Asphalt & Concrete Servs., Inc. v. Perry

• Decision Date: 30 January 2015
• Docket Number: No. 2059, Sept. Term, 2013.,2059, Sept. Term, 2013.
• Citation: 221 Md.App. 235,108 A.3d 558
• Parties: ASPHALT & CONCRETE SERVICES, INC. v. Moran Burdette PERRY.
• Court: Court of Special Appeals of Maryland

221 Md.App. 235

108 A.3d 558

ASPHALT & CONCRETE SERVICES, INC.

v.Moran Burdette PERRY.

No. 2059, Sept. Term, 2013.

Court of Special Appeals of Maryland.

Jan. 30, 2015.

Imoh E. Akpan (David A. Skomba, Ralph L. Arnsdorf, Franklin & Prokopik, on the brief), Baltimore, MD, for Appellant.

Thomas C. Costello (Anne L. Preston, Matthew T. Holley, Costello Law Group, on the brief), Towson, MD, for Appellee.

Panel: DEBORAH S. EYLER, GRAEFF, and REED, JJ.

Opinion

GRAEFF, J.

Moran Perry, appellee, filed a complaint in the Circuit Court for Prince George's County, seeking compensatory damages for injuries he sustained when he was struck by a dump truck while crossing an intersection. He sued Higher Power Trucking, LLC (“Higher Power”), William H. Johnson, II, and appellant, Asphalt & Concrete Services, Inc. (“ACS”), alleging negligence and negligent hiring and supervision.¹ A jury found that Mr. Johnson's negligence in operating his vehicle was the proximate cause of Mr. Perry's injuries, that Mr. Johnson was an employee of ACS, and that ACS was negligent in hiring Mr. Johnson. It awarded Mr. Perry $529,500 in damages.

On appeal, ACS presents four questions for our review, which we have rephrased slightly, as follows:

1. Did the circuit court err in admitting evidence of Mr. Johnson's suspended driver's license, expired vehicle registration, negative driving record, and lack of liability insurance?

2. Did the circuit court err in denying ACS's motion to dismiss Mr. Perry's initial complaint?

3. Did the circuit court abuse its discretion in permitting Mr. Perry to amend his initial complaint after the statute of limitations had expired?

4. Did the court err in denying ACS's motions for judgment?

For the reasons set forth below, we answer the last three questions in the negative, but we agree with ACS that the circuit court erred in admitting evidence of Mr. Johnson's lack of insurance. Accordingly, we shall reverse the judgment of the circuit court and remand for further proceedings.

FACTUAL AND PROCEDURAL BACKGROUND

On April 11, 2012, Mr. Perry filed his initial complaint. He alleged that, on April 28, 2009, while he was walking in an intersection with the right of way, Mr. Johnson hit him with the dump truck he was driving, causing Mr. Perry “profound and painful injuries.” Mr. Perry alleged that Mr. Johnson was employed by Higher Power, that ACS had hired Higher Power as its agent and/or servant, and that Higher Power was subject to ACS's direction and control.

Count I alleged negligence, asserting that ACS, Higher Power, and Mr. Johnson owed duties of care to Mr. Perry “to lawfully operate the truck in a safe and reasonable manner,” and they breached those duties by negligently operating the vehicle and by operating the vehicle “in violation of Maryland law regarding licensure and insurance.” Count II alleged that ACS had negligently hired and supervised Higher Power, and it breached its duties to ensure that Higher Power “utilized properly licensed drivers without reckless propensities and that the vehicles utilized by Higher Power for the benefit of ACS were properly insured as required by law.”

On August 30, 2013, after the completion of discovery, ACS filed a Motion for Summary Judgment, asserting that there was no dispute that Mr. Johnson was not an employee of ACS, as he was employed by Higher Power, and therefore, ACS could not be vicariously liable for Mr. Johnson's actions under the doctrine of respondeat superior. It further asserted that, even if ACS and Mr. Johnson did have an employment relationship, and ACS had a duty to ensure that Higher Power used properly licensed and insured drivers, any breach of that duty was not the proximate cause of the accident.

On September 27, 2013, Mr. Perry filed a Motion for Leave to File a First Amended Complaint to “conform the allegations contained in the original Complaint with undisputed evidence[ ] developed through discovery.” Specifically, Mr. Perry stated that the evidence developed during discovery established that Higher Power “was a forfeited limited liability company and was not in good standing according to the publicly available records of the Maryland State Department of Assessments and Taxation [ (“SDAT”) ] at the time of the accident.” Accordingly, Mr. Perry asserted, Higher Power was not authorized to do business in Maryland, and Mr. Johnson was unlawfully utilizing the name to operate his dump truck business. Mr. Perry, therefore, sought to dismiss Higher Power as a separate named defendant and amend the complaint to reflect that Higher Power “was simply a trade name under which [Mr. Johnson] was unlawfully operating his dump truck business.”

