Hiob v. Progressive American Insurance

KRAUSER, C J. The Court of Appeals held, in Houghton v. County Commissioners of Kent County, 305 Md. 407 , 504 A.2d 1145 (1986), that the voluntary dismissal by the plaintiffs of the only remaining defendant in that case, amounted to a final judgment under Maryland Rule 2-601 and therefore triggered the thirty-day period for filing a notice of appeal. Eleven years after that decision, Rule 2-601(a) was amended. It now requires that “[e]ach judgment shall be set forth on a separate document.” This appeal presents the question of whether the holding of Houghton retains any precedential value, notwithstanding that amendment. Deborah Hiob and the passengers of her vehicle—Margaret Nelson, Laura Dusome, and Virginia Hiob—were in an automobile accident, which resulted in the death of Laura Dusome and Virginia Hiob and serious bodily injuries to Deborah Hiob and Margaret Nelson.

When, following that accident, a dispute arose as to the amounts due under their uninsured motorists’ insurance policies, Deborah Hiob and her husband, Douglas Hiob, individually and as personal representative of the estate of Virginia Hiob, together with Margaret Nelson and the personal representative of the estate of Laura Du- ⁷³⁶ some—all of whom are the appellants in this case—brought a declaratory judgment action in the Circuit Court for Baltimore County against appellee, Progressive American Insurance Company (“Progressive”), as well as Erie Insurance Exchange (“Erie Insurance”). The case was then removed to the United States District Court for the District of Maryland. But that court, upon determining that it lacked jurisdiction to consider the matter, remanded this case to the Circuit Court for Baltimore County. The Baltimore County circuit court ultimately granted Progressive’s motion for summary judgment, eliminating it from the case.

Sometime after that, appellants, upon reaching a settlement with Erie Insurance, dismissed it from the case and then noted this appeal. In response, Progressive moved to dismiss this appeal, asserting that appellants had filed their notice of appeal more than thirty days after Erie’s dismissal and that, therefore, their appeal was time-barred under Maryland Rule 8-202(a), which requires that a notice of appeal be filed within thirty days “after entry of the judgment.” We denied that motion without prejudice and with leave for Progressive to raise this issue in its brief. As Progressive has done so, we now grant that motion and dismiss this appeal. Background On August 17, 2006, Deborah Hiob was driving her 2005 Toyota Corolla westbound on Liberty Road (Maryland Route 26) in Baltimore County.

She had three passengers in her car: her mother-in-law, Virginia Hiob, as well as Margaret Nelson and Laura Dusome. At that moment, a truck driven by Raymond Bert Strigle was traveling in the opposite direction on Liberty Road. At some point, Strigle’s truck veered across the center line of the road and collided head-on with Hiob’s vehicle. All four occupants of Hiob’s vehicle sustained serious injuries, and, within the next two months, Virginia Hiob and Laura Dusome died from their injuries.

The damages sustained by the four occupants of the Hiob vehicle exceeded the total amount of all available insurance. ⁷³⁷ On the date of the accident, Strigle owned an automobile insurance policy issued by State Auto Insurance Company (“State Auto”), with “split limits” of liability coverage of $100,000 per person/$300,000 per accident. State Auto settled with the Hiob vehicle’s occupants, paying the full $300,000 per accident policy limit, divided among them by mutual agreement, in exchange for waivers by all parties and their insurers of their rights of subrogation against Strigle. As a consequence, neither State Auto nor Strigle has ever been named as a party to this case. Margaret Nelson, a survivor of the accident, owned an automobile insurance policy issued by Nationwide Mutual Insurance Company (“Nationwide”).

Nationwide waived its rights of subrogation and paid $50,000 to Ms. Nelson under the terms of her uninsured motorists’ coverage. As a result, it, too, is not a party to this case. Virginia Hiob, who died after the accident, owned an automobile insurance policy issued by Erie Insurance. Although initially a party in this case, Erie Insurance eventually settled with Virginia Hiob’s estate and is not a party to this appeal.

