Duckett-Murray v. Encompass Ins. Co. of Am.

Eyler, Deborah S., J. In this appeal, we must examine the reach of Maryland's statutory policy in favor of equality of liability and uninsured motorist ("UM") coverage limits in private passenger automobile insurance policies. 1 In January 2013, Michael David Haynesworth, an appellee, struck a vehicle owned and operated by Lashawn Duckett-Murray, the appellant, causing her to suffer personal injuries. Haynesworth had no motor vehicle liability insurance coverage. In the Circuit Court for Prince George's County, Duckett-Murray filed suit for damages against Haynesworth and Encompass Insurance Company of America ("Encompass"), also an appellee, her own motor vehicle liability and UM insurance carrier. Duckett-Murray and Encompass filed cross-motions for partial summary judgment on the issue of the applicable UM limits.

Duckett-Murray argued that by statute her policy's UM limits necessarily were equal to her policy's $300,000 liability limits. Encompass argued that the UM limits were $75,000, as stated on the policy declarations page. The circuit court issued a memorandum opinion and order ruling that the applicable UM limits were $75,000 and granting partial summary judgment in favor of Encompass. In a jury trial, Haynesworth was found liable to Duckett-Murray for $192,148.15 in damages.

The court entered judgment against Haynesworth in the full amount of the verdict and against Encompass for $75,000. On appeal, Duckett-Murray presents one question, which we have rephrased: Did the circuit court err by ruling that the UM limits on her automobile insurance policy were not equal to the policy's liability limits? We answer that question in the affirmative. We shall vacate the judgment against Encompass for $75,000 and remand the case for the court to enter judgment in favor of Duckett-Murray and against Encompass for $192,148.15.

FACTS AND PROCEEDINGS By 1992, Md. Laws, Chap. 641 ("the 1992 Law"), the General Assembly amended Maryland's motor vehicle insurance laws to state that "[u]nless waived ... the amount of [UM] coverage provided under a private passenger motor vehicle liability insurance policy shall equal the amount of liability coverage provided under the policy." Md. Code (1997, 2011 Repl. Vol., 2013 Supp.), § 19-509(e)(2) of the Insurance Article ("Ins."). To be effective, a waiver of equality of coverage must be in writing and made by the "first named insured" under the policy. Ins. § 19-510(b)(1). 2 The 1992 Law included two sections that were not codified.

Section 2 stated that "[t]his Act shall apply only to motor vehicle insurance policies issued or delivered on or after the effective date of this Act[,]" and section 3 established an effective date of October 1, 1992. The accident that gave rise to the lawsuit in this case happened on January 3, 2014. At that time, Duckett-Murray was insured under a "USP Deluxe" policy from Encompass, for the policy period November 4, 2013, through November 4, 2014. Barbara Duckett ("Barbara"), Duckett-Murray's mother, was identified on the declarations page as the "Policyholder." 3 The policy covered two vehicles: a 2003 Chrysler Town & Country driven by Barbara and a 2008 Dodge Charger driven by Duckett-Murray.

Barbara, Duckett-Murray, and Barbara's sister, Bertha Duckett ("Bertha"), were listed as drivers on the policy. The declarations page showed liability limits of $300,000 and UM limits of $75,000. It is undisputed that neither Barbara nor any prior policyholder ever executed a written waiver of UM coverage equal to liability coverage consistent with Ins. sections 19-509 and 19-510. On cross-motions for summary judgment, the parties presented evidence pertinent to when the policy was "issued or delivered." That evidence showed that on October 30, 1987, Edison Duckett ("Edison"), Barbara and Bertha's father and Duckett-Murray's grandfather, applied to CNA Insurance Companies ("CNA") for a combined policy of homeowners and automobile insurance.

At that time, Edison; his wife, Mary Duckett ("Mary"); Barbara, then age 33; Bertha, then age 30; and Duckett-Murray, then age 10, all were living at 12809 Heatherwich Court, in Brandywine. Barbara and Duckett-Murray continue to live at the Heatherwich Court residence. 4 On November 4, 1987, "Universal Security Deluxe Policy" No. US6021509 was issued to "Named Insured[s]" "Edison and Mary and Barbara Duckett." The "New Business Coverage Summary" pages identified CNA as the insurer and Continental Casualty Company ("CCC") as the insurance underwriter. The liability limit was $300,000 and the UM limit was $50,000. Three vehicles were covered: a 1987 Chevrolet Celebrity, a 1986 Ford Escort, and a 1980 Ford Pinto.

