Popham v. State Farm Mutual Insurance

ROBERT M. BELL, Judge. This appeal and cross-appeal from the judgment of the Circuit Court for Montgomery County, which dismissed all but one of the claims before it, require this Court to determine whether the insurer under an “excess” or “umbrella” personal liability policy that includes automobile liability excess coverage must offer in writing to the insured uninsured motorist coverage up to the limits of the excess automobile liability coverage. That inquiry focuses on Maryland Code (1957,1991 Repl.Vol.) Art. 48A, § 541(c)(2) and (f). This case also presents the issue whether, by alleging the failure of the insurer and its agent to advise the insured that he could purchase uninsured motorist coverage equal to the liability coverage of the “excess” or “umbrella” policy, the appellants stated a cognizable claim in negligence against the appellees.

I. While appellant Christine Popham (“Christine”) was a passenger, an automobile driven by Michael Paul Dowling was involved in a one car accident. As a result, Christine suffered serious and permanent injuries and incurred more than $40,-000 in medical expenses. The automobile driven by Dowling ¹³⁹ was insured by the Maryland Automobile Insurance Fund (“MAIF”), with personal injury liability coverage limits of $20,000/$40,000. Christine was an additional insured on two insurance policies issued to her father, appellant Douglas G. Popham (“Popham”) by appellee State Farm Mutual Insurance Co., Inc. (“State Farm”).

One, a family automobile insurance policy, provided uninsured motorist insurance coverage, in the same amount as its liability coverage, of $100,000/ $300,000. The other, an “excess” personal liability insurance policy, contained liability coverage of $1,000,000, but no uninsured motorist coverage. The appellants sued State Farm and its agent, appellee Walter Menage (“Menage”). As to State Farm, relying on Maryland Code (1957, 1991 RepLVol.) Article 48A, § 541(c)(2), they sought a declaration that they were entitled to uninsured motorist liability insurance coverage under the umbrella policy in the same amount as the liability coverage it provided.

In another count, they alleged that both appellees negligently failed to comply with their common law duty to advise Pop-ham, “in writing and in a reasonably commercial manner” of the right to purchase in connection with the umbrella policy, uninsured motorist insurance coverage in the same amount as the liability coverage that policy offered. 1 The appellees moved to dismiss for failure to state a claim upon which relief could be granted 2 each count of the ¹⁴¹ appellants’ complaint pertaining to them. The trial court granted the motion following a hearing, ruling that: it is the finding by this Honorable Court that the personal liability umbrella policy or excess policy issued by State Farm Mutual Automobile Insurance Company to Douglas Popham is a motor vehicle liability policy as contemplated by Art. 48A, § 541(c), and as such it would ordinarily be subject to Art. 48A, § 541(c)(2), which would require the insurer to provide written notice to the insured of the opportunity to purchase uninsured motorist coverage in an amount equal to the liability limits of the policy; however, this Court further finds that the legislative intent of Art. 48A, § 541(f), which states that “Policies of insurance that have as their primary purpose to provide coverage in excess of other valid and collectible insurance or qualified self-insurance may include uninsured motorist coverage as provided in subsection (c) of this section” (emphasis supplied), is that umbrella or excess policies were not to be included in the definition of motor vehicle liability insurance policies, or, alternatively, was to create an exclusion or exemption to the requirements of § 541(c)(2).... Finding no just cause for delay, it entered final judgment in favor of the appellees pursuant to Maryland Rule 2-602(b). ¹⁴² The appellants timely appealed to the Court of Special Appeals and the appellees cross-appealed, challenging the finding that an excess or umbrella insurance policy is a motor liability policy as contemplated by Art. 48A, § 541(c). We granted certiorari on our own motion prior to consideration by the Court of Special Appeals in order to consider the issues raised by the appeal and cross-appeal, 329 Md. 22 , 616 A.2d 1286 .

II

Unless an appeal is from a final judgment, the appellate court does not acquire subject matter jurisdiction to review it. Sisk & Son v. Friendship Packers, 326 Md. 152, 158 , 604 A.2d 69, 72 (1992); Estep v. Georgetown Design, 320 Md. 277, 282 , 577 A.2d 78, 80 (1990). A judgment is final if it is “so far final as to determine and conclude the rights involved in the action, or to deny to the party seeking redress by the appeal the means of further prosecuting or defending his rights and interests in the subject matter of the proceeding.” In Re Buckler Trusts, 144 Md. 424, 427 , 125 A. 177, 178 (1924). See also Baltimore City Department of Social Services v. Stein, 328 Md. 1, 10 , 612 A.2d 880, 884 (1992); Sigma Repro.

