280 A.3d 679
Md.2022Background
- In Feb. 2016 a two-car collision in Montgomery County, MD killed Michael Buarque de Macedo’s spouse and one child; a second child (Helena) survived with permanent injuries. Michael was driving.
- Michael and Alessandra had a primary auto liability policy with Travelers (TIC) with $500,000 limits; Michael alone had a $2,000,000 personal umbrella policy with AIC (also a Travelers company) that contained a household exclusion barring coverage for bodily/personal injury to the insured or household relatives.
- The Macedos settled for the $500,000 primary limit but reserved rights under the umbrella; they then sued for declaratory relief that the umbrella household exclusion is void under Md. Cts. & Jud. Proc. §5-806(b) as applied to unemancipated children (and estates) suing parents.
- The circuit court granted summary judgment to Travelers, declaring the umbrella household exclusion valid; the Court of Special Appeals affirmed, and the Court of Appeals (Maryland) granted certiorari.
- The Court of Appeals held §5-806(b)’s reference to "motor vehicle liability coverage" refers to primary motor vehicle liability (and related mandatory UM) coverages, not to personal umbrella policies; therefore the umbrella household exclusion is enforceable.
Issues
| Issue | Plaintiff's Argument (Macedos) | Defendant's Argument (Travelers) | Held |
|---|---|---|---|
| Whether CJP §5-806(b) voids household exclusions in umbrella policies up to the umbrella's motor vehicle limits | §5-806(b) bars "any insurance policy provisions, up to the limits of motor vehicle liability coverage," so an umbrella that provides excess motor vehicle liability is covered and its household exclusion is void to the umbrella limits | §5-806(b) must be read in context of the Insurance Article; "motor vehicle liability coverage" refers to primary mandatory motor vehicle liability/UM coverages, not supplemental umbrella coverage | Court: Held for Travelers — §5-806(b) applies to primary motor vehicle liability (and UM) coverages, not to personal umbrella policies; household exclusion enforceable |
Key Cases Cited
- Stickley v. State Farm Fire & Cas. Co., 431 Md. 347 (2013) (held that an umbrella policy is not "motor vehicle liability insurance" under the Insurance Article and that household exclusions in umbrella policies can be enforceable)
- Schneider v. Schneider, 160 Md. 18 (1930) (adopted reciprocal parent-child tort immunity)
- Allstate Ins. Co. v. Kim, 376 Md. 276 (2003) (discussed exceptions to parent-child immunity and legislative role in change)
- Bozman v. Bozman, 376 Md. 461 (2003) (abrogated interspousal tort immunity)