Provident General Insurance v. McBride

KARWACKI, Judge. In this expedited appeal from a declaratory judgment rendered by the Circuit Court for Baltimore County, the appellant, Provident General Insurance Company, and the appellees, Kathleen McBride and Atlanta Casualty Company, have filed an agreed statement of the case and facts pursuant to Rule 1029 b. We set forth that statement in edited form: 1. On or about June 22, 1984, Provident General Insurance Company issued an automobile liability insurance policy to Kathleen McBride, 1 Rembert Court, Apartment 304, Parkville, Maryland 21234, with a general limit of liability of $100,000. 2.

On August 2, 1984, while the Provident policy was in effect, McBride was a passenger in an automobile owned by her and being operated by Aidan Francis Jones when that car was involved in a collision with a vehicle being operated by Kathleen Wurth. 3. For purposes of this case, it is conceded that Jones was operating the vehicle with permission of McBride at the time of the accident. 4. At the time of the accident, an automobile liability insurance policy was in effect between Jones and Atlanta ⁴⁹⁹ Casualty Company. Under the Atlanta policy, coverage is extended to Jones while operating the McBride vehicle and the coverage afforded under that policy is excess to any liability coverage provided under the Provident policy. 5.

On September 3, 1985, a complaint was filed on behalf of McBride and against Jones in the Circuit Court for Baltimore County. In that case, McBride alleged the happening of the accident and negligence of Jones to have proximately caused the accident and personal injuries sustained by her. That case will hereinafter be referred to as the “McBride case.” 6. The McBride case was placed at issue in the fall of 1985; that case is presently stayed by virtue of a court order of April 16, 1986. 7.

On February 21, 1986, a declaratory judgment action was filed on behalf of Provident in the Circuit Court for Baltimore County, naming as respondents McBride, Jones and Atlanta. That case will hereinafter be referred to as the “Provident case.” 8. The Provident policy provides the following pertinent sections: PART A—LIABILITY COVERAGE INSURING AGREEMENT We will pay damages for bodily injury or property damage for which any covered person becomes legally responsible because of an auto accident. We will settle or defend, as we consider appropriate, any claim or suit asking for these damages.

In addition to our limit of liability, we will pay all defense costs we incur. Our duty to settle or defend ends when our limit of liability for this coverage has been exhausted. “Covered person” as used in this Part means: 1. You or any family member for ownership, maintenance or use of any auto or trailer. ⁵⁰⁰ 2. Any person using your covered auto.

(subject to): LIABILITY COVERAGE EXCLUSION ENDORSEMENT LIABILITY COVERAGE The following exclusion is added to Part A, Section A: We do not provide Liability Coverage for any person for bodily injury to you or any family member. UNINSURED MOTORISTS COVERAGE—MARYLAND UNINSURED MOTORISTS INSURANCE INSURING AGREEMENT We will pay damages which a covered person is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of: 1. Bodily injury sustained by a covered person and caused by an accident; and 2. Property damage caused by an accident.

Only items 1, 2, 4 and 5, under the definition of “uninsured motor vehicle” apply to property damage. The owner’s or operator’s liability for these damages must arise out of the ownership, maintenance or use of the uninsured motor vehicle. We will pay under this coverage only after the limits of liability under any applicable liability bonds or policies have been exhausted by payment of judgments or settlements. No judgment for damages arising out of a suit brought against the owner or operator of an uninsured motor vehicle is binding on us unless we: 1.

Received reasonable notice of the pendency of the suit resulting in the judgment; and of the suit resulting in the judgment; and 2. Had a reasonable opportunity to protect our interests in the suit. ⁵⁰¹ “Covered person” as used in this endorsement means: 1. You or any family member. “Uninsured motor vehicle” means a land motor vehicle or trailer of any type: 1. To which there is neither: a.

Cash or securities; nor b. a liability bond or policy; applicable at the time of the accident. 2. To which a liability bond or policy applies at the time of the accident, but its limit for liability is less ,than the minimum limit specified by the financial responsibility law of Maryland. 3. Which, with respect to damages for bodily injury only, a liability bond or policy applies at the time of the accident in limits equal to or greater than the limit specified by the financial responsibility law of Maryland, but less than the limit of liability for this coverage. 5. To which a liability bond or policy applies at the time of the accident, but the bonding or insuring company: a. denies coverage; or b. is or becomes insolvent.

However, “uninsured motor vehicle” does not include any vehicle or equipment: 1. Owned or furnished or available for your regular use. LIMIT OP LIABILITY The limit of liability shown in the Declarations for this coverage is our maximum limit of liability for all damages resulting from any one accident. This is the most we will pay regardless of the number of: 1.

Covered persons; 2. Claims made; ⁵⁰² 3. Vehicles or premiums shown in the Declarations; or 4. Vehicles involved in the accident.

Except with respect to coverage under paragraph 3, of the definition of uninsured motor vehicle, any amounts otherwise payable for damages under this coverage shall be reduced by all sums: 1. Paid because of the bodily injury or property damage by or on behalf of persons or organizations who may be legally responsible. This includes all sums paid under Part A of the policy. 9. Provident filed a motion for summary judgment with its complaint for declaratory relief and raised three contentions: I. The liability coverage exclusion endorsement in the policy issued by Provident to McBride excludes liability coverage to a permissive driver where the bodily injury is incurred by the named insured, so the policy does not provide liability coverage to Jones as to the claims of McBride.

II

If the liability coverage exclusion endorsement in the Provident policy is invalid as against public policy, the invalidity does not extend beyond the twenty thousand dollar compulsory limit of this state’s insurance law, and the exclusion is valid as to any sum over twenty thousand dollars. 1 III. The definition of an uninsured/underinsured motor vehicle in the Provident policy does not include an uninsured/underinsured vehicle owned by the named insured, so the policy provides no uninsured motorist coverage to McBride. 10. On or about February 23, 1986, an answer was filed in the Provident case on behalf of McBride, along with an ⁵⁰³ answer to the Motion for Summary Judgment, a Motion for Summary Judgment on behalf of McBride and a Memorandum of Law. In her answer to the Motion for Summary Judgment, McBride responds that the liability coverage exclusion endorsement is invalid, that it is invalid to the extent of the one hundred thousand dollar policy limit, and that McBride is entitled to benefits under the Provident policy. 11.

On or about April 3, 1986, an answer in the Provident case was filed on behalf of Atlanta. It is the contention of Atlanta that the Provident policy provides primary liability coverage for bodily injuries up to its full policy limits of $100,000. 12. No answer was filed in the Provident case by Jones. 13. On June 26, 1986, the Honorable Leonard S. Jacobson issued a Memorandum Opinion in the Provident case and ruled that Provident policy provides coverage up to full limits of one hundred thousand dollars under its liability provisions to Jones. 14.

The lower court did not rule on the issue of uninsured motorist coverage. The parties signing this Statement of the Case are in agreement that a ruling by this Court will serve to avoid the potential expense and delay of another appeal to this Court. 15. The following two issues are to be presented by appellant to this Court on this expedited appeal: 1. May a compulsory automobile liability insurance policy issued in this State validly exclude claims for bodily injury to the named insured from the optional coverage which is over and above the mandatory coverage required by statute? 2.

May a compulsory automobile liability insurance policy issued in this State validly exclude uninsured motorist benefits to the named insured for injuries alleged to be incurred while riding in an uninsured vehicle owned by