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Baltimore Gas and Electric Co. v. Commercial Union Insurance Co.2/4/1997
parties, the trial court, on remand, should determine the reasonable fees, costs, and expenses that BGE incurred during the period when BGE was entitled to representation, for which Commercial may be liable.
III. Commercial's Duty to Indemnify BGE
"An insurer's unjustified refusal to defend does not estop it from later denying coverage under its duty to indemnify. . . . The insurer's breach of contract should not . . . be used as a method of obtaining coverage for the insured that the insured did not purchase." Oweiss, 67 Md. App. at 720 (quoting A.D. Windt, INSURANCE CLAIMS AND DISPUTES § 4.35 (1982)). As the judgment against BGE in the Corradetti suit was not based on Ferguson's negligence, it was not covered by the policy. Therefore, Commercial had no duty to indemnify BGE for the judgment in the Corradetti suit.
Nevertheless, BGE, in its cross-claim, could seek contribution from Ferguson on the theory that Ferguson is a joint tortfeasor with BGE. As we said in Hartford v. Scarlett Harbor, 109 Md. App. 217, 280-81, 674 A.2d 106, cert. granted, 343 Md. 334 (1996),
in order for a party to have a right of contribution, two prerequisites must be satisfied. First, the parties must share a "common liability" or burden. Second, the party seeking contribution must have paid, under legal compulsion, more than his fair share of the common obligation.
Parties share a common liability if they are either co-obligors or joint tortfeasors. Parties are co-obligors if they are jointly liable or jointly and severally liable on an obligation. They are not co-obligors, however, if they are only severally liable on the obligation. The Uniform Contribution Among Tortfeasors Act, Md. Ann. Code, art 50, § 16(a) (1994), provides: "'Joint tort-feasors means two or more persons jointly or severally liable in tort for the same injury to person or property, whether or not judgment has been recovered against all or some of them." (Emphasis supplied). In sum, parties share a common liability if they are either (1) jointly liable on the same non-tort obligation (such as a contract, promissory note, or tax), or (2) jointly or severally liable, or both, in tort, for the same harm.
(Citations omitted.) Further, as our recent opinion in Lerman v. Heeman, 112 Md. App. 320, 685 A.2d 782, 1996 Md. App. LEXIS 159, *9-11 (1996) makes clear, the tortfeasor seeking contribution need not even have lodged a cross-claim in the tort plaintiff's suit in order to seek contribution from its joint tortfeasor.
In this case, BGE filed a cross-claim against Ferguson. If BGE can prove that Ferguson is a joint tortfeasor in regard to the Corradettis' injuries, it may be entitled to contribution. BGE's claim, however, would arise from traditional tort principles, not from its insurance policy with Commercial. Although, in the end, Commercial may be required to pay monies to BGE, on behalf of Ferguson, if Ferguson is found liable, Commercial's obligation to pay would arise from its contractual obligation as Ferguson's insurer.
JUDGMENT REVERSED IN PART AND AFFIRMED IN PART AS TO COMMERCIAL'S AND AMERICAN'S DUTY TO DEFEND BGE.
JUDGMENT IN FAVOR OF COMMERCIAL AND AMERICAN AFFIRMED AS TO INDEMNIFICATION.
JUDGMENT ON BREACH OF CONTRACT CLAIM, IN FAVOR OF FERGUSON, AFFIRMED.
CASE REMANDED TO THE CIRCUIT COURT FOR ANNE ARUNDEL COUNTY FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION.
COSTS TO BE PAID ONE HALF BY BGE, ONE QUARTER BY COMMERCIAL, AND ONE QUARTER BY AMERICAN.
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