B & K Rentals & Sales Co. v. Universal Leaf Tobacco Co.

WILNER, Judge. Appellant is in the business of supplying scaffolding and seating for public gatherings. In May, 1980, it entered into a lease with appellee to store some of its equipment in appellee’s tobacco warehouse in Anne Arundel County. On April 6, 1985, a fire broke out at the warehouse that destroyed all or most of the equipment appellant had stored there.

Believing that the fire was caused by the negligence of appellee and its employees, appellant brought this action for damages in the Circuit Court for Anne Arundel County. For reasons that we shall shortly discuss, appellant had a difficult time establishing at trial how the fire started, and appellee twice moved for judgment based on appellant’s failure to prove negligence, either directly or by inference. Those motions were denied, however, and the case was submitted to a jury, which returned a verdict in appellant’s favor for $123,252. The court thereupon decided that the evidence as to negligence really was insufficient and granted appellee’s motion for judgment NOV.

After its own motion to alter or amend that judgment was denied, appellant brought this appeal. When the appeal was first before this Court, appellee insisted that our review was limited to whether the circuit court abused its discretion in denying appellant’s motion to alter or amend the judgment NOV and did not extend to the substantive correctness of that judgment. That argument was based on some restrictive language in appellant’s notice of appeal. We found the argument plausible, limited our consideration to whether the court abused its discretion in granting the judgment NOV, found that it had not, and therefore affirmed the judgment.

B & K Rentals v. Universal Leaf, 73 Md.App. 530, 535 A.2d 492 (1988). The Court of Appeals disagreed with that limited approach, however, concluding that the appeal presented for consideration the issues raised by appellant as to the validity of the ¹⁰⁷ judgment NOV. It therefore reversed our judgment and remanded the case to us for further proceedings. B & K Rentals v. Universal Leaf, 319 Md. 127 , 571 A.2d 1213 (1990).

We turn then to the issues presented by appellant. Trial Proceedings There were only two people who had any direct knowledge of how the fire at the warehouse started—Walter Johnson and Leonard Grimes. Both men were employees of appellee and were working at the warehouse when the fire started. Neither of them was available to testify, however.

Mr. Johnson was killed in the fire, and Mr. Grimes had apparently moved to Kentucky and could not be located. Lacking the benefit of those witnesses, appellant was forced to rely on evidence gathered by two fire investigators, Lieutenants Stallings and Klasmeier of the Anne Arundel County Fire Department. Some of that evidence consisted of their observations and photographs of the scene, which were admitted without objection. The crux of the dispute was over appellant’s attempt to introduce, through the investigators, statements made by Mr. Grimes to Lt.

Stallings as to the conduct of Grimes and Johnson and as to how the fire may have started. This arose in essentially three contexts—the testimony of Lt. Klasmeier, the testimony of Lt. Stallings, and two written reports prepared by Lt.

Stallings. The two reports were ruled inadmissible; Lt. Stallings was not permitted to express an opinion as to the cause of the fire because his opinion was based in part on statements made to him during his investigation by Mr. Grimes and other witnesses. Lt.

Klasmeier, however, was allowed to express an opinion as to the cause of the fire even though his opinion was based in large measure on Lt. Stallings’s report and the information supplied to Lt. Stallings by Mr. Grimes. In its complaint, appellant averred that the fire started when, and because, Mr. Johnson “negligently, carelessly and improperly left a burning acetylene torch untended in the [warehouse].” No evidence of that was presented at ¹⁰⁸ trial.

There was evidence, essentially undisputed, that Johnson and Grimes were working in the warehouse that day, that there was no indication of vandalism, that an acetylene torch was present in the warehouse but that when found by Lt. Klasmeier the knob was in an “off” position, and that there were also present in the warehouse a number of dollies on small wheels that were used for moving tobacco. There was also evidence that string used to bundle the tobacco often became tangled in the dolly wheels and that it was appellee’s practice to unclog the wheels by burning the string with a torch. The theory espoused at trial was that Johnson was burning string from the dolly wheels and that the fire somehow started from that operation.

The significance of the evidence as to the presence in the warehouse of the torch and the dollies came principally, as we said, from statements made by Mr. Grimes to Lt. Stallings. In a supplemental written report prepared for his Division Chief, Lt. Stallings stated that he arrived at the scene at about 2:00 p.m., while the fire was still burning, and that he spoke with a number of firefighters and other witnesses, including Mr. Grimes.

