King v. State Farm, 1541

• Decision Date: 04 June 2004
• Docket Number: No. 1541,1541
• Citation: 850 A.2d 428,157 Md. App. 287
• Parties: Penelope KING et vir. v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY et al.
• Court: Court of Special Appeals of Maryland

850 A.2d 428

157 Md. App. 287

Penelope KING et vir. v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY et al.

No. 1541, Sept. Term, 2003.

Court of Special Appeals of Maryland.

June 4, 2004.

Andre' R. Weitzman of Baltimore, for appellant.

Michael J. Budow (Richard E. Schimel, Laura B. Jacobs, Budow and Noble, PC on the brief), Bethesda, for appellee.

HOLLANDER, DEBORAH S. EYLER, and LAWRENCE F. RODOWSKY (retired, specially assigned), JJ.

RODOWSKY, Judge.

This action was brought by the insureds against the insurer on a policy of underinsured motorist (UIM) insurance. Trial was before a jury. The Circuit Court for Baltimore City, at the request of the insurer, forbade the parties from identifying the insurer as the defendant before the jury. Submitting that this restriction constituted reversible error, the insureds appeal from a judgment that was within the limits of the tortfeasor's automobile liability policy. For the reasons stated below, we conclude that the insureds' point is well taken.

On the date of the automobile accident involved here, February 9, 2001, the appellants, Penelope King (Mrs. King), and her husband, Thomas R. King, Jr., were insured by the appellee, State Farm Mutual Automobile Insurance Company (State Farm), under a policy that contained UIM coverage of $100,000 per person and $300,000 per occurrence. The accident occurred when Mrs. King, while crossing a street in the pedestrian crosswalk, was struck by an automobile operated by one Wendy Farley (Ms. Farley), as a result of which Mrs. King suffered bodily injuries. The claims against Ms. Farley were resolved first. Her automobile liability insurance carrier, Allstate Insurance Company (Allstate), settled for $20,000.¹ The parties to the action before us agree that this payment was the limit under the Allstate policy for appellants' claims.² Thereafter, appellants brought the instant action against State Farm claiming $80,000 in their ad damnum.³

Prior to trial of the UIM claim, the parties agreed that Ms. Farley was solely responsible for the accident, that State Farm's UIM policy was in effect at that time, that its limits were $100,000/$300,000, and that the credit against any verdict in favor of Mrs. King would be $20,000. The extent of Mrs. King's injuries, however, was sharply disputed.

Against this background, State Farm, on the morning trial was to begin, moved in limine that identification of State Farm as the defendant be prohibited. Referring to Maryland Rule 5-411, dealing with the exclusion of references to liability insurance, State Farm submitted that it was "inherently prejudicial to discuss the insurance coverage." Mrs. King opposed the motion, arguing that "the mere fact that an insurance company is a party to a case is not a basis to claim prejudice" and that "the defendant[] now want[s] to make up a fictitious case[.]" The trial court granted the motion, reasoning as follows:

"[A]ll this jury is going to be asked to consider is the injuries suffered and the damages that they're entitled to.

"So I agree there are cases where it would not be appropriate to limit any mention of State Farm. I don't think in the context it's presented here, or the posture of this case at this time that there is really any reason to get into that. The question is damages. So I'm going to grant the defense motion in limine in terms of referencing the case."

The colloquy with the court then turned to how, precisely, the ruling could be implemented. State Farm submitted that there was "no reason to reference the defendant," while Mrs. King suggested that the difficulty of implementation was why the prohibition should not be imposed. The court, reaffirming its ruling, concluded that, "[i]n terms of calling the case," it would give a brief description about the plaintiffs' seeking damages "and make it clear those are the only issues we're dealing with."

In view of the court's ruling on State Farm's motion in limine, the appellants sought, and obtained, a ruling that Ms. Farley could not be identified as the motorist.

After the venire was sworn and before voir dire, the trial court made the following statement to the prospective jurors:

"[T]he case which is pending before this Court now is a civil case and it involves an incident which occurred on February the 9th, 2001, in the vicinity of Kelly Avenue and Sulgrave Avenue in Baltimore City. On that date, Mrs. Penelope King, who is a plaintiff in this case, was a pedestrian. She was struck by a motor vehicle while she was crossing the street.

"It is admitted in this case that the driver of the car which struck Mrs. King was negligent in striking her and was the sole cause of the occurrence. It is further admitted and understood that Mrs. King was not at fault in any sense in this case.

