Maryland

Automobile Total Loss Thresholds

Total Loss Threshold (75%).

Cost to repair vehicle exceeds 75% of the fair market value. Md. Code, Transportation § 11-152 (a)(1).

Deductible Reimbursement

Automobile and Property: No applicable statute, Administrative Code provision or case law exists. Insurer can subrogate even if insured has not been made-whole. Maryland doesn’t recognize Made Whole Doctrine.

Related Case Law: Stancil v. Erie Ins. Co., 740 A.2d 46 (Md. App. 1999).

Diminution of Value

First Party: Diminution of value has been found to be appropriate as a measure of damages in a condemnation case. Reichs Ford Road Joint Venture v. State Roads Comm’n of the State Hwy. Admin., 880 A.2d 307 (Md. 2005).

Third Party: Maryland courts have determined that “if [a] plaintiff can prove that after repairs his vehicle has a diminished market value, then he can recover in addition to the cost of repairs the diminution in market value, provided the two together do not exceed the diminution in value prior to the repairs.” Fred Frederick Motors, Inc. v. Krause, 277 A.2d 464 (Md. 1971).

First Come, First Served: Subrogating Multiple Claims in Excess of Policy Limits

There is ordinarily no requirement that a liability insurer wait until all claims have been presented before it deals with any claimant. Therefore, a liability insurer may settle claims in good faith with some claimants even if such settlement reduces amount available to other claimants. Hartford Cas. Ins. Co. v. Dodd, 416 F. Supp. 1216 (D. Md. 1976).

Funeral Procession Traffic Laws

Maryland law allows anyone in a procession to pass through a red light as long as the first vehicle in the procession went through it while it was still green. This privilege is accorded only if a vehicle’s headlights are on. While the procession goes through the red signal, any other vehicle with a green light can enter the intersection only if it will not cross the procession’s path. Md. Code, Transportation, § 21-207.

Imputing Contributory Negligence of Driver to Vehicle Owner

Imputed Contributory Negligence Law:  Contributory negligence of co-owner husband driver is not imputed to co-owner wife passenger suing for damages. The same is true in non-owner driver situations. Nationwide Mut. Ins. Co. v. Stroh, 550 A.2d 373 (Md. 1988).

Vicarious Liability/Family Purpose Doctrine:  No Vicarious Liability Statute.

Maryland does not recognize the Family Purpose Doctrine. Toscano v. Spriggs, 343 Md. 320, 681 A.2d 61 (1996).

Sponsor Liability for Minor’s Driving:  § 16-107: Drivers’ license application must be cosigned by parent or guardian, who will then be liable for negligent operation by minor.

Laws Regarding using Cell Phones/Headphones/Texting While Driving

Cell Phone/Texting:  No driver may operate a vehicle while using a cell phone in a hand-held manner or to text message.  Md. Code, Trans. Law § 21-1124.1.

Drivers who hold a learner’s or instruction permit and are under the age of 18 may not use a wireless communications device while operating a vehicle.  Md. Code, Trans. Law § 21-1124.1-(d)(1)(I).

Other Prohibitions:  Drivers may not wear ear plugs, headsets, or ear phones over both ears while driving, except in emergency situations, operating refuse equipment, or hearing aids.  Md. Code, Trans. Law § 21-1120.

Comments:  No person may operate a motor vehicle while using a cell phone, texting, or wearing headphones.  Ocean City, Maryland Code of Ordinances § 14-333 (c)(1)(e).

Loss Of Use

Loss of Use: Yes. A measure of damages may include a reasonable allowance for loss of use of the vehicle. Taylor v. King, 213 A.2d 504 (Md. 1965). “Damages are supposed to compensate the injured person for the wrong which has been done him.” Restatement, Torts, § 910. “If his loss is greater than the market value of the chattel at the time of its destruction, an owner should, on principle, be allowed additional items which will adequately compensate him unless some of those claimed items are so speculative as to create danger of injustice to the defendant.” Weishaar v. Canestrale, 217 A.2d 525, 530-31 (Md. App. 1966). No case law information regarding whether a rental vehicle must actually be rented in order to use a rental value as a loss of use calculation. There is no recovery for loss of use when a vehicle has been substantially destroyed or is not substantially repairable. Barnes v. United R. & Electric Co., 116 A. 855 (Md. 1922).

Lost Profits: No case law or statutory support for lost profits as a measure of loss of use damages. However, Maryland does acknowledge that economic loss includes the loss of profits resulting from loss of use, which may be persuasive. Village of Cross Keys, Inc. v. Gypsum, 556 A.2d 1126 (Md. 1989); A.J. Decoster Co. v. Westinghouse, 634 A.2d 1330, 1332 (Md. 1994); Lloyd v. Gen. Motors Corp., 916 A.2d 257, 291 (Md. 2007).

Med Pay/PIP Subrogation

Med Pay: No subrogation. Optional first-party coverage. Md. Code, Ins. § 19-109.

PIP: No subrogation rights. Md. Code, Ins. § 19-507. “Add-On” PIP State. PIP coverage must be offered, but can be waived. No significant limitation on third-party suits.

• “Add-On” PIP State. PIP coverage must be offered but can be waived. No significant limitation on third-party suits.

