42 A.3d 587
Md.2012Background
- The Swartzbaughs purchased a package homeowners and auto policy from Encompass listing Kenneth, Lynne, and Kelly as drivers.
- Lynne signed a Maryland Insurance Administration waiver of enhanced uninsured motorist (UM) coverage on a form that identified her as the First Named Insured.
- The waiver reduced UM limits to the statutory minimums ($20/$40 bodily injury, $10 PD) for a lower premium and remained in effect unless withdrawn.
- In 2008 Kelly was injured in an accident with an underinsured driver, and Encompass’s UM coverage could not be collected due to the waiver.
- Petitioners challenged the waiver’s effectiveness, arguing Lynne was not the “first named insured”; the circuit court and Court of Special Appeals upheld the waiver.
- The Maryland Court of Appeals granted certiorari to interpret the meaning of “first named insured” in IN § 19-510 and its application to this case.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Meaning of first named insured under IN § 19-510 | Swartzbaughs: first named insured means the first person named in declarations | Encompass: primacy is a status conferred by designation or who signs form | First named insured denotes the person designated as such who acts for others in policy documents |
| Effectiveness of Lynne's waiver given policy documents | Lynne's designation as first named insured is not supported by the documents | The MIA waiver form and statutory scheme designate the signer as first named insured | Waiver by Lynne was valid under IN § 19-510 because she certified herself as first named insured on the waiver form. |
Key Cases Cited
- Enterprise Leasing Co. v. Allstate Ins. Co., 341 Md. 541 (Md. 1996) ( UM coverage framework and prerogatives under compulsory insurance)
- GEICO v. Comer, 419 Md. 89 (Md. 2011) (UM coverage includes underinsured/uninsured motorists)
- MAIF v. Perry, 356 Md. 668 (Md. 1999) (waiver provision added to address rising costs of PIP/UM)
- Nationwide Mut. Ins. Co. v. Powell, 292 F.3d 201 (4th Cir. 2002) (insurer's duty to provide adequate notice of UM waiver effects)
- U.S. Fidelity & Guaranty Co. v. National Paving & Contracting Co., 228 Md. 40 (Md. 1962) (statutory interpretation and primacy principles)
- Bankers & Shippers Ins. Co. v. Lockamy, 51 Md.App. 1 (Md. Ct. App. 1982) (omnibus/ named insured concepts in policy structure)