*1 TRANSAMERICA INSURANCE COMPANY v.
MARY BROHAWN et al. 892, September Term, [No. 1973.] Decided October *2 argued May 24, 1974, J., The cause was on before C. Orth, JJ., reargued and and and en banc on Davidson, Powers September 16, 1974, J., before C. and Orth, Morton, Thompson, Moylan, Gilbert, Menchine, Davidson, Moore and JJ. Lowe, Mackie,
Edward C. with whom were Robert W. Fox and Rollins, Smalkin, brief, Weston & Andrew on the for appellant. Meagher, Goodman, Meagher
Francis J. with were whom brief, appellees. Enoch & on the for J., opinion C. delivered the of the Court. Lowe and
Orth, JJ., J., dissent and filed dissenting Davidson, Lowe, opinion J., in page at concurs 207infra. Davidson, Mary J. F. Brohawn and Martha Schmidt efforts of Rosier, nursing grandmother, from a remove their Ethel being prosecuted criminal of home resulted their damages. a res fenses and sued for Mrs. Rosier had been Weeks-Cuppett Nursing Oakland, Home ident of the Maryland, years, originally by her for some four admitted son, Mark, son, Brohawn, year Mrs. her nineteen old Robert. and Mrs. Schmidt went to the Home on November according Brohawn, They so, did to Mrs. because nursing home, “talked the Director at the Schmidt variously 1. The Home us as referred to the record before Weeks-Cuppett, Cuppett-Weeks, Graham-Weeks, Cuppett, Weeks Nursing Home. get my grandmother within up come he told her to her in the street.” going to set out thirty days he was place took after disparate versions of what are two There to one as the shall refer they at the Home. We arrived version, other, Clara C. and the because Brohawn-Schmidt Home, Mary Friend, employees Jane two Shaffer Both involved, version. directly as the Shaffer-Friend were transcript proceedings gleaned from versions are County in the Circuit Court for Garrett trial the criminal jointly tried, and Mrs. Schmidt Mrs. Brohawn at which interrogatories filed in the civil answers to and from the brought by and Mrs. Friend Mrs. Shaffer actions and Mrs. Schmidt. Mrs. Brohawn version, supplied by According the Shaffer-Friend Home, the Brohawn Gank, employee of the Regina an asked them Mrs. Gank entourage about lunchtime. arrived *3 lunch, we did her “that Mrs. Rosier ate while to be seated they going eating, on get and insisted nobody in while allow not in, went to Mrs. they sit down.” Mrs. Gank went in and “So, Weeks, the Home. one of the owners of Mr. Shaffer and Shaffer, Mrs. time, came over and Mr. Weeks then at the again.” lobby got out in the them and they must have seen lunch, told Mrs. Mrs. Gank Rosier finished After Mrs. go thing party they could in. irst her that Brohawn and “[F] taking they me and said are know, come to I of the aides one out, said, they take her the one I can’t out.... Mrs. Rosier supposed her out.” is to take signs in the one that her foul “said some Mrs. Schmidt and Mrs. Brohawn out, they going to take her they were And said language .... again went stop them”. Mrs. Gank going to nobody was Brohawn, got back, Mrs. they Mrs. get Mrs. Shaffer. When the door.” were “outside of Mrs. Rosier Schmidt, and Mark and Mrs. of Mrs. Rosier one arm got hold of Mrs. Shaffer Gank, Mrs. and Mark hit arm. got of the other hold Gank falling down the time, was Mrs. Shaffer “... about leaving with succeeded forces steps. The Brohawn cement “pulling Rosier, was back.” who when Annex working in another she was said Mrs. Shaffer Mrs. Schmidt and Mrs. Brohawn by Mrs. Gank. called pacing up hall, . they . were and down the using were profane language. So, tried, . . . we I even tried to talk to them, so, again I thought went over to the other side everything right, was all came back and then Mrs. Gank again called me they taking and said her out of the building. So, proceeded I go building again. back to the — they And both her going had out to the door and were on So, grabbed outside door. Mrs. and I Gank both her, arm, and, one on course, each side of the that is when tussel, we had a jerked little and I around against uniform arm-railing and fell my and hit side and on down to the bottom floor.” She identified Mrs. Brohawn “jerked as the one who her Answering around.” “ interrogatories put she it differently: a little defen- [T]he dant either intentionally struck and assaulted her or care- lessly and negligently her, struck and causing assaulted her fall back railing an iron and fall steps down the ground, to the sustaining personal injury.” duty Mrs. Friend was on attempt when the was made to remove Mrs. Rosier. Mrs. Brohawn and Mrs. Schmidt “ . . . both came in and . . . out, tried to take Mrs. Rosier stop I tried to keep them at the first door to them from taking Mrs. Rosier. said, And Mrs. Rosier I do not want to go, good that she is to me and me, she feeds time, and at that she hauled off and me hit on the arm and knocked me back where we hanging have our coats in the cloakroom there.” It appeared from the cross-examination of Mrs. Friend that person who her hit was Mrs. Brohawn. She also said she saw Mark Mrs. hit Gank.
