252 A.3d 65
Md. Ct. Spec. App.2021Background
- Gebhardt owned a four‑unit Baltimore apartment building with a metal fire escape attached to both 2709 (Gebhardt) and neighboring 2707 N. Calvert; the escape’s final ladder descended into the neighbor’s backyard “within a foot or two” of Gebhardt’s premises.
- The ladder was removed (Feb. 2016); Gebhardt discovered the loss later and sued the neighbors; the City cited a building‑code egress violation and suspended the occupancy permit.
- Gebhardt reconstructed compliant steps solely on its property at a cost of $23,570, settled with prior owners for $30,000 (allocating funds to those costs), and claimed additional unreimbursed attorneys’ fees of $114,628.83.
- AEI, Gebhardt’s commercial property insurer for the relevant policy period, denied coverage for the missing ladder, asserting exclusions and arguing the ladder was not “at the premises.”
- The trial court ruled for AEI, finding “at” ambiguous and reading it to mean “on” (excluding nearby property). The Court of Special Appeals reversed, holding “at the premises” unambiguous in context and covering the ladder, and remanded for further proceedings on exclusions and damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the destroyed ladder/fire escape was "at the premises" under the Policy's Building coverage | "At" can mean on or near; ladder was part of insured’s fire escape, attached to the building and within feet of the premises, so it is "at" the premises | "At" is ambiguous; should be read as "on" to give insurer workable boundaries; ladder sat on neighboring property and is not covered | The phrase "at the premises" is unambiguous in context and includes the attached fire escape ladder; coverage applies unless a valid exclusion bars it |
| Whether "at" is ambiguous and whether extrinsic evidence may be considered | If ambiguous, extrinsic/contextual evidence (longstanding visibility/use, ownership, necessity) supports coverage | Ambiguity exists (dictionaries show multiple meanings); insurer needs clear boundaries | Court held the dictionary senses show breadth, not ambiguity here; no extrinsic evidence needed; if ambiguous, courts construe against drafter (insurer) but not reached because term unambiguous |
| If not covered as Building "fixtures," whether the ladder is covered as "Your Business Personal Property" within 100 feet | Ladder is a fixture owned by Gebhardt and within 100 feet; policy explicitly lists "fixtures" in that coverage, so covered | Fixture is real property and not personal property; thus personal‑property coverage shouldn't apply | Even if not Building coverage, the ladder would be covered under Your Business Personal Property because the Policy expressly includes fixtures located within 100 feet |
| Whether AEI’s exclusion for "acts or decisions" of others (and related defenses) bars coverage and whether attorneys' fees are recoverable | Plaintiff seeks adjudication that exclusions do not bar coverage and that attorneys' fees from neighbor litigation are recoverable as damages under collateral litigation doctrine | AEI relied on exclusion B.3.b. at trial; argued acts/decisions of others caused loss and may preclude coverage | Court reversed on the coverage threshold and remanded for the trial court to decide whether AEI preserved/exerts the exclusion and, if not, whether attorneys’ fees are recoverable (factual determinations required) |
Key Cases Cited
- Maryland Cas. Co. v. Blackstone Int'l Ltd., 442 Md. 685 (2015) (insurer policies construed by contract principles)
- Pacific Indemnity Co. v. Interstate Fire & Casualty Co., 302 Md. 383 (1985) (contract interpreted as whole to determine parties’ intent)
- Myers v. Kayhoe, 391 Md. 188 (2006) (objective theory of contract interpretation)
- Credible Behavioral Health, Inc. v. Johnson, 466 Md. 380 (2019) (extrinsic evidence considered only to resolve genuine ambiguity)
- Connors v. Government Employees Ins., 442 Md. 466 (2015) (policy term ambiguous if reasonably susceptible to more than one meaning)
- Cole v. State Farm Mut. Ins. Co., 359 Md. 298 (2000) (dictionary use discussed; ambiguity analysis)
- Fister ex rel. Estate of Fister v. Allstate Life Ins., 366 Md. 201 (2001) (court may not create ambiguity where none exists)
- Bernhardt v. Hartford Fire Ins., 102 Md. App. 45 (1994) (distinguishing intrinsic ambiguity from uncertain application)
- Vito v. Grueff, 453 Md. 88 (2017) (clear contractual language controls; extrinsic evidence not considered)
- Nationwide Mut. Ins. v. Regency Furniture, Inc., 183 Md. App. 710 (2009) (fixtures typically real property but policies can expressly include fixtures as covered personal property)