Allstate Insurance v. Kponve

SALMON, J. The parties to this appeal are appellant, Allstate Insurance Company (“Allstate”), and appellee, Austria Kponve (“Mrs. Kponve”). At all times here pertinent, Allstate provided underinsured motorist coverage to Mrs. Kponve. On April 10, 2009, while Allstate’s policy was in force, Mrs. Kponve was involved in an automobile accident with a motorist ³⁷² named Douglas Leonel Mendoza (“Mendoza”). Mrs. Kponve sued Mendoza in the Circuit Court for Montgomery County alleging that Mendoza’s negligence resulted in severe injury to her. 1 Allstate filed a motion to intervene in the lawsuit in which it alleged that Mrs. Kponve and her husband had a contract of insurance with Allstate and that Mendoza “may be or is” an underinsured motorist as defined in that policy.

The motion to intervene further alleged that under the policy issued to the Kponves, Allstate “will or may be bound by any judgment entered against” Mendoza. Lastly, Allstate alleged that Allstate’s interest “may or may not be adequately represented by the existing parties who have failed to include Allstate ... as a [defendant.” The motion to intervene was granted. Afterwards, Mendoza’s insurance carrier settled Mrs. Kponve’s claim against Mendoza for Mendoza’s policy limits, which left Allstate as the only remaining defendant. Prior to trial, counsel for the parties stipulated to the fact that Allstate issued Mrs. Kponve an automobile insurance policy that provided her with uninsured/underinsured motorist coverage and that, on the date of the subject accident, that policy was in effect.

The parties did not stipulate, however, as to the amount of the uninsured/underinsured coverage or as to the amount of setoff, if any, Allstate was entitled to as a result of the settlement by Mendoza’s carrier. In May of 2013, a two-day jury trial was held in the Circuit Court for Montgomery County. At the conclusion of the trial, the jurors answered several questions set forth on a special verdict sheet. The jury found that: 1) Mrs. Kponve was not contributorily negligent; 2) Mendoza’s negligence caused Mrs. Kponve’s injuries; and 3) the damage suffered by Mrs. Kpon-ve, as a result of the subject accident, totaled $374,000. 2 ³⁷³ The clerk entered a judgment in favor of Mrs. Kponve and against Allstate in the amount of $874,000, even though Allstate’s liability to Mrs. Kponve under its contract had never been established.

Within ten days of the entry of that judgment, Allstate filed what it called a “Motion to Alter or Amend Judgment,” in which it alleged: 1) the underinsured motorist limits set forth in Mrs. Kponve’s policy were $50,000 per individual; and 2) that the insurance carrier for Mendoza had settled Mrs. Kponve’s claim against Mendoza for $25,000, which was the liability limit under Mendoza’s policy. According to Allstate, the court should therefore reduce the judgment against it to $25,000. The trial judge, after hearing argument, took the matter under advisement. About six months later, the court issued an order denying Allstate’s motion.

No explanation was given for the denial of the motion. This timely appeal followed. L BACKGROUND FACTS On the morning that trial commenced, the following colloquy occurred: [Allstate’s counsel]: [Y]our honor, as far as insurance issues are concerned, we’re not raising any issues that there wasn’t a policy— THE COURT: Yeah. [Allstate’s counsel]: —or that the plaintiff didn’t pay it. We’re just going strictly with was the putative uninsured driver actually negligent or not?

That’s the only issue we really— [Mrs. Kponve’s counsel]: That’s fine. THE COURT: Okay. [Mrs. Kponve’s counsel]: So I don’t know if we can stipulate ahead of time that there was a policy in force. My client’s prepared to testify to— [Allstate’s counsel]: Yeah, yeah, we can stipulate to that. It has policy limits of $50,000 per— ³⁷⁴ THE COURT: You think they need to know that the policy limits? [Allstate’s counsel]: No, I don’t think they need to know, but I just think— THE COURT: No. [Allstate’s counsel]: —you need to know, your honor, in case— THE COURT: Right, yeah. [Allstate’s counsel]: —there’s a— THE COURT: In case if it goes— [Allstate’s counsel]: —verdict of $12 million, that I feel both chastens [sic], but desirous of—concerning the policy limits. [Mrs. Kponve’s counsel]: And then— THE COURT: If there’s a verdict of $12 million and this court doesn’t take appropriate action, I think that this— you will probably text [sic] this case to the Court of Appeals.

