author: Wilner, J.,

text:
    PETER R. ADAMS v. ALAN H. PECK
    [No. 1350,
    September Term, 1978.]

      Decided July 13, 1979.

    The cause was argued before Thompson and Wilner, JJ., and James S. Getty, Associate Judge of the Fourth Judicial Circuit, specially assigned.

      Peter Parker and Harold T. Flanagan, Jr., for appellant.

      Charles E. Iliff, Jr., with whom were John H. Mudd and Semmes, Bowen & Semmes on the brief, for appellee.
   Wilner, J.,

delivered the opinion of the Court.

Peter R. Adams appeals from the summary judgment entered by the Superior Court of Baltimore City that terminated his libel action against Alan H. Peck. The question that we must decide is whether the privilege that attaches to testimony given by a witness in a judicial proceeding extends to pre-trial communications between a potential witness gnd counsel that relate to matters at issue in pending litigation.

It is unfortunate that the relevant facts surrounding this controversy are not set forth more directly and concisely in the record, especially as this comes to us from the granting of summary judgment. From the various pleadings, however, and particularly from the document containing the allegedly libelous statement, which' was attached as an exhibit to appellant’s Declaration, the facts appear to be these.

After a contentious and unhappy marriage, Dr. Adams and his wife separated on July 28,1976; and on that day a bill and a cross-bill for divorce were filed in the Circuit Court for Baltimore County. The record does not reveal the grounds alleged in these pleadings or the extent to which collateral matters were in dispute. On August 9,1976, they entered into a “formal” separation agreement under which Mrs. Adams was given custody of their two young children, subject to appellant’s right of visitation for up to fifteen hours a week.

In early 1977, the two children — young boys aged 2% and 4 — began to relate to Mrs. Adams bizarre and obviously disturbing tales of sexual activity and molestation suffered at the hands of their father during their visits with him. Mrs. Adams consulted the attorney representing her in the divorce proceedings, Albert S. Barr, III, who referred her to the appellee, Dr. Peck, for a pyschiatric evaluation of the children. On February 16, 1977, Dr. Peck interviewed Mrs. Adams and the older of the two boys. During this interview, the child described in considerable detail examples of sexual contact and activity occurring between the father and the children, at the father’s insistence, that, if true, can only be described as deliberate, abusive, and grossly abnormal. From what he heard and observed, Dr. Peck concluded that the child was telling the truth; one episode in particular that the child described, Dr. Peck said, “strikes me as something which he could not make up, but probably did witness.”

Accepting these stories as credible, Dr. Peck concluded:

“I would urge that he be kept away from his father on a definite basis for a considerable length of time if this story is true, and I have no reason not to believe this. His father is an ill man and in definite need of psychiatric treatment. I have advised Mrs. Adams to keep [the child] from the father and to keep a close eye on him. I will observe him closely over the next few weeks and if I feel this has done definite and permanent harm to him, then I would feel intensive psychiatric therapy with a competent therapist would be warranted. Again I urge that all visitations with the father stop, and the father not be allowed to be around the children.”

This statement was the concluding paragraph in a three-page report that Dr. Peck sent to Mr. Barr. It does not appear that he sent the report to anyone else, although it is alleged that Mr. Barr circulated it to his client, to the child’s pediatrician, to appellant’s attorney, to a judge of the court in which the divorce proceedings were then pending, and possibly to other court personnel. Within a month after receipt of Dr. Peck’s report, a petition was filed to modify appellant’s visitation rights. The record in this case does not reveal whether that petition has been heard, if so whether Dr. Peck appeared as a witness or whether his report was offered into evidence, or what, if any, changes were made in appellant’s visitation privileges. Neither does it reveal the status of the divorce proceedings.

This proceeding was commenced on January 30,1978 (while the divorce proceeding was still pending), when appellant sued Dr. Peck for $1,500,000 in damages for “falsely and maliciously causing] to be typed or printed, and circulated and published, a certain paper writing in the form of a so-called ‘Psychiatric Evaluation’, which paper writing falsely and maliciously defamed the plaintiff herein.” Although the entire report was attached as an exhibit to the Declaration, the part of it singled out for attention and quoted in the Declaration itself was the one sentence: “His father is an ill man and in definite need of psychiatric treatment.” Summary judgment in favor of Dr. Peck was granted upon the sole basis that the report, even if defamatory, was absolutely privileged; and that, as noted, is the issue now before us.

The fountainhead of the Maryland law in this area is a trilogy of cases decided by the Court of Appeals on the same day — June 13, 1888. The first of these cases, Maulsby v. Reifsnider, 69 Md. 143, involved the extent to which words spoken by an attorney in the course of a judicial proceeding were privileged. There was no apparent dispute as to the existence of a privilege; the question was whether it was an absolute or a qualified one. Based upon the English precedent cited by the Court, the difference was this: if the privilege was absolute, as defined and applied in Munster v. Lamb, L.R. 11 Q.B.Div. 588 (1883), “no action will lie against counsel for slanderous words spoken with reference to, and in the course of, an inquiry before a judicial tribunal, although they were uttered maliciously and without any justification or even excuse, and from personal ill-will towards the person slandered.” See 69 Md. at 154. In other words under an absolute privilege the test was merely whether the words sued on were spoken in the course of a judicial proceeding; if so, they were not actionable. Under a qualified privilege, there was a second criterion that also had to be met: not only must the words be spoken in the course of a judicial proceeding, they must, as well, have been relevant to that proceeding. See, for example, Mackay v. Ford, 5 Hurl. & Nor. 790, cited 69 Md. at 154.

After an extensive and learned review of these two approaches and the English cases from which they arose, a majority of the Court opted for the qualified privilege. “[W]e cannot accept”, the Court said at p. 162, “the absolute and unqualified privilege laid down in Munster v. Lamb.’’ Thus, the Court went on to say, “if counsel in the trial of a cause maliciously slanders a party, or witness or any other person in regard to a matter that has no reference or relation to, or connection with, the case before the court, he is and ought to be answerable in an action by the party injured.”

The second case, Hunckelv. Voneiff, 69 Md. 179, concerned the extent of the privilege possessed by a witness; and, in contrast to the view taken in Maulsby with respect to counsel, the Court concluded that an absolute privilege existed. At p. 187, the Court stated quite succinctly the basis for this policy:

“The case now before us is not that of an advocate but of a witness, and in our opinion it is of the greatest importance to the administration of justice that witnesses should go upon the stand with their minds absolutely free from apprehension that they may subject themselves to an action of slander for what they may say while giving their testimony.”

In reaching this conclusion, the Court squarely aligned itself with the English courts, which also had adopted an absolute privilege for witnesses, notwithstanding that the weight of American authority “is in favor of a much greater restriction upon the privilege than is sanctioned by the English decisions.” 69 Md. at 193. But, continued the Court:

“[W]e are not controlled by any decision of our own courts, and are at liberty to settle the law for this State according to our best judgment. After a most careful consideration of the subject, we are convinced that the privilege of a witness should be as absolute as it has been decided to be by the English authorities we have cited, and we accordingly adopt the law on this subject as they have laid it down.” Id. at 193.

Because what the Court in effect did was to incorporate the

English law by reference, without stating the underlying principles in its own terms, it becomes important to note that the English decisions relied upon all dealt with words spoken from the witness stand. The rationale expressed for the rule by the various English authorities was essentially that witnesses appear in court under compulsion —' in obedience to the authority of the law and in discharge of a public duty — and that, in testifying, they are subject to the control of the court and to the penalty of perjury if they speak falsely. Indeed, in Seaman v. Netherclift, L.R.2.C.P.D. 53, quoted at some length by the Maryland Court, Chief Judge Cockburn, speaking for the English Court of Appeal, observed as a caveat to the absolute privilege:

“But I agree that if in this case beyond being spoken maliciously the words had not been spoken in the character of a witness or not while he was giving evidence in the case, the result might have been different. For I am very far from desiring to be considered as laying down as law that what a witness states altogether out of the character and sphere of a witness, or what he may say dehors the matter in hand, is necessarily protected. I quite agree that what he says before he enters or after he has left the witness-box is not privileged, which was the question, in the case (Trotman v. Dunn, 4 Camp. 211,) before Lord Ellenborough.” Hunckel, supra, at 190. (Emphasis supplied.)

