SIGNIFICANT CASE SUMMARY

Maryland Case Summary

In the Matter of Justin Holder
Maryland Appellate Court
No. 1627, Sept. Term, 2024

Decided: February 5, 2026

The Maryland Insurance Administration’s final decision that Insurer did not owe Petitioner a duty to defend collaterally estopped Petitioner from relitigating that issue and prevented liability against Insurer for not acting in good faith.

Background

Petitioner’s insurance policy included the duty to defend with an exclusion for injury expected or intended by the policyholder’s acts. Petitioner had a land dispute with his neighbors that resulted in a lawsuit against Petitioner for intentional torts. Insurer denied coverage and declined to provide a defense for this lawsuit based on the policy’s terms. Petitioner filed an administrative complaint against Insurer under Md. Code § 27-303 (“303 action”) alleging the insurer “refuse[d] to pay a claim for an arbitrary or capricious reason.” The Maryland Insurance Administration (MIA) found Insurer did not owe coverage or a duty to defend because the lawsuit was for solely intentional torts. Petitioner did not appeal this decision but rather filed a new administrative complaint alleging denial of coverage not in good faith under Md. Code § 27-1001 (“1001 action”). Insurer moved for and was granted summary decision on the grounds of administrative collateral estoppel. Petitioner filed for judicial review in the Circuit Court for Washington County and amended the complaint alleging a separate civil cause of action. Insurer moved to strike the new claims. The Circuit Court affirmed MIA’s ruling and granted Insurer’s motion to strike. Petitioner appealed.

Holding

The Appellate Court held that Petitioner was collaterally estopped from relitigating the issue of whether the insurer owed the duty to defend, and that the Circuit Court did not abuse its discretion when striking Petitioner’s additional claims. The contested 303 action hearing could create a collateral estoppel effect directly addressing the subject issue, the finding of which was key to MIA’s decision. The Appellate Court determined that the 303 action decision estopped Petitioner’s 1001 action as the issue to be addressed in that action was identical to that which reached a final decision on the merits in the 303 action. Further, the parties in both actions were identical and Petitioner was afforded a full and fair opportunity to be heard on the issue in the 303 action. The Appellate Court concluded that Insurer could not be liable for not acting in good faith when it did not have a duty to defend under the policy. The Appellate Court affirmed the Circuit Court’s judgment.

Questions about this case can be directed to Veronica Giron at (442) 641-0557 or vgiron@tthlaw.com.