152 A.3d 795
Md.2017Background
- On Nov. 14, 2011 Alhassan Bundu-Conteh was rear-ended while driving his 2006 Ford Crown Victoria taxicab and suffered injuries. He owned that taxicab and a personal 1997 Jeep.
- Bundu-Conteh had a State Farm personal auto policy on the Jeep that included PIP; the taxicab was insured by a different carrier with liability-only (no PIP).
- Bundu-Conteh submitted a PIP claim to State Farm; State Farm denied payment relying on a policy exclusion for injuries "while occupying a motor vehicle owned by you ... and which is not insured under the liability coverage of this policy."
- The Maryland Insurance Administration (MIA) concluded State Farm’s denial violated PIP statutes and ordered payment; the Commissioner agreed, but the circuit court and Court of Special Appeals reversed. The Maryland Court of Appeals granted certiorari.
- The core legal question: whether the statutory "owned but uninsured" exclusion authorizes an insurer to deny PIP when the insured is injured driving a taxicab the insured owns but that is not covered for PIP under the insurer’s policy.
Issues
| Issue | Plaintiff's Argument (MIA / Bundu-Conteh) | Defendant's Argument (State Farm) | Held |
|---|---|---|---|
| Is a taxicab a "motor vehicle" for purposes of IN §19-505(c)(1)(ii) and §19-513(d)(1)(i)? | Taxicab is excluded from the Insurance Article’s definitional scope and thus should not trigger the owned-but-uninsured exclusion. | Taxicabs should be treated as motor vehicles for these provisions to avoid absurd results and to permit the owned-but-uninsured exclusion to operate. | Court: For purposes of the owned-but-uninsured exclusion and §19-513(d)(1)(i), a taxicab is a "motor vehicle." |
| What does "uninsured motor vehicle" mean in IN §19-505(c)(1)(ii)? | Means uninsured altogether (no insurance at all); the exclusion was aimed at vehicles totally uninsured (response to Gartelman). | Means uninsured for PIP coverage (not insured for PIP under the applicable policy); exclusion should cover vehicles lacking PIP. | Court: "Uninsured motor vehicle" means uninsured for PIP coverage (i.e., not insured for PIP under the vehicle’s policy). |
| Does the State Farm policy exclusion (owned-but-not-insured-under-this-policy) conflict with statute/agency interpretation? | MIA: exclusion is inconsistent with statutory purpose and Commissioner’s interpretation; agency interpretation deserves deference. | State Farm: exclusion mirrors the statute-authorized owned-but-uninsured exclusion and prevents insureds from using PIP on one vehicle to cover others. | Court: The policy exclusion is unambiguous and is authorized by IN §19-505(c)(1)(ii); State Farm properly denied PIP. |
| Should deference be given to the Insurance Commissioner’s contrary legal conclusion? | Commissioner’s interpretation was statutory and remedial; agency determinations merit weight. | Statutory interpretation is for the courts; prior case law supports State Farm’s reading. | Court: No deference where agency conclusion is an erroneous legal interpretation; Court rejects the Commissioner/MIA view. |
Key Cases Cited
- Pa. Nat’l Mut. Cas. Ins. Co. v. Gartelman, 288 Md. 151, 416 A.2d 734 (Md. 1980) (invalidated an insurer’s owned-but-uninsured exclusion where statute then lacked authorization)
- Nasseri v. GEICO Gen. Ins. Co., 390 Md. 188, 888 A.2d 284 (Md. 2005) (PIP coverage generally follows the person; taxicab exclusion to the definition of motor vehicle was not meant to deny PIP to insureds injured in accidents involving taxicabs)
- Gov’t Emps. Ins. Co. v. Comer, 419 Md. 89, 18 A.3d 830 (Md. 2011) (upheld owned-but-uninsured exclusion in UM/UIM context; interpreted "uninsured" to include lack of UM/UIM coverage under the applicable policy)
- Powell v. State Farm Mut. Auto. Ins. Co., 86 Md. App. 98, 585 A.2d 286 (Md. Ct. Spec. App. 1991) (Court of Special Appeals upheld owned-but-uninsured exclusion as consistent with statutory predecessor and policy objectives)
- Md. Auto. Ins. Fund v. Sun Cab Co., 305 Md. 807, 506 A.2d 641 (Md. 1986) (confirmed taxicabs need not carry PIP or UM/UIM; exclusion from mandatory PIP for taxicabs upheld)