At issue in Hunckel v. Voneiff was actual testimony; and thus the question of whether words spoken or written by a witness (or potential witness) in some other context — i.e., the issue presently before us — was not considered or decided by the Hunckel Court. Nor, except for the nisi prius decision in Trotman v. Dunn in 1815, does it appear to have been directly addressed, other than by dicta, in the English decisions cited by that Court. We do not, therefore, consider the Court’s adoption of the English law “as they have laid it down” as necessarily adopting as well Lord Cockburn’s dicta, much less as conclusive precedent on the particular issue now at bar.

The third case decided that day in 1888 was Bartlett v. Christhilf, 69 Md. 219 (1888). This involved the nature of a party-litigant’s privilege. Bartlett and Christhilf, both attorneys, had been appointed receivers by the Circuit Court for Baltimore City. Christhilf subsequently filed a petition in the receivership proceeding alleging that Bartlett had wrongfully withheld assets from the receivers, had obstructed the collection of assets, had acted in contempt of the court’s authority, and had embezzled receivership assets. Before a hearing was held on this petition, the receivership action was settled and dismissed. Bartlett then sued Christhilf for libel and malicious abuse of court process.

Once again, the Court of Appeals reviewed the English cases and commentators which, it concluded (p. 226):

“... hold that statements made in any of the pleadings or proceedings in a cause before a court having jurisdiction of the subject are absolutely privileged, even though made maliciously and falsely. This privilege, protecting against a suit for libel or slander, is founded upon what would seem to be a sound public policy which looks to the free and unfettered administration of justice, though as an incidental result it may, in some instances, afford an immunity to the evil disposed and malignant slanderer.” Id. at 226.

In the particular case, the Court did not deem it necessary to determine whether a litigant’s privilege was absolute or qualified — i.e., whether the privilege existed only if “the thing written has relation to the subject-matter undergoing judicial investigation” {Id. at 226) — because the petition at issue there did in fact relate to the receivership proceeding. Thus, even though Christhilf was not actually a party in the receivership case, his petition was protected by the privilege, whether absolute or qualified. At page 227:

“To allow such suits to prevail would most effectively deter every one from presenting a well-founded complaint for fear of being pursued with ‘infinite vexation.’ It is better, therefore, where the statements are false and knowingly false, to leave the party injured to the redress which the Criminal Court may apply, than to open the door for the institution of civil suits which may be successfully used as an efficient means to obstruct the full and fearless pursuit and administration of justice.”

The development of the law in this area since 1888 has not been especially dramatic. What the Court has done, however, is to revise some of the semantic distinctions and to view the privilege possessed by counsel, witnesses, and parties as essentially the same and therefore as applying to both evidentiary and non-evidentiary statements. These revisions were announced in Kennedy v. Cannon, 229 Md. 92, 96 (1962), where, after quoting at some length from Maulsby, the Court observed that what was described there as a qualified privilege (for attorneys),

“... reflects the view of a majority of the jurisdictions in this country, although the semantics in this area of tort law have changed somewhat since the date of the Maulsby case. What was characterized in that case as a qualified privilege for communications, conditioned on their being pertinent or relevant to a judicial proceeding, without regard to the motive of the speaker, is referred to by modern text writers and in case law as an absolute privilege. (Citations omitted.) This absolute immunity extends to the judge as well as to witnesses and parties to the litigation, for defamatory statements uttered in the course of a trial or contained in pleadings, affidavits, depositions, and other documents directly related to the case. (Citations omitted.) An absolute privilege is distinguished from a qualified privilege in that the former provides immunity regardless of the purpose or motive of the defendant, or thé reasonableness of his conduct, while the latter is conditioned upon the absence of malice and is forfeited if it is abused.” (Emphasis supplied.) Kennedy, supra, at 96.

See also Di Blasio v. Kolodner, 233 Md. 512 (1964); Herring v. Citizens Bank & T. Co., 21 Md. App. 517 (1974); Kerpelman v. Bricker, 23 Md. App. 628 (1974).

This is the current state of the Maryland law and, as the Kennedy Court noted, of the law generally throughout the nation. The statement of a witness given in testimony or in pleadings, affidavits, depositions, “and other documents directly related to the case” are “absolutely” privileged. The rule is expressed this way in Restatement (Second) of Torts, § 588 (1977):

“A witness is absolutely privileged to publish defamatory matter concerning another in communications preliminary to a proposed judicial proceeding or as a part of a judicial proceeding in which he is testifying, if it has some relation to the proceeding.” (Emphasis supplied.)

Comment e to this section addresses, in particular, statements made prior to the actual commencement of the judicial proceeding. It says:

“As to communications preliminary to a proposed judicial proceeding, the rule stated in this Section applies only when the communication has some relation to a proceeding that is actually contemplated in good faith and under serious considerations by the witness or a possible party to the proceeding. The bare possibility that the proceeding might be instituted is not to be used as a cloak to provide immunity for defamation when the possibility is not seriously considered.”

Counsel have referred us to no Maryland case (and indeed have suggested that there are none) in which the privilege of a witness, which is essentially a testimonial privilege, has been held applicable to pre-trial statements made to an attorney. And, in the absence of any binding precedent, each side suggests that the case be determined on the basis of sound public policy. Naturally, they disagree on what that policy should be. Two opposing principles seem to be involved, both seeking to serve the same end: the truth-seeking function of the judicial process.

Appellant urges that the privilege be limited to statements made under oath; otherwise, he says, there would be no effective constraint upon false and scandalous statements made by witnesses and potential witnesses. The privilege becomes and remains functional, he suggests, only because, and to the extent that, there are collateral sanctions available to deter a witness from speaking falsely. To be sure, there is some measure of support for this view in Hunckel v. Voneiff and its English antecedents. Appellee, on the other hand, contends that denial of the privilege to pre-trial communications between potential witnesses and counsel would invite far more serious disruptions to the proper administration of justice by inhibiting the ability of counsel (and litigants) to gather evidence and prepare their cases for trial. The hypothesis here is that the effectiveness of the truth-seeking process is dependent primarily upon adequate pre-trial preparation; and, unless potential witnesses are protected against civil liability (and the harassment of lawsuits seeking to impose such liability), they will be most reluctant to share their knowledge and opinions except under the most formal, most expensive, and least efficient circumstances.

We note initially that there is ample precedent in the law for extending the testimonial privilege to unsworn pre-trial communications between potential witnesses and counsel. More important, the precedent, though not legally binding upon this Court, rests upon sound principles of law and public policy, and for that reason will be adopted by us.

Given the proclivity of our Court of Appeals for following English decisions in this general area, perhaps the most significant case in this regard is Watson v. M’Ewan (1905) A C 480 (HL), decided by the House of Lords on appeal from the Court of Session, Scotland. The facts were these. In October, 1901, the plaintiff, desirous of obtaining a separation from her husband on the ground of his cruelty, consulted the defendant, a physician, with a view of acquiring his testimony as to her poor condition. The defendant did indeed examine her, and he made notes of his findings. The plaintiff subsequently instituted suit against her husband. During the course of trial, the defendant and other physicians examined the plaintiff on her husband’s behalf. The defendant reported “the results of his examination, his opinion of the case, and the nature of the evidence he was prepared to give” to the husband’s • agents. At the same time, he “gave information to said parties as to certain matters which he alleged he had ascertained as the result of his prior examination” of the plaintiff, and showed his notes from that examination to the husband and his attorney. Later, the defendant testified in the case, using his notes from the earlier examination. They referred to the plaintiff then being pregnant, taking “morphia”, and desiring an abortion (an abortion, at the time, being a criminal act). The plaintiff then sued the defendant for slander, not because of what he said from the witness stand, but because of his pre-testimonial communication with the husband and his counsel.

