Queen v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 20 June 2019
• Docket Number: Case No.: PWG-18-2625
• Parties: ANDRAE QUEEN and others similarly situated, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE CO., et al., Defendants.
• Court: U.S. District Court — District of Maryland

ANDRAE QUEEN and others similarly situated, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE CO., et al., Defendants.

Case No.: PWG-18-2625

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND Southern Division

June 20, 2019

MEMORANDUM OPINION AND ORDER

Andrae Queen, who had an automobile insurance policy (the "Policy") through State Farm Mutual Automobile Insurance Company,¹ was injured in an automobile accident in St. Mary's County, Maryland involving Desiree Berry, who was not insured. Compl. ¶¶ 3, 7, 8, 10, ECF No. 1-3. Pursuant to the Uninsured Motor Vehicle Coverage provision of his Policy, Queen made a claim for personal injury damages and economic loss, including $306.23 he spent on a rental car while his vehicle was being repaired, and State Farm accepted the claim. Compl. ¶¶ 9, 12-16, ECF No. 1-3. State Farm denied coverage for the rental car cost, however. Id. ¶ 18. In this putative class action brought on behalf of similarly situated policyholders, Queen seeks to recover from State Farm for breach of contract (Count II) and requests a declaratory judgment that automobileinsurance policies must cover loss of use expenses, including rental car costs, under their uninsured motor vehicle coverage provisions (Count III).² Id. ¶¶ 40-52.

Pending is State Farm's Motion to Dismiss, in which it argues that the Policy's Uninsured Motor Vehicle Coverage provision does not cover rental car costs or other loss of use expenses. ECF No. 21.³ While the unambiguous language of the Policy does not include this coverage, Queen's claims are plausible nonetheless, because he has identified case law holding that the term "property damage," as it applies to vehicles, includes damages for loss of use, such as rental car costs, and Maryland law requires insurers to provide coverage for property damages claims between $250 and $15,000. State Farm's challenges to Queen's arguments do not withstand scrutiny. Therefore, State Farm's Motion IS DENIED.

Standard of Review

Pursuant to Rule 12(b)(6), Queen's claims are subject to dismissal if they "fail[] to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). A pleading must contain "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), and must state "a plausible claim for relief," Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678. Rule 12(b)(6)'s purpose "'is to test the sufficiency of a complaint and not to resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.'"Velencia v. Drezhlo, No. RDB-12-237, 2012 WL 6562764, at *4 (D. Md. Dec. 13, 2012) (quoting Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006)).

For purposes of resolving State Farm's Motion to Dismiss, I accept Queen's well-pleaded allegations as true. See Aziz v. Alcolac, 658 F.3d 388, 390 (4th Cir. 2011). The Policy, which Queen did not attach to his Complaint but State Farm attached to its Motion, is integral to the Complaint and relied on in the Complaint, and Queen does not dispute its authenticity. Accordingly, it will be considered in resolving State Farm's motion. See Phillips v. LCI Int'l, Inc., 190 F.3d 609, 618 (4th Cir. 1999). Notably, where an allegation in the operative complaint conflicts with an attached written instrument, "the exhibit prevails." Fayetteville Inv'rs v. Commercial Builders, Inc., 936 F.2d 1462, 1465 (4th Cir. 1991).

Discussion

A breach of contract is "a failure without legal excuse to perform any promise which forms the whole or part of a contract...." In re Ashby Enters., Ltd., 250 B.R. 69, 72 (Bankr. D. Md. 2000) (quoting Conn. Pizza, Inc. v. Bell Atl.-Wash., D.C., Inc., 193 B.R. 217, 225 (Bankr. D. Md. 1996) (quoting Weiss v. Sheet Metal Fabricators, Inc., 110 A.2d 671, 675 (Md. 1955)) (quotation marks omitted)). Under Maryland law, "[t]he elements of a claim for breach of contract include 'contractual obligation, breach, and damages.'" Tucker v. Specialized Loan Servicing, LLC, 83 F. Supp. 3d 635, 655 (D. Md. 2015) (quoting Kumar v. Dhanda, 17 A.3d 744, 749 (Md. Ct. Spec. App. 2011)).

Contractual Language

In this case, whether State Farm breached the contract depends on the nature of its contractual obligation for Uninsured Motor Vehicle Coverage claims, which is a matter of contract interpretation.

Maryland courts adhere to the principle of the objective interpretation of contracts . . . ; i.e., if the language employed is unambiguous, 'a court shall give effect to its plain meaning and there is no need for further construction by the court' . . . We . . . attempt to construe contracts as a whole, to interpret their separate provisions harmoniously, so that, if possible, all of them may be given effect.

