Consumers Life Insurance v. Smith

DAVIS, Judge. Consumers Life Ins. Co. (Consumers) appeals from the judgment of the Circuit Court for Baltimore County granting a motion for summary judgment filed by the plaintiff below, Patricia Ann Smith, appellee. Smith filed suit against Consumers to recover $10,000 accidental death and dismemberment benefits payable under a group policy insuring the life of her husband, Joseph M. Smith.

The Court denied Consumer’s motion for summary judgment and granted summary judgment in favor of Smith. In this appeal, we are asked to interpret in a group insurance policy the term “accidental bodily injury” and determine whether it includes injury occurring while the insured is ⁵⁷² engaged in proscribed behavior, i.e., driving while legally intoxicated. FACTS On November 9, 1986, Joseph Smith was killed in a single car accident when the car he was driving left the roadway, struck a telephone pole and overturned. The police investigation revealed that the decedent’s vehicle was travelling in excess of 60 miles per hour when it left the roadway.

The post mortem examination further revealed that the decedent had a .20 percent blood alcohol concentration, indicating that he had been operating his vehicle while intoxicated. 1 The decedent was insured under a Group Term Life Insurance and Group Accidental Death and Dismemberment Insurance Policy with Consumers Life Insurance Co. This insurance policy provides for death benefits and double indemnity benefits in the event of “an accidental, bodily injury which results directly and independently of all other causes” and not from any of the excepted risks, i.e., suicide, intentionally self-inflicted injury, infection or disease, and war. Consumers paid the $10,000 death benefits but, because the decedent’s death occurred during the operation of his motor vehicle while intoxicated, Consumers denied payment of the accidental death benefit on the ground that the death was not accidental within the terms of the policy. I. SUMMARY JUDGMENT We are asked to determine whether the appellant, by refusing payment of certain benefits, breached its contract with the insured. The standard for appellate review of the grant of a motion for summary judgment is whether the ⁵⁷³ trial court erroneously granted summary judgment where there exists a genuine issue as to material facts in which case the movant is not entitled to judgment as a matter of law.

Md.Rule 2-501(a). The function of the summary judgment procedure is “merely to determine whether there is an issue of fact to be tried, and, if there is none, to cause judgment to be rendered accordingly.” Porter v. General Boiler Casing Co., 284 Md. 402, 413 , 396 A.2d 1090 (1979). Moreover, all duly shown facts which would be admissible in evidence and all reasonable inferences deducible therefrom must be considered most favorably to the party opposing the motion. Washington Homes, Inc. v. Interstate Land Dev.

Co., 281 Md. 712, 718 , 382 A.2d 555 (1978). The evidence regarding the insured’s death is undisputed. The insured died as a result of an automobile accident when he operated his vehicle while intoxicated and collided with a utility pole. “Where there is no real dispute as to facts which are pertinent to the question of coverage which are shown by evidence properly admissible the construction is for the court.” Truck Insurance Exchange v. Marks Rentals, 288 Md. 428, 433 , 418 A.2d 1187 (1980). The record in this case presents no real dispute as to the facts which are pertinent to the question of coverage.

Therefore, the “question is one of the construction of the contract in the light of the language employed in the contract, the subject matter and the surrounding circumstances. When these are clear, it is the province of the court, rather than of the jury, to construe the contract.” Ebert v. Millers Fire Ins. Co., 220 Md. 602, 610 , 155 A.2d 484 (1959). The Court of Appeals has observed that [t]he jury’s function in the interpretation of documents then will arise wherever, in view of the surrounding circumstances and usages offered in evidence, the meaning of the writing is not so clear as to preclude doubt by a reasonable man of its meaning.

If the meaning after taking the parol evidence, if any, into account is so clear that no reasonable man could reach more than one conclusion as to the meaning of the writing under the circum ⁵⁷⁴ stances, the court will properly decide the question of fact for itself as it may any question of fact which is equally clear. Montauk Corp. v. Seeds, 215 Md. 491, 497 , 138 A.2d 907 (1958), quoting S. Williston, 4 A Treatise on the Law of Contracts § 616 at 660-63 (3d ed. 1957). In order to see whether there existed a dispute as to material facts, we must determine first whether the terms of the contract are ambiguous. If the terms are unambiguous, we may construe the insurance contract as a matter of law.

