Owens-Illinois, Inc. v. Armstrong

• Decision Date: 01 September 1991
• Docket Number: OWENS-ILLINOI,INC,No. 77,77
• Citation: 604 A.2d 47,326 Md. 107
• Parties: , Prod.Liab.Rep. (CCH) P 13,128 v. Othello ARMSTRONG, et al. ,
• Court: Maryland Court of Appeals

Page 107

326 Md. 107

604 A.2d 47, Prod.Liab.Rep. (CCH) P 13,128

OWENS-ILLINOIS, INC. v. Othello ARMSTRONG, et al.

No. 77, Sept. Term, 1991.

Court of Appeals of Maryland.

April 7, 1992.

Harry S. Johnson (Patrick C. Smith, Gardner M. Duvall, Julia K. Evans, Whiteford, Taylor & Preston, on brief), Baltimore, Walter E. Dellinger, Durham, N.C., argued, for petitioner.

Edward F. Houff, Carolyn J. Moses, Church & Houff, P.A., Baltimore, for amicus curiae Center for Claims Resolution.

Shepard A. Hoffman (Harry Goldman, Jr., David M. Layton, Goldman & Skeen, P.A., on brief), Baltimore, for respondents.

Argued before MURPHY, C.J., ELDRIDGE, RODOWSKY, McAULIFFE, CHASANOW, KARWACKI and ROBERT M. BELL, JJ.

CHASANOW, Judge.

Kaylo is an asbestos-containing insulation that was manufactured and sold by petitioner, Owens-Illinois, Inc., from 1948 to 1958. In 1958, Owens-Illinois, Inc. conveyed the Kaylo product line to Owens-Corning Fiberglas. Kaylo was generally sold as 50-60 pound blocks which were separated into pieces with hammers or saws. The cutting fitting, and installation of Kaylo was alleged to have been extremely dusty work.

Respondent, Othello Armstrong, worked first as a laborer and later as a welder on engines and in boiler rooms of various ships being built or repaired at the Bethlehem Steel Corporation shipyards. Armstrong was employed at the shipyards from 1942 to 1963. While there, Armstrong claims he was exposed to thick clouds of asbestos-containing dust which was identified by a witness as Kaylo dust. There is no allegation that Armstrong was exposed to asbestos products after he left the shipyards in 1963.

Respondent, Forrest Wood, was a rigger at a Bethlehem Steel shipyard from 1941 to 1975. As a rigger, Wood assisted other workmen in the removal of equipment and materials from ships. His job included assisting pipe-coverers in the installation and removal of pipe-covering insulation. This work, like that performed by Armstrong, was alleged to have involved exposure to heavy clouds of Kaylo dust.

Armstrong and Wood, along with two other workers not directly involved in this appeal, filed suit in the Circuit Court for Baltimore City against Owens-Illinois and other companies that manufactured, installed, or supplied asbestos-containing insulation products. The plaintiffs' allegations were based on negligence and strict liability in tort. A jury returned verdicts for Armstrong and Wood against each defendant. The trial court, Judge Clifton J. Gordy, Jr., denied the defendants' motion for judgment notwithstanding the verdict.

Owens-Illinois and Eagle-Picher Industries, two of the defendants, appealed. The latter's appeal was stayed after it filed a Title 11 bankruptcy petition in the United States Bankruptcy Court for the Southern District of Ohio, thus making Owens-Illinois the sole defendant seeking review of the judgments. The Court of Special Appeals affirmed the awards. Owens-Illinois v. Armstrong, 87 Md.App. 699, 591 A.2d 544 (1991).

This Court granted Owens-Illinois' petition for certiorari. We shall address each issue raised by Owens-Illinois, amplifying when necessary the factual scenario presented above.

BUSINESS RECORDS

In 1969, a Bethlehem Steel industrial health engineer was directed by a vice president to conduct an asbestos exposure study and prepare a report on the exposure of both Bethlehem and non-Bethlehem personnel to asbestos-containing dust at Bethlehem's facilities. The five-page report was offered into evidence by Owens-Illinois as a business record of Bethlehem Steel.

Owens-Illinois contends the Bethlehem study should have been admitted because it showed that, in three "bystander" dust counts taken around employees in the same jobs as Wood and Armstrong working in ship engine rooms where insulation was being installed, no measurable amount of asbestos fibers was detected. Although acknowledging that the report was prepared and maintained in the ordinary course of business, Armstrong and Wood objected to its admissibility. Judge Gordy ruled:

"I don't have any problem with this [meeting the] business record exception. That does not automatically make an exhibit admissible. It gets over that hurdle, but it is significantly unreliable.... I am not satisfied that the conclusions or the results cited herein are reliable. It is not trustworthy...."

