Progressive Advanced Insurance Company v. Corekin

Filing 30

MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 9/18/2017. (sat, Chambers)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
PROGRESSIVE ADVANCED INSURANCE
COMPANY

:

v.

:

Civil Action No. DKC 16-1340

:
JASON COREKIN
:
MEMORANDUM OPINION
Presently
declaratory
judgment
Company

pending

judgment

filed

by

and

ready

action

are

Plaintiff

(“Progressive”

or

for

resolution

cross

motions

Progressive

“Plaintiff”)

for

Advanced
(ECF

No.

in

summary
Insurance
25)

Defendant Jason Corekin (“Mr. Corekin” or “Defendant”).
No. 26).

this

and
(ECF

The issues have been briefed, and the court now rules,

no hearing being deemed necessary.

Local Rule 105.6.

For the

following reasons, Plaintiff’s motion for summary judgment will
be granted, and Defendant’s cross motion for summary judgment
will be denied.
I.

Background1
Defendant claims that the insurance he had with Plaintiff

included

$300,000

in

uninsured

motorist

coverage.

Plaintiff

contends that he waived full coverage and opted for the lower

1

Unless
undisputed.

otherwise

noted,

the

facts

outlined

here

are

amount of $100,000.2

The genesis of this dispute began on May

24, 2009, when Defendant created an online account and completed
his

electronic

Plaintiff.
completed

application

As
a

part

page

of

for

the

entitled

an

insurance

application

“Notice

policy

process,

Concerning

the

with

Defendant
Waiver

of

Increased Limits of Uninsured Motorist Coverage in Maryland.”
(ECF No. 25-3 (emphasis in the original)).
word-for-word

reproduction

of

a

The page contained a
Maryland

Insurance

Administration’s (“MIA”) model form that authorizes individuals
to

waive

the

default

amount

of

uninsured

motorist

“UIM”) coverage.

(See ECF Nos. 25-3; 25-8).

Defendant

a

clicked

box

which

stated

he

was

(“UM”

or

On the page,
“affirmatively

waiv[ing] [the default UM coverage] and instead elect[ing] to
purchase lower uninsured motorists limits.”
2:02).
page.

(ECF No. 25-4, at

He then typed his name in the signature space of the
(Id. at 2:12).

On May 25, 2009, Plaintiff accepted the application and
sent Defendant information about the new policy including the
discount he received for using the online system.
17; ECF No. 2-1; ECF No. 3 ¶ 17).

(ECF No. 2 ¶

From May 2009 until 2014,

Defendant paid each of his policy premiums electronically.

2

(ECF

Uninsured motorist coverage is coverage a policyholder
receives in the event of an accident with an uninsured, at-fault
motorist.
2

No. 25-5, at 4).

Defendant also communicated electronically

with Plaintiff, conducted online transactions with Plaintiff,
and

received

(Id.

at 5).

electronic

copies

of

documents

from

Plaintiff.

The Declarations Page consistently stated that

Uninsured Motorist Coverage was $100,000 each person.

(ECF No.

25-7).
On

November

11,

2014,

Defendant

was

in

an

automobile

accident.

After the accident, Defendant submitted a claim to

Plaintiff

for

uninsured

motorist

coverage,

and

dispersed $100,000 to Defendant for the accident.
2016,

Defendant’s

Defendant

was

counsel

entitled

to

wrote
an

to

Plaintiff

additional

Plaintiff

On April 5,
alleging

$200,000

that

because

Defendant never effectively waived his right to the default UM
coverage.

(ECF No. 2-3).

On May 5, 2016, Plaintiff commenced this action seeking a
declaration that Plaintiff had fulfilled its obligation under
the insurance policy and that Defendant waived his right to the
default

UM

coverage.

(ECF

No.

2).

Defendant

answered

and

counterclaimed seeking a declaration that he had not waived his
right to the default UM coverage.

(ECF No. 6).

Plaintiff filed

a motion for summary judgment, and Defendant responded and filed
a cross motion for summary judgment. (ECF Nos. 25; 26).

3

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 248.

view

the

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).

4

“When

cross-motions

for

summary

judgment

are

before

a

court, the court examines each motion separately, employing the
familiar standard under Rule 56 of the Federal Rules of Civil
Procedure.”

Desmond v. PNGI Charles Town Gaming, LLC, 630 F.3d

351, 354 (4th Cir. 2011).

The court must deny both motions if it

finds there is a genuine dispute of material fact, “[b]ut if
there is no genuine issue and one or the other party is entitled
to prevail as a matter of law, the court will render judgment.”
10A Charles A. Wright, et al., Federal Practice & Procedure §
2720 (3d ed. 1998).
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

constitute the “last act.”

and

In

an

the

insurance
payment

of

contract,
the

the

premiums

Id. at 66 (citing Sun Ins. Office v.
5

Mallick,

160

Md.

71,

81

(1931)).

