996 F.

2d 645

Alice J. PAVELKA, Plaintiff-Appellant,

v.
Susan R. CARTER; Montgomery County, Maryland,
Defendants-Appellees.
No. 92-1887.

United States Court of Appeals,

Fourth Circuit.
Argued Feb. 4, 1993.
Decided June 9, 1993.

James Berkley Carson, Carson & Jones-Bateman, Baltimore, MD, argued

(John B. Jones-Bateman, on brief), for plaintiff-appellant.
Patricia P. Hines, Associate County Atty., Rockville, MD, argued (Joyce
R. Stern, County Atty., Joann Robertson, Sr. Asst. County Atty., on brief),
for defendants-appellees.
Before ERVIN, Chief Judge, and HALL and PHILLIPS, Circuit Judges.
OPINION
PHILLIPS, Circuit Judge:

Alice Pavelka appeals from a grant of partial summary judgment against her
and the dismissal of the remainder of her automobile negligence action against
Susan Carter and Montgomery County, Maryland for lack of sufficient amount
in controversy to maintain diversity jurisdiction. Because the district court erred
in holding that governmental immunity barred recovery against the defendants
of amounts in excess of $30,000, we reverse.

* The material facts, viewed in the light most favorable to the nonmovant
Pavelka on this appeal from summary judgment against her, are few. On May
5, 1989, Pavelka's car was struck from behind by a car which had itself been
struck by a bus owned by appellee Montgomery County, Maryland. The bus
was being operated within the County by the appellee Carter, an employee of

its Ride-On bus service.

3

On September 9, 1991, Pavelka, a citizen and resident of Virginia, brought a

diversity action in the District of Maryland against the County, a governmental
unit of the State of Maryland, and Carter, a Maryland resident, seeking
$200,000 in compensation for property damage and personal injuries. The
defendants answered, then moved for partial summary judgment, interposing a
statutory governmental immunity defense ostensibly limiting claims to $20,000
per injured party and $10,000 in total property damage. After Pavelka answered
the motion, pressing a different interpretation of Maryland law on governmental
immunity, and the defendants replied, the district court granted defendants the
relief they sought. Because that relief limited Pavelka's potential recovery to
$30,000, the district court then dismissed the cause for failure to meet the
$50,000 amount in controversy requirement of diversity jurisdiction. See 28
U.S.C. 1332.

Pavelka appealed.

II
5

This case presents a question of the degree to which the defendants enjoy
governmental immunity in this negligence action for money damages and
requires us to determine how best to harmonize three aspects of Maryland law:
the Maryland common law of local governmental immunity, Maryland
Transp.Code Ann. 17-107(c)1 , and the Local Government Tort Claims Act
(LGTCA), Maryland Cts. & Jud.Proc.Code Ann. 5-401 et seq. In making that
determination, we consider first the immunity of the County, then that of the
bus driver Carter.

* With respect to the County there are actually two questions. First, we ask
whether it enjoyed governmental immunity with respect to Pavelka's accident in
the first place. After finding that it did, we then consider the extent to which it
waived that immunity or otherwise obligated itself with respect to Pavelka's
claim.

* Counties in Maryland have governmental immunity in negligence actions

only when the activity concerning which suit is brought is a governmental and
not a proprietary one. Maryland-Nat'l Capital Park and Planning Comm'n v.
Kranz, 308 Md. 618, 521 A.2d 729, 731 (1987).2 Mayor of Baltimore v. State
ex rel. Blueford, 173 Md. 267, 195 A. 571, 576 (1937), explains the difference
between the two:

8
Where
the act in question is sanctioned by legislative authority, is solely for the
public benefit, with no profit or emolument inuring to the municipality, and tends to
benefit the public health and promote the welfare of the whole public, and has in it
no element of private interest, it is governmental in its nature.
9

The Maryland Court of Appeals recently has put it more simply:

10
Another
way of expressing the test ... is whether the act performed is for the
common good of all or for the special benefit or profit of the corporate entity.
11

Tadjer v. Montgomery County, 300 Md. 539, 479 A.2d 1321, 1325 (1984).

