Harris v. Nationwide Mutual Insurance

JOHN J. BISHOP, Judge, Specially Assigned. Appellants, Sigridur Harris (“Mrs. Harris”) and Robert Harris (“Mr. Harris”), brought suit in the Circuit Court for Prince George’s County to collect money allegedly owed to them under the terms of an uninsured/underinsured motorist policy issued by appellee, Nationwide Mutual Insurance Company (“Nationwide”). Both sides moved for summary judgment. After a hearing, the court issued a memorandum opinion and order granting Nationwide’s motion and denying the Harrises’ motion.

Mr. and Mrs. Harris noted a timely appeal. For the reasons stated herein, we reverse. ISSUES Mr. and Mrs. Harris raise two issues, which we reorder and rephrase: ⁴ I. Did the circuit court err when it ruled that Sigridur Harris’s injuries were not the result of an “accident,” as that term is used in the applicable insurance policy?

II

Did the circuit court err when it ruled that Sigridur Harris’s injuries did not arise out of the “ownership, maintenance, or use of an uninsured motor vehicle,” as those terms are used in the applicable insurance policy? FACTS On November 7, 1993, Sigridur Harris was walking to her car in the parking lot of the Marlow Heights Shopping Center when an unidentified man in an unidentified car drove up beside her and grabbed a purse which was hanging from her shoulder. Mrs. Harris’s arm became entangled in the purse’s strap, and when the driver, who was still clutching the purse, accelerated, she was knocked to the ground and dragged about 15 feet before she was released. The driver sped away with her purse, and was never caught.

Mrs. Harris, however, suffered severe injuries from the incident, including a broken shoulder and broken knuckles. At the time of the incident, Mr. and Mrs. Harris owned an uninsured motorist policy issued by Nationwide. That policy provides, in relevant part: YOU AND A RELATIVE We will pay compensatory damages, including derivative claims, which are due by law to you or a relative from the owner or driver of an uninsured motor vehicle because of. bodily injury suffered by you or a relative, and because of property damage. Damages must result from an accident arising out of the: 1. ownership 2. maintenance; or 3. use of the uninsured motor vehicle.

Mr. and Mrs. Harris asked Nationwide to pay them benefits under the policy for Mrs. Harris’s injuries, but Nationwide ⁵ refused. Mr. and Mrs. Harris then brought suit against Nationwide for breach of contract. At the conclusion of discovery, both sides moved for summary judgment. After a hearing, the circuit court granted Nationwide’s motion and denied the Harrises’ motion; according to the court, Mrs. Harris’s injuries did not arise out of the “ownership, maintenance, or use of [an] uninsured motor vehicle,” and were not the result of an “accident,” as those terms are used in the applicable policy.

DISCUSSION Before we address the issues raised by Mr. and Mrs. Harris, we must make several introductory points about the interpretation of insurance policies in general, and of uninsured motorist policies in particular. The General Assembly has enacted a comprehensive statutory scheme regulating insurance. Accordingly, all insurance policies issued in Maryland must be interpreted in light of the pronouncements of the legislature. This is particularly true in the interpretation of uninsured motorist policies.

The legislature has mandated that insurers provide a minimum amount of uninsured motorist coverage to their insureds, and insurers are strictly prohibited from contracting around the mandatory minimum. Any attempt by an insurer to provide less than the required minimum coverage will be voided by the courts. See Nationwide Mutual Insurance Company v. United States Fidelity & Guaranty Co., 314 Md. 131, 135 , 550 A.2d 69 (1988) (An insurance policy in Maryland must contain the minimum coverage required by law; if an insurance policy excludes “a particular coverage required by law, the omission or exclusion is ineffective, and the insurance policy will applied as if [it contains] the minimum coverage.”); Lee v. Wheeler, 310 Md. 233, 239 , 528 A.2d 912 (1987) (Courts will not “recognize exclusions [in insurance policies] beyond those expressly enumerated by the legislature.”). See also West American Insur ⁶ ance Company v. Popa, 108 Md.App. 73, 82-88 , 670 A.2d 1021 , certiorari granted, 342 Md. 391 , 676 A.2d 79 (1996) (Where uninsured motorist was. the State of Maryland, Court of Special Appeals refused to give literal interpretation to uninsured motorist policy which limited insureds to amount they were “legally entitled to recover” from uninsured/underinsured tortfeasor, since that policy language provided insureds with less coverage than the minimum required by the,legislature; Court of.

