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Asphalt & Concrete Services, Inc. v. Perry

August 5, 2020

Morgan Perry was struck by a dump truck and suffered significant injuries. He sued the driver, the owner of the dump truck, and Asphalt & Concrete Services, Inc. (“ACS”). The dump truck was carrying materials on behalf of ACS at the time of the accident. The driver did not have a valid driver’s license and his insurance had been revoked for non-payment.

By the time of the trial, the main defendant was ACS. At trial, Perry moved into evidence the driver’s failure to maintain insurance, over ACS’s objection. The Court admitted the evidence, stating that it was relevant to the claim of negligent hiring. The jury returned a verdict in the amount of $529,520 against ACS and found that Johnson was both an employee of ACS and that ACS negligently hired Johnson. ACS appealed.
The Court of Special Appeals addressed the propriety of admitting the insurance information. Generally, Maryland Rule 5-411, prohibits the admission of evidence related to insurance. However, there are some exceptions to the rule, specifically for claims regarding negligent hiring. The lack of insurance was evidence of negligent hiring, since insurance was a necessary predicate for operating a dump truck on the road. Even so, admission of this evidence was only proper if it was a proximate cause of the harm.

Proximate cause consists of two elements: (1) cause in fact and (2) legally cognizable cause. Causation in fact raises the threshold question of “whether the defendant’s conduct actually produced an injury.” Two tests are used to determine whether cause in fact exists, “the ‘but for’ test and the ‘substantial factor test.’” The “‘but for’ test applies when the injury would not have occurred in the absence of the defendant’s negligent act.” The “substantial factor” test appears when “two independent causes concur to bring about an injury, and either cause, standing alone, would have wrought the identical harm.”

In this case, the lack of insurance for non-payment was not a proximate cause of the collision with Perry. Without this causal connection, admission of Johnson’s lack of insurance was prejudicial to ACS. The Court reversed the judgment for Perry and remanded for a new trial.