In re Morgan Stanley & Co. Inc.

316 A.3d 552

262 Md.App. 1

In the MATTER OF MORGAN STANLEY AND CO. INC., et al.

No. 1554, Sept. Term, 2022

Appellate Court of Maryland.

May 30, 2024

Circuit Court for Anne Arundel County, Case No. C-02-CV-19-004073, Michael E. Malone, Judge.

Argued by David A. Skomba (Melissa A. McGaunn, Franklin & Prokopik, P.C., Baltimore, MD), on brief, for Appellant.

Argued by Benjamin T. Boscolo (Ashley E. Strandjord, ChasenBoscolo Injury Lawyers, Greenbelt, MD, on brief), for Appellee.

Argued before: Graeff, Reed, Robert K. Taylor Jr. (Specially Assigned), JJ.^*

Graeff, J.

In November 2019, the Maryland Workers’ Compensation Commission (the "Commission") issued a decision finding that Henry Gundlach, appellee, had "sustained an occupational disease of pneumonitis (lungs) arising out of and in the course of employment" as a financial advisor for Morgan Stanley & Co., Inc. ("Morgan Stanley"), one of the appellants. The Commission found that Mr. Gundlach had an average weekly wage of $6,730.27, and it ordered Morgan Stanley and its insurer, Indemnity Insurance Company of North America, also an appellant, to pay Mr. Gundlach’s causally related medical expenses. It further ordered that the case be held for consideration whether Mr. Gundlach had sustained permanent partial disability.

Appellants sought judicial review of the Commission’s decision, and the case was tried before a jury in the Circuit Court for Anne Arundel County. Appellants moved for judgment at the close of all the evidence, arguing that, as a matter of law, Mr. Gundlach did not sustain an occupational disease compensable under the Maryland Workers’ Compensation Act (the "Act"), Md. Code Ann., Lab. & Empl. ("LE") §§ 9-101 to 9-1201 (2016 Repl. Vol.). The court denied the motion, and the jury returned a verdict in favor of Mr. Gundlach. The court then issued an order affirming the Commission’s order.

On appeal, appellants present the following question for this Court’s review, which we have rephrased slightly, as follows:

Did the circuit court err in denying appellants’ motion for judgment at the close of all the evidence, given the limitation on liability for occupational diseases set forth in LE § 9-502(d)(ii)?

For the reasons set forth below, we shall reverse the judgment of the circuit court.

FACTUAL AND PROCEDURAL BACKGROUND

I. Proceedings Before the Commission

Mr. Gundlach had been a financial advisor for Morgan Stanley since 2008. He worked in Morgan Stanley’s branch office in Annapolis, Maryland, earning approximately $6,730 per week. His last day of work after developing pneumonitis was Friday, May 2, 2019.

On May 29, 2019, Mr. Gundlach filed two claims with the Commission: (1) Claim No. W124495, for occupational disease; and (2) Claim No. W124496, for accidental injury. In support of both claims, Mr. Gundlach alleged that he was exposed to mold in his workplace, and as a result, he developed pneumonitis.¹

On November 21, 2019, the Commission held a hearing. Counsel for Mr. Gundlach amended Mr. Gundlach’s date of disablement from May 3, 2019, to May 3, 2018.

Mr. Gundlach testified that, during the time he was a financial advisor for Morgan Stanley, he worked in two offices, one located in Building B, for six and a half to seven years, and then a different office, located in Building A, for another three and a half years. Mold was discovered in his second office after Morgan Stanley inspected below the baseboards. Mr. Gund- lach testified that his first office was never inspected visually for mold. He was alleging, however, that exposure in his first office contributed to his pneumonitis. He never saw mold in that office, but he saw water damage in the first office "usually around the inside of the doors." He also noticed that ceiling tiles were stained with water. In the second office, he also noticed dampness after storms.

In 2012, Mr. Gundlach started having respiratory problems. Later that year, he began seeing his regular doctor due to a persistent cough. During the visits with his doctor, "this cough was a recurrent theme." His doctor ordered a chest x-ray on April 2, 2014, which revealed "pulmonary infiltrates." The radiologist’s impression was that Mr. Gundlach had "nonspecific chronic interstitial fibrosis."

In April 2014, Mr. Gundlach began to see Dr. Nevins Todd, a pulmonologist. During his visits with Dr. Todd, they would "go through environmental type things," attempting to identify what could be causing his respiratory problems. Mr. Gundlach did not have any history of smoking, Although he had a history of asbestos exposure, his doctor had "ruled that out a long time ago," stating that his respiratory problems had "nothing to do with mesothelioma" because the scans did not "show anything like the same patterns."