Made Whole: Can be overridden with Plan language. Stancil v. Erie Ins. Co., 740 A.2d 49-50 (Md. Ct. of Special App. 1999).

Statute of Limitations: Runs three (3) years from the date the cause of action accrues. Md. Cts. & Jud. Proc. § 5-101 (1998).

Owner Liability For Stolen Vehicles

Key In The Ignition Statutes: Md. Code Trans. § 21-1101.

Common Law Rule: The negligence of one driving a stolen vehicle supersedes the negligence of one who left the vehicle unattended. Hartford Ins. Co. v. Manor Inn of Bethesda, Inc., 642 A.2d 219 (Md. Ct. App. 1994).

Payment of Sales Tax After Vehicle Total Loss

First-Party Claims:  Insurer may (1) offer a replacement auto that is substantially similar (does not address if sales tax and fees are included). Md. Code Regs. § 31.15.12.07, or (2) offer a cash settlement based on the actual cost of a substantially similar vehicle including all applicable taxes and transfer fees. Md. Code Regs. § 31.15.12.04. Insurers have been cited for refusing to reimburse sales tax on a total loss claim under Md. Code Ann., Ins. § 27-303 and § 27-304.

Third-Party Claims:  Insurer may only offer a cash settlement based on the actual cost of a substantially similar vehicle including all applicable taxes and transfer fees. Md. Code Regs. §§ 31.15.12.03 and 31.15.12.04. MD Ins. Order 11-25-80.

Pedestrian and Crosswalk Laws

Statute:

Md. Code Trans. § 21-502: Vehicle must yield to pedestrians close to or in vehicle’s half of crosswalk. Pedestrians must not leave crosswalk in front of vehicle if vehicle doesn’t have time to stop.

Md. Code Trans. § 21-503: Pedestrians must not cross diagonally, must yield to vehicles when crossing outside crosswalk, must use crosswalk at intersections with traffic control devices.

Summary: Pedestrian crossing outside crosswalk has forfeited their right-of-way but is not prima facie negligent. Thompson v. Sun Cab Co., 184 A. 576, 170 Md. 299 (Md. 1936).

Rental Car Company Physical Damage and Loss of Use Claims

Recovery From Renter: Recovery of physical damage and loss of use are not prohibited or otherwise regulated. Terms of rental agreement control. Collision Damage Waivers regulated by statute. Md. Stat. § 14-2101.

Recovery From Third-Party: Recovery for loss of use allowed generally. Nothing specifically allowing rental car companies to recover. The owner or subrogated carrier may recover a reasonable allowance for loss of use of the vehicle. Taylor v. King, 213 A.2d 504 (Md. 1965). Loss of use may be recovered for a period of time reasonable to get the vehicle repaired. Loss of use can be recovered for expenses in procuring a necessary substitute or for the value of the use of a substitute until a replacement vehicle can be obtained. Weishaar v. Canestrale, 217 A.2d 525 (Md. App. 1966). No case law or statutory support for lost profits as a measure of loss of use damages. However, Maryland does acknowledge that economic loss includes the loss of profits resulting from loss of use, which may be persuasive. Village of Cross Keys, Inc. v. Gypsum, 556 A.2d 1126 (Md. 1989); A.J. Decoster Co. v. Westinghouse, 634 A.2d 1330, 1332 (Md. 1994); Lloyd v. Gen. Motors Corp., 916 A.2d 257, 291 (Md. 2007).

Rental Car Company’s Liability Insurance Primary or Excess

Summary: As of January 1, 2020, a car renter’s personal auto insurance is primary. Md. Transp. Code § 18-102; Code of Md. Reg. § 11.18.01.03; Rentals Unlimited Inc. v. Aetna Casualty & Surety Ins. Co., 647 A.2d 1278 (Md. App. 1994). The only exception is if the rental vehicle is a “replacement vehicle”, defined in § 18-102(a)(2)(i) as:

…a vehicle that is loaned by an auto repair facility or a dealer, or that an individual rents temporarily, to use while a vehicle owned by the individual is not in use because of loss, as “loss” is defined in that individual’s applicable private passenger automobile insurance policy, or because of breakdown, repair, service, or damage.

Another exception is if the renter’s insurance is provided by the Maryland Automobile Insurance Fund. Md. Transp. Code § 18-102(a)(2)(ii). A person in the business of renting or leasing motor vehicles, trailers, or semitrailers must file with the Financial Responsibility Division of the Administration, for each vehicle rented or leased, a copy of the liability insurance policy or proof of Maryland self-insurance certification. Code of Md. Reg. § 11.18.01.03(A).

Slower Traffic Keep Right

Statute: Md. Code Transp. § 21-301 and Md. Code Transp. § 21-303.

Summary: Drivers must drive in the right lane except when overtaking and passing another vehicle; when there is an obstruction in the right lane; on a roadway divided into three or more lanes; or on a roadway designated for one-way traffic. Overtaken vehicle to give way to right, except when overtaking and passing on the right is permitted, the driver of an overtaken vehicle, on audible signal, shall give way to the right in favor of the overtaking vehicle. Any vehicle going 10 MPH or more below the applicable maximum speed limit must drive in the right lane.

