Dolan v. Kemper Independence Ins. Co., No. 0084, Sept. Term, 2017
| Court | Court of Special Appeals of Maryland |
| Writing for the Court | Arthur, J. |
| Citation | 237 Md.App. 610,187 A.3d 741 |
| Docket Number | No. 0084, Sept. Term, 2017 |
| Decision Date | 28 June 2018 |
| Parties | Gary DOLAN, et al. v. KEMPER INDEPENDENCE INSURANCE COMPANY |
237 Md.App. 610
187 A.3d 741
Gary DOLAN, et al.
v.
KEMPER INDEPENDENCE INSURANCE COMPANY
No. 0084, Sept. Term, 2017
Court of Special Appeals of Maryland.
June 28, 2018
Argued by: Ryan P. Richie (Wilson and Parlett on the brief) all of Upper Marlboro, MD, for Appellant.
Argued by: Thomas L. Doran (DeCaro, Doran, Siciliano, Gallagher & DeBlasis, LLP on the brief) all of Bowie, MD, for Appellee.
Panel: Graeff, Nazarian, Arthur, JJ.
Arthur, J.
This appeal stems from a declaratory judgment action in which appellee Kemper Independence Insurance Co. sought to establish that it had no duty to pay underinsured motorist (UIM) benefits to appellant Gary Dolan. In support of its position, Kemper cited Mr. Dolan's unwillingness to participate in an examination under oath (EUO). Kemper argued that, by refusing to submit to an EUO, Mr. Dolan had breached the insurance contract. Kemper also argued that, under its policy, submission to an EUO was a condition precedent to Mr. Dolan's ability to file suit against Kemper for breach of contract.
The Circuit Court for Anne Arundel County declared that Mr. Dolan was not entitled to UIM benefits under the policy. Mr. Dolan appealed. We affirm.
FACTUAL AND PROCEDURAL HISTORY
The parties stipulated to the relevant facts:
On October 27, 2010, Mr. Dolan was a passenger in a vehicle operated by Windy Marie Dolan. The vehicle was involved in an accident. Mr. Dolan sustained injuries as a result of the accident.
Mr. Dolan's parents had an automobile insurance policy with Kemper. Mr. Dolan claimed UIM benefits as a "family member" under his parents' policy.1
Section III, Part E, of the policy that Kemper issued to Mr. Dolan's parents states, in pertinent part, as follows:
We have no duty to provide coverage under this policy unless there has been full compliance with the following duties:
* * *
B. A person seeking any coverage must:
1. Cooperate with us in the investigation, settlement or defense of any claim or suit.
* * *
3. Submit, as often as we reasonably require:
* * *
b. To examination under oath and subscribe the same.
Under Section II, Part F, of the Kemper policy, "No legal action may be brought against [Kemper] until there has been full compliance with all the terms of this policy."
Sometime in late 2010 or early 2011, Kemper became aware of the accident in which Mr. Dolan was injured. Anticipating that Mr. Dolan might make a claim for UIM benefits, Kemper requested that he give a recorded statement. Mr. Dolan's counsel denied the request.
On March 10, 2011, Kemper sent a formal request for a recorded statement via a letter to Mr. Dolan's counsel. Counsel denied that request as well.
On April 12, 2011, Kemper, through counsel, sent a written request for an EUO to Mr. Dolan's counsel. Two days later, Mr. Dolan's counsel responded by email, stating that Kemper was not entitled to an EUO until Mr. Dolan made a formal claim for UIM benefits.
On August 8, 2011, Kemper received a letter from Mr. Dolan's counsel. The letter represented that Ms. Dolan's insurer, Nationwide Mutual Insurance Co., had tendered its policy limits of $50,000 in settlement of Mr. Dolan's claims against her.
