Woznicki v. Geico General Insurance
90 A.3d 498
Md. Ct. Spec. App.2014Background
- On Nov. 12, 2010 Jessica Woznicki was injured in a car accident; tortfeasor’s insurer (Nationwide) offered its $20,000 policy limits; Woznicki had $300,000 UM/UIM coverage with GEICO.
- GEICO’s policy (and Md. Code § 19-511) required written certified-mail notice of any tentative settlement that would exhaust liability limits, and gave GEICO 60 days to consent/refuse and 30 days to pay if it refused.
- Woznicki’s Delaware counsel, Castle, negotiated and accepted Nationwide’s $20,000 release in July 2011 and returned the signed release; he had at some point spoken by phone with a GEICO employee but did not request a written waiver or identify the employee’s exact statements.
- GEICO denied UIM coverage in Aug. 2011 for failure to comply with the Consent to Settle Clause and § 19-511; Woznicki sued GEICO for breach of contract seeking UIM benefits in excess of $20,000.
- The Circuit Court granted GEICO summary judgment, finding undisputed failure to comply with § 19-511 and no material evidence that GEICO waived the statutory/policy requirements; Woznicki appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 19-511 is non-waivable | Woznicki: insurer can waive strict compliance; statute doesn’t expressly forbid waiver | GEICO: "shall" makes § 19-511 mandatory and non-waivable | Court: § 19-511 is not shown to be non-waivable as a matter of law; waiver remains possible absent explicit statutory prohibition |
| Whether there was a genuine factual dispute that GEICO waived the notice/consent requirement | Woznicki: Castle’s deposition about a July phone call shows GEICO consented/waived written notice requirement | GEICO: Castle’s testimony lacks specifics (what was said), no written confirmation, and Castle was unaware of statutory/policy duties | Court: No reasonable inference of waiver from the vague testimony; summary judgment proper |
| Whether Ins. Art. § 19-110 requires GEICO to prove actual prejudice to deny coverage for breach of § 19-511 | Woznicki: § 19-110 (prejudice requirement) applies because Consent to Settle is a notice provision | GEICO: § 19-110 does not apply because Consent to Settle is a condition precedent protecting subrogation, not mere notice | Court: § 19-110 does not apply; consent/settlement procedure is akin to a no-action/proof-of-loss condition and insurer need not show prejudice |
| Whether insured’s settlement extinguished insurer’s subrogation rights and justifies denial | Woznicki: settlement was made without prejudice and insurer could still pursue UIM claim | GEICO: settlement released tortfeasor and prevented GEICO’s subrogation rights, after failing to comply with statutorily mandated procedures | Court: Settlement created a fait accompli extinguishing subrogation opportunity; enforcement of § 19-511/policy clause justified denial |
Key Cases Cited
- Buckley v. Brethren Mut. Ins. Co., 207 Md. App. 574 (Md. Ct. Spec. App.) (explains insurer options under § 19-511 after compliant notice)
- Keeney v. Allstate Ins. Co., 130 Md. App. 396 (Md. Ct. Spec. App.) (statute designed to balance insured’s settlement ability with insurer’s subrogation rights)
- GEICO v. Harvey, 278 Md. 548 (Md. 1976) (distinguishes proof-of-loss/no-prejudice rules from notice; insurer need not show prejudice for certain policy conditions)
- Phillips Way, Inc. v. Am. Equity Ins. Co., 143 Md. App. 515 (Md. Ct. Spec. App.) (no-action clause analysis; insurer not required to show prejudice where clause protects against collusive/overly generous settlements)
- Hovnanian Land Inv. Group, LLC v. Annapolis Town Centre at Parole, LLC, 421 Md. 94 (Md.) (defines waiver and standards for inferring implied waiver)