John T. Handy Co. v. Carman

CATHELL, Judge. This is a crabby case! Appellant, John T. Handy Co., Inc., appeals from a verdict rendered by a jury in the Circuit Court for Somerset County in which James Carman, Ward and Wade Walker, and Jack Howard, appellees and Crisfield crabbers, 1 were awarded $78,850 in damages. The cause of action arose out of, and damages were awarded in respect to, the alleged negligence and/or breach of contract by appellant in ¹⁹¹ failing to keep shedding shanties operating in a proper fashion causing the deaths of tens of thousands of peelers, busters and, presumably, soft crabs.

Before proceeding to appellant’s questions, a rudimentary understanding of the soft shell crab process may be helpful. We will identify some of the stages and types of crabs, first noting that shedding is a vital part of the reproduction process, i.e., mating occurs during the female crab’s soft shell stage and males, being caring and attentive creatures, grab, restrain and enclose the females and thus protect them during the peeler, buster, and vulnerable soft shell stages. 2 Peelers are hard crabs thinking about shedding. They are distinguished by colorations. Busters have gone further than thinking about it; they are literally “busting” at the seams.

Soft crabs have “busted” out or shed their hard shells and their new shells have not yet begun to harden. Paper shells (buckrams) represent an intermediate stage, after the soft shell of the crab has begun to harden from the minerals in the water. Paper shells have little marketable value, though it is not uncommon for them to be eaten. The last stage is the return to the hard crab stage.

There is a brief period during which time the soft crab must be removed from water, after the buster has completed the process of busting out, so it does not transmogrify into a paper shell and become a hard crab once again. In order to monitor the process, female peelers are caught in open water, often enticed by hardshell male “Jimmy” crabs, 3 and transferred to floats (usually, now in shanties) ¹⁹² where fresh salt water is continually pumped in (or, in some instances, naturally passes through floats that are anchored in waterways). This keeps the crabs alive as they pass through the various stages of the shed. During this process, the crabs (1,000 to 1,200 a float) require constant monitoring (tending) so that the soft shells may be immediately removed (fished) from the water in order to keep them in a soft state and to otherwise protect them from predation by other crabs.

Appellant presents five questions: 1. Did the Trial Court commit reversible error by instructing the Jury on the law of bailments? 2. Even if it was not erroneous for the Trial Court to have instructed the Jury on the law of bailments, was it reversible error not to also give the requested instruction that before the theory of bailment could be considered, the Jury must first find that the crabs had been delivered to John T. Handy Co., Inc., which thereafter had exclusive control of the crabs at the time of the alleged loss of crabs? 3. Did the Trial Court commit reversible error when, over objection, it admitted evidence of a compromise and settlement of a disputed claim in 1988 offered to show that ¹⁹³ the intention of the parties in 1991 was that John T. Handy Co., Inc. would pay such claims? 4.

Did the Trial Court commit reversible error when, over objection, it admitted into evidence the 1992 agreement between John T. Handy Co., Inc. and other crabbers to show the intent of the parties in 1991, where the 1992 agreement had been materially changed from 1991 to address the problems which had arisen with the Plaintiff Crabbers in 1991? 5. Did the Trial Court commit reversible error when, over objection, it permitted the Plaintiff Crabbers to appeal to the ethnic and racial biases of the Jurors by blaming the uninvolved Japanese owners of John T. Handy Co., Inc. for the problems alleged? We shall address these questions as necessary. First, however, we shall note certain facts pertinent to our inquiry.

Facts Appellant is a soft crab processor, ie., it is in the business of purchasing and processing soft crabs that it receives live (or “still”) from crabbers, and then reselling the processed crabs, frozen or alive. The shedding season runs roughly from May through September. One of, it' not the major, “runs” of soft shells occurs in the mid-May to early June period. In earlier days of the industry, and to some extent even today, shedding was done by the crabbers in individual shanties or numerous floats actually situated in bay waters where the persons tending the floats would do so by way of catwalks over the water or from boats.

Because of the necessity to “tend” the floats around the clock, they were luminated. It was not at all unusual to see strings of low intensity lights strung out over the water of many of the creeks, harbors, and crabbing centers of the lower shore. Relatively recently, however, processors, such as appellant and others, began to construct “floats” that were not floated but, rather, were constructed out of the water and compart ¹⁹⁴ mentalized in shanties, 4 some containing scores of individual floats and most with a capacity of 1,000 to 1,200 crabs per float. Water is then pumped from the water source to the floats in a continual cycle to provide fresh salt water and, thus, oxygen in which the peelers and busters, are placed to complete the cycle to soft crab stage.