City of Coll. Park v. Precision Small Engines, 161 A.3d 728, 734 (Md. Ct. Spec. App. 2017) (quoting Walker v. Dep't of Human Res., 842 A.2d 53 (Md. 2004) ); see also Sagner v. Glenangus Farms, Inc., 198 A.2d 277, 283 (Md. 1964) ("A recognized rule of construction in ascertaining the true meaning of a contract is that the contract must be construed in its entirety and, if reasonably possible, effect must be given to each clause so that a court will not find an interpretation which casts out or disregards a meaningful part of the language of the writing unless no other course can be sensibly and reasonably followed.").

The Uninsured Motor Vehicle Coverage provision states that the Policy "provides Uninsured Motor Vehicle coverage if 'U' is shown under 'SYMBOLS' on the Declarations Page," Policy 12, which it is, see Decl. P., ECF No. 21-1, at 2. The Insuring Agreement for Uninsured Motor Vehicle Coverage is as follows:

We [State Farm] will pay compensatory damages for bodily injury and property damages an insured is legally entitled to recover from the owner or driver of an uninsured motor vehicle. The bodily injury must be sustained by an insured. The bodily injury and property damage must be caused by an accident arising out of the ownership, maintenance, or use of an uninsured motor vehicle as a motor vehicle.

Policy 13. It defines "property damage" as

damage to or destruction of:

1. your car or a newly acquired car; and

2. property owned by an insured while contained in your car or a newly acquired car.

Id. Additionally, the Physical Damage Coverages section states:

The physical damage coverages are Comprehensive coverage, Collision Coverage, Emergency Road Service Coverage, and Car Rental and Travel Expenses Coverage.

This policy provides:

1. Comprehensive Coverage if "D";

2. Collision Coverage if "G";

3. Emergency Road Service Coverage if "H";

4. Car Rental and Travel Expenses Coverage if "R1"

is shown under "SYMBOLS" on the Declarations Page.

Id. at 16; see also id. at 16-17 (stating terms of car rental coverage). Notably, the Declarations Page of Queen's Policy does not include the symbol "R1" next to Uninsured Motor Vehicle Coverage. See Decl. P.

This language is unambiguous, and any argument to the contrary is disingenuous at best. The property damage for which State Farm will pay compensatory damages under its uninsured motorist provision only includes the damage that the car sustains. Policy 13. Lest a policyholder believe that such damage somehow includes the cost of a car rental while the car is repaired, the Policy also includes symbols on the Declarations Page that clearly show the coverage included; for Mr. Queen, the uninsured motorist coverage does not include the symbol that would indicate that car rental expenses were covered. Id. at 16; Decl. P.

Statutory Requirements for Coverage

Queen insists that, regardless of the language of the Policy, Maryland law "establish[ing] minimum, mandatory liability coverage [and] mandatory UM [uninsured motorist] coverage" requires that uninsured motorist provisions cover car rental expenses. Pl.'s Opp'n 2. It is true that the Policy language

must be read within the context of Maryland's strong public policy favoring compensation of those injured by UM drivers. Forbes v. Harleysville Mut. Ins. Co., 322 Md. 689, 697, 589 A.2d 944 (1991). "Any provisions of [an] insurance policywhich purport to condition, limit or dilute the unqualified uninsured motorist coverage mandated by the statute are void and unenforceable." Nationwide Mut. Ins. Co. v. Webb, 291 Md. 721, 730, 436 A.2d 465 (1981). The Court of Appeals "has consistently rejected attempts by insurers, as well as insureds and the insurance commissioner, to circumvent the plain language of the required coverage provisions of the statutes dealing with automobile insurance." Nationwide Mut. Ins. Co. v. Webb, 291 Md. 721, 730, 436 A.2d 465 (1981)

Buckley v. Brethren Mut. Ins. Co., 53 A.3d 456, 465-66 (Md. Ct. Spec. App. 2012), aff'd, 86 A.3d 665 (Md. 2014). Thus, insofar as the Policy impermissibly does not include "coverage required by law, the omission or exclusion is ineffective, and the insurance policy will be applied as if the minimum required coverage were contained in the policy." Nationwide Mut. Ins. Co. v. U.S. Fid. & Guar. Co., 550 A.2d 69, 71 (Md. 1988).

Relevantly, Maryland insurance law states:

The uninsured motorist coverage contained in a motor vehicle liability insurance policy:

(i) shall at least equal:

1. the amounts required by Title 17 of the Transportation Article; and

2. the coverage provided to a qualified person under Title 20, Subtitle 6 of this article [i.e., the Maryland Automobile Insurance Fund ("MAIF") provisions] . . . .

Md. Code Ann., Ins. § 19-509(e)(1). The relevant section of the Transportation Article provides that the insurance that drivers in Maryland are required to carry must

provide for at least:

(1) The payment of claims for bodily injury or death arising from an accident of up to $30,000 for any one person

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