UNREPORTED IN THE COURT OF SPECIAL APPEALS OF

*This is an unreported opinion, and it may not be cited in any paper, brief, motion, or other

document filed in this Court or any other Maryland Court as either precedent within the rule of

stare decisis or as persuasive authority. Md. Rule 1-104.

UNREPORTED

IN THE COURT OF SPECIAL APPEALS

OF MARYLAND

No. 1662

September Term, 2014

KEVIN PRICE

STATE FARM INSURANCE COMPANY, et al.

Nazarian,

Leahy,

Wilner, Alan M.

(Retired, Specially Assigned),

JJ.

Opinion by Wilner, J.

Filed: September 14, 2015

— Unreported Opinion —

On the evening of January 25, 2012, Ronald Krach, while operating his 2004 Dodge

Dakota along Belair Road in Baltimore City, struck and killed Joice Price, who was

crossing the street in a motorized wheelchair. As a result of that event, a civil action was

filed against Krach by Kevin Price, individually and as personal representative of Joice’s

Estate.

When an issue arose as to whether Krach was insured with respect to that collision,

Price filed an action in the Circuit Court for Baltimore City against Krach, State Farm

Insurance Company, and the Maryland Automobile Insurance Fund (MAIF), seeking a

declaratory judgment that Krach had in effect at the time of the accident a liability

insurance policy issued by State Farm --Policy No. 305 7282-F27-2-8 -- in the amount of

$250,000 per person and $500,000 per occurrence. That was the only relief sought.

State Farm answered the complaint and filed a motion for summary judgment on

the principal ground that the policy in question had been cancelled as of 12:01 a.m. on

January 24, 2012 due to Krach’s failure to pay the premium on the policy and that the

policy had not been reinstated prior to the accident. Although Price, Krach, and MAIF

contended that the premium should be regarded as having been timely paid, the court

determined, orally, that the premium had not been paid in time to avoid cancellation and

that, at the time of the accident, the policy had been cancelled and had not been reinstated.

— Unreported Opinion —

Upon those determinations, it entered an order granting State Farm’s motion. This appeal

by Price, with support from MAIF, as an appellee, ensued.

Unfortunately, although the court did address and resolve, in the context of the

motion for summary judgment, the legal issue presented, it never entered a declaratory

judgment declaring the rights of the parties, which is the one and only thing it was asked

to do. The Court of Appeals, on numerous and recent occasions, has made unmistakably

clear that, although it is permissible for a Circuit Court to resolve matters of law by

summary judgment in declaratory judgment actions, “the court must, in a separate

document and in writing, define the rights and obligations of the parties or the status of the

thing in controversy” even if “the action is not decided in favor of the party who sought

the declaratory judgment.” (Emphasis added). Allstate v. State Farm, 363 Md. 106, 117,

n.1, 767 A.2d 831, 837, n.1 (2001); Lovell Land v. SHA, 408 Md. 242, 256, 969 A.2d 284,

292 (2009), Catalyst Health v. Magill, 414 Md. 457, 472, 995 A.2d 960, 968 (2010),

Montgomery County v. Shropshire, 420 Md. 362, 371, n.7, 23 A.3d 205, 210 (2011),

DeWolfe v. Richmond, 434 Md. 403, 433, 76 A.3d 962, 979 (2012).

An order stating only

that one party’s motion for summary judgment is granted “fails to comply with the

State Farm has filed a motion to strike MAIF’s brief on the ground that, as MAIF

did not file a cross-appeal, it is impermissible for it to request that the judgment below be

reversed. In light of our decision effectively to affirm the ruling of the Circuit Court, the

motion is moot.

As Allstate v. State Farm makes clear, the requirement of a separate written

declaration “is not just a matter of complying with a hyper-technical rule.” Rather, it is

“for the purpose of giving the parties and the public fair notice of what the court has

determined.” Id . at 117, n.1 767 A.2d at 837, n.1.

— Unreported Opinion —

Declaratory Judgments Act requirement that the court declare the parties’ rights in light of

the issues presented.” Jennings v. Government Employees Ins., 302 Md. 352, 356, 488

A.2d 166, 168 (1985).

