B & K Rentals & Sales Co. v. Universal Leaf Tobacco Co.
324 Md. 147, 596 A.2d 640, 1991 Md. LEXIS 168 (1991)
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Rule of Law:
A statement made by a party's agent or employee concerning a matter within the scope of their employment, and made during the existence of the employment relationship, is admissible as a non-hearsay vicarious admission against the party.
Facts:
- Universal Leaf Tobacco Co. (Universal) owned and operated a tobacco warehouse.
- B & K Rentals and Sales Co., Inc. (B & K) leased a portion of the warehouse to store its business equipment.
- Two Universal employees, Walter Johnson and Leonard Grimes, were working in the warehouse.
- Grimes lit an acetylene torch for Johnson, who then used it to burn strings off the wheels of a wooden dolly.
- Shortly after Johnson finished, Grimes heard a popping noise and saw smoke coming from the area where Johnson had been working.
- A fire broke out, destroying most of B & K’s stored equipment.
- Grimes later told a fire investigator, Lt. Stallings, that he believed the fire was related to Johnson's use of the acetylene torch.
Procedural Posture:
- B & K brought a negligence action against Universal in the Circuit Court for Anne Arundel County (a trial court).
- At trial, the court excluded reports containing Universal employee Leonard Grimes's statements as inadmissible hearsay.
- The jury returned a verdict in favor of B & K for $123,252.00.
- Universal filed a motion for judgment notwithstanding the verdict (JNOV).
- The trial court granted Universal's motion for JNOV, setting aside the jury's verdict and entering judgment for Universal.
- B & K, as appellant, appealed to the Court of Special Appeals of Maryland (an intermediate appellate court).
- The Court of Special Appeals affirmed the trial court's judgment, holding that under existing Maryland law, the employee's statements were inadmissible hearsay.
- B & K, as petitioner, sought and was granted a writ of certiorari from the Court of Appeals of Maryland (the state's highest court).
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Issue:
Does a statement made by an agent concerning a matter within the scope of their employment, made during the existence of the employment relationship, constitute an admissible vicarious admission against the principal, even if the agent lacked specific 'speaking authority' or the statement was not part of the 'res gestae'?
Opinions:
Majority - Chasanow, Judge
Yes. A statement by a party's agent concerning a matter within the scope of the agency or employment, made during the existence of the relationship, is admissible as a vicarious admission against the party. The court explicitly abandons the prior, more restrictive common law rule that required the agent to have 'speaking authority' or that the statement be part of the 'res gestae' (made contemporaneously with the event). The court adopts the standard embodied in Federal Rule of Evidence 801(d)(2)(D), reasoning that the former 'res gestae' terminology was nebulous, inconsistently applied, and resulted in the exclusion of reliable and probative evidence. The trustworthiness of an agent's statement is supported because the agent is well-informed about business matters, the statement is typically against the employer's interest, and an employee is unlikely to make such statements unless they are true. Furthermore, it is fair to hold a principal responsible for its agent's statements about matters within the scope of employment, just as the principal is vicariously liable for the agent's actions. Applying this new standard, Grimes's statements to the fire investigator were admissible because he was an agent, the statements concerned matters within the scope of his employment, and they were made during his employment.
Analysis:
This decision marks a significant modernization of Maryland evidence law, aligning the state with the Federal Rules of Evidence and the majority of other jurisdictions on the issue of vicarious admissions. By jettisoning the vague and archaic 'res gestae' and 'speaking authority' requirements, the court established a clearer, more predictable, and more functional test. The ruling lowers the evidentiary bar for admitting employee statements against their employers, which will likely make it easier for plaintiffs in tort and other cases to introduce critical evidence of causation and negligence directly from those involved in the underlying events.
