St. James Construction Co. v. Morlock

HARRELL, Judge. Appellants and cross-appellees, St. James Construction Company (St. James) and Edward J. Dyas, Jr. (Dyas), appeal from a judgment entered against them after a jury trial in the Circuit Court for Anne Arundel County (Lerner, J. presiding). Appellees and cross-appellants, James and Nancy Morlock, brought an action against St. James pursuant to Council of Co-Owners v. Whiting-Turner, 308 Md. 18 , 517 A.2d 336 (1986). This case gave property owners an action in negligence against an architect or builder, regardless of whether privity existed between them, for recovery of the reasonable cost of correcting a dangerous condition resulting from the negligent design or construction of a building.

Facts In April 1988, two years after purchasing their house from Francis J. Black, the original owner and occupant, the Morlocks discovered that a brick veneer wall over the garage of the house had severe cracks and holes in it. The house was constructed by St. James in 1978. The Morlocks consulted an engineer, who informed them that the condition of the brick was such that the wall was in danger of collapsing at any time. The engineer advised them to remove the brick as soon as possible.

This they did. Later the Morlocks replaced the brick with a wood veneer, due in part to their inability to afford the projected cost of restoring the wall to its original brick condition. The cost of repairing the wall with the wood veneer was $6,670.83. On 3 June 1988, the Morlocks filed an action against St. James, Black, and Dyas, St. James’ President, who, according to testimony at trial, chose the materials for and designed the wall’s wooden support structure.

Later amend ²²¹ ments to their complaint added as defendants Michael D. McNeally, who supervised the construction of the house for St. James, and Harold Laque, a carpenter hired by Black in 1981 to build a closet which extended beneath the brick veneer wall. The case was tried before a jury between 25 and 27 September 1990. Much of the testimony at trial concerned the reason or reasons for the wall’s failure. The Morlocks, St. James, and Laque had separate engineers who testified as expert witnesses for them on this issue.

The engineers variously placed the blame on: (1) the use of wood rather than masonry to support the brick veneer wall; (2) other inadequacies in the design and construction of the wall and its support structure, such as failure to layer or “step” the brick so that each brick sat on a flat surface and failure to join the wooden support structure together properly; and (3) Laque’s removal of a number of the vertical support beams in the wooden framework beneath the wall in 1981. All of the engineers, as well as McNeally, agreed that it was not normal building practice to support a masonry wall with wood. There was also testimony that St. James’ choice of building materials was not in conformity with applicable building regulations in Anne Arundel County. The trial judge granted McNeally’s motion for judgment at the close of all the evidence.

The rest of the case went to the jury, which ultimately returned a verdict absolving Black and Laque from liability, and imposing liability upon St. James and Dyas. The jury assessed damages against the latter two in the amount of $49,172.07. The trial judge, believing that the jury had somehow duplicated the figure $2,912.07 in its verdict, offered the Morlocks the choice of either agreeing to remit that portion of the jury’s award or facing a new trial. The Morlocks, evidently preferring the lesser of two evils, accepted the reduction.

A judgment of $46,260 was entered against St. James and Dyas on 22 October 1990. We will elaborate on the facts of this case as ²²² necessary in our discussion of the individual issues presented. St. James and Dyas present three issues on appeal: I. Whether the imposition of personal liability upon Dyas was proper; II. Whether the circuit court erred in allowing the Morlocks to present testimony at trial as to the cost of restoring the brick veneer wall to its original condition; and, III.

Whether the circuit court erred in taking judicial notice of two national building standards as the applicable building regulations in Anne Arundel County at the time the house was built. On cross-appeal the Morlocks present two issues: IV. Whether the circuit court erred in denying their motion under Md.Rule 2-424(e) for attorney’s fees and other expenses; and, V. Whether the circuit court erred in granting remittitur. I. St. James first challenges the imposition of personal liability for the negligent design and construction of the Morlocks’ house upon Edward J. Dyas, President of St. James.

In Council of Co-Owners v. Whiting-Turner, 308 Md. at 18 , 517 A.2d 336 , the Court of Appeals held that builders and architects could be held liable in tort for damages suffered by parties who are not in contractual privity with them where their negligent conduct has created a risk of personal injury. The Court stated: We hold that privity is not an absolute prerequisite to the existence of tort duty in this type of case, and that the duty of builders and architects to use due care in the design, inspection, and construction of a building extends to those persons foreseeably subjected to the risk of ²²³ personal injury because of a latent and unreasonably dangerous condition resulting from that negligence. Additionally, we hold that where the dangerous condition is discovered before it results in injury, an action in negligence will lie for the recovery of the reasonable cost of correcting the condition. Id. at 22 , 517 A.2d 336 .

St. James’ liability for the negligent design and construction of the Morlocks’ house was based upon the cause of action announced in Council of Co-Owners . Dyas’ personal liability was founded upon this cause of action as well, coupled with the well established rule that an officer of a corporation may be held personally liable for torts committed by the corporation if the officer “either specifically directed, or actively participated or cooperated in,” the corporation’s negligent conduct. Fletcher v. Havre de Grace Fireworks Co., 229 Md. 196, 201 , 183 A.2d 386 (1962) (emphasis in original). Dyas contends that the latter rule should not have been applied in the case sub judice.

