Provider of an energy solution to customers in the business-to-business, business-to-consumer, and business-to-business-to-consumer markets. The company's solution searches multiple sources (independent power producers) to find their customers a fair and competitive price. Customers can pay energy bills online, track energy usage, and access billing and usage history. The company's Internet-based "Web Care" feature enables customers to "chat" online with a live customer service representative any time. The company ensures a seamless transition by providing customers with uninterrupted electricity and gas services through existing wires and pipes.
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Nov 10, 2022
U.S. Court of Appeals for the 4th Circuit Consumer Protection; fraud: Where several individuals made half a dozen material misrepresentations in connection with a telemarketing scam, and consumers were misled as a result, their verdicts for violations of the Federal Trade Commission Act and the Telemarketing Sales Rule were affirmed. 20-2215, 21-1454, 21-1520, 21-1521, 21-1591, 21-1592 (filed Nov. 1, 2022). Criminal; fraud: Where a fraudster argued that she could not be convicted under the federal wire fraud statute because the scheme was devised and carried out in Israel, her argument was rejected. Because the conviction was based on misuse of wires within the United States, it stood as a permissible domestic prosecution. United States v. Elbaz, No. 20-4019 (filed Nov. 3, 2022). Maryland Court of Special Appeals Civil Practice; relation back: Where a man sued Montgomery County after a police officer’s vehicle struck his, and the moved to substitute the officer after the statute of limitations had expired, his motion was denied. The case did not involve a misnomer, compulsory joinder of a necessary party or substitution of real party in interest. Linz v. Montgomery County, No. 1289, Sept. Term, 2021 (filed Nov. 1, 2022). Commercial; foreclosure surplus: Where the Department of Housing and Urban Development, or HUD, which held a second priority lien on real property, moved to recover the surplus left after the property was sold at foreclosure, the circuit court did not err in allowing it to do so. Brower v. Ward, No. 1720, Sept. Term, 2021 (filed Oct. 31, 2022). Consumer Protection; public service commission: Where the Public Service Commission has jurisdiction to ensure that each public service company engaging in utility business in Maryland comply with specific consumer protections laws, it had jurisdiction to determine whether a utility supplier violated the Maryland Telephone Solicitations Act, or MTSA. In the Matter of SmartEnergy Holdings LLC, No. 1675, Sept. Term, 2021 (filed Oct. 31, 2022). Criminal; contraband weapon: Where a detainee was found in possession of a fingernail clipper that was taken apart, sharpened and then added to a plastic handle, the court did not err in finding him guilty of possessing a weapon and contraband in a place of confinement. Vanison v. State, No. 296, Sept. Term, 2021 (filed Oct. 31, 2022). Domestic Relations; de facto parents: Where a child’s existing legal parents do not consent to the formation of a parent-like relationship between the child and a third party, the third party has failed to establish a de facto parent relationship. Basciano v. Foster, No. 1978, Sept. Term, 2021 (filed Nov. 1, 2022). U.S. Court of Appeals for the 4th Circuit Consumer protection Fraud BOTTOM LINE: Where several individuals made half a dozen material misrepresentations in connection with a telemarketing scam, and consumers were misled as a result, their verdicts for violations of the Federal Trade Commission Act and the Telemarketing Sales Rule were affirmed. CASE: Federal Trade Commission v. Pukke, Nos. 20-2215, 21-1454, 21-1520, 21-1521, 21-1591, 21-1592 (filed Nov. 1, 2022) (Judges WILKINSON, Motz, Keenan). FACTS: Andris Pukke and other appellants sought to develop thousands of acres of land in Belize, which they marketed as a luxury resort called “Sanctuary Belize.” In their sales-pitch to U.S. consumers, many promises were made but not kept. In 2018, the Federal Trade Commission, or FTC, shut this down, calling Sanctuary Belize a “scam,” and alleging violations of the Federal Trade Commission Act and the Telemarketing Sales Rule for making misrepresentations to consumers. The FTC also brought contempt charges against Pukke stemming from past judgments against him. After an extensive bench trial, the district court found ample evidence of violative and contumacious conduct, ultimately ruling in the FTC’s favor. LAW: The district court held Pukke in contempt for not cooperating with the FTC and for repaying a loan before he repaid the FTC. Additionally, the court held Pukke, Peter Baker and John Usher in contempt for making misrepresentations in telemarketing, a direct violation of a permanent injunction in a prior matter. Both of these findings are