State Farm Fire and Casualty Company v. Huguely et al

Filing 30

MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 3/20/2017. (sat, Chambers)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
STATE FARM FIRE & CASUALTY CO.
:
v.

:

Civil Action No. DKC 13-3088

:
GEORGE W. HUGUELY, V, ET AL.
:
MEMORANDUM OPINION
Presently

pending

and

ready

for

resolution

in

this

declaratory judgment action is a motion for summary judgment
filed

by

Plaintiff

(“Plaintiff”).

State

(ECF No. 23).

Farm

Fire

and

Casualty

Company

The issues have been briefed and

a hearing was held on January 10, 2017.

For the following

reasons, the motion for summary judgment will be denied.
I.

Background1
This case involves the intersection of three actions in

which George W. Huguely, V (“Defendant”) is the defendant: a
criminal case, a civil case, and this insurance coverage case.
A.

Criminal Case

Early on the morning of May 3, 2010, one of Yeardley Love’s
roommates

found

her

dead

in

her

bedroom.

Commonwealth, 63 Va.App. 92, 99-100 (2014).

Huguely

v.

Defendant, who had

dated Yeardley Love “on and off” for years, had been drinking
1

Unless otherwise noted, the facts outlined here are
undisputed or construed in the light most favorable to
Defendant, the non-moving party.

alcohol heavily on May 2 and went to her house late that night.
Id. at 99, 101.

He admitted to police that he kicked a hole in

her bedroom door to gain access to her room, had a physical
altercation with her during an argument, and left her bleeding
on her bed.

Id. at 102 n.4.

In a 2012 trial, a jury in the

Circuit Court for the City of Charlottesville, Virginia found
Defendant responsible for her death and guilty of second degree
murder.

Id.

at

105.

Subsequently,

the

Court

of

Appeals

affirmed Defendant’s conviction, id. at 131, and the Supreme
Court of Virginia and the Supreme Court of the United States
each denied Defendant’s petitions for review, see Huguely v.
Virginia, 136 S.Ct. 119 (2015) (mem.); Petition for Writ of
Certiorari at 3, Huguely v. Virginia, 136 S.Ct. 119 (2015) (No.
14-1474).

Defendant has since filed a Petition for Writ of

Habeas Corpus in the Charlottesville court where his trial was
originally

held.

(ECF

No.

25-2).

The

post-conviction

proceedings are ongoing.
B.

Civil Case

On April 26, 2012, interested party Sharon D. Love (“Ms.
Love”), as administrator of the estate of Yeardley Love, brought
a civil suit against Defendant in the Circuit Court for the City
of

Charlottesville.

alleges

that

(ECF

Defendant

No.

was

Love’s injuries and death.

the

1-1).

Her

proximate

amended
cause

(ECF No. 1-2 ¶ 13).
2

of

complaint
Yeardley

The alternative

counts

of

the

complaint

include

ordinary

negligence,

“gross

negligence – indifference and acting with utter disregard of
caution,” “willful and wanton negligence – acting with conscious
disregard and reckless indifference,” “assault and/or battery,”
and punitive damages.

(Id. at 4-9).

Based on section 8.01-419

of the Virginia Code, the suit alleges Yeardley Love had a life
expectancy of another 58.9 years and seeks nearly thirty million
dollars in compensatory damages and an additional one million
dollars in punitive damages.

(Id. at 10-11).

In November 2015,

the circuit court stayed its proceedings to allow this court to
act in the instant insurance coverage case, but some discovery
between those parties has continued.
ECF No. 73-4, at 2-3).

(See Case No. DKC-13-1479,

Trial is now set for July 2018.

(ECF

No. 25, at 6).
C.

Insurance Case

The

case

in

this

court

concerns

whether

Plaintiff,

an

insurance company, is contractually obligated to defend and to
indemnify Defendant in the Civil Case.

Interested party Andrew

Murphy, III, Defendant’s step-father (together with Defendant
and interested party Marta Murphy, “Respondents”), purchased a
homeowners’ insurance policy (“the Policy”) from Plaintiff for
Respondents’ home in Maryland.

(ECF No. 23-4).

The Policy

includes broad indemnification provisions stating that “[i]f a
claim

is

made

or

a

suit

is

brought
3

against

an

insured

for

damages because of bodily injury . . . to which this coverage
applies, caused by an occurrence, we will: 1. pay up to our
limit of liability for the damages for which the insured is
legally liable; and 2. provide a defense at our expense . . . .”
(Id. at 20).

After Ms. Love filed her complaint in the Civil

Case, Defendant sought coverage from both Plaintiff (ECF No. 1 ¶
22)

and

Chartis

Property

Casualty

Company

(“Chartis”),

which

insured Mr. and Mrs. Murphy under two other policies (See Case
No.

DKC-13-1479,

ECF

No.

1).

Chartis

has

been

providing

a

defense for Defendant under a reservation of rights (Id. ¶ 54),
and it filed a declaratory judgment action in this court on May
23, 2013 (the “Chartis Case”).
On June 28, 2013, Plaintiff acknowledged Defendant’s claim
for coverage in the Civil Case and told Defendant that it would
be investigating his claims under the Policy.

