Nasseri v. Geico General Insurance

ELDRIDGE, J. We issued a writ of certiorari in this case for the purpose of resolving two important coverage issues under the Motor Vehicle Insurance subtitle of the Insurance Code, Maryland Code (1996, 2002 Repl.Vol., 2005 Supp.), §§ 19-501 through 19-516 of the Insurance Article. ¹⁹⁰ The first issue arises because, inter alia, § 19 — 501 (b)(2)(ii) of the Insurance Code excludes a “taxicab” from the definition of “motor vehicle.” 1 The petitioner Ebrahim Nasseri drives a taxicab and is also the owner of a personal motor vehicle insured by the respondent GEICO General Insurance Company. The question presented by this case is whether the driver of a taxicab, who is injured in a collision between the taxicab and a motor vehicle which is neither a taxicab nor a bus, has personal injury protection (PIP) coverage, under his personal motor vehicle insurance policy, for the injuries suffered in the collision. The second question presented by this case concerns the validity, under the Insurance Code, of a PIP exclusion in the GEICO insurance policy covering the petitioner’s personal motor vehicle. The PIP section of the policy provides that the insured is “not covered if injured while in, or through being struck by, any motor vehicle which is not an insured auto if it is ... available for the regular use of’ the insured. 2 ¹⁹¹ I. The facts of this case are undisputed, and to a large extent they were set forth in a stipulation filed in the Circuit Court for Montgomery County.

The accident giving rise to this litigation occurred on May 15, 2001. The petitioner Ebrahim Nasseri was driving a taxicab that collided with a motor vehicle which was neither a taxicab nor a bus. Nasseri’s taxicab was available to him under an agreement entered into between the owner of the taxicab, Action Taxicab, Inc., and Nasseri. That agreement required Nasseri to pay Action $95.00 per day in exchange for the use of the taxicab.

The agreement further restricted his use of the taxicab to twelve hours within any twenty-four hour period. At the time of the accident, the taxicab was covered only by liability insurance, in accordance with the minimum requirements of Maryland law applicable to taxicabs. Nasseri, however, maintained a separate policy of motor vehicle insurance through GEICO General Insurance Company for his personal motor vehicle. That policy provided for PIP coverage in the event of personal injury resulting from a “motor vehicle accident.” It is the coverage under Nasseri’s policy with GEICO that is at issue in this case.

Following the accident, Nasseri submitted a claim for PIP benefits to GEICO under his personal motor vehicle insurance policy in the amount of $2,500.00, the limit under that policy. GEICO responded by denying PIP coverage for alternative reasons. First, GEICO stated that, under § 19 — 501(b)(2)(ii) of the Insurance Article, taxicabs are specifically exempt from the definition of “motor vehicle,” and that, therefore, Nasseri was not injured in a “motor vehicle accident” within the meaning of the PIP statute, § 19-505 of the Insurance Article. 3 Next, GEICO asserted that, under the insurance policy, ¹⁹² Nasseri then filed a small claim action for damages in the District Court of Maryland, sitting in Montgomery County, against GEICO. He claimed that, under the insurance policy on his personal motor vehicle and the pertinent statutory provisions, he was entitled to PIP benefits for the injuries suffered in the collision.

