Benning v. Allstate Ins. Co.

• Decision Date: 01 September 1991
• Docket Number: No. 818,818
• Parties: Patricia A. BENNING, et al., v. ALLSTATE INSURANCE COMPANY. ,
• Court: Court of Special Appeals of Maryland

Page 592

90 Md.App. 592

602 A.2d 233

Patricia A. BENNING, et al., v. ALLSTATE INSURANCE COMPANY.

No. 818, Sept. Term, 1991.

Court of Special Appeals of Maryland.

March 2, 1992.

David M. Kopstein (Dross & Levenstein, on the brief), Washington, D.C., for appellant Benning.

Pamela J. Mooney, pro se.

Mary S. Akerley (Sasscer, Clagett & Bucher, on the brief), Upper Marlboro, for appellee.

Argued before WILNER, C.J., and CATHELL and MOTZ, JJ.

WILNER, Chief Judge.

On February 4, 1989, Patricia Benning, while a passenger in a car being driven by her sister Pamela, was severely injured when the car went out of control and hit a pole. Pamela was insured at the time under a policy issued by Allstate Insurance Company. The policy provided coverage for bodily injury claims up to $100,000 but contained a partial "household exclusion," which limited coverage to $20,000 for bodily injury claims made by "any person related to an insured person ... and residing in that person's household." Residence was defined in the policy as "the physical presence in your household with the intention to continue living there." ("your" emphasized in original; other emphasis supplied.)

Through counsel, Patricia informed Allstate that she was asserting a claim against Pamela. Allstate, apparently, did not contest that the accident was covered under the policy or that Patricia's injuries would support a claim for more than $20,000. Because at the time of the accident Patricia was living in the same home as Pamela, however, Allstate took the position that the household exclusion applied; it offered to settle the claim for $20,000. Contending that she was but a temporary resident in Pamela's home and did not, at the time of the accident, intend to continue living there, Patricia rejected both Allstate's position that the household exclusion applied and its offer. Instead of rushing to sue her sister, however, Patricia filed suit against Allstate in the Circuit Court for Charles County seeking a declaratory judgment that the household exclusion did not apply to her and that the policy therefore covered her claim up to $100,000. That suit was filed on July 18, 1990.

After an exchange of discovery focusing on Patricia's living arrangements, Allstate, on March 22, 1991, moved for summary judgment, or, in the alternative, for dismissal, principally on the basis that Patricia had no standing to bring the action. That defense was based on Butler v. Liberty Mut. Ins. Co., 36 Md.App. 684, 375 A.2d 576 (1977), where we concluded that a declaratory judgment action will not lie by a claimant against an alleged tortfeasor's insurer to resolve a dispute as to the tortfeasor's coverage until the claimant has obtained a judgment against the tortfeasor.

On April 8, 1991, eighteen days prior to the date scheduled for trial of the action, Pamela filed a motion to intervene in the case, asserting, among other things, that she wanted Allstate to compensate her sister but did not want to be sued by her. She did not concede, either in her motion or in the proposed complaint attached to her motion, that she was negligent or otherwise responsible for the accident or would have any liability to her sister. Pamela supported Patricia's assertion that the household exclusion in the policy did not apply. Concomitantly, Patricia responded to Allstate's motion, contending that Pamela's intervention would "cure" the standing problem and that, if Pamela were allowed to intervene, Patricia could remain in the case "as a co-plaintiff."

The complaint, Allstate's motion, and Pamela's motion to intervene all came before the court on April 26, 1991, the previously scheduled trial date. Although Pamela asked the court to deal with her motion first, the court began (and ended) with Allstate's motion. After hearing argument, including a concession by Patricia that the motion was well-founded and that, had Patricia known of the Butler case, she never would have brought the action, the court granted the motion. The effect of that was to put Patricia, the only plaintiff then in the case, out of court. The court then decided that it did not need to address Pamela's motion because there was no case pending in which she could intervene. Both Patricia and Pamela have appealed.

Patricia's Appeal

Patricia acknowledges in her brief that the judgment entered with respect to her was correct. She concedes that her case is controlled by Butler, and she tells us that the soundness of that decision "is not now being questioned." The law is clear that the right to appeal may be lost by "acquiescence in, or recognition of, the validity of the decision below from which the appeal is taken...." Franzen v. Dubinok, 290 Md. 65, 68, 427 A.2d 1002 (1981), quoting from Rocks v. Brosius, 241 Md. 612, 630, 217 A.2d 531 (1966). That is certainly the case here. We shall therefore dismiss Patricia's appeal.