(ECF No. 1 ¶ 33).

During its investigation, Plaintiff sought to examine Defendant
under oath, but he has refused to submit to such an examination.
(ECF Nos. 23-7; 23-8).

Defendant’s counsel in the Criminal Case

told Plaintiff that Defendant would “decline to meet with you
unless

and

until

his

criminal

matters

are

fully

concluded.”

(ECF No. 23-8).
Plaintiff then initiated this suit, on November 1, 2013,
naming Respondents and Sharon Love as interested parties and
seeking

a

declaratory

judgment
4

that

it

was

not

required

to

defend or to indemnify Defendant in the Civil Case under the
Policy.

(ECF

No.

1).

Plaintiff

alleged

that

Defendant’s

refusal to cooperate with its investigation violated a provision
of the Policy setting out the insured’s duties after a loss.
(Id.

¶

45).

With

regard

to

liability

coverage,

the

Policy

requires an insured “shall perform the following duties” and
“shall cooperate with [Plaintiff] in seeing that these duties
are performed: . . . at our request, assist in: . . . securing
and giving evidence and obtaining the attendance of witnesses.”
(ECF No. 23-4, at 23).
refusal
breach

to
of

submit
the

to

Policy

The complaint alleges that Defendant’s
an

examination

and

resulted

constituted
in

actual

a

material

prejudice

to

Plaintiff’s ability to evaluate the Civil Case and to identify
defenses to its coverage obligations, which included issues over
Defendant’s residency and provisions in the Policy that exclude
coverage for injuries that are “either expected or intended by
the insured; or . . . the result of willful and malicious acts
of the insured,” (the “Exclusions”).

(Id. ¶¶ 32, 55-63).

At the time Plaintiff filed its complaint, the court had
already

stayed

the

Chartis

appeal in the Criminal Case.
36).

Case,

pending

Defendant’s

direct

(Case No. DKC-13-1479, ECF No.

Plaintiff consented to a similar stay in this case, which

was entered on December 6, 2015.

(ECF Nos. 7; 8).

On January

5, 2016, after Defendant had exhausted all direct appeals in his
5

criminal

proceedings,

the

court

reopened

(Case No. DKC-13-1479, ECF No. 56).
reopen

this

case

November 22.
instant

on

November

2,

for

summary

Chartis

Case.

Plaintiff filed a motion to
2016,

(ECF Nos. 15; 21).

motion

the

which

was

granted

on

Plaintiff then filed the

judgment,

arguing

that

both

the

Exclusions and Defendant’s failure to cooperate provide bases to
deny

coverage.

(ECF

No.

responded in opposition.

23).

Respondents

(ECF Nos. 25; 27).

and

Ms.

Love

On January 10,

2017, the court held a joint hearing on the instant motion and a
motion for summary judgment in the Chartis Case.
II.

Standard of Review
A motion for summary judgment will be granted only if there

exists no genuine dispute as to any material fact and the moving
party

is

entitled

to

judgment

as

a

matter

of

law.

See

Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986);

Anderson

v.

Liberty

Lobby,

Inc.,

477

U.S.

242,

(1986); Emmett v. Johnson, 532 F.3d 291, 297 (4th Cir. 2008).
prevail

on

a

motion

for

summary

judgment,

the

moving

250
To

party

generally bears the burden of showing that there is no genuine
dispute as to any material fact.
248-50.

Liberty Lobby, 477 U.S. at

A dispute about a material fact is genuine “if the

evidence is such that a reasonable jury could return a verdict
for the nonmoving party.”
inquiry,

a

court

must

Id. at 249.

view

the
6

facts

In undertaking this
and

the

reasonable

inferences drawn therefrom “in the light most favorable to the
party

opposing

the

motion,”

Matsushita

Elec.

Indus.

Co.

v.

Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting United
States v. Diebold, Inc., 369 U.S. 654, 655 (1962)); see also
EEOC v. Navy Fed. Credit Union, 424 F.3d 397, 405 (4th Cir.
2005), but a “party cannot create a genuine dispute of material
fact

through

mere

speculation

or

compilation

of

inferences.”

Shin v. Shalala, 166 F.Supp.2d 373, 375 (D.Md. 2001) (citation
omitted).
III. Applicable Law
In

diversity

actions,

a

district

court

applies

the

substantive law and choice of law rules of the state in which
the court sits.

Padco Advisors, Inc. v. Omdahl, 179 F.Supp.2d

600, 605 (D.Md. 2002) (citing Erie R.R. Co. v. Tompkins, 304
U.S.

64

(1938)).

In

contract

claims,

Maryland

applies

the

doctrine of lex loci contractus, meaning that the law of the
place where the contract was made applies.
Hart, 327 Md. 526, 529 (1992).

Allstate Ins. Co. v.

“The locus contractus is the

place where the last act is performed which makes an agreement a
binding contract.”
241

Md.

delivery

Grain Dealers Mut. Ins. Co. v. Van Buskirk,

58,

65-66

of

the

(1965).

policy

In

and

constitute these “last acts.”

an

the

insurance
payment

of

contract,
the

the

premiums

Id. (citing Sun Ins. Office v.

