Case Title: Allstate Insurance Co. v. Jones

Citation: 

Docket Number: 001349

State: virginia

Court: Virginia Supreme Court

Date: 2001-04-20T00:00:00Z

Document:
Present: All the Justices 
 
ALLSTATE INSURANCE COMPANY 
 
 
            OPINION BY JUSTICE LEROY R. HASSELL, SR. 
v.  Record No. 001349 
April 20, 2001 
 
MARCELLUS D. JONES 
 
FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND 
Melvin R. Hughes, Jr., Judge 
 
 
In this appeal, we consider whether a passenger in a car 
that was insured at the time of an accident is entitled to 
enforce a judgment entered against a named insured driver 
pursuant to the uninsured motorist provisions of the driver's 
automobile liability insurance policy even though the 
insurance company which issued the policy denied liability 
coverage to its named insured driver for failure to cooperate. 
 
The relevant facts are not in dispute.  On May 14, 1996, 
Marcellus D. Jones was injured when he was a passenger in an 
automobile owned and operated by Christopher D. Robinson.  
Allstate Insurance Company (Allstate) had issued a policy of 
automobile liability insurance to Robinson, a named insured 
under the provisions of the policy. 
 
Jones filed a negligence action against Robinson in the 
circuit court.  During the pendency of the negligence action, 
Allstate informed Jones and his counsel that it denied 
liability coverage to Robinson because of his lack of 
cooperation.  Jones served Allstate with process in the tort 
action.  Jones obtained a judgment against Robinson in the 
tort action in the amount of $55,000 with costs and interest. 
 
Jones initiated this proceeding by filing a separate 
motion for judgment against Allstate.  He alleged that when 
Allstate denied liability coverage to Robinson, Robinson 
became an uninsured motorist pursuant to the provisions of 
Code § 38.2-2206 and that Allstate was required to pay the 
$25,000 uninsured motorist insurance limit prescribed in the 
policy that Allstate had issued to Robinson as partial 
satisfaction of Jones' judgment.  Allstate denied that it had 
any obligation to satisfy any part of the judgment.  Both 
litigants filed motions for summary judgment.  The circuit 
court held that pursuant to Code § 38.2-2206, Allstate had an 
obligation to pay its uninsured motorist policy limit, and the 
court entered summary judgment in favor of Jones in the amount 
of $25,000.  Allstate appeals. 
 
Allstate contends that it has no obligation to pay its 
prescribed policy limit to satisfy a portion of the judgment 
that Jones obtained against Robinson.  Allstate says that to 
recover under its insurance policy, Jones "must first qualify 
as an 'insured' at the time the vehicle became uninsured.  
Only as an insured under said policy can [Jones] avail himself 
of the coverage imbued via its uninsured motorist 
endorsement."  Allstate observes that "[t]he policy 
 
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endorsement relating to uninsured motorists provides coverage 
to, inter alia, persons occupying insured motor vehicles.  
Hence, the analysis which counsels reversal of the [c]ircuit 
[c]ourt's judgment requires this [C]ourt to . . . determine 
whether . . . Robinson's vehicle constituted an insured motor 
vehicle at the time [Jones] served Allstate."  Furthermore, 
Allstate asserts that as a condition precedent to uninsured 
motorist coverage, there must be both an insured motor vehicle 
and an uninsured motor vehicle.  Allstate, relying upon our 
decision in Superior Insurance Company v. Hunter, 258 Va. 338, 
520 S.E.2d 646 (1999), contends that an automobile cannot be 
deemed both "an insured motor vehicle and an uninsured motor 
vehicle." 
 
Responding, Jones contends that Allstate has an 
obligation to pay the limits of its insurance policy to 
partially satisfy the judgment pursuant to the uninsured 
motorist provisions of the policy because he is an insured as 
defined by Code § 38.2-2206(B).  Continuing, Jones argues that 
our decision in Superior Insurance Company is not applicable 
to the facts and circumstances of this proceeding. 
 