supported by an abundance of evidence and show no hint of an abuse of discretion. It is clear that Pukke and Sanctuary Belize Enterprise, or SBE, violated the Telemarketing Sales Rule, or TSR, and Federal Trade Commission Act. The court found that SBE, under the direction of Pukke, made half a dozen material misrepresentations that misled consumers. The findings made by the district court show that Pukke’s Belizean business venture was dishonest to the core. The district court correctly surmised that this sort of deception lies at the heart of what the FTC is empowered to seek out and stop. Though he tries unconvincingly to refute these findings, Pukke’s main contention is that the court was wrong to grant $120.2 million in equitable monetary relief against him under § 13(b) of the FTC Act. Although the FTC may seek injunctive relief under § 13, the Supreme Court held in AMG Capital Management, LLC v. Federal Trade Commission, 141 S. Ct. 1341 (2021), that it does not authorize the FTC to seek, or a court to award, “equitable monetary relief such as restitution or disgorgement.” Pukke latches onto this last point, claiming that the judgment in the Sanctuary Belize case must be thrown out under AMG Capital. AMG does indeed render invalid the $120.2 million equitable monetary judgment, at least to the extent that judgment rests on § 13(b). Vacating that judgment does not help Pukke, however, because he already has a $120.2 million judgment against him for contempt of the telemarketing injunction. And AMG does not undercut the injunctive relief entered under § 13(b). The district court entered default judgments against Usher and several corporate defendants. The defaulted parties filed a Rule 60(b)(5) motion to set aside the default judgments, which the district court denied because of a failure to comply with local rules. Usher was notified multiple times about the ongoing proceedings against him. Yet, “Usher never appeared.” As for the corporate defendants, they similarly failed to make an appearance. It is undeniable that default judgments are warranted “against defendants who failed to appear or participate in the proceedings.” This is a clear-cut case for default judgment, and the court conscientiously laid out the evidence supporting the same. Usher and the corporate defendants nevertheless assert that the $120.2 million judgment against them must be thrown out under AMG Capital. As noted, AMG requires vacating the $120.2 million equitable monetary judgment, but the default judgments are upheld because the district court did not abuse its discretion and AMG does not affect the injunctive relief granted in each default judgment. Affirmed in part and vacated and remanded in part. Criminal Fraud BOTTOM LINE: Where a fraudster argued that she could not be convicted under the federal wire fraud statute because the scheme was devised and carried out in Israel, her argument was rejected. Because the conviction was based on misuse of wires within the United States, it stood as a permissible domestic prosecution. CASE: United States v. Elbaz, No. 20-4019 (filed Nov. 3, 2022) (Judges RICHARDSON, Rushing, Traxler). FACTS: Lee Elbaz and her confederates orchestrated a multimillion-dollar fraud scheme, operating from Israel and targeting unsophisticated victims worldwide. Posing as an investment firm, Elbaz and her partners solicited “investments” that cost fraud victims over $100 million, including millions from victims in the United States. While vacationing in New York, Elbaz was arrested and later convicted for conspiring to commit wire fraud and for substantive wire fraud itself. In this opinion, the panel grants panel rehearing, vacates the prior panel opinion and issues a new panel opinion below. LAW: Elbaz contends that the federal wire-fraud statute criminalizes only domestic, not extraterritorial, conduct. And this, she argues, requires vacating her conviction because the wire-fraud scheme was devised and carried out in Israel. If a statute lacks a clear indication of an extraterritorial application, it has none. If the statute does not apply extraterritorially, we the court asks whether the case “involves a domestic application of the statute.” To identify a permissible domestic application, the court must determine the statute’s “focus” and whether the conduct relevant to the statute’s focus occurred inside the United States. Here, the court agrees that the wire-fraud statute lacks any affirmative statutory instruction that it criminalizes purely extraterritorial conduct. But the court finds the statute’s focus to be on the use of the wire—not the underlying fraudulent scheme. So Elbaz’s conviction based on misuse of wires within the United States stands as a permissible domestic prosecution. Elbaz next argues that the district court erred by refusing to compel immunity for witnesses she planned to call. The court has suggested that in some extreme circumstances a district court