*1
Feb. *2 Baltimore, (Morton Edelstein, brief), on J. Potter Steven Petitioner. (Leonard Sperling, J. Andrea C. Babest Sperling,
Samuel Baltimore, brief), Framm, Respondent. & Sperling RODOWSKY, BELL, C.J., ELDRIDGE, Argued before RAKER, JJ., and F. McAULIFFE JOHN CHASANOW (retired), KARWACKI, Specially Judges L. and ROBERT Assigned. (retired), KARWACKI, Judge Specially
ROBERT L. Assigned. a claimant in case is whether presented question against unincorpo- an judgment default by filing a writ permit of taxicab holders
rated association the Motor Vehicle Administration garnishment (“MVA”), credit that was with attaching a letter of Maryland Self-Insurance security pursuant to the MVA as MVA, by regulations promulgated Program. Pursuant to establish to form associations permitted taxicab owners are in required partici- order requisite number 11.18.02.03. COMAR program. in the self-insurance pate program in the self-insurance Participants post security with the in order to partic- MVA secure their as a self-insured and to ipation provide protection for the public. In this case the posted with the MVA was the form of an irrevocable letter of credit in amount $100,000 naming beneficiary. the MVA as the are asked We to decide whether Arrow Cab participated the self-insur- program ance as an taxicab whether the letter of credit is an asset of the association subject to garnishment by judgment creditor. giving controversy
The automobile accident rise to this Himelstein, occurred on October 1988. Michelle the Re- spondent, was a passenger a taxi cab bearing name painted green Arrow Cab and the familiar and white colors taxicab association. evidently The driver misjudged the distance needed to turn complete right and consequently causing hit the curb taxi to ricochet off the curb back into the street. aAs result of this occurrence the Respondent *3 injuries. suffered 14, 1991, August
On Respondent filed suit the Circuit City naming Court for Baltimore Arrow Cab as defendant and listing David Granat as the president of Arrow Cab and the party to be Apparently served. David Granat initially refused stating service that there was company. no such The sum- mons by was returned the sheriff non est stating the reason “Arrow Cab such Company—No company.” Subsequent the running of the statute of Respondent limitations the filed complaints naming amended as defendants G & G Cars two International, Inc. Arrow Company, Manage- Cab Taxi t/a ment, Inc., Gensler, Inc., Jane T. Leasing, Taxi Inc. and Guy Primarily Stafford. as a result of the running of the statute of limitations all of the defendants except Company Arrow Cab were dismissed from the action. A final amended complaint naming was filed as defendants Arrow Cab Company Granat, David H. trading as Arrow Cab. of process Service finally was effected for Arrow Cab on Company November 28,1998, Granat, private process when a server served David 18, president 1994, of Arrow Cab. On April a trial was Granat, individually, and David scheduled was dismissed from No answer was he left the courtroom. whereupon action appeared no one Arrow Cab filed on behalf ever judgment was Cab; a default consequently, Arrow behalf $19,- in the amount of Respondent of the in favor 878.09. issued of Garnishment Writ July
On MVA, stating answer filed an which garnishee, court debtor, Company, was defendant/judgment and that it Program Self-Insurance Maryland’s participant an irrevocable letter in the form of of Arrow Cab held assets upon order further answered The MVA of credit. a draft to Ms. to issue instruct the bank court it would of Garnishment in the Writ specified in the amount Himelstein judgment. her in order Cars then filed G & G Intervene was
A Motion to Cab, International, Inc., Inc. and individual New Pikesville (“Petitioners”), which was trading as Arrow Cab owners then filed a The Petitioners by the trial court. granted in the alternative for sum- Quash Motion to Garnishment Petitioners’ motion The trial court denied mary judgment. to trial on the sole proceed the matter and ordered garnish- writ of presented by original issue evidentiary plaintiff and interven- garnishee, ment and the answers of the the letter of specifically concerning whether ing defendants is an asset of credit/security posted garnishee on behalf of the defendant, satisfy plain- garnished and can be 13-14, on December judgment. tiffs The trial was held Leard, Raymond only who testified was Mr. witness *4 for Automobile Lia- Manager Program for the Self-Insurance Administra- Maryland, for the State of Motor Vehicle bilities tion, of who testified behalf Department Transportation, testimony, During the course of Mr. Leard’s Respondent. the in this operation of the taxicab unique corporate structure effect, In have created a revealed. the Petitioners case was associated with the parties cake as to all of the corporate layer of this taxicab. operation
The taxicab which the Respondent passenger at the of her injury by International, time was owned & GG Cars Inc. which had it to Taxi Management, leased Inc. under lease International, Inc., number 46. The president G & G Cars David is also president Management, Granat of Taxi Inc. According International, to the terms of the lease &G G Cars Inc. was to be responsible providing liability coverage on the vehicle.
