JMP Associates, Inc. v. St. Paul Fire & Marine Insurance

⁶³² MARVIN H. SMITH, Judge, Specially Assigned. We shall here hold that under the facts in this case the “on” requirement in a jeweler’s block policy that an “employee or sales personnel [be] in or on the vehicle at the time of the loss” is ambiguous. 1 (Emphasis added.) Petitioner JMP Associates, Inc. (JMP) sued respondent The St. Paul Fire & Marine Insurance Company (StPaul) in the Circuit Court for Montgomery County for breach of contract under a jeweler’s block policy. We conclude that the trial judge erred in holding the term “in or on” unambiguous and in granting summary judgment in favor of St. Paul. The Court of Special Appeals likewise erred when it affirmed that judgment.

Accordingly, we shall reverse. In JMP Assoc. v. St. Paul Fire, 109 Md.App. 343 , 674 A.2d 562 (1996), the intermediate appellate court stated: “The relevant facts are undisputed. JMP is a wholesale jeweler with a principal place of business in Silver Spring, Maryland. It sells its products to jewelers in other States as well, including to those in North Carolina. “In March, 1992, St. Paul issued to JMP a Jeweler’s Block Policy, insuring jewels, watches, precious metals, and other stock usual to JMP’s business ‘against risks of direct physical loss or damage except those listed in the Exclusions—Losses We Won’t Cover section.’ One of the exclusions listed in that section stated: ‘Unattended vehicle.

We won’t cover loss to property while it is left in or on a vehicle unless you, your employee or sales personnel are in or on the vehicle at the time of the loss.’ (Emphasis added). ⁶³³ “On March 23, 1994, while this policy was in force, JMP’s sales representative, Marty Leibson, was traveling in North Carolina on his way to make a business call in Charlotte. He was carrying in the trunk of his car a collection of jewelry worth about $150,000. Leibson stopped for gas in Shelby, North Carolina. After pumping the gas, he walked over to the check-out station to pay for it, using his credit card.

The trunk was locked, and the car was visible. As the cashier rang up the sale, a van pulled in and partially blocked Leibson’s view of his car. When the transaction was completed, Leibson returned to his car. The van had left, and Leibson noticed nothing out of the ordinary.

He drove on to Charlotte, parked at his customer’s store, unlocked the trunk to get his merchandise, and, for the first time, discovered that the cases containing the jewelry were missing. Leibson immediately reported the theft to the proper authorities, but to no avail. “JMP made a claim on the policy. That claim was rejected on the ground that Leibson was not ‘in or on’ the vehicle at the time of the loss. “JMP raises a number of issues in this appeal, but the central one is the proper construction of the word ‘on’ as it appears in that clause of the exclusion. It seems to be agreed that the loss occurred at the gas station and that Leibson was not ‘in’ the car when the loss occurred.

The question is whether,' for purposes of construing the policy, he can be regarded as having been ‘on’ the vehicle at the time.” Id. at 345-46 , 674 A.2d at 563 . The Court of Special Appeals concluded, “ ‘[0]n’ means ‘on’ and not ‘near.’ ” Id. at 350 , 674 A.2d at 565 . It said it thus “align[ed] [itself] with the majority view” and held that “[t]he [trial] court did not err in applying the exclusion.” Id. We granted JMP’s petition for certiorari to address the important question here presented.

The Law Maryland Rule 2-501(e) provides: ⁶³⁴ “The court shall enter judgment in favor of or against the moving party if the motion and response show that there is no genuine dispute as to any material fact and that the party in whose favor judgment is entered is entitled to judgment as a matter of law.” The law relative to summary judgment has been stated and restated by this Court many times. See, e.g., Goodwich v. Sinai Hosp., 343 Md. 185, 206-07 , 680 A.2d 1067, 1076-77 (1996); Heat & Power v. Air Prods., 320 Md. 584, 591-92 , 578 A.2d 1202, 1205-06 (1990); King v. Bankerd, 303 Md. 98, 110-12 , 492 A.2d 608, 614-15 (1985); and Berkey v. Delia, 287 Md. 302, 304-05 , 413 A.2d 170, 171 (1980). In King , Judge Cole said for the Court: “In reviewing the grant or denial of a motion for summary judgment, we are concerned primarily with deciding whether a material factual issue exists, and in this regard, all inferences are resolved against the moving party. Lynx, Inc. v. Ordnance Products, Inc., 273 Md. 1, 7-8 , 327 A.2d 502, 509 (1974); Salisbury Beauty Schools v. State Board of Cosmetologists, 268 Md. 32, 40-41 , 300 A.2d 367, 374 (1973); see Natural Design, Inc. v. Rouse Co., 302 Md. 47, 62 , 485 A.2d 663, 671 (1984).