According to the Brohawn-Schmidt version there was no altercation, steps no one fell down the and no one was struck by anyone. trial, At the criminal Brohawn, as we have indicated, testified that she went to the Home because her “ sister . . . talked nursing with the Director home, at the up and he her get my grandmother told to come and within thirty days going or he was to set her out in the street. This woman away has ran a number of times and has been brought by police, back police and this should be on the dockets. very This unhappy nursing woman was at this
home, did want to be and she there. put up She did not things any struggle when we left. She said none happened: said here.” recounted what was She “Well, they having lunch, said she was her and when — having said she was the woman came the woman out, my room, her sister went into the lunch came glass had was a of a of water and all she fourth sitting in front of her. my
Well, my I sister followed sister —after I heard room, talking her, then I also went into the and there, my got grandmother I was tied and when this, very I I So, when roped the bed. saw her, I did untie untying and upset I started and help me my son to because her. And then I asked impossible tight it was for were so the knots my helped myself. So, me untie byit son me to do feet, very got she was her, her to her and and we thought we me, she glad and she said that to see thought given up lost, for she she was her had her coat I where forever, And asked lost. for there home, said, going I said, I was, am and she you’re going said, Grandma, going home. I we’re Honor, lying, your again, and I’m not happy once to. got to answer I’ve a Creator because lady out, and the little completely We walked — — stutter, know, she you she had the bad me — that Mrs. someone said to someone said that well, said, let them lady leaving, and this is Rosier us, walked Nobody stopped we stop go, them. don’t our car Honor, we walked to door, your out blonde lady, And that stopped us. Nobody left. — gotwe after go, then she said, them lady let well, going call says, I’m yelled, she outside, she you. And as God well, I says, dare I police, her soul for answer witness, will have to my she lying, not me.” her *5 propounded interrogatories Mrs. Brohawn’s answers to testimony. her She substantially same as her were “ placed episode. . explained Mrs. Gank the Mark-Gank him Mark Brohawn to detain her hand on the shoulder of . . . When Mark Brohawn was told to take her hands off. and him, shrugged he Gank to remove her hand from told Mrs. him; grip but aside shoulder to loosen the she had on his parties personal contact between from this there was no known to this defendant.”
The Criminal Prosecutions were filed informations 9 March 1971 criminal
On County charging that Mrs. for Garrett Circuit Court and kidnapped Mrs. Rosier and Mrs. Schmidt Brohawn Friend. Mrs. When Mrs. Shaffer and they assaulted and beat March, Mrs. trial on came on for the informations guilty pleaded to the assault and Mrs. Schmidt Brohawn guilty accepted verdicts pleas were and charges. The suspended days of 30 each, jail sentence As to entered. kidnapping payment fine of and costs. upon of a $100 charges were dismissed. Damages Actions
The Civil for Friend Mrs. sued September 1971 Mrs. Shaffer and 8On Frederick W. Schmidt2 Brohawn, Mrs. and Schmidt Mrs. alleging Mrs. County, Court for Garrett
the Circuit maliciously “willfully and Mrs. Schmidt Brohawn provocation” made an assault any just cause without “beat, Friend and wounded upon Mrs. Shaffer and serious, painful causing “to suffer them, them ill-treated” punitive Compensatory and injuries”. permanent September upon 14On damages were claimed. Schmidts, were removed to the the cases suggestion Schmidt, Schmidt, 2. Frederick W. the husband of Martha J. was not present attorney at the time of the incident at the Home. The infra, explained: Company, “Apparently Transamerica Insurance see there identity was a mistake in as to Mark Brohawn so that Mr. Schmidt was joined apparently nothing had whatever to as a.Defendant but do with this defendant in the civil incident.” Mark was not named as a suits for charges damages, him. appear and it does not that criminal were filed Allegany County Maryland Rule Court for for trial. Circuit *6 filed, were On 3 1971 amended declarations November adding alleging injuries that a second count negligence of Mrs. and the incurred due to the Brohawn yet as These tort actions have not been tried. Schmidts. Judgment Proceeding Declaratory The Company policy No. Superior The Risk Insurance issued insured, her 88 Mrs. Brohawn and husband as the 47 89 years Superior Risk from 11 June 1969. effective for three Company. subsidiary Ohio Farmer’s acquired Maryland Company Transamerica Insurance 1969, according Superior Risk in a certification policies of paragraph a, Under entitled in the record Transamerica. — Liability”, subsection 1 (“Insuring Personal “Coverage E policy, Company agreed Agreements”), II of Section with the named insured: all pay insured sums which on behalf
“To obligated legally pay as shall become the Insured injury property bodily damages or because any Company shall defend suit damage, and the alleging bodily injury or Insured such damages damage seeking are property Section, any if payable this even under the terms of groundless, false or allegations of the suit are may fraudulent; Company make such but any claim or suit investigation and settlement expedient.” it deems II, (“Exclusions”),
Paragraph c, Section subsection apply any act “to Section did provided that with intent of the Insured at the direction or committed damage property.” person or injury or to cause under date Transamerica Brohawns wrote Counsel for the filed enclosing amended declarations of 3 November Pointing that “the Friend. out by Mrs. and Mrs. Shaffer damages payable clearly are claims ‘which Second Count requested he your policy”, the terms’ under defense of this action arrangements made “for the policy.” manager Transamerica’s claims wrote Mr. and Brohawn on 14 March 1972. letter, part, relevant read: writing