Defendant,

resident, received the policy in Maryland.
substantive law applies to this dispute.
however,

govern

procedural

rules

a

Maryland

Therefore, Maryland

in

Maryland law does not,
this

court,

even

when

jurisdiction is based on diversity, and it does not apply when
there is conflicting federal law.
“In an action for declaratory judgment, the burden of proof
is not put on the plaintiff merely because he has filed the
action, rather the Court must examine the underlying issues to
determine the burden of proof.”

Reasor v. City of Norfolk, Va.,

606 F.Supp. 788, 793 (E.D. Va. 1984); (citing Royal Indemnity
Co. v. Wingate, 353 F.Supp. 1002, 1004 (D.Md.), aff'd. 487 F.2d
1398 (4th Cir.1973); Medtronic Inc. v. Mirowski Family Ventures,
LLC, 134 S.Ct. 843, 849-50 (2014) (holding that a declaratory
judgment action did not shift the burden of proof for patent
infringement

related

actions).

Here,

the

parties’

dispute

involves a possible breach of an insurance contract.
In

an

insurance

coverage

dispute,

the

insured

has

the

initial burden “of proving all elements of a prima facie case
including

the

existence

of

a

policy,

payment

of

applicable

premiums, compliance with policy conditions, the loss as within
policy coverage, and the insurer’s refusal to make payment when
required to do so by the terms of the policy.”
Ins. § 254:11 (3rd ed. 2017).

17A Couch on

Thereafter, the insurer must prove
6

the

applicability

of

affirmative defenses.

an

exclusion

or

limitation,

or

other

Couch, § 254:12; see Hartford Acc. and

Indem. Co. v. Sherwood Brands, Inc., 111 Md.App. 94 (1996),
vacated

on

other

grounds,

“UM/UIM

liability

limits

347

Md.

32

(1997).

contained

in

the

Furthermore,

declarations

generally cap the insurer’s total liability per claim.”
Couch, § 171:13.

page
12

In a contract action for recovery of uninsured

motorist coverage, the insured would have “to prove the amount
of

[]

contract

damages,

i.e.,

establish

underinsured motorist coverage . . .”

the

amount

of

her

Allstate Ins. Co. v.

Kponve, 225 Md.App. 370, 388 (2015).
IV.

Analysis
The

parties

relationship

transacted

electronically,

all

aspects

beginning

in

of

this

2009.

insurance
Plaintiff

asserts that the resulting contract is valid, including the UM
waiver.

Defendant,

on

contends

that

did

he

the

other

not

hand,

agree

to

somewhat
transact

electronically, making his UM waiver invalid.

curiously,
business

Carried to its

logical conclusion, however, that argument would undermine the
validity of the entire contract, not simply the UM waiver, and
he

would

be

unable

to

prove

that

he

had

a

policy

with

Progressive at all.
The parties have framed their differences based exclusively
on a provision in Maryland law, “Maryland Uniform Electronic
7

Transactions Act” (“MUETA”), Md.Code Ann., Com. Law § 21-101 et
seq.

One section of that Act, Section 21-104(b)(3), provides:

“Except

for

a

separate

and

optional

agreement

the

primary

purpose of which is to authorize a transaction to be conducted
by

electronic

means,

a

provision

to

conduct

a

transaction

electronically may not be contained in a standard form contract
unless that provision is conspicuously displayed and separately
consented to.”
Based

on

that

section,

Defendant

contends

“signature” on the UM waiver form was invalid.
course, disagrees.

that

his

Plaintiff, of

Before addressing that precise issue, it is

helpful to recount the history of Maryland’s enactment of the
statute,

and

the

parallel

federal

statute,

“Electronic

Signatures in Global and National Commerce Act” (“E-SIGN”), 15
U.S.C. § 7001 et seq., which is not mentioned by the parties.
As will be seen, Defendant’s arguments are unavailing and the
court will declare that Progressive has no further obligation to
Mr. Corekin concerning UM benefits.
A. Electronic Contracts
In

the

latter

part

of

transactions

became

more

and

the

20th

more

century,

prevalent

as

and

electronic
allowed

for

agreements to be reached across vast geographic expanses, policy
makers and commercial actors recognized that the law needed to
be updated to accommodate the new technology.
8

Moreover, to

encourage further e-commerce, the law needed to be uniform.

In

light

of

of

this

new

reality,

the

National

Conference

Commissioners on Uniform State Laws (NCCUSL) approved a project
to

create

Balloon,

a

proposal

From

Wax

for

Seals

a

to

uniform

model

Hypertext:

act.

Electronic

Anthony

M.

