High Court Sends Former Chamber Director’s Case Back To Worcester

SNOW HILL — In a case that appears to be never going away, Maryland’s highest court this week upheld an appeal filed by the former Greater Ocean City Chamber of Commerce executive director over thousands of dollars in attorney fees and other costs associated with litigating a dispute dating back over five years.
In April 2009, a Worcester County jury awarded former Ocean City Chamber of Commerce Executive Director Dan Barufaldi $60,000 in damages in a civil suit that alleged a breach of contract and other charges related to his hiring, employment and ultimate resignation from the post. Barufaldi shortly thereafter filed a motion in Worcester County Circuit Court seeking roughly $160,000 in attorney fees and other costs associated with pursuing the successful case against his former employer.
The Worcester County Circuit Court denied Barufaldi’s motion for attorney fees without providing a specific explanation for the decision and the former chamber director appealed to the Maryland Court of Special Appeals. The intermediate appellate court reversed the circuit court’s decision to deny an award of attorney fees and costs to Barufaldi for a variety of reasons, including the circuit court used conflicting state and federal statutes as the reason for the denial.
The case was remanded back to the Worcester County Circuit Court again, and once again the trial court denied Barufaldi’s motion to recoup the original $160,000 in fees and costs, along with additional fees he then sought for appealing the case. In its second denial, the circuit court also pointed to the chamber’s inability to pay the award Barufaldi was seeking.
After two denials at the Circuit Court level, and two successful appeals at the Court of Special Appeals, the Ocean City Chamber of Commerce last spring sought the opinion of the Maryland Court of Appeals and the higher court agreed to take up the case. This week, the Court of Appeals issued an opinion the Worcester County Circuit Court’s reasoning for denying Barufaldi’s claim for attorney fees and costs were not valid and once again sent the case back to the circuit court for further review.
“Because the trial court’s denial of an award of attorney’s fees and costs were based on factors inappropriate to this case, it will be remanded to the Circuit Court for further consideration of Mr. Barufaldi’s motion,” the Court of Appeals opinion issued this week reads.
In simpler terms, Barufaldi’s motion for attorney fees and other costs has now been reviewed and denied two times in Worcester County Circuit Court, twice the Court of Special Appeals has reversed the circuit court’s denial and now the highest court in Maryland, the Court of Appeals, has weighed in on the issue and has sent it back to Worcester County Circuit Court once again.
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. In April 2009, after a three-day trial, a Worcester County jury awarded Barufaldi $60,000 in damages, seemingly ending the dispute.
The chamber was forced to take out a $60,000 loan to satisfy the jury award, but Barufaldi continued to press forward with a request for an award of attorney fees and other costs associated with litigating the original case. After the circuit court denied Barufaldi’ motion for attorney fees and other costs for a second time over concerns about the potential financial impact on the chamber, the Court of Special Appeals opined the chamber’s inability to pay the requested award was not an appropriate reason for denying it.
“The Circuit Court ruled that a fee award was inappropriate because the chamber had not acted in bad faith and the chamber would be rendered insolvent by paying the fees,” the opinion reads. “An award would not have any appreciable deterrent effect and might jeopardize the existence of the chamber. The lawsuit was not of general applicability to other employees but dealt only with Mr. Barufaldi and the dispute was, on the merits, a close case.”
With its decision to send the case back to circuit court for a third time, the Court of Appeals agreed the ability to pay was not a sufficient reason for denying the award of attorney fees.
“In addition, the court of special appeals held that the chamber’s apparent inability to pay the attorney fees and other costs was not compatible with the statute that allowed for an award of fees,” the opinion reads.