A denial of water, or a breakdown in the pumping system, can cause massive kills, which is what allegedly occurred in the case sub judice. Some shanties that processors provide are rented out to crabbers who must provide their own pumps and water supply system to the leased floats. Other shanties, including the ones at issue here, are rented to the crabbers under arrangements that require the lessor, appellant here, to provide the water system to the shanties and floats. Under either type of arrangement, the processor’s primary purpose is. to have a ready supply of soft crabs available for purchasing, processing, and resale.

Some arrangements, 5 including those at issue here, require the crabbers to sell all of the marketable crabs shed in the shanties and floats rented from the processor to that processor. If the crabber does not do so, the arrangements require that the crabbers vacate the premises. 6 Additionally, as part of the interaction between processors and “its” watermen, 7 the processors regularly lend start up money to the watermen for new pots, repairs, etc., at the beginning of the season. The loans and the rental payments for the shanties and floats are deducted from the sums due the ¹⁹⁵ watermen for the soft shells sold to the processor. Sales culminate when the soft shells are delivered to the processor’s “dock” throughout each day as they are removed from the floats.

They are immediately placed in coolers to await further processing. A system of tickets has been devised to keep track of the source of the soft shells received. In the case at bar, appellant paid the watermen once weekly, on Friday or Saturday, for soft shells delivered throughout the week. The price was set each Friday or Saturday solely by appellant for all the soft shells sold during the preceding week.

The sums borrowed and rental sums due for shanty and float rental were then deducted from the amounts due according to a formula based upon previous year’s catch records and other factors. In the case mb judice, appellees filed suit claiming that appellant’s water provision system had become inoperative, resulting in the premature death of most of the crabs in the floats. Appellee Howard offered evidence that at the time of the problem, he had between 80,000 and 96,000 crabs in his floats. 8 He was able to salvage “406 dozen crabs (4,872).” Appellee Carman had “76,800 crabs” in his floats and was able to salvage 7,346. The Walkers had between 56,000 and 72,000 crabs.

They salvaged 6,744 crabs. After further allowances were made for normal mortality losses, the jury awarded damages to each appellant, apparently based upon an average price paid the watermen of $.50 per crab. Based upon the figures they presented to the jury, appellees claimed that Mr. Howard was entitled to damages in excess of $45,000; Mr. Carman was entitled to damages in excess of $32,800, and the Walkers to damages in excess of $30,000. Howard received an award of $30,000; Carman $26,500, and the Walkers $22,600. ¹⁹⁶ None of the parties has appealed the amount of damages the jury awarded to the respective appellees.

At the conclusion of the evidentiary stage, the trial judge presented copies of the special verdict sheet he proposed to furnish the jury to each party. Appellant’s attorney responded, “It looks fine just the way it is.” The parties did not designate or include that verdict sheet in the extract. The record includes at least two special verdict sheets. However, the completed verdict sheet contained in the record, which we presume was the one presented to the jury, provides as follows: SPECIAL VERDICT SHEET 1.

Do you find for the Plaintiff, James Carman? Yes x No _ 2. If you find for the Plaintiff, James Carman, what if any, damages do you award? $26,250.00 3. Do you find for the Plaintiffs, Wade Walker and Ward Walker?

Yes x No 4. If you find for the Plaintiffs, Wade Walker and Ward Walker, what if any, damages do you award?. $22,600.00 5. Do you find for the Plaintiff, Jack Howard? Yes x No _ 6.

If you find for the Plaintiff, Jack Howard, what if any, damages do you award? $30,000.00 From the verdict sheet, there is no way to determine whether the jury’s verdicts were based on bailment principles, negligence principles, or contract, i.e., lessorfiessee breach of contract principles. ¹⁹⁷ Prior to submitting the case to the jury, the trial judge gave his charge. His instructions included an instruction on bailment that appellant asserts was in error: Bailment is the delivery and acceptance or obtaining of possession of property for a particular purpose without transfer of ownership. The bailor is the party who delivers the property. The bailee is the party who receives or has possession of the property and is required to return the property when the purpose for the delivery or obtaining possession is accomplished.

