Property Insurance v. Yanni

• Decision Date: 15 March 2007
• Docket Number: No. 67, Sept. Term, 2006.,67, Sept. Term, 2006.
• Citation: 919 A.2d 1,397 Md. 474
• Parties: PROPERTY AND CASUALTY INSURANCE GUARANTY CORPORATION v. Peter L. YANNI.
• Court: Court of Special Appeals of Maryland

919 A.2d 1

397 Md. 474

PROPERTY AND CASUALTY INSURANCE GUARANTY CORPORATION v. Peter L. YANNI.

No. 67, Sept. Term, 2006.

Court of Appeals of Maryland.

March 15, 2007.

Albert J. Mezzanotte, Jr., Anne Talbot Brennan (Whiteford, Taylor & Preston, L.L.P., Towson, on brief), for appellant.

Kelly E. Cook (Martin E. Gerel, Ashcraft & Gerel, LLP, Rockville, on brief), for appellee.

Argued before BELL, C.J., RAKER, ^*

WILNER, CATHELL, HARRELL, BATTAGLIA and GREENE, JJ.

BATTAGLIA, J.

Section 9-727 of the Workers' Compensation Act, codified in the Labor and Employment Article¹ requires that "insurers" or "employers" begin payment of workers' compensation within fifteen days of their award by the Workers' Compensation Commission. If payments are not timely made, Section 9-728 of the Act² provides for the assessment of penalties against a delinquent "employer" or "insurer" in progressive percentages of the original award, depending on the number of days the payment is late. Maryland Code (1999), Section 9-728 of the Labor and Employment Article.

In this workers' compensation case, Appellant, the Property and Casualty Insurance Guaranty Corporation ("PCIGC"), was assessed penalties and attorneys' fees by the Workers' Compensation Commission for the late payment of a workers' compensation award to Appellee, Peter L. Yanni, after the workers' compensation insurer to Yanni's employer, Legion Insurance Company, was declared insolvent. We are called upon in this case to determine whether the PCIGC is an "insurer" and subject to the assessment of penalties under Section 9-728 of the Labor and Employment Article; whether the penalties fall within Section 9-301(d) of the Insurance Article's definition of a "covered claim" which the PCIGC is required to consider; and whether the PCIGC is immune from the assessment of penalties under Section 9-314 of the Insurance Article, Maryland Code (1995, 1997 Repl.Vol.), and Section 5-412 of the Courts and Judicial Proceedings Article (1974, 2002 Repl. Vol.).

We shall hold that the PCIGC is not obligated to pay the late-payment penalties assessed against it by the Workers' Compensation Commission because it is not an "insurer," the penalties do not constitute part of Yanni's "covered claim," and because the PCIGC is immune from the imposition of penalties.

I. Background

On October 19, 2000, Peter L. Yanni, employed with MTI Technology Corporation ("MTI") as a Customer Service Engineer, sustained an injury when a piece of equipment on which he was working began to fall, causing him to twist and wrench his back, for which he subsequently filed a claim for workers' compensation. MTI was insured for such claims by Legion Insurance Company ("Legion"), which was declared insolvent in July of 2003. PCIGC subsequently assumed responsibility for Yanni's claim.

On September 29, 2004, the Workers' Compensation Commission, after conducting a hearing on Yanni's claim, determined that Yanni had sustained an accidental injury arising out of and in the course of his employment. The Commission awarded Yanni $211.00 in weekly wages, to be paid for 75 weeks, for permanent partial disability, commencing when his temporary total disability terminated.³ Yanni also was awarded $3,165.00 in attorneys' fees and $528.00 for medical bills.

When the PCIGC failed to timely pay the award, Yanni filed issues⁴ with the Workers' Compensation Commission, requesting that penalties be assessed against the PCIGC pursuant to Section 9-728 of the Labor and Employment Article, Maryland Code (1991). At the hearing on Yanni's request for penalties, both parties stipulated to the fact that Yanni's workers' compensation award was not paid until November 23, 2004, and the attorneys' fees until November 29, almost sixty days after the issuance of the award. The Commission ordered PCIGC to pay Yanni penalties in the amount of 35% of his workers' compensation award, but did not award additional penalties for the delayed payment of attorneys' fees. Yanni's counsel subsequently wrote the Commission inquiring into whether they had inadvertently neglected to assess that penalty in its Order; the Commission responded by issuing a new Order, "rescinding and annulling" its earlier order and denying Yanni's request for any penalties. Yanni filed a second set of issues with the Commission, again requesting penalties against the PCIGC for the late payment of his award and attorney's fees. A second hearing was held before the Commission, after which the Commission ordered the PCIGC to pay Yanni penalties in the amount of 35% of the original award, plus $500.00 in additional attorneys' fees.

The PCIGC petitioned the Circuit Court for Montgomery County for judicial review of the penalties and subsequently filed a motion for summary judgment, to which Yanni responded by filing a cross-motion for summary judgment. The Circuit Court granted summary judgment to Yanni. The PCIGC noted a timely appeal to the Court of Special Appeals presenting one question for review:

Is the property and casualty insurance guaranty corporation subject to the assessment of a fine for late payment of benefits under § 9-728 of the Labor and Employment Article?

