Justia Maryland Court of Appeals Opinion SummariesArticles Posted in Insurance Law
Tapestry, Inc. v. Factory Mutual Insurance
In this insurance dispute brought by Insured seeking declarations that the policies issued by Insurer covered the losses it had suffered from repairing and remediating its physical space to accommodate the health necessities brought about by the COVID-19 pandemic, holding that the allegations did not trigger the primary coverage provided by the relevant policies.Insured asserted that it suffered hundreds of millions of dollars for health and safety protocols and modifications to its stores due to the presence of COVID-19. After Insurer denied coverage Insured brought this lawsuit. Insurer moved to dismiss the complaint, after which Insured filed a motion to certify a question of law to the Court of Appeals. The Court of Appeals answered that when a first-party, all-risk property insurance policy covers "all risks of physical loss or damage" to insured property from any cause unless excluded, coverage is not triggered when a toxic, noxious, or hazardous substance such as COVID-19 is physical present in the indoor air of that property, is also present on and can later be dislodged from physical items on the property, and causes a loss of the functional use of the property. View "Tapestry, Inc. v. Factory Mutual Insurance" on Justia Law
CX Reinsurance Co. v. Johnson
The Court of Appeals held that an injured tort claimant's rights under a general liability insurance policy do not vest until the claimant has obtained a judgment against, or entered into a qualifying settlement with, an insured.CX Reinsurance Company issued commercial general liability policies to several Baltimore residential Landlords that included coverage for bodily injuries resulting from lead paint exposure at the Landlords' rental properties. CX field contract rescission actions against the Landlords, which the parties settled. Under the terms of the rescission settlements, the coverage for lead paint-related losses was substantially reduced. Claimants alleged they suffered bodily injuries from lead paint exposure while residing in the Landlords' rental properties, but the majority of claimants had not obtained final judgments against, or entered into settlements with, the Landlords before CX and the Landlords settled. The lower courts ruled that the Claimants were intended beneficiaries of the polices. The Court of Appeals reversed in part, holding (1) the Claimants who did not hold final judgments against or enter into approved settlement agreements with the Landlords were not the intended beneficiaries under the policies; and (2) the Claimants who obtained final judgments against their Landlords prior to the settlements of the applicable rescission cases may enforce the pre-settlement terms of the policies. View "CX Reinsurance Co. v. Johnson" on Justia Law
Macedo v. Automobile Insurance Co.
The Court of Appeals affirmed the judgment of the circuit court ruling that a household exclusion in umbrella policy issued by The Travelers Indemnity Company (TIC) was valid and enforceable, holding that the circuit court properly granted summary judgment to Travelers on Count VIII of Plaintiffs' complaint.Michael Buarque de Macedo and his wife and child died in a two-vehicle collision in Montgomery County and a remaining child suffered permanent injuries. Michael and his wife were the named insureds of a primary automobile liability insurance policy issued by TIC. The policy contained a household exclusion purporting to preclude coverage for bodily injury or personal injury suffered by Michael or related individuals who resided in Michael's household. Plaintiffs (collectively, the Macedos) brought this action asserting several claims against Michael's estate and the State. Count VIII of the complaint sought a declaratory judgment that the household exclusion was void as against public policy and contrary to statute. The circuit court declared the household exclusion valid and enforceable. The court of special appeals affirmed. The Court of Appeals affirmed, holding that the circuit court correctly ruled that the household exclusion in TIC's umbrella policy was valid and enforceable. View "Macedo v. Automobile Insurance Co." on Justia Law
Westfield Insurance Co. v. Gilliam
The Court of Appeals held that only the amount that a workers' compensation insurer actually pays for medical expenses is part of the statutory offset against underinsured motorist benefits.Michael Gilliam was injured in an automobile accident during the course of his employment and received payments from his employer's workers' compensation insurer and the other driver's liability insurer. Gilliam later sought to recover the amounts by which the other driver was underinsured from an insurance policy covering the vehicle he was driving. As required by Maryland law, the healthcare providers who treated Gilliam had generated bills in amounts greater than the amounts set by the Workers' Compensation Commission but accepted payments at those lower amounts in full satisfaction for their services. At issue was whether the difference between the bills' amounts and the workers' compensation insurer's payments constituted a "benefit" that Gilliam had "recovered" under the Workers' Compensation Act that was to be offset against any recovery Gilliam would obtain from the underinsured motorist coverage of the auto policy. The Supreme Court held that a difference between a higher face amount billed by a healthcare provider and the amount actually paid by the workers' compensation insurer was not part of that offset. View "Westfield Insurance Co. v. Gilliam" on Justia Law
Nationwide Property & Casualty Insurance Co. v. Selective Way Insurance Co.
