Case Title: Haislip v. Southern Heritage Insurance Co.

Citation: 

Docket Number: 962214

State: virginia

Court: Virginia Supreme Court

Date: 1997-09-12T00:00:00Z

Document:
Present:  Carrico, C.J., Compton, Stephenson,
* Lacy, 
Hassell, Keenan and Koontz, JJ. 
 
MICHAEL F. HAISLIP 
 
OPINION BY JUSTICE LEROY R. HASSELL, SR. 
v.   Record No. 962214         September 12, 1997 
 
SOUTHERN HERITAGE INSURANCE 
COMPANY, ET AL. 
 
 
FROM THE CIRCUIT COURT OF HENRICO COUNTY 
 
Buford M. Parsons, Jr., Judge 
 
 
In this appeal, we consider whether Code § 38.2-2204 
requires an insurance company, which had issued an 
automobile liability insurance policy, to provide full and 
separate coverage to its named insured who was allegedly 
guilty of negligent entrustment of a vehicle, even though 
the insurer had already paid the insurance policy limits on 
behalf of a permissive user who negligently operated the 
insured vehicle.   
 
Michael F. Haislip filed a motion for judgment against 
Raymond L. Goode and Tina L. Price to recover damages he 
incurred as a result of an automobile accident.  Haislip 
alleged that Price negligently entrusted her car to Goode, 
who negligently operated the vehicle.   
 
At the time of the accident, Price's car was insured 
under an automobile liability policy issued to her by 
Southern Heritage Insurance Company.  Apparently, Goode did 
not have an automobile liability insurance policy, and 
Southern Heritage settled Haislip's claim against Goode and 
                     
     
*Justice Stephenson participated in the hearing and 
decision of this case prior to the effective date of his 
retirement on July 1, 1997. 
issued a settlement check to Haislip in the amount of 
$25,000, which Southern Heritage believes is the maximum 
amount of insurance coverage available to Haislip under the 
terms of the policy of insurance. 
 
Subsequently, Southern Heritage filed a motion for 
declaratory judgment, asking that the trial court declare 
that:  the maximum amount of coverage available to Haislip 
under the policy is $25,000; the policy had been exhausted 
by reason of the settlement paid on behalf of Goode and; 
Southern Heritage has no duty to defend or pay any amounts 
related to the claim Haislip made against Price.  Haislip 
filed a motion for summary judgment, asserting that the 
maximum amount of coverage available to him under the 
insurance policy is $50,000.  The trial court considered 
argument of counsel and entered an order denying Haislip's 
motion for summary judgment and granting Southern Heritage's 
motion for declaratory judgment.  The trial court entered a 
judgment declaring that the insurance coverage available to 
Haislip under the insurance policy had been exhausted by the 
payment of $25,000 to him in settlement of his claim against 
Goode.  Haislip appeals. 
 
Haislip argues that even though the automobile 
liability insurance contract provided $25,000 of coverage 
per occurrence, Code § 38.2-2204 requires Southern Heritage 
to provide $25,000 of liability coverage to Goode and 
another $25,000 of coverage to Price.  Haislip contends that 
Goode and Price are persons insured within the meaning of 
the policy and, as a result, Southern Heritage is required 
to provide a maximum of $25,000 of coverage to Price for her 
negligent entrustment of the vehicle and another $25,000 of 
coverage to Goode for his negligent operation of the insured 
vehicle.  Continuing, Price asserts that Code § 38.2-2204 
"provides that all contracts of bodily injury liability 
insurance must contain a provision insuring the named 
insured, as well as any other person using the motor vehicle 
with the express or implied consent of the named insured."  
   
Southern Heritage argues, however, that Code § 38.2-
2204 "was not created for the benefit of the insured, nor 
was it created in order to allow double recovery to the 
party who has suffered damage by the negligent use of the 
insured's car when operated by another with the owner's 
permission."  Southern Heritage asserts that the purpose of 
Code § 38.2-2204 is to protect the injured party who has 
suffered damage "by allowing that party a single recovery 
under the insured's policy." 
 
Code § 38.2-2204, commonly referred to as the omnibus 
clause, states in part: 
 
 
"A.  No policy or contract of bodily injury 
or property damage liability insurance, covering 
liability arising from the ownership, maintenance, 
or use of any motor vehicle . . . shall be issued 
or delivered in this Commonwealth to the owner of 
such vehicle . . . or shall be issued or delivered 
by any insurer licensed in this Commonwealth upon 
any motor vehicle . . . that is principally 
garaged, docked, or used in this Commonwealth, 
unless the policy contains a provision insuring 
the named insured, and any other person using or 
responsible for the use of the motor vehicle . . . 
with the expressed or implied consent of the named 
insured, against liability for death or injury 
sustained, or loss or damage incurred within the 
coverage of the policy or contract as a result of 
negligence in the operation or use of such vehicle 
. . . by the named insured or by any such person." 
 
(Emphasis added). 
 
