Circuit Court for Anne Arundel County Case No.
Arthur, Beachley, Zarnoch, Robert A. (Senior Judge, Specially
consolidated appeals arise from a motor vehicle accident
involving appellant, Margaret Shilling, and an underinsured
motorist tortfeasor. Ms. Shilling's underinsured motorist
provider (UIM), appellee Nationwide, gave its permission to
Ms. Shilling to settle her claim with the tortfeasor and
waived subrogation on April 23, 2013. Ms. Shilling ultimately
agreed to accept the tortfeasor's insurance policy limits
of $20, 000 and executed a release in favor of the tortfeasor
and the tortfeasor's insurer on February 3, 2014. On
September 23, 2016, Ms. Shilling filed a complaint against
Nationwide in the Circuit Court for Anne Arundel County,
asserting that Nationwide was liable under the UIM provisions
of its insurance policy for damages in excess of the $20, 000
settlement with the tortfeasor's insurer. Nationwide
moved to dismiss based on limitations. The circuit court
granted Nationwide's motion, finding that Ms.
Shilling's claim was untimely because the statute of
limitations started to run on Ms. Shilling's UIM claim
when Nationwide consented to the settlement on April 23,
2013. After Ms. Shilling filed her first appeal, the parties
jointly moved to stay the appeal and remand the case to the
circuit court to determine the "date of exhaustion"
of the tortfeasor's liability insurance. This Court
granted the motion and stayed the appeal. On remand, the
circuit court again agreed with Nationwide, finding that the
date of exhaustion was April 23, 2013. Ms. Shilling then
noted this second appeal, which we consolidated with her
consolidate Ms. Shilling's questions presented for review
into a single question:
Did the circuit court err in holding that the statute of
limitations on Ms. Shilling's UIM claim against
Nationwide began running on April 23, 2013, the date on which
Nationwide gave Ms. Shilling permission to settle with the
answer "yes" to that question, reverse the circuit
court's judgment, and remand to that court for further
April 19, 2011, Ms. Shilling was involved in a motor vehicle
accident with an underinsured tortfeasor at or near
Gambrills, Maryland. On April 14, 2013, the tortfeasor's
insurance company offered Ms. Shilling the maximum amount of
liability coverage available under its policy - $20, 000 - as
full and final settlement of her claims against the
tortfeasor. Nine days later, on April 23, 2013, Nationwide
agreed to the proposed settlement and waived its subrogation
rights against the tortfeasor. Approximately ten months
later, on February 3, 2014, Ms. Shilling signed a "Full
Release of All Claims and Demands"
("Release"), thereby releasing the tortfeasor and
the tortfeasor's insurance company in exchange for
payment of the $20, 000 policy limit. Ms. Shilling's
attorney deposited the settlement check into his escrow
account on February 14, 2014.
January 26, 2015, Ms. Shilling sent a letter to Nationwide to
start settlement negotiations for her underinsured motorist
claim. Nationwide acknowledged receipt of Ms. Shilling's
letter on February 2, 2015, and four days later requested
additional information to assist with review of her claim.
The record shows multiple telephone conversations between Ms.
Shilling's attorney and Nationwide between February and
June 2015 concerning the status of Ms. Shilling's UIM
claim. On September 23, 2016, Ms. Shilling filed a complaint
against Nationwide in the Circuit Court for Anne Arundel
County alleging that Nationwide, under its UIM coverage, owed
her damages she sustained in excess of the $20, 000
settlement with the tortfeasor's insurance company.
Nationwide moved to dismiss, asserting that Ms.
Shilling's UIM claim was barred by limitations. According
to Nationwide, the statute of limitations for Ms.
Shilling's claim started running on April 23, 2013 - the
date Nationwide consented to settlement and waived
subrogation - and expired on April 23, 2016, five months
before Ms. Shilling filed suit in the circuit court.
hearing, the circuit court granted Nationwide's motion to
dismiss. The court found that "[o]n April 23, 2013 a
contract was formed by the settlement agreement in this case.
. . . Thus, if [Ms. Shilling] believed there was a breach by
[Nationwide], [Ms. Shilling] needed to file suit by April 23,
2016." Because Ms. Shilling did not file suit until
September 23, 2016, the circuit court determined that her
suit was time-barred.
Shilling filed a timely appeal. On January 10, 2018, Ms.
