Circuit Court for Baltimore City
Case No. 24-C-12-002377
Argued: 11/10/14




                                   IN THE COURT OF APPEALS OF MARYLAND



                                                 No. 21


                                          September Term, 2014



                                   PEOPLE'S INSURANCE COUNSEL DIVISION


                                                   v.


                                   STATE   FARM   FIRE    AND   CASUALTY
                                   COMPANY, et al.




                                        Barbera, C.J.
                                        Harrell
                                        Battaglia
                                        Greene
                                        Adkins
                                        McDonald
                                        Watts,

                                                          JJ.




                                             PER CURIAM ORDER
                                    Adkins and McDonald, JJ., dissent.


                                        Filed: February 24, 2015
PEOPLE'S INSURANCE COUNSEL     *     IN THE
DIVISION
                               *     COURT OF APPEALS

          v.                   *     OF MARYLAND

                               *     No. 21

STATE FARM FIRE AND CASUALTY   *     September Term, 2014
COMPANY, et al.


                     PER CURIAM ORDER

     The petition for writ of certiorari in the above-entitled case

having been granted and argued, it is this 24th day of February,

2015,

     ORDERED, by the Court of Appeals of Maryland, that the writ of

certiorari be, and it is hereby, dismissed with costs, the petition

having been improvidently granted.




                                     /s/ Mary Ellen Barbera
                                              Chief Judge



Judge Adkins and Judge McDonald dissent.
Circuit Court for Baltimore City
Case No.: 24-C-12-002377
Argued: 11/10/2014
                                      IN THE COURT OF APPEALS

                                             OF MARYLAND



                                                   No. 21

                                           September Term, 2014



                                    PEOPLE’S INSURANCE COUNSEL
                                              DIVISION

                                                     v.

                                   STATE FARM FIRE AND CASUALTY
                                           COMPANY, et al.


                                            Barbera, C.J.
                                            Harrell
                                            Battaglia
                                            Greene
                                            Adkins
                                            McDonald
                                            Watts,

                                                   JJ.



                                   Dissenting Opinion by Adkins, J., which
                                             McDonald, J., joins.



                                                   Filed: February 24, 2015
       Because I think that this Court should act with great restraint when choosing to

dismiss a case as improvidently granted, both because it is unfair to the parties and a waste

of judicial resources, I dissent.

       This appeal arose from an insurance dispute between Gregory and Moira Taylor and

their insurer, State Farm Fire and Casualty Company. The Taylors’ carport collapsed under

the weight of snow during the 2010 blizzard, a severe storm that presumably led to similar

property damage to perhaps thousands of other Marylanders. The Taylors challenged State

Farm’s decision that their homeowner’s insurance policy did not cover the damage. They

asked the Maryland Insurance Administration (“MIA”) for a formal investigation of the

claim denial. The MIA denied the complaint,1 and the Circuit Court for Baltimore City

affirmed its decision. On appeal, the Court of Special Appeals affirmed, holding that

“[b]ecause State Farm’s decision to deny the Taylors’ claim was based on a correct legal

interpretation of the language of the Policy, it was not arbitrary, capricious, or made

without good faith.” People’s Ins. Counsel Div. v. State Farm Fire & Cas. Ins. Co., 214

Md. App. 438, 457, 76 A.3d 517, 528 (2013).

       The People’s Insurance Counsel Division2 petitioned this Court for a writ of

certiorari, asking us to answer the following questions:


       1
         After the MIA’s initial determination denying the complaint and concluding that
State Farm did not violate any insurance laws, the Taylors requested a hearing, at which
time the People’s Insurance Counsel Division joined the litigation. The MIA again denied
the Taylors’ complaint.
       2
        The People’s Insurance Counsel Division was created in 2005 as part of the
Maryland Patients’ Access to Quality Health Care Act of 2004, Md. Code (1984, 2009
Repl. Vol.), §§ 6-301–08 of the State Government Article (“SG”). Its duties include: (1)
             1. Should this Court reexamine Maryland common law on
                construing insurance contracts and, recognizing that such
                contracts are not the product of equal bargaining, hold that
                terms contained in an insurance policy must be strictly
                construed against the insurer?