Grimes told him that he (Grimes) had lit an acetylene torch for Mr. Johnson at about 11:00 that morning, that Johnson used the torch to burn string from the dolly wheels, that at some point Johnson went to chase some youngsters who were riding their bikes in the warehouse, that Johnson later reported that he had finished working with the wheels in the receiving area, and that, prior to beginning new chores, they walked to the office area to make some coffee. While waiting for the coffee to brew, “Leonard Grimes began to hear a ‘popping’ noise and looked out the office door seeing smoke coming from the area where Walter Johnson had just finished burning the string from the jack wheels.” Lt. Stallings reported further that Grimes “did feel the cause for the fire was related to the strings being burned off the ‘jack wheels’ with the acetylene torch. The rear door was to have been open and the wind was blowing strong this date.” ¹⁰⁹ Upon this and the other information gathered by him, Lt.

Stallings opined in his supplemental report that “the cause for the 9 alarm tobacco warehouse fire seems directly related to the open flame acetylene torch that was being used by Mr. Walter Johnson in burning strings from the jack wheels.” He expressed essentially the same opinion in a separate report he prepared for the National Fire Protection Association, stating that “[t]he probable cause for the fire was as the result of a warehouse employee using an Acetylene torch to burn string off wheel Jacks/Dolly.” These two reports, though written by Lt. Stallings, were offered into evidence during the direct examination of Lt. Klasmeier. They were objected to on the ground of hearsay, actually double-level hearsay.

Appellee urged that Mr. Grimes’s statements to Lt. Stallings constituted the first level of hearsay and that Lt. Stallings’s written report of those statements represented the second level of hearsay. Appellant acknowledged that to be the case but argued that Grimes’s statements to Stallings were admissible as an admission of a party and that Stallings’s report itself was admissible under the business record exception to the hearsay rule.

Little or no question was raised that the reports constituted business records; they were ruled inadmissible because (1) the court found that Grimes’s statements did not qualify as an admission (and were not admissible under the undifferentiated res gestae exception) and (2) as Stallings’s opinion was based in large measure on those inadmissible statements, it too was inadmissible. Although Lt. Stallings also testified and identified his two reports, appellant did not attempt to introduce them again through him. Lt.

Stallings recounted for the jury what he did when he arrived at the scene, including the fact that he interviewed a number of people, among them Mr. Grimes. He stated that he had formed an opinion as to the cause and origin of the fire and that his opinion was based on his personal investigation, the expertise he had developed over the years, his view of the fire scene, and “upon [his] interviews with the seven ... interviewees.” When asked to relate that opin ¹¹⁰ ion, appellee’s objection was sustained on the ground that the opinion was based partly on the statements of other people. Curiously, however, and to us inexplicably in light of this ruling, the court allowed Lt. Klasmeier to express his opinion as to the cause and origin of the fire even though his opinion was based principally on the reports of Lt.

Stallings, and most particularly on what Lt. Stallings said Mr. Grimes had told him. 1 Klasmeier opined that “the cause and origin would have been the actions of Mr. Johnson using an acetylene torch to burn strings off of wheels inside the warehouse.” The court instructed the jury that appellant’s claim was based on the alleged negligence of appellee, that appellant had the burden of proving that negligence, and that no inference of negligence arises from the mere happening of the event. It defined negligence as the doing of something that a person using ordinary care would not do or the not doing of something a person using ordinary care would do. It told the jury: “However, if each of the following circumstances is more probable than not, you may consider that there was negligence.

First, the event would not ordinarily happen without negligence. Second, the cause of the event was in the Defendant’s exclusive control. Third, no action by anyone else including the Plaintiff was a cause of the event. Should you find it was more probable than not that the Defendant was negligent then the Defendant is called upon for a satisfactory explanation and may explain to ¹¹¹ your satisfaction that there was no negligence on his part which was a cause of the event.

If you are not satisfied with the Defendant’s explanation and conclude that the Defendant’s negligence caused the Plaintiffs injuries, your verdict should be for the Plaintiff.” In its motion for judgment NOV, appellee argued that the court had erred in allowing Lt. Klasmeier’s opinion as to the origin and cause of the fire. Somewhat inconsistently, as that opinion was really the only evidence as to origin and causation, it also urged that the case was not one for “res ipsa loquitur,” because appellant had presented evidence through that opinion as to how the fire started. Relying principally on Nalee, Inc. v. Jacobs, 228 Md. 525 , 180 A.2d 677 (1962), it asserted that appellant had proved too much to rely on the “doctrine” of res ipsa loquitur and too little to prove negligence directly.

The court rejected the first complaint, confirming its belief that Lt. Klasmeier’s opinion was admissible, but found merit in the second. Noting Nalee, it found that appellant had proved the cause of the fire but had failed to show that the use of the torch by Mr. Johnson was negligent. For that reason, it entered judgment for appellee.

Issues In this appeal, appellant presses its contentions that (1) the two written reports by Lt. Stallings should have been admitted, (2) it did produce sufficient evidence of negligence to sustain the jury’s verdict, and (3) submission of the case on a res ipsa loquitur theory was proper. For whatever reason, appellant makes no complaint about the exclusion of Lt. Stallings’s testimonial opinion as to the origin and cause of the fire.

