Kimmel v. Safeco Insurance Co.

HOLLANDER, Judge. Theresa A. Kimmel, appellant, brought suit against SAFE-CO Insurance Company, appellee, in the Circuit Court for Prince George’s County, alleging breach of an insurance con ³⁴⁹ tract. Appellant claimed that she was improperly denied benefits under the uninsured motorist provisions of her motor vehicle insurance policy (the “Policy”). She challenges the entry of summary judgment in favor of appellee, and poses the following questions: I. Are the purported exclusions as to uninsured motorist coverage invalid because the exclusions are not authorized by statute?

II

Do essential differences between liability and uninsured motorist coverage make the purported exclusions as to uninsured motorist coverage void against public policy?

III

Is appellant’s complaint barred by the defenses of accord and satisfaction? We answer question three in the affirmative, and shall therefore affirm. As question three is dispositive of the matter, we need not address appellant’s other questions. Factual Background On August 22, 1992, appellant, who was a passenger in an automobile, was severely injured in a one car accident.

The accident occurred because appellant’s husband, who was driving, fell asleep at the wheel and collided with a guard rail. Appellant’s medical expenses exceeded $70,000. Both appellant and her husband owned the vehicle involved in the accident, which was insured by appellee under SAFE-CO Policy No. F01171048. The Policy provided $500,000 of liability coverage and $300,000 of uninsured motorist coverage, subject to certain limitations and exclusions.

The liability section of the Policy contained the following “household exclusion”: This policy does not apply under the Liability Section: *t* •{* *i> H- 11. for any person for bodily injury to the named insured or any relative to the extent that the limits of liability for bodily injury liability coverage exceed the limits of liability required by the Maryland Vehicle Laws—Required Security; ³⁵⁰ By statute, an automobile insurer must provide a minimum of $20,000 in liability coverage for bodily injury to one person. Maryland Code (1957, 1992 RepLVol.), § 17-103(b) of the Transportation Article (“T.A.”). Appellee determined that the Policy’s household exclusion reduced the liability coverage of the Policy from $500,000 to the statutory minimum of $20,000. Appellee then sent appellant a letter, dated September 24, 1992, along with a check, dated September 29, 1992, for $20,000.

The letter, which referred to the policy in issue and the date of loss that corresponded to the accident date, stated in part: Enclosed please find a release and payment of $20,000. This represents the amount recoverable under your SAFE-CO automobile policy number F01171048. Please forward your hospital bills, shock trauma and Mt. Vernon when you receive them.

We have already paid your personal injury protection limits of $2,500; however, we have done so without a bill. I need the bill for our records and documentation. Again, please do not delay in forwarding the medical bills. Please sign the enclosed release and return to my attention.[ 1 ] The check for $20,000 included information on its face that is relevant here.

It contained pre-printed categories, including the loss date, the claim number, the policy number, the insured, the agent, and the coverage. All of the categories were completed by hand. The notation “abi” was written under the reference to “coverage.” In addition, the following phrase was handwritten under the line where the amount of the check was stated in words: “full & final payment of all claims.” Thereafter, appellant accepted the $20,000 check; she endorsed it and, on October 7, 1992, it was stamped “paid”. On September 28,1992, appellant’s son, an attorney, wrote a letter to appellee that stated, in pertinent part: ³⁵¹ Just a short note to follow up on your settlement letter of September 10, 1992 2 to Theresa Kimmel.

This is to confirm that the offer of $20,000.00 to Mrs. Kimmei will not in any way impair her right to seek recovery under the medical provisions of this policy. If there is anything incorrect about this please notify me immediately. Based on the household exclusion, appellee reduced the amount of liability coverage to $20,000, as we noted. This essentially created a situation in which the driver—appellant’s husband—was “underinsured.” 3 Consequently, appellant sought additional recovery under the uninsured motorist protection of her Policy, because the payment under the liability portion of the Policy was less than the $300,000 in uninsured motorist coverage that she thought was available to her.

When appellee declined to pay appellant additional monies, appellant instituted suit. The insurer subsequently moved for summary judgment, claiming: 1) the insurance policy excluded recovery under the uninsured motorist coverage for an accident involving a motor vehicle insured under the policy; 2) the uninsured motorist coverage contained a family member exclusion; 3) appellant had released appellee from further claims; and 4) the claim was barred by accord and satisfaction. Appellant opposed the motion on statutory and public policy grounds. She argued, inter alia, that the Policy illegally defined an uninsured motorist to exclude an owned vehicle insured in any amount.