Signatures,

Contract Formation, and A New Model for Consumer Protection in
Internet Transactions, 50 Emory L.J. 905, 908-909 (2001); Robert
A. Wittie & Jane K. Winn,

Electronic Records and Signatures

Under the Federal E-SIGN Legislation and the UETA, 56 Bus. Law.
293, 294-97 (2000).
In

1999,

NCCUSL

approved

Transactions Act (“UETA”).

the

Uniform

Electronic

Patricia Brumfield Fry, Introduction

to the Uniform Electronic Transactions Act: Principles, Policies
and Provisions, 37 Idaho L. Rev. 237, 248 (2001).

UETA is

designed “to facilitate electronic transactions consistent with
other applicable law.”

UETA § 6(1) (Nat’l Conference of Comm’rs

on Unif. State Law 1999).

UETA is technology-neutral.

It does

not require, prefer, or discourage one type of technology but
rather allows for parties to choose the technology they desire.
UETA is also minimalist.

UETA “applies only to transactions

between parties each of which has agreed to conduct transactions
by electronic means.”

UETA § 5(b).

When the parties have

agreed to transact electronically, UETA simply provides:

9

(a) A record or signature may not be denied
legal
effect
or
enforceability
solely
because it is in electronic form.
(b) A contract may not be denied legal
effect or enforceability solely because an
electronic record was used in its formation.
(c) If a law requires a record to be in
writing, an electronic record satisfies the
law.
(d) If a law requires a signature, an
electronic signature satisfies the law.
§ 7.
Even before NCCUSL could finalize UETA, members of Congress
incorporated

UETA’s

principles

into

proposed

legislation

designed to ensure the validity of electronic signatures on a
national basis.3

On March 25, 1999, Senator E. Spencer Abraham
S. 761, 106th

introduced the “Millennium Digital Commerce Act.”
Cong.

(1999).

introduced

the

Commerce Act.”

On

May

6,

“Electronic

Congressman
Signatures

Thomas
in

J.

Global

H.R. 1714, 106th Cong. (1999).

Bliley,
and

Jr.

National

The bills had

similar operative effects and adhered to UETA’s key provisions.
Both

bills

validity

contained

solely

a

because

prohibition
it

was

on

denying

initiated

a

contract’s

through

electronic

means, H.R. 1714 § 101(a); S. 761 § 6(a), and both bills were
technology-neutral, allowing parties to choose the technology

3

Although UETA was not approved until July 1999, a version
was discussed at the NCCCUSL annual meeting in 1998 and its
provisions were known. Fry at 247-48; Wittie & Winn at 296.
10

they preferred and enforcing that choice,

H.R. 1714 § 101(b);

S. 761 § 5.
The bills differed in their preemptive effect.

The Senate

version provided:
Nothing in this section shall be construed
to preempt the law of a State that enacts
legislation
governing
electronic
transactions
that
is
consistent
with
subsections (a) and (b).
A State that
enacts, or has in effect, uniform electronic
transactions legislation substantially as
reported
to
State
legislatures
by
the
National Conference of Commissioners on
Uniform State Law shall be deemed to have
satisfied this criterion, provided such
legislation as enacted is not inconsistent
with subsections (a) and (b).
S. 761 § 6(c).

In comparison, the House version allowed for a

state law to “modify, limit, or supersede” the provision of
federal

law

specified

if

the

state

alternative

law

referenced

procedures

to

the

make

federal

valid

law,

electronic

agreements, was adopted within two years of the federal law, and
did not discriminate on the basis of the size of the business or
the type of technology employed.
The
Senate

House

bill

passed

passed

on

its

bill

November

H.R. 1714 § 102(a), 102(b).
on

November

19.

The

9,

1999

House

and

and

conferenced and produced the final version of the bill.

the

Senate
The

bill subsequently passed both houses of Congress and was signed
into law.

The final version contained the same prohibition on

invalidating

electronic

agreements
11

solely

because

they

were

electronic

and

allowed

preferred technology.

transacting

parties

to

choose

their

The bill, however, contained a preemption

clause that was a hybrid between the House and Senate language.
Like

the

House

Version,

supersede” language.

it

adopted

the

“modify,

limit,

or

Like the Senate version, it specifically

allowed for superseding the federal law by adopting UETA.
U.S.C. § 7002(a)(1).

15

Like the House version, it also allowed

for a state to supersede the federal law through an alternative
version that was consistent with federal law, was technologyneutral, and, if enacted after the federal law, made “specific
reference”

to

the

federal

law.

§

7002(a)(2).

E-SIGN

was

enacted into law on June 30, 2000.
Meanwhile, in December 1999, companion bills based on UETA
were introduced in the Maryland General Assembly.

As the bills

were pending, Assistant Attorney General Steven Sakamoto-Wengel
wrote to the legislature on behalf of Maryland’s Office of the
Attorney General, Consumer Protection Division.

In the letters,

he raised concerns that UETA would undermine requirements that
certain

contract

provisions

and,

terms
in

“be

many

set

apart

cases,

from

separately

other

contract

initialed

by

consumers,” and that, “under the proposed UETA, consumers could
sign a piece of paper in a person-to-person transaction - even
when the consumer does not own a computer - and still find that
all

notices,

disclosures

and

records
12

relating

to

that

transaction [were] posted on a website in their name.”