Special Appeals also voided exclusion in the uninsured motorist policy for accidents with government-owned vehicles, since such an exclusion provided insureds with. less coverage than the statutory minimum). Here, the language of the applicable insurance contract mirrors that of the uninsured motorist statute. Under Md. Ann.Code art. 48A, § 541(c)(2)® (1994 Repl.), an insurance company must pay a policyholder all damages “[t]he insured is entitled to recover-from the owner or operator of an uninsured motor -vehicle because of bodily injuries sustained in an accident arising out of the ownership, maintenance, or use of such uninsured motor ,vehicle[.]” The contract, in turn, provides: YOU AND A RELATIVE We will pay compensatory damages, including derivative claims, which are due by law to you or a relative from the owner or driver of an uninsured motor vehicle because of. bodily injury suffered by you or a relative, and because of property damage. . Damages must result from an accident arising out of the: 1. ownership 2. maintenance; or 3. use of the uninsured motor vehicle.

Because of the rule which prohibits insurance companies from providing less than the minimum coverage mandated by the legislature, and because the language of the contract sub judice mirrors the language of the applicable statute, this case, although nominally a contract dispute, requires statutory interpretation in order to resolve properly the dispute be ⁷ tween the parties. That is, we must determine the scope of the terms “accident” and “ownership, maintenance, or use of [an] uninsured motor vehicle” in § 541(c)(2)(i) of Article 48A. I. Meaning of “Accident” The basic question here is whether the definition of the term “accident” in § 541(c)(2)(i) is broad enough to encompass the assault on Mrs. Harris. Nationwide contends that the term “accident” refers only to occurrences which are unintentional, and that the incident involving Mrs. Harris is therefore not covered because it involved an intentional act on the part of the unknown assailant.

Mr. and Mrs. Harris, by contrast, argue that “accident” has a much broader meaning. They contend that the term refers to any occurrence involving an automobile, including those acts which are intentional. In Md.Code Ann. art. 48A, § 538(a) (1994 Repl.), the legislature defines the term “accident,” as that term is used in § 541. Under that definition, “[a]ccident means any occurrence involving a motor vehicle, other than an occurrence caused intentionally by or at the direction of the insured, from which damage to any property or injury to any person results.” In Schweitzer v. Brewer, 280 Md. 430 , 374 A.2d 347 (1977), the Court of Appeals established the following principles of statutory construction: [T]he cardinal rule of construction of a statute is to effectuate the actual intention of the legislature ...

The primary source from which [a court] glean[s] the legislative intent is the language of the statute itself. When the intent is expressed in clear and unambiguous language, [a court] will carry it out, if no constitutional guarantees are impaired. Words are granted their ordinary signification so as to construe the statute according to the natural import of the language used without resorting to subtle or forced interpretations for the purpose of extending or limiting its operation. If reasonably possible the parts of a statute are to be reconciled and harmonized, the intention as to any one part being found by reading all the parts together, and none of its words, clauses, phrases, or sentences shall be ren ⁸ dered surplusage or meaningless.

Results that are unreasonable, illogical or inconsistent with common sense should be avoided whenever possible consistent with the statutory language. In other words, an interpretation should be given to statutory language which will not lead to absurd consequences. Id. at 438-39 , 374 A.2d 347 . Applying these principles to the definition of “accident” in § 538(a), that definition would certainly appear broad enough to encompass the incident involving Mrs. Harris.

Indeed, when given its plain or ordinary meaning, the phrase “any occurrence involving an automobile” refers to more than merely unintentional incidents; rather, it encompasses all incidents involving an automobile, whether intentional or unintentional. This interpretation of the statute is reinforced by the interplay between §§ 541(c)(2)(v), 243H, and 243-1. Section 541(c)(2)(v) requires that the uninsured motorist coverage provided by an insurer be no “less than the coverage afforded ... under Article 48A, §§ 243 H and 243-1.” Sections 243H and 243-1 are the statutory successors to the provisions governing the Unsatisfied Claim and Judgment Fund, and they allow persons injured by a phantom vehicle and not otherwise covered by an uninsured motorist policy to recover up to specified amounts ($20,000 per person and $40,000 per accident) for their injuries. Under § 243H, a claimant is entitled to payment for “death ... or personal injury ... or for damage to property in excess of $250 arising out of the ownership, maintenance, or use of a motor vehicle in the State”; the section, however, fails to mention the term “accident” at all.

See Md.Code Ann. art. 48A, §§ 243H(a)(l),(2),(3) (1994 Repl.). Given both the plain language of § 243H and its omission of the term “accident,” the section is clearly broad enough to encompass intentional injuries to claimants. Such a reading is reinforced by Frazier v. Unsatisfied Claim and Judgment Fund Board, 262 Md. 115 , 277 A.2d 57 (1971), in which the Court of Appeals held that intentional injuries were covered by identical relevant language in the statute governing the Unsatisfied Claim and Judgment Fund. Id. at 119-20 , ⁹ 277 A.2d 57 .