Sudden Medical Emergencies While Driving

Defense of Unanticipated Unconsciousness. If the driver of a motor vehicle suddenly and unforeseeably becomes physically or mentally incapacitated, he is not liable for injury resulting from the operation of the vehicle while so incapacitated. Moore v. Presnell, 379 A.2d 1246 (Md. 1977).

Exception to this defense is if the driver knows his or her illness will likely cause unconsciousness. The party claiming the defense is not required to have proved its defense by showing the specific cause of the presumptively wrongful act, but need only adduce evidence sufficient to raise a fact issue for the jury. Moore v. Presnell, 379 A.2d 1246 (Md. 1977).

Suspension of Drivers’ Licenses

Administrative Suspension: Prior to 10/1/20, if a person has been rejected for insurance by the Maryland Automobile Insurance Fund, he must, within 10 days, file a written report, along with proof of insurance, or the Administration could suspend his driver’s license and registration. Md. Code Transp. § 17-105. Effective 10/1/20, House Bill 280 eliminates the ability of the Administration to suspend a driver’s license merely because they cannot afford to pay a fine or fee.

Judgment: Effective 10/1/20, House Bill 280 retroactively eliminates the ability of the Administration to suspend a judgment debtor’s driver’s license at the request of a judgment creditor. Previously, insurers could provide notice to the Administration of an unpaid judgment and the Administration would suspend the driver’s license and registration of the judgment debtor; but it died in committee on 1/5/21. The only recourse now are normal collection efforts. The Administration will also withdraw any prior suspension previously granted. HB 280 also eliminates requirement that individuals on installment plan pay 10% of the debt per year. Md. Code Transp. § 17-209.

Contact Information: Maryland Department of Transportation, Motor Vehicle Administration, 6601 Ritchie Highway, N.E., Glen Burnie, MD 21062, (301) 729-4550, https://mva.maryland.gov/drivers/Pages/default.aspx

Use of Non-Original Equipment Manufacturer (OEM) Aftermarket Crash Parts in Repair of Damaged Vehicles

Authority: Md. Code Commercial Law § 14-2301 to 2304; Md. Code Insurance § 27-906.

Summary: If non-OEM parts are used, the body shop must attach a statement to the written estimate informing the insured of which parts are non-OEM and that the vehicle manufacturer does not warrant these parts. A copy of the non-OEM part’s warranty must be provided to the vehicle owner upon request.

Municipal/County/Local Governmental Immunity and Tort Liability

Legal Authority:

Local Government Tort Claims Act:  Md. Code Ann., Cts. & Jud. Proc. § 5-301, et seq.  Local government not immune to tort claims, unless exception set forth in statute (“indirect statutory qualified immunity”).  Md. Code § 5-303.

Notice Deadlines: A claimant may not institute an action against the State unless the claimant submits written notice of claim within one (1) year.  Notice given to the corporate authorities of the local government.  “Actual notice” may be sufficient.  Md. Code State Gov’t § 5-304.

Claims/Actions Allowed:  Employee must be sued directly, not the governmental entity.  Holloway-Johnson v. Beall, 103 A.3d 720 (Md. 2014), aff’d in part, rev’d in part, 130 A.3d 406 (Md. 2016). Local government responsible for any judgment against employee. If motor vehicle, defense only for damages in excess of insurance policy limits.  Md. Code § 5-303(b); § 5-307(b).  Liable for negligence in operation of motor vehicle.  Md. Code § 5-507(a)(2).

Comments/Exceptions:  No immunity if act is:  (1) Discretionary function; and (2) Without malice. Md. Code § 5-507; Thacker v. City of Hyattsville, 762 A.2d 172 (Md. Ct. App. 2000), cert. denied, 768 A.2d 55 (2001).  Employee may not sue fellow employee if covered under workers’ compensation.  Md. Code § 5-302(c).

Damage Caps:  $400,000 Per Person.  $800,000 Per Occurrence. (Excluding Interest) Md. Code § 5-303.  The State and its officers and units are not liable for punitive damages.  Md. Code § 5-303.

State Sovereign Immunity And Tort Liability

Tort Claims Act: Maryland Tort Claims Act. Md. Code. Ann., State Gov’t §§ 12-101 – 12-110.

The immunity of the State and of its units is waived as to a tort action, in a court of the State. Md. Code, State Gov’t § 12-104 (1984).

Notice Deadlines:  A claimant may not institute an action against the State unless:

(1) the claimant submits a written claim to the Treasurer within one year;

(2) the Treasurer or designee denies the claim; or

(3) the cause of action is filed within three years after it arises.

Md. Code, State Gov’t § 12-106.

Claims/Actions Allowed:  Immunity of the State is waived for tortious acts of State personnel while acting within the scope of public duties which shall include, but not be limited to:

(1) any authorized use of a State-owned vehicle by State personnel, including, but not limited to, commuting to and from the place of employment;

(2) services (defined by § 12-101) to third parties performed by State personnel in the course of participation in an approved clinical training or academic program.

Md. Code, Cts. & Jud. Proc. § 5-522.