The proposed first amended complaint alleged that ACS employed Mr. Johnson as its agent and/or servant and that Mr. Johnson was subject to ACS's control and direction. It alleged the same counts, negligence and negligent hiring and supervision, but it substituted Mr. Johnson for Higher Power as ACS's agent, servant and/or employee, acting at the direction and control of ACS.

On October 2, 2013, ACS filed a motion to dismiss Mr. Perry's initial complaint and a response in opposition to the Motion for Leave to File an Amended Complaint. With respect to the initial complaint, ACS asserted that it failed to state a claim upon which relief could be granted. It asserted that Mr. Johnson was an employee of Higher Power, not ACS, and therefore, it could not be liable for Mr. Johnson's negligent actions under the theory of respondeat superior, and it had no duty to ensure that Higher Power's employees were properly licensed and insured. With respect to Mr. Perry's motion for leave to amend, ACS argued that the motion should be denied, asserting that the proposed amended complaint introduced “new material facts and new causes of actions against [ACS],” and, because the statute of limitations on new causes of action arising out of the incident had expired on April 30, 2012, the amended complaint was time-barred.

On October 4, 2013, the court held a hearing on ACS's motion for summary judgment, ACS's motion to dismiss, and Mr. Perry's motion for leave to amend. ACS argued that there was no allegation in the original complaint that Mr. Johnson was ACS's employee, and therefore, the complaint failed to state a claim on which relief could be granted. Mr. Perry responded that, although the initial complaint indicated his intent to hold ACS responsible for the actions of Higher Power, he learned during discovery that Higher Power was not a legal entity, but instead, it was a trade name under which Mr. Johnson operated. He further argued that there was ample evidence from which a jury could conclude that Mr. Johnson was ACS's employee and that ACS had actual or constructive knowledge of Mr. Johnson's incompetence. In support of the latter contention, Mr. Perry argued that ACS was aware that Mr. Johnson did not have a valid license or insurance, and he was operating an unregistered vehicle.

The court denied ACS's motions. It granted Mr. Perry's motion, stating that “he just wants to conform the complaint to reflect that Higher Power Trucking, LLC was simply a trade name.”

On October 7, 2013, trial began. At the start of trial, ACS requested that the court grant a thirty-day postponement so it could file an answer to Mr. Perry's first amended complaint and a third-party claim against Higher Power. Mr. Perry argued that the operative facts had not changed because the complaint ultimately alleged that ACS was responsible for Mr. Johnson's conduct. Summarizing Mr. Perry's response as an argument that “there's no difference between Higher Power and [Mr.] Johnson,” the court denied the motion.

ACS then filed a motion to dismiss the first amended complaint on the ground that it was filed beyond the three-year limitations period. It argued that the original complaint against Higher Power, as an agent of ACS, was a nullity because a complaint filed against a forfeited corporation is a nullity, which does not toll the statute of limitations. Counsel for Mr. Perry argued that the original complaint identified both Higher Power and Mr. Johnson as defendants, and that the only fact that had changed was the discovery that Higher Power was “nothing more than a trade name.” The court denied ACS's motion.

The court next heard arguments on ACS's motions in limine, which sought to preclude evidence that, at the time of the accident, Mr. Johnson had a suspended driver's license and the vehicle was uninsured. Counsel for ACS argued that the company's negligence had to be a proximate cause of the accident, and it proffered that Mr. Johnson's license was suspended, not for a moving violation, but for failing to appear in court. Counsel argued that “whether or not Mr. Johnson's license was suspended does not speak to his ability to operate a motor vehicle safely,” and there was no evidence that ACS knew his license was suspended. With respect to the lack of insurance, counsel proffered that the vehicle was uninsured at the time of the accident because of a lapse for nonpayment, not “because of an accident, a negative.” The court stated that it would reserve on its ruling until it had “more of a factual basis.”

During opening statements, counsel set forth their opposing theories for the jury. Counsel for Mr. Perry stated that the evidence would show that Mr. Johnson was acting as an employee of ACS when he struck Mr. Perry, and therefore, ACS was responsible for Mr. Johnson's negligence. Counsel for ACS responded that Higher Power, who was absent from trial, was Mr. Johnson's employer, and ACS was merely a customer of Higher Power's delivery service and should not be held responsible for Higher Power's actions. Counsel stated that ACS was only a party in the case because Mr. Perry “couldn't find Higher Power.”

Mr. Perry was the first witness. He testified that, on April 28, 2009, he was walking to a Weis Market near his home to purchase groceries. When he arrived at the intersection...