She claimed that the Policy improperly excluded coverage for a passenger/insured who was injured in an accident for which the driver/insured’s liability coverage was less than the amount of the Policy’s uninsured motorist ³⁵² coverage. See Maryland Code (1957, 1991 RepLVol.), Article 48A, § 541(c)(1). She also contended that the Policy violated Art. 48A, § 541(g)(1), which requires the insurer to provide uninsured motorist coverage equal to the amount of liability coverage, unless waived by the insured. Further, appellant denied that she released appellee from all claims or that the parties had entered into an accord and satisfaction.

Rather, it was her understanding that the money she received only represented payment under the liability portion of her Policy. In an affidavit appended to her opposition to appellee’s motion, appellant averred, in pertinent part: 1. I received a check in the amount of $20,000 from my insurer, Safeco Insurance Company, and a cover letter, dated September 24, 1992, from Safeco____ At the time I received and negotiated this check, I was suffering from severe injuries sustained in the subject motor vehicle collision on August 22, 1992. I did not intend to release Safeco from liability under the uninsured motorist coverage of the policy which is the subject of this case.

It was my understanding that the check represented liability coverage only, and it was endorsed by me only as payment of the $20,000 liability coverage under the policy, and not a release in full of all claims under the policy. I never intended to release Safeco from coverage for uninsured motorist coverage, PIP coverage, or any coverage other than liability coverage. Appellant also argued in her legal memorandum that SAFECO’s payment “was only in settlement of coverage A and B. Coverage G, uninsured motorist coverage, is not referred to in the check, nor is it referred to in the cover letter.” Apparently, she was referring to the “abi” notation on the $20,000 check, suggesting that this meant the check only pertained to coverage under sections A and B of the Policy, which are the liability and property damage sections, but not the uninsured motorist coverage contained in section G of the Policy. On June 5, 1996, appellant filed a motion for partial sum ³⁵³ mary judgment on the issue of “liability.” 4 At the subsequent motions hearing, the parties primarily focused upon several insurance law issues.

Appellee also renewed its contention that accord and satisfaction barred appellant’s recovery. We need not explore the arguments concerning the insurance issues, because they are not pertinent to our resolution of this case. We note, instead, that appellant did not address appellee’s assertion that her claim was barred by the doctrine of accord and satisfaction. In granting appellee’s motion for summary judgment, the court incorporated “by reference the points and authorities of the defendant, Safeco Insurance Company.” Standard of Review To grant summary judgment, a trial court must determine that the parties do not dispute any material fact, and that one party is entitled to judgment as a matter of law.

Md.Rule 2-501; see also Beatty v. Trailmaster Products, Inc., 330 Md. 726, 737-38 , 625 A.2d 1005 (1993); Bagwell v. Peninsula Regional Med. Ctr., 106 Md.App. 470, 488 , 665 A.2d 297 (1995), cert. denied, 341 Md. 172 , 669 A.2d 1360 (1996); Bits “N” Bytes Computer Supplies, Inc. v. Chesapeake & Potomac Tel. Co., 97 Md.App. 557, 576-77 , 631 A.2d 485 (1993), cert. denied, 333 Md. 385 , 635 A.2d 425 (1994). Summary judgment is not a procedural shortcut to avoid a trial, however.

Rather, it is an appropriate method of deciding cases when the parties do not dispute the material facts. Seaboard Surety Co. v. Richard F. Kline, Inc. 91 Md.App. 236, 242 , 603 A.2d 1357 (1992). ³⁵⁴ In order to defeat a motion for summary judgment, the party opposing the motion must present admissible evidence to show the existence of a dispute of material fact. Bagwell, 106 Md.App. at 488 , 665 A.2d 297 ; Commercial Union Ins. Co. v. Porter Hayden, 97 Md.App. 442, 451 , 630 A.2d 261 (1993), rev’d on other grounds, 339 Md. 150 , 661 A.2d 691 (1995).

A party cannot establish the existence of a dispute merely by making formal denials or general allegations of disputed facts. Bagwell, 106 Md.App. at 488 , 665 A.2d 297 ; Seaboard Surety, 91 Md.App. at 243 , 603 A.2d 1357 . Further, the evidence offered to show the existence of a dispute of fact must be sufficiently detailed and precise to enable the trial court to make its ruling as to the materiality of the proffered fact. Beatty, 330 Md. at 738 , 625 A.2d 1005 ; Bagwell, 106 Md.App. at 489 , 665 A.2d 297 .

