Lewis v. Allstate Ins. Co.

• Decision Date: 04 March 2002
• Docket Number: No. 122,122
• Citation: 368 Md. 44,792 A.2d 272
• Parties: BARRY W. LEWIS v. ALLSTATE INSURANCE COMPANY.
• Court: Maryland Court of Appeals

792 A.2d 272

368 Md. 44

BARRY W. LEWIS v. ALLSTATE INSURANCE COMPANY.

No. 122, Sept. Term, 1999.

Court of Appeals of Maryland.

March 4, 2002.

Gerard P. Uehlinger, Towson, for petitioner.

Michael A. DeSantis, Lanham, for respondent.

Argued before BELL, C.J., ELDRIDGE, RODOWSKY¹, RAKER, WILNER, CATHELL, and HARRELL, JJ.

ELDRIDGE, J.

The issue in this case is whether the Maryland statutory provisions regulating motor vehicle insurance, Maryland Code (1997, 2001 Supp.), § 19-501 et seq. of the Insurance Article, authorize a policy provision which reduces the amount of uninsured motorist benefits, to which the insured is otherwise entitled, by the amount of money which the insurer had previously paid to the insured under a medical payments endorsement in the policy. We shall hold that a policy provision providing for such reduction is not authorized by the statutes and is, therefore, invalid.

The basic facts of the case have been stipulated to by the parties. On December 31, 1994, Barry W. Lewis was driving his 1993 Chevrolet automobile on Belle Grove Road, at the intersection with Gibbons Avenue, in Anne Arundel County, Maryland, when Lewis's Chevrolet was struck by a vehicle driven by Karl W. Reiser. According to Lewis, he was lawfully and carefully driving his automobile at the time, and Reiser negligently drove through a stop sign on Gibbons Avenue, thereby causing the collision. As a result of the accident, Lewis sustained personal injuries and incurred medical expenses.

Reiser was an uninsured motorist, and Lewis's vehicle was insured by Allstate Insurance Company. The Allstate policy issued to Lewis included the statutorily required liability, personal injury protection, and uninsured motorist coverages. The policy also contained an optional medical payments endorsement, for which Lewis paid a separate premium, providing medical payments coverage in addition to that encompassed by the personal injury protection coverage.

In light of his injuries resulting from the accident, Lewis filed claims with Allstate under the medical payments endorsement and the uninsured motorist coverage of his policy. The parties settled the medical payments claim for $5,000.00, which Allstate paid to Lewis, but they were unable to settle the uninsured motorist claim.

Lewis and his wife then filed in the Circuit Court for Anne Arundel County a three-count complaint seeking monetary damages from the uninsured motorist Reiser and from Allstate. Count one was a tort action in which it was alleged that the accident was caused by Reiser's negligence, and count two was an action for loss of consortium. The third count was a breach of contract claim against Allstate, based upon the uninsured motorist provisions of the insurance policy. A default order, and later a default judgment, was entered against Reiser.

The breach of contract action against Allstate was tried before a jury which rendered a verdict against Allstate totaling $11,154.00. The jury's verdict specified the damages as follows: past medical bills—$2,910.00; past lost wages— $6,244.00; non-economic damages— $2,000.00.

Thereafter, Allstate filed a motion to revise the judgment by reducing it to $6,154.00. According to Allstate, the reduction was justified because of the $5,000.00 which Allstate had previously paid under the medical payments endorsement in the policy. Allstate relied on a policy provision in the uninsured motorist coverage which stated that uninsured motorist

"damages payable will be reduced by... all amounts payable under any workers compensation law, disability benefits law, or similar law, automobile medical payments, or any similar automobile medical payments coverage."

In response to Allstate's motion, Lewis argued, inter alia, that the above-quoted policy provision was void under the Maryland statutes regulating automobile insurance.

The Circuit Court granted Allstate's motion and reduced the judgment to $6,154.00. Lewis appealed, and the Court of Special Appeals affirmed in an unreported opinion. This Court then granted Lewis's petition for a writ of certiorari. Lewis v. Allstate, 357 Md. 190, 742 A.2d 520 (1999).

As we have pointed out on several occasions, the Maryland statutory provisions regulating motor vehicle insurance are comprehensive. These statutes mandate compulsory motor vehicle insurance or approved self-insurance, require that motor vehicle insurance policies contain particular coverages in specified minimum amounts, require that certain other coverages be offered to insureds, prohibit various practices by motor vehicle insurance companies, and create administrative procedures for resolving controversies between insureds and insurers. With regard to coverages which are either required or which insurers must offer to their insureds, the statutory provisions expressly authorize certain limitations, conditions, exceptions and exclusions. For more detailed discussions of the comprehensive Maryland statutory scheme regulating motor vehicle insurance, see, e.g., Dutta v. State Farm, 363 Md. 540, 547-555, 769 A.2d 948, 952-956 (2001); MAIF v. Perry, 356 Md. 668, 670-676, 741 A.2d 1114, 1115-1118 (1999); Enterprise v. Allstate, 341 Md. 541, 549-551, 671 A.2d 509, 514-515 (1996); Van Horn v. Atlantic Mutual, 334 Md. 669, 679-684, 641 A.2d 195, 200-202 (1994); Forbes v. Harleysville Mutual, 322 Md. 689, 695-700, 589 A.2d 944, 947-949 (1991); Lee v. Wheeler, 310 Md. 233, 236-242, 528 A.2d 912, 914-917 (1987).