As some of those cases also make clear, however, the lack of a separate written

declaratory judgment is not a jurisdictional defect. The appellate courts have discretion to

review the merits of the controversy and remand for entry of an appropriate declaratory

judgment by the circuit court. The record before us in this case permits us to do that, and

that is what we shall do. The beneficent exercise of our discretion in this case should not,

however, be regarded as a right to have this kind of dereliction excused.

FACTS BEARING ON SUMMARY JUDGMENT

As noted, primary coverage on the Dodge Dakota owned by Krach was provided by

State Farm Policy No. 305 7282-F27-20S. Krach’s wife, Angela Sheldon, owned two other

vehicles that also were covered by State Farm policies – a 2011 GMC Terrain covered by

Policy No. 130 0588-D18-20B and a 2001 Pontiac Montana covered by Policy No. 602

2358-F-10-20E. The premiums on Sheldon’s policies were up-to-date; nothing was owed

on them, and those policies were in full force and effect. Krach was delinquent, however,

in paying the premium due for the renewal of his primary policy which, according to the

Declarations page, was due to expire at 12:01 a.m. on December 27, 2011.

It appears from an affidavit of Wendy Riggs-Richie, a State Farm custodian of

records, submitted as Exhibit 11 to the Motion for Summary Judgment, that Morgan Krach

also was an insured under Ronald Krach’s policy and that, on November 10, 2011, Ronald

Krach was notified that the policy would not be renewed unless Morgan Krach was

excluded as an insured. Krach agreed to that condition, whereupon, on (continued…)

— Unreported Opinion —

On January 11, 2012, State Farm sent a cancellation notice to Krach, informing him

that the renewal premium of $439.20 was past due and if that amount was not paid, the

policy would be cancelled effective 12:01 a.m. standard time on January 24, 2012. The

notice stated that payment of the premium prior to “the date and time of cancellation”

would reinstate the policy, but if the premium was paid “after that date and time, you will

be informed whether your policy has been reinstated and, if so, the exact date and time of

reinstatement.” (Emphasis added). The notice added that “[t]here is no coverage between

the date and time of cancellation and the date and time of reinstatement.” (Emphasis

added).

At some point on January 24, 2012, Sheldon electronically directed her bank, Wells

Fargo, to pay $590.52 to State Farm. In an affidavit submitted in opposition to the Motion

for Summary Judgment, Sheldon averred that she directed that payment on behalf of her

husband, that she intended that it be applied to the policy covering his Dodge Dakota, that

she assumed it would be credited to that policy, and that she also assumed that, being sent

electronically, it would be received by State Farm that day. Krach submitted an affidavit

containing similar averments. Neither affidavit specifies what time on the 24

the direction

was sent to Wells Fargo, specifically whether it was at or before 12:01 a.m. Neither Price,

nor anyone else, has contended that Sheldon directed that payment at or prior to 12:01 a.m.

December 5, 2011, State Farm sent Krach a renewal bill for $439.20 and advised that

payment of that amount was due no later than January 5, 2012.

— Unreported Opinion —

The only reasonable inference is that her communication with Wells Fargo was after 12:01

a.m.

Two exhibits to the motion for summary judgment – Exhibits 5 and 6 -- when read

together, are inconsistent with Krach’s and Sheldon’s assumption as to when the payment

would be received by State Farm and also raise a question regarding their assumption that

State Farm would apply the payment to Krach’s primary policy. An online payment

confirmation from Wells Fargo (Exhibit 5) confirms that Sheldon directed the payment to

State Farm on January 24 and states that her direction would be “processed” on the 24

but it also states clearly that the payment would be “Deliver[ed] by” January 26, 2012.

From the face of the document, Sheldon was immediately on notice that State Farm may

not receive the payment until January 26, and that is what the evidence shows occurred. A

State Farm Bill and Payment Summary (Exhibit 6) shows that the payment was made by

“CHECKFREE,” an undefined term, and states that the sum was not, in fact, received by

State Farm until January 26.

With respect to how the payment would be applied by State Farm, there was no

direction to Wells Fargo, or any other communication prior to January 26, 2012, that State

Farm apply the payment to Krach’s primary policy, and, indeed, when the payment was

received by State Farm on the 26

, it applied the payment to Sheldon’s policy that insured

her GMC Terrain. Sheldon later contended that her failure to specify that the payment

should be applied to Krach’s policy was due to the “confusing and ambiguous layout and

— Unreported Opinion —

lack of description on the bill-pay site,” presumably meaning the Wells Fargo electronic

payment site.

The accident, as noted, occurred on the evening of January 25. Krach reported the

accident to State Farm the next day. It was not until then that Krach and Sheldon

discovered that Sheldon’s payment had not been received on the 24

and that, when

received on the 26

, it had been applied to the “wrong” policy. On the 26

, Krach paid the

correct amount due -- $ 439.20 – by credit card, whereupon State Farm sent Sheldon a

refund of the $590.42 she had paid, reinstated Krach’s policy as of 12:01 a.m. on

January 27, 2012, and sent Krach a refund of $7.48 for the three days his policy was out of

force (January 24, 25, and 26). It also informed Krach that it reserved the right to deny

coverage for the January 25 accident. That, of course, is what led to this declaratory

judgment action.

DISCUSSION

The standard of appellate review of a declaratory judgment entered as the result of

granting a motion for summary judgment is whether the declaration is correct as a matter

of law. We review the record in a light most favorable to Price, the non-moving party, and

construe any reasonable inferences that may be drawn from the facts against State Farm,

the moving party. If there are no genuine disputes of material fact, we review, de novo,

the trial court’s conclusions of law. Land Preservation v. Claggett, 412 Md. 45, 61, 985

A.2d 565, 574-75 (2009); DeWolfe v. Richmond, 434 Md. 403, 412, n.6, 76 A.3d 962, 967,

n.6 (2012). Ordinarily, the appellate court is confined to the legal grounds relied on by the

— Unreported Opinion —

trial court in granting the summary judgment. Pasteur v. Skevofilax, 396 Md. 405, 440-41,

914 A.2d 113, 134 (2007).

At the hearing in the Circuit Court, the argument in opposition to the motion for

summary judgment centered on a proposed extension of the “postal acceptance rule,”

which is to the effect that, when a party consents to a required communication, including a

payment, being sent by mail, the communication is regarded as received by that party when

it is properly delivered to the U.S. Postal Service. See Reserve Insurance v. Duckett, 249

Md. 108, 116-122, 238 A.2d 536. 540-43 (1968); U.S. Life v. Wilson, 198 Md. App. 452,

466-81, 18 A.3d 110, 117-127 (2011) (applying Illinois law). Price argued that the same

principle should apply to electronic transmissions, the effect of which would be that State

Farm should be regarded as having received Sheldon’s payment on January 24 – the day

she directed Wells Fargo to make the payment – and that, because nothing was due on her

policies, State Farm should have credited that payment to her husband’s policy, even

though there was no direction for it to do so, she was not the owner of the insured vehicle,

and the amount was in excess of the premium that was due – overdue – on that policy.

In support of its motion, State Farm contested those arguments, but its main point

was that they were irrelevant. It urged that, by the clear terms of the cancellation notice,

Krach’s primary policy was cancelled as of 12:01 a.m. on January 24, and it was undisputed

that, even if Sheldon’s payment were to be regarded as received by State Farm the moment

she pushed the button authorizing Wells Fargo to send it, that was undisputedly after 12:01

a.m. By then, the policy had been cancelled; it was no longer in effect and was not subject

— Unreported Opinion —

to automatic reinstatement. That was the basis – the only basis – on which the court granted

the motion for summary judgment, and it was legally correct in doing so. Whether, and

under what circumstances, the postal acceptance rule should be extended to apply to

electronic transmissions is an interesting and important question, but it is not relevant to

this case. From his remarks, it is clear that the trial judge’s heart was with Mr. Price, but

his mind was where it needed to be.

CASE REMANDED TO CIRCUIT COURT FOR BALTIMORE

CITY TO ENTER A PROPER DECLARATORY JUDGMENT

IN CONFORMANCE WITH THE SUMMARY JUDGMENT

ENTERED ON SEPTEMBER 15, 2014; APPELLANT TO PAY

THE COSTS.