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Austin v. Unsatisfied Claim and Judgment Fund Board

Decided: March 9, 1964.


Appeal from the Circuit Court of Baltimore City; Cullen, J.

Brune, C. J., and Henderson, Hammond, Prescott and Marbury, JJ. Henderson, J., delivered the opinion of the Court.


This appeal is from an order by Judge Cullen declaring that the appellee was not obligated to make payment on any judgment had against Millard Murray, the driver of a car owned by John Robinson, Jr. The appellants were injured in a collision between this car and their own on September 13, 1959. The order also absolved National Indemnity Company from making payments for either Murray or Robinson. The court's first ruling was based on a finding that the appellants had not exhausted their remedy against Robinson, and that this relieved the Fund from liability.

The facts are quite complicated and necessitate a rather full statement. The accident in question occurred in Queen Anne's County. Murray had no policy of liability insurance but Robinson had one with National Indemnity Company, covering the owner and anyone operating the vehicle named therein with the permission of the owner. Robinson and Murray were residents of Baltimore City; the Austins were residents of Queen Anne's County. Robinson notified National of the accident and it made an offer of settlement in the sum of $6,000.00 which was declined. Suits were filed in Queen Anne's County on July 25, 1960, alleging negligence on the part of both Robinson and Murray. It was not alleged that Murray was the agent or servant of Robinson or engaged in any business for him. It seems to be conceded that Robinson had simply loaned his car to Murray and was not in the car at the time of the accident. But it was alleged that Robinson was negligent in permitting Murray to operate his car in that he "knew or should have known at that time that the defendant, Millard Murray, was a careless driver and did use intoxicating beverages."

Process in the suits was served on Robinson and he forwarded the declarations and summons to National. It filed general issue pleas on his behalf and interrogatories that were answered by the three Austins. In those answers they asserted that

Robinson knew that Murray "would indulge in intoxicating beverages, for he as well as the said Millard Murray had indulged in the same on many previous occasions, and he knew that this trip was a party occasion." Murray was served with process some two months later but did not forward his declarations and summons to National, and it filed no plea on his behalf. It had notice that he was a potential party, of course, through the declarations forwarded by Robinson, claiming joint liability. On November 9, 1960, counsel for the appellants dismissed their suits against Robinson, took default judgments against Murray and had them extended after inquisition in the total amount of $11,500.

On November 16, 1960, counsel for the Austins made demand for payment on National, and on November 22, 1960, threatened suit. On December 8, 1960, counsel for National orally disclaimed liability on the ground that Murray had not cooperated as required by the policy. Formal notice of disclaimer, however, was not filed with the Commissioner of Motor Vehicles until April, 1961. On December 28, 1960, demand was made by letter upon the Unsatisfied Claim and Judgment Fund, followed by the formal execution of the claim on forms supplied by the Fund.

The default judgments obtained in Queen Anne's County were filed in Baltimore City and attachments against National issued thereon. On February 16, 1962, Judge Foster dismissed the attachments, after hearing, and ruled that National was relieved of its obligations under the policy because of Murray's non-cooperation. The appellants entered an appeal to this Court which was later dismissed.

On March 27, 1962, the appellants filed in the Circuit Court for Queen Anne's County applications for payment of the default judgments from the Fund. Counsel for the Fund answered contending that it had no notice of the default judgments and hence was not liable, under Code (1957), Art. 66 1/2, sec. 164, and further that notice of the disclaimer by National was not given within 30 days, the time required by law. With Murray's express consent, and the consent of the Austins, the default judgments were stricken out on June 12, 1962. Counsel for the Fund, who was also representing Murray at the time, moved

for dismissal on the ground of improper venue. The motion was granted. On July 16, 1962, the Austins filed suit against Murray in Baltimore City. On August 20, 1962, the present suit for declaratory judgment was filed against the Austins, Robinson and Murray, and National Indemnity Company. The latter moved for summary judgment.

There is no merit in the suggestion that timely notice of the disclaimer was not given. Judge Cullen found that the notice was timely and his finding is not challenged on appeal. On the other hand, we find no merit in the appellant's contention that the Fund was estopped from bringing the suit for declaratory relief. The argument seems to be based on the conduct of the appellee in consenting to the striking of the default judgments in Queen Anne's County. But we think the recitals in Judge Keating's opinion indicate that the judgments were stricken because he found that the Fund was legally entitled to ...

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