12

The heavily subsidized nature of the Ride-On service, see Joint Appendix at 68,
makes clear that it exists for "the common good of all" and not for the special
benefit or profit of the County as a corporate body. It is undoubtedly authorized
by the legislature, 25A Maryland Ann.Code 5A(a); Maryland Transp.Code
Ann. 10-207(a), and we take judicial notice that public transportation in
general, and thus the Ride-On bus service in particular, benefits the public
health and welfare in a variety of well established ways. Moreover, it has no
obvious element of private interest. Given the breadth of governmental
activities recognized by the Maryland courts, see, e.g., Burns v. Mayor of
Rockville, 71 Md.App. 293, 525 A.2d 255, 262 (1987) (civic ballet); Austin v.
Mayor of Baltimore, 286 Md. 51, 405 A.2d 255, 263 (1979) (children's day
camp); see also Town of Brunswick v. Hyatt, 91 Md.App. 555, 605 A.2d 620,
625 (1992) (finding municipal pool a governmental activity even though it
made a profit), there is no doubt that municipal bus service qualifies for similar
treatment.3 Governmental immunity therefore applies, and Pavelka can recover
damages from the County only to the extent it has waived that immunity. We
therefore turn to that issue.

2
13

The County concedes that Maryland Transp.Code Ann. 17-107(c) waives any
governmental immunity that it otherwise might assert with respect to the
security that state law requires all vehicle owners or lessees, including
governmental ones, to post. That security is $20,000 per person per accident
($40,000 total) and $10,000 in total property damage. Maryland Transp.Code
Ann. 17-103(b). The County argues, however, that 17-107(c) is the only
waiver of its liability applicable in this case, making partial summary judgment
for it on all liability over and above that required security and the resulting
dismissal for lack of subject matter jurisdiction proper.

14

Pavelka, on the other hand, contends that the Local Government Tort Claims
Act, Maryland Cts. & Jud.Proc.Code Ann. 5-401 et seq., operates
concurrently with 17-107 and, where its notice requirements are met, see 5404, makes a more substantial waiver of the County's immunity. Since she
undoubtedly complied with those notice provisions, Pavelka contends, she
should be permitted to recover from the County the full $200,000 the LGTCA
permits. See 5-403(a). This argument relies heavily on Maryland v. Harris,
327 Md. 32, 607 A.2d 552 (1992), which implied that the Maryland Tort
Claims Act (MTCA), Maryland State Gov't Code Ann. 101 to 12-110,
creates a more expansive waiver of immunity distinct from that provided by
17-107 in those situations where it applies.4 Harris, 607 A.2d at 556-57.

15

But the MTCA actually waives the state's sovereign immunity in such
negligence cases if its notice requirements are met. 12-104(b); 12-105(b).
The LGTCA does not waive local governmental immunity when a local
governmental entity is sued in its own capacity, Khawaja v. Mayor of
Rockville, 89 Md.App. 314, 598 A.2d 489, 494 & n. 6 (1991), cert. granted,
325 Md. 551, 601 A.2d 1114 (1992),5 so the logic of Harris is inapplicable. The
County's direct liability for Pavelka's accident is thus limited to that provided
by 17-107.

16

The LGTCA does have a function, however, and that function is to protect local
government employees from suits and judgments on alleged torts committed by
them within the scope of their employment, in order to maintain their incentive
to perform to the best of their abilities. Ennis v. Crenca, 322 Md. 285, 587 A.2d
485, 488 (1991). To that end, it obligates local governments to defend their
employees for job-related tort claims. 5-402(a). It also bars direct execution
of judgments against those employees, absent proof of actual malice, and forces
successful plaintiffs to execute their judgments against the local government
employers instead. 5-402(b), 5-403(b). The employers are expressly
obligated to pay these judgments, 5-403(b), but their obligations are not
without limit: liability on an individual claim is limited to $200,000, 5403(a), punitive damages cannot be recovered, 5-403(c), and the employer
may raise any defenses or immunities held by the employee, even where those
defenses or immunities could not have been vicariously asserted by the
employer to bar respondeat superior liability at common law. Compare 5403(d)-(e) with the Maryland common law rule discussed in James v. Prince
George's County, 288 Md. 315, 418 A.2d 1173, 1182-83 (1980), superseded by
statute as stated in Prince George's County v. Fitzhugh, 308 Md. 384, 519 A.2d
1285 (1987).

