Baltimore County v. Baltimore County Fraternal Order of Police, Lodge No. 4

REPORTED

IN THE COURT OF SPECIAL APPEALS

OF MARYLAND

No. 1904

September Term, 2013

_______________________________________

BALTIMORE COUNTY, MARYLAND

v.

BALTIMORE COUNTY FRATERNAL

ORDER OF POLICE, LODGE NO. 4

No. 099

September Term, 2014

_______________________________________

BALTIMORE COUNTY, MARYLAND

v.

BALTIMORE COUNTY FRATERNAL

ORDER OF POLICE, LODGE NO. 4

Meredith,

Wright,

Hotten,

JJ.

Opinion by Meredith, J.

Filed: December 17, 2014

Baltimore County, appellant, mounts a variety of challenges to an arbitration award

regarding retirement benefits that was issued in 2008, affirmed in 2010 by the Circuit Court

for Baltimore County, and ultimately affirmed again in 2012 by the Court of Appeals in FOP

Lodge No. 4 v. Baltimore Co., 429 Md. 533 (2012), reconsideration denied, 429 Md. 533

(2013). Although the County contends that it is not appealing the arbitration award itself,

but rather its enforceability, that contention is undermined by the arguments the County

makes. In the rulings which led to the present consolidated appeals, the Circuit Court for

Baltimore County held that, in accordance with the law of the case doctrine, the County was

required to comply with the previously confirmed arbitration award. Under protest, the

County did pay the amount due as a result of the arbitration award, but continues to challenge

the enforceability of the award.

QUESTIONS PRESENTED

The County presented nine questions for our review, the majority of which had

already been raised in proceedings prior to the previous appeal. The primary focus of the

current appeal is:

Did the trial court correctly apply the law of the case doctrine? 1

1

The following are the County’s questions presented:

1. Whether the arbitration award was unenforceable because there has

never been an appropriation by the County Council to pay for the reset

of the rates or for the ‘make whole’ relief granted in that award?

2. Whether the arbitration award was unenforceable because the County

Council never enacted a budget containing funds for a reset or for make

whole relief; instead it enacted FY 2008-2015 budgets which contained

For the reasons that follow, we affirm the judgments of the Circuit Court for

Baltimore County.

the reduced subsidies negotiated by the Health Care Review

Committee, and the Circuit Court was bound to respect those

enactments as the only contract between FOP and the County?

3. Whether public policy, as clearly expressed in the Baltimore County

Charter, the Baltimore County Code, and controlling Maryland case

law, provides an exception to the enforcement of the arbitration award

in this case?

4. Whether the Show Cause Order threatening incarceration was an

unconstitutional exercise of judicial power calculated to coerce an

appropriation or illegal payments in violation of the separation of

powers doctrine?

5. Whether the arbitration award is unenforceable because the original

grievance was not timely filed and the issue of the effect of that lack of

timeliness on the arbitration award has never been resolved?

6. Whether the arbitration award is unenforceable as FOP’s grievance was

invalid on its face, because under the MOU ‘retirees’ are not

‘employees’ entitled to bring any kind of grievance?

7. Whether the Circuit Court’s award of injunctive relief and damages to

FOP was clearly erroneous, because FOP did not sustain any harm or

damages as a result of the reduced subsidy rates?

8. Whether the Circuit Court’s refusal to allow the County’s witnesses to

give any substantive testimony was clearly erroneous?

9. Whether FOP was entitled to prejudgment interest?

As will be explained in this opinion, five of these questions (1, 2, 3, 5, and 6) have already

been decided against the County in earlier decisions. We answer questions 7 and 8 in the

negative, and we answer question 9 in the affirmative. Because question 4 is now moot, we

decline to rule on the question.

2

FACTS AND PROCEDURAL HISTORY

This case has its roots in a grievance filed in 2007, although the backdrop to that

grievance extends back to 1991. Appellee, FOP Lodge No. 4 (“appellee” or “FOP”), is the

exclusive bargaining agent for the Baltimore County Police Department. Periodically, the

FOP and the County negotiate a Memorandum of Understanding (“MOU”) setting forth each

party’s rights and obligations. In 1991, owing to what the County has characterized as a bad

economic climate, the County offered its eligible employees a retirement incentive program;

among the County employees to whom it applied were FOP members. The retirement

incentive program provided that eligible officers who retired on or before January 31, 1992,

were guaranteed a 90/10 health-insurance subsidy split; that is, it was guaranteed to those

retirees that the County would pay 90% of their health-insurance premium, and the retiree

would pay 10%.

The County notified those employees who did not take advantage of that incentive

program that the health insurance split would be as follows: “An individual who retires on

or after February 1, 1992, with 30 or more years of creditable service will receive the same

subsidy as an active employee and that subsidy may go up or down as a result of labor

negotiations[.]” But, as part of the negotiations for the 1996 MOU, which took effect on July

1, 1995, the FOP and the County agreed that an 85/15 split would apply retroactively to those

officers who retired between February 1, 1992, and July 1, 1995; they were, at that time,

“locked in.” The specific language that “locked in” this split stated: “The health insurance

3

subsidy in place at the time of retirement shall remain in effect until the retiree becomes

eligible for Medicare.” It was the FOP’s position that the practical effect of this provision

was to guarantee an 85/15 subsidy split to those retirees.

This arrangement was repeated in subsequent MOUs without dispute until the “2008

MOU” that would become effective July 1, 2007, and run through June 30, 2008. During

negotiations about that MOU, the County, citing runaway health-care costs, informed the

FOP that it intended eventually to move to an 80/20 split, with a one-percent decrease in the

County’s contribution to take effect each year in five successive years. The County proposed

to change the benefit to an 84/16 split in 2008, followed by an 83/17 split in 2009, and so on.

The FOP voted against this change, but it was nevertheless accepted by the Health Care

Review Committee, the official bargaining agent as to healthcare issues for several unions

for County employees, including the FOP. The County applied the less favorable split to all

retirees, including those who had retired when there were MOUs in effect which included

language the FOP considered a lock in of benefits.

Pursuant to the procedures outlined in the relevant MOU, FOP filed a grievance

against the County, alleging that the proposed downward adjustment of the health-care

subsidy violated Section 7.3(a) and (c) of the 2007 MOU.2 The grievance was denied by the

2

Section 7.3 of the July 1, 2006-June 30, 2007 MOU (“2007 MOU”) provided, in

relevant part:

“Section 7.3(a)-Health Care Coverage

Medical Plans. The County shall provide employees and retirees not eligible

for Medicare with a Triple Option Medical Plan. Effective September 1, 2003,

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Baltimore County will convert prior HCP and POS plans into the said Triple

Option plan. The plan design shall be as follows. . . [chart omitted].

The Triple Option Plan shall be available as an option to all active employees,

all retirees not eligible for Medicare, and their eligible dependents.

The County shall provide at least two (2) Health Maintenance Organization

Plans (HMOs). These plans will also be available as an option to all active

employees, all retirees not eligible for Medicare, and their eligible dependents.

Subsidy. The County shall contribute 85% of the premium cost for the Triple

Option Plan. Active Employees will pay 15% of the premium cost. Retirees

not eligible for Medicare will receive a subsidy based on the amount of

creditable service and consistent with County policy in force at the time of

retirement.

***

Section 7.3(c)-Retiree Health Insurance

The County shall provide the same health insurance benefit plans offered to

active employees for retirees not eligible for Medicare who attain sufficient

creditable service for a full retirement within their bargaining unit, or retirees

who qualify for disability retirement. The County will contribute toward the

premiums for available benefit plans consistent with County policy in force at

the time of retirement. The health insurance subsidy in place at the time of

retirement shall remain in effect until the retiree becomes eligible for

Medicare. Upon reaching eligibility for Medicare, County retirees are

required to enroll in both part A and part B of Medicare in order to enroll in

the County’s Medicare Supplemental Plan. The County subsidy for the

Medicare Supplemental Plan is 75% of the plan premium.

County retirees who would otherwise reach Medicare eligibility age, but who

do not qualify on their own or through a spouse for Medicare coverage, will

be allowed to remain in the County health plans offered to non-Medicare

retirees. Upon reaching Medicare eligibility age, the County subsidy will be

75% of the premium cost for the medical plan. Continuation of managed

dental and vision coverage after reaching Medicare eligibility age is available

only under the terms and conditions of Federal COBRA laws.”

5

Labor Commissioner on November 6, 2007; the Labor Commissioner concluded that,

because FOP was complaining about a violation of Section 7.3 of the 2007 MOU, and that

MOU expired on June 30, 2007, those sections were “no longer controlling,” and the County

could not have violated them.

FOP then demanded arbitration pursuant to the dispute-resolution provision of the

MOU. On May 9, 2008, Arbitrator Richard Bloch, Esquire, conducted a hearing. One of the

arguments made by the County was that the grievance had not been timely filed because it

was not filed within ten workdays after the 2007 MOU’s expiration on July 1, 2007. Rather,

the grievance was filed on September 14, 2007, which was within ten workdays of

September 1, 2007, the date on which the County’s new 84/16 split began to be reflected in

the retirees’ health-insurance premiums. The main argument made by the County, however,

was that there was nothing left to either grieve or arbitrate relating to the now-expired 2007

MOU. In his decision, Arbitrator Bloch rejected both of these contentions. Because the

arbitrator’s findings have been affirmed in subsequent proceedings, and, we will hold, remain

binding, we will quote from them extensively:

During 1995 negotiations for a new collective bargaining agreement,

the Union successfully negotiated a health insurance provision that locked in

the subsidy in effect at the time of retirement until the retiree reached age 65.

Moreover, the parties agreed to apply that benefit retroactively to officers who

retired between February 1, 1992 and July 1, 1995, the effective date of the

new Memorandum of Agreement (hereinafter “MOU”). Section 7.13 of the

MOU stated, in relevant part:

(Emphasis added.)

6

Section 7.13: Retiree Health Insurance-The County shall provide

the same health insurance benefits (programs and contributions)

for retirees under the age of sixty-five (65) as it does for active

employees, at the time the employees retires (sic). The health

insurance subsidy at the time of retirement will remain in effect

until the retiree or the retiree’s surviving beneficiary reaches age

sixty-five (65).

Effective July 1, 1995, retirees who retired on or after

February 1, 1992 shall receive the County contribution for

health insurance as set forth above.[FN 3 OMITTED]

As structured, this language had a two-fold impact. The first paragraph

provided the “lock” for the subsidy in effect at the time of an officer’s

retirement. The second paragraph ensured that officers who retired between

February 1, 1992 and July 1, 1995 would receive the same guarantee with

respect to the rate existing at their times of retirement. The language remained

in subsequent MOUs until 2003-2004. [FN 4 OMITTED] The sole change at

that time, however, related to removal of the sentence providing that

“Effective July 1, 1995, retirees who retired on or after February 1, 1992 shall

receive the County contribution for health insurance as set forth above.” (The

parties did not then see that as a substantive change and do not claim here that

it has any impact on the current dispute.) The critical lock-in language —

“The health insurance subsidy in place at the time of retirement shall remain

in effect until the retiree becomes eligible for Medicare” remained unchanged

in the MOUs effective in 2004-2005, 200[ ]5-2006 and 2006-2007. [FN 5:

“During those periods of time, the contribution split remained at 85/15.”]

The dispute in this case centers on changes applicable to the July 1,

2007 - June 30, 2008 MOU. In negotiations preceding the agreement, the

County proposed the following language:

E. Retiree Health Insurance. The County shall provide the

same health insurance benefit plans offered to active

employees for retirees not eligible for Medicare who

attain sufficient creditable service for a retirement within

their bargaining unit, or retirees who qualify for

disability retirement. The County will contribute toward

the premium for available benefit plans in accordance

with the Administrative Officer’s Policy, on Insurance

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Benefits for Baltimore County retirees. Employees who

retire from county service shall have the subsidy

provided for in Exhibit (I). [FN 6 OMITTED]

For all negotiations after 1995, the FOP, and other County unions, as

well as a non-Union employee group, were represented (for health care issues)

by a group known as the Health[care] Review Committee (“HRC”). [FN 7

OMITTED] That Committee initially objected to the County’s proposed

revised language, specifically the removal of the “lock-in” terms. [FN 8

OMITTED] Nevertheless, the HRC agreed to the modified health insurance

package. Ultimately, the final proposal from the County on retiree health

insurance read as follows:

E. Retire[e] Health Insurance

“The County shall provide the same health insurance benefit

plans offered to active employees for retirees not eligible for

Medicare who attain sufficient creditable service for a

retirement within their bargaining unit, or retirees who qualify

for disability retirement: Individuals who retired prior to July 1,

2007 who are Medicare eligible the County Subsidy for the

Medicare Supplemental Plan is 75% of the plan premium. The

County will contribute toward the premium for available benefit

plans in accordance with the County Policy, on Insurance

Benefits for Baltimore County retirees. Employees who retiree

(sic) from county service shall have the subsidy provided for in

Exhibit I.”

Pursuant to the existing process, each union brought the health

insurance package to its membership for separate votes. The FOP

membership, for its part, rejected the health insurance package. On September

7, 2007, the County moved to increase the retiree health insurance premium

split. [FN 9 OMITTED]

The FOP claims, in this arbitration, that the rejected portion of the

health benefits package is not effective, as a result of its not having been

ratified. Moreover, it contends the promises made during prior MOUs to

retirees were in the nature of vested benefits and not only were not removed

by the 2007 negotiations, but could not have been removed. Members covered

by that language, it says, must continue to have health benefit subsidies remain

at the level in effect at their retirement until they reach 65.

8

Issue

Do officers who retired on or after February 1, 1992 and before

July 1, 2007 have a vested right to retain the health insurance premium

split applicable to active officers as of the time of their retirement? [FN 10

OMITTED]

FOP Position

The FOP claims the promises made beginning in 1995 continue to be

fully binding on the County. The right to lock in benefit splits at the levels in

effect upon retirement is vested, says the FOP, and cannot be changed with

respect to those employees. It requests the County be directed to: (1)

rescind the modification to the premium split for such retirees, (2) reset

the contribution split to the 85/15 level and (3) direct that the County shall

not implement other scheduled changes to the premium split. It also

requests that the County be ordered to make retirees whole for the

increased premium amounts improperly charged to them since September

1, 2007.

County Position

The County claims the grievance is not arbitrable. The grievance itself

was filed September 14, 2007, based on language in the FY 2007 MOU. But,

says the County, the previous MOU expired June 30, 2007. Any rights

existing thereunder were thereby extinguished. Moreover, says the County, the

MOU makes the grievance procedure applicable to “all employees.” The

MOU defines an “employee” as “all sworn personnel up to and including the

rank of lieutenant of the police department.” Since retirees are not

“employees”, the FOP has no contractual right to grieve on their behalf. It

requests that the grievance be denied.

