Appeals Court Weighs In On Chamber, Ex-Director Case

BERLIN – The Maryland Court of Special Appeals last week issued a series of opinions in the ongoing dispute between a former Greater Ocean City Chamber of Commerce executive director and his previous employer, ruling generally against the chamber on several key points and remanding the issue of attorney fees back to the Worcester County Circuit Court for further review.

In April 2009, a Worcester County jury awarded former Ocean City Chamber of Commerce Executive Director Daniel Barufaldi $60,000 in damages in a civil suit that alleged a breach of contract and other charges related to his hiring, employment and eventual resignation from the post. Barufaldi was hired as executive director of the Greater Ocean City Chamber of Commerce in November 2005 without a formal contract outlining his base salary or a discussed incentive payment program based on his job performance.

While the terms of his employment were allegedly discussed informally, a formal contract was never finalized and Barufaldi ultimately resigned to take a similar position in Charles County. He later filed suit against the chamber seeking back pay including the incentives he was informally promised. The chamber countered Barufaldi was not entitled to any back pay or incentives because he actively sought, and eventually accepted, a new position while on duty.

After a three-day trial in April 2009, a Worcester County jury awarded Barufaldi $60,000 in damages, seemingly ending the dispute. However, both parties filed appeals on various issues. For example, the chamber contended Barufaldi’s resignation and departure resulted in damages because it was essentially forced to pay the former director and his replacement at the same time. However, the Maryland Court of Special Appeals opined last week Barufaldi’s early departure did not represent a breach.

“On the Chamber’s counterclaim, the court’s motion for judgment is affirmed,” the opinion reads. “While the evidence showed that the Chamber sustained damages as a consequence of Barufaldi’s early departure, contrary to the court’s ruling, the evidence also showed that the Chamber’s failure to take steps necessary to make incentive payment to Barufaldi was a material breach of the contract that relieved Barufaldi of his obligation to render future performance.”

The appeals court essentially reached the conclusion Barufaldi was entitled to the back pay awarded by the Circuit Court jury.

“Even if Barufaldi had materially breached by resigning before the end of the term, he still was entitled to payment for the work he had performed before the breach, including the incentive pay for that time period,” the opinion reads. “And reasonable jurors could find there was no bona fide dispute over Barufaldi’s entitlement to incentive pay under the employment contract.”

For Barufaldi’s part, the former chamber director filed an appeal around the same time seeking repayment of over $160,000 in attorney fees spent on the initial case and the appeal. In its opinion released last week, the Court of Special Appeals ruled the lower court erred in its discretion on the issue of outstanding attorney fees and remanded the case back to the Circuit Court level for further review.

“On Barufaldi’s petition for attorneys’ fees, the trial court did not adequately explain its exercise of discretion to deny an award of fees under a fee-shifting statute,” the opinion reads. “Accordingly, the denial of fees is reversed and remanded for further proceedings.”

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