Mills v. Judd

• Decision Date: 10 December 1969
• Docket Number: No. 95,95
• Parties: Gary Lee MILLS and Federal Mutual Insurance Company v. Regina C. JUDD, infant, by Joan Judd her mother and next friend, and Joan Judd.
• Court: Maryland Court of Appeals

Page 144

256 Md. 144

259 A.2d 267

Gary Lee MILLS and Federal Mutual Insurance Company v. Regina C. JUDD, infant, by Joan Judd her mother and next

friend, and Joan Judd.

No. 95.

Court of Appeals of Maryland.

Dec. 10, 1969.

Edwin H. Miller, Hagerstown (Miller, Miller & Kuczynski, Hagerstown, on the brief), for appellants.

Ernest V. Wachs, Hagerstown (Wachs & Kreykenbohm, Hagerstown, on the brief), for appellees.

Before HAMMOND, C. J., and BARNES, McWILLIAMS, FINAN and SINGLEY, JJ.

FINAN, Judge.

This case is before us on appeal from a decision of the Circuit Court for Washington County which held that a policy of insurance written by the defendant-appellant, Federal Mutual Insurance Company (Company), did provide liability coverage for defendant-appellant, Gary Lee Mills, a minor, who through the negligent operation of an automobile had caused injury to the plaintiff-appellee, Regina Judd, in an accident occurring in West Virginia. The facts before us are not in dispute but rather the legal interpretation which should be given to them.

Bruce Mills, Gary's father, had obtained a public liability policy on his 1960 Pontiac from Federal Mutual. When Gary, who is a minor, obtained a license, an endorsement designated as 'Statutory Coverage for Named Minors' and commonly referred to as the JR-11 coverage was added to the policy. This JR-11 coverage is necessary if the parent, guardian, or other responsible adult who signed the minor's application for a driver's license, is to be free from the imputation of the negligence of the minor. Maryland Code (1967 Repl.Vol.) Art. 66 1/2, § 93.

A second endorsement to this policy designated as 'Use of Other Automobiles Endorsement-Broad Form,' read in pertinent part:

'2(b) This endorsement does not apply:

(4) to any automobile owned by the named insurer or named individual or a member of the same household.' (The named insured for the purpose of this provision was Gary Lee Mills.)

On September 22, 1967, Gary was driving his mother's automobile in West Virginia when the accident occurred. Regina Judd, appellee, was a passenger in the car and sustained injuries in the accident. She brought suit against Gary and recovered a judgment against him. In an effort to collect this judgment, a suit was filed against Federal Mutual alleging that the policy required the company to pay appellee for damages caused by Gary Mills.

The insurance policy issued by the Company to the father covering public liability and property damage, the 'Use of Other Automobiles Endorsement-Broad Form,' and the 'Statutory Coverage for Named Minors,' JR-11 endorsement, must all be read and considered as a whole. Appleman, Insurance Law and Practice, Section 7537, 'Endorsements.' See also Erie Insurance Exchange v. Gosnell, 246 Md. 724, 731, 230 A.2d 467 (1967). Under such a rule of construction it is clear that, because of the exclusions contained in the 'Use of Other Automobiles Endorsement-Broad Form,' the Company was not liable for any accident which occurred while Gary was operating his mother's car. However, the 'Statutory Coverage for Named Minors,' JR-11 endorsement, in effect created an exception to the exclusions contained in the 'Use of Other Automobile Endorsement-Broad Form' in that it did provide coverage for Gary '* * * when driving a motor vehicle upon a highway in this State. * * *'; otherwise, it would not have conformed with the requirement of § 93(b) of Art. 66 1/2. The question is, however, did this 'Statutory Coverage for Named Minors,' JR-11 endorsement, also have the effect of providing coverage while Gary was driving his mother's car outside of the State of Maryland?

The lower court held, and we think erroneously so, that the 'Statutory Coverage for Named Minors,' JR-11 endorsement, covered Gary while operating his mother's car outside the State of Maryland. In our opinion, the reasoning which produced this conclusion placed unwarranted reliance upon § 131 of Art. 66 1/2, titled, 'Policy of insurance as proof of financial responsibility.' The court below stated:

'* * * The financial responsibility to be furnished was formally set forth in Section 119, now Section 122. Financial responsibility of minors as well as other motorists, is also regulated by Section 131 of Article 66 1/2. This Section is headed 'Policy of Insurance as Proof of Financial Responsibility.' A part of this Section reads as follows:

'(a) Such policy of insurance shall meet the requirements enumerated hereunder when:

(5) It shall provide insurance anywhere within the continental limits of the United States or the Dominion of Canada.'