In operated order a vehicle to be as a taxicab State of it must permit have a that is issued Public Service According Commission. to the regulations “taxicabs under permits this Commission shall have full name of the owner each taxicab for which a permit has been issued, permanently painted on one door on each side of the taxicab letters at least 2 high.” inches COMAR 1/2 20.90.02.16(A)(1). Thus it is permit the name of the holder appears on the side of the cab and not the name of the owner, International, vehicle G & G Cars Inc. Management,
Taxi Inc. responsible was then for matching up the vehicles with the valid permit holders which are required to create a vehicle that can operated be as a taxicab. yet Then company, another Taxi Inc. Leasing, leased bearing taxicabs the name Arrow Cab the distinctive green and white color scheme to taxicab drivers. Apparently Taxi Inc. Leasing, is a created for corporation pur- the sole pose matching up the vehicles Management, leased Taxi Inc. with taxi drivers.
The trial court Respondent’s denied Judgment Motion for MVA, garnishee, and granted Petitioners’ Motion Quash Garnishment, holding that the letter credit is not an asset of Arrow although acknowledge the court did the existence of the unincorporated association. The court the following: stated that, effect, difficulty
“So the though Arrow Cab association, it, an entity, view, which is an in my is not an entity assets, for which any the MVA holds which are subject garnishment the plaintiffs judgment.
563
that
characterizations
my
prior
with
own
agree
I will
persons,
those
those
way
certainly
particular
holders,
individuals,
corporations provide
those
permit
those
Cab,
service,
certainly may
of Arrow
colors
flying
taxi
who or what
for mere mortal
to determine
confusing
be
(E.48).
responsible.”
of Specials
to the Court
appeal
noted an
Respondent
court and
ruling
of the trial
that court reversed
Appeals;
is
of credit held
the MVA
irrevocable letter
held that
Cab,
Arrow
which
an
asset
to the trial
The case was remanded
subject
garnishment.
Cab, 113
Himelstein v. Arrow
proceedings.
for further
court
(1997).
then
The Petitioners
1. 1. Did the in Self-Insurance Certificate posted the named self-insureds arising subject garnishment from a COMAR 11.18.02.04 was judgment against entity that was not a named self-insured? an Cars, finding Special Appeals err in that G & G 2. the Court of Did 11.18.02.03(A)(3) pursuant to COMAR Inc. obtained self-insured status or leased more than 26 vehicles? an association when it owned finding Special Appeals err in that the Petitioners’ Did the Court of 3. alleged operated as association that was an asset of an subject garnishment? finding Special Appeals err in that an association Did the Court of 4. damage personal injuries property indemnify for or can be liable to 20.90.02.19(B) requires to as- only the taxicab owner COMAR where liability? sume such Special Appeals finding whenever a err in 5. Did the Court of insignia is used registered of taxicabs distinctive color scheme 20.90.02.16, an associa- pursuant the taxicab owners have to COMAR being capable sued and status tion formed to obtain self-insured holding vehicle's owners? the assets of the taxicab legislative finding Special Appeals err in Did the Court of Transportation Department Motor Vehicle to make the intent exists Program? garnishee for all claims in the Self-Insurance Division a I. Was the Court of Special Appeals correct in holding that Petitioners are members of an unincorporated association of taxicabs, namely which allowed them to partici- pate and benefit from Maryland’s Self-Insurance pro- *6 gram that is administered the MVA?
