Royal Ins. Co. of America v. Austin

• Decision Date: 01 September 1988
• Docket Number: No. 1592,1592
• Citation: 79 Md.App. 741,558 A.2d 1247
• Parties: ROYAL INSURANCE COMPANY OF AMERICA v. Bernard AUSTIN
• Court: Court of Special Appeals of Maryland

Page 741

79 Md.App. 741

558 A.2d 1247

ROYAL INSURANCE COMPANY OF AMERICA v. Bernard AUSTIN.

No. 1592 Sept. Term, 1988.

Court of Special Appeals of Maryland.

June 13, 1989.

James L. Kelly, Jr. (Brian J. Nash and Montedonico & Mason, Chartered, on the brief), Rockville, for appellant.

Christopher K. Mangold (Koonz, McKenney & Johnson, on the brief), Landover, for appellee.

Argued before BISHOP, ALPERT, and ROSALYN B. BELL, JJ.

ALPERT, Judge.

In this case of first impression we are called upon inter alia, to decide whether the undefined term "hit and run vehicle" in an automobile insurance policy's uninsured motor vehicle's coverage excludes accidents where there has been no contact between the insured's vehicle and the "phantom" vehicle.

The parties have agreed that:

"a motor vehicle accident ... occurred on February 24, 1984, when a truck driven by the Appellee was forced off the road by an unidentified truck (phantom vehicle) which had failed to negotiate a turn and crossed the double yellow line coming into the Appellee's lane. In order to avoid striking the phantom vehicle head-on, the Appellee turned his truck to the right, striking a dirt embankment, which caused his vehicle to overturn and injure the Appellee. At no time did the phantom vehicle and the Appellee's truck come into contact with one another.

At the time of the accident, Appellee was working within the scope of his employment at Doughtie's Foods, Inc., and was operating an employer-provided vehicle that was insured by the Appellant, Royal Insurance Company of America (Royal). Under the terms of the uninsured motorist endorsement of the commercial vehicle insurance policy issued to Doughtie's Foods, Inc., by Appellant Royal, the Appellee is an insured of the Appellant.

A complaint was filed by Bernard Austin, appellee, against Royal Insurance Company of America ("Royal Insurance"), appellant, in the Circuit Court for Prince George's County after Royal Insurance denied coverage to Austin under the Uninsured Motorist provision of a commercial vehicle insurance policy owned by Doughtie Foods, Inc. (Austin's employer). Both Austin and Royal Insurance moved for summary judgment. By order dated June 14, 1988, the trial court denied both parties' motions. On June 22, 1988, a consent judgment was entered by the trial court. Both parties signed the agreement through their attorneys. The agreement contained a provision that purportedly preserved Royal Insurance's "right to appeal the Court's denial of defendant's Motion for Summary Judgment."

On appeal, Royal Insurance argues that the lower court erred in refusing to grant its motion for summary judgment. It argues that because Austin's vehicle was run off the road by a "phantom vehicle" that did not come into physical contact with Austin's truck, Austin is not covered by the terms of the policy's uninsured motorist provision. Further, Royal Insurance argues, contrary to the trial court's order denying its motion for summary judgment, that such an exclusion is not void as against the public policy of Maryland because the insurance policy involved is a commercial one, not a personal insurance policy.

Appealability of Consent Judgment

Preliminarily, although neither party raises the point, we must examine whether we may properly exercise jurisdiction in this case. It is a well-settled proposition in Maryland that consent decrees are not appealable. See Franzen v. Dubinok, 290 Md. 65, 68, 427 A.2d 1002 (1981); First Federated Commodity Trust Corp. v. Commissioner, 272 Md. 329, 332, 322 A.2d 539 (1974); Mercantile Trust Co. v. Schloss, 165 Md. 18, 24, 166 A. 599 (1933); Prince George's County v. Barron, 19 Md.App. 348, 349, 311 A.2d 453 (1973). Perceiving no pertinent difference between consent decrees in equity and consent judgments at law, this court has applied the same rule to the latter. See Casson v. Joyce, 28 Md.App. 634, 639, 346 A.2d 683 (1975). The reasoning behind this jurisdictional bar is that an appeal from consensual rulings is patently inconsistent with the intent of such voluntary rulings expeditiously to resolve legal disputes. See generally Franzen, supra, 290 Md. at 68-69, 427 A.2d 1002.