The date that Erie Insurance was dismissed from the case plays, as we shall see, a central role in our disposition of this appeal. Finally, at the time of the accident, Deborah Hiob and her husband, Douglas Hiob, owned an automobile insurance policy issued by Progressive, providing “split limits” of uninsured motorists’ coverage of $250,000 per person/$500,000 per accident. Each of the injured occupants of the Hiob vehicle, as well as the estates of the two occupants who had died as a result of the accident, filed claims against Progressive under the uninsured motorists’ provision of that policy. In response to those claims, Progressive asserted that the policy at issue only required it to pay an aggregate of $150,000; that is, the difference between the $500,000 per accident limit and the $350,000 already paid to appellants under other insurance policies.

Appellants disagreed, contending that, because the policy stated that the per accident ⁷³⁸ limit was “subject to” the per person limit, the per person limit should control and that, therefore, Progressive was liable for amounts to each of the injured parties up to the respective $250,000 per person limits, so long as its aggregate payments did not exceed $500,000. Therefore, according to appellants, Progressive’s refusal to pay more than $150,000 in total was in violation of that policy. In any event, because appellants and Progressive agreed that Progressive was hable for at least $150,000, Progressive paid that amount to appellants, dividing it among them as agreed. Then, seeking a resolution of their claim to the remainder of the funds purportedly owed under the uninsured motorists’ provision, appellants filed a declaratory judgment action in the Baltimore County circuit court.

Cross motions for summary judgment eventually 1 followed. On September 23, 2009, the circuit court granted Progressive’s motion for summary judgment and denied appellants’. A written order, setting forth that disposition, was docketed on October 7, 2009. The order declared that “Progressive’s aggregate policy limit for the uninsured/underinsured motorist claims” was “$150,000.00, representing its $500,000.00 per accident limit, less the total amount of other insurance coverage available and paid to [appellants], $350,000.00”; and that, having paid, as agreed by the parties, a total of $150,000 to appellants, Progressive had “paid its policy limit to” appellants, and there was “no additional uninsured/underinsured motorist coverage available to [appellants] under the Progressive policy.” As of the date the order was docketed, the case remained open because Erie Insurance was still a party.

The docket reflects no further activity for more than a year. Meanwhile, as noted earlier, appellants and Erie Insurance had agreed to a settlement. Appellants thereafter filed a line voluntarily dismissing Erie Insurance from the case “with prejudice.” That dismissal was entered on the docket on ⁷³⁹ January 10, 2011. On that same day, appellants filed a motion to reduce the order of October 7, 2009, to final judgment.

Then, more than thirty days later, on February 15, 2011, appellants filed a notice of appeal. Ten days after that, on February 25, 2011, the Baltimore County circuit court granted appellants’ motion to reduce the order of October 7, 2009, to final judgment. The February 25 docket entry states: “final judgment is entered on this 8th day of Feb. 2011 and the earlier findings & rulings ... set out in [the] order dated 9/23/09/filed Oct 7, 2009 are incorporated into this final judgment.” Discussion Relying on Maryland Rule 2-601, which governs entry of judgments, Progressive maintains that the voluntary dismissal of Erie Insurance by appellants, as a party to this matter, on January 10, 2011, effectively rendered the October 7, 2009 order a final judgment and set the clock ticking for noting an appeal. Then, invoking Rule 8-202(a), which requires that a “notice of appeal shall be filed within 30 days after entry of the judgment or order from which the appeal is taken,” Progressive contends that appellants were required to file the notice of appeal within thirty days of January 10, 2011, or, in other words, no later than February 9, 2011.

Because the notice of appeal was filed six days after that date, Progressive asserts that their appeal was untimely and should be dismissed. Appellants respond that, because the docket below shows that final judgment was “entered on this 8th day of Feb. 2011 and the earlier findings & rulings ... set out in [the] order dated 9/23/09/filed Oct. 7, 2009 [were] incorporated into this final judgment,” a “reasonable application” of Rule 8-202 leads to the conclusion that the Baltimore County circuit court “treated February 8, 2011 as the date of entry of final judgment in this case,” and so should we. The grant of appellants’ motion to reduce the October 7, 2009 order to final judgment is, in our view, inconsequential. Once Erie Insurance was dismissed from the case, there were ⁷⁴⁰ no more defendants or claims before the circuit court in this matter.