On appeal, Owens-Illinois contends that "once a document has been found to be a business record there is no additional trustworthiness or reliability test unless [in a criminal case] the 6th Amendment is implicated." We disagree with Owens-Illinois and hold that a trial judge has discretion to exclude a document that meets the technical requirements of a business record when the objecting party persuades the judge that the document lacks the degree of reliability and trustworthiness that business records are ordinarily assumed to possess. ¹

In Palmer v. Hoffman, 318 U.S. 109, 63 S.Ct. 477, 87 L.Ed. 645 (1943), tort actions were filed against a railroad for death and personal injuries arising out of a railroad accident at a grade crossing. Plaintiffs alleged that the railroad was negligent because the engineer failed to ring the bell, blow the whistle, and have a light burning at the front of the train when approaching the crossing. Two days after the accident, pursuant to railroad requirements, the engineer gave a signed statement to railroad officials and to a State Public Utilities Commission representative containing his version of the accident and denying any negligence. Before trial the engineer died. At trial, the engineer's statement was offered into evidence by the railroad as a business record. Plaintiffs' objection to the admissibility of the statement was sustained, and after a verdict for the plaintiffs, the railroad appealed. The United States Supreme Court ultimately granted certiorari and upheld the trial judge's decision not to admit the engineer's statement. Perhaps the best analysis of the Palmer decision is found in 2 McCormick on Evidence, § 288 at 272 (John W. Strong ed., 4th ed. 1992) (hereinafter, McCormick ), which provides:

"While Palmer has been subject to various interpretations, the most reasonable reading of it is that it did not create a blanket rule of exclusion for accident reports or similar records kept by businesses. Rather, it recognized a discretionary power in the trial court to exclude evidence which meets the letter of the business records exception, but which, under the circumstances, appears to lack the reliability business records are assumed ordinarily to have. The existence of a motive and opportunity to falsify the record, especially in the absence of any countervailing factors, is of principal concern. The Federal Rule incorporates this reading of Palmer by permitting admission if the report otherwise complies with the requirements of the rule, 'unless the source of information or the method or circumstances of preparation indicate lack of trustworthiness.' " (Footnotes omitted).

This Court has recognized that, in some instances, business records may be excluded if established to be unreliable or untrustworthy. In Marine Bank v. Stirling, 115 Md. 90, 102-03, 80 A. 736, 739-40 (1911), a bank ledger on which checks "found loose in the bank" were entered was found too uncertain or unreliable to be admissible. We stated:

"Such a claim would not ordinarily of itself affect the admissibility of an individual ledger, containing the accounts between depositors and the bank, but under such circumstances as are shown in this case there is too much indicating the uncertainty and unreliability of this ledger account to permit it to be used as evidence per se...."

115 Md. at 103, 80 A. at 740.

The federal rules of evidence pertaining to the hearsay exception for business records and public records exclude otherwise admissible records if the sources of information or other circumstances "indicate lack of trustworthiness." Federal Rules of Evidence 803(6) and 803(8).

In Ellsworth v. Sherne Lingerie, Inc., 303 Md. 581, 495 A.2d 348 (1985), this Court examined the public records hearsay exception and held that "factual findings" contained in public records are admissible unless the party opposing introduction of a public record proves the factual finding is unreliable. Judge McAuliffe, writing for the Court, indicated how such unreliability may be established. The reasoning is equally applicable to proving a business or public record is untrustworthy. The Court stated:

"We also make clear that even though the burden rests upon the party opposing the introduction of a public record to demonstrate the existence of negative factors sufficient to overcome the presumption of reliability, this does not mean that additional evidence will be required in every case to meet that burden. Indicia of unreliability may be contained in the report itself, or may be disclosed by the evidence of the party offering the report."

303 Md. at 612, 495 A.2d at 364.

The factors that can be utilized by a trial judge in determining whether a business record or a portion of a business record should be excluded for lack of trustworthiness may include such factors as: 1) the purpose for which the record was prepared and any possible motive to falsify including whether the record's use in prospective litigation was a motive for its preparation, see Rossi v. Mobil Oil Corp., 710 F.2d 821, 830 (Temp.Emer.Ct.App.1983), Jefferson Garden Associates v. Greene, 202 Conn. 128, 520 A.2d 173, 181 (1987); 2) how routine or non-routine the record is and how much reliance the business places on the record for business purposes, Palmer v. Hoffman, supra; and 3) where, as in the instant case, the record contains opinions and conclusions--how valid, speculative, or conjectural the opinions or conclusions are, as well as the need for interpretation or cross-examination to prevent misleading or confusing the trier of fact. See ...