Southern Management Corp. v. Taha

Southern Management Corp. v. Taha, 378 Md. 461, 836 A.2d 627 (2003), governs whether appellant's failure to raise the inconsistency contention in the motion for judgment constitutes a waiver, on judgment notwithstanding the verdict ("JNOV") review, of his argument that the punitive damage award was inconsistent with the verdict. In that case, Southern Management Corporation ("SMC") and two of its employees, McGovern and Wylie-Forth, were sued for malicious prosecution by a former employee who alleged that McGovern and Wylie-Forth filed unfounded burglary charges against him. Id. at 469-70. SMC was a defendant solely under a theory of respondeat superior liability. Id. at 467. The case was tried before a jury, which returned an irreconcilably inconsistent verdict: it found in favor of McGovern and Wylie-Forth but against SMC, even though SMC's liability was predicated solely on that of its employees. Id. SMC filed an unsuccessful motion for JNOV, on the ground that it could not be liable if its employees were not. Id. at 475. The Court of Appeals reversed the trial court's denial of the motion for JNOV. It said, id. at 493-95. We must point out . . . that SMC selected an inappropriate, although not fatally so, post-judgment instrument for challenging the jury verdicts in this case. Following the Circuit Court's entry of judgment against SMC but in favor of . . . Wylie-Forth and McGovern, SMC filed a Motion for Judgment Notwithstanding the Verdict pursuant to Maryland Rule 2-532. Under that Rule, however, a party may move for judgment notwithstanding the verdict "only if that party made a motion for judgment at the close of all the evidence and only on the grounds advanced in support of the earlier motion." Maryland Rule 2-532(a) . When SMC moved for judgment at the close of the evidence, the jury, of course, had not rendered a verdict and the issue of inconsistent jury verdicts could not have been raised at that time. Having not raised the issue in its motion for judgment, SMC should not have relied upon Rule 2-532 as the basis for its post-judgment motion. Nevertheless, as we recognized in Allstate Ins. Co. v. Miller, 315 Md. 182, 189, 553 A.2d 1268, 1271 (1989), a timely motion for judgment notwithstanding the verdict, which seeks revision of a final judgment, may "invoke the court's revisory power under Md. Rule 2-535(a)." This holds true, even if the grounds for the motion had not been advanced in support of a motion for judgment at the close of all the evidence. Id. SMC filed its post-judgment motion in this case within 30 days after the entry of the jury verdicts, giving rise to the court's powers to set aside the judgments. Nonetheless, the Circuit Court, failing to exercise its broad discretion, allowed the judgments to stand, even though those judgments reflected irreconcilably inconsistent jury verdicts. In this regard, the Circuit Court erred as a matter of law, and the judgment as to SMC must be set aside. In Southern Management Corp. v. Taha, the plaintiff sued his former employer and two employees for malicious prosecution. Id. at 470. The jury found the employer corporation liable but not the employees. Id. at 473. On appeal, the question for the Court of Appeals was whether, under the doctrine of respondeat superior, a corporation could be held liable when its employees were exonerated. Id. at 478. The Court explained that if an employee is "responsible for the acts about which the complaint is made by the plaintiff, the employer is also responsible since they would have been acting in the course of their employee responsibilities." Id. Further expounding upon this principle, the Court opined: However, we have long held that a corporation can act only by virtue of its agents. See Hecht v. Resolution Trust Co., 333 Md. 324, 345, 635 A.2d 394, 405 (1994); Maryland Trust Co. v. Mechanics Bank, 102 Md. 608, 629, 63 A. 70, 78 (1906); Central Railway Co. v. Brewer, 78 Md. 394, 401, 28 A. 615, 616 (1894); Carter, 51 Md. at 295-96 (1879). Corporations have been described as "creatures of legal fiction," which are "incapable of tortious conduct" by themselves. Lokay v. Lehigh Valley Cooperative Farmers, 342 Pa.Super. 89, 492 A.2d 405, 408, 409 (1985). Because, by themselves, corporations are "dejure persons" and "cannot . . . have a mental state of any kind," they "can only . . . be liable for . . . the mental states of their various employees, when they act within the authority given to them." Louisiana Power & Light Co. v. United Gas Pipe Line Co., 642 F.Supp. 781, 803 (E.D.La.1986). (Id. at 480.) For liability to exist, an employee must be acting pursuant to its employer's authority, which simply means that the act was "incident to the performance of the duties entrusted to the employee by the employer." Id. at 481 (quoting Ennis v. Crenca, 322 Md. 285, 293-94, 587 A.2d 485 (1991)).