Thus, final judgment, as Progressive maintains, was entered in this case on January 10, 2011, when the clerk of the circuit court entered appellants’ voluntary dismissal of Erie Insurance. We reach this conclusion based on Houghton v. County Commissioners of Kent County, 305 Md. 407 , 504 A.2d 1145 (1986), which was decided under a previous version of Maryland Rule 2-601, and Houghton’s progeny, which were decided under a later version of that rule. We begin with Houghton where, under similar procedural circumstances, the Court of Appeals reached the same result as we do here. In that 1986 case, the trial court granted the defendants’ motion to dismiss counts I and III of a three-count complaint, and, thereafter, the plaintiffs voluntarily dismissed, with prejudice, count II.

Both actions were entered on the docket, but neither was designated as a “judgment.” Id. at 410 , 504 A.2d 1145 . Then, roughly three months later, the circuit court ordered that a “final judgment” as to counts I and III be entered on the docket, and, the following day, the plaintiffs noted an appeal. Id. at 411 , 504 A.2d 1145 . At that time, Maryland Rule 2-601 (“Entry of judgment”) (1984) 2 stated in part: (a) When entered.

Upon a general verdict of a jury or upon a decision by the court allowing recovery only of a sum certain or costs or denying all relief, the clerk shall forth ⁷⁴¹ with enter the judgment, unless the court orders otherwise. Upon a special verdict of a jury or upon a decision by the court granting other relief, the court shall promptly approve the form of the judgment, and the clerk shall then enter it. (b) Method of entry—Date of judgment. The clerk shall enter a judgment by making a record of it in writing on the file jacket, or on a docket within the file, or in a docket book, according to the practice of each court, and shall record the actual date of the entry.

That date shall be the date of the judgment. As the Court of Appeals observed, the initial order granting the defendants’ motion to dismiss counts I and III of the complaint, as well as the subsequent voluntary dismissal of the only remaining count, “were entered on the docket as required by Rule 2-601(b),” and, because “[njothing in Rule 2-601 ... requires that the word ‘judgment’ always be used as a prerequisite to finality,” the absence of that term from the two orders did not prevent the Court from concluding that they, together, “constituted the final judgment of the circuit court.” Houghton, 305 Md. at 412-13 , 504 A.2d 1145 . Consequently, the Court dismissed the appeal, finding that it had been filed more than thirty days after the entry of judgment. Id. at 413 , 504 A.2d 1145 .

In concluding our discussion of that case, we pause briefly to note that, when Houghton was decided, Maryland Rule 2-601(b) was identical to the current version of section (b) of the rule. In fact, the principal difference between the current rule and the version of the rule then in effect is the amendment to section (a) of the rule which occurred in 1997. That amendment incorporated the “separate document” requirement, the effect of which was “to convert the official form of a judgment from a docket entry to a separate document.” Byrum v. Homing, 360 Md. 23, 33 , 756 A.2d 560 (2000). Prior to the adoption of that amendment, there had been concern expressed that, under the then extant version of the rule, attorneys may “be trapped because they do not know the ⁷⁴² exact date of the judgment, and they may lose an appeal.” Minutes, Court of Appeals Standing Committee on Rules of Practice and Procedure, Oct. 8, 1993, at 11 (available at http:// mdcourts.gov/lawlib/collections/digitalcollections.html) (last visited May 24, 2013).

An example of the confusion wrought by the rule was outlined in Davis v. Davis, 335 Md. 699 , 646 A.2d 365 (1994), where a circuit court orally announced the judgment of the court, and the clerk thereafter entered that oral judgment on the docket, only to have the same court later issue an order memorializing that judgment, which was also entered on the docket. Id. at 704-05 , 646 A.2d 365 . In that case, the Court of Appeals held, under the pre-1997 version of Rule 2-601(a), that the earlier oral judgment, once docketed by the clerk, became a final judgment. Id. at 709-17 , 646 A.2d 365 .

As a consequence, the appellant in that case lost his right to appeal from that judgment, as he did not note an appeal until more than thirty days after entry of judgment. Id. at 717-18 , 646 A.2d 365 . To