Maryland Auto. Ins. Fund v. Erie Ins. Exchange

Decision Date01 September 1994
Docket NumberNo. 1089,1089
Citation660 A.2d 929,105 Md.App. 377
PartiesMARYLAND AUTOMOBILE INSURANCE FUND v. ERIE INSURANCE EXCHANGE. ,
CourtCourt of Special Appeals of Maryland

Christopher A. Conte (Lipshultz and Hone, Chartered, on the brief), Silver Spring, for appellant.

C. Elliott Wilson, III (McCarthy, Wilson & Ethridge, on the brief), Rockville, for appellee.

Argued before WILNER, C.J., and FISCHER and SALMON, JJ.

SALMON, Judge.

The issue presented in this case is one of first impression. It requires us to interpret and implement Md.Code (1957, 1994 Repl.Vol.), Art. 48A, § 543. ARTICLE 48A, § 5431, deals, inter alia, with the coordination of insurance policies providing for personal injury protection ("PIP") benefits under circumstances where two insurance policies potentially provide PIP benefits for the same injured party. The facts that give rise to this litigation are simple and undisputed.

FACTS

Samoil Fink was, on October 13, 1990, insured under an automobile insurance policy issued by Erie Insurance Exchange ("Erie"). On that same date, Bradley Wilson was insured under an automobile insurance policy issued by the Maryland Automobile Insurance Fund ("MAIF"). The automobile insurance policies issued by both Erie and MAIF provided for the payment of PIP benefits, pursuant to § 539, in the maximum amount of $2,500 each.

On October 13, 1990, a taxicab, registered in Virginia, was stalled on the Washington Beltway. The stalled vehicle was Both Erie and MAIF moved for summary judgment based on the facts set forth above. After hearing oral argument, the trial judge (Miller, J.) granted judgment in favor of Erie in the amount of $2,500 and declared that MAIF and not Erie was obligated to pay Mr. Fink PIP benefits as a result of the subject accident. MAIF then filed this timely appeal.

not required to, and did not, have PIP coverage. Mr. Wilson, driving a Chevrolet Cavalier, [660 A.2d 930] collided with the rear of the stationary taxicab, and the force of that collision propelled the taxicab into Mr. Fink, who was standing nearby. There was no physical contact between Mr. Wilson's vehicle and Mr. Fink. As a result of the collision, Mr. Fink sustained injuries resulting in medical bills and other expenses (covered by PIP) in excess of $2,500. Erie paid Mr. Fink $2,500 and then brought the subject action asking the Circuit Court for Montgomery County to enter judgment in its favor against MAIF for $2,500 and declare: 1) that MAIF "is the primary provider of" PIP benefits to Mr. Fink for the October 13, 1990 accident, and 2) that MAIF was obligated to re-pay Erie for the PIP benefits paid to Mr. Fink.

QUESTION PRESENTED

MAIF presents one question:

Whether payment of a PIP claim to a pedestrian must be made by the insurer of a vehicle with PIP coverage that strikes another vehicle without PIP coverage that in turn strikes the pedestrian, rather than by the pedestrian's own PIP carrier.

DISCUSSION

Section 539 provides, with exceptions not here relevant, that all policies of motor vehicle liability insurance issued in Maryland shall afford minimum benefits up to $2,500 (PIP benefits) for the named insured and other "designated individuals" injured as a result of a motor vehicle accident. Under Maryland's statutory scheme, PIP payments are payable without regard to "fault or non-fault of the named insured or the recipient in causing or contributing to the accident." § 540(a)(1). Among the "designated individuals" eligible to receive PIP benefits are "[p]edestrians injured in an accident in which the insured vehicle is involved." § 539(b)(3).

Section 538 defines "accident" as "any occurrence involving a motor vehicle, other than an occurrence caused intentionally by or at the direction of the insured, from which damage to any property or injury to any person results." (Emphasis added). This definition of "accident" is applicable to §§ 538-546.

Section 543, designated "[d]uplication of benefits; coordination of benefits," specifies that PIP benefits shall not be recovered "from more than one motor vehicle liability policy or insurer on either a duplicative or supplemental basis." § 543(a). Where there is potential coverage by more than one insurer, § 543(b) and (c) establish which insurer is liable for payment of PIP benefits.

Section 543(b)(1), reads:

Benefits payable by insurer of vehicle; exception.--(1) As to any person injured in an accident while occupying a motor vehicle for which the coverage described under § 539 of this subtitle is in effect, and as to any person injured by such a motor vehicle as a pedestrian or while in, on, or alighting from any other vehicle powered by animal or muscular power, or on or alighting from an animal, the benefits shall be payable by the insurer of the motor vehicle.

