Maryland Auto Accident Victim Seeks Litigation Costs After Insurance Company Settles Claim for $30,000

If an insurance company refuses to cover your injuries after a Maryland car accident case, you may have to take legal action.  In some situations, you may be able to recover your attorney’s fees and court costs in bringing the lawsuit.  In an April 16, 2019 case, the Court of Special Appeals of Maryland considered whether an auto insurance company should have been ordered to pay the plaintiff’s attorney’s fees and costs after she successfully obtained a settlement.

The plaintiff in the case was injured in a motor vehicle collision in Maryland.  The driver who caused the accident was in a rental car at the time.  He was insured by the defendant insurance company under a policy issued to him in West Virginia, which provided liability coverage up to $20,000.  Following the accident, the plaintiff filed a personal injury suit against the driver.  The defendant offered to settle the suit for the coverage limits of the driver’s policy.  The plaintiff refused the settlement offer, asserting that because the accident occurred in Maryland, the other driver should have been covered for up to $30,000 for bodily injury liability.

The plaintiff sought a declaratory judgment from the court to establish that $30,000 of liability coverage was available to her under the other driver’s insurance policy.  The defendant ultimately offered her $30,000 to settle the case, which she accepted.  The plaintiff then filed a motion for attorneys’ fees and costs based upon the declaratory judgment action she had pursued against the defendant.  When the court denied the request, the plaintiff appealed.

In Maryland, if an insured person must resort to litigation to enforce her insurer’s contractual duty to provide coverage for a claim that potentially falls within her policy, the insured may recover her attorneys’ fees and expenses from litigating the issue.  The defendant argued that this rule did not apply to the instant case, as it was not the plaintiff’s insurer.

The appeals court first looked to the language of the other driver’s insurance policy to determine the scope of the insurance coverage.  The court concluded that under the detailed definition provided in the contract, the plaintiff was not considered an “insured” for the purposes of coverage.

The plaintiff then asserted that she was a third-party beneficiary to the policy, and as such, she could enforce its provisions and recover her costs.  To recover under the terms of a contract as a third-party beneficiary or an incidental beneficiary, an individual must show that the parties to the contract clearly intended that the third party benefit from it.  An incidental beneficiary, one who receives a benefit from a contract that was not planned by the contracting parties, has no rights against the contracting parties.  The court determined that the plaintiff was merely an incidental beneficiary of the policy because it clearly was not created to benefit her.  Accordingly, the court found that there was no basis under which the plaintiff could recoup her attorney’s fees.

At Foran & Foran, P.A., our Maryland injury attorneys have the experience and knowledge to help you recover your losses after an accident.  We understand that mounting medical bills and time off work can lead to financial hardship and will work tirelessly to pursue the compensation you deserve.  Request a free consultation to discuss an auto accident case, premises liability case, medical malpractice action, or another negligence claim by calling (301) 441-2022 or contacting us online.