Nasseri v. Geico General Insurance

Citations: 888 A.2d 284; 390 Md. 188; 2005 Md. LEXIS 745Docket: 60, September Term, 2003

Court: Court of Appeals of Maryland; December 15, 2005; Maryland; State Supreme Court

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Ebrahim Nasseri, the petitioner, sought personal injury protection (PIP) coverage from GEICO General Insurance Company after sustaining injuries in a collision while driving a taxicab. The case presents two key legal questions regarding Maryland's Motor Vehicle Insurance Code. First, it examines whether a taxicab driver injured in a collision with a non-taxicab vehicle is entitled to PIP benefits under his personal motor vehicle insurance policy, considering that taxicabs are excluded from the definition of "motor vehicle" per Maryland Code § 19-501(b)(2)(ii). Second, it evaluates the legality of a PIP exclusion in Nasseri's GEICO policy, which states that coverage does not apply if the insured is injured while in or struck by a vehicle available for their regular use.

The facts indicate that Nasseri was involved in the accident on May 15, 2001, driving a taxicab he rented from Action Taxicab, Inc. His rental agreement restricted his use of the cab and required a daily fee. While the taxicab had only liability coverage, Nasseri held a separate GEICO policy for his personal vehicle that included PIP benefits. Following the accident, GEICO denied his claim for PIP coverage, arguing that the incident did not qualify as a "motor vehicle accident" due to the statutory exclusion and asserting that the policy excluded coverage for vehicles regularly used by the insured. Nasseri subsequently filed a small claims action against GEICO, asserting his entitlement to PIP benefits based on his insurance policy and applicable laws.

The District Court ruled that Nasseri was not entitled to Personal Injury Protection (PIP) benefits because taxicabs are excluded from the statutory definition of 'motor vehicle,' resulting in a judgment for GEICO. On appeal, the Circuit Court affirmed GEICO's judgment based on the validity of the 'regular use' exclusion in the insurance policy. Nasseri subsequently filed a petition for a writ of certiorari, questioning whether GEICO was required to provide PIP coverage and the validity of the 'regular use' exclusion under the statute. The court granted the petition and indicated it would reverse the lower court's decision.

GEICO's argument hinged on the definitions of 'motor vehicle' and 'motor vehicle accident' found in the Insurance Article, asserting that because 'motor vehicle' does not include taxicabs, any accident involving a taxicab could not fall under the definition of a 'motor vehicle accident.' However, the court identified a critical flaw in this reasoning: the statute defines 'motor vehicle accident' as any occurrence involving a motor vehicle, without excluding accidents involving taxicabs when another non-taxi motor vehicle is involved. The court clarified that the definition requires only one motor vehicle to be present in the accident, which was satisfied in Nasseri's case since his taxicab collided with a non-taxi vehicle.

Furthermore, the court referenced section 19-505 of the Insurance Article, which stipulates that PIP coverage applies to individuals injured in any motor vehicle accident. Nasseri's injury occurred in an accident involving his taxicab and a motor vehicle that was neither a taxicab nor a bus, thus qualifying for PIP benefits. The applicability of section 19-505 was further supported by section 19-513(d)(1)(i), which mandates that insurers pay benefits for injuries sustained in motor vehicle accidents, regardless of whether specific coverages are in effect for the vehicle occupied.

The language referenced in the legal document specifically addresses scenarios similar to the case at hand, identifying taxicabs, buses, state-owned vehicles, and vehicles with an affirmative written waiver of Personal Injury Protection (PIP) benefits as those for which PIP coverage would not apply. In this instance, Nasseri held a PIP insurance policy but was in a vehicle without active PIP benefits. Denying him PIP benefits solely because he was in a vehicle without coverage would conflict with § 19-513(d)(1)(i). Chapter 655 of the Acts of 1977 clarifies that taxicabs were exempted from certain mandatory insurance provisions, but this exemption does not eliminate required PIP coverage for other motor vehicles involved in accidents. Legal precedents indicate that an insured with PIP coverage is typically entitled to benefits when injured in another vehicle, with the coverage hierarchy depending on whether the occupied vehicle has PIP coverage. If it lacks such coverage, the insured’s own policy provides primary coverage. Therefore, since Nasseri was driving a taxicab, it does not justify a denial of PIP benefits mandated by the Insurance Code. GEICO's alternative argument hinges on a policy exclusion that denies coverage if injured in a vehicle not classified as an insured auto, which is subject to limitations as per § 19-505(c) of the Insurance Article.