Comments/Exceptions:  Immunity of the State is not waived for any tortious act or omission of State personnel that:

(1) Is not within the scope of the public duties of the State personnel; or

(2) is made with malice or gross negligence.

Md. Code, Cts. & Jud. Proc. § 5-522.

Damage Caps:  The liability of the State and its units may not exceed $400,000 to a single claimant for injuries arising from a single incident or occurrence. Md. Code, State Gov’t § 12-104. The State and its officers and units are not liable for punitive damages. Md. Code, Cts. & Jud. Proc. § 5-522.

Anti-Indemnity Statutes

Prohibits Broad Indemnity. Applies to Construction Contracts or Agreements. Md. Code Ann., Cts. & Jud. Proc. 5-401.

Not applicable to validity of an insurance contract or workers’ compensation issues.

Contribution Actions

Pure Joint and Several Liability. Joint and Several Liability; each defendant may be liable for full amount of damages. Md. Code § 3-1401.

Tortfeasor has action for contribution against joint tortfeasor who signs release and agrees he is a joint tortfeasor or who is so determined by a court. A joint tortfeasor who has paid more than his pro-rata share of judgment may enforce right of contribution by making a post-trial motion for Judgment of Contribution or Recovery Over pursuant to Md. Rule 2-614 even if he did not file a cross-claim against his joint tortfeasors. Lerman v. Heemann, 701 A.2d 426 (Md. 1997). A contractual waiver of subrogation does not bar contribution under the Maryland Uniform Contribution Among Joint Tortfeasors Act (“UCATA”). Gables Construction, Inc. v. Red Coats, Inc., 2019 WL 2067348 (Md. App. 2019).

The three (3) year statute of limitations runs from the date of payment or judgment. Md. Cts. & Jud. Proc. § 5-101 (1998); Tadjer v. Montgomery Cty., 487 A.2d 658 (Md. 1985).

Contributory Negligence/Comparative Fault

Pure Contributory Negligence: Damaged parties cannot recover any damages if even 1% at fault. If plaintiff contributes to his damages, he will be barred from recovery. Board of County Comm’r of Garrett County v. Bell Atlantic, 695 A.2d 171 (Md. 1997).

Dog Bite Laws

Dog owner will be held liable if victim can prove that the dog owner knew of the dog’s vicious propensities. However, if the victim is found to be even 1% at fault, they cannot recover anything. Herbert v. Ziegler, 261 Md. 212, 139 A.2d 699 (Md. 1958); Twigg v. Ryland, 62 Md. 380, 1884 WL 5954 (Md. 1884).

Economic Loss Doctrine

Intermediate Rule. There is no recovery under a negligence theory for purely economic losses resulting from a defective product, unless the defect causes a dangerous condition creating risk of death or personal injury; “economic losses” include loss of value or use of product itself, cost to repair or replace the product, or lost profits resulting from loss of use of the product. A.J. Decoster v. Westinghouse Electric Corp., 634 A.2d 1330 (Md. 1994). An exception exists for “other property.” National Coach Works v. Detroit Diesel Corp., 128 F.Supp.2d 821 (D. Md. 2001). Another possible exception to the rule exists when the plaintiff passes the “legal threshold of pleading the existence of a clear and extreme danger of death or serious personal injury.” Pulte Home Corp. v. Parex, Inc., 723, 923 A.2d 971 (Md. App. 2007); Council of Co-Owners Atlantis Condo., Inc. v. Whiting-Turner Contracting Corp., 517 A.2d 336, 345-48 (Md. 1986) (clear danger of death or personal injury). When there is a “dangerous condition and risk of death or personal injury” this is an exception to the ELD. Morris v. Osmose Wood Preserving, 667 A.2d 624 (Md. 1995). Maryland has a two-part test to determine the degree of risk required to circumvent the ELD, both the nature of the damage threatened and the probability of the damage occurring are examined to determine whether the two, viewed together, show a clear, serious, and unreasonable risk of death or personal injury. Morris v. Osmose Wood Preserving, 667 A.2d 624 (Md. 1995). Where the possible injury is severe (e.g., multiple deaths), the probability of the injury is not required to be as high as if the possible injury was only a minor injury. Id.; A.J. Decoster Co. v. Westinghouse Electric Corp., 634 A.2d 1330 (Md. 1994).

The ELD applies in construction disputes. In Balfour Beatty Infrastructure, Inc. v. Rummel Klepper & Kahl, LLP, 2016 WL 360875 (Md. App. 2016), the court acknowledged that while some jurisdictions permit a contractor’s cause of action against a design professional/engineer for negligence arising from defective plans and specifications, even in the absence of contractual privity, Maryland is not one of them. The ELD does not allow a cause of action for purely economic losses (such as delays, or problems caused by defective plans) in the absence of direct contractual privity or its equivalent between the construction contractor and the design professional.

Parental Responsibility

Willful Misconduct. Parents are liable for restitution for minor’s criminal acts. Md. Code § 11-604.

Minor’s Driving. Drivers’ license application must be cosigned by parent or guardian, who will then be liable for negligent operation by minor. Md. Code § 11-604.

The limit of liability is $10,000.00. Child must be under 18-years-old.

