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Montgomery County Board of Education v. Horace Mann Insurance Co.11/10/2004
laim brought against a [teacher] by a parent or other claimant with respect to an action taken by the [teacher], the board shall provide counsel for that individual if:
(i) The action was taken in the performance of his duties, within the scope of his employment, and without malice; and
(ii) The board determines that he was acting within his authorized capacity in the incident."
The board views § 4-104(d)(1) as establishing two separate hurdles for a teacher. First, the teacher must meet the test of sub-paragraph (i) and show that the action complained of was taken in the performance of his/her duties, that it was within the scope of his/her employment, and that it was without malice. Even if the teacher satisfies that test, the board contends that the teacher "must seek the Board's determination that she was acting in an authorized capacity in the incident."
The addition of sub-paragraph (ii) creates an ambiguous redundancy in the statute that, in light of the board's argument, needs to be resolved. Subparagraph (i) sets an objective standard for coverage - the employee was acting in the performance of his/her duties, within the scope of his/her employment, and without malice. If that test is met, the employee was necessarily acting in an authorized capacity. We cannot imagine any circumstance in which the board could properly conclude that the employee was not acting in an authorized capacity if the employee was acting in the performance of his/her duties, within the scope of his/her employment, and without malice. The question, then, is whether the Legislature, having articulated a proper objective standard, nonetheless intended that the board, in its own discretion and based on its own subjective analysis, make the ultimate decision whether to provide a defense.
When called upon to construe an ambiguous statute, we are left, in the absence of some clear extrinsic evidence of legislative intent, to rely on the most relevant of the various canons of statutory construction. Two are paramount in this context: (1) § 4-104(d) is quintessentially remedial legislation enacted for the benefit of school employees and, as remedial legislation, it is to be liberally construed to effectuate its beneficent purpose, Coburn v. Coburn, 342 Md. 244, 256, 674 A.2d 951, 957 (1996), and (2) that section must be read in harmony with § 4-105, to which it is clearly related. In Tucker v. Fireman's Fund Ins. Co., 308 Md. 69, 77, 517 A.2d 730, 734 (1986), we applied the liberal-construction-of-remedial-legislation principle in construing the statute requiring motor vehicle insurance policies to contain personal injury protection coverage, observing that, in view of the "clear remedial purpose" of the law, "a liberal construction of the statute is required."
The relationship between § 4-104(d) and § 4-105 is evident. As we have observed, the duty to defend whenever there is a potentiality of coverage is an integral part of comprehensive liability insurance and is therefore implicit under § 4-105. Although it is the insurer, of course, that makes the initial decision whether such a potentiality of coverage exists, that decision is reviewable de novo by a court when properly challenged in a breach of contract or declaratory judgment action. The court, upon its own analysis, determines whether, on the facts presented, there exists a duty to defend. It would be wholly inconsistent with our case law - case law that predates the enactment of the statutes now contained in §§ 4-104(d) and 4-105 and that was therefore presumably known to the Legislature when they enacted those statutes - to construe § 4-105 as allowing the board to make its own unreviewable decision whether
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