Wolf v. Ford

Eighteen-year-old Elizabeth Wolf (plaintiff) approached Harry M. Ford (defendant), a stockbroker with the investment firm Legg Mason Wood Walker, Inc. (Legg) (defendant), to invest $135,000. Wolf signed a contract with Legg authorizing Ford to buy, sell, or trade in securities, giving Ford the discretionary power to do so but also expressly permitting Wolf to make such decisions, and providing that Wolf exonerated Ford and Legg from any liability for losses other than those resulting from gross negligence or willful misconduct. A year later, Legg sent Wolf a letter asking to confirm Ford’s continued discretionary authority. Wolf did so. Wolf withdrew money from her account several times, totaling $64,000. Approximately four years into the contract, Wolf was unhappy with her account performance, terminated Ford’s discretionary authority, and transferred her account to John Seifert (defendant), a different stockbroker with Legg. Less than a year later, Wolf closed her account and filed suit against Ford, Seifert, and Legg (collectively, the stockbrokers). Wolf testified that the stockbrokers never lied to her or made any misrepresentations. The trial court granted the stockbrokers’ motion for summary judgment, holding that the exculpatory clause barred Wolf’s suit. Wolf appealed, arguing that the exculpatory clause violated public policy, and the Maryland Supreme Court issued a writ of certiorari on its own motion.