Smith v. Lead

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In the Circu it Court for B altimore C ity Case No. 24-C-99-004490 IN THE COURT OF APPEALS OF MARYLAND No. 68 September Term, 2004 ______________________________________ REGINALD SMITH, JR., ET AL. v. LEAD INDUSTRIES ASSOCIATION, INC., ET AL. ______________________________________ Bell, C.J. Raker Wilner Cathell Harrell Battaglia Greene, JJ. ______________________________________ Opinion by Wilner, J. ______________________________________ Filed: April 4, 2005 This is essentially a tort-based product liability case involving, among other causes of action, allegations of fraudulent and negligent misrepresentation and failure to warn of hazards associated with either the prod uct itself or the use of the product. We granted certiorari to consider two principal questions: (1) whether injured minors can maintain an action for fraudulent or negligent misrepresentation when there is no direct reliance by them on the alleged misrepresentations; an d (2) whether a manufacturer whose p roduct is no t itself harmful can be liable for failing to warn of hazards inherent in other products that may arise from the use of its p roduct. 1 Because it is now clear that no final or appealable judgment exists and that the Court of Special Appea ls erred in dec laring otherw ise, we are o bliged to direct that the appeal be dismissed without addressing those issues. BACKGROUND This is an action by seven minor plaintiffs against twenty-one defendants to recover for injuries sustained from exposure to lead contained in either paint or gasoline. The plaintiffs, who, through one or both of their respective parents, all joined in a single fifteencount, 172-page complaint, come from four different families: there are three Smith children, one Brantley child, one Hamilton child, and two Shorter children. Th e defend ants fall into one or more of fou r categories those that produ ced tetraethyl lead (TeL), a gasoline additive that reduces knock in internal combustion engines; those that produced lead pigment used 1 A third issue was also in cluded in the petition for certiorari whether the petitioners properly appealed the dismissal of their Consumer Protection Act count. The Court of Special Appeals held that they had not done so. in manufacturing paint; paint manufacturers which either produced paint containing that pigment (lead paint) or which did not produce lead paint but failed to provide warnin gs regarding the safe rem oval of lea d paint in the ir surface pr eparation in structions; and two trade or ganiza tions ch arged w ith prom oting th e use an d unsa fe rem oval of lead pa int. The action was filed in the Circuit Court for Baltimore City. Early in the proceeding, the plaintiffs moved to sever the action into four se parate cases, one f or each fa mily, or, in the alternative, to allow them to dismiss the action without prejudice in order that se parate actions could be brought. The court denied that relief. Instead, it treated the motion as one for separate trials pursuant to Maryland Rule 2-503(b) and granted that relief. In a subsequent pre-trial scheduling order, the court set four separate trial dates one for the Smith children, one for the Brantley child, one for the Hamilton child, and one for the Shorter children and established different discovery schedules with respect to the quadrifurcated claims. Although that scheduling order was amended from time to time, the question of severance was never revisited, and the case pro ceeded in accordan ce with the ruling denying the motion fo r severanc e but grantin g separate tria ls on a per fa mily basis. The effect of the court s ruling was to maintain the action as a unitary one, inv olving all plaintiffs ag ainst all defendants. See Blades v. Woods, 338 M d. 475, 659 A.2d 872 (1995). No complaint has been made in this appeal about the validity or propriety of that ruling. The case then proceeded with a blizzard of motions to dismiss and for summary judgmen t, which ultimately were granted, in whole or in part. In Au gust, 2001, the court -2- denied a motion by Duron, Inc. to dismiss Count I of the Third Amended Complaint but reassigned Counts I, II, and III (Conspiracy, Concert of Action, and Aiding and Abetting) as part of the descriptive Nature of the Action appea ring in p relimina ry paragra phs. The effect of that order was to dismiss those counts as substantive causes of action at least as to Duron.2 On October 24, 2001, the court granted a motion for summary judgment in favor of Lasting Paints, Inc. against the Plaintiffs. The order granting the motion (1) is not in the record, although a copy was inclu ded in the record e xtract, and (2 ) was nev er dockete d in this action.3 It appears to apply to the six plaintiffs then in the case. One child, Shatavia Smith, did not join the case as a plaintiff un til a month later, and the order was never extended to include her. A motion by the plaintiffs to reconsider the granting of Lasting Paints motion was denied. 