J. Aron & Co. v. Service Transp. Co.

• Citation: 486 F. Supp. 1070
• Decision Date: 04 February 1980
• Docket Number: Civ. No. B-77-1542.
• Court: U.S. District Court — District of Maryland
• Parties: J. ARON AND COMPANY, INC. to its own use and to the use of the Home Insurance Company, Plaintiff, v. SERVICE TRANSPORTATION COMPANY, Defendant and Third-Party Plaintiff, v. FIREMAN'S FUND OF AMERICA, INC. and Paul Arnold Associates, Inc., Third-Party Defendants.

486 F. Supp. 1070

J. ARON AND COMPANY, INC. to its own use and to the use of the Home Insurance Company, Plaintiff, v. SERVICE TRANSPORTATION COMPANY, Defendant and Third-Party Plaintiff, v. FIREMAN'S FUND OF AMERICA, INC. and Paul Arnold Associates, Inc., Third-Party Defendants.

Civ. No. B-77-1542.

United States District Court, D. Maryland.

February 4, 1980.

COPYRIGHT MATERIAL OMITTED

Francis J. Gorman, James W. Bartlett, III and Semmes, Bowen & Semmes, Baltimore, Md., for plaintiff.

Joshua R. Treem, Steven A. Allen, and Weinberg & Green, Baltimore, Md., for defendant and third-party plaintiff.

Donald L. Merriman and Merriman, Crowther & Merriman, Baltimore, Md., for third-party defendant Fireman's Fund.

Louis G. Close, Jr. and Whiteford, Taylor, Preston, Trimble & Johnston, Baltimore, Md., for third-party defendant Paul Arnold Associates, Inc.

MEMORANDUM AND ORDER

BLAIR, District Judge.

Early in the morning of June 29, 1977, Service Transportation's truck terminal warehouse burned to the ground. This is a diversity action brought by J. Aron & Company, Inc., the owner of a large shipment of coffee which was destroyed or seriously damaged in the fire. The plaintiff alleges that the defendant breached its duty as warehouseman/bailee. The defendant has counterclaimed for storage charges accruing after the fire. Additionally, the defendant has impleaded Fireman's Fund, its insurance carrier. The case was tried to the court. The following represent the court's findings of fact and conclusions of law as required by Fed.R.Civ.P. 52(a), although not specifically so designated.

The relevant facts are quite simple and almost undisputed. The plaintiff is a Louisiana corporation in the business of importing coffee, with its principal place of business in New Orleans. The defendant is a New Jersey corporation, an I.C.C.-licensed motor carrier, with a place of business in Baltimore. The amount in controversy exceeds $10,000. (Undisputed). It follows that jurisdiction is proper under 28 U.S.C. § 1332.

In June 1977, Service Transportation received 1,000 bags of the plaintiff's coffee, in good condition and invoiced at $442,378.15. (Undisputed). The coffee was held at the defendant's Baltimore terminal pending release by the Food and Drug Administration. (Testimony of Hotstream; Plaintiff's Exhibits 30-36). By letter of June 23, 1977, Service Transportation notified J. Aron & Company, Inc. that it was holding the coffee "at the risk of the owner"¹ and "as warehouseman only" and that storage charges would be assessed. (Plaintiff's Exhibit 14). The defendant stored the coffee in four trailers backed up against the doors of its terminal. The coffee was severely damaged by a fire of unknown origin which occurred on June 29, 1977. (Undisputed).

Thus the plaintiff proved the three elements necessary and sufficient to establish a prima facie case for recovery: delivery of its goods to the defendant, bailment for hire, and the defendant's failure to return the property in the condition in which it was received.² Trans-System Service, Inc. v. Keener, 249 Md. 369, 239 A.2d 897, 898 (1968); Fox Chevrolet Sales, Inc. v. Middleton, 203 Md. 158, 99 A.2d 731, 732 (1953); Security Storage & Trust Co. v. Denys, 119 Md. 330, 86 A. 613, 616 (1913).³

The burden then shifted to the defendant to come forward and present evidence of non-liability, evidence either excusing its failure to return the bailed goods or evidence tending to show that it exercised due care in safeguarding the plaintiff's property. Trans-System, supra, 239 A.2d at 898; Stehle Equipment Co., Inc. v. Alpha Constr. & Dev. Co., 247 Md. 210, 230 A.2d 654, 655 (1967); Freter v. Embassy Moving & Storage Co., Inc., 218 Md. 12, 145 A.2d 442, 444 (1958); Fox Chevrolet, supra, 99 A.2d at 732; Chas. J. Miller, Inc. v. McClung-Logan, 40 Md.App. 585, 588, 392 A.2d 1153 (Ct.Spec.App.1978). The Maryland version of the Uniform Commercial Code, Md.Ann.Code, Comm.L.Article § 7-403(1)(b)⁴ is not to the contrary. The code places the ultimate burden of proof upon the owner of the bailed goods, but this burden does not even arise until the warehouseman or bailee⁵ establishes some evidence which would legally excuse non-delivery. Once the bailee articulates a legally sufficient excuse, a question for the trier of fact is presented, and the bailor must proceed affirmatively to demonstrate negligence.⁶Compare Fox Chevrolet, supra, 99 A.2d at 732-33:

The burden of proving negligence never shifts from the plaintiff. He must prove the delivery, the bailment and the failure to return; thereupon it is incumbent upon the bailee to explain the failure. If he does so, the bailor must prove that the bailee failed to use ordinary care and diligence to safeguard such property and that his failure to perform that duty caused the loss.

