Geico Gen. Ins. Co. v. United Servs. Auto. Ass'n

GEICO GENERAL INSURANCE COMPANY v. UNITED SERVICES AUTOMOBILE ASSOCIATION

No. 2247

COURT OF SPECIAL APPEALS OF MARYLAND

September Term, 2015

July 12, 2018

Circuit Court for Prince George's County

Case No. CAL 14-19692

UNREPORTED

Kehoe, Berger, Harrell, Glenn T., Jr. (Senior Judge, Specially Assigned) JJ.

Opinion by Kehoe, J.

*This is an unreported opinion, and it may not be cited in any paper, brief, motion or other document filed in this Court or any other Maryland Court as either precedent within the rule of stare decisis or as persuasive authority. See Md. Rule 1-104 This insurance coverage disputes pits GEICO General Insurance Company against United Services Automobile Association. At issue is how the uninsured/underinsured ("UM/UIM") provisions in each company's policy apply to injuries suffered by Linda Wright as a result of a motor vehicle accident in 2013. The Circuit Court for Prince George's County entered a declaratory judgment stating that the two insurers were obligated to pay benefits on a pro rata basis. GEICO has appealed. We will vacate the judgment of the circuit court and remand this case for further proceedings.

Background

In 2013, Wright was a passenger in an automobile that was involved in an accident with a vehicle driven by Ravindra Saboji. Wright suffered serious injuries. The parties do not dispute that Saboji was at fault.

The vehicle in which Ms. Wright was riding was owned by Ellen Ware. At the time, Ware had an automobile liability policy issued by USAA. Wright was insured by GEICO. Both policies provided UM/UIM coverage. The USAA policy had a maximum UM/UIM limit of $100,000. The limit in the GEICO policy was $300,000.

Ms. Wright filed a civil action against Saboji and GEICO, asserting a negligence claim against Saboji, and a breach of contract claim against GEICO. The latter claim was based upon GEICO's alleged refusal to pay benefits pursuant to the UM/UIM provisions in her policy. Ms. Wright filed an amended complaint joining USAA as an additional defendant and asserting a claim for UM/UIM benefits. USAA filed a cross-claim against GEICO,seeking a declaratory judgement as to the respective obligations of each insurer under the UM/UIM provisions in each policy.

We won't belabor the procedural history. The coverage dispute came before the circuit court by means of a motion for summary judgment filed by USAA. The arguments made by the parties to the circuit court are essentially the same as those made on appeal, and we will summarize them later. The court issued a declaratory judgment that stated in relevant part (emphasis added):

should the jury or any other finder-of-fact return a verdict for monetary damages in excess of the Defendant Ravindra Saboji's insurance policy, [USAA] and GEICO . . . are obligated to compensate [Wright] for uninsured/under-insured motorist benefits on a pro rata basis with [USAA] bearing one-third (1/3) of any excess obligation and GEICO . . . bearing two-thirds of any excess obligation (up to the limits of coverage).

Wright entered into a settlement with Saboji, and her claim against him was dismissed with prejudice. The declaratory judgment was entered as the final judgment in the case and this appeal followed.

Analysis

We review de novo a circuit court's decision to grant summary judgment. Payne v. Erie Ins. Exchange, 442 Md. 384, 391 (2015).

A Summary of the Parties' Contentions

The parties agree that UM/UIM coverage is available to Ms. Wright under both the GEICO and USAA Policies, because she was an "insured" under the GEICO policy and a "covered person" under the USAA policy. The dispute is whether one policy, but not theother, must provide primary UM/UIM coverage or whether both policies concurrently provide primary coverage on a pro rata basis. GEICO argues that USAA is the primary carrier, so GEICO's responsibilities begin only when USAA's policy limit is exhausted. USAA contends that both insurers are primary carriers and that their liability is pro rata based upon the respective policy limits. The circuit court agreed with USAA.

GEICO's argument is based upon its reading of § 19-513 of the Insurance Article ("IA") of the Maryland Code, which it asserts is controlling. Its analysis begins with § 19-513(c), which explicitly provides that, in cases like the present one, the primary carrier for purposes of personal injury protection ("PIP") is the insurer of the motor vehicle which the injured person was occupying at the time of the accident. GEICO concedes that there is no provision in § 19-513 that clearly states that the same rule applies in UM/UIM cases. But, GEICO suggests, the language of § 19-513(d) points to the same result by necessary and unavoidable implication. As an alternative contention, GEICO posits that a reading of the relevant parts of the UM/UIM portions of its policy and the USAA policy points to the same conclusion.

