RRD Attorneys Win Ruling That Maryland Law Does Not Require Reforming Out-of-State Policy Limits
Paul Sunshine, Partner in the Litigation Department of our Delaware office, along with Associate Martin Page, prevailed on a Motion for Summary Judgment in a Declaratory Relief action on behalf of an insurance carrier seeking to determine policy limits involving a multi-jurisdictional question of law. Plaintiff argued that the Delaware automobile policy limits should be conformed to Maryland’s higher per-person limits. Paul successfully argued that the limits identified in the policy, which conformed with Delaware law, applied.
Plaintiff was injured in an automobile collision in the State of Maryland. The Defendant insured maintained coverage on his Delaware registered vehicle with a policy issued in Delaware. The coverage provided limits consistent with Delaware’s required minimum limits. The plaintiff, a Maryland resident, sought a determination that the policy issued in Delaware, which included a provision that the limits would be conformed to meet any applicable financial responsibility laws in other states, should be reformed to provide Maryland’s higher minimum limits. The Delaware carrier disagreed, arguing that Maryland law did not actually trigger any provision in the underlying policy that would require payments above the stated limits.
In Kotkowski v. Nationwide Property & Casualty Insurance, et. al., the Federal District Court interpreted the policy under Delaware contract law in light of Maryland tort and insurance law. The Court first analyzed Maryland’s Transportation Code and Financial Responsibility Laws and concluded that policies issued to out-of-state vehicles were not required to match Maryland’s insurance liability minimums. The Court then concluded that the policy language was unambiguous: the policy minimums could only increase if the State’s law required additional payments. In its holding, the Court rejected the Plaintiff’s argument that the policy language caused Nationwide to voluntarily adopt the liability minimums of any state in which an accident occurred.
The parties filed cross Motions for Summary Judgment. The Court denied the Plaintiff’s Motion and granted Nationwide’s Motion, reasoning that Maryland’s financial responsibility statute clearly only applies to vehicles registered in Maryland. Further, the policy provisions in the Delaware-issued policy were unambiguous and the plaintiff could not seek to make them ambiguous simply because he disagreed with the applicability of those provisions. RRD was pleased to obtain this result for our clients, which has far-reaching implications for future auto claims.
Attorneys at Reger Rizzo & Darnall routinely represent and counsel insurance companies at the trial level and on appeal in connection with complex insurance coverage and bad faith matters. Our attorneys’ coverage experience includes general liability, environmental and mass tort, first party property, personal lines and specialty coverages.