State for Use of Cavanaugh v. Arundel Park Corp.

• Decision Date: 16 January 1959
• Docket Number: No. 84,84
• Citation: 218 Md. 484,147 A.2d 427
• Parties: STATE of Maryland, For the Use of Agnes Frances CAVANAUGH et al. v. The ARUNDEL PARK CORPORATION et al.
• Court: Maryland Court of Appeals

Page 484

218 Md. 484

147 A.2d 427

STATE of Maryland, For the Use of Agnes Frances CAVANAUGH et al. v.The ARUNDEL PARK CORPORATION et al.

No. 84.

Court of Appeals of Maryland.

Jan. 16, 1959.

John J. O'Connor, Jr., Baltimore (O'Connor & Preston, Baltimore, on the brief) for appellants.

James P. Garland, Baltimore (William D. Macmillan and Robert D. Bartlett, Baltimore, on the brief) for appellees.

Before BRUNE, C. J., and HENDERSON, HAMMOND, PRESCOTT and HORNEY, JJ.

HENDERSON, Judge.

This appeal is from a judgment for costs in favor of four defendants: St. Rose of Lima Roman Catholic Church, Rt. Rev. Leonard J. Ripple, Roman Catholic Archbishop of Baltimore, a corporation sole, and the Holy Name Society of St. Rose of Lima Roman Catholic Church, after the trial court sustained demurrers to a second amended declaration.The original declaration, a death action for negligence arising out of a fire which occurred on January 29, 1956, at the St. Rose of Lima oyster roast held at Arundel Park in Anne Arundel County, was filed on December 11, 1956.Pleas were filed, and on July 26, 1957, an amended declaration was filed for the purpose of bringing in additional parties-defendant.Timely pleas were filed by all the defendants.

In addition to the general issue pleas, the above named defendants filed special pleas that they were non-profit 'eleemosynary institutions' and, consequently, 'immune from liability for damages' for the alleged torts of their agents, servants and employees.The legal basis for such a claim seems rather obscure, since it seems to be conceded that policies of liability insurance were then in effect.On October 14, 1957, the plaintiffs, with leave of court, filed a second amended declaration alleging that the above named defendants'are insured, and are, accordingly, estopped from pleading eleemosynary immunity pursuant to the provisions of Art. 48A, section 82, of the 1951 Annotated Code of Maryland.'This section was incorporated, without change, in Code(1957), Art. 48A, sec. 85.These defendants demurred to the second amended declaration on the ground that this constituted a 'new or different cause of action' and that such new action was filed too late and hence barred by the death statute.The demurrers were sustained without leave to amend.

Under Code(1951), Art. 67, sec. 4(the same provision is incorporated in Code(1957), Art. 67, sec. 4), an action for wrongful death must be brought within 18 months after the death of the deceased person.It is conceded that if the second amended declaration is to be regarded as a new cause of action, it was filed too late and the defect is open to demurrer.SeeState v. Parks, 148 Md. 477, 129 A. 793.The trial court held that although the original declaration was based upon negligence under the death statute, the second amended declaration was predicated upon the insurance statute and asserted a new cause of action.This statute, Code(1957), Art. 48 A, sec. 85(as enacted by chapter 900, Acts of 1947), provides: 'Each policy issued to cover the liability of any charitable institution for negligence or any other tort shall contain a provision to the effect that the insurer shall be estopped from asserting, as a defense to any claim covered by said policy, that such institution is immune from liability on the ground that it is a charitable institution.'

Although the statute merely prescribes a mandatory policy clause, which in terms raises an estoppel against the insurer from asserting the defense of immunity, we have said that the statute has the effect of raising an estoppel against the insured to the extent of the coverage.In Gorman v. St. Paul Fire & Marine Ins. Co., 210 Md. 1, 7, 121 A.2d 812, we squarely held that the statute did not contemplate or permit a direct action by a tort claimant against the insurer.In answer to the contention that such a construction would nullify the statute, we stated that the Legislature probably had in mind the fact that an insurer under a liability policy normally conducts the defense, and that the estoppel was intended to run against the insured, to the extent of the collectable insurance, and to that extent only.Evidently the Legislature took notice of the growing practice whereby charitable institutions voluntarily procure liability insurance for the protection of persons injured through the negligence or other torts of their agents, sevants or employees, and sought to assure to such persons the full benefit of the coverage procured, without disturbing the existing rule under other circumstances.SeeHoward v. South Baltimore General Hospital, 191 Md. 617, 62 A.2d 574, andThomas v. Board of County Com'rs of Prince George's County, 200 Md. 554, 560, 92 A.2d 452.In carving out this exception, the Legislature may well have had in mind the fact that, except to the extent of the premiums voluntarily paid, there would be no invasion of trust funds, upon which the rule of immunity was largely predicated.SeePerry v. House of Refuge, 63 Md. 20, 28andLoeffler v. Trustees of Sheppard & Enoch Pratt Hospital, 130 Md. 265, 274, 100 A. 301, L.R.A.1917D, 967.The trust fund theory has been repudiated in a growing number of states.See note 25 A.L.R.2d 29, 60, and supplementary cases cited.In Taylor v. Knox County Board of Education, 292 Ky. 767, 167 S.W.2d 700, 145 A.L.R. 1333, the Kentucky court held that the similar Kentucky statute permitted action against the insured to the extent of the collectable insurance, construing the Kentucky statute in the light of another statute authorizing school boards to procure liability insurance to cover the transportation of school children.This case was cited with approval in the Gorman case.The case of Rogers v. Butler, 170 Tenn. 125, 92 S.W.2d 414, also cited in the Gorman case, reached the same result even in the absence of statute.But later cases in other states seem to have declined to extend the exception so far.SeeHolland v. Western Airlines, Inc., D.C., 154 F.Supp. 457, 460, and cases cited.Cf.Williams' Adm'x v. Church Home for Females and Infirmary for Sick, 223 Ky. 355, 3 S.W.2d 753, 62 A.L.R. 721 cited in the Thomascase, supra.

Our statute, as construed, poses a number of procedural problems.If the mere fact that liability insurance has been procured, a fact which could be ascertained, if unknown to the injured person, through discovery or interrogatories, is enough to raise the estoppel, and prevent immunity from being asserted as a defense, pro tanto, then it might be argued that there would be no need to allege such fact in the declaration.Upon that hypothesis the amendment might be regarded as surplusage.If it must be alleged in the declaration, and proved as a part of the plaintiff's case, this would seem to run counter to the general rule that, since a reference to insurance by the plaintiff tends to confuse the issue of negligence and have a prejudicial effect upon the jury, such reference may be ground for reversal.We note that in several recent cases the insurance carriers have preferred to remain incognito, and have not sought to raise the issue of immunity under the pleadings.See the references to the companion case in the Gormancase, supra, andCasey v. Roman Catholic...