Gable v. Colonial Ins. Co. of California

• Citation: 548 A.2d 135,313 Md. 701
• Decision Date: 01 September 1987
• Docket Number: No. 27,27
• Parties: Tina Harness GABLE v. COLONIAL INSURANCE COMPANY OF CALIFORNIA. ,
• Court: Court of Appeals of Maryland

Page 701

313 Md. 701

548 A.2d 135

Tina Harness GABLE v. COLONIAL INSURANCE COMPANY OF CALIFORNIA.

No. 27, Sept. Term, 1987.

Court of Appeals of Maryland.

Oct. 13, 1988.

Marc J. Atas (Cohen, Dwin & Garfield, P.A., on the brief), Baltimore, for petitioner.

Edward J. Brown (Smith, Somerville & Case, on the brief), Baltimore, for respondent.

Argued before MURPHY, C.J., and ELDRIDGE, COLE, RODOWSKY, McAULIFFE, ADKINS and BLACKWELL, JJ.

ELDRIDGE, Judge.

Section 539(a) of the Maryland Insurance Code mandates that every motor vehicle insurance policy issued in this State shall provide minimum "medical, hospital and disability benefits" (known as "Personal Injury Protection" or "PIP" benefits). Maryland Code (1957, 1986 Repl.Vol., 1988 Cum.Supp.), Art. 48A, § 539(a). Under § 543(d) of the Insurance Code, however, the PIP benefits are to be reduced by the amount of benefits the recipient "has recovered ... under workmen's compensation laws." The question before this Court is whether a provision in a motor vehicle insurance policy providing for a reduction in PIP benefits by the amount the insured may be entitled to recover in the future under "workers' compensation law" is valid in light of the above statutory provisions. We hold that it is not.

The facts are not in dispute. On September 6, 1985, Tina Harness Gable, while in the course of her employment, was injured in an automobile accident. Ms. Gable filed a claim with the Workmen's Compensation Commission in September 1985. She did not pursue her claim, however, and has never received any benefits under the Workmen's Compensation Act. Ms. Gable then filed a claim for PIP benefits with her automobile insurer, Colonial Insurance Company of California. Colonial refused to pay because of a policy exclusion for injuries "occurring during the course of employment if benefits are payable or must be provided under a workers' compensation law or similar law." ¹

Ms. Gable brought this action in the District Court of Maryland, sitting in Baltimore County, to recover $978.55 in PIP benefits. After judgment was entered in favor of Colonial because of the policy exclusion, Ms. Gable appealed to the Circuit Court for Baltimore County. In the de novo appeal, the circuit court granted Colonial's motion for summary judgment, relying on the policy exclusion. Thereafter, this Court granted Ms. Gable's petition for a writ of certiorari which challenged the validity of the policy provision as applied under the circumstances of this case.

As previously noted, supra n. 1, both parties agree that the language of the Colonial insurance policy bars recovery of PIP benefits in the instant case. Nevertheless, if the policy provision, as applied to the facts of this case, is contrary to the Insurance Code, the provision is unenforceable. See, e.g., Lee v. Wheeler, 310 Md. 233, 528 A.2d 912 (1987); Hoffman v. United Services Auto. Ass'n, 309 Md. 167, 171-172, 174-179, 522 A.2d 1320 (1987); State Farm Mut. v. Nationwide Mut., 307 Md. 631, 636, 516 A.2d 586 (1986); Nationwide Mutual Ins. Co. v. Miller, 305 Md. 614, 620, 505 A.2d 1338 (1986); Jennings v. Government Employees Ins., 302 Md. 352, 356-357, 488 A.2d 166 (1985); Guardian Life Ins. v. Ins. Comm'r, 293 Md. 629, 643, 446 A.2d 1140 (1982); Nationwide Mutual Ins. v. Webb, 291 Md. 721, 436 A.2d 465 (1981); Pennsylvania Nat'l Mut. v. Gartelman, 288 Md. 151, 156, 416 A.2d 734 (1980). In our view the provision, as applied to PIP benefits and workmen's compensation benefits not yet recovered, is inconsistent with public policy as embodied in the Maryland Insurance Code. The statutory language allows a deduction from PIP benefits only for workmen's compensation benefits actually received.

Section 539(a) of the Insurance Code requires every motor vehicle liability insurance policy issued in Maryland to afford a minimum of $2,500 medical, hospital, and disability benefits. Section 543(d), however, specifies: "Benefits payable under the coverages required in [§ 539] ... shall be reduced to the extent that the recipient has recovered benefits under workmen's compensation laws of any state or the federal government." (Emphasis added).

