Pope v. Sun Cab Co.

GETTY, Judge. This appeal raises two questions; one substantive, one procedural. The substantive question is whether the court below erred in deciding that Md.Ann.Code art. 48A, § 538(b) (1979) excuses taxicabs from carrying the uninsured motorists insurance that would otherwise be required by Md.Ann. ²²² Code Art. 48A, § 541(c) (1979, 1984 Cum.Supp.). The procedural question is whether the trial court erred in deciding the substantive question in the course of a demurrer and Show Cause Order rather than in a pending declaratory judgment action.

Three cases, all from the Circuit Court for Baltimore City (Ward, J.), were consolidated for purposes of this appeal. The background of each is as follows: 1. Pope v. Sun Cab Láveme D. Pope, et al., (hereinafter “Pope”), passengers in a taxicab owned and operated by the Sun Cab Company, Inc. (hereinafter “Sun Cab”), filed suit on February 16, 1983, for injuries allegedly incurred on July 25, 1982, when their cab stopped suddenly to avoid colliding with another automobile. Sterling Owen Paige and Linda Paulette Regan Paige, the alleged owners of the other car, were named as defendants along with Sun Cab and its driver, William Barnes.

When, during discovery, the Paiges both denied having been the operator of the other car, Pope filed an amended claim on December 2, 1983, including therein an uninsured motorist claim against Sun Cab. This claim, based upon § 541(c), alleged that the driver of the other vehicle could not be identified. Sun Cab demurred to the uninsured motorist claim, raising the definitional section of § 538(b) as excusing it from obtaining uninsured motorist coverage. When the Maryland Automobile Insurance Fund (hereinafter “MAIF”) learned of Sun Cab’s position regarding the scope of the uninsured motorists coverage law, it recognized that if Sun Cab prevailed on this point the plaintiffs would assert their uninsured motorists claims against the uninsured motorists division of MAIF.

The court added MAIF as a party to the proceeding before deciding Sun Cab’s demurrer to Pope’s claim. ²²³ The court ordered MAIF to show cause why Pope should not be allowed to sue it on their uninsured motorists claim. MAIF argued that § 541(c) did require Sun Cab to provide uninsured motorists coverage. On the same date, MAIF filed for declaratory judgment on this issue. MAIF also filed a Motion for Continuance and/ or Stay in the Pope case until the court had decided MAIF’s declaratory judgment action.

By orders of May 9, 22 and June 7, 1984, the court denied MAIF’s request for a continuance of Pope, sustained Sun Cab’s demurrer to that suit on the ground that § 538(b) excluded Sun Cab from the § 541(c) uninsured motorists coverage requirement, and granted Pope’s petition to sue MAIF. 2. Bailey v. MAIF This companion case began as a Petition to sue MAIF filed by Lillian R. Bailey who, as a passenger in another Sun Cab, was injured when the cab was struck by a hit-and-run driver. In an earlier suit brought by Bailey on the same facts, the court had sustained without leave to amend Sun Cab’s demurrer, again ruling that § 538(b) excluded taxis from the § 541(c) uninsured motorists coverage requirements. In turning to MAIF for relief, Bailey alleged that Maryland law does not require Sun Cab to carry uninsured motorists coverage.

In MAIF’s Answer to the court’s Show Cause Order, it again raised, as a defense, the argument that § 538(b) does not operate to exclude taxis from the uninsured motorists coverage requirements of § 541(c). MAIF filed a Motion for Continuance and/or Stay pending the outcome of the same declaratory judgment action referred to earlier, MAIF v. Sun Cab and Pope. Again, the judge denied the Motion for Stay and granted Bailey’s petition to sue MAIF. 3. MAIF v. Sun Cab and Pope MAIF filed suit on April 3, 1984, to obtain a declaratory judgment on the proper interpretation of § 541(c).

Sun Cab responded to MAIF’s action by filing a Motion Raising ²²⁴ Preliminary Objection to the effect that the issue of whether § 541(c) required it to carry uninsured motorists coverage was already being addressed in its pending demurrer to Pope v. Sun Cab. When Bailey filed her petition to sue MAIF, MAIF added her as a party defendant to its declaratory judgment action. Sun Cab thereupon renewed its Motion Raising Preliminary Objection, adding as grounds therefor that the Circuit Court for Baltimore City had already sustained Sun Cab’s demurrer in Bailey v. Sun Cab on the basis that § 538(b) excluded it from the § 541(c) uninsured motorists coverage requirements. The trial court granted both Motions Raising Preliminary Objection on June 7.

