Ohio Casualty Insurance v. Chamberlin

Opinion by KARWACKI, J. On May 23, 2005, Ohio Casualty Insurance Company, appellant, filed a motion in the Circuit Court for Baltimore County, seeking to compel Sara Chamberlin, appellee, to return $20,000 paid to her pursuant to Md.Code (2002 Repl.Yol.) § 19-511 of the Insurance Article (“Ins.”). On August 12, 2005, the circuit court issued a written opinion and order denying appellant’s motion, and this appeal followed. The sole question presented for our consideration is whether the circuit court erred in denying appellant’s request for reimbursement of the funds advanced pursuant to Ins. § 19-511. Finding no error, we shall affirm.

FACTUAL BACKGROUND This case arises out of an automobile accident involving motor vehicles operated by Sara Chamberlin, appellee, and Charlotte Deitrick. Chamberlin filed a complaint in the Circuit Court for Baltimore County against Deitrick and her own uninsured/underinsured motorist (“UIM”) carrier, Ohio Casualty Insurance Company, appellant herein, claiming that she was injured as a result of Deitrick’s negligence and demanding compensation from Deitrick and Ohio Casualty. ²³² Prior to trial, Deitrick’s insurer, Progressive Insurance Company, offered its policy limits of $20,000 in exchange for a release of all claims by both Chamberlin and Ohio Casualty. Ohio Casualty rejected the request for a release. Pursuant to Ins. § 19-511, Ohio Casualty advanced to Chamberlin the $20,000 that had been offered by Progressive, and the ease proceeded to trial.

The jury returned a verdict in favor of Chamberlin in the amount of $5,445 and Progressive paid that amount to Ohio Casualty. By letter dated April 21, 2005, Ohio Casualty demanded that Chamberlin repay the $20,000 that had been advanced to her pursuant to § 19-511, but Chamberlin refused. Thereafter, Ohio Casualty filed a motion in the trial court seeking an order compelling the return of the $20,000. A hearing was held on July 6, 2005, and the court held its decision sub curia.

In a written opinion and order filed on August 12, 2005, the circuit court denied Ohio Casualty’s request for an order compelling the return of the $20,000 paid to Chamberlin stating, in part: Ohio Casualty had an opportunity to carefully assess its exposure in this case, and it ultimately determined that [Chamberlin’s] claim was worth significantly more than the proposed settlement amount; otherwise, it would have no reason to “thwart” settlement to preserve its own subrogation rights. Accordingly, [Chamberlin] is entitled to keep the $20,000 advanced by Ohio Casualty. DISCUSSION Ohio Casualty contends that the circuit court erred in denying its motion to compel the return of the $20,000 paid to Chamberlin, to the extent that the funds advanced exceeded the jury verdict, because there is no provision in Maryland law or in the insurance policy issued to Chamberlin that entitles her to retain the full amount paid by Ohio Casualty, and it would be neither fair nor equitable to allow her to do so, particularly when the jury verdict was considerably less than ²³³ the amount advanced. Resolution of this issue requires us to examine § 19-511 of the Insurance Article.

As the Court of Appeals stated in Adamson v. Correctional Medical Services, Inc., 359 Md. 238, 251 , 753 A.2d 501 (2000), “[t]he principles of statutory construction are not novel.” The cardinal rule of statutory construction is to ascertain and effectuate legislative intention. State v. Green, 367 Md. 61, 81 , 785 A.2d 1275 (2001). Our “quest to discover and give effect to the objectives of the legislature begins with the text of the statute.” Adamson, 359 Md. at 251 , 753 A.2d 501 (quoting Huffman v. State, 356 Md. 622, 628 , 741 A.2d 1088, 1091 (1999)). “ ‘[I]f the plain meaning of the statutory language is clear and unambiguous, and consistent with both the broad purposes of the legislation, and the specific purpose of the provision being interpreted, our inquiry is at an end.’ ” Thomas v. Dep’t of Labor, Licensing, and Regulation, 170 Md.App. 650 , 908 A.2d 99, 104 (2006)(quoting Breitenbach v. N.B. Handy Co., 366 Md. 467, 473 , 784 A.2d 569 (2001)). See also Adamson, 359 Md. at 251 , 753 A.2d 501 (and cases cited therein)(if the Legislature’s intentions are evident from text of statute, inquiry will cease and plain meaning of statute will govern). “ ‘Where the statutory language is plain and unambiguous, a court may neither add nor delete language so as to reflect an intent not evidenced in that language.’ ” Chesapeake & Potomac Telephone Co. v. Director of Finance for Mayor and City Council of Baltimore, 343 Md. 567, 579 , 683 A.2d 512 (1996)(quoting Condon v. State, 332 Md. 481, 491 , 632 A.2d 753 (1993)).

