Cole v. State Farm Mutual Insurance Company6/14/2000
Before we consider the merits of this appeal, we set forth the principles that will guide our interpretation of the language of the insurance policy in question. Our primary task in interpreting an insurance policy, as with any contract, is to apply the terms of the contract itself. See Chantel Assoc. v. Mount Vernon Fire Ins. Co., 338 Md. 131, 142, 656 A.2d 779, 784 (1995); Harford County v. Harford Mut. Ins. Co., 327 Md. 418, 434, 610 A.2d 286, 294 (1992); Mitchell v. Maryland Casualty Ins., 324 Md. 44, 56, 595 A.2d 469, 475 (1991); Pacific Indem. Co. v. Interstate Fire & Cas. Co., 302 Md. 383, 388, 488 A.2d 486, 488 (1985). We look first to the contract language employed by the parties to determine the scope and limitations of the insurance coverage. See Chantel Assoc., 338 Md. at 142, 656 A.2d at 784; Kendall v. Nationwide Ins. Co., 348 Md. 157, 165, 702 A.2d 767, 771 (1997). When interpreting the words of a contract, we seek to give the words their "customary, ordinary, and accepted meaning." Mitchell, 324 Md. at 56, 595 A.2d at 475. In addition, we "examine the character of the contract, its purpose, and the facts and circumstances of the parties at the time of execution." Pacific Indem., 302 Md. at 388, 488 A.2d at 488.
If the meaning of the terms of the insurance policy are plain and unambiguous, we will determine the meaning of the terms of the contract as a matter of law. See id. at 389, 488 A.2d at 489. If the terms are ambiguous, however, we will look to evidence from extrinsic sources such as dictionaries or an interpretation of the term employed by one of the parties before the dispute arose. See id. A term of a contract is ambiguous if, to a reasonably prudent person, the term is susceptible to more than one meaning. See Pacific Indem., 302 Md. at 389, 488 A.2d at 489; St. Paul Fire Ins. Co. & Marine v. Pryseski, 292 Md. 187, 198, 438 A.2d 282, 288 (1981); Truck Ins. Exch. v. Marks Rentals, 288 Md. 428, 433, 418 A.2d 1187, 1190 (1980).
Turning to the policy at issue in this case, we note that it is, in our experience, somewhat unusual to find the type of first party coverage represented by the accidental death and dismemberment coverage here in question in an automobile liability policy. Automobile liability insurance, typically thought of as third party coverage, often contains a number of types of first party coverage, such as uninsured motorist claims, collision, comprehensive, medical payments, and personal injury protection. See Bausch & Lomb, Inc. v. Utica Mut. Ins. Co., 355 Md. 566, 582, 735 A.2d 1081, 1090 (1999). As noted supra, Section V of Ms. Cole's State Farm policy states, in pertinent part, that:
We [Respondent] will pay the amount shown in the schedule that applies for death, or loss, caused by accident. The insured has to be occupying or be struck by a land motor vehicle or trailer. The death or loss must be the direct result of the accident and not due to any other cause. The death or loss must occur within 90 days of the accident. (Emphasis in original).
The language of the policy plainly requires the existence of three interdependent elements before Respondent is obligated to pay accidental death benefits to its insured. The insured first has to be occupying a motor vehicle when a death or loss is inflicted. Next, the death or loss caused to the insured must be the direct result of an "accident." Finally, the death or loss must occur within ninety days of the "accident." Respondent concedes that Ms. Cole occupied a covered vehicle at the time she was shot and that she died within moments after she was shot. Thus, the sole focus of our inquiry in this case is whether Ms. Cole's death was the direct result of
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