The language of § 543(d) shows a legislative intent to provide offsets only for workmen's compensation benefits actually received and not for future benefits. The subsection provides for a deduction only for workmen's compensation benefits that the claimant "has recovered." The General Assembly drew a sharp distinction between workmen's compensation benefits which have been received and those benefits which have not. To allow a deduction for unrecovered benefits would insert an additional exception to the provision mandating PIP coverage. As a matter of statutory construction, where the Legislature has required specified coverages in a particular category of insurance, and has provided for certain exceptions or exclusions to the required coverages, additional exclusions are generally not permitted. Lee v. Wheeler, supra, 310 Md. at 239, 528 A.2d at 915; State Farm Mut. v. Nationwide Mut., supra, 307 Md. at 638, 516 A.2d at 589; Jennings v. Government Employees Ins., supra, 302 Md. at 358-359, 488 A.2d at 169-170; DeJarnette v. Federal Kemper Ins. Co., 299 Md. 708, 725, 475 A.2d 454 (1984); Pennsylvania Nat'l Mut. v. Gartelman, supra, 288 Md. at 156, 416 A.2d at 737.

Colonial chiefly relies upon State Farm Mut. v. Ins. Comm'r, 283 Md. 663, 392 A.2d 1114 (1978), asserting that "State Farm is directly on point." (Brief, p. 8). Nevertheless, it is the difference between recovered and unrecovered workmen's compensation benefits which makes the case at bar distinguishable from the State Farm case. In State Farm, the insured had received workmen's compensation benefits but later had reimbursed the workmen's compensation carrier when he received a settlement for his tort claim against a negligent third party. When the insured's own automobile insurance company reduced his PIP benefits by the amount he had received from, but later repaid to, the workmen's compensation carrier, he brought suit. This Court held that the automobile insurance carrier could offset the PIP benefits by the amount of the workmen's compensation benefits because the insured "had recovered" those workmen's compensation benefits. In reaching that conclusion, we stated (283 Md. at 671-672, 392 A.2d at 1118):

"The critical words in the statute are 'has recovered.' The general meaning in law of the verb 'to recover' is 'to get,' 'to obtain,' 'to come into possession of,' 'to receive.' Garza v. Chicago Health Clubs, Inc., 347 F.Supp. 955, 962 (N.D.Ill.1972); Covert v. Randles, 53 Ariz. 225, 231, 87 P.2d 488, 490 (1939); Swader v. Flour Mills Co., 103 Kan. 703, 704, 176 P. 143, 144-145 (1918); Black's Law Dictionary, p. 1440 (rev. 4th ed. 1968); Webster's New International Dictionary of the English Language, p. 2081 (2d ed. unabridged, 1961). In a narrower sense, 'to recover' means 'to succeed in a [legal] proceeding,' Webster's New International Dictionary of the English Language, supra, or 'to obtain in any legal manner in contrast to voluntary payment,' Black's Law Dictionary, supra. See also Union Petroleum S.S. Co. v. United States, 18 F.2d 752, 753 (2d Cir.1927), cert. denied, 274 U.S. 760, 47 S.Ct. 770, 71 L.Ed. 1338 (1927); Garza v. Chicago Health Clubs, Inc., supra, 347 F.Supp. at 962; Covert v. Randles, supra, 53 Ariz. at 231."

Under either definition of "has recovered" the insured in the present case, unlike the insured in State Farm, has not recovered any workmen's compensation benefits. See also Hines v. Potomac Elec. Power Co., 305 Md. 369, 376-377 504 A.2d 632 (1986); Smelser v. Criterion Ins. Co., 293 Md. 384, 444 A.2d 1024 (1982).

The contrast between the language of the Maryland statute and that of similar statutes in other states is further indication of the General Assembly's intent to allow offsets only for those workmen's compensation benefits which have been actually received. New York's no-fault statute, for example, states that benefits shall be reduced by "amounts recovered or recoverable on account of such injury under state or federal laws providing social security disability benefits, or workers' compensation benefits." N.Y.Ins.Law § 5102(b)(2) (Consol.1985) (emphasis added). Accord Conn.Gen.Stat.Rev. § 38-333, subd. [c] (1987) ("any amount paid or payable by virtue of any workers' compensation law shall be deducted"); Mich.Comp.Laws § 500.3109 (1983) ("Benefits provided or required to be provided under the laws of any state or the federal government shall be subtracted ..."); Minn.Stat.Ann. § 65B.61, subd. 2 (1986) ("If benefits are paid or payable under a workers' compensation law ... no disability income loss benefits are payable ..."); Utah Code Ann. § 31A-22-309 (1986) (benefits "are reduced by ... any benefits which that person receives or is entitled to receive ... under any workers' compensation ... plan").

A New York court pointed to the legislature's choice of the word 'recoverable' in holding that in New York an insurer may deduct the amount of workmen's compensation benefits upon a mere showing of their availability. Carlo Service Corp. v. Rachmani, 64 A.D.2d 579, 407 N.Y.S.2d 700, 701 (1978). Conversely, the absence of the word 'recoverable' in the Maryland statute indicates that in Maryland the insurer's right to offset workmen's compensation benefits is contingent upon their receipt.

Colonial Insurance Company also relies upon § 540(a) of the Maryland Insurance Code. Subsection (a) of § 540 states as follows:

"(a) Fault; collateral sources; coordination; subrogation.--The benefits required under § 539 of this subtitle shall be payable without regard to the fault or nonfault of the named insured or the recipient in causing or contributing to the accident, and without regard to any collateral source of medical, hospital, or wage continuation benefits. Where the insured has coverage for both the...