The original policy of insurance issued to the Father of Gary Lee Mills did necessarily include the provisions of this statutory mandate.

No point is made here that the JR-11 attached to the Father's policy does not cover the car owned by the Mother and which was involved in the accident. By proper endorsement, the JR-11 in this case provides that the insurance applies to the operation of any automobile by the minor.'

To understand wherein the lower court erred, we first turn to the JR-11 endorsement or, as it is technically titled, the 'Statutory Coverage for Named Minors,' which expressly provides in relevant part:

'It is agreed that such insurance as is afforded by the policy for Bodily Injury Liability and Property Damage Liability applies to the operation of any automobile by the minor named below in accordance with the provisions of Section 93 of Article 66 1/2 of the Annotated Code of Maryland (1957 Edition) as amended, * * *.' (Emphasis supplied.)

We turn next to the following pertinent part of subsections (b) and (d) of § 93 of Article 66 1/2.

'(b) Imputation of negligence.-Any negligence of a minor under the age of twenty-one (21) years when driving a motor vehicle upon a highway in this State shall be imputed to the person who has signed the application of such minor for a permit or license, * * *' (Emphasis supplied.)

'(d) Compliance with proof of financial responsibility as required by § 122 of this article.-On and after June 1, 1954, the application of any person under the age of twenty-one (21) years for an instruction permit or operator's or chauffeur's license shall be accompanied by such proof of financial responsibility as is required under the provisions of § 122 of this article. * * *' (Emphasis supplied.)

It is important to note that nowhere in § 93 is any mention made of § 131, but rather reference is made to 'such proof of financial responsibility as is required under the provisions of § 122 of this article Art. 66 1/2.' ¹

We now turn to § 122, which requires that:

'(a) Generally.-Within ninety days after the receipt of a report of a motor vehicle accident within this State which has resulted in bodily injury or death, or damage to the property of any one person in excess of one hundred dollars ($100.00,) the Department shall suspend the license of each operator and all registrations of the owner of a motor vehicle in any manner involved * * *, unless such operator or owner or both shall deposit security in a sum which shall be sufficient * * * to satisfy any judgment or judgments for damages resulting from such accident * * * and unless such operator or owner or both, has previously given or shall immediately give and thereafter maintain for a period of three (3) years, proof of financial responsibility; * * *'

'(b) Operators or owners covered by insurance.-This section shall not apply:

(1) * * *

(2) To such operator, if not the owner of such motor vehicle, if there was in effect at the time of such accident an automobile liability policy or bond with respect to his operation of motor vehicles not owned by him.

(3) To such operator or owner if the liability of such operator or owner for damages resulting from such accident is, in the judgment of the Department (of Motor Vehicles), covered by any other form of liability insurance policy or bond.'

We emphasize that in the case at bar, the father and Gary did not have to obtain insurance after the fact of the accident. If they had been uninsured at the time of the accident, then, unquestionably they would have been in the position of having to obtain an insurance policy in keeping with the provisions of § 131 of Art. 66 1/2 titled, 'Policy of insurance as proof of financial responsibility.' Section 131 does require that the policy '* * * provide insurance anywhere within the continental limits of the United States or the Dominion of Canada.' It is upon this section that the opinion of the lower court erroneously turns.

In the instant case, at the time of the accident the father already had in effect insurance coverage which would have released him of the burden of any imputed negligence, under the laws of Maryland, arising out of his son's operation of a motor vehicle. Art. 66 1/2, § 93(b). This insurance coverage satisfied the requirements of § 93 and § 122 of Art. 66 1/2, and in our opinion this was all that was necessary for the father and minor son to operate a motor vehicle in this State in keeping with the financial responsibility provisons of Art. 66 1/2.

For a better understanding of the distinction which must be observed between the type of insurance that may satisfy § 122, as contrasted with the type of insurance policy required by the provisions of § 131, we look to the case of Fidelity & Casualty Co. of New York v. McConnaughy, 228 Md. 1, 179 A.2d 117 (1962), which we think contains the answer to the question before this Court. In McConnaughy, the insurance carrier after filing a certificate showing that the negligent motorist was insured (Form SR 21) endeavored to escape liability by interposing the defense of non-cooperation on the part of the insured. However, the party injured by the insured motorist obtained judgment against him and then sued the insurance carrier contending that by virtue of the provisions of § 131(a)(6)(F) of Art. 66 1/2, the insurance carrier was...