Hatzinicolas v. Protopapas

¶1“The doctrine usually called the parent-child immunity rule exists in Maryland.” Frye v. Frye, 305 Md. 542, 543, 505 A.2d 826, 827 (1986). The immunity includes actions sounding in negligence. Id. at 567, 505 A.2d at 839. In this negligence action an unemancipated infant sues the business partner of one of the infant’s parents and alleges negligence arising out of the conduct of the partnership business. The Court of Special Appeals extended parental immunity to the defendant. Hatzinicolas v. Protopapas, 73 Md.App. 271, 533 A.2d 1311 (1987). In so doing that court was persuaded by one aspect of the rationale in David v. David, 161 Md. 532, 157 A. 755 (1932) which held that a wife could not maintain a negligence suit against the partnership of which her husband was a member. For reasons hereinafter explained we conclude that parent-child immunity should not be extended to a parent’s partner or partnership and we disapprove of the implications to the contrary in David.

¶2The record on which the legal issue is presented consists of the complaint and admissions of fact. Petitioner, the infant plaintiff, Niki Hatzinicolas (Niki), who was born October 20, 1983, is the daughter of Evgenia Hatzinicolas (Evgenia) and Michael Hatzinicolas (Michael). Niki resides with both of her parents. Michael and the respondent, Nicholas Protopapas (Protopapas), were partners in a business known as Hopkins Carry Out. The two partners had no written partnership agreement. They purchased an automatic slicing machine which was operated on the premises of their partnership business. At the machine’s rear were a rotating wheel and chain mechanism normally covered by a metal plate. The complaint stated that

“[o]n or about December 4, 1984, while the [slicing machine] was in use as an automatic slicer, the minor Plaintiff was on the premises of Hopkins Carry Out, when she went to the rear of the shop and placed her right hand on or near the chain and gears of the [slicing machine]. Her ring-finger and middle finger were forced *343into the gears, the metal guard of the [slicing machine] having fallen off or otherwise not being present on the back of the machine at that time.”

¶3Niki, by Evgenia, her mother and “next friend”, sued Protopapas “t/a Hopkins Carry Out.” The plaintiff alleged that

“Protopapas t/a Hopkins Carry Out was negligent by failing to maintain the establishment in a proper and safe manner for its invitees, that [Protopapas] knew or should have known of the dangerous condition of the [slicing machine], should have maintained additional protection or barriers between persons such as Plaintiff and the [slicing machine], and was in other respects negligent.”

¶4Protopapas obtained summary judgment based on parent-child immunity.1 Following affirmance of the judgment by the Court of Special Appeals, we granted the plaintiffs petition for certiorari.

¶5Our analysis begins by construing the complaint as fleshed out by the admitted facts. The theory of liability is that the defendant’s duty arises as a possessor of land, or of chattels, or both. The admissions of fact make clear that the possession and alleged breach of duty are by Protopapas and by Michael, as partners and joint tortfeasors. The claim, however, is asserted only against Protopapas. The nonjoinder is permissible. Under the Uniform Partnership Act, Md.Code (1975, 1985 Repl.Vol.), Title 9 of the Corporations and Associations Article (CA), the tort liability of partners is joint and several. See CA §§ 9-305 and 9-307(1).2 Indeed, under the liability theory asserted, even *344though any negligence of Protopapas and Michael is necessarily concurrent, the plaintiff may maintain the action without suing every joint tortfeasor. See Carroll v. Kerrigen, 173 Md. 627, 632, 197 A. 127, 128 (1938); Gordon v. Opalecky, 152 Md. 536, 550, 137 A. 299, 304 (1927); Walters v. Baltimore & O.R.R., 120 Md. 644, 657-58, 88 A. 47, 52 (1913); Diamond State Tel. Co. v. Blake, 105 Md. 570, 572, 66 A. 631, 632 (1907).

¶6The plaintiffs description of Protopapas as a person “t/a Hopkins Carry Out” does not convert this claim into one asserted against the partnership. Maryland has a “common name” statute. See Md.Code (1974, 1984 Repl. Vol.), § 6-406 of the Courts and Judicial Proceedings Article (CJ).3 This complaint does not name Hopkins Carry Out as a defendant, and the plaintiff did not serve Protopapas as an agent for the unincorporated group.