In recognition of its burden, Service Transportation adduced the following evidence: that the fire was of unknown and possibly suspicious origin (testimony of Langan, Baccini, Cornell); that there was no history of fires in the neighborhood and that its building had never burned (testimony of Miller, Strobel); that there was greater danger of theft than of fire, and that as precaution against theft, Service had backed the coffee-laden trailers close against the terminal doors (deposition of Powell, testimony of Strobel) and equipped the terminal with a very sensitive ADT burglar alarm system (deposition of Powell, testimony of Husey, Meckel); that the building was locked on the night of the fire; that Service generally provided overnight transfer service, with the result that goods were only very rarely stored on the dock overnight; and that the premises were attended from approximately 4:00 a. m. until 1:00 a. m. every day (testimony of Miller, Gange).

If this were a jury trial, the court would have to determine at this point whether the defendant bailee had articulated sufficient evidence of excuse or due care to warrant sending the case to the jury. The court is of the opinion that the defendant probably did not make a sufficient showing of nonliability. Compare, for example, the case of Trans-System Service, Inc. v. Keener, supra, 239 A.2d at 898, in which a tractor stored on the defendant's premises was destroyed by fire. The defendant, in support of its burden of explaining the loss, proved (1) that the tractor was stored enclosed in a yard protected by a seven-foot chain link and barbed wire fence; (2) entrance to the lot was by means of a sliding gate; (3) the tractor was parked on the rear of the lot, two to two and a half feet from the fence; (4) the distributor cap had been removed from the tractor and it had not been started for many months; (5) no flammable materials were allowed on the lot near the tractor; (6) there was no prior record of vandalism on the premises; (7) the lot was well-lighted at all times; (8) there were employees on duty 24 hours a day, seven days a week; (9) the defendant had never before suffered a fire on its premises; (10) the cause of the fire was unknown; and (11) that, on discovering the tractor on fire, defendant's employee immediately tried to put it out with a fire extinguisher and called the Fire Department. This evidence was held sufficient to overcome the plaintiff's prima facie case, id., 239 A.2d at 899.

In the instant case, Service offered no evidence, for example, that the warehouse was attended by responsible employees at the time of the fire, no evidence that there were no flammable materials stored on the premises, and no evidence of any precautions taken to prevent fire by the last employee to leave on the night of the fire. (The employee, one Fisher, is presumed to have left the terminal at approximately 1:00-1:15 a. m. The fire broke out sometime before 2:00 a. m. (Powell deposition). Fisher was not called as a witness.) Nevertheless, since the court sat as the trier of fact, the court has assumed that the bailee's showing was sufficient, and required the plaintiff to prove affirmatively the bailee's negligence.

To this end, J. Aron proved the following facts: the Service Transportation terminal building was neither fireproof nor fire resistant. (Undisputed). It had masonry walls, a pitched, wood-trussed roof constructed of tarpaper and asphalt shingles, and seven wooden garage-type doors running down either side of the storage area, against which trailers were backed. (Undisputed). The building was described by one expert as "combustible," and is classified under the Baltimore City Building Code as "ordinary." (Testimony of Baccini, Peters). There was no fire alarm, smoke detection or fire abatement system on the premises. Cf. Baltimore City Building Code § 4871, 4888. There was no round-the-clock guard service: in fact, the premises were routinely left unattended between 1:00 and 4:00 a. m. (Undisputed). The fire originated in the office area and within 30 to 40 minutes spread the entire length of the warehouse, engaging the roof and spreading to the trailers containing the plaintiff's coffee.

Finally, the plaintiff proved that, in violation of the Baltimore City Fire Code, there were stored on the premises on the night of the fire five 55-gallon drums of a "Class II" flammable liquid called Kure-n-Seal and five 55-gallon drums of a "Class I" flammable liquid printer's ink.⁷ The flash point of the two liquids is 108 ° and 25 ° fahrenheit respectively. (Undisputed).⁸ The drums were stored near the middle of the dock, approximately opposite the doors at which the trailers containing J. Aron's coffee were parked. The Class II liquid had been stored on the Service Transportation premises for several weeks prior to June 29. (Testimony of Strobel; Plaintiff's Exhibit 181). Service handled flammable printer's ink every day. Usually the ink drums stayed on the dock only a few hours. On the night of the fire and perhaps on other occasions as well, the drums were left overnight. (Testimony of Strobel).

In the...