In defense, but without taking a cross-appeal, appellee continues to insist that Lt. Klasmeier should not have been allowed to express his opinion, without which there would be virtually no direct evidence of negligence. The issues framed by the parties create a certain complexity in the case. The predominant question is whether ¹¹² the court erred in granting judgment NOV.

That, in turn, depends on whether there was sufficient evidence before the jury to permit it to find that appellee was negligent; if there was any legally relevant evidence, however slight, from which a rational mind could have found negligence on appellee’s part, the entry of judgment NOV would be improper. In deciding that question, of course, we must look at the evidence that was, in fact, before the jury. What complicates the matter is that both sides maintain that the court erred in deciding what evidence went to the jury. Appellant insists that it was entitled to have the jury consider not only Lt.

Klasmeier’s testimony and opinion but Lt. Stallings’s reports as well. Appellee, as noted, urges that Lt. Klasmeier’s opinion should not have been allowed.

These evidentiary questions ordinarily would be relevant more to whether a new trial was warranted than to whether a judgment NOV was proper, but here, because they bear on the sufficiency of appellant’s evidence, we need to consider them in the context of the judgment NOV. Discussion As we indicated earlier, the theory of negligence actually pled by appellant was that the fire was caused by Mr. Johnson having left a burning acetylene torch unattended. As we also noted, there was absolutely no evidence presented to establish that fact. Had the case rested on the theory pled by appellant, therefore, judgment NOV would have been required.

The case, as tried, did not rest on that theory, however. It proceeded rather on the supposition that the fire somehow started from the burning of string by Mr. Johnson, and indeed evidence was presented in support of that theory. The jury had before it testimony and photographs establishing the presence in the warehouse of the dolly wheels and the torch, testimony that appellee’s employees had used a torch to burn string from dolly wheels in the past, and Lt. Klasmeier’s opinion that the fire was caused by Mr. Johnson’s burning of string.

This evidence certainly sufficed to permit the jury to determine ¹¹³ that the fire arose from the string-burning operation. It did not have to reach that conclusion, of course, but it reasonably could have done so. At this point, we need to consider whether the court erred in permitting Lt. Klasmeier’s opinion, for Klasmeier’s opinion was really the linchpin of appellant’s case; it alone gave meaning to the other evidence noted.

Unfortunately, the context of the issue requires us to look not only at Lt. Klasmeier’s opinion but Lt. Stallings’s reports as well. Although both Lt.

Klasmeier and Lt. Stallings considered a number of things in reaching their respective conclusions as to the cause of the fire, it is clear, and really beyond rational dispute, that they relied principally on the statements of Mr. Grimes. But for his narrative, it seems evident that neither would or could have come to the conclusion stated. As we observed, appellee’s attack on those opinions was based largely on the assertion that Grimes’s statements constituted hearsay and that neither they nor any opinion based on them was admissible.

We deal first with that question. Grimes’s statements to Lt. Stallings were offered as an “admission” of a party, the theory being that, as Grimes was an employee of appellee, any statements of his that qualify as an admission would be attributable to appellee. As Professor McLain explains, “[u]nder Maryland common law, ‘admissions of a party-opponent’ are admissible as substantive evidence under an exception to the hearsay rule.

Under the exception, a party is free to introduce anything an opposing party has said or done which is relevant to the case, without fear that a valid objection can be raised under the hearsay rule.” McLain, Maryland Evidence § 801(4).l (1987 & 1990 Supp.) (footnotes omitted). As she further points out, the statement need not be against the party’s interest when made; rather, “the only requirements for admissibility ... are that (1) the statement was made, adopted, or authorized by a party or that party’s agent ...; (2) the statement is offered in evidence ¹¹⁴ against that party by an opposing party; and (3) as with all evidence, the statement must be relevant to a material fact.” Id. (footnotes omitted, emphasis added). In point of fact, current Maryland case law requires more, when the statement is made by an agent of a party rather than the party himself, than the mere fact of agency.

We pointed out in Burkowske v. Church Hosp. Corp., 50 Md.App. 515, 439 A.2d 40 (1982), that “in order to bind the principal (and thus constitute an admission by it), the agent’s statement not only must concern matters within the scope of his own agency authority but must also be part of the res gestae, i.e., made contemporaneously with the transaction to which it relates.” Id. at 520 , 439 A.2d 40 (emphasis added). Why this second condition of contemporaneity, which invokes a wholly independent exception, or set of exceptions, to the hearsay rule is, or should be, required is not explained in the Maryland cases. Indeed, the inclusion of this requirement has been justly criticized by such eminent authorities as Thayer, Wigmore, and McCormick as, in effect, applying substantive agency law as though it were a rule of evidence.

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