Recognizing this as a case of first impression in England (and the Empire), and the arguments to be made on both sides .of the question, the Earl of Halsbury, L.C., opined for the House:

“It appears to me that the privilege which surrounds the evidence actually given in a Court of justice necessarily involves the same privilege in the case of making a statement to a solicitor and other persons who are engaged in the conduct of proceedings in Courts of justice when what is intended to be stated in a Court of justice is narrated to them — that is, to the solicitor or writer to the Signet. If it were otherwise, I think what one of the learned counsel has with great cogency pointed out would apply — that from time to time in these various efforts which have been made to make actual witnesses responsible in the shape of an action against them for the evidence they have given, the difficulty in the way of those who were bringing the action would have been removed at once by saying, ‘I do not bring the action against you for what you said in the witness-box, but I bring the action against you for what you told the solicitor you were about to say in the witness-box.’ If that could be done the object for which the privilege exists is gone, because then no witness could be called; no one would know whether what he was going to say was relevant to the question in debate between the parties, A witness would only have to say, 1 shall not tell you anything; I may have an action brought against me tomorrow if I do; therefore I shall not give you any information at all.’ It is very obvious that the public policy which renders the protection of witnesses necessary for the administration of justice must as a necessary consequence involve that which is a step towards and is part of the administration of justice — namely, the preliminary examination of witnesses to find out what they can prove. It may be that to some extent it seems to impose a hardship, but after all the hardship is not to be compared with that which would arise if it were impossible to administer justice, because people would be afraid to give their testimony.” Id. at 487.

Having adopted the reasoning urged here by appellee, the Lord Chancellor did not ignore the concern expressed by appellant here and Mrs. M’Ewan there. His response to it was a pragmatic one. At page 488:

“The answer, of course, dealing with it as a matter of convenience and indeed of necessity for the administration of justice, I suppose, is this: unless he does give evidence in a Court of justice, in which case he can be indicted for perjury if his evidence is wilfully false, nobody knows anything about it — it slumbers, I suppose, in the office of the solicitor, and nobody hears or cares anything about it. Practically, I think that would be the answer. But whether that be a good answer or not, what seems to me to be an overwhelming consideration in the determination of this case is that a witness must be protected for his preliminary statement or he has no protection at all, and that there is that protection established is, as I have already said, beyond all possibility of doubt.” (Emphasis supplied.)

Some American courts have reached in the same direction, though with somewhat less precision and “style” than the Earl of Halsbury. In Zirn v. Cullom, 63 N.Y.S.2d 439 (1946), a question was raised as to whether a letter written by an attorney to the opposing party pertaining to the possible settlement of pending litigation was privileged. At page 440, the Court said:

“It is not absolutely essential, in order to obtain the benefits of absolute privilege, that the language claimed to be defamatory be spoken in open court or contained in a pleading, brief, or affidavit. Thus, ‘the privilege extends to statements made to a solicitor when preparing the witness’s proof, and also to letters passing between a solicitor and his client, written for the purpose of giving or obtaining advice.’ Odgers, Libel and Slander, 6th Ed., p. 198. ‘The same privilege exists as to statements made to a party and his solicitor in preparing the proof for trial.’ Newell, Slander and Libel, 4th Ed., p. 401.” Id. at 440-41.

In an earlier case, Moore v. Manufacturers' Nat. Bank, 25 N. E. 1048, 1049 (1890), the New York Court of Appeals had said:

“The general doctrine of privilege, as applied to actions for libel and slander is founded upon the reasonable view that in the intercourse between members of society, and in proceedings in legislative bodies, and in courts of justice, occasions arise when it becomes necessary or proper that the character and acts of individuals should be considered and made the subject of statement or comment, and that in the interests of society a party making disparaging statements in respect to another on such a lawful occasion should not be subjected to civil responsibility on an action of this character, although such statements might be untrue.”

Essentially this approach was taken by the New Jersey court in Middlesex Concrete Products v. Carteret Ind. Ass’n., 172 A. 2d 22 (N.J. Super. 1961). The plaintiff there, Middlesex, had entered into a contract with a New Jersey borough to construct a sewage treatment plant and had gotten into a dispute with the borough over various items. A lawsuit was filed, and, during the course of it, one of the defendants, an engineering firm, wrote a report for the borough, in which it allegedly accused the plaintiff of various types of wrongdoing in the performance of the contract and urged that the borough not make further payments to the plaintiff absent a judicial determination. This produced a suit by plaintiff for tortious interference with a business relationship, to which the defense of privilege was asserted. The essence of the complaint was hot what the defendant’s agents had said as witnesses at trial on the contract dispute, but rather the statements contained in the pre-trial report made to the borough. This pre-trial report, said the plaintiff, “was not a step in a judicial proceeding and it afforded those harmed by it none of the protection which a judicial proceeding affords in that the report was not under oath; its author was not subject to prosecution for perjury” or subject to cross-examination. 172 A. 2d at 24. In short, essentially the same argument made by appellant here was made by the appellant there.

Rejecting that argument, however, the Court said, in relevant part:

“The privilege or immunity is not limited to what a person may say under oath while on the witness stand. It extends to statements or communications in connection with a judicial proceeding. It protects a person while engaged in private conferences with an attorney with reference to litigation. ...
“... The investigation, report, consultations, aid and advice were pertinent and relevant to the litigation as preliminary steps in the defense of the case and a part of the preparation for the actual trial. As such, they are part of a judicial proceeding and within the privilege or immunity stated.
“If this were not so, every expert who acts as a consultant for a client with reference to proposed or actual litigation, and thereafter appears as an expert witness, would be liable to suit at the hands of his client’s adversary on the theory that while the expert’s testimony was privileged, his preliminary conferences with and reports to his client were not and could form the basis of a suit for tortious interference.” Id. at 25.

It is clear from what the New Jersey court said that the privilege which it applied was that which pertained as well in defamation cases, and it therefore seems to us that what it said, and held, in the context of an action for tortious interference with contract, would apply equally to an action for defamation.

A similar conclusion was reached, though probably in dicta, in Anderson v. Mate, 384 N.E.2d 759 (Ill.App. 1978). The genesis of that case was an automobile accident in which a child was injured. The plaintiff, a pediatrician and encephalographer, was retained to perform an electroencephalographic examination of the child. Her report indicated abnormal brain tracings. After suit was filed by the child, the insurer retained the defendant, a neurosurgeon, to examine the child. His report, unsworn, which was sent to defense counsel in that case (and by defense counsel to the child’s attorney), suggested that if the plaintiffs recommendations were her “usual” ones, they “are of no clinical value and should not in any way influence your thinking on this case.” Id. at 760. This caused the plaintiff to sue for libel.

Although the court decided the case on another ground, it did discuss and hold applicable the defense of privilege. At page 761:

“An absolute privilege applies to statements made in the course of judicial proceedings provided they are pertinent and material to the matter in controversy____The matters in controversy in the suit brought by the injured child against Liberty Mutual’s insured were the claimant’s present physicial condition and whether the headaches complained of were causally related to the head injury sustained in the accident. Defendant’s report bore precisely on these issues. The contents of defendant’s report, including the allegedly libelous statements, were material, relevant and therefore, absolutely privileged.” (Citations omitted.)

See also Smith v. Hatch, 271 C.A.2d 39 (Cal. 1969), where, in connection with an action for libel based upon an attorney’s letter, the court stated at page 45:

“The absolute privilege attaches to any publication that has any reasonable relation to the action and is permitted by law if made to achieve the objects of the litigation, ‘even though the publication is made outside the courtroom and no function of the court or its officers is invoked.’ ... Accordingly, ‘it is not limited to the pleadings, the oral or written evidence, to publications in open court or in briefs or affidavits.’ ...” Id. at 45-46. (Citations omitted.)

Also Vasquez v. Courtney, 557 P. 2d 672 (Or. 1976), applying the privilege to a letter written by a deputy sheriff to a probation officer in connection with the latter’s preparation of a pre-sentence report to the court; Jiminez v. Maritime Overseas Corporation, 360 F. Supp. 142, 144 (S.D.N.Y. 1973); Gilpin v. Tack, 256 F. Supp. 562 (W.D. Ark. 1966); 1 Harper & James, The Law of Torts § 5.22, p. 424 (1956) (“The witness is protected not only against liability for statements made in the witness box while under oath, but for conversations with counsel before the trial....”); Annot., Defamation —Pre-trial Procedures, 23 A.L.R.3d 1172; Developments in the Law of Defamation, 69 Harv.L.Rev. 875, 923-24 (1956).

