Maryland’s Highest Court Upholds Commercial Property Owner’s Duty of Care to Neighboring Property Owner

Maryland’s Highest Court Upholds Commercial Property Owner’s Duty of Care to Neighboring Property Owner

By Ashley Friedman, Esquire

            (August 4, 2020) In its July 27, 2020 opinion in Steamfitters Local Union No. 602 v. Erie Ins. Exch.. and Steamfitters Local Union No. 602 v. Cincinnati Ins. Co., Maryland’s highest court upheld the lower courts’ finding that Steamfitters, as a commercial property owner, owed a duty to its neighbors to maintain its property in a manner that would not cause an unreasonable risk of fire spreading to the neighboring property. The case stemmed from an April 16, 2015, fire that started on a property owned by Steamfitters Local Union No. 602, in Capital Heights, Maryland, and subsequently spread to the neighboring properties, owned by Gordon Contractors, Inc. (“Gordon”), and Falco Industries, Inc., C&M Properties LLC, C&M Properties Delaware, LLC, and Garage Center LLC (collectively referred to as “Falco”). The fire started in a mulched strip of common area that ran along the boundary line between Steamfitters’ property and a commercial construction yard owned by Gordon. Steamfitters’ apprentices regularly congregated for hours at a time in and near the mulched area before the start of classes held in the union hall. The mulch bed was ten feet wide and ran approximately 200 feet along the fence between Steamfitters’ parking lot and Gordon’s yard. The mulch bed consisted of shredded wood mixed with dead pine needs from trees planted in the bed. During the investigation into the cause of the fire, hundreds of cigarette butts that had been discarded in the mulched area were discovered.

The fire spread along the chain-link fence that separated Steamfitters’ property from the Gordon property and ignited foam insulation that was stored against the fence on Gordon’s side. This insulation liquefied, causing further spread, and ultimately the fire engulfed multiple vehicles on the Gordon property, as well as the contents of a large dumpster. Before it was extinguished, the fire also spread to the Falco property, which was on the other side of the Gordon property. Gordon and its insurers, Erie Insurance Exchange and Continental Casualty Company, filed a complaint against Steamfitters in the Circuit Court for Prince George’s County on December 14, 2015, alleging a single count of negligence and seeking damages of $1,276,200.24. Cincinnati Insurance Company, as the subrogee of Falco, filed a complaint against Steamfitters in the Circuit Court for Prince George’s County on March 4, 2016, also alleging a single count of negligence. The cases were consolidated in April 2016. As such, the collective Plaintiffs were Gordon and its insurers, and Falco and its insurer. Gordon and Falco did not allege that Steamfitters was vicariously liable or that it had a duty to control an unknown person who discarded a cigarette. Instead, Gordon and Falco proceeded on the theory that Steamfitters, as the property owner, failed to use reasonable care to prevent the foreseeable risk of fire spreading to nearby properties.

The case was tried before a jury from July 17-20, 2017. At trial, Lt. Wayne Crosby of the Prince George’s County Fire Marshal’s Office, who was the lead investigator on the fire, testified as an expert in fire origin, cause, growth, and spread. Lt. Crosby determined that the fire started in the mulch bed on Steamfitters’ side of the fence and that the constant wind on the day of the fire, which had gusts up to 40 miles per hour, kept the fire low and pushed it down the fence line toward a dumpster, where it grew. He opined that the only possible ignition source for the fire was a cigarette and noted that a very large number of cigarette butts were found in the mulch on the Steamfitters’ side of the fence.  He opined that the fire started when someone flicked a cigarette into the mulch near the fence or when the wind blew a cigarette butt up against the fence. Erie’s expert witness on fire investigations, Michael Schaal, reached a similar to conclusion to Lt. Crosby. Mr. Schaal noted that he observed “hundreds and hundreds, if not thousands of cigarettes” in the mulched area on Steamfitters’ side of the fence. He too, opined that the fire originated on Steamfitters’ side of the fence, and that the wind was a significant factor in causing the fire to spread. In addition, several photographs of the mulched area that were taken after the fire showed hundreds of cigarette butts in the mulch bed.

