Mutual Benefit Insurance v. Jordan

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
MUTUAL BENEFIT INSURANCE 
COMPANY,
Plaintiff-Appellee,
v.
BASHE P. JORDAN,
Defendant-Appellant,  No. 00-1977
and
SHANNON CENTURY, by and through
her mother Della Ree Harris; DELLA
REE HARRIS,
Defendants.

Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Andre M. Davis, District Judge.
(CA-99-3541-AMD)
Argued: February 26, 2001
Decided: April 2, 2001
Before WILKINSON, Chief Judge, TRAXLER, Circuit Judge,
and T. S. ELLIS, III, United States District Judge
for the Eastern District of Virginia, sitting by designation.
Reversed and remanded by unpublished per curiam opinion.
COUNSEL
ARGUED: Erik Cameron Martini, MCGUIRE WOODS, L.L.P., Bal-
timore, Maryland, for Appellant. Irwin Raphael Kramer, KRAMER
2 MUTUAL BENEFIT INSURANCE v. JORDAN
& ASSOCIATES, Owings Mills, Maryland, for Appellee. ON
BRIEF: Patrick R. Buckler, Ronald M. Cherry, MCGUIRE WOODS,
L.L.P., Baltimore, Maryland, for Appellant.
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
OPINION
PER CURIAM:
Bashe P. Jordan appeals the district court’s order awarding sum-
mary judgment to Mutual Benefit Insurance Company ("Mutual Ben-
efit") in Mutual Benefit’s declaratory judgment action. We reverse
and remand for further consideration.
I.
Jordan owned a number of "rowhouses" in Baltimore, Maryland. In
1985, Jordan rented an apartment in a rowhouse located at 1007 West
Lanvale Street to Della Ree Harris ("Harris"). Harris believed that her
daughter, Shannon Century, began suffering from lead poisoning as
a result of the child’s exposure to lead paint while they were living
in this apartment. Harris brought an action on behalf of her child in
state court seeking damages from Jordan and others ("the Century
action"). The complaint alleged that Harris and her daughter lived in
Jordan’s apartment "during 1984-1987."
Mutual Benefit issued a homeowner’s policy ("the policy") cover-
ing the apartment and other rental properties owned by Jordan. The
policy had an effective period of October 2, 1987 through October 2,
1988. The policy provided coverage for the property owned by Jordan
and personal liability protection for Jordan. Under the terms of the
policy, Mutual Benefit provided a defense for Jordan in the Century
action.
MUTUAL BENEFIT INSURANCE v. JORDAN 3
During the discovery phase of the Century action, however, Mutual
Benefit came to the conclusion that it had no duty to defend Jordan.
Harris was served with interrogatories directing her to list her home
address "by date beginning two (2) years prior to [her daughter’s] first
blood lead level which measured more than ten (10) mcg. per deciliter
up to the present time." J.A. 67. Harris provided the following
response:
The minor Plaintiff [Century], her mother, and siblings
resided at the following addresses from the time of birth (all
dates are approximations):
...
d) 1007 West Lanvale Street, 1st Floor 1985-1986
e) 2207 Brunt Street 1987-1990
J.A. 38. Mutual Benefit viewed this response as demonstrating that
the policy was not in effect at the time that Harris and her daughter
were living in Jordan’s apartment at 1007 West Lanvale Street since
the policy went into effect in October 1987.
Accordingly, Mutual Benefit filed this declaratory judgment action
seeking a determination from the district court that Mutual Benefit did
not have a duty to defend Jordan in the Century action or to indem-
nify him for any judgment entered against him in that action. The dis-
trict court concluded that the policy was not in effect at the time of
the events allegedly giving rise to the underlying claims against Jor-
dan and entered an order declaring that Mutual Benefit had no duty
to defend or indemnify Jordan.
II.
Maryland law governs our analysis and provides that an insurer’s
duty to defend the policyholder arises "as long as the plaintiff in a tort
case alleges an action that is potentially covered by the policy, no
matter how attenuated, frivolous, or illogical that allegation may be."
