Medical Mut. Liability Ins. Soc. of Maryland v. Mutual Fire, Marine & Inland Ins. Co.

Decision Date01 September 1977
Docket NumberNo. 48,48
Citation379 A.2d 739,37 Md.App. 706
PartiesMEDICAL MUTUAL LIABILITY INSURANCE SOCIETY OF MARYLAND v. The MUTUAL FIRE, MARINE AND INLAND INSURANCE COMPANY, et al. ,
CourtCourt of Special Appeals of Maryland

John F. King and Angus R. Everton, Baltimore, with whom were Anderson, Coe & King, Baltimore, on the brief, for appellant.

James D. Peacock, Baltimore, with whom were John H. Mudd, Pamela P. Wassmann and Semmes, Bowen & Semmes, Baltimore, on the brief, for appellees.

Argued before MOORE, LOWE and LISS, JJ.

LISS, Judge.

The immortal Bard said,

"Friendship is constant in all other things

Save in the office and affairs of love;

Therefore all hearts in love use their own tongues;

Let every eye negotiate for itself

And trust no agent." 1

The issue here is whether this admonition applies as well to affairs of the market place as to affairs of the heart.

Appellant, Medical Mutual Liability Insurance Society of Maryland (hereinafter, Medical Mutual), sued B. Dixon Evander, individually (hereinafter, Evander), B. Dixon Evander and Associates, Inc., a corporation of the State of Maryland (hereinafter, Evander Associates), and The Mutual Fire Marine and Inland Insurance Co., a body corporate of the State of Pennsylvania (hereinafter, Mutual Fire), for slander and libel. In its declaration the appellant alleged generally that it had been injured as a result of numerous false statements respecting the appellant's business contained in a brochure prepared and published by Evander and Evander Associates while acting on their own behalf and as agents for Mutual Fire, appellee.

Mutual Fire filed a motion for summary judgment supported by affidavits asserting generally that Evander and his firm were not acting as appellee's agents, servants and employees when the brochure was prepared and issued. Appellant filed an answer to the motion for summary judgment supported by affidavits and exhibits. The trial court (Brannan, J.) granted summary judgment for Mutual Fire and a motion for reconsideration was filed by the appellant. A hearing was held and, after hearing argument and considering memoranda filed by both parties, the trial court entered final judgment in favor of the appellee, dismissing it as a party to the action and permitted an appeal pursuant to Rule 605 a, 2 Maryland Rules of Procedure. It is from this judgment that this appeal was filed.

The facts disclosed by the various motions, affidavits and exhibits in the case are in the main undisputed. Evander is a licensed surplus lines broker 3 authorized by the State of Maryland to place medical malpractice insurance with Mutual Fire. He is also licensed as an insurance agent and is the executive officer of Evander Associates, which is a corporation licensed to procure insurance policies.

As a surplus lines broker, Evander placed medical professional liability insurance with the appellee, Mutual Fire. That type of insurance is on the list of surplus lines approved by the Maryland Insurance Commissioner. Evander had no express agency agreement, written or oral, with Mutual Fire. He was under no contractual obligation to place insurance with Mutual Fire and could place business with any insurer that would accept the risk. After placing each risk with Mutual Fire, Evander filed with the Insurance Division of the Maryland Department of Licensing and Regulation a surplus lines affidavit, as required by the Surplus Line Insurance Law. Maryland Code (1957, 1976 Cum.Supp.) Art. 48A, § 185. Each affidavit certified that the statutory conditions authorizing the placement of such coverage with a nonadmitted insurer had been met. These conditions included the requirement that no authorized insurer writing medical malpractice insurance in Maryland would accept the risk.

Evander also filed copies of 45-day binders, as provided under section 191 of the Surplus Line Insurance Law. The binders were stamped to indicate that the insurance was issued by a nonadmitted insurer as required by section 186. Under section 191, copies of the binders were required to be filed and the original delivered promptly to the insured after placement of the insurance. The names of Shand, Morahan & Company, Inc. (hereinafter, Shand, Morahan) as underwriting managers and Mutual Fire as carrier were printed at the top of each binder. The words B. Dixon Evander & Associates, Inc. were printed at the bottom of the binder.

