Nesbit v. Geico

• Decision Date: 23 July 2004
• Docket Number: No. 131,131
• Citation: 382 Md. 65,854 A.2d 879
• Parties: Richard NESBIT v. GOVERNMENT EMPLOYEES INSURANCE COMPANY.
• Court: Maryland Court of Appeals

854 A.2d 879

382 Md. 65

Richard NESBIT v. GOVERNMENT EMPLOYEES INSURANCE COMPANY.

No. 131, Sept. Term, 2003.

Court of Appeals of Maryland.

July 23, 2004.

Todd L. Schuler (Mark C. Miller, William J. Blondell, Jr., Chtd., Baltimore, on brief), for petitioner.

Frank F. Daily (Cynthia Dietz Spirt, Law Offices of Frank F. Daily, P.A., Hunt Valley, Andrew Janquitto, Mudd, Harrison & Burch, Towson, on brief), for respondent.

James S. Wilson, Joan F. Brault, Brault, Graham, Scott & Brault, LLC, Rockville, brief of Amicus Curiae Property Casualty Insurers Association of America, for respondent.

Argued before BELL, C.J., RAKER, WILNER, CATHELL, HARRELL, BATTAGLIA, GREENE, JJ.

GREENE, J.

On February 7, 2003, Richard Nesbit ("Nesbit") was injured in an automobile accident. Nesbit attempted to recover personal injury protection ("PIP") benefits from his insurer, Government Employees Insurance Company ("GEICO"). GEICO rejected the PIP claim because Nesbit had no PIP coverage, having signed a PIP waiver on June 15, 1998. Nesbit sued GEICO in the District Court of Maryland sitting in Baltimore County. The parties tried the case on July 3, 2003, and the Court entered judgment on behalf of GEICO. Nesbit noted a de novo appeal in the Circuit Court for Baltimore County on August 7, 2003. The Court held the trial on December 1, 2003. Nesbit did not appear for the trial, but his attorney attended. After taking testimony and hearing arguments, the Court entered judgment in favor of GEICO. Nesbit petitioned this Court for a writ of certiorari, which we granted on March 11, 2004.

The issue before this Court is whether Section 19-506 of the Insurance Article of the Maryland Code voids a PIP waiver that (by its own terms) remains effective until withdrawn by the insured in writing, if the insured's policy has been renewed and changed since the signing of the PIP waiver. We hold that such a contract is permissible under Maryland law.

Nesbit also questions whether the waiver form used by GEICO complied with the statute and whether the Court erred by finding that he had received a three-page waiver form from GEICO even though GEICO only produced the signed signature page of the form at trial. We hold that the form used complied with the statute and that the Circuit Court did not err in finding that Nesbit had received the whole form.¹

FACTS

At the time of Nesbit's accident (February 2003), he maintained an automobile insurance policy with GEICO. The renewal policy had issued on October 11, 2002, and covered the period from November 27, 2002, through May 27, 2003. Nesbit obtained his original policy with GEICO in 1998. On June 15, 1998, Nesbit signed a waiver of PIP benefits, which included the following language:

I affirmatively waive the benefits required by section 539 of Article 48A of the Maryland Insurance Code (PIP). I understand and agree that this waiver of coverage shall be applicable to the policy or binder of insurance described below, on all future renewals of the policy and on all replacement policies unless I notify the company in writing to the contrary, with the effective date of such change being no earlier than the receipt date by the company of my written notification.

Nesbit's original policy with GEICO covered a 1992 Honda and a 1992 Pontiac. At the time of the accident, Nesbit's policy covered the 1996 Dodge Caravan that was involved in the accident and a 2000 Toyota.

As noted previously, Nesbit did not appear for the trial in Circuit Court. He was, however, represented by an attorney who agreed to stipulate to certain facts. The attorneys stipulated to the fact that Nesbit was insured by GEICO at the time of the accident, that Nesbit was injured in the accident, that Nesbit signed the signature page of the PIP waiver on June 15, 1998, and that Nesbit returned that signed page to GEICO. Nesbit's attorney presented no witnesses. He argued that the initial PIP waiver signed in 1998 was no longer effective because Nesbit had renewed and changed his policy to include two different vehicles than were originally covered and the waiver form itself did not comply with the statutory requirements.

GEICO called Alice Hinkle ("Hinkle"), the underwriting and sales manager for GEICO, to testify. Hinkle testified that GEICO routinely sends out a three-page PIP waiver notice form to insureds, the third page being the signature page admitted to by Nesbit. The first two pages contain information about PIP including who it covers, how much the premiums are with full PIP coverage, how much the premiums are if PIP is waived, the minimum coverage benefits, what losses it covers, and for whom coverage can and cannot be waived. GEICO did not produce the original or a copy of the form actually sent to Nesbit. Rather, GEICO offered a copy of a sample form into evidence, which was received. Hinkle testified that such a form would have been sent to Nesbit and that GEICO only retained the signature page — the portion of the form that Nesbit returned to them.

