Moylan’s opinion fully answered the question that was the subject of the writ of certiorari, the Court of Appeals did not need to address the availability of a writ of actual innocence for a convicted person who did not deny committing the offense. On that point, this Court stated in Yonga, 221 Md.App. at 58, 108 A.3d 448 that CP § 8-301 had its roots in the “revolution in forensic investigation that resulted from the rapidly evolving science of DNA identification.” We noted that, in the context of capital punishment, which by its nature is irrevocable, the concern was “not with executing someone who might have been procedurally not guilty.... The concern was with actual, factual innocence.” Id. We observed that “[t]here is no question that Maryland’s first DNA statute was aimed at facilitating the exoneration of those convicted defendants who were actually innocent of the crime for which they had been convicted,” id. at 59, 108 A.3d 448 (citing Blake v. State, 395 Md. 213, 219, 909 A.2d 1020 (2006)). Judge Moylan observed in our opinion in Yonga: “The leitmotif of ‘actual innocence’ resonates throughout the caselaw.” Id. (citing Gregg v. State, 409 Md. 698, 715, 976 A.2d 999 (2009); and Thompson v. State, 411 Md. 664, 679, 985 A.2d 32 (2009)). We further observed in Yonga, id. at 57, 108 A.3d 448 that, in Bousley v. United States, 523 U.S. 614, 623, 118 S.Ct. 1604, 140 L.Ed.2d 828 (1998), the Supreme Court had stated that “ ‘actual innocence’ means factual innocence and not mere legal insufficiency.”

Although, in Yonga, the Court of Appeals did not need to reach the question of whether a person who could not profess factual innocence could qualify for a writ of actual innocence, we are persuaded that the Court has already answered this question by adopting a rule that expressly requires the petitioner to affirm “that the conviction sought to be vacated is based on an offense that the petitioner did not commit.” Rule 4-332(d)(9). Unless and until the Court rescinds that rule, in the absence of legislative action to revise CP § 8-301, we will hold that a person who does not expressly deny committing the act that led to the conviction is not eligible for a writ of actual innocence.

JUDGMENT OF THE CIRCUIT COURT FOR BALTIMORE COUNTY AFFIRMED. COSTS TO BE PAID BY APPELLANT.

      . The Court of Appeals discussed the nature of a defense of "not criminally responsible” in Treece v. State, 313 Md. 665, 676, 547 A.2d 1054(1988):
      When the defense of not criminally responsible is asserted, along with a not guilty plea, the initial question is the defendant's guilt or innocence. If the verdict is guilty, the next step is the determination of criminal responsibility. If lack of responsibility is found, that is not an acquittal. The result of “the successful interposition of a plea of insanity is not that an accused is to be found not guilty of the criminal act it was proved he had committed, but that he shall not be punished therefor.” [Langworthy v. State, 284 Md. 588, 598, 399 A.2d 578 (1979)].
      In short, the defendant who “successfully” pleads not criminally responsible is subject to the stigma of a criminal conviction, although he or she may not be subject to all of the consequences that would otherwise flow therefrom.
      (Emphasis added; internal citations omitted.)