Before this court, Pennsylvania General has not pressed its earlier argument that the Lees' insurance policy was formed in the District of Columbia. Instead, it contends that District of Columbia law applies because the accident occurred in the District.*fn2 We disagree.
UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT
Appeal from the United States District Court for the District of Columbia, Civil Action No. 81-02866.
Bork and Starr, Circuit Judges, and McGowan, Senior Circuit Judge.
DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE STARR
The issue in this case is whether an insurance policy covering Maryland residents provides recovery for damages sustained in an accident involving a "phantom" vehicle in the District of Columbia, where no physical contact occurred between the vehicles. We conclude that Maryland law governs the contractual relationship between the policyholders and their insurance company, but that Maryland's law is sufficiently unclear so as to warrant certifying to the Maryland Court of Appeals the question whether state law mandates coverage in the situation at hand. I
On April 27, 1980, Ark and Oliva Lee, residents of the State of Maryland, were driving their car in the District of Columbia. As they proceeded, a vehicle operated by Marlene Wheeler swerved to avoid an unidentified vehicle that suddenly entered her traffic lane. In so doing, Ms. Wheeler struck the Lees' vehicle head-on. Both the Lees sustained serious physical injuries.
The Lees subsequently filed suit against Wheeler in the United States District Court for the District of Columbia, invoking diversity jurisdiction, 28 U.S.C. § 1332 (1982). The Lees also joined their insurer, Pennsylvania General Insurance Company (Pennsylvania General), seeking coverage under the policy's uninsured motorist provisions for the damages sustained as a result of the phantom's negligence.
In March 1983, Pennsylvania General moved for summary judgment, claiming that the insurance policy held by the Lees expressly required physical contact with the phantom vehicle in order for the uninsured motorist coverage provisions of the policy to apply. That coverage limitation, Pennsylvania General further argued, was permissible under District of Columbia law. The District Court denied the motion, without explanation.
In November 1983, Pennsylvania General revived its argument that District of Columbia law applied and moved for dismissal. Although the Lees were residents of Maryland, their automobile was titled and registered in Maryland, the original insurance policy and all renewals were addressed and mailed to the Lees' Maryland residence, Pennsylvania General contended that the policy was nonetheless governed by District of Columbia law because the Lees furnished to the insurance agent their application and initial premium in the District, where the Lees operated a restaurant.
The Lees denied that the application and initial premium, whatever their probative value, had been delivered in the District and emphasized the various nexi mentioned above with the State of Maryland. Nonetheless, after a brief hearing in November 1983, the District Judge orally granted Pennsylvania General's motion to dismiss. No findings of fact or conclusions of law were provided.
The District Court certified the judgment in favor of the insurer for interlocutory appeal on January 4, 1984, and on January 16, 1984, a Petition for Permission to appeal was filed. Permission was denied, however, on March 20, 1984. The case thus continued in District Court where the Lees' claim against Wheeler was eventually resolved in their favor. *fn1 The Lees then appealed the earlier dismissal of their claim against Pennsylvania General. See supra note 1. II
The case, as now before us, presents solely issues of contract and state statutory law. With the resolution of the Lees' claims against Wheeler, all tort aspects of the litigation have dropped out. We are thus presented with a contract action concerning what is clearly a Maryland contract. In this situation, we hold that Maryland law governs. The fact that the accident occurred in the District does not endow the District with an interest in the contractual relationship between the contracting parties. *fn3 Accordingly, we look to Maryland law to determine whether the insurance policy covered damages sustained in a non-impact accident with a phantom vehicle outside the State of Maryland.
As we previously observed, the Lees' insurance policy required physical contact with the uninsured vehicle in order for recovery to lie, a requirement that the Lees are unable, of course, to satisfy. The Lees nevertheless contend that under Maryland law a "physical contact" limitation on recovery is void, and that they are therefore entitled to recover. Pennsylvania ...