Opinion ID: 2299657
Heading Depth: 1
Heading Rank: 5

Heading: The Swartzbaugh Case

Text: The facts are straightforward and not in dispute. This case concerns an insurance policy purchased by Kenneth and Lynne Swartzbaugh and its potential coverage of an accident involving their daughter, Kelly Swartzbaugh. [2] In July 1998, Lynne, who handled the family finances with respect to insurance and related items, applied for insurance coverage for the family with a local independent insurance broker. She ultimately purchased a package policy that included both homeowners and motor vehicle insurance with Respondent Encompass Insurance Company. [3] With respect to motor vehicle insurance, the policy provided liability coverage in the amounts of $250,000 per person and up to $500,000 per accident. As later amended, it listed three vehicles, and named Kenneth, Lynne, and Kelly as drivers. In connection with the automobile policy, Lynne executed a waiver of higher UM coverage on the standard MIA form. The form included a paragraph above the signature line which stated: This is to certify that: I am the first named insured/applicant. I have been offered Uninsured Motorist Coverage in amounts equal to my Personal Liability Coverage limits at a total premium of $204 annually. I affirmatively waive this offer and instead elect to purchase lower uninsured motorists limits of $20/$40 (bodily injury) and $10 (property damage), at a total premium of $61 annually, subject to the minimum limits required by Maryland law. (emphasis added). [4] Immediately beneath the signature line appeared the legend: (Signature of First Named Insured). The reference to $20/$40 (bodily injury) and $10 (property damage) referred to the minimum coverage amounts in effect when the waiver was executed in 1998 $20,000 for personal injuries per person up to $40,000 per accident and $10,000 for property damage [5] all substantially below the UM coverage that would have prevailed under the policy in the absence of a waiver. By its terms, consistent with Maryland law, the waiver remained in effect until withdrawn. See IN § 19-510(e). The waiver was never withdrawn. In March 2008, Kelly was injured while a passenger in an accident involving an under-insured driver. The driver's insurer tendered the limits of his policy. Because the higher limits of UM coverage on the Petitioners' own motor vehicle policy had been waived, she was unable to collect further damages from Encompass under that policy's UM coverage. The Petitioners then brought a declaratory judgment action in the Circuit Court for Carroll County, seeking a declaration that the waiver was ineffective on the ground that Lynne was not in fact the first named insured on the policy. The circuit court disagreed and ruled that the waiver signed by Lynne was valid and enforceable. The Petitioners appealed to the Court of Special Appeals, which affirmed the circuit court in a reported decision. Swartzbaugh v. Encompass Ins. Co., 201 Md.App. 133, 28 A.3d 785 (2011). We granted certiorari to decide the significance of the phrase first named insured as used in IN § 19-510 and its application to this case.