Mallick, 160 Md. 71, 81 (1931)).
7

Although it appears that the

Policy was addressed to Mr. Murphy in California (ECF No. 23-4,
at

2,

4),

Murphys

at

Plaintiff
their

contends

Maryland

that

address

it

was

(ECF

delivered

No.

23-2,

to
at

the
15).

Plaintiff argues in the alternative that California law would
apply Maryland law because the property insured was in Maryland.
(ECF No. 23-2, at 16).

Neither Respondents nor Ms. Love dispute

that Maryland substantive law is applicable here.

Maryland law

does not, however, govern procedural rules in this court, even
when jurisdiction is based on diversity.
IV.

Declaratory Judgment While State Action Is Pending
Respondents

argue

that

declaratory

judgment

is

not

appropriate at this time, given the ongoing nature of the Civil
Case.

“Federal standards guide the inquiry as to the propriety

of declaratory relief in federal courts, even when the case is
under the court’s diversity jurisdiction.”

White v. Nat’l Union

Fire Ins. Co., 913 F.2d 165, 167 (4th Cir. 1990).

Under federal

law, district courts have “some measure of discretion [as to
whether]

to

entertain

a

declaratory

judgment

otherwise properly within its jurisdiction.”

action

that

is

Nautilus Ins. Co.

v. Winchester Homes, Inc., 15 F.3d 371, 375 (4th Cir. 1994).

The

United States Court of Appeals for the Fourth Circuit has held
that district courts should not entertain a declaratory judgment
action during the pendency of a related state proceeding “when
the result would be to ‘try a controversy by piecemeal, or to
8

try particular issues without settling the entire controversy.’”
Mitcheson v. Harris, 955 F.2d 235, 239 (4th Cir. 1992) (quoting
Aetna Cas. & Sur. Co. v. Quarles, 92 F.2d 321, 325 (4th Cir.
1937)).

A court must consider four factors in deciding whether

to make a declaratory judgment in such a case:
(i) the strength of the state’s interest in
having the issues raised in the federal
declaratory action decided in the state
courts; (ii) whether the issues raised in
the federal action can more efficiently be
resolved in the court in which the state
action is pending; (iii) whether permitting
the federal action to go forward would
result in unnecessary “entanglement” between
the federal and state court systems, because
of the presence of “overlapping issues of
fact or law[;]”[] and (iv) whether the
declaratory judgment action is being used
merely as a device for “procedural fencing.”
Myles Lumber Co. v. CNA Financial Corp., 233 F.3d 821, 824 (4th
Cir. 2000) (quoting Nautilus, 15 F.3d at 377).
Respondents

contend

that

neutral,”

that
while

the
the

first

and

second

declaratory action here.

judgment

(ECF No. 25, at 11-14).2

inappropriate in this case.
maintain

declaratory

fourth

and

third

factors
factors

(Id. at 11-12).

are

is
They

“seemingly

weigh

against

The Fourth Circuit

held in Mitcheson that, with regard to the first factor, the
district court should have refrained from deciding a coverage
case

where
2

Maryland

law

would

preclude

a

state

court

from

Ms. Love confirmed at the motions hearing that she has no
objection to handling this declaratory judgment action prior to
the Civil Case.
9

issuing

declaratory

judgment

and

the

legal

coverage suit were “close” and “problematic.”
240.

issues

in

the

955 F.2d at 236,

The same concerns are not present here.

Maryland law

governs the contract, but the Civil Case is taking place in
Virginia,

which

clearly

has

questions of Maryland law.
a

“procedural

federal

court

fencing”
in

little

in

resolving

This case also does not appear to be

case

in

which

effort

an

interest

to

get

“a

party

certain

has

raced

issues

that

to
are

already pending before the state courts resolved first in a more
favorable
neither

forum.”
the

Nautilus,

first

nor

15

the

F.3d

fourth

at

380.

factor

Accordingly,
weighs

against

entertaining the declaratory judgment action here.
Respondents argue that it would be wasteful to engage in
“duplicative discovery” that has “already occurred in the Civil
[Case],” but, given that the trial in the Civil Case has been
stayed and will not occur for nearly a year and half, making a
determination on coverage before the trial in the Civil Case
will both “serve a useful purpose in clarifying and settling the
legal relations in issue,” and “terminate and afford relief from
the uncertainty, insecurity, and controversy giving rise to the
proceeding.”
at

325).

damages

Nautilus, 15 F.3d at 375 (quoting Quarles, 92 F.2d
Because

arising

controversy

Plaintiff’s

from

between

the

these

duties

Civil
parties,
10

to

Case

defend

and

represent

adjudication

of

to

the
the

pay
only
case

through declaratory judgment would resolve their entire dispute.
Most

importantly,

warrants

although

determination

of

Respondents
insurance

argue

coverage

that
in

efficiency

the

Virginia

courts, the Virginia Circuit Court in the Civil Case previously
stayed its proceedings specifically to allow this court to make
a determination on the insurance issue.