Analysis

For the reasons that follow, the finding is this grievance has merit.

Central to the County’s rebuttal to the grievance, and its claim that the

grievance is not arbitrable, is its contention that the 2007 MOU, on which the

FOP’s grievance is premised, has expired. In the absence of any statutory

foundation for healthcare benefits [FN 11 OMITTED] since the grievance was

filed some three months after expiration of the 2007 agreement, says the

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County, the benefit expired and, with it, the arbitrator’s authority to enforce the

labor agreement.

The end of a labor contract, however, does not always signal the death

of negotiated rights thereunder, including the right to have a dispute over that

matter resolved through arbitration. That principle was decided by the United

States Supreme Court in Nolde Brothers, Inc. v. AFL-CIO [(430 U.S. 243

(1977) (FN 12 OMITTED)]. . . .

. . . [T]he Supreme Court held the grievance in that case did, in fact, survive

the contract termination. . . . Concluding, finally, that national labor policy has

established a strong presumption in favor of arbitrability [FN 16 OMITTED]

the Court affirmed the arbitrability of the matter.

In Litton v. National Labor Relations Board, et al. [Litton Financial

Printing Division, a Division of Litton Business Systems, Inc., Petitioner v.

National Labor Relations Board, et al., 501 U.S. 190 (1991)][FN 17

OMITTED], the Supreme Court took the opportunity to expand on the Nolde

principles. It reiterated that the obligation to arbitrate disputes over post-

expiration contract terms is by no means unlimited. An expired collective

bargaining agreement, noted the Court, is no longer a legally enforceable

document. [FN 18 OMITTED] But the Court highlighted an exception,

significant here, in cases involving “obligations already fixed under the

contract but as yet unsatisfied.” [(501 U.S. 190 at 197) (FN 19 OMITTED)]

The Nolde Brothers presumption is limited to disputes arising

under the contract. A postexpiration grievance can be said to

arise under the contract only where it involves facts and

occurrences that arose before expiration, where an action taken

after expiration infringes a right that accrued or vested under the

agreement, or where, under normal principles of contract

interpretation, the disputed contractual right survives expiration

of the remainder of the agreement.

[(501 U.S. 190 at 205-06.)]

***

In this case, the ultimate question is whether the retiree rights at issue

may be considered vested and thus capable of continuing enforcement. There

10

is, in this case, a companion issue, however, that raises the question of whether

the retiree rights were terminated through bargaining by the FOP’s designated

bargaining agent, the Health[care] Review Committee. This opinion turns now

to both those issues.

As noted earlier, the HRC, while initially protesting the removal of the

“lock-in” language, ultimately agreed to management’s proposed change. But

this, one concludes, did not result in the FOP’s forfeiting the rights at issue.

[FN 21 OMITTED] According to the record, the FOP rejected the health

insurance package proposed by the County. [FN 22 OMITTED] The County

directs the arbitrator’s attention to the decision of Arbitrator M. David

Vaughan, who concluded, in January of 2008, that the County did not engage

in an unfair labor practice by refusing to negotiate further with the FOP after

it rejected the County’s proposed language changes. Vaughan concluded,

among other things, that the Health[care] Review Committee was the

authorized representative of the Unions, including the FOP, and that there was

no provision, contractually or statutorily, for a dissenting unit to demand

additional negotiations. This, however, does not set to rest the status of the

retiree language. Arbitrator Vaughan held, in his decision, that the rejected

proposal would not be made part of the FOP MOU:

There is no “next step” in bargaining health care issues

following rejection. The rejected proposal is not incorporated

into the MOU, but through the County’s budget process, it can

be funded and implemented as a Management initiative, outside

of collective bargaining.

[FN 23 OMITTED]

The arbitrator’s conclusion that the FOP MOU would not contain the revised

language is consistent with the language in each Union MOU, including the

FOP’s, in which “tentative agreements are subject to ratification by the

membership of each employee organization.” [FN 24 OMITTED]

Significantly, the jurisdiction of the unfair labor practice arbitrator was

confined solely to the question of whether the FOP could demand additional

bargaining with the County over the issue. Mr. Vaughan was clear, in his

decision, that the contract question here at issue was not before him:

There is apparently a contractual grievance, not before me, in

the instant ULP claim, with regard to existing retirees and the

County contribution for health Insurance. [FN 25 OMITTED]

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The remaining question — whether retirees had a vested right to the

benefit here sought is answered directly by the unequivocal language of

the MOUs: The statement that “the health Insurance subsidy in place at

the time of retirement shall remain in effect until the retiree becomes

eligible for Medicare” is subject to no interpretation other than that here

proposed by the FOP. When the parties bargained this language, they made

a binding promise to retirees that the subsidy would remain at whatever

level existed at their retirement. That is a vested right, and it was not, and

could not be, changed by the negotiations discussed in this Opinion. For

these reasons, the finding is that the grievance is timely and that it should be,

and is, granted.

AWARD

The grievance is granted. Officers who retired on or after February

1, 1992 and before July 1, 2007 have a vested right to retain the health

insurance split applicable to them as active officers at the time of their

retirement. The County is directed to rescind its modification, to reset the

contribution split applicable to these officers to 85/15, to continue that

split so long as, by the terms of the language, these officers remain eligible

and to make whole affected retirees for increased premium amounts

improperly charged to them since September 1, 2007.

(Emphasis added.)

As noted, the Arbitrator’s decision that the grievance was timely and that it should be

granted — and the accompanying “award” — was entered on July 15, 2008.

On August 14, 2008, the County filed a complaint in the Circuit Court for Baltimore

County, seeking to vacate the arbitration award. In its complaint, the County made the

following contentions:

• “the Arbitrator exceeded his power, in that he did not have jurisdiction

over the Grievance, which was filed on September 14, 2007 after the

expiration of the Memorandum of Understanding (MOU) between the

Baltimore County Administration and the Fraternal Order of Police,

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Lodge No. 4 which was in effect from July 1, 2006 through June 30,

2007”;

• “the Arbitrator had no authority to provide the relief requested by the

FOP [because] the Arbitrator’s Award rewrote the healthcare subsidy

provisions of the FY 2008 MOU which had been negotiated by the

Healthcare Review Committee, FOP Lodge 4's health insurance

bargaining agent”;

• “[the] Grievance was moot, because the FY 2007 MOU had expired at

the time the Grievance was filed on September 14, 2007”;

• “[b]ecause the FY 2007 MOU had expired on June 30, 2007, there was

no agreement to arbitrate healthcare subsidy language contained in the

expired FY 2007 MOU. Accordingly, there was no arbitration

agreement as described in Section 3-206 of the Courts and Judicial

Proceedings Article, the issue was not adversely determined in

proceedings under Section 3-208 of the Courts and Judicial

Proceedings Article, and Baltimore County raised its objection in the

Arbitration Hearing and in its Post-Hearing Brief”;

• “[t]he Arbitrator’s Award usurps the power of the Baltimore

County Executive and the Baltimore County Council to enact a

budget which provides for health insurance and health insurance

subsidies pursuant to the terms negotiated by the Healthcare

Review Committee, FOP Lodge 4's bargaining agent”;

• “[there] is no vested future right to the specific benefits prescribed in

the expired FY 2007 MOU, as established by long-standing practice

and applicable law”; and

• “[t]he Arbitration Award is contrary to the very clear public

policy, as stated in the Baltimore County Charter and Code, that

the Baltimore County Council appropriates the funds needed to

provide healthcare subsidies for retirees. The Arbitrator has no

power or authority to order the Baltimore County Council to

appropriate funds as stated in his Award.”

(Emphasis added.)

13

The County further argued that “retirees” are not “employees,” and therefore FOP was

not empowered to file a class grievance on behalf of retirees. The County asserted:

Section 1.2 of the FY 2007 MOU states that “the term ‘employee’ shall mean

all sworn personnel up to and including the rank of Lieutenant of the Police

Department.” The award on its face relates to the rights of retirees. Since

retirees by definition are not “employees” covered by the MOU, FOP did not

have the contractual right to file a class grievance on behalf of retirees as set

forth in Section 8.4 of the MOU, . . . .

The County also contended that the “Award involves mistakes so gross as to constitute

manifest injustice,” and that the award “contains mistakes of law and fact which are apparent

on the face of the Award.” The County requested that the circuit court vacate the arbitration

award and remand the matter back to the Arbitrator with instructions to deny the FOP’s

grievance. On March 13, 2009, the County filed a Motion for Summary Judgment in which

it presented arguments asserting the above points.

On April 3, 2009, FOP filed an opposition to the County’s motion for summary

judgment, along with FOP’s own cross-motion for summary judgment.

On August 28, 2009, the Circuit Court for Baltimore County denied both the County’s

motion for summary judgment and FOP’s cross-motion, and the motions judge explained that

“[t]here are too many questions that need to be asked for summary judgment to be granted

in this case.” Both parties filed motions for reconsideration, and by order of court filed

October 21, 2009, the motions for reconsideration were denied.

On May 24, 2010, motions for summary judgment were again heard by the Circuit

Court for Baltimore County. On August 17, 2010, the court filed a memorandum opinion

14

and order denying the County’s motion for summary judgment and granting the motion for

summary judgment filed by FOP. Because several of the issues addressed in the circuit

court’s grant of summary judgment to FOP have been argued in this Court once again in the

County’s present appeal, we will reproduce here portions of the circuit court’s August 17,

2010, opinion and order in favor of FOP, which, as noted above, has been previously

affirmed by the Court of Appeals.

First, the circuit court found that the grievance was timely and the award was

arbitrable. The circuit court stated: “Here, unlike the facts presented in [Barclay Townhouse

Associates v. Stephen L. Messersmith, Inc., 67 Md. App. 493 (1986), a case cited by the

County in support of its argument that the determination of the existence of an agreement to

arbitrate is made by the court rather than the arbitrator], there was a written agreement

between the County and the FOP to arbitrate any grievance filed under the MOU. [FN 24

OMITTED]” Accordingly, the court found the FOP’s claim properly subject to binding

arbitration:

Applying the principles established in Nolde and Litton, the Court finds

that the grievance was arbitrable, despite the fact that the MOU had expired

prior to its filing. The FY 2007 MOU clearly stated: “The health insurance

subsidy in place at the time of retirement shall remain in effect until the retiree

becomes eligible for Medicare.” [FN 41 OMITTED] The clear, unambiguous

language of the agreement creates a promise to retirees that the subsidy in

place when they retire will remain the same until they become eligible for

Medicare. As such, the retirees at issue have a vested right to the maintenance

of that subsidy until they become Medicare eligible. As the Court noted

above, each MOU since FY 1996 has contained similar language.

Additionally, the FY 1996 agreement retroactively included those officers that

had retired between 1992 and 1995. Consequently, the officers that retired

15

while these agreements were in place obtained the vested right. Therefore, the

FOP’s grievance, alleging that the County’s action of increasing the subsidy

splits after the agreement had terminated infringed on the vested right to

maintain the prior split, arose under the contract as defined by Litton. As a

result, Arbitrator Bloch had proper jurisdiction to arbitrate the grievance.

(Emphasis in circuit court’s opinion.)

As noted, the circuit court specifically addressed, and rejected, the County’s assertion

that the grievance was not timely filed:

The County contends that Arbitrator Bloch should have dismissed the

grievance for being untimely. The FOP’s grievance was related to the FY 2007

MOU, which expired on June 30, 2007. Section 8.2 of the MOU required a

grievance to be filed “within ten (10) workdays of the event giving rise to the

grievance, or within ten (10) workdays following the time when the employee

should have reasonably gained knowledge of its occurrence.” [FN 42

OMITTED] Here, the County contends that the event giving rise to the

grievance occurred on March 12, 2007 when the FOP rejected the terms

negotiated by the HCRC for the FY 2008 MOU. The County further argues

that because the FOP was claiming a vested right in the FY 2007 MOU, the

grievance had to arise, at the latest, on the date the MOU expired — June 30,

2007. The FOP didn’t file its grievance until September 14, 2007, which was

more than ten workdays after the MOU had expired. As a result, argues the

County, Arbitrator Bloch should have dismissed the grievance as untimely.

The Court disagrees.

The question of whether a grievance is timely filed is for the arbitrator.

[FN 43 OMITTED] The Court finds no error with Arbitrator Bloch’s award

in relation to the timeliness of the grievance. Even though the FY 2007 MOU

expired on June 30, 2007, the actual infringement of the vested right contained

within the agreement, and [which] was the subject of the grievance, did not

occur until the County implemented changes to the health insurance subsidy

splits on September 1, 2007. It was at that point the effected [sic] retirees

became subject to increased subsidy splits, which gave rise to the grievance.

The FOP filed its grievance on September 14th, which was within ten

workdays of the event giving rise to the grievance, as required under the MOU.

Therefore, Arbitrator Bloch did not err by not dismissing the grievance as

untimely.

16

The court also rejected the County’s argument that retirees are not “employees”

entitled to bring a grievance — an argument that the County has renewed in this appeal:

The County contends that the FOP’s filing does not constitute a

grievance because, under the terms of the MOU, the FOP may only file a

grievance on behalf of employees. [FN 44 OMITTED] Section 1.2 of the

MOU defines employees to “mean all sworn personnel up to an[d] including

the rank of Lieutenant of the Police Department.” The County argues that

since the FOP’s grievance was filed on behalf of retirees who, by the terms of

the MOU, are not employees, the FOP did not have a contractual right to file

a class grievance on their behalf.

The County cites to Allied Chemical and Alkali Workers v. Pittsburgh

Plate Glass Co. [(404 U.S. 157 (1971)] to support its contention. [FN 45

OMITTED] In Allied, the Supreme Court held that retirees are not employees

within the meaning of § 8(a)(5) of [the] National Labor Relations Act and

could not be included in the collective bargaining unit. [FN 46 OMITTED]

At issue in the case was whether the employer had committed an unfair labor

practice by making unilateral changes to retiree benefits instead of bargaining

for those changes with the union. This is very different from the issue

presented by the County in this present case.

