Thomas v. Erie Ins. Exchange, 347

• Decision Date: 10 July 1962
• Docket Number: No. 347,347
• Citation: 182 A.2d 823,229 Md. 332
• Parties: Rosa THOMAS v. ERIE INSURANCE EXCHANGE.
• Court: Maryland Court of Appeals

Page 332

229 Md. 332

182 A.2d 823

Rosa THOMAS v. ERIE INSURANCE EXCHANGE.

No. 347.

Court of Appeals of Maryland.

July 10, 1962.

Harold Buchman, Baltimore (Robert R. Bright and Lawrence B. Coshnear, Baltimore, on the brief), for appellant.

Thomas G. Andrew, Baltimore (Rollins, Smalkin, Weston & Andrew, Baltimore, on the brief), for appellee.

Before BRUNE, C. J., and HENDERSON, HAMMOND, PRESCOTT and SYBERT, JJ.

MARBURY, Judge.

On August 16, 1959, Rosa Thomas, the appellant and plaintiff below, while riding as a passenger in an automobile owned and operated by William O. Miller, insured by Erie Insurance Exchange (Erie), appellee and defendant below, sustained serious injuries and incurred hospital and medical expense for treatment in the amount of $1831.50 when the automobile in which she was riding as a passenger struck a utility pole. She filed a suit in the United States District Court against Miller to recover damages for her personal injuries arising out of the accident allegedly caused by the negligence of the insured. The case was settled prior to trial and the appellant executed a paper entitled Release in Full on December 2, 1960, which stated that in consideration of $15,000, she released:

'William O. Miller, his heirs, executors, administrators, agents and assigns, and all other persons, firms or corporations liable or who might be claimed to be liable, none of whom admit any liability to the undersigned but all expressly deny any liability, from any and all claims, demands, damages, actions, causes of action or suits of any kind or nature whatsoever, and particularly on account of all injuries, known and unknown, both to person and property, which have resulted or may in the future develop from an accident which occurred on or about the 16th day of August, 1959, at or near Red Lion, Pennsylvania.'

The release also declared:

'* * * that the terms of this settlement have been completely read and are fully understood and voluntarily accepted for the purpose of making a full and final compromise adjustment and settlement of any and all claims, disputed or otherwise, on account of the injuries and damages above mentioned, and for the express purpose of precluding forever any further or additional claims arising out of the aforesaid accident.'

Following settlement of her suit against Miller, the appellant requested Erie to pay her medical expenses in accordance with the medical pay clause of the insurance policy issued by Erie to Miller. By the medical pay provision, for which Miller paid a separate premium, Erie undertook

'to pay all reasonable expenses incurred within one year from the date of accident for necessary medical, surgical, X-ray * * *, ambulance, hospital * * * services * * * to or for any person who sustains bodily injury caused by accident * * * while occupying the owned automobile while it is being used by the named insured * * *.'

Upon the refusal of Erie to pay her in accordance with the medical pay provision, the appellant filed this suit. Both parties submitted the case to the court below without a jury on the pleadings, admissions of fact, agreed stipulations of counsel, and without testimony. From the judgment in favor of Erie for costs the appellant appealed.

The facts which were stipulated by counsel were as follows:

1, Appellant qualified as a beneficiary under the medical pay clause of appellee's policy and was eligible to recover the policy limit of $1,000 for payment of her hospital and medical expense; appellee denied her right to recover solely by reason of the release.

2, The medical pay provision called for a premium from the insured separate and apart from the premium for liability coverage, and constituted a direct contractual obligation by the appellee to pay the appellant's hospital and medical bills.

3, There was no discussion between the parties or their counsel during settlement negotiations, or at any time before settlement and the execution of the release, concerning a claim under the medical pay clause of Miller's policy.

4, The appellant, were she present to testify at the trial, would state under oath that she did not contemplate or consider a claim under the medical pay clause at the time she executed the release, and had no intention to release such claim by signing the release.

5, The personal injury suit, filed by the appellant against Miller, alleged only the negligence of Miller, and was instituted to recover damages, which included among other things her hospital and medical expenses; this suit was settled, and payment was made by the check of the appellee.