Under Md. Code (1996, 2006 Repl. Vol.), § 19–511 of the Insurance Article, as it read in 2011, Kemper had 60 days from August 8, 2011, to decide whether to consent to the settlement. If Kemper consented to the settlement, it would waive its right to "contest the issues of tort liability" in Mr. Dolan's action to recover on the policy. Maurer v. Pennsylvania Nat'l Mut. Cas. Ins. Co. , 404 Md. 60, 75, 945 A.2d 629 (2007) ; Morse v. Erie Ins. Exch. , 217 Md. App. 1, 21, 90 A.3d 512 (2014), aff'd sub nom.
Woznicki v. GEICO Gen. Ins. Co. , 443 Md. 93, 115 A.3d 152 (2015). If, however, Kemper refused to consent to the settlement, it was required to pay the amount of the settlement offer to Mr. Dolan in order to preserve its defenses in a UIM claim.2
On September 22, 2011, Kemper notified Mr. Dolan, in writing, that it would not consent to Nationwide's settlement offer. On the same day, Kemper advanced the $50,000 that it was required to pay to preserve its right to contest issues of tort liability. Mr. Dolan accepted Kemper's check, thereby triggering his UIM claim against the Kemper policy.3
At some point after the claim was triggered, Kemper requested an EUO. The record does not reflect what response, if any, Kemper received.
On October 28, 2011, Mr. Dolan's counsel wrote to Kemper's counsel. The letter transmitted information about Mr. Dolan's injuries, requested information about the dollar amount of UIM coverage under the Kemper policy, and asked whether Kemper would tender the policy limits. The letter confirms that by that date Mr. Dolan had made a formal claim for UIM benefits.
On November 7, 2011, Kemper's counsel wrote to Mr. Dolan's counsel. In that letter, Kemper's counsel confirmed an agreement with Mr. Dolan's counsel that Kemper was entitled to an EUO. Kemper's counsel requested dates for the EUO.
On November 13, 2011, Kemper's counsel sent a follow-up email to Mr. Dolan's counsel, offering proposed dates for an EUO. Mr. Dolan's counsel did not respond to the email.
Instead, on November 23, 2011, Mr. Dolan filed a complaint with the Circuit Court for Anne Arundel County. The complaint alleged a negligence claim against Windy Marie Dolan, the driver of the car in which Mr. Dolan was injured. The complaint also alleged a breach of contract claim against Kemper for failing to pay UIM benefits.
On December 5, 2011, counsel for Kemper spoke to counsel for Mr. Dolan to follow up on the scheduling of an EUO. Mr. Dolan's counsel said that an assistant at the firm would secure a date for the
EUO. Kemper's counsel confirmed the discussion in a letter of the same date.
On December 9, 2011, Mr. Dolan's counsel called Kemper's counsel to inform him that Mr. Dolan had filed suit. Mr. Dolan's counsel asserted that Mr. Dolan would submit to a deposition, but would not appear for an EUO.
In a conversation with Kemper's counsel on February 14, 2012, counsel for Mr. Dolan confirmed that his client would not submit to an EUO and that a deposition would give Kemper everything that it was entitled to receive. Kemper confirmed Mr. Dolan's refusal to submit to an EUO in a letter dated February 15, 2012. On the following day, Kemper formally denied Mr. Dolan's claim for UIM benefits.
At some point thereafter, Mr. Dolan was found to be incompetent to stand trial against criminal charges in an apparently unrelated case. As a result of that finding, the circuit court stayed Mr. Dolan's lawsuit against Ms. Dolan (the driver) and Kemper. Even after Mr. Dolan was later found to have regained his competence, the court continued the stay, so that Kemper could file a complaint for declaratory relief.
On May 11, 2016, Kemper filed its complaint. In brief, Kemper asked the court to declare that the policy required Mr. Dolan to submit to an EUO as a prerequisite to receiving UIM coverage and that Mr. Dolan had breached the contract with Kemper by refusing to submit to an EUO. Pending the adjudication of Kemper's complaint for declaratory relief, the circuit court continued the stay of Mr. Dolan's tort claim
against the driver and his breach of contract claim against Kemper.
