Igwilo v. Property & Casualty Ins. Guaranty Corp.

THIEME, Judge. Appellants, Charles Igwilo and Uchechukwu Angela Igwilo, are the parents of an infant daughter, appellant Ozioma A. Igwilo. Mr. and Mrs. Igwilo were the plaintiffs in a medical malpractice case (“Igwilo I”) against Dr. Maria Y. Que in the Circuit Court for Baltimore City. Dr. Que was insured by the P*I*E Mutual Insurance Company (“P*I*E”), which was adjudged insolvent after Igwilo I was filed.

Subsequent to P*I*E’s insolvency, the Property and Casualty Insurance Guaranty Corporation (“PCIGC”), appellee, provided a defense to Dr. Que in Igwilo I. Igwilo II was filed, also in the ⁶³³ Circuit Court for Baltimore City, to obtain a judicial declaration as to how many “covered claims” the Igwilos had asserted in Igwilo I. In Igwilo II, the Igwilos filed a motion for summary judgment in which they sought a declaration that they had three “covered claims.” PCIGC sought a declaration that the Igwi-los had only one “covered claim.” The court granted the Igwilos’ motion for summary judgment, but found that they had two “covered claims.” Appellants appeal from that determination and present the following questions, which we have rephrased in the interest of clarity, for our review: 1. Did the court err in determining that the Igwilos had two “covered claims”? 2. May Mr. and Mrs. Igwilo recover damages for loss of services and pre-majority medical expenses for their infant daughter? We answer “no” to the first question and “yes” to the second question, and affirm. 1 Facts In their complaint, the Igwilos asserted that Dr. Que committed medical malpractice by not properly treating Mrs. Igwilo while she was pregnant.

The complaint alleged that after a prenatal examination on August 10, 1996, Dr. Que ⁶³⁴ failed to diagnose Mrs. Igwilo with preeclampsia. As a result of Dr. Que’s malpractice, on August 25, 1996, Ozioma A. Igwilo, the Igwilos’ child, was born with severe and irreversible brain damage. The Igwilos further asserted that Mrs. Igwilo suffered various physical symptoms and problems that would not have occurred but for Dr. Que’s negligence. These symptoms included pain, severe swelling of the face and extremities, headache, epigastric pain, progression of the disease from mild preeclampsia to severe preeclampsia to severe toxemia, and performance of an emergency cesarean section because her condition was too far advanced to respond to drug therapy and other conservative measures.

As parents and next friends of Ozioma Igwilo, Mr. and Mrs. Igwilo sought damages as a result of the child’s bodily injuries. In addition, the parents in their individual capacities sought recovery of damages that they suffered because of Ozioma’s injuries. The parties dispute whether the complaint also sought compensation for damages arising out of the bodily injuries to Mrs. Igwilo. Dr. Que was insured by P*I*E under a policy that provided liability coverage of $1,000,000.00 for “each claim” and $3,000,-000.00 as an “annual aggregate.” P*I*E was adjudged insolvent, and PCIGC stepped in to defend and indemnify Dr. Que.

Thereafter, a dispute arose between the Igwilos and PCIGC concerning the number of “covered claims” presented by the Igwilos in their complaint against Dr. Que. Specifically, the Igwilos contended that they had asserted three “covered claims,” one for Mr. Igwilo, one for Mrs. Igwilo, and one for Ozioma Igwilo. PCIGC denied separate coverage for each of these claims and, instead, asserted that the claims aggregated to form one “covered claim.” The Igwilos brought the declaratory judgment action (Igwilo II) to have the court determine the number of “covered claims” implicated by their complaint in the underlying tort action (Igwilo I). The court ruled that the Igwilos had asserted “two separate, distinct ‘covered claims’ ” in the underlying medical malpractice action.

In its memorandum opinion, the court stated: ⁶³⁵ The court finds that the language of Md.Code Ann., Ins. Art., § 9-302 and § 9-306 applies to any “covered claim” that may result from the negligence of the insured and existing on or before insolvency of insurer. In the case sub judice, Plaintiffs assert two separate distinct “covered claims” that arose as a result of the alleged negligence of Dr. Que, both of which existed before insolvency of P*I*E. The parents’ claim for injuries sustained by the mother, with resultant damage to marital relationship, and loss of child’s services comprise one “covered claim,” and the child’s claim, for injuries sustained as a result of the claimed negligence constitute the second “covered claim.” Therefore, these two claims are each considered a “covered claim” within the meaning of Md.Code Ann., Ins. § 9-306. In its order, the court held: The PCIGC’s obligation, therefore, is to provide liability coverage up to $299,900 for each of the two “covered claims,” asserted in the underlying litigation, i.e.: a) the injury to the child and all claims that are caused by, derive from or arise out of that bodily injury; and b) the injury to the mother and all claims that are caused by, derive from or arise out of that bodily injury.

