Pennsylvania National Mutual Casualty Insurace v. Gartelman

Melvin, J., delivered the opinion of the Court. The issues in this appeal involve the proper application of the Personal Injury Protection Endorsement (the PIP Endorsement) and the Uninsured Motorists Insurance Endorsement (the UM Endorsement) to a policy of automobile liability insurance, issued October 27,1976, by the appellant, Pennsylvania National Mutual Casualty Insurance Company (Penn National) to Gilbert J. Gartelman, the husband of appellee, Doris M. Gartelman. On July 13, 1977, while Mrs. Gartelman was operating a Garelli “moped” on a public highway in Anne Arundel County, Maryland, she allegedly sustained personal injuries when she was forced off the highway by an unidentified motor vehicle. The moped was owned by Mr. Gartelman.

It may be generally defined as a vehicle with two wheels in tandem designed to be operated by human power with the assistance of a small internal combustion engine. Mr. Gartelman’s policy listed seven different motor vehicles owned by him as “covered automobiles.” The moped was not so listed. Mrs. Gartelman looked to Penn National for benefits under the PIP Endorsement and the UM Endorsement of her husband’s policy. Penn Mutual denied coverage under either endorsement because of a certain exclusion provided in each endorsement.

Mrs. Gartelman and her husband thereupon filed a petition for declaratory judgment seeking a declaration that benefits were available to Mrs. Gartelman under each endorsement. The Gartelmans joined the Maryland ⁴¹⁵ Automobile Insurance Fund (MAIF) as a defendant in the action and requested a further declaration that in the event the court found no coverage under the UM Endorsement in the Penn National policy, MAIF would “be required to accept the claim of the Plaintiffs under the terms and conditions of Article 48A [Annotated Code of Maryland].” Penn National’s motion for summary judgment on the issue of the PIP Endorsement was denied; instead, summary judgment in favor of Mrs. Gartelman was granted on that issue. MAIF’s motion for summary judgment, in which MAIF successfully contended that Mrs. Gartelman was covered by the UM Endorsement in the Penn National policy, was granted. Penn National filed a timely appeal from the order of court (Goudy, J.) directing that these two judgments be entered.

The issue as to each endorsement is whether an exclusion provided in the endorsement is legally effective to deny coverage to Mrs. Gartelman. I. THE PIP ENDORSEMENT. Section 539 of Article 48A (Md. Ann. Code, 1979 Repl. Vol.) provides in pertinent part that no policy of motor vehicle liability insurance may be issued after January 1,1973, unless it affords minimum medical, hospital, disability, and loss of income benefits up to $2,500 (the PIP coverage) for “the named insured and members of his family residing in his household... injured in any motor vehicle accident (including an accident involving an uninsured motor vehicle or a motor vehicle whose identity cannot be ascertained)____” (Emphasis added.) Section 540 provides that benefits required under section 539 shall be payable without regard to fault.

Section 545 provides for permissible exclusions from the coverage prescribed by section 539 and reads as follows: “The coverages prescribed under § 539 of this article may exclude from benefits thereunder any person otherwise insured under the policy who: ⁴¹⁶ (a) Intentionally causes the accident resulting in the injury, or (b) Is injured while operating or voluntarily riding in a vehicle known by him to be stolen, or (c) Is injured while in the commission of a felony or while in violation of § 21-904 of the Transportation Article. (d) With respect to motorcycles, economic loss benefits required under § 539 may be excluded, or may be offered with deductibles, options or with specific exclusions. (1972, ch. 73, § 1; 1977, ch. 765, § 13.)” Penn National sought to comply with the mandate of section 539 by including in the policy issued to Mr. Gartelman its “Maryland Personal Injury Protection Endorsement.” The endorsement contained, however, the following exclusion: “This insurance does not apply: (a) ... (b) ...

(c) to bodily injury sustained by the named insured, or any relative while occupying ... any motor vehicle owned by the named insured ... and which is not an insured motor vehicle.” “Named insured” is defined in the endorsement to mean: “the person or organization named in the declarations and if an individual [Mr. Gartelman], includes his spouse if a resident of the same household [Mrs. Gartelman].” “Insured motor vehicle” is defined in the endorsement as: “a motor vehicle of which the named insured is the owner, to which the bodily injury liability insurance of the policy applies and for which a specific premium is charged.” ⁴¹⁷ “Motor vehicle” is defined in the endorsement as: “an automobile and any other vehicle, including a tractor, operated or designed for operation upon a public road by any power other than animal or muscular power.” Thus, it is clear that under the terms of the endorsement the exclusion quoted above deprives Mrs. Gartelman of coverage because she (a “named insured”) sustained bodily injury while occupying a motor vehicle owned by a “named insured” (Mr. Gartelman) and which was not insured. Penn National concedes that the endorsement exclusion “is not specifically provided for in § 539.” Nor, of course, is it included in the list of exclusions permitted by section 545. For these reasons Judge Goudy held that the exclusion resulted in less coverage than that required by law and was, therefore, ineffective. We agree.