The District Court held that he was not entitled to PIP benefits because of the exclusion of taxicabs from the statutory definition of “motor vehicle.” The District Court, therefore, rendered judgment for GEICO. On a de novo appeal to the Circuit Court for Montgomery County, the Circuit Court also entered judgment for GEICO, although on the ground that the “regular use” exclusion in the GEICO policy was applicable and valid. Nasseri filed in this Court a petition for a writ of certiorari, presenting the issues of whether § 19-505 of the Insurance Article requires GEICO to provide PIP coverage under the ¹⁹³ circumstances here and whether the “regular use” exclusion contained in the insurance policy is invalid under the statute. We granted the petition, Nasseri v. Geico, 377 Md. 111 , 832 A.2d 204 (2003), and we shall reverse. ¹⁹² (a) Coverage required. — Unless waived in accordance with § 19-506 of this subtitle, each insurer that issues, sells, or delivers a motor vehicle liability insurance policy in the State shall provide coverage for the medical, hospital, and disability benefits described in this section for each of the following individuals: (1) except for individuals specifically excluded under § 27-606 of this article: (1) the first named insured, and any family member of the first named insured who resides in the first named insured's household, who is injured in any motor vehicle accident, including an accident that involves an uninsured motor vehicle or a motor vehicle the identity of which cannot be ascertained; and (ii) any other individual who is injured in a motor vehicle accident while using the insured motor vehicle with the express or implied permission of the named insured; (2) an individual who is injured in a motor vehicle accident while occupying the insured motor vehicle as a guest or passenger; and (3) an individual who is injured in a motor vehicle accident that involves the insured motor vehicle: (i) as a pedestrian; or (ii) while in, on, or alighting from a vehicle that is operated by animal or muscular power.” ¹⁹³ II.

GEICO’s argument, that the driver of a taxicab is not entitled to PIP benefits under the driver’s personal motor vehicle insurance policy, is based entirely upon the definitions of “motor vehicle” and “motor vehicle accident” in § 19-501(b)(2)(h) and (c)(1) of the Insurance Article. The essence of GEICO’s argument is as follows (respondent’s brief at 5-6): “By statutory definition, § 19-501, ‘motor vehicle’ does not include ‘a taxicab.’ ” “Furthermore, inasmuch as the statute provides that ‘motor vehicle accident’ means an occurrence involving a ‘motor vehicle,’ the policy language referring to motor vehicle accidents must be read as requiring a motor vehicle accident which does not involve a ‘taxicab.’ ” (Emphasis in original). A principal flaw in GEICO’s argument is that § 19-501(c)(l) of the Insurance Article does not define “motor vehicle accident” as an “accident which does not involve a taxicab.” Instead, the statute defines “motor vehicle accident” as “an occurrence involving a motor vehicle that results in damage to property or injury to a person.” (Emphasis supplied). The occurrence in the present case clearly involved “a motor vehicle,” namely the other vehicle with which Nasseri’s taxicab collided.

For purposes of this case, we shall assume arguendo that the statutory phrase “motor vehicle accident” in subsection (c)(1) incorporates the taxicab exclusion in subsection (b)(2)(ii), and that an accident between two taxicabs might not be a “motor vehicle accident” within the meaning of subsection (c)(1). Nevertheless, as long as another motor vehicle, which is not a taxicab or bus, is involved in the accident, such accident plainly comes within the definition of “motor vehicle ¹⁹⁴ accident” in subsection (c)(1). The subsection requires only the involvement of one motor vehicle for there to be a motor vehicle accident; it does not require that all vehicles involved in the collision be “motor vehicles.” Moreover, the pertinent language of § 19-505 of the Insurance Article, setting forth the basic PIP coverage, encompasses in subsection (a)(l)(i) an insured “who is injured in any motor vehicle accident, including an accident that involves an uninsured motor vehicle.... ” (Emphasis supplied). Again, assuming arguendo that a person injured in a collision between two taxicabs might not be injured in “any motor vehicle accident” within the meaning of the § 19-505, Nasseri was injured in an accident involving his taxicab and a motor vehicle which was neither a taxicab nor a bus. .Nasseri was certainly injured in a motor vehicle accident under the language of the statute, and § 19-505 provides PIP coverage for anyone injured in any motor vehicle accident.