Edison, Mary, and Bertha were listed as drivers, but Barbara was not. In fact, Barbara had her own automobile insurance policy with Allstate. The only reason Barbara was included as a "Named Insured" on the policy was because it covered the Heatherwich Court residence and she was a mortgagor on the house, along with her parents. 5 The next year, for the policy period November 4, 1988, through November 4, 1989, only Edison was listed as a "Named Insured." The policy was renewed for the policy years beginning November 4, 1988, through November 4, 1994, with Edison as the "Named Insured" and the coverage limits, number of vehicles covered, and drivers unchanged. In policy years 1990 through 1993, various automobiles were substituted. 6 Beginning November 4, 1995, the policy name changed from "Universal Security Deluxe Policy" to "USP Deluxe." The policy number, limits, vehicles, and drivers were unchanged.

Edison remained the sole "Named Insured." Beginning November 4, 1996, the name of the policy underwriter was changed from CCC to Continental Insurance Company ("Continental"). 7 The policy was renewed with no changes on November 4, 1997. On November 4, 1998, the policy was renewed but the Nissan Maxima assigned to Edison was removed and not replaced, so only two vehicles were covered, not three. On July 30, 1999, an endorsement added Barbara as a "Policyholder" and as a driver. 8 Edison, Mary, and Bertha continued to be listed as drivers. Two vehicles were covered: one assigned to Mary and one to Bertha.

On November 4, 1999, the policy was renewed with liability limits remaining at $300,000, but with UM limits increased to $55,000, consistent with a change in the statutory minimum. Edison and Barbara remained the "Policyholders." Edison died in August of 2000. The policy was renewed on November 4, 2000, with no changes. On November 4, 2001, the policy was again renewed, still listing Edison and Barbara as "Policyholders," but not listing Edison as a driver.

The policy number, liability limits, and UM limits remained unchanged, although the policy stated that it now was being issued by Glens Falls Insurance Company ("Glens Falls"). The policy was renewed on November 4, 2002, still with "Edison & Barbara Duckett" listed as the "Policyholders." On December 23, 2002, the policy was amended by endorsement to delete Edison as a "Policyholder" and add Mary. Thus, "Barbara & Mary Duckett" were now the "Policyholders." On November 4, 2003, Duckett-Murray, then age 26, was added as a driver, and a third vehicle, a 1993 Jeep Grand Cherokee, was added. "Barbara and Mary Duckett" remained the "Policyholders." 9 Bertha and Mary also were listed as drivers.

The "USP Deluxe Renewal Policy" for the November 4, 2004, through November 4, 2005 policy period bore a new policy number, No. # 261526627, and stated that it was being issued by Encompass, "Formerly known as CNA Personal Insurance." The "Coverage Summary" page stated "Policyholder Since: 11/1987." 10 The "Policyholders" and coverage limits remained unchanged. The USP Deluxe Renewal policy was renewed on November 4, 2005. The "Renewal Policy Coverage Summary" states: "Policy Number: 261526627. This is a replacement of policy 006021509." It further states that the issuer is "Encompass Insurance Formerly known as CNA Personal Insurance" and includes the "Policyholder Since: 11/1987" language.

The policy was renewed again on November 4, 2006, with no changes. The policy was renewed on November 4, 2007, with two vehicles covered instead of three. 11 In December 2007, Mary died. On November 4, 2008, the policy was renewed with "Barbara Duckett" as the sole "Policyholder." Barbara renewed the policy in 2009 and again in 2010. Beginning November 4, 2011, the UM coverage was increased to $75,000, consistent with changes to the statutory minimum, while the liability coverage remained unchanged.

A third covered vehicle, a 2008 Dodge Charger, was added. The policy was renewed on November 4, 2012, with the 1998 Dodge Stratus removed, so the policy only covered two vehicles. On November 4, 2013, the policy was renewed with no changes. As mentioned, the accident giving rise to this lawsuit occurred on January 3, 2014, during the 2013 policy period.