II. Was the Court of Special Appeals correct in holding
that the irrevocable
letter
credit
to the
MVA
COMAR,
Petitioners in compliance with
security require-
ments for self-insurers was an asset of the unincorporated
association,
Arrow
subject
which was
to garnishment
judgments
the association?
questions
We shall answer both
in the affirmative.
As an initial matter it is important
to remember why the
Assembly
General
has enacted financial
in
responsibility laws
the first instance.
clearly
We
held
Pennsylvania Nat. Mut.
Gartelman,
151, 154,
Cas. Ins. Co. v.
734,
288 Md.
416 A.2d
(1980)
Maryland,
736
that “[I]n
there is an
legisla-
established
policy designed
tive
to make certain that those who own and
operate motor vehicles in this State are financially responsible.
legislative
This
policy has the overall
purpose
remedial
protecting the public by assuring that
operators
owners of motor
are financially
able to pay compensa-
damages
tion for
from
resulting
motor vehicle accidents.” We
explained
further
that in order to “effectuate this legislative
policy, the owner of a motor
registered Maryland
vehicle
is
required
provide security, usually in the form of a vehicle
(1992
liability
policy.” Maryland
insurance
Code
Repl.Vol.)
17-103,
§
§
154,
17-104 of the Transportation Article.
Id. at
the time negligent, of the was found not the assets of alleged unincorporated subject were Cab/ garnishment?
565 consid Appeals, when case, Special In recent Court legisla reaffirmed program, ering the self-insurance regulations motor vehicle adopting behind “purpose tive the established promote is to on vehicles insurance require victims to assure that that seeks legislative policy avenue of financial have a guaranteed accidents of automobile Unlimited, Aetna Cas. & Sur. Ins. Inc. v. Rentals redress.” (1994). 1278, 1282 A.2d Co., Md.App. Administra However, provides “[t]he also the statute of a place form of may accept another tion [MVA] other if it finds that the form policy liability insurance vehicle by sub the benefits security adequately provides (1992 § 17- (b) Repl.Vol.) Md.Code of this section.” section 103(a)(2) The Administration Article. Transportation of the 12-104(b)(l) (1992 § Repl.Vol.) by Md.Code authorized carry regulations to rules and adopt Article to Transportation *7 it is Law that Maryland Vehicle aspects out those administering. charged with are program govern the self-insurance regulations 18, 02 and Chapter in COMAR Title Subtitle
codified as follows: part in relevant
“Chapter 02 Self-Insurers Scope.
.01 all self-insurers in designed govern regulations are These federal and the State, government the State except government. Definitions.
.02 meaning have the following terms chapter, A. In this indicated.
B. Terms Defined.
(1) Administra- means the Motor Vehicle “Administration” tion.
(3) means: B self-insurer” “Class
(a) company; or A Taxicab .03 Conditions for Certification as a Self Insurer. An A. applicant certification as a self-insurer shall: (1) Provide the same required by Transportation benefits Article, Title Annotated of Maryland, Code subdivision, political regulatory agency, or commission self-insurer; regulates which (2) application Maryland File an self-insurance annu- ally accompanied by:
(b) A of a type and amount acceptable to the Administration;
(c) A listing of vehicles includes for each vehicle the:
(i) Make,
(ü) Model,
(iii) Year,
(iv) number, Vehicle identification (v) number, Tag
(vi) number; Title
(3) or an or directly Own lease 26 or more approved by the Administration: (7) Comply applicable with all rules and regulations as set forth by the Public jurisdic- Service Commission the local tion; D(2)
E. The § letters credit regula- *8 tion shall:
(3) Be payable demand to the Motor Vehicle Adminis- tration of upon presentation judgment a final against self-insured, limits, named statutory within that remains and____” unsatisfied, added). (Emphasis now turn to We the facts of the instant case in light legislative purpose adoption behind the of responsi- financial
567 by the regulations adopted bility by as implemented laws the MVA issued the Certificate contend that MVA. Petitioners Interna- & G Cars No. to Petitioner G of Self-Insurance tional, Inc., involved the accident. the owner the vehicle G & Mr. Leard testified that G further assert that Petitioners self- International, and obtained Inc. owned Cars Both these assertions are on that basis. insured status lists the The certificate self-insurance patently incorrect. Individual granted approval self-insurance persons and G G Cars & Pikesville Cab Owners T/A Arrow/New International, addition, Mr. correspondence In sent Inc. Maryland Public Transportation, to the Director Leard Commission, having all entities as he names three Service certificate. under the same granted been self-insured status G & G Cars Moreover, testimony to Leard’s according Mr. International, have denied self-insured Inc. alone would been International, a Inc. has used car license as G & G Cars status a “used car dealer Maryland and therefore as the State (E.20). in this at this time.” could not be self-insured State Furthermore, COMAR, B indicated in a Class clearly as is Maryland company. taxicab G & G Cars self-insurer means International, not but company Inc. is taxicab to other merely rather is the owner of vehicles that leased companies.