Dr. Todd told Mr. Gundlach that exposure to bird feathers, including down feathers, could be causing his respiratory problems. Mr. Gundlach "had used, for many years off and on, a feather pillow." When he got married in 2015 and his wife moved into his home in Crownsville, Maryland, she brought with her five pieces of furniture that contained down feathers. Two years later, in 2017, Dr. Todd instructed Mr. Gundlach to remove the furniture from his home. Mr. Gundlach had the furniture removed immediately, and he limited "all feather exposure," but his symptoms persisted.

In April 2017, Dr. Todd started discussing with Mr. Gundlach the possibility that exposure to mold could be causing his cough. Mr. Gundlach had his home tested for mold in January 2018, but the results were negative. Approximately two months later, in March 2018, Mr. Gundlach asked Dr. Todd whether he should have his office tested for mold. Dr. Todd stated: "[W]ell, if they’ll let you." Mr. Gundlach then asked Morgan Stanley to have his office tested for mold, and it agreed.

Sometime after Morgan Stanley tested Mr. Gundlach’s office for mold, Mr. Gundlach learned that the results were positive. The testing confirmed that "there was visible mold growing in [his] office." Mr. Gundlach then asked Morgan Stanley for permission to work from home, and it agreed.

On May 3, 2018, Mr. Gundlach started working from home. Within two weeks, he started "subjectively feeling enormously more energy," and he no longer felt like he wanted to sit in a chair all day. After working from home for approximately two months, testing revealed an increase in his pulmonary function. In January 2019, however, Mr. Gundlach contracted bronchitis, and subsequent testing revealed a decrease in his pulmonary function. After that, he continued to decline. On cross-examination, Mr. Gundlach testified that, approximately five months before the hearing, he had consulted with a doctor regarding a possible lung transplant. In closing arguments, counsel for the parties argued with respect to whether the level of mold in Mr. Gundlach’s office rose to the level needed to create a causal relationship between the disease and the employment.

After the hearing, the Commission issued an order in Claim No. W124495, finding that Mr. Gundlach had "sustained an occupational disease of pneumonitis (lungs) arising out of and in the course of employment." It ordered appellants to pay Mr. Gundlach’s causally related medical expenses. It further ordered that the case would be held for further consideration as to whether Mr. Gundlach had sustained permanent partial disability. The Commission also issued an order in Claim No. W124496, finding that Mr. Gundlach had not sustained an accidental injury arising out of his employment.²

II. Proceedings in the Circuit Court

On December 18, 2019, appellants filed a petition in the Circuit Court for Anne Arundel County, seeking judicial review of the Commission’s decision in Claim No. W124495, finding that Mr. Gundlach sustained an occupational disease of pneumonitis (lungs) arising out of and in the course of employment. On November 22, 2021, appellants unsuccessfully moved for summary judgment, and the case was tried before a jury.

Trial began on October 6, 2022. In opening statement, counsel for appellants stated that Morgan Stanley was not disputing that Mr. Gundlach had a serious medical condition, but the issue was whether his condition was related to his employment. Counsel noted that the Commission had rejected Mr. Gundlach’s claim for "accidental injury as an alternate theory of compensability." Mr. Gundlach did not appeal that decision, and the issue of accidental injury was not before the jury. Counsel stated that Mr. Gundlach’s pneumonitis was not an occupational disease because mold in his workplace did not cause his condition, and pneumonitis is "not consistent with exposure that is attributable to his type of employment as a financial advisor."

Counsel for Mr. Gundlach stated in his opening statement that "employers and their insurance companies must provide worker’s compensation benefits when a working person becomes incapacitated … because of a disease that results from the place where they work." He stated that Morgan Stanley had to prove that the Commission was wrong in finding that Mr. Gundlach suffered an occupational disease, which it could not do.

A. Testimony of Dr. Ross Myerson

Dr. Ross Myerson, an expert in occupational and environmental medicine, testified that, at the request of appellants’ counsel, he performed an independent medical examination ("IME") on Mr. Gundlach in October 2019. During the IME, Mr. Gundlach told Dr. Myerson that he developed a "persistent dry cough" in 2012. Two years later, after undergoing a chest x-ray and CT scan, Mr. Gundlach saw a pulmonologist at the University of Maryland Medical Center, Dr. Nevins Todd. Mr. Gundlach advised Dr. Myerson that "he had lung problems due to hypersensitivity pneumonitis," which was characterized as "an inflammation of the lungs, usually related to an allergic component." In 2018, Mr. Gundlach "began working exclusively from home at which time he noted a reduction in cough and his shortness of...