Great Atlantic & Pacific Tea Co. v. Royal Crown Bottling Co.

Hammond, J., delivered the opinion of the Court. A defendant in a tort action appeals from the refusal of the trial court to allow it to file a cross claim against a codefendant. The cross claim sought to assert that the codefendant was or might be liable to the cross claimant for the damages asked by the plaintiff in the case and the cost of defense under an express agreement of indemnity or, alternatively, on an implied warranty. The trial judge rejected the cross claim because, as he saw it, it did not arise out of the occurrence that was the subject matter of the original action.

The plaintiff, Tyler, sued the Great Atlantic & Pacific Tea Company, Inc. (A. & P.), Royal Crown Bottling Co. (Royal Crown), and International Paper Co. (International), claiming damages for injuries, including loss of vision, sustained ²⁸³ when the bottom of a paperboard carton containing six bottles of Diet Rite Cola purchased at an A. & P. store in Cumberberland fell out and a bottle of the Cola broke on her kitchen floor, causing glass to strike her in the eye. Tyler’s declaration alleged that A. & P. had purchased the carton of Diet Rite from Royal Crown and that Royal Crown had bought the paperboard carton from International. The declaration, alleging (1) negligence on the parts of A. & P. and Royal Crown, (2) negligence by International, (3) breach of warranty by International, and (4) breach of warranty by A. & P., was filed on January 19, 1965, and on February 16 both A. & P. and Royal Crown timely filed appropriate general issue pleas. In April, pursuant to Maryland Rule 320 d 1, A. & P. moved for leave to amend its pleas to include a cross claim against Royal Crown on the grounds (a) that it filed its pleas without including its cross claim, which was attached, and that without leave of court could not now file it because Maryland Rule 314 d 2 requires a cross claim to be filed within fifteen days from the expiration of the last day for filing the responsive pleading to the claim to which the cross claim is filed, and (b) : “The amendment and Movant’s pleas would 'promote justice in that it would be more convenient and less expensive for all parties to dispose of all outstanding claims against each other in this proceeding.

If the Cross Claim is not asserted in this proceeding, Movant will be compelled to engage in additional litigation as the Cross Claim is germane to the original claim, and both must be resolved in order to do complete justice.” Judge Naughton signed an order, ex parte, permitting the requested amendment. The cross claim alleged in count one that by an agreement dated February 24, 1964, Royal Crown agreed: “* * * jn the event of consumer complaints, claims or legal actions, alleging damage, death, illness, or injuries resulting from the purchase, sale, and/or use of such merchandise, to indemnify and save you harmless from any and all liability, and to assume full responsibility and expense of investigation, litigation, ²⁸⁴ and/or settlement of any such complaint, claim or legal action on condition that the merchandise was handled under normal conditions of sale by your company from the time of arrival of the merchandise until final sale to the consumer * * *.” Count two alleged that A. & P. had warranted Tyler that the carton holding the Diet Rite Cola bottles was suitable and safe and that it was not and caused her harm, and that if Tyler is entitled to damages from A. & P. for this claimed breach of warranty then A. & P. “is entitled to recover the same damages and the expenses of investigation and litigation” from Royal Crown who sold the carton of Diet Rite Cola to A. & P. with the same warranty that A. & P. sold it to Tyler. On April 27 Royal Crown moved to strike the cross claim because it was not timely filed and because “it brings into this case a new issue foreign to all other issues in the case and does not arise out of a common question of law or fact with the other issues.” Judge Naughton granted the motion to strike, finding that the cross claim' did not arise out of the occurrence of the injury to Tyler but was “merely a result of the original action,” that the cross claim, being for breach of a contract of indemnity, was not “germane” to the original action for negligence and breach of warranty and that the cross claim was premature since the cost of litigation would not be fully known at the time of trial in light of “the almost inevitable motion for a new trial, appeal, and other possible legal actions.” The ruling that the cross claim could not be filed at all obviated the need to pass on the question of the timeliness of its filing. At the outset the issue of the appealability of the order striking the cross claim—and so denying A. & P. the right to seek in the same action its asserted due from Royal Crown—suggests itself, although neither side has briefed or argued the point.