Against this growing weight of authority, we know of no instance in which an appellate court, in England or America, has withheld the privilege from pre-trial (but post-commencement) communications between a potential witness and counsel that are relevant to the pending proceeding. The reasons expressed for extension of the privilege are sound, and clearly suffice, in our judgment, to warrant the extension. As the Court of Appeals observed in State v. Pratt, 284 Md. 516, 520, 398 A. 2d 421, 423 (1979), “given the complexities of modern existence, few if any lawyers could, as a practical matter, represent the interest of their clients without a variety of nonlegal assistance.” Absent the privilege, that assistance would not be as readily forthcoming, and, indeed, may not be forthcoming at all. We, therefore, conclude that the privilege accorded to statements made by witnesses and counsel in the course of judicial proceedings extends to communications made between them prior to trial that relate in some way to pending litigation. The report prepared by Dr. Peck was clearly of that nature, and is therefore protected by the “absolute” privilege set forth in Kennedy v. Cannon, supra.

Appellant raises the secondary issue of whether, in light of a supplemental answer filed by him to one of appellee’s interrogatories, it was proper for the court to enter summary judgment.

On May 5, 1978, appellee filed a set of interrogatories upon appellant. Interrogatory No. 4 asked:

“With respect to your allegation that this defendant [/.e., Dr. Peck] caused the report attached to the declaration to have been ‘circulated and published’, state:
(a) The nature, date and circumstances of each alleged instance of circulation and/or publication.
(b) The full name and address of each person to whom you contend that the report was circulated and/or published, indicating as to each such person the date of receipt of the report and the name and address of the person from whom such report was received.”

On July 19, 1978, appellant answered some of the interrogatories. With respect to No. 4, he said (omitting addresses):

“The report was mailed to Albert S. Barr, III ... on approximately February 17, 1977. The report was then forwarded by Mr. Barr with the knowledge and acquiescence of defendant, to Jacob D. Hornstein, various unknown personnel of the clerk’s office of the Circuit Court for Baltimore County..., Caryl W. Adams ... and The Honorable Frank E. Cicone ... all on approximately February 28, 1977. Other persons may have received said report, but their identities have not yet been ascertained by plaintiff.” (Emphasis supplied.)

Two months later — on August 10 — appellant filed a supplemental answer to Interrogatory No. 4, which stated, tersely, “4(b) and 6(a) William A. Sinton, Jr.; M.D., pediatrician (address omitted)”. Appellee promptly excepted to this supplemental answer on the ground that it failed to state the nature, date, and circumstances of the circulation, the date the report was received by Dr. Sinton, or from whom Dr. Sinton allegedly received the report. On September 6, 1978, the exception was sustained by the court, and appellant was given 15 days to file a supplemental answer. He never complied with the court’s order, and on November 14, 1978 —10 weeks later — appellee’s motion for summary judgment was granted.

Appellant now argues that because of his allegation that Dr. Sinton had also received Dr. Peck’s report, there was evidence of an “extra-judicial” publication that would not be privileged. The simple answer to this is that the record before us gives absolutely no indication that this point was raised and decided in the lower court. Indeed, in light of the court’s ruling on appellee’s exception to the supplemental answer, the allegation, such as it is, was not properly before the court when it entered summary judgment, and could not, therefore, have been decided. We shall therefore decline to consider the point on appeal. Maryland Rule 1085.

Judgment affirmed; appellant to pay the costs.

      . This is one of the deficiencies in the record. This secondary circulation by Mr. Barr is alleged by appellant in his answers to interrogatories. The allegation has been neither admitted nor denied by Mr. Barr or anyone else; and, although it was-never considered or adjudicated by the trial court, for purposes of this appeal we shall accept it as though it were true, whether or not it is.

      . Here again, this is gleaned from one of appellant’s answers to interrogatories indicating that he underwent a psychiatric evaluation on March 17, 1977, “in connection with a petition for modification of visitation rights in the case of Adams v. Adams....”

      . Two judges noted in concurring Opinions their preference for the absolute privilege. As the Court held the statements in question to have been made with reference to the proceeding and thus protected even under the qualified privilege, the divergence of view was only as to the applicable law, and not as to the result in that case.

      . The Court dispelled, in its ruling on a motion for reargument, any notion that the distinction which it drew between counsel and witnesses was inadvertent. See. 69 Md. at 196-99.

      . Trotman v. Dunn was an 1815 nisi prius case in which the plaintiff, a journeyman baker, had originally sued the defendant, his employer, in the Court of Conscience, to recover a week’s wages. While attending that court, in that proceeding, the defendant said of the plaintiff, “He has been transported before, and ought to be transported again. He has been robbing me of nine quartern loaves a week”, although it was not clear in what stage of the proceedings these words were spoken or to whom they were addressed. This produced a subsequent action by plaintiff for defamation. Lord Ellenborough opined that “filf it had been proved that the defendant spoke these words in opening his defence to the commissioners of the Court of Conscience, I should immediately have directed a nonsuit. This would have been a privileged communication, and the words could not be considered as spoken maliciously in the manner and form stated in the declaration.” On the other hand, said Ellenborough, “if he spoke them ad invidiam, and in a calumniatory manner, they are actionable, though uttered in the room where the Court of Conscience was sitting.” The circumstance under which the words were spoken was a question of fact that the court left to the jury to decide.
      With all due respect to Chief Judge Cockburn, it appears that he may have overstated somewhat the actual point at issue in Trotman v. Dunn.

      . Not all courts have fully concurred with the point of view expressed in § 588 or in comment e; some have flatly refused to apply the privilege to communications made prior to the institution of the judicial proceeding, even where such a proceeding was under good faith contemplation and was subsequently filed. See, for example, Kenny v. Cleary, 363 N.Y.S.2d 606 (1975); Twelker v. Shannon & Wilson, Inc., 564 P. 2d 1131 (Wash. 1977); also Prosser, Law of Torts § 114, p. 780 (4th ed. 1971). It is not necessary in this case to adopt or reject that part of the rule or the comment. When Dr. Peck wrote the report, there was a judicial proceeding pending in which appellant’s visitation privilege was a viable and important issue notwithstanding the parties’ prior agreement. The report was obviously germane to that issue. Even the Twelker court, though refusing to apply the privilege to statements made prior to initiation of the proceeding, did not suggest that the protection of the privilege would be unavailable to statements made after the action is filed.

      . This, of course, generated a collateral issue of confidentiality which is not germane here.

      . As noted earlier (footnote 6), we need not and do not address or decide in this case whether, or under what circumstances, the privilege would extend further to statements made in connection with contemplated litigation not yet filed.


source: Caselaw Access Project

author: Lowe, J.,

license: Public Domain

text:
    PALMIRA N. ALLGOOD v. JOSEPH L. SOMERVILLE, SR.
    [No. 1361,
    September Term, 1978.]

      Decided July 13, 1979.

    The cause was argued before Lowe and Couch, JJ., and James S. Getty, Associate Judge of the Fourth Judicial Circuit, specially assigned.

      Benjamin R. Wolman, with whom were Eugene M. Newman and Wolman & Gushee on the brief, for appellant.

      Robert A. Zarnoch, Assistant Attorney General, with whom was Stephen H. Sachs, Attorney General, on the brief, for appellee.
   Lowe, J.,

delivered the opinion of the Court.

In this appeal from a demurrer sustained without leave to amend by the Circuit Court for St. Mary’s County, appellant clings to a thin conclusory reed which is far too insubstantial to keep her afloat.

Appellant, Palmira N. Allgood, was a deputy sheriff hired by appellee, Sheriff Somerville, and subsequently terminated by him. No reason for termination was given other than that her services were no longer needed. She petitioned to enjoin that termination. According to the chancellor’s opinion, appellee’s demurrer (which was not included in the record extract but clearly should have been, Md. Rule 1028) asserted:

“that this court lacks jurisdiction over the subject matter of this case; that the plaintiff has failed to state a claim upon which relief can be granted; and that the plaintiff has failed to allege sufficient injury warranting injunctive relief.”

He then pointed out that there was no tenure or merit system protecting appellant.

“The defendant is a constitutional officer with the common law power to appoint and terminate his deputies. Article 10, Section 44, Maryland Constitution; Beasley v. Ridout, 94 Md. 641 (1902); Anderson on Sheriffs, Section 85. The General Assembly has over the years restricted the Sheriff’s rights by providing deputy sheriffs of several counties with tenure after expiration of probation and certain procedural rights with respect to terminations. See Courts and Judicial Proceedings Article, Section 2-309 (h), (Carroll County), 2-309 (1) (Frederick County); and Section 2-309 (w) (Washington County). However, it appears that no similar provision has been enacted pertaining to the Sheriff of St. Mary’s County.”