¶7Further analyzing the record we note the absence of any facts concerning whether, between the two partners, either had primary responsibility for maintaining the premises or the slicing machine. The record is also silent concerning who had started the slicing machine at the time of the *345occurrence, who had brought the infant plaintiff onto the premises and who was responsible for her immediate supervision at the time of the occurrence.

¶8The arguments plaintiff made to the Court of Special Appeals fell into two general categories. The first sought to prevent extension of parental immunity to a partner of the infant’s parent. In that approach the plaintiff emphasized that public policy manifests concern for the protection of children’s rights, that Protopapas was severally liable, and that the father, Michael, was not being sued by the daughter, Niki. Plaintiff’s second argument examined the scope of the parent-child immunity concept. Niki submitted that the immunity does not apply, even if the parent is a defendant sued directly by the child, where the tort arises out of the parent’s conduct of a business. Plaintiff contended that the policy underlying the immunity, namely, protecting the exercise of parental discretion, is not as strong in the business context as in the domestic context, particularly when it is likely that liability insurance insulates the intrafamily relationship from, at least, the full impact of the litigation.

¶9The Court of Special Appeals answered both aspects of plaintiff’s argument by pointing out that, even if the parent is not formally joined as a party defendant to the child’s claim, the defendant partner, or the partnership, may claim contribution from the nonparty, partner-parent who is jointly and severally liable. To permit Niki’s suit against Protopapas would allow the plaintiff to do indirectly what she could not do directly. This analysis by the Court of Special Appeals rested largely on this Court’s bar of a personal injury action by a wife against her husband’s partnership in David v. David, 161 Md. 532, 157 A. 755 (1932). The Court of Special Appeals thought “the reasoning of David... to be persuasive here.” Hatzinicolas v. Protopapas, 73 Md. App. 271, 279, 533 A.2d 1311, 1315 (1987).

¶10Answering in particular the business activity argument of the plaintiff, the Court of Special Appeals viewed employment of an underage plaintiff by the parent’s partnership to *346have been a significant factor present in decisions from other states relied upon by the plaintiff.4 Employment of the infant is absent in the instant matter. In addition to its having refused judicially to recognize any business exception to parental immunity in Shell Oil Co. v. Ryckman, 43 Md.App. 1, 403 A.2d 379 (1979), the intermediate appellate court also described this Court’s position in Frye v. Frye, 305 Md. 542, 505 A.2d 826 (1986), to be “that the insurance argument was one to be made to the General Assembly should it wish to legislate in the area of parent-child immunity.” 73 Md.App. at 279, 533 A.2d at 1315.

¶11We shall consider the precedential value of the Daviddecision in Part I. In Part II we shall test the result sought by Protopapas by the policy underlying parent-child immunity-

¶12*347I

¶13In the Davidcase, Minnie B. David, the wife of Samuel David, had filed a personal injury action “against Charles David and Samuel David, co-partners trading as Union Wallpaper Company[.]” 161 Md. at 533, 157 A. at 755. Thus, unlike the instant case, the plaintiff in Davidjoined as a party defendant the partner who directly enjoyed a personal immunity. At the time of the Davidsuit the only way in which a plaintiff could obtain a judgment which would directly reach partnership assets was to join as defendants all members of the partnership upon whom service of process could be obtained.5 The predecessor of CJ § 6-406, the common name statute, was not enacted until the Acts of 1937, Ch. 504, § 124. Niki, the infant plaintiff here, did not employ the common name statute. Thus in the instant case, unlike David, a judgment for the plaintiff would not “directly reach” all partnership assets. Cf. CJ § 6-406(b) (see n. 3, supra). The liability asserted in the instant action, however, is also a partnership liability and in that respect this case is like Davidwhere the wife’s injuries resulted from a fall into an open, unguarded, and unlighted elevator shaft on partnership premises.

¶14Davidaffirmed a judgment on the pleadings in favor of the defendants. Applying the law of that era, the Davidcourt reasoned from the premise that the wife could not sue her husband at law due to the common law disability of coverture. One of the amalgam of statutes known as the Married Women’s Property Act, specifically, the Act of 1898, Ch. 457, § 5, had in terms empowered married women to sue for torts committed against them as fully as if they *348were unmarried.6Furstenburg v. Furstenburg, 152 Md. 247, 136 A. 534 (1927), however, gave the statute a limited construction. Furstenburgheld that the statute applied only to actions by married women against third parties to the marriage relationship but not to actions by married women against their husbands.7Id. at 252-53, 136 A. at 536.