Although the circuit court initially denied Kemper's motion for summary judgment, Kemper and Mr. Dolan eventually agreed upon a set of stipulations concerning the universe of relevant facts. The parties submitted the stipulations to the circuit court, along with legal argument on their respective positions.
On March 20, 2017, the circuit court conducted what was nominally a bench trial, but was really more in the nature of a hearing on a summary judgment motion, because no facts were in dispute.4 After the hearing, the court issued a written declaratory judgment, in which it concluded:
that submitting to an EUO administered by Plaintiff Kemper was a condition precedent to him receiving UIM benefits under the insurance policy issued by Plaintiff Kemper, that Defendant Gary Dolan's failure to do so amounted to a material breach of the insurance contract, and that Defendant Gary Dolan is not entitled to receive UIM benefits under the insurance policy issued by Plaintiff Kemper.
Mr. Dolan noted a timely appeal.
QUESTION PRESENTED
Mr. Dolan presents one question for our review:
Did the trial [c]ourt err by finding that Appellant had breached his contract with Appellee by filing a law suit against Appellee before submitting to an Examination Under Oath?
Mr. Dolan's question misstates the circuit court's...
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Molina v. State, No. 2380, 2537 Sept. Term, 2017
...of Javier's contention that unfair prejudice outweighed any relevance the evidence may have had. See Dolan v. Kemper Indep. Ins. Co. , 237 Md. App. 610, 626, 187 A.3d 741 (2018) (exercising discretion to consider an argument on appeal despite grounds to conclude the appellant waived the arg......
-
CX Reinsurance Co. v. Johnson, 691, Sept. Term, 2020
...portion of the Court's opinion is clearly dicta , we have recently endorsed this principle. See Dolan v. Kemper Indep. Ins. Co ., 237 Md. App. 610, 620 n.5, 187 A.3d 741 (2018) ("A liability insurance policy, however, is a policy issued to protect an insured against the claims of injured th......
-
Molina v. State, No. 2380
...of Javier's contention that unfair prejudice outweighed any relevance the evidence may have had. See Dolan v. Kemper Indep. Ins. Co., 237 Md. App. 610, 626 (2018) (exercising discretion to consider an argument on appeal despite grounds to conclude the appellant waived the argument). 24. Thi......
-
CX Reinsurance Co. v. Johnson, 691-2020
...portion of the Court's opinion is clearly dicta, we have recently endorsed this principle. See Dolan v. Kemper Indep. Ins. Co., 237 Md.App. 610, 620 n.5 (2018) ("A liability insurance policy, however, is a policy issued to protect an insured against the claims of injured third parties." (ci......
-
Molina v. State, No. 2380, 2537 Sept. Term, 2017
...of Javier's contention that unfair prejudice outweighed any relevance the evidence may have had. See Dolan v. Kemper Indep. Ins. Co. , 237 Md. App. 610, 626, 187 A.3d 741 (2018) (exercising discretion to consider an argument on appeal despite grounds to conclude the appellant waived the arg......
-
CX Reinsurance Co. v. Johnson, 691, Sept. Term, 2020
...portion of the Court's opinion is clearly dicta , we have recently endorsed this principle. See Dolan v. Kemper Indep. Ins. Co ., 237 Md. App. 610, 620 n.5, 187 A.3d 741 (2018) ("A liability insurance policy, however, is a policy issued to protect an insured against the claims of injured th......
-
Molina v. State, No. 2380
...of Javier's contention that unfair prejudice outweighed any relevance the evidence may have had. See Dolan v. Kemper Indep. Ins. Co., 237 Md. App. 610, 626 (2018) (exercising discretion to consider an argument on appeal despite grounds to conclude the appellant waived the argument). 24. Thi......
-
CX Reinsurance Co. v. Johnson, 691-2020
...portion of the Court's opinion is clearly dicta, we have recently endorsed this principle. See Dolan v. Kemper Indep. Ins. Co., 237 Md.App. 610, 620 n.5 (2018) ("A liability insurance policy, however, is a policy issued to protect an insured against the claims of injured third parties." (ci......