Universal Underwriters Ins. Co. v. Allstate Ins. Co., 962
| Court | Court of Special Appeals of Maryland |
| Writing for the Court | MOTZ |
| Citation | 638 A.2d 1220,99 Md.App. 595 |
| Parties | UNIVERSAL UNDERWRITERS INSURANCE COMPANY, et al. v. ALLSTATE INSURANCE COMPANY, et al. , |
| Docket Number | No. 962,962 |
| Decision Date | 01 September 1993 |
Page 595
v.
ALLSTATE INSURANCE COMPANY, et al.
Page 596
Frank W. Braden, Jr. (Don F. Ryder, Jr. and Schroeder, Ryder, Braden, on the brief), Rockville, for appellants.
[638 A.2d 1221] Thomas Patrick Ryan (McCarthy, Wilson & Ethridge, on the brief), Rockville, for appellees.
Argued before DAVIS, MOTZ and HARRELL, JJ.
MOTZ, Judge.
This appeal concerns the liability of two insurance companies for losses arising from an automobile accident involving a vehicle owned by a dealer, who was insured by one company, when "test driven" by a driver, who was insured by the other company.
The facts are undisputed. Appellant, Universal Underwriters Insurance Company (Universal), issued a Maryland policy to Crystal Ford, Ltd. (Crystal), a car dealership, which provided garage liability protection for vehicles owned by Crystal.
Page 597
Appellee, Allstate Insurance Company (Allstate), had previously issued an individual automobile indemnity policy in Kentucky to Scott A. Lynn, the prospective purchaser of a car owned by Crystal. On April 20, 1991, Mr. Lynn obtained Crystal's permission to test drive a vehicle being offered for sale by the dealer. During his test drive, Mr. Lynn struck a vehicle operated by a third party, in which Delores Hayes was a passenger. Ms. Hayes sustained injuries as a result of the collision and, in March, 1992, sued both Mr. Lynn and Crystal in the Circuit Court for Montgomery County for damages allegedly caused by his negligence.Universal filed the instant declaratory judgment action in May, 1992. In its complaint, Universal sought a declaration that Mr. Lynn's Allstate policy provided primary coverage for Ms. Hayes's damage, that Allstate bore "the primary duty to defend and indemnify" Mr. Lynn, and that Universal's duty, if any, was "excess" to that of Allstate. Allstate subsequently moved for summary judgment; Universal filed a cross-motion for summary judgment. Following a hearing on the motions, the circuit court granted summary judgment in favor of Allstate and denied Universal's motion. The court issued a declaration that:
Universal Underwriters Insurance Company, as primary insurer, is obligated to defend and indemnify (up to its policy limits) the defendant, Scott A. Lynn, for all claims arising from the occurrence which underlies this action, with the policy of Allstate Insurance Company providing excess coverage up to its policy limits.
Universal seeks reversal of the declaratory judgment granted in favor of Allstate. Before this Court, Universal raises a single question:
Did the trial court err in declaring that Universal's policy was primary and Allstate's excess rather than requiring the carriers to share the cost of defense and indemnity equally?
Where as here factual issues are undisputed, an appellate court determines whether the moving party was entitled to summary judgment as a matter of law. Beatty v. Trailmaster
Page 598
Products, Inc., 330 Md. 726, 737, 625 A.2d 1005 (1993). The applicable standard of review is simply "whether the trial court was legally correct." Id.The Universal policy owned by Crystal provides:
INSURING AGREEMENT--WE will pay all sums the INSURED legally must pay as damages (including punitive damages where insurable by law) because of INJURY to which this insurance applies caused by an OCCURRENCE arising out of GARAGE OPERATIONS or AUTO HAZARD.
"AUTO HAZARD" is defined as:
The policy then states who might be considered an insured within the meaning of the auto hazard protections:
1. YOU;
2. Any of YOUR partners, paid employees, directors, stockholders, executive officers, a member of their household or a member of YOUR household, while using an AUTO covered by this Coverage Part, or when legally responsible for its use. The actual use of the AUTO must be by [638 A.2d 1222] YOU or within the scope of YOUR permission;
3. Any other person or organization required by law to be an INSURED while using an AUTO covered by this Coverage Part within the scope of YOUR permission.
Other provisions narrow the breadth of the policy's coverage:
THE MOST WE WILL PAY * * * With respect to persons or organizations required by law to be an INSURED, the most WE will pay is that portion of such limit needed to comply with the minimum limits provision of such law in the jurisdiction where the OCCURRENCE took place. When there is other insurance applicable, WE will pay only the amount needed to comply with such minimum limits after such other insurance has been exhausted.
* * * * * *
Page 599
OTHER INSURANCE--The insurance afforded by this COVERAGE PART is primary, except it is excess ... for any person or organization who becomes an INSURED under this Coverage Part as required by law.