In United Steelworkers of America v. Canron, Inc. [(580 F.2d 77 (3rd

Cir. 1978)], the Court of Appeals for the Third Circuit was presented with a

situation similar to this Court. In Canron, the union argued that the collective

bargaining agreement obligated the employer to arbitrate a dispute over retiree

benefits. [FNs 47 & 48 OMITTED] The employer countered that under Allied,

the union lacked standing to sue on behalf of retirees. [FN 49 OMITTED] The

Third Circuit rejected the employer’s contentions, reasoning that if the

employer had contractually agreed to continue making premium payments for

retirees, “then under accepted contract principles the union has a legitimate

interest in protecting the rights of the retirees and is entitled to seek

enforcement of the applicable contract provisions.” [FN 50 OMITTED]

Specifically addressing the holding in Allied, the Third Circuit stated:

Even though retirement benefits of former employees already

retired are not a mandatory subject of collective bargaining, “it

does not naturally follow, as the company implies, that a union

loses all interest in the fate of its members once they retire.” We

17

therefore hold that the plaintiff union has standing to represent

the retirees in seeking arbitration under its labor contract with

Canron. [FN 51 OMITTED]

The Third Circuit’s reasoning with regard to Allied is reinforced by the

Eighth Circuit’s decision in Anderson v. Alpha Portland Industries, Inc. [(752

F.2d 1293 (8th Cir. 1985)] [FN 52 OMITTED] In Anderson, retired employees

sued their former employer in federal district court after the employer

announced it was terminating insurance benefits for retirees. [FN 53

OMITTED] The District Court entered summary judgment in favor of the

employer on the basis that the retirees had not exhausted the grievance

procedures referenced in the insurance agreement and contained in the

collective bargaining agreement. [FN 54 OMITTED] In reversing the District

Court, the Eighth Circuit rejected the employer’s contentions that case law,

including Canron, required retirees to proceed through the union in order to

pursue their disputes. [FN 55 OMITTED] However, the Court noted, Canron

does provide “that a union has standing to assert retirees’ rights under a

collective bargaining agreement to which it is a party if it chooses and that an

employer may not refuse to arbitrate its contractual obligations with the

union.” [FN 56 OMITTED] [(Emphasis in original.)]

Here, it is clear that the FOP is a party to the FY 2007 MOU and that

it has chosen to assert the rights of its retired members. As a result, the County

may not refuse to arbitrate with the FOP over its contractual obligations to

retirees. Based on the foregoing law, this Court finds that Arbitrator Bloch did

not err in arbitrating the grievance made on behalf of retirees.

The County also maintained that the arbitrator’s finding that the retirees’ rights to the

subsidy split in place at the time of their retirement was vested was manifest error requiring

vacation of the arbitration award, but the circuit court rejected this argument and explained:

The County stridently maintains that Arbitrator Bloch’s finding of a

vested right to the health insurance subsidy in place at the time of an officer’s

retirement was an error so gross as to work a manifest injustice. The County

contends that the letter of [the] County Administrator [] regarding the

Retirement Incentive Program in 1991 made clear the County’s intention that

health care subsidies for retirees could go up or down depending on future

labor negotiations. [FN 57 OMITTED] In light of this fact, the County argues,

18

retiree health insurance subsidies are not vested rights and the language in

Section 7.3(c) of the 1997 MOU can in no way be interpreted as providing

such.

***

Here, Arbitrator Bloch concluded that the language contained in Section

7.3(c) was unequivocal and subject to only one interpretation — that the

County made a binding promise to retirees that the subsidy split in effect at the

time of their retirement would remain unchanged. Arbitrator Bloch’s

conclusion is awarded a great deal of deference by this Court. [FN 60

OMITTED] . . . Based on the foregoing facts and applicable law, the Court

finds that Arbitrator Bloch did not commit manifest error, as alleged by the

County, in concluding that the MOU created a vested right.

Finally, the County made arguments related to its contentions that the arbitration

award disregarded the negotiations of the Healthcare Review Committee, and that the award

otherwise contravenes County budget procedures. These arguments are renewed in the

present appeal. We will quote here the circuit court’s ruling relative to these arguments:

Lastly, the County contends that Arbitrator Bloch exceeded his

authority by effectively rewriting the health care subsidy provisions negotiated

by the HCRC on behalf of the FOP for the FY 2008 MOU and by ordering the

County to maintain the 85/15 subsidy split for officers that retired after

February 1, 1992 and before July 1, 2007.

Specifically, the County argues that Arbitrator Bloch exceeded his

authority as set forth [at] Section 8.3, Step 4 of the FY 2007 MOU. That

section provides:

The arbitrator shall have no authority to add to, detract from,

alter, amend or modify any provision of this Memorandum of

Understanding or any rules or regulations of any agency of the

County, or establish or alter any wage rate or wage structure.

[FN 62 OMITTED]

19

The County further asserts that the Award was contrary to the Budgetary

and Fiscal Procedures set forth in the Baltimore County Charter and the

Baltimore County Code, which state the County Executive and County

Council are responsible for enacting a budget and appropriating funds

needed to run the County, including health care subsidies. Arbitrator

Bloch’s Award, the County argues, usurped these powers by ordering the

County to maintain and fund the 85/15 subsidy split.

The FOP counters that Arbitrator Bloch’s Award concerned only the

interpretation and enforcement of compensation terms that were previously set,

and as such, does not usurp either the legislative or executive power of the

County. The FOP points to the distinction between grievance arbitration,

which uses a neutral third party to resolve a dispute over the interpretation of

an existing contract, and interest arbitration, which uses a neutral third party

to set the terms of a new contract. Under the prevailing case law, argues the

FOP, grievance arbitration does not involve the delegation of legislative

authority because the arbitrator is acting in [a] judicial capacity rather than a

legislative one. [FN 63 OMITTED] “The authority to interpret an existing

contract, therefore, does not constitute legislative authority, and the

nondelegation principle is not implicated in grievance arbitration.” [FN 64

OMITTED]

The Court agrees with the FOP’s position. The County and the FOP

agreed to submit “any dispute concerning the application or interpretation of

the terms of [the FY 2007] Memorandum of Understanding” to binding

arbitration. [FN 65 OMITTED] The grievance submitted to Arbitrator Bloch

concerned the interpretation of Section 7.3(c), a contract term that had already

existed and had been bargained for by the parties. In resolving the grievance,

Arbitrator Bloch did no more than what was required of him – to interpret the

disputed contract language in accordance with the facts presented and

applicable law. Therefore, the Court finds that Arbitrator Bloch did not exceed

his authority i[n] reaching his Award.

(Emphasis added.)

On August 19, 2010, the County noted its appeal of the circuit court’s grant of

summary judgment in favor of FOP and the denial of the County’s own motion for summary

judgment. In an unreported opinion filed on December 8, 2011, this Court reversed the

20

circuit court. We held that FOP had not been entitled to summary judgment in its favor as

a matter of law, and that the County had demonstrated its entitlement to summary judgment.

Baltimore County, Maryland v. Baltimore County Fraternal Order of Police, Lodge No. 4

(No. 1428, September Term, 2010). In our opinion, we noted that, in the County’s brief, it

had presented us with nine questions (which are strikingly similar to five of the questions

raised by the County in the present appeal):

1. Whether the arbitrator lacked jurisdiction to arbitrate the grievance and

whether the grievance was arbitrable, because the FY 2007 MOU had

expired?

2. Whether the grievance was moot due to the expiration of the FY 2007

MOU?

3. Whether the grievance was timely filed?

4. Whether the FOP’s late filing constituted a valid grievance since by

definition “retirees” are not “employees” entitled to bring a class

grievance?

5. Whether the Arbitrator had the authority to rescind and rewrite the

language negotiated by the Health Care Review Committee, FOP’s

health care benefit bargaining agent?

6. Whether there was a “vested right” to future health insurance benefits

and subsidies prescribed in the expired FY 2007 MOU, based on the

evidence, long-standing practice and applicable law, and whether it was

manifest error for the Arbitrator to conclude so by relying on cases that

interpret the NLRA?

7. Whether the Arbitrator’s own comments demonstrated the manifestly

unjust and grossly mistaken nature of his award?

8. Whether the County clearly intended that health care subsidies would

be negotiated annually and could “go up and down”?

21

9. Whether, contrary to law and public policy, the Arbitrator’s Award

usurped the power of the Baltimore County Executive and the

Baltimore County Council to enact a budget which provides for health

insurance and health insurance subsidies pursuant to the terms

negotiated by the HCRC, FOP Lodge’s bargaining agent?

In the footnote in which this Court recited the County’s nine questions presented in

that previous appeal, we said: “For the reasons stated in our opinion, we cannot provide a

certain answer to the County’s first question. Instead, we hold that the circuit court erred

when it upheld the arbitration award and we leave the remaining questions to be resolved in

a future arbitration or civil proceeding, if this litigation continues.” The mandate of this

Court was: “Judgments Reversed. Case remanded to the Circuit Court for Baltimore County

with instructions to enter judgment in favor of [the County]. Costs to be paid by [FOP].”

But FOP’s petition for writ of certiorari was granted by the Court of Appeals. It

appears that no cross-petition or conditional cross-petition was filed by the County. On

November 19, 2012, the Court of Appeals reversed this Court’s judgment in favor of the

County, and reinstated the judgment of the circuit court. The Court of Appeals ruled:

We agree with the Circuit Court’s decision to leave undisturbed the

arbitrator’s findings in this case. The fact that the MOU has expired does

not mean the County had no duty to arbitrate disputes arising out of that MOU.

A dispute may be arbitrable after the expiration of the underlying agreement,

if the agreement contained a broad arbitration clause and the rights that are the

subject of the dispute accrued or vested during the life of the agreement.

The MOU’s arbitration clause was broad. It did not exclude grievances

arising after the expiration of the MOU but pertained to “[a]ny dispute

concerning the application or interpretation” of the MOU. The arbitrator

found that FOP’s grievance was arbitrable even after the MOU’s expiration

because — based on the arbitrator’s reading of the MOU’s health-insurance

22

clause — retirees’ rights to an 85/15 health-insurance premium split had vested

at the time of their retirement. The Circuit Court was legally correct in

granting summary judgment in FOP’s favor after subjecting the arbitrator’s

findings to a deferential standard of review. Thus, we reverse the judgment of

the Court of Special Appeals.

FOP Lodge No. 4, supra, 429 Md. at 564-65 (emphasis added). The mandate of the Court

of Appeals was not to remand to this Court so that all nine questions presented by the County

in its 2011 appeal to this Court could be answered; instead, the mandate ordered a remand

to this Court “with directions to affirm the judgment of the Circuit Court for Baltimore

County” (emphasis added), with costs in both this Court and the Court of Appeals to be paid

by the County.

The County filed a motion for reconsideration in the Court of Appeals on December

7, 2012. In that motion, the County asserted: 1) the FOP was bound by the negotiations of

the Healthcare Review Committee (HCRC), which agreed to the reduction in the subsidy

split (a reduction to which FOP expressly did not agree); and 2) “[c]onsistent with many prior

decisions of this Court, this case should be remanded to the Court of Special Appeals for

consideration of all undecided appellate issues.” As to this last point, the County specifically

asserted the following:

Of great practical consequence to the County, there has been no

review of the following issue which was raised by the County in its Brief

in the CSA:

Contrary to law and public policy, the arbitrator’s award usurps

the power of the Baltimore County Executive and the Baltimore

County Council to enact a budget which provides for health

23

insurance and health insurance subsidies pursuant to the terms

negotiated by the HCRC, FOP Lodge 4's bargaining agent.

(Baltimore County’s CSA Brief at 34).

The Arbitrator in this case had no power or authority to order the

County Executive and the County Council to fund a split different from

the negotiated split enacted into law as part of the FY 2008, 2009, 2010,

2011 and 2012 budgets, to order the County Executive and County

Council to reset the split at 85/15 in any future budgets, or to “make

whole” affected retirees for increased premium amounts not budgeted by

the County Executive and County Council.

If this Court’s decision is allowed to stand, and this matter is remanded

to the CSA with directions to affirm the judgment of the Circuit Court for

Baltimore County, the Arbitrator’s affirmed award will be unenforceable, since

there have been no funds appropriated through the executive budget process

to afford the relief capriciously dictated by the Arbitrator.

(Emphasis added.)

On January 18, 2013, the Court of Appeals denied the County’s motion for

reconsideration. 429 Md. 533. The mandate of the Court of Appeals issued the same day,

and, as noted above, it directed this Court to affirm the judgment of the Circuit Court for

Baltimore County. It did not direct this Court to consider further any other “undecided

appellate issues.”

On March 5, 2013, FOP filed in the circuit court a petition for award of costs and

disbursements, seeking $130,691.90 in costs and disbursements, including attorneys’ fees.

The petition was supported by billing records and an affidavit of trial counsel.

On April 5, 2013, FOP filed in the circuit court a “motion to enforce this court’s

judgment and for an order to show cause.” The motion asserted that the County “refuses to

24

comply with this Court’s judgment by providing the required relief.” FOP further asserted

that the County’s refusal was “without any justification and accomplishes nothing other than

to further delay resolution of this matter and gratuitously increase the parties’ expenses by

unnecessarily prolonging litigation.” In support of the requested relief, the motion stated:

. . . Notwithstanding the issuance of the mandate by the Maryland Court of

Appeals and the order by the Court of Special Appeals vacating its earlier

decision, the County refuses to provide the required relief.

First, the County has refused to rescind its reduction of the retiree health

care subsidy in effect at the time of each officer’s retirement. Stated

differently, the County continues to overcharge retirees for health insurance.

Second, the County refuses to make those retirees whole for the

amounts that the County improperly charged to them. In this regard, the

County has previously provided the FOP with a chart showing the amounts by

which the County had charged each retiree above the rates in effect at the time

of retirement. That chart, which is attached as Exhibit 3, shows that for

overcharges through May of 2011, the County owes the retirees collectively

$572,887.10, plus appropriate interest. The County has also refused to provide

the data to calculate the amounts by which the County has overcharged retirees

from May 2011 through the present.

. . . In an effort to bring this longstanding litigation to a close without further

delay or expense to either party, since the issuance of the Court of Appeals

decision in November of 2012, FOP’s counsel has made many attempts to

discuss with the County the County’s provision of the required relief to the

affected retirees. On each occasion, the attorney for the County has stated

simply that the County is continuing to consider its options. At no point,

however, has the County offered any explanation as to why it was not

providing the relief required by this Court’s order and judgment, as affirmed

by the Maryland Court of Appeals, or a timeline by which it would provide the

required relief.

Accordingly, in order to resolve this matter without further litigation,

on March 20, 2013, the FOP sent the County Attorney correspondence

requesting that the County promptly take the following steps:

25

1. Effective April 1, 2013, the County must provide each

affected retiree with the retiree health subsidy in place at

the time of his or her retirement.

2. The County must issue payment to the affected retirees

in the amounts identified in [Exhibit 3] by Friday, March

29, 2013.