Letter

from Assistant Attorney General Steven Sakamoto-Wengel to the
Honorable Thomas L. Bromwell, Chairman, S. Fin. Comm. (Feb. 3,
2000) (on file with the Maryland State Law Library) (“SakamotoWengel Letter”) (for ease of access, available at ECF No. 32-1).
He

proposed

a

number

of

amendments,

“the

most

important

amendment,” was copied from Cal. Civ. Code § 1633.5(b).4

The

proposal stated, “Except for a separate and optional agreement
the primary purpose of which is to authorize a transaction to be
conducted

by

transaction
standard

electronic

by

form

means,

electronic
contract

an

means

that

(“Sakamoto-Wengel Letter”).

is

agreement

may

not

not

an

be

to

conduct

contained

a

in

a

record.”5

electronic

The “amendment [was] designed to

ensure that an agreement to communicate electronically is not
found from mere boilerplate in a paper communication.”
Although
Assistant
specific

the

Attorney
language”

Committee

agreed

General’s
and

instead

with

amendment,
“crafted

the
it

Id.

purpose

of

“rejected

clearer

language

largely reflect the spirit of the proposed language.”

Id.

the
the
to
The

4

Hawaii inserted this clause into its own version of UETA.
Haw. Rev. Stat. Ann. § 489E-5.
5

A standard form contract is a “preprinted contract
containing set clauses, used repeatedly by a business or within
a
particular
industry
with
only
slight
additions
or
modifications to meet the specific situation.”
Black’s Law
Dictionary (10th ed. 2014).
13

new language, which was enacted into law as Section 21-104(b)(3)
of the Maryland Commercial Law Article, provides:

“Except for a

separate and optional agreement the primary purpose of which is
to authorize a transaction to be conducted by electronic means,
a provision to conduct a transaction electronically may not be
contained in a standard form contract unless that provision is
conspicuously displayed and separately consented to.”
§

21-104(b)(3).6

Despite

the

changes,

the

Com. Law

amendment

still

“address[ed] the . . . concern that a person could unwittingly
assent to conduct a transaction by overlooking a provision in a
form contract.”

S. Fin. Comm., “Defense of Committee Amendments

Adopted,” 2000 Sess. S.B. 3 (on file with the Maryland State Law
Library) (for ease of access, available at ECF No. 32-2).

The

final bill was passed into law and became effective June 1,
2000.
As the parties have identified, this case revolves around
Section

21-104(b)(3).

Defendant

argues

that

Progressive’s

standard form contract did not satisfy Section 21-104(b)(3) and
therefore he never agreed to transact business electronically
and

could

Plaintiff

not
argues

effectively
that

its

waive

the

contract

6

default
satisfies

UM

coverage.

Section

21-

This language is also part of Virginia’s version of UETA.
Virginia adopted UETA contemporaneously with Maryland.
See Va.
Code Ann. § 59.1-483(b).

14

104(b)(3)

and,

alternatively,

the

parties’

course

of

conduct

established an agreement under Section 21-104(b)(2).7
In

his

argument,

Defendant

interprets

Section

21-

104(b)(2)’s more general provision for all forms of contracts to
conflict with Section 21-104(b)(3)’s more specific provision for
standard form contracts.
statutory

construction

Citing to “[t]he well-accepted law on
.

.

.

that

where

general

provisions,

terms or expressions in one part of a statute are inconsistent
with more specific or particular provisions in another part, the
particular provisions must govern or control,” he concludes that
Section 21-104(b)(3)’s provision for standard form contract must
control over Section 21-104(b)(2)’s provision for all contracts.
Thus, under his logic, Defendant’s signed electronic contract
cannot establish an agreement, even though a paper agreement
would

have

requirements

been
not

effective,
imposed

on

because

it

agreements

failed
in

to

other

satisfy
mediums.

Defendant’s argument fails to appreciate the interplay of E-SIGN
and MUETA.
Assuming

arguendo

that

his

interpretation

of

correct, then Section 21-104(b)(3) would be preempted.
SIGN,

a

state

law

cannot

“den[y]

7

legal

effect,

MUETA

is

Under E-

validity

or

Plaintiff also argues, somewhat circularly, that its
agreement to authorize an electronic transaction is not part of
the standard form contract because it is separate and optional.
(ECF No. 27-7). This argument does not need to be addressed.
15

enforceability

[of

a

contract]

solely

because

an

electronic

signature or electronic record was used in its formation.”
U.S.C.

§§

argument

7001(a)(2);
is

that

7002(a)(2)(A)(i).

despite

the

Here,

payments,

15

Defendant’s

signatures,

and

correspondence, the contract is a legal nullity because it was
done electronically and failed to adhere to additional standards
for

electronic

agreements.