Shilling and Nationwide filed a joint motion to stay the
appeal and remand to the circuit court to determine
"whether the date of exhaustion of the tortfeasor's
policy limits is the date that the underinsured insurer
consents to the settlement with the tortfeasor or the date
the Release with the tortfeasor is signed or the check for
the underlying policy limits is deposited." This Court
granted the motion and stayed the appeal.
to the stay, the circuit court held a hearing on February 28,
2018. Although no testimony or other evidence was adduced at
the hearing, the parties agreed that: 1) Nationwide consented
to the settlement and waived subrogation on April 23, 2013;
2) Ms. Shilling executed the Release and settled with the
tortfeasor's insurer on February 3, 2014; 3) Ms.
Shilling's attorney deposited the settlement check into
his escrow account on February 14, 2014; and 4) Ms. Shilling
filed suit against Nationwide on September 23, 2016. Between
April 2013 and February 2014, Ms. Shilling claimed that she
investigated whether the tortfeasor had other insurance
policies that could potentially provide additional coverage
for her claim. Her attorney argued that
we could not accept the settlement [without checking for
other potential policies] because . . . if we do, then we are
in the worst of both situations and we just committed
malpractice where we have no recourse against the tortfeasor
because we have settled and a general release would settle .
. . those other claims.
Shilling asserted that, if she were to sign a release in
favor of the tortfeasor where the tortfeasor had other
available liability coverage, she would not be able to pursue
a UIM claim against her insurer. Ms. Shilling therefore
argued that the date she signed the Release in favor of the
tortfeasor started the running of limitations.
continued to maintain that limitations began to run on April
23, 2013, when Nationwide consented to Ms. Shilling's
settlement with the tortfeasor and waived any potential
subrogation claim. Nationwide rejected Ms. Shilling's
claim that limitations did not begin until she signed the
Release on February 3, 2014, reasoning that such a rule would
place "all the power in [Ms. Shilling's hand] . . .
because [she] could hypothetically wait 2, 6, 10 years to
actually execute that release." It contended that
"there has been a settlement as soon as the underinsured
carrier consents because you are asking for their consent to
settle." In Nationwide's view, Ms. Shilling had
three years to find any additional coverage available to the
tortfeasor and should not "get an additional year or two
years because [she did] not want to sign the release
April 30, 2018, the circuit court accepted Nationwide's
position concerning limitations and issued an order stating
that "in a claim for breach of an uninsured motorist
contract the date of the exhaustion of the tortfeasor's
policy is the date the insurer consented to settlement with
the tortfeasor." Because Nationwide consented to Ms.
Shilling's settlement and waived subrogation on April 23,
2013, the court ruled that Ms. Shilling's claim against
Nationwide was time-barred. After Ms. Shilling filed a second
timely appeal, we granted her motion to lift the stay and
consolidated the two appeals.
State of Uninsured/Underinsured Motorist Law
1972, the General Assembly enacted Maryland's uninsured
motorist statute. Woznicki v. GEICO Gen. Ins. Co.,
443 Md. 93, 109 (2015). The law has undergone multiple
changes, most notably expanding coverage to underinsured
motorists in 1981. Id. (noting that "the
General Assembly recognized 'uninsured motor
vehicles' as including 'underinsured motor
vehicles.'"). However, the purpose has remained
The purpose of the uninsured motorist statute is to provide
minimum protection for individuals injured by uninsured
motorists . . . [the] statute creates a floor to liability
not a ceiling. Consistent with the public policy of affording
minimal protection for innocent victims, an insured can
purchase a "higher amount of uninsured motorist
insurance which will become available when the insured's
uninsured motorist coverage, as well as his damages, exceed
the liability coverage of the tortfeasor."
Id. at 110 (internal citations omitted) (quoting
Erie Ins. Exch. v. Heffernan, 399 Md. 598, 612
(2007)). Because this coverage is remedial in nature, it is
"to be liberally construed to ensure that innocent
victims of motor vehicle accidents can be compensated for the
injuries they suffer as a result of such accidents."
Id. (quoting State Farm Mut. Auto. Ins. Co.
v. DeHaan, 393 Md. 163, 194 (2006)).
issue in the present case is Md. Code (1996, 2017 Repl.
Vol.), § 19-511 of the Insurance Article
("IA"). IA § 19-511 imposes obligations upon
the insurer after the insured provides his or her insurer a
copy of the tortfeasor's liability insurer's written
settlement offer pursuant to IA § 19-511(b). The statute
(c) Response to settlement offer. - Within 60 days
after receipt of the notice required under subsection (b) of
this section, the uninsured insurer ...