Pamela's Appeal

Pamela's appeal stands in a different posture. The effect of the court's failure to address her motion to intervene was a denial of the motion. Denial of intervention, whether claimed as of right or as permissive, is an appealable final order. Maryland Life & Health Ins. v. Perrott, 301 Md. 78, 87, 482 A.2d 9 (1984). Her appeal, therefore, is a procedurally proper one.

As we indicated, the court declined to address Pamela's motion on the ground that, having dismissed Patricia's complaint, there was no pending action in which Pamela could intervene. Technically, of course, that was correct, but it does not end the inquiry. It simply recasts the issue as whether the court abused its discretion in addressing Allstate's motion to dismiss Patricia's complaint before considering Pamela's motion to intervene.

The Maryland Rules are designed, and are directed to be construed, "to secure simplicity in procedure, fairness in administration, and elimination of unjustifiable expense and delay." Md.Rule 1-201(a). Those objectives, we believe, must also govern the exercise of the court's discretion in dealing generally with proceedings before it. The effect of the procedure used by the court here was to deny Pamela's motion whether or not it had merit and to force her, if she chose to pursue her action against Allstate, to file another lawsuit with all of the cost, delay, and inconvenience attending that course. ¹ We see absolutely no virtue in that approach, only mischief. If the court believed that Pamela did not meet the standards for either mandatory or permissive intervention under Md.Rule 2-214, it should have so ruled and denied her motion on that basis. If, on the other hand, Pamela did meet the standards for intervention and should have been made a party-plaintiff, then the procedure used became simply a device to deny her a right to which she was entitled. In either event, the procedure chosen secured neither simplicity in procedure, fairness in administration, nor the elimination of unjustifiable expense and delay; indeed, it achieved quite the opposite. We therefore conclude that the court abused its discretion in failing to address Pamela's motion to intervene before acting upon Allstate's motion to dismiss Patricia's complaint.

We turn then to consider whether the motion was one that should or could have been granted.

Intervention is dealt with in Md.Rule 2-214. Both § (a) of the Rule, dealing with intervention as of right, and § (b), dealing with permissive intervention, allow intervention only upon "timely motion." Allstate's first defense to Pamela's motion was that it was untimely. It was filed eight and a half months after the initial complaint, after discovery had been completed between Allstate and Patricia, and only 18 days before scheduled trial. As Allstate pointed out, Pamela and Patricia resided in the same household, and so no claim could be made (or was made) that Pamela was unaware of the action. On the other hand, Patricia, supporting Pamela's motion, noted that Pamela's intervention would "cure" the standing problem asserted by Allstate with respect to Patricia's complaint and that "It is important to note that Allstate has already conceded that Pamela was negligent and has further conceded that Patricia's medical expenses alone exceeded $20,000. Therefore, regardless of what other defenses Allstate might raise on Pamela's behalf in a tort suit, it is clear that the major obstacle to the settlement of Patricia's claim against Pamela is the resolution of the dispute regarding Pamela's coverage. In all likelihood, the substantial expenditure of the resources of the Court and of the parties that would be necessitated by a tort suit can be avoided by a prior resolution of the coverage dispute."

In Montgomery Co. v. Ian Corp., 282 Md. 459, 465, 385 A.2d 80 (1978), the Court decided that the timeliness requirement in the Maryland Rule should be construed and applied in accordance with the standards announced for the analogous Fed.Rule Civ.Proc. 24 in NAACP v. New York, 413 U.S. 345, 365-66, 93 S.Ct. 2591, 2602-03, 37 L.Ed.2d 648 (1973), to wit:

"If [the motion] is untimely, intervention must be denied. Thus, the court where the action is pending must first be satisfied as to timeliness. Although the point to which the suit has progressed is one factor in the determination of timeliness, it is not solely dispositive. Timeliness is to be determined from all the circumstances. And it is to be determined by the court in the exercise of its sound discretion; unless that discretion is abused, the court's ruling will not be disturbed on review."

See also Hartford Ins. Co. v. Birdsong, 69 Md.App. 615, 623-26, 519 A.2d 219 (1987).

As we pointed out in Birdsong, timeliness is a threshold issue that must be resolved before considering the merits of the motion. Clearly, the Circuit Court did not resolve that question. Because a ruling on timeliness is a discretionary call with the circuit court, we would, ordinarily, remand the matter for the court to exercise its...