             2. Did the Commissioner err in allowing State Farm to deny
                coverage for damage to a collapsed carport under a policy
                that insured against “the sudden, entire collapse of a
                building” based on a restrictive definition of the term
                “building” that does not appear in the insurance policy or
                any other written document, and is based solely on oral
                instructions given to a catastrophe claims adjuster when she
                was dispatched to handle claims following a severe
                snowstorm?

After we granted the writ, the parties filed briefs, and we held oral argument on November

10, 2014. A majority of this Court now thinks that grant of certiorari was error and

dismisses the appeal as improvidently granted. I disagree and would address the merits.

      Writing for the Court, Judge McDonald recently described the limited bases upon

which we will dismiss a case as improvidently granted:

             On occasion, this Court dismisses a case after briefing and
             argument on the ground that the petition for writ of certiorari
             was improvidently granted. In such cases the grant of the
             petition was a mistake, either because it becomes apparent later
             that there is truly no issue of public importance in the case or
             because there is such an issue, but it was not preserved below




evaluating matters pending before the MIA and intervening on behalf of insurance
consumers; (2) reviewing rate increases of 10% or more filed with the MIA; and (3)
conducting investigations and requesting the MIA to initiate an action to protect the
interests of insurance consumers. SG § 6-306.
                                            2
                or the record in the case provides an inadequate basis for
                rendering useful guidance on that issue.

Sturdivant v. Md. Dep’t. of Health & Mental Hygiene, 436 Md. 584, 589, 84 A.3d 83, 86

(2014). Thus, to dismiss a case as improvidently granted, we should first conclude that

there is no issue of public importance, that the issue was not preserved, or that there is an

inadequate record by which to render useful guidance. As I will explain, none of these

grounds is present here. First, though, further review of the law on such dismissals is in

order.

         This is not the first time a judge on this Court has criticized a decision to dismiss as

improvidently granted (or “DIG,” as it is colloquially termed). In a dissent from one such

dismissal, Chief Judge Robert Bell (ret.) opined:

                The Court of Appeals has a responsibility to decide any case
                properly presented that meets the threshold criteria: presenting
                issues that it is desirable and in the public interest to decide.
                That responsibility, as to any issue, may be triggered by such
                considerations as novelty, complexity, conflicting precedents,
                impact or importance and the breadth or extent thereof and
                likelihood of recurrence.

                Once a “cert” worthy case has been accepted on certiorari,
                there must be a compelling reason not to decide it; it really
                must have been improvidently granted.

Koenig v. State, 368 Md. 150, 151, 792 A.2d 1124, 1125 (2002) (Bell, C.J., dissenting)

(emphasis added). Chief Judge Bell (ret.) brought into focus the injury to the Court’s

reputation that can arise from a DIG, when he said:

                On the morning that this case was heard, a young lawyer spent
                the first part of her argument thanking the Court for taking the
                case that she was arguing as the petitioner. At great length, she
                spoke of the importance of the issue, the complexity and the

                                                3
              need for resolution for the guidance of bench and bar and,
              again, expressed her gratitude that the Court had granted
              certiorari to review it. Being of the view that there was no
              reason for the attorney to thank the Court for doing what it is
              mandated to do, I interrupted her, offering a simple, but what I
              thought was, and still think is an, accurate, explanation for
              doing so: “That is what we do.” Granting certiorari to
              consider and resolve some novel, difficult and complex
              issue and broadly relevant issue is indeed what we do. In
              fact, as the court of last resort in this State, charged, in
              addition with setting the legal policy, that is, it may be said,
              the Court’s “raison d’etre.” In this case, I fear that we have
              not justified to the people of this State, whom we are
              mandated to serve, our “raison d’etre.”

Id. at 159, 792 A.2d at 1129–30 (emphasis added). I, too, fear that in issuing a DIG after

oral argument in this case, we have not justified our “raison d’etre.”

       Dismissal of a meritorious case as improvidently granted draws attention and

criticism from Court observers and commentators. See, e.g., Samuel Estreicher & John E.

Sexton, A Managerial Theory of the Supreme Court’s Responsibilities: An Empirical

Study, 59 N.Y.U. L. Rev. 681, 802 (1984) (“Occasionally the Justices dismiss a writ of

certiorari as improvidently granted. As recently illustrated by Gillette Co. v. Miner [459

U.S. 86, 103 S. Ct. 484, 74 L. Ed. 2d 249 (1982)] and Westinghouse Electric Corp. v.