Prior to any proceedings in the intermediate appellate court, we issued a writ of certiorari on our own initiative. Prop. Guaranty v. Yanni, 394 Md. 479, 906 A.2d 942 (2006).

II. Analysis

In this case we are called upon to determine whether the trial judge properly granted summary judgment to Yanni. The entry of summary judgment is governed by Maryland Rule 2-501, which provides in pertinent part that:

(f) Entry of judgment. The court shall enter judgment in favor of or against the moving party if the motion and response show that there is no genuine dispute as to any material fact and that the party in whose favor judgment is entered is entitled to judgment as a matter of law.

Maryland Rule 2-501(f). We recently explicated the standard of review for the entry of summary judgment in River Walk Apartments, LLC v. Roger Twigg, 396 Md. 527, 914 A.2d 770 (2007):

The question of whether the trial court properly granted summary judgment is a question of law and is subject to de novo review on appeal. Standard Fire Ins. Co. v. Berrett, 395 Md. 439, 450, 910 A.2d 1072, 1079 (2006); Miller v. Bay City Prop. Owners Ass'n, Inc., 393 Md. 620, 632, 903 A.2d 938, 945 (2006), quoting Myers v. Kayhoe, 391 Md. 188, 203, 892 A.2d 520, 529 (2006); Ross v. State Bd. of Elections, 387 Md. 649, 658, 876 A.2d 692, 697 (2005); Todd v. MTA, 373 Md. 149, 154, 816 A.2d 930, 933 (2003); Beyer v. Morgan State Univ., 369 Md. 335, 359, 800 A.2d 707, 721 (2002). If no material facts are in dispute, we must determine whether summary judgment was correctly entered as a matter of law. Standard Fire Ins. Co., 395 Md. at 450, 910 A.2d at 1079; Ross, 387 Md. at 659, 876 A.2d at 698; Todd, 373 Md. at 155, 816 A.2d at 933; Beyer, 369 Md. at 360, 800 A.2d at 721. On appeal from an order entering summary judgment, we review "only the grounds upon which the trial court relied in granting summary judgment." Standard Fire, 395 Md. at 450, 910 A.2d at 1079; Ross, 387 Md. at 659, 876 A.2d at 698, quoting Eid v. Duke, 373 Md. 2, 10, 816 A.2d 844, 849 (2003), quoting in turn Lovelace v. Anderson, 366 Md. 690, 695, 785 A.2d 726, 729 (2001).

Id. at 541-42, 914 A.2d at 778.

The issues before us require us to construe various provisions of the Insurance and the Labor and Employment Articles. In conducting statutory interpretation, our primary goal is always to "to discern the legislative purpose, the ends to be accomplished, or the evils to be remedied by a particular provision, be it statutory, constitutional or part of the Rules." In re Kaela C., 394 Md. 432, 468, 906 A.2d 915, 936 (2006); quoting General Motors Corp. v. Seay, 388 Md. 341, 352, 879 A.2d 1049, 1055 (2005) quoting in turn Davis, 383 Md. at 605, 861 A.2d at 81; City of Frederick v. Pickett, 392 Md. 411, 427, 897 A.2d 228, 237 (2006). We begin our analysis by first looking to the normal, plain meaning of the language of the statute, reading the statute as a whole to ensure that "`no word, clause, sentence or phrase is rendered surplusage, superfluous, meaningless or nugatory'." In re Kaela C., 394 Md. at 468, 906 A.2d at 936; Mayor & Town Council of Oakland v. Mayor & Town Council of Mountain Lake Park, 392 Md. 301, 316, 896 A.2d 1036, 1045 (2006); Kane v. Bd. of Appeals of Prince George's County, 390 Md. 145, 162, 887 A.2d 1060, 1070 (2005); 468 Giant Food, Inc. v. Dep't of Labor, 356 Md. 180, 194, 738 A.2d 856, 860-61, 863 (1999). If that language is clear and unambiguous, we need not look beyond the statute's provisions and our analysis ends. City of Frederick, 392 Md. at 427, 897 A.2d at 237; Davis, 383 Md. at 605, 861 A.2d at 81. If however, the language is subject to more than one interpretation, it is ambiguous, and we resolve that ambiguity by looking to the statute's legislative history, case law, and statutory purpose. In re Kaela C., 394 Md. at 468, 906 A.2d at 936; Mayor of Oakland, 392 Md. at 316, 896 A.2d at 1045; Canaj, Inc. v. Baker and Div. Phase III, 391 Md. 374, 403, 893 A.2d 1067, 1084 (2006); Comptroller v. Phillips, 384 Md. 583, 591, 865 A.2d 590, 594 (2005).

The PCIGC's statutory purpose is "to provide a mechanism for the prompt payment of covered claims under certain [insurance] policies and to avoid financial loss to residents of the State who are claimants or policyholders of an insolvent insurer." Maryland Code (1995, 2003 Repl.Vol.), Section 9-302(1) of the Insurance Article. Created by the General Assembly in 1971 as the Maryland Insurance Guaranty Association, the PCIGC was originally structured as a nonprofit, unincorporated legal entity, emulating a model act proposed in 1969 by the National Association of Insurance Commissioners which was adopted by over forty states. Ins. Comm'r of State v. Prop. & Cas. Ins. Guar. Corp., 313 Md. 518, 522 n. 2, 546...