Woznicki v. GEICO Morse v. Erie Insurance
115 A.3d 152
| Md. | 2015Background
- This case consolidates two Maryland UM/UMI cases (Woznicki v. GEICO and Morse v. Erie) to decide waiver and prejudice issues related to consent-to-settle and notice requirements.
- Woznicki involved a 2010 Cecil County collision where GEICO denied UIM after Woznicki settled with the tortfeasor for the policy limit without GEICO’s written consent.
- Nationwide insured the tortfeasor with a $20,000 limit; Woznicki’s counsel allegedly obtained GEICO’s oral consent during a July 2011 telephone exchange.
- Morse involved a 2007 Delaware accident; Nationwide offered $15,000 to settle; Morse settled before Erie gave written consent, triggering denial of UM benefits.
- Erie and GEICO argued § 19-511’s consent-to-settle provisions do not require prejudice and may be waived by insurer and insured, while the petitioners argued prejudice rules should apply.
- The Maryland UM scheme aims to expedite recovery for victims and balance insured rights, with § 19-511 and § 19-110 shaping how notices, cooperation, and prejudice interact in denial of UM coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does § 19-511 permit waiver of its notice requirement by insurer and insured? | Woznicki: GEICO orally consented to settlement; waiver should apply. | GEICO: waiver of § 19-511’s notice is not legally permissible; the statute uses mandatory language. | Yes, waiver is legally possible under § 19-511. |
| Must a UM carrier prove prejudice under § 19-110 when denying UM coverage for noncompliance with consent to settle provisions? | Morse/Woznicki argue prejudice rules apply; Maryland common law supports prejudice-based disclaims. | Respondents argue § 19-110 is inapplicable to consent-to-settle noncompliance; Local Gov’t Ins. Trust exception does not extend here. | No prejudice showing is required; prejudice standards do not apply to consent-to-settle noncompliance under § 19-511. |
Key Cases Cited
- Buckley v. Brethren Mut. Ins. Co., 437 Md. 332 (Md. 2014) (statutory UM settlement scheme expedited recovery)
- Erie Ins. Exch. v. Heffernan, 399 Md. 598 (Md. 2007) (UM statute purpose; remedy to compensate victims; balance rights)
- Local Gov’t Ins. Trust v. Prince George’s County, 388 Md. 162 (Md. 2005) (prejudice rule integration with § 19-110; common law prejudice standard for notices)
- Watson v. United States Fidelity & Guaranty Co., 231 Md. 266 (Md. 1963) (notice as condition precedent; no prejudice requirement for notice failures)
- Harvey v. Gov’t Employees Ins. Co., 278 Md. 548 (Md. 1976) (predecessor to § 19-110; prejudice interplay with notice/claims processing)