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REPORTED IN THE COURT OF SPECIAL APPEALS OF MARYLAND No. 423 September Term, 2006

MAX'S OF CAMDEN YARDS v. A.C. BEVERAGE

Eyler, James R., Moylan, Jr., Charles E. (Ret., specially assigned), Rodowsky, Lawrence F. (Ret., specially assigned), JJ. Opinion by Eyler, James R., J. Filed: December 26, 2006

Max's of Camden Yards, L.L.C ("Max's") and Insurance Designers of Maryland, Inc., Max's liability insurer, appellants, filed a complaint, later amended, in the Circuit Court for Baltimore City against A.C. Beverage, Inc. ("A.C. Beverage"), Selective Insurance Company of America ("Selective"), A.C. Beverage's liability insurer, appellees, and Chad Burger ("Burger").1 Prior to the filing of the complaint in this case,

Burger had sued Max's and A.C. Beverage, alleging that they negligently had caused Burger to sustain personal injuries, and appellees had settled Burger's claims against both Max's and A.C. Beverage, without any contribution from appellants. In this

case, appellants seek to be indemnified for attorney's fees and costs incurred in the defense of the Burger suit. Appellants

also seek a declaration that appellees must indemnify them in any future actions brought by parties alleging injuries sustained in the same manner as Burger. Overview Generally, if more than one tortfeasor is found liable to a plaintiff, and one of them is found to be passively negligent, the passively negligent tortfeasor has a right of implied indemnity against an actively negligent tortfeasor. Usually, the issue of implied indemnity is addressed either after findings of fact have been made in the underlying case or as a preliminary matter when later fact findings are contemplated

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Burger is not a party on appeal.

in the underlying case.

In the case before us, the issue of

implied indemnity arose after the tort plaintiff's claims were settled and, therefore, in the absence of findings of fact, or contemplated findings of fact, in the underlying case. Stated briefly, Burger, the tort plaintiff, sued two alleged tortfeasors, Max's and A.C. Beverage, claiming compensation for personal injuries allegedly caused by the tortfeasors' negligence. Prior to trial, one of the tortfeasors, A.C.

Beverage, settled all of the plaintiff's claims and obtained a release of itself and the other tortfeasor. The non-settling

tortfeasor, Max's, then filed a separate indemnity action against the settling tortfeasor, A.C. Beverage, alleging that the settling tortfeasor was actively negligent and that it, the nonsettling tortfeasor, was only passively negligent. The non-

settling tortfeasor claimed that it was entitled to be indemnified for the attorney's fees and costs incurred in defending the tort plaintiff's claims, and for the attorney's fees and costs it was incurring in pursuing its indemnity claim. The two insurance carriers, parties on this appeal, are parties only by virtue of being liability carriers for the two alleged tortfeasors. An implied indemnity action between alleged or actual tortfeasors based on the active-passive negligence distinction is recognized under Maryland law. It is unclear, however, whether

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and, if so, under what circumstances attorney's fees and costs, as distinguished from losses or damages, may be recovered in such an implied indemnity action. The primary issue before us is whether, on the facts of this case, the non-settling tortfeasor has a valid indemnity claim for attorney's fees and costs against the settling tortfeasor. The

answer ultimately turns on: (1) whether Maryland recognizes a right to recover attorney's fees and costs as an element of recovery if an implied indemnity action otherwise lies; and, if so, (2) whether the right to indemnity is controlled by the tort plaintiff's allegations against each tortfeasor, i.e., whether active or passive negligence was alleged, or by the facts as found after a trial; and (3) if both active and passive acts of negligence were alleged against the non-settling tortfeasor, regardless of whether indemnity is controlled by the allegations or the facts as found, whether the attorney's fees and costs the non-settling tortfeasor seeks to recover should be apportioned between defense of the active negligence claims and defense of the passive negligence claims. To our knowledge, there are no

Maryland cases squarely on point. We expressly do not answer the above questions generally, confining our holding to the facts of this case. We do so

because we have determined that it is virtually impossible to anticipate the various factual situations that may arise and

