Matta v. Government Employees Ins. Co.

• Court: Maryland Court of Appeals
• Writing for the Court: KENNEY
• Citation: Matta v. Government Employees Ins. Co., 705 A.2d 29, 119 Md.App. 334 (Md. App. 1997)
• Decision Date: 01 September 1997
• Docket Number: No. 243,243
• Parties: Harpreet K. MATTA v. GOVERNMENT EMPLOYEES INSURANCE CO. ,

Page 334

119 Md.App. 334

705 A.2d 29

Harpreet K. MATTA v. GOVERNMENT EMPLOYEES INSURANCE CO.

No. 243, Sept. Term, 1997.

Court of Special Appeals of Maryland.

Jan. 28, 1998.

Leonard C. Pederson, Jr. (Schulze & Pederson, P.C., on the brief), Washington, DC, for Appellant.

James M. Brault (James S. Wilson and Brault, Graham, Scott & Brault, L.L.C., on the brief), Rockville, for Appellee.

Argued before MOYLAN, THIEME and KENNEY, JJ.

KENNEY, Judge.

Appellant was injured in an automobile accident while a passenger in a car owned by her father and being driven by her brother. The standard household exception under the liability coverage provision of her parent's automobile insurance policy limited her recovery to $20,000. The policy excluded an insured auto from uninsured motorist coverage and defined the vehicles covered under the policy as being insured autos. Appellant sued her brother in the Circuit Court for Montgomery County and sought also to recover additional benefits from appellee, Government Employees Insurance Co. (GEICO), under the uninsured motorist provision of her parent's policy. The circuit court granted appellee's motion for summary judgment on the uninsured motorist claim and judgment was entered pursuant to Rule 2-602. ¹ Appellant challenges the legal correctness of the trial court's grant of the motion, essentially asking this Court to address one question:

Is appellee responsible to appellant for insurance benefits under the uninsured motorist provision of her parent's policy?

We shall answer in the negative and affirm the judgment of the trial court.

BACKGROUND

On October 31, 1995, appellant's brother was driving northbound on Frederick Road in Montgomery County when the car crossed the center line and collided with another vehicle. Appellant, a passenger in the car driven by her brother, sustained serious injuries, including the partial amputation of her right foot. Both appellant and her brother resided in the family home with their parents.

The car was insured by appellee pursuant to a policy with $300,000 per person/per occurrence limits for both liability and uninsured motorist coverage. The father was the named insured under the policy and the brother and appellant were included as additional "persons insured" under the policy. The liability provisions of the policy included a standard household exclusion that relieved the insurer of responsibility for providing full coverage for bodily injuries sustained by relatives of the named insured residing in the named insured's household. Consequently, by its terms, the policy required appellee to provide appellant with only the statutory minimum liability coverage for injuries sustained while riding with her brother in the car covered by the policy.

Appellant sought additional coverage under the uninsured motorist provisions of the policy, and when appellee denied coverage, appellant filed a claim in the Circuit Court for Montgomery County seeking the difference between the applicable statutory minimum liability coverage, $20,000, and the $300,000 uninsured motorist coverage limit of the policy. Appellant argued that she was entitled to claim under the uninsured motorist provisions of the policy because the tortfeasor's liability coverage was less than the amount of uninsured motorist coverage provided to her by the insurance carrier. Thus, even though both the tortfeasor and the accident victim were covered under the same insurance policy, appellant contended that the policy's definition of an uninsured motorist permitted a determination of coverage for her injury. She argues that any policy exclusion from uninsured motorist coverage of the automobiles insured under the policy is violative of the applicable statutory law and the public policy of Maryland on which such law is based.

In its motion for summary judgment, appellee argued that the policy issued to appellant's father explicitly excluded from uninsured motorist coverage an "insured auto," and that the vehicle driven by appellant's brother was insured as required by law at the time of the accident. Appellee firmly maintains the validity of a household exclusion to uninsured motorist coverage and the policy language implementing the exclusion.

THE POLICY BEHIND THE POLICY

Maryland law requires that an owner of a registered vehicle carry a minimum amount of both liability and uninsured motorist insurance to cover the payment of claims for bodily injury or death arising out of an accident. Md.Code (1977, 1992 Repl.Vol.), § 17-103 of the Transportation Article ("the Maryland Financial Responsibility Law"). The prescribed minimum coverage limits are $20,000 for any one person and $40,000 for any two or more persons. Id. The purpose of Maryland's compulsory insurance law is to ensure that those who own and operate motor vehicles registered in the State are financially able to pay compensation for damages resulting from motor vehicle accidents. Enterprise Leasing Co. v. Allstate Ins. Co., 341 Md. 541, 671 A.2d 509 (1996); Blue Bird Cab Co. v. Amalgamated Cas. Ins. Co., 109 Md.App. 378, 675 A.2d 122 (1996); Larimore v. American Ins. Co., 69 Md.App. 631, 519 A.2d 743 (1987), rev'd on other grounds, 314 Md. 617, 552 A.2d 889 (1989). The Court of Appeals has construed the statute to embody a public policy that all automobile liability policies shall contain bodily injury or death liability coverage in at least the statutory minimum amounts. State Farm Mut. Auto. Ins. Co. v. Nationwide Mut. Ins. Co., 307 Md. 631, 643, 516 A.2d 586 (1986).

