Steamfitters Local Union No. 602 v. Erie Ins. Exch.
| Decision Date | 27 July 2020 |
| Docket Number | No. 40, Sept. Term, 2019,40, Sept. Term, 2019 |
| Citation | 469 Md. 704,233 A.3d 59 |
| Parties | STEAMFITTERS LOCAL UNION NO. 602 v. ERIE INSURANCE EXCHANGE, et al. Steamfitters Local Union No. 602 v. Cincinnati Insurance Company, et al. |
| Court | Court of Special Appeals of Maryland |
Argued by James S. Liskow (DeCaro, Doran, Siciliano, Gallagher & DeBlasis, LLP of Bowie, MD), on brief, for Petitioner.
Argued by Lawrence F. Walker (Cozen O'Connor of Philadelphia, PA; Eric N. Stravitz, Stravitz Law Firm, P.C. of Lanham, MD; Howard S. Stevens and Meighan G. Burton, Pascale Stevens, LLC of Baltimore, MD; Thomas A. Marsh, Jr., Law Offices of Robert A. Stutman, P.C. of Fort Washington, MD) and Mark D. Palmer (Bacon, Thornton & Palmer, L.L.P. of Greenbelt, MD) on briefs, for Respondents.
In this case, we are asked to determine whether the owner of a commercial property owes its neighbor a common law duty to use reasonable care to prevent the risk of a spread of fire, where the property owner knows, or should know, that persons are habitually discarding hundreds of cigarette butts in a mulched common area along the boundary between the properties.
On April 6, 2015, a fire started on property owned by Steamfitters Local Union No. 602 ("Steamfitters") in Capitol Heights, Maryland, in a mulched strip of common area running along the boundary line between Steamfitters’ property and a commercial construction yard owned by Gordon Contractors, Inc. ("Gordon"). The fire spread along a chain-link fence that separated the properties, causing property damage to Gordon's construction yard, as well as to a property adjoining Gordon's property. The fire was started in an area where Steamfitters’ apprentices regularly congregated for hours at a time, prior to the commencement of their training classes held in Steamfitters’ union hall. During the investigation into the cause of the fire, hundreds of cigarette butts that had been discarded in the mulch were recovered.
The litigation that resulted from the fire damage commenced on December 14, 2015, when Gordon and its insurers, Erie Insurance Exchange ("Erie") and Continental Casualty Company ("Continental") filed a complaint in the Circuit Court for Prince George's County against Steamfitters alleging a single count of negligence and claiming damages of $1,276,200.24.
Steamfitters filed a third-party complaint against the Heating, Piping and Refrigeration Training Fund (the "Training Fund"), alleging contractual indemnification, common law indemnification, and contribution.
A second action was commenced on March 4, 2016, when Cincinnati Insurance Company ("Cincinnati"), as the subrogee of Falco Industries, Inc., C & M Properties, LLC, C & M Properties Delaware, LLC, and Garage Center, LLC (referred to collectively as "Falco") filed a complaint against Steamfitters in the Circuit Court for Prince George's County, alleging a single count of negligence. Cincinnati alleged that the fire started in the mulched strip of land on Steamfitters’ property and spread to Falco's property, causing substantial damage to Falco's real property and personal property. Steamfitters also filed a third-party complaint against the Training Fund with respect to Cincinnati's claim, alleging contractual indemnification, common law indemnification, and contribution.2
In April 2016, the two cases were consolidated. For ease of reference, we shall refer to Gordon, Erie, Continental, and Cincinnati as either the Plaintiffs or the Respondents.
Steamfitters and the Training Fund filed cross-motions for summary judgment on the issue of contractual indemnification.3
After a hearing, the circuit court denied Steamfitters’ motion and granted summary judgment in favor of the Training Fund. The circuit court found that Steamfitters was not entitled to indemnification under the use agreement between the parties ("Agreement") because: (1) the Training Fund did not explicitly agree to indemnify Steamfitters for Steamfitters’ own negligence; (2) the Agreement expired before the fire occurred; and (3) the claims against Steamfitters did not arise out of the Training Fund's use of the premises. Steamfitters also moved for summary judgment against the Plaintiffs on the negligence claims. The court denied Steamfitters’ motions.