Vaughn, [466 U.S. 521, 104 S. Ct. 2163, 80 L. Ed. 2d 531 (1984)] this practice wastes

scarce judicial resources and seriously damages the Court’s credibility.”).3




       3
          Although one “DIG” will not jeopardize a Court’s credibility, we must ever remain
alert to court practices and decisions that might produce even a smidgen of distrust in our
proceedings. See Thurgood Marshall, Supreme Justice: Speeches and Writings, at 268 (J.
Clay Smith, Jr. ed., 2003) (“We must never forget that the only real source of power that
we as judges can tap is the respect of the people.” (footnote omitted)).
                                             4
       Looking to our sister states, I find dissenting judges equally disturbed about the

unfairness to the litigants and the injury to the court’s reputation that will arise from the

majority’s decision to dismiss a case as improvidently granted. See, e.g., In re D.C., 157

Ill. 2d 525, 526, 648 N.E.2d 602, 603 (Ill. 1995) (Miller, J., dissenting) (“[D]ismissal of

the present appeal can be explained on only one ground: that members of this court who

initially voted in favor of review have now concluded that the issue raised here does not

warrant our attention. Although we do not lack the authority to dismiss a discretionary

appeal because of a change of mind, we must also be aware that the repeated exercise

of the dismissal power on this ground calls into question the adequacy of our

procedures for selecting cases for review.” (emphasis added)); Smith v. State, 72 S.W.3d

353, 354–55 (Tex. Crim. App. 2002) (Cochran, J., dissenting) (“[T]his Court was fully

aware of these procedural problems and record omissions when we granted the State’s

petition. We knew that granting the petition would require us to cut through a Gordian

knot, and now we have shrunk from that task. Our dismissal is not fair to the litigants,

who have spent countless hours preparing their briefs, researching the law, and

presenting cogent written arguments to this Court.” (emphasis added)); Israel Pagan

Estate v. Capital Thrift & Loan, 771 P.2d 1032, 1033 (Utah 1989) (Howe, J., dissenting)

(“I believe that dismissing the writ as having been improvidently granted and refusing to

reach and rule on the merits of the case are grossly unfair to the parties at this juncture.

There has been no change in circumstances since the writ was granted, nor has the basis

upon which review was permitted been found to be nonexistent.” (emphasis added)). All

these reasons militate against dismissal in this case.

                                              5
       We should carefully abide by a fair and consistent standard in making decisions to

dismiss writs as improvidently granted. Sturdivant was clear and straightforward in its

enunciation of the standard. To dismiss this case as improvidently granted, then, we must

first conclude that: (1) there is no issue of public importance presented; (2) the issue was

not preserved; or (3) there is an inadequate record by which to provide useful guidance.

See Sturdivant, 436 Md. at 589, 84 A.3d at 86. This case does not fit any of these criteria.

       The public importance of the issues presented in this case is clear. Interpretation of

this policy language would impact thousands of Marylanders with carports or similar

structures. Further, with this dismissal, both insureds and insurance companies will be

denied the benefit of a definitive ruling from this Court interpreting this widely-used

contract and assessing what constitutes a failure to act in good faith within the meaning of

Md. Code (1995, 2011 Repl. Vol.), § 27-303 and § 27-1001 of the Insurance Article (“IN”).

A decision on the merits affords an opportunity to refine our law establishing the rules

regarding construction of insurance policies, especially when an ambiguity is present.

       Regarding Sturdivant’s third criterion, the adequacy of the record before this Court

cannot be assailed. The MIA proceedings included extensive evidence-gathering and

testimony. The parties provided us with extensive documentation of the insurance policy,

the claims dispute, and the proceedings below.

       I can only speculate that the Court now dismisses on preservation grounds. Yet, I

see no procedural defect in this appeal. In February 2010, a blizzard caused the Taylors’

carport to collapse from the weight of snow. When State Farm denied them coverage for

damage to the carport, they filed a complaint with the MIA. Throughout this process, the

                                             6
Taylors and People’s Insurance Counsel Division contended that the policy should include

coverage for the carport’s collapse. They consistently asserted that State Farm arbitrarily

made the policy determination to exclude coverage for carports only in the immediate wake

of the 2010 blizzard. State Farm offered nothing to contradict the assertion, and indeed,

its own employees and experts testified that they were not previously aware of this policy.