The opinion then addressed what the judge discerned to be the underlying cause of action that appellant was trying to set forth in her vague, conclusory and circuitous petition:

“The ‘Law Enforcement Officers’ Bill of Rights’ was enacted by the Legislature in 1974 (Chapter 722, Acts of 1974), its application expanded by amendment in 1975 (Chapter 809, Acts of 1975), and substantially rewritten in 1977, (Chapter 366, Acts of 1977). The purpose of the Law Enforcement Officers’ Bill of Rights was to guarantee certain procedural safeguards to law enforcement officers during investigations and hearings which could result in disciplinary action, demotion or dismissal. Abbott v. Administrative Hearing Board, 33 Md. App. 681, 366 A. 2d 756 (1976). Section 728 (b) sets forth the procedures to be followed and conditions that must be met whenever a law enforcement officer is under investigation or is subject to interrogation by a law enforcement agency, for any reason which could lead to disciplinary action, demotion or dismissal. Similarly, Section 730 (a) confers a right to a hearing if an investigation or interrogation of a law enforcement officer results in the recommendation of some action such as dismissal. Section 731 requires that the hearing board make a finding of guilty or not guilty on each issue before the board.
In the instant case, there can be no doubt that the plaintiff is a law enforcement officer within the meaning of Sections 727 (b) (5) and 727 (b-1). But the plaintiff does not allege or contend that she was either investigated, interrogated, or charged. Nor were any complaints or accusations made against her. This admission appears fatal, for the language of the Law Enforcement Officers’ Bill of Rights clearly indicates that the law enforcement agency must act in one of the above ways before the procedural safeguards and protections can come into play. Simply put, the court is of the opinion that the language of the statutes here relied upon by the plaintiff do not reach terminations of non-tenured law enforcement officers without cause. A hearing board could not properly make a finding of guilty or not guilty when there have been no accusations, complaints or charges giving rise to the termination.”

Presumably the appellant argued there, as she did here, that the statute should be construed as a tenure provision and at the very least sufficiently so as to require a law enforcement officer’s employer to justify a dismissal in court when called upon to do so. The chancellor declined to do that — and so do we.

“The plaintiff urges that if the provisions of the Law Enforcement Officers’ Bill of Rights is so construed, no law enforcement officer in the future will be charged. The court however refuses to speculate or substitute its judgment for what the legislature has duly enacted. Nor will it assume or presume purposes that are not indicated or expressed by the statute itself.”

The chancellor concluded by finding that the Law Enforcement Officers’ Bill of Rights was inapplicable in the instant case and that appellant had failed to state a claim upon which relief could be granted.

On appeal, recognizing our reluctance to write into a statute that which the Legislature omitted, appellant alternatively argues that under § 734 of the Act a law enforcement officer

“who is denied any right afforded by this subtitle may apply ... for any [sic] order directing the law-enforcement agency to show cause why the right should not be afforded.”

She then points to § 733 of the subtitle which elliptically reads:

“A law-enforcément officer may not be discharged ... or otherwise discriminated against in regard to his employment... by reason of his exercise of or demand for the rights granted in this subtitle, or by reason of the lawful exercise of his constitutional rights.”

Appellant indicates in her brief that her petition had alleged:

“Your plaintiff submits that the arbitrary, capricious, unlawful, and improper conduct of the Defendant is, inter alia, a discharge and discriminatory action in retaliation for exercising rights granted by the laws of this County, the State of Maryland, and the Constitution of the United States, including without limitation, Article 27, Section 733, Annotated Code of Maryland, and the XIV Amendment of the United States Constitution, and Title 18, United States Code, Section 1983, et seq. ...”

That bald conclusory statement is obviously demurrable absent some factual recitation to support a cause of action thereunder. The record nowhere indicates that appellant raised this constitutional infringement issue before the chancellor and she frankly admitted she did not. There is no allusion of conduct or evidence in support of the allegation in appellant’s “Affidavit in Support of Petition for Injunctive Relief,” any of the memoranda filed by appellee or even a suggestion at argument that such evidence does in fact exist. The chancellor responded to appellant’s sole thrust below, and we are in accord with that response.

Nor did appellant ask for leave to amend and the chancellor, therefore, cannot be faulted for denying that which was not requested. See Columbia R. E. Title Ins. Co. v. Caruso, 39 Md. App. 282, 290 (1978). Appellant’s silence as to. any constitutional infringement to support her claim for an injunction and demand to show cause, together with her singular reliance upon an entirely different theory of the case, should not be permitted to be changed upon appeal after an unfavorable judgment. Kasten Constr. Co. v. Jolles, 262 Md. 527, 533-534 (1971); Alois v. Waldman, 219 Md. 369 (1959); Brehm v. P. B. & W. R. Co., 114 Md. 302, 305 (1911).

Judgment affirmed.

Costs to be paid by appellant.


author: Liss, J.,

text:
    RALPH PRITTS & SONS, INC. v. WILLIAM C. BUTLER et ux.
    [No. 1387,
    September Term, 1978.]

      Decided July 13, 1979.

    The cause was argued before Thompson, Liss and Couch, JJ.

      Hugh H. McMullen, with whom were Geppert, McMullen & Paye on the brief, for appellant.

      Leo William Dunn, Jr., with whom were Manuel A. Palau and Dunn & Emig, P.A. on the brief, for appellees.
   Liss, J.,

delivered the opinion of the Court.

The appellant in this case is Ralph Pritts and Sons, Inc., a body corporate of the State of Maryland, which operates an automotive repair shop in Oakland, Garrett County, Maryland. The appellees are William C. Butler and Barbara Ann Butler, his wife, who sued the appellant in the Circuit Court for Garrett County for the personal injuries sustained by Mr. Butler and for the loss of consortium alleged by his wife, arising out of an explosion which occurred on January 8,1977. The explosion involved a lift apparatus located in the appellant’s garage which was being used after normal business hours by the appellee and an employee of the appellant.

At trial before the trial judge and a jury, the parties offered testimony which raised substantial issues of fact for determination by the jury. The testimony offered at trial was as follows: Howard Fulk was a regular, full-time employee of the appellant. The appellee, William C. Butler, was a longtime customer of the appellant’s garage who had previously bought several automobiles from Fulk in his capacity as an employee and salesman for the appellant. The appellee, in the past, had automotive work performed on his vehicles at the garage. Sometime in December, 1976, Fulk, using a vehicle belonging to the appellant, drove the appellee to a parts shop located in Cumberland, Maryland. While there, the appellee had Fulk purchase a winch which he wanted installed on one of his vehicles. As Butler did not have sufficient cash with him to pay for the winch, the equipment was charged to the account of the appellant. Fulk and Butler returned to the appellant’s garage and deposited the winch where it remained undisturbed for a month. The understanding between Butler and Fulk was that Butler was to be billed for the winch, however Butler insisted that before he would pay the bill, Fulk would be required to install the winch on Butler’s truck. Fulk testified that he intended to install the winch “some Saturday evening after I got off work and the garage was closed.”

Evidence was produced to the effect that the appellant had permitted its employees to work on their own cars at the appellant’s garage after hours and on weekends, and that the employees were authorized to use the equipment at the garage while repairing their own vehicles. Appellant indicated that the employees had been advised that this privilege extended only to the employee-owned vehicles.' However, Fulk testified that he knew of no company policy which precluded him from working on the appellee’s car after hours in the company garage. He stated further that he had notified the general manager that he had purchased the winch for Butler, that he had charged it to the company’s account, and that he proposed to install the winch on the appellant’s car on his own time, after hours. The general manager denied having any recollection of receiving such information from Fulk.

In any event, on January 8, 1977, at approximately 5:00 P.M., when the garage was closed for regular business, Fulk, Butler and several of his friends undertook to install the winch on Butler’s truck. The vehicle was placed on a hoist which was operated by Fulk. Butler testified that there was suddenly a loud explosion which “rose from underneath me,” and that the force of the explosion caused the deck plate, which covered the hydraulic container of the lift, to strike the appellee in the leg, causing his leg to collapse underneath him and causing him to be thrown six to eight feet from the truck. As a result of the explosion, the appellee alleged that he sustained serious personal injuries, which required extensive medical treatment, that he lost large sums of wages and that he and his wife suffered a loss of consortium.