A listing of the taxicab vehicles that were be covered part the self- the self-insurance certificate was application insurance submitted the MVA. COMAR 11.18.02.03(2)(c). appli- were with the Multiple lists submitted produced cation with some on Arrow Cab letterhead while International, on G Cars Inc. letter- others were created & G indicating head to other entities. It cars were leased then entities the vehicles and separate was these who leased the taxicab that coupled permits them with their created There- program. was to be covered the self-insurance fore, together that banded separate legal it was these entities Cab, thereby to form the number of in order to aggregating requisite taxicabs Program. qualify participate Maryland’s Self-Insurance *9 Furthermore, the association Arrow Cab held itself as out company public one to the and was therefore well known the public They as Arrow Cab. achieved recognition this name primarily by maintaining a fleet of with green taxicabs and white with an livery insignia painted and on each vehicle as permitted by COMAR 20.90.02.16. Every association, company,
“a. or partnership, individu- operating al five or permits more taxicabs under of this may Commission and adopt employ a distinctive color insignia scheme registered or which shall be with the Com- mission. An owner a taxicab not his or paint vehicle vehicles to so closely resemble the distinctive color scheme insignia or of other as to mislead the public taxicabs identity the of the owner.”
In this case use of the distinctive color scheme was the unincorporated parties association Arrow Cab as the do not fit the particular definition of a company, partnership individual as the vehicles are owned operated by and different individuals, all whom operated under the banner of Arrow Cab. suggest permit Petitioners do individual holders not realize an increased or decreased financial benefit aas result of participation any other permit holder. Al- though admit they there is a public policy interest having large group a a permit holders use common trade public name for to recognize contact taxicab services, Petitioners would like to corporate have their layer cake and eat it too.
As practical a matter public recognition is to the benefit taxicab as the result will be that it will experience increased business as a of the public’s result awareness. it clear permit Therefore holders certainly do realize financial benefit from the participation permit other holders in association because the number operate taxicabs that under the same banner of Arrow public Cab increases the with familiarity the taxicab service also increases. If permit operates one holder single operates name another permit holder under a different then name these obviously individual taxicabs be will disadvantage as the likeli- significant marketplace at a less. considerably A being hood of called service will likely of a taxi will most call needing consumer services is most familiar to them not company whose name *10 a reasonably It follows that single operator. the name of a of a well utilizing will secure the services consumer feel more security likely This would include company. known taxicab efficient, that provided the that the service is the belief maintained, is company and that the finan- are well cially responsible. of the self-insur that Arrow Cab availed itself
Given which allowed unincorporated ance as an association program illogical to its the it would be then participation program, the the of credit self-insured hold that bond/letter subject to not an asset of this association case, facts of this the of garnishment. Under the existence rise to the for the of gives posting the association is what need of Arrow Cab there would the bond. Without association program not in the self-insurance any participation have been security necessary. no or would have To and thus bond been do, as even if this is suggest, the Petitioners association of to of credit not an deemed exist that the letter is asset is there would association absurd. Without association posting have no for the of thus no been need and letter credit ever would have been issued. subject
As an to unincorporated association Arrow Cab is (1995 § by suit statute Md.Code 6- provided Repl.Vol.) Title Proceedings 406 of the Courts and Judicial as follows: “(a) association, joint An unincorporated company, stock group recognized name sue or group other which has group any affecting be sued name cause of action rights, group.” the common and liabilities property, Finally, garnishment pro claim Petitioners improper as a ceedings MVA violation Maryland. As held in sovereign immunity the State of we Services, ARA Health v. Department Safety Inc. Public Services, sovereign applicability Correctional “The 570 (1)
immunity particular case, therefore, in a on: turns whether and, the entity asserting immunity qualifies for protection; its (2) so, legislature if whether the has immunity, waived either directly or by necessary implication, in a manner that would 85, immunity 92, render the defense of 344 unavailable.” Md. Inc., Board v. citing (1996) John K Ruff, 685 A.2d 438 580, 586, (1976). 278 Md. A.2d The flaw in argument they Petitioners’ is that are not entitled to the defense of sovereign immunity they do not qualify its MVA, as protection. The authorized by the General Assem- has bly, provided responsibility financial of a taxicab association that wishes qualify self-insurers is assured the association posting letter of credit is which subject garnishment. Thus, express there was an waiver of immunity Moreover, in this instance MVA. the taxicab not a governmental entity not entitled to immunity. *11 AFFIRMED,
JUDGMENT WITH COSTS. McAULIFFE, (retired), F. JOHN J. Specially Assigned, concurs in the result. McAULIFFE, (retired), Judge
JOHN F. Specially Assigned, concurring.