3. In order to determine the additional amount that the

County owes the affected retirees, by March 26, 2013,

the County must update the attached chart [Exhibit 3]

through March 31, 2013 (or later if the County fails to

change the retiree health subsidy provided to the affected

officers by that date) and provide the FOP with a copy of

the entire chart in Microsoft Excel format.

4. The County agrees that it is required to pay pre- and post-

judgment interest at the legal rate.

. . . The County simply ignored this correspondence and continues to refuse

to provide any of the relief required by this Court’s judgment. [FN 1

OMITTED] . . .

On April 23, 2013, the County filed a response to FOP’s motion to enforce the

judgment. In its response, the County failed to refute FOP’s contention that the County was

refusing to comply with the court’s order which confirmed the arbitration award. Instead,

the County continued to dispute the validity of the arbitration award, and asserted once again

that it was “contrary to the very clear requirements as stated in the Budgetary and Fiscal

Procedures set forth in Article VII of the Baltimore County Charter and in § 10-1-113 of the

Baltimore County Code.” The County argued that — despite the circuit court’s previous

ruling which was affirmed by the Court of Appeals — under the Baltimore County Code,

Charter, and

26

controlling case law, the Arbitrator had no power or authority to order the

County Executive and County Council to fund a split different from the

negotiated split enacted into law as part of the FY 2008, 2009, 2010, 2011,

2012, and 2013 budgets, to order the County Executive and County Council

to reset the split at 85/15 in any future budgets, or to “make whole” affected

retirees for increased premium amounts not budgeted by the County Executive

and County Council.

The County further argued that the circuit court lacked the “power or authority” to

enforce the arbitration award. The County also asserted: that “any rescission and resetting

of the health care subsidy split would violate the agreement FOP’s bargaining agent, the

Health Care Review Committee, made with the County”; that the circuit court’s August 10,

2010, order granting summary judgment in favor of FOP did not constitute “an enforceable

judgment against the County for a sum certain”; that the arbitrator lacked the authority “to

rescind and rewrite the language negotiated by the Health Care Review Committee, FOP’s

bargaining agent”; that “FOP never proved and the Arbitrator never determined the amount

which would ‘make whole affected retirees’ or any liquidated sum that could be reduced to

a judgment against the County”; that the “separation of powers doctrine prohibits this Court

from ordering the County Executive and the County Council to appropriate funds, long after

the Budgets for FY 2008-2013 have been enacted”; and finally, that “[e]nforcement of the

Award at this stage of the proceedings would violate the County’s statutory right to have the

[nine] issues it raised in the Court of Special Appeals [in the 2011 appeal] adjudicated.”

On May 17, 2013, the circuit court held a hearing on FOP’s motion to enforce. At the

hearing, counsel for the County indicated that the County was still pressing the arguments

27

it had raised in the first appeal. The application of the law of the case doctrine to the

County’s public-policy argument is supported by the following colloquy:

[BY THE COUNTY]: Thank you, Your Honor. Before I discuss the

seven arguments I presented in our response to

the Motion to Enforce, I would like to

characterize those seven arguments as essentially

one argument which I did not articulate in specific

terms but it is the public policy exception to the

enforcement of an arbitration award and, in effect,

our arguments, our seven arguments are asking

this Court to find that as a matter of public

policy as expressed in the Batimore County

Charter and the Baltimore County Code, this

matter is not enforceable. Now, there’s two

parts to this procedure. One is our Complaint to

Vacate the Award. [FOP’s counsel] has

conveniently ignored the fact that the Court of

Special Appeals reversed this Court and said that

your decision was wrong. Now, is it wrong for us

to believe an arbitrator’s award is beyond his

powers to then file a Complaint to vacate that

award with this Court. This Court agreed with the

arbitrator, then file an appeal to the Court of

Special Appeals, which agreed with us. So there

is at least some debate here about the issues, legal

issues. So up to the point where the Court of

Special Appeals affirmed us, the case would have

been in our favor. Of course, then I had to go

through the Court of Appeals and, unfortunately,

the Court of Special Appeals did not address the

nine legal issues we raised, which we’re entitled

to have addressed under the Court[s] and Judicial

Proceedings Article in a direct appeal to that

Court and if the Court will recall ----

[BY THE COURT]: But you made, you made that argument to the

high, to the highest Court of this, of this State.

28

[BY THE COUNTY]: I did, I argue, I did make the argument, I said

—

[BY THE COURT]: And they rejected it, right?

[BY THE COUNTY]: Well, they did but the legal issues have not been

decided, Your Honor. Where does that leave us?

[BY THE COURT]: It leaves you with a Court of Appeals opinion.

[BY THE COUNTY]: And the Court of Appeals opinion, to be quite

frank with you, was rendered to, to that Court, to

uphold a princip[le] concerning vesting. That’s

all they were interested in. That was their agenda.

Why? I don’t know. They didn’t want to hear

anything else. They didn’t want to hear the fact

that the bargaining agent for FOP and all of the

unions sat down, negotiated with the County and

agreed to this reduction. Simple contract law.

They’re your agent, you agreed to it, the principal

is bound. So if there’s any bad faith in this case,

it’s the bad faith of the FOP. To sit, to agree that

the health care agent is bargaining for them, they

reach an agreement with the County and then FOP

wants to pull the rug out from under the whole

thing.

[BY THE COURT]: Well, that’s why the whole thing was litigated.

[BY THE COUNTY]: That’s correct.

[BY THE COURT]: And you have a Court of Appeals opinion.

[BY THE COUNTY]: But my, my point of bringing it up is we sat

across the table with them and bargained with the

health care bargaining agent and reached an

agreement which now they want, they have

nullified.

29

[BY THE COURT]: Well, I mean, you don’t suggest that this whole

issue has to be re-litigated?

[BY THE COUNTY]: No, I’m saying at this point, well, as far as I’m

concerned, the nine issues remain unaddressed.

The Court of Special Appeals said that the

arbitrator did not address the County’s argument

that the arbitration clause itself had expired. The

Court [of Special Appeals] determined that this

omission was a palpable mistake and the award

should have been vacated. According to the

Court of Special Appeals reversed the judgments

of the Circuit Court granting FOP’s Motion for

Summary Judgment and denying the County’s

Motion for Summary Judgment which should

have been granted. And the Court [of Special

Appeals], in its footnote, first footnote in the case,

listed the nine issues.

[BY THE COURT]: All right.

[BY THE COUNTY]: And indicated that those are, would only be

addressed necessarily in any future litigation.

[BY THE COURT]: Well, that’s the Court of Special Appeals.

[BY THE COUNTY]: That’s correct.

[BY THE COURT]: The Court of Appeals is saying something

different.

[BY THE COUNTY]: Well, the Court of Appeals never ruled on this

issue. All they did was —

[BY THE COURT]: And the Court of Appeals is saying the Court of

Special Appeals doesn’t need to.

[BY THE COUNTY]: They reversed the Court of Special Appeals and

remanded it directly back to this Court for entry of

judgment.

30

[BY THE COURT]: Well, no, they remanded it to the Court of Special

Appeals.

[BY THE COUNTY]: To have it remanded back here.

[BY THE COURT]: Right.

[BY THE COUNTY]: For entry of judgment —

[BY THE COURT]: They didn’t tell the Court of Special Appeals to

address those issues.

[BY THE COUNTY]: No, they did not. That was what we were

requesting —

[BY THE COURT]: So what right do I have, what power do I have to

do that?

[BY THE COUNTY]: You do not have that power. I’m just bringing

it up as a matter of fairness. We had been denied

the opportunity in a direct appeal to have our

issues decided. . . .

(Emphasis added.)

In a later colloquy, the County attempted to explain why its current arguments about

the unenforceability of the award were not exhausted:

[BY THE COURT]: So if, if, I guess I’m confused because if the, if

the issue is that because there’s no

appropriation made, tough luck, I guess

basically, why did the County ever file to

vacate the arbitration award? Why did you

just, why didn’t you just say it’s not

appropriated, we don’t need to worry about it.

[BY THE COUNTY]: Because we felt that there were very sound

legal arguments to be made as to why that

31

arbitration award was erroneous. And, again

—

[BY THE COURT]: But if it’s not appropriated, why waste five years?

Why not just say, it’s not appropriated, we don’t

have to pay it?

[BY THE COUNTY]: Well, as the matter moved forward, because there

was no appropriation, because the health care

agent, the health care review committee, the

bargaining agent, had reached an agreement and

under the budgetary process, that was the number

that then became part of the budget submission

that was passed by the Council and that has

occurred each successive year. Now, why was it

done? Because we felt like the, why did we

appeal, why did we seek to vacate? Because we,

we —

[BY THE COURT]: Yeah, I mean, if it’s not appropriated.

[BY THE COUNTY]: — thought it was wrong. We thought it was

wrong and, it was legally wrong and we felt

like we would win on that basis.

[BY THE COURT]: So win or lose, this was another argument you

were, the County had that it was going to pull

out of its back pocket at some time?

[BY THE COUNTY]: No, this was not pulled out of the back pocket,

Your Honor. It was, it was —

[BY THE COURT]: Well, you’re, you’re saying it wasn’t appropriated

so we don’t have to pay it. Why not just say,

okay, the award is the award and we just don’t

have to pay it because it’s not appropriated?

[BY THE COUNTY]: That’s what we’re saying now.

[BY THE COURT]: I know you’re saying that now.

32

[BY THE COUNTY]: Now that they’re trying to enforce it.

[BY THE COURT]: So why’d you wait five years?

[BY THE COUNTY]: Because it was not at the position where it would

be enforced. Now, it’s trying to, that’s point.

[BY THE COURT]: Okay.

[BY THE COUNTY]: The public policy does not allow its enforcement.

We were trying to attack the legal basis, that, we

were trying to attack the award as legally

unsound for the reasons which have never been

decided by any Court. Now that it’s being

enforced or attempted to be enforced, we’re

saying public policy bars its enforcement.

(Emphasis added.)

The circuit court took the matter under advisement, and allowed the County to file a

supplemental memorandum in support of its public policy argument. On August 14, 2013,

the circuit court issued a memorandum opinion and order granting FOP’s motion to enforce.

This order was docketed on August 28, 2013.

The circuit court’s opinion took note of all the arguments presented by the County,

and concluded that the law of the case doctrine barred any further consideration of the

arguments about the enforceability of the award. The circuit court ordered the County to take

the following actions within twenty days: 1) “provide each affected retiree with the retiree

health subsidy in place at the time of his or her retirement”; 2) “issue payment in the amount

of” $572,887.10, “plus appropriate interest, which is the amount referenced in the chart

previously prepared by [the County] and provided to [FOP] in May of 2011, attached as

33

Exhibit 3 to [FOP’s] Motion to Enforce,” and “issue payments directly to each affected

retiree in the proportions set forth in the chart prepared by [the County]”; and 3) update the

previously-referenced damages chart with “information sufficient for [FOP] to calculate a

sum certain judgment to which it is entitled, including any appropriate pre[-] and post[-

]judgment interest,” and provide FOP with a copy of the updated damages chart.

On September 6, 2013, the County filed a motion to alter or amend the judgment

pursuant to Maryland Rule 2-534. On October 9, 2013, FOP filed its response. On October

15, 2013, the court conducted a hearing on the County’s motion. At the hearing, the County

continued to raise issues regarding the timeliness of the initial grievance and whether or not

retirees were entitled to pursue a grievance. The County again pointed to the nine issues it

had previously raised in its first appeal to this Court, and the County also renewed its public

policy arguments about the County’s failure to make an appropriation to pay the amounts

ordered by the Arbitrator. At one point during the hearing, counsel for the County seemed

to disavow the reliability of the damages chart which had been previously provided by the

County:

[BY THE COURT]: Does the, does the County dispute the numbers on

this chart?

[BY THE COUNTY]: To be honest with you, I don’t know what the

numbers really mean and I haven’t sorted through

them. I don’t know, at this point, who prepared

them. I haven’t been able to track it down. So,

no, I don’t agree with, and I think I need to, I,

there has to be an opportunity for us —

34

[BY THE COURT]: This is, this is the document, as I recall, that the

County supplied to the FOP?

[BY THE COUNTY]: As part of a global settlement discussion of all

cases.

[BY THE COURT]: I understand that, but is there any, is there any

dispute as to anything on that chart?

[BY THE COUNTY]: I dispute it because I don’t know what it says and

I don’t know how it was arrived at.

[BY THE COURT]: Have you, have you had a chance to review it?

[BY THE COUNTY]: I have reviewed it.

[BY THE COURT]: You have?

[BY THE COUNTY]: Yes.

[BY THE COURT]: So having reviewed it, is there anything that you

dispute on it?

[BY THE COUNTY]: Excuse us, Your Honor. Basically, there, the

numbers are unsubstantiated in any manner which

would, could relate to evidence that a judgment

could be based on, Your Honor.

[BY THE COURT]: I’m just asking if you dispute anything on it?

[BY THE COUNTY]: I dispute them, yes, I do.

[BY THE COURT]: You dispute, you don’t know how the County

created it, prepared it and transferred it to the

opposing party in good faith negotiations for a

global settlement, you dispute what’s on there, is

that what you’re telling this Court?

[BY THE COUNTY]: I personally don’t know what it says or who

prepared it, therefore, I have to dispute it.

35

[BY THE COURT]: Okay. All right.

[BY THE COUNTY]: And it’s not substantiated in terms of a piece of

evidence that you put somebody on the stand and

say, Mr. Jones —

[BY THE COURT]: I, I, I understand your evidentiary point. My

question is, this document that the County

prepared and presented to the FOP, does the

County dispute what’s on the County’s

document?

[BY THE COUNTY]: I can’t speak for the County because I can only

speak for myself.

[BY THE COURT]: You’re, you’re representing the County.

[BY THE COUNTY]: My investigation of it revealed that I couldn’t

identify who had prepared it. Without that,

talking to that person, I have to dispute it.

[BY THE COURT]: Okay. But as of this point in time, which has

been, I don’t know when you turned the document

over, it’s been several years though, right? Two

thousand eleven?

[BY THE COUNTY]: Yes, it’s been a while.

[BY THE COURT]: All right. So it’s been about two, over two years.

Has anything come to your attention, to the

County’s attention, to, to bring into dispute

anything on that document?

[BY THE COUNTY]: No, because it never came up. The settlement

negotiations ended and that was the end of that.

There was not a settlement reached and, therefore,

the document became irrelevant.

[BY THE COURT]: All right. Have you reviewed it since the Court’s

Order back in, several months ago?

36

[BY THE COUNTY]: Your Honor’s Order?

[BY THE COURT]: Um hm. Have you reviewed the document?

[BY THE COUNTY]: No, I haven’t really, I’ve looked at it but I

haven’t reviewed it. I’m not —

[BY THE COURT]: Has anything, is there anything to dispute now

about that document?