(emphasis added). The policy's "general conditions" further specify its purported relationship to other insurance:
OTHER INSURANCE--Unless stated otherwise in a Coverage Part, this insurance is excess over any other insurance, whether it is collectible or not. [The policy's Maryland amendment deletes the words "whether collectible or not" from the end of the last sentence.
Taken together, these provisions unambiguously state that when an auto owned by the policyholder is driven by a person "who becomes an Insured ... as required by law," like Mr. Lynn, a test driver, the policy is "excess" when other insurance is "applicable."
Mr. Lynn's Allstate policy also contains an "excess" insurance provision. The provision is applicable whenever its insured, here Mr. Lynn, drives a vehicle not owned by him. Although the policy states that it will provide coverage to its insured if it is driving a "non-owned" vehicle, it nonetheless restricts coverage:
If There is Other Insurance
Our liability insurance will be excess over any other collectible insurance if:
1. an insured person is using a substitute private passenger auto or non-owned auto....
Mr. Lynn's policy with Allstate then, equally unambiguously is "excess" to other insurance when, as here, the insured is driving a car not owned by him and other insurance is applicable.
The situation presented in this case concerns "double or overlapping insurance," which occurs when more than one insurance policy might cover damages arising from a claim involving a single vehicle. Nolt v. United States Fidelity and Guaranty Co., 329 Md. 52, 60, 617 A.2d 578 (1993). Because a literal reading of the excess clauses of each policy "would
Page 600
leave the insured without coverage," we must determine which policy (or policies) is (or are) "primary" and which is (or are) "excess." Ryder Truck Rental, Inc. v. Schapiro & Whitehouse, Inc., 259 Md. 354, 361 n. 1, 269 A.2d 826 (1970) (observing that no court has accepted the argument that conflicting excess provisions ought to preclude liability of the insurers). Universal argues that it and Allstate should bear equally the indemnification and...To continue reading
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Noland v. Virginia Ins. Reciprocal, 34702.
...Ins. Co. v. Lexington Ins. Co., 478 So.2d 363, 365 (Fla. Dist.Ct.App.1985) (same); Universal Underwriters Ins. Co. v. Allstate Ins. Co., 99 Md. App. 595, 638 A.2d 1220, 1224 (1994) (same); Titan Indem. Co. v. American Justice Ins. Reciprocal, 758 So.2d 1037, 1040 (Miss.Ct. App.2000) (same);......
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Liberty Mut. Ins. Co. v. Sentinel Ins. Co., 27429.
...resolved conflicts between those clauses by treating both coverages as primary. See Universal Underwriters Ins. Co. v. Allstate Ins. Co., 99 Md.App. 595, 638 A.2d 1220, 1224 (1994) (noting that when two excess clauses are applicable and "directly conflict" the majority rule is that they "ar......
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...thereby rendering each of the coverages to be treated as primary insurance. See Universal Underwriters Ins. Co. v. Allstate Ins. Co., 99 Md.App. 595, 602-04, 638 A.2d 1220, 1224 (1994). "[I]f literal effect were given to both 'excess insurance' clauses of the applicable policies, neither po......
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Sentry Select Ins. Co. v. Home State Cnty. Mut. Ins. Co., 5:12CV10
...Ins. Co.v. Hill, 24 Kan.App.2d 943, 955 P.2d 1333, 1336 (1998); see alsoUniversal Underwriters Ins. Co. v. Allstate Ins. Co., 99 Md.App. 595, 638 A.2d 1220, 1222 (1994) (noting the “LIMIT OF INSURANCE” provision is a provision narrowing the breadth of the policy's coverage). Section 1952.25......
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Noland v. Virginia Ins. Reciprocal, 34702.
...Ins. Co. v. Lexington Ins. Co., 478 So.2d 363, 365 (Fla. Dist.Ct.App.1985) (same); Universal Underwriters Ins. Co. v. Allstate Ins. Co., 99 Md. App. 595, 638 A.2d 1220, 1224 (1994) (same); Titan Indem. Co. v. American Justice Ins. Reciprocal, 758 So.2d 1037, 1040 (Miss.Ct. App.2000) (same);......
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Liberty Mut. Ins. Co. v. Sentinel Ins. Co., 27429.
...resolved conflicts between those clauses by treating both coverages as primary. See Universal Underwriters Ins. Co. v. Allstate Ins. Co., 99 Md.App. 595, 638 A.2d 1220, 1224 (1994) (noting that when two excess clauses are applicable and "directly conflict" the majority rule is that they "ar......
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Hoffmaster v. Harleysville Ins. Co.
...thereby rendering each of the coverages to be treated as primary insurance. See Universal Underwriters Ins. Co. v. Allstate Ins. Co., 99 Md.App. 595, 602-04, 638 A.2d 1220, 1224 (1994). "[I]f literal effect were given to both 'excess insurance' clauses of the applicable policies, neither po......
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Sentry Select Ins. Co. v. Home State Cnty. Mut. Ins. Co., 5:12CV10
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