Code § 38.2-2206 provides in relevant part: 
 
"A. . . . [N]o policy or contract of bodily 
injury or property damage liability insurance 
relating to the ownership, maintenance, or use of a 
motor vehicle shall be issued or delivered in this 
Commonwealth to the owner of such vehicle or shall 
 
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be issued or delivered by any insurer licensed in 
this Commonwealth upon any motor vehicle principally 
garaged or used in this Commonwealth unless it 
contains an endorsement or provisions undertaking to 
pay the insured all sums that he is legally entitled 
to recover as damages from the owner or operator of 
an uninsured motor vehicle . . . . 
 
"B.  . . . . 
 
" 'Insured' as used in subsections A, D, G, and 
H of this section means the named insured and, while 
resident of the same household, the spouse of the 
named insured, and relatives, wards or foster 
children of either, while in a motor vehicle or 
otherwise, and any person who uses the motor vehicle 
to which the policy applies, with the expressed or 
implied consent of the named insured, and a guest in 
the motor vehicle to which the policy applies or the 
personal representative of any of the above. 
 
" 'Uninsured motor vehicle' means a motor 
vehicle for which (i) there is no bodily injury 
liability insurance and property damage liability 
insurance in the amounts specified by § 46.2-472, 
(ii) there is such insurance but the insurer writing 
the insurance denies coverage for any reason 
whatsoever, including failure or refusal of the 
insured to cooperate with the insurer . . . ." 
 
 
In applying the statutory definitions contained in Code 
§ 38.2-2206(B), we must consider whether, at the time of the 
accident, Jones was a guest in Robinson's motor vehicle and 
whether, at the time of the accident, there was a bodily 
injury liability insurance policy in effect, but the insurer 
writing the insurance subsequently denied coverage for any 
reason whatsoever. 
 
Applying the plain and unambiguous language in Code 
§ 38.2-2206, we hold that Allstate is required to pay the 
limit of its uninsured motorist insurance coverage policy 
 
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toward the judgment that Jones obtained against Robinson.  
Even though Allstate had issued a policy of automobile 
liability insurance to Robinson, its named insured, which was 
in effect at the time Jones was injured, Allstate denied 
coverage to Robinson because Allstate believed that he had 
breached his duty to cooperate as required by the terms of 
that policy. 
 
Once Allstate decided to deny coverage to its named 
insured, Robinson, because of lack of cooperation, the vehicle 
which Robinson was operating at the time of the accident met 
the statutorily prescribed definition of an uninsured motor 
vehicle.  Code § 38.2-2206(B) expressly provides that an 
uninsured motor vehicle means a motor vehicle for which there 
is insurance, "but the insurer writing the insurance denies 
coverage for any reason whatsoever, including failure or 
refusal of the insured to cooperate with the insurer."  And, 
we observe that Jones, a passenger in the car at the time of 
the accident, was an insured within the meaning of Code 
§ 38.2-2206 because he was a guest in the motor vehicle. 
 
In Superior Insurance Company v. Hunter, supra, we 
considered whether the underinsured motorist provision of a 
tortfeasor's automobile liability insurance policy was 
available to satisfy claims of passengers in the tortfeasor's 
vehicle who were insured under the same policy and whose 
 
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claims for damages exceeded the limits of the policy's 
liability coverage.  Purcell Hunter and his daughter, Lekedra 
D. Hunter, were passengers in a vehicle owned by Purcell 
Hunter and driven by his wife, Eva L. Hunter.  The vehicle 
collided with a car driven by Ikesha M. Dye.  Purcell Hunter, 
Lekedra Hunter, Dye, and a passenger in Dye's vehicle were 
injured in the accident. 
 
At the time of the accident, Purcell Hunter was a named 
insured under an automobile insurance policy issued by 
Superior Insurance Company (Superior).  Eva Hunter and Lekedra 
Hunter were also named insureds under the terms of the policy, 
which provided liability coverage of $25,000 for each person 
injured, limited to $50,000 per accident.  The policy also 
contained uninsured/underinsured motorist coverage with the 
same limits. 
 