2 The court issued its order in response to Duron s Motion to Dismiss Count I of the Third A mended Comp laint, in which no other d efendan ts had joined . In its Memorandum and Order, the court stated that it would interpret Counts I and III as having been set forth in the Nature of the Action section of the Third Amended Comp laint for any fu ture procee dings perta ining to this ca use of actio n. Althou gh this language suggests that the court intended its order to apply as to all plaintiffs and defendants in the action, the effect of its ruling is an open question, since the court never entered a separate order to that effect. Later, in its February 14, 2002 Memorandum Opinion and O rder, the court stated that Count II ha d also been reassigned to the Nature of the Ac tion section of the Th ird Ame nded C omplaint. T hus, the cou rt believed tha t it had reassigned all three counts as to all plaintiffs and defendants. 3 The caption of the order, as it appears in the record extract, indicates that it was entered in both this case and an other, Joan E. Young v. Lead Industries Association, Inc., No. 24-C -99-0044 91. Perhap s the order w as included and dock eted in that ac tion, but it is not inc luded o r docke ted in thi s one. -3- The next day, October 25, 2001, the court granted a motion for partial summ ary judgment in favor of American Cyanamid Company. That company was sued in two capacities for its own conduct and as a successor- in-interest to John R. MacGregor Lead Com pany. The motion and the order granting it addressed only the successor-in-interest liabi lity, which is why it was labeled a partial summary judgment. As with the grant of Lasting Paints motion, it went aga inst only the six pla intiffs then in the case, no t Shatavia Smith, who w as added a mo nth later. In Febru ary, 2002 , the court dismissed (1) Counts IV through XV against PPG Industries, Inc. (PPG), E. I. DuPont de Nemo urs & Com pany (Du Pon t), an d Eth yl Corporation with respect to the TeL claims made against them, (2) those same counts against Atlantic Richfield Company (Atlantic Richfield), NL Industries, Inc. (NL), SCM Corporation (SCM), Glidden Corporation (Glidden), The Sherwin-Williams Company (SherwinWilliams), American Cyanamid Company (American Cyanamid), and Fuller-O Brien Corporation (Fuller-O Brien) with respect to the lead pigment claims made against them, (3) those counts ge nerally against National Paint and Coatings Association (NPCA) one of the two trade associations, (4) Coun ts V, VIII, and XI through XV against Lead Industries Association, Inc. (LIA), the other trade association, and (5) Counts XI through XIV the fraud counts again st all def endan ts. A wee k later, the cou rt dismissed a ll remaining counts as to Atlantic Richfield and American Cyanamid and all counts as to ASARCO, Inc. and Doe Run R esourc es. -4- That left Counts IV through X and XV (Alternative Liability, Negligent Product Design, Negligent Failure to Warn, Supplier Negligence, Strict Liability/Defective Design, Strict Liability/Failure to Warn, Commercial Seller Liability, and Consumer Protection A ct) alive against ten p aint manufacturing defenda nts (Sherwin-Williams, SCM, Glidden, Du Pont, Fuller-O Brien, PPG, Valspa r Corporation, Benjam in Moore & Com pany, and Duro n, Inc.) and Counts IV, VI, VII, IX, and X alive against LIA. On Novemb er 15, 2002, the court granted summary judgment on Counts IV through X and XV in favor of all defendants except Fuller-O Brien and LIA, but only as to the Smith plaintiffs.4 On No vember 2 1, it granted su mmary judg ment to Fu ller-O Brie n on those counts, but, as Fuller-O Brien s m otion wen t to all plaintiffs, presumably the judgment did as well. That was the last order entered by the Circuit Court. On December 10, 2002, all of the plaintiffs filed an appeal from