“I am this you any letter to inform action taken the Transamerica Insurance Company, to determine the cause and other facts pertaining captioned to the above incident which 24, occurred on or about November and in investigating the thereof, cause and other facts shall not waive or invalidate of the conditions policies you of insurance that have company with this and shall not waive or invalidate any party any rights agreement. whatever of to this objection agreement The-sole and intent of this is to *7 provide for the determination of the cause and pertaining other facts to the said loss or accident any investigation thereof, and preserve and all rights parties of all the thereto.” May
On 14 1973 proceeding Transamerica instituted a at law in the Allegany County Circuit Court for against Mary Brohawn, Brohawn, Mark Shaffer, Mary Clara C. Jane Friend, Frederick W. Schmidt and Martha Schmidt under Declaratory Judgments the Uniform Maryland. Act of Courts Proceedings and Judicial (Courts Art.) Article §§ 3-415, sought inclusive. It 3-401to a of declaration parties under the insurance Specifically contract. it prayed “A Declaratory Judgment for that Plaintiff has no coverage under the any hereinabove set forth or liability may adjudged against Defendants MARY BROHAWN and MARK injuries BROHAWN for Defendants SHAFFER and FRIEND any as a result of acts committed Defendants BROHAWN on or about November subjects 1970 and which are the of the suits described; hereinabove and that Plaintiff is relieved of obligation to defend Defendants BROHAWN in said suits.” requested It also that Mrs. Shaffer and Mrs. Friend be enjoined prosecuting any “from action in a Circuit Court for Allegany County applicable provision accordance with the Maryland hearing A had on Rules Procedure.” August judgment proceeding On on 23 issued order “. . . that November the court an the Petition on behalf of Transamerica be, hereby Company,
Insurance and the same is denied. The jury’s will be determined verdict matter injuries, on submitted as to the manner in which the issues any, if sustained and Transamerica Insurance Company shall defend the insured under the non-waiver agreement parties. between the to be executed Costs pending deferred trial on the merits.” On 30 November Appeals. That appeal an Transamerica noted Court Court transferred the case to this its of 31 Court order (14); January (a) 1974. Courts Art. 12-308 Rule 814. § below erred in Transamerica contends court refusing grant declaratory granting relief in not judgment in its favor as matter of law. Declaratory Judgments Act
The Uniform Declaratory legislative mandate is that Uniform liberally “.. . construed Judgments Act shall be being remedial, purpose “... to settle administered.” It is uncertainty insecurity from and afford relief status, legal rights, other relations.” Courts respect to record, except Any the District Court Art. 3-402. court § jurisdiction, “. . . declare Maryland, may, within its status, legal rights, relations whether or and other proceeding be claimed. An action relief is or could further *8 declaratory ground a open objection on the that is not (a). exercise prayed for.” 3-403 judgment or decree is § expansive general powers is even broader than of these 3- legislature,3 for powers to enumerated § construe 3. reads: Section 3-406 contract, will, trust, deed, written “Any person under a interested status, contract, rights, or constituting writing or whose a or other other ordinance, statute, municipal legal a are affected relations contract, regulation, or rule or administrative question or franchise, of construction may determined have ordinance, statute, instrument, validity, arising under provides. legislature (b) expressly Moreover, so has that, in spelled out, (a), except in which cases divorce § 3-409 marriage sought, may grant or annulment of is a court a judgment declaratory case, in civil if it will or decree a serve uncertainty controversy giving or terminate rise proceeding, (1) controversy and if an actual exists contending parties; (2) antagonistic between claims are present parties between the involved which indicate litigation; party imminent and inevitable or a asserts a (3) legal relation, status, right, privilege and or this is adversary challenged party, denied an or who also or has in asserts a concrete interest it. Concurrent remedies no are declaratory (c).4 firmly relief. bar It is established § 3-409 seldom, ever, petition if declaratory that a should bill or in a judgment proceeding be dismissed without of a declaration parties. Employers v. Kacur Mutual Co., Casualty 500; Savings 253 Md. Bank v. Baltimore of Bank Commissioner State Maryland, 248 Md. 461. of v. See Borders Board George’s Education Prince County, Import Md. Baltimore Car Service & 256; Storage, v. Maryland Inc. Port Authority, 258 Md. 335. Discretion courts refuse a is very example, For judgment may limited. refused where it does serve purpose not a useful or terminate controversy. Goodman, Liss v. 224 Md. v. Bachman 173; Lembach, Thus, 192 Md. jurisdiction declaratory judgment necessarily cases is mandatory, not Schanker v. State, 208 Md. and a empowered court not is to decide regulation, contract, rule or
administrative a declaration of or franchise obtain rights, status, legal or other relations under it.” may Section 3-407 states “A contract be construed before or after a breach of the contract.” any question arising Section 3-408 enables the determination trust, including questions from the of an administration estate or writings. of construction of wills other 3-403(b) provides that such enumeration limit Section does or general powers any proceeding restrict the exercise of the where judgment sought, relief which a or decree will controversy uncertainty. terminate the remove an (b), however, provides special 4. Under if a form of 3-409 statute § case, remedy specific type statutory remedy for a shall be followed.