Therefore, given that §§ 243H and 243-1 clearly cover intentional injuries, and that § 541(c)(2)(v) mandates that uninsured motorist coverage provided by an insurer not be less than the coverage afforded by §§ 243H and 243-1, we would be in contravention of the clearly-expressed intent of the legislature were we to hold that the uninsured motorist statute only requires coverage for injuries arising out of unintentional torts. Nationwide, however, asks us to ignore the plain language of §§ 538(a), 541(c)(2)(v), 243H, and 243-1. According to Nationwide, we must interpret the term “accident” in light of the pronouncement of the Court of Appeals in Forbes v. Harleysville Mutual Insurance Company, 322 Md. 689 , 589 A.2d 944 (1991) that “the purpose of uninsured motorist statutes is ‘that each insured under such coverage have available the full statutory minimum to exactly the same extent as would have been available had the tortfeasor complied with the minimum requirements of the financial responsibility law.’ ” Id. at 697 , 589 A.2d 944 (quoting Nationwide Mutual Insurance Company v. Webb, 291 Md. 721, 737 , 436 A.2d 465 (1981)). Nationwide asserts that the quoted language from Forbes establishes that the purpose of the uninsured motorist statute is to allow an insured to collect what he would have been able to collect had the uninsured tortfeasor complied with the financial responsibility law, codified in Md.Code (1992 Repl.), § 17-103 of the Transportation Article.

Nationwide also asserts that the liability coverage mandated by the financial responsibility law is only for unintentional torts committed by the insured; according to Nationwide, § 17-103 does not require coverage for intentional torts. Thus, argues Nationwide, because the liability coverage mandated by the financial responsibility law is only for unintentional torts, and because the purpose of the uninsured motorist statute is to allow the insured to collect what he would have been able to collect had the tortfeasor complied with the financial responsibility law, the coverage mandated by the uninsured motorist statute is only for injuries arising from unintentional incidents. ¹⁰ Nationwide’s argument is entirely without merit. As an initial matter, it is not at all clear that Maryland’s financial responsibility law requires liability coverage for unintentional torts only. Nationwide’s argument is based on § 17 — 103(b)(1), which requires liability coverage for “claims for bodily injury or death arising from an accident[.]” According to Nationwide, the legislature’s use of the term “accident” means that it intended only to require liability coverage for unintentional torts, and not intentional ones.

The problem is that neither of Maryland’s appellate courts has had occasion to address the scope of the term “accident” in § 17-103. Many of the jurisdictions that have addressed the issue, however, have held that financial responsibility laws which require liability coverage for “accidents” mandate coverage for both intentional and unintentional torts. See Nationwide Mutual Insurance Company v. Roberts, 261 N.C. 285 , 134 S.E.2d 654, 660-61 (1964); Hartford Acc. & Indemn. Co. v. Wolbarst, 95 N.H. 40 , 57 A.2d 151, 153-54 (1948); Wheeler v. O’Connell, 297 Mass. 549 , 9 N.E.2d 544, 546-47 (1937); State Farm Fire and Casualty Company v. Tringali, 686 F.2d 821, 825-26 (9th Cir.1982); Nationwide Mutual Insurance Company v. Knight, 34 N.C.App. 96 , 237 S.E.2d 341, 343-44 (1977), certiorari denied, 293 N.C. 589 , 239 S.E.2d 263 ; Martin v. Chicago Insurance Company, 184 Ga.App. 472 , 361 S.E.2d 835, 837-38 (1987).

See also Dotts v. Taressa J.A., 182 W.Va. 586 , 390 S.E.2d 568, 573-74 (1990) (Where financial responsibility law required that insurance policies indemnify insured against “loss from the liability imposed by law for damages arising out of the ownership, operation, maintenance, or use of [a] motor vehicle,” intentional tort exclusion in policy issued under that law is void up to statutory minimum); Hudson v. State Farm Mutual Insurance Company, 569 A.2d 1168, 1171-72 (Del. Supr.1990) (State financial responsibility law required motor vehicle liability policy to “insure person named [in the policy] ... against loss for the liability imposed by law for damages arising out of the ownership, maintenance or use of [a motor vehicle]”; thus, phrase in liability policy providing coverage for injuries “caused by accident” is interpreted from the ¹¹ standpoint of the victim, and not the insured); South Carolina Farm Bureau Mutual Insurance Company v. Mumford, 299 S.C. 14 , 382 S.E.2d 11, 13-14 (App.1989) (Statute requiring that automobile liability policies contain provision insuring “against loss from liability imposed by law for damages” resulted in coverage where insured deliberately crashed vehicle into truck in an attempt to commit suicide, even though policy contained an exclusion for intentional injury or property damage); Mosley v. West American Insurance Company, 743 S.W.2d 854, 855-56 (Ky.App.1987) (Statute required liability insurance to cover