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02/10/69 Gichner Et Al., v. Antonio Troiano Tile &

February 10, 1969







Danaher,* Wright and Tamm, Circuit Judges.




Appellants, plaintiffs below, owned a warehouse, part of which they leased to the corporate appellee, Antonio Troiano Tile & Marble Co., Inc. Troiano had several employees, including Whitaker, the warehouse manager, who had a key to the warehouse. Whitaker, three other Troiano employees, and a girl entered the warehouse at about 3:00 the morning of August 11, 1963, after a drinking spree; they left within an hour. One of the employees, Faulds, drove off with the girl, travelled one block, ran out of gas, and fell asleep in the car. They were awakened by police and arrested for drunkenness at about 6:00 A.M. Meanwhile, at 5:35 A.M. the Fire Department received a call that the warehouse was burning. It was burned extensively before the fire could be controlled. Gichner claimed a loss of $56,000, of which $20,000 was covered by insurance.

Gichner and the insurance company *fn1 sued Troiano and Whitaker. *fn2 They alleged that the fire was started by negligent smoking on the part of Whitaker and the others in the warehouse that night. Troiano's liability was predicated on three grounds. The first two were based on negligence: (1) in giving a key to Whitaker, and (2) in allowing smoking on the premises and failing to take steps to prevent fires even though flammable material was stored there. The third ground was based on breach of contract, in that Troiano's lease stated that Troiano "will repair or replace any other damage caused to the demised premises by negligence OR THE NEGLIGENCE OF HIS SERVANTS OR EMPLOYEES . . .."

At trial Gichner presented a District of Columbia Fire Department investigator who concluded, after eliminating all other possible causes of the fire (such as faulty electricity, heating, etc.), that it was caused by careless smoking; he reached his conclusion even though no direct evidence of smoking (such as cigarette butts) was present. Gichner also introduced four depositions. The first was Whitaker's, in which he stated that he and the other employees had been out drinking that night, had picked up the girl, found that she had a skinned knee, taken her to the warehouse where they bandaged the knee, and then left. He stated that he did not think anybody had been smoking. A second deposition, by employee Faulds, corroborated Whitaker's story. Faulds stated he did not know if the people had been smoking in the warehouse that night.

The third deposition was that of an employee of a neighboring warehouse who stated that he had seen Troiano employees drinking and smoking near the warehouse premises in the past. In the fourth deposition Benito Troiano, head of Troiano, stated that he knew his employees smoked on the job, and that he had not stopped them. Further, he stated that there were no fire extinguishers kept on the premises, and that mastic (a material which the fire investigator testified was flammable) was stored there in cans. Gichner attempted to introduce a statement given by Faulds to the fire inspector later in the morning of the fire, in which he admitted that the group had been smoking in the warehouse group had been smoking in the warehouse that night. The trial judge ruled it out as hearsay. *fn3

At the close of plaintiff's case Judge Holtzoff, sitting without a jury, granted judgment for the defendants. He ruled that, although the fire investigator's conclusions were good enough for Fire Department purposes, the evidence was not sufficient to "justify the Court in inferring that by a fair preponderance of the evidence it has been established that careless smoking was the cause of the fire . . .." This was so even though the investigator had eliminated "every other imaginable cause" in reaching his conclusion. Judge Holtzoff stated that there was no direct testimony that the group had been smoking at all, and that he could not infer that they had been smoking from the mere fact that the men were smokers. The judge thus found that there was no proof that negligence on the part of the employees started the fire. Because of this finding, he did not rule on the theory of liability of Troiano for its employees, specifically stating that he did not need to reach that point.