The Igwilos appeal from the court’s order, contending that the court erred in failing to find that they set forth three “covered claims” in their complaint. PCIGC has cross-appealed, arguing that the court erred in failing to find that the Igwilos’ complaint set forth a single “covered claim.” 2 Discussion Standard of Review The Court of Appeals has stated that “the proper standard for reviewing the granting of a summary judgment motion ⁶³⁶ should be whether the trial court was legally correct.” Heat & Power Corp. v. Air Prods. & Chems., Inc., 320 Md. 584, 592 , 578 A.2d 1202 (1990) (citations omitted). The purpose of the summary judgment procedure is not to try the case or to decide the factual disputes, but to decide whether there is an issue of fact that is sufficiently material to be tried. See Coffey v. Derby Steel Co., 291 Md. 241, 247 , 434 A.2d 564 (1981); Berkey v. Delia, 287 Md. 302, 304 , 413 A.2d 170 (1980).

Thus, pursuant to Maryland Rule 2-501(e), summary judgment is appropriate only if there is no dispute of material fact and the party in whose favor judgment is entered is entitled to judgment as a matter of law. See, e.g., Murphy v. Merzbacher, 346 Md. 525, 531 , 697 A.2d 861 (1997); Bowen v. Smith, 342 Md. 449, 454 , 677 A.2d 81 (1996); Rosenblatt v. Exxon Company, U.S.A., 335 Md. 58, 68 , 642 A.2d 180 (1994); McGraw v. Loyola Ford, Inc., 124 Md.App. 560, 572 , 723 A.2d 502 , cert. denied, 353 Md. 473 , 727 A.2d 382 (1999). The summary judgment motion before the trial court involved the interpretation of a statute. This Court has held that the “interpretation of a statute presents a question of law.” Papillo v. Pockets, Inc., 119 Md.App. 78, 83 , 704 A.2d 448 (1997).

Neither party contends that any material facts were in dispute; therefore, we will review the trial court’s decision de novo “to determine whether the court reached the correct legal result.” Nicholson Air Services, Inc. v. Board of County Com’rs of Allegany County, 120 Md.App. 47, 62 , 706 A.2d 124 (1998). Relationship Between P*I*E and PCIGC PCIGC was created by the Maryland Legislature as a “remedy for the particular societal malady caused by defunct insurance carriers.” Joe Shifflet, Inc. v. PCIGC, 77 Md.App. 706, 709 , 551 A.2d 913 (1989). Under the statutory scheme, discussed in greater detail below, PCIGC supplants the insolvent insurer to fulfill “the obligations that the insolvent insurer should have fulfilled.” Id. at 710 , 551 A.2d 913 . PCIGC thus “stands in the shoes of the insolvent insurer and[,] subject to applicable policy limits and conditions, is liable for ⁶³⁷ ‘covered claims’ that could have been brought against the insurer.” McMichael v. Robertson, 77 Md.App. 208, 214 , 549 A.2d 1157 (1988); see also Maryland Ins.

Guar. Ass’n v. Muhl, 66 Md.App. 359, 361 , 504 A.2d 637 (1986). The Insurance Article of the Maryland Code sets forth the obligations of PCIGC. Section 9-302 provides that the purposes of the subtitle are: (1) to provide a mechanism for the prompt payment of covered claims under certain policies and to avoid financial loss to residents of the State who are claimants or policyholders of an insolvent insurer; and (2) to provide for the assessment of the cost of payments of covered claims and protection among insurers.

The powers and duties of PCIGC are provided in § 9-306. Section 9~306(a)(l) provides that, subject to a statutory cap, PCIGC is “obligated to the extent of the covered claims existing on or before the determination of the insolvency” or to certain covered claims that arise after the insolvency. Section 9-306(a)(2) provides that PCIGC’s obligation “shall include only that amount of each covered claim that is in excess of $100 and less than $300,000.” The statute further provides that PCIGC “is not obligated to a policy holder or claimant in an amount in excess of the obligation of the insolvent insurer under the policy out of which the claim arises.” § 9-306(a)(4). The trial court and all parties agreed that PCIGC’s maximum liability per “covered claim” is $299,-900.00.