may be able to order the prosecution to seek immunity. But if such an extreme case exists, it is only when the defendant “makes a decisive showing of prosecutorial misconduct or overreaching.” Here, there is not a decisive showing of such extraordinary misconduct. In fact, there is no showing of prosecutorial misconduct. Elbaz also argues that the district court erred by refusing to grant a mistrial after a juror overheard a disparaging remark about Elbaz. The court disagrees. The district court acted well within its discretion to address this issue by removing the juror, ensuring no outside information was conveyed to other jurors and restarting deliberations with an alternate juror and orders to proceed from scratch. Separate from her claim that her conviction involved an improper extraterritorial application of the wire-fraud statute, Elbaz argues that the district court erred in considering her foreign conduct in sentencing. Elbaz’s fraud scheme targeted victims both in the United States and abroad, and the district court considered losses to foreign victims when calculating her baseline sentencing level and restitution owed. Elbaz must also pay restitution under the Mandatory Victims Restitution Act of 1996. The Act applies only to “the victim of the offense.” So unlike sentencing, the broader concept of “relevant conduct” does not expand “the offense of conviction.” Thus, the district court’s restitution order under the Act must be limited to “the losses to the victim caused by the offense.” The substantive wire-fraud counts cannot support restitution for foreign losses. Those counts involved individual U.S. victims. So only those domestic victims can receive restitution under the Act for the substantive counts. Nor can the conspiracy count justify restitution under the Act for losses stemming from a purely extraterritorial conspiracy. Accordingly, the court finds the inclusion of those foreign victims with no nexus to criminal conduct in the United States in the restitution calculation was an error and remand for recalculation. The district court imposed three years of supervised release, orally announcing that the terms were subject to “the standard and statutory conditions of supervised release” along with “additional conditions.” The court holds that Elbaz’s objections to her term of imprisonment are not specific enough to preserve a challenge to the terms of supervised release. Under the applicable plain error standard, the court finds no plain error. Affirmed in part, vacated in part and remanded. Maryland Court of Special Appeals Civil practice Relation back BOTTOM LINE: Where a man sued Montgomery County after a police officer’s vehicle struck his, and the moved to substitute the officer after the statute of limitations had expired, his motion was denied. The case did not involve a misnomer, compulsory joinder of a necessary party or substitution of real party in interest. CASE: Linz v. Montgomery County, No. 1289, Sept. Term, 2021 (filed Nov. 1, 2022) (Judges Reed, Beachley, EYLER) FACTS: Christopher Andrew Linz was injured in an automobile accident with a vehicle driven by Michael J. Chindblom, a police officer employed by Montgomery County. Mr. Linz brought a timely suit for negligence against the county. After limitations had run, he moved for leave to file an amended complaint substituting Chindblom as the sole defendant in place of the county. He asserted that the amendment was necessary to correct a misnomer and that the relation back doctrine would apply to make his amended complaint timely. The court denied the motion, and a motion for reconsideration, on the ground that there was no misnomer to correct and therefore the relation back doctrine did not apply. LAW: Mr. Linz’s complaint identified “Defendant Montgomery County” as a “municipal entity in the State of Maryland” and “Michael Chindblom” as a “law enforcement officer” “employed . . . by Defendant Montgomery County.” Throughout the complaint, the county and Chindblom were referred to separately. Not surprisingly, Mr. Linz did not assert below, nor does he argue on appeal, that he or his lawyer thought, mistakenly, that the county and Chindblom were factually one and the same. Obviously, they are not. Neither are they one and the same legally. Moreover, nothing in the wording of the complaint can be read as confusing the county with Chindblom, referring to them interchangeably or using one name in place of the other. The consistently separate references to the two are at odds with the words “Montgomery County” being used mistakenly or inadvertently instead of “Ofc. Chindblom.” The circuit court correctly determined on the undisputed facts that there was not a misnomer in the original complaint. Although Mr. Linz cites Crowe v. Houseworth, 272 Md. 481 (1974), to argue that the relation back doctrine can be applied in the absence of a misnomer, he does not make any showing that Chindblom was subject to