6, The appellee was not specifically named in the release, and the check, issued by the appellee in settlement of the case, did not make any allocation or reference to the medical pay clause of the policy or to medical expenses, and

7, That the appellant admitted that all of the medical expenses alleged in the declaration in this suit were alleged as special damages by her in the course of negotiations for settlement of the suit instituted by her in the United States District Court against William O. Miller.

This case is one of first impression in Maryland and presents the question of whether the broad terms of the general release executed by the appellant under the facts and circumstances of this case were sufficient to comprehend settlement of both Miller's tort liability and the medical pay clause of the policy issued by Erie to Miller, so as to bar recovery under the medical pay clause in a subsequent suit by the appellee against the insurer.

The appellant contends that the payment of $15,000 by Erie as consideration for the release was entirely under the bodily injury liability section of the policy and that she is entitled separately to be paid for medical expenses under the medical pay coverage section of the policy as well. For the purposes of this opinion we will assume that she had a right to double recovery, that is by way of special damages for her medical expenses under the tort liability provision of the policy and also under the medical pay clause. The majority of the courts which have considered the problem have recognized the right to double recovery. Severson v. Milwaukee Auto. Ins. Co., 265 Wis. 488, 61 N.W.2d 872, 42 A.L.R.2d 976; Truitt v. Gaines (U.S.D.C., Del.), 199 F.Supp. 143; Distefano v. Delta Fire & Casualty Company (La.App.), 98 So.2d 310, 42 A.L.R.2d 983; 8 Appleman, Insurance Law & Practice, § 4896, p. 349; contra Hawayek v. Simmons (La.App.), 91 So.2d 49, 61 A.L.R.2d 1254; cf. Baltimore Transit Co. v. Harroll, 217 Md. 169, 175, 141 A.2d 912; and Plank v. Summers, 203 Md. 552, 556, 102 A.2d 262.

The appellant argues that she has not yet received any compensation under the medical pay coverage and that when she executed the release she did not intend thereby to surrender any of her rights under the second coverage. The appellee contends that a double recovery has already taken place in the settlement for $15,000 and that the release was a discharge of all claims, including any under the medical pay clause.

The trial judge ruled that the words 'all other persons' as set forth in the release included Erie, although the latter was not named specifically in the release. We agree. Broader or more comprehensive language is unlikely to be found in a general release. The appellant admitted that had the release contained the words 'all other persons including Erie Insurance Exchange' in lieu of 'all other persons' she would have no claim under the medical pay clause. To agree with her would involve a mere exercise of semantics which we can not find to be justified. Cf. Glass v. Doctors Hospital, 213 Md. 44, 131 A.2d 254; and Tupper v. Hancock, 319 Mass. 105, 64 N.E.2d 441. The appellant stipulated that she knew the check she was getting was from the insurance company, that all of the medical expenses now being claimed were alleged as special damages by her in the course of negotiations for the settlement which was consummated by the release in question. She knew, of course, that any claims that she had arose out of injuries resulting from the accident of August 16, 1959.

Likewise without merit is her claim that the words of the release 'liable or who might be claimed to be liable * * * on account of all injuries' could not include Erie because it was not directly liable to the insured appellant except for the medical pay clause. While it is true that the absence of a direct action statute, as in Maryland, precludes a litigant from bringing suit directly against the insured, nevertheless the liability of the insurer still exists under the policy. Moreover, the reason that the appellee was not a party to the suit in the negligence case was because it would not have been a proper party defendant. The mere fact that Erie was liable under two contractual provisions of the policy did not prevent the parties in negotiating the settlement from including in a single general release all claims against the insurance company so that both claims were properly subjects of the negotiated settlement. Barbour v. State Farm Mutual Automobile Insurance Co. (D.C.Mun.App.), 141 A.2d 924.

In Barbour an action was brought by the mother of one injured in an accident to recover for medical expenses under the medical pay coverage of an automobile liability policy. The Municipal Court of Appeals sustained a finding that...