A bailment for hire is one from which both the bailor and the bailee benefit. To recover damages, the bailor must prove that a bailment for hire existed and that the bailee did not return the property in the condition it was when received, ordinary wear and tear excepted. Even though the bailee shows that the loss resulted from an alleged accident or action beyond his or her control, the bailor may, nevertheless, recover if the alleged accident or action beyond the bailee’s control could have been avoided by the bailee’s use of reasonable care. The bailor has the burden of proving that the loss could have been avoided had the bailee exercised reasonable care over the property.

At the conclusion of the trial court’s charge, appellant’s counsel approached the bench and stated: Your Honor, as you know, my exceptions are to all of the instructions with regard to bailment. My basic position is this. The concept of bailment is one which arises in the law to permit parties who have turned over the exclusive control of property to another party, called a bailee, to recover by shifting the burden or the burden of going forward to the party, the bailee, to prove that they were not negligent if the property was damaged by the time the bailor got the property back. In order to accomplish that, I believe all the case law on bailment is confusing in some respects.

But I believe it is crystal clear on this point, as illustrated by Broadview Apartments, that where the control of the property that is ¹⁹⁸ subject to the bailment is not subject to—has not been delivered to the exclusive control of the bailee, then it cannot be a bailment. And so, for that reason, I except to all of the instructions that bring bailment into issue. I think it’s simply going to confuse the jury on an issue which is not in this case, because the evidence is clear that the crabbers put the crabs in, the crabbers tended them while they were in the floats, the crabbers took them out, and the only time that Handy got the exclusive control of that property was when it was sold to them as a soft crab. The only reason that Handy had any access at all to their premises was solely for maintenance purposes.

Even, I would go one step further, however, with the exception. Even with respect to the bailment instructions given, they do not include an instruction which I had included within my earlier summation, where I had included bailment before all the evidence was in, which makes it clear that the jury has to decide whether or not the property was subject to the control of the bailee, in this case Handy, since the jury is not even aware that that is an issue they have to determine. It suggests to them that—it could suggest to them, certainly, that there is a bailment here where there is, at the very minimum, a factual dispute and, of course, I don’t believe it’s even a factual dispute. Those are my exceptions, Your Honor.

Question 1. Did the Trial Court commit reversible error by instructing the Jury on the law of bailments? We have exhaustively reviewed the evidence presented at trial and can come to no other conclusion but that no bailment of the type suggested by the appellees possibly existed under the facts of this case. 9 It was, thus, error for the trial court to instruct the jury on bailment. It was prejudicial error in that it, in and of itself, created for appel ¹⁹⁹ lees a prima facie case and shifted the initial burden to appellant to establish a lack of its negligence.

Moreover, because of the special verdict sheet used and the bailment instruction given, we are unable to determine whether the jury rendered its verdict because the crabs somehow were not returned in satisfactory condition to appellees (bailment) or because it found appellant negligent, or because it found that appellant had breached its duties under the lease. If based solely upon a failure to return the crabs, the verdict would not be supported by the evidence adduced. We shall, however, remand the case for retrial because there existed sufficient evidence for the submission to the jury of the causes of action in breach of contract, and, perhaps, even in negligence, as the damages claimed might be, under A.J. Decoster Co. v. Westinghouse Electric Corp., 333 Md. 245 , 634 A.2d 1330 (1994), considered damages to the property of appellant. 10 We shall first address the general law of bailments. The early types of bailments were divided into five classes: (1) depositum, (2) mandatum, (3) commodatum, (4) pignori acceptum, or vadium, and (5) locatum.

Depositum.—Depositum, or a deposit, is a naked bailment, without reward, of goods to be kept for the bailor, by one usually called a depositary. Custody, as opposed to service, is said to be the chief purpose thereof. But there is a large class of deposits in which there is no actual delivery to keep and no actual agreement to accept the goods or to keep or take care of them, and the contract of the depositary is implied from the nature of the transaction or occurrence by which the property comes into the hands of one not the owner, and from the principles of equity and justice that ought to govern the conduct of men toward each other. Mandatum.—Mandatum, a mandate or commission, may be defined as a bailment of goods without recompense, where the mandatary, or person to whom the property is ²⁰⁰ delivered, undertakes to do some act with respect to the thing bailed, as simply to carry it.