compulsory joinder, as were the newly added plaintiffs in Crowe. Indeed, in the absence of Chindblom, complete relief already has been accorded between them. The county has paid Mr. Linz the maximum amount for which it could be liable in a negligence action against it based on Chindblom’s use of a county-owned vehicle. Nor did Rule 2-201, governing real parties in interest, apply to Mr. Linz’s attempt to substitute Chindblom for the county. For much of the same reasons that Chindblom was not subject to compulsory joinder as a defendant in this case, he was not a real party in interest. Notwithstanding that this case does not involve a misnomer, compulsory joinder of a necessary party or substitution of real party in interest, Mr. Linz argues that if the “critical factors” discussed in several Maryland relation back cases exist, the doctrine should apply. With respect to the first factor, he maintains that because Chindblom was the tortfeasor whose conduct caused the injuries, as alleged in the original complaint, he was the intended defendant. As to the second factor, Mr. Linz asserts that the facts developed in discovery show that during the three-year limitations period, Chindblom knew about the potential negligence claim against him. However, even if Mr. Linz can show that Chindblom was on notice of the potential claim against him during that period, the undisputed facts do not tend to show it was Mr. Linz’s intention all along to sue Chindblom. At bottom, Mr. Linz’s argument is that when a person knows, during the limitations period, that an action may be brought against him or her, the defense of limitations should not apply. This would be a radical departure from Maryland law on statutes of limitations that is not necessary in this case and, among other negative consequences, would undermine any obligation of diligence on the part of those pursuing causes of action. Judgment of the Circuit Court for Montgomery County affirmed. Commercial Foreclosure surplus BOTTOM LINE: Where the Department of Housing and Urban Development, or HUD, which held a second priority lien on real property, moved to recover the surplus left after the property was sold at foreclosure, the circuit court did not err in allowing it to do so. CASE: Brower v. Ward, No. 1720, Sept. Term, 2021 (filed Oct. 31, 2022) (Judges Kehoe, Friedman, RIPKEN) FACTS: Timothy Brower appeals an order of the circuit court concerning the distribution of a surplus arising from a foreclosure sale of his residential property. The circuit court had initially ratified the court auditor’s report that awarded the surplus to Brower. Following a motion to intervene by HUD, which held a second priority lien on the foreclosed property, the court modified its order and allowed HUD to file a claim for the surplus. Brower filed exceptions to that report, and the court overruled those exceptions and ratified the order. This timely appeal followed. LAW: The right to participate in and claim a portion of surplus proceeds in a foreclosure sale is governed by Maryland Rule 14-216, which provides: “At any time after a sale of property and before final ratification of the auditor’s account, any person claiming an interest in the property or in the proceeds of the sale of the property may file an application for the payment of that person’s claim from the surplus proceeds of the sale.” Brower’s first argument appear to be that Maryland Rule 14-216 is the only applicable rule to the action. He argues that compliance with the Maryland Rules of Procedure is mandatory, and therefore HUD’s failure to timely file a claim for the surplus forecloses its right to any portion of that surplus. While Rule 14-216 expressly permits a claimant to file an application prior to final ratification, there is no indication that 14-216 displaces all other Maryland Rules, including those providing for revising final judgments. Although it is undisputed that HUD filed its motion after the final ratification, HUD was not foreclosed from requesting the court to exercise its revisory powers and reopen the judgment pursuant to Rules 2-534 and 2-535. Brower next argues that the court erred in granting HUD’s motion to reopen the case and intervene. To this end, he contends that HUD’s motion was not a motion to revise pursuant to Rule 2-535, and thus the court’s revision of the final judgment was done on its own. Additionally, because that revision took place more than 30 days from the court’s original judgment, he argues, the court lacked the power to revise the judgment absent a showing of fraud, mistake or irregularity. It has long been the rule in Maryland that a motion, however labeled, may be treated as a motion to revise under Rule 2-535 where the substance of the motion was clearly a request to revise the judgment. Here, HUD clearly sought for the court to revise the judgment, which awarded the entirety of the surplus to Brower. Additionally, in its reply to Brower’s