Stickley v. State Farm Fire & Cas. Co.

• Decision Date: 27 April 2012
• Docket Number: Sept. Term, 2011.,No. 307,307
• Citation: 204 Md.App. 679,42 A.3d 696
• Parties: Joan J. STICKLEY v. STATE FARM FIRE & CASUALTY COMPANY.
• Court: Court of Special Appeals of Maryland

204 Md.App. 679

42 A.3d 696

Joan J. STICKLEY

v.STATE FARM FIRE & CASUALTY COMPANY.

No. 307, Sept. Term, 2011.

Court of Special Appeals of Maryland.

April 27, 2012.

S. Whitney Cleaver (Alexander & Cleaver, PA, on the brief), Fort Washington, MD, for appellant.

Michael J. Budow (Richard E. Schimel, Budow & Noble, PC, on the brief) Bethesda, MD, for appellant.

Panel: EYLER, JAMES R., WRIGHT, LAWRENCE F. RODOWSKY (Retired, specially assigned), JJ.

JAMES R., J.

Joan J. Stickley, appellant, appeals from the grant of a motion for summary judgment in favor of State Farm Fire & Casualty Company, appellee, in the Circuit Court for Montgomery County. At issue is the applicability of Maryland Code (2005 Supp.), § 19–504.1 of the Insurance Article (“Ins.”), which requires an insurer to offer “under a policy ... of private passenger motor vehicle liability insurance liability coverage for claims made by a family member in the same amount as the liability coverage for claims made by a nonfamily member under the policy ...,” to a personal liability umbrella policy. In granting summary judgment in favor of appellee, the circuit court concluded that, pursuant to the unambiguous language of the statute, an umbrella policy is not a policy of “private passenger motor vehicle liability insurance”; thus, it does not fall within the purview of Ins. § 19–504.1. The question of what constitutes “private passenger motor vehicle liability insurance” and, more specifically, whether that phrase refers only to primary insurance policies, or whether it extends to umbrella policies, is an issue of first impression in Maryland. For the reasons that follow, we shall affirm.

Factual & Procedural Background

On March 19, 2008, at approximately 2:05 p.m., appellant was the passenger in a motor vehicle operated by her husband, Vernon Stickley, which motor vehicle was proceeding west on Old Frederick Road near the intersection with Maryland Route 15 in Frederick, Maryland. At the same time, Joel Lindblom was operating a motor vehicle traveling north on Maryland Route 15. According to appellant, after stopping at a stop sign at the intersection of Old Frederick Road and Maryland Route 15, Mr. Stickley negligently proceeded into the Maryland Route 15 roadway where the vehicle he was operating was struck by the vehicle Mr. Lindblom was operating. Mr. Stickley was killed as a result of the accident, and appellant suffered significant injuries.

At the time of the accident, appellant and her husband owned several insurance policies issued by State Farm insurance companies, including a motor vehicle liability policy (the “motor vehicle policy”) with limits for bodily injury of $100,000 per person/$300,000 per accident, and for property damage of $25,000 per accident issued by State Farm Mutual Automobile Insurance Company (“State Farm Mutual”), and a Personal Liability Umbrella Policy (the “umbrella policy”) with limits of $2,000,000 for personal liability and $2,000,000 for uninsured and underinsured motor vehicle coverage, issued by appellee. The umbrella policy provided coverage for bodily injury, personalinjury,¹ and property damage, as defined in the policy. The declarations page noted that coverage included uninsured and underinsured motor vehicle coverage. Appellant's claim was for bodily injury, defined as physical injury.

The umbrella policy mandated that the insured maintain specific underlying insurance, as shown on the declarations page, including automobile liability insurance. Automobile liability insurance is defined as “a policy which provides coverage for the insured for that insured's liability arising out of the ownership, operation, maintenance or use of any automobile. That [underlying] policy must include Uninsured and/or Underinsured Motor Vehicle coverage if Uninsured and/or Underinsured Motor Vehicle coverage is shown on the declarations page of this policy.” Further, the umbrella policy mandated that “ ‘[r]equired underlying insurance must be maintained at all times in an amount at least equivalent to the Minimum Underlying Limits shown on the declarations page.” Appellant and her husband maintained the required underlying coverages.

The umbrella policy is not, strictly speaking, an excess policy, in that its coverage does not expressly track and provide the same coverage as the underlying policies. Rather, the umbrella policy requires the insured to pay the amount of the required primary coverage to the extent the required underlying coverage does not exist. While this distinction seems to have played a role in a few cases from other jurisdictions, as explained below, our decision does not turn on that distinction.