all appealable Orders, including but not limited to the final jud gmen ts entere d on N ovem ber 15, 2 002. The Court of Special A ppeals, in an unreported opinion, recognized that there was no final judgment in the case in that many of the counts against many of the defendants were still unre solv ed w ith re spec t to th e Brantle y, Hamilton, and Shorter plaintiffs. It assumed, 4 The motion fo r summary judgme nt filed by those defendants ask ed that the court grant judgm ent in their fav or as to all claim s asserted on behalf of Plaintiffs R eginald Smith, Jr., Shatara Smith, and Shatavia Smith (the Smith Plaintiffs ) based upon the Smith Plain tiffs failure to id entify the man ufacturer o r seller of the p roduct alleg edly causing them injury. The co urt s order granted the D efendants M otions for Summ ary Judgm ent. -5- however, that all claims against all defendants had been finally resolved with respect to the Smith children, an d conclud ed, as a result, th at to condition the Smith appeal upon the entry of final judgment in the claims brought by the other plaintiffs would be inefficient, at best, and possibly foolish. That wa s so, it said, because the facts for each family of plaintiffs were different and because a decision in the Smith appeal might clarify issues that re main in the other ca ses. On tha t ground, the intermediate appellate co urt, invoking Maryland R ule 8-602(e)(1)(C), purported to enter final ju dgment o n the Sm ith claims an d proceed ed to address the substantive issues prese nted in the a ppeal. The Court of Special Appeals affirmed the trial court s grant of summary judgment with respect to the fraud, negligent misrepresentation, and intentional concealment claims on the ground th at the plaintiff s failed to produce sufficient e vidence o f reliance on their part, which the appellate court held was necessary to establish liability. The court also agreed that the manufacturers of non-lead-based paint had no duty to warn the plaintiffs of the hazards associated with the removal of lead paint, not made by them, when preparing the surface for repainting. The court found no duty owing to the plaintiffs by the two trade associations. The one area in which the appellate court disagreed with the trial cou rt concerne d the liability of the defendants that produced lead pigment and lead paint claims of alternative liabi lity, negligent product design, supplier negligence, strict liability for defec tive design, a nd liability of commercial sellers for harm caused by produ cts into which harm ful componen ts are integrated. Judgme nts with resp ect to those c laims again st those def endants were reversed -6- and the case was remanded for further proceedings. 5 DISCUSSION In Shoem aker v. Sm ith, 353 Md. 143, 165, 725 A.2d 549, 560 (1999), we confirmed the long-standing rule that [t]he right to seek appellate review ordinarily must await the entry of a final judgment, disposing of all claims aga inst all parties, an d that there w ere only three exce ptions to that r ule: a ppeals from inter locu tory ru lings spe cific ally allowed by statute (Maryland Code, § 12-303 of the Cts . & Jud. Pr oc. Article), im mediate ap peals permitted under M aryland Rule 2-602(b), a nd appea ls from interlo cutory rulings all owed under the common law collateral order doctrine. See also Frase v. Barnhart, 379 Md. 100, 109-10, 840 A.2d 114, 119 (2003). In Rohrbeck v. Rohrbeck, 318 Md. 28, 41, 566 A.2d 767, 773 (198 9), we held that: If a ruling of the court is to constitute a final judgment, it must have at least three attributes: (1) it must be intended by the court as an unqualif ied, f inal d ispo sition of the m atter in co ntrovers y, (2) unless the court properly acts pursuant to Md. Rule 2-602(b), it must adjudicate or complete the adjudication of all claims against all parties, and (3) the clerk must make a proper record of it in ac cordan ce with Md. R ule 2-6 01. See also Walk v. Hartford Casualty , 382 Md. 1, 10-11, n.4, 85 2 A.2d 98, 103 -04, n.4 (2004); Jones v. Hubbard, 356 Md. 513, 524, 740 A.2 d 1004, 1 010 (199 9); Board o f Liquor v. F ells 5 The Court of Special Appeals did not consider the lower court s grant of summary judgment as to Count XV, holding that its dismissal [was] not appealed by plaintiff s. -7- Point Ca fe, 344 Md. 120 , 129, 685 A.2d 7 72, 776 (1996). Clea rly, as the Court of Special Appeals recognized, the various orders entered by