This case, however, is different than the cases cited above in a material respect. A stipulation in the consent order in this case allows appellant to appeal the trial court's denial of its motion for summary judgment and to seek certiorari in the Court of Appeals. In the posture of the case before us, this stipulation leads us to the conclusion that the order below was not a true consent judgment as to both liability and damages, but it was, at most, a stipulation as to damages should Royal Insurance's bout in the appellate arena be unsuccessful. As such, we do not think the labelling of the order as a "Consent Judgment" should, under these circumstances, preclude appellate review. ¹ This has been the view taken in other jurisdictions examining similar consensual agreements. See e.g., Checker Van Lines v. Siltek Int'l, Ltd., 169 N.J.Super. 102, 404 A.2d 333 (Ct., App.Div.1979) (per curiam ); Messina v. Lufthansa German Airlines, 64 A.D.2d 890, 408 N.Y.S.2d 109 (App.Div.1978); IFG Leasing Co. v. Snyder, 77 Or.App. 374, 713 P.2d 630 (1986).

Construction of "Hit and Run" Provision in Insurance Policy

Doughtie Foods' insurance policy with Royal Insurance provides that Royal Insurance "will pay all sums the insured ² is legally entitled to recover as damages from the owner or driver of an uninsured motor vehicle." Additionally, the policy states:

4. "Uninsured motor vehicle" means a land motor vehicle or trailer.

* * *

* * *

d. Which is a hit-and-run vehicle and neither the driver nor owner can be identified.

The term "hit and run vehicle" is not further defined anywhere else in the policy. No extraneous evidence as to its meaning is before this court. Royal Insurance contends that as a matter of law the term excludes from coverage accidents where no contact between the insured's vehicle and the second vehicle or "phantom vehicle" takes place. Austin contends that the term can be reasonably interpreted to include unknown drivers who do not come into physical contact with the insured's vehicle but, nevertheless, cause the accident.

In our exhaustive review of the law we have been unable to uncover any cases where a court has been faced with interpreting the phrase "hit and run vehicle" in an insurance policy where the policy does not include some express qualifying language excluding from coverage "non-contact" accidents. We have, however, reviewed numerous decisions where courts have been required to interpret the phrase "hit and run" in statutes mandating uninsured motorist coverage. In nearly all of the cases, the issue involved is whether an insurance policy that expressly excludes from coverage accidents that occur without physical contact between the vehicles involved is void as against public policy because it provides less than the minimum coverage under a statute that requires coverage in undefined "hit and run" situations. ³

Although a few courts have held that the undefined statutory term "hit and run" clearly requires insurance coverage only in physical contact situations, see, e.g., Lemke v. Kenilworth Ins. Co., 109 Ill.2d 350, 94 Ill.Dec. 66, 487 N.E.2d 943 (1985); Grace v. State Farm Mut. Auto Ins. Co., 197 Neb. 118, 246 N.W.2d 874 (1976); Hendricks v. United States Fidelity & Guaranty Co., 5 N.C.App. 181, 167 S.E.2d 876 (1969); Hayne v. Progressive Northern Ins. Co., 115 Wis.2d 68, 339 N.W.2d 588 (1983), the vast majority of the cases interpret the inclusion of the phrase "hit and run" in the statute as requiring insurance coverage even in non-physical contact situations. See e.g., Abramowicz v. State Farm Mut. Auto Ins. Co., 369 A.2d 691 (Del.Super.1977); Lanzo v. State Farm Mut. Auto Ins. Co., 524 A.2d 47 (Me.1987); Surrey v. Lumbermens Mut. Cas. Co., 384 Mass. 171, 424 N.E.2d 234 (1981); Halseth v. State Farm Mut. Auto Ins. Co., 268 N.W.2d 730 (Minn.1978); Soule v. Stuyvesant Ins. Co., 116 N.H. 595, 364 A.2d 883 (1976); Biggs v. State Farm Mut. Auto Ins. Co., 569 P.2d 430 (Okl.1977); Pin Pin H. Su v. Kemper Ins. Co., Etc., 431 A.2d 416 (R.I.1981); Clark v. Regent Ins. Co., 270 N.W.2d 26 (S.D.1978) Marakis v. State Farm Fire & Cas. Co., 765 P.2d 882 (Utah 1988); Hartford Accident & Indemnity Co. v. Novak, 83 Wash.2d 576, 520 P.2d 1368 (1974) (en banc). Representative of the reasoning behind the decisions in the latter cases is Marakis, supra, wherein the court commented:

Other courts which have upheld the...