The Court of Appeals affirmed the judgment of the court of special appeals concluding that prejudgment interest on defense costs where a party breaches its duty to defend does not fall within the exception to the "modified discretionary approach" and is within the discretion of the fact-finder.The modified discretionary approach used by Maryland courts in awarding prejudgment interest generally places the award of prejudgment interest within the discretion of the trier of fact but also recognizes exceptions where a plaintiff is entitled to prejudgment interest as a matter of right. At issue was whether prejudgment interest should be awarded as a matter of right. The Court of Appeals held (1) prejudgment interest on defense costs is left to the discretion of the fact-finder; and (2) where the jury in this case was not presented with a claim of prejudgment interest, was not instructed on the issue, and did not separately state an award of prejudgment interest in the verdict, the circuit court was not authorized to award prejudgment interest. View "Nationwide Property & Casualty Insurance Co. v. Selective Way Insurance Co." on Justia Law
United Bank v. Buckingham
The Court of Appeals held that a change in life insurance beneficiary constitutes a conveyance under the Maryland Uniform Fraudulent Conveyance Act (MUFCA), Md. Code Comm. Law 15-201(c), and that a guardian of property is not granted the authority to change a life insurance beneficiary on a policy of the ward under section 15-102(t) of the Estates and Trusts Article (ET).In a case arising from a decade-long dispute between the adult children of the Buckingham family and United Bank, the United States District Court for the District of Maryland certified two questions of law to the Court of Appeals regarding whether the children intentionally defrauded the Bank when they successfully diverted significant amounts of life insurance proceeds away from the declining family business and to their personal use. The Court of Appeals answered the questions as follows: (1) a change of the beneficiary designation of a life insurance policy constitutes a conveyance under MUFCA; and (2) the guardian of property does not have the authority to change the beneficiary on a life insurance policy of a ward under ET 15-102(t). View "United Bank v. Buckingham" on Justia Law
Berry v. Queen
In two cases involving similar underlying facts and an identical legal issue the Court of Appeals held that the phrase "damage to property," incorporated by reference in the uninsured motorist statute, requires an insurer to reimburse loss of use damages, such as rental car costs, to an insured.At issue was whether the Maryland Uninsured Motorist statutory provision of Md. Code Ann., Ins. 19-509(e)(1) and the provisions of Title 17 of the Transportation Article and Title 20 Subtitle 6 of the Insurance Article require an insurer to pay benefits for loss of use of a vehicle damaged by an uninsured driver. The Court of Appeals held that the phrase "damage to property," as incorporated by reference in the uninsured motorist statute, embraces loss of use damages caused by an uninsured driver, regardless of any limitations or omissions that may exist in the applicable policy of insurance. View "Berry v. Queen" on Justia Law
Nationwide Mutual Insurance Co. v. Shilling
The Court of Appeals held that the statute of limitations begins to run in an underinsured motorist claim against an insurer when the insurer breaches the contract to provide underinsured motorist benefits by denying the insured's claim.Insured was injured in an automobile accident with an underinsured motorist. The underinsured tortfeasor extended to Insured a policy limits settlement offer of $20,000. Insured accepted the offer and then attempted to collect additional underinsured motorist benefits from Insurer. The motor vehicle liability insurance policy covered up to $300,000 per person for bodily injury caused by an uninsured or underinsured motorist. Insured later filed suit against Insurer seeking the balance of unpaid damages not covered by the $20,000 settlement. The circuit court dismissed the complaint as untimely. The Court of Special Appeals reversed. The Court of Appeals affirmed, holding (1) the statute of limitations in an underinsured motorist claim begins to run when the insurer denies an insured's demand for benefits, thereby breaching the insurance contract; and (2) Insured's underinsured motorist claim was not time barred. View "Nationwide Mutual Insurance Co. v. Shilling" on Justia Law
Nationwide Mutual Insurance Co. v. Shilling
The Court of Appeals held that the statute of limitations begins to run on an underinsured motorist claim when the insurer breaches the contract to provide underinsured motorist benefits by denying the insured's claim, thereby breaching the insurance contract.Margaret Shilling was injured in an automobile accident with Barbara Gates, an underinsured motorist. Gates was insured by Agency Insurance Company of Maryland (Agency) under a policy that provided up to $20,000 per person in bodily injury coverage. Shilling was insured by Nationwide Mutual Insurance Company under a policy that included uninsured and underinsured motorist coverage in the amount of $300,000 per person in bodily injury coverage. After Agency and Shilling settled Shilling sued Nationwide seeking the balance of unpaid damages not covered by Agency's $20,000 settlement. Nationwide moved to dismiss, arguing that the claim was time barred under the three-year statute of limitations set forth in Md. Code Ann. Cts. & Jud. Proc. A 5-101. The circuit court granted the motion to dismiss. The court of special appeals ultimately reversed, holding that the suit was not time-barred. The Court of Appeals affirmed, holding that the statute of limitations begins to run upon the insurer's breach of the insurance contract, which occurs when the insurer refuses to pay underinsured motorist benefits. View "Nationwide Mutual Insurance Co. v. Shilling" on Justia Law
Rossello v. Zurich American Insurance Co.
In this case brought against an insurer in Plaintiff's attempt to collect on a judgment in his favor in a strict liability and negligent failure to warn action, the Court of Appeals held that damages from a continuous bodily injury judgment must be allocated on a pro rata, time-on-the-risk basis across all insured and insurable periods triggered by Plaintiff's injuries.Almost forty years after exposure to asbestos at his place of work, Plaintiff was diagnosed with mesothelioma. Plaintiff won a nearly $2.7 million judgment against the asbestos installer. Plaintiff then initiated garnishment proceedings against Defendant as insurer of the asbestos installer. At issue before the circuit court was how to allocate loss among various trigger insurance policies because the installer was only insured by Defendant from 1974 to 1977 through four comprehensive general liability policies. The circuit court concluded that Plaintiff's damages must be allocated on a pro rata, time-on-the risk basis across all insured and insurable periods triggered by Plaintiff's injuries. The Supreme Court affirmed, holding that the circuit court properly applied the pro rata allocation approach rather than a joint-and-several approach that would have required the insurer to cover the entire judgment. View "Rossello v. Zurich American Insurance Co." on Justia Law