Copies of the declaration sheets of the actual policies were also filed by Evander with the Insurance Division. These sheets also were stamped to indicate that Mutual Fire was a nonadmitted insurer. Evander's duties as a surplus lines broker included the procurement of the actual policy from the insurer and the delivery of the policy to the insured. Mutual Fire's name was printed at the top of each declaration sheet and at the bottom of the page the following statement appeared: "All claims to be reported directly to Shand, Morahan & Company, Inc., 801 Davis Street, Evanston, Illinois." The signature of Evander appeared below the name of Shand, Morahan on a line designated "authorized representative." Evander's address was not listed.

A review of the documents filed by Evander with the Insurance Division indicates that Evander, in his capacity as a surplus lines broker, after January of 1976, placed 369 medical professional liability policies with Mutual Fire on behalf of Maryland physicians. During this period, no other surplus lines broker placed medical malpractice insurance with Mutual Fire and Evander did not place malpractice insurance with any other surplus lines insurer.

On August 5, 1975, Evander placed an advertisement in The Evening Sun in which he purported to list 133 "representing agents" of Mutual Fire. A news story, which appeared several days later in the Sunpapers, indicated that a number of the agents listed had stated that they were not agents for Mutual Fire and that they had not authorized the use of their names. Mutual Fire in its affidavit stated that it had not given permission or authority to Evander to prepare and distribute any advertising materials on its behalf and that it never had any knowledge of the preparation of the advertisement nor had it ever ratified Evander's conduct. Evander was prohibited by law, as a surplus lines broker, from preparing and issuing such advertisements, Code, Art. 48A, § 201(b), and was specifically advised by Mutual Fire's underwriting manager that he had no authority to prepare and distribute such materials.

One year later, in the summer of 1976, Evander and his firm prepared and distributed a brochure which purported to compare the medical malpractice insurance coverage provided by appellant, Medical Mutual, with that provided by Mutual Fire, the appellee. Evander admitted that he knew he had no authority to distribute such material on behalf of Mutual Fire; however, he prepared the brochure printed it, and distributed it in the name of his own company, Evander Associates.

Evander Associates paid for the publishing of the brochure with its own funds. A separate page of the brochure stated that

"The information contained herein was subject, in whole or in part, to the opinion of legal and accounting counsel. . . . Any incorrect or misleading statements contained herein are totally unintended and will be corrected upon written notice, containing the confirmable basis of the correction to: B. Dixon Evander and Associates, Inc., 2326 N. Charles St., Baltimore, Md. 21218, who are solely responsible for the preparation and contents contained herein."

It is this brochure which appellant contends contained allegedly slanderous and libelous statements for which it seeks compensatory and punitive damages from Evander, Evander Associates and Mutual Fire.

The sole issue presented by this appeal is whether the trial court erred in granting Mutual Fire's motion for summary judgment on the grounds that there was no genuine dispute between the parties as to any material fact, and that as a matter of law Evander, individually, and Evander Associates, were not acting as agents for the appellee when they published the brochure containing the alleged defamatory statements.

Summary judgment pursuant to Maryland Rule 610 is proper only where there is no dispute as to a material fact and the moving party is entitled to judgment as a matter of law. McDonald v. Burgess, 254 Md. 452, 255 A.2d 299 (1969); Horst v. Kraft, 247 Md. 455, 231 A.2d 674 (1967); Owens v. Simon, 245 Md. 404, 226 A.2d 548 (1967).

The Court of Appeals, in Tellez v. Canton Railroad Co., 212 Md. 423, 430, 129 A.2d 809, 813 (1957), said:

"The function of the summary judgment procedure is not to try the case or to decide issues of fact. It is merely to determine whether there is an issue of fact to be tried, and if there is none, to cause judgment to be rendered accordingly."

In Fenwick Motor Co., Inc. v. Fenwick, 258 Md. 134, 138, 265 A.2d 256, 258 (1970), the Court said:

"In a summary judgment proceeding even where the underlying facts are undisputed, if those facts are susceptible of more than one permissible inference, the choice between those inferences should not be made as a matter of law, but should be submitted to the trier of fact."

Liebergott v. Investment Bldg., 249 Md. 584, 241 A.2d 138 (1968); Reeves v. Howar, 244 Md. 83, 222 A.2d 697 (1966); Mayor and City Council v. Allied Contractors, Inc., 236 Md. 534, 204 A.2d 546 (1964).

The basic issue presented to the trial court by the motion for summary judgment was whether the various affidavits and exhibits in support of and in opposition to the motion were sufficient to raise a factual issue requiring a determination as to whether a principal-agent relation existed between Evander or Evander Associates and the appellee. One who moves for summary judgment has the burden of demonstrating clearly the absence of any genuine issue of fact and any doubt as to the...

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