[BY THE COUNTY]: Yes, the whole thing.

[BY THE COURT]: Okay.

[BY THE COUNTY]: On both substantive, it’s unsubstantiated and on

evidentiary grounds. I think Your Honor —

[BY THE COURT]: What substantively is incorrect on it?

[BY THE COUNTY]: It has, the document hasn’t been substantiated by

the testimony of a witness who can say ----

[BY THE COURT]: What, what facts on the document are in dispute?

[BY THE COUNTY]: Well, I wouldn’t know that until I have a witness

on the witness stand to know what’s in dispute

and be able to either not prove it or prove it.

[BY THE COURT]: All right.

[BY THE COUNTY]: I’m not trying to play a game, Your Honor. I, I

just, you know, this is a document that was

prepared for settlement discussion. Now, it’s

providing the basis for a, I guess, a half million or

a million and a half dollar judgment.

[BY THE COURT]: Well, I guess I can understand if there’s a dispute

as to the amount or the, or the facts on that

document, there’s a bona fide dispute about that,

then you need an evidentiary hearing.

37

[BY THE COUNTY]: I can’t, I can’t, as I stand here say —

[BY THE COURT]: But if there’s no, if there’s no dispute, then

there’s no need for a hearing.

[BY THE COUNTY]: There’s –

[BY THE COURT]: If you’re disputing —

[BY THE COUNTY]: Yes, I’m disputing —

[BY THE COURT]: If you, as the representative for the County, is

disputing the document that the County prepared,

I’d like to know what, what is it about that

document that the County prepared that the

County disputes.

[BY THE COUNTY]: I’m not sure if the numbers are accurate.

[BY THE COURT]: Okay.

[BY THE COUNTY]: But either way, I don’t think it’s a document that

Your Honor can use because it’s part of a

settlement discussion under the Rules of

Evidence. In any event, and, and it shows that

rather than using a document that was part of a

settlement discussion, there needs to be a hearing

where somebody proves something.

[BY THE COURT]: So, so you’re saying the County entered into a

settlement discussion without vetting the

document that’s being used as the basis for that

negotiation?

[BY THE COUNTY]; I have no idea. I wasn’t part of that.

In response to the County’s refusal to admit the reliability of the document that it had

previously prepared and provided to the FOP, the court permitted a brief period of discovery

38

for the purpose of ascertaining the damages amount, and the court scheduled a damages

hearing for January 28, 2014. As part of its order of November 5, 2013, the court stayed

paragraphs 3 and 4 of its order of August 28, 2013; in other words, it stayed the part of the

order requiring the County to pay $572,887.10, “plus appropriate interest,” and to update the

damages chart within 20 days.

On November 8, 2013, the County noted an appeal to this Court of the November 5,

2013, order. It also filed a motion for a stay pending appeal, which was denied by the circuit

court in a memorandum opinion and order filed on December 15, 2013. The County then

made application to this Court for a stay pending appeal, and that was denied on December

26, 2013.

A damages hearing was held on February 6, 2014. Admitted in evidence as FOP’s

Exhibit 1 was an updated chart, provided by the County, showing that the updated damages

amount through the end of January 2014 was $1,413,120.81. That balance was growing by

approximately $28,000 per month for every month the County refused to comply with the

court’s previous orders to reset the subsidies and “make whole” the retirees. FOP produced

an expert economist who testified as to pre- and post-judgment interest, which, at the time

of the damages hearing, was “a little over $219,000 in total” and growing by “approximately

$7,000 to $8,000 of interest each month.” FOP also produced evidence showing that its total

attorneys fees were up to $240,412.80.

39

At the damages hearing, the County again argued that FOP was entitled to no damages

whatsoever. FOP called as its first witness Becky Ellis, a health-insurance administrator for

the County and the individual who prepared the damages spreadsheet at issue that reflected

that the County owed the affected retirees in excess of $1.4 million. The County objected

to the admission of the document prepared by its employee at its direction on the basis that,

“although it’s authentically what she prepared, what [it] is being presented for is not

proper[.]” The objection was overruled.

When it came time to cross-examine Ms. Ellis, the County asked its employee, “[d]oes

the County owe the retirees [ ] damages?” The question drew an objection that was sustained.

The County explained that the question “relates to our argument that these retirees are

entitled to zero damages.” The County then proffered that Ms. Ellis’s “answer would be that

there are no damages because the Health Care Review Committee agreed to the change in

the subsidy rate.”

FOP then called its expert economist, Dr. Amy McCarthy, to testify regarding her

interest calculations, which showed that the amount of interest that accrued between

September 1, 2007, and December 31, 2013, was $219,175.22.

The County was then permitted to call a witness, Fred Homan, out of turn. Mr.

Homan testified that he was the County administrative officer, “responsible for the day-to-

day operation of the county.” Prior to holding his then-current position, Mr. Homan had been

the Director of Budget and Finance for the County from November 1989 until July 2007.

40

The County’s repeated attempts to have Mr. Homan testify that it was his opinion that the

retirees were not due any compensatory damages drew objections that were sustained, but

the County was permitted to proffer what Mr. Homan’s testimony would be. Among the

contentions appellant makes on this appeal is a claim that the court, in sustaining “virtually

every objection by FOP to every substantive question posed to the County’s witnesses,”

committed legal error in “refus[ing] to allow the County’s witnesses to give any substantive

testimony” at the February 6, 2014 damages hearing. The following colloquy reflects the

proffered testimony that was excluded.

[BY THE COUNTY]: Mr. Homan, in your capacity as the County’s

administrative officer and being the director of

Budget and Finance, you’re familiar with the

County’s executive budget system —

[BY FOP’S COUNSEL]: Your Honor, I object to the relevance of what I

am now imagining this entire line of questioning

to be, to not be about ascertaining the amount of

damages which is the sole purpose of this hearing,

but instead to relitigate for countless time the

merits of this litigation.

[BY THE COURT]: Mr. [County’s counsel]?

[BY THE COUNTY]: Your Honor, again, this goes back to our

contention that with respect to this damages

hearing there are no damages, and Mr. Homan

will explain why.

[BY THE COURT]: Okay. I’ll sustain the objection.

[BY THE COUNTY]: Then I would like to make a proffer.

***

41

Mr. Homan will testify that under the County’s

Executive Budget System as set forth in the

Baltimore County Charter and Code, specifically

Section 715 of the Charter and Section 10-1-113

of the Baltimore County Code, which if he were

allowed to testify I would offer as exhibits in

support of his testimony. The Executive Budget

System entered into and formed a part of the FY

2007 MOU as if expressly referred to and

incorporated into the MOU, and that’s under

Maryland case law.

Under that system any agreements [a]ffecting

appropriations are fully subject to the County’s

annual budget process. This principle embraces

unlike those provisions which [a]ffect the validity,

construction, discharge, and enforcement of a

contract. Even if the retirees had a vested right to

certain rates, that vested right was fully subject to

the Executive Budget System and the agreement

negotiated by the Health Care Review Committee.

I’d then ask Mr. Homan the following question —

well, I will ask him and if there’s an objection I’ll

proffer the answer.

[BY THE COURT]: All right.

[BY THE COUNTY]: Do you agree or disagree with the following

statement, Mr. Homan? If the final enacted

ledger contains the agreed upon appropriations

from which health care subsidies should have

been paid, then is the County obligated to pay —

[BY FOP’S COUNSEL]: I’m gonna object on two —

[BY THE COURT]: All right. Sustained.

[BY FOP’S COUNSEL]: I don’t even believe a proffer is appropriate

because you’re the judge and he’s asking now Mr.

42

Homan. That question is improper, period,

because —

[BY THE COURT]: I sustained the objection, and you may proffer.

[BY THE COUNTY]: The answer — the proffer would be as follows: If

the final enacted budget contains the agreed upon

appropriations from which health care subsidies

should have been paid, then the County is

obligated to pay, but if the final enacted budget

contains less appropriations than were previously

agreed upon, then the budget controls and the

County is only liable up to the amount actually

appropriated.

Next question, Mr. Homan, do you agree with the

following statement? If the final enacted budgets

for FY 2008 to 2014 contain the health care

subsidy reductions agreed to by the Health Care

Review Committee, then the County is under no

obligation to pay any other subsidy —

[BY FOP’S COUNSEL]: Objection, Your Honor.

[BY THE COURT]: Sustained.

[BY THE COUNTY]: The answer would be that if the final enacted

budgets —

[BY THE COURT]: This is a proffer.

[BY THE COUNTY]: This is a proffer, correct. If the final enacted

budgets for FY 2008 to 2014 contain the health

care subsidy reductions agreed to by the Health

Care Review Committee, then the County is not

under any obligation to pay any other subsidy.

Next question, Mr. Homan, under the C[h]arter

and the Code can the County comply with any

order of the Court to “issue payment” of alleged

43

excess contributions to affect[ed] retirees “plus

appropriate interest” ---

[BY FOP’S COUNSEL]: Objection, Your Honor.

[BY THE COURT]: Sustained.

[BY THE COUNTY]: And the answer would be —

[BY THE COURT]: Proffer.

[BY THE COUNTY]: The proffer would be no. The next question

would be why not, and the answer would be —

[BY FOP’S COUNSEL]: Your Honor, if you want me to object to —

[BY THE COURT]: I think you should object.

[BY FOP’S COUNSEL]: Objection.

[BY THE COURT]: Sustained.

[BY THE COUNTY]: The proffer would be because there has never

been an appropriation ordinance by the county

coun[ci]l for such payments.

Next question, Mr. Homan, under the Charter and

Code can the County comply with any order by

this Court that the County “shall provide each

effective [sic] retiree with [the] health care

subsidy in place at the time of his or her

retirement” ---

[BY FOP’S COUNSEL]: Objection.

[BY THE COURT]: Sustained.

[BY THE COUNTY]: The answer would be no. The next question to

Mr. Homan, why not —

44

[BY FOP’S COUNSEL]: Objection.

[BY THE COURT]: Sustained.

[BY THE COUNTY]: The answer would be —

[BY THE COURT]: It’s a proffer. They’re all proffers.

[BY THE COUNTY]: The proffer would be because there’s never been

an appropriation ordinance by the county

coun[ci]l for such reset or such repayments —

such payments, pardon me. That would be Mr.

Homan’s testimony.

A similar pattern of proffers was used during the examination of the County’s two

other witnesses at the damages hearing, Keith Dorsey and George Gay. Mr. Dorsey testified

that, since July 2007, he has been the Director of Budget and Finance for Baltimore County.

The following colloquy is pertinent:

[BY THE COUNTY]: Now, pursuant to the budget bearing physical [sic]

proceedings of the County Charter and the County

Code, was the County Council in its budgetary

enactments for FY 2008 and 2014 appropriated

the funds to pay for the health care subsidy split

negotiated by the Health Care Review Committee

in 2007?

[BY MR. DORSEY]: Yes, I did —

[BY FOP’S COUNSEL]: Objection, your Honor. This is outside the scope

of today’s hearing.

[BY THE COURT]: All right. Sustained. Strike the question and the

answer.

[BY THE COUNTY]: Well, observe the same —

45

[BY THE COURT]: You can make a proffer.

[BY THE COUNTY]: — process. I will proffer that the answer will be

the County has appropriated the funds to pay for

the health care subsidy split negotiated by the

Health Care Review Committee in 2007.

Next question, Mr. Dorsey, has the County

Council in its budgetary enactments fiscal year

2008 to 2014 appropriated the funds to pay for

health care subsidy split in effect prior to July 1,

2007 —

[BY FOP’S COUNSEL]: Objection.

[BY THE COURT]: Sustained.

[BY THE COUNTY]: I’ll proffer, your Honor. The answer would be

no.

Next question, Mr. Dorsey, has the County

Council appropriated the funds for any alleged

damages claimed in this case —

[BY FOP’S COUNSEL]: Objection.

[BY THE COURT]: Sustained.

[BY THE COUNTY]: The proffer would be that the County Coun[ci]l

has not appropriated any funds to pay for any

alleged damages claimed in this case.

Mr. Dorsey, the next question is has the County

Council appropriated the funds to pay for any

retroactive reset of the retiree health care subsidy

splits to their pre-July 1, 2007 level –

[BY FOP’S COUNSEL]: Objection.

[BY THE COURT]: Sustained.

46

[BY THE COUNTY]: The proffer is that the County Council has not

appropriated the funds for any retroactive reset of

the health care retiree subsequent to their pre-July

1, 2007 level.

Mr. Dorsey, has the County Council appropriated

the funds to pay for any award of interest,

attorney fees or litigation expenses in connection

with this case —

[BY FOP’S COUNSEL]: Objection.

[BY THE COURT]: Sustained.

[BY THE COUNTY]: The proffer would be the answer is no, the County

Council has not appropriated the funds to pay for

any award of interest, attorney fees or litigation

expenses. That would be the testimony of — the

proffered testimony of Mr. Dorsey.

George Gay testified next on behalf of the County. At the time of the damages

hearing, Mr. Gay was the County’s Director of Human Resources, but in his previous

position as Labor Commissioner, he denied the FOP’s initial grievance in this matter

following a hearing on November 6, 2007. Mr. Gay’s testimony, in part, was as follows:

[BY THE COUNTY]: Let me show you what has been marked as

Plaintiff’s Exhibit 5. Do you recognize that?

[BY MR. GAY]: It appears to be the grievance filed by the FOP

concerning the health care subsidy split.

[BY THE COUNTY]: Is this the grievance that resulted in a hearing that

you conducted?

47

[BY MR. GAY]: I didn’t.[3]

[BY THE COUNTY]: What was your finding in connection with that

hearing —

[BY FOP’S COUNSEL]: Objection, your Honor. It’s outside the scope of

today’s hearing.

[BY THE COURT]: Sustained.

[BY THE COUNTY]: I will proffer that the result was the grievance was

denied.

Mr. Gay, do you see where in the box where it

says [“]employee’s name[”], the [“]Baltimore

County FOP Lodge 4[”] appears?

[BY MR. GAY]: Yes.

[BY THE COUNTY]: Is FOP Lodge 4 an employee —

[BY FOP’S COUNSEL]: I object, your Honor. Same objection.

[BY THE COURT]: Sustained.

[BY THE COUNTY]: The answer would be as I proffer it, your Honor,

no.

Do you see down where it says “Box 2 What do

you think should be done about it?” You see

that?

[BY MR. GAY]: Yes, uh-huh.

[BY THE COUNTY]: You see anywhere in that box where the FOP

requested, “Make whole relief” ---

3

We assume this is a transcription error; Mr. Gay did conduct a hearing on FOP’s

grievance on November 6, 2007, and denied the grievance in an opinion he issued on

November 19, 2007.