(ECF

No.

26-1,

at

10).

This

interpretation of MUETA would deny legal effect to an agreement
“solely

because

7001(a)(1).

it

is

in

electronic

form.”

15

U.S.C.

§

As such, Section 21-104(b)(3) would violates E-

SIGN’s technology-neutral requirement and would be preempted.
15 U.S.C. §§ 7001(a)(2); 7002(a)(2)(A)(i).
If E-SIGN preempts MUETA, then 15 U.S.C. § 7001(a)(1) would
control which has no special clause for standard form contracts.
This provision would allow for an electronic signature to create
a legally binding agreement as along as both parties agreed to
use electronic means.

15 U.S.C. § 7001(a)(1), (b)(2).

This

provision of E-SIGN is the same as UETA and case law applying
the unamended UETA supports finding that the course of conduct
here

establishes

electronically.

an

agreement

to

conduct

transactions

See, e.g., Stover-Davis v. Aetna Life Ins.,

Co., No. BAM-15-1938, 2016 WL 2756848, *4 (E.D. Cal. May 12,
2016)(concluding parties had an intent to conduct transactions
electronically and finding an electronic contract valid because
16

the plaintiff had created an online account and electronically
signed the agreement); Rosas v. Macy’s, Inc., No. PSG-11-7318,
2012

WL

3656274,

*6

(C.D.

Cal.

Aug.

24,

2012)

(finding

an

electronically signed form with language stating a signature was
an agreement to contract electronically constituted an agreement
to conduct transactions electronically); Traynum v. Scavens, 786
S.E.2d

115,

120

(“Progressive's

(S.C.

2016),

online

reh'g

denied

communication

of

(June

the

17,

offer

2016)

of

UIM

coverage was effective because Traynum agreed to interact with
Progressive

electronically

by

choosing

to

purchase

insurance

through Progressive's website[.]”); Waddle v. Elrod, 367 S.W.3d
217, 228 (Tenn. 2012) (holding that an email exchange between
parties’

attorney

“evidenced

an

intent

to

finalize

the

settlement by electronic means”); see also UETA § 5, Comment
4(D)

(“If

one

orders

books

from

an

on-line

vendor,

such

as

Bookseller.com, the intention to conduct that transaction and to
receive

any

correspondence

electronically
Defendant’s
means,

and

can

conduct

be

inferred

would

Defendant’s

related
from

signify

signature

to
the

the

conduct.”).

assent
on

transaction

the

to
UM

use

Thus,

electronic

waiver

would

establish a waiver.
At least one commentator flatly stated at the time MUETA
was passed that that the unique provision of Maryland law would
be preempted by E-SIGN.

Carla Stone Witzel, Electronic Laws:
17

More details on the digital signature laws, Baltimore Business
Journal,

Sept.

18,

2000,

https://www.bizjournals.com/baltimore/stories/2000/09/18/focus5.
html (“The Maryland legislature added a unique requirement to
UETA that will be pre-empted by the federal Electronic Signature
Act when it becomes effective in October.

Under the Maryland

UETA, an agreement to conduct a transaction electronically may
not

be

contained

in

a

standard

form

contract,

unless

the

provision is conspicuously displayed and separately consented
to.”).

It is not clear, however, that Ms. Witzel’s prediction

and Defendant’s interpretation is correct.

Instead, Section 21-

104(b)(3)’s provision can be interpreted in harmony with Section
21-104(b)(2)

and

in

a

way

to

satisfy

the

exemption

from

preemption in E-SIGN.
As

the

Court

of

Appeals

of

Maryland

has

repeatedly

explained, “The cardinal rule of statutory interpretation is to
ascertain

and

Legislature.

effectuate

the

real

and

actual

intent

of

the

A court’s primary goal in interpreting statutory

language is to discern the legislative purpose, the ends to be
accomplished,

or

the

evils

to

be

remedied

by

the

statutory

provision under scrutiny.”

State v. Johnson, 415 Md. 413, 421

(2010)

marks

(internal

quotation

omitted).

“When

the

plain

meaning language is clear and “consistent with the statute’s
apparent purpose,” the “inquiry as to legislative intent ends
18

ordinarily.”

Id.

(internal

quotation

marks

omitted).

statutory language, however, is not read in a vacuum.

The

“Rather,

the plain language must be viewed within the context of the
statutory scheme to which it belongs, considering the purpose,
aim, or policy of the Legislature in enacting the statute.”
(internal quotation marks omitted).
Legislature

intends

its

enactments

It is presumed that “the
to

operate

consistent and harmonious body of law.”
marks omitted).

Id.

together

as

a

Id. (internal quotation

“Where the words of a statute are ambiguous and

subject to more than one reasonable interpretation, or where the
words are clear and unambiguous when viewed in isolation, but
become ambiguous when read as part of a larger statutory scheme,
a court must resolve the ambiguity by searching for legislative
intent

in

other

indicia,

including

the

history

of

the

legislation or other relevant sources intrinsic and extrinsic to
the

legislative

process.