According to appellant, she and Mr. Stickley had always insured their homes and motor vehicles with State Farm, they had used the same State Farm agent for 45 or 50 years, and the umbrella policy was issued in the early–1980's. Following the accident, appellant made liability claims under both policies. State Farm Mutual agreed that the motor vehicle liability policy provided coverage and extended the full policy limits of $100,000 to appellant. Appellee, however, denied appellant's claim under the umbrella policy based on a policy exclusion commonly referred to as the “household exclusion.” The terms of the exclusion provide:

EXCLUSIONS

There is no coverage under this policy for any:

* * *

13. bodily injury or personal injury to any insured as defined in part a. or b. of the definition of insured, including any claim made or suit brought against any insured to share damages with or repay someone else who may be obligated to pay damages because of such bodily injury or personal injury;

* * *

DEFINITIONS

* * *

6. “insured” means:

a. you and your relatives whose primary residence is your household;

b. Any other human being under the age of 21 whose primary residence is your household and who is in the care of a person described in 6.a.[.]

There is no such exclusion in the motor vehicle policy.

Following appellee's denial of appellant's claim under the umbrella policy, appellant sought a declaratory judgment in the circuit court relying on Ins. § 19–504.1, which became effective October 1, 2004, and which applied to binders or policies of “private passenger motor vehicle liability insurance” issued, delivered or renewed in the State on or after January 1, 2005. Section 19–504.1 requires, inter alia, that when liability coverage under a policy of “private passenger motor vehicle liability insurance” exceeds the requirements of Trans. § 17–103, an insurer must offer as part of that policy liability coverage for claims made by a family member in the same amount as the liability coverage for claims made by a non-family member under the policy. According to appellant, the “plain meaning” of a policy of “ ‘private passenger motor vehicle liability insurance’ includes a personal liability umbrella polic[y]”; thus, the umbrella policy is subject to the requirements of Ins. § 19–504.1. As a result, according to appellant, appellee had to offer coverage under the umbrella policy for claims made by a family member in the same amount as coverage for claims made by a non-family member, and appellee failed to offer such coverage. In appellant's complaint seeking declaratory relief, appellant did not expressly allege the purported effect of a failure to “offer” coverage, assuming a statutory violation. On appeal, appellant contends that the effect is to “void” the household exclusion.

Subsequently, both parties filed motions for summary judgment, and a hearing was held on March 30, 2011. At the conclusion of the hearing, the court ruled that the requirements of Ins. § 19–504.1 were met when appellee tendered to appellant, a family member, the limit of coverage under the motor vehicle liability policy, the same amount of coverage provided for a non-family member. The court ruled that an umbrella policy is not a private passenger motor vehicle liability insurance policy; thus, is not a policy that is included under Ins. § 19–504.1, and ruled that there is no prohibition on a household exclusion in an umbrella policy.

Following the court's oral ruling, it issued an order denying appellant's motion for summary judgment, and granting appellee's motion for summary judgment. This appeal followed.

Discussion

The umbrella policy was renewed after January 1, 2005 and, thus, is subject to § 19–504.1 if it comes within its substantive terms. The sole issue before us is whether a personal liability umbrella policy is a policy of “private passenger motor vehicle liability insurance,” thereby requiring an insurer to offer coverage under the umbrella policy for a claim made by a family member in the same amount as the coverage made by a non-family member, pursuant to Ins. § 19–504.1.

As an initial matter, we observe that both appellant and appellee cite to foreign jurisdictions in support of their respective baseline arguments that the umbrella policy is or is not a policy within the meaning of the statute. We find the case law from other jurisdictions to be of limited use because of differences in legal requirements and differences in statutory language. We conclude it is unnecessary to parse those cases, however, because we are able to resolve the question before us by reference to the statute at issue and other Maryland law. We conclude that an umbrella policy is not a policy of private passenger motor vehicle liability insurance and that a household exclusion in an umbrella policy is a valid, contractual term not subject to the requirements of Ins. § 19–504.1.

It is well-settled that

[i]n statutory interpretation, our primary goal is always “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.” Barbre v. Pope, 402 Md. 157, 172 (2007); Gen. Motors Corp. v. Seay, 388 Md. 341, 352 (2005). See also Dep't of Health...