Winterwerp v. Allstate Ins. Co., 277 Md. 714, 717 , 357 A.2d 350 (1976). The pertinent clause in the case sub judice reads: Upon receipt by the Insurance Company of due proof that an Employee while insured under the policy has received an accidental bodily injury, which results directly and independently of all other causes, and as a result of the injury, has suffered any of the following losses after the date on which the injury was received, and that the loss suffered by the Employee did not result from any of the Risks Excepted, the Insurance Company will pay the amount of the benefit provided for the loss suffered ... RISKS EXCEPTED: The insurance provided by the policy does not cover, and no payment will be made for, any loss which results directly or indirectly from: (1) suicide or intentional self-inflicted injury while sane; (2) infection ... or disease; (3) war, declared or undeclared, or any act of war.

(Emphasis added). Several well-established principles govern the construction of insurance contracts in Maryland. Pacific Indemnity Co. v. Interstate Fire & Casualty Co., 302 Md. 383, 388 , 488 A.2d 486 (1985). In an insurance contract, as in any other contract, the intention of the parties is determined primarily by the terms of the contract.

To ascertain the parties’ intention, the instrument must be considered as a whole. Id. The Court of Appeals opined that “language which is merely general in nature or imprecisely defined is ⁵⁷⁵ not necessarily ambiguous.” Truck Ins., 288 Md. at 433 , 418 A.2d 1187 . On the subject of ambiguity G.J. Couch, 2 Couch Cyclopedia of Insurance Law (2d ed. 1959) states: § 15:84. — Test in determining existence of ambiguity.

The test to be applied by the court in determining whether there is ambiguity is not what the insurer intended its words to mean, but what a reasonably prudent person applying for insurance would have understood them to mean. The criterion is ambiguity from the standpoint of a layman, not from that of a lawyer. Id. at 416-18 (emphasis added). See also, C & H Plumbing v. Employers Mutual Casualty Co., 264 Md. 510, 515 , 287 A.2d 238 (1972).

Applying this test we believe that the word “accident” is not ambiguous to a reasonably prudent person. The Court of Appeals has consulted Webster’s Dictionary, Random House Dictionary, or, less often, Black’s Law Dictionary to determine the ordinary and accepted meaning of a word. Pacific Indemnity, 302 Md. at 388 , 488 A.2d 486 . Webster’s Third New International Dictionary 11 (3d ed. unabr. 1986) defines “accident,” as an event or condition occurring by chance or arising from unknown or remote causes ... lack of intention or necessity ... an unforeseen unplanned event or condition ... usu. sudden event or change occurring without intent or volition through carelessness, unawareness, ignorance or a combination of causes and producing unfortunate result____ Black’s Law Dictionary 15 (6th ed. 1990) also defines “accident”: In its most commonly accepted meaning, or in its ordinary or popular sense, the word may be defined as meaning: a fortuitous circumstance, event, or happening ... an event which under the circumstances is unusual and unexpected by the person to whom it happens ... an unusual or unexpected result attending the operation or performance of a usual or necessary act or event ... any unexpected personal injury resulting from any unlooked for mishap ⁵⁷⁶ or occurrence ... an undesigned, a sudden and unexpected event ...

INSURANCE CONTRACT. An accident within accident insurance policies is an event happening without any human agency, or, if happening through such agency, an event which, under circumstances, is unusual and not expected by the person to whom it happens. A more comprehensive term than ‘negligence,’ and in its common signification the word means unexpected happening without intention or design____ (Emphasis added). In the instant policy, the term “accidental bodily injury” is further qualified by the clause, “which results directly and independently of all other causes.” Since we need to construe the instrument as a whole, we must determine whether this qualification makes the term “accident” ambiguous to a reasonably prudent layperson; we hold that the qualifying language does not render the term ambiguous.

See Webster’s Third New International Dictionary, supra. “That a term cannot be precisely defined so as to make clear its application in all varying factual situations does not mean that it is ambiguous.” Allstate v. Humphrey, 246 Md. 492, 496 , 229 A.2d 70 (1967). In interpreting the contractual terms “we have no right to relieve one of the parties from disadvantageous terms by process of interpretation nor may we make a new contract under guise of construction.” C & H Plumbing, 264 Md. at 512 , 287 A.2d 238 . Moreover, enumerating specific excepted risks (suicide, intentionally self-inflicted injury,