This factor thus weighs

in favor of proceeding with this declaratory judgment action.
Respondents also argue that there are “overlapping issues
of

fact

federal

or
and

law”
state

that

would

court

cause

actions

entanglement

because

a

between

determination

the
of

Defendant’s intent might “put at risk, by issue preclusion or
claim preclusion, the ability of any state court to adjudicate
fairly the underlying liability.”

Icarom, 904 F.Supp. at 460.

At the motions hearing, Respondents pointed to the claim for the
intentional torts of assault and battery in Count Four of the
Civil Case.

Although many of the factual determinations that

will need to be decided in the Civil Case will not overlap here,
there is some potential for overlap with regard to Defendant’s
intent, if Virginia tort law regarding intoxication and intent
aligns with Maryland insurance law on the same issues.

There is

therefore some risk of entanglement.
In United Capital Ins. Co. v. Kapiloff, 155 F.3d 488, 494
(4th

Cir.

1998),

the

Fourth

Circuit

held

that

declaratory

judgment was appropriately employed when only the third factor
11

weighed in favor of abstention.

Moreover, the entanglement was

stronger in that case than it is here because the state and
federal actions revolved around entirely “the same core issues
of law and fact,” but the court still found declaratory judgment
was appropriate.
Farm

Fire

&

Id.3

Cas.

5934669,

at

*1-*5

factors,

proceeding

A similar conclusion was reached in State

Co.

v.

(D.Md.
with

Oliver,
Oct.

this

8,

No.

ELH-15-2140,

2015).

Weighing

declaratory

judgment

2015
all

WL

four

action

is

appropriate.
V.

Denial of Coverage Based on an Intentional or Expected Act
A.
In

Duty to Pay Damages
Maryland,

insurance

policies

are

to

be

construed

pursuant to “ordinary principles of contract interpretation.”
Megonnell v. United Servs. Auto. Ass’n, 368 Md. 633, 655 (2002).
Thus, the words used in an insurance policy should be given
“their
“meaning

usual,

term.”

a

ordinary,

reasonably

and

prudent

accepted
layperson

meaning”
would

–

i.e.,

attach

to

the
the

Bausch & Lomb Inc. v. Utica Mut. Ins. Co., 330 Md. 758,

779 (1993).

Where the provisions of an insurance policy are

unambiguous, the meaning of the terms is determined by the court
as a matter of law.

Cole v. State Farm Mut. Ins. Co., 359 Md.

298, 305 (2000).

3

The comity issue was also closer in that case because the
state court was in Maryland and was applying Maryland law.
12

The two Exclusions in the Policy bar coverage for injuries
that are (1) “either expected or intended by the insured;” or
(2) “the result of willful and malicious acts of the insured.”
(ECF

No.

dispute
caused

23-4,
of

fact

Yeardley

at

21).

that
Love’s

Plaintiff

argues

“[Defendant’s]
death

were

that

actions

there

which

intentional

and

is

no

directly

[Yeardley]

Love’s injuries were expected and result from the willful and
malicious acts of [Defendant].”

(ECF No. 23-2, at 28).

As will

be discussed, Plaintiff has failed to show that there is no
dispute of material fact as to these issues.
Ordinarily,
acts

provision,

to

exclude

an

coverage

insurer

must

based
show

on
that

an

intentional
the

insured

subjectively intended the harmful results, not simply the acts
that led to the harms.
The exclusionary clause in the present
case does not contain these words; instead
it excepts “damage which is either expected
or intended from the standpoint of the
Insured.” Admittedly, the issue is the same
if stated in rough terms: whether the loss
was intentional or accidental.
The precise
approach to be used, however, differs in two
important respects.
First, there is the
question of whether the results or the means
must have been intended.
The Allstate
policy indicates, in our view, that the
insured must have intended the results
(“damages”), not simply the causing act, for
coverage not to apply. In contrast, “caused
by accident” is ambiguous with regard to
this distinction, as the Haynes court noted.
228 Md. at 400, 179 A.2d at 904.
Second,
the Allstate policy provides that the result
must be expected or intended “from the
13

standpoint
of
the
Insured,”
thereby
requiring, we believe, a more subjective
standard for intent than the test of
foreseeability applied in Harris & Brooks
and Treas.
Allstate Ins. Co. v. Sparks, 63 Md.App. 738, 742-43 (1985).
Plaintiff acknowledges that malice similarly requires that the
harmful act be made “to deliberately cause harm or injury.”
(ECF No. 23-2, at 33 (citing Henderson v. Md. Nat’l Bank, 278
Md. 514, 519 (1976))).
Plaintiff attempts to fit this case into an exception to
the

general

indicating

rule

that

by

some

comparing
acts

are

it
so

to

other

likely

to

coverage
cause

harm

cases
that

intent to commit the act establishes an intent to cause the
resulting harm.

See, e.g., Harpy v. Nationwide Mut. Fire Ins.

Co., 76 Md.App. 474, 483-84 (1988).
While it is true that an intended act
causing unintentional injury, under some
circumstances, can be considered negligence,
“[a]s the probability of injury to another,
apparent
from
the
facts
within
[the
injurer’s] knowledge, becomes greater, his
conduct takes on more of the attributes of
intent, until it reaches that substantial
certainty
of
harm
which
juries,
and
sometimes courts, may find inseparable from
intent itself.”
Id. (quoting Ghassemieh v. Schafer, 52 Md.App. 31, 41 (1982))
(finding that the intent to act and the intent to harm are
inseparable in a child molestation case).