       State Farm argues instead that the Taylors incorrectly brought their claim under

IN § 27-303—which addresses unfair claim settlement practices—under which the Taylors

had an administrative remedy, but had to prove that State Farm failed to act in good faith.

They—and amici—argue that IN § 27-1001 of the Insurance Article was the proper vehicle

under which to challenge State Farm’s interpretation of their policy. Perhaps the Taylors

would have fared better under IN § 27-1001, where they could recover damages for a mere

breach of contract under subsection (e)(2).4 But they still have the right to pursue a claim



       4
         In pertinent part, Md. Code (1995, 2011 Repl. Vol.), § 27-1001 of the Insurance
Article reads:
               (e)(2) With respect to the determination of damages under
               paragraph (1)(i)5 of this subsection:
                      (i) if the Administration finds that the insurer
                      breached an obligation to the insured, the
                      Administration shall determine the obligation of
                      the insurer to pay:
                              1. actual damages, which actual
                              damages may not exceed the limits
                              of any applicable policy; and
                              2. interest on all actual damages
                              incurred by the insured[; and]
                      (ii) if the Administration also finds that the
                      insurer failed to act in good faith, the
                      Administration shall also determine the
                      obligation of the insurer to pay:
                                             7
under IN § 27-303, so long as they can prove State Farm engaged in an unfair settlement

practice, which in this case would mean they failed “to act in good faith, as defined under

§ 27-1001.” IN § 27-303(9). Even with the more limited scope of such an administrative

claim, the Court should go forward with its decision to grant certiorari—we did not grant

the writ only to decide a claim under the broader IN § 27-1001.

       Another procedural roadblock thrown up by State Farm is that the Taylors did not

argue, at the Circuit Court level, as they do here, that Maryland’s law on contract

interpretation involving insurance policies should be modified so that the terms of the

policy “should be strictly construed against the insurer.” This may be so, although

Petitioner made the argument to the Court of Special Appeals. But any failure to preserve

this issue would have minimal impact on our decision. The absence of the broad issue of

contract interpretation does not make the important and far-reaching issues in this case

disappear. No one questions that Maryland abides by the “construe against the drafter”

principle of contract interpretation. See Sullins v. Allstate Ins. Co., 340 Md. 503, 508–09,

667 A.2d 617, 619 (1995). And the insurance company is always the drafter. Although

the rule advocated by Petitioner and our existing rule may have subtle distinctions, the case

can certainly be resolved using our well-settled rules of contract construction.         So,


                            1. expenses and litigation costs
                            incurred by the insured, including
                            reasonable attorney’s fees, in
                            pursuing recovery under this
                            subtitle; and
                            2. interest on all expenses and
                            litigation costs incurred by the
                            insured[.]
                                             8
regardless of whether the first issue is preserved, we should resolve the question of whether

we should reverse the MIA’s decision that State Farm did not act arbitrarily in denying the

claim under IN § 27-303(2) or (9). If we hold that the MIA erred, then the statute provides

a remedy under IN § 27-301 and IN § 27-303. If the MIA acted reasonably in finding that

State Farm’s actions were not arbitrary, then this section does not provide the Taylors or

People’s Insurance Counsel with the administrative remedy they sought. By dismissing

this case as improvidently granted, we leave this issue unresolved.

       In the absence of any of the three reasons we have previously offered for dismissing

a case as improvidently granted, we should consider and rule upon the merits of this case.

As Chief Judge Bell (ret.) said, in dissenting to another DIG, “[t]he Court was not misled

concerning the case by information supplied or withheld. Nor could there be any mistaken

assumptions about the case. It is not enough to want to avoid an issue, squarely presented.”

Jacobson v. Sol Levinson & Bros., 371 Md. 442, 449, 809 A.2d 691, 695 (2002) (Bell, C.J.,

dissenting).

       Our decision to avoid these questions does nothing to clarify or advance the law.

And it gives short shrift to the litigants before us after they have performed the onerous

work of preparing briefs and record extracts, as well as preparing and conducting oral

arguments. We owe the parties and the people of the State due consideration of the issues

properly presented. Here, unfortunately, the litigants and public are left in the dark again,

in a case that could impact thousands of Maryland homeowners.




                                             9
       Chief Judge Bell (ret.) wrote in Koenig, “[i]n this case, I fear that we have not

justified to the people of this State, whom we are mandated to serve, our ‘raison d’etre.’”