If there is a conflict between the inferences that may be drawn from that before the court, summary judgment is not proper. As Judge Smith explained in Porter v. General Boiler Casing Co., 284 Md. 402, 413 , 396 A.2d 1090, 1096 (1979) (quoting Fenwick Motor Co. v. Fenwick, 258 Md. 134, 138 , 265 A.2d 256, 258 (1970)[) ], ‘ “even where the underlying facts are undisputed, if those facts are susceptible of more than one permissible inference, the choice between those inferences should not be made as a matter of law, but should be submitted to the trier of fact.” ’ ” King, 303 Md. at 110-11 , 492 A.2d at 614 . In Bailer v. Erie Ins., 344 Md. 515 , 687 A.2d 1375 (1997), Judge Rodowsky recently set forth for the Court the bases for construction of insurance policies: ⁶³⁵ “Under Maryland law, ‘[i]nsurance policies, being contractual, are construed as other contracts.’ Bond v. Pennsylvania Nat’l Mut. Casualty Ins.

Co., 289 Md. 379, 384 , 424 A.2d 765, 768 (1981). As such, a court interpreting an insurance policy is to examine the instrument as a whole, focusing on the character, purpose, and circumstances surrounding the execution of the contract. Pacific Indem. Co. v. Interstate Fire & Casualty Co., 302 Md. 383, 388 , 488 A.2d 486, 488 (1985). ‘[W]e accord words their ordinary and accepted meanings.

The test is what meaning a reasonably prudent layperson would attach to the term.’ Id. Unlike the law of some states which construes insurance contracts against the insurer, this Court holds that an insurance contract will be construed against the insurer only when an ambiguity remains after considering the intentions of the parties from the policy as a whole and, if necessary, after admitting and considering any relevant parol evidence. Cheney v. Bell Nat’l Life Ins. Co., 315 Md. 761, 766-67 , 556 A.2d 1135, 1138 (1989).” Bailer, 344 Md. at 521-22 , 687 A.2d at 1378 .

To similar effect, see Collier v. MD-Individual Practice, 327 Md. 1, 5-6 , 607 A.2d 537, 539 (1992) (with the further statement, “If the language is ambiguous, extrinsic evidence may be consulted.”); Pacific Indem. v. Interstate Fire & Cas., 302 Md. 383, 388-89 , 488 A.2d 486, 488-89 (1985); Truck Ins. Exch. v. Marks Rentals, 288 Md. 428, 435 , 418 A.2d 1187, 1190 (1980). In Collier , this Court made the specific statement, “In Maryland insurance policies ordinarily are construed in the same manner as contracts generally.” 327 Md. at 5 , 607 A.2d at 539 . In Orkin v. Jacobson, 274 Md. 124 , 332 A.2d 901 (1975), we said: “Our predecessors in Waters v. Griffith, 2 Md. 326, 333 [ (1852) ], said that ‘[w]e must give, if we can, some distinct meaning to every word employed in the contract....’ To like effect see 17 Am.Jur.2d Contracts § 259 (1964), citing, among other cases, Nat.

Fire Ins. Co. v. Crane, 16 Md. 260 (1860): ⁶³⁶ ‘ § 259. Giving effect to entire con tract, and all its pails and language. ‘It is a fundamental rule of contract construction that the entire contract, and each and all of its parts and provisions, must be given meaning, and force and effect, if that can consistently and reasonably be done. An interpretation which gives reasonable meaning to all its provisions will be preferred to one which leaves a portion of the writing useless or inexplicable.