Steamfitters’ business manager and corporate designee, Daniel Loveless, testified that the apprentices would hang around outside the union hall prior to the start of class as they often did not have time to go home. He testified that the apprentices would pass the time by napping, gossiping, minding their own business, and/or smoking, and that some drank beer. Mr. Loveless was responsible for property maintenance, and while no one was assigned the task of picking up trash along the fence, he had done so on two or three occasions prior to the fire. During his deposition, Mr. Loveless testified that he was sure as to whether he had seen cigarette butts in the mulch prior to the fire, but admitted that he saw cigarette butts in the mulch after the fire. He also acknowledged that there were more butts “than there should have been” and that “in the right situation” a carelessly discarded cigarette could ignite a fire. He also admitted that throwing cigarette butts into mulch posed a risk of fire. Steamfitters’ corporate representative, John Mastripolito, testified that he walked through the mulched area eight times between February 2015 and the date of the fire. While he did not see any cigarette butts in the mulch, he acknowledged he had poor vision, wore glasses, and would not be concerned even if there were 100 cigarette butts in the mulch because he was “just not into cigarette butts.”

The jury returned verdicts in favor of the Plaintiffs. Damages were awarded in favor of Erie, as the subrogee of Gordon, in the amount of $1,039,176.67, in favor of Continental, as subrogee of Gordon, in the amount of $72,338.48, and in favor of Gordon, individually, in the amount of $111,125.38. Damages were also awarded in favor of Cincinnati, as subrogee of Falco, in the amount of $119,909.10. Steamfitters noted a timely appeal to the Court of Special Appeals, who affirmed the trial court’s judgments in a split decision. Thereafter, Steamfitters petitioned for a writ of certiorari, which was granted to consider four questions, the first of which was:

1. Does an owner of commercial property owe the neighboring property owners a duty to use reasonable care to prevent the spread of fire, where the property owner knows, or should know, that persons are habitually discarding hundreds of cigarette butts in a mulched common area adjacent to the property line?

The Court of Appeals answered this question in the affirmative. The Court first noted that when determining whether a duty exists in a particular context, it turns to W. Page. Keeton, et al., Prosser and Keeton on the Law of Torts (“Keeton”) §53 (5th ed. 1985), which characterizes “duty” as “an obligation, to which the law will give recognition and effect, to conform to a particular standard of conduct toward another.” The Court explained that under Maryland law, no universal test has ever been formulated for determining whether a duty exists. Instead, the requirements of a legal duty are dependent upon the specific facts and circumstances presented. Quoting from Jacques v. First Nat. Bank of Md., the Court stated that “a tort duty is … an expression of the sum total of those considerations of policy which lead the law to say that the plaintiff is entitled to protection.” 307 Md. 527, 533 (1986).

When determining whether a duty should be recognized, the Court stated it considers, among other things, the following:

The foreseeability of harm to the plaintiff, the degree of certainty that the plaintiff suffered the injury, the closeness of the connection between the defendant’s conduct and the injury suffered, the moral blame attached to the defendant’s conduct, the policy of preventing future harm, the extent of the burden to the defendant and the consequences to the community of imposing a duty to exercise care with the resulting liability for breach, and the availability, cost and prevalence of insurance for the risk involved.

Ashburn v. Anne Arundel Cty., 306 Md. 617, 627 (1986). Among these factors, foreseeability weighs the heaviest. The Court explained that foreseeability is considered prospectively, taking into account the facts existing at the time of the negligent conduct.

