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REPORTED IN THE COURT OF SPECIAL APPEALS OF MARYLAND No. 972 September Term, 1995

Fraeda J. Lewis v. State Farm Mutual Automobile Insurance Company

Murphy, C.J., Fischer, Alpert, Paul E. (Ret'd, specially assigned),

JJ.

Opinion by Fischer, J.

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Filed: November 27, 1996

Fraeda Lewis (Mrs. Lewis) appeals from an order of the Circuit Court for Baltimore City that affirmed an administrative law

judge's (ALJ) finding that State Farm Mutual Automobile Insurance Company's (State Farm) decision to add a premium surcharge to Mrs. Lewis's automobile insurance policy was justified and proper.1 Following the Maryland Insurance Administration's (MIA) finding that State Farm's surcharge decision was proper, Mrs. Lewis

requested a hearing before the State Insurance Commissioner of Maryland (the Commissioner), which assigned the hearing to an ALJ of the Office of Administrative Hearings.2 The ALJ found that

State Farm's actions were justified and accordingly dismissed Mrs. Lewis's protest. Lewis then appealed to the circuit court, which Mrs. Lewis raises the following issue

affirmed the ALJ's decision.

for our review, which we have reworded and condensed as follows: I. Did the circuit court err by affirming the decision of the Administrative Law Judge?

FACTS
On November 13, 1993, Mr. Lewis was driving Mrs. Lewis's 1988 Mercedes automobile. passengers in the car. Mrs. Lewis and Fred and Joan Cohen were While in Baltimore City, Mr. Lewis lost

The premium surcharge took the form of State Farm removing Mrs. Lewis's "good driver" designation, therefore causing her premiums to increase. It is the Commissioner's regular practice to assign section 240AA hearings to an ALJ in the Office of Administrative Hearings. See COMAR 09.30.65.01 et seq. (detailing the procedures for an ALJ hearing).
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control of the car and skidded into a guard rail.

At the time of

the accident, the road was still wet from a rainstorm that had occurred earlier in the day. No one in the car sustained injuries,

but the accident caused substantial damage to the car itself. Following the accident, Mrs. Lewis filed a claim with State Farm, her insurance company, under her collision coverage. State

Farm investigated the claim, determined that Mrs. Lewis's policy covered the accident, and paid $1,577.66 for repairs to the car.3 Subsequent to its payment to Mrs. Lewis, State Farm decided to impose a surcharge on Mrs. Lewis's policy based on its belief that Mr. Lewis was more than fifty percent at fault in causing the accident.4 State Farm then notified Mrs. Lewis of its plans to add Mrs. Lewis requested that the MIA investigate State The MIA did so and eventually confirmed that

the surcharge.

Farm's decision.

decision as proper and justified. After the MIA's decision, Mrs. Lewis requested a hearing with the Commissioner.
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On November 3, 1994, a hearing was held before

The record indicates that the $1,577.56 was distributed in two payments, one of $1099.18 and a second of $478.38.
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Mrs. Lewis's insurance policy reads, in part: An accident is chargeable if State Farm paid at least $400 or more . . . under the Property Damage Liability Coverage or, in the event of a one-car accident, under the Collision coverage. . . . . (Note: Accidents shall not be chargeable (1) if the driver was less than 50% at fault or (2) because of any payment made under the Personal Injury Protection Coverage.)

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an ALJ, which found that: The Licensee's [State Farm's] proposed surcharge is in accordance with MD. ANN, CODE art. 48A,

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