opposition, HUD explained that the court had jurisdiction to reopen the case and permit HUD’s intervention, which was requested in the original motion, pursuant to Rule 2-535. The court is satisfied that, based on the substance of the motions, HUD was requesting that the court exercise its revisory powers. Brower finally argues that the court’s grant was improper as a matter of law. According to Brower, the court “arbitrarily” examined equitable considerations instead of applying the plain language of Rule 14-216 and disallowing the untimely claim, which ultimately resulted in prejudice to him. As the circuit court noted in its findings, Brower received the benefit of an eight-year, interest free loan from HUD to cure his default and avoid foreclosure on his residential property. The obligation to repay that loan was triggered by the later foreclosure sale, pursuant to the terms of the loan contract. Brower does not dispute that he owes the money pursuant to the loan. The court found that, given the lack of dispute that money was owed and the short time frame in which HUD sought to intervene, there was no prejudice to Brower in granting the motion to intervene. This court discerns no error in that conclusion. Judgment of the Circuit Court for Worcester County affirmed. Consumer protection Public Service Commission BOTTOM LINE: Where the Public Service Commission has jurisdiction to ensure that each public service company engaging in utility business in Maryland comply with specific consumer protections laws, it had jurisdiction to determine whether a utility supplier violated the Maryland Telephone Solicitations Act, or MTSA. CASE: In the Matter of SmartEnergy Holdings LLC, No. 1675, Sept. Term, 2021 (filed Oct. 31, 2022) (Judges Zic, RIPKEN, Raker) FACTS: Following the receipt of numerous customer complaints by the Public Service Commission, a complaint was filed against SmartEnergy Holdings LLC, contending that it systematically violated consumer protection laws. Following an evidentiary hearing, a public utility law judge, or PULJ, proposed an order finding that SmartEnergy engaged in unfair, false, misleading and deceptive marketing, advertisement and trade practices. SmartEnergy appealed that proposed order, and the Commission affirmed the PULJ’s findings of violations, in addition to finding that the MTSA was applicable. The Commission ordered SmartEnergy to refund all of its Maryland retail supply customers, that were enrolled during the violation time period, the difference between the rates charged by SmartEnergy and the applicable utility rate. The circuit court affirmed the Commission’s findings. LAW: Initially, SmartEnergy argues that the Commission does not have jurisdiction to decide disputes related to the MTSA. It argues that because “violations of regulations relating to ‘telephone solicitations’ are ‘unfair or deceptive trade practices, they are subject to enforcement by the Attorney General’s Office.’” The Commission is expressly charged with fashioning remedies for violations of “any” applicable consumer protection law. It has jurisdiction over each public service company engaging in utility business in Maryland, which includes SmartEnergy, to ensure that those companies comply with specific consumer protections laws, under which the MTSA falls. Based on these applicable statutes, the Commission has jurisdiction to determine whether a utility supplier violated the MTSA. SmartEnergy next contends that the Commission erred in finding that SmartEnergy violated Maryland provisions regarding contracting requirements as well as Maryland provisions prohibiting deceptive practices. As to the contracting requirements, SmartEnergy argues that the violations were based on the MTSA, and the MTSA is not applicable to its conduct. Alternatively, SmartEnergy argues that, even if the MTSA is applicable, its actions are nonetheless exempt from MTSA requirements because they fall within two exemptions: preexisting business relationship, and purchase of goods pursuant to examination of mailing material. Finally, SmartEnergy contends the Commission’s factual findings were not supported by substantial evidence. The court rejects each argument. SmartEnergy also asserts that the penalty issued was arbitrary and capricious. To this end, SmartEnergy argues that it was improperly penalized for “relying on the Commission’s own guidance and prior decisions.” It further contends that, citing to several Commission decisions wherein a penalty was levied against a retail supplier in an amount less than that which was imposed here, the penalty was “wildly inconsistent with Commission precedent involving significantly more egregious conduct.” The court rejects these arguments. Next, SmartEnergy argues that the Commission improperly dismissed its selection bias argument, and the conclusions are therefore based on improperly extrapolated alleged wrongdoings. Last, SmartEnergy argues the Commission