Liberty Mutual Insurance v. Storch

Thompson, J., delivered the opinion of the Court. This case reaches this Court under Maryland Rule 1026 g which provides that counsel, with approval of the trial judge, may in appropriate cases file a statement of the case in lieu of the original record. The statement follows: “Liberty Mutual Insurance Company, as plaintiff, filed a law suit against Hannah Storch, Individually, as surviving tenant by the entirety of M. Leo Storch, Deceased, and Hannah Storch, Personal Representative of the Estate of M. Leo Storch, Deceased. “This action was brought by Liberty Mutual to recover the sum of $16,245.00 paid by Liberty Mutual to its insureds, Dorothy Nalaboff and Phoebe Barsky, t/a P. D. Craft House. The Declaration alleged that on or about October 24, 1970, Liberty Mutual’s' insureds were tenants in a building owned, controlled, maintained, and managed by the defendant and her decedent; said building being located in Seabrook, Prince George’s County, Maryland.

Liberty Mutual’s insureds operated an arts and crafts business on the second floor of the building. The building had been designed and constructed by the deceased, M. Leo Storch. “On the date mentioned above, a fire occurred resulting in a complete loss to Liberty Mutual’s named insureds of their business stock in trade. The Declaration further recited the following: ‘That said fire started through the negligence and carelessness of the defendants as a result of faulty construction contrary to good practice and contrary to the applicable building construction and fire codes, being Article 11 of the Basic Building Code as issued by the Building Officials Conference of America and applicable to buildings in Prince George’s County, Maryland, and that among other violations of said Basic Building Code, the ⁴⁵ defendant violated Section 1114.1 in that it did not provide for 6 inches of clearance from the mechanical warm air funace and combustible construction materials; that at the time and place set forth, Dorothy Nalaboff and Phoebe Barsky, t/a P. D. Craft House, were named insureds under policies of insurance issued to them by Liberty Mutual Insurance Company; that pursuant to said policies, the plaintiff, Liberty Mutual Insurance Company, paid to the said Dorothy Nalaboff and Phoebe Barsky t/a P. D. Craft House, the sum of Sixteen Thousand Two Hundred Forty-Five Dollars ($16,245.00) and has a subrogated interest pursuant to its policies of insurance for that amount.)’ “Trial was held before Judge William H. McCullough and a jury in the Circuit Court for Prince George’s County. During trial, Liberty Mutual’s subrogated interest was established as was the amount of the payment by Liberty Mutual to the named insureds. “At Trial, the written lease between defendant and her decedent as landlord and plaintiff’s subrogor as tenant was received in evidence.

Paragraph 12 of that lease agreement provided as follows: ‘12. That all personal property in and upon said premises shall be and remain at the sole risk of the said Tenant, and the said Landlord shall not be liable for any damage or loss to said property upon any acts or negligence of any other persons, nor from any other cause whatsoever . . .’ “At the conclusion of all the evidence, the Defendant moved for a directed verdict based on Paragraph 12 of the lease being an Exculpatory Clause. The Plaintiff argued that said exculpatory clause was not applicable and barred by Article 21, Section 8-211 of the Annotated Code of Maryland. That section was originally enacted as Chapter 124 of the 1964 Laws of Maryland, and Amended by ⁴⁶ Chapter 349, Section 1 of the 1972 Laws of Maryland, (that section is set forth in full on page two of the Court’s Memorandum Opinion and Order of Court entered on November 7, 1973).

The Trial Judge reserved ruling on the Defendants’ Motion for a Directed Verdict and submitted the case to the jury on proper instructions. “The jury returned a verdict in favor of the plaintiff in the amount sued for. The defendants filed a Memorandum in Support of their Motion for a Directed Verdict, as did the plaintiff. “Judge McCullough by his Opinion and Order of November 7, 1973, ordered that Judgment Non Obstante Veredicto be entered in favor of the defendants. A copy of his opinion and order is attached hereto as a part hereof. “It is from that Order that the plaintiff noted a timely appeal to this Court.” The exculpatory clause as originally enacted by Chapter 124 of The Laws of Maryland 1964 provided as follows: “Any provision of a lease or other rental agreement whereby a tenant enters into a covenant, agreement or contract, by the use of any words whatsoever, the effect of which is to indemnify the landlord or hold the