48

[BY FOP’S COUNSEL]: Objection, your Honor. It’s outside the scope.

[BY THE COURT]: Sustained.

[BY THE COUNTY]: The answer would be no, that’s the proffer. If I

could have Exhibit Number 2, please.

I’m showing you what’s been previously marked

and admitted into evidence as Exhibit Number 2,

which is the complaint filed in this case.

I want to direct your attention to Exhibit 2

attached to that complaint, which is the FY 2000

MOU between Baltimore County and FOP Lodge

4. Do you recognize that?

[BY MR. GAY]: Yes.

[BY THE COUNTY]: In looking at that can you explain what the health

care subsidy split was as it existed as of the

effective date and up to the time it became

expired of that MOU?

[BY MR. GAY]: It varies based on the levels of coverage, because

there’s an HCP, there’s also a triple option plan.

[BY THE COUNTY]: You said what is it, an HCP?

[BY MR. GAY]: Yes.

[BY THE COUNTY]: What does that mean?

[BY MR. GAY]: Health care preferred, and a PLS plan into said

triple option plan.

[BY THE COUNTY]: Okay. Is it accurate to say that the amount of the

subsidy is various subsidies for the different

health plans in this MOU are different from what

was negotiated by the Health Care Review

Committee in 2007 —

49

[BY FOP’S COUNSEL]: Objection, your Honor.

[BY THE COURT]: Sustained.

[BY THE COUNTY]: The answer as proffered would be yes, these are

different.

Let me show you what has been marked as the

next County Exhibit, which is Number 6. Do you

recognize that document?

[BY MR. GAY]: Yes.

[BY THE COUNTY]: What is it?

[BY MR. GAY]: It’s p o rtio n s of th e m e m o ra n d u m o f

understanding between the County and the

American Federation of State, County and

Municipal Employees.

[BY THE COUNTY]: What fiscal year is this MOU effective?

[BY MR. GAY]: July 1st of 2007 through June 30 of ‘08.

[BY THE COUNTY]: So, could we call that one the FY 2008 MOU with

A[FS]CME?

[BY MR. GAY]: Correct.

[BY THE COUNTY]: Does that MOU incorporate the changes that were

negotiated by the Health Care Review Committee

during negotiations with that committee regarding

the health care subsidies —

[BY FOP’S COUNSEL]: Your Honor, I object to the question and I also

object to the admission of the document, both are

outside the scope.

[BY THE COURT]: Care to be heard, Mr. [County’s counsel]?

50

[BY THE COUNTY]: Just trying to establish that the A[FS]CME — this

is an illustrative MOU. The Health Care Review

Committee negotiated the changes on behalf of all

the unions, and they voted in favor of the changes,

and FOP was the only one who would not go

along with the changes. That’s why they filed a

grievance. All the other unions as illustrated by

this MOU of A[FS]CME agreed to the changes

and have abided by them ever since then. This

MOU does contain the changes negotiated by the

Health Care Review Committee.

[BY THE COURT]: All right. Sustained.

[BY THE COUNTY]: I think my explanation, I ask that be considered

the proffer.

[BY THE COURT]: It is.

[BY THE COUNTY]: Just to be clear I offer it into evidence at this time,

that is the MOU.

[BY THE COURT]: Any objection?

[BY FOP’S COUNSEL]: Yes, I object to the admission of the document.

[BY THE COURT]: Sustained. It will not be admitted.

[BY THE COUNTY]: Mr. Gay, going back to Exhibit 2 attached to the

complaint you have in front of you, which is the

FY FOP —

[BY MR. GAY]: FOP, yes. Exhibit 2, I have that.

[BY THE COUNTY]: Do you see under Section 1.2 which appears, the

page designated E22, the definition of employee

—

[BY FOP’S COUNSEL]: Objection, your Honor. It’s outside the scope.

51

[BY THE COURT]: Sustained.

[BY THE COUNTY]: The answer would be yes, he does see that. I

would ask him then to read the definition, and it

would be read as follows: “Employee defined.

Whenever used in this memorandum of

understanding, the term ‘Employee’ shall mean all

sworn personnel up to and including the rank of

lieutenant of the police department.”

Mr. Gay, the meaning of employee there, does

that include retirees —

[BY FOP’S COUNSEL]: Objection, your Honor.

[BY THE COURT]: Sustained.

[BY THE COUNTY]: The proffer would be that the term employee as

defined herein does not include retirees.

Does a person who is not an employee have the

right to bring a grievance?

[BY FOP’S COUNSEL]: Objection, your Honor.

[BY THE COURT]: Sustained.

[BY THE COUNTY]: The answer would be no, they do not have a right

to bring a grievance.

Turning to page E35 of the document, Mr. Gay,

do you see Section 8.4, Class Grievance?

[BY MR. GAY]: Yes.

[BY THE COUNTY]: Could you read that, please —

[BY FOP’S COUNSEL]: Objection, your Honor.

[BY THE COURT]: Sustained.

52

[BY THE COUNTY]: The reading would be if the grievance —

[BY FOP’S COUNSEL]: Your Honor, it’s already in the record. It doesn’t

need to be read into the record.

[BY THE COURT]: Okay. It’s in the record.

[BY THE COUNTY]: Okay.

Are retirees employees entitled to bring a chance

[sic] grievance?

[BY FOP’S COUNSEL]: Objection.

[BY THE COURT]: Sustained.

[BY THE COUNTY]: The answer would be no.

Take a look, if you would, at Section 7.2(d), page

E29. Do you see that first sentence?

[BY MR. GAY]: Say that again, please.

[BY THE COUNTY]: Page E29, Section 7.2(d), Health Care Bargaining

Agent. Do you see that?

[BY MR. GAY]: Yes.

[BY THE COUNTY]: The first sentence?

[BY MR. GAY]: Yes.

[BY THE COUNTY]: What does that state?

[BY FOP’S COUNSEL]: Objection, your Honor. It’s already in the —

[BY THE COURT]: Sustained.

[BY THE COUNTY]: Mr. Gay, in your experience have you ever seen a

claim for award of attorney’s fees in connection

53

with a grievance, an arbitration or a complaint to

vacate an arbitration award?

[BY MR. GAY]: No, I haven’t.

[BY THE COUNTY]: Is there any provision in the MOU to support such

a claim with such an award —

[BY FOP’S COUNSEL]: Objection, your Honor.

[BY THE COURT]: Sustained.

[BY THE COUNTY]: The answer as proffered would be no. That’s all

the questions I have of Mr. Gay.

On March 6, 2014, the court filed an order reflecting its partial grant of FOP’s motion

to enforce. The March 6 order awarded FOP, “pursuant to the ‘make whole’ provision of the

Arbitrator’s Award,” damages of $1,413,120.81, but declined to award any attorney’s fees

or pre-judgment interest. In a footnote, the court explained:

[FOP] is not entitled to compound pre-judgment interest. Med. Mut. Liab. Ins.

Soc. of Maryland v. Davis, 389 Md. 95, 112 (2005), Walker v. Acting Dir.,

Dep’t of Forests & Parks, 284 Md. 357, 367 (1979). The Court is unable to

determine an amount for simple pre-judgment interest because [FOP’s] Exhibit

4 computes pre-judgment interest compounded monthly. Accordingly, the

Court cannot award pre-judgment interest to [FOP].

Both the County and FOP noted appeals to this Court following entry of the March

6 order.4

On February 18, 2014, FOP filed a motion “to clarify amount of prejudgment

interest.” FOP informed the court that it agreed that, to the extent FOP was owed any

4

FOP filed a Line in this Court on July 31, 2014, dismissing its cross-appeal.

54

prejudgment interest, it was owed only simple interest, not interest compounded in any

manner. FOP attached to the motion an affidavit of its expert economist, Dr. Amy McCarthy,

in which Dr. McCarthy averred that she had “recalculated the interest owed to the affected

retirees based on the amounts reflected in the spreadsheet provided by the County to the

FOP,” and that, using the annual rate of 6% simple interest, the retirees were owed

$213,446.47 in prejudgment interest. A spreadsheet showing the supporting calculations was

attached to Dr. McCarthy’s affidavit.

On February 26, 2014, the County filed its opposition to the motion. On March 14,

2014, FOP filed a motion to reconsider the March 6 order, pointing to the simple-interest

calculations of Dr. McCarthy as sufficient evidence of the amount, and asking the court to

perform the “ministerial task” of awarding the properly-computed pre-judgment interest

which FOP claimed. FOP additionally noted that it would not object to the County deposing

or otherwise questioning Dr. McCarthy. The County filed its supplemental opposition on

March 28, 2014. On April 28, 2014, the court granted FOP’s motion for reconsideration, and

entered an amended judgment awarding FOP the original judgment amount of $1,413,120.81,

plus pre-judgment interest of $213,446.47, for a total judgment of $1,626,567.28. On April

25, 2014, the County noted its appeal of the amended judgment order.5

5

The amended order was signed on April 17, 2014, but not docketed until April 28,

2014. However, counsel were copied on the order once it was signed, which may explain

how the County was able to note an appeal to this Court on April 25, 2014. See Maryland

Rule 8-602(d), which deems a notice of appeal filed after the rendering of a judgment, but

before the judgment is docketed, as being filed on the same day as the docket entry of the

judgment.

55

Meanwhile, on April 15, 2014, FOP filed a petition for an order of constructive civil

contempt against the County, County Executive Kevin Kaminetz, Director of the Office of

Budget & Finance Keith Dorsey, and County Administrative Officer Fred Homan.6 In its

contempt petition, FOP noted that it had been several months since the County’s liability had

been determined; the County’s attempts to have the matter stayed by the circuit court and

this Court had failed; and the County’s refusal to make payment in accordance with the

court’s orders left FOP with no other option than to ask that the officials who were refusing

to pay be held in contempt. On April 15, the circuit court issued a show cause order,

directing the County and the named officials to appear at a hearing on June 26, 2014, and

“show cause why the Court should not hold each in contempt and/or impose sanctions,

including incarceration.”

On April 14, 2014, the County filed a response to the petition for an order of

constructive civil contempt.7 It also filed an answer to the petition for an order of

6

This was FOP’s second petition for order of constructive civil contempt. On October

4, 2013, it filed a petition for order of constructive civil contempt against the County and

Messrs. Kamenetz and Dorsey. The County filed an opposition that was docketed on

October 2, 2013 — before FOP’s petition was even docketed. It appears that FOP’s petition

had been transmitted to the County’s counsel on September 20, 2013, which may explain

why the opposition was docketed before the petition it opposed was docketed. Nevertheless,

FOP voluntarily withdrew that first petition for order of constructive civil contempt in open

court on February 6, 2014.

7

The docket entries reflect that FOP filed its second petition for order of constructive

civil contempt against the County and Messrs. Kamenetz, Dorsey, and Homan on April 15,

2014, but the County filed its opposition to that petition on April 14, 2014. The date on the

signature page of FOP’s petition is March 28, 2014, as is the date on the letter from FOP to

the Clerk of the Circuit Court for Baltimore County that accompanied the petition. We

56

constructive civil contempt on April 28, 2014, incorporating by reference its earlier-filed

response to that petition. On April 28, 2014, the County also filed a motion to quash the

show cause order, and asked the court to exempt the individual County officials from having

to personally appear on June 26.

On May 16, 2014, FOP filed an opposition to the motion to quash, and on May 28,

2014, the court denied the County’s motion to quash.

On May 30, 2014, the County filed a certification of compliance with outstanding

court orders, representing that it had, under protest, paid the judgment amount of

$1,413,120.81; $213,446.47 in pre-judgment interest; $55,348.68, representing the subsidy

for the months of April and May of 2014; $14,260.32 in post-judgment interest at 10% per

annum, accounting from the docketing of the court’s amended judgment on April 28, 2014,

through May 30, 2014; and $227.70 in post-judgment interest for the April 2014 subsidy, for

a grand total of $1,696,403.98. Additionally, the certification contained an affirmation of

Keith Dorsey that the subsidy rates had been reset as ordered by the court in its November

5, 2013, order. The rest of the certification made clear that the County made these payments

“solely as a result of the coercion and duress imposed upon it,” and that it reserved all of its

appeal rights. A second supplemental certification followed on June 10, 2014, representing

surmise that the County’s April 14 opposition to FOP’s yet-to-be-docketed petition was

triggered by the County’s receipt of FOP’s petition sometime between March 28 and April

14.

57

that another payment of $20,209.56 had been made by the County to account for prejudgment

interest from February 1, 2014, through April 28, 2014.

In the present appeal, the County challenges the circuit court’s orders of November

5, 2013 (ordering the County to reset the retiree health insurance split to the rate in effect at

the time of retirement); March 6, 2014 (entering judgment in favor of FOP for

$1,413,120.81); and April 28, 2014 (entering an amended judgment in favor of FOP for

$1,626,576.28).

DISCUSSION

I. The Law of the Case doctrine

The law of the case doctrine provides generally that, “[o]nce an appellate court has

answered a question of law in a given case, the issue is settled for all future proceedings”

between the litigants. Stokes v. American Airlines, Inc., 142 Md. App. 440, 446 (2002). The

doctrine “prevents trial courts from dismissing appellate judgment and re-litigating matters

already resolved by the appellate court.” Id. “The function of this doctrine is to prevent

piecemeal litigation.” Fid.-Balt. Nat’l Bank & Trust Co. v. John Hancock Mut. Life Ins. Co.,

217 Md. 367, 371-72 (1958).

In Reier v. State Dept. of Assessments and Taxation, 397 Md. 2, 21 (2007), the Court

of Appeals described the doctrine by quoting the following passage from Fid.-Balt Nat’l

Bank & Trust Co.:

It is the well-established law of this state that litigants cannot try their

cases piecemeal. They cannot prosecute successive appeals in a case that raises

58

the same questions that have been previously decided by this Court in a former

appeal of that same case; and, furthermore, they cannot, on the subsequent

appeal of the same case raise any question that could have been presented

in the previous appeal on the then state of the record, as it existed in the

court of original jurisdiction. If this were not so, any party to a suit could

institute as many successive appeals as the fiction of his imagination could

produce new reasons to assign as to why his side of the case should

prevail, and the litigation would never terminate. Once this Court has

ruled upon a question properly presented on an appeal, or, if the ruling

be contrary to a question that could have been raised and argued in that

appeal on the then state of the record, as aforesaid, such a ruling becomes

the ‘law of the case’ and is binding on the litigants and courts alike, unless

changed or modified after reargument, and neither the questions decided

nor the ones that could have been raised and decided are available to be

raised in a subsequent appeal.

