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Insurance Liability Due to Agent Assurances:
In Nationwide Mutual Insurance
Co. v. Regional Electric Contractors, Inc., CSA No. 1299,
Sept. Term, 1995. Filed, May 31, 1996, the Maryland Court of
Special Appeals held that a commercial insurer was liable for
damages from an accident despite the fact that there had been
no tort proceeding or lawsuit between the two parties. Due to
the fact that the insurance agent urged the insured to pay damages
to the third party, assuring it that coverage was in place. The
Court found that the insurance company was bound to provide coverage,
despite the exclusionary language of the policy. The action stemmed
from a switchboard explosion caused by the employee of an electrical
contracting company. The insurance contract specifically excluded
accidents caused by the insured company's faulty work, however,
after the switchboard explosion, the insured repaired the property
owner's damages so that suit was never filed against the company.
The insurer argued that the lack of suit left its insured's liability
undetermined, leaving its coverage obligation uncertain. The
Court of Special Appeals agreed that enforcing coverage absent
a tort proceeding between the damaged and the insured, is "manifest
opportunity for fraud and collusion between the insured and the
third party - something for which no insurance company bargains."
However, it was Regional's Nationwide agent who suggested the
repair be made, and assured the contracting company that it was
covered for the switchboard accident. As a result, the Court
of Special Appeals took a minority position holding that the agent's
words estopped Nationwide from denying coverage, even if the accident
would not be covered under the policy's terms.
Medical Malpractice/ Damages:
In Travis Pepper , a minor,
et al. v. Johns Hopkins Hospital, CSA No. 1241, Sept. Term,
1995. Filed May 31, 1996, the Court of Special Appeals held that
even though a minor may not be financially responsible for paying
his own medical costs, such costs may be recoverable where evidence
shows that the minor was not getting the proper medical care.
Johns Hopkins Hospital had argued that since the minor child
could not be held financially responsible for his own medical
care, he could not claim such expenses as damages on his own behalf.
The Court found that since there was evidence to show that the
parents were not financially able to provide their son with all
of the care he needed, a jury could have found that he was entitled
to collect medical expenses.
Workers' Compensation Statute of Limitations:
In Karen E. DeBusk v. Johns
Hopkins Hospital, CSA No. 110, Sept. Term, 1995. Filed June
3, 1996, the Court of Appeals held that the two year statute
of limitations for filing a Workmens' Compensation claim runs
from the date that the injury is sustained, and not from the date
that the injury is discovered for accidental injuries. In rejecting
the plaintiff's argument that the 1991 revision to the Workers'
Compensation Statute restored the law to its pre-1957 standard
which allowed the limitations period to run from the date when
the disability became apparent, the Court stated that "a
statute of limitations which is triggered by an externally verifiable
date, is a classic example of an objective, bright-line rule which
fosters predictable outcomes in otherwise unpredictable situations."
The Court also found that the two year limitations period was
not unconstitutional since it was rationally related to the injury
driven starting date of the statute of limitations.
Time Limit for Bringing Suit on Homeowner's Policy:
In Rocco Luppino v. Vigilant Insurance Company, CSA No. 1497,
Sept. Term, 1995. Filed June 4, 1996, the Court of Special Appeals
held that the time limit for filing suit against an insurer does
not begin to run until a judgment is rendered and the insured
becomes legally obligated to pay. Purchasers of the plaintiff's
home sued him more than three years after the date of settlement,
when they discovered extensive termite damage. Plaintiff had
canceled his home- owner's policy the day the sale closed, and
the insurance company said that it was not required to defend
under the canceled policy. The Court of Special Appeals ruled,
however, that Vigilant was liable for "the ultimate net loss"
suffered by the insured, and that the time period for suing the
insured did not begin to run until the jury found against him.
Tort Law/Auto Insurance:
In Nationwide Mutual Insurance Company v. Edward Seitz,
CSA No. 1477, Sept. Term, 1995. Filed June 3, 1996, the Court
of Special Appeals held that where two insurers cover cars involved
in a multi-car accident resulting in injuries to a third party,
both may be held liable up to the amount of the higher policy's
Personal Injury Protection (PIP) coverage limit. Where the Plaintiff
was injured when two vehicles collided, one of which was covered
by a Personal Injury Protection (PIP) policy in the amount of
$2,500, and the second of which was covered by a PIP policy in
the amount of $10,000.00, the Court held that both insurers were
liable to the Plaintiff for PIP benefits not to exceed the higher
policy. As the Plaintiff had been "injured" by both
vehicles in the chain reaction collision, under § 543 (b)(1)
of the Maryland Insurance Code, both insurers were obligated to
pay PIP benefits.
Workers' Compensation/Benefits:
In Roland H. Bowen v. A.H.
Smith, CA No. 61, Sept. Term, 1994. Filed June 4, 1996, the
Court of Appeals held that a recipient of Workers' Compensation
is not disqualified because of his incarceration. The case arose
on an appeal from summary judgment on the issue of whether or
not an employer may terminate or suspend Temporary Total Disability
benefits while the worker is in jail. The Court held that the
Maryland Workers' Compensation Act has no indication that benefit
recipients are disqualified because of incarceration and since
the statute must be liberally construed to benefit injured workers,
any such restriction must come explicitly from the General Assembly.
Since the statute does not address the issue of whether Temporary
Total Disability benefits may be suspended or terminated when
the claimant is incarcerated, the Court ruled that the claimant
was entitled to full Workers' Compensation benefits. The Court
went on to state that the sole determinant for terminating Temporary
Total Disability payments is whether or not the claimant continues
to suffer from the disability and loss of wage earning capacity
on which the original award was bottomed. The relevant factual
question is whether the disability continues to impair wage earning
capacity. If the claimant is no longer disabled, he is no longer
entitled to benefits. The ruling places Maryland squarely within
the majority of jurisdictions that have considered the issue and
reached the same conclusion.
