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Connors v. Government Employees Ins. Co.

Court of Special Appeals of Maryland

March 25, 2014

LINDA CONNORS, INDIVIDUALLY ETC.
v.
GOVERNMENT EMPLOYEES INSURANCE COMPANY

Woodward, Berger, Eyler, James R. (Retired, Specially Assigned), JJ.

OPINION

Page 163

[216 Md.App. 421] Woodward, J.

Appellants, Linda Connors, individually and as personal representative of the Estate of Robert Connors, appeal from an Order of the Circuit Court for Montgomery County granting summary judgment in favor of appellee, Government Employees Insurance Company (" GEICO" ).[1] Appellants present one question for our review:

Do the underinsured motorist provisions of GEICO's insurance contract provide the Appellant, Linda Connors Individually and Linda Connors as personal representative of the Estate of Robert Connors, a limit of underinsured coverage of $300,000 each, subject to an aggregate

Page 164

payment to all Appellant's claims by GEICO not to exceed $300,000?

Finding no error, we shall affirm the judgment of the circuit court.

BACKGROUND

Linda and Robert Connors, husband and wife, were injured on April 14, 2009, while walking on Captain Dement Drive in Waldorf, Maryland. A vehicle driven by Adam Pond, pulled out of a driveway at 3269 Captain Dement Drive, striking Mr. and Mrs. Connors and knocking them to the ground. Mrs. Connors suffered minor physical injuries and significant emotional trauma, while Mr. Connors was injured severely, and he died on January 31, 2011. Mr. and Mrs. Connors were both " insureds" under a motor vehicle policy issued by GEICO which provided uninsured motorist coverage (" UIM" ) with [216 Md.App. 422] policy limits of $300,000 per person/$300,000 per occurrence. The tortfeasor, Adam Pond, maintained automobile liability insurance through Allstate Insurance Company with liability limits of $100,000 per person/$300,000 per occurrence. With GEICO's consent, Mr. and Mrs. Connors accepted " per person" policy limits from Allstate, receiving $100,000 each, thereby exhausting the limits of the Allstate policy.

The Connorses submitted claims to GEICO pursuant to the UIM provisions of GEICO's Maryland Family Automobile Policy issued to Mr. Connors. GEICO asserted that, after crediting the policy for $200,000, which appellants received from Allstate, only $100,000 of UIM benefits remained. The Connorses disagreed with GEICO's calculation, contending that the " per person" limit of the policy should apply, leaving $300,000 in UIM benefits remaining.

The Connorses filed a claim with the Maryland Insurance Administration, pursuant to Maryland Code (1996, 2006 Repl. Vol., 2008 Cum. Supp.), § 27-1001 of the Insurance Article II (" I.A. II" ),[2] alleging that GEICO had failed to act in good faith in settling their claim. On July 22, 2010, the Maryland Insurance Administration issued a decision, finding that GEICO did not breach its obligation to act in good faith, and agreeing with GEICO that $100,000 of UIM coverage remained. GEICO subsequently tendered the Connorses the $100,000 it asserts is available according to the terms of the UIM policy, under an agreement that allows appellants to pursue their contention that $300,000 in benefits remain (inclusive of the $100,000 paid).

On December 16, 2010, Mr. and Mrs. Connors filed a lawsuit against GEICO, seeking declaratory relief in the Circuit Court for Montgomery County. After considering cross-motions for summary judgment, the circuit court granted summary judgment in favor of GEICO. The circuit court, in relevant part, stated as follows:

[216 Md.App. 423] 2. The GEICO Policy is not ambiguous. GEICO is obligated under GEICO Policy No. 0377-86-55-06 to make $100,000 in UIM benefits available to satisfy the claims of [appellants].
3. GEICO's remaining UIM obligation is calculated by taking its $300,000 " per accident" limit under the GEICO Policy and subtracting all amounts received by [appellants] that exhausted the tortfeasor's liability limits, which in this instance was $200,000. GEICO's remaining UIM obligation to [appellants] is to fill the " gap" between what [appellants] could have recovered from the tortfeasor

Page 165

had the tortfeasor maintained identical liability coverage to the coverage [appellants] purchased under the GEICO Policy. That " gap" is $100,000 which, as noted, has been paid.

Appellants noted this timely appeal.

DISCUSSION

When we review the decision of a circuit court granting summary judgment, we review that decision de novo. Powell v. Breslin, 195 Md.App. 340, 345, 6 A.3d 360 (2010), aff'd, 421 Md. 266, 26 A.3d 878 (2011). A trial court, when deciding a motion for summary judgment, may grant summary judgment if the motion and response show that there is no genuine dispute as to any material fact and that the party in whose favor the judgment is entered is entitled to judgment as a matter of law. Id. at 345-46. Where there is no dispute of material fact, our review focuses on whether the trial court's grant of the motion was legally correct. Id. at 346.

