E-Alert Case Updates
Court of Special Appeals of Maryland Finds that Contractors Owe a Duty to Exercise Reasonable Care to Prevent Damage to Tangible Personal Property to Third Parties who Own that Property Inside a Structure
Cash & Carry America, Inc. v. Roof Solutions, Inc., et al.
Available at: http://www.mdcourts.gov/opinions/cosa/2015/2122s12.pdf
Cash & Carry America, Inc. (“Cash & Carry”) filed a lawsuit against Roof Solutions, Inc. and its employee (“Roof Solutions”) alleging that negligence on the part of Roof Solutions while replacing a roof on a townhouse owned by Merle Coe, the Chief Executive Officer of Cash & Carry, caused the roof to catch fire and damaged property belonging to Cash & Carry that was inside of the townhouse at the time of the fire. According to Coe, when the roofing employee came to look at his townhouse, Coe told him that the computers in the upstairs bedroom office were the property of Cash & Carry. On the day of the fire, the District of Columbia Fire Department investigators opined that it was caused by roofers using a torch to heat tar paper and this flame from the torch ignited the structural members of the roof. The fire was classified as accidental. According to the roofing employee, he was only aware of the computers the day after the fire, when Coe pointed out that they had been sitting in water since the flames were extinguished by the fire department. Roof Solutions alleged there was no knowledge of the property belonging to Cash & Carry; they did not owe a duty of care to Cash & Carry; that Cash & Carry was not a third party beneficiary of the subcontracting agreement; and, that Cash & Carry’s claims were barred under the economic loss doctrine.
The Circuit Court for Montgomery County granted summary judgment in favor of Roof Solutions on Cash & Carry’s negligence claim. The Court of Special Appeals reversed and remanded for further proceedings.
The Court found that a roofing contractor who performs work on a structure does owe a duty of care to a third party owner of personal property, which is found inside of the structure. The Court noted that, under Maryland law, in determining whether a duty is owed to a plaintiff, the essential issue is whether plaintiff’s interests are entitled to legal protection against the defendant’s conduct. The Court indicated that there is a movement in the law away from privity being required for a contractor to be liable in tort for physical injury to property or persons of a third party. This type of contractual privity or some other special relationship between the contractor and third party whose property is located in the structure that the contractor is working on is not necessary. The risk of harm created by the Roof Solutions’s alleged negligence was not solely economic, there was also a risk of injury and death, and thus, “foreseeability” would determine whether a duty of care in tort applies. Any visitor, not just Coe, would be subject to the same risks of injury and death caused by the fire. Similarly, the risk to the personal property in the townhouse would not vary based on who owned the property. Moreover, a reasonably prudent roofing contractor would realize the risk and that it would not be confined to the owner of the townhouse. Therefore, the Court indicated that the risk of harm, not the actual harm that occurs, is the “touchstone” of the duty analysis.
Furthermore, the Court noted that the economic loss doctrine, which prohibits plaintiffs in product liability actions from recovering tort damages for what is in fact a breach of contract, would be inapplicable to the instant case. The Court elaborated that the doctrine would apply, for example, if the roof was defective in a way that did not pose a safety risk; then plaintiff would have a contract claim, but no tort recovery would be permitted. Here, a torch was used carelessly and caused a fire.
Ultimately, the Court of Special Appeals found that Roof Solutions had a duty to exercise due care when performing roofing work, which included protecting Cash & Carry’s tangible personal property located inside of the townhouse. The duty would not rely upon the contractor’s knowledge of the identity of each owner of the property.
This duty, however, is not extended to risks of harm to non-tangible personal property and economic loss consequential to injury to such non-tangible property. Thus, Cash & Carry could not recover damages to its software.
Maryland Defense Counsel, Inc.
1218 Broadway Rd.
Lutherville, MD 21093
|©2008 Maryland Defense Counsel, Inc. All Rights Reserved.|