¶15Faced with Furstenburg, the wife in Davidargued that coverture was a defense personal to her husband and that *349the partnership was an entity distinct from her husband which could not assert the defense. 161 Md. at 536, 157 A. at 756. This argument led the Davidcourt to review the distinctions between natural and legal persons, on the one hand, and partnerships, as possible entities separate from the partners, on the other. The Court concluded that

“it is sufficient to say that, for the purposes of this case, the vital difference between a partnership and a legal entity complete in itself, such as a natural person or a corporation, is that each partner is severally liable for the wrongful acts and omissions of the partnership, and that [one partner] is bound to contribute to his copartners his proportionate share of any sum advanced by them to satisfy an enforceable demand against it.”

¶16Id. at 538, 157 A. at 757. The Court then reasoned that, because the husband might be required to make contribution from his personal estate to the partner, or to the partnership, the same policy which had caused the Furstenburgcourt to exclude suits against a husband from the statutory abrogation of coverture dictated that the vestige of the wife’s common law disability should prevent her from suing her husband and his partner, as partners.8

¶17*350That the Furstenburgremnant of coverture was substantially interwoven in the Davidholding is clearly demonstrated by Fernandez v. Fernandez, 214 Md. 519, 135 A.2d 886 (1957). There a wife had sued her husband in replevin. She contended that a married woman could maintain at law any claim against her husband which was not based on a tort resulting in personal injuries. Id. at 521, 135 A.2d at 887. This Court, speaking through Judge Hammond and citing, inter alia, Furstenburg and David, held that replevin would not lie and that a wife’s action to recover her property from her husband was limited to an action in equity. Id. at 524,135 A.2d at 889. If the policy considerations of Furstenburgand Davidhad predominated over the coverture element, one would expect the analysis in Fernandezto have been directed at whether that policy extended to property disputes between spouses. It would also seem to be immaterial from a policy standpoint whether the action was one at law or in equity. Thus, by permitting the action to proceed in equity, Fernandezwas merely applying the coverture analysis of David.

¶18In deciding whether one partner enjoys another partner’s personal immunity in a tort action arising out of the partnership business, the weight to be given to David’s reliance on a partner’s exposure for contribution was considerably weakened by Tobin v. Hoffman, 202 Md. 382, 96 A.2d 597 (1953). That case, filed in the Circuit Court for Prince George’s County, arose out of a two vehicle collision at an intersection in Washington, D.C. The plaintiff, a passenger, sued her host driver, who was her husband’s business partner, and sued the operator of the second vehicle. This Court considered District of Columbih substantive law to *351control the interspousal immunity defense raised by the husband’s partner. Id. at 392, 96 A.2d at 601. There was no case law in the District of Columbia on interspousal immunity at that time, other than Thompson v. Thompson, 218 U.S. 611, 31 S.Ct. 111, 54 L.Ed. 1180 (1910), the decision which had inspired the Furstenburgconstruction of the Maryland Married Women’s Property Act. Applying the common law, the TobinCourt held that interspousal immunity did not bar the wife’s claim against her husband’s partner. 202 Md. at 391, 96 A.2d at 601. The common law of the District of Columbia is derived from the common law of Maryland as a result of the federal acceptance in 1791 of the Maryland cession. See United States v. Groen, 72 F.Supp. 713 (D.D.C.1947). Whether the defense raised in Tobinis considered as a disability of a married woman, or as an immunity of a spousal defendant, the defense is of sufficiently antiquated vintage that the common law underlying it would be the same in both Maryland and the District of Columbia. The Tobincourt treated Furstenburgand Davidas reflecting the common law of the District of Columbia as well as of Maryland, but distinguished Davidon the ground that the husband in Tobinhad not been joined as a defendant.9

¶19*352Of particular significance to the Court of Special Appeals’ use of Davidis that the defendant partner in Tobinspecifically argued that the spousal partner would be obligated for contribution to the named defendant. The partnership in Tobinwas dissolved sometime after the accident giving rise to the suit. In the dissolution agreement the husband covenanted to contribute to the defendant partner one-half of the liability of the partnership arising out of the accident, in excess of the amount paid by liability insurance. 202 Md. at 392, 96 A.2d at 601. This Court, through Chief Judge Sobeloff, said: “We are disinclined to hold that such a voluntary agreement, especially when made after the accident, inhibits this suit.” Id.