Our goal in interpreting statutes is to give them their “most reasonable interpretation, in accord with logic and common sense, and to avoid a construction not otherwise evident by the words actually used.” Greco v. State, 347 Md. 423, 429 , 701 A.2d 419 (1997). We will avoid constructions that are illogical, unreasonable, or inconsistent with common sense. Frost v. State, 336 Md. 125, 137 , 647 A.2d 106 (1994). Moreover, we will not engage in a “forced or subtle interpretation in an attempt to extend or limit the statute’s meaning.” Nesbit v. GEICO, 382 Md. 65, 76 , 854 A.2d 879 (2004). ²³⁴ “We bear in mind, however, that the plain meaning rule is elastic, rather than cast in stone.” Adamson, 359 Md. at 251 , 753 A.2d 501 (citing Kaczorowski v. Mayor & City Council of Baltimore, 309 Md. 505, 513 , 525 A.2d 628 (1987)). “If persuasive evidence exists outside the plain text of the statute, we do not turn a blind eye to it.” Id.

We may consider the context in which the statute appears, related statutes, legislative history, and other sources for a more complete understanding of what the General Assembly intended when it enacted particular legislation. Id.; Ridge Heating, Air Conditioning & Plumbing v. Brennen, 366 Md. 336, 350-51 , 783 A.2d 691 (2001); Harris v. State, 331 Md. 137, 146 , 626 A.2d 946 (1993). “We may also consider the particular problem or problems the legislature was addressing, and the objective it sought to attain.” Sinai Hosp. of Baltimore, Inc. v. Dep’t of Employment and Training, 309 Md. 28, 40 , 522 A.2d 382 (1987). “This enables us to put the statute in controversy in its proper context and thereby avoid unreasonable or illogical results that defy common sense.” Adamson, 359 Md. at 252 , 753 A.2d 501 . In the case at hand, our analysis begins with the statutory language itself, which provides: (a) If an injured person receives a written offer from a motor vehicle insurance liability insurer or that insurer’s authorized agent to settle a claim for bodily injury or death, and the amount of the settlement offer, in combination with any other settlements arising out of the same occurrence, would exhaust the bodily injury or death limits of the applicable liability insurance policies, bonds, and securities, the injured person shall send by certified mail, to any insurer that provides uninsured motorist coverage for the bodily injury or death, a copy of the liability insurer’s written settlement offer. (b) Within 60 days after receipt of the notice required under subsection (a) of this section, the uninsured motorist insurer shall send to the injured person: (1) written consent to acceptance of the settlement offer and to the execution of releases; or ²³⁵ (2) written refusal to consent to acceptance of the settlement offer.

(c) Within 30 days after a refusal to consent to acceptance of a settlement offer under subsection (b)(2) of this section, the uninsured motorist insurer shall pay to the injured person the amount of the settlement offer. (d) (1) Payment as described in subsection (c) of this section shall preserve the uninsured motorist insurer’s subrogation rights against the liability insurer and its insured. (2) Receipt by the injured person of the payment described in subsection (c) of this section shall constitute the assignment, up to the amount of the payment, of any recovery on behalf of the injured person that is subsequently paid from the applicable liability insurance policies, bonds, and securities. (e) The injured person may accept the liability insurer’s settlement offer and execute releases in favor of the liability insurer and its insured without prejudice to any claim the injured person may have against the uninsured motorist insurer: (1) on receipt of written consent to acceptance of the settlement offer and to the execution of releases; or (2) if the uninsured motorist insurer has not met the requirements of subsection (b) or subsection (c) of this section.

This statute sets forth the settlement procedure for claims pertaining to the uninsured motorist coverage provided by § 19-509 of the Insurance Article. The uninsured motorist provision was enacted to protect innocent victims from irresponsible drivers who drive without insurance. It is liberally construed to ensure that innocent victims of motor vehicle accidents can be compensated for the injuries they suffer as a result of such accidents. State Farm Mut.

Auto. Ins. Co. v. DeHaan, 393 Md. 163, 194 , 900 A.2d 208 (2006). The specific provisions of § 19-511(b) at issue in this case were enacted in 1995.

The words of section (b) do not address whether an insured is entitled to keep the entire amount paid ²³⁶ to him or her by a UIM carrier when a subsequent jury verdict is less than that amount. The legislative history, however, sheds some light on the purpose of the settlement provisions. A Floor Report prepared for Senate Bill 258 provides that the Ml contains a remedy to a problem that has existed in Maryland’s tort system for some time. Currently, an injured person who makes a claim against a liability carrier for limits available under the liability policy is frequently not allowed by their uninsured/underinsured motorist carrier to give the liability carrier a full release of their claim.

Therefore, if the injured person wishes to make an additional claim for their injuries against their underinsured motorist coverage, they get caught in a situation where the liability carrier will not give them the limits of the at-fault party’s policy without a release and the uninsured/underinsured motorist carrier will not allow them to give a release to the liability carrier. As a result, they are unable to recover funds from either carrier. This dilemma can cause a lengthy delay in settlement. Senate Bill 253 would eliminate this dilemma by requiring the uninsured/underinsured motorist carrier to: (1) allow their injured insured to settle with the liability carrier and provide a release or (2) pay their injured insured themselves to fully maintain their subrogation rights against the liable party.

Therefore, the injured party gets his money more quickly and the uninsured/underinsured motorist carrier would have “up front” the liability settlement. There is nothing in the Bill File to suggest that the Legislature considered that a jury verdict could be less than the amount paid to the insured by the UIM carrier. In fact, as a Revised Fiscal Note for Senate Bill 253 indicates, the assumption clearly was that “[e]ventually the injured person’s insurer would recover ... from the tortfeasor’s insurer and be able to seek recovery ... from the