Perry v. Asphalt & Concrete Services, Inc.
133 A.3d 1143
Md.2016Background
- Moran Perry was struck by a dump truck on April 28, 2009; the truck was driven by William Johnson and owned/operated under the name Higher Power. Perry sued Johnson, Higher Power, and Asphalt & Concrete Services, Inc. (ACS) for negligence and negligent hiring/supervision.
- ACS contracted with independent truck operators; ACS policy required proof of a driver’s liability insurance and license before hiring. ACS personnel twice requested proof from Higher Power but did not receive documentation before the accident.
- Officer Joseph Palkovic investigated and testified that the Progressive policy covering the truck had been canceled for nonpayment on March 14, 2009 (i.e., the truck lacked liability coverage at the time of the accident).
- At trial the court allowed testimony and documentary references showing the lack of insurance (over ACS’s objection), and instructed the jury that vehicle insurance requirements could be evidence of negligence if violation caused the injury. The jury found ACS liable and awarded damages to Perry.
- The Court of Special Appeals reversed, holding lack of insurance was not causally connected to Perry’s injury and therefore inadmissible; the Court of Appeals granted certiorari and affirmed the intermediate court, holding admission of lack-of-insurance evidence was legal error and prejudicial because it was irrelevant to proximate cause.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admissibility of evidence that the truck lacked liability insurance | Perry: lack of insurance is relevant to whether ACS breached its duty in hiring (shows ACS failed to follow its hiring policy, bearing on competency) | ACS: Rule 5-411 bars insurance evidence as proof of negligence; lack of insurance is not the proximate cause of the accident | Admissibility requires relevance to proximate cause; lack of insurance here was not a proximate cause and was legally irrelevant, so admission was error |
| Whether negligent hiring claim was supported such that insurance evidence could be limited to that claim | Perry: evidence of ACS’s hiring practices and requests for insurance made the lack-of-insurance probative on negligent hiring | ACS: Even if negligent hiring occurred, the absence of insurance did not cause Perry’s injuries and thus is irrelevant | Court: Evidence of failure to verify insurance can be relevant to hiring competence, but only if that failure is tied to proximate cause; here it was not |
| Prejudice from admission of lack-of-insurance evidence | Perry: admission was limited and would not unfairly prejudice ACS | ACS: Admission likely led jury to infer fault and influenced liability finding and damages | Held prejudicial: reasonable probability the jury considered the irrelevant insurance evidence in finding liability; new trial required |
| Trial court’s procedural handling (foundation before admission and curative steps) | Perry: court properly required foundation of employment relationship before admitting insurance testimony | ACS: court misapplied its prerequisite, permitted prejudicial evidence before foundation, and failed to give curative instruction or use procedural tools to avoid prejudice | Court: Trial court abused discretion by admitting irrelevant evidence and by failing to limit/prevent prejudice; curative instructions were not given, warranting retrial |
Key Cases Cited
- Cramer v. Housing Opportunities Comm’n of Montgomery Cty., 304 Md. 705, 501 A.2d 35 (1985) (explains negligent hiring requires proof of breach and proximate cause; negligent hiring alone is not actionable unless it caused the harm)
- Snowhite v. State, Use of Tennant, 243 Md. 291, 221 A.2d 342 (1966) (identifies exceptions where insurance references may be admissible, including when insurance evidence relates to cause or liability)
- Pittway Corp. v. Collins, 409 Md. 218, 973 A.2d 771 (2009) (discusses proximate cause as involving both cause in fact and legally cognizable cause; foreseeability requirement)
- Morris v. Weddington, 320 Md. 674, 579 A.2d 762 (1990) (noting that revelation of lack of insurance can so contaminate a trial as to require mistrial when it demonstrably affects jury awards)