In deciding the meaning of the statute, we must 
consider the plain language that the General Assembly 
employed when enacting this statute.  For example, we stated 
in Barr v. Town & Country Properties, 240 Va. 292, 295, 396 
S.E.2d 672, 674 (1990) (quoting Watkins v. Hall, 161 Va. 
924, 930, 172 S.E. 445, 447 (1934)): 
 
 
"'While in the construction of statutes the 
constant endeavor of the courts is to ascertain 
and give effect to the intention of the 
legislature, that intention must be gathered from 
the words used, unless a literal construction 
would involve a manifest absurdity.  Where the 
legislature has used words of a plain and definite 
import the courts cannot put upon them a 
construction which amounts to holding the 
legislature did not mean what it has actually 
expressed.'" 
 
Accord Abbott v. Willey, 253 Va. 88, 91, 479 S.E.2d 528, 530 
(1997); Weinberg v. Given, 252 Va. 221, 225-26, 476 S.E.2d 
502, 504 (1996); Dominion Trust Co. v. Kenbridge Constr. 
Co., 248 Va. 393, 396, 448 S.E.2d 659, 660 (1994).   
 
Additionally, in interpreting Code § 38.1-381, the 
predecessor to the current omnibus statute, we stated that 
the omnibus statute "is by force of its provisions made a 
part of a liability policy, and is to be liberally construed 
to accomplish its intended purpose.  However, . . . we must 
look to the words used in the statute to determine its 
meaning, and only the meaning of the statute as determined 
should be given effect."  Grange Mutual v. Criterion Ins. 
Co., 212 Va. 753, 756, 188 S.E.2d 91, 93 (1972); accord City 
of Norfolk v. Ingram, 235 Va. 433, 437, 367 S.E.2d 725, 727 
(1988); Storm v. Nationwide Ins. Co., 199 Va. 130, 135, 97 
S.E.2d 759, 762 (1957). 
 
We are of opinion that the plain language contained in 
Code § 38.2-2204(A) requires Southern Heritage to provide 
$25,000 of insurance coverage for any claim or judgment that 
Price may be legally obligated to pay to Haislip for claims 
arising out of the underlying automobile accident, even 
though Southern Heritage has already paid $25,000 to settle 
Haislip's claims against Goode.  The plain language 
contained in the omnibus clause requires the Southern 
Heritage policy to contain "a provision insuring the named 
insured, and any other person using . . . the motor 
vehicle. . . ."   
 
The General Assembly's use of the word "and" in Code 
§ 38.2-2204(A) means that Southern Heritage is required to 
provide insurance coverage to both Price, who is the named 
insured, and Goode, who was driving the motor vehicle with 
Price's consent.  The word "and" is unambiguous.  "And" 
means "along with or together with . . . added to or linked 
to."  Webster's Third New International Dictionary, p. 80 
(1986).  Even though Southern Heritage's insurance policy 
contains a limitation of $25,000 per occurrence, that 
limitation, if applied, would violate the omnibus clause 
because once Southern Heritage paid the $25,000 to settle 
Haislip's claims against Goode, Price, the named insured, 
who paid the policy premiums, would not receive any 
liability insurance coverage.  Thus, Southern Heritage's 
interpretation of its policy and the omnibus clause would 
render the word "and" used in the statute meaningless. 
 
Accordingly, we will enter a declaration here that Code 
§ 38.2-2204 requires Southern Heritage to provide a maximum 
of $25,000 in coverage for any claim that Haislip may make 
against Price in addition to the $25,000 that Southern 
Heritage has already paid to settle Haislip's claims against 
Goode.   
 
Reversed and final judgment. 
JUSTICE COMPTON, with whom CHIEF JUSTICE CARRICO and JUSTICE 
STEPHENSON join, dissenting. 
 
 
The issue in this case, involving allegations of 
negligent operation by a permissive user and of negligent 
entrustment by a named insured, is whether the policy's 
liability limits are to be paid for each accident or for 
each act of negligence that may result in injuries to the 
claimant. 
 
Of course, under the omnibus clause, Code § 38.2-
2204(A), the policy in question must contain a provision 
insuring the named insured "and" any other person using the 
insured's motor vehicle with the expressed or implied 
consent of the named insured against liability for injury 
sustained as a result of negligence in the operation or use 
of the vehicle.  Manifestly, Price, the named insured, "and" 
Goode, the permissive user, were "insured" under the policy; 
the insurer was obligated to provide a defense to both Price 
"and" Goode and, if the policy's monetary limits had not 
been exhausted, to pay the claimant's damages upon 
establishment of legal liability. 
 
But employment of the word "and" in the omnibus clause 
does not mandate or require payment of the policy's 
liability limits for each act of negligence, that is, both 
negligent driving and negligent entrustment.  The insurer's 
policy unambiguously provided that "the limit of bodily 
injury liability . . . applicable to `each person' is the 
limit of the company's liability for all damages . . . 
arising out of bodily injury sustained by one person as the 
result of any one occurrence." Nothing in the omnibus clause 
annuls that policy provision.  "Simply put, the liability 
limits are per accident, not per act of negligence.  Any 
contrary interpretation of the policy language would be 
unfounded."  Helmick v. Jones, 452 S.E.2d 408, 411 (W. Va. 
1994); accord Mid-Century Ins. Co. v. Shutt, 845 P.2d 86 
(Kan. App. 1993).  But see Iaquinta v. Allstate Ins. Co., 
510 N.W.2d 715 (Wis. App. 1993). 
 
Accordingly, the maximum amount that the claimant 
Haislip may recover under the insurance contract is $25,000. 
 Thus, I would affirm the judgment of the trial court in 
favor of the insurer.