failed to consider any remedial measures taken by SmartEnergy. Once again, the court rejects these arguments. Judgment of the Circuit Court for Montgomery County affirmed. Criminal Contraband weapon BOTTOM LINE: Where a detainee was found in possession of a fingernail clipper that was taken apart, sharpened and then added to a plastic handle, the court did not err in finding him guilty of possessing a weapon and contraband in a place of confinement. CASE: Vanison v. State, No. 296, Sept. Term, 2021 (filed Oct. 31, 2022) (Judges ZIC, Ripken, Wright) FACTS: Michael Vanison was charged with: (1) knowingly possessing a weapon while confined in a place of confinement, in violation of § 9-414(a)(4) of the Criminal Law Article; (2) knowingly possessing contraband in a place of confinement, in violation of § 9-412(a)(3) of the Criminal Law Article and (3) wearing or carrying a dangerous and deadly weapon, in violation of § 4-101(c)(1) of the Criminal Law Article. Mr. Vanison entered a not guilty plea on an agreed statement of facts and was found guilty on all three counts. Mr. Vanison was sentenced to one year and one day for knowingly possessing a weapon while confined in a place of confinement, to be served consecutive to any other sentences he was serving. The remaining counts were merged into the first. LAW: Count One charged Mr. Vanison under Criminal Law § 9-414(a)(4). That section provides that “[a] person detained or confined in a place of confinement may not knowingly possess or receive a weapon.” “Weapon” is further defined by the same subtitle as “a gun, knife, club, explosive, or other article that can be used to kill or inflict bodily injury.” State’s exhibit one is not included with the record on appeal, and there is no photograph in the record. However, the trial court described the item as follows: “Object was found in his anus and that appeared to be part of a fingernail clipper that was taken apart, sharpened and then added to a plastic handle. I did view the item and let it, it looks like to me is a makeshift knife. It is a knife.” In addition, the court found that “I believe that the knife that I looked at which is Exhibit 1 is a knife or it is another article that could be used to kill or inflict bodily injury and therefore I believe it meets the definition of a weapon for that section.” A “knife” is one of the items enumerated in Criminal Law § 9-410(h). Further, a “weapon” includes items “that can be used to kill or inflict bodily injury.” As the circuit court’s findings were not clearly erroneous, the court is persuaded, under a plain reading of the statute, that the item was a “weapon” and that the evidence was sufficient to sustain Mr. Vanison’s conviction under Criminal Law § 9-414(a)(4). Count Two charged Mr. Vanison under Criminal Law § 9-412(a)(3). That section provides that “[a] person may not: . . . (3) knowingly possess contraband in a place of confinement.” “Contraband” is further defined by § 9-410 as “any item, material, substance, or other thing that: . . . (1) is not authorized for inmate possession by the managing official; or (2) is brought into the correctional facility in a manner prohibited by the managing official.” Considering the dictionary definition, along with the provisions of § 9-412 and § 9-414, the court concludes that the ordinary understanding of “contraband” would include a makeshift knife concealed in an inmate’s anus and discovered during a routine strip search at intake. This conclusion is also supported by provisions of the Code of Maryland Regulations, especially by the pertinent regulations governing inmate discipline. As such, the evidence was sufficient to sustain Mr. Vanison’s conviction under Criminal Law § 9-412(a)(3). Count Three charged Mr. Vanison with wearing or carrying a dangerous weapon concealed on or about the person in violation of Criminal Law § 4-101(c)(1). That section defines “weapon” to include “a dirk knife, bowie knife, switchblade knife, star knife, sandclub, metal knuckles, razor, and nunchaku.” But “weapon” does not include “1. a handgun; or 2. a penknife without a switchblade.” The Court of Appeals has adopted a four-factor analysis to be considered when addressing whether a defendant’s intent transformed a concealed instrument into a concealed dangerous or deadly weapon: “(1) the nature of the instrument, i.e., its size, shape, condition and possible alteration; (2) the circumstances under which it is carried, i.e., the time, place and situation in which the defendant is found with it; (3) defendant’s actions vis-[à]-vis the item; and (4) the place of concealment.” Here, the court is persuaded that there was legally sufficient evidence that Mr. Vanison carried the concealed knife with the intent to use it as a weapon. Judgment of the Circuit Court for Washington County affirmed. Domestic relations De facto parents BOTTOM LINE: Where a child’s existing legal parents do not consent to the formation of