Sun Cab Co. v. Carmody

McWilliams, J., delivered the opinion of the Court. After seven days of trial in the Superior Court of Baltimore City the court, Grady, J., having denied a motion for a directed verdict, submitted to the jury, with appropriate instructions, six issues, all of which were decided favorably to the appellee (Carmody). Following argument on motions for judgment N.O.V. and for a new trial, judgment on the verdict was made absolute in favor of Carmody against the appellant (Sun) in the amount of $55,777. Sun urges us to set at naught $17,200 (issues four and five) of the judgment, invoking, as it did below, section IV (5) of the Statute of Frauds, 29 Car. 2, C. 3, § IV (5) (1676), 2 Alexander’s British Statutes 689 (Coe ed. 1912).

Judge Grady held, correctly we think, that the Statute is not applicable. Our recital of the pertinent facts is a distillate of more than 1,000 pages of testimony. Upon finishing law school Carmody, now 67, sought employment in the insurance industry. In time he became vice president, in charge of claims, of National Mutual Insurance Company of Washington.

Eventually Herbert Glassman, who owned Sun, acquired control of National. Sun had been insured by National for many years, during which time there was an agreement between the two companies in respect of collections from tortfeasors causing damage to Sun’s taxicabs in motor vehicle accidents. National was paid 50% of the amounts recovered out of which it had to pay its expenses, including attor ³⁴⁷ neys’ fees. In 1961 Glassman, having decided to sell his interest in National, offered Carmody the same arrangement.

Carmody accepted. He began working on Sun’s claims in December 1961. The arrangement was never reduced to writing. Carmody’s status was that of independent contractor.

He testified that under his arrangement with Sun he was not to be called upon to perform any other services without compensation. Glassman, on the other hand, testified that Carmody was to “assist Mr. Schiff [Sun’s president and Glassman’s brother-in-law] and pay his attorneys that represent him in all matters pertaining to insurance. Also, if * * * [he] had enough time” to handle “the safety end of the cab company.” In 1962 American Insurance Company, one of Sun’s compensation carriers, demanded a retrospective premium of $23,000. Carmody testified Schiff proposed to him that he resist American’s claim on the same contingent basis that applied in respect of the damage cases, i.e., 50% of any amount he could save for Sun.

Schiff denied this. He said Carmody was obliged to do this free of charge. As a result of Carmody’s activities American abandoned its entire claim. A year or more after American made its demand Security Insurance Company, another compensation carrier, billed Sun for an $11,000 retrospective premium.

Schiff again, according to Carmody, solicited his assistance on the same terms. Schiff denied this also. Again as a result of Carmody’s efforts Security abandoned its claim. On Christmas Eve, 1966, Schiff told Carmody the company had been sold and that all of Sun’s personnel “was to go with the new owners with two exceptions, he [Schiff] was out and so was [Carmody].” When Carmody asked for an accounting and payment Schiff said “he wasn’t going to pay [him] for anything.” He said “he was getting out and he wasn’t interested.” He invited Carmody to “go ahead and sue Sun.” In denying Sun’s motion for a directed verdict Judge Grady held, paraphrasing 2 Corbin, Contraéis § 448 ³⁴⁸ (1950), that “the agreement must be one of which it can truly be said that it is not to be performed within one year * * *, that there must not be the slightest possibility that it can be fully performed within one year.” Judge Grady thereupon instructed the jury (as to issues four and five) : “Now, Issue Four reads: “Do you find any money due to the plaintiff from the defendant as a result of an alleged verbal agreement between the plaintiff and Mr. Schiff of the Sun Cab Company concerning the plaintiff’s services rendered in connection with a claim made by the American Insurance Company against the defendant for retrospective insurance premiums ? “Issue Five is exactly the same except that. instead of relating to the American Insurance Company it relates to the other insurance company mentioned in the evidence, the Security Insurance Company. “In order for the plaintiff to recover under Issues Four and Five, you must find that he has established from the evidence that there was an agreement between the plaintiff and Mr. Schiff of the Sun Cab Company to the effect that the plaintiff would receive for his services in these two matters an amount equal to one-half of any savings to the Sun Cab Company, which he might accomplish.

You must further find that these savings were in fact accomplished as a result of the plaintiff’s services. So that if you find that this agreement was made and that the plaintiff did render services under this agreement concerning workmen’s compensation insurance policies and that his services did effect savings for the defendant company, then your answer to part A of Issues Four and Five will be ‘yes.’ You will then go on and consider part B under each ³⁴⁹ of those two issues, and your answers then would be one-half of whatever savings you should find the plaintiff effected through his efforts. On the other hand, if you find that the plaintiff has failed to prove that such an agreement was made, or if your minds are in a state of even balance on that question, or if you find that he failed to prove that these services did effect the savings to the company, then your answer to part A of Issues Four and Five would be ‘no.’ If you answer ‘no,’ to both of these issues, then you would not consider part B which relates to the amount of money.” Counsel’s