Supreme Court of Maryland Clarifies District Court Jurisdiction for Underinsured Motorist (“UIM”) Claims

      In Bowens v. State Farm Mut. Auto. Ins. Co., 492 Md. 608, 347 A.3d 415 (2025), the Supreme Court of Maryland addressed a critical procedural question for jurisdiction purposes—that is, whether and when certain underinsured motorist (“UIM”) claims may be filed in the District Court of Maryland, as opposed to one of Maryland’s Circuit Courts. Here, the Court clarified that the jurisdictional inquiry is controlled by amount sought from the UIM insurer—not the total damages necessary to establish coverage.

    This case arose from a motor vehicle accident that occurred in Prince George’s County (the “Accident”) wherein George Bowens (“Plaintiff”) was injured. The undisputed tortfeasor carried minimum liability coverage of $30,000 per person and $60,000 per accident. The injured Plaintiff carried UIM coverage of $50,000 through Defendant, State Farm Mutual Auto Insurance Company (“State Farm”).

    The tortfeasor’s insurance company tendered the full $30,000 of liability insurance coverage to the injured Plaintiff. After Plaintiff accepted and received the $30,000 of liability insurance coverage, Plaintiff filed a breach of contract action in the District Court of Maryland for Prince George’s County (the “District Court”) seeking the remaining $20,000 in UIM benefits from State Farm.

    Under Maryland’s Courts and Judicial Proceedings Article, the District Court may not hear certain contracts or tort cases where the damages exceed $30,000 (the “Statutory Cap”). See Md. Code Ann., Cts & Jud. Proc. (“CJP”) § 4-401(1); see generally CJP § 4-402 (outlining exceptions to CJP § 4-401). For this reason, State Farm challenged the District Court’s subject matter jurisdiction over the contract action. Specifically, State Farm contended that for Plaintiff to recover $20,000 in UIM benefits, Plaintiff was required to prove that his total damages were at least $50,000 (the State Farm UIM policy limits). Because this amount was beyond the District Court’s jurisdictional limit of $30,000, the District Court did not have subject matter jurisdiction over the case.

    The District Court agreed and dismissed the case for lack of jurisdiction. On appeal, the Circuit Court for Prince George’s County affirmed the dismissal.

    The Supreme Court of Maryland reversed the lower courts’ decisions, holding that jurisdiction over UIM cases is determined by the amount of damages the plaintiff seeks to recover from a defendant, not the total damages a plaintiff must prove to establish entitlement to those damages.

    The Court first turned to CJP § 4-401(1) which specifies that the District Court’s Statutory Cap for contracts actions is based upon the “debt or damages claimed” being less than or equal to $30,000. In doing so, the Court held that that the “phrase ‘debt or damages claimed’ is measured by the sum the plaintiff seeks from the defendant in the pending District Court action and does not include amounts previously paid to the plaintiff by a tortfeasor's liability insurer.” Bowens, 492 Md. at 613, 347 A.3d at 418.

    Through this holding, the Court reaffirmed that, because this is a UIM case, the Plaintiff’s burden of proof necessarily required Plaintiff to demonstrate that his total damages exceeded the underlying $30,000 policy tendered by the tortfeasor. However, this evidentiary necessity does not alter or redefine the amount in controversy for jurisdictional purposes. Rather, by rejecting State Farm’s argument (that the Plaintiff’s evidentiary need to prove damages in excess of $30,000 necessarily deprives the District Court of jurisdiction), the Court clarified that the jurisdiction question turns on whether the actual recovery sought from an insurance company remains below the statutory cap.

    In this case, the Supreme Court of Maryland concluded that because the amount in controversy was $20,000—below the District Court’s statutory cap—Plaintiff’s UIM claim therefore fell comfortably within the purview of the District Court’s jurisdiction.

    

    This decision will certainly affect jurisdictional analyses surrounding certain UIM claims. Insurers should reasonably anticipate that some UIM disputes—previously litigated in Circuit Court—may now be filed and pursued in Maryland’s district courts which are traditionally known to be faster and less formal that Circuit Courts.

            -  Audreina Blanding, Associate