I Appellants complain, first, that the trial court abused its discretion when it granted Sun Cab’s two Motions Raising Preliminary Objections to MAIF’s declaratory judgment action. MAIF urges that the first motion, which was grounded upon Sun Cab’s pending demurrer in Pope v. Sun Cab, should have been denied because under former Md. Rule 323(a)(6) MAIF was not a proper party to Pope until after Pope’s petition to sue MAIF was granted, and because the action in Pope was not for the same cause as that in the declaratory judgment action. We do not find any merit to MAIF’s complaint that it was not an original party to the tort action. MAIF was made a party — at its specific request — in time to oppose Sun Cab’s demurrer.

The Answer, exhibits, memorandum and affidavit filed by MAIF in answer to the court’s Show Cause Order in Pope persuade us that it was accorded an adequate opportunity to be heard on its interpretation of §§ 538(b) and 541(c). We further find that Sun Cab’s demurrer in Pope rendered that action for the “same cause” as the declaratory judgment action. The Court of Appeals has set forth the chief criterion by which we are to review a trial court’s ²²⁵ exercise of its discretion to deny declaratory judgment on the grounds of the pendency of another action: “If the issue ... were not the ultimate to be determined in a pending suit by a third party, a declaratory judgment would be appropriate. But where ... the question to be resolved in the declaratory judgment action will be decided in pending actions, it is inappropriate to grant a declaratory judgment.” Brohawn v. Transamerica Insurance Co., 276 Md. 396, 406 , 347 A.2d 842 (emphasis added).

Although no Maryland court has defined the term, we think that by “ultimate issues” the Brohawn Court must have meant to include those issues raised by a defendant which, if resolved in his favor, will provide him with an absolute defense to the pending suit. The statutory interpretation issue raised by Sun Cab’s demurrer to Pope was, in our view, such an ultimate issue. There remain two other objections to the trial court’s decision to deny declaratory judgment, both of which go to the form of the court’s order. First MAIF points out that appellate courts are quick to reverse dismissals based upon Rule 323(a)(6) motions.

See, e.g., Coppage v. Orlove, 262 Md. 665 , 278 A.2d 587 (1971) (per curiam); Europa Books, Inc. v. Pomerleau, 41 Md.App. 114 , 395 A.2d 1195 (1979). We think, however, that the chief objection to disposing of a declaratory judgment action on a motion raising preliminary objection is that, as with demurrers, the courts “wish to avoid dismissals without a declaration of the rights of the parties.” Wiggins v. State, 22 Md.App. 291, 295 , 324 A.2d 172 (1974). Here we note that the court’s order granting Sun Cab’s motions did declare the rights of the parties, incorporating by reference “those reasons stated by Sun Cab Co. in its [Second] Motion Raising Preliminary Judgment [sic] filed on or about May 14, 1984,” i.e., that “Maryland Annotated Code, Article 48A, Section 541(c) did not require Sun Cab Company, Inc. to maintain uninsured motor vehicle coverage.” ²²⁶ The second problem with the procedure below arises from the fact that the court sustained Sun Cab’s demurrers in both Pope and Bailey before it granted Sun Cab’s motions alleging a pending action for the same cause in MAIF. Technically, at the time the court granted the motions, their prerequisites — a “pending” action between the same parties for the same cause — no longer existed.

Appellant, how-' ever, has not raised this point and hence we will not discuss it beyond noting that, in the past, when a declaration for declaratory judgment raised a pure question of law, the Court of Appeals permitted the trial court to treat a demurrer to that declaration as a motion for summary declaratory judgment. See Hunt v. Montgomery County, 248 Md. 403 , 237 A.2d 35 (1968). Finally, MAIF points out that a declaratory judgment below would have resolved the statutory interpretation issue that impinged upon several pending tort cases and saved the various plaintiffs the time and expense they incurred in locating the proper party defendant to their uninsured motorists claims. See 276 Md. at 396 , 347 A.2d 842 .

We agree, just as we agree that the evidentiary hearing and discovery accorded by a declaratory judgment action may be useful in determining legislative intent. For these reasons we think the trial court had the discretion to grant declaratory judgment even when Sun Cab’s demurrer that raised the same issue was still pending in