So far as reasonably possible, effect will be given to all the language and to every word, expression, phrase, and clause of the agreement. No word or clause should be rejected as mere surplusage if the court can discover any reasonable purpose thereof which can be gathered from the whole instrument. A construction will not be given to one part of a contract which will annul another part, unless such a result is fairly inescapable. Comparatively unimportant parts or provisions which may be severed from the agreement without impairing its effect or changing its character will be suppressed or subordinated if in that way, and only in that way, the agreement can be sustained and enforced.’ Id. at 660-62.” Orkin, 274 Md. at 129-30, 332 A.2d at 904 .

Similar statements are found in 43 Am.Jur.2d Insurance § 275 (1982) and 17A Am.Jur.2d Contracts § 386 (1991). To like effect, see Sagner v. Glenangus Farms, Inc., 234 Md. 156, 167 , 198 A.2d 277, 283 (1964). The Cases We have reviewed each of the cases cited by the Court of Special Appeals and many other cases. We shall discuss each of these cases other than an unreported Ohio intermediate appellate court opinion that was decided contrary to the view espoused by our intermediate appellate court and by St. Paul.

We find no clear cut majority view applicable to this case. Appellate cases heretofore decided really shed little light on the issue here because those cases represent situations or language so substantially different from that in the case ⁶³⁷ before us. Only two of the cases, Phil G. Ruvelson, Inc. v. St. Paul Fire & Marine Ins. Co., 235 Minn. 243 , 50 N.W.2d 629 (1951), and Princess Ring Co. v. Home Ins.

Co., 52 R.I. 481 , 161 A. 292 (1932), are from courts of last resort. None of the cases is from a United States Court of Appeals. St. Paul puts great store by Princess Ring, particularly its statement “ ‘[ojpportunity makes the thief.’ ” 52 R.I. at 484 , 161 A. at 293 . The statement, however, has to be taken in the context of the facts of the case.

The court there said relative to the insurance policy: “It stated that it covered loss of the insured property arising from any cause except ‘... loss or damage to property insured hereunder whilst in or upon any automobile ... unless such conveyance is attended at the time the loss occurs by a permanent employee of the assured, or by a person whose sole duty is to attend the conveyance and who at such time shall remain in or upon the conveyance ...’” Id. at 483 , 161 A. at 293 . The facts were that the jewelry company’s permanent employee went to visit his brother. Two containers of jewelry were in the car. When he arrived at his brother’s house, the brother’s father-in-law was outside.

He asked the father-in-law to watch the car. When the employee went to ring the doorbell at his brother’s home, he saw someone jump into the car and drive away. The court found that the permanent employee “was not in attendance upon the automobile at the time the jewelry was stolen. He was about forty feet from the automobile, attending to another matter.” Id. at 484 , 161 A. at 293 .

As to the father-in-law, the court said: “Does the evidence prove that Mr. Mark was ‘a person whose sole duty is to attend the conveyance and who at such time shall remain in or upon the conveyance’? The phrase ‘shall remain in or upon the conveyance’ fixed the place where the person attending the automobile was required to be when the property insured was ‘in or upon any automobile.’ The same phrase is used both in reference to the property insured and the person attending the automobile. ⁶³⁸ Both must be ‘in or upon’ the automobile. ‘Opportunity makes the thief.’ If Mr. Mark had been in the automobile probably the thief would not have entered. There is no evidence that the thief then knew the jewelry was in the automobile. “We are of the opinion that the evidence proves that plaintiffs loss was not covered by the insurance policy because plaintiff failed to comply with the requirements contained in the exception above quoted.” Id. 484-85 , 161 A. 292 . In Ruvelson, the policy read as to an exclusion: “ ‘Loss of or damage to property insured hereunder whilst in or upon any automobile, motorcycle or any other vehicle unless, at the time the loss occurs, there is actually in or upon such vehicle, the assured or a permanent employee of the assured, or a person whose sole duty it is to attend the vehicle 235 Minn. at 244 , 50 N.W.2d at 630 .

