GARY DOLAN, et al.
KEMPER INDEPENDENCE INSURANCE COMPANY
Circuit Court for Anne Arundel County Case No.
Graeff, Nazarian, Arthur, JJ.
appeal stems from a declaratory judgment action in which
appellee Kemper Independence Insurance Co. sought to
establish that it had no duty to pay underinsured motorist
(UIM) benefits to appellant Gary Dolan. In support of its
position, Kemper cited Mr. Dolan's unwillingness to
participate in an examination under oath (EUO). Kemper argued
that, by refusing to submit to an EUO, Mr. Dolan had breached
the insurance contract. Kemper also argued that, under its
policy, submission to an EUO was a condition precedent to Mr.
Dolan's ability to file suit against Kemper for breach of
Circuit Court for Anne Arundel County declared that Mr. Dolan
was not entitled to UIM benefits under the policy. Mr. Dolan
appealed. We affirm.
and Procedural History
parties stipulated to the relevant facts:
October 27, 2010, Mr. Dolan was a passenger in a vehicle
operated by Windy Marie Dolan. The vehicle was involved in an
accident. Mr. Dolan sustained injuries as a result of the
Dolan's parents had an automobile insurance policy with
Kemper. Mr. Dolan claimed UIM benefits as a "family
member" under his parents' policy.
III, Part E, of the policy that Kemper issued to Mr.
Dolan's parents states, in pertinent part, as follows:
We have no duty to provide coverage under this policy unless
there has been full compliance with the following duties:
B. A person seeking any coverage must:
1. Cooperate with us in the investigation, settlement or
defense of any claim or suit.
3. Submit, as often as we reasonably require:
b. To examination under oath and subscribe the same.
Section II, Part F, of the Kemper policy, "No legal
action may be brought against [Kemper] until there has been
full compliance with all the terms of this policy."
in late 2010 or early 2011, Kemper became aware of the
accident in which Mr. Dolan was injured. Anticipating that
Mr. Dolan might make a claim for UIM benefits, Kemper
requested that he give a recorded statement. Mr. Dolan's
counsel denied the request.
March 10, 2011, Kemper sent a formal request for a recorded
statement via a letter to Mr. Dolan's counsel. Counsel
denied that request as well.
April 12, 2011, Kemper, through counsel, sent a written
request for an EUO to Mr. Dolan's counsel. Two days
later, Mr. Dolan's counsel responded by email, stating
that Kemper was not entitled to an EUO until Mr. Dolan made a
formal claim for UIM benefits.
August 8, 2011, Kemper received a letter from Mr. Dolan's
counsel. The letter represented that Ms. Dolan's insurer,
Nationwide Mutual Insurance Co., had tendered its policy
limits of $50, 000 in settlement of Mr. Dolan's claims
Md. Code (1996, 2006 Repl. Vol.), § 19-511 of the
Insurance Article, as it read in 2011, Kemper had 60 days
from August 8, 2011, to decide whether to consent to the
settlement. If Kemper consented to the settlement, it would
waive its right to "contest the issues of tort
liability" in Mr. Dolan's action to recover on the
policy. Maurer v. Pennsylvania Nat'l Mut. Cas. Ins.
Co., 404 Md. 60, 75 (2007); Morse v. Erie Ins.
Exch., 217 Md.App. 1, 21 (2014), aff'd sub nom.
Woznicki v. GEICO Gen. Ins. Co., 443 Md. 93 (2015). If,
however, Kemper refused to consent to the settlement, it was
required to pay the amount of the settlement offer to Mr.
Dolan in order to preserve its defenses in a UIM
September 22, 2011, Kemper notified Mr. Dolan, in writing,
that it would not consent to Nationwide's settlement
offer. On the same day, Kemper advanced the $50, 000 that it
was required to pay to preserve its right to contest issues
of tort liability. Mr. Dolan accepted Kemper's check,
thereby triggering his UIM claim against the Kemper
point after the claim was triggered, Kemper requested an EUO.
The record does not reflect what response, if any, Kemper
October 28, 2011, Mr. Dolan's counsel wrote to
Kemper's counsel. The letter transmitted information
about Mr. Dolan's injuries, requested information about
the dollar amount of UIM coverage under the Kemper policy,
and asked whether Kemper would tender the policy limits. The
letter confirms that by that date Mr. Dolan had made a formal
claim for UIM benefits.
November 7, 2011, Kemper's counsel wrote to Mr.
Dolan's counsel. In that letter, Kemper's counsel
confirmed an agreement with Mr. Dolan's counsel that
Kemper was entitled to an EUO. Kemper's counsel requested
dates for the EUO.
November 13, 2011, Kemper's counsel sent a follow-up
email to Mr. Dolan's counsel, offering proposed dates for
an EUO. Mr. ...