In

resolving

ambiguities,

a

court

considers the structure of the statute, how it relates to other
laws,

its

general

purpose,

and

the

relative

rationality

legal effect of various competing constructions.”

and

Id. (internal

quotation marks omitted).
Under

E-SIGN,

preemption

is

avoided

if

a

provision

satisfies either of two methods for a state law to “modify,
limit, or supersede” E-SIGN’s provisions.
MUETA

“constitutes

an

enactment

or
19

One method is if

adoption

of

the

Uniform

Electronic Transactions Act.”

15 U.S.C. § 7002(a)(1).

E-SIGN

provides no answer as to how to determine whether a law, such as
MUETA,

modeled

on

UETA

but

containing

additional

provisions

“constitutes an enactment” of UETA for the purposes of Section
7002(a)(1).

This point is likely academic as any law that could

“constitute[] an enactment” of UETA would likely satisfy the
alternative provided in Section 7002(a)(2).8
Pursuant to Section 7002(a)(2), a state statute can exceed
the federal statute if it provides a method to establish the
legal validity of electronic records, the methods are consistent
with federal law, and the methods do not give preference to one
technology over another.9

15 U.S.C. § § 7002(a)(2).

Section 21-

8

The interpretation of the first clause has been the topic
of some scholarly debate but few judicial opinions. See, e.g.,
Robert Carson Godbey & William G. Meyer, III, Contracting in
Cyberspace, 5-Feb Haw. B.J. 6 (2001)(“Commentators have noted
that the preemption provisions of E-SIGN are somewhat unclear.
It may take court review to determine how to interpret these
provisions of E-SIGN and their effect on Hawaii's version of
UETA.”); Adam R. Smart, E-Sign Versus State Electronic Signature
Laws: The Electronic Statutory Battleground, 5 N.C. Banking
Inst. 485, 498-99 (2001) (“However, until there is judicial
review of the [scope of E-SIGN’s preemption clause] or
regulatory clarification, it may be impossible to determine with
certainty what the outcome would be in a state that has enacted
a non-uniform UETA.”) (internal citation omitted).
9

15 U.S.C. § 7002(2)(B) states that enact such a law, “if
enacted or adopted after June 30, 2000, [must] make[] specific
reference to this chapter.”
MUETA was adopted June 1, 2000,
and, therefore, this provision does not apply to it.
20

104(b)(3) can be interpreted to fulfill the criteria set forth
in 15 U.S.C. § 7002(a)(2) and to avoid preemption.
First,

the

Maryland

provision

clearly

“specifies

the

alternative procedures or requirements for the use or acceptance
(or

both)

of

electronic

records

or

electronic

signatures

to

establish the legal effect . . . of contracts or other records.”
15

U.S.C.

§

7002(a)(2)(A).

Here,

electronic

records

are

accepted and legally enforceable when “the parties [have] agreed
to conduct transactions by electronic means.”

Com. Law §§ 21-

104(b)(1); 21-106.
In

addition,

Section

21-104(b)(3)

can

be

consistent with 15 U.S.C. § 7001’s requirements.
§ 7002(a)(2)(A)(i).

read

to

be

See 15 U.S.C.

Under Section 7001, electronic agreements

are legally enforceable, but no person can be required “to use
or

accept

7001(b)(2).

electronic
MUETA

records

provides

or
for

electronic
the

legal

signatures.”
enforceability

§
of

contracts, Com. Law § 21-106, and Section 21-104(b)(1) creates
the same threshold question as the federal law: has a person
agreed to conduct transactions electronically or are they being
forced to do so without consent?

See 15 U.S.C. § 7001(b)(2).

Although federal law does not provide much guidance to answer
that

question,

Maryland

law

provides

a

method

to

whether parties have chosen to use electronic means.

determine
Courts

look to “the context and surrounding circumstances, including
21

the

parties’

conduct,”

Com.

Law

§

21-104(b)(2),

but

courts

cannot infer an agreement “solely from the fact that a party has
used

electronic

104(b)(4).

means

to

pay

an

account,”

Com.

Law

§

21-

In the case of a standard form contract, a provision

authorizing electronic transactions can, by itself, demonstrate
an

agreement

provision

is

to

conduct

separate

electronic

and

optional

transactions
from

the

if

rest

of

that
the

agreement or conspicuously displayed and separately consented
to.

Com. Law § 21-104(b)(3).

Even without such a freestanding

provision, however, the parties’ conduct would still be relevant
and could establish a valid agreement.

Com. Law § 21-104(b)(2).

This interpretation of Section 21-104(b)(3) better comports
with the text, structure, and history of MUETA.