Clearly, the concept of a “covered claim” is central to this statutory scheme. Section 9-301(d) defines a “covered claim” as “an insolvent insurer’s unpaid obligation ... that ... arises out of a policy of the insolvent insurer.” Therefore, to determine whether a claim constitutes a “covered claim” under the statute, we must examine the language of the underlying insurance policy between PCIGC and the insolvent insurer. The insolvent insurer’s obligation under its policy to the insured determines the insurer’s “unpaid obligation,” which in turn determines what constitutes a “covered claim.” As ap ⁶³⁸ plied in this ease, P*I*E’s obligation to Dr. Que under its insurance policy constitutes its “unpaid obligation.” PCIGC’s obligation to pay a “covered claim” subject to the statutory cap is therefore the same as P*I*E’s original contractual obligation under its policy with Dr. Que. P*I*E Insurance Policy Under the policy issued to Dr. Que, P*I*E’s obligation is limited by the Limits of Liability provision applicable to “each claim.” The Limit of Liability stated in the General Declarations, as applicable to “each claim,” is the limit of [P*I*E’s] liability for all damages because of any one claim or suit or all claims or suits first made during the Policy period because of injury to or death of any one person....

Thus, as it applies to this case, P*I*E’s liability is limited to $1,000,000.00 “for all damages because of ... all claims or suits ... because of injury to ... any one person.” (Emphasis added.) On appeal, PCIGC argues that, “[rjegardless of the number of claims or tort claimants, if there is one bodily injury, only one ‘each claim’ limit applies to all claims related to that bodily injury. Regardless of the number of claims or tort claimants, if there is one bodily injury, the most P*I*E Mutual was obligated to pay for all those claims was $1,000,000.” (Emphasis in original.) On the contrary, the Igwilos contend that the word “each” in the liability limitation means that every claim is individually subject to the liability cap, regardless of whether the claims all relate to or arise from bodily injury to one person. The Igwilos further contend that, under the Section II, Paragraph 2 of the policy, any additional claims for damages resulting from the same injury are considered separate claims. Upon reviewing the statute, the underlying insurance policy, and applicable case law, we reject the Igwi-los’ contention and agree with PCIGC.

As the Court of Appeals recognized in Daley v. United Services, 312 Md. 550, 553 , 541 A.2d 632 (1988), ⁶³⁹ “[u]nder policies fixing a maximum recovery for ‘bodily injury’ to one person, the vast majority of courts have held that such a ‘per person’ liability limitation applies to all claims of damage flowing from such bodily injury.” (Citing Annotation, Construction and Application of Provision in Liability Policy Limiting the Amount of Insurer’s Liability to One Person, 13 A.L.R.3d 1228 , 1234 (1967 & Supp.1987).) In such circumstances, “all damage claims, direct and consequential, resulting from injury to one person, are subject to the limitation.” 13 A.L.R.3d at 1234 (1967 & Supp.1999). Indeed, courts have “uniformly” taken the position that “the limit as to recovery for the bodily injuries of one person limits all recovery for damages consequential on that bodily injury, regardless of the fact that such damages are claimed by one who himself suffered bodily injury.” 13 A.L.R.3d at 1240 (1967). In Daley , the insurance policy at issue contained limitations quite similar to the one in this case: Limits of Liability: The limit of bodily injury liability stated in the Declarations as applicable to “each person” is the limit of the company’s liability for all damages, including damages for care and loss of service, arising out of bodily injury sustained by one person as the result of any one occurrence. Coverage — Limits of Liability A. Bodily Injury Liability each person — $100,000.00— Each Occurrence — $200,000.00.

Daley, 312 Md. at 552 , 541 A.2d 632 . After reviewing the language of the policy in Daley , the Court summarized the insurer’s obligation: [The obligation] was subject to two limits: (1) a $100,000 “each person” limit for all damages, including damages for care and loss of services arising out of bodily injury sustained by one person as the result of any one occurrence; and (2) a $200,000 “each occurrence” limit for all such ⁶⁴⁰ damages arising out of bodily injuries sustained by two or more persons as a result of any one occurrence. Daley, 312 Md. at 552 , 541 A.2d 632 . The Court later pointed out that “[w]here state law creates a right to damagés for mental anguish suffered by those in specified relationships to the person who suffers bodily injury or death, it has been held that the damages for mental anguish are, in effect, derivative of the single bodily injury.” Id. at 554 , 541 A.2d 632 .

The provision in the underlying insurance policy in this case is strikingly similar to that in Daley . The Limits of Liability provisions divide P*I*E’s liability into two categories: (1) “each claim” liability, which applies when one person has died or been injured, and (2) “annual aggregate” liability,