It asserts that the rule set forth in Council of Co-Owners is a “narrowly circumscribed exception” to the general requirement of privity in this type of case, and that “subordinate tiers of privity between corporate 'builders’ and their officers and employees” should be maintained. We disagree. “The general rule is that corporate officers or agents are personally liable for those torts which they personally commit, or which they inspire or participate in, even though performed in the name of an artificial body.” Tedrow v. Deskin, 265 Md. 546, 550 , 290 A.2d 799 (1972). Cf. A.B. Corp. v. Futrovsky, 259 Md. 65, 79 , 267 A.2d 130 (1970) (in contract cases, corporate officers may be shielded from personal liability, except where fraud is involved).

Nothing in the Council of Co-Owners decision suggests that the rule should not be applied to the officers or agents of corporate builders. Indeed, examination of the purpose underlying the Court’s abandonment of the privity requirement leads to the conclusion that the general rule should apply in actions brought under Council of Co-Owners . The Court, in sub ²²⁴ stituting foreseeability for contractual privity as the principal determinant of duty where the risk created is one of personal injury, sought to impose liability on those best able to avoid such risks. See Council of Co-Owners, 308 Md. at 31 , 517 A.2d 336 , quoting MacPherson v. Buick Motor Company, 217 N.Y. 382 , 111 N.E. 1050 (1916) (“We have put aside the notion that the duty to safeguard life and limb, when the consequences of negligence may be foreseen, grows out of contract and nothing else.”).

Achievement of this object would obviously be hampered, if not prevented completely, if privity were to be maintained as a barrier to imposing liability on those personally responsible for the tortious conduct of builders or architects. We hold, therefore, hold that the general rule that corporate officers or agents who either specifically direct or actively participate in corporate torts applies in actions brought under the Council of Co-Owners rule. 1 Dyas also contends that “there was no evidence upon which reasonable minds could conclude that Dyas committed a negligent act because [the Morlocks] did not establish a standard of care which might have applied to Dyas as a corporate officer or employee.” This contention is also without merit. We see no reason, nor does Dyas suggest any, why a different, presumably lower standard of care should be applied to Dyas as a corporate officer than was applied to St. James itself. Rather, by choosing the materials that were to be used in the construction of the brick veneer wall’s supporting structure, Dyas took upon himself the same standard of care that applied to St. James. ²²⁵ Dyas’ final contention with respect to his personal liability is that there was insufficient evidence that his involvement in the design and construction of the wall proximately caused its failure to justify submitting the question of his liability to the jury.

We disagree. All that is necessary to allow a plaintiff’s case to go before a jury is that the evidence establish “a reasonable likelihood or probability” that the defendant’s act caused the plaintiff’s injury or damage. Peterson v. Underwood, 258 Md. 9, 17 , 264 A.2d 851 (1970). See also McSlarrow v. Walker, 56 Md. App. 151, 159 , 467 A.2d 196 (1983) (“The matter of causation need not be established by direct and positive proof to an absolute certainty.”).

Examination of the record reveals that both the Morlocks’ engineer and Laque’s engineer testified at trial that the use of wood to support the masonry wall was a cause of the wall’s failure. While their testimony also identified other possible concurrent causes, it was certainly sufficient to support a reasonable conclusion that the use of wood was responsible for the wall’s condition. There was also testimony that Dyas directed that wood be used to support the wall. The trial court was therefore correct in letting the jury determine the issue of Dyas’ liability.

II

St. James and Dyas next argue that under Council of Co-Owners the Morlocks’ recovery should have been limited to $6,670.83, the actual cost of repairing the wall. We agree. The Court stated in Council of Co-Owners that where an unreasonably dangerous condition is discovered in a building, an action in negligence will lie against the architect or builder “for the recovery of the reasonable cost of correcting the condition.’’ Council of Co-Owners, 308 Md. at 22 , 517 A.2d 336 (emphasis added). The Court thus expressly limited the measure of damages in such actions.

The Morlocks elected to repair the wall by replacing the brick veneer with a wood one. The repairs the Morlocks undertook indisputably corrected the dangerous condition of ²²⁶ the wall. The Morlocks were, therefore, entitled only to the cost of replacing the brick with a wood veneer. We concur with the Morlocks’ contention that homeowners should not necessarily be limited in actions brought under Council of Co-Owners to the least expensive method of repairing a dangerous condition, if such method, while correcting the dangerous condition, results in significant deterioration of the quality or value of the house.

The question is one of reasonableness. Id. Despite the added expense, restoring the brick wall to its original condition may well have been just as reasonable as putting up a wood veneer. If so, and had the Morlocks elected to restore the wall to its original condition, they may have been entitled to a corresponding amount of damages.

The Morlocks did not do so, however. Consequently, they cannot recover the much higher cost of restoring