Langston v. Allstate Ins. Co.

• Citation: 392 A.2d 561,40 Md.App. 414
• Decision Date: 13 October 1978
• Docket Number: No. 42,42
• Parties: Jean D. LANGSTON et al. v. ALLSTATE INSURANCE COMPANY.
• Court: Court of Special Appeals of Maryland

Page 414

40 Md.App. 414

392 A.2d 561

Jean D. LANGSTON et al. v. ALLSTATE INSURANCE COMPANY.

No. 42.

Court of Special Appeals of Maryland.

Oct. 13, 1978.

Walter G. Moyle, Jr., and B. Paul Noble, Washington, D. C., with whom were Noble, Moyle & Roberts, Washington, D. C., on the brief, for appellants.

Charles E. Wilson, Jr., Rockville, with whom were McCarthy & Wharton, Rockville, on the brief, for appellee.

Argued before GILBERT, C. J., and MORTON and THOMPSON, JJ.

GILBERT, Chief Judge.

This litigation between Jean D. Langston, her son, Lawrence Langston, the appellants, and their insurer, Allstate Insurance Company, the appellee, is being fought on two fronts, I. e., Maryland and Florida. At this point in time, the Langstons have seen their victory gained in an arbitration proceeding and confirmed in the Circuit Court of the 11th Judicial Circuit in and for Dade County, Florida, in the form of a summary judgment "against Allstate Insurance Company in the amount of $40,000.00," qualified but not totally nullified by the District Court of Appeal of Florida, Third District, in Allstate v. Langston, Fla.App., 358 So.2d 1387, filed June 6, 1978. In the meantime, the Circuit Court for Montgomery County, patently declining to follow the Florida arbitration proceeding or the Dade County circuit court, entered a judgment in favor of the Langstons against Allstate for $5,000.

The battle between the litigants is being waged over whether claimants, under a motor vehicle policy insuring two vehicles on separate premiums, may "stack" or pyramid coverage so as to obtain the maximum amount payable on each vehicle. Phrased in more explicit terms, the issue is, when two premiums are paid in one policy for two vehicles, may the claimant add or "stack" the maximum amount payable to any one person under the policies so that the $20,000 maximum amounts on each policy becomes a total of $40,000.

The arbitrators expressed no opinion on the question, nor should they have done so under Florida law, because that State has held in Government Employees Insurance Co. v. Mirth, 333 So.2d 545, 547 (Fla.3d DCA 1976) that:

"Under a liability indemnity insurance policy providing uninsured motorists coverage, issues relating to the merits of the claim against the tort-feasor are triable on the arbitration, But an issue bearing on coverage is not to be so tried, and is triable by the court. Cruger v. Allstate Insurance Company, Fla.App. 1962, 162 So.2d 690; Zeagler v. Commercial Union Ins. Co. of N.Y., Fla.App. 1964, 166 So.2d 616." (Emphasis supplied.)

See also Allstate v. Langston, supra.

The Circuit Court for Montgomery County implicitly held that the "stacking or pyramiding" of benefits was not allowed in Maryland. Moreover, the court sanctioned a credit to Allstate in the amount that the Langstons recovered from the insurance carrier on the vehicle in which Lawrence Langston was riding when he was injured.

Our task then is to rise above the debate between the parties and to endeavor to secure for each its respective rights, thereby securing those rights for the people of the State.

THE FACTS.

Lawrence S. Langston, a Maryland resident, but a student at the University of Miami, was severely injured on September 23, 1975, as the result of a collision between an uninsured vehicle and a motorcycle on which Langston was a passenger. Langston was paid $15,000, the full amount of the uninsured motorist coverage of the motorcycle owner's motor vehicle liability. At the time of the accident, Langston was an insured under a motor vehicle liability policy containing uninsured motorist coverage. That policy had been issued in Maryland by Allstate to Mrs. Jean D. Langston. It insured her against liability and loss occasioned by an uninsured motorist. The policy covered two vehicles, a 1972 Ford and a 1966 Chevrolet. Lawrence Langston was included within the ambit of the policy by his status as son of the insured and resident of the same household as the insured. The policy limit as to an uninsured motorist for each vehicle was $20,000 each person, $40,000 each accident. ¹

The damages to Lawrence "far exceeded" the $15,000 that was paid to him by Universal Underwriters Insurance Co., the motorcycle operator's insurance carrier. Lawrence, therefore, made demand upon Allstate in the amount of $40,000, a figure he arrived at by "stacking" the $20,000 coverage afforded for damages caused by an uninsured motorist ² on each of his mother's two vehicles. Allstate rejected the "stacking" concept. Instead, it deducted the $15,000 paid to Lawrence by Universal Underwriters from the $20,000 figure to which it contended it had obligated itself through the issuance of the policy to Mrs. Langston and offered the sum of $5,000 to Lawrence in settlement of his claim.