196
questions
propositions.
moot
Liberto v. State’s
or abstract
Attorney
City,
Baltimore
State,
Davis v.
356;
Md.
223
183
declaratory
Md.
procedure
385. And the
should not be used
purely
questions
decide
theoretical
questions
or
may never
County
Queen
Commissioners
arise.
Anne’s
County Miles,
v.
hand,
We believe it as the found,6 court below that a justiciable presented. general issue was The rule is that the remedy declaratory judgment appropriate is for the purpose construing an insurance determining obligations of insurer and insured under its provisions. World Perry, Insurance Co. v. 449, 452, Md. and cases cited therein. granted, despite court here
its
denied,
statement
the Petition therefor was
was to
order Transamerica
to defend the action
agreement
Brohawn
“under
the non-waiver
executed
parties.”
necessary
between the
It is not
that a
judgment
any particular
form,
long
court, by
as
decree, actually passes upon
adjudges
its order or
Director,
v.
proceedings.
issues raised
261 Md.
Bruce
State,
585;
Reddick v.
expressly
Transamerica about the court’s action: places “That order Appellant precisely the kind of insoluble dilemma prompted which it to file Declaratory this Judgment Appellant action. present jury
cannot to the in the tort action the issue of whether Mary the acts of Brohawn were injure, with argue intent to that such acts were committed with such intent. If Mary it defends Brohawn in obedience order, to the trial court’s it must do exclusively, so interest, her and it cannot, therefore, argue in its own interest that the acts were committed with injure, intent to prejudicial would be insured, to the especially in view of the fact that I Count of the Declaration in
the $100,000.00 tort case punitive demands damages.”
It asserts that Glens Falls
Company
Insurance
v. American
Oil Company,
provides
Although precise question in Glens Falls was question presented same us, as the legal to we think that the principles opinion enunciated applicable are to the issue here. Under the insurance contract in Glens Falls the company, here, agreed insurance as pay on behalf of the insured all sums which the insured legally shall become obligated pay damages by as as covered the terms of the
7. The question Court in Falls stated Glens at 121-122: appeal presents “This for the first time in this Court question of type whether or not an insurer in the _ usual liability policy may, automobile party in an action a third seeking indemnity policy, under raise a defense of non-coverage intentional, based on an non-accidental act insured, subsequent judgment person in favor of the third against in the insured in an action in which the declaration declared negligence party and in which the insurer was not a and did not defend.” agreed, Falls, here, company as In Glens
policy. policy as is afforded respect to such insurance liability, damage liability property bodily injury and for alleging such the insured .. defend suit “. thereof, if even seeking damages on account injury . .. and company fraudulent; but groundless, false or suit is such negotiation investigation, and settlement may make such In expedient. ...”8 Glens deems suit as it any action or insurer, investigation, took the after Falls, here, policy. In was no position that there insured representative of the deceased Falls, Glens we find no such agreement, and sign a non-waiver refused to here.9 agreement executed Falls, “[w]hile, Glens
In at observed Court at *11 glance, appear first it would the insurer’s any against '‘defend agreement ... to suit the * * * coverage policy], insured the of the even if such [within groundless, absolutely obligated suit is false or fraudulent.’ policy it to defend the action . . . the cannot be so construed.” explained, It at 135-136: defend, under the require
“To
the insurer
to
case,
put
present
would
circumstances of the
both
in the
the insurer and the insured
untenable
cooperate
position
attempting
in the conduct
were,
fact,
litigation when their interests
of the
proceed
adverse ...
If the insurer were to
undertake the defense of its insured
these
circumstances,
prove
it could not be allowed to
contrary
insured, yet by
to the interests of the
facts
action,
estopped
participating in the
it would be
re-litigating
questions
the
in a
from
same
Thus,
subsequent action.
it must be concluded that
where,
obligation
the insurer’s
to defend is relieved
as
policy
Falls
Glens
provisions
issued
of the
relevant
are the
8. These
policy here
provisions
comparable
of the
For
quoted
126-127.
in Md. at
254
supra.
see
at issue
from Transamerica
face,
14 March
letter of
9. On
regard
only
taken
to action
rights under the
reserved
Brohawns
captioned
pertaining
the above
facts
other
the cause
determine
“to
24,1970....”
