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In a newly issued opinion, the Court of Appeals of Maryland has clarified existing law and expressly recognized an independent cause of action for breach of fiduciary duty. In William H. Plank, II, et al. v. James P. Cherneski, et al., Misc. No. 3, September Term, 2019. the Court observed that whether Maryland recognizes an independent cause of action for breach of fiduciary duty is a question that “Courts and commentators have been asking … for 23 years since this Court articulated its holding in Kann v. Kann, 344 Md. 689 (1997).” In Kahn, the Court declared that there was “no universal omnibus tort for the redress of breach of fiduciary duty,” but noted that “[t]his does not mean that there is no claim or cause of action available for breach of fiduciary duty.” 344 Md. at 713. In its new decision, the “Court recognizes an independent cause of action for breach of fiduciary duty. To establish a breach of fiduciary duty, a plaintiff must demonstrate: (1) the existence of a fiduciary relationship; (2) breach of the duty owed by the fiduciary to the beneficiary; and (3) harm to the beneficiary. The recognition of an independent cause of action for breach of fiduciary duty is pertinent to the operations of condominium and homeowner associations, and, in particular, may impact the potential liability of developers during the period of time when they are in control of an association’s board.
We are pleased to announce that Mr. Burke has completed mediation and conflict resolution skills training requirements, and been certified as a mediator, including qualification as a court-designated mediator for alternative dispute resolution procedures in all Maryland Courts. He may be retained for mediation services, as well as for representation in construction, condominium and homeowner association matters, through Baker Donelson, 100 Light Street, 19th Floor, Baltimore, Maryland 21202, 410-862-1192, firstname.lastname@example.org.
An amendment to Section 11-103 of the Maryland Condominium Act, adopted by the General Assembly during 2020 legislative session, clarifies the procedures for obtaining the consent of the holders of mortgages and deeds of trust to amendments to the condominium’s declaration, where such consent it required under a condominium’s governing documents. It is intended to address circumstances in which holders of mortgages or deeds of trust do not respond to notices of proposed amendments. The new law provides that the condominium provide holders of mortgages and deeds of trust with a copy of the proposed amendment, and, if the holder fails to object in writing within 60 days after receiving the notice, they are deemed to have consented to the amendment. This provision is not applicable where the proposed amendment would (1) alter the priority of the lien of the mortgage or deed of trust; (2) materially impair or affect the unit as collateral; or (3) materially impair or affect the right of the holder to exercise rights under the mortgage or deed of trust. In those instances, express consent must still be obtained. A similar amendment was enacted to Section 11B-116 of the Maryland Homeowner Association Act. These new provisions take effect on October 31, 2020.