368 Md. at 159, 792 A.2d at 1130. I fear the Court repeats this mistake today.

       Judge McDonald has authorized me to state that he joins in the views expressed in

this dissenting opinion.




                                            10
Circuit Court for Baltimore City
Case No.: 24-C-12-002377
Argued: 11/10/2014

                                      IN THE COURT OF APPEALS

                                            OF MARYLAND



                                                 No. 21

                                          September Term, 2014



                                    PEOPLE’S INSURANCE COUNSEL
                                              DIVISION

                                                    v.

                                   STATE FARM FIRE AND CASUALTY
                                           COMPANY, et al.



                                           Barbera, C.J.
                                           Harrell
                                           Battaglia
                                           Greene
                                           Adkins
                                           McDonald
                                           Watts,

                                                 JJ.



                                    Dissenting Opinion by McDonald, J.



                                                 Filed: February 24, 2015
       Sometimes we make a mistake when we grant a petition for certiorari. When we

do, we should admit it and correct it, even if the correction is couched in passive voice and

a five-syllable adverb (“dismissed as improvidently granted”). But, for the reasons that

Judge Adkins explains well, that is not this case. It is “desirable and in the public interest”

that we resolve the issue of how an insurance contract such as the one in this case should

be construed under Maryland common law.

       As an aside, I note that the five-vote majority in favor of dismissing this petition is

the minimum that ought to be necessary for dismissing a petition. An explanation: Under

the longstanding practice of this Court, consistent with the statute that sets forth our

certiorari jurisdiction, a petition for certiorari is granted if three judges vote to do so (even

if four judges do not favor granting the petition). See Inner Workings of the Court of

Appeals of Maryland, <http://www.mdcourts.gov/coappeals/coaoverview.html>.1                 If a

petition, once so granted, could be immediately dismissed on an identical 4-3 vote, it would

be at odds with the three-vote standard for granting petitions and with the statute that caps

the requisite number of votes at three. See Maryland Code, Courts & Judicial Proceedings

Article, §12-203 (“The Court of Appeals may by rule provide for the number of its judges

who must concur to grant the writ of certiorari in any case, but that number may not exceed




       1
        If only five members of the Court are available to consider a petition, the Court
has required only two affirmative votes to grant the petition. Glenn T. Harrell, Jr., To
Certiorari and Beyond (January 18, 2012) at p.3 n.4.
three”) (emphasis added).       The upshot is that we should not dismiss a petition as

improvidently granted unless we do so by a super-majority vote of at least 5-2.2




       2
        A similar question has arisen, from time to time, in the United States Supreme
Court where the nine justices apply what is known as the “Rule of Four” to grant petitions
for certiorari – i.e., a petition is granted if at least four of the nine justices concur in the
grant. On occasion, that Court has dismissed a case, by a 5-4 vote, on the ground that the
petition was “improvidently granted.” It has been pointed out that such an action is
inconsistent with the “Rule of Four.” United States v. Shannon, 342 U.S. 288, 298 (1952)
(Douglas, J. dissenting) (“If four can grant and the opposing five dismiss, then the four
cannot get a decision of the case on the merits. The integrity of the four-vote rule on
certiorari would then be impaired.”); Ferguson v. Moore-McCormack Lines, 352 U.S. 521,
560 (1957) (Harlan, J., concurring and dissenting) (“permitting the … writ to be thus
undone would undermine the whole philosophy of the ‘rule of four’”); R. Revesz & P.
Karlan, Nonmajority Rules and the Supreme Court, 136 U. Penn. L. Rev. 1067, 1082-95
(1988). Nevertheless, the Supreme Court has sometimes dismissed a case on such a vote.

        There is an important distinction between our Court and the Supreme Court here.
When the Supreme Court dismisses a case on the ground that the petition for certiorari was
improvidently granted on a 5-4 vote, in contradiction of the “Rule of Four,” it is simply
violating its own informal convention which, though referred to as a “rule,” has never been
formally adopted. See New York v. Uplinger, 467 U.S. 246, 251 (1984) (Stevens, J.,
concurring) (“the Rule of Four is a valuable, though not immutable, device for deciding
when a case must be argued”). By contrast, the statute that sets forth our certiorari
jurisdiction prohibits us from requiring more than three affirmative votes to grant a writ of
certiorari to review a case on the merits.

                                               2
