Blue Bird Cab Co., Inc. v. Amalgamated Cas. Ins. Co.

• Decision Date: 01 September 1995
• Docket Number: No. 1015,1015
• Citation: 675 A.2d 122,109 Md.App. 378
• Parties: BLUE BIRD CAB CO., INC. v. AMALGAMATED CASUALTY INSURANCE COMPANY. ,
• Court: Court of Special Appeals of Maryland

Page 378

109 Md.App. 378

675 A.2d 122

BLUE BIRD CAB CO., INC. v. AMALGAMATED CASUALTY INSURANCE COMPANY.

No. 1015, Sept. Term, 1995.

Court of Special Appeals of Maryland.

April 2, 1996.

Reconsideration Denied May 28, 1996.

Gregory K. Wells (John M. Smallwood and Smallwood, Wells & Pugh, P.A., on the brief), Largo, for appellant.

Samuel M. Forstein (Robert J. Gage, Mark E. Plotkin, Covington & Burling and Mark A. Gilder, on the brief), Washington, DC, for appellee.

Argued before FISCHER, CATHELL and SALMON, JJ.

SALMON, Judge.

This case began on May 22, 1990, when Margaret C. Streett filed suit in the Circuit Court for Prince George's County against Blue Bird Cab Company, Inc. ("Blue Bird") and Juliette Lamont. Ms. Streett alleged that she had been injured while a passenger in a Blue Bird taxicab driven by Ms. Lamont on August 4, 1989. Blue Bird requested that its insurance carrier, Amalgamated Casualty Insurance Company ("Amalgamated"), defend it and provide coverage for any liability as a result of the accident. Appellee Amalgamated denied coverage. Blue Bird filed a Third Party Complaint for Declaratory Judgment against Amalgamated on April 10, 1991, requesting that the circuit court declare "that Blue Bird Cab Co., Inc., is covered under the Insurance Policy issued by Amalgamated Casualty Insurance Company for any loss resulting from the Complaint filed [by Ms. Streett] and that Amalgamated is responsible for the defense of this action."

The court heard evidence on the third-party complaint on April 8, 1993. At the close of Blue Bird's case, the trial judge entered a judgment in favor of Amalgamated, stating, "I have to conclude that [Blue Bird] ha[s] not succeeded in establishing that there was insurance coverage existing under the policy of insurance with Amalgamated Casualty Insurance Company." Blue Bird appeals from this decision and presents four questions for our resolution:

I. Is the Amalgamated insurance policy ambiguous?

II. Did Amalgamated waive enforcement of exclusion (g), which excludes coverage when a taxicab is driven by someone who is not listed as an additional named insured?

III. Is exclusion (g) void as against public policy?

IV. Is exclusion (g) valid as to coverage above the statutory minimum prescribed by the compulsory insurance law?

We answer the first two questions in the negative, and the second two in the affirmative.

FACTS

Ms. Lamont was hired by Blue Bird in August 1988 as a taxicab driver-operator. At the April 8, 1993, trial on the declaratory judgment claim, Stanley Bretner, president of Blue Bird, testified that, on the day Ms. Lamont was hired, he instructed her to go to the Amalgamated offices for approval and listing as an additional named insured on Blue Bird's taxicab liability insurance policy. Mr. Bretner further testified that shortly thereafter he received a telephone confirmation from Amalgamated that Ms. Lamont had been approved as a driver. ¹

The policy at issue provided:

III. PERSONS INSURED

Each of the following is an insured under this insurance ...:

(a) the named insured, and

(b) any other individual named as an additional named insured in the declarations or endorsements issued to form a part of this policy, provided each person holds a valid license to operate a taxicab.

The named insured under the policy was Blue Bird. The term "insured" is defined in the policy as "a person described above under 'Persons Insured.' "

The policy declaration dated September 20, 1988, listed as insured 157 vehicles, ² for which Blue Bird was charged a premium of either $93.79 or $101.44 for each per month. The same policy listed 150 drivers as additional named insureds. ³

Exclusion (g) states that the policy does not apply "while the automobile is being driven by a natural person not named in the declarations or endorsements issued to form a part of this policy." Finally, the cover page of the policy declares: "NOTICE: The names of any person who operates your vehicle must be provided to the insurance company and listed on this policy."

On May 17, 1988, Amalgamated sent Blue Bird a letter reminding it that "the names of any and all drivers must be provided to the insurance company for processing; otherwise, there is no coverage under the policy." On October 27, 1988, Amalgamated sent a similar letter stating, "the names of any and all drivers must be provided to the insurance company, and the list must be kept current; otherwise there is no coverage under the policy." (Emphasis in the original.) Mr. Bretner testified that he was aware that a driver had to be listed to be covered.

