Pennsylvania National Mutual Casualty Insurance v. Gartelman

Davidson, J., delivered the opinion of the Court. This case concerns the interrelationship between Maryland insurance law and certain exclusions from coverage provided by motor vehicle liability policies. The facts of this case are undisputed. One of the appellees, Doris M. Gartelman (claimant), was an insured motorist under a policy issued to her husband by the appellant, Pennsylvania National Mutual Casualty Insurance Company (insurer).

On 13 July 1977, the claimant, while operating an uninsured moped 1 owned by her husband, was injured when she was forced off the road by an unidentified truck. The claimant sought benefits from the insurer under the insurance policy’s personal injury protection (PIP) and uninsured motorist (UM) provisions. The insurer refused to pay because of exclusions contained in the policy. On 21 February 1978, in the Circuit Court for Anne Arundel County, the claimant filed a petition for a declaratory judgment seeking a declaration that she was entitled to coverage under the policy, or, in the alternative, under the Act governing the Maryland Automobile Insurance Fund (MA1F).

Md. Code (1957, 1979 Repl. Vol.), Art. 48A, §§ 243A-N. The trial court granted the claimant’s and MAIF’s motions for summary judgment, declared that the claimant was entitled to coverage under both the PIP and UM provisions of the policy, and entered judgment in favor of the claimant and MAIF. The insurer appealed to the Court of Special Appeals which affirmed. Pennsylvania Nat’l Mutual Casualty Ins.

Co. v. Gartelman, 43 Md. App. 413 , 405 A.2d 779 (1979). We granted a writ of certiorari. We too shall affirm. ¹⁵⁴ I Personal Injury Protection Coverage This case initially presents the question whether, under Art. 48A, § 539 and § 545, a motor vehicle liability policy may exclude from PIP coverage an insured who is injured while occupying an uninsured motor vehicle owned by a named insured. In Maryland, there is an established legislative policy designed to make certain that those who own and operate motor vehicles in this State are financially responsible.

Art. 48A, §§ 243A-N; §§ 538-547; Md. Code (1977 & 1979 Cum. Supp.), § 17-101 — § 17-107 of the Transportation Article. This legislative policy has the overall remedial purpose of protecting the public by assuring that operators and .owners of motor vehicles are financially able to pay compensation for damages resulting from motor vehicle accidents. See Rentals Unlimited, Inc. v. Administrator, Motor Vehicle Admin., 286 Md. 104, 110 , 405 A.2d 744, 748-49 (1979); Keystone Mutual Casualty Co. v. Hinds, 180 Md. 676, 679 , 26 A.2d 761, 762 (1942).

To effectuate this legislative policy, the owner of a motor vehicle registered in Maryland is required to provide security, usually in the form of a vehicle liability insurance policy. §§ 17-103, 17-104 of the Transportation Article. Every such insurance policy must provide PIP coverage. Art. 48A, § 539. The primary purpose of this requirement is to assure financial compensation to victims of motor vehicle accidents without regard to the fault of a named insured or other persons entitled to PIP benefits. § 540. 2 Section 539 provides in pertinent part: "No policy of motor vehicle liability insurance shall be issued, sold or delivered . .. unless the policy also ¹⁵⁵ affords the minimum medical, hospital and disability benefits set forth herein....

The benefits, or their equivalent, shall cover the named insured and members of his family residing in his household....” Section 545 expressly provides for certain exclusions from this requirement. It states: "The coverages prescribed under § 539 of this article may exclude from benefits thereunder any person otherwise insured under the policy who: (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.” Here the policy under which the claimant was insured provided the required PIP coverage. However, with respect to exclusions, it provided in pertinent part: "This insurance does not apply (c) to bodily injury sustained by the named insured or any relative while occupying ... any motor vehicle owned by the named insured ... which is not an insured motor vehicle.” The insurer contends that the insurance policy’s exclusion of an insured injured while occupying an uninsured motor vehicle owned by a named insured is nothing more than a "narrowing [of] the insurer’s liability in a manner not inconsistent with statutory requirements.” It asserts that there is "no statutory bar or evidence of intent to preclude ¹⁵⁶ such an exclusion.” The insurer concludes that its exclusion does not conflict with the statutory requirements and is valid.

The claimant contends that the exclusion is invalid. She points out that although the statute provides for certain exclusions, it does not provide for excluding an insured occupying an uninsured motor vehicle owned by a named insured. Accordingly, she concludes that the policy does not provide the coverage required by § 539. The cardinal rule of statutory construction is to ascertain and effectuate the actual intent of the Legislature.

Department of State Planning v. Mayor of Hagerstown, 288 Md. 9, 14 , 415 A.2d 296, 299 (1980). Where a statute expressly provides for certain exclusions, other should not be inserted. Coleman v. State, 281 Md. 538, 546 , 380 A.2d 49, 54 (1977); State Ins. Comm’r v. Nationwide Mutual Ins.

Co., 241 Md. 108, 117 , 215 A.2d 749, 754-55 (1966). Any provision of an automobile liability insurance policy which conflicts with the requirements of the statute regulating such policies is invalid. Peninsula Ins. Co. v. Houser, 248 Md. 714, 721 , 238 A.2d 95, 99 (1968); Keystone Mutual, 180 Md. at 679 , 26 A.2d at 762 ; Lord v. Maryland Automobile Ins.

Fund, 38 Md. App. 374, 377 , 381 A.2d 23, 25 (1977). Applying these principles to the instant case produces a clear result. Section 545 expressly provides for only four exclusions from the required PIP coverage. It does not expressly provide an exclusion for an insured occupying an uninsured motor vehicle owned by a named insured.

We decline to insert such an exclusion which would be contrary to the remedial legislative purpose of assuring compensation for damages to victims of motor vehicle accidents without regard to fault. The insurance policy in this case, because it provides an exclusion for an insured occupying an uninsured motor vehicle owned by a named insured, denies PIP coverage to a class of persons who are required by § 539 to be covered. The policy’s exclusion, therefore, conflicts with the statute and is ¹⁵⁷ invalid. Accordingly, the claimant is entitled to coverage under the policy’s PIP provision.

II Uninsured Motorist Coverage The second question presented is whether, under Art. 48A, §§ 541 (c) and 243H (a) (1) (i), a motor vehicle liability policy may exclude from UM coverage an insured who is injured while occupying an uninsured highway vehicle owned by an insured other than himself. In Maryland, in addition to PIP coverage, every motor vehicle liability insurance policy must provide UM coverage. § 541 (c). The primary purpose of this requirement is to assure financial compensation to the innocent victims of motor vehicle accidents who are unable to recover from financially irresponsible uninsured motorists. State Farm Mutual Automobile Ins.

Co. v. Maryland Automobile Ins. Fund, 277 Md. 602, 605 , 356 A.2d 560, 562 (1976); Allied American Mutual Fire Ins. Co. v. Commissioner of Motor Vehicles, 219 Md. 607, 611 , 150 A.2d 421, 424 (1959). Section 541(c) provides in pertinent part: "[E]very policy of motor vehicle liability insurance ... shall contain coverage ... 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