Appellant moved for a directed verdict at the conclusion of the plaintiff’s case and at the close of all the evidence. Both motions were denied, and the case was submitted to the jury which after deliberation returned a substantial verdict in favor of the appellees. The trial judge denied motions for a judgment n.o.v. and a new trial, and it is from these several judgments that this appeal was filed.

Appellant presents four questions to be decided by this appeal. We shall not consider them in the order suggested by the appellant but will instead consider the issues in the following sequence:

1. Did the court below err in instructing the jury that they could consider the plaintiff a business invitee while on the defendant’s premises?

2. Is the doctrine of res ipsa loquitur applicable in the instant case?

3. Was there sufficient evidence of negligence on the part of the defendant to warrant submission of the case to the jury?

4. Did the court err in instructing the jury that they could consider lost wages of the plaintiff?

1. Business Invitee

Appellant vigorously contends that the trial court erred in submitting to the jury the question of whether the appellee was a business invitee on the appellant’s premises where he sustained the injuries complained of in this case.

The Court of Appeals, in Bramble v. Thompson, 264 Md. 518, 521, 287 A. 2d 265 (1972), gave a concise and lucid explanation of the duties of the owners of real property to invitees, licensees, and trespassers as follows:

The liability of owners of real or personal property to an individual injured on their property is dependent on the standard of care owed to the individual and that in turn is contingent upon a determination of the individual's status while on the property, i.e., whether he is an invitee, licensee, or trespasser. An invitee is one invited or permitted to enter or remain on another’s property for purposes connected with or related to the owner’s business. The owner must use reasonable and ordinary care to keep his premises safe for the invitee and to protect the invitee from injury caused by an unreasonable risk which the invitee, by exercising ordinary care for his own safety, will not discover. [Citations omitted.] A licensee is one privileged by virtue of proper consent to enter for his own purpose or convenience onto another’s property. There are two types of licensees, a bare licensee and a licensee by invitation. A bare licensee takes the property as he finds it and, like a trespasser, he is owed no duty by the owner except that he may not be wilfully or wantonly injured or entrapped by the owner once his presence is known. [Citations omitted.] A licensee by invitation is a social guest who takes the premises as his host uses them. In general, the legál duty owed him by the host is to take the same care of the guest as the host takes of himself or members of his family. He must exercise reasonable care to make the premises safe for his guest or he must warn him of known dangerous conditions that cannot reasonably be discovered and which in fact are not discovered by the guest. [Citations omitted.] A trespasser is one who intentionally and without consent or privilege enters another’s property. [Citations omitted.] The only duty of care a property owner owes to a trespasser, even one of tender years, is to refrain from wilfully or wantonly injuring the intruder. [Citations omitted.]

The appellee contends, justifiably we believe, that there was evidence from which the jury could have found that the appellee was a business invitee on the premises of the appellant when his injuries were sustained. There was testimony, which if believed, established the fact that Fulk extended a specific invitation to the appellee to come to the appellant’s premises to have the winch installed. The testimony further showed that Fulk had been employed by the appellant for more than five years and had performed a variety of functions for the appellant including being a shop foreman and salesman, and purchasing parts. In addition, Fulk testified that when he agreed to install the winch after hours, he was aware of no regulations or policies of the appellant which precluded such action on his part. He stated that it was not unusual for this type of work to be performed in the evening, and that he had apprised the general manager of what he proposed to do without receiving any objection. That the arrangement was not unusual was substantiated by the general manager who testified concerning the use of the garage after hours. He stated that “several of the employees brought other people’s cars in and worked on them. We didn’t say anything to them about it, no.”

It seems clear to us that on this state of the record, the trial court was eminently correct in submitting to the jury the question of whether Fulk had the actual authority to expressly invite the appellee to the appellant’s place of business on the fateful Saturday evening. Nor may the appellant avoid responsibility for the acts of his employee by relying on restrictions on the acts of the employee unknown to the persons dealing with that employee. As the Court of Appeals said in Banks v. Montgomery Ward & Co., 212 Md. 31, 43, 128 A. 2d 600 (1957), “[i]t is held generally that an employer cannot escape liability for the acts of his agent by placing limitations on his authority not known to others dealing with him nor properly inferable from the nature of his employment.”

We conclude that there was evidence from which the jury could conclude that the appellee in this case acquired the status of a business invitee by way of Fulk’s express invitation. Even if, arguendo, we were to decide that there was no sufficient express invitation, we believe that the appellee would, nevertheless, be a business invitee by implication.

The Court of Appeals, in Crown Cork & Seal Co. v. Kane, 213 Md. 152, 131 A. 2d 470 (1957) held that a person on another’s premises could be a business invitee because of an implied invitation. The defendant in that case contended that the plaintiff was not an invitee or business visitor when he was injured on the defendant’s premises because the plaintiff was not acting for the mutual benefit of the defendant “or promoting any business interest of the owner, but [that he was] acting solely for his own personal pleasure and benefit.” Id. at 158. In commenting on this defense, the Court said:

The cases all recognize that an invitation may be express or implied, and there are many cases in which an invitation has been implied from circumstances, such as custom, the acquiescence of the owner in habitual use, the apparent holding out of premises to a particular use by the public, or simply in the general arrangement or design of the premises. [Id. at 159.]

See Gray v. Sentinel Auto Parts Co., 265 Md. 61, 288 A. 2d 121 (1972); Woodward v. Newstein, 37 Md. App. 285, 377 A. 2d 535 (1977).

Appellant urges that Crown Cork, supra, is inapplicable because there was no evidence of a pecuniary or economic benefit to the appellant flowing from the installation of the winch in the case at bar. The Court of Appeals, in discussing the nature and type of the benefit contemplated in Crown Cork, noted that “the cases which proceed on the benefit theory rely, in many instances, upon rather remote and indirect benefits.” 213 Md. at 159. In the present case, there was evidence to indicate that the appellee was an old and valued customer who had dealt with the appellant on a number of occasions and whose continued good will might well ensure future beneficial transactions between the appellant and appellee. In addition, evidence was adduced regarding a more direct pecuniary benefit to the appellant. Appellee testified that in addition to purchasing the winch, he intended to buy from the appellant a battery, clamps and other accessories required for installation of the winch. Obviously, such purchases would amount to sufficient pecuniary benefit to the appellee to bring this case under the aegis of Crown Cork.

The jury concluded that the appellee was a business invitee either expressly or impliedly, and in both regards the appellant’s duty was to use reasonable and ordinary care to keep his premises safe for the invitee and to protect the invitee from injury caused by an unreasonable risk which the invitee, by exercising ordinary care for his own safety, would not discover.

2. lies Ipsa Loquitur

Appellee, in his brief and argument, urged that there was sufficient direct evidence of negligence on the part of the appellant to require the case to be submitted to the jury. He reserved for himself, however, a fail-back position contending that even if there were insufficient evidence of direct negligence, that the facts and circumstances surrounding this accident were sufficient to raise an inference of negligence under the doctrine of res ipsa loquitur. The jury, he contends, had a right to weigh that circumstantial evidence even though it might not have been required to accept it as sufficient to establish the appellant’s negligence. See Munzert v. American Stores, 232 Md. 97, 192 A. 2d 59 (1963).

We shall not decide the issue whether res ipsa loquitur is applicable in this case because we conclude that there was sufficient evidence of direct negligence to require the issue to be submitted to the jury.

3. Sufficiency of the Evidence of Negligence

The standard of appellate review to be employed where a motion for a directed verdict has been ruled upon by the lower court involves a resolution of the question as to whether there is any legally relevant and competent evidence, however slight, from which a rational mind could infer a fact in issue which, if present, would warrant a finding that the trial court invaded the province of the jury by declaring a directed verdict. In such circumstances, the case should be submitted to the jury and a motion for a directed verdict denied. Impala Platinum, Ltd. v. Impala Sales (U.S.A.), Inc., 283 Md. 296, 389 A. 2d 887 (1978). Maryland Rule 552 requires submission of a cáse to the jury if there be any evidence, however slight, legally sufficient as tending to prove negligence, the weight and value of such evidence being left to the jury. Keene v. Arlan’s Department Store of Baltimore, Inc., 35 Md. App. 250, 370 A. 2d 124 (1977); Krol v. York Terrace Bldg., Inc., 35 Md. App. 321, 370 A. 2d 589 (1977). And meager evidence of negligence is sufficient to carry the case to the jury. Beahm v. Shortall, 279 Md. 321, 368 A. 2d 1005 (1977).

