Court Opinion

ID: 9693283
Source: CourtListenerOpinion
Date Created: 2023-08-25 16:34:43.888827+00
Date Added: 2024-06-11T18:19:44.230936
License: Public Domain

GILBERT, Chief Judge.
This appeal arises from the Circuit Court for Montgomery County, wherein Judge William C. Miller ruled that Allstate Insurance Company, because of a household exclusionary clause, was not obligated to indemnify Charles and Barbara Walther for more than the statutory minimum provided in the Maryland Financial Responsibility Law.1
The single issue before us is whether, in the light of the Court of Appeals decision in Boblitz v. Boblitz, 296 Md. 242; 462 A.2d 506 (1983), declaring invalid interspousal immunity, the circuit court erred “in determining that the limit of liability for insurance coverage for claims by household members” is the amount “required by the Maryland Financial Responsibility Law.”
At the time of the incident for which claim is made, Charles and Barbara Walther were husband and wife. Mrs. *407Walther was injured when she attempted to exit the car while her husband was simultaneously causing the vehicle to accelerate. The car door struck Mrs. Walther, injuring a femur, ankle, knee, and hip. Mr. Walther was insured by Allstate Insurance Company. His policy coverage was in the amount of $50,000 per person and $100,000 per occurrence. Notwithstanding those policy limits, Allstate offered Mrs. Walther $20,000 in settlement of all claims, asserting that, with respect to her, that sum was the policy limit.
The limitation, Allstate says, is written into the insurance contract under what is commonly referred to as the “household clause.” That clause specifically excludes “bodily injury to any person related to an insured person by blood, marriage, or adoption and residing in that person's household, to the extent that the limits of liability for this coverage exceed the limits of liability required by the Maryland Financial Responsibility Law.” The Maryland Financial Responsibility Law, Md. Transp.Code Ann., § 17-103(b)(l), currently requires minimum insurance coverage in the amount of $20,000. Both parties moved for summary judgment. In a written opinion, Judge Miller concluded that the “household clause” limitation on liability for bodily injury does not violate public policy. Judge Miller ruled that the limit of liability insurance coverage, with respect to Mrs. Walther under her husband’s policy with Allstate, was $20,000.
Because Boblitz abolished interspousal immunity in negligence cases, the Walthers aver that the limitation on household claims imposed by the Maryland Financial Responsibility Law violates the public policy derived from Boblitz. The Walthers reason that the abrogation of inter-spousal immunity not only permits Mrs. Walther to sue her husband for all damages she sustained as a result of his negligence but to assert that because the Maryland Financial Responsibility Law prohibits them from recovering damages in excess of $20,000 it violates public policy. Overlooked by that simplistic argument is the fact that Mrs. Walther is not precluded from recovering damages from *408her husband in excess of $20,000 but merely from obtaining more than $20,000 from her husband’s insurance carrier, Allstate. The Boblitz Court said:
“We share the view now held by the vast majority of American States that the interspousal immunity Rule is unsound in the circumstances of modern life in such cases as the subject. It is a vestige of the past. We are persuaded that the reasons asserted for its retention do not survive careful scrutiny. They furnish no reasonable basis for denial of recovery for tortious personal injury. We find no subsisting public policy that justifies retention of a judicially created immunity that would bar recovery for injured victims in such cases as the present.”
Boblitz, 296 Md. at 273, 462 A.2d 506 (citation omitted).
Subsequent to Boblitz, the Court decided Jennings v. Government Employees Ins., 302 Md. 352, 488 A.2d 166 (1985). There it was held that the “household exclusion” clause of GEICO’s insurance policy was invalid because it ran afoul of the Maryland Financial Responsibility Law. The GEICO policy sought to exclude household members from any recovery from the insurer. The Jennings Court stated that the denial of benefits to a household member was void as against public policy because the Maryland Financial Responsibility Law requires coverage of at least the legislatively mandated minimum amount.
Lest there be any doubt as to Jennings’ holding pertaining to the validity generally of “household exclusion clauses,” the Court in State Farm Mut. v. Nationwide Mut., et al., 307 Md. 631, 516 A.2d 586 (1986), held that the “household clause” of insurance policies was invalid only if the clause excluded less than the prescribed statutory minimal liability required by Md. Transp.Code Ann. § 17-103(b)(1).
Footnote 1 in State Farm clearly indicates that the Court was addressing a factual situation involving the exclusion of the insured, himself, as distinguished from members of his household. Nevertheless, the Court specifically rejected the holdings in Estep v. State Farm Mut. Auto. Ins. Co., *409103 N.M. 105, 703 P.2d 882 (1985), Hughes v. State Farm Mut Auto. Ins. Co., 236 N.W.2d 870 (N.D.1975), and Meyer v. State Farm Mut. Auto. Ins. Co., 689 P.2d 585 (Colo. 1984). All three of those cases declared totally invalid “household exclusion clauses” that prevented an injured wife from recovery under the policy.