Duckett-Murray made a claim against Encompass for UM benefits up to the $300,000 liability limits under the policy. Encompass took the position that the stated $75,000 UM limits applied. Duckett-Murray filed suit against Haynesworth and Encompass on May 21, 2015. On July 1, 2016, Duckett-Murray moved for partial summary judgment, arguing that because Ins. section 19-509(e)(2) requires UM limits to equal liability limits for a private passenger automobile insurance policy, absent an affirmative written waiver, and because neither Barbara nor any other Policyholder made such a waiver, the UM benefits recoverable under the policy automatically were up to the $300,000 liability limits.

Encompass filed a timely opposition to Duckett-Murray's motion and a cross-motion for partial summary judgment. It maintained that Ins. section 19-509(e)(2) did not apply to the policy covering Duckett-Murray because that policy was not "issued or delivered" on or after October 1, 1992, having been continuously renewed since 1987. The court heard argument on September 1, 2016, and, on September 14, 2016, entered a memorandum opinion and order. It ruled that the policy covering Duckett-Murray had been issued and delivered in 1987 and renewed continuously thereafter, opining: While there have been numerous changes to the policy, they are those of the routine variety.

Individuals frequently change the covered drivers when necessary and change the covered vehicle when they purchase a new car. They then proceed to renew their coverage at the expiration of each term. This Court finds that is what the Duckett family did here. They renewed their motor vehicle insurance policy every November since the policy was issued in 1987.

The best evidence is the most recent renewal itself that indicates "Policyholder Since: 11/1987. The court concluded that because the policy merely was renewed yearly after it was first purchased in 1987, it was not "issued or delivered" after October 1, 1992, and, therefore, a waiver of enhanced UM coverage limits was not required. It relied upon World Insurance Co. v. Perry , 210 Md. 449 , 454, 124 A.2d 259 (1956), which holds that "a renewal of an insurance policy by the payment of a new premium and the issuance of a receipt therefor, where the renewal is in pursuance of a provision to that effect, is not a new contract but an extension of the old." A jury trial went forward on October 3-4, 2016, and, as mentioned, the jury found in favor of Duckett-Murray, and against Haynesworth, awarding damages of $192,148.15. On October 18, 2016, the court entered judgment against Haynesworth for $192,148.15 and Encompass for $75,000.

Duckett-Murray noted a timely appeal. 12 DISCUSSION Duckett-Murray contends the circuit court's interpretation and application of uncodified section 2 of the 1992 Law is "inconsistent with the text and purpose of the remedial statute creating a default of matching limits of liability coverage and uninsured motorist benefits." In her view, the legislature adopted a policy that favors equality of liability and UM coverage limits, by making that the default coverage circumstance absent an affirmative written waiver; and it intended for that policy to apply to motor vehicle insurance policies such as the one here, which, although labeled as a "renewal" policy, "was not issued to the same person to whom it was issued on the effective date of" the 1992 Law and "was not issued by the same company, or an affiliated company, that issued" the policy in 1992. She maintains that because, under Ins. section 19-510(a)(1), the "first named insured" has the power to execute a waiver of enhanced UM coverage on behalf of the other insureds, any time the first named insured under the policy changes, as happened here in 2002 and again in 2008, there is a new contract, not a policy renewal. In that circumstance, equality of coverage as mandated by Ins. section 19-509(e)(2) applies, and the new first named insured must be given the opportunity to execute a waiver. 13 Encompass responds that the circuit court correctly ruled that, for purposes of uncodified section 2, only a new policy, not a renewal policy, is a policy "issued or delivered" on or after October 1, 1992. In its view, the renewal of a policy first issued and delivered before October 1, 1992, never will trigger the equality of coverage requirement, even if the policy has been renewed multiple times and the renewals have significantly changed the policy over time.

Encompass asserts that, after the policy at issue here first was issued in 1987, it became a renewal policy, to which the 1992 Law did not apply. That is so, it maintains, regardless of which named insured actually renewed the policy each year. Encompass argues that Swartzbaugh v. Encompass Ins. of America , 425 Md. 614 , 42 A.3d 587 (2012), supports this position. No Maryland case has interpreted uncodified section 2, and the UM statute does not define the phrase "issued or delivered." The words "issued," "sold," or "delivered," usually in full or partial combination, appear throughout the motor vehicle insurance title of the Code (Title 19), however.

