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Brethren Mutual Ins. Co. v. Buckley

Court of Appeals of Maryland

March 4, 2014


Argued November 5, 2013,

Circuit Court for Baltimore County. Case No. 03-C-08-008799.

For Petitioner: David M. Kopstein, Esquire, Amicus Curiae of the Maryland Association for Justice, Kopstein & Associates, LLC, Seabrook, MD.

Barbera, C.J., Harrell, Greene, Adkins, Eldridge, John C., (Retired, Specially Assigned), Cathell, Dale R., (Retired, Specially Assigned), McAuliffe, John (Retired, Specially Assigned), JJ.


Page 666

[437 Md. 335] Adkins, J.

In this case we examine the scope of a general release executed pursuant to Md. Code (1997, 2011 Repl. Vol.), § 19-511 of the Insurance Article (" § 19-511" ). Petitioner, The Brethren Mutual Insurance Company (" Brethren" ), appeals the decision of the Court of Special Appeals that a general release executed by its policy holder, Ember L. Buckley (" Buckley" ), in favor of a tortfeasor's liability insurer did not likewise waive Buckley's claim under her uninsured motorist policy with Brethren.


Respondent, Buckley, was involved in a single-vehicle accident on March 18, 2007. Buckley was the front-seat passenger in a motor vehicle driven by her boyfriend, Harvey Betts (" Betts" ). Betts was covered by a liability insurance policy issued

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by GEICO, with policy limits of $100,000. GEICO offered to settle Respondent's claim against Betts for the full policy limits. Notwithstanding this settlement, Buckley had medical bills related to this accident in excess of $200,000. Because the settlement with Betts did not cover the full extent of her injuries, Buckley sought coverage under her uninsured/underinsured motorist (" UM" ) policy with Petitioner, Brethren.

In order to comply with Maryland's UM scheme,[1] Respondent sent notice of the settlement offer from GEICO to Brethren via certified mail on August 29, 2007.[2] In response, [437 Md. 336] Brethren's claims adjuster stated in a letter dated October 30, 2007 that Brethren would waive any subrogation action against Betts. Having received this message, Buckley signed a full release of all claims against Harvey Betts and a hold harmless agreement in favor of Betts and GEICO on December 6, 2007 (" the Release" ). The Release stated that:

I/we, Ember Buckley . . . for and in consideration of a draft for the sum of one hundred thousand dollars . . . do . . . hereby remise, release, and forever discharge Harvey Betts. Releasee(s), successors and assigns, and/or his, her or their associates, heirs, executors and administrators, and all other persons, firms or corporations of and from any and every claim, demand, right or cause of action, of whatever kind of nature, on account of or in any way growing out of any and all personal injuries and consequences thereof . . . resulting or to result from an accident that occurred on or about the eighteenth day of March, 2007, at or near Saw Mill Court Baldwin, MD . . . .

(Emphasis in original). After executing the Release with GEICO, Buckley attempted to recover for the remainder of her outstanding medical bills from Brethren under her UM policy. Brethren denied coverage and refused to pay.

Buckley filed suit against Brethren in the Circuit Court for Baltimore County, alleging breach of contract and seeking the policy limit of $300,000 in compensatory damages, attorney's fees and interest. Brethren answered the complaint, asserting a general denial of liability, and raising the defenses of failure to state a claim, contributory negligence and assumption [437 Md. 337] of the risk. Brethren did not raise the Release as an affirmative defense until its Amended Answer, filed two months after its initial Answer, and nearly three months after Buckley filed her complaint.

Both parties filed motions for summary judgment. Brethren argued that the Release, as written, was a general release, and thus released all persons, firms, and corporations from future claims, regardless of whether they were parties to the Release. Brethren further argued that Buckley's subjective intent in executing the Release was irrelevant--the words on the page should be interpreted exactly as written. Responding, Buckley contended that the Release only applied to Betts and

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his insurer, and that her execution of it was clearly in accordance with § 19-511. That statute reads, in pertinent part:

§ 19-511. Uninsured motorist coverage -- Settlement procedures.
(a) Notice of settlement offer required . -- If an injured person receives a written offer from a motor vehicle insurance liability insurer . . . to settle a claim for bodily injury or death, and the amount of the settlement offer . . . would exhaust the bodily injury or death limits of the applicable liability insurance policies . . . the injured person shall send by certified mail, to any insurer that provides uninsured motorist coverage . . . a copy of the liability insurer's written settlement offer.
(b) Response to settlement offer . -- Within 60 days after receipt of the notice . . . the uninsured motorist insurer shall send to the injured person:
(1) written consent to acceptance of the settlement offer and to the execution of releases; or(2) written refusal to consent to ...

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