Spoliation

Adverse Inference/Presumption: In Miller v. Montgomery County, 64 Md.App. 202, 214-15, 494 A.2d 761, cert. denied, 304 Md. 299, 498 A.2d 1185 (Md. 1985), Judge Bloom, writing for the Supreme Court of Maryland, explained the effect spoliation of evidence might have on the spoliator’s case as follows: The destruction or alteration of evidence by a party gives rise to inferences or presumptions unfavorable to the spoliator, the nature of the inference being dependent upon the intent or motivation of the party. Unexplained and intentional destruction of evidence by a litigant gives rise to an inference that the evidence would have been unfavorable to his cause, but would not in itself amount to substantive proof of a fact essential to his opponent’s cause. Under Miller, an adverse presumption may arise against the spoliator even if there is no evidence of fraudulent intent. Anderson v. Litzenberg, 115 Md.App. 549, 559, 694 A.2d 150, 155 (Md. App. 1997). The presumption that arises from a party’s spoliation of evidence cannot be used as a surrogate for presenting evidence of negligence in a prima facie case.

Sanctions: Maryland courts have condoned discovery sanctions as remedies for spoliation of evidence. See Klupt v. Krongard, 728 A.2d 727, 738 (Md. Ct. Spec. App. 1999). The ultimate sanction of dismissal or default when spoliation may be imposed when the spoliation involves: (1) a deliberate act of destruction; (2) discoverability of the evidence; (3) an intent to destroy the evidence; (4) occurrence of the act at a time after suit has been filed, or, if before, at a time when filing is fairly perceived as imminent. White v. Office of the Public Defender, 170 F.R.D. 138, 147 (D. Md. 1997). One court noted that the greatest of sanctions is appropriate when the conduct demonstrates willful or contemptuous behavior, or a deliberate attempt to hinder or prevent effective presentation of defenses or counterclaims. Manzano v. Southern Md. Hosp., Inc., 698 A.2d 531, 537 (Md. 1997).

Statute of Limitations

Personal Property3 YearsMd. Cts. & Jud. Proc. Code § 5-101

Personal Injury/Death3 YearsMd. Cts. & Jud. Proc. Code § 5-101

Personal Injury/Medical Malpractice/After Injury Date5 YearsMd. Cts. & Jud. Proc. § 5-109(a)

Personal Injury/Medical Malpractice/After Discovery Date3 YearsMd. Cts. & Jud. Proc. § 5-109(a)

Breach of Contract/Written3 YearsMd. Cts. & Jud. Proc. § 5-101

Breach of Contract/Oral6 YearsMd. Cts. & Jud. Proc. § 5-101

Breach of Contract/Sale of Goods4 YearsMd. Coml. § 2-725

Statute of Repose/ProductsN/AN/A

Statute of Repose/Real Property10/20 YearsMd. Code Ann § 5-108*

Breach of Warranty/U.C.C.4 YearsMd. Com. Law Code § 2-725

Workers’ Comp Third Party Case3 YearsMd. Emp. & Lab. Code Ann. § 9-901-903

Strict Product Liability3 YearsMd. Cts. & Jud. Proc. Code § 5-101; Phipps v. General Motors Corp., 363 A.2d 955, 962 (Md. 1976).

Statute of Limitations Exceptions

*20 Years for improvement to real property. 10 Years for actions against architect, professional engineer or contractor related to improvement to real property. Md. Code Ann. § 5-108.

Health and Disability Insurance

Statute of Limitations: 3 Years. Md. Cts. & Jud. Proc. Code § 5-101. Medical Malpractice Actions: Earlier of 5 years after injury date or 3 years after injury was discovered.

Subrogation of Medical and Disability Benefits are allowed. Roberts v. Total Health Care, Inc., 109 Md. App. 635, 650, 675 A.2d 995, 1002 (1996), aff’d, 349 Md. 499, 709 A.2d 142 (1998); see also Md. Cts. & Jud. Proc. § 11-112; contract. Made Whole Doctrine does not apply. Md. Code Ann., Cts. & Jud. Proc. § 11-112; See also Stancil v. Erie Ins. Co., 740 A.2d 46 (Md. App. 1999). Common Fund Doctrine applies. Md. Code Ann., Cts. & Jud. Proc. § 11-112 (*Reduction will not apply if insurer intervenes and actively participates).

Admissibility of Expert Testimony

Admissibility Standards: Daubert

Case/Statutory Law:  Md. Rule 5-702

Comments: In August 2020, the Court of Appeals of Maryland adopted the standard for admitting expert testimony under Daubert.  Rochkind v. Stevenson, 236 A.3d 630 (Md. 2020). Rule 5-702 (2021) remains applicable as has been adopted per a July 9, 2021 order adding a cross-reference to the Rochkind decision.

Pre-Suit Disclosure of Liability Policy Limits in Third-Party Claims

Duty To Disclose: Yes. Maryland Courts and Judicial Proceedings §§ 10-1101 – 1105.

Comments: An insurer must disclose their limits within 30 days if a claimant provides a written demand of at least $12,500 which includes the following information if available: (1) Date of accident, (2) Name and address of alleged tortfeasor, (3) Copy of accident report, (4) Claim number, (5) Claimant’s health bills and loss-wages documentation, and (6) Medical records.

