Leonard v. Sav-A-Stop Services, Inc.

• Decision Date: 09 January 1981
• Docket Number: No. 21,SAV-A-STOP,21
• Parties: Richard Alan LEONARD et al. v.SERVICES, INCORPORATED et al.
• Court: Maryland Court of Appeals

Page 204

289 Md. 204

424 A.2d 336

Richard Alan LEONARD et al. v. SAV-A-STOP SERVICES, INCORPORATED et al.

No. 21.

Court of Appeals of Maryland.

Jan. 9, 1981.

Thomas Sisk, Chestertown (Rasin & Sisk and Susanne Hayman Schmoldt, Chestertown, on the brief), David M. Williams, Chestertown, on brief for Mary Jane Weikel, other appellant, for appellants.

M. King Hill, Jr., Baltimore (Jon H. Grube and Smith, Somerville & Case, Baltimore, on the brief), for appellee.

Argued before MURPHY, C. J., and SMITH, DIGGES, ELDRIDGE, COLE, DAVIDSON and RODOWSKY, JJ.

RODOWSKY, Judge.

The Maryland Workmen's Compensation Act does not give immunity to a worker against claims for damages based on injury or death tortiously caused to a co-worker in the course of their employment. Motor vehicle liability insurance policies of employers, in force in Maryland, routinely exclude coverage of the tortfeasor-worker in such cases. ¹ Appellant, Richard Alan Leonard (Leonard), faces a wrongful death action brought by the family of a co-worker which is based on a motor vehicle tort. In an effort to avoid the resulting dilemma, Leonard sought indemnification from his employer, Sav-A-Stop Services, Incorporated (Services). He obtained a declaratory judgment to that effect from the Circuit Court for Anne Arundel County which was based on concepts of estoppel, negligent misrepresentation and negligence by way of failure to warn. The Court of Special Appeals reversed. Sav-A-Stop Services, Inc. v. Leonard, 44 Md.App. 594, 410 A.2d 603 (1980). We affirm the intermediate appellate court because Services had no duty to Leonard to provide him with insurance against the hazard involved here and because Services did not breach any duty to warn.

The background facts are succinctly stated by the findings of the trial court.

The Plaintiff, Richard Allen [sic] Leonard (Leonard), and Carlton Rayhill Weikel (Weikel) were both employed by Defendant, Sav-A-Stop Services, Inc. on September 3, 1975. As part of the duties of his employment, Leonard was required to drive, and did with regularity, a vehicle provided to him by his employer.... Leonard occasionally transported fellow employees in the vehicle when it was necessary for him to have help. This fact was known to Sav-A-Stop Services, Inc. Weikel, Leonard's immediate superior in the company, was a passenger in the company vehicle on September 3, 1975. On that day the vehicle, driven by Leonard, was involved in an accident in Anne Arundel County, Maryland. As a result of this accident, Weikel was killed and Leonard was seriously injured. At the time of the accident, both men were acting in the course of their employment.

Both Leonard and Weikel's widow filed claims with the Workmen's Compensation Commission and were given awards. Subsequently, Mrs. Weikel and her children ... sued Leonard in the Circuit Court for Anne Arundel County for damages arising out of this accident. That case is Law No. D-160 (the wrongful death case).

At the commencement of his employment with Sav-A-Stop Services, Inc., Leonard was covered by his own automobile liability insurance. He filled out a questionnaire for his employer ... stating the same. At some time thereafter, Leonard sold his private automobile and cancelled his insurance. He did not notify his employer of this nor was he requested to give such notice.

In this state the Workmen's Compensation Act, Maryland Code (1957, 1979 Repl. Vol.), Article 101, "excludes an action in tort by an employee against his employer, but does not exclude tort actions between co-employees." Hutzell v. Boyer, 252 Md. 227, 232, 249 A.2d 449, 452 (1969). See also Wilson v. Fraser, 353 F.Supp. 1, 3 (D.Md.1973); Travelers Corp. v. Boyer, 301 F.Supp. 1396, 1401 (D.Md.1969); Thomas v. Hycon, Inc., 244 F.Supp. 151, 154 (D.D.C.1965). ²

Leonard had never been told by Services that the employer's automobile liability coverage did not apply to him were he negligently to injure a fellow worker. Nor is there any evidence that Leonard inquired of Services about liability coverage. When the wrongful death action was brought, Leonard sought protection from Services' insurer under its general automobile liability policy. Coverage was denied because of an exception from the definition of "insured" as to "any person while engaged in the business of his employer with respect to bodily injury to any fellow employee of such person injured in the course of his employment ...." ³

