New Amsterdam Casualty Co. v. Baker

• Decision Date: 30 December 1947
• Docket Number: Civil Action No. 3318.
• Citation: 74 F. Supp. 809
• Parties: NEW AMSTERDAM CASUALTY CO. v. BAKER.
• Court: U.S. District Court — District of Maryland

74 F. Supp. 809

NEW AMSTERDAM CASUALTY CO. v. BAKER.

Civil Action No. 3318.

District Court, D. Maryland.

December 30, 1947.

Austin F. Canfield, of Washington, D. C., and George E. Kieffner, of Baltimore, Md., for plaintiff.

Joseph Bernstein and Roszel C. Thomsen, both of Baltimore, Md., for defendant.

CHESNUT, District Judge.

The defendant has filed a motion for summary judgment on the ground that the action is barred by limitations. The jurisdiction of the court is based solely on diverse citizenship. The law of the forum governs with respect to the period of limitations, which, in this State, is three years. The question in the case, however, is whether the three-year period began to run more than three years before filing the suit, in this case.

The motion is based on the pleadings without additional affidavits or further facts. The facts stated in the pleadings may be briefly stated. On August 19, 1941, the defendant sold ten (10) dozen Chenille robes to Lansburgh & Bros. owning and operating a department store in the District of Columbia. The contract of sale was made in New York City. The parties were aware that the purchase was made for purposes of re-sale. On January 3, 1942, Lansburgh sold one of the robes to one Doris E. Deffebach without any express warranty. Subsequently on January 17, 1942, while this ultimate purchaser was wearing the robe in her home a spark flew from a lighted match against the robe causing it to be immediately ignited, and causing severe burns to her arms and body. The ignition of the robe was alleged to have been due to the type of construction of the fabric.

Thereupon Doris E. Deffebach brought suit against Lansburgh in the United States District Court for the District of Columbia. At the trial of the case the court directed a verdict in favor of Lansburgh, but on appeal this was reversed by the United States Court of Appeals for the District of Columbia. The court decided as a matter of law that if the robe caught fire and burned, as the witness testified, there was a breach of Lansburgh's implied warranty of fitness. Deffebach v. Lansburgh & Bro., 80 U.S. App.D.C. 185, 150 F.2d 591, 168 A.L.R. 1052 (June 29, 1945). A petition for certiorari was denied by the Supreme Court. (Nov. 19, 1945) 326 U.S. 772, 66 S.Ct. 177, 90 L.Ed. 466. Baker, the defendant in this case, was duly and promptly advised by Lansburgh of the pendency of the litigation in the District of Columbia and invited to participate in the defense of the suit; but failed or refused to do so.

On February 27, 1946 that case was compromised and settled by the parties in consideration of the payment of $13,000, which was paid to the plaintiff Deffebach by the New Amsterdam Casualty Company, Lansburgh's insurer. This suit was instituted by the insurer as subrogee of Lansburgh on December 12, 1946.

It will be noted that the original sale by Baker to Lansburgh and the re-sale by Lansburgh to Deffebach and the time of the alleged discovery of the defect in the garment by reason of the injury to the latter, all occurred more than three years prior to the institution of this suit. The only event in the sequence of facts occurring within the three-year period was the compromise settlement by Lansburgh with Deffebach and the consequent payment by the insurer. The question in the case, therefore, becomes limited to the inquiry, whether the running of the period of limitations was postponed until the acknowledgment of liability by Lansburgh and the consequent determination of the amount of damages by the insured; or, in other words, when did the statute of limitations begin to run in this case. The defense of the statute is set up in the defendant's answer, and the parties have raised no question of procedure in presenting the point for determination by the court on the motion for summary judgment.

As jurisdiction of the court in this case is dependent solely upon diverse citizenship, the Maryland law must be applied. Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487. It is clear by the Maryland statute, Md. Code of 1939, Art. 57, § 1 that the applicable period is three years. But, as already stated, the question in the case is, when did this period begin to run. Counsel have not been able to find, nor do I know of, any Maryland decision on this latter point in its application to the facts of this case. Compare Glenn v. Williams, 60 Md. 93, 122, cited with approval in Hawkins v. Glenn, 131 U.S. 319, 330, 9 S.Ct. 739, 33 L. Ed. 184. See also Crofoot v. Thatcher, 19 Utah 212, 57 P. 171, 75 Am.St.Rep. 725; Great Western Telegraph Co. v. Purdy, 162 U.S. 329, 16 S.Ct. 810, 40 L.Ed. 986.

The complaint alleges that the contract was made in New York and it was stated by counsel at the hearing, without contradiction, that while the defendant's manufacturing plant was in Baltimore, he had a sales office in New York City. Possibly the delivery of the garments may have been made either in Baltimore or in the District of Columbia but this does not appear as a fact now before the court. This being so, counsel for the defendant contends that the time for the beginning of the running of the statute should be determined by the place where the contract was made, that is, New York. Or, if it be inferred that delivery was possibly made in Washington, then by the law of the District of Columbia, or at least by the general law upon the subject which, it is argued, should be applied as the probable law of Maryland in the absence of any prior Maryland State decision upon the point. The Maryland rule as to conflict of laws should also be applied if there were any decision on the point; but apparently there is none. Klaxon Co. v. Stentor Elec. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477; Guaranty Trust Co. v. York, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079, 160 A.L.R. 1231. In the absence of any applicable Maryland decision the question must be resolved on the basis of general principles of law which presumably would be applied by the Maryland Court of Appeals.

Counsel for the defendant argues that "When limitations starts to run is ordinarily determined by the law of the place of the performance of the contract. Beale, Conflict of Laws, sec. 370(1), p. 1272". As the pleadings allege no other place of performance than New York where the contract was made, the conclusion is urged that the beginning of the limitations period must be determined in this case by the law of New York State. The only case that seems to be "on all fours" with the instant case ...