Recording Conversations

All-Party Consent: The Wiretapping and Electronic Surveillance Act holds that it is unlawful to:

(1) Willfully intercept, endeavor to intercept, or procure any other person to intercept or endeavor to intercept, any wire, oral, or electronic communication;

(2) Willfully disclose, or endeavor to disclose, to any other person the contents of any wire, oral, or electronic communication, knowing or having reason to know that the information was obtained through the interception of a wire, oral, or electronic communication in violation of this subtitle; or

(3) Willfully use, or endeavor to use, the contents of any wire, oral, or electronic communication, knowing or having reason to know that the information was obtained through the interception of a wire, oral, or electronic communication in violation of this subtitle.

However, it is lawful to intercept a wire, oral, or electronic communication where the person is a party to the communication and where all of the parties to the communication have given prior consent. Md. Code Ann., Cts. & Jud. Proc. § 10-402 (c)(3

Product Liability Law

Statute of Limitations/Repose: 3 years for personal injury and wrongful death. Md. Cts. & Jud. Proc. § 5-101. Discovery Rule applies.

Liability Standards: Negligence, Strict Liability, Warranty.

Fault Allocations: Pure Contributory, except strict liability.

Non-Economic Caps/Limits On Actual Damages: Non-Economic Cap. Md. Cts. & Jud. Proc. § 11-108(b).

Punitive Y/N and Limits: Yes.

Heeding Presumption?: Yes. U.S Gypsum Co. v. Mayor of Baltimore, 647 A.2d 405, 413 (Md. 1994); Eagle-Picher Industries, Inc. v. Balbos, 604 A.2d 445, 468-69 (Md. 1992).

Innocent Seller Statute: Yes. Md. Cts. & Jud. Proc. § 5-405.

Joint and Several Liability: Yes. Md. Code § 3-1401.

Available Defenses: Assumption of Risk; Misuse; Alteration; Learned Intermediary; State of the Art; Presumption; Sophisticated User.

Restatement 2^nd or 3^rd?: Both.

“Matching Regulations” And Laws Affecting Homeowners Property Claims

Statute/Regulation: None.

Caselaw: None.

Comments: A bulletin from the Maryland Insurance Administration (“MIA”) notes that although the MIA does not always require a complete match of replaced siding under an RCV policy, “insurers whose settlement practices fail to take into account major differences in color shades, textures, or siding dimensions as provided above may be subject to action.” MIA Bulletin No. 97-1.

Condominium/Co-Op Waiver of Subrogation Laws

Associations must maintain property of common elements and general liability insurance. Additionally, the statute requires the insurer waive subrogation rights against any unit owner of the condo and members of their household. The statute also says that a unit owner may obtain insurance for their own benefit. Md. Code Real Property § 11-114 (adopting parts of the Uniform Common Ownership Act).

Damage to Property Without Market Value

Service Value:  No Case Law

Intrinsic Value:  The measure of damages is difference between value of property before and after its injury. Taylor v. King, 213 A.2d 504 (Md. 1965).

Sentimental Value:  Plaintiffs have not been permitted to recover for emotional injuries flowing from negligence-level torts for damage to their property. Brooks v. Jenkins, 104 A.3d 899 (Md. App. 2014).

General Contractor Overhead And Profit Payments In First-Party ACV Property Damage Claims

Payment And Depreciation Of GCOP/Sales Tax: No applicable case law, statutes, administrative rules, or other guidance with regard to the calculation and/or depreciation of GCOP.

Landlord/Tenant Subrogation

A tenant’s liability for damage to the leased premises in a subrogation action brought by the landlord’s insurer after paying the claim should be determined by the reasonable expectations of the parties to the lease, as determined from the lease itself and any other admissible evidence, on a case-by-case basis. Evidence outside the four corners of the lease may be relevant in some cases. Most generally, it clarified that a tenant’s liability to the landlord’s insurer depends on the reasonable expectations of the parties to the lease, “as determined from the lease itself and any other admissible evidence.” Rausch v. Allstate Ins. Co., 882 A.2d 801 (Md. 2005). A tenant’s liability in a subrogation action is determined by examining “the lease as a whole, along with any other relevant and admissible evidence,” to determine the reasonable expectations of parties to the lease. Fowlkes v. Choudhry, 248 A.3d 298, 311 (Md. 2021).

Anti-Subrogation Rule

Maryland courts recognize, as a legal principle, that an insurer may not recover from its insured, or a co-insured, as subrogee. Rausch v. Allstate Ins. Co., 882 A.2d 801 (Md. 2005).

Criminal Restitution

A court in Maryland has the ability to order a criminal defendant to pay restitution, and Maryland specifically enumerates by statute that restitution may be paid to an insurer. Even in light of this statute, the direct victim of the defendant’s criminal act has priority over the insurer in a right to restitution payment. Md. Code Ann. [Crim.] § 11‐606(a)(3), (b).

