United States District Court, D. Maryland
P. Gesner Chief United States Magistrate Judge
Colony Insurance Company (“Colony, ” or
“plaintiff”) brings this action seeking a
declaratory judgment that its insurance policy with defendant
R & P Automotive, LLC (“R&P”) is void
ab initio, of no force and effect, and properly
rescinded. (ECF No. 42 at 3). Plaintiff joined as defendants
Rose Tamaris, Master Systems Automotive, Inc.
(“Master”), Matthew Anders, and Main Street
America Assurance Company (“Main Street”). (ECF
No. 42 at 4-5). Currently pending before the court are: (1)
Defendant Matthew Anders' Motion for Summary Judgment
(“Anders' Motion”) (ECF No. 77); (2)
Defendants Master, R&P, and Rose Tamaris' Joint
Motion for Summary Judgment (“R&P Group's
Motion”) (ECF No. 78); (3) Defendant Main Street's
Motion for Summary Judgment Joining R&P's Motion for
Summary Judgment (“Main Street's Motion”)
(ECF No. 79); (4) Plaintiff's Motion for Summary Judgment
and Response in Opposition to Defendants' Motions for
Summary Judgment (“Plaintiff's Motion”) (ECF
No. 80); (5) Defendant Matthew Anders' Reply to
Plaintiff's Response to His Motion for Summary Judgment
and Plaintiff's Motion for Summary Judgment
(“Anders' Reply”) (ECF No. 81); (6)
Defendants Rose Tamaris, Master, and R&P's Opposition
to Plaintiff's Motion for Summary Judgment and Reply to
Plaintiff's Opposition to Defendants' Motion for
Summary Judgment (“R&P's Reply”) (ECF No.
83); (7) Defendant Main Street's Response to
Plaintiff's Motion for Summary Judgment (“Main
Street's Reply”) (ECF No. 85); and (8)
Plaintiff's Reply to Defendants' Responses Regarding
Motions for Summary Judgment (“Plaintiff's
Reply”) (ECF No. 86). A hearing was held on October 24,
2018. (ECF No. 88). For the reasons stated below,
Plaintiff's Motion (ECF No. 80) is GRANTED in part and
DENIED in part and Anders' Motion (ECF No. 77), the
R&P Group's Motion (ECF No. 78), and Master's
Motion (ECF No. 79) are GRANTED in part and DENIED in part.
ruling on a motion for summary judgment, this court considers
the facts and draws all reasonable inferences in the light
most favorable to the nonmoving party. Scott v.
Harris, 550 U.S. 372, 378 (2007). When the parties have
filed cross-motions for summary judgment, in
“considering each individual motion, the court must
take care to ‘resolve all factual disputes and any
competing, rational inferences in the light most
favorable' to the party opposing that motion.”
Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir.
2003) (quoting Wightman v. Springfield Terminal Ry.
Co., 100 F.3d 228, 230 (1st Cir. 1996)).
2012, Rose Tamaris formed R & P Automotive, LLC
(“R&P”). (ECF No. 78-2). R&P provided
auto detailing services, primarily for DARCARS at
DARCARS' Honda dealership location in Bowie, MD. (ECF No.
77-3 at 6). Mrs. Tamaris' late husband, Andreas Tamaris,
owned another entity, Master Systems Automotive, Inc.
(“Master”), which also provided auto detailing
services, but primarily for DARCARS at DARCARS' Lexus of
Silver Spring location. Id. In 2015, Mrs. Tamaris
acquired full ownership of Master from Mr. Tamaris. (ECF Nos.
77-3 at 6-7, 78-4). Mrs. Tamaris also owned a third entity,
East Coast Automotive, LLC (“East Coast”),
another auto detailing business. (ECF No. 77-3 at 4-5).
2013, Mrs. Tamaris applied for insurance from plaintiff for
R&P with the assistance of insurance agent Jon Christiana
of C&E Insurance and Financial Services. (ECF No. 78-5).
On the insurance application, under the heading
“Applicant Information, ” “R & P
Automotive, LLC” is listed under “Business Trade
Name.” (ECF No. 78-6 at 1). The business entity is
identified as an “LLC” and operations are
described as “auto detailer.” Id.
Question three asked “are you involved in any
additional business operations other than what is described
above?” and the box marked “No” is checked.
Id. Question 10, titled “Rating Exposure
Basis, ” directed the applicant to “list ALL
Owners, Employees and Drivers.” (ECF No. 78-6 at 2).
The sole party listed in response is Rose Tamaris, described
as “Owner/Operator.” Id. On the last
page of the application, Rose Tamaris signed above a line
“Applicant's Signature” and below a
declaration stating “I declare to the best of my
knowledge that all statements herein are true and no material
facts have been suppressed or misstated. I am also aware that
my operation may be inspected by the Insurance
Company.” (ECF No. 78-6 at 5).
issued a policy of garage coverage insurance to R&P for a
year starting in October of 2013 and renewed this policy for
a year starting in October of 2014. (ECF No. 78-1 at 4). In
July 2015, plaintiff paid a claim for property damage to a
vehicle caused by one of R&P's workers. (ECF No. 78-1
at 5). On October 16, 2015, R&P submitted a renewal
application for insurance. (ECF No. 78-1 at 6). On this
application, Question 16 asked about prior claims history.
(ECF No. 78-7 at 2). A box for “Losses Reported in Last
36 months” was checked and “Tristate has all
information” was written under “Date of Loss,
Amount, ” and “Description of Loss.”
Id. Additionally, in this application, Question 5
was reworded slightly and asked “Do you have an
ownership interest in or operate any other business?”
Id. The box for “No” was checked.