On appeal Gichner raises two points: (1) the trial judge should have considered the statement by Faulds, and (2) the testimony of the fire investigator, with or without Faulds' statement, was sufficient to make out a case of negligent smoking as the cause of the fire. Troiano, in addition to contesting these arguments, claims that in any case Troiano cannot be held liable for the negligent acts of its employees committed outside the scope of their employment. I

Faulds admittedly was in his employer's warehouse the morning of the fire, leaving at about 3:45 A.M. He fell asleep in his car near the warehouse, was awakened by police a couple of hours later, and was arrested for drunkenness. As he was taken to police headquarters he saw smoke coming from the warehouse. (In his deposition he admitted that "when the police woke us up it was burning up.") At police headquarters he was questioned by police and by the fire investigator. In his statement taken there at 9:40 the same morning he described having been out drinking and going into the warehouse. He stated:

". . . I guess we got there about 3:00 AM and John had a key so we went in the back door and sat around talking and smoking inside the front door. I think we left about somewhere around 3:45 AM . . .. . . ."

In his deposition taken January 21, 1966, some two and a half years after the fire, Faulds stated that he did not know if the people had been smoking the night of the fire. He was asked if he had made a statement to the fire investigator and he replied affirmatively, but the matter apparently was not pursued. At trial the court asked plaintiffs' attorney whether Faulds had been "confronted with the statement at the deposition." The attorney replied, "No, Your Honor; it was not available to counsel, it was in the Fire Department's files."

Faulds did not testify at the trial, and Gichner offered his statement into evidence. The statement was obviously hearsay, and the question before us is whether it can be admitted under an exception to the hearsay rule as a declaration against interest. Such a declaration is one of a series of traditional exceptions to the hearsay rule, see C. McCORMICK, EVIDENCE Ch. 28 (1954), well recognized in this jurisdiction. Wabisky v. D.C. Transit System, Inc., 114 U.S. App. D.C. 22, 309 F.2d 317 (1962); Pennsylvania R. Co. v. Rochinski, 81 U.S. App. D.C. 320, 158 F.2d 325 (1946); Martin v. Savage Truck Line, Inc., D. D.C., 121 F. Supp. 417 (1954).

"concern a matter of which the declarant was personally cognizant, were against his pecuniary and proprietary interest, and were made with no probable motive to falsify."

The Johnson court went on to detail a fourth requirement -- that the declarant be unavailable to testify at trial. The court noted that originally the exception was limited to instances where the declarant was dead. However, since the rationale behind the exception is that the statements are intrinsically reliable and that there is a need for them, the court reasoned that they should be admitted when the declarant is unable to testify at trial for other reasons:

"So far as the record shows, Meyer [the declarant] was not deceased at the time of the trial. It is clear, however, that he was both absent and unavailable. The record shows that diligent efforts were made to find him and it is quite apparent that he was not within the jurisdiction of the court. . . .

Clearly, the necessity for resorting to hearsay is just as great when the declarant is outside the jurisdiction or cannot be found after a diligent search as when he is dead. . . ."

Ibid. See also Deike v. Great Atlantic & Pacific Tea Co., 3 Ariz.App. 430, 415 P.2d 145, 147 (1966); Neely v. Kansas City Public Service Co., Ct. App., 241 Mo. App. 1244, 252 S.W. 2d 88, 91 (1952).

In examining Faulds' statement it is apparent that two of the criteria for admissibility are easily met: the subject matter was one with which Faulds was "personally cognizant," and no conceivable "motive to falsify" is evident. We find that the third requirement is also met: Faulds' statement to the fire investigator was against his interest within the meaning of the exception.

A statement is against pecuniary and proprietary interest when it threatens the loss of employment, or reduces the chances for future employment, or entails possible civil liability. C. McCORMICK (supra) 254, pp. 548-549; compare Koninklijke Luchtvaart Maatschappij N.V. KLM, Etc. v. Tuller, 110 U.S. App. D.C. 282, 291, 292 F.2d 775, 784, cert. denied, 368 U.S. 921, 7 L. Ed. 2d 136, 82 S. Ct. 243 (1961); Wabisky v. D.C. Transit System, Inc. (supra). Here Faulds' statement is an important link in providing a basis for concluding that Faulds and the other nighttime visitors to the warehouse were responsible for starting the fire; the possibility of civil liability against him arising from the statement is thus evident. Indeed, an effort was made to make him a defendant in this case. See Note 2 (supra). Further, even though Troiano did not have a rule against smoking on the premises, Faulds' admission that he had been there after hours, for a purpose unrelated ...

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