First, Section

21-104(b)(3) never says a standard form contract, itself, is
invalid because it does not contain an electronic authorization
section outside the body of the contract.
electronic

authorization

clause

would

It simply says the
not

be

effective.

Defendant’s reading adds a provision not found in the statute to
invalidate the entire contract whereas this alternative reading
abides more closely to the language of the statute which only
applies to the agreement to conduct transactions electronically.
Moreover,

although

“[i]t

is

an

often

repeated

principle

that a specific statutory provision governs over a general one,”
Lumbermen’s

Mut.

Cas.

Co.

v.

Ins.
22

Comm’r,

302

Md.

248,

268

(1985), “when two statutes are capable of coexistence, it is the
duty of the courts . . . to regard each as effective.”
v.

Mancari,

104(b)(3)

417

U.S.

simply

to

535,

551

(1974).

invalidate

Reading

clauses

in

Morton

Section

standard

21form

contracts that do not meet its specification without affecting
21-104(b)(2)’s rule for determining whether parties have agreed
to

conduct

harmonizes

transactions
the

two

parts.

electronically
It

allows

based

for

the

on

conduct

provisions

to

achieve the Maryland legislature’s dual goals of “facilitating
electronic transactions,” Com. Law § 21-105(1), while “limiting
the application of [MUETA] to transactions where the parties
have agreed to conduct transactions electronically.”

Maryland

Bill History, 2000 Sess. S.B. 3.
Furthermore,
specific

concern

the
that

legislative
“a

person

history

could

demonstrated

unwittingly

assent

a
to

conduct a transaction electronically by overlooking a provision
in a form contract.”
(emphasis

added).

amendment

designed

invalidate

Defense of Committee Amendments Adopted
It

to

simply
protect

Defendant’s

does
the

agreement

not

make

unwitting
which

sense

that

an

would

apply

to

was

initiated

electronically, consented to electronically, and was exclusively
done via electronic means.

This alternative interpretation does

make sense.

Under that reading, a person who agrees on paper to

a

form

standard

contract

with

an
23

electronic

authorization

provision and conducts all business in person cannot later be
bound to conduct electronic transactions because the facts and
circumstances

do

not

demonstrate

transactions electronically.
the

other

hand,

a

an

agreement

to

conduct

See Com. Law § 21-104(b)(3).

person

who

initiates

a

On

transaction

electronically, signs a standard form contract electronically,
and conducts all business electronically can later be bound to
conduct

business

electronically

because

the

facts

and

circumstances demonstrate an agreement to conduct transactions
See Com. Law § 21-104(b)(2).10

electronically.

Thus, Section

21-104(b)(3) can be read as an elaboration in the standard form
context of the general rule outlined in E-SIGN that a party must
agree

to

use

electronic

means

before

being

bound

to

an

agreement, and be consistent with that law.

See 15 U.S.C. §

7001(a),

§

Although
suggested

(b)(2);
this

Md.Code

Ann.,

interpretation

interpretation,

it

Com.

appears
is

Law

superior

enough

to

21-104(b)(1).
to

say

Defendant’s
that

this

interpretation would be a valid one and would satisfy E-SIGN’s
technology-neutrality

requirement,

the

second

element

of

E-

SIGN’s preemption analysis.

10

If the Maryland provision applies only to standard form
contracts not done through electronic means, as initially
proposed, then it also would not be preempted because it does
not affect the validity of electronic contracts.
24

Lastly, Section 21-104(b)(3) “do[es] not require, or accord
greater

legal

application

status
of

or

a

specification[.]”

effect

to,

specific

the

implementation

technology

or

15 U.S.C. § 7002(a)(2)(A)(ii).

or

technical
It involves

disclosure and makes no reference to one form of technology or
another.

It does not run afoul of the technology-neutrality

requirement of 15 U.S.C. § 7002(a)(2)(A)(ii).
Under this reading, Section 21-104(b)(3) of the Maryland
Commercial

Law

Article

would

not

be

preempted

by

E-SIGN.

Despite the parties’ devoting much of their arguments to the
question

of

whether

the

electronic

authorization

was

either

separate and optional or conspicuously displayed and separately
consented to, this interpretation renders it is unnecessary to
resolve that issue.

The abundant evidence of consent from the

parties’ course of dealings would demonstrate an agreement to
conduct

transactions

electronically.

See

Com.

Law

§

21-

104(b)(2).
Here, Defendant made an account online to facilitate his
transactions with Plaintiff.
initially
electronic

applied
copies

online.
of

his

(ECF No. 25-5, at 2).
(Id.

at

policy

1).

Defendant

documents.

(Id.

Defendant communicated with Plaintiff electronically.
5).

Defendant
received
at

5).

(Id. at

Defendant received a discount on his insurance premiums for

agreeing to conduct his transactions electronically.
25

(ECF No.

25-7).
No.

Defendant paid each policy premium electronically.

25-5,

at

5).