As the author of the leading treatise on Maryland motor vehicle insurance law has commented, "[t]he phrase 'issue, sell, or deliver' and its derivatives have not been given any special judicial interpretation by Maryland courts." Andrew Janquitto, Maryland Motor Vehicle Insurance , § 5.5 at 140 (3d ed. 2011) (footnote omitted) (hereinafter "Janquitto"). But the way in which these words are used in Title 19, subtitle 5 "suggests that 'issued' and 'sold' are synonymous," while "delivery" stands on its own. Id. at 140-41 (footnote omitted). The meaning of "issued or delivered" in uncodified section 2 is not entirely clear.

From 1975, when UM coverage first was mandated, those words were used broadly: "[E]ach motor vehicle liability insurance policy issued, sold, or delivered in the State after July 1, 1975, shall contain" UM coverage as further described. Ins. § 19-509(c). Likewise, they have been used broadly from 1972 on, in mandating minimum liability coverage amounts: "Each motor vehicle liability insurance policy issued, sold, or delivered in the State shall provide the minimum liability coverage specified in Title 17 of the Transportation Article." Ins. § 19-504. As the Janquitto treatise points out, because insurance contracts are said to come into existence when sold and delivered, these words may have been used to make clear, for conflict of laws purposes, that any insurance policy formed in the State of Maryland after the effective date of those statutory mandates would need to provide the minimum liability and UM coverages.

Janquitto, at 141. There is no case law or history to suggest a distinction between new and renewal policies in that context. The words "issued or delivered" in uncodified section 2 are not as broadly phrased as in Ins. sections 19-509(c) and 19-504, however, given the use of the word "only" in that section. Rather, they seem to have been meant as a limitation upon the insurance policies to which the 1992 Law would apply.

"This Act shall apply only to ... policies issued or delivered on or after" October 1, 1992, implies that there are policies to which the Act will not apply, i.e. , those not issued or delivered on or after that date. (Emphasis added.) The parties to this appeal are in agreement that the limitation envisioned by the General Assembly in uncodified section 2 applies to ordinary renewal policies. That is, a routine renewal policy is not a policy "issued or delivered" within the meaning of section 2. Maryland law is well-established that when an insured renews a policy that permits renewal, and the insurer accepts the renewal, the resulting policy merely is a continuation of the already existing policy.

World Insurance Co. v. Perry, supra . We agree with the parties that it is unlikely that the legislature generally intended renewal policies to be included among the policies "issued or delivered" on or after October 1, 1992, as that would have eliminated any distinction, for purposes of UM limits, between policies sold or delivered before October 1, 1992, and policies sold or delivered on or after that date. The question is whether there can be circumstances in which a renewal policy that is issued or delivered has changed so much from the policy as originally sold that it is, in effect, a new policy. Duckett-Murray urges a broad reading of uncodified section 2 to that effect, while Encompass urges a narrow reading, so that only a new contractual relationship with a new customer is a policy "issued or delivered" under uncodified section 2.

In determining the meaning of uncodified section 2, we must "ascertain and effectuate the intent of the General Assembly." Bottini v. Dep't of Fin. , 450 Md. 177 , 187, 147 A.3d 371 (2016). In so doing, we look first to the language of the statute [or here, the uncodified provision of the law], giving it its natural and ordinary meaning. We do so on the tacit theory that the General Assembly is presumed to have meant what it said and said what it meant. When the statutory language is clear, we need not look beyond the statutory language to determine the General Assembly's intent.

If the words of the statute, construed according to their common and everyday meaning, are clear and unambiguous and express a plain meaning, we will give effect to the statute as it is written. In addition, we neither add nor delete words to a clear and unambiguous statute to give it a meaning not reflected by the words that the General Assembly used or engage in forced or subtle interpretation in an attempt to extend or limit the statute's meaning. If there is no ambiguity in the language, either inherently or by reference to other relevant laws or circumstances, the inquiry as to legislative intent ends. If the language of the statute is ambiguous, however, then courts consider not only the literal or usual meaning of the words, but their meaning and effect in light of the setting, the objectives, and the purpose of the enactment under consideration.