the Circuit Court in this case do n ot constitute, or even come close to constituting, a final judgment under the c riteria stated in Rohrbeck. Mo st of the c laim s pled by th e Brantle y, Hamilton, and Shorter plaintiffs are unresolved, and, indeed, as we shall explain, some of the claims pled by the Smith plaintiffs appear also to be unresolved. Nor are any of the trial court s rulings appealable under the collateral order doctrine or under Maryland Code, § 12303 of the Cts. & Jud. Proc. A rticle. If they are appealable at this time, it can only be pursuant to Ma ryland Rule 2-602(b). Rule 2-602(a) provides generally that an order or other form of decision, however designated, that adjudicates fewer than all of the claims in an action, less than an entire claim, or the rights and liabilities of fewer than all the parties to the action (1) is not a final judgmen t, (2) does not terminate the action as to any of the claims or any of the parties, and (3) is subject to revision at any time before the entry of a judgment that adjudicates all of the claims by and against all of the parties. Section (b) of the Ru le permits the Circuit Co urt, if it expressly deter mines in a written order that there is no just reason for delay, to direct in the order the entry of a fin al judgme nt as to one o r more bu t fewer tha n all of the claims or parties or for some but less than all of the amount requested in a claim seeking only money relief. The Circ uit Court made no such determination and entered no such order. The appeal was therefore one that is not allowed by law and should have been dismissed. -8- Maryland Rule 8-602(e)(1) pe rmits this Court or the Cou rt of Special Appe als, if it concludes that an order from which the appeal was taken was not a final judgment when the notice of appeal was filed but that the lower court had discretion to direct the entry of a final judgment pursuant to Rule 2-602(b), to dismiss the appeal, to remand the case for the lower court to decide w hether to en ter a final judg ment und er Rule 2-6 02(b), or to enter a final judgment on its own initiative. If it chooses the latter option, the Rule directs that it treat the notice of a ppeal as if f iled on the d ate it enters the ju dgment a nd proce ed with the appeal. In this case, as noted, the Court of Special Appeals chose that third option, believing that it would b e inefficien t and possib ly foolish to do otherw ise. We disagree. The re are so many loose ends left in th e Circuit C ourt that, to pro ceed with this appeal now would be to do what we, and the C ourt of Sp ecial App eals, have co nsistently held ou ght not to be done. Neither efficiency nor the avoidance of foolishness is served. As we have indicated, the appellate court implicitly assumed that all claims by the Smith plaintiffs had been resolved against all of the defendants. That does not appear to be the case. Although LIA and perhaps the other parties thought otherwise, the record indicates that, when LIA filed for bankruptcy on April 4, 2002, Counts IV , VI, VII, IX, and X were still open against it, and, because of the bankruptcy stay, those claims, by the Smith plaintiffs, have yet to be resolved.6 See Starfish Condo. v. Yorkridge Serv., 292 Md. 557, 565-66, 440 6 The record before us shows that on November 13, 2000, LIA and NPCA the two trade associations filed motions to dismiss Counts V, VIII, and XI - XV (product (contin ued...) -9- A.2d 373, 378 (1982). If th at is so, as it appe ars to be, the trial court could not have entered a final judgment under Rule 2-602(b) unless it severed LIA as a defend ant because, given the nature of the allegations against LIA, that would h ave amo unted to sp litting a single claim, w hich is n ot allow ed. As the trial court noted in its memorandum of February 14, 2002, the complaint against the trade associations was that (1) they were charged with the responsibility of establishing standards in order to require that the prod ucts manu factured a nd sold by the ir members were safe, (2) they permitted officers of companies who had knowledge of the dangers of lead to form their policies, and (3) they acted as ag ents for the o ther defen dants in committing the intentional torts and were equally liable. Those allegations served as the basis for the liability asserted against LIA in all of the cou nts in the Third Amended Comp laint, and thus all of those counts, under o ur case law, co nstituted