Top court: Insurance no bar to fee award

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A lawyer who sued his neighbors for defamation must pay more than $3,600 in attorneys’ fees to one of the defendants, even though an insurance company paid the entire legal bill, Maryland’s top court held.

The Court of Appeals rejected arguments that victims of frivolous litigation should not be awarded attorneys’ fees that were paid by an insurer, as the defendants did not personally “incur” any legal expenses.

The decision was a defeat for Forest Hill lawyer Michael C. Worsham, who was challenging an award of attorney’s fees to his neighbor, Romualda Greenfield, in a dispute dating back more than a decade.

Writing for the court, retired Chief Judge Robert M. Bell said Maryland Rule 1-341 authorizes an award of attorneys’ fees when an action has been brought in bad faith, and its goal of deterring frivolous litigation would be thwarted if plaintiffs could elude paying attorney’s fees that were covered by an insurer.

Liability insurance “is quite common, and sometimes required by law,” for businesses, professionals and other individuals, Bell wrote.

“To bar imposition of Rule 1-341 upon an abusive litigant, based solely on the presence of an insurer, would render the numerous entities protected by liability insurance the unshielded targets of frivolous lawsuits, with no recourse, and no mechanism for imposing consequences upon those parties who target them,” the opinion says.

Neither Worsham nor Greenfield’s attorney, Thomas P. Ryan, returned telephone calls seeking comment Friday. Ryan is with McCarthy Wilson LLP in Rockville.

The litigation between the neighbors began in 2000 when Robert Greenfield filed criminal charges against Worsham for malicious destruction of property and second-degree assault.

A Harford County jury acquitted Worsham of malicious destruction of property and could not reach a verdict on a second-degree assault charge, resulting in a mistrial.

Worsham, a solo practitioner, then sued the Greenfields for malicious prosecution, defamation, false light/invasion of privacy, civil conspiracy and aiding and abetting.

Harford County Circuit Judge William O. Carr granted summary judgment in 2004 to the Greenfields on all counts except malicious prosecution. Robert Greenfield subsequently prevailed on the malicious prosecution claim.

After that litigation concluded, the Greenfields filed a motion for more than $40,000 in attorneys’ fees, expenses and costs.

Harford County Circuit Judge Emory A. Plitt Jr. granted the motion as to Romualda Greenfield only, finding that Worsham had named her in the lawsuit without substantial justification.

Plitt awarded her $3,613.13 in fees, costs and expenses.

In August 2009, the intermediate Court of Special Appeals affirmed. Worsham then sought review by the Court of Appeals.

The high court heard arguments in the case on June 3, 2010, and issued its decision on Wednesday. In the three-year interim, Judge Joseph F. Murphy Jr. left the bench on Sept. 30, 2011 and did not participate in the 6-0 decision.

WHAT THE COURT HELD

Case:

Worsham v. Greenfield, CoA No. 139, Sept. Term 2009. Reported. Opinion by Bell, C.J. (Retired). Argued June 3, 2010. Filed Oct. 23, 2013.

Issue:

May a defendant be awarded attorney’s fees even if her fees were paid by her insurance company?

Holding:

Yes; fees may be awarded in cases where the plaintiff filed suit in bad faith or without sufficient justification.

Counsel:

Michael C. Worsham for petitioner; Thomas P. Ryan for respondent.

RecordFax # 13-1023-22 (24 pages).