a parent-like relationship between the child and a third party, the third party has failed to establish a de facto parent relationship. CASE: Basciano v. Foster, No. 1978, Sept. Term, 2021 (filed Nov. 1, 2022) (Judges Kehoe, LEAHY, Friedman) FACTS: John Basciano appeals from an order establishing Colleen Foster and William R. Foster as de facto parents. The Fosters are the maternal grandparents of the only child between father and their daughter, Katie Lynn Foster. The court granted father and the Fosters joint legal custody of the minor child with tie-breaking authority to the Fosters, and primary physical custody to the Fosters. LAW: Where a child’s existing legal parents both do not consent to the formation of a parent-like relationship between the child and a third party, the third party has failed to establish a de facto parent relationship. The third party, however, may obtain custody of the child after establishing that the parents are either unfit or that exceptional circumstances exist such that continued custody with the parents would be detrimental to the child’s best interest. Once a party has demonstrated unfitness or exceptional circumstances, the court can proceed to the best interests of the child analysis, and there is no need to show de facto parentage in order for the third party to have standing. Here, the circuit court found “that [de facto] parenthood of [C.] was established by the Fosters through exceptional circumstances, therefore they were able to meet the first prong.” Father rightly claims that the circuit court conflated the third-party “exceptional circumstances” analysis with the first prong of the de facto parentage test, when they are, in fact, separate constructs. There are at least two reasons why one cannot be substituted for the other. First, the requirements for obtaining status as a de facto parent, focus on the relationship between a third party “with a non-biological, non-adopted child” which the parent consents to and nurtures. By contrast, the unfitness or exceptional circumstances analysis focuses on the parents’ inability to continue to have custody of their child because the continuation of custody is against the child’s best interests. Second, the term “exceptional circumstances” has different connotations and carries different meanings and requirements among the various types of third-party custody proceedings. Here de facto parenthood status was not properly conferred on the Fosters because neither father nor mother consented to the development of a parent-like relationship. Moreover, the court is unpersuaded by the Fosters’ alternative argument that father provided implied consent to the Fosters while he was recovering from heroin addiction. The Fosters do not direct the court to where the circuit court concluded that father impliedly consented to the formation of a de facto parental relationship, and the court has not found any such consent in our review of the record. Turning to whether the circuit court appropriately determined that exceptional circumstances permitted the court, after examining C.’s best interests, to confer third-party custody of C. with the maternal grandparents, the circuit court found that father “relinquished all parenting responsibility to the Fosters until May of 2021” after his overdosing on heroin while caring for C. During this period, which consisted of the majority of C.’s life, the Fosters “bond[ed] with [C.] as parents.” Although the judge found that father had made significant strides in his recovery, for a substantial period of C.’s life, the judge concluded that father had abandoned C. and “neglected him,” requiring intervention by the state and the Fosters to protect C. and care for his needs. The court concludes, based on the unique aspects of this case, that C. was away from father for a sufficient time to shift constructive custody to the Fosters. Finally, the circuit court did not abuse its discretion by entering a custody order that does not provide for an increase in father’s time with C. Accordingly, the case is remanded to the circuit court with instruction to vacate the portion of its custody order granting the Fosters de facto parenthood status of C. The remaining provisions of the court’s order remain in full force and effect. Judgment of the Circuit Court for Anne Arundel County reversed in part and affirmed in part.
SmartEnergy Frequently Asked Questions (FAQ)
When was SmartEnergy founded?
SmartEnergy was founded in 1999.
Where is SmartEnergy's headquarters?
SmartEnergy's headquarters is located at 300 Unicorn Park Drive, Woburn.
What is SmartEnergy's latest funding round?
SmartEnergy's latest funding round is Acquired.
How much did SmartEnergy raise?
SmartEnergy raised a total of $18.1M.
Who are the investors of SmartEnergy?
Investors of SmartEnergy include Dexia Group, TrustCapital Partners and ProSeed Capital Holdings C.V.A..
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