November
about
on or
occurred
incident
here,
with an unresolved conflict of
it is faced
(Citation omitted)
to that of its insured.”
interest
agreed
majority opinion in Farm
with the
Bureau
Court
Hammer,
(4th
v.
177 F. 2d
Mutual Automobile Ins. Co.
1949),
denied,
quoted,
cert.
339 U. S.
from which it
Cir.
“ Company the Insurance was ‘It is obvious that qualified defense not to undertake the of the injured parties against insured in the suits him, disqualification due and that this to the possible It for the insured’s own conduct. was not th„se insured, company in suits to defend the protect its own interests. It at the same time to exculpate by showing could not itself beyond scope injurious acts of the insured were showing policy, for this would establish parties liability injured to an of the insured to the greater even extent than that claimed complaints. . . . “ changed by express ‘The situation is not agreement policy in company suit to upon defend suit the insured based alleged policy. actions within the purpose provision impose The clear of this is to upon company only obligation pay any judgment against insured, but also to bear *12 defending any against him the burden of suit purview policy. within the of the It could not have intended, however, coverage extend been to policy nullify or to its conditions. That would company only have been the case if the were not damages alleged any bound to defend action by neglect, have been caused accident due to but thereby estopped should be to show in court damages intentionally by that the were caused so, criminal insured. If conduct effectively battery would be assault and clause indemnity excised from the contract and the insured, injured as well as the party, subrogee insured, would be able to avoid one upon conditions which the was issued. Company The justified Insurance in withdrawing from the defense of the in suit Virginia court when the character of the insured’s disclosed, conduct was doing, preserved so it right present its to make (177 its defense.’ F. 2d at 801).” in Court Glens Falls concluded, therefore:
“Thus, as Glens Falls could
reasonably
be
required
defend
action
under
circumstances with
here,
which it was faced
it
pursue
could
(1)
one of three alternatives:
refuse to
liability (as it,
fact,
defend and
did), (2)
disclaim
against
defend the action
the insured under a
agreement,
(3)
non-waiver
preliminary
obtain a
by instituting
resolution of the conflict
an action
regard
for a
coverage
Declaratory Judgment
the Uniform
Act,
Maryland Code, Article 31A.”
It seems reasonable that Transamerica not follow first alternative, for, doing, peril. in so it would act at its toAs alternative, although the second the order of the court below agreement was couched terms of “the non-waiver parties”, we find no executed between the “non-waiver agreement” parties executed reflected the record. referring Apparently the court was to the letter of March Mr. and Brohawn. from Transamerica See supra. letter, signed only by Transamerica, But this went *13 merely rights investigate a reservation of question coverage, of not to defend the action. There remains the alternative, third which seemed to the in Court Glens Falls provide in “best solution” Transamerica, event. in faet, it, attempting resorted to to obtain a of resolution conflict with which it was petitioning faced for a declaratory judgment. below, however, The court did not presented resolve the essential issues to it. As we have indicated, Petition, it although denied the it ordered Transamerica to defend the Brohawn, action it expressly left the matter of under the determination at trial of the tort action. We think that the court erred. Transamerica was in entitled the action filed it a rights obligations to declaration of its respect prayed to the matters Petition, basically whether it policy. was liable under the reverse We the order of the court below and remand the proceedings. case for further The Procedure on Remand
We are aware proceeding that a obligations ascertain the under the insurance policy would entail a presented determination the issues actions, except the tort for the damages assessment the event Mrs. Brohawn is found to be liable for the acts attributed to her.10 We see no compelling why reasons declaratory proceeding may question not resolve the — liability Brohawn’s whether she committed the acts alleged, did, and if she whether she committed them intentionally or negligently, whereby committed them injured. Shaffer and This, sure, Friend were to be will require upon findings factual conflicting evidence, but, findings purview Declaratory fact are within the Judgments Moreover, Act. jury, if the case is heard before a may jury declaratory make factual determinations proceeding upon issues submitted to them. Art. Courts § provides: proceeding brought 3-404 “The fact right jury this subtitle does not affect a trial which 10. The Petition for relief did seek an assessment damages. Damages ordinarily would be assessed in the tort action. *14 the section Note to exist.” The Revisor’s may
otherwise 31A, 9, “When which read: based on Art. it was § states that of involves the determination this proceeding under article a in jury the may to a fact, be submitted issues issues such of by the proper interrogatories, with instructions form of may special be taken.” general verdict court, a or either continued: note reflect that a is revised to the fact “The section equity. of When jury is not in a court trial available Judgments Declaratory was Act the Uniform transferring practice of adopted in 1945there was a arising equity in to a fact in an action issues of advisory this law for verdict and court of an applied proceeding under this apparently to a practice In by This abolished Rule 517. subtitle. was provides addition, rule that the the determination equity of in a of shall be made all issues court jury. development In of the a view of that without law, clarify jury provision it is desirable to trial 31A, of 9.” Article § Thus, fixing necessary a of factual determinations declaratory by in liability may made action instituted be will whether Mrs. The finder of fact ascertain Transamerica. did, alleged act. If it that she Brohawn committed finds negligently whether acts were determine it will Thereupon, intentionally committed. committed Mayor City ux., Silver, In Council Baltimore et al. v. et 263 Md. of Appeals 462, the of Court said: proceedings being pursued of “We cannot conceive further evidentiary hearing in in would not result an would be which there would, dispute. proceedings opinion, in Such in an facts our be impermissible purposes declaratory extension of relief as Code, contemplated under Article 31A.” statement, holding We may construe this not as a factual determination no declaratory judgment proceeding, be made a in the context of but summary judgment, being refusal of which lower court was Appeals. response reviewed the refusal dismissal of the Court The statement made in request City this Court affirm “that should the lower court’s grant summary judgment, its motion for that we not affirm the petition declaratory judgment for remand the case but for proceedings further within the framework of relief.” The Court disposed was not to do so. liability Brohawn, policy, under the liability Judgment of Transamerica will be resolved.12 findings accordance with the shall be entered in the declaratory proceedings, being judicata, res could be judgment basis for a motion the tort action on the question liability under either count one or count two as may appropriate. judgment fixing liability If the is in against Brohawn, favor Shaffer and Friend and it could damages be extended the tort case the assessment of upon inquisition hearing. an although Art.