Plaintiff further

contends that the inclusion of the term “expected” along with
14

“intended” in insurance contracts was designed to ensure that
coverage is similarly excluded where an act is “so certain to
cause a particular harm that it can be said that a person who
performed such an act intended the harm.”
Ins. Co., 22 Ariz.App. 601, 602 (1975).

Clark v. Allstate

Citing to Webster’s New

Collegiate Dictionary, Plaintiff reiterates that to “expect” is
“to anticipate . . . the coming occurrence; to consider probable
or certain.”

(ECF No. 23-2, at 31).

Plaintiff makes similar

arguments that malice might be inferred from the circumstances
under which the tort is committed.

(See ECF No. 23-2, at 33

(citing cases)).
After laying out these exceptions, however, Plaintiff makes
almost no reference to any evidence in the record supporting the
legal

conclusions

expected,

or

Plaintiff

cites

that

willful
stand

Defendant’s

and
for

acts

malicious.
the

are

At

intentional,

best,

proposition

that

the

cases

there

is

sometimes “no dichotomy between the damages resulting from [the
insured’s] conduct and his intent to perform the acts [that
cause the harm],” because the harm is “entirely contained within
the activity [to] which he admits.”
Plaintiff

fails

to

explain

what

Pettit, 349 Md. 786.
specific

acts

it

can

But
show

Defendant took during the murder of Yeardley Love and whether
those acts are similar to the acts that courts have previously
considered “substantially certain” to cause resulting harms.
15

Even if the cases Plaintiff cites supported the application
of these propositions here, Plaintiff’s evidence also fails to
answer the precedent question of whether Defendant intended to
commit any of the acts that he engaged in on the night of
Yeardley Love’s murder.
of

Plaintiff’s

Conspicuously absent from the section

motion

on

its

duty

to

pay

damages

is

reference to the implications of Defendant’s intoxication.
asked

about

Defendant’s

Plaintiff referenced

intoxication

at

the

motions

any
When

hearing,

Pettit v. Erie Ins. Exch., 349 Md. 777

(1998), Lititz Mut. Ins. Co. v. Bell, 352 Md. 782 (1999), and
Erie

Ins.

Exch.

According

to

state

mind

of

intent.

v.

Stark,

Plaintiff,
set

a

962

these

high

F.2d

cases

bar

for

(4th

349

addressing
excusing

an

Cir.
an

1992).

insured’s

individual’s

In these cases, the courts dealt with individuals with

pedophilia, explosive rage disorder, and suicidal depression.
In Pettit, the Court of Appeals of Maryland rejected evidence
that an insured who “suffered from a mental disorder known as
pedophilia . . . did not have the intent to harm” the children
who were his victims.
adopted

the

rule

that

capacity to form intent.
suffered

from

Pettit, 349 Md. at 784.
pedophilia

is

Id. at 787.

“intermittent

explosive

not

relevant

The court
to

one’s

In Lititz, the insured
disorder,”

a

mental

illness recognized by the American Psychiatric Association as
involving “the occurrence of discrete episodes of failure to
16

resist

aggressive

acts.”

impulses

that

Lititz, 352 Md. at 795.

result

in

serious

assaultive

The court, however, emphasized

that the insured could not rely on his mental illness because he
admitted that his assaults were intentional and was only arguing
that the harms were not intended.

Id. at 796-98.

The Lititz

court also made note: “If [the insured] has not intended the
contact itself due to a mental condition, then the act might be
considered an ‘accident’ and not intentional because the contact
(the

harm)

would

have

taken

place

without

expectation.”

Lititz, 352 Md. at 798.

suffered

a

from

commit suicide.
the

insured’s

insured

were

deep

depression

and

his

foresight

or

In Stark, the insured
allegedly

attempted

to

Although the court questioned the authenticity
suicide
truly

attempt,

insane,

it

acknowledged

“theoretically,

that

[the

if

the

insured’s]

mental state might also be found such as to negate all of [the
insurer’s] coverage avoidance defenses even if his purpose was
not solely to commit suicide.”

Stark, 962 F.2d at 354, 356.

Because there were factual questions at issue in the case, the
court vacated the district court’s grant of summary judgment.
These cases thus support Plaintiff’s position modestly, if
at all, and they acknowledge that an insured’s state of mind
might affect both his intent to harm and his intent to commit
the acts causing the harm.

In the decision from the Court of

Appeals in Saba v. Darling, 320, Md. 45, 50 (1990), the court
17

seemed to recognize that some amounts of alcohol might reduce a
person

to

being

“so

intentional acts.”
indicated

that

intoxicated
Id.

the

that

he

could

not

perform

Although the evidence in that case

assailant

was

in

fact

“able

to

form

the

conscious intent” to assault his victim, the court’s language
suggests that intoxication could push an individual past that
threshold.
In
witness

Id.

the

instant

affidavit

case,

stating

Ms.
that

Love

has

Defendant

produced
was

“so

an

expert

intoxicated

that he lacked the capacity to form the specific intent to hurt
[Yeardley] Love” and that he also “lacked the capacity to be
aware that he was committing any crime.”
The

affidavit

further

states

that

(ECF No. 27-2, at 6).

the

amount

of

alcohol

Defendant had consumed would have resulted in an “inability to
form a plan or develop an intent” and left him “without reason
or understanding of the consequences of his behavior.”