¶20At the time of Tobinthere was no District of Columbia partnership statute.10 Nevertheless, under the common law, where one partner, because of the joint or joint and several liability of partners, is forced to pay an entire partnership debt, the other partners are obliged to indemnify pro rata. See A. Bromberg, Crane and Bromberg on Partnership § 65, at 371-73 (1968) (Bromberg). Even though the dissolution agreement between the partners in Tobinin effect recognized the spousal partner’s common law obligation, the TobinCourt attached no significance to *353the contribution obligation when only the husband’s partner was sued by the wife.

¶21Tobindid, however, find significance in Yellow Cab Co. v. Dreslin, 181 F.2d 626 (D.C.Cir.1950). 202 Md. at 392, 96 A.2d at 601. Yellow Cab held that the defendant in an action by the wife could not claim contribution from the husband, as an alleged joint tortfeasor. Because the husband enjoyed interspousal immunity, there was no joint liability and thus there was “nothing to which a right of contribution could attach.” 11181 F.2d at 627.

¶22Tobinemployed joint tortfeasor principles to test whether the immunity of one partner would affect another partner’s liability. The result reached in Tobinby applying the District of Columbia law of joint tortfeasors is the same as that under Maryland law. Under the Maryland Uniform Contribution Among Tort-Feasors Act, Md.Code (1957,1986 Repl.Vol.), Art. 50, § 16(a) “ ‘[jjoint tort-feasors’ means two or more persons jointly or severally liable in tort for the same injury to person or property[.]” Our cases have held that there is no right to contribution from an alleged joint tortfeasor who enjoys immunity as to the plaintiff’s claim, because there is no common liability to the plaintiff. See Ennis v. Donovan, 222 Md. 536, 161 A.2d 698 (1960) (inter-spousal immunity); Baltimore Transit Co. v. State ex rel. Schriefer, 183 Md. 674, 39 A.2d 858 (1944) (workers’ compensation immunity). See also Zaccari v. United States, 130 F.Supp. 50 (D.C.Md.1955) (applying Maryland parent-child immunity). Thus Tobincasts doubt on the significance, under Maryland law, of Michael’s obligation, based on the partnership agreement, to contribute his pro rata share of any partnership loss.

¶23In its decision in this case the Court of Special Appeals also cited Stokes v. Association of Indep. Taxi Operators, Inc., 248 Md. 690, 237 A.2d 762 (1968) (per curiam) and *354Riegger v. Bruton Brewing Co., 178 Md. 518, 16 A.2d 99 (1940) in support of its conclusion that it would be inconsistent with the parent-child immunity doctrine for Niki to obtain damages “that in the end would be payable in part by the injured child’s father.” Hatzinicolas v. Protopapas, 73 Md.App. 271, 276, 533 A.2d 1311, 1313 (1987). Both cases held that respondeat superior liability may not be imposed on the master of a negligent servant who is immune from liability to the plaintiff. 248 Md. at 691, 237 A.2d at 762; 178 Md. at 525, 16 A.2d at 102. For a number of reasons we shall not extend the rule applied in those cases to the instant facts.

¶24First, the potential liability of the negligent servant to the master is one-hundred-percent of the loss caused to the master by the servant’s negligence in the course of the master’s business. The obligation between partners, unless their voluntary agreement provides otherwise, is stated under CA § 9-401:

“(1) Each partner ... must contribute towards the losses, whether of capital or otherwise, sustained by the partnership according to his share in the profits [, and]

(2) The partnership must indemnify every partner in respect of payments made and personal liabilities reasonably incurred by him in the ordinary and proper conduct of its business, or for the preservation of its business or property.”

¶25Thus, Michael’s exposure under these obligations is to contribute his pro rata share of any partnership loss. Although his obligation is contractual, it is more like the pro rata contribution among joint tortfeasors than like the one-hundred-percent indemnification of a master by a negligent servant.

