Summary of Nationwide Mutual Insurance Co. v. Webb
Nationwide Mutual Insurance Co. v. Webb, 291 Md. 721, 736 (1981) addresses the enforceability of a consent to sue clause in an uninsured motorist endorsement. This case consolidated this case and MAIF v. Franz. Both cases concerned this issue of the enforceability of consent to sue clauses in uninsured motorist endorsements. Basically, what was going on was that insurance companies were writing clauses into their car insurance contracts that compelled arbitration in uninsured motorist cases.
In Franz, MAIF's attorney asked the Maryland Court of Appeals of overturn summary judgment granted in favor of Anthony Franz because the Maryland Court of Special Appeals found that the arbitration clause in Franz's insurance policy with MAIF (now called Maryland Auto Insurance) contained an unenforceable mandatory arbitration clause.
Similarly, in Webb, Nationwide Insurance asked the Maryland Court of Appeals to affirm a lower court finding that it was not bound by a dispute involving the injured insured because he had not abided by the consent to sue clause.
The court found in favor of the personal injury victim in both cases, affirming the judgment in Franz and vacated and remanded Webb, finding that consent to sue clauses were unenforceable because they limited uninsured motorist coverage. The court noted that Marylnad has a keen interest in protecting insured drivers, that there was an interest in avoiding repetitive litigation, and that insurers' rights were protected because they had the option of intervening in disputes between insured and uninsured motorists.
Mandatory Arbitration in MarylandWebb is an exception to Maryland law that allows for the enforcement of mandatory arbitration agreements. The Maryland Arbitration Act embodies a legislative policy in favor of the enforcement of agreements to arbitrate. Arbitration is encouraged by Maryland law because it "originates from an agreement between the parties as to how and in what forum the parties will settle their disputes." Birkey Design v. Eagle Nursing Home, 113 Md. App. 261, 265, 687 A.2d 256 (1997).
So there is hope for the future. Thankfully, this is not a problem facing victims bringing uninsured motorist claims in Maryland.We are not unmindful of the growing concern over the use of arbitration contracts to compel consumers and prospective employees to waive, in effect, important constitutional and statutory rights or be denied, in the case of consumers, needed goods and services, and, in the case of prospective employees, desirable employment. [Citations ommitted.] This concern is not unfounded. The use of arbitration to resolve employment disputes and consumer complaints is growing at a startling pace. What was once considered just a voluntary alternative means of resolving disputes quickly and inexpensively, has the potential, as one commentator has observed, to become “a tool for the powerful to exert authority over the less powerful."
- Maryland arbitrators and mediators: get a list of active mediators and arbitrators in Maryland
- Maryland Law Update
- Sample Interrogatories Filed by Nationwide: examples of interrogatories from this insurance company in a car accident case
- Settling Claims with Nationwide (details on dealing with Nationwide Insurance for settlement)