Baltimore Gas & Elec. Co. v. Commercial Union Ins. Co., 688 A.2d
4 MUTUAL BENEFIT INSURANCE v. JORDAN
496, 505 (Md. Ct. Spec. App. 1997) (emphasis added) (internal quota-
tion marks omitted). Whether the insurer has a duty to defend is "ordi-
narily determined based on the allegations in the suit and the language
of the policy." Id. The court "resolve[s] the duty to defend . . . by
examining the four corners of the complaint and the four corners of
the policy." Id. at 509 (quoting Mt. Vernon Fire Ins. Co. v. Scottsdale
Ins. Co., 638 A.2d 1196 (Md. Ct. Spec. App. 1994)). Thus, the insurer
is not permitted to introduce extrinsic evidence to contest coverage if
the allegations in the underlying complaint establish that the claims
against the insured are potentially covered. See Sheets v. Brethren
Mut. Ins. Co., 679 A.2d 540, 542 n.2 (Md. 1996). And, "where a
potentiality of coverage is uncertain from the allegations of a com-
plaint, any doubt must be resolved in favor of the insured." Aetna
Cas. & Sur. Co. v. Cochran, 651 A.2d 859, 863-64. (Md. 1995).
A court may consider extrinsic evidence if the facts asserted in the
outside source are uncontroverted; however, when a "reasonable dis-
pute" exists over the truth of such facts, the court is limited to exam-
ining the complaint and the policy. Baltimore Gas, 688 A.2d at 509.
Jordan’s argument can be succinctly stated: the complaint alleges
claims against Jordan that are potentially covered by the policy and
the "extrinsic" evidence relied upon by Mutual Benefit does not con-
tain uncontroverted facts that resolve the issue. We agree. For pur-
poses of the duty to defend question, the only real issue is whether
Harris and her daughter were living at the apartment during the policy
period of October 2, 1987 through October 2, 1988. The complaint
alleges that they resided there "during 1984-1987," which certainly
could include part of the policy period. Thus, the claims against Jor-
dan in the underlying tort action are potentially covered by the policy,
triggering Mutual Benefit’s duty to defend. Furthermore, we do not
agree with Mutual Benefit that Harris’s interrogatory answers in the
Century action change this result. Although Harris indicated that she
and her daughter resided at Jordan’s apartment in "1985-1986,"
Mutual Benefit may rely on this response only if it is uncontroverted.
The response itself, however, is prefaced with the statement that "all
dates are approximations." J.A. 38. In her deposition, Harris made it
clear that this approximation was far from certain. Having lived at a
number of different places, Harris could recall only that she moved
into Jordan’s apartment at 1007 West Lanvale sometime in the 1980s.
Moreover, as Jordan suggests, if we piece together the dates that Har-
MUTUAL BENEFIT INSURANCE v. JORDAN 5
ris was apparently able to provide, it is likely that she and her daugh-
ter would have been living at the apartment during the policy period:
Shannon Century was born on June 10, 1982. According to
Harris’ deposition testimony, she and Shannon lived at
Edmonson Avenue for at least one year following Shan-
non’[s] birth, i.e, up to June 10, 1983. Harris indicates that
she lived at Arlington Avenue following Edmonson
Ave[nue] until June 6, 1985, and then at Fulton for a year
following Arlington, i.e., June 10, 1986. If Harris and Cen-
tury lived at 1007 West Lanvale for a period of two years
following Fulton, the trail indicates that they lived at the
insured property as late as June 10, 1988.
Brief of Appellant at 12 n.1 (citations omitted). We agree with Jordan
that the "extrinsic" evidence relied upon by the district court is not
uncontroverted. Looking only to the four corners of the policy and the
complaint in the underlying tort action, we conclude that the insured
is entitled to the benefit of the doubt. Thus, Mutual Benefit was not
entitled to summary judgment on its claim that it did not have a duty
to defend Jordan in the Century action.1
III.
For the foregoing reasons, we reverse the district court’s order
awarding summary judgment and declaring that Mutual Benefit has
no duty to defend or indemnify Jordan. Our ruling is based on the four
corners of the complaint and the policy which, in our view, raise a
claim that is potentially covered and therefore trigger Mutual Bene-
fit’s duty to defend. Since there is a reasonable dispute regarding the
extrinsic evidence, the insured is entitled to the benefit of the doubt
as to coverage. Thus, we hold that the grant of summary judgment
was premature and we remand for further consideration.2
REVERSED AND REMANDED
1
We also reject Mutual Benefit’s argument that Harris’s interrogatory
responses effectively amended the complaint in the Century action.
2
Given the fact that the underlying state action is ongoing, the district
court may wish to consider declining further exercise of its jurisdiction
over this declaratory judgment action or staying the action. See Centen-
nial Life Ins. Co. v. Poston, 88 F.3d 255, 256-58 (4th Cir. 1996).