Made Whole Doctrine

Not only does Maryland not adopt the Made Whole Doctrine, it specifically disclaims it. Stancil v. Erie Ins. Co., 740 A.2d 46 (Md. App. 1999). In Stancil, the homeowner’s insurer that paid policy limits for fire destroying a home as a result of an automobile accident was entitled to subrogation from the tortfeasor before the insured was made whole. Id. The fact that the insured failed to properly insure his property created no responsibility by the insurer, and the principles of equity did not apply. Id. What is interesting about Maryland subrogation is that in order to waive or contract around the Made Whole Doctrine, it is not necessary to show intent of the parties through contract language or otherwise. All that is needed is a right of subrogation expressed in the contract or Plan. Id. It should be noted that while the court’s decision in Stancil is favorable and makes subrogation sense, the court in that decision distinguished between the property insurance policy at issue in that case and generic health insurance policies or Plans:

Health insurance policies differ from the policy involved sub judice which has a precise policy limit, a maximum amount that the insurer is required to pay. Health insurance policies do not require the insured to select a maximum overall limit. The limits are set by the company depending on the medical service provided. Here, Stancil decided on the limit and chose one that was less than the real value of his property. Id. at 48.

Whether and to what extent this health insurance/property insurance distinction affected the court’s decision and will affect the decisions of future appellate courts hearing similar matters involving health insurance subrogation is not certain at this point. Maryland courts have held that, in the context of homeowner’s insurance policy in which insured elected not to fully insure his property, principles of equity did not require insured to be made whole before insurer was entitled to subrogation. Id. The court distinguished Stancil from those cases involving health care claims, recognizing that the principles of equity might demand that the insured be made whole before insurer would be entitled to subrogation in the context of health care claims.

Medical Expenses, Insurance Write-Offs, and The Collateral Source Rule

Collateral Source Rule: Maryland has employed the common law CSR since 1899. Norfolk Southern Ry. Corp. v. Tiller, 944 A.2d 1272 (Md. App. 2008). It permits plaintiff to recover the full damages, regardless of collateral sources plaintiff received from sources unrelated to the tortfeasor. A benefit that is directed to the injured party should not be shifted so as to become a windfall for the tortfeasor. Motor Vehicle Admin. v. Seidel, 604 A.2d 473, 254 (Md. App. 1992) (citing Restatement (Second) of Torts, § 920A(2), comment (b)).

Recovery Of Medical Expenses Rule:

Private Insurance: Payments received from private insurance are prohibited from consideration due to CSR. Narayen v. Bailey, 747 A.2d 195 (Md. App. 2000).

Medicare/Medicaid: Payments from government entities are also not to be considered pursuant to the CSR. Narayen, supra.

Related Law/Comments:

Exceptions to CSR: (1) Collateral source may be admissible to rebut a false claim of impoverishment by plaintiff. Abrishamian v. Barbely, 981 A.2d 797 (Md. App. 2009); and (2) Collateral benefits may be admissible if relevant to the issue of malingering. Tiller, supra.

Medical Malpractice: Under the non-economic damages cap applicable to medical malpractice claims, past medical expenses are limited to amounts paid by or on behalf of plaintiff, and amounts incurred but not paid but for which another person, on behalf of the plaintiff, is obligated to pay. Permits evidence of this nature in post-verdict proceedings. After receiving collateral source evidence in a medical malpractice action after the verdict is rendered, the trial court may determine whether damages awarded are excessive, and is not required to declare the damages excessive simply because plaintiff has been or will be reimbursed by a collateral source. Md. Code Ann. Courts & Jud. Proc. §§ 3-2A-06, 3-2A-09(d).

Employee Leasing Laws

Maryland case law holds that where there is an implied contract of hire between an employee provided by a temporary services agency and the client company, the client company is considered the employee’s special employer and is afforded protection under the Exclusive Remedy Rule. Travelers Indem. Co. v. Ins. Co. of North Am., 519 A.2d 760 (Md. App. 1987). The employee is considered jointly employed by the temporary services agency and the client company.

Hospital Lien Laws

Statute: Md. Code §§ 16-601 – 605. Hospital’s Lien.

Perfecting Lien: To properly perfect a lien in Maryland, the hospital must:

(1) File a notice of lien with the clerk of the circuit court of the county where the medical or other services were provided. § 16-602.

(2) Send a copy of the notice of lien and a statement of the date of its filing by registered or certified mail to the person alleged to be liable for the injuries received by the patient. § 16-602.

(3) The notice of lien shall be in writing and shall contain: (a) name and address of injured patient; (b) date of accident; (c) name and location of hospital; (d) amount claimed; and (e) name of person alleged to be liable for injuries received. § 16-602.

(4) The hospital also shall send a copy of the notice of lien by registered or certified mail to any insurance carrier known to insure the person alleged to be liable for the injuries received by the patient. § 16-602.

Comments: The lien in Maryland is only for 50% of the recovery or sum which the patient may collect in judgment, settlement, or compromise. § 16-601(a). A hospitals lien is subordinate to an attorney’s lien for services rendered in collecting or obtaining damages. § 16-601(c). The lien does not attach to any workers’ compensation benefits. § 16-601(a).