Id. Rose Tamaris signed her name on the last page
with the same declaration that was in the 2013 application.
(ECF No. 78-7 at 7). Plaintiff again renewed the policy for a
year beginning in October of 2015. (ECF No. 78-1 at 4).
September 14, 2016, Ana Morales, a worker for R&P, was
working at the Lexus of Silver Spring dealership,
Master's work site, and operated a vehicle that struck
defendant Matthew Anders. (ECF Nos. 80-3, 77-3 at 19-20). At
the time, defendant Main Street insured Master. (ECF No. 80-4
at 1). Main Street denied coverage for this claim because
“[Ms. Morales] was temporarily helping [Master] by
working at the Lexus of Silver Spring dealership” and
therefore did not qualify as an insured under Master's
policy. Id. R&P also submitted a claim to
plaintiff for this incident, and plaintiff conducted an
investigation. (ECF No. 78-12).
December 1, 2016, plaintiff rescinded R&P's insurance
policy based on material misrepresentations it found in
R&P's application. (ECF No. 78-14 at 1).
Specifically, plaintiff stated that Mrs. Tamaris failed to
disclose her ownership interest in Master and control over
its operations and that Ms. Tamaris failed to list all
owners, employees, and drivers. (ECF No. 78-14 at 1-2).
Plaintiff alleges that these facts were material to
plaintiff's acceptance of the risk of covering
R&P's garage operations and that plaintiff relied
upon these material misrepresentations in issuing the policy.
(ECF No. 42 at 6-7). Plaintiff further alleges that, had
R&P accurately and completely disclosed this information,
plaintiff would not have issued the policy. (ECF No. 42 at
8). Plaintiff now seeks a declaration that this policy is
void ab initio. (ECF No. 42 at 3).
moved for summary judgment on May 4, 2018, and argued that
(1) there was no material misrepresentation when R&P
answered that they did not have any interest in or operate
any other business; (2) there was no material
misrepresentation when R&P listed Rose Tamaris only
owner, employee, or driver; and (3) if there was a
misrepresentation, the policy cannot be voided ab
initio under Maryland law. (ECF No. 77-1 at 5).
Defendants R&P, Master, and Rose Tamaris jointly moved
for summary judgment on May 4, 2018, and claimed that (1)
Master and Rose Tamaris are entitled to summary judgment as a
matter of law because they are not parties to the insurance
contract; (2) R&P did not make any material
misrepresentations because it did not own any other
businesses and did not have any employees; and (3) plaintiff
waived any right to rescind the policy because it knew or
should have known that R&P used workers that it
characterized as “independent contractors” after
plaintiff investigated and paid a claim in July of 2015. (ECF
No. 78 at 1-4). Finally, Defendant Main Street joined the
R&P group's Motion for Summary Judgment and filed an
accompanying memorandum arguing that (1) there were no
misrepresentations on the policy applications and that, even
if there were misrepresentations, (2) the policy could not be
voided ab initio under Maryland law. (ECF No. 79-1
at 1, 7).
18, 2018, plaintiff moved for summary judgment and opposed
defendants' motions. (ECF No. 80). Plaintiff argued that
(1) it properly rescinded the policy based on the material
misrepresentations regarding Mrs. Tamaris' ownership and
control over other businesses and the size of her workforce;
(2) it issued the policy in reliance on these material
misrepresentations; and (3) the policy can be voided ab
initio under Maryland law. (ECF No. 80-1 at 13, 19, 22).
STANDARD OF REVIEW
judgment is appropriate when “there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed.R.Civ.P. 56(a). A
genuine dispute remains “if the evidence is such that a
reasonable jury could return a verdict for the nonmoving
party.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986). A fact is properly considered
“material” only if it might affect the outcome of
the case under the governing law. Id. The party
moving for summary judgment has the burden of demonstrating
the absence of any genuine issue of material fact.
Fed.R.Civ.P. 56(a); Pulliam Inv. Co., Inc. v. Cameo
Props., 810 F.2d 1282, 1286 (4th Cir. 1987). On those
issues for which the nonmoving party has the burden of proof,
however, it is his or her responsibility to oppose the motion
for summary judgment with affidavits or other admissible
evidence specified in Federal Rule of Civil Procedure 56.
Fed.R.Civ.P. 56(c); Mitchell v. Data Gen. Corp., 12
F.3d 1310, 1315-16 (4th Cir. 1993). If a party fails to make
a showing sufficient to establish the existence of an
essential element on which that party will bear the burden of
proof at trial, summary judgment is proper. Celotex Corp.
v. Catrett, 477 U.S. 317, 322-23 (1986).
reviewing a motion for summary judgment, the court does not
evaluate whether the evidence favors the moving or nonmoving
party, but considers whether a fair-minded jury could return
a verdict for the nonmoving party on the evidence presented.
Anderson, 477 U.S. at 252. In undertaking this
inquiry, the court views all facts and makes all reasonable
inferences in the light most favorable to the nonmoving
party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio
Corp., 475 U.S. 574, 587 (1986). The nonmoving party,
however, may not rest on its pleadings, but must show that
specific, material facts exist to create a genuine, triable
issue. Celotex, 477 U.S. at 324. A
“scintilla” of evidence in favor of the nonmoving
party, however, is insufficient to prevent an award of
summary judgment. Anderson, 477 U.S. at 252.
Further, “mere speculation” by the nonmoving
party or the “building of one inference upon
another” cannot create a genuine issue of material
fact. Cox v. Cnty. of Prince William, 249 F.3d 295,
299-300 (4th Cir. 2001). Summary judgment should be denied
only where a court concludes that a reasonable jury could
find in favor of the nonmoving party. Anderson, 477
U.S. at 252.