Bahn v. Chicago Motor Club Ins. Co.

• Decision Date: 01 September 1993
• Docket Number: No. 393,393
• Citation: 98 Md.App. 559,634 A.2d 63
• Parties: Allen K. BAHN, et ux. v. CHICAGO MOTOR CLUB INSURANCE COMPANY. ,
• Court: Court of Special Appeals of Maryland

Page 559

98 Md.App. 559

634 A.2d 63

Allen K. BAHN, et ux. v. CHICAGO MOTOR CLUB INSURANCE COMPANY.

No. 393, Sept. Term, 1993.

Court of Special Appeals of Maryland.

Dec. 10, 1993.

John G. Nalls (William J. Rowan, III and Rowan & Quirk, on the brief), Rockville, for appellants.

Elisabeth S. Rubin and Roger W. Titus (Venable, Baetjer & Howard, on the brief), Rockville, for appellee.

Argued before GARRITY, CATHELL and MOTZ, JJ.

MOTZ, Judge.

This appeal involves the question of whether a Maryland court has personal jurisdiction over a foreign automobile insurer sued by its own insured. The Circuit Court for Montgomery County held that it did not and so dismissed the claims of the insureds, appellants, Allen K. Bahn and his wife Sansherma Bahn, against the insurer, appellee, Chicago Motor Club Insurance Company (C.M.C.).

These claims arise out of a motor vehicle accident between Mr. Bahn and Loi H. Hang. On December 21, 1988, a vehicle driven by Mr. Hang smashed into a 1984 Volkswagen Rabbit driven by Mr. Bahn. Mr. Bahn sustained personal injuries and damage to his car, which was titled in the name of Lockheed Research, Inc., a family-owned business incorporated by Mr. Bahn and of which he was president. Lockheed is an Illinois corporation, and the car was titled and registered in that state under Lockheed's name. In 1985, however, Mr. and Mrs. Bahn moved to Maryland, brought the car with them, and then drove it in this State.

The insurer of the car, C.M.C., is incorporated in Illinois and licensed to do business only there and in Indiana. C.M.C. does not advertise in Maryland, maintains no agents in Maryland, and does not insure vehicles registered in Maryland. On February 11, 1986, after the Bahns had moved to Maryland, Mrs. Bahn, on behalf of Lockheed, obtained insurance from C.M.C. on the car. Mrs. Bahn supplied C.M.C. with Illinois addresses for both the mailing address and the place where the insured vehicle was "principally kept." Although Mr. Bahn swore in an affidavit that he advised C.M.C. "sometime in 1986, and certainly by January of 1987" that the new address of Lockheed was Gaithersburg, Maryland, between September, 1986 and October, 1987, the policy was twice renewed by C.M.C. and each renewal continued to reflect Illinois addresses.

In October, 1987, C.M.C. sent Lockheed a "Lapse of Coverage" notice, which C.M.C. mailed to one of Lockheed's Illinois addresses. The "Lapse of Coverage" notice stated:

This is to inform you that the required downpayment on your renewal policy has not been received, and your policy has expired at 12:00 a.m. standard time on the expiration date shown above [October 22, 1987].

In order to renew this policy, the required downpayment must be received in this office not later than: 11/02/87.

Upon receipt of this notice, the Bahns sent C.M.C., from Maryland, payment and the "Lapse of Coverage" notice, on which the Bahns had crossed out the Illinois mailing address and inserted as Lockheed's address: P.O. Box 850, Gaithersburg, Maryland 20877. C.M.C. then sent Lockheed, at the Gaithersburg address, a policy "declaration," dated November 23, 1987, for the policy period October 22, 1987 to April 22, 1988. The declaration contained the notation "policy renewed, change mailing address." ¹ C.M.C. sent Lockheed, at the Gaithersburg address, another insurance policy "declaration," dated April 21, 1988 for the policy period April 22, 1988 to October 22, 1988.

On October 24, 1988, a second "Lapse of Coverage Notice" was issued by C.M.C. and sent to Lockheed at the Gaithersburg address. This notice contained language identical to that set forth above and requested a "total renewal premium" of $655 by "no later than" November 2, 1988 "in order to renew this policy." A check dated October 22, 1988, in that amount was mailed by Lockheed from Maryland to C.M.C. and was cashed by C.M.C. on November 9, 1988. C.M.C. then sent Lockheed, at the Gaithersburg address, another policy "declaration" marked "policy renewed." This one was dated November 9, 1988 and covered the period October 22, 1988 to April 22, 1989; it was the renewal in effect at the time of Mr. Bahn's accident with Mr. Hang.

The policy provided that "the ordinary use of [the] vehicle" was "pleasure/less than 3 miles to work [in Illinois] one way." The policy at all times also provided This policy applies only to accidents, occurrences and losses during the policy period while the automobile is within the United States of America, its territories or possessions, or Canada, or is being transported between ports thereof.