Id.

Thus, despite Plaintiff’s urgings, there is clearly a dispute of
fact over whether “the risk and danger [of his actions] were
known or should have been known at the time.”
33).

(ECF No. 23-2, at

Therefore, Plaintiff’s motion for summary judgment cannot

be granted on this issue.
B.

Duty to Defend

Even where an insurer’s duty to defend against a suit is
based

on

its

potential

liability
18

in

that

suit,

the

duty

to

defend is distinct from the duty to indemnify.

Walk v. Hartford

Cas. Ins. Co., 382 Md. 1, 15 (2004).
In determining whether a liability
insurer has a duty to provide its insured
with a defense in a tort suit, two types of
questions ordinarily must be answered: (1)
what is the coverage and what are the
defenses under the terms and requirements of
the insurance policy? (2) do the allegations
in the tort action potentially bring the
tort claim within the policy’s coverage?
The first question focuses upon the language
and requirements of the policy, and the
second question focuses upon the allegations
of the tort suit.
St. Paul Fire & Marine Ins. Co. v. Pryseski, 292 Md. 187, 193
(1981).

Because the duty to defend is a “broader” duty, Walk,

382 Md. at 15, if there is any doubt as to “whether or not the
allegations of a complaint against the insured state a cause of
action within the coverage of a liability policy sufficient to
compel the insurer to defend the action, such doubt will be
resolved in [the] insured’s favor.”

Aetna Cas. & Sur. Co. v.

Cochran, 337 Md. 98, 107 (1995) (quoting U.S. Fid. & Guar. Co.
v.

Nat’l

obviously

Paving
still

Co.,
faces

228

Md.

potential

40,

54

(1962)).

liability

under

Defendant
Ms.

Love’s

negligence claims, and it cannot be declared that Plaintiff owes
no duty to defend him in the Civil Case in accordance with the
terms of the Policy.

19

VI.

Failure to Cooperate
The

Policy

following

provides

duties”

and

that

an

“shall

insured

cooperate

“shall
with

perform

the

[Plaintiff]

in

seeing that these duties are performed: . . . at our request,
assist in: . . . securing and giving evidence and obtaining the
attendance of witnesses.”
argues

that

Defendant’s

(ECF No. 23-4, at 18).
failure

to

submit

to

an

Plaintiff
examination

under oath constitutes a breach of his contractual obligations
under the Policy and that this breach “preclude[s] him from
receiving coverage under the State Farm policy in the Civil
[Case].”
In

(ECF No. 23-2, at 18).
their

papers

and

at

the

motions

hearing,

neither

Respondents nor Ms. Love has disputed that Defendant breached
these provisions of the contract.

Rather, they point to section

19-110 of the Insurance Article of the Maryland Code, which
states that
An insurer may disclaim coverage on a
liability insurance policy on the ground
that the insured or a person claiming the
benefits of the policy through the insured
has breached the policy by failing to
cooperate with the insurer or by not giving
the insurer required notice only if the
insurer establishes by a preponderance of
the evidence that the lack of cooperation or
notice has resulted in actual prejudice to
the insurer.
According

to

Respondents,

Plaintiff

has

failed

to

show

actual prejudice due to Defendant’s failure to cooperate.
20

any
They

rely on Allstate Insurance Co. v. State Farm Mutual Automobile
Insurance Co., 363 Md. 106, 127-28 (2001), which held that “the
proper focus” in determining prejudice should be on whether the
insured “has, or may reasonably have, precluded the insurer from
establishing
liability.”

a

legitimate

jury

issue

of

the

insured’s

Under Allstate v. State Farm, the insurer need not

meet the high bar of proving “that the verdict was the result of
the lack of cooperation,” but must, at least show “that the
failure of cooperation has, in a significant way, precluded or
hampered it from presenting a credible defense to the claim.”
Id.

According to Respondents, Plaintiff has not provided any

evidence

that

it

could

have

produced

different

“credible

defenses” or established “legitimate jury issues” if Defendant
had testified.

(ECF No. 25, at 16, 19-22; see also ECF No. 27,

at 12-13).
Although Plaintiff does not address prejudice directly in
its papers, it does say that asking Defendant certain enumerated
questions “would have allowed State Farm to know exactly what
happened that night for purposes of determining whether he is
entitled

to

a

defense

insurance policy.”

or

indemnification

under

the

subject

(ECF No. 23-2, at 24; see also id. at 19).

At the motions hearing, Plaintiff adopted Chartis’s reliance on
Metlife Auto & Home v. Cunningham, 59 Mass.App.Ct. 583 (2003).
In

that

case,

the

tort

plaintiffs
21

Robert

and

Edwina

Beland

accused

the

insured,

Jason.

