18 A.3d 152
Md. Ct. Spec. App.2011Background
- MAIF is Maryland’s auto insurer of last resort; Daughton sued MAIF for breaching PIP payment timing and failing to pay overdue interest.
- Daughton’s claim alleged MAIF paid PIP after 30 days and did not pay 1.5% monthly interest as required by Ins. §19-508.
- MAIF moved for summary judgment arguing sovereign immunity under State Government Article §12-202; action filed outside the one-year window.
- Circuit Court held MAIF is a State agency/instrumentality and granted summary judgment for MAIF on both counts; dismissal based on §12-202 after sovereign-immunity analysis.
- Circuit Court bifurcated issues, held MAIF sovereignly immune in its insurer capacity, and concluded Daughton’s contract claims were barred; judgment affirmed on appeal.
- Daughton argued MAIF operates as a governmental entity for UCJF purposes but as a private insurer otherwise; court found MAIF a State agency in both roles.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is MAIF a State agency entitled to sovereign immunity in acting as an insurer? | Daughton; MAIF lacks state-control-like attributes for immunity. | MAIF is a State agency/instrumentality in both UCJF successor and insurer roles. | Yes; MAIF is a State agency for sovereign-immunity purposes. |
| Does Ins. §19-508 create an implied private right of action for statutory interest? | Daughton seeks implied private remedy for interest. | No implied private right; Cort v. Ash test not satisfied. | No private right implied. |
| Are Daughton’s claims time-barred under SG §12-202 because the contract was not completed? | Contract not completed until MAIF paid interest. | Waived; contract completed when policy canceled and payments ceased. | Claims barred; contract completion occurred by November 21, 2005; one-year period runs from then. |
Key Cases Cited
- Katz v. Washington Suburban Sanitary Comm'n, 284 Md. 503 (Md. 1979) (sovereign immunity and agency status framework cited for immunity analysis)
- Mezzanotte v. Md. Ins. Guaranty Ass'n, 297 Md. 26 (Md. 1983) (agency/instrumentality test considering interrelationship with State)
- Harrison v. Motor Vehicle Administration, 302 Md. 634 (Md. 1985) (MAIF as UCJF successor performing governmental function)
- Central Collection Unit v. DLD Associates Ltd. P'dship, 112 Md.App. 502 (Md. App. 1996) (test for agency/instrumentality status via entire State relationship)
- Napata v. Univ. of Md. Med. Sys. Corp., 417 Md. 724 (Md. 2011) (application of Mezzanotte to State-instrumentality status analysis)
- Cort v. Ash, 422 U.S. 66 (U.S. 1975) (test for implied private rights of action under statute)
- Erie Ins. Co. v. Chops, 322 Md. 79 (Md. 1991) (Cort test applied to Maryland tort/contract context)