Page 33 - Reservation of Rights - Special Edition

MARYLAND
Notice
Notice that an insurer is disclaiming coverage must be sent to the insured within a reasonable time. Med. Mut. Liab. Ins. Soc’y of Md. v. Miller, 451 A.2d 930 (Md. Ct. Spec. App. 1982). An insurer will be estopped from disclaiming liability if it does not repudiate liability within a reasonable time after becoming aware of the insured’s failure to cooperate. Travel- ers Ins. Co. v. Godsey, 273 A.2d 431 (Md. 1970.)
In Medical Mutual, the court found that the insurer had knowledge of the breach of the cooperation clause almost a year before it attempted to disclaim liability. Accordingly the court held that the insurer was estopped from disclaiming li- ability due to its failure to notify the insured within a reason- able time. Med. Mut., 451 A.2d 930.
Content
A reservation of rights or disclaimer letter must state all defenses “arising from the failure of the claimant to satisfy
some technical condition subsequent” or those defenses
will be deemed waived. Grounds for disclaiming coverage based on the “scope of the risks to be covered” that are not included in a reservation of rights or disclaimer letter are not deemed waived. Creveling v. Gov’t Emps. Ins. Co., 828 A.2d 229 (Md. 2003). Nevertheless, a proper reservation of rights or disclaimer letter should include all of the policy language and facts on which a denial of coverage is based. Wolfe v. Anne Arundel County, 761 A.2d 935 (Md. Ct. Spec. App. 2000).
In Insurance Co. of North America v. Coffman, the plaintiff in a declaratory judgment action argued that an insurer could not rely upon a policy exclusion that it had failed to raise in a letter of rejection. The Court held that it was not important that the insurer failed to raise the exclusionary defense in the rejection letter, for the effect of applying a doctrine of waiver or estoppel in that circumstance would be to create insur- ance coverage by waiver, which the Maryland Court of Ap- peals has precluded as a matter of law. The Court also noted that “[t]here is a distinction in Maryland between defenses founded upon a lack of basic coverage and those arising
2018 ReseRvation of Rights - special edition
MARYLAND
Bacon, Thornton & Palmer L.L.P. provides experienced civil representation throughout the Baltimore- Washington corridor. The firm is AV rated by Martindale-Hubbell and included in the Martindale- Hubbell Bar Register of Preeminent Lawyers.
With decades of experience, and hundreds of jury verdicts exclusively in the area of civil litigation in the Federal and State courts of Maryland and the District of Columbia, the firm provides aggressive representation with efficient, personal case handling. Our clients include many Insurance and Fortune 500 companies, for which the firm provides representation in a wide array of practice areas.
Our founding partners have worked together for over 20 years, with numerous significant decisions reported in the Maryland Appellate Courts, District of Columbia Court of Appeals, and the United States Courts of Appeals for the Fourth Circuit and the District of Columbia Circuit. We appreciate having numerous clients of equal long-standing, a fact we attribute to our dedication in providing personal high quality legal representation at efficient costs.
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