We have said that there is an ambiguity within a statute when there exist two or more reasonable alternative interpretations of the statute. When a statute can be interpreted in more than one way, the job of this Court is to resolve that ambiguity in light of the legislative intent, using all the resources and tools of statutory construction at our disposal. Id. at 187-88 , 147 A.3d 371 (citation omitted). It is evident from the history of the Maryland UM law from its inception until enactment of the 1992 Law that the General Assembly's objective has been to maximize the number of consumers who purchase UM coverage in excess of the statutory minimum amount.

As noted, since 1975, private passenger automobile insurance policies issued in Maryland have been required to provide minimum levels of UM coverage. See 1975 Md. Laws, Chap. 562; see also Swartzbaugh v. Encompass Ins. of Am. , 201 Md. App. 133 , 143-46, 28 A.3d 785 (2011) (discussing the legislative history of mandatory UM coverage in Maryland). In 1981, the General Assembly went a step further, requiring insurers to "make available" to insureds UM coverage above the minimum levels, so long as that coverage did not exceed the amount of liability coverage under their policies. 1981 Md. Laws, Chap. 510. (It also expanded UM coverage to include certain underinsured motor vehicles.) In 1989, the General Assembly tried to put teeth in that law, changing it to "require insurance companies to offer in writing the opportunity to contract for higher amounts of [UM] coverage." Swartzbaugh , 201 Md. App. at 145 , 28 A.3d 785 (emphasis in original).

And finally, when it became evident that a law that placed the burden on consumers to act to increase their UM limits could not be made strong enough to be effective, the General Assembly enacted the 1992 Law, shifting the burden to insurers to provide UM coverage equal to liability coverage unless equal UM coverage was affirmatively waived in writing. 14 As this Court explained in Swartzbaugh , the impetus behind the 1992 amendment was the lack of awareness regarding the importance of carrying uninsured motorist coverage in an amount equal to the policy's liability coverage. By requiring the insured to affirmatively waive higher uninsured motorist coverage, an "insured's inaction [wa]s more protection," and the " 'default setting' recognize[d] the realities of life and dovetail[ed] with the legislative aim of [uninsured motorist] coverage-a full recovery." 201 Md. App. at 146 , 28 A.3d 785 (quoting Janquitto, § 8.7 at 334). See also Staab v. Am. Motorists Ins.

Co. , 345 Md. 428 , 435-36, 693 A.2d 340 (1997) (observing that the General Assembly "has determined, as a general policy, that insureds should have the same amount of [UM] coverage as they have automobile liability coverage, unless they affirmatively waive the equivalent level over and above the mandatory minimum[.]") Generally, because the UM statute is "remedial" legislation, we must construe it liberally " 'in order to effectuate its purpose of assuring recovery for innocent victims of motor vehicle accidents.' " Nationwide Mut. Ins. Co. v. Webb , 291 Md. 721 , 737, 436 A.2d 465 (1981) (quoting State Farm v. Md. Auto. Ins.

Fund , 277 Md. 602 , 605, 356 A.2d 560 (1976) ). More specifically, we must construe the meaning of "issued or delivered" in uncodified section 2 in light of the public policy underlying UM coverage, which has evolved to afford greater protection, through the private sector, to those injured by uninsured motorists: Before 1981, the public policy was to place the insured in the same position he or she would have occupied had the uninsured motorist maintained liability limits in the amount mandated by Title 17 of the Transportation Code. The public policy behind today's UM statute is to place the insured in the same position he or she would have occupied had the tortfeasor maintained liability limits equal to the claimant's own UM coverage .... Today's UM statute is designed to provide the insured the opportunity to secure a full recovery for his or her injuries.

The General Assembly enables the insured to purchase UM insurance greatly in excess of the minimum limits mandated by Title 17 ..., and, once purchased, that coverage is inviolable (unless the UM statute expressly permits such a violation). In this sense, the insured has the opportunity to secure a full recovery if he or she purchases higher UM limits. Janquitto, § 8.1 at 310 (emphasis in original). As noted, Encompass relies upon Swartzbaugh to support its position that, contrary to what Duckett-Murray argues, significant changes in the "named insured" do not create a new policy so long as the policy has been continuously renewed.

In Swartzbaugh , the Court of Appeals held that "first