The applicability of § 19-505, under the circumstances of this case, is reinforced by the language of § 19 — 513(d)(l)(i) of the Insurance Article. Section 19 — 513(d)(l)(i) states: “ — (1) The insurer under a policy that contains the coverages described in §§ 19-505 and 19-509 of this subtitle shall pay the benefits described in §§ 19-505 and 19-509 to an individual insured under the policy who is injured in a motor vehicle accident: (i) while occupying a motor vehicle for which the coverages described in §§ 19-505 and 19-509 of this subtitle are not in effect....” It would appear that the above-quoted language was directly aimed at circumstances like those presented here. The vehicles “for which the coverages described in §§ 19-505 and 19-509” would legally not be “in effect” are taxicabs, buses, vehicles owned by the State of Maryland, 5 and vehicles for which the first named insured has made “an affirmative ¹⁹⁵ written waiver of [PIP] benefits.” 6 In this case, Nasseri had an insurance policy providing PIP benefits, and he was occupying a motor vehicle for which PIP benefits were not in effect. A holding that he was not entitled to PIP benefits, precisely because he was occupying a vehicle for which PIP benefits were not in effect, could not be reconciled with § 19— 513(d)(l)(i).

The legislative enactment which deleted taxicabs from the definition of “motor vehicle” for purposes of certain coverages mandated by the Insurance Code was Ch. 655 of the Acts of 1977. The title to Ch. 655 shows that the exemption for taxicabs was not as sweeping as GEICO argues in the case at bar. 7 The title of Ch. 655 reads as follows: “FOR the purpose of exempting certain vehicles, as defined in the Vehicle Laws, from certain required primary coverage insurance provisions; and subdividing a section.” Consequently, the purpose of Ch. 655 was simply to provide that the compulsory automobile liability insurance policies on taxicabs and certain other vehicles did not have to contain ¹⁹⁶ policy provisions for PIP and some other statutory coverages. The purpose was not to negate required PIP and other required coverages, under policies on all other types of motor vehicles, whenever a taxicab happened to be involved in an accident with another type of motor vehicle. The language of the Insurance Article, as well as numerous opinions by this Court, make it clear that an insured, who has PIP coverage under a policy on the insured’s motor vehicle, and who is injured in an accident while occupying a different motor vehicle owned by someone else, is ordinarily entitled to PIP coverage under the policy on the insured’s vehicle.

If the vehicle occupied by the insured also has PIP coverage, that coverage will be primary and the coverage under the policy on the insured’s vehicle will be secondary. If the occupied vehicle has no PIP coverage, the coverage under the insured’s policy will be primary. See, e.g., Bishop v. State Farm Mutual Auto Insurance, 360 Md. 225, 236-238 , 757 A.2d 783 (2000); MAIF v. Perry, 356 Md. 668, 671-672, 676-677 , 741 A.2d 1114, 1115-1116, 1118-1119 (1999); Travelers Ins. Co. v. Benton, 278 Md. 542, 543 , 365 A.2d 1000, 1002 (1976) (The statute “provides, with respect to a person insured under a policy providing PIP coverage who is injured in an accident while occupying a motor vehicle for which such coverage is not in effect, that the PIP benefits shall be payable by the injured party’s insurer providing such coverage”) (internal quotation marks omitted).

See also Pennsylvania Nat’l Mutual Casualty Insurance Company v. Gartelman, 288 Md. 151, 154-157 , 416 A.2d 734, 736-739 (1980). Therefore, under the circumstances of this case, the fact that Nasseri was driving a taxicab furnished no valid basis for denying him PIP benefits required by the Insurance Code. 8 ¹⁹⁷ III. GEICO’s alternative argument is based on the exclusion, in the PIP section of the insurance policy on Nasseri’s personal vehicle, that the insured is “not covered if injured while in, or being struck by, any motor vehicle which is not an insured auto if it is ... available for the regular use of’ the insured. Section 19-505(c) of the Insurance Article specifies the permissible exclusions from required PIP coverage.

That subsection reads as follows: “(c) Exclusions. — (1) An insurer may exclude from the coverage described in this section benefits for: (1) an individual, otherwise insured under the policy, who: 1. intentionally causes the motor vehicle