Bond v. Pennsylvania Nat. Mut. Cas. Ins. Co., 85

• Decision Date: 20 January 1981
• Docket Number: No. 85,85
• Parties: Patricia Marie BOND et al. v. PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY.
• Court: Maryland Court of Appeals

Page 379

289 Md. 379

424 A.2d 765

Patricia Marie BOND et al. v. PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY.

No. 85.

Court of Appeals of Maryland.

Jan. 20, 1981.

Susan S. Miller, Baltimore (Frederick Wm. Miller, Baltimore, on the brief), Patricia Marie Bond by Hartman J. Miller, for appellant, Liberty Mut. Ins. Co.

M. Natalie McSherry, Baltimore (Whiteford, Taylor, Preston, Trimble & Johnston, Baltimore, on the brief), for appellee.

Argued before MURPHY, C. J., and SMITH, DIGGES, ELDRIDGE, COLE, DAVIDSON and RODOWSKY, JJ.

DIGGES, Judge.

The omnibus clause of an automobile liability insurance policy is at the apex of this dispute. Relevant here, the portion of the policy which includes it, reads:

Persons Insured: Under the Liability and Medical Expense Coverages, the following are insureds:

(a) with respect to an owned automobile,

(1) the named insured,

(2) any other person using such automobile with the permission of the named insured, provided his actual operation or (if he is not operating) his other actual use thereof is within the scope of such permission.

The current case presents issues respecting the scope of the insurance protection afforded by this provision.

Plaintiff Patricia Marie Bond, one of the two appellants here, initiated this declaratory judgment action in the Circuit Court for Baltimore County to have determined under three insurance policies her rights to personal injury coverage and payment of medical expenses for injuries she sustained in an automobile accident. In addition, Patricia sought declarations of liability protection for Renee Irene Lantz, the non-owner operator of the vehicle in which the plaintiff was a passenger when injured, under two of the insurance policies or, in the alternative, coverage under the uninsured motorist provisions of the plaintiff's personal automobile policy. In pursuit of these objectives, Patricia joined as defendants in her action: Renee Lantz, the driver of the involved automobile; Pennsylvania National Mutual Casualty Insurance Company, the insurance carrier covering the vehicle in which the plaintiff was injured; Liberty Mutual Insurance Company (the other appellant), the insurer of the Renee Lantz family automobile; and The Home Indemnity Company, the uninsured motorist insurer under plaintiff Bond's own policy.

The accident which spawned this litigation occurred on July 1, 1978, when the automobile owned by Lillian Fairley but operated by Renee Lantz collided with a utility pole injuring passenger Patricia Bond. The car, a 1967 Dodge Dart, was purchased by Lillian Fairley's husband shortly after their child, Kathy, celebrated her sixteenth birthday and, though the car was owned by her father, the daughter was granted very extensive use of it. Upon Mr. Fairley's death, title to the Dart was transferred to his widow and Kathy's mother continued to permit her daughter to enjoy near exclusive use of the automobile. The vehicle, on the day of the accident, was insured by Penn National, whose liability policy denominated owner Lillian Fairley as the named insured and recorded her daughter, Kathy, to be the principal operator of the car.

The record before us reveals that on the day of the accident, by prearrangement, Kathy drove the Dart to Patricia's house to fetch her friend and from there the two travelled to pick up Renee at her home. The three young ladies had intended to proceed to a dance in Essex, but, as they were a bit early, the trio decided to stop at a nearby bar "just to sit around and talk for a while." Shortly after Kathy and a boyfriend she met at the bar left the establishment and went for a drive in his car, Renee and Patty decided to go to a nearby carnival in the Dart. It was on the return trip to the bar, with Renee driving, that the one car accident occurred. Although large portions of the relevant evidence are in conflict, Chief Judge Raine, as the trier of fact, resolved those differences by making findings which we, under the Maryland Rule 886 standard, cannot say are "clearly erroneous"; accordingly, we accept those determinations as established. The Chief Judge spoke:

I find as a fact that Kathy Fairley gave permission to Renee Lantz to drive the Dodge Dart that was involved in an accident in which Patricia Bond was injured.

The restrictions on the area of use was the broad metropolitan Baltimore area, so that I find as a fact that the car was being used within the permitted geographic area set forth by the owner, the named insured.

Kathy Fairley was allowed to roam at will (in the Dart) and the time involved was within the scope of Kathy's permitted use.

However, I find as a fact that the person driving the car was Renee Lantz, and the owner and named insured had specifically restricted her daughter, Kathy, from allowing anybody, including Renee Lantz, to drive the car. And Renee had heard Mrs. Fairley say that, but she did not think that that was an order coming from the real owner; she reasonably believed that she had gotten permission from the owner, she erroneously believing that Kathy was the owner and not Mrs. Fairley.

I find as a fact, that (the Dart) was not being used by anyone who was authorized expressly or by implication to use the car. ((Emphasis supplied).)

Based on these determinations (as well as other undisputed germane evidence), the circuit court declared with regard to insurance coverage of the July 1 accident: (i) that neither Penn National nor Home Indemnity was obligated to defend Renee Lantz or to pay any judgment rendered against her; and (ii) that Liberty Mutual must, in addition to providing Renee a defense for suits instituted against her, pay on her behalf all judgments rendered in those suits to the full extent of its policy limits. Since we observe no error in these declarations, we will not interfere with the judgment as it was entered by the circuit court.

In this Court the two appellants make independent and differing arguments in urging reversal of the declaratory judgment as entered by the circuit court. But before discussing the specific contention made by each with respect to the reach of the provisions of the insurance policies here encountered, we make a few general observations that underlie interpreting such contracts. Insurance policies, being contractual, are construed as other contracts. National Grange Mut. Ins. v. Pinkney, 284 Md. 694, 704-06, 399 A.2d 877, 882-83 (1979). Thus,

"(i)t is well settled that in interpreting insurance contracts, words are to be given their customary and normal meaning. Absent ambiguity the construction of the contract remains within the province of the court and Maryland has not adopted the rule, followed in many jurisdictions, that an insurance policy is to be most strongly construed against the insurer. If the language of an insurance contract is ambiguous, however, construction is for the jury, and the ambiguity is to be resolved against the company which prepared the policy and in favor of the insured." (Id. at 705, 399 A.2d at 882, with citations omitted and quoting from Gov't Employees Insur. v. DeJames, 256 Md. 717, 720, 261 A.2d 747, 749 (1970).)

With these guidelines before us, we now consider the respective contentions here made by the appellants.

(i)

Urging "that a...