Mr. Albert Paye, who was called by the appellee as an expert witness, stated that the explosion of the hydraulic lift resulted from a failure of the weld that attached the dished head of the lift to the cylindrical portion of the reservoir of the hoist. Paye observed that the failure occurred because of the deterioration of the exterior metal surface of the tank which he concluded was caused by water accumulating in the bottom of the hoist pit.

Paye testified, in part, as follows:

Q. Now Mr. Paye, as a result of your investigation or a result of the information that you acquired, do you have an opinion, based on your engineering expertise with reasonable probability, as to what was the cause of this particular explosion on the 8th day of January, 1977? A. If I may refer to my report and notes which I have here to answer that.
Q. Yes, you may. A. Because it’s rather cumbersome — cumbersome response. Plausibly, the circumferential weld attaching the bottom dished head to the cylindrical section of the hydraulic fluid reservoir failed due to deterioration of the metal in the exterior surface of the tank probably due to galvanic action or corrosion. Visual inspection of the interior surface of the tank indicated that it was smooth and well preserved. However, the'exterior surface of the tank especially in the vicinity of the bottom dished head weld does show marked pitting. Similar pitting is not evident in the area of the top dished head weld. Is this —
Q. Yes, I think also in that particular report, the last paragraph of that particular report, you have arrived at a conclusion. A. These observations lead to the conclusion that there was a complete failure of the weld that fastened the bottom dished head to the cylindrical section of the hydraulic fluid reservoir.
As to the cause of the deterioration of the tank metal and the weld, my inquiries reveal that water often accumulated in the bottom of the pit. This water came from floor washings and from melting snow and ice.
Q. Go ahead and finish it, sir. A. I’d have to quote employees here which I think Judge Thayer ruled out.
Q. No, I don’t think he ruled that out specifically. You can answer that. A. Employees said that they pumped the pit —
(Mr. McMullen) Objection, your Honor.
(The Court) Yes, sustained.
By Mr. Dunn:
Q. Does your investigation reveal any policy as to how often the people at Ralph Pritts & Sons would pump out this particular — A. No, I didn’t find out, they said they did from time to time.

In addition to the testimony that corrosion was visible on the exterior surface of the hoist, there was also testimony to the effect that water accumulation had been cleared by the appellant’s employees “from time to time” from the bottom of the hoist pit. Thus, it is apparent that the appellant was aware of the water situation and knew or should have known of the visible exterior corrosion that ultimately resulted in the mishap. As the appellee was a business invitee, the appellant owed him a duty to use reasonable and ordinary care to keep his establishment safe and to protect the invitee from any unreasonable risk he would not discover on his own. Bramble v. Thompson, supra. While the proprietor will not be held negligent for defects of which he had no notice and which were not or could not have been disclosed by proper inspection, he is responsible for resultant injury adjunct to a breach of his duty of ordinary care. See Sherman v. Suburban Trust Co., 282 Md. 238, 384 A. 2d 76 (1978).

Considering the state of the evidence and the standard of care required to be employed, the motion for a directed verdict was properly denied, and the consideration of the case was correctly submitted to the triers of the facts.

4. Jury Instruction — Lost Wages

At the conclusion of the trial, the judge instructed the jury, in part, as follows:

You may consider the personal injuries sustained by the plaintiff and their extent and duration; the effect such injuries have on the over-all physical and mental health and well-being of the plaintiff; the physical pain and mental anguish suffered in the past, and which with reasonable probability may be expected to be experienced in the future; the disfigurement and humiliation or embarrassment, if any, associated with such; the medical and other expenses reasonably incurred in the past, and which with reasonable probability may be expected in the future; the loss of earnings, if any, in the past, and such earnings or reduction in earning capacity which with reasonable probability may be expected in the future.

It is clear from our perusal of the record that the appellee pressed no claim for loss of employment at trial. During the course of the trial, counsel for the appellee stated, while conducting the direct examination of his client in the presence of the jury, “that you are not making any claim for loss of employment.” Therefore, despite the subsequent instruction to the.contrary, the jury was informed that no basis existed for a lost wage claim.

The court further instructed the jury that:

I want to advise you that the fact that I have instructed you on the issue of damages must not be considered by you as any indication of the plaintiffs right to recover damages or is any indication of my view on the issue of liability or as to which party is entitled to your verdict. I have instructed you on the issue of damages to guide you in the event that you find from the evidence that the plaintiff is entitled to recover damages, since it is my duty to instruct you fully on all of the law in this case. (Emphasis supplied.)

As the jury had no evidence of loss of employment before it and was specifically instructed to base its finding solely on the evidence, we find the reference to earning capacity in the instruction was harmless error.

The Court of Appeals has said on numerous occasions that in considering a trial court’s instructions to a jury the instructions must be considered as a whole. See Henry v. State, 273 Md. 131, 150, 328 A. 2d 293 (1974); Wood v. Abell, 268 Md. 214, 235, 300 A. 2d 665 (1973). In Baltimore & O. R. R. v. Plews, 262 Md. 442, 462-63, 278 A. 2d 287 (1971), the Court quoted Judge Prescott in Wilhelm v. State Traffic Comm., 230 Md. 91, 185 A. 2d 715 (1962), which is applicable here:

[W]e have said that the trial court’s instructions must be considered as a whole; that the charge need not comply with the technical rules of formal written prayers; that this Court will not be overly critical of the words used by the trial judge if the result is sufficient, Lloyd v. Yellow Cab Co., 220 Md. 488, 154 A. 2d 906; and, even if an erroneous instruction were given, it did not constitute a ground for reversal in the absence of prejudice, Connor v. State, 225 Md. 543, 171 A. 2d 699. Id. at 102.

The instruction in the present case as to wages was erroneous, but the error was harmless.

Judgment affirmed, costs to be paid by appellant.

      . In Sherman v. Suburban Trust Co., 282 Md. 238, 384 A. 2d 76 (1978), the Court of Appeals, speaking through Chief Judge Murphy, held that the question whether Maryland should adopt a general negligence standard for owners of real property was not properly before the Court for review. In a dissenting opinion, Judge Levine expressed the view that the issue was properly before the Court and urged that the common law classifications of invitee, licensee and trespasser should be abolished in favor of a general negligence standard. This issue was not raised nor argued below in the case at bar, nor was it presented to us by brief or oral argument. We must conclude that any change in the common law rules we have here stated must await another day.


author: Couch, J.,

text:
    JOHN D. COPANOS & SONS, INC. v. McDADE RIGGING AND STEEL ERECTION COMPANY, INC. et al.
    [No. 1390,
    September Term, 1978.]

      Decided July 13, 1979.

    The cause was argued before Thompson, Liss and Couch, JJ.

      Jerald J. Oppel and Pamela J. White, with whom were Oher, Grimes & Shriver on the brief, for appellant.

      EmanuelH. Horn and John E. Mudd, with whom were Gary C. Duvall and Miles & Stockbridge on the brief, for appellees.
   Couch, J.,

delivered the opinion of the Court.

This appeal requires us to decide when a business concern may recover lost profits in an action based on negligence, breach of contract, breach of warranty, and strict liability. On the one hand, John D. Copanos & Sons, Inc., the business concern and appellant, urges that any lost profits which can be shown with reasonable certainty may be recovered. On the other hand, McDade Rigging and Steel Erection Company, Inc., and Rental Tools and Equipment Company, Inc., appellees, contend that lost profits allegedly suffered by a “new” business may not be recovered. It is their position that appellant’s venture in this case was new, hence it may not recover any such lost profits. The trial court agreed with appellees and from that ruling this appeal flows.