Health Center v. State, 297 Md. 660, 665 , 467 A.2d 483, 485 (1983); Peat, Marwick, Mitchell & Company v. Los Angeles Rams Football Company, 284 Md. 86, 91 , 394 A.2d 801, 804 (1978); Rohrbeck v. Rohrbeck, 318 Md. 28, 41 , 566 A.2d 767, 773-74 (1989). In other words, in addition to being intended as an unqualified, final disposition of the matter in controversy, Friendship Packers, 326 Md. at 159 , 604 A.2d at 72 ; Rohrbeck, 318 Md. at 41 , 566 A.2d at 773 , “[t]he judgment must settle the rights of the parties, thereby concluding the cause of action.” Estep v. Georgetown Leather Design, 320 Md. 277, 282 , 577 A.2d at 80-81 (1990). See also Stein, 328 Md. at 9-10 , 612 A.2d at 884 ; Wilde v. Swanson, 314 Md. 80, 84 , 548 A.2d 837, 839 (1988); Houghton v. County Commissioners, 305 Md. 407, 412 , 504 A.2d 1145, 1148 , on reconsideration, 307 Md. 216 , 513 A.2d 291 (1986); Highfield Water Company v. Washington Sanitary District, 295 Md. 410, 415 , ¹⁴³ 456 A.2d 371, 373 (1983); Schultz v. Pritts, 291 Md. 1, 6 , 432 A.2d 1319, 1322 (1981). Of course, the clerk must make a proper record of the judgment in accordance with Maryland Rule 2-601.

Rohrbeck, 318 Md. at 41 , 566 A.2d at 773 . And, when the judgment does not adjudicate all of the claims of the parties, the court must act in accordance with Maryland Rule 2-602(b). 3 See Waters v. U.S.F. & G., 328 Md. 700, 707 , 616 A.2d 884, 887 (1992). As we have seen, the trial court entered final judgment pursuant to Maryland Rule 2-602(b). When it did so, however, there was pending the claim against Dowling and both the appellants’ motion for reconsideration, filed within three days of the court’s oral ruling, and the appellees’ motion to strike the motion for reconsideration.

The docket reflects that the court has not yet ruled on either motion. When it ruled orally, the court contemplated, and so advised counsel, that it would sign an order, embodying that ruling, to be submitted by the appellees’ counsel. Clearly, the oral ruling was not, and could not be, a final judgment. See Waller v. Maryland Nat'l Bank, 332 Md. 375, 377-80 , 631 A.2d 447, 448-49 (1993); Maryland Rule 2-602(a). 4 This raises the question whether unresolved motions filed in response to a ¹⁴⁴ ruling not yet final are impediments to appeal when that ruling subsequently is made final when the court signs an order embodying it and containing the certification required by Maryland Rule 2-602(b).

Both the motion for reconsideration and the answering motion to strike related to an opinion of the court not yet embodied in a judgment. While the finality of a judgment, otherwise final, is lost when a party files a motion pursuant to Maryland Rule 2-533, 2-534, or 2-535, within ten days of its entry, Alitalia Linee Aeree Italiane v. Tomillo, 320 Md. 192, 200 , 577 A.2d 34, 38 (1990); B & K Rental v. Universal Lift, 319 Md. 127, 132 , 571 A.2d 1213, 1215-16 (1990); Yarema v. Exxon Corp., 305 Md. 219 , 241 n. 19, 503 A.2d 239 , 250 n. 19 (1986) ; Unnamed Att’y v. Attorney Grievance Comm’n, 303 Md. 473, 486 , 494 A.2d 940, 946 (1985), no such effect obtains when a motion to reconsider is filed in connection -with an opinion, or non-final order, of the trial court. This is so because no appeal lies from the opinion of a trial court which is not embodied in a judgment. Gluckstern v. Sutton, 319 Md. 634, 650 , 574 A.2d 898 , 906 cert. denied, 498 U.S. 950 , 111 S.Ct. 369 , 112 L.Ed.2d 331 (1990); Billman v. Maryland Deposit Ins.