217 Md. at 371-72 (emphasis added).

In this appeal, the County argues that the law of the case doctrine does not apply

because it is now challenging the “enforceability of the recent orders,” not the “legally

distinct issue[ ] . . . of the legal validity of the award itself.” The County contends that the

Court of Appeals never decided any issue related to enforceability. The County again

contends that the nine questions it presented to this Court in its 2011 appeal “were never

addressed by the Court of Special Appeals or the Court of Appeals.” It claims the Court of

Appeals’s refusal to grant the County’s request to remand the case to this Court for

consideration of the nine questions it raised in its previous appeal “effectively denied the

County’s right of appeal which is guaranteed by Courts & Judicial Proceedings Article, § 12-

301.”8 The County contends that the circuit court’s application of the law of the case

8

Md. Code, Courts & Judicial Proceedings Article (1973, 2013 Repl. Vol.) (“CJP”),

§ 12-301 provides:

59

doctrine was “patently erroneous in light of the Court of Appeals holding in Garner v.

Archers Glen Partners, Inc., 405 Md. 43 (2008).” The County is incorrect, and its reliance

on Garner is misplaced.

In Garner, a group of citizens filed a petition for judicial review in the Circuit Court

for Prince George’s County, contesting the approval, by the Prince George’s County

Planning Board, of a preliminary plan. The circuit court affirmed the Planning Board, and

the citizens appealed to this Court. In an unreported opinion (“Archers Glen I”), this Court

held that the Planning Board “failed to articulate sufficiently the findings in support of its

conclusion that the Preliminary Plan conformed to the recommendations of the Master Plan.”

405 Md. at 49. This Court vacated the circuit court’s affirmance of the Planning Board and

directed that the case be remanded to the Planning Board for further proceedings, but first,

“[i]n an attempt to avoid the expense and delay of additional appeals,” we offered for

guidance dicta “discussing the potential legal effect to be accorded the General Plan in the

subdivision process[.]” Id. at 52. On remand, the Planning Board again approved the

Preliminary Plan, and the citizens again contested that approval by filing a petition for

judicial review. When the circuit court considered the second petition for judicial review,

Except as provided in § 12-302 of this subtitle, a party may appeal from

a final judgment entered in a civil or criminal case by a circuit court. The right

of appeal exists from a final judgment entered by a court in the exercise of

original, special, limited, statutory jurisdiction, unless in a particular case the

right of appeal is expressly denied by law. In a criminal case, the defendant

may appeal even though imposition or execution of sentence has been

suspended. In a civil case, a plaintiff who has accepted a remittitur may cross-

appeal from the final judgment.

60

it ordered the case remanded to the Planning Board for further fact-finding. The developer

and the Planning Board appealed to this Court.

In this second appeal, we reversed the circuit court’s remand order, and we filed a

reported opinion. Archers Glen Partners, Inc. v. Garner, 176 Md. App. 292 (2007)

(“Archers Glen II”.) One of the arguments the citizens made in Archers Glen II was that this

Court’s discussion, in dicta, in Archers Glen I was “the law of the case,” and therefore, “the

recommendations of the General Plan were binding on the Planning Board in considering and

acting on the Preliminary Plan.” 405 Md. at 52. We held in Archers Glen II that the dicta

in our earlier opinion was merely dicta that did not constitute the law of the case. The

citizens appealed our decision in Archers Glen II, and the Court of Appeals affirmed, noting:

“[I]t is clear that, in Maryland, dicta not adopted as a final determination may not serve as

the binding law of the case.” Id. at 57.

By contrast, in the instant case, the Court of Appeals’s decision affirming the circuit

court’s grant of summary judgment in favor of FOP was not mere dicta. It was a final

determination that FOP was entitled, as a matter of law, to the judgment to enforce the

arbitration award. That decision necessarily embraced and resolved all of the issues that the

County raised, as well as any other issues that were then available to raise, challenging the

validity of the arbitration award.

In the previous appeal of this case, in its opinion ruling that the circuit court’s order

to enforce the arbitration award was affirmed, the Court of Appeals stated:

61

Thus, the Circuit Court would be legally correct in granting

summary judgment in FOP's favor, if (1) it reviewed the arbitrator's findings

under a proper standard of review and (2) if FOP was entitled to judgment

as a matter of law.

As the arbitrability of FOP's grievance was a decision to be initially

made by the arbitrator, that decision was subject to the same deferential

standard of review as the arbitrator's findings on the merits. Thus, the Circuit

Court needed to make sure that both the arbitrator's findings (1) that FOP's

grievance was arbitrable and (2) that FOP was entitled to relief did not

constitute a “palpable mistake of law or fact apparent on the face of the award

or a mistake so gross as to work manifest injustice.” Prince George's Cnty.

Educators' Ass'n, 309 Md. at 105, 522 A.2d at 941 (quotation marks omitted).

Because the Circuit Court was unsure what standard to apply in reviewing the

arbitrator's arbitrability finding, the Circuit Court subjected that finding to both

a deferential and non-deferential standard of review. As for the award itself,

the court “awarded great deference” to the arbitrator's findings. Accordingly,

the Circuit Court applied a proper standard of review in both instances.

We now look to the arbitrator's findings to determine whether the

Circuit Court was legally correct in granting summary judgment in FOP's

favor. The arbitrator began his opinion by acknowledging the County's

argument about the supposedly preclusive effect of the MOU's expiration on

the arbitrability of FOP's grievance. Relying on Nolde[9] and Litton [10] , the

arbitrator responded to the County's challenge by stating that “[t]he end of a

labor contract, however, does not always signal the death of negotiated rights

thereunder, including the right to have a dispute over that matter resolved

through arbitration.” The arbitrator then discussed Nolde and Litton for their

vesting principles and concluded that “the ultimate question is whether the

retiree rights at issue may be considered vested and thus capable of continuing

enforcement.”

In the arbitrator's view, the question of vesting “is answered directly by

the unequivocal language of the MOUs: The statement that ‘the health

9

Nolde Bros. v. Bakery & Confectionary Workers Union, 430 U.S. 243, 97 S.Ct. 1067,

51 L.Ed.2d 300 (1977).

10

Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 111 S.Ct. 2215, 115 L.Ed.2d 177

(1991).

62

insurance subsidy in place at the time of retirement shall remain in effect until

the retiree becomes eligible for Medicare’ is subject to no interpretation other

than that here proposed by the FOP.” He continued, “[w]hen the parties

bargained this language, they made a binding promise to retirees that the

subsidy would remain at whatever level existed at their retirement. That is a

vested right, and it was not, and could not be, changed by the [subsequent]

negotiations....” The arbitrator concluded: “[o]fficers who retired on or after

February 1, 1992 and before July 1, 2007 have a vested right to retain the

health insurance split applicable to them as active officers at the time of their

retirement.”

The County attacks the arbitrator's findings on several fronts. In

addition to arguing against the application of Nolde and Litton to this case, the

County suggests that the “Arbitrator acknowledged, but did not address, the

County's argument that all obligations under the Agreement expired, including

both the healthcare obligations and the independent obligation to arbitrate.”

According to the County, this alleged failure to consider whether the

arbitration clause had expired gives basis to vacate the arbitration award not

only for a palpable mistake in law, but also for failure “to consider all matters

submitted.”

The County also argues that the healthcare subsidy was not a vested

right. Here, the County asserts that “[t]here is no ‘vested right’ to future health

insurance benefits and subsidies in the expired FY 2007 MOU, based on

evidence, long-standing practice, and applicable law.” In support of this

statement, the County mentions the Labor Commissioner's testimony, where

he stated that “there is no vested right to health insurance benefits and there

never has been such a right in Baltimore County.” The County also points out

that “there is no statutory requirement that County employees be provided with

health care benefits.”

The County's arguments are unavailing. First, we agree with FOP

that “as a corollary to his express findings that the right had vested, and as a

necessary precondition to his granting the grievance, the arbitrator necessarily

determined that the arbitration clause was enforceable and that the grievance

was arbitrable.” The arbitrator's consideration of the arbitrability of the dispute

and the merits of the case illustrates the interconnectedness of these two issues

in cases where arbitrability depends on the interpretation of the underlying

agreement. Having found that the retirees were entitled to the health-insurance

premium split in effect at the time of their retirement, the arbitrator necessarily

63

also found, by implication, that the arbitration clause survived the MOU's

expiration, and the dispute was arbitrable. See Nolde, 430 U.S. at 249, 97 S.Ct.

at 1071 (“[I]n determining the arbitrability of the dispute, the merits of the

underlying claim for severance pay are not before us. However, it is clear that,

whatever the outcome, the resolution of that claim hinges on the interpretation

ultimately given the contract clause providing for severance pay.”); Litton, 501

U.S. at 205–06, 111 S.Ct. at 2225 (“A postexpiration grievance can be said to

arise under the contract only where it involves facts and occurrences that arose

before expiration, where an action taken after expiration infringes a right that

accrued or vested under the agreement, or where, under normal principles of

contract interpretation, the disputed contractual right survives expiration of the

remainder of the agreement.”).

Second, like the Circuit Court, we see no reason to disturb the

arbitrator's finding of vesting. The County's arguments on the lack of county

employees' statutory entitlement to health care based on Commissioner Gay's

testimony simply miss the point. The arbitrator found that the rights had

vested based on his interpretation of the underlying MOU, which stated

that “the health insurance subsidy in place at the time of retirement shall

remain in effect until the retiree becomes eligible for Medicare.” We do not

think that the arbitrator's reading of this clause as a “binding promise”

constituted a “manifest disregard of the law” or resulted in “manifest

injustice.” Prince George's Cnty. Educators' Ass'n, 309 Md. at 105, 522 A.2d

at 941. On the contrary, we agree with the Circuit Court that the

arbitrator's interpretation of this language was consistent with the

objective theory of contract interpretation that Maryland adheres to,

under which courts give primary effect to the terms of the agreement.

Cochran v. Norkunas, 398 Md. 1, 16, 919 A.2d 700, 709 (2007).

In any event, the arbitrator's findings are awarded a great deal of

deference and should not be disturbed, unless the arbitrator demonstrates

a “manifest disregard of the law ... beyond and different from a mere

error in the law or failure on the part of the arbitrator[ ] to understand

or apply the law.” Prince George's Cnty. Educators' Ass'n, 309 Md. at 102,

522 A.2d at 939. Since we see no such mistakes here, we conclude that the

Circuit Court correctly determined that FOP was entitled to judgment as

a matter of law. Thus, we reverse the judgment of the Court of Special

Appeals.

429 Md. at 561-64 (emphasis added).

64

Plainly, the Court of Appeals affirmed the circuit court’s conclusion that the grievance

was arbitrable, which means that it necessarily agreed that the grievance was properly

pursued by FOP on behalf of the retirees — despite the County’s insistence that retirees are

not employees entitled to bring a grievance — and that the grievance was timely. Summary

judgment would not have been properly granted to FOP if it were otherwise.

Similarly, the Court of Appeals could have remanded, but did not remand, the case

to this Court for further consideration of the “nine questions” the County raised in the 2011

appeal. In a motion for reconsideration, the County expressly asked the Court of Appeals to

remand for further consideration, and made the following arguments — a portion of which

we quoted above — in support of the remand requests:

Compounding its error in nullifying a negotiated agreement, the Court

[of Appeals] either mistakenly or intentionally refused the County’s request to

remand this case to the [Court of Special Appeals] for consideration of the

issues which the County had raised, but which were not addressed by that

Court. (See the issues listed in the [Court of Special Appeals’s] Unreported

Opinion at note 1, reproduced at Petitioner’s App. 217-218). Thus, the County

has been denied the right of appeal which is guaranteed by Courts & Judicial

Proceedings Article, § 12-301 from the final judgment entered by the Circuit

Court for Baltimore County.

The Court’s decision to remand to the [Court of Special Appeals] “with

directions to affirm the judgment of the Circuit Court for Baltimore County”

is inconsistent with its many prior decisions remanding “to the intermediate

appellate court for consideration of undecided issues.”

***

Of great practical consequence to the County, there has been no review

of the following issue which was raised by the County in its Brief in the [Court

of Special Appeals]:

65

Contrary to law and public policy, the arbitrator’s award

usurps the power of the Baltimore County Executive and the

Baltimore County Council to enact a budget which provides for

health insurance and health insurance subsidies pursuant to the

terms negotiated by the HCRC, FOP Lodge 4's bargaining agent.

The Arbitrator in this case had no power or authority to order the

County Executive and County Council to fund a split different from the

negotiated split enacted into law as part of the FY 2008, 2009, 2010, 2011

and 2012 budgets, to order the County Executive and County Council to

reset the split at 85/15 in any future budgets, or to “make whole” affected

retirees for increased premium amounts not budgeted by the County

Executive and County Council.

If this Court’s decision is allowed to stand, and this matter is remanded

to the [Court of Special Appeals] with directions to affirm the judgment of the

Circuit Court for Baltimore County, the Arbitrator’s affirmed award will be

unenforceable, since there have been no funds appropriated through the

executive budget process to afford the relief capriciously dictated by the

Arbitrator.

(Emphasis added.)

Notwithstanding these arguments, the Court of Appeals denied the County’s motion

for reconsideration, and left in place its order to affirm the judgment of the circuit court.

“[O]nce an appellate court rules upon a question presented on appeal, litigants and lower

courts become bound by the ruling, which is considered to be the law of the case.” Scott v.

State, 379 Md. 170, 183-84 (2004). As the Court of Appeals made plain in Fid. Balt. Nat’l.

Bank, supra, 217 Md. at 372, “neither the questions decided [by the appellate courts] nor the

ones that could have been raised and decided are available to be raised in a subsequent

appeal.” (Emphasis added.)

66

In the Court of Appeals’s opinion in Garner v. Archers Glen Partners, Inc., supra,

405 Md. at 56, it quoted the following from Turner v. Housing Auth. of Balt., 364 Md. 24,

34 (2001):

It is well settled that the law of the case doctrine does not apply when one of

three exceptional circumstances exists: the evidence on a subsequent trial was

substantially different, controlling authority has since made a contrary decision

on the law applicable to such issues, or the decision was clearly erroneous and

would work a manifest injustice.

But none of those “exceptional circumstances” is present here.

Moreover, the public policy arguments about enforceability that the County complains

have never been addressed were, in fact, presented to and ruled on by the circuit court before

the first round of appeals. In the circuit court’s memorandum opinion and order granting

summary judgment in favor of FOP, the court noted that one of the County’s arguments was

that “the Arbitrator had no authority to rewrite the FY 2008 MOU and order the County to

reset the previous 85/15 split for the retirees in question.” As noted above, the circuit court

addressed the County’s public policy arguments as follows:

Lastly, the County contends that [the Arbitrator] exceeded his authority

by effectively rewriting the health care subsidy provisions negotiated by the

HCRC on behalf of the FOP for the FY 2008 MOU and by ordering the

County to maintain the 85/15 subsidy split for officers that retired after

February 1, 1992 and before July 1, 2007.