Leonard then instituted the present declaratory judgment action on the law side of the circuit court. In his third amended petition Leonard joined as defendants Services, the parent corporation of Services, the base and excess liability insurers and a prior policy period insurer of Services and of its parent, the lessor of the vehicle involved in the accident, the lessor's insurer and the persons who were plaintiffs in the wrongful death action. ⁴ Partial summary judgment was granted in favor of the insurers of Services under its general automobile liability and excess policies. ⁵ This partial summary judgment determined that the cross employee exception was not contrary to public policy. After trial on the remaining issues, the circuit court by memorandum and order dated December 5, 1978 made declarations adverse to Leonard other than with respect to his claims against Services based on estoppel, negligence and negligent misrepresentation.

On the merits of the claims against Services the trial court reasoned that the employer had a duty to warn Leonard when it placed him in "a position to expose him to potential financial ruin." Silence of the employer "who knew or should have known of the (exception)" was said to be "an omission sufficient to give rise to an estoppel." Leonard relied on the silence, believed he was insured and was damaged thereby. The trial court also concluded that Services "impliedly represented that (the vehicle) was adequately insured for the purpose for which it would be used," without ascertaining the extent of Leonard's insurance or warning him to procure sufficient insurance, for which "the damages should equal the amount of personal liability incurred by (Leonard) which he would not have incurred otherwise." It was ordered and declared that Services be required (1) to pay damages equal to the cost of affording Leonard a defense in the wrongful death action; (2) to pay damages equal to the amount of any judgment which may be rendered against Leonard in the wrongful death action; (3) to afford a defense on behalf of Leonard in the wrongful death action; and (4) to reimburse Leonard for costs and attorney's fees. An order for appeal was noted by Services.

No cross-appeal was noted by Leonard. Thus none of the declarations adverse to Leonard, including those bearing on the cross employee exception, are subject to review. An order for appeal was filed by the Weikels on January 10, 1979, but that appeal was dismissed by the Court of Special Appeals as having been filed too late.

In reversing the judgment as to Services, the Court of Special Appeals reasoned that there is no duty on "an employer to warn an employee against that employee's own negligence" and "(s)imilarly, there is no duty to warn the employee that no insurance coverage is provided for his own negligence." It further held that "the equitable estoppel doctrine can only be used as a defense to a cause of action or to avoid a defense, but not as the basis for an affirmative cause of action." Sav-A-Stop Services, Inc. v. Leonard, supra, 44 Md.App. at 600-01, 410 A.2d at 607.

(1)

Before addressing the merits, we turn to a threshold issue of appealability. The Weikels argue as appellants in this Court ⁶ that there is no final judgment and the appeal is premature because the clerk of the circuit court "merely" recorded on the law docket the filing of the memorandum and order of December 5, 1979. Actually, the clerk recorded the filing of the memorandum and also copied on the law docket the text of the order which granted affirmative relief consistent with Leonard's requested relief against Services. Principal reliance is placed by the Weikel appellants on Stitzel v. Kurz, 18 Md.App. 525, 308 A.2d 430, cert. denied, 269 Md. 755, 761 (1973) in which appeals were held to be premature. That was a jury trial damage suit where the court filed a memorandum which concluded that a defendant's motion for judgment n. o. v. should be granted and the plaintiffs' motion for new trial denied, together with an order directing the clerk to enter these findings, but the clerk did not enter judgment on the docket. Here the action is one for declaratory judgment. Maryland Code (1974, 1980 Repl. Vol.), Section 3-411 of the Courts Article provides that in such actions the "declaration may be affirmative or negative in form and effect and has the force and effect of a final judgment or decree." The December 5, 1978 memorandum of the trial court constituted negative declarations and the order specified the affirmative declarations and relief awarded. The memorandum and order were filed and the filing was docketed. No further matter of form was required.

(2)

In its estoppel analysis of the silence of Services the trial court held that Services was under a duty to speak, by reasoning that the duty of the employer to furnish a safe place to work, and to warn, as stated in Bauman v. Woodfield, 244 Md. 207, 216, 223 A.2d 364, 368 (1966), reached the risk of financial harm to the employee presented here.

We do not view estoppel as the basis of an affirmative duty by Services to indemnify Leonard. In Impala Platinum Limited v. Impala Sales (U.S.A.), Inc., 283 Md. 296, 322, 389 A.2d 887, 903 (1978), it was said that this

Court has upheld and consistently applied the definition of equitable estoppel contained in 3 J. Pomeroy, Equity Jurisprudence § 804 at 189 (5th ed. 1941):

"Equitable estoppel is the effect of the voluntary conduct of a party whereby he is...