ANNAPOLIS – Two Howard County children who won a $2.36 million wrongful death settlement against their father for killing their mother will not be able collect damages from his homeowners insurance policy.
The Maryland Court of Special Appeals ruled Wednesday that Nationwide’s “Golden Blanket” homeowners insurance excluded payments to “resident relatives” of the insured — in this case, the children.
The court noted that its decision almost certainly deprives the children of any chance of collecting “substantial sums” from their father, John C. Calhoun, who has filed for bankruptcy.
“Nonetheless, we feel constrained to reach this result by application of disciplined and proper appellate analysis,” Judge Glenn T. Harrell Jr. wrote.
Gladys Calhoun fell to her death in 1992 after her husband kicked the ladder out from under her while she was cleaning the gutter of their Marriottsville home, according to court documents. Calhoun pleaded guilty in 1993 to voluntary manslaughter and was sentenced to five years in prison.
In 1994, the children’s guardian filed a wrongful death suit against Calhoun on their behalf and a jury awarded the children $2.36 million.
The guardian, James Eagan, then sought to collect the full verdict from Nationwide, which had insured Calhoun for $300,000 in personal liability protection.
But a Howard Circuit judge rejected that claim and a three- judge panel of the appeals court agreed Wednesday, saying Nationwide’s policy with Calhoun specifically excluded payouts to people related to, or living with, the insured.
The children, both minors at the time of their mother’s death, lived with their parents in the 2500 block of Thompson Drive.
The children’s attorney, Gary S. Peklo, had argued that “resident-relative” clause should be ignored because the policy is ambiguous.
“Nowhere on the first page (of the policy) is there any mention or warning about possible exclusions,” he wrote. “In this case it is imperative that one keeps in mind that Mr. and Mrs. Calhoun … were never learned appellate judges and were never seasoned insurance defense counsel.”
But the appeals court was not convinced.
“A reasonably prudent person would understand the `resident relative’ exclusion to exclude the claims of a `resident relative,'” Harrell wrote.
He noted that Maryland does not follow the rule of some jurisdictions of interpreting insurance policies “most strongly” against the company.
The court also rebuffed Peklo’s argument that the “resident relative” exclusion violated “public policy” because the events that led to Mrs. Calhoun’s death did not involve any collusion among members of the family.
Peklo said he would be “very surprised” if he did not appeal the decision to the Court of Appeals.
He also said he will continue to seek the full $2.36 million from Nationwide, even though Calhoun’s policy only offered $300,000 of coverage. He based his argument on Nationwide’s refusal to enter into any settlement discussions.
“My argument is to go back and say, `OK, the Court of Appeals has said you should have been at the settlement table,'” he said. “Now you have to pay the consequences. It’s an interesting argument. I don’t know if it would fly.”
An attorney for Nationwide could not be reached to comment on the case Wednesday.