Hinkle also testified that the PIP waiver form used by GEICO has been approved by the Maryland Insurance Administration. In support of this testimony, GEICO introduced a letter from GEICO to the Maryland Insurance Commissioner regarding the approval of various GEICO forms, including the Waiver of Personal Injury Protection form, which was attached to the letter. The letter, which was received as an exhibit, included a June 7, 1994, stamp from the Maryland Insurance Administration that says "APPROVED."

Hinkle testified that since the time that Nesbit signed the PIP waiver, his policy had changed to include two different vehicles than were originally covered. She also acknowledged that the rate that would have been paid for PIP after the policy changed would have been different than the PIP rate that would have been paid originally. This change was based on a number of factors, including the fact that the vehicles covered were different.

As previously noted, Nesbit did not testify. There is no evidence that he ever notified GEICO in writing or otherwise that he intended to revoke his PIP waiver. Neither is there any evidence that he sought to obtain PIP coverage at any time after the initial waiver or that he ever paid for the PIP coverage he chose to waive in 1998. Hinkley testified that the declarations page received by Nesbit in October of 2002 showed that he had "option A" for PIP coverage which, as explained by that document, meant that $2,500 of PIP benefits had been waived by the signing of the PIP waiver.

At the conclusion of the trial, the judge found that Nesbit waived his PIP coverage and that the form "clearly and concisely explains in the right type ... the effect of the waiver, the nature and extent and cost of coverage that would be provided. It did all of that. And as I said, he signed the form and sent it back and the evidence is that the form that was used has been approved by the Maryland Insurance Commission." Regarding Nesbit's legal arguments, the trial judge stated:

I'll incorporate what I said earlier which brings us up to this point and the argument that the insurance companies must, in this case GEICO, tell the insured each renewal period that they can waive or not waive PIP. I don't believe the statute requires the companies to do that.... Why MAIF is singled out in these two statutes, I do not know the answer to that, but I do know that the form that was sent that has been approved by the Commissioner to, in this case Mr. Nesbit, told him that this waiver was applicable to all future renewals and all replacement policies unless Mr. Nesbit notified the company in writing to the contrary.

The Circuit Court entered judgment in favor of GEICO. This appeal followed.

DISCUSSION

Md. Rule 8-131(c) provides that when an action has been tried without a jury, "the appellate court will review the case on both the law and the evidence. It will not set aside the judgment of the trial court on the evidence unless clearly erroneous, and will give due regard to the opportunity of the trial court to judge the credibility of the witnesses." The deference shown to the trial court's factual findings under the clearly erroneous standard does not, of course, apply to legal conclusions. When the trial court's order "involves an interpretation and application of Maryland statutory and case law, our Court must determine whether the lower court's conclusions are legally correct under a de novo standard of review." Walter v. Gunter, 367 Md. 386, 392, 788 A.2d 609, 612 (2002).

When interpreting a statute, we must determine the intent of the legislature in enacting it. Mayor & City of Baltimore v. Chase, 360 Md. 121, 128, 756 A.2d 987, 991 (2000). The rules governing the search for legislative intent are settled. Id. In Chesapeake and Potomac Telephone Co. of Maryland v. Director of Finance for Mayor and City Council of Baltimore, 343 Md. 567, 683 A.2d 512 (1996), we stated:

[W]e begin our analysis by reviewing the pertinent rules of [statutory construction]. Of course, the cardinal rule is to ascertain and effectuate legislative intent. To this end, we begin our inquiry with the words of the statute and, ordinarily, when the words of the statute are clear and unambiguous, according to their commonly understood meaning, we end our inquiry there also.

Chesapeake and Potomac, 343 Md. at 578, 683 A.2d at 517 (internal citations omitted). We assign words their ordinary and natural meaning when interpreting statutory language. Lewis v. State, 348 Md. 648, 653, 705 A.2d 1128, 1131 (1998), quoting Gardner v. State, 344 Md. 642, 647-48, 689 A.2d 610, 612-13 (1997).

Section 19-505(a) of the Insurance Article of the Md.Code requires "each insurer that issues, sells, or delivers a motor vehicle liability insurance policy in this State" to provide PIP coverage, unless that coverage is waived in accordance with § 19-506 of the Insurance Article. Md.Code (1997, 2002 Repl.Vol.), ...