241 Md. App. 1
Md. Ct. Spec. App.2019Background
- A fire in April 2014 severely damaged a near-complete 139‑unit building; Upper Rock sued Red Coats (security/fire watch) and Red Coats settled for $14M (conceding joint‑tortfeasor status). Red Coats then pleaded third‑party contribution against Gables Construction, Inc. (GCI).
- GCI was general contractor under a Prime Contract with Upper Rock that contained (a) indemnification clauses, (b) insurance requirements, and (c) a waiver of subrogation endorsing insurers not to pursue parties for losses covered by insurance.
- Red Coats contracted with a Gables affiliate (GRSI) under a Vendor Services Agreement (VSA) that required insurance, additional‑insured endorsements, and a waiver of subrogation "on all policies" in favor of Gables and affiliates.
- The trial court granted partial summary judgment that GCI breached the standard of care; the jury found GCI’s negligence proximately caused the fire and answered that the contractual waiver of subrogation did not preclude Red Coats’ contribution claim. The court entered judgment for Red Coats: $7,000,000 (one‑half of the $14M settlement).
- On appeal the Court of Special Appeals affirmed liability rulings but held (1) a contractual waiver of subrogation does not bar contribution claims under Maryland’s UCATA against non‑party beneficiaries, and (2) the VSA and the settlement release limit GCI’s contribution exposure; remanded to adjust damages (court concluded GCI’s pro rata liability was $2M).
Issues
| Issue | Red Coats' Argument | GCI's Argument | Held |
|---|---|---|---|
| Whether GCI is a joint tortfeasor under UCATA | Jury and court rulings that GCI’s negligence proximately caused the fire make it a joint tortfeasor | GCI argued waiver of subrogation and contractual duties mean it is not "jointly or severally liable in tort" | Held: GCI adjudicated/judicially determined to be a joint tortfeasor for UCATA purposes |
| Whether contractual waiver of subrogation bars contribution under UCATA | Waiver is only contractual; Red Coats (and its insurer) were not parties to the Prime Contract so waiver cannot bar contribution by nonparties | GCI argued waiver precludes contribution and limits liability to amounts not covered by insurance | Held: A contractual waiver of subrogation does not bar contribution under UCATA as to non‑contracting joint tortfeasors; waivers bind only parties/privities |
| Effect of VSA and Settlement on amount recoverable by Red Coats from GCI | VSA insurance/waiver language and settlement/release affect how much Red Coats can recover from GCI | GCI said it should be shielded or limited to insurer‑paid amounts by the Prime Contract waiver | Held: The Settlement Agreement and the VSA (as to affiliates/additional insureds) limit Red Coats’ recovery; GCI’s pro rata exposure reduced (court concluded $2M rather than $7M) |
| Denial of superseding cause instruction & partial summary judgment on negligence | Red Coats argued evidence supported summary judgment and no superseding cause instruction because GCI breached standard of care | GCI argued factual disputes (NFPA/OSHA compliance, expert testimony) required denial of summary judgment and warranted superseding cause instruction | Held: Partial summary judgment on breach was proper (GCI failed to rebut admissions/expert deposition); denial of superseding cause instruction was not error |
Key Cases Cited
- Valk v. Montgomery County, 317 Md. 186 (discusses limits on contribution where plaintiff’s remedies against a defendant are extinguished, and the concept of "common liability")
- Parler & Wobber v. Miles & Stockbridge, 359 Md. 671 (refuses a contractual or policy shield that would subvert UCATA; contribution allowed where public policy favors fact‑finder allocation)
- Baltimore Transit Co. v. State ex rel. Schriefer, 183 Md. 674 (describes UCATA’s purpose to create contribution rights among joint tortfeasors)
- Swigert v. Welk, 213 Md. 613 (distinguishes releases that deny liability from those that admit it for UCATA application)
- Mercy Medical Center v. Julian, 429 Md. 348 (defines pro rata/share principles under UCATA and effect of releases)