Even if there are disputed facts, they will not bear on the determination of a motion for summary judgment, unless they are material. Thus, the threshold question in resolving a summary judgment motion is whether there is a dispute of material fact. Warner v. German, 100 Md.App. 512, 516 , 642 A.2d 239 (1994). A fact is material if the outcome of the case would be different depending on how the factfinder resolved the disputed fact.

Keesling v. State, 288 Md. 579, 583 , 420 A.2d 261 (1980); Miller v. Fairchild Indus., 97 Md.App. 324, 340 , 629 A.2d 1293 , cert. denied, 333 Md. 172 , 634 A.2d 46 (1993). In the absence of a dispute as to a material fact, we must determine whether the trial court reached the correct legal result in granting summary judgment. Beatty, 330 Md. at 737 , 625 A.2d 1005 ; Bagwell, 106 Md.App. at 488 , 665 A.2d 297 . Appellate courts generally review a grant of summary judgment based only on the grounds relied upon by the trial court.

Blades v. Woods, 338 Md. 475 , 659 A.2d 872 (1995); Gross v. Sussex Inc., 332 Md. 247 , 254 n. 3, 630 A.2d 1156 (1993); Hoffman v. United Iron and Metal Co., 108 Md.App. 117, 132-33 , 671 A.2d 55 (1996). If the trial court did not specify the grounds upon which it granted summary judgment, appellate courts assume that the trial court “carefully consid ³⁵⁵ ered all of the asserted grounds and determined that all or at least enough of them ... were meritorious.” Bond v. NIBCO, Inc., 96 Md.App. 127, 138 , 623 A.2d 731 (1993). Discussion Appellant contends that the defense of accord and satisfaction is not applicable; she asserts that there was no “settlement” of a “disputed claim,” and thus her acceptance of SAFECO’s check did not determine all of her rights under the Policy. Rather, she argues that the money pertained only to certain coverages under the Policy.

In this regard, she relies on her affidavit and the letter from her son to SAFECO as evidence that she did not intend to release her rights under the Policy. Based on the notation of “abi” under the coverage section on the face of the check, appellant also suggests that there is a factual question as to whether the $20,000 check, by its terms, “limited the settlement to coverages ‘A and B,’ ” the Policy’s bodily injury liability and collision coverages. She points out that the uninsured motorist coverage is in section G of the Policy, and no reference to section G appears on the $20,000 check. Appellee counters that an accord and satisfaction arose once appellant accepted the check, as it clearly indicated that it was intended as payment in full under the Policy.

It further argues that the intent of the recipient of the check is not dispositive. To the contrary, it asserts that it is the intent of the party tendering the check that controls. As early as Scheffenacker v. Hoopes, 113 Md. 113 , 77 A. 130 (1910), the Court of Appeals sustained a directed verdict for the defendant based on the principles of accord and satisfaction. There, the plaintiff, a publisher of catalogues, had filled an order for the defendant, apparently for catalogues in his livestock business.

The defendant was dissatisfied with the catalogues and, upon receiving a bill for $722.40 from the plaintiff, instead sent partial payment. Enclosed with the check was a letter stating: ³⁵⁶ I enclose a check ... intended to be in settlement of bill for printing catalogues, which you rendered me under date of October 20th. You know my dissatisfaction with your work. Your failure to do it properly has caused me great damage and injury.

I should require you to make my loss good, but I do not wish a controversy, and rather than have one I am enclosing check for ($361.20), one-half of your bill, in full settlement thereof. If you do not care to accept such a compromise, do not use my check, and I will then reserve the right to claim for the damage I have suffered.” In a return letter, the plaintiff protested that the amount of money was inadequate in light of the work he had done. He stated that he was unable to use the check unless the defendant assured him that the check was “not intended as full payment but only as part payment.” Nevertheless, the plaintiff sent the check to the defendant’s bank for certification. Consequently, funds from the defendant’s account were allocated .to cover the amount of the check.

The Court explained the defense of accord and satisfaction: The principles applicable to a defense of this character are well settled. In the case of a liquidated claim, such as the present one may be assumed to be for the purposes of this decision, an acceptance of part of the amount in satisfaction of the whole will bar a recovery of the remainder if the settlement is supported by