¶26Second, the record before us does not present facts under which one partner may be required to indemnify a partner or the partnership for a loss in its entirety. “Generally, partnership losses occasioned by the conduct or poor judgment of one partner will be borne by the partnership in the absence of fraud, culpable negligence, or bad faith.” Mar*355cus v. Green, 13 Ill.App.3d 699, 710, 300 N.E.2d 512, 520 (1973) (where statutory liability without fault for personal injury in the collapse of scaffolding was an inherent risk of real estate developer partnership, one partner could not, absent express indemnification, shift his share of the partnership liability to another partner who, as builder for the partnership, had control of the scaffolding).

¶27Third, the rule of Rieggerand Stokes, which precludes respondeat superior liability by extending the servant’s intrafamily immunity to the master, is the rule only in a small minority of states. We discussed this minority position in James v. Prince George’s County, 288 Md. 315, 418 A.2d 1173 (1980), involving a Prince George’s County charter provision waiving governmental immunity. Bradshaw v. Prince George’s County, 284 Md. 294, 305, 396 A.2d 255, 262 (1979) had held that, despite the waiver, the county was not liable where public official immunity was enjoyed by the individual for whose allegedly tortious conduct the county was sought to be held responsible. We re-examined the Bradshawanalysis in Jameswhere we said:

“As a general rule, followed by a vast majority of American courts, the master remains liable for the servant’s conduct even though the servant is himself not liable because of a personal immunity. See 2 F. Harper & F. James, [The Law of Torts ] § 26.17, at 1427 n. 6 [ (1956) ] (citing cases); Annot., 1 A.L.R.3d 677, 689-99 (1965 & 1979 Supp.) (citing cases from 25 American jurisdictions plus England & Canada); Restatement (Second) of Agency § 217 (1958); W. Seavy, Handbook of the Law of Agency § 93, at 167 (1964). However, there is an exception to this view, recognized in Maryland and a handful of other jurisdictions, which permits an employer to assert the immunity of the employee in a suit by a member of the employee’s family. See Riegger v. Brewing Company, 178 Md. 518, 523, 16 A.2d 99, 101 (1940) (suit by wife against husband’s employer); Annot., 1 A.L.R.3d, supra, at 685-86 (citing cases from six jurisdictions).14

¶28*356288 Md. at 332 & n. 14, 418 A.2d at 1182-83 & n. 14. Jamesrejected Bradshaw’s rule that Prince George’s County was not liable if the individual tortfeasor was immune. Jamesfurther limited the Rieggerlimitation on respondeat superi- or liability to the intrafamily immunities. Id. at 333, 418 A.2d at 1183. Accordingly, Rieggerand Stokesdo not point the way toward enlarging the scope of intrafamily immunities so as to extend the defense to the partner of a parent.

¶29Because Davidis neither controlling nor, of itself, persuasive, we examine contribution between partners in light of the policy underlying parent-child immunity.

¶30II

¶31The parent-child immunity doctrine “ ‘is founded upon public policy, and is designed to preserve the peace and harmony of the home, as well as to recognize the authority of the parent, under normal conditions, responsible for the maintenance of the home.’ ” Frye v. Frye, 305 Md. 542, 550, 505 A.2d 826, 830 (1986) (quoting Yost v. Yost, 172 Md. 128, 134, 190 A. 753, 756 (1937) (minor child cannot sue father in equity for failure to provide support or for neglect).

¶32Mahnke v. Moore, 197 Md. 61, 77 A.2d 923 (1951) carved out of the parent-child immunity doctrine an exception under which a minor child has a right of action against a parent for injuries resulting from cruel and inhuman treatment or for'malicious and wanton wrongs. In Frye, we *357repeated what Mahnkehad been careful to point out, namely:

“ ‘It is conceded, of course, that parental authority should be maintained. It is also conceded that a child should forego any recovery of damages if such recovery would unduly impair discipline and destroy the harmony of the family. Ordinarily, the parent is not liable for damages to the child for a failure to perform a parental duty, or for excessive punishment of the child not maliciously inflicted, or for negligent disrepair of the home provided by the father. These grow out of and pertain to the relation of parent and child.’ ”

¶33305 Md. at 550-51, 505 A.2d at 830-31. We summed up the fundamentals of the doctrine when we said in Fryethat “[o]ur primary concern with regard to matters involving the parent-child relationship [is] the protection of family integrity and harmony and the protection of parental discretion in the discipline and care of the child.” Id. at 551, 505 A.2d at 831. Protopapas submits that the protection of these interests requires that the claim against him be dismissed because he has a right to contribution from Michael.