It is a bailment of something for mere gratuitous service on it by the bailee. Commodatum.—A commodatum consists in the gratuitous lending of personal property to be used by the bailee and returned in specie. Pignori Acceptum or Pignus.—Pignori acceptum, or pig-nus, sometimes called vadium, and, in English, a pawn or a pledge, occurs when goods or chattels are delivered to another in pledge, to be security to him for money borrowed or another engagement entered into with him by the bailor. Locatum.—Locatum, sometimes designated as locatio et conductio, or a hiring, arises when goods are left with the bailee for some use or service by him, and is always for some reward.

This species of bailment has been subdivided as follows: (1) locatio rei, or the hire of a thing, whereby the hirer gains its temporary use; (2) locatio operis faciendi, or the hiring of work or labor on a thing; (3) locatio custodiae, or the hiring of care and pains, or services, to be performed or bestowed on the thing delivered; and (4) locatio operis, mercium vehendarum, or the hiring of the carriage of goods, when they are bailed, either to a public carrier or to a private person for the purpose of being carried from place to place. 8 Am.Jur.2d Bailments § 16 (1980) (footnotes omitted). Modern usage, however, divides bailments into three types: (1) for the sole benefit of the bailor; (2) for the sole benefit of the bailee; and (3) for the mutual benefit of both. This modern classification is comprehensive and includes every kind of bailment. Under it the old Roman divisions group themselves readily.

Thus, in the first class-bailments for the bailor’s benefit-come depositum and mandatum. Commodatum is embraced by the second class, as it is a bailment for the bailee’s sole benefit. And the third class, bailments for the mutual benefit of both parties, comprises ²⁰¹ locatum, with its subdivisions, and pignori acceptum or vadium. 8 Am.Jur.2d Bailments § 17 (1980). In the case sub judice, a bailment, if any exists, would come under the third modern classification, ie., a bailment for the mutual benefit of both.

Thus, it is our function to determine whether, based upon the facts of this case, a bailment existed in the first instance. The Court of Appeals discussed one of the definitions of a bailment in General Refining Co. v. International Harvester Co., 173 Md. 404, 414-15 , 196 A. 131 (1938): A bailment is said, in Dobie on Bailment and Carriers, to be: “The relation created through the transfer of the possession of goods or chattels, by a person called the bailor to a person called the bailee, without a transfer of ownership, for the accomplishment of a certain purpose, whereupon the goods or chattels are to be dealt with according to the instructions of the bailor.” Other definitions cited by Dobie are these: “Bailment is defined by Sir William Jones {Jones, Bailments, 1) as being a delivery of goods in trust, on a contract, express or implied, that the trust shall be duly executed, and the goods redelivered as soon as the time or use for which they were bailed shall have elapsed or been performed. According to Judge Story {Story, Bailments, ch. 1, sec. 2) a bailment is ‘a delivery of a thing in trust, for some special object or purpose, and upon a contract, express or implied, to conform to the object or purpose of the trust.’ In Kent’s Commentaries (2 Kent, Comm. [4th Ed.] sec. 40, p. 558) a bailment is said to be ‘a delivery of goods on trust, upon a contract, express or implied, that the trust shall be duly executed, and the goods restored by the bailee, as soon as the purpose of the bailment shall be answered.’ ” To constitute a bailment there must be an existing subject-matter, a contract with reference to it which involves possession of it by the bailee, delivery, actual or construe ²⁰² tive, and acceptance, actual or constructive. 6 Amer.Juris. 190 et seq. [Emphasis added.] The effect of a mutual bailment, if one exists, is that upon a mere showing that the item bailed has not been returned, then in such case, [where] a demand and an unexplained refusal to [re]deliver are proven, a prima facie case of negligence is made out; yet, when the loss ... is ... occasioned by a cause which would excuse the bailee, ... then the defense is complete, unless the bailor follows by showing that the bailee, by the exercise of ordinary care and diligence might have avoided the loss or injury. Fox Chevrolet Sales, Inc. v. Middleton, 203 Md. 158, 161 , 99 A.2d 731 (1953).

See also Charles J. Miller, Inc. v. McClung-Logan Equip. Co., 40 Md.App. 585 , 392 A.2d 1153 (1978), where the late Judge Liss, for the Court, discussed the historical origins of the law of bailments and condensed the body of a law to its simplest components. The law of bailments is ancient—extending back to Biblical times and before. The Biblical law of bailments, as so many other facets of the law, filtered through the ecclesiastical courts into