Subsection c) outlines exclusions from insurance coverage, allowing insurers to deny benefits for individuals who: 1) intentionally cause their injuries in a motor vehicle accident; 2) are nonresidents injured as pedestrians outside the state; 3) are injured while knowingly operating or riding in a stolen vehicle; or 4) are injured while committing a felony or violating specific transportation laws. Additionally, benefits may be excluded for the named insured or their family members if they are injured in an uninsured vehicle owned by the named insured or residing family members.

In the context of motorcycles, insurers may exclude economic loss benefits or provide them with deductibles and options. The 'regular use' exclusion in Nasseri's policy is not authorized by the applicable insurance code. GEICO acknowledges this but argues for its application based on the facts of the case involving a taxicab. However, the Court has established that exclusions not expressly authorized by the Legislature will not be recognized, as seen in multiple precedents, including Stearman v. State Farm and Salamon v. Progressive Classic Insurance. The Court emphasizes that it will not endorse unauthorized exclusions, particularly where the Legislature has mandated specific coverages, and GEICO fails to provide justification for treating the taxicab exclusion differently from others. Thus, GEICO's argument for upholding the 'regular use' exclusion is rejected.

Upholding the 'regular use' exclusion in the GEICO insurance policy would contradict the Court's ruling in Pennsylvania Nat'l Mutual Casualty Insurance Company v. Gartelman, where both the PIP and uninsured motorist exclusions were deemed invalid. The Gartelman decision clarified that the Insurance Code only allows for specific exclusions from PIP coverage and does not permit a broad exclusion for individuals occupying uninsured vehicles owned by the named insured. In response to this ruling, the General Assembly enacted legislation allowing for a more limited exclusion that applies only to the named insured and immediate family members living in the same household, specifically for injuries occurring in uninsured vehicles owned by them. This legislative change does not authorize any exclusion based on 'regular use,' which means GEICO's reliance on such an exclusion is not supported by Maryland law and is therefore invalid. The judgment of the Circuit Court for Montgomery County is reversed, and the case is remanded for further proceedings consistent with this opinion, with costs to be paid by the respondent.

Section 19-501 defines key terms relevant to motor vehicle liability insurance. A "motor vehicle" includes any vehicle operated on a public road by non-animal power, excluding buses and taxicabs. A "motor vehicle accident" is an event involving such vehicles that results in property damage or personal injury, but excludes intentional acts by the insured. The "named insured" is the individual specified in the insurance policy.

The GEICO policy excludes coverage for injuries sustained in vehicles owned by the insured or their relatives that are not insured, and this case does not contest the aspect of being in or struck by such a vehicle. Section 19-505(a) mandates Personal Injury Protection (PIP) coverage for the named insured, their household members, and others using the insured vehicle with permission, as well as for pedestrians or those alighting from animal-powered vehicles.

GEICO initially provided a third reason for denying coverage but later withdrew it. The legal precedent underscores the importance of legislative titles in interpreting statutory intent. The petitioner argues that the GEICO policy should offer PIP coverage beyond statutory requirements; however, the court deems it unnecessary to address this due to the existing statutory mandate for coverage. GEICO acknowledges that its exclusion clause is broader than specific exclusions outlined in 19-505(c). Furthermore, GEICO's reliance on a previous case, Winterwerp, is noted, although that case did not address the validity of the clause in relation to the Insurance Code.