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Business Law/Workers' Compensation Insurance:
In Commercial Union Insurance Company v. Harleysville Mutual Insurance
Company, et al., CSA No. 1339, Sept. Term, 1995. Filed, May
7, 1996, the Court of Special Appeals held that a Workers' Compensation
insurer is not required to cover claims mandated by states not
covered by the insurance policy and not recoverable in the state
which coverage is provided. The case concerned an employee of
a small Virginia construction company who was injured while working
as a subcontractor on a job in Maryland, and the worker filed
a Workers' Compensation claim in Maryland. The Virginia
construction company's application for Workers' Compensation
insurance requested coverage for Virginia only. Based on the
application and the coverage issued as a result thereof, the Court
of Special Appeals held that insurer should not be liable where
employer had paid a premium for insurance coverage in only one
state. The Court declined to create a situation in which employers
are provided with "all states" Workers' Compensation
coverage when they have only desired coverage and paid premiums
for one state. As a result, the Court held that the insurance
policy issued to the employer did not require the insurer to indemnify
the employer for the amounts awarded to the claimant by the Maryland
Workers' Compensation Commission.
Workers' Compensation:
In Joan A. Barnes v. Children's Hospital,
CSA No. 729, Sept. Term, 1995. Filed May 1, 1996, the Court
of Special Appeals held that an employee called to work on a Saturday
was on a special mission, and therefore, could collect Workmens'
Compensation payments from her employer, where the time, nature
and urgency of the journey were of such characters to make the
journey itself a substantial part of the service rendered. The
Court found that a journey may be a special mission even where
the task performed at the work place is a regular part of the
employee's duty. The Court stated that the special mission rule
contemplates situations in which either the journey or the mission
is special, not simply where the task to be performed at the workplace
is special. When an employee makes a special journey to the place
of employment at the request of the employer, the employee is
acting in the course of his employment even if the tasks that
he is expected to do are completely normal or regular. Applying
the law to the instant case, the Court held that since the claimant
was in the process of dropping her family off at home in order
to attend to her business obligations after receiving an emergency
call from her employer, that her injury was reasonably related
to her business interests. The Court stated "but for the
request to report from work, she would have not attempted to take
her family home at that time."
Lead Paint Poisoning:
In Octavia Brown v. Carel
Wheeler, CSA No. 1301, Sept. Term, 1995. Filed May 6, 1996,
the Court of Special Appeals declined to adopt a standard holding
all landlords renting older homes to automatic knowledge or reason
to know that their properties are contaminated with a toxic substance.
The Court set out a standard of proof which a plaintiff must
meet in order to survive a landlord's motion for summary judgment
in lead paint poisoning cases. The ruling involved a landlord
who only rented one property, and the Court affirmed the Court
of Special Appeals' holding that the case would not proceed where
the plaintiff could not produce evidence that a landlord knew
three things, namely, that lead paint existed on the premises
at the time of exposure, that lead paint generally exists in older
buildings, and that deteriorated lead paint is a hazard. In alternative
to the above three prong test, a plaintiff may show that the defendant
has superior knowledge of such matters as is normally held by
a person in the business of renting a property. The Court noted
that in lead paint poisoning cases based on negligence, the plaintiff
must show evidence that would prove that the landlord had actual
knowledge or reason to know of chipping paint, that the condition
of the paint was hazardous, and that the landlord was given an
opportunity to correct the problem.
Americans With Disabilities:
In Stephen L. Kiess v. D&H
Distributing Company, U.S. District Court No. S95-2868, April
25, 1996, the United States District Court gave a narrow reading
to the term "disability" as it applies to the Americans
with Disabilities Act (ADA). The Court held that a kitchen installer
with a heart condition which prevented him from lifting heavy
objects, was not disabled as the term "disability" applies
in the ADA, since lifting heavy objects was essential to his installer
position, and no accommodation would allow him to perform such
lifting. Further, the Court stated that the company was not required
to shift work responsibilities or create a position to accommodate
him. Significantly, the Court stated that "not every ailment
is a qualifying disability under the Americans with Disabilities
Act." In finding that the plaintiff's heart condition restricted
only heavy lifting, rather than the major activities of his life,
the Court found that his "condition" was not sufficient
to constitute a disability for ADA purposes. "The inability
to perform a particular job, such as plaintiff's kitchen installing
job, does not amount to a disqualifying disability sufficient
to make out a prima facie case under
the ADA." Otherwise, everyone with a Workers' Compensation
case that kept them from returning to work would be "disabled"
regardless of the other criteria for disability under the ADA.
The Court held that there was no compunction to change the plaintiff's
job from a kitchen installer to a finisher or push off all of
the heavy work inherent in plaintiff's job to plaintiff's fellow
workers, and as there were no vacant positions for which the plaintiff
was qualified, the employer was not required to create a job to
suit the plaintiff's individual needs.
Civil Procedure/Service of Process:
In Maryland Firemen's Association
v. John Chaves, President Firefighters' Association of American,
U.S. District Court No. 96-2, April 25, 1996, the District Court
of Maryland held that a defendant who received inadequate service
of process should not be subject to a default judgment entered
in favor of the plaintiff. The Court held that the plaintiff
was not entitled to a default judgment because, under the Federal
Rules, service of process may be performed "pursuant to the
law of the state in which the District Court is located."
Maryland law requires a Complaint and Summons to be sent by Certified,
not First Class, mail.
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