Fund, 312 Md. 128, 132 , 538 A.2d 1172, 1174 (1988); Doehring v. Wagner, 311 Md. 272, 274 , 533 A.2d 1300, 1301 (1987); Administrator, Motor Vehicles Administration v. Vogt, 267 Md. 660, 665 , 299 A.2d 1, 3-4 (1973); Alberstadt v. Alberstadt, 257 Md. 552, 553 , 263 A.2d 535, 535-36 (1970); Hudson Building Supply Company v. Stulman, 258 Md. 304, 307 , 265 A.2d 925, 926 (1970). When the court entered final judgment, taking the action challenged by one side, but urged by the other, it rendered moot both the motion to reconsider and the motion to strike. Therefore, neither did, or could, affect the finality of that judgment.

III

Maryland Code (1957, 1990 Cum.Supp.) Article 48A, § 541(c)(2), in effect at the time of the accident, in pertinent ¹⁴⁵ part, provided: 5 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 amount required under Title 17 of the Transportation Article, for damages which the insured is ¹⁴⁶ 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. There shall be offered in writing to the insured the opportunity to contract for higher amounts than those provided under Title 17 of the Transportation Article if these amounts do not exceed the amounts of the motor vehicle liability coverage provided by the policy____ (Emphasis added). Section 541 was added to the Insurance Code in 1972. See Ch. 73, Acts of 1972.

Subsection (c) did not, at that time, however, contain a provision comparable to that emphasized above. It was amended by Ch. 510, Acts of 1981. In addition to breaking the subsection down into paragraphs, that amendment added a provision to subsection (c)(2) requiring insurers to make “available to the insured the opportunity to contract for higher amounts than those provided under Title 17 of the Transportation Article if these amounts do not exceed the amount of the motor vehicle liability coverage provided by the policy.” That language remained unchanged until 1989, when the word “available” was replaced with “offered in writing.” See Ch. 542, Acts of 1989. Subsection (f) was added to section 541 in 1983, along with subsection (e).

See Ch. 656, Acts of 1983. Unchanged since its enactment, it provides: (f) Uninsured motorist coverage in policies providing coverage in excess of other insurance. — Policies of insurance that have as their primary purpose to provide coverage in excess of other valid and collectible insurance or qualified self insurance may include uninsured motorist coverage as provided in subsection (c) of this section. The trial court found both that a personal liability insurance policy providing motor vehicle liability coverage is a motor vehicle liability policy and that, by enacting section 541(f), the Legislature either intended that such policies not be motor vehicle liability policies or that they be excluded or exempted from the requirements of section 541(c)(2). Neither the appel ¹⁴⁷ lants nor the appellees was completely satisfied with that ruling.

Relying on Cohen v. American Home Assurance Co., 367 So.2d 677 (Fla.App.1979) and Southern American Insurance Co. v. Dobson, 441 So.2d 1185 (La.1983), the appellants are in total agreement with the trial court’s ruling that umbrella or excess policies providing motor vehicle liability coverage fall within the definition of motor vehicle liability policy. The appellants adamantly disagree, however, that the Legislature intended to exempt such policies from the requirements of subsection (c)(2). Among the reasons they proffer for that disagreement is that, had the Legislature wanted to exempt umbrella or excess policies, it could, and would, have done so more directly. Appellees agree with the trial court that, in enacting section 541(f), the Legislature intended to exclude umbrella or excess policies from the reach of subsection (c)(2).

They do not accept, however, that an excess or umbrella policy is a motor vehicle liability insurance policy. When the nature and purpose of each is considered, they argue, there is a clear distinction between an umbrella or excess insurance policy and a motor vehicle liability insurance policy: A motor vehicle liability insurance policy is specific in providing protection or certain coverages to identified or defined insureds using the described vehicle, or in some instances, a non-owned vehicle and, as such, only insures against the risks of loss arising from the use and maintenance of the specific motor vehicle.... On the other hand, an umbrella or excess policy is procured by an insured to provide insurance coverage in excess of other “underlying” insurance policies.... It is not tied to a specific automobile (and may not provide any automobile related coverage), but is designed to protect the insured against catastrophic losses....