Courts 3-405 mandates § prejudice shall not *15 person party proceeding (except not a to the in a class action), (2), person (a) any subsection “a who has or claims declaration, interest which would be affected shall be party”, (a) (1). Here, made a required, subsection as all persons had, interest, who or parties claimed to the declaratory judgment proceeding, question and there is no being judgment. as to their bound See 181; Moore, v. 215 Md. State, Williams Reddick Md. v. 213 18. pleaded guilty note that the fact that Mrs. Brohawn in _We to assault liability. suggests the criminal trial would be relevant to her Transamerica pleading guilty proceeding permits only inference, that that she assaulted them, evidence of her in the criminal one injure Mrs. Shaffer and Friend with the intent to excluding coverage policy. thus under the We observe that plea charge may to the criminal in introduced the civil against Campfield Crowther, action as an admission interest. v. 252 Md. may explain plea. McCormick, 100-101. she But the reasons for her Law (1954), 242, p. transcript Evidence 512. The § of the criminal trial shows of respect that Mrs. Brohawn was informed of and advised with her to consequences plea required acceptance and the plea as for a valid aof guilty. Cognizant matters, of plea. made promises and that of all of those she still desired to enter the expressly upon inquiry plea She told the court of her that the was freely, voluntarily understandingly, duress, compulsion, and without threats, that she was satisfied with the services of her counsel properly competently represented. she felt she had been and At declaratory judgment proceeding explained plea she the reason for the through attorney. Mrs. Schmidt’s He testified that Mrs. Brohawn and Mrs. pleaded guilty by way plea Schmidt bargaining, to through assault of negotiations Attorney. bargain conducted with the State’s The was that the accept plea guilty State charge “would a of to a lesser of assault return by dismissing kidnapping charge.” plea
for attorney was characterized voluntary, plea bargaining though but “made after even she professes her innocence.” expressly plea. We reach no conclusion here as of to effect
204 suggest precedent without is not this
What we was precisely what done State jurisdiction. It Farm al, 254 Md. Company Treas, v. et Insurance Mutual Auto proceeding propriety of a 615, where, apparently, such questioned.13 not even cognizant arguments of We are advanced indicated, procedures of procedure herein other Note, suggested by See The Role some authorities. of Estoppel Determining Declaratory and Collateral Relief Hastings 21 Duty Indemnify, to the Insurer’s Defend Note, Journal, (1969); 191 Declaratory Law Use Liability Duty Judgment Determine Insurer’s — Journal, Interests, 41 Indiana Law 87 Defend Conflict Comment, (1965); Duty The Insurer’s Defend Pennsylvania University Liability Policy, Insurance — Comment, (1966); Duty Review, Law Insurance — Interests, 3 Natural Resources Journal Defend Conflict (1963), the cases in the articles. cited discussed procedure adopted convinced, however, here, are that the We disadvantages, lends while without some best itself to justice compared when interests alternatives.14
Obligation Attorneys ’Fees Pay completely resolved has not disposition of this case
Our *16 comparable. significantly There was a The Farm 13. facts State are Treas, Jr., George Harry against by Martin as the insurer suit A. State Farm Dawson, surviving R. Dawson,.individually husband Irma of as declaratory judgment Judgment Fund for a that Claim the Unsatisfied coverage provide policy by for Treas did not the State Farm to issued agreed policy, the Farm Under the terms of liability State death of Mrs. Dawson. pay by operation injury bodily an Treas in the of incurred urged “by injury accident.” The insurer at the if was caused automobile the injuries in the death Mrs. Dawson were which of trial that the caused resulted by that the death of The lower court found intentional acts Treas. coverage injury policy. The of the Court of an within the was Appeals reversed, death was not “caused the an accident because and accidental holding erred, that the that the lower court convinced policy by meaning by within the of the but accident” Treas. that the intentional act intentional act of It found was not unforeseen, nothing in that there was unusual act unexpected occurring produced the result. declaratory aware, proceeding 14. The of fact in the would be of trier point course, outstanding an of We out that there was contract insurance. by declaratory that here action initiated the insurer. the was provided