The Facts

Appellant has been a manufacturer of pharmaceuticals since 1963, and has apparently enjoyed steadily increasing profits on the manufacture and sale of pharmaceuticals in liquid, tablet, and powder form. Included among the pharmaceuticals appellant produces are various types of penicillin. In 1972 appellant purchased a Zanasi capsule machine to be used in the production of capsuled pharmaceuticals, specifically ampicillin, a form of penicillin. Having decided to move certain of the equipment within its plant, appellant contracted with appellee McDade to move the equipment, which included moving the Zanasi machine from the first floor to the second floor. While on the first floor, the machine had been operated, tested, finely tuned, and made ready to begin commercial production of ampicillin capsules immediately upon its placement on the second floor. On October 2, 1973, McDade prepared the capsule machine for removal to the second floor by positioning it on a forklift rented to McDade by appellee Rental. The machine was raised to a height of five to eight feet; the forklift then pitched forward against a wall of the plant destroying the capsule machine and causing other damage, not pertinent here. Search for a replacement machine was instituted but because of its foreign manufacture and the limited number of Zanasi machines in existence, it was not until December 31,1973 that another machine could be purchased, installed, tested, and made fully operational. Appellant proffered that during this period certain customers cancelled their firm orders and did not fulfill their intentions to order large quantities of ampicillin capsules. Suit was filed in the Superior Court of Baltimore City where, prior to trial, appellee Rental moved the court to restrict appellant’s evidence of consequential damages by eliminating evidence of lost profits from the case. After a hearing, during which appellant made a proffer as to the evidence it was prepared to offer with regard to lost profits, the trial court granted appellee Rental’s motion.

Following the receipt of evidence, a jury awarded appellant the amount of $50,019.49 against both appellees. This amount, of course, does not encompass any “lost profits” award.

The Contentions

Appellant contends that lost profits which can be shown with reasonable certainty, and are not speculative or conjectural, should be recoverable if they were foreseeable. Appellees urge that lost profits from a new business or venture simply are not recoverable under Maryland law and that, in any event, lost profits in this case were not foreseeable and are thus not recoverable.

The Law

It seems well settled in this State that there may be a recovery for unrealized profits providing (1) plaintiff shows that a breach by a defendant was the cause of the loss; (2) it is shown that defendant could have reasonably foreseen that a loss of profits would be a probable result of a breach; and (3) the lost profits are proved with reasonable certainty. See Impala Platinum v. Impala Sales, 283 Md. 296, 339, 389 A. 2d 887 (1978), and M & R Builders v. Michael, 215 Md. 340, 345-46, 138 A. 2d 350 (1958). There appears to be a caveat to this rule in the case of a new business, however, which appellees and the trial court felt was dispositive. This caveat was examined in detail by the Court of Appeals in Evergreen Amusement Corp. v. Milstead, 206 Md. 610, 112 A. 2d 901 (1955), where it was said:

“We think the court did not err in refusing the proffered evidence. Under the great weight of authority, the general rule clearly is that loss of profit is a definite element of damages in an action for breach of contract or in an action for harming an established business which has been operating for a sufficient length of time to afford a basis of estimation with some degree of certainty as to the probable loss of profits, but that, on the other hand, loss of profits from a business which has not gone into operation may not be recovered because they are merely speculative and incapable of being ascertained with the requisite degree of certainty. Restatement, Contracts, Sec. 331, states the law to be that damages are recoverable for profits prevented by breach of contract ‘only to the extent that the evidence affords a sufficient basis for estimating their amount in money with reasonable certainty’, and that where the evidence does not afford a sufficient basis, ‘damages may be measured by the rental value of the property.’ Comment ‘d’ says this: ‘If the defendant’s breach has prevented the plaintiff from carrying on a well-established business, the amount of profits thereby prevented is often capable of proof with reasonable certainty. On the basis of its past history, a reasonable prediction can be made as to its future.’ (italics supplied) That damages for profits anticipated from a business which has not started may not be recovered, is laid down in 25 C.J.S., Damages, Sec. 42, and 15 Am. Jur., Damages, 157; 5 Corbin, Contracts, Sec. 1022, 1023; 1 A.L.R. 156; 99 A.L.R. 938. See also The Requirement of Certainty for Proof of Lost Profits, 64 Harvard Law Review 317. The article discusses the difficulties of proving with sufficient certainty the profits which were lost, and then says: ‘These difficulties have given rise to a rule in some states that no new business can recover for its lost profits.’ While this Court has not laid down a flat rule (and does not hereby do so), nevertheless, no case has permitted recovery of lost profits under comparable circumstances.”

Id. at 618-19. Thus the Court of Appeals has not entirely foreclosed the possibility that lost profits can be recovered by an established firm embarking on a new method of manufacture. Whether the caveat is even applicable here seems debatable since it is arguable that the encapsulating process of a form of penicillin, which appellant has produced in other forms for years, is not a “new business”. We believe each case must be judged on its facts and thus it was error for the trial court to grant the motion restricting the evidence which would have developed those facts. The real concern in considering lost profits as an element of damages is not whether the business is old or new, but rather whether anticipated profits can be shown with. reasonable certainty so that the evidence rises above speculation or conjecture.

The question here, then, is whether appellant’s proffer meets the three part test of M & R Builders, supra, bearing in mind the fact that the Zanasi machine had never started commercial production. The trial judge, in granting appellee Rental’s motion restricting the evidence of lost profits, based his decision primarily on the “new business” rule, but there was also an implicit finding that appellees could not have foreseen a loss of profits and that the proffer contained “much vagueness, speculation, and expectations.” While we are mindful of Md. Rule 1086, we believe the proffer was sufficient to rise above speculation and conjecture and that the court erred in limiting the evidence. The proffer, as shown by the record, was to the effect that appellant would offer evidence to show:

1) that it had been in business as a manufacturer of pharmaceuticals since 1963, with its profits increasing yearly;
2) that it had an agreement with McDade to move the capsule machine;
3) McDade and Rental both were aware that appellant was in the pharmaceutical manufacturing business;
4) McDade knew the machine to be moved was a capsule making machine;
5) McDade and Rental both saw the plant in operation producing pharmaceuticals;
6) the machine was destroyed in the process of moving it;
7) appellant had contracts for the sale of encapsulated ampicillin and, following the accident, the contracts were cancelled;
8) the cost of producing the capsules was established in detail;
9) the sales price and contracts for sale were established in detail; and
10) that after a new machine was obtained and put into operation (after 52 days), 10% of the plant was set aside for the production of ampicillin.

Appellees contend that they could not have foreseen a loss of profits to appellant. The Court of Appeals in M & R Builders, supra, discussed the foreseeability problem with respect to a buyer and seller. What was said concerning the buyer applies with equal force to appellant’s situation:

“Ordinarily cases involving this subject fall into two distinct factual categories: (i) cases where the injured party is a seller of something — he may be a farmer selling produce, a manufacturer selling a product, a merchant selling goods, wares and merchandise, or a building contractor selling both materials and services — and the defendant has breached his contract to buy, and (ii) cases where the injured party is a buyer of something which he plans to resell, either directly, as a middleman, or as a manufacturer, in a transaction collateral to his contract with a supplier. In the second category a plaintiff seeks recovery of collateral profits which he had lost. In such cases a failure to deliver, delivering late or delivering unusable goods, if the plaintiff is unable to obtain substitutions promptly from another supplier, might delay the collateral transaction, frustrate it, or increase its cost, and may indeed cause the loss of a customer. However, in such instances the loss of profits is collateral, not direct, and more stringent proof of loss by the buyer is required than is demanded of a seller. To meet the demands of the ‘certainty’ rule, a buyer for resale must introduce detailed evidence of the number of sales lost, the prices which might have been obtained, and the costs of reselling. In the first category, into which the case at bar falls, the plaintiff seeks recovery of direct profits which it has lost. In such cases the loss of profits is generally measured by the difference between the contract price and the actual or estimated costs of full performance. In such instances the proof requirements are not as strict, and courts have universally held that a defendant bargaining with a businessman should necessarily foresee that the prospect of the seller making a profit was the reason he entered into the contract, thus satisfying the ‘foreseeability’ rule.” Id. at 346-47.

The mere circumstance that more stringent proof is required where the anticipated profits stem from collateral transactions does not warrant a prohibition on such proof. We believe that the proffer, if supported by evidence, would be sufficient to warrant submitting the issue to the jury as it meets the three criteria set out in M & It Builders, supra. We are not to be understood to say appellant must prevail on this issue, only that appellant should be given an opportunity to put on its proof and, if the proffer is proved, that the issue is one for determination by the jury.

Judgment reversed.

Case remanded for a new trial as to damages only.

Costs to be paid by appellees.