An umbrella policy “assumes a risk of much less frequent occurrence, i.e., the risk of judgments in excess of primary policy limits, and accordingly carries premiums which reflect the lesser magnitude of this risk.... ” Appellees’ Brief at 4-5 (citations omitted). The appellees support their position with cases applying the Delaware and ¹⁴⁸ Alabama statutes. See, e.g., O’Hanlon v. Hartford Accident & Indemnity Company, 639 F.2d 1019 (3rd Cir.1981); Trinity Universal Insurance Company v. Metzger, 360 So.2d 960 (Ala.1978). Determining the correctness of the trial court’s findings presents questions of statutory construction.

We recently reviewed some of the principles of statutory construction in G.E.I.C.O. v. Insurance Commissioner, 332 Md. 124 , 630 A.2d 713 (1993). Noting that the primary goal of statutory construction is discerning the legislative intent, we stated: We begin our search for legislative intent with the words of the statute to be interpreted, Harris v. State, 331 Md. 137, 145-46 , 626 A.2d 946, 950 (1993); State v. Crescent Cities Jaycees Foundation, Inc., 330 Md. 460, 468 , 624 A.2d 955, 959 (1993); State v. 149 Slot Machines, 310 Md. 356, 361 , 529 A.2d 817, 819 (1987); Kaczorowski v. Mayor & City Council of Baltimore, 309 Md. 505, 515 , 525 A.2d 628, 632 (1987), considered in light of the context in which the statute appears. Mars v. Prince George’s County, 319 Md. 597, 604 , 573 A.2d 1346, 1349 (1990); 149 Slot Machines, 310 Md. at 361 , 529 A.2d at 819 ; Kaczorowski, 309 Md. at 515 , 525 A.2d at 632 ; Baltimore Gas & Electric Company v. Public Service Commission, 305 Md. 145, 137 , 501 A.2d 1307, 1313 (1986). Context may include related statutes, pertinent legislative history and “other material that fairly bears on the ... fundamental issue of legislative purpose or goal----” Kaczorowski, 309 Md. at 515 , 525 A.2d at 632-33 .

Id. at 131, 630 A.2d at 717 . See also State v. Thompson, 332 Md. 1, 6-7 , 629 A.2d 731, 734 (1993). Statutes which are a part of a statutory scheme are to be construed together and in light of the statutory scheme, State v. Crescent City Jaycees Foundation, Inc., 330 Md. 460, 468 , 624 A.2d 955, 959 (1993); State v. Bricker, 321 Md. 86, 93 , 581 A.2d 9, 12 (1990), and harmonized to the extent possible. Neither should be read, however, “so as to render the other or any portion of it, ¹⁴⁹ meaningless, surplusage, superfluous, or nugatory.” G.E.I.C.O. v. Insurance Commissioner, 332 Md. at 132, 630 A.2d at 717 .

See Tracey v. Tracey, 328 Md. 380, 387 , 614 A.2d 590, 594 (1992). The appellants note that, by its literal terms, § 541(c)(2) applies to “every policy of motor vehicle liability insurance.” It does not distinguish between those policies that provide primary coverage and those that provide excess coverage. They submit that a personal liability umbrella or excess policy which provides motor vehicle liability coverage is as much a motor vehicle liability insurance policy as is a primary policy providing such coverage. Consequently, say appellants, such a policy is within the plain language of subsection (c)(2).

This is the rationale utilized by the Supreme Court of Louisiana in Dobson, 441 So.2d at 1190 . See also Cohen, 367 So.2d at 681-82 ; St. Paul Fire and Marine Insurance Company, Inc. v. Goza, 137 Ga.App. 581 , 224 S.E.2d 429, 431 (1976). But see 8C Appleman, Insurance Law & Practice, § 5071.65, at 107 (1981). The Dobson court alternatively held that the policy or purpose underlying Louisiana’s uninsured motorist statute mandated the same result. 441 So.2d at 1191 .