obligation the of the contractual as the matter policy part insurance on the of the insurer to defend its insured, corresponding right and the of the insured to be by any . . suit the insurer in defended the Insured bodily damage seeking alleging injury property such or damages payable which are the terms of [the pertinent any if policy], allegations even of the section groundless, Any . . the suit are false or fraudulent. .” act at the committed or direction of insured intent injury damage person property or cause was policy. excluded from is It clear that the alleging negligently addition the count that Mrs. Brohawn acts, brought committed the suit within the ambit policy, limited, however, by defense clause holding import holding in Glens Falls. The of our far on thus duty merely matter of to defend is that the clause pertaining preclude to defense of the suit does not maintaining declaratory Transamerica from In action. properly represented action Mrs. Brohawn is to be choosing. obligation counsel of her But the of Transamerica entirely is proceeding not relieved. If in declaratory it is determined either that Mrs. Brohawn did not commit the alleged acts, or negligently them, that she did commit causing injuries, properly then Transamerica is liable pay reasonable counsel expenses fees and her in incurred action.15We find Cohen v. Am. Home Co., Assurance 255 Md. Appeals which the Court of expressly any holding overruled in Erie Lane, v. Insurance 55, subject contrary Md. interpretation, to a dispositive of the In matter. that case the insured sued damages resulting tort for from an automobile accident. brought insurer declined to defend. The insured suit for extent, to determine to what if at all, coverage existed on the issued. The lower court found that the insurer was bound to defend and awarded the Upon negligently a determination that the insured committed the causing injuries, would, course, only obliged acts insurer but, believe, policy, anxious, under the inquisition we defend insured at damages. to assess *17 stipulated to be reasonable as amount counsel
insured an declaratory The expenses the action. Court fees finding duty the to defend both the Appeals affirmed speaks in one terms of the It that whether the award. said expenditure by having the failure to authorized insurer speaks attorney’s one terms fees defend or whether part declaratory judgment being action a of the for damages by the of the insurer’s sustained insured because wrongful contract, the insurer bound to breach of by bringing pay fees incurred insured in declaratory judment action to establish that the insurer had agreed had do. If an not done that which it insurer is so brought by bound as to such a action insured, certainly declaratory it is so bound as to a an by judgment brought action insurer the insured must defend. possible is, however, resolution another
There subject declaratory It action. matters which are intentionally Mrs. Brohawn may that be determined event, duty'on alleged. we see no that the acts In committed expenses pay fees part counsel of Transamerica declaratory If action. she in the Mrs. Brohawn incurred injure, there is no with intent the acts committed policy. for the does call under the insured in a suit based on such defend the insurer conduct, grounded allegations in a purposeful but suit on allegations even if are negligent acts the insured such false, or We that had groundless, fraudulent. observe action, and the tort declined defend Transamerica injuries resulted a determination action Brohawn, acts of caused intentional duty to defend not be held to have had Transamerica could good for holds her. We think same action.
Order 7 November reversed; remanded case trial; paid by to be new costs appellant.
Lowe, J., dissenting:
One by corporate of the incentives held out liability “pay[ing] insurers addition to obligated on of behalf insured all sums . . . damages ... as . . .” is the vast investigative legal pool placed of resources at an disposal, promises insured’s any with which it to defend suit “ any . . allegations . even if groundless, of the suit are false or By ruling today, fraudulent. . . .” majority their permits legal those vast by resources contracted for protection insured as his to be utilized disadvantage. to his majority succinctly stage. sets the “Thus, the necessary factual determinations to a fixing liability may [Mrs. be made Brohawn’s] action instituted [her insurer] Transamerica.
The finder of will fact ascertain whether Mrs. Brohawn alleged committed the act. If it finds that did, she will it determine whether the acts were negligently intentionally committed or committed.