The Langstons, in accordance with the terms of their policy, ³ demanded that the dispute "be settled by arbitration in accordance with the rules of the American Arbitration Association." Seemingly racing to circumvent the arbitration proceeding, Allstate, on March 2, 1977, filed, in the Circuit Court for Montgomery County, a "Bill for Declaratory Relief." That bill was followed two days later in Florida, by Allstate's instituting a "Complaint for Injunction" ⁴ and then on March 9, 1977, a "Motion for Temporary Stay" of the arbitration pending the determination of the Maryland suit brought in Montgomery County. The motion to stay was denied so that the arbitration hearing was held in Dade County on March 14, 1977. The arbitrators made the following award:

"THE UNDERSIGNED ARBITRATOR(S), designated under the arbitration provision of Policy No. 0-18-550435, having been duly sworn and having heard the proofs and allegations of the parties, AWARDS as follows:

The Arbitrators (Sic ) AWARD to the claimant is FORTY THOUSAND DOLLARS AND NO CENTS ($40,000.00). SU This AWARD is subject to a judicial determination of the applicable policy limits. Claimant contends stacking applies. Respondent denies this. Respondent contends it is entitled to a $15,000.00 set-off. Claimant denies this. Claimant contends there is $40,000.00 in coverage. Respondent contends the coverage is $5,000.00. The Arbitrators make no decision in this regard. If the coverage is $5,000.00 the AWARD is $5,000.00. If the coverage is $40,000.00 the AWARD is $40,000.00.

This Award is in full settlement of all claims submitted to this arbitration."

On the basis of the arbitration award, the Langstons moved for summary judgment. The Dade County court granted the motion and entered judgment for Lawrence by confirming and adopting "as the judgment of . . . (the) court" the "Award of Arbitration." On July 28, 1977, the Dade court "entered two additional orders. One was entitled 'Order Granting . . . (Lawrence's) Amended Motion for Summary Judgment.' That order did not contain confirmation of the arbitration award, but recited that the motion for summary judgment was granted, and ordered 'that accordingly summary judgment shall be entered against Allstate . . . in the amount of $40,000.00.' The other, entitled 'Final Judgment,' ordered that Lawrence recover from Allstate . . . the said amount of $40,000.00, with provision therein for execution to issue." Allstate v. Langston, supra. Allstate moved for a rehearing which was denied and then, as we have seen, appealed to the District Court of Appeal of Florida, Third District.

While the matter was pending in the Florida trial court, Allstate moved that summary judgment be granted to it by the Montgomery County trial court on the ground that there was "no genuine dispute between the parties as to any material fact, and that . . . (it) was entitled to judgment as a matter of law." Md. Rule 610. The circuit court denied the Langston motion to stay the Maryland case until after disposition by Florida.

On December 12, 1977, the court heard argument on Allstate's motion for summary judgment, opposition thereto, the Langstons' "Counter-Motion for Summary Judgment" and the opposition to that motion. The court denied the counter-motion but granted Allstate's motion and entered judgment in favor of the Langstons for $5,000, the amount Allstate maintained that it owed under Mrs. Langston's motor vehicle liability policy after allowing a deduction of a sum equal to the amount recovered from Universal.

This appeal followed, but before the matter was argued in this Court, the Florida intermediate Court of Appeals, as we have previously said, reversed the Dade County circuit court. The Florida appellate court held that

"(t)he action initially filed in Maryland for coverage determination conferred on that court the jurisdiction to litigate and settle the question. Wade v. Clower, 94 Fla. 817, 114 So. 548 (1927). For that reason, the question as to the coverage limit could not have been decided in the subsequently filed action in Dade County . . . even if the latter action had been brought for that purpose. . . .

Where the policy was issued in Maryland to a resident of that State, the construction and legal effect of the terms of the policy and the rights and obligations of the parties thereto are to be determined by the laws of that State. (Citations omitted)."

THE LAW.

Before we explore whether the so-called "stacking or pyramiding" is permitted by the Maryland statute, we think it well to discuss the question of the credit allowed Allstate as a result of the payment to the Langstons by Universal Underwriters of $15,000.

If there were any doubt over whether a credit could be taken, it was resolved in a strikingly similar case, by the Court of Appeals in McKoy v. Aetna Casualty & Surety Co., Inc., 281 Md. 26, 374 A.2d 1170 (1977).

McKoy was struck by a negligent driver while she was operating her vehicle in Washington, D. C. The negligent driver was insured by Government Employees Insurance Company (GEICO), but the liability of GEICO, under the policy was limited to $10,000. ⁵ McKoy alleged her...