a single claim. See 6 (...continued) design, fraud, and Consumer Protection Act). The next day, LIA and NPCA filed a supplemental memorandum in support of their motion to dismiss those counts. On November 21, NPC A, but not LIA, filed a memorandum in support of a motion to dismiss Counts II, IV, and V - XIV, although it did not actually file a motion to dismiss those counts until February 12, 2001. On February 14, 2002, the court entered an order that the Motion[s] to Dismiss of Defendant Lead Industries Association and National Paint and Coating A ssociation are granted. Th e order did not specify wh ich counts were dismissed, although, in an accompanying memorandum, it seemed to assume that the motion went to the entire Third Amended Complaint. In NPCA s case, it effectively did, but in LIA s case, it did not. In an opposition to the plaintiffs motion for reconsideration, LIA also assumed that the dismissal went to the entire Third Amended Complaint. The p roblem is that the only motion to dism iss applicable to the Third Amen ded Co mplaint that w e can find in the record on behalf of LIA went on ly to Counts V, VIII, and XI - XV. -10- Biro v. Schombert, 285 Md. 290, 402 A.2d 71 (1979); East v. Gilchrist, 293 Md. 453, 445 A.2d 343 (198 2); Medical Mutual v. Evander, 331 Md. 301, 309-13, 628 A.2d 170, 174-76 (1993) and cases cited there; Huber v. Nationwide, 347 Md. 415, 701 A.2d 415 (1997). Because they constituted a single claim, the trial court could not have entered a final judgment under R ule 2-602(b) with respect to LIA or any other defendant or plaintiff unless it severed LIA entirely, and, if the trial court had n o authority to en ter such a jud gment, neither did the Court of S pecial Appeals un der Rule 8-602(e ). Apart from that problem, the order of October 24, 2001granting summary judgment in favor of Lasting Paints against the Plaintiffs (1) was never docketed in this action and could not achieve the status of a judgment until it is so docketed, and (2) did not include Shatavia Smith, who was not yet a party. The summary judgment was never extended to include her after her intervention the following month. That is true as well with the partial summary judgment entered in favor of American Cyanamid on October 25, 2001; that, too, did not include Shatavia Smith. Beyond the open issues regarding the Smith plaintiffs, we made quite clear in Diener Enterprises v. Miller, 266 Md. 551, 295 A.2d 470 (1972), that discretion to enter judgment under what is now R ule 2-602(b) was to be reserve d for th e very in freque nt harsh case. Id. at 556, 295 A.2d at 473. The appellate court retains the authority, in reviewing the exercise of that discretion, to determine if there is anything in the record which establishes the existence of any hardship or unfairness which would justify discretionary departure from -11- the usual rule establishing the time for appeal. Id. at 555, 295 A.2d at 473. The limited nature of the discretion accorded under Rule 2-602(b) has been confirmed by us on several occasions. See Planning Board v. Mortimer, 310 Md. 639 , 648, 530 A.2d 1 237, 1242 (198 7), quoting Diener Enterprises v. Miller, supra ( The exercise of discretion is rev iewable and should not be routinely exercised. A separate appeal under Rule 2-602 should be allowed only . . . in the very infrequent harsh case. ); Wilde v. Swanson, 314 Md. 80, 87, 548 A.2d 837, 840 (1988) (s ame); Starfish Condo. v. Yorkridge Serv., 292 Md. 557, 569, 440 A.2d 373, 380 (1982); Pappas v. Pappas, 287 Md. 45 5, 464, 413 A.2d 54 9, 553 (19 80); Taha v. Southern, 367 Md. 564 , 790 A.2d 11 (2 002). The Co urt of Spe cial Appe als has tradition ally been in lock-step with this approach and has not hesitated to countermand the entry of judgment under Rule 2-602(b) and dismiss an appeal upon a finding that the trial court had not articulated a sufficient reason why there was no just reaso n for delay, suf ficient to allow an immed iate app eal. See Canterbury Rid. Condo. v. Chesapeake Inv., 66 M d. App . 