Megonnell v. United States Automobile Association, 368 Md. 633

Summary

The Maryland Court of Appeals held that the household exclusion in the primary automobile insurance policy did not apply to the excess coverage section of the insured's umbrella policy because the umbrella policy did not contain a follow-form clause. The court further held that settlements paid to other claimants arising from the same accident exhausted the primary policy's per-accident limits, triggering excess coverage for the petitioner's judgment. The court reversed the Court of Special Appeals and held that the petitioner was entitled to recover the judgment, post-judgment interest, and costs.

Holdings

1. Settlement payments arising from the same occurrence count toward exhaustion of the primary policy's $500,000 per-occurrence liability limit; the $700,000 settlements with the Anders exhausted that limit.
2. The primary policy's household exclusion did not apply to the umbrella policy's excess-coverage section because the umbrella policy lacked a conspicuous, clear, and express clause incorporating the primary policy's exclusions or making the excess coverage follow form.
3. Once the primary policy's per-occurrence limit was exhausted, the remaining settlement amounts and Veronica Megonnell's $291,000 judgment were covered by the umbrella policy's excess-coverage section.
4. USAA was not responsible for Veronica Megonnell's attorney's fees in the declaratory-judgment action.

Questions Presented

1. Whether settlements arising from the same occurrence count toward exhaustion of the primary policy's $500,000 per-occurrence limit.
2. Whether the excess-coverage section of the umbrella policy incorporated the primary policy's household exclusion through a follow-form provision.
3. Whether, after exhaustion of the primary policy limits, the umbrella policy's excess coverage applied to Veronica Megonnell's judgment.
4. Whether Veronica Megonnell was entitled to attorney's fees in the declaratory-judgment action.

Disposition

reversed_and_remanded