OCIP/CCIP Subrogation In Workers’ Compensation Construction Cases

OCIP Law: The Exclusive Remedy Rule applies to an owner who has provided workers’ compensation coverage for all employees of subcontractors through an OCIP/CCIP program. Rodriguez Novo v. Recchi America, Inc., 846 A.2d 1048 (Md. App. 2004).

Statutory Employer Law: Maryland law requires a principal contractor to provide and pay workers’ compensation benefits to the employee of any contractor or subcontractor, provided that the work undertaken is part of the business, occupation, or trade of the principal contractor. Md. Labor § 9-508. Therefore, when certain conditions are met, the Act broadens the definition of “employer” to cover “principal contractors” that ordinarily would not be considered employers under common law. To have immunity under the Exclusive Remedy Rule in Maryland, a principal contractor must: (1) have contracted to perform the work; (2) which is a part of his trade, business, or occupation; and (3) must have contracted with a subcontractor for the execution by or under the subcontractor of the whole or any part of such work. Principal contractors who do not meet the requirements of § 9-508 are not considered “statutory employers” and can be sued as third parties. Honaker v. W. C. & A. N. Miller Development Co., 365 A.2d 287 (Md. 1976).

Comments: A principal employer under Md. Labor § 9-508 is entitled to Exclusive Remedy protection even if it does not actually provide workers’ compensation benefits to the employee of a subcontractor. Para v. Richards Group of Washington Ltd. Partnership, 339 Md. 241 (Md. 1995).

Recovery Of Increased Workers’ Compensation Premiums By Employer

Recovery For Increased Premiums? Undecided.

Statute/Case Law: None. But See Young v. Sass, 2006 WL 4104497 (Md. Cir. Ct. 2006). Briefing by defendant says, “Although the Maryland Courts have not directly addressed this issue, numerous other jurisdictions have done so, and the vast majority of those jurisdictions have rejected such claims.” Young v. Sass, 2005 WL 5250191 (Md. Cir. Ct. 2005).

Rule Summary: There is no authority or precedent regarding the attempted recovery of damages for increased workers’ compensation insurance premiums by an employer from a third-party tortfeasor. Such a cause of action has been attempted but not successfully brought to a conclusion.

Which Workers’ Compensation “Benefits” Can Be Subrogated?

There is no precedent or discussion in case law regarding whether nurse case management fees or other allocated costs which may benefit the employer and/or employee can be recovered in subrogation. Section 9-902 describes a workers’ compensation carrier’s subrogation interest as follows:

… compensation paid or awarded and the amount of payments for medical services, funeral expenses, or any other purpose under Subtitle 6 of this title.… Md. Lab. & Empl. § 9-902(b).

Subtitle 6 is entitled “Benefits.” Section 9-660 is under Subtitle 6 and is entitled “Provision of medical services and treatment.” It lists the medical services required to be paid by the carrier:

(1) medical, surgical, or other attendance or treatment;

(2) hospital and nursing services;

(3) medicine;

(4) crutches and other apparatus; and

(5) artificial arms, feet, hands, and legs and other prosthetic appliances.

This subsection describes the medical bills that can be recovered. It refers generically to “nursing services.” Section 9-6A-09 concerns “Rehabilitation Practitioners” and sets forth the qualifications for a “nurse case manager”, a “rehabilitation counselor”, and a “vocational evaluator.”

Workers’ Compensation Subrogation Waiver Endorsements

Subrogation Statute: Md. Lab. & Empl. § 9-901-903

Waiver Allowed? Yes. Heat & Power Corp. v. Air Products & Chemicals, Inc., 578 A.2d 1202 (Md. App. 1990).

Effect Of Waiver Endorsement on Carrier’s Right To Assert A Lien On Claimant’s Recovery: The effect of a waiver of subrogation on the carrier’s rights, including its right to enforce its statutory lien, has not yet been decided.

Other Applicable Law: None.

Workers’ Compensation

Statute of Limitations:  3 Years. Md. Emp. & Lab. Code Ann. § 9-901-903.

Can Carrier Sue Third Party Directly:  The carrier has an exclusive right for 2 months after first award of compensation. Joint right to file after 2 months.

Right to Intervene:  Yes.

Recovery from UM/UIM Benefits:  No.

Subrogation Against Medical Malpractice:  Yes, if malpractice aggravates the injury.

Subrogation Against Legal Malpractice:  Undecided.

Recovery Allocation/Equitable Limitations:  Carrier gets first money, less fees and costs.

Employer Contribution/Negligence:  No.

Attorney’s Fees/Costs:  Pro-rata, unless an intervention is necessary.

Future Credit:  Yes.

Auto No-Fault:  No.

Workers’ Compensation Claims by Undocumented Employees

Y/N/U:  Y

Statute:  The statute covers all individuals, and mentions unlawful employment, but in the context of minors. It is silent on “illegal alien” and their legal status.  Md. Code, Lab. & Emp. Law § 9-202(a).

Case Law:  Design Kitchen and Baths v. Lagos, 882 A.2d 817 (Md. Ct. Spec. App. 2005).

Comments/Explanation/Other:  Lagos held that undocumented aliens who are injured in the course and scope of employment are a “covered employee” for workers’ compensation purposes, and the IRCA does not preempt the state’s workers’ compensation laws.