In that case, the employee began to feel drowsy because of medication he was taking. The employee went to a hotel to procure a cup of coffee to serve as an antidote for the medicine which he had taken. He had first securely locked his car with the suitcases containing the jewels and merchandise contained in the car. He found one of the car windows broken and the jewelry missing upon his return.

The court, upholding denial of the claim, stated: “The language used in the exception now before us is clear and unequivocal. It requires that the assured, or a permanent employe[e] of assured, or a person whose sole duty it is to attend the vehicle be actually in or upon the automobile when the loss occurs.” Id. at 251 , 50 N.W.2d at 633 . We have found but two cases addressing the issue of ambiguity. In one case the policy language involved was substantially different from that in the case before us.

Moreover, it was not “in or on” that was construed but “unattended.” In Zurich Midwest v. St. Paul Fire & Marine, 159 ⁶³⁹ Ill.App.3d 961, 111 Ill.Dec. 813 , 513 N.E.2d 59 (1987), the exclusion read: “ ‘ Unattended Vehicle. We won’t cover loss to property while such is left in or on a vehicle unless you, your employee or sales personnel are attending the vehicle at the time of the loss.’ ” Id. at 963 , 111 Ill.Dec. at 814 , 513 N.E.2d at 60 . There, as the court put it: “After his last stop in Wisconsin, Gutman made a brief stop at a doughnut store with windows which were wide open and without curtains. He stayed within approximately 40 feet of his locked car and his car was out of sight for less than one minute, while he used the restroom.” Id. at 962 , 111 Ill.Dec. at 814 , 513 N.E.2d at 60 .

The court held: “The ‘Unattended Vehicle’ clause in the case at bar is not subject to double or multiple meanings. As defined in Webster’s New International Dictionary 2482 (3d ed.1966), ‘unattended’ means ‘lacking a guard, escort, caretaker, or other watcher.’ Here, when Gutman went into the restaurant, albeit with the car securely locked, and lost sight of the car when he went into the washroom, he no longer was attending it. Under these facts, the car was unattended.” Id. at 963 , 111 Ill.Dec. at 814 , 513 N.E.2d at 60 . The second case to address ambiguity is Tivoli Corp. v. Jewelers Mut.

Ins. Co., 932 S.W.2d 704 (Tex.Ct.App.1996). The court set forth the exclusion in the policy: “Property Excluded We do not cover property: Hí sfc Hi H* H* 10. In or on a vehicle that is not attended.

An attended vehicle has a person actually in or on the vehicle. This ⁶⁴⁰ person must be you, your employee, or a person whose duty it is to attend it. (Emphasis added). Id. at 707 .

The court set forth the facts: “On December 9, 1991, George Kessler, Tivoli’s wholesale jewelry salesman, who was traveling between sales locations, placed jewelry valued at $78,000 in the trunk of his car. Kessler stopped at a check cashing business owned by his friend in Houston. Parking in the parking lot and locking the car, Kessler left the jewelry in the trunk. Inside the building, he used the restroom located in a locked security area behind the lobby.

Exiting the restroom, Kessler stood by a -window with his friend in the secured area overlooking the check cashing business’s lobby. Kessler saw thieves taking the jewelry from his car’s trunk. He ran from the secured area through the lobby and attempted unsuccessfully to stop the thieves as they drove away.” Id. The court said, “We must determine whether the insurance claim was properly denied.

One issue is whether the ‘unattended vehicle’ exclusion contained in the insurance policy is ambiguous, as maintained by Tivoli and Goldman, so as to preclude summary judgment.” Id. at 710 . In denying the claim, it said: “We hold in this case the salesman did not have the jewelry in his possession at the time of the theft. We also hold the property was left in an unattended vehicle when he went into the building.” Id. at 711 . In Jerome I. Silverman, Inc. v. Lloyd’s Underwriters, 422 F.Supp. 89 (S.D.N.Y.1976), the policy excluded: “ ‘...

Loss of or damage to property insured hereunder while in or upon any automobile, motorcycle or any other vehicle unless, at the time the