USAA takes the position that it is the law of Maryland that courts should look to policy language to resolve disputes between parties "as to what, and from which company, coverage is to be made available." USAA states that the relevant language in both policies, properly interpreted, points to the conclusion that both carriers have primary coverage and that they are therefore required to compensate Ms. Wright pro rata according to the maximum limits in the UM/UIM provisions of each policy. In USAA's mind, § 19-513(d)does not affect the result, because GEICO asks us "for all intents and purposes, to set forth new law which prescribes instances not explicitly set forth in section (d), where an insurer of a motor vehicle would be obligated to provide primary coverage for uninsured/underinsured benefits to an injured party."

Both parties, of course, cite reported decisions of appellate courts, both of Maryland and elsewhere, to support their positions. Both agree, however, that there is no case that directly addresses the meaning of § 19-513 in UM/UIM cases.

In our view, GEICO has the better argument. Subtitle 5 of Title 19 of the Insurance Article pertains to mandatory coverages. Section 19-513 prohibits duplicative and supplemental recoveries from multiple insurers from the coverages required by Subtitle 5.¹ As we will now explain, we read § 19-513 in much the same way as does GEICO.

1. IA § 19-513

In assessing GEICO's statutory argument, we will apply well-settled principles of statutory construction. The Court of Appeals has recently explained:

The cardinal rule of statutory interpretation is to ascertain and effectuate the intent of the Legislature. Statutory construction begins with the plain language of the statute, and ordinary, popular understanding of the English language dictates interpretation of its terminology. In construing the plain language, a court may neither add nor delete language so as to reflect an intent not evidenced in the plain and unambiguous language of the statute; nor may it construe the statute with forced or subtle interpretations that limitor extend its application. Statutory text should be read so that no word, clause, sentence or phrase is rendered superfluous or nugatory. . . . It is also clear that we avoid a construction of the statute that is unreasonable, illogical, or inconsistent with common sense.

We analyze the contested provisions of Maryland's Insurance Article in the context of the statutory scheme and construe the plain language so that the various sections of the article do not conflict with one another. . . . In addition, the meaning of the plainest language is controlled by the context in which it appears. As this Court has stated, because it is part of the context, related statutes or a statutory scheme that fairly bears on the fundamental issue of legislative purpose or goal must also be considered. Thus, not only are we required to interpret the statute as a whole, but, if appropriate, in the context of the entire statutory scheme of which it is a part.

Woznicki v. GEICO Gen. Ins. Co.,443 Md. 93, 108-09 (2015) (quoting Stickley v. State Farm Fire & Cas. Co., 431 Md. 347, 358-59 (2013) (citations and quotations omitted in Woznicki)).

IA § 9-513 states in pertinent part (emphasis added):

(a) This section does not prohibit a nonprofit health service plan or an authorized insurer, with the approval of the Commissioner, from providing medical, hospital, and disability benefits in connection with motor vehicle accidents.

(b) (1) Notwithstanding any other provision of this subtitle, a person may not recover benefits under the coverages described in §§ 19-504,² 19-505,³19-509,⁴ 19-509.1,⁵ and 19-512⁶ of this subtitle from more than one motor vehicle liability insurance policy or insurer on a duplicative basis.

(2) Except as provided in § 19-509.1 of this subtitle, and notwithstanding any other provision of this subtitle, a person may not recover benefits under the coverages described in §§ 19-504, 19-505, 19-509, and 19-512 of this subtitle from more than one motor vehicle liability insurance policy or insurer on a supplemental basis.

(c) (1) The insurer of a motor vehicle for which the coverage described in § 19-505 of this subtitle is in effect shall pay the benefits described in § 19-505 of this subtitle to an individual who is injured in a motor vehicle accident:

(i) while occupying the insured motor vehicle;

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(d)(1) The insurer under a policy that contains the coverages described in §§ 19-505 and 19-509 of this subtitle shall pay the benefits described in §§ 19-505 and 19-509 to an individual insured under the policy who is injured in a motor vehicle accident:

(i) while occupying a motor vehicle for which the coverages described in §§ 19-505 and 19-509 of this subtitle are not in effect;

(ii) by a motor vehicle for which the coverages described in §§ 19-505 and 19-509 of this subtitle are not in effect as a pedestrian, while in, on, or alighting from a vehicle powered by animal or muscular power, or while on or alighting from an animal.

• • •

(2) Benefits payable under paragrap

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