Mrs. Bahn reported the December 21, 1988 accident to C.M.C. on the next day by telephone. In response to that report, C.M.C. sent a letter to Lockheed in Maryland requesting additional information and advising its insureds not to give statements concerning the accident to anyone other than authorized agents of C.M.C. Mr. Bahn later received a letter, dated June 15, 1989, from a representative of Johns Eastern Company, Inc., a Maryland corporation, indicating that he was the local claims adjuster for C.M.C. and requesting that Mr. Bahn contact him so that repairs could be initiated on the vehicle. An appraisal was done of the vehicle in Bethesda, Maryland by Reed Appraisers, Inc., a company located in Wheaton, Maryland and hired by C.M.C. On August 3, 1989, C.M.C. wrote to Lockheed advising that the vehicle was a total loss and making an offer of settlement on the property damage aspect of the accident. A settlement as to property damage was reached and C.M.C. mailed a check to Maryland payable to Mr. Bahn in the amount of $2,250.00 in March of 1991. On March 25, 1991, C.M.C. wrote to the attorney for the Bahns requesting signatures on medical and wage authorizations. C.M.C. accepted a property damage subrogation settlement from Geico Insurance Company in Maryland in the amount of $1,380.00 on August 21, 1991.

The insurance policy included an under-insured motorist endorsement that provided coverage up to $500,000 for any one person per accident. Mr. Hang also was insured at the time of the accident, but his policy provided a $20,000 limit of liability. Therefore, the Bahns demanded payment from C.M.C. for personal injury to Mr. Bahn and loss of consortium in the amounts suffered in excess of $20,000. C.M.C. refused payment.

On December 17, 1991, the Bahns filed a four-count complaint in the circuit court. Counts I and II (personal injury and loss of consortium, respectively) sought damages from Mr. Hang; Counts III and IV alleged that C.M.C. had breached its insurance contract by refusing to pay the Bahns damages for those injuries under the under-insured motorist coverage. Mr. Hang answered the complaint, asserting that he was not liable. C.M.C. filed a motion to dismiss for lack of personal jurisdiction.

After hearing argument of counsel, the circuit court dismissed ² Counts III and IV against C.M.C. for lack of personal jurisdiction. In finding that it had no jurisdiction over C.M.C., the circuit court reasoned:

[T]he essence of the dealings between the parties really came down to a billing situation. The Court finds that is not sufficient to establish jurisdiction in Maryland. The motion to dismiss on the basis claimed is granted.

Although Counts I and II remained against Mr. Hang, the Bahns moved, pursuant to Maryland Rule 2-602, to certify the judgment on the counts against C.M.C. as final, with no just reason for delay. The circuit court entered an order certifying the judgment as final, as requested. After entry of judgment in favor of C.M.C., the Bahns appealed. They present a single issue for our consideration:

Whether the court erred in dismissing Counts III and IV of appellant's complaint on the grounds of lack of personal jurisdiction over the appellee.

Before addressing this question, we examine the circuit court's certification of the judgment for immediate appeal pursuant to Md.Rule 2-602(b). That rule provides in pertinent part ... If the court expressly determines in a written order that there is no just reason for delay, it may direct in the order the entry of a final judgment:

(1) as to one or more but fewer than all of the claims or parties....

The order of the court below clearly is a final judgment within the scope of Md.Rule 2-602(b) in that it finally adjudicates the rights of one, but not all, of the parties. In addition, dismissal for lack of personal jurisdiction is a judgment that, absent the presence of multiple claims, is immediately appealable. See e.g., Camelback Ski Corp. v. Behning, 307 Md. 270, 513 A.2d 874, vacated and remanded, 480 U.S. 901, 107 S.Ct. 1341, 94 L.Ed.2d 512 (1987), opinion on remand, 312 Md. 330, 539 A.2d 1107 (1988). A trial court's exercise of its discretionary power to certify a final judgment for immediate appeal pursuant to Md.Rule 2-602(b) is, however, only to be exercised in the "very infrequent harsh case" in which an "early appellate decision of a particular point is of sufficient importance, or [in which] delay will produce sufficient hardship or unfairness, to outweigh the general policy against piecemeal appeals." Planning Board v. Mortimer, 310 Md. 639, 648, 530 A.2d 1237 (1987); see also Diener Enters. v. Miller, 266 Md. 551, 556, 295 A.2d 470 (1972); Allstate Ins. Co. v. Angeletti, 71 Md.App. 210, 219, 524 A.2d 798 (1987).

In moving for judgment pursuant to Md.Rule 2-602, the Bahns asserted:

Because of the nature of the case involved herein, Government Employees Insurance Company on behalf of the Defendant Hang has offered its $20,000 policy limits to settle Hang's potential liability. The Plaintiffs have refused to accept the offer, and cannot accept the offer until the issue of whether or not Chicago Motor Club Insurance Company is or is not properly before the Court is finally determined. If the Plaintiff settles with the Defendant Hang, and gives a release, the Plaintiffs may potentially be releasing any...