I concur in the complaint result. The Plaintiffs amended named as Defendants “Arrow Company” Cab and H. “David Granat, trading as Arrow Cab.” David H. was Granat served “president.” appeared Granat on the scheduled date trial was and successful in having the second count of com- the plaint, which sued him in an individual capacity, dismissed. courtroom, then left Granat the and trial proceeded on the first count against Arrow Cab Company. No answer had ever been filed on behalf of Arrow Company, attorney Cab and no to appeared company. Judgment defend that was in against favor of Plaintiff the Company Cab in the $19,878.09. amount of appeal No from judg- taken that ment. attempted when the Plaintiff arose controversy
The instant the of credit through letter judgment collect her security for self- Administration the Motor Vehicle with operating as motor aggregation of an insurance self-insured of the motor vehicles The owners taxicabs. arguing proceeding, garnishment the group this intervened should not be letter credit funds the promised agree I intervenors judgment. available the Plaintiff and that not correct this assertion from source. I reach her this judgment have satisfaction the Plaintiff has conclusion, however, the basis that this damages arising out of the judgment obtained a final of taxicabs part group is a of a taxicab that operation arrangement approved by by a self-insurance insured by the letter of and secured Motor Vehicle Administration against A the driver of this judgment credit. final obtained this self-insurance paid to be taxicab would be against any party must other judgment too plan, so negligent operation. responsible for the driver’s shown Company, claiming that it was The Plaintiff sued Arrow Cab taxicab which was operated an association that owned and accident, was vicari involved I am not at all ously liable for the driver. negligence Company certain that Arrow Cab was an association1, was, if it liable for the it would be colors of Arrow any driver under the negligence operating issues, however, judgment were Cab. These resolved in which Granat Company—a proceeding alleged participate unincorpo not to on behalf elected rated association. *12 2-124(h) provides Rule follows: aggregation for this agree approval I do not of self-insurance
1. approval unincorporated of an of motor vehicles and owners constitutes approved Company. group by the as Arrow Cab association known package was made for a self-insurance Motor Vehicle Administration entities, persons up some of which of vehicles owned various operated operated and some of which under under Cab colors colors. New Pikesville Cab Unincorporated association. an upon Service made association sued its group pursuant name Code, Article, § Courts 6^406 by serving any officer or member its If governing board. there are no officers or board, if the association has no governing service upon any made member of the association.
If Company an unincorporated certainly officer, Granat was a member or and service of process upon him would be sufficient. Granat could have challenged allegation that Arrow Cab was an Company unincorporated association the allegation that if it existed vicariously as an association it was liable for the negligence so, the driver. Granat chose not do and the judgment final that action those judgment resolved issues. The injuries was for suffered because of negligent operation specifically taxicab that was listed as a covered vehicle self-insurance, this method of security posted support the self-insurance was therefore properly attached for payment judgment. is on It this basis that I vote to affirm.
v. WOODMONT COUNTRY CLUB. Term, Sept.
No. 1996. Appeals Maryland. Court
Feb.