Furthermore, any portions of motor vehicle insurance policies which are inconsistent with this statutory scheme are void. Bishop v. State Farm, 360 Md. 225, 234-235, 757 A.2d 783, 788 (2000) ("To the extent that applicable insurance regulatory statutes require broader or different coverage than the wording of an insurance policy, `the statutory language would prevail over the insurance policy language,'" quoting West American v. Popa, 352 Md. 455, 465 n. 2, 723 A.2d 1, 6 n. 2 (1998)). Staab v. American Motorists, 345 Md. 428, 436-437, 693 A.2d 340, 344 (1997); Gable v. Colonial Ins. Co., 313 Md. 701, 703, 548 A.2d 135, 136 (1988) ("if the policy provision... is contrary to the Insurance Code, the provision is unenforceable"), and cases there cited.

In light of the comprehensive nature of the statutory provisions regulating motor vehicle insurance, and the various limitations, conditions, exceptions and exclusions expressly authorized by the Legislature, this Court has consistently "held invalid insurance policy limitations, exclusions and exceptions to the statutorily required coverages which were not expressly authorized by the Legislature." Van Horn v. Atlantic Mutual, supra, 334 Md. at 686, 641 A.2d at 203. See also Dutta v. State Farm, supra, 363 Md. at 552, 769 A.2d at 955

("`exclusions from statutorily mandated insurance coverage not expressly authorized by the Legislature generally will not be recognized,'" quoting West American v. Popa, supra, 352 Md. at 475, 723 A.2d at 10-11); Enterprise v. Allstate, supra, 341 Md. at 547, 551, 671 A.2d at 512, 515 ("Where the Legislature has mandated insurance coverage, this Court will not create exclusions that are not specifically set out in the statute. * * * [T]he purpose of the compulsory insurance law `would be frustrated to a significant extent' if we were to allow an exclusion from the required security that is not specifically provided by statute"); Larimore v. American Ins. Co., 314 Md. 617, 622, 552 A.2d 889, 891 (1989); Gable v. Colonial Ins. Co., supra, 313 Md. at 704, 548 A.2d at 137 ("where the Legislature has required specified coverages in a particular category of insurance, and has provided for certain exceptions or exclusions to the required coverages, additional exclusions are generally not permitted"); Lee v. Wheeler, supra, 310 Md. at 239, 528 A.2d at 915 ("we will not imply exclusions nor recognize exclusions beyond those expressly enumerated by the legislature").

Specifically with regard to the monetary amounts of insurance coverages which are required or must be offered by insurers, the statutory provisions extensively set forth mandated minimum amounts as well as permissible offsets and reductions in the coverages. See, e.g., the following sections of the Insurance Article: § 19-504 (minimum liability coverage); § 19-505(b) (minimum personal injury protection benefits); § 19-507(b) (authorizing nonduplication policy provisions where there are both personal injury protection and medical insurance benefits); § 19-509(e) (delineating the minimum amount of uninsured/underinsured motorist coverage); § 19-512(a) (authorizing deductibles, in specified amounts, under collision coverage); § 19-513(d) (permitting certain deductions from uninsured/underinsured motorist benefits under limited special circumstances); § 19-513(e) (authorizing a reduction in personal injury protection and uninsured/underinsured motorist benefits by the amount of workers' compensation benefits previously received).

Since the General Assembly has in detail expressly authorized certain offsets from or reductions in the statutorily mandated monetary amounts of insurance, this Court has steadfastly refused to recognize other offsets or reductions not expressly authorized by statute. For example, § 19-513(e) of the Insurance Article authorizes a reduction in personal injury protection (PIP) and uninsured/underinsured motorist benefits by the amount of workers' compensation benefits that the recipient has previously received. In Gable v. Colonial Ins. Co., supra, 313 Md. 701, 548 A.2d 135, we held that a provision in an insurance policy, authorizing a reduction in PIP benefits by the amount of workers' compensation benefits to be received in the future, was void. The Court in Gable stated (313 Md. at 704, 548 A.2d at 136-137):

"The language of § [19-513(e)] shows a legislative intent to provide offsets only for workmen's compensation benefits actually received and not for future benefits.

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