Maryland Court Decides Issue of Insurance Coverage in Truck Accident

The Maryland Court of Special Appeals reviewed a wrongful death case involving a truck accident and addressed the issue of whether the defendant had insurance coverage. In Glass v. State Farm Fire & Cas. Ins. Co. (Md. Ct. Spec. App. Aug. 5, 2015), the defendant’s employee was driving the company delivery van and lost control of it. The van swerved across the center lines and hit the victim’s vehicle head-on. The victim died of injuries caused by the accident shortly thereafter. The victim’s husband brought a personal injury negligence and wrongful death suit against the employee and the employer, and he later amended the complaint to include the employer’s insurer.

The parties disputed whether the accident was covered under the business policy issued by the insurer, due to the unintended entanglement of two separate legal entities of the employer. In 2004, the employer created a general partnership. The general partnership purchased and owned the van driven by the employee, as well as the insurance policy in effect at the time of the accident. However, when the employer formed an LLC in 2006, intending to merge the general partnership with the LLC, it was never properly completed. As a result, both companies remained in existence as separate legal entities, and the general partnership held title to the van and the insurance policy. Although the employer began conducting business in the name of the LLC, it was performing the contractual obligations of the general partnership.

The parties filed motions for declaratory judgment for the trial court to decide the issue of insurance coverage. After an evidentiary hearing, the trial court found that at the time of the accident, the company was conducting business on behalf of the general partnership, and the van was owned by the general partnership. Therefore, the court held, the accident was not covered under the business policy through an exemption to a coverage exclusion for injuries arising out of the use of a non-owned automobile.

On appeal, the plaintiff argued that the trial court erred in finding that the general partnership was the owner of the van. In determining the ownership of a vehicle, there is a rebuttable presumption that the titleholder of an automobile is its owner. In Glass, the plaintiff presented evidence that the LLC was responsible for paying the van’s expenses, maintenance, and insurance at the time of the accident. However, although the name on the payment checks reflected the LLC, the entity had never been formally changed with the bank, and the business account remained in the name of the general partnership. In addition, it was not clear to which entity the tax returns should be attributed. As a result, the appeals court found no clear error with the trial court’s decision and affirmed.

If you have been injured in a car accident, hiring a skilled attorney to represent you can be beneficial in protecting your rights. The Maryland attorneys at Foran & Foran, P.A. provide legal guidance to clients in a range of personal injury claims, including car accident, medical malpractice, workers’ compensation, and more. To discuss your case with one of our experienced accident lawyers, contact us at (301) 441-2022 or through our website.

More Blog Posts:

Maryland Court Rules in Favor of Insurance Company in Car Accident Settlement Case<, Maryland Personal Injury Blog, published July 30, 2015

Maryland Court of Appeals Upholds “Gap” Insurance Policy in Pedestrian Accident Case, Maryland Personal Injury Blog, published October 31, 2015

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