Dye and her passenger filed claims for their damages with 
Superior and alleged that Eva Hunter was negligent in her 
operation of the vehicle.  Superior paid these claims, which 
totaled $38,500.  Purcell Hunter and Lekedra Hunter filed 
claims with Superior for damages resulting from their personal 
injuries, and they filed an action against Eva Hunter, 
alleging that her negligence was a proximate cause of their 
injuries.  Because Superior had previously paid $38,500 to 
settle the claims of Dye and her passenger, only $11,500 in 
 
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total liability coverage remained available to satisfy the 
claim submitted by Purcell Hunter and Lekedra Hunter. 
 
Lekedra Hunter and Purcell Hunter filed actions against 
Superior and sought declaratory judgments that Superior was 
required to satisfy their claims in excess of $11,500 by 
paying pursuant to the policy's underinsured motorist 
coverage. 
 
Rejecting their contentions, we stated: 
"[I]n construing Code § 38.2-2206 as a whole, we 
conclude, even under the facts of this case when 
only one insurance policy is involved, that the 
General Assembly did not intend that a vehicle could 
be 'underinsured' with respect to itself.  In light 
of the provisions of subsection (A), it is clear 
that subsection (B) contemplates a situation in 
which there are at least two applicable insurance 
policies at issue — the liability coverage provided 
by a tortfeasor's insurance policy, and the 
uninsured/underinsured motorist coverage provided by 
an injured party's insurance policy. 
 
"Subsection (A) provides that the limits of the 
uninsured/underinsured coverage of any policy issued 
in Virginia 'shall equal but not exceed the limits 
of the liability insurance provided.'  It does not 
permit the amount of liability coverage provided by 
a policy to be less than uninsured/underinsured 
motorist coverage provided by that policy.  The 
total amount of this coverage necessarily is to be 
determined at the time the policy is issued by the 
insurance company. 
 
"The definition of 'underinsured' in subsection 
(B), however, contemplates just such a scenario, 
that is, where the amount of the liability coverage 
is less than the amount of the uninsured/ 
underinsured motorist coverage.  The two subsections 
can be reconciled only if it is assumed, as we do 
here, that subsection (B) contemplates a situation 
in which there are two insurance policies at issue.  
Moreover, subsection (A) states that the 
 
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underinsured motorist coverage must 'obligate the 
insurer to make payment for bodily injury or 
property damage caused by the operation or use of an 
underinsured motor vehicle.'  The reference to 'an 
underinsured motor vehicle' contemplates the 
existence of a second insurance policy. 
 
"Read together, subsection (A) and subsection 
(B) do not contemplate that, under the circumstances 
of this case, a claimant would be permitted to 
recover under both the liability and 
uninsured/underinsured motorist coverages of a 
single policy.  In the present case, the 
uninsured/underinsured motorist coverage provided by 
Superior's policy would not be 'afforded to' 
[Lekedra Hunter and Purcell Hunter].  Thus, there 
are no underinsured motorist coverages afforded to 
[Lekedra Hunter and Purcell Hunter] to compare with 
the amount of liability coverage 'available for 
payment.' " 
 
Superior Insurance Company, 258 Va. at 344-45, 520 S.E.2d at 
649. 
 
As the aforementioned discussion clearly indicates, our 
holding in Superior Insurance Company is not dispositive of 
the issue in this appeal.  In Superior Insurance Company, we 
held, under the facts and circumstances of that case, that the 
underinsured motorist provisions of a tortfeasor's automobile 
liability insurance policy could not be used to satisfy claims 
of passengers who are insureds under the same policy and whose 
claims exceed the limits of the policy's liability insurance 
coverage.  Here, however, we are concerned with a completely 
different factual scenario.  Unlike Superior Insurance 
Company, we are not confronted with a situation in which an 
insurance company, that had issued an automobile liability 
 
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insurance policy, could be required to pay its contracted 
limits of liability coverage and also pay underinsured 
motorist coverage from the same policy.  Jones seeks to 
recover solely on the uninsured motorist provisions and, 
hence, Allstate cannot be subject to liability beyond its 
contractual limits. 
 
In view of our holding, we need not consider Allstate's 
remaining arguments.  Accordingly, we will affirm the judgment 
of the circuit court. 
Affirmed. 
 
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