17

The County doesn't debate the existence of this obligation to fund judgments

17

The County doesn't debate the existence of this obligation to fund judgments
against its employees imposed by the LGTCA, but pins its hopes instead on the
claim that its bus driver Carter is herself immune from suit, hence not subject to
a liability which would trigger its obligation. We therefore turn next to that.

B
18

The district court found Pavelka's claim against Carter barred by 17-107(c),
but we disagree, for the reasons expressed below.

19

Governmental immunity from negligence torts in Maryland extends beyond the

governmental entity itself to protect "public officials" exercising discretionary
functions. James, 418 A.2d at 1178. It does not, however, extend to "mere
government employee[s] or agent[s]" performing ministerial functions like
Carter, a city bus driver. Id.

20

On appeal, Carter does not in fact contend that driving a bus was a discretionary
function or that she was a public official. Indeed, she ignores this line of cases
altogether and argues that notwithstanding any general rules applicable to
employee liability, fidelity to the purpose of 17-107 requires that she be
absolved of potential liability in excess of the security required by the
Transportation article. She also argues that the claim against her is barred by
the doctrine of respondeat superior.

21

Both these arguments are mistaken. Perhaps recognizing that 17-107(c), by

its terms, does not apply to her, Carter rests her argument that it nonetheless
bars action against her primarily on policy grounds. Failing to read 17-107(c)
to bar suit against her would generate an absurd result, she says, because
Pavelka could then evade what appellees contend is a cap on the County's
liability imposed by 17-107 by seeking up to $200,000 from Carter under the
LGTCA, which the County would then be required to pay. The result is only
absurd, however, if 17-107(c) is indeed a cap on the County's direct and
indirect liability to Pavelka.

22

We don't believe it is. Section 17-107(c) is part of the title requiring most
vehicle owners to carry minimal insurance coverage. Md.Transp.Code Ann.
17-101 et seq. Its caption reads "Prohibitions," and the section bars two things.
First, it forbids drivers to drive cars they know are uninsured and owners to
permit their uninsured vehicles to be driven. 17-107(a). Second, it provides

23
Defense
of Sovereign Immunity.--An owner or lessee of any motor vehicle
registered under Title 13 of this article may not raise the defense of sovereign or

governmental immunity, to the extent of benefits provided by the security accepted

by the Administration under 17-103 of this subtitle, in any judicial proceeding in
which the plaintiff claims that personal injury, property damage, or death was
caused by the negligent use of the motor vehicle while in government service or
performing a task of benefit to the government.
24

17-107(c). As we read this latter provision, it merely prevents Maryland's

governmental entities from interposing the governmental or sovereign
immunity they might otherwise enjoy to frustrate otherwise proper recovery
against the mandatory security all vehicle operators (including governmental
ones) must post. To the extent of that security, then, it puts governmental
vehicle owners or lessees in the same position as private owners or lessees. And
by its terms, at least, it says nothing whatsoever about the liability of vehicle
operators like Carter.

25

As we noted at the outset, this dispute requires accommodation of two statutes

and a common law doctrine. It seems to us that this accommodation is relatively
straightforward. The doctrine of governmental immunity reflects the public's
interest in not paying tort judgments with public funds for torts arising out of
the performance of governmental functions for the benefit of all.6 The
Maryland legislature, however, has recognized that other policy considerations
trump this one in certain cases. One such case is that of providing minimal
recovery for vehicular accidents, where the legislature has privileged, to a
limited extent, citizens' interest in securing compensation for injuries
negligently inflicted upon them. That policy is embodied in Maryland
Transp.Code Ann. 17-101 et seq. The other case of relevance here is that of
protecting ordinary local government employees, who enjoy no common law
immunity from liability for their negligent but good faith acts in the scope of
employment, from tort suits which might discourage vigorous prosecution of
their duties. Maryland could, of course, have furthered this goal at the expense
of tort victims by simply extending governmental immunity to those tortfeasors,
but it chose not to do it that way, presumably because the traditional tort system
goals of compensating victims and deterring misconduct remained important.
Instead, it simply shifted the cost of employee negligence in such cases to a
party better able to pay, their local government employer, compromising in the
process the public interest described above in keeping tort victims out of the
public purse. This is the policy reflected in the LGTCA. With that framework
in mind, we see no reason why the policy considerations which undoubtedly
led to the enactment of 17-107 should lead us to provide Carter (and thus,
indirectly, the County) with a cloak of immunity similarly situated parties have
never enjoyed in Maryland.