Appellants contend that the circuit court erred in interpreting the language of the GEICO insurance policy's UIM provisions. They argue that the plain language of the insurance contract allows for both Mrs. Connors and the estate of Mr. Connors to collect $300,000 pursuant to the policy's " per person" limits. Specifically, appellants contend that the policy's " subject to" language in subsection (2) of the " Limits of Liability" portion of Section IV support the " per accident" [216 Md.App. 424] limit as being subservient to the " per person" limit. Appellants assert that the UIM policy provides $300,000 " per person" worth of coverage irrespective of the limiting language $300,000 " per occurrence." Because there were claims filed on behalf of two individuals, Mr. Connors and Mrs. Connors, appellants contend the UIM benefits calculation should start with a total of $600,000 in UIM coverage. Appellants agree that GEICO should receive credit for the $200,000 from Allstate's liability policy, but argue that this amount should be applied to the $600,000 figure, leaving $400,000. Finally, appellants conclude their calculation by using the $300,000 " per accident" limit as a " cap" on the $400,000 aggregate amount, thus entitling them to a total recovery from GEICO of $300,000.

GEICO responds that the language of the UIM policy is clear and unambiguous, mandating that $100,000 of UIM benefits remain available to appellants. GEICO asserts that the insurance contract states clearly that the " per occurrence" limit applies to claims of two or more people, and is to be reduced by all amounts paid by the tortfeasor, in aggregate. GEICO also argues that appellants' interpretation of the " subject to" language is flawed, because, when read properly, it functions to restrict an individual insured from collecting more than the " per occurrence" policy limit. GEICO further contends that, in order to interpret the insurance policy accurately, the contract must be read in context with Maryland's UIM statutory scheme and relevant case law. According to GEICO, appellants' conscious decision to purchase $300,000 in UIM coverage, viewed in accord with Maryland's UIM statute, represents " the amount that would place [a]ppellants in the same position [as] if the tortfeasor had carried identical liability coverage." GEICO also contends that Maryland case law supports the " per occurrence" limit as the " appropriate starting point" for a UIM " gap" calculation. GEICO concludes that the circuit court was correct in finding that $100,000 of UIM benefits remain under the provisions of the insurance policy and in granting summary judgment in its favor.

[216 Md.App. 425] I.

UIM coverage " plays a leading role in Maryland's comprehensive motor vehicle

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insurance scheme by assuring compensation for victims of noninsured or inadequately insured motorists." Andrew Janquitto, Maryland Motor Vehicle Insurance § 8.1, at 308 (3d ed. 2011). Multiple amendments to the Maryland UIM statute evidence the increasing importance of UIM insurance within insurance law. UIM coverage first found its way into Maryland law in 1972. 1972 Md. Laws, Chap. 73, § 1; see also Janquitto, supra, § 8.1, at 308. In 1975, the UIM statute was amended to require every motor vehicle insurance policy issued in Maryland to contain minimum uninsured motorist coverage. 1975 Md. Laws, Chap. 562, § 1; see also Waters v. U.S. Fid. & Guar. Co ., 328 Md. 700, 710, 616 A.2d 884 (1992) . In 1981, the UIM scheme was again amended to allow insureds the opportunity to contract for more than a minimum amount of UIM coverage. 1981 Md. Laws, Chap. 510; see also Waters, 328 Md. at 711 (noting that by Chapter 510 of the 1981 Acts, the " General Assembly . . . required that insurers shall [make] available to the insured the opportunity to contract for higher amounts" (second alteration in original) (internal quotation marks omitted)).

Uninsured, and underinsured,[3] motorist insurance is applicable when the limit of the tortfeasor's liability insurance policy is less than an insured's UIM coverage. Waters, 328 Md. at 711-12. Maryland Code (1977, 2009 Repl. Vol.), § 17-103 of the Transportation Article II mandates that in Maryland, each motor vehicle liability policy contain a minimum of $20,000 coverage for injury or death of any one person in an accident, $40,000 in coverage for injury [216 Md.App. 426] or death of two or more people in an accident,[4] and a minimum of $15,000 in coverage for property damage resulting from any one accident. See also I.A. II § 19-509(e) (requiring that UIM coverage equal at least the amount required by Title 17 of the Transportation Article). The underlying purpose of Maryland's UIM scheme is to " provide an injured insured with resources equal to those which would have been available had the tortfeasor carried liability coverage equal to the amount of uninsured motorist coverage which the injured insured purchased from his own insurance company." Waters, 328 Md. at 714. The statute permits insureds to contract for higher amounts than those provided under Title 17 of the Transportation Article provided these amounts do not exceed the amounts of the motor vehicle liability coverage provided by the policy. I.A. II § 19-509(e); Hoffman v. United Servs. Auto. Ass'n, 309 Md. 167, 178, 522 A.2d 1320 (1987).

We interpret the language of an insurance policy in accord with the same principles applicable to the construction of other contracts. Mitchell v. AARP Life Ins. Program, N.Y. Life Ins. Co ., 140 Md.App. 102, 116, 779 A.2d 1061 (2001). Like any other contract, an insurance contract is " measured by its terms unless a statute, a regulation, or public policy is violated thereby." Pac. Indem. Co. v. ...


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