State Farm Mutual v. Duckworth

Defendant and her husband (Duckworths) purchased two automobile policies and one motorcycle insurance policy from plaintiff (State Farm) where all three insurance contracts contained "anti-stacking" provisions that precluded recovery of uninsured motorist benefits under any policy other than that covering the damaged vehicles. The Duckworths subsequently moved to Florida, where the husband was struck and killed by an uninsured motorist while driving the motorcycle covered under the Maryland policy. State Farm consequently brought this action in the district court, seeking a declaratory judgment that it had satisfied its contractual obligations to the husband's estate. At issue before the district court was the applicability of the public policy exception to Florida's choice of law rule in disputes over contract terms. The district court declared that State Farm had satisfied its contractual obligations to the husband's estate and dismissed defendant's counterclaims. Taking into account all of the undisputed facts, and assuming that defendant informed a State Farm representative that the Duckworths' move from Maryland to Florida would be "permanent," the court held that State Farm still did not receive reasonable notice sufficient to trigger the public policy exception. The court held that, even if defendant informed the representative as alleged, her later actions overwhelmingly indicated to State Farm that the Duckworths' move was not necessarily permanent and that, consequently Maryland law would continue to govern the Duckworths' policies. Therefore, the issue of fact upon which defendant's appeal rested was immaterial and, as State Farm was deprived of reasonable notice, judgment as a matter of law was proper.