            For the past 80 years, Maryland law has recognized that ownership, operation, and maintenance of property come with the common law duty to use reasonable care so as to not cause harm to the neighboring property owners. The duty recognized is not dependent on the presence of a particular type of material, or the occurrence of a particular type of activity. A duty may arise when, viewing the totality of the circumstances, there exists a hazardous condition and the property owner was on notice of the hazardous condition. This duty was first recognized in Frenkil v. Johnson, 175 Md. 592 (1939), and later clarified in La Belle Epoque, LLC v. Old Europe Antique Manor, LLC, 406 Md. 194 (2008). In La Belle Epoque, the Court imposed a duty of reasonable care on the property owner for its own conduct in allowing a hazardous condition created by a third party to continue after learning of its existence. Id. at 219.

            Applying the general principals of a property owner’s duty of reasonable care set out in La Belle Epoque and Frenkil, the Court held that under the specific facts and circumstances presented in this case, Steamfitters owed to its neighbors a common law duty to maintain its property in a manner that would not cause an unreasonable risk of the spread of fire to the neighboring properties. The Court agreed with the Court of Special Appeals that while Steamfitters used its property, including the mulch strip, in a normal or ordinary manner, “there was evidence from which the jury could determine that Steamfitters was aware that hundreds of cigarettes had been discarded in the mulch and that this practice put it on notice that a dangerous practice was occurring on its property, specifically the disposal of cigarettes in a combustible substance.” Steamfitters Local Union No. 602 v. Erie Ins. Exch. 241 Md. App. 94, 120 (2019)

            The Court pointed out that Plaintiffs presented evidence at trial that Steamfitters created the mulched area and allowed individuals to linger in this area for hours prior to the commencement of classes. There was evidence from which a jury could determine that union officials, Mr. Loveless and Mr. Mastripolito, knew or should have known individuals were carelessly discarding hundreds of cigarette butts in the mulch because they had both walked through the area on several occasions in the weeks leading up to the fire. Indeed, Mr. Loveless acknowledged there were more cigarette butts than there should have been and that discarding them in the mulch presented a risk of fire. Despite this knowledge, Steamfitters took no action to prevent the foreseeable risk that a fire might start on its property as a result of individuals careless acts of habitually discarding cigarette butts in the mulch.

            The Court noted that simply keeping mulch on one’s property is not considered to be a dangerous condition, but an otherwise natural or normal condition can become dangerous when human activity is added into the mix. Here, a duty arose because an otherwise normal condition, the placement of much, “became dangerous by virtue of the practice of persons tossing cigarette butts into the mulch.” Steamfitters, 241 Md. App. at 120. The Court concluded that because of the confluence of factors in this case, Steamfitters owed its neighbors a duty to take reasonable steps to remove the danger. Steamfitters knew apprentices and other individuals gathered in the mulched area for hours prior to class and that these individuals smoked and discarded their cigarette butts in the mulch during that time. The Court pointed out that it is common knowledge that discarding cigarettes in combustible material, like mulch, could start a fire, and it was certainly a foreseeable consequence of allowing or enabling the constant discarding of cigarettes along a common boundary between commercial properties.

            The Court emphasized that, like the Court of Special Appeals, its conclusion rested “on the evidence from which a jury could find that a large number of cigarette butts were discarded in the mulch over a long period of time prior to the fire.” Id. at 121. This case did not a present a situation where only a couple butts were found in the area, or where there was no evidence from which a jury could conclude that the property owner had actual or constructive knowledge of the hundreds of cigarette butts located in combustible material adjacent to the neighboring property. The Court held that “under the facts of this case, Steamfitters had a duty to exercise reasonable care to maintain its property in a manner that would not cause an unreasonable risk of the spread of fire from cigarette butts regularly discarded in combustible material.”

            It is clear from the Court of Appeals’ opinion that the determination of whether a duty exists is a highly fact-specific inquiry, and that courts weigh the totality of the circumstances in a case before determining whether a duty exists. This opinion makes clear that commercial property owners owe a duty to their neighbors to remedy a hazardous condition caused by third parties on their property when they become aware of the condition.