As can be seen, although Allstate’s counsel represented to the court that the policy it issued to Mrs. Kponve had “policy limits of $50,000 per—,” Mrs. Kponve’s counsel did not indicate, one way or the other, whether he agreed with that representation. Shortly after the colloquy just quoted, the following exchange occurred: [Allstate’s counsel]: Okay, Allstate Insurance Company is their uninsured motorist—is the plaintiffs uninsured[ 3 ] motorist carrier, and is asserting that Mr. Mendoza was not negligent, and that if anyone was negligent, it was the plaintiff. THE COURT: Okay. ³⁷⁵ [Mrs. Kponve’s counsel]: Well, that’s not the stipulation.. I think the stipulation was that there was a policy in place.

THE COURT: See why we’re doing this now? Go ahead. [Allstate’s counsel]: Okay. [Mrs. Kponve’s counsel]: That there was an uninsured motorist policy in place, and Mrs. Kponve had paid all her premiums and defendant Allstate has denied payment because it believes Mr. Mendoza was not negligent. THE COURT: That’s fine. That just—it adds an important factor here, that there’s an uninsured motorist policy, that all premiums were paid, the plaintiff is the insured, and that Allstate contends that Mr. Mendoza is not negligent.

So you’ll state that to the jury. All right. Pursuant to the foregoing agreement, Allstate’s counsel, in his opening statement, told the jury the following: I’m here representing the Allstate Insurance Company. You may not have noticed this before, but when you buy insurance in the State of Maryland, the State requires you to also buy what is called uninsured motorist coverage.

That is to protect you under various legal circumstances, which are not at issue in this case. Nonetheless, this is the claim under that portion of policy. And that policy was in effect. And Allstate’s not—dispute that.

We don’t dispute the happening of the accident. And we certainly agree that the plaintiff was—got the injury. However, in this case, Allstate Insurance Company does step into the shoes of Mr. Mendoza and have the defenses that Mr. Mendoza could assert. Counsel then told the jury that it was Allstate’s position that Mendoza was not negligent. 4 ³⁷⁶ As mentioned earlier, Allstate filed a timely post-trial motion, in which it asserted that the judgment in the above-captioned case should be reduced to $25,000.

In its motion, Allstate made the following representation: 1) that its contract with Mrs. Kponve had underinsured motorist coverage with a limit of $50,000 per person; 2) that Mendoza’s insurer, AMI Insurance Group-American Independent Companies, Inc., under policy no. 3433976, settled with Mrs. Kponve for its policy limits of $25,000; and that Allstate waived its subrogation rights against Mendoza in return for Mendoza’s agreement to appear at trial. Allstate asked the court to “reduce the verdict amount to the policy limits of $50,000 and credit Allstate Insurance Company with the $25,000 paid by Mr. Mendoza’s insurer and enter a judgment in the amount of $25,000.” In its accompanying memorandum of law, Allstate relied primarily on language used in Allstate Ins. v. Miller, 315 Md. 182 , 553 A.2d 1268 (1989). Mrs. Kponve filed an opposition to Allstate’s post-trial motion in which she contended that once Allstate intervened in the tort case filed against Mendoza, it had the obligation to plead and prove its contractual defenses and if it failed to do so, it was bound by the jury verdict and the court’s judgment. Mrs. Kponve concluded her memorandum in opposition to Allstate’s motion with the following statement: Plaintiff submits that it is wholly inappropriate and unjust for Allstate, having rolled the dice at trial and lost, to now be able, outside the presence of the jury and in post-trial papers, to whittle down the $374,000 verdict to a mere $25,000 judgment based on an argument it had never raised in its answer or in its motion to intervene.