(Emphasis added).

Broken into its components, Section 543(b)(1) envisions four different scenarios:

1. A person is injured in an accident while occupying a motor vehicle covered by an insurance policy containing PIP;

2. A person is injured as a pedestrian by a motor vehicle covered by an insurance policy containing PIP 3. A person is injured while in, on or alighting from any other vehicle powered by animal or muscular power, by a motor vehicle covered by a policy containing PIP; and

4. A person is injured while on or alighting from an animal by a motor vehicle covered by a policy containing PIP.

Under any of these circumstances, the injured party recovers PIP from the insurer of the covered motor vehicle, not from his or her own personal automobile insurer. In other words, the PIP is said to "run with" or "follow" the motor vehicle.

Andrew Janquitto, Maryland Motor Vehicle Insurance 426 (2nd ed. 1991) (emphasis added).

Art. 48A, § 543(c), deals with coordination of policies providing PIP benefits under § 539, as well as coordination of uninsured motorist benefits under § 541. Section 543(c) reads as follows:

Benefits payable by insured party's insurer.--As to any person insured under a policy providing the coverage described under §§ 539 and 541 of this subtitle who is injured in an accident while occupying a motor vehicle for which the coverage described under §§ 539 and 541 of this subtitle is not in effect, or struck as a pedestrian or injured while in, on, or alighting from any other vehicle powered by animal or muscular power or on or alighting from an animal by a motor vehicle for which the coverage described under §§ 539 and 541 of this subtitle is not in effect, the benefits shall be payable by the injured party's insurer providing such coverage; provided, however, that such benefits shall be reduced to the extent of any medical or disability benefits coverage applicable to the motor vehicle and collectible from the insurer of such motor vehicle.

(Emphasis added).

As stated in Maryland Motor Vehicle Insurance, supra, at 427 Section 543(c) sets up four different scenarios where the injured party collects from his or her own personal automobile insurance.

1. The injured party is injured while occupying a motor vehicle not protected by PIP and uninsured motorist coverage;

2. The injured party is injured while struck as a pedestrian by a motor vehicle not protected by PIP an uninsured motorist coverage;

3. The injured party is injured while in, on or alighting from any other vehicle powered by animal or muscular power by a motor vehicle not protected by PIP and uninsured motorist coverage; and

4. The injured party is injured while on or alighting from an animal by a motor vehicle [not] protected by PIP and uninsured motorist coverage.

In any of these circumstances, the injured party collects from his or her own insurer. This is an inescapable conclusion, of course, because the injured party certainly cannot collect from the insurer of the motor vehicle causing the accident since that motor vehicle does not have either PIP or uninsured motorist coverage. Simply put, the PIP and uninsured motorist coverage cannot "run" with the vehicle causing the harm because there is no insurance capable of running with that vehicle. Therefore, the injured party's insurance, by default, steps in to fill the gap. [ 2]

(Emphasis added).

In Travelers Ins. Co. v. Benton, 278 Md. 542, 546, 365 A.2d 1000 (1976), the Court summarized as follows:

As heretofore indicated, § 543(b) and (c) establish which insurer is liable for payment of PIP benefits. Where PIP coverage is "in effect" on the motor vehicle involved in the accident, the insurer of that vehicle is liable for payment; where such coverage "is not in effect," the injured person's insurer is liable for the PIP benefits....

The Benton Court did not say who would pay PIP benefits when two motor vehicles are "involved in the accident," one with PIP coverage "in effect" and one without PIP coverage. 3

As it pertains to this case, § 543(b)(1) provides that a pedestrian "injured by" a motor vehicle with PIP coverage shall collect from the insurer of that vehicle. On the other hand, § 543(c) says that if a pedestrian is "struck by" a motor vehicle not covered by a policy containing PIP, then the pedestrian's own PIP carrier shall pay. Erie contends that MAIF should pay under § 543(b)(1) because a MAIF insured car, with PIP coverage, injured Mr. Fink. MAIF contends that 543(c) controls, and Erie should pay Mr. Fink's PIP benefits, because Erie is Mr. Fink's PIP carrier, and Mr. Fink was "struck by" a vehicle (the taxi cab) that was not covered by a policy containing PIP.

The first issue to be addressed is whether, within the meaning of § 543(c), the MAIF insured vehicle "struck" Mr. Fink. It is undisputed that the Wilson vehicle (insured by MAIF) did not make direct physical contact with Mr. Fink. "In common parlance [however] the word 'struck' is frequently used to denote a movement or a force causing or resulting in a physical impact." Southern Guarantee Insurance Co. v. Berry, 560 F.Supp. 901, 903 (1983).

In Berry, supra,...

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