Specifically, the County argues that [the Arbitrator] exceeded his

authority as set forth [in] Section 8.3, Step 4 of the FY 2007 MOU. That

section provides:

The arbitrator shall have no authority to add to, detract from,

alter, amend or modify any provision of this Memorandum of

67

Understanding or any rules or regulations of any agency of the

County, or establish or alter any wage rate or wage structure.

The County further asserts that the Award was contrary to the Budgetary and

Fiscal Procedures set forth in the Baltimore County Charter and the Baltimore

County Code, which state the County Executive and County Council are

responsible for enacting a budget and appropriating funds needed to run the

County, including health care subsidies. [The Arbitrator’s] Award, the County

argues, usurped these powers by ordering the County to maintain and fund the

85/15 subsidy split.

The FOP counters that [the Arbitrator’s] Award concerned only the

interpretation and enforcement of compensation terms that were previously set,

and as such, does not usurp either the legislative or executive power of the

County. The FOP points to the distinction between grievance arbitration,

which uses a neutral third party to resolve a dispute over the interpretation of

an existing contract, and interest arbitration, which uses a neutral third party

to set the terms of a new contract. Under the prevailing case law, argues the

FOP, grievance arbitration does not involve the delegation of legislative

authority because the arbitrator is acting in [a] judicial capacity rather than a

legislative one. “The authority to interpret an existing contract, therefore, does

not constitute legislative authority, and the nondelegation principle is not

implicated in grievance arbitration.” [City & County of Denver v. Denver

Firefighters Local No. 858, 664 P.2d 1032, 1038 (Colo. 1983).]

The Court agrees with the FOP’s position. The County and the FOP

agreed to submit “any dispute concerning the application or interpretation of

the terms of [the FY 2007] Memorandum of Understanding” to binding

arbitration. The grievance submitted to [the Arbitrator] concerned the

interpretation of Section 7.3(c), a contract term that had already existed and

had been bargained for by the parties. In resolving the grievance, [the

Arbitrator] did no more than what was required of him – to interpret the

disputed contract language in accordance with the facts presented and

applicable law. Therefore, the Court finds that [the Arbitrator] did not exceed

his authority i[n] reaching his Award.

(Footnotes omitted.)

68

We are not persuaded by the County’s argument that the law of the case doctrine

should not apply because the public policy arguments it made previously went to the merits

of the award, whereas the present arguments attack the enforceability of the award. The

arbitrator’s award expressly directed the County to take the actions the FOP asked the circuit

court to compel in the motion to enforce. The award stated:

The County is directed to rescind its modification, to reset the contribution

split applicable to these officers to 85/15, to continue that split so long as, by

the terms of the language, these officers remain eligible and to make whole

affected retirees for increased premium amounts improperly charged to them

since September 1, 2007.

The County was obligated to assert all of its arguments that might support vacating

the award, including all of its arguments against enforcement of the award, during the first

round of circuit court proceedings. When the Court of Appeals confirmed in 2012 that FOP

was entitled to the grant of summary judgment in its favor, all of the public policy arguments

the County had made, or could have made, about enforceability of the arbitration award were

resolved against the County. Consequently, the arguments that the County makes on this

appeal related to enforceability — including its questions presented 1, 2, and 3 — have

already been conclusively resolved by the Court of Appeals’s prior ruling in favor of FOP.

We will not consider these questions further.

Similarly, the County’s arguments about the timeliness of the initial grievance and the

right of the retirees to file a grievance — appellant’s questions presented 5 and 6 — have

also already been conclusively resolved. The circuit court determined, as a predicate to its

69

August 17, 2010, grant of summary judgment in favor of FOP, that the grievance was timely

filed and that the retirees had standing to pursue it. This finding was necessarily affirmed

by the Court of Appeals’s 2012 ruling affirming the grant of summary judgment in FOP’s

favor.

II. The balance of the County’s contentions on this appeal

Having held that the County’s questions presented 1, 2, 3, 5, and 6 are not before us

for review due to the law of the case doctrine, we turn now to the County’s remaining

contentions, which raise issues that arose for the first time after the remand.

First, in question 4, the County asks whether the show cause order’s threat of

incarceration was “an unconstitutional exercise of judicial power calculated to coerce an

appropriation or illegal payments in violation of the separation of powers doctrine.” Because

the circuit court never ordered the incarceration of any County official, this issue is moot.

Suter v. Stuckey, 402 Md. 211, 219 (2007) (“A case is moot when there is . . . no longer an

effective remedy the Court could grant.”). We decline to render an advisory opinion on the

constitutional question.

Next, in question 7, the County asks whether the circuit court’s “award of injunctive

relief and damages to FOP was clearly erroneous, because FOP did not sustain any harm or

damages as a result of the reduced subsidy rates.” In support of its claim that the court erred,

the County cites one case: L.W. Wolfe Enterprises, Inc. v. Maryland National Golf, L.P., 165

Md. App. 339, 343 (2005). But L.W. Wolfe is a case about a mechanic’s lien that a

70

subcontractor wanted to obtain against an entire golf course as a remedy for unpaid work the

subcontractor did on certain cart paths at the golf course. The trial court found that the

subcontractor was not entitled to the mechanic’s lien on the entire property because the work

it did on the cart paths was repair, not new construction. L.W. Wolfe’s applicability to the

issues presented in the instant case is not readily apparent.

The circuit court action in this case began when the County filed a motion to vacate

the arbitrator’s award. That motion recited the basic facts, including that FOP filed a class

grievance on September 14, 2007, complaining, on behalf of its affected members, about the

altered subsidy split. The motion to vacate made numerous arguments, but never asserted

that FOP lacked standing to pursue a grievance on behalf of its members. Moreover, the

FOP’s motion to enforce the arbitration award provided an adequate basis for the court to

enter the order for payment of compensation contemplated by the arbitrator’s ruling.

The County asks in question 8 whether the circuit court erred in refusing to allow its

witnesses to testify, at the damages hearing, about their thoughts regarding whether there was

any merit to the underlying grievance in the first instance, or whether certain appropriations

had been made. The court sustained FOP’s objections to these questions, and the County was

allowed to proffer what its witnesses’ answers would be, which were generally that the

grievance was improper and the retirees FOP represents were not entitled to any relief. But

a damages hearing was not an appropriate forum to relitigate the validity of the underlying

award. Consequently, we perceive no error in the refusal of the court to permit the County’s

71

witnesses to give irrelevant testimony. See Maryland Rule 5-402 (“Evidence that is not

relevant is not admissible.”)

Finally, in question 9, the County asks whether FOP was entitled to pre-judgment

interest. The County argues that the circuit court erred in relying on the affidavit of Dr. Amy

McCarthy, FOP’s economist expert, and in entering an amended judgment that awarded pre-

judgment interest. The County complains that Dr. McCarthy’s affidavit was hearsay not

within any exception, and that the court’s post-hearing reliance on it prevented the County

from cross-examining Dr. McCarthy. The County complains further that, in any event, FOP

was not entitled to pre-judgment interest because “there is no entitlement to prejudgment

interest on unliquidated claims.” The County’s arguments fail.

An unliquidated claim is “one, the amount of which has not been fixed by agreement

or cannot be exactly determined by the application of rules of arithmetic or of law.” 3

S AMUEL W ILLISTON & R ICHARD A. L ORD, A T REATISE ON THE L AW OF C ONTRACTS § 7:34

(4th ed. 2008). The County complains that the amount it owed the retirees in damages was

unliquidated. But the County’s own evidence proved otherwise. At issue was the County’s

liability, vel non, for its decision to discontinue the 85/15 subsidy split it had paid for retirees

between 1992 and 2007. The higher amounts charged the retirees were specifically

ascertainable amounts. Although the total amounts were not known by FOP, these amounts

were readily quantifiable, and were not unliquidated. The arbitrator, the circuit court, and

the Court of Appeals all found that the County had made a vested benefit agreement to

72

maintain an 85/15 subsidy split for a specifically identifiable group of retirees until each

became eligible for Medicare. Once liability was determined, the amount of damages was

readily ascertainable from the County’s own records. It depended on four fixed, known

numbers: the total premium cost of the insurance, the amount the County should have been

charging the retirees (15%), the amount the County had charged the retirees post-September

1, 2007, and the difference between what the County should have been charging and what

it had actually collected from those retirees. The County provided the spreadsheet showing

all these numbers, and FOP’s expert witness, Dr. McCarthy, explained the numbers to the

court at the damages hearing. The court had previously determined that FOP was entitled

to prejudgment interest; the principal amount on which that interest was to be calculated was

ascertainable (but growing each month); and therefore the court was permitted to perform

the ministerial task of determining the amount of prejudgment interest due without convening

another hearing. In the absence of any suggestion — either in the circuit court or on appeal

— that Dr. McCarthy’s arithmetic was incorrect, we perceive no error in the circuit court’s

reliance upon her computations.

In Blue Cross & Blue Shield of Maryland, Inc. v. Chestnut Lodge, Inc., 81 Md. App.

149 (1989), this Court quoted with approval from Affiliated Distillers Brands Corp. v. R.W.L.

Wine & Liquor Co., Inc., 213 Md. 509, 516 (1957) (citations omitted):

The law in Maryland with reference to interest is well settled. The general rule

is that interest should be left to the discretion of the jury, or the Court when

sitting as a jury. However, this general rule is subject to certain exceptions that

are as well established as the rule itself. Among the exceptions are cases on

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bonds, or on contracts, to pay money on a day certain, and cases where the

money has been used. If the contractual obligation be unilateral and is to pay

a liquidated sum of money at a certain time, interest is almost universally

allowed from the time when its payment was due.

Here, FOP’s entitlement to prejudgment interest was clear. All that remained to be

done was the math. In Ali v. CIT Technology Financing Services, Inc., 188 Md. App. 269

(2009), we remanded a case because we could not discern, from the record, how the trial

court arrived at its prejudgment interest award. We noted, however, that “we are unaware

of any case requiring the trial judge to disclose its method of calculating prejudgment

interest.” Id. at 298. That is not an issue here. In this case, the County provided

spreadsheets showing the subsidy amount being paid, the subsidy amount that should have

been paid, what the retirees were actually charged, and the difference. Dr. McCarthy

performed the arithmetic and testified at the damages hearing. The County cross-examined

her at the hearing and questioned her at her deposition.

FOP points to a case from the United States Court of Appeals for the Fourth Circuit,

Kosnoski v. Howley, 33 F.3d 376 (4th Cir. 1994), in support of its contention that the circuit

court in this instance was permitted, without holding another hearing, to perform the task of

computing the amount of already-awarded prejudgment interest, as such a computation

would involve only plugging numbers into a formula, not revisiting the merits of the award

itself. In its reply brief, the County cited no cases in opposition to this notion. We find the

reasoning of the 4th Circuit in Kosnoski persuasive. There, Kosnoski, the owner of two

companies, agreed with Howley that, if Howley found a buyer for his companies, Kosnoski

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would pay Howley a finder’s fee of 5%. Howley found a buyer, and Kosnoski paid the 5%

finder’s fee as to one of the companies he sold, but refused to pay Howley his finder’s fee

relative to the other company. Kosnoski sued Howley and sought to have their arrangement

declared unenforceable under West Virginia law. Howley counterclaimed, seeking his 5%

finder’s fee on the second company. The United States District Court for the Southern

District of West Virginia sided with Howley, and ordered Kosnoski to pay Howley the 5%

finder’s fee he was due, “plus any appropriate pre-judgment and post-judgment interest at

the legal rate.” Id. at 377.

Kosnoski appealed to the 4th Circuit, and lost. He then filed a motion for rehearing

or rehearing en banc, which was denied. Kosnoski still refused to pay, and asserted that the

District Court had not set the start date from which the interest would accrue. Howley filed

a motion to fix interest, which Kosnoski argued was really a motion to alter or amend under

Federal Rule of Civil Procedure 59(e). Because the motion had been filed more than ten days

after the entry of judgment, Kosnoski argued it was untimely and had to be denied. Howley

argued that it was not a motion to alter or amend because the District Court had already

determined that he was entitled to prejudgment interest, and his motion merely asked the

judge to do the math and set the amount. The District Court agreed with Howley.

Kosnoski again appealed, and the 4th Circuit again ordered him to pay Howley the

prejudgment interest that was due. Pointing out that it had already been determined that

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Howley was entitled to prejudgment interest, the 4th Circuit held that the District Court was

permitted to fill in the blanks as to the precise amount due:

[S]uch a court does not revisit the merits of the question [regarding entitlement

vel non to prejudgment interest] and certainly does nothing that can be called

“reconsidering” the matter. Instead, the court is asked to perform a completely

ministerial task by plugging the time period, the interest rate and the judgment

amount into a preset formula and announcing the result.

The facts of this case demonstrate the ministerial nature of the court’s

responsibility: both parties understood that interest had been awarded; both

parties understood that West Virginia law set the rate of prejudgment interest

at ten percent; and both parties understood the time frame for computation.

The court’s only task was to do the calculation and make the amount official.

We simply do not believe that by performing this function the court altered or

amended the judgment. Rather, we are persuaded that the court, in

undertaking such a task, merely supplies a figure to the judgment, the amount

of which had already been fixed at the time of the entry of judgment. This

omission is the type of error that is properly within the scope of [Fed.] Rule

[Civ. Pro.] 60(a).[11]

***

The task required of the court was completely ministerial, and involved

the mere application of a series of facts previously determined to a set formula

in order to elucidate a part of the judgment order that, while providing notice

to all as to their positions, was sufficiently inexact to allow Kosnoski to

attempt not to comply.

Id. at 379.

11

Federal Rule of Civil Procedure 60(a) states:

(a) Corrections Based on Clerical Mistakes; Oversights and Omissions.

The court may correct a clerical mistake or a mistake arising from oversight

or omission whenever one is found in a judgment, order, or other part of the

record. The court may do so on motion or on its own, with or without notice.

...

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The reasoning in Kosnoski applies with equal force here. A calculation of simple

interest at the rate of 6% for pre-judgment interest — or 10% for post-judgment interest —

on a fixed sum is a ministerial task and one for which the court did not need to convene a

new hearing.

JUDGMENTS OF THE CIRCUIT

COURT FOR BALTIMORE COUNTY

AFFIRMED. COSTS TO BE PAID BY

APPELLANT.

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