An action was brought against Ms. Smith for negligence and
against State Farm for breach of contract for failing to pay the amount of its
UM coverage. Subsequently, Carrissa settled with Ms. Smith for $50,000, the
limit of her liability insurance coverage. Carrissa then filed a motion for
partial summary judgment on the issue of Ms. Smith's liability, based on an
assertion that State Farm had consented to the settlement with Ms. Smith.
In support of her partial motion for summary judgment as to
liability, Carrissa argued that State Farm had consented to a settlement with
Ms. Smith, and by virtue of its consent to settle, could not contest Ms. Smith's
liability. State Farm responded by citing its answers to interrogatories where
it denied liability on the ground that Ms. Smith was not liable to Carrissa.
Carrissa filed a reply stating that State Farm had either consented to the
settlement or had refused to respond in the matter required by MD. CODE ANN.,
INS. § 19-511, and had waived its right to contest the liability of Ms. Smith.
The court denied Carrissa's motion on the ground that State Farm's denial of Ms.
Smith's liability was not consent to settle, and that a later agreement between
counsel was with the understanding that liability of Ms. Smith was being denied.
Prior to the beginning of trial, the parties stipulated that
the claims against Ms. Smith would be dismissed; the case would be tried on the
issue of Ms. Smith's liability and not damages; and that in the event of a
judgment against State Farm, State Farm would pay $50,000, the limit of its UM
coverage less the amount received from Ms. Smith's liability carrier. A jury
returned a verdict finding that Ms. Smith was negligent and Carrissa was not
contributorily negligent. State Farm then filed a motion for judgment
notwithstanding the verdict, which the court granted, on the ground that
Carrissa was contributorily negligent as a matter of law. On appeal, Carrissa
contended that the Court erred in (1) denying her motion for partial summary
judgment, and (2) granting State Farm's motion for judgment notwithstanding the
verdict.
ANALYSIS OF DENIAL OF MOTION FOR PARTIAL SUMMARY JUDGMENT
Carrissa's UM policy provided that an insured could not
settle with any person who may be liable for bodily injury without State Farm's
written consent. The policy contained a subrogation provision, which, inter
alia, entitled State Farm, to the extent it made payment under its UM coverage,
to the proceeds of any settlement recovered by Carrissa.
Maryland law is clear that a carrier, providing UM coverage
containing a clause requiring consent to settle, that consents to the settlement
of its insured's tort claim against an uninsured/underinsured tortfeasor is
bound by the settlement. The UM carrier cannot thereafter contest tort
liability. The same result ordinarily occurs if the policy does not contain a
clause requiring consent to settle.
MD. CODE ANN., INS. § 19-511 addresses a situation in which
the liability insurer of the alleged tortfeasor offers the policy limits to the
injured person. Under § 19-511, when policy limits are offered, the insurer
providing UM coverage must either consent to acceptance of the offer and give up
its ability to contest liability, or, if it refuses to consent, pay the amount
of the offer, with an opportunity to recoup the amount paid. Thus, the statute
protects an injured insured when a liability carrier acknowledges liability and
offers its limits, but the UM carrier refuses to consent to acceptance because
it concludes it has nothing to lose by forcing a trial on liability.
In the instant case, there was no written consent to settle
from State Farm. In fact, State Farm's denial of liability implied that it did
not consent to settlement. State Farm's waiver of subrogation did not imply
consent because consent would mean that it intended to pay up to its limits
without recourse, a result inconsistent with the denial of liability. The waiver
of subrogation was consistent with State Farm's position, that because Ms. Smith
was not liable, it would never have to pay anything for which it would have a
right to recover by subrogation.
At most, State Farm's response to Carrissa's notice,
pursuant to § 19-511, constituted a violation of the statute in that State Farm
neither gave written consent to acceptance of the offer from Ms. Smith, or
written refusal to consent. State Farm's violation of the statute prevented it
from arguing that entering into the settlement was a breach of its policy. The
violation may have compromised State Farm's subrogation rights, had they not
been waived, but it did not have the effect of an expressed consent to settle or
an admission of liability.
FACTS RELEVANT TO CONTRIBUTORY NEGLIGENCE
The accident occurred while Ms. Smith was driving down a
road where Carrissa was riding her bicycle on the sidewalk. As Ms. Smith
approached Carrissa, she did not see her crossing the road. Ms. Smith's car then
struck Carrissa in the middle of the lane. Carrissa flew off the bicycle, hit
the windshield, and ended up lying on the trunk of the car. Carrissa did not see
Ms. Smith's vehicle prior to the accident. Under these facts, the Court stated
that, in its view, the issue of contributory negligence was close, but it was
going to submit the case to the jury. The jury found that Ms. Smith was
negligent and that her negligence was the proximate cause of the accident. The
jury also found that Carrissa was not contributorily negligent. State Farm then
moved for judgment notwithstanding the verdict.
ANALYSIS OF CONTRIBUTORY NEGLIGENCE ISSUE
Children under the age of ten are evaluated according to
their "age, experience, and training." Carrissa argued that she had been riding
a bike for only about two years prior to the accident; had been riding a bike
without training wheels for only approximately one year prior to the accident;
and at the time of the accident, she was riding a new bike in an unfamiliar
neighborhood with more traffic than usual.
A child aged five or older may be guilty of contributory
negligence. At age five or older, the issue is analyzed in terms of the evidence
as to the child's age, experience, and training to show the level of knowledge
of the risks associated with the conduct in question. Carrissa was over eight
years old. Moreover, she knew how to ride a two wheel bike; she knew that she
was not to ride in the street; and she was aware that she could not cross the
street in the middle of a block in the face of traffic. The fact that Carrissa
was not familiar with the bike or the neighborhood was irrelevant to her
conduct. The evidence was clear that Carrissa entered the street in front of Ms.
Smith's oncoming vehicle. The evidence was also clear that she understood the
training she had received and the risks associated with her actions. Thus, she
was found contributorily negligent as a matter of law.
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