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fashion rules governing each. We hold that when: (1) the tort plaintiff sues more than one alleged tortfeasor and alleges active negligence against the tortfeasor seeking indemnity, and (2) the tort plaintiff's suit is dismissed as to the alleged tortfeasor seeking indemnity and the alleged tortfeasor from whom indemnity is sought prior to adjudication of tortfeasor status, then (3) the alleged tortfeasor seeking indemnity is not entitled to fees and costs incurred in defending the tort plaintiff's claims or fees and costs incurred in pursuing the indemnity action. Factual and Procedural Background According to appellants' amended complaint, Max's owned and operated a restaurant and bar. Pursuant to an agreement between

Max's and A.C. Beverage, A.C. Beverage was responsible for inspecting and cleaning the beer lines in Max's establishment. Several patrons at Max's restaurant and bar became ill after allegedly consuming tainted beer. One such patron, Burger,

brought a claim for damages against Max's and A.C. Beverage, who had serviced the lines that carried the beer from the keg to the beer tap. As an exhibit to the amended complaint, appellants attached a copy of the complaint filed by Burger. In his complaint,

Burger alleged that he became violently ill and suffered severe injuries after consuming beer at Max's due to (1) Max's

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negligence in failing to properly inspect, maintain and clean its facilities; in negligently hiring incompetent and negligent contractors to inspect, maintain, and clean its facilities; in negligently supervising the contractors that it hired, and (2) A.C. Beverage's negligence in failing to properly inspect, maintain and clean the beer lines. Burger's action never reached trial as Burger settled all of his claims in exchange for money paid by Selective, A.C. Beverage's insurer. settlement. Appellants did not contribute to the

Burger executed a general release, which released

both alleged tortfeasors, and dismissed his complaint with prejudice. Appellants' amended complaint contained four counts. I was styled "declaratory judgment-the Burger action" and requested a declaration that appellees were required to indemnify appellants for the fees and costs incurred in defending the Burger action. Count II was styled "breach of contract." The Count

count is vague, but at oral argument appellants asserted that the contract referred to was the contract between Max's and A.C. Beverage. Count III was styled "indemnification" and sought a

judgment for the fees and costs incurred in defending the Burger action and in pursuing the action against appellees. Count IV

was styled "declaratory judgment-subsequent claims" and requested a declaration that appellees shall indemnify appellants, for both

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costs of defense and damages, in any other claims filed by patrons of Max's, alleging injuries as a result of drinking tainted beer. Appellees filed a motion to dismiss the amended complaint on the ground that no indemnification was owed by either Selective or A.C. Beverage and, specifically, that Selective had no contractual relationship with appellants. Following oral argument, the circuit court granted appellees' motion to dismiss by order, incorporating the reasons stated on the record at oral argument. With respect to the

indemnity claim, it appears the court relied heavily on this Court's decision in Boatel Indust., Inc. v. Hester, 77 Md. App. 284 (1988). With respect to the request for declaratory relief

as to any future claims by persons claiming personal injury as a result of ingesting tainted beer, the court found that appellants had not presented a justiciable controversy. Contentions Appellants sought indemnification for fees and costs incurred (1) in defense of the Burger action, and (2) in pursuing this action. Appellants also requested a declaration of the

indemnification rights of the parties with respect to any future claims. We shall examine the contentions in the order listed.

There is no need to address other contentions except to state that there was no contract or tort relationship between

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appellants and Selective, A.C. Beverage's insurer, and appellants have no valid direct claim against Selective. Additionally,

while Count I was styled a request for declaratory relief, it related to the Burger action. Resolution of the indemnity claim

in Count III effectively declared the rights of the parties in that regard. There was nothing to add. Finally, Count II,

breach of contract, requires no discussion because, as confirmed at oral argument, the contract was alleged solely to provide a basis for imposing a tort duty on A.C. Beverage. Appellants do

not claim that appellees expressly agreed to indemnify appellants. For the reasons set forth below, we shall affirm the judgment entered by the circuit court. Indemnification for the Burger Action Passive/Active Negligence A claim for indemnification may be based on an express contract or may be implied by law. concerned with express indemnity. In this case, we are not Indemnity between tortfeasors

or alleged tortfeasors, the situation before us, falls within the concept of implied indemnity. Implied indemnity between tortfeasors "arose in an era when contribution among joint tortfeasors was not permitted." Franklin v. Morrison, 350 Md. 144, 154 (1998). The right to

contribution is now available pursuant to the Uniform

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Contribution Among Tortfeasors Act ("UCATA"), see Maryland Code (2002 Repl. Vol., 2006 Cum. Supp.)

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