635, 505 A.2d 858 (198 6); Allstate Ins. Co. v. Angeletti, 71 Md. App. 21 0, 524 A .2d 798 (1 987); Carl Messenger Service v. Jones, 72 Md. App. 1, 527 A .2d 763 (1 987); Tharp v. D isabled Ve ts, 121 Md. App. 548, 710 A.2d 378 (1998); Murph y v. Steele, 144 Md. A pp. 384, 798 A .2d 1149 (2002 ). The purpose of Rule 2-60 2(a) is to prevent piecemeal appeals, which, beyond being inefficient and costly, can create significant delays, hardship, and procedural problems. The appellate court may be faced with having the same issues presented to it multiple times; the -12- parties may be forced to assemble record s, file briefs and record extracts, and prepare and appear for oral argument on multiple occ asions; resolu tion of the c laims rema ining in the trial court may be delayed while the p artial appeal p roceeds, to th e detrimen t of one or more parties and the orderly operation of the trial court; and partial rulings by the appellate court may do more to confus e than clarify the unresolved issues. That is precisely why Rule 2602(b) is reserved for the infrequent harsh case, and why the trial judge, who normally has a much better grasp of the situation than an appellate court, is viewed, at least in the first instance, as the dispatcher. See Planning Board v. Mortimer, supra, 310 Md. at 647, 530 A.2d at 12 41; Wilde v. Swanson, supra, 314 Md. at 87, 548 A.2d at 840. Although Rule 8-60 2(e) perm its an appellate court to enter a judgment if the trial court could properly have done so u nder Rule 2-602 (b), its discretion is even more limited than that of the trial judge. As we made clear in Brown v. Gress, 378 M d. 667, 681, 838 A.2d 362, 370 (200 3), th e app ellate cou rt ma y not enter judgment on its own initiative if the trial judge has refused to do so. It may not substitute its judgment for that of the trial court in that setting, and, although it has authority to act under Rule 8-602(e), it should be reluctant to do so when, as here, the trial court was never asked to act under Rule 2-602(b). If a party believes that the circumstances warrant an immediate appeal, the request sho uld ordinar ily be presented first to the trial court the preferred dispatcher for c onsideration. That court not only has greater knowledge than an appellate court regarding the overall effect of an immedia te appeal but a greater interest in whether the case remaining before it should be -13- put on ice while an interlocutory appeal proceed s. Except in the most ex traordinary circumstance, predominantly where the problem of an open claim is a more or less technical one that was overlooked by the appellant when the appea l was note d and w hich, if spotted then, would likely have been corrected, the trial court should not be by-passed in this regard, as was delibera tely done in this ca se. This is not a case in which the lack of a final judgment was not apparent when the appeal was taken, where a 2-602 problem surfaced after the appeal was noted, and whe re it seems clear that, if the matter had been presented to the trial court, that court likely wo uld have acted under Rule 2-602(b). The plaintiff-appellants, which included all of the plaintiffs, not just the Smith plaintiffs, had to be fully aware when they noted the appeal that no final judgment existed and tha t no app eal cou ld poss ibly lie und er either Cts. & Jud. Pro c. Art. § 12-303 or under the collateral order doctrine. The 2-602 problem was obvious before the appeal was noted, and, given all of the issues that remain unresolved, it is not at all clear that the trial court wo uld have g iven favo rable consideration to a request to enter judgment under Rule 2-602(b). The decision of the Court o f Special A ppeals to enter judgment under Rule 8-602(e) avoided neither inefficiency nor foolishness. Quite the contrary. By entering judgment on its own initiativ e and ente rtaining the ap peal, the cou rt delayed resolu tion of the claims of -14- the other plaintiffs in the Circuit Cou rt for more than a year,7 made more uncertain the status of Lasting Paints and American Cyanamid with respect to Shatavia Smith, ma de equally uncertain the status of possibly unresolved claims against LIA, set the stage for at least one additional appeal, and, if the case proceeds family by family in the Circuit Court and an immedia te appeal will be permitted as to each, set the stage for perhaps three additional appeals. T he Cou rt of Specia l Appeals abused its d iscretion in en tering the jud gment. JUDGMENT OF COURT OF SPECIAL APPEALS VACATED; CASE REMANDED TO THAT COURT WITH INSTRUCTIONS TO DISMISS APPEAL; COSTS IN THIS COURT AND IN COURT OF SPECIAL APPEALS TO BE PAID BY PETITIONER S. 7 The app eal was n oted on D ecembe r 10, 2002 . The Co urt of Spe cial Appe als mandate issued June 23, 2004. -15-

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