On January 23, 2017, the Maryland Court of Appeals, in a split opinion, determined that the driver of a taxicab who was injured in an accident was not entitled to Personal Injury Protection (“PIP”) benefits under his personal automobile insurance policy, which did not insure the taxicab. The cab driver, Alahassan Bundu-Conteh, was rear-ended by a motor vehicle while driving his taxicab. The taxicab was insured by Amalgamated Insurance Company and carried liability-only coverage, which does not include PIP coverage. PIP coverage is limited no-fault coverage, usually in the amount of $2,500.00, that provides a person insured under a policy containing PIP coverage with limited benefits to pay for medical expenses and/or lost wages, whether or not the insured was responsible for causing the accident. In Maryland, all insurers of motor vehicles are required to offer PIP coverage to their insured. Taxicabs and buses, however, are excluded from the definition of “motor vehicle” under the applicable statutes. Accordingly, Mr. Bundu-Conteh’s insurance policy with Amalgamated only provided liability coverage, but not PIP coverage. After the accident, Mr. Bundu-Conteh submitted a PIP claim to State Farm, which insured his personal automobile. State Farm denied the claim, relying on an exclusion in the policy that stated: “there is no coverage: . . . for you or any resident relative while occupying a motor vehicle owned by you or any resident relative and which is not insured under the liability coverage of this policy[.]” Mr. Bundu-Conteh contended that this exclusion did not apply to him because he was driving a taxicab that is excluded from the definition of “motor vehicle” under the PIP statute, and therefore the exclusion did not apply to him while occupying his taxicab. He also argued that the exclusion is incompatible with well-settled Maryland law.
The Maryland Insurance Administration concluded that the exclusion in the State Farm policy ran afoul of the “owned but uninsured” exclusion set forth in Maryland Insurance Code §19-505(c)(1)(ii), which states: “an insurer may exclude from the coverage described in this section benefits for:. . . (ii) the named insured or a family member of the named insured who resides in the named insured’s household for any injury that occurs while the named insured or family member is occupying an uninsured motor vehicle owned by: 1. the named insured; or 2. an immediate family member of the named insured who resides in the named insured’s household. State Farm appealed to the Circuit Court, which reversed the Administration. The Administration then appealed to the Court of Special Appeals, which affirmed the Circuit Court. The Administration then petitioned the Court of Appeals, which granted certiorari.
The Court of Appeals determined that a taxicab is a “motor vehicle” for purposes of the owned but uninsured exclusion from PIP coverage set forth in §19-505(c)(1)(ii), and that the term “uninsured motor vehicle” under Insurance § 19-505(c)(1)(ii) means uninsured for PIP coverage, and therefore a taxicab, which is not insured for PIP coverage, is an “uninsured motor vehicle” for purposes of that section. In essence, the Court of Appeals concluded that the exclusion in the State Farm policy applied to the taxicab. Three judges dissented on the grounds that the majority’s conclusion that “a properly insured taxicab is an ‘uninsured’ vehicle for purposes of the personal injury protection . . . statute . . . is not only contrary to the plain language of the statute and its legislative history, but also inconsistent with [the] most recent decision on PIP coverage and the construction of the statute by the agency charged with administering it.” The dissent stated: “State Farm’s argument that its denial of coverage is justified by [Section 19-505(c)(1)(ii)] requires one to rewrite the statute-i.e., that the exclusion extends to ‘an injury that occurs while the named insured . . . is occupying an uninsured a motor vehicle that, even if insured buy another policy, lacks PIP coverage and that is owned by . . . the named insured . . .” The dissent added: “if the statute were rewritten in that manner, it would be quite at odds with the other exclusions in this statute…[which] [o]ther than an exclusion for a non-resident pedestrian involved in an accident outside Maryland … are all designed to deny benefits to a person involved in some kind of wrongdoing.” The dissent stated that “Mr. Bundu-Conteh did not waive PIP coverage in his State Farm policy. Nor did he waive PIP for his taxicab; under State law, the insured did not offer it to him and was not required to do so.” Therefore, “neither the plain language of . . . Section 19-505(c)(1)(ii) nor its legislative history supports a denial of PIP coverage to an insured who also owns and operates a properly insured taxicab.” The dissent’s position is that the statute is unambiguous and that the taxicab is not an “uninsured” motor vehicle for purposes of PIP benefits.
This decision by the Court of Appeals is notable for the Court’s willingness to broadly interpret the language of the PIP statute to deny benefits under a remedial statute.