¶34The issue before us presents Protopapas as a joint tortfeasor who, at the option of the plaintiff, is liable to the plaintiff for one-hundred-percent of the damages. It is only internally, within this two-person, equal partnership, that Protopapas has a right to reduce any ultimate, personal loss to fifty-percent by contribution from Michael. Thus, Protopapas’s position is that although he would ordinarily be liable to a similarly situated plaintiff for the entire loss, his partner’s daughter should have no recovery whatsoever because her father is liable to contribute fifty-percent of any partnership loss.

¶35Preservation of the family interests described above does not require that we extend parent-child immunity to bar any recovery from a parent’s partner.

¶36At the time of the occurrence Hopkins Carry Out either had adequate liability insurance covering this claim, had *358inadequate liability insurance or had no liability insurance whatsoever.12 If Hopkins Carry Out had adequate liability insurance, Michael already paid his partnership share of any liability to the plaintiff by his contribution to the premium of the firm’s liability policy. On that basis this suit would not impact the parent-child relationship.

¶37If Hopkins Carry Out has inadequate or no liability insurance, Michael will be required personally to contribute his partnership share of any recovery or of any excess recovery. Michael agreed to take that risk when, in partnership form, he entered into a business, one of the exposures of which was tort liability to persons on the business premises. But it would be unrealistic to pretend that Michael and Evgenia did not take the possible extent of his contribution obligation into account when the decision was made in the Hatzinicolas family to have Niki sue Protopapas. Here the plaintiff child lives with both parents. If the suit were unacceptable within the family unit, presumably it would not have been brought. While the decision to have a child sue a parent’s partner may impair, or even destroy, the relationship between partners, that relationship is not the concern of the parent-child immunity doctrine. From the standpoint of the subject doctrine, neither parental authority nor family harmony are significantly impaired by the fact that in a child’s action against a parent’s partner, *359partners or partnership, the economic effect might be to reduce the recovery within the family unit by the parental partner’s contractual, pro rata share of the partnership liability to the plaintiff.13

¶38Accordingly, we hold that it was error to grant Protopapas summary judgment. To the extent that David v. David, 161 Md. 532, 157 A. 755 (1932) is to the contrary, Davidis overruled.14

¶39The solution proposed by the concurring opinion is to reduce the infant’s recovery by a percentage equal to the percentage of the parent’s interest in partnership profits and losses. This “equitable” result protects parental immunity by extending it at the sacrifice of principles of the law of damages and of contracts. The rule contended for reduces the plaintiff’s damages on a basis which has nothing to do with the nature and extent of the injuries but on the basis of the deal which the child’s parent has struck with the parent’s partners. That result cannot be sustained by analogy to a joint tortfeasor’s release. In the latter scenario the plaintiff’s damages are reduced as a result of the plaintiff’s agreement with the settling tortfeasor. The infant plaintiff’s guardian has not agreed to any reduction from a full recovery. Further, even if the infant plaintiff’s *360damages could be arbitrarily reduced by some amount, what would otherwise be partnership losses would be reduced by that amount. The parent would not enjoy one-hundred-percent of the reduction in the loss but, under partnership principles, the parent would enjoy the amount of a reduction from a full recovery for the plaintiff only to the extent of the parent’s responsibility for partnership losses. Thus the theory advanced by the concurrence requires holding that the partnership agreement here is illegal in part and that its contribution obligations cannot be applied to one partner as to one loss. Finally, even if the plaintiff’s claim is meritorious, it may or may not be entered in the partnership accounts, depending on the fact and extent of liability insurance, so that the reduction from the plaintiff’s recovery may not even inure to the parent. The preservation of parent-child immunity under facts of the instant type does not justify contorting legal principles in the manner suggested.

¶40JUDGMENT OF THE COURT OF SPECIAL APPEALS REVERSED, CASE REMANDED TO THAT COURT FOR THE ENTRY OF A MANDATE VACATING THE JUDGMENT OF THE CIRCUIT COURT FOR BALTIMORE CITY AND REMANDING THIS CASE TO THAT COURT FOR FURTHER PROCEEDINGS. COSTS TO BE PAID BY THE RESPONDENT, NICHOLAS PROTOPAPAS.