"What you will be called upon to determine in this case is what amount of damages, if any, ought to be awarded to the plaintiffs' side based upon the evidence that is presented showing that damages were caused by the negligence of the operator of the vehicle which struck her."

Immediately before opening statements, the court told the impaneled jury that "this... is the claim by the Kings for damages that resulted from Mrs. King being struck by a motor vehicle on February 9th, 2001." Counsel for State Farm opened by stating his name and saying, "I'm the attorney for the defendant in this matter."

At trial, Mrs. King testified in person, and the medical experts for the parties testified via videotape deposition. As a result of the ruling prohibiting identifying State Farm as the defendant, a portion of the cross-examination of State Farm's medical expert was excised. Appellants claim that this consequence of the ruling demonstrates actual prejudice.⁴

After a three-day trial, the jury rendered an itemized verdict totaling $16,999.93. Judgment on that verdict was entered as satisfied, based upon appellants' prior settlement with Allstate.

In this Court appellants submit that "the identity of a party is not a matter of mere evidence, but is fundamental to the rule that the trier of fact must be aware of the real parties in interest to the litigation." Brief of Appellants at 8. State Farm, on the other hand, submits that the requirement under Maryland Rule 2-201, under which "[e]very action shall be prosecuted in the name of the real party in interest," applies only to plaintiffs. State Farm sees the decision as to whether a defendant is to be identified to be an evidentiary ruling that, under the circumstances here, was within the discretion of the trial court. In addition, because this case involved only a question of damages, State Farm contends that the prohibition against identifying it as the defendant, even if it were an abuse of discretion, was harmless error so that the judgment must be affirmed.

As we shall explain below, the abuse of discretion analysis and the harmless error analysis merge.

I. The Ordinary Procedure

Maryland Rule 1-301(a), a rule applicable "to all matters in all courts of this State, except the Orphans' Courts," Md. Rule 1-101(a), mandates that an original pleading "contain the names and addresses, including zip code, of all parties," unless unknown. Upon filing with the clerk of court, this information becomes of public record and remains so, even in the archives of closed cases, unless a statute, rule of court, or, under extraordinary circumstances, an order of court, provides otherwise.

State Farm is the party defendant to this action. It "is a breach of contract action by the insured[s] against [their] own insurer. Under the statutorily required coverage, the defendant has directly promised to pay the insured plaintiff[s] under certain conditions." Reese v. State Farm Mut. Auto. Ins. Co., 285 Md. 548, 552-53, 403 A.2d 1229, 1231 (1979) (holding that an insured under uninsured motorist (UM) coverage need not first sue the tortfeasor as a condition of recovery from the UM insurer). Because actions by an insured on a policy of UM/UIM insurance are contract actions, they "are governed by the principles and procedures applicable to contract actions generally." Id. at 553, 403 A.2d at 1232. See also Lane v. Nationwide Mut. Ins. Co., 321 Md. 165, 169-70, 582 A.2d 501, 503 (1990).

In a case in which the insured sued the UM/UIM insurer for failure to pay under that coverage, the Court of Appeals, in a clear reference to the ordinary procedure of identifying the parties for the jury, said: "In cases where the insurance carrier is a party to the litigation, obviously the existence of insurance cannot be kept from the jury." Farley v. Allstate Ins. Co., 355 Md. 34, 42, 733 A.2d 1014, 1018 (1999). To the same effect, see also Allstate Ins. Co. v. Miller, 315 Md. 182, 191, 553 A.2d 1268, 1272 (1989). The policy itself, however, containing limits of the UM/UIM coverage, should not be introduced, where limits are not an issue, because unfair prejudice from disclosing limits outweighs probative value. See Farley and Allstate v. Miller, both supra.

Further, State Farm's reliance on Md. Rule 5-411 is misplaced. That rule provides that, subject to exceptions, "[e]vidence that a person was or was not insured against liability is not admissible upon the issue whether the person acted negligently or otherwise wrongfully." In this action, the type of insurance, the existence of which the jury would learn from State Farm's being identified as the defendant, is UM/UIM insurance. Because UM/UIM coverage

"is a promise by the insurer to pay its own insured, rather than a promise to its insured to pay some third party, the uninsured motorist coverage is in insurance parlance `first party coverage' like collision, comprehensive, medical payments or personal injury protection, and not `third party coverage' such as personal injury or property damage liability insurance."

Reese, 285 Md. at 552, 403 A.2d at 1231-32.

Under ordinary circumstances this contract action on first party coverage...