Section 539 mandates that the benefits of PIP coverage be afforded to, among others, “the named insured and members of his family residing in his household” who are “injured in any motor vehicle accident.” It is not disputed that but for the exclusion, Mrs. Gartelman fits the category of persons to whom coverage must be afforded. A well-established rule of statutory construction was expressed by the Court of Appeals in State Insurance v. Nationwide, 241 Md. 108, 117 , 215 A.2d 749 (1966). “Where a statute expressly provides for certain exclusions, others should not be slightly read therein by implication, for if the Legislature intends other exclusions it is so easy to add them to the already-named explicit ones. CF. Vanderford v. Farmers’ Bank, 105 Md. 164 ; Fowel v. State, 206 Md. 101 ; 2 Sutherland Statutory Construction (3 ed.), § 4915.

Here, the Legislature has provided in section 545 for certain permissible exclusions from the coverage mandated by section 539. The exclusion contained in Penn National’s PIP Endorsement is not among them. Penn National would ⁴¹⁸ have us add to that list, by judicial fiat, an exclusion that the Legislature did not see fit to provide. This, we decline to do.

Penn National argues that our decision in Lord v. Maryland Automobile Insurance Fund, 38 Md. App. 374 , 381 A.2d 23 (1977), supports the conclusion that the disputed exclusion is permissible. In that case, the claimant, a non-resident of Maryland, sought PIP benefits from the named insured’s insurance carrier after sustaining injuries in an automobile accident while he was driving the named insured’s automobile with her consent in Louisville, Kentucky. The insured’s insurance policy contained a provision that excluded from its PIP coverage “any person other than the Named Insured or a member of his family who is a resident of the same household if the accident occurs outside of Maryland." (Emphasis added.) In upholding the validity of the exclusion, we found no statutory bar to “imposing a contractual territorial limitation which excludes [from PIP benefits] non-residents of the State of Maryland.” We cited authority (Couch on Insurance 2d § 37.803 (1961)) to the effect that “[territorial use limitations are valid” and “are not conditions.” We found in the Maryland statutes concerning automobile insurance “no legislative intent” to bar the territorial exclusion challenged in that case. We are not persuaded that the same considerations that convinced us to sanction the territorial exclusion in the Lord case require approval of the exclusion in the case now before us.

In enacting section 539 of the Maryland Insurance Code, we think the Legislature intended to create two classes of persons to whom the benefits of PIP coverage must be afforded. The first class includes the named insured and his family members residing in his household “injured in any motor vehicle accident,” and the second class includes “other persons” who are entitled to the benefits of PIP coverage only when a vehicle to which the policy applies is involved. 1 ⁴¹⁹ With respect to the first class, to which Mrs. Gartelman clearly belongs, the language of the section does not condition coverage upon the occupancy of an “insured motor vehicle” at the time of the accident. The members of that class are entitled to coverage when injured in "any” motor vehicle accident * 2 even when an “insured motor vehicle” is not in any way involved in the accident. Because Penn National’s exclusion in its PIP Endorsement does condition coverage for members of the first class upon their occupancy of “an insured motor vehicle” it is inconsistent with statutory requirements and is illegal and ineffective.

II THE UNINSURED MOTORIST ENDORSEMENT Section 541 (c) of the Insurance Code (Art. 48A) provides: “(c) Uninsured motorist coverage. — In addition to any other coverage required by this subtitle, every policy of motor vehicle liability insurance issued, sold, or delivered in this State after July 1,1975 shall contain coverage, in at least the amounts required under Title 17 of the Transportation Article, for damages which the insured is entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injuries sustained in an accident arising out of the ownership, maintenance, or use of such uninsured motor vehicle. The coverage required under this subsection (c) shall be ⁴²⁰ in such form and subject to such conditions as may be approved by the Commissioner of Insurance. Any provision in any policy of motor vehicle liability insurance issued after July 1, 1975, with respect to the coverage provided for damages sustained by the insured as a result of the operation of an uninsured motor vehicle, which commands or requires the submission of any dispute between the insured and the insurer to binding arbitration, is prohibited and shall be of no legal force or effect. In no case shall the uninsured motorist coverage be less than the coverage afforded a qualified person under Article 48A, §§ 243H and 243-1.

The coverage required under this subsection shall be primary to any right to recover from the Maryland Automobile Insurance Fund pursuant to § 243H of this article.” (Emphasis added.) The coverage afforded by section 243H includes the following: “(a) ... (1) Claims for the death of or personal injury to a qualified person or for damage to property in excess of $100, arising out of the ownership, maintenance or use of a motor vehicle in this State where the identity of the motor vehicle and of the operator and owner thereof cannot be ascertained or it is established that the motor vehicle, at the time the accident occurred, was in the possession of some person other than the owner without the owner’s consent and that the identity of the person cannot be ascertained; provided that (i) The claimant was not, at the time of the accident, operating or riding in an uninsured motor vehicle owned by him and is not the personal representative of the person so operating or riding in such a vehicle____” (Emphasis added.) Section 243-1 sets the amounts payable to a claimant under section 243H. ⁴²¹ In compliance with section 541 (c), the policy issued by Penn National contained an endorsement (the UM Endorsement) providing that Penn National would .. pay all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured highway vehicle because of bodily injury or property damage, caused by accident and arising out of the ownership, maintenance or use of such uninsured highway vehicle____” (Emphasis added.) The endorsement provides that “an insured” is: “(a) the named insured and any designated insured and, while residents of the same household, the spouse and relatives of either; (b) any other person while occupying an insured highway vehicle;