The case against Steamfitters was tried before a jury from July 17–20, 2017. Steamfitters moved for judgment at the conclusion of the Plaintiffs’ case-in-chief, at the conclusion of the defense, and at the conclusion of the Plaintiffs’ rebuttal case. In doing so, Steamfitters argued that it had no common law duty to the neighboring properties. The trial judge denied the motions. The jury returned verdicts in favor of the Plaintiffs. Damages were awarded in favor of Erie, as the subrogee of Gordon, in the amount of $1,039,176.67; in favor of Gordon, individually, in the amount of $111,125.38; in favor of Continental, as Gordon's subrogee, in the amount of $72,338.48; and in favor of Cincinnati, as subrogee of Falco, in the amount of $119,909.10. Steamfitters noted a timely appeal. The Court of Special Appeals affirmed the trial court's judgments in a split decision. See Steamfitters Local Union No. 602 v. Erie Ins. Exch., 241 Md. App. 94, 209 A.3d 158 (2019) (Friedman, J., dissenting).
Steamfitters petitioned for writ of certiorari ,4 which we granted to consider the following questions, which we rephrased:
For the reasons more fully discussed herein, we answer the first question in the affirmative, and questions two through four in the negative. We affirm the judgment of the Court of Special Appeals in its entirety.
Steamfitters owns and maintains a union hall in Capitol Heights, Maryland. The union has apprentices who pay dues and receive training, among other benefits. The Training Fund operated an apprentice school in the union hall and provided training to Steamfitters’ apprentices, pursuant to a written Agreement with Steamfitters for the use of space.
Gordon owns a construction material yard adjacent to Steamfitters’ union hall. Falco occupies a commercial warehouse that is on the other side of Gordon's property. The Gordon and Steamfitters properties were separated by a chain-link fence with security slats. Steamfitters created and maintained a ten-foot-wide mulch bed that ran approximately 200 feet along the fence between its parking lot and Gordon's yard. The mulch bed consisted of shredded wood mixed with dead pine needles from trees planted in the bed.
Gordon and Falco alleged that the April 6, 2015, fire started on Steamfitters’ property after a lit cigarette was discarded in the mulched area on Steamfitters’ side of the fence. The fire spread along the fence between the properties and ignited foam insulation that was stored against the fence on Gordon's side that liquefied, thereby causing further spread, and ultimately engulfing multiple vehicles and the contents of a large dumpster. Before it was extinguished, the fire also spread to property belonging to Falco and its business affiliates. Gordon and Falco did not allege that Steamfitters was vicariously liable or that it had a duty to control the unknown person who allegedly discarded the cigarette. Rather, Gordon and Falco proceeded on the theory that Steamfitters, as the property owner, failed to use reasonable care to prevent the foreseeable risk of fire spreading to nearby properties.
The Court of Special Appeals summarized the trial testimony and evidence pertinent to the matters presented on appeal. See Steamfitters Local Union No. 602 ("Steamfitters "), 241 Md. App. at 104–10, 209 A.3d 158. We paraphrase the court's summary below.
Steamfitters’ business manager and corporate designee, Daniel Loveless, generally explained the apprentices’ use of Steamfitters’ property. Because the apprentices work all over the Washington, D.C., metro area, and often do not have time to go home before classes, Steamfitters provided its apprentices with a parking lot on its property on which to congregate, sometimes for hours before classes. Apprentices would arrive between 2:30 p.m. and 5:00 p.m. Over time, Mr. Loveless observed that, prior to the start of classes, apprentices passed the time by napping, gossiping, minding their own business, and smoking, and that some drank beer. Mr. Loveless was responsible for property maintenance. Although no employee was specifically assigned the task of cleaning up trash along the fence that separated Steamfitters’ and Gordon's properties, Mr. Loveless had done so on two or three occasions prior to the fire. According to Mr. Loveless, the mulch had not been replaced in a while, and the ground was bare in some areas. During his deposition, Mr. Loveless testified that he was unclear whether he had seen cigarette butts in the mulch prior to the fire. However, he admitted that after the fire, he saw cigarette butts in the mulch. Mr. Loveless acknowledged that there were more butts "than there should have been," and that, "[i]n the right situation," a carelessly discarded cigarette could start a fire. Excerpts from Mr. Loveless's deposition were read to the jury at trial, including his admission that cigarettes discarded into mulch present a risk of fire:
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