Case Title: Dyer v. Dairyland Insurance Co.

Citation: 

Docket Number: 031532

State: virginia

Court: Virginia Supreme Court

Date: 2004-04-23T00:00:00Z

Document:
PRESENT: All the Justices 
 
LENNA JO DYER 
 
 
 
      OPINION BY 
v.  Record No. 031532 
        JUSTICE G. STEVEN AGEE 
 
 
 
       APRIL 23, 2004 
DAIRYLAND INSURANCE COMPANY 
 
FROM THE CIRCUIT COURT OF CHESTERFