Central GMC, Inc. v. Lagana

• Decision Date: 01 September 1997
• Docket Number: No. 1028,1028
• Parties: CENTRAL GMC, INC., et al. v. Deborah A. LAGANA. ,
• Court: Court of Special Appeals of Maryland

Page 195

120 Md.App. 195

706 A.2d 639

CENTRAL GMC, INC., et al. v. Deborah A. LAGANA.

No. 1028, Sept. Term, 1997.

Court of Special Appeals of Maryland.

March 3, 1998.

James A. Haynes (William Ober, on the brief), Towson, for appellants

George Z. Petros, Camp Springs, for appellee.

Argued before DAVIS, THIEME and BYRNES, JJ.

DAVIS, Judge.

Appellants Central GMC, Inc. (GMC) and Injured Workers' Insurance Fund (IWIF) noted this timely appeal from the judgment of the Circuit Court for Prince George's County granting appellee Debra A. Lagana's Motion for Summary Appellee appealed to the Circuit Court for Prince George's County where she filed a Motion for Summary Judgment. Appellants filed a Cross-Motion for Summary Judgment. Initially, in an Order dated August 26, 1996, the trial court denied both motions without a hearing. In response, the parties filed a Joint Motion to Vacate Order Denying Summary Judgment, which the court granted by an Order dated February 26, 1997. Eventually, the court held a hearing on the competing motions for summary judgment and, in an order dated April 18, 1997, it denied appellants' Cross-Motion for Summary Judgment and granted appellee's Motion for Summary Judgment.

Judgment and denying appellants' Cross-Motion for Summary Judgment. The genesis of the case below was a claim filed by appellee with the Maryland Workers' Compensation Commission (Commission) seeking compensation benefits from appellants for bodily injuries sustained in a motor vehicle accident that occurred on March 1, 1993. The Commission held a hearing on April 27, 1995. The resulting Order, dated May 9, 1995, disallowed the claim, based on a finding that appellee had made a binding election of remedies.

This appeal followed, in which appellants raise two questions for our review, reframed below:

I. Does the unauthorized settlement of an injured employee's claim against a third-party tort-feasor prior to the filing of a workers' compensation claim for the same accident constitute a binding election of remedies so as to preclude the workers' compensation claim?

II. Does the logic of Franch v. Ankney, 341 Md. 350, 670 A.2d 951 (1996), apply only when an injured employee settles a claim against a third party after filing a workers' compensation claim for the same accident?

We answer both questions in the affirmative and reverse the judgment of the circuit court.

FACTS

On the morning of March 1, 1993, appellee sustained bodily injuries in a motor vehicle accident while in the course of employment with appellant GMC. GMC's workers' compensation carrier at the time of the accident was appellant IWIF. When the accident occurred, appellee was on her way to work in a pick-up truck owned by GMC. GMC provided the vehicle to appellee in her position as Assistant Parts Manager for the GMC dealership. Appellee testified that the vehicle was provided "to get [her] back and forth to work as part of [her] salary." The vehicle driven by appellee was struck from behind by a vehicle driven by Tammy Gross. Appellee's vehicle rolled over and she sustained severe bodily injuries that ultimately resulted in the amputation of her left arm.

Immediately after the accident, appellee was taken to the hospital for treatment of her injuries. She was sedated and unconscious for an entire work week. On March 3, 1993, while appellee was still unconscious, GMC submitted the Employer's First Report of Injury, which, according to appellee, correctly stated that she was operating a company vehicle on her way to work at the time of the accident.

Appellant IWIF acknowledged the Employer's First Report of Injury by letter dated March 4, 1993. The letter indicated that appellee was entitled to receive weekly compensation benefits. While appellee was still in the hospital, and without any action on her part, IWIF began to issue temporary total disability checks to appellee.

After sending approximately seven or eight checks, IWIF sent a letter dated May 3, 1993 to GMC with a copy to appellee, advising both of them that IWIF was denying coverage for the accident. The letter stated, in part:

The information received by this office indicates that while the above named was injured, it was not an accidental injury within the meaning of the Workers' Compensation Law.

The Injured Workers' Insurance Fund cannot accept liability as the result of this incident as no compensable The letter also suggested that GMC and appellee contact the Commission "for further information and guidance" if they disagreed with IWIF's decision. IWIF did not issue any more checks to appellee. Appellee returned all of the previously issued checks to IWIF; she had not negotiated any of them.

injury was sustained. Treatment for this incident may be covered by private health insurance carriers.

After IWIF's denial of coverage, appellee, with the assistance of counsel, ¹ pursued a personal injury tort claim against Ms. Gross, the driver of the other motor vehicle involved in the accident (the third party). Ms. Gross's liability insurer, Nationwide Mutual Insurance Company (Nationwide), extended its full policy limits. On or about June 1, 1993, prior to filing a claim with the Commission for any benefits resulting from the accident, and without having filed a suit against the third party, appellee accepted Nationwide's policy limits offer.

After IWIF's denial, appellee also proceeded with an underinsured motorist claim against Motors Insurance Corporation (Motors), GMC's liability insurer. Discovery in that action indicated that appellee's use of the GMC vehicle was a result of it being provided as a condition of her employment. Consequently, appellee determined that IWIF's denial of coverage was in error.

Accordingly, appellee filed a claim with the Commission on October 27, 1994 seeking workers' compensation benefits from GMC and IWIF. In response, and in contrast to its May 3, 1993 denial of coverage, IWIF conceded to the Commission that appellee's claim was an accidental injury, causally connected to her employment. Instead, IWIF contended, as both appellants argue now, that appellee's settlement with Nationwide constituted a binding election of remedies that precluded appellee's workers' compensation claim.

A commissioner disallowed appellee's claim for compensation on May 9, 1995, ruling that she had made a binding

election of remedies. Appellee appealed to the circuit court wherein she and appellants filed competing motions for summary judgment on the issues before this Court. On April 18, 1997, relying on Franch v. Ankney, 341 Md. 350, 670 A.2d 951 (1996), the lower court granted summary judgment in favor of appellee, denied appellants' cross-motion for summary judgment, and remanded the matter to the Commission. GMC and IWIF appealed from that decision.

DISCUSSION

We begin our discussion by setting forth the appropriate standard of review and relevant portions of Maryland's Workers' Compensation statute.

Standard of Review

The standard for appellate review of a trial court's grant or denial of a motion for summary judgment requires us to determine whether the trial court was legally correct. Heat & Power Corp. v. Air Prods. & Chems., Inc., 320 Md. 584, 590-91, 578 A.2d 1202 (1990); Barnett v. Sara Lee Corp., 97 Md.App. 140, 146, 627 A.2d 86, cert. denied, 332 Md. 702, 632 A.2d 1207 (1993). In so doing, we review the same material from the record and decide the same legal issues as the circuit court. Nationwide Mut. Ins. Co. v. Scherr, 101 Md.App. 690, 695, 647 A.2d 1297 (1994), cert. denied, Scherr v. Nationwide Mut. Ins. Co., 337 Md. 214, 652 A.2d 670 (1995).

Motions for summary judgment are governed by MARYLAND RULE 2-501, which provides that "[t]he court shall enter judgment in favor of or against the moving party if the motion and response show that there is no genuine dispute as to any material fact and that the party in whose favor judgment is entered is entitled to judgment as a matter of law." MARYLAND RULE 2-501(e) (1997). See also Bagwell v. Peninsula Regional Medical Ctr., 106 Md.App. 470, 488, 665 A.2d 297 (1995), cert. denied, 341 Md. 172, 669 A.2d 1360 (1996)(holding trial court to same requirements as MD. RULE 2-501). In making its determination, the circuit court must view the facts and all inferences from those facts in the light most favorable to the non-moving party. Brown v. Wheeler, 109 Md.App. 710, 717, 675 A.2d 1032 (1996).

When the underlying facts are undisputed, but produce more than one permissible inference, the choice between those inferences should not be made by the court as a matter of law, but should be submitted to the trier of fact. Fenwick Motor Company v. Fenwick, 258 Md. 134, 138, 265 A.2d 256 (1970).

Suits Against Third-Party Tort-feasors under Maryland's Workers' Compensation Statute

With the standard of review firmly in place, we now set forth, in relevant part, MD.CODE (1991 Repl.Vol.), LABOR AND EMPLOYMENT (LE), §§ 9-901, 9-902, and 9-903 (portion of Maryland's workers' compensation statute that governs actions against third-party tort-feasors). We cite to these sections throughout our discussion because the language of the statute and the intent of its drafters are key to our analysis.

§ 9-901. Choice of proceeding against third party or employer.

When a person other than an employer is liable for the injury or death of a covered employee for which compensation is payable under this title, the covered employee or, in case of death, the personal representative or dependents of the covered employee may:

(1) file a claim for compensation against the employer under this title; or

(2) bring an action for damages against the person liable for the injury or death or, in case of joint tort[-]feasors, against each joint tort[-]feasor.

§ 9-902. Action against party after award or payment of compensation.

(a) Action by self-insured employer, insurer, or fund.--If a claim is filed and compensation is awarded or...