26

This brings us to the appellees' more direct assertion of the same logic, their
apparent contention that the doctrine of respondeat superior also bars Pavelka's
claim. It is true, as Carter and the County argue, that this doctrine imputes the
negligence of the servant to the master and makes the latter liable for the torts
of the former. Dhanraj v. Potomac Elec. Power Co., 305 Md. 623, 506 A.2d
224, 226 (1986). But that liability is joint and several; the servant is not
relieved. See Chilcote v. Von Der Ahe Van Lines, 300 Md. 106, 476 A.2d 204,
208 (1984). Moreover, the doctrine is one of vicarious liability, not vicarious
immunity, so any immunity the County may enjoy does not, absent the
operation of some other principle of law, protect Carter. No other such principle
has been suggested.

27

Carter therefore is potentially liable for her negligence just like any other civil
defendant. Unlike most civil defendants, however, she enjoys the protection of
the LGTCA, which bars Pavelka from actually executing any judgment
obtained against Carter and forces her to execute instead against the County,
which is then obligated to satisfy Pavelka's adjudicated claim against Carter in
an amount up to $200,000.

III
28

Because Carter is liable in damages for any negligence on her part which
proximately caused Pavelka's injury, and because the LGTCA obligates
Pavelka to execute any judgment obtained on that claim against the County
rather than Carter herself and also obligates the County to satisfy it up to
$200,000, partial summary judgment for Carter and the County on amounts
over 17-103's statutory security requirements was inappropriate, as was
dismissal for lack of subject matter jurisdiction. The judgment of the district
court is therefore reversed and the cause remanded for further proceedings
consistent with this opinion.

29

REVERSED AND REMANDED.

The parties refer to 17-107(b), but the relevant provision was apparently
redesignated 17-107(c) effective July 1, 1988, before Pavelka's 1989
accident. 1988 Md.Laws 787. Since her accident, it's been amended again, 1990
Md.Laws 546, 3, but that amendment has no effect on this appeal, so the text
is presented as it was in effect at the time of the accident

The County argues that we need not reach the governmental/proprietary

function inquiry at all, since (it argues) waiver of governmental immunity turns
exclusively on whether the conditions of 17-107 of the Md.Transp.Code Ann.
are met. This is incorrect. The governmental/proprietary function question is
logically antecedent to the waiver inquiry, since it determines whether counties
have tort immunity at all under Maryland law, Kranz, 521 A.2d at 731, not
whether they've waived it
3

The only case cited by Pavelka finding a particular activity not to be

governmental in nature is Higgins v. City of Rockville, 86 Md.App. 670, 587
A.2d 1168, cert. denied, 323 Md. 309, 593 A.2d 669 (1991). There the court
found that maintenance of a state-owned driveway was a proprietary function,
but its holding was based on stare decisis, not policy, and was strictly limited to
liability for negligent maintenance of streets, sidewalks, footways, and adjacent
areas. Id. at 1173 (noting that "[t]he exemption of this particular function from
the benefits of governmental immunity, logical or illogical, seems destined to
remain with us for the foreseeable future." (footnote omitted)). That anomaly is
not relevant here

The MTCA concerns state sovereign immunity; the LGTCA addresses the
more limited doctrine of local government immunity

The Court of Appeals' writ of certiorari did not specify which questions
presented by petitioner it would address. One of those questions could be read
to raise the issue whether the LGTCA does in fact constitute an independent
waiver of governmental immunity, but that is not now the law of Maryland

Until the enactment of the LGTCA, the public generally had not been deemed
to have an interest in insulating local government employees from the
consequences of their negligence