Opinion ID: 1016459
Heading Depth: 4
Heading Rank: 1

Heading: the defendant owed a duty to the plaintiff to

Text: disclose a material fact; (2) the defendant failed to disclose that fact; (3) the defendant intended to defraud or deceive the plaintiff; (4) the plaintiff took action in justifiable reliance on the concealment; and (5) the plaintiff suffered damages as a result of the defendant’s concealment. Green v. H & R Block, Inc., 355 Md. 488, 525, 735 A.2d 1039, 1059 (1999). The Maryland Court of Special Appeals has characterized intentional concealment as “actionable fraud.” Finch v. Hughes Aircraft Co., 57 Md. App. 190, 231, 469 A.2d 867, 888 (1984) (citing Fegeas v. Sherrill, 218 Md. 472, 147 A.2d 223 (1958)). The phrase “false statements” does not inherently indicate an intention to deceive. See Medical Mut. Liability Ins. Soc. of Maryland v. B. Dixon Evander & Associates, Inc., 92 Md. App. 551, 570, 609 A.2d 353, 362 (1992) (“A false statement ‘is one that is not substantially correct.’”) (quoting Batson v. Shiflett, 325 Md. 684, 726, 602 A.2d 1191, 1212 (1992)). However, to void an insurance policy based upon an insured’s “false swearing”5 the statement must have been knowingly and intentionally stated with knowledge of its untruthfulness or with reckless disregard for its truthfulness and with the purpose to defraud. United States Fire Ins. Co. v. Merrick, 171 Md. 476, , 190 A. 335, 342 (1937). Because the law does not favor forfeitures, Hartford Fire Ins. Co. 5 “False swearing” is somewhat different from “false statement” in that it implies a false statement made under oath. Regardless, whether the statement was made under oath is inapposite; both phrases specify an untrue utterance. 16 v. Himelfarb, 355 Md. 671, 681, 736 A.2d 295, 301 (1999), such a definition is necessary so that an insurer cannot avoid a claim simply because an insured unintentionally provided incorrect information. Moreover, it mimics the definition of fraud and intentional misrepresentation. The important similarity among these various terms--“fraud,” “intentional concealment,” “intentional misrepresentation,” and “false statements,”--is the scienter requirement, and scienter must be proven by clear and convincing evidence. First Union, 154 Md. App. at 147, 838 A.2d at 433 (Md. 2003) (citing VF Corp. v. Wrexham Aviation Corp., 850, Md. 693, 704, 715 A.2d 188, 193 (1998)). MBIC cites to case law in numerous states that require only a preponderance of the evidence burden for an insurer’s contractual claim of misrepresentation, false statement, or concealment. See, e.g., Rego v. Connecticut Ins. Placement Facility, 593 A.2d 491, 494 (Conn. 1991) (applying preponderance of the evidence standard); Horrell V. Utah Farm Bureau Ins. Co., 909 P.2d 1279, 1281 & n.4 (Utah App. 1996) (same); Williams v. United Fire and Casualty Co., 594 So.2d 455, 458 (La. App. 1991) (same). Nonetheless, as long as Maryland remains in the minority of states that require clear and convincing evidence in a common law fraud claim, or until the courts of Maryland decide otherwise, we decline to adopt a preponderance of the evidence standard for an insurer’s contractual defenses of fraud, intentional concealment or 17 misrepresentation, or false statements. Accordingly, we hold that the district court did not err in charging the jury to apply the clear and convincing burden to MBIC’s affirmative defense.