# Transamerica Insurance v. Brohawn > Court of Special Appeals of Maryland · October 18, 1974 · 23 Md. App. 186 URL: https://www.frixlaw.com/law-library/cases/9692567 ## Case - **Full name:** TRANSAMERICA INSURANCE COMPANY v. MARY BROHAWN Et Al. - **Court:** Court of Special Appeals of Maryland - **Decided:** October 18, 1974 - **Citations:** 23 Md. App. 186; 326 A.2d 758; 1974 Md. App. LEXIS 282 - **Precedential status:** Published - **Opinion:** Dissent by Lowe - **Judges:** Orth, Powers, Davidson, Morton, Thompson, Moylan, Gilbert, Menchine, Moore, Lowe - **Cited by:** 10 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9692567 ## Opinion text *207 Lowe, J., dissenting: One of the incentives held out by corporate liability insurers in addition to “pay[ing] on behalf of insured all sums . . . obligated ... as damages . . .” is the vast investigative and legal pool of resources placed at an insured’s disposal, with which it promises to defend any suit “ . . . even if any of the allegations of the suit are groundless, false or fraudulent. . . .” By their ruling today, the majority permits those vast legal resources contracted for by the insured as his protection to be utilized to his disadvantage. The majority succinctly sets the stage. “Thus, the factual determinations necessary to a fixing of [Mrs. Brohawn’s] liability may be made in the declaratory action instituted by [her insurer] Transamerica. The finder of fact will ascertain whether Mrs. Brohawn committed the alleged act. If it finds that she did, it will determine whether the acts were negligently committed or intentionally committed. Thereupon, the liability of Mrs. Brohawn, the coverage under the policy, and the liability [if any] of Transamerica will be resolved.” pp. 18-19. This setting permits Mrs. Brohawn’s defender to bring and control a suit by which it becomes her opponent. Mrs. Brohawn’s problems began with the prospect of a law suit arising from the altercation between her and her initial accusers. The problems escalated when Transamerica sought a declaratory judgment which in effect caused it to join the accusers rather than to defend as contracted. The majority encourages the insurer to lay down the shield for the Brohawns at the first sign of attack and pick up a sword to join the assaulting force. The insurer’s resources are then permitted by the majority to be utilized to attempt to prove not only that Mrs. Brohawn has done what she denies but has done it intentionally, thereby subjecting her to even greater damages of a punitive nature. With one observation of the majority as to their remand procedure I most readily *208 concur, it is “not without some disadvantages . . . .” My concern is that the insured becomes a disproportionate recipient of those disadvantages. It is little solace to the Brohawns that if their insurance carrier doesn’t defeat them by proving the tort intentional, it will then have to conform to its contract. 1 If some disadvantage must result from any of the three alternatives, described by the majority from Glens Falls, 254 Md. at 136, it is troubling to find that we resolve them in favor of the corporate carrier which drafted the contract and which has not yet been compelled to perform, as opposed to the individual “insured” who has relied on the seemingly unrestricted promise to defend and who has fully performed with payments for protection, in advance, year after year after year. Either of the other two alternatives described seems far more conscionable. Certainly alternative number two could result in no harm to either party, i.e., if the company were to defend the action under a non-waiver or reservation of rights agreement. The concern expressed that the corporate counsel would be placed in an awkward conflict of interests between his allegiance to the insurer and his duty to the insured, is ironic in the light of the position in which he is placed by the declaratory judgment procedure. At least in the second alternative his duty would be clear — that is to defend the insured — and I refuse to believe an officer of this court would do otherwise. Indeed, I fail to see the concern expressed as to the first Glens Falls alternative, of compelling the insurance company to defend or decline at its peril. That is precisely the decision that must be made by every party to every contract when one party suddenly sees he may not have the best of all possible worlds. While I agree that there may be circumstances conceivable where the declaratory remedy may be appropriate, I part with the majority when it so crystallized these particular factual circumstances as to deny the trial *209 judge any discretion. We are far less able to balance the equities of the various procedures as applied to each case than is he. And we should not lose sight of the basic purpose of the declaratory relief. It is a convenience, to avoid unnecessary litigation but never intended to reverse established rights, substantive or procedural. It is significant that the majority is persuaded by a preference (not a directive) expressed by Judge Barnes in Glens Falls, 254 Md. at 136, 2 that the “third alternative, seeking declaratory relief in regard to coverage . . . would seem to provide the best solution.” (Emphasis added). This suggestion, even from so eminent a jurist as Judge Barnes, may b'e persuasive but is not obligatory. The question posed by Glens Falls was not whether the declaratory judgment procedure was available. Its availability as an alternative was never questioned. The issue was whether or not Glens Falls was estopped from denying coverage having declined to attempt the declaratory judgment route, and the answer was clearly in the negative. The question decided today is quite different. Here we are telling a trial judge who had the parties and issues before him that he is without discretion to decide that the alternative pursued is not appropriate under the facts and circumstances of the particular case, notwithstanding the petitioner sought a declaration of rights under a contract whose very language has been interpreted by Glens Falls, supra. The majority has lost sight of the fact that Glens Falls decided that the contract did not compel the insurer to *210 defend the questionable claim nor did it preclude it from relitigating the question of coverage after declining to defend. In short it left all options open to the insurance company whose rights were uninjured. Although I agree that under the Glens Falls decision, the lower court here could have permitted the action, I nevertheless believe the determination of the propriety of the remedy was within the lower court’s discretion. Under the majority decision the short cut declaratory procedure is compelled by the mere application therefor, withdrawing any discretion from the trial judge and leaving the unassailable choice of procedure solely to the insurer. Basic rights of the primary parties in interest including the principal issue of liability, are decided by this third party determination of alternatives. A review of that final determination by a dispassionate trial judge is, to me, much to be preferred over an absolute right of election by either party. The very fact that this court remains divided is some indication that reasonable minds might differ in different circumstances. Most assuredly “circumstances alter cases.” 3 The decision of which procedure provides the best balance under each set of circumstances, is best left to an impartial arbiter rather than a party of interest. Finally, the power to construe under the Uniform Declaratory Relief Act is precisely that — a power to construe. A party may have “determined any question of construction or validity . . .” of the contract and “obtain a declaration of rights, status, or other legal relations under it.” Cts. and Jud. Proc. Art., § 3-406. Nowhere do I find the slightest intent indicated by the Legislature to permit the tort liability to be determined as an incident of the “question of construction.” The procedure permitting obtention of a declaratory judgment was provided to alleviate rather than compound procedural problems. It was surely not meant to interfere with the parties’ well-established rights. I respectfully dissent and Judge Davidson has authorized me to say that she joins me in so doing. . Even counsel fees are provided for by the majority — if the company does not prevail. . In addition to the Glens Falls dictum the majority points to State Farm Mutual Auto Insurance Co. v. Treas, et al., 254 Md. 615 , “where, apparently, the propriety of such a proceeding was not even questioned.” The reason is apparent. The Court of Appeals limits the scope of their review to questions “ . . . tried and decided by the lower court.” Md. Rule 885. That the “propriety of [the] . . . proceeding was not. . . questioned” when the issue had never been raised does not place the Court of Appeals’ stamp of approval on all like procedures which may later be called in question. I do not question that the procedure is permissible when used as an alternative, nor should it be prohibited if unquestioned by the parties. However, when called in question, under each factual context the trial judge should be left free to balance the equities. The issue should not be foreclosed without regard to the individual variables of each case. . “The Old Judge” by Thomas Chandler Haliburton (“Sam Slick”). --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9692567. Public record. Not legal advice.