JMP Assiciates, Inc. v. St. Paul Fire & Marine Ins. Co.

• Decision Date: 01 September 1996
• Docket Number: No. 72,72
• Citation: 345 Md. 630,693 A.2d 832
• Parties: JMP ASSOCIATES, INC. v. The ST. PAUL FIRE & MARINE INSURANCE COMPANY. ,
• Court: Maryland Court of Appeals

Page 630

345 Md. 630

693 A.2d 832

JMP ASSOCIATES, INC. v. The ST. PAUL FIRE & MARINE INSURANCE COMPANY.

No. 72, Sept. Term, 1996.

Court of Appeals of Maryland.

May 12, 1997.

Walter H. Madden, Rockville, for Petitioner.

Harry J. Carleton (Cotter, Fiscella Carleton, on brief), Fairfax, VA, for Respondent.

Argued before BELL, C.J., ELDRIDGE, RODOWSKY, CHASANOW, KARWACKI and RAKER, JJ., and MARVIN H. SMITH, Judge (retired), Specially Assigned.

MARVIN H. SMITH, Judge, Specially Assigned.

We shall here hold that under the facts in this case the "on" requirement in a jeweler's block policy that an "employee or sales personnel [be] in or on the vehicle at the time of the loss" is ambiguous. ¹ (Emphasis added.)

Petitioner JMP Associates, Inc. (JMP) sued respondent The St. Paul Fire & Marine Insurance Company (St. Paul) in the Circuit Court for Montgomery County for breach of contract under a jeweler's block policy. We conclude that the trial judge erred in holding the term "in or on" unambiguous and in granting summary judgment in favor of St. Paul. The Court of Special Appeals likewise erred when it affirmed that judgment. Accordingly, we shall reverse.

In JMP Assoc. v. St. Paul Fire, 109 Md.App. 343, 674 A.2d 562 (1996), the intermediate appellate court stated:

"The relevant facts are undisputed. JMP is a wholesale jeweler with a principal place of business in Silver Spring, Maryland. It sells its products to jewelers in other States as well, including to those in North Carolina.

"In March, 1992, St. Paul issued to JMP a Jeweler's Block Policy, insuring jewels, watches, precious metals, and other stock usual to JMP's business 'against risks of direct physical loss or damage except those listed in the Exclusions--Losses We Won't Cover section.' One of the exclusions listed in that section stated:

'Unattended vehicle. We won't cover loss to property while it is left in or on a vehicle unless you, your employee or sales personnel are in or on the vehicle at the time of the loss.'

(Emphasis added).

"On March 23, 1994, while this policy was in force, JMP's sales representative, Marty Leibson, was traveling in North Carolina on his way to make a business call in Charlotte. He was carrying in the trunk of his car a collection of jewelry worth about $150,000. Leibson stopped for gas in Shelby, North Carolina. After pumping the gas, he walked over to the check-out station to pay for it, using his credit card. The trunk was locked, and the car was visible. As the cashier rang up the sale, a van pulled in and partially blocked Leibson's view of his car. When the transaction was completed, Leibson returned to his car. The van had left, and Leibson noticed nothing out of the ordinary. He drove on to Charlotte, parked at his customer's store, unlocked the trunk to get his merchandise, and, for the first time, discovered that the cases containing the jewelry were missing. Leibson immediately reported the theft to the proper authorities, but to no avail.

"JMP made a claim on the policy. That claim was rejected on the ground that Leibson was not 'in or on' the vehicle at the time of the loss.

"JMP raises a number of issues in this appeal, but the central one is the proper construction of the word 'on' as it appears in that clause of the exclusion. It seems to be agreed that the loss occurred at the gas station and that Leibson was not 'in' the car when the loss occurred. The question is whether, for purposes of construing the policy, he can be regarded as having been 'on' the vehicle at the time."

Id. at 345-46, 674 A.2d at 563. The Court of Special Appeals concluded, " '[O]n' means 'on' and not 'near.' " Id. at 350, 674 A.2d at 565. It said it thus "align[ed] [itself] with the majority view" and held that "[t]he [trial] court did not err in applying the exclusion." Id.

We granted JMP's petition for certiorari to address the important question here presented.

The Law

Maryland Rule 2-501(e) provides:

"The 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."

The law relative to summary judgment has been stated and restated by this Court many times. See, e.g., Goodwich v. Sinai Hosp., 343 Md. 185, 206-07, 680 A.2d 1067, 1076-77 (1996); Heat & Power v. Air Prods., 320 Md. 584, 591-92, 578 A.2d 1202, 1205-06 (1990); King v. Bankerd, 303 Md. 98, 110-12, 492 A.2d 608, 614-15 (1985); and Berkey v. Delia, 287 Md. 302, 304-05, 413 A.2d 170, 171 (1980).