Thereupon, liability Brohawn, of Mrs. policy, liability any] and the [if will pp. Transamerica be resolved.” 18-19. setting permits This Mrs. Brohawn’s defender bring to and control a suit which it opponent. becomes her problems began Brohawn’s prospect with the of a law suit arising from the altercation between her and her initial problems accusers. The escalated when sought Transamerica which in join effect caused it to accusers rather than to defend as majority contracted. The encourages lay the insurer to down the shield for the sign Brohawns at the pick first up attack and a sword to join assaulting force. The insurer’s resources are then permitted by majority attempt to be utilized prove to only not that Mrs. Brohawn has done she denies but what has done intentionally, it thereby subjecting her to even greater damages punitive of a nature. With one observation majority procedure as to their remand I readily most
concur, disadvantages My it “not without some . . . .” disproportionate concern is that the insured becomes recipient disadvantages. It those is little solace if their Brohawns that insurance carrier doesn’t defeat them by proving intentional, the tort it will then have to conform contract.1 disadvantage
If must result from some the three Falls, alternatives, Glens majority from described troubling to find we Md. at it is resolve them corporate carrier which drafted the contract and favor of compelled yet perform, opposed which has been *19 seemingly has relied on the individual “insured” who the fully performed promise defend and who has unrestricted advance, year protection, year after payments with for year. of the other two alternatives described after Either seems far more conscionable.
Certainly number two could result no harm alternative i.e., if the party, company were to defend action to either rights agreement. The non-waiver reservation a expressed be corporate concern that would counsel his in an conflict of interests between placed awkward duty insured, ironic allegiance insurer and his to the is to the by position placed which he is light in the declaratory judgment procedure. least in the second At — duty defend the be that is to his would clear alternative — an officer of this court and I refuse to believe insured Indeed, I fail to see the concern otherwise. would do Falls alternative, the first Glens expressed as to decline at compelling company defend or the insurance must be made precisely decision that peril. is That party suddenly sees every when one every party to contract possible of all worlds. may not the best he have conceiv- may be circumstances agree there that IWhile I appropriate, remedy may able where crystallized these it so majority when part deny the trial as circumstances particular factual — company majority if provided fees are Even counsel prevail. does not judge any discretion. We are far less able to balance the equities procedures of the various applied as to each case than is he. And we should sight not lose purpose basic of the declaratory relief. It is a convenience, to avoid unnecessary litigation but never intended to reverse es- rights, tablished procedural. substantive or significant It is that majority persuaded is preference (not directive) expressed by Judge Barnes in Falls, Glens 136,2 254 Md. at that the “third alternative, seeking declaratory in regard relief . . . would provide seem to the best solution.” (Emphasis added). This suggestion, even from so jurist eminent a Judge Barnes, may persuasive b'e but is obligatory. question The posed by Glens Falls was not whether the declaratory judgment procedure was availability available. Its as an alternative The issue was whether or not Glens never was questioned. Falls estopped was denying coverage from having declined attempt the declaratory judgment route, and the answer clearly negative. today question quite different. Here we are decided telling parties judge issues before a trial who had the him he is without discretion to decide appropriate pursued under the alternative is not facts case, notwithstanding particular circumstances petitioner sought a declaration of under a contract *20 Falls, by Glens very language interpreted whose has been supra. Glens majority sight The has lost of the fact that compel insurer to Falls decided that did not the the contract majority points to State the 2. Glens Falls dictum In addition to the 615, “where, Treas, al., Md. v. et 254 not even Co. Farm Mutual Auto Insurance questioned.” proceeding apparently, propriety a was of such the scope Appeals apparent. the of their of limits The Court The reason is “ by Md. Rule lower court.” questions decided the . . . tried and review to 885. when the issue had stamp question. questioned” proceeding . . “propriety was not. . . . That the of [the] Appeals’ place Court of does not the never been raised on all may in procedures called approval later be like of permissible procedure prohibited when used as an question is I the do not by parties. unquestioned alternative, the if it be nor should judge trial However, question, context the under each factual when called equities. be should not The issue the be left free to balance should foreclosed regard of each case. individual variables to the without preclude questionable the claim nor did it defend it from relitigating question declining of after to options open In it to defend. short left all the insurance company rights uninjured. whose agree
Although decision, I that under the Glens Falls permitted action, here have I lower court could propriety nevertheless believe determination of remedy was within the lower court’s discretion. Under majority declaratory procedure decision the short cut is compelled by application therefor, withdrawing the mere judge leaving from discretion the trial procedure solely unassailable choice of to the insurer. Basic primary parties of including interest principal liability, by are party issue decided third this determination of alternatives. A review of that final by dispassionate judge is, me, determination a trial to much preferred right to be over an absolute election either party. very fact that this court remains divided is some might indication that reasonable minds differ different assuredly circumstances. Most “circumstances alter cases.” procedure provides The decision of which the best balance circumstances, under each set impartial is best left to an party arbiter rather than interest.
Finally, power construe under the Uniform — power Declaratory precisely Relief Act party may any question A have construe. “determined validity .” of construction or . . the contract and “obtain a status, rights, legal declaration of other relations under Art., and Jud. Proc. it.” Cts. 3-406. I find the Nowhere do § slightest permit Legislature intent indicated liability “question tort determined as an incident of the procedure permitting of construction.” The obtention of a provided rather to alleviate than procedural compound problems. surely It was not meant to parties’ rights. interfere well-established respectfully Judge I dissent and Davidson has authorized say joins me doing. that she me so (“Sam Judge” Slick”). “The Thomas Chandler Haliburton Old