Id. at 584.

Brian

Cunningham,

of

killing

their

son

Mr. Cunningham sought to have Metlife, his

insurer, cover his defense and liability in the tort suit.

Id.

Mr. Cunningham agreed to sit for an examination under oath, but
he then proceeded to invoke the Fifth Amendment whenever he was
asked any questions about Jason’s death.
held

that

Defendant

breached

his

Id. at 585.

duty

to

The court

“cooperate

with

[Metlife] and assist [Metlife] in any matter concerning a claim
or

suit,”

but

acknowledged

that

Massachusetts

common

law

required “an affirmative showing of actual prejudice” in order
to relieve an insurer of its coverage duties.

Id. at 586, 590.

The court rejected the Belands’ argument that Cunningham had no
duty to cooperate with Metlife in the context of the declaratory
judgment action because it was his adversary in that case.
at 589.
“the

Id.

Instead, it held that the duty to cooperate included

obligation

to

provide

accurate

information

bearing

on

coverage,” noting that the duty to cooperate exists because an
insurer “[t]ypically . . . has little or no knowledge of the
facts

surrounding

a

claimed

loss”

and

is

therefore

entirely

“dependent on its insured for fair and complete disclosure.”
Id.

The court found that Cunningham’s unwillingness to provide

information
coverage

to

Metlife

exclusion

prejudiced

defense

for

it

in

the

intentional

context
acts.

of

its

“Because

coverage or lack thereof involved Cunningham’s intentions, his
22

statement about his own intent and expectations would have been
of

enormous

value,”

and

the

absence

of

his

statement

sufficient to prejudice Metlife in the coverage case.

was

Id. at

591.
Plaintiff does not cite to any Maryland cases supporting
Cunningham’s premise that prejudice can occur in the coverage
area, as opposed to the underlying tort suit, and the parties
dispute the context in which the prejudice must occur under
Section 19-110.

Allstate v. State Farm focused exclusively on

“a legitimate jury issue
credible

defense

to

the

of the insured’s liability” and “a
[tort]

claim,”

and

thus

appears

to

support the position that prejudice must occur in the underlying
tort

claim

–

that

is,

the

insurer

is

prejudiced

because

it

cannot properly represent the insured against a third party.
Under Cunningham, on the other hand, prejudice to the insurer
can also occur in coverage disputes – that is, the insurer is
prejudiced because it cannot properly defend itself against the
insured.
At least one treatise on insurance law clearly takes the
Cunningham view, stating that “[a]n insurer may prove prejudice
by showing that the failure to cooperate substantially impaired
its ability to investigate the insured loss or liability claim,
to defend against an otherwise-insured liability claim, or to
investigate and develop defenses to coverage.”
23

3 Jeffrey E.

Thomas,

New

Appleman

on

20.02[5][d] (3d ed. 2012).

Insurance

Law

Library

Edition

§

Another treatise posits both sides of

the issue, but prefers the articulation from Cunningham:
Note that the insured’s duty to cooperate
under a liability policy ordinarily relates
only to issues impacting on liability to the
plaintiff. It has, in fact, been held that
the cooperation provision is not breached if
the insured’s lack of cooperation relates
only to the issue of coverage.
See Martin
v. Travelers Indem. Co., 450 F.2d 542, 553,
(5th Cir. 1971) (Mississippi law) (insured’s
misrepresentations
to
insurer
of
no
significance because they related only to
the issue of coverage under the policy and
had
no
bearing
on
liability
to
the
plaintiff).
The

better rule is to the contrary.
E.g.,
Waste
Management,
Inc.
v.
International Surplus Lines Ins. Co., 144
Ill. 2d 178 (1991) (A duty to cooperate
provision created an obligation on the part
of the insured to “disclose all of the facts
within his knowledge and otherwise to aid
the insurer in its determination of coverage
under
the
policy”
—
even
though
the
provision did not “expressly” so state. The
Court broadly held that the purpose of the
cooperation clause was to enable the insurer
to protect its interests); Owens-Illinois,
Inc. v. United Ins. Co., 138 N.J. 437, 650
A.2d 974, 996 (1994) (an insured’s duty to
cooperate encompasses providing its insurer
information that would enable the insurer to
evaluate
the
insured’s
request
for
coverage).
Allan D. Windt, 1 Insurance Claims & Disputes § 3:2 at n.1 (6th
ed. 2016).
There is one case involving Maryland law and applying § 19110 that offers some support for this view, but it is a decision
24

of this court, and not a Maryland court.

In Ball v. NCRIC,

Inc., 174 F.Supp.2d 361, 366-67 (D.Md. 2001),

rev’d Ball v.

NCRIC, Inc., 40 F.App’x 760 (4th Cir. 2002), the trial court held
that

the

insured’s

failure

to

cooperate

was

prejudicial

for

multiple reasons.

The court emphasized both that cooperation

would

the

have

given

insurer

“a

chance

to

discover

any

mitigating circumstances to defend [the insured] against [the
third

party’s]

claim,”

and

that

the

insurer

“was

unable

to

ascertain whether [the claims] were intentional torts, which are
not covered under the policy.”