If nothing else, Allstate’s motion to alter or amend should be denied because it never sought to protect its own interests in this regard by counter-claiming against Mrs. Kponve in order to ³⁷⁷ keep the issue ripe for litigation. At this point, a $374,000 judgment has been entered against this Defendant, and there is no reason to change that. A hearing on Allstate’s post-trial motion was held on August 30, 2013. At the commencement of the hearing, counsel for Allstate proffered what it contended was the policy of insurance that it issued to Mrs. Kponve and was in effect at the time of the accident.

Allstate’s counsel argued, inter alia, that at trial Mrs. Kponve had the burden of proof as to the contract provisions but that neither party had introduced the policy into evidence. Counsel for Allstate also represented, once again, that the policy limits for underinsured motorist coverage was $50,000 per person and that the claim against Mendoza had “settled for $25,000.” Counsel for Allstate added that in discovery his client had provided the number of the Allstate policy that was in effect and, if plaintiff contended that this was not the policy, the party with the “burden of proof [was required] to prove something opposite.” Mrs. Kponve’s counsel argued that the insurance contract proffered to the court by Allstate was “inadmissible at this point.” Counsel worded his argument as follows: Your honor, I’d object to the admission of that [insurance policy] at this time. It’s inadmissible at this point on a motion for post[-]trial. An attorney can’t come in and yank a piece of paper out three months after the trial and say, “We forgot to put this in the record.” There’s nothing in the record before you as of this moment, and they’re now trying to place a document in the record that has not been authenticated, that we’ve never seen until today.

Counsel for Mrs. Kponve also argued that “this is purely a contract case” not a negligence case. Her counsel maintained that the case was a contract action “because the negligent driver was dismissed, so the only parties here are the insurer and the insured on a contract case.” In the words of Mrs. Kponve’s counsel: “It’s not our burden to prove there’s a limitation once they’ve stipulated that ‘Yes, we will cover your ³⁷⁸ damages by this contract that you’ve paid the premiums on.’ The burden is on them.” [ 5 ] In his argument, counsel for Mrs. Kponve criticized Allstate for failing to prove the insurance contract by a “demand for admission” or a “motion for partial summary judgment.” Counsel for Mrs. Kponve also argued that the issue before the court was controlled by Allstate Ins. v. Miller, supra, and asserted that: Now there are reasons why a plaintiff should not agree to this [i.e., stipulate as to policy limits], and why the burden should be placed on Allstate—if they want a [sic] claim there’s a limitation in a certain amount. There are hundreds of thousands of Maryland drivers and passengers, and to think that all these drivers and passengers know exactly what their policy says and where it is and which amendment is in place at which time, is placing too much of a burden on the plaintiff. Some plaintiffs don’t even speak very well the language that the policy is drafted in.

And therefore it’s perfectly appropriate to tell Allstate that if you think there’s a limit here, prove it. You don’t have to prove it to the jury, but at least put it in the record as was twice done in Miller , and not done whatsoever until today. (Emphasis added.) Counsel for Mrs. Kponve further argued: So it’s our position they ought to do what all other attorneys have to do. When something’s not stipulated to, you put it in the record.

You prove it. And there are at least 10 different ways they could have done that in pre[-]trial and trial without showing it to the jury. Counsel for Allstate, in response to the argument that insureds could not be expected to know the contents of their policies, stated: ³⁷⁹ [PJeople are held responsible for knowing what the contents of their own contracts—especially if they are going to be filing lawsuits regarding those, especially if they’re represented by attorneys, especially if they have a burden of proof (Emphasis added.) II. PRELIMINARY MATTERS Mrs. Kponve, citing Md. Rule 8-131(a), claims that the issue of whether she or Allstate had the burden of proof is not properly before this court.

