Motions for Summary Judgment in Insurance Coverage Dispute


– Plaintiffs,


– Defendants.

CASE NO.: 03-C-22-008726

Plaintiffs’ Response to Defendant Encompass Insurance Company’s Motion for Summary Judgment and Plaintiffs’ Cross-Motion for Summary Judgment

Plaintiffs, by and through their attorneys, Ronald V. Miller, Jr., Laura G. Zois, and Miller & Zois, LLC, under Rule 2-501, file the following Plaintiffs’ Response to Defendant Encompass Insurance Company’s Motion for Summary Judgment and Cross-Motion for Summary Judgment, and in support thereof, state the following:

1. Introduction

This is a catastrophic brain injury lawsuit involving a 14-year-old boy struck as a pedestrian in an Ocean City, Maryland, crosswalk. This declaratory judgment action seeks a judicial order that additional coverage is available from Encompass Insurance.

2. Argument

A. “You” Is Not Defined in Exhibit 2.

Defendant claims that the word “You” is defined in the Introduction of the policy, citing Exhibit 2 to its Motion. Perhaps this is defined in the policy, but Plaintiffs are unable to find this definition in Exhibit 2. If, in fact, the word “You” is not defined in the policy, clearly thepolicy is ambiguous because it does not identify who “You” is. If this is the case, the policy would ambiguously cover Daniel Perl, a named driver on the insurance policy. Plaintiffs have filed discovery to flush out the answer to this question but expect that Defendant’s response to this Motion will provide the answer.

B. Defendant’s Motion Ignores the Critical Issue in the Case

In two sentences on pages 4-5 of its Motion, Defendant blithely glides through the critical legal question in this case:

“‘You’ is defined in the Introduction of the policy as the Aperson shown as the Named Insured in the Coverage Summary and his or her spouse if a resident of the same household. Exhibit 2. Edward and Susan Perl would therefore, be “you” as they are the Policyholders.”

Presumably, Defendant makes this argument because Edward and Susan Wilisare identified on the Coverage Summary as the policyholders. Yet, the Coverage Summary does not define the term “Named Insured.” The Coverage Summary does, however, list as the very first rated driver on the very first page, Defendant Daniel Willis.

Defendant is implicitly arguing that the words “Named Insured” and “Policyholder” are synonymous. Defendant does not, however, explain why this would be so. Why would Defendant use an undefined word in the definition of the word “You” if they had intended to mean the word “Policyholder” which is clearly identified on the Coverage Summary as Edward and Susan Perl? Defendant drafted this instrument. If they had intended “Policyholder” to mean “Named Insured” it is reasonable to assume they would have done so. Moreover, Defendant could have short-circuited this entire loop if it had merely defined the word “You” with precision by naming by name who “You” is, as it so easily could have done.

In light of this language, Plaintiffs contend most, if not all, people reading this policy would conclude that Daniel Perl is a named insured listed on the Coverage Summary. The path to ambiguity, of course, is far less arduous. The test for ambiguity in Maryland is whether the language used could suggest two different meanings to a reasonably prudent layperson. See Heat & Power v. Air Products, 320 Md. 584, 596 (1990); Pacific Indem. Co. v. Interstate Fire & Casualty Co., 302 Md. 383, 389 (1985). [Note: Pacific Indemnity provides a great overview of Maryland contract law and Maryland insurance contract law.]

Under this test, it is impossible to claim that a reasonable person would ignore all of the evidence and logic to the contrary and assume that “Policyholder” means “Named Insured” and that the insurance company just uses both terms interchangeably. This argument is simply untenable.

C. Summary Judgment Should Be Granted in Favor of the Plaintiffs

Defendant may argue that even if Plaintiffs’ contention is true, a jury must decide the ambiguity. But Maryland law is clear that a contract should be construed against the drafter of the contract. Id. In the absence of any parol evidence, ambiguous contracts should be construed by the Court against the drafter. Id. Accordingly, summary judgment should be granted in favor of the Plaintiffs.

Respectfully submitted,

Miller & Zois, LLC
Ronald V. Miller, Jr.
1 South St, #2450
Baltimore, MD 21202
(410)760-8922 (fax)
Attorneys for the Plaintiffs

Ambiguity in Maryland Insurance Contracts

In Maryland contract law, the resolution of ambiguity in a contract is guided by established legal principles and case law.  This is a question for the judge, not the jury.

When a contract contains ambiguous terms or provisions, meaning that they are open to more than one reasonable interpretation, the goal is to ascertain the intent of the parties at the time the contract was formed. But Maryland, more than most states, leans heavily towards the “plain language rule,” which starts by examining the plain and ordinary meaning of the contract’s words and phrases.  If that gets you nowhere, the court will look at the parties’ course of dealing, usage of trade, and course of performance to determine their intent. If the contract language is clear and unambiguous, the court will enforce the contract as written. But an ambiguous contract is for the jury to decide.

Of course, there is not a lot of negotiating in 99.000% of Maryland insurance contracts.  So if all else fails, and the court cannot ascertain the parties’ intent, it will give the jury the rule of interpretation that any ambiguity will be resolved in favor of the party who did not draft the contract.

Maryland Does Not Lean Toward the Insured

Many states resolve ambiguities or uncertainties in favor of the insured under the premise that there is unequal bargaining power between insurance companies, which typically have legal teams and expertise, and individual policyholders who may have limited knowledge of insurance contracts

That makes sense, right?  But not in Maryland. Our state does not treat an insurance contract much differently than any other contract.

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