In King, Judge Cole said for the Court:

"In reviewing the grant or denial of a motion for summary judgment, we are concerned primarily with deciding whether a material factual issue exists, and in this regard, all inferences are resolved against the moving party. Lynx, Inc. v. Ordnance Products, Inc., 273 Md. 1, 7-8, 327 A.2d 502, 509 (1974); Salisbury Beauty Schools v. State Board of Cosmetologists, 268 Md. 32, 40-41, 300 A.2d 367, 374 (1973); see Natural Design, Inc. v. Rouse Co., 302 Md. 47, 62, 485 A.2d 663, 671 (1984). If there is a conflict between the inferences that may be drawn from that before the court, summary judgment is not proper. As Judge Smith explained in Porter v. General Boiler Casing Co., 284 Md. 402, 413, 396 A.2d 1090, 1096 (1979) (quoting Fenwick Motor Co. v. Fenwick, 258 Md. 134, 138, 265 A.2d 256, 258 (1970)[) ], ' "even where the underlying facts are undisputed, if those facts are susceptible of more than one permissible inference, the choice between those inferences should not be made as a matter of law, but should be submitted to the trier of fact." ' "

King, 303 Md. at 110-11, 492 A.2d at 614.

In Bailer v. Erie Ins., 344 Md. 515, 687 A.2d 1375 (1997), Judge Rodowsky recently set forth for the Court the bases for construction of insurance policies "Under Maryland law, '[i]nsurance policies, being contractual, are construed as other contracts.' Bond v. Pennsylvania Nat'l Mut. Casualty Ins. Co., 289 Md. 379, 384, 424 A.2d 765, 768 (1981). As such, a court interpreting an insurance policy is to examine the instrument as a whole, focusing on the character, purpose, and circumstances surrounding the execution of the contract. Pacific Indem. Co. v. Interstate Fire & Casualty Co., 302 Md. 383, 388, 488 A.2d 486, 488 (1985). '[W]e accord words their ordinary and accepted meanings. The test is what meaning a reasonably prudent layperson would attach to the term.' Id. Unlike the law of some states which construes insurance contracts against the insurer, this Court holds that an insurance contract will be construed against the insurer only when an ambiguity remains after considering the intentions of the parties from the policy as a whole and, if necessary, after admitting and considering any relevant parol evidence. Cheney v. Bell Nat'l Life Ins. Co., 315 Md. 761, 766-67, 556 A.2d 1135, 1138 (1989)."

Bailer, 344 Md. at 521-22, 687 A.2d at 1378. To similar effect, see Collier v. MD-Individual Practice, 327 Md. 1, 5-6, 607 A.2d 537, 539 (1992) (with the further statement, "If the language is ambiguous, extrinsic evidence may be consulted."); Pacific Indem. v. Interstate Fire & Cas., 302 Md. 383, 388-89, 488 A.2d 486, 488-89 (1985); Truck Ins. Exch. v. Marks Rentals, 288 Md. 428, 435, 418 A.2d 1187, 1190 (1980). In Collier, this Court made the specific statement, "In Maryland insurance policies ordinarily are construed in the same manner as contracts generally." 327 Md. at 5, 607 A.2d at 539.

In Orkin v. Jacobson, 274 Md. 124, 332 A.2d 901 (1975), we said:

"Our predecessors in Waters v. Griffith, 2 Md. 326, 333 [ (1852) ], said that '[w]e must give, if we can, some distinct meaning to every word employed in the contract....' To like effect see 17 Am.Jur.2d Contracts § 259 (1964), citing, among other cases, Nat. Fire Ins. Co. v. Crane, 16 Md. 260 (1860):

'- ' § 259. Giving effect to entire con tract, and all its parts and language.

'It is a fundamental rule of contract construction that the entire contract, and each and all of its parts and provisions, must be given meaning, and force and effect, if that can consistently and reasonably be done. An interpretation which gives reasonable meaning to all its provisions will be preferred to one which leaves a portion of the writing useless or inexplicable. So far as reasonably possible, effect will be given to all the language and to every word, expression, phrase, and clause of the agreement. No word or clause should be rejected as mere surplusage if the court can discover any reasonable purpose thereof which can be gathered from the whole instrument. A construction will not be given to one part of a contract which will annul another part, unless such a result is fairly inescapable. Comparatively unimportant parts or provisions which may be severed from the agreement without impairing its effect or changing its character will be suppressed or subordinated if in that way, and only in that way, the agreement can be sustained and enforced.' Id. at 660-62."

Orkin, 274 Md. at 129-30, 332 A.2d at 904. Similar statements are found in 43 Am.Jur.2d Insurance § 275 (1982) and 17A Am.Jur.2d Contracts § 386 (1991). To like effect, see Sagner v. Glenangus Farms, Inc., 234 Md. 156, 167, 198 A.2d 277, 283 (1964).

The Cases

We have reviewed each of the cases cited by the Court of Special Appeals and many other cases. We shall discuss each of these cases other than an unreported Ohio intermediate appellate court opinion that was decided contrary to the view espoused by our intermediate appellate court and by St. Paul. We find no clear cut majority view applicable to this case. Appellate cases heretofore decided really shed little light on the issue here because those cases represent situations or language so substantially different from that in the case before us. Only two of the cases, Phil G. Ruvelson, Inc. v....