We think the order carried the finality requisite to make it appealable. Northwest’n Nat. Ins. Co. v. Rosoff, 195 Md. 421 , held that an order denying the right to implead a codefendant was final for the purposes of appeal, saying (at p. 433): ²⁸⁵ “On the other hand, where the trial court declines to implead a third party, the defendant’s right to proceed against that third party, in that proceeding, has been finally determined, and he should have the right to have that question settled by the appellate court before he is forced to submit to trial without such third party in the case.

We think, where impleading is denied, the spirit and the intention of the rule are best served by immediate appeals. It is our conclusion, therefore, that the orders herein are final, and that the appeals are not premature, but can and should be heard at this time.” The rationale and reasoning of Rosoff seem applicable to a denial of the right to file a cross claim against an existing co-defendant. Maryland Rule 314 b is a chip off the old block of Rule 13 (g) of the federal rules of civil procedure. The United States Court of Appeals for the Seventh Circuit held in Blair v. Cleveland Twist Drill Co., 197 F. 2d 842 , where the trial court dismissed the cross claim of one defendant in a tort action seeking to recover from a codefendant all or part of the claim of the plaintiff, on the basis of an implied indemnity, that the order of dismissal was an appealable order.

It said (p. 845) : “* * * even though the judgment was not on the merits in that it purported to be without prejudice as to the ultimate rights as between the two defendants, it was final as far as this proceeding was concerned in that it deprived the Railroad of its right, recognized by Rule 13 (g), to have its cross-claim against the Drill Company adjudicated in the same proceeding.” See also Concannon v. State Roads Comm,, 230 Md. 118, 125 ; City of Baltimore v. Moore, 209 Md. 516 . The fact that the cross claim was not filed within fifteen days from the expiration of the last day for filing the responsive pleading to the claim to which the cross claim is addressed, as Rule 314 d 2 requires, would not prevent it being filed later by permission of the trial judge. Rule 320, titled “Amendment,” provides in paragraph a 1 that “the court may permit any of ²⁸⁶ the proceedings, including process, pleadings, and record, to be amended so that the case may be tried on its merits.” Paragraph a 2 permits an action to be amended from one form to another. Paragraph a 3 provides that “the court may permit a further or better statement of particulars of any matter in any pleading to be made at any time.” Rule 5 w defines “a proceeding” or “the proceedings” as “all or any part of an action,” and Rule S v defines “pleading” as “any paper filed in any action, setting forth a cause of action or ground of defense, or filed with the object of bringing an action to issue or trial or obtaining any decision or act by the court including * * * a declaration * * * plea in bar * * *.” Rule 320 c 1 and 2 allow an amendment to be permitted by the court at any time before final judgment in a case tried by the court and at any time before the jury retires in a jury case. 320 d 1 (b) says: “An amendment shall not be made without leave of court but leave to amend shall be freely granted in order to promote justice.” These pertinent and applicable rules must be read together and so read mean that a cross claim must be filed within the time specified in Rule 314 d 2 unless leave of court is granted to file it at a later date, as authorized by the various provisions of Rule 320.

Judge Naughton had the power and the right to grant the motion to amend the pleadings by the filing of a cross claim at the time he did so. Judge Naughton’s three reasons for rejecting A. & P.’s cross claim—that it did not arise out of but was the result of the original action, that the original action was in tort and the cross claim in contract and that damages would not be fully ascertainable at the trial—are sought to be buttressed by Royal Crown’s assertion that an already complicated case would be unduly and unfairly further complicated by the introduction of the indemnity agreement (the unfairness which Roj^al Crown sees appears to be that it would not only be a defendant potentially liable as a tortfeasor it would also be a defendant who had promised to pay A. & P.’s liability to any person injured by reason of Royal Crown’s merchandise). We think that the reasons advanced did not, separately or cumulatively, justify the rejection of the cross claim. The pur ²⁸⁷ pose of rules permitting the joinder of multiple parties and claims was to remedy the procedural and substantive defects