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Commercial Uninsured Motorist Policies in Maryland |Schuler v. Erie Insurance Exchange

This case, Schuler v. Erie Insurance Exchange, is about whether uninsured motorist coverage for a business requires coverage for "vehicle owners and members of their family."  The Maryland Court of Special Appeals says no.  But the opinion is not all bad for victims. 

Facts of Schuler

In this Montgomery County, Maryland case, a pedestrian was injured in a car accident when he was struck by an uninsured motorist. The pedestrian's car was insured by MAIF. The pedestrian's wife drove a company vehicle with an Erie Insurance Exchange commercial policy, with the employer as the named insured. 

After the pedestrian was struck by the uninsured car (as he was standing next to his own automobile, a 1983 Camero (remember that car?), at the time of the accident), he sought recovery under the Erie policy as opposed to the MAIF policy because, not surprisingly, the Erie policy had higher limits (20/40 as opposed to 100/300). (Note: the minimum car insurance coverage in Maryland is now is 30/60.) 

The pedestrian's accident attorney's claim was denied by Erie and the lawyer brought suit on behalf of the pedestrian. Montgomery County Circuit Court Judge DeLawrence Beardudge entered summary judgment for Erie and the pedestrian's attorney appealed.

pedestrian crossing

The Court of Special Appeals of Maryland affirmed, ruling that under the unambiguous language of the insurance policy, the pedestrian was not covered for UM or PIP benefits because he was not the insured or a relative of the insured (which was his wife's company), and the accident did not occur while he was using his wife's car.

This big issue is whether the spouse of the owner of a car insured by the owner's employer is an insured entitled to uninsured motorist and PIP coverage.  Erie took the position that only covered vehicles involved in accidents were insured under this commercial policy.  The injured spouse, of course, contended that the policy should cover not only the owners of the cars but their relatives.  

Erie won this argument and it won the case for them. But this case can also be a weapon for plaintiffs' lawyers.  How?  The court disagreed with Erie's argument that only covered vehicles were insured.   That is simply not what the plain meaning of the policy says.  

Cases Citing Schuler

Schuler has been cited by a number of other opinions by Maryland courts.  These are the cases over the last 23 years.  

  • Erie v. Morales (2017).  In this unreported opinion authored by Judge Berger, the court reversed the P.G. County trial court's ruling for the plaintiff, finding that this case was factually in line with Schuler.  
  • Bushey v. Northern Assur. Co. of Am., 130 Md. App. 169 (2000).  This was an awful case.  A head-on crash killed two high school sisters in Charles County.  The estate of the passenger sister brought a claim for uninsured motorist benefits because the car only had a $20,000/$40,000 policy under the father's commercial insurance policy.  The court denied the claim.  It found that, unlike Schuler, the clear language of the policy limited uninsured motorist coverage to covered autos. 
  • Empire Fire & Marine v. Liberty Mutual, 117 Md. App. 72 (1997). Schuler is more often cited for the conservative law of Maryland contract law that it recites instead of the uninsured motorist issues it addresses. The first principle of the construction of insurance policies in Maryland is not to make sure the insured is not taken advantage of by the insurance company.  Instead, it is to apply the terms of the contract to determine the scope and limitations of its coverage.  This case cites Schuler for the idea that this "principle serves to achieve the touchstone of policy construction -to ascertain and effectuate the intent of the parties to the agreement."

Information on Erie
  • Dealing with Erie on accident claims:  Our lawyers have been on the other side of Erie many times and have recovered millions of dollars from this insurer.  We offer our insight on how to maximize the value of claims against Erie. 
  • Sample Erie Interrogatories (sample of the types of written questions you can expect from Erie during a lawsuit)
  • Sample Erie Interrogatory Answers (sample of Erie's answer to written discovery in an uninsured motorist case)
  • Sample Erie Expert Designation (expert designations in an Erie accident lawsuit)

More on Uninsured Motorist Coverage

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