Estep involved a widow’s claim, in a dual capacity, against her deceased husband’s automobile insurance carrier. The widow asserted a claim in her individual capacity as an injured party and in an official capacity as personal representative of the decedent’s estate. The New Mexico Supreme Court, in a 3-2 decision, upheld the widow’s claim, declaring all “household exclusions” void as against public policy.
Hughes was concerned with a claim by a wife arising from a snowmobile collision. Both the husband and wife were “named” insureds under the policy. At the time of the accident the wife was a passenger in the vehicle driven by her husband. The Hughes’s insurance carrier denied liability on the basis of the “household exclusion clause.” The North Dakota Court declared that the “household exclusion” provision was violative of public policy.
The Colorado Supreme Court in Meyer consolidated three appeals into one. One of the three cases, Aguine, also involved a husband and wife. The wife was injured as a result of a one car collision. She sued her husband. The Colorado Court in holding that the wife could recover under her husband’s policy struck down the “household exclusion clause.”
The fact that Estep, Hughes and Meyer were rejected by the Court of Appeals in State Farm v. Nationwide leads us to draw the inference that the Court’s opinion is more sweeping than the footnote professes it to be. At least, State Farm implicitly approved the household exclusion clause’s application to spouses of insured motor vehicle operators.
*410Our inference as to a spouse’s being embraced within the household exclusion clause is strengthened by those foreign cases upon which the Court in State Farm relied and “aligned” itself.
Among those cited cases are Dewitt v. Young, 229 Kan. 474, 625 P.2d 478 (1981) (claim by named insured who was injured while passenger in own car); Pennsylvania Nat. Mut. Cas. Ins. v. Parker, 282 S.C. 546, 320 S.E.2d 458 (1984) (insured’s son’s use of pickup truck involved in fatal accident); Bishop v. Allstate Ins. Co., 623 S.W.2d 865 (Ky.1981) (wife against husband — exclusionary clause that eliminated minimum coverage for tort liability was void as against public policy); Arceneaux v. State Farm Mutual Automobile Ins. Co., 113 Ariz. 216, 550 P.2d 87 (1976) (child suit against father — recovery limited to household exclusion provision which complied with the State’s Motor Safety Responsibility Act); Estate of Neal v. Farmers Ins. Exch., 93 Nev. 348, 566 P.2d 81 (1977) (household exclusion void insofar as it seeks to eliminate the statutory minimum insurance).
Our distillation of the above cited cases results in the conclusion that motor vehicle insurance household exclusion clauses are invalid only if they contravene the State’s financial responsibility act. Although the Walthers read Boblitz, when superimposed upon Jennings and State Farm, as voiding all household exclusion clause limitations, as between husband and wife, we do not see it that way. Nothing in Boblitz purports to declare that the minimum coverage mandated by Transp. Art. § 17-103(b)(l) does not apply to an insured’s spouse.
Maryland Annotated Code art. 48A, § 545(c) provides: “The Insurer may exclude from the coverage described ... benefits for the named insured or members of his family residing in the household when occupying an uninsured motor vehicle that is owned by the named insured or a member of his immediate family residing in his household.”
*411Insurers have a right to limit their liability and to impose whatever condition they please in the policy so long as neither the limitation on liability nor the condition contravenes a statutory inhibition or the State’s public policy. “A contractual provision that violates public policy [, however,] is invalid, but only to the extent of the conflict between the stated public policy and the contractual provisions.” State Farm, 307 Md. at 643, 516 A.2d 586. Boblitz, as a matter of public policy, abrogated interspousal immunity, not a contractual limitation on insurance benefits.
The General Assembly of Maryland amended Md.Ann. Code art. 48A, § 545(c) in 1989, six years after the Boblitz decision. Presumably that legislative body knew of Boblitz, Jennings, and State Farm v. Nationwide at the time of the amendment. The amendment was limited to substituting in the statute the word “described” for “prescribed” and the insertion of the phrase “of the subtitle.” Significantly, we think the Legislature did not exempt spouses from the “household exclusionary clause.”
The “household clause” in the Walthers’s insurance contract limits the amount a spouse may recover from the insurance carrier for injuries resulting from an automobile accident for which the insured is responsible. The clause does not prohibit an injured spouse from maintaining an action against the other spouse for damages in excess of the insurance policy limitations.
At the time Mr. Walther entered into the contract for auto insurance with Allstate, he covenanted that any claim by members of his household for damages would not be covered by the policy limits if the claim exceeded the statutory minimum required by the Maryland Financial Responsibility Law.
We hold that the household exclusionary clause sanctioned by Md.Ann.Code art. 48A, § 545 applies to the named insured and all members of his, her, or their household to the extent that the policy coverage exceeds the statutory minimum. Phrased differently, a household exclusion limits *412the amount a household member may recover to the sum mandated by the Maryland Financial Responsibility Law.
JUDGMENT AFFIRMED.
COSTS TO BE PAID BY APPELLANTS.

. The Maryland Transportation Code Annotated, § 17-103(b)(l), provides for the payment of minimum benefits up to $20,000 for any one person and up to $40,000 for any two or more persons for bodily injuries or death resulting from an accident.