Insurance companies who contract to supply this coverage may "limit their liability and impose whatever condition they please in the policy so long as neither the limitation on liability nor the condition contravenes a statutory inhibition or the State's public policy." Walther v. Allstate Ins. Co., 83 Md.App. 405, 411, 575 A.2d 339, cert. denied, 320 Md. 801, 580 A.2d 219 (1990) (citing State Farm v. Nationwide, supra ). One standard exclusion that has been recognized as valid by Maryland courts is the "household" exclusion. State Farm v. Nationwide, 307 Md. at 644, 516 A.2d 586. This exclusion limits the insurer's liability to the statutory minimum amount of coverage for claims asserted by household members of the insured who are injured in an accident while occupying or when struck by a car operated by the insured or a member of the household. Id.

In addition to liability coverage in an amount at least equal to the statutory minimum, uninsured motorist insurance is required to be included in each automobile insurance policy issued in Maryland pursuant to "remedial legislation" designed by the General Assembly "for the protection of the motoring public." Langston v. Allstate Ins. Co., 40 Md.App. 414, 436, 392 A.2d 561 (1978). The purpose of the requirement is to assure financial compensation to the innocent victims of motor vehicle accidents who are unable to recover from financially irresponsible uninsured motorists. Pennsylvania Nat'l Mut. Cas. Ins. Co. v. Gartelman, 288 Md. 151, 416 A.2d 734 (1980); Larimore, supra.

Since 1973, Maryland has required every motor vehicle insurance carrier to offer uninsured motorist coverage in every motor vehicle insurance policy issued in Maryland. Md.Code (1997), § 19-509(c) of the Insurance Article ("Ins."). ² Waters v. U.S. Fidelity & Guar. Co., 328 Md. 700, 710, 616 A.2d 884 (1992). In 1975, the Code was amended to require that every motor vehicle insurance policy issued in Maryland contain minimum uninsured motorist coverage in the amount required under the Maryland Financial Responsibility Law, i.e., $20,000 per person and $40,000 per accident. Ins. § 19-509(e); Waters, 328 Md. at 710, 616 A.2d 884. Prior to further amendments to the Insurance Code in 1981, the Court of Appeals had stated that the purpose of the uninsured motorist provisions was "that each insured under such coverage have available the full statutory minimum to exactly the same extent as would have been available had the tortfeasor complied with the minimum requirements of the financial responsibility law." Waters, 328 Md. at 710, 616 A.2d 884 (quoting Nationwide Mutual Ins. v. Webb, 291 Md. 721, 737, 436 A.2d 465 (1981) (citation omitted) (emphasis added)). The effect of this mandatory coverage was to "provid[e] minimum protection to individuals injured by uninsured motorists." Waters, 328 Md. at 710, 616 A.2d 884 (quoting Yarmuth v. Gov't Employees Ins. Co., 286 Md. 256, 264, 407 A.2d 315 (1979)). In 1981, the legislature amended the statute to provide people with the option of purchasing more uninsured motorist coverage than the minimum required by the statute. Popham v. State Farm Mut. Ins. Co., 333 Md. 136, 146, 634 A.2d 28 (1993).

After the 1981 amendment, people who purchased higher uninsured motorist coverage could claim against their own policies after exhausting the liability limits of the tortfeasors' policies under appropriate circumstances. This legislative action recognized the concept of "underinsurance" by including within the definition of an "uninsured motor vehicle" a motor vehicle "for which the sum of the limits of liability under all valid and collectible liability insurance policies ... applicable to bodily injury or death ... is less than the amount of coverage provided under this section." Ins. § 19-509(a)(2)(i).

THE STATUTE

Ins. § 19-509 provides, in pertinent part, that each motor vehicle liability policy issued, sold, or delivered in the State ... shall contain coverage for damage, subject to the policy limits, that:

(1)the insured is entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injuries sustained in a motor vehicle accident arising out of the ownership, maintenance, or use of the uninsured motor vehicle....

The amount of uninsured motorist coverage for an individual shall at least equal $20,000, the amount required by Title 17 of the...