Md. Rule 8-131(a) provides, in pertinent part, that ordinarily, except for matters of subject matter or personal jurisdiction, an appellate court “will not decide any other issue unless it plainly appears by the record to have been raised in or decided by the trial court[.J” Contrary to appellee’s argument, the issue of which party had the burden of proof clearly was raised in the trial court. After all, the entire thrust of appellee’s opposition to Allstate’s post-trial motion was that Allstate’s motion should be denied because Allstate failed to meet its burden of proof regarding how much was owed to Mrs. Kponve under her policy. Moreover, that issue was decided by the trial court, at least implicitly, because if the trial judge did not believe that Allstate had the burden of proof, there would be no other possible basis to sustain the $374,000 judgment against Allstate. Moreover, as shown by the facts set forth in Part I of this opinion, appellant did argue in support of its post-trial motion that Mrs. Kponve had the burden of proving contract damages.

Appellee’s brief can be interpreted as meaning that Mrs. Kponve contends that Allstate, at no time prior to the return of the jury verdict, argued that appellee had the burden of proving her contract damages—and it was therefore too late to bring the matter up on post-trial motion. If that is appellee’s argument, it has no merit. The amount of contract damages was not an issue in the tort action decided by the ³⁸⁰ jury and in fact might never be an issue unless: 1) the jury ruled against the underinsured as to liability; 2) the verdict against the underinsured motorist exceeded the policy limits under the policy held by the underinsured motorist; 8) the parties disagreed as to the amount due under the contract; and 4) Mrs. Kponve brought a breach of contract action to determine what was due to her under her policy. See West American Insurance Company v. Popa, 352 Md. 455, 463, 723 A.2d 1 (1998).

Appellee, in her brief, devotes considerable attention to the issue of whether the insurance policy proffered by Allstate was properly authenticated, or whether it should have been attached to Allstate’s post-trial motions, as opposed to simply being submitted to the court about three months after the jury verdict was returned. We agree with appellee that the policy was not properly authenticated and therefore should not be considered by the court. But this is inconsequential unless the trial court was correct when it (impliedly) found that Allstate had the burden of proving that under its policy it owed Mrs. Kponve something less than $374,000.

III

ANALYSIS The central issue presented in this appeal is whether, as appellee contends, Allstate had the burden of proving: 1) the amount of underinsured motorist coverage; and 2) the amount, if any, of credit Allstate was entitled to receive as a result of the settlement by Mendoza’s carrier. Since July 1, 1975, every motor vehicle liability insurance policy issued, sold or delivered in Maryland, has been required to contain coverage in certain minimum amounts for damages, subject to policy limits, that: (1) the insured is entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injuries sustained in a motor vehicle accident arising out of ³⁸¹ the ownership, maintenance, or use of the uninsured motor vehicle; and (2) a surviving relative of the insured, who is described in § 3-904 of the Courts Article, is entitled to recover from the owner or operator of an uninsured motor vehicle because the insured died as the result of a motor vehicle accident arising out of the ownership, maintenance, or use of the uninsured motor vehicle. Maryland Code (2011 Repl.Vol.) Insurance Article 19-509(c). Section 19-509 of the Insurance Article provides, in relevant part: (d) Form and conditions of coverage.—The uninsured motorist coverage required by this section shall be in the form and subject to the conditions that the Commissioner approves.

(e) Amount of coverage.—(1) The uninsured motorist coverage contained in a motor vehicle liability insurance policy: (i) shall at least equal: 1. the amounts required by Title 17 of the Transportation Article; and 2. the coverage provided to a qualified person under Title 20, Subtitle 6 of this article: and (ii) may not exceed the amount of liability coverage provided under the policy. (2) Unless waived in accordance with § 19-510 of this subtitle, the amount of uninsured motorist coverage provided under a private passenger motor vehicle liability insurance policy shall equal the amount of liability coverage provided under the policy. The term “uninsured motor vehicle” includes motor vehicles operated by individuals that are “underinsured.” This is made clear by section 19-509(a) of the Insurance Article, which reads: (a) “Uninsured motor vehicle” defined.—In this section, “uninsured motor vehicle” means a motor vehicle: ³⁸² (1) the ownership, maintenance, or use of which has resulted in the bodily injury or death of an insured; and (2) for which the sum of the limits