According to Mr. Bretner's testimony, once Blue Bird sent a potential driver to Amalgamated for approval, Amalgamated never sent written confirmation. Instead, Amalgamated would phone Blue Bird with its approval. Blue Bird would, however, receive, albeit at irregular intervals, declaration pages to the policy that listed the names of all drivers approved by Amalgamated as additional named insureds. Blue Bird received updated declaration pages dated September 6, 1988 and September 20, 1988, but Ms. Lamont's name did not appear on either list. Blue Bird received no lists in 1989 until three months after the accident. There is no dispute that Ms. Lamont's name never appeared on a declaration page listing additional named insureds under the policy.

On August 4, 1989, Ms. Lamont was involved in an accident while driving a Blue Bird taxicab. Her passenger, Ms. Streett, was severely injured. Ms. Streett sued Ms. Lamont and Blue Bird, as noted above. Blue Bird filed a cross-claim for indemnification against Ms. Lamont. The tort action went to trial in front of a jury on October 26, 1994. The jury returned a verdict of $415,000 in favor of Ms. Streett. The trial judge entered judgment in favor of Blue Bird on the cross-claim. While post-judgment motions were pending, Blue Bird settled the action that Ms. Streett had filed against it. ⁴ Blue Bird then filed this timely appeal.

DISCUSSION

I.

Blue Bird asks us to determine whether the insurance policy issued to it by Amalgamated was ambiguous. Blue Bird asserts that exclusion (g) is "clearly ambiguous" because it is not "clear if this exclusion applies to both the named insured, as well as the driver operator."

"We have made it clear that where an insurance company, in attempting to limit coverage, employs ambiguous language, the ambiguity will be resolved against it as the one who drafted the instrument, as is true in the construction of contracts generally." Haynes v. American Casualty Co., 228 Md. 394, 400, 179 A.2d 900 (1962). Where there is no ambiguity in an insurance contract, however, the Court has no alternative but to enforce the policy's terms. Howell v. Harleysville Mut. Ins. Co., 305 Md. 435, 505 A.2d 109 (1986).

We see no ambiguity in the language of the policy. The exclusion plainly applies to both Blue Bird and any natural person who is not listed as an additional named insured in the declaration.

II.

Blue Bird also argues that Amalgamated waived the condition that a driver be listed as an additional named insured. Blue Bird contends that it sent Ms. Lamont to Amalgamated to be listed and that it received confirmation of her approval by phone. Blue Bird further contends that Amalgamated's practice of never sending a written confirmation of a listing constitutes a waiver of the exclusion, even though it would receive, at irregular intervals, declaration pages, which purported to list all additional named insureds. Blue Bird argues that it was "led to believe that [it was] following the standard procedures in order to list Lamont as an additional named insured."

Waiver is "the intentional relinquishment of a known right, or such conduct as warrants an inference of the relinquishment of such right, and may result from an express agreement or be inferred from circumstances." Food Fair Stores, Inc. v. Blumberg, 234 Md. 521, 531, 200 A.2d 166 (1964), quoted in GEICO v. Medical Servs., 322 Md. 645, 650, 589 A.2d 464 (1991). "Any acts or conduct of the insurer or its representatives, that are, under the circumstances, calculated to mislead the insured and to induce him to believe that performance of the condition will not be required, or that proofs of loss would be ineffectual and nugatory, will, if he is thereby misled, amount to a waiver." Citizen's Mut. Fire Ins. Co. v. Conowingo Bridge Co., 113 Md. 430, 440, 77 A. 378 (1910).

There was no action by Amalgamated that can be construed as evidencing an intent not to enforce the additional named insured exclusion. According to Mr. Bretner, he sent Ms. Lamont to Amalgamated for approval in August of 1988. Amalgamated sent Blue Bird two declaration sheets listing additional named insureds in September 1988, neither of which listed Ms. Lamont as an insured. The cover page of the policy in question notifies the insured that the "name of any person who operates your vehicle must be provided to the insurance company and listed on this policy." (Emphasis added.) We find that the trial judge was correct in rejecting appellant's argument that it had proven a waiver in this case.

III.

Blue Bird also argues that exclusion (g) is void as against public policy and should not be enforced to deny coverage.

The Maryland statutory insurance scheme requires, with a few narrow exceptions, that every owner of a registered motor vehicle maintain liability coverage for personal injury of $20,000 for any one person, $40,000 for any accident, and $10,000 for property damage. Md.Code (1977, 1992 Repl.Vol.) § 17-103(b) of the Transportation Article. ⁵ The required insurance attaches to automobiles, not to persons. Neale v. Wright, 322 Md. 8, 14, 585 A.2d 196 (1991). The Maryland Code also requires that every owner of a registered motor vehicle maintain personal injury protection (PIP) benefits of $2,500, and uninsured motorist (UM) insurance in specified minimum amounts. Md.Code (1957,...