Defendant

and

Plaintiff’s

(ECF

conduct

would

establish an agreement to conduct transactions electronically.
See Com. Law § 21-104(b)(2). Therefore, Defendant’s electronic
signature

would

signify

his

assent

to

the

insurance

policy,

bound him to its terms, and waived the default UM coverage.

See

Com. Law §§ 21-104(b)(2), 106.
Ultimately, it is unnecessary conclusively to resolve the
correct interpretation of Section 21-104(b)(3) because Defendant
has not advanced any argument that would entitle him to void the
agreement.
signified

Therefore,
assent

to

the

the

agreement
terms

is

of

the

valid

and

Defendant

insurance

agreement

including its waiver of default UM coverage.
B. Insurance Waiver
Defendant argues alternatively that the electronic contract
was not a valid waiver of UM default coverage. Defendant argues
the

waiver

form

did

not

comply

with

the

Maryland

statutory

requirements for a waiver of UM default coverage because, even
though MIA posted the form as a model on its website, MIA did
not “require” the form.
Under
coverage

in

effective,

Maryland
an
the

(ECF No. 26-1, at 3).

law,

a

insurance
insurer

person

policy,

must

can
but,

first

waive
for

provide

the

the
the

default

waiver
person

to

UM
be

with

certain information about UM coverage in a particularized format
26

and then the person must assent to the waiver.
Ann., Ins. § 19-509(b)(1).

See Md.Code

Pursuant to Section 19-510(d)(1) of

the Maryland Insurance Article, an insurer must provide a waiver
form

in

readable

print

with

key,

statutorily

mandated

information “on the form that the [MIA] Commissioner requires.”
Plaintiff argues that it complied with these statutory dictates
because it used a form posted on MIA’s website that had all the
necessary information in the proper format.

(ECF No. 25-1, at

15).
In a nearly identical situation, the Court of Appeals of
Maryland already rejected an argument that a waiver form was
invalid when it was only approved by the MIA.

In Nesbit v.

Government Employees Insurance Co., 382 Md. 65 (2004), the MIA
had

approved

a

form

used

by

GEICO

for

a

personal

injury

protection (“PIP”) waiver. It concluded that a waiver was on
“the form that the [MIA] Commissioner requires” as long as it
correctly

laid

necessitated.

out

all

the

information

that

the

statute

Ins. § 19-506(d)(1); Nesbit, 382 Md. at 79.

The

court noted that its conclusion was buttressed by MIA’s approval
of

the

form

at-issue

because

“[a]n

administrative

agency’s

interpretation and application of the statute which the agency
administers should ordinarily be given considerable weight by
reviewing courts.”

Nesbit, 382 Md. at 80 (internal quotation

marks omitted).
27

Here, the form Plaintiff used included all the required
information in the appropriate format.

MIA also posted this

precise form on its website as an example of an effective waiver
and, as in Nesbit, MIA’s endorsement and support for this form
is entitled to deference.

See Nesbit, 382 Md. at 80.

Thus, “it

is clear that the . . . waiver form provided by [Plaintiff]
satisfies the requirements” of Section 19-510(d).

Id. at 80.

C. Certification
Defendant requests that this court certify a question to
the Court of Appeals of Maryland.

(ECF No. 26-1, at 11).

“A

federal court's certification of a question of state law to that
state's highest court is appropriate when the federal tribunal
is required to address a novel issue of local law which is
determinative in the case before it.”

Grattan v. Bd. of Sch.

Comm’rs of Baltimore City, 805 F.2d 1160, 1164 (4th Cir. 1986).
Here,

Defendant

has

dug

himself

certification to be appropriate.
were

certified

to

the

Court

too

deep

a

hole

for

In this case, if the question
of

Appeals

of

Maryland

and

Defendant’s electronic signature, payments, and communications
did not establish an agreement because he had never agreed to
use the means which he had chosen to use, a somewhat far-fetched
argument,
Maryland

then,
law

as

as

explained

above,

the

agreement

would

E-SIGN
have

been

would

preempt

denied

legal

effect solely because it was done electronically and Plaintiff
28

would

be

Appeals

entitled
of

to

Maryland

declaratory
found

relief.

Defendant

had

If

the

entered

Court
into

of

this

agreement, then Plaintiff would also be entitled to declaratory
relief.

In a closer case, it might be appropriate to certify.

In this case, respect for state courts requires the resolution
of

the

case

without

resort

to

certification

because

certification would result in an expenditure of resources on an
issue that would not change the ultimate outcome.
Bros. v. Schein, 416 U.S. 386, 390-91 (1974).

See Lehman
Accordingly,

certification is denied.
V.

Conclusion
For the foregoing reasons, Plaintiff’s motion for summary

judgment

will

be

granted

and

summary judgment will be denied.

Defendant’s

cross

motion

for

A separate order will follow.

/s/
DEBORAH K. CHASANOW
United States District Judge

29