Id. at 367.

reversed

unpublished

that

decision

in

an

NCRIC, Inc., 40 F.App’x at 765.

The Fourth Circuit
opinion.

Ball

v.

The court acknowledged that the

district court’s conclusion had rested in part on the premise
that

“had

[the

insured]

cooperated,

he

might

have

provided

testimony that would have demonstrated . . . that [the insurer]
had

no

duty

to

indemnify.”

Id.

at

762.

It

reversed

the

district court’s decision on the ground that the insured was
only

non-cooperative

fugitive,

and

cooperation

the

after

for

a

insurer
he

had

number
had
been

not

of

years

while

attempted

to

garner

his

but

before

the

apprehended,

declaratory judgment action was brought.

he

was

a

Id. at 763; cf. U.S.

Specialty Ins. Co. v. Skymaster of Virginia, 26 F.App’x 154, 158
(4th Cir. 2001) (unpublished opinion) (holding, under Virginia
law,

which

does

not

apply

the
25

prejudice

standard,

that

an

insured

could

not

immaterial

just

exclusions

rather

avoid

because
than

answering

the

certain

questions

aiding

the

questions

related

defense

to
in

as

coverage
the

tort

litigation).
Nearly all of the Maryland cases applying § 19-110 seem to
have considered prejudice in the same context as in Allstate v.
State Farm, namely the underlying tort claim.

Those decisions,

however, were a result of the facts presented and simply do not
address
dispute.

prejudice

in

the

context

of

a

coverage

exclusion

As the court in Allstate v. State Farm stated, “[i]t

is very difficult to fashion a workable ‘one size fits all’
standard” because of “the very different circumstances, and thus
the very different kinds of prejudice, that can be presented by
breaches of [the duty to cooperate] provisions.”

Allstate v.

State Farm, 363 Md. at 124.
It thus appears to be an open question whether prejudice
under

Section

19-110

can

occur

in

the

opposed to the underlying tort suit.

coverage

dispute,

as

In applying the law of

Maryland, a federal district court must:
interpret the law in accordance with the
Court of Appeals of Maryland, or where the
law is unclear, as it appears that the Court
of Appeals would rule.
See Liberty Mut.
Ins. Co. v. Triangle Indus., 957 F.2d 1153,
1156 (4th Cir. 1992) (holding that if state
law is unclear federal courts must predict
the decision of the state’s highest court);
Brendle v. General Tire & Rubber Co., 505
F.2d 243, 245 (4th Cir. 1974). To forecast a
26

decision of the state’s highest court we can
consider,
inter
alia:
canons
of
construction,
restatements
of
the
law,
treatises, recent pronouncements of general
rules or policies by the state’s highest
court,
well
considered
dicta,
and
the
state’s trial court decisions.
See Liberty
Mut., 957 F.2d at 1156.
Wells v. Liddy, 186 F.3d 505, 527–28 (4th Cir. 1999).

If a case

presents a determinative novel issue of state law, certification
to

the

Article

Court

of

of

the

Appeals

under

Maryland

section

Code

12-603

may

be

of

the

Courts

appropriate,

but

certification should be approached cautiously:
Where there is no case law from the forum
state which is directly on point, the
district court attempts to do as the state
court would do if confronted with the same
fact pattern. Wilson v. Ford Motor Co., 656
Cir.
1981);
Empire
F.2d
960[]
(4th
Distributors of N.C. v. Schieffelin & Co.,
859 F.2d 1200, 1203 (4th Cir. 1988); Doe v.
Doe, 973 F.2d 237, 240 (4th Cir. 1992). Only
if the available state law is clearly
insufficient should the court certify the
issue to the state court.
Smith v. FCX,
Inc., 744 F.2d 1378, 1379 (4th Cir. 1984),
cert. denied, 471 U.S. 1103, 105 S.Ct. 2330,
85 L.Ed.2d 848 (1985).
Roe v. Doe, 28 F.3d 404, 407 (4th Cir. 1994).
At

this

certification

juncture,
in

any

it

would

event.

be

premature

Although

to

Plaintiff

consider
may

have

produced evidence of the reasonableness of its investigation,
the evidence of the impact of Defendant’s recalcitrance is not
so overwhelming as to prove prejudice as a matter of law.

There

has been an entire criminal trial on the underlying event, which
27

included

a

video

taped

interview

with

Defendant.

Other

individuals are available who can provide, and apparently have
provided, evidence related to Defendant’s residence at the time.
While

there

remain

disputes

of

material

fact

precluding

resolution of the exclusion issues, Plaintiff has not shown as a
matter

of

law

that

examination

under

prejudiced

its

oath

Defendant’s
or

ability

failure

otherwise
to

assert

to

to

answer
a

submit

to

an

its

questions

coverage

defense.

Accordingly, Plaintiff’s motion will not be granted based on
Defendant’s failure to cooperate.
VII. Conclusion
For the foregoing reasons, the motion for summary judgment
filed by Plaintiff State Farm Fire and Casualty Company will be
denied.

A separate order will follow.

/s/
DEBORAH K. CHASANOW
United States District Judge

28