The court noted the evolution of the statute from one “allowing only limited recovery to the innocent victim to [one] permitting the insured to choose the maximum limits of his uninsured motorist coverage.” Id. This rationale, too, applies equally to section 541. Like the Louisiana statute, although subsection (a) requires that every policy of motor vehicle liability insurance contain the minimum required liability coverage, subsection (b) permits an insurer to issue liability coverage in excess of that amount. Section 541(c)(2) then not only requires uninsured motorist coverage “in at least the amounts required under Title 17 of the Transportation Article,” but it also provides a mechanism whereby an insured may contract for additional uninsured motorist coverage up to the amount of liability coverage provided by the policy.

Moreover, it does ¹⁵⁰ so, as we have seen, without differentiating between primary and umbrella policies. The cases upon which the appellees rely reason that the uninsured motorist provision applies only to the basic policy, the umbrella policy being for the purpose of covering only catastrophic occurrences. See, e.g., Metzger, 360 So.2d at 961-62 ; O’Hanlon, 639 F.2d at 1027 (excess umbrella coverage is merely supplementary to the underlying policy, which must provide the insured with the benefits required under the uninsured motorist statute). Not all “valid and collectible insurance or qualified self-insurance” is automobile liability insurance.

Consequently, not every policy of insurance whose primary purpose is to provide coverage in excess of such insurance need include uninsured motorist coverage as provided in section 541(c)(2). It is only when it is to complement automobile liability insurance coverage that excess coverage in that regard would be required. Thus, the appellants argue, that the purpose of section 541(f) could be to make sure that where automobile liability coverage is offered on an excess basis, the insured has the same opportunity to effect uninsured motorist coverage, and to the same extent, as in the case of a primary automobile liability policy. In other words, subsection (f) may be interpreted simply as making clear that where motor vehicle liability insurance is offered on an excess basis, the provisions of section 541(c), including subsection (c)(2), would apply.

The appellees point out that subsection (f) uses the term “may,” rather than “shall.” They reason that, because the provision is permissive, not mandatory, insofar as uninsured motorist coverage is concerned, the decision to provide such coverage is at the option of the insurer. Moreover, if subsection (c)(2) encompasses an excess policy providing automobile liability coverage, then appellees suggest that interpreting subsection (f) as proposed by the appellants would be redundant and that the legislative intent in enacting subsection (f) would have been to exclude umbrella or excess liability policies providing motor vehicle liability coverage from the require- ¹⁵¹ merits of § 541(c)(2). 6 Along with subsection (f), Ch. 656 enacted subsection (e), which exempted from the coverage required by subsection (c) a policy of liability insurance that insures a motor vehicle that is not subject to registration under § 13-402 of the Transportation Article, because it is not driven on a highway or it is exempt under § 13^f02(c)(10) of the Transportation Article. Enactment of that subsection seems to have been the raison d’etre of the bill, as reflected by the Bill Analysis of House Bill 1294, prepared by the Department of Legislative Reference for the Senate Economic Affairs Committee: CAPSULE SUMMARY: This bill exempts from Maryland’s mandatory uninsured motorist coverage those vehicles not subject to registration because they are not driven on highways or are exempt under § 13.402(c)(10). SUMMARY OF CHANGES: A new subsection exempts from mandatory uninsured motorist coverage vehicle not subject to registration because they are not driven on highways or are exempt under § 13.402(c)(10); the Report of the Senate Economic Affairs Committee: LEGISLATIVE INTENT: The intent and purpose of this bill is to exempt from this State’s mandatory uninsured motorist coverage vehicles ¹⁵² which are not subject to registration because they are not driven on the highway and to exempt snowmobiles; and a letter, dated February 24, 1983, from the Deputy Executive Director of MAIF to John Lang, III, the Supervisory Analyst in the Department of Fiscal Services.

According to a memo, dated January 13, 1983, from David L. Hill, Senior Attorney, subsection (f) was “thrown in ... to take care of ‘umbrella’ policies for Jim’s benefit.” 7 Nothing in the file sheds any light on what “to take care of ‘umbrella’ policies” was intended to mean. The only other document in the files reflecting on subsection (f)’s purpose is a draft of the bill which shows the deletion of the phrase, “but need not.” To decide appellants’ contentions concerning a statutorily imposed duty on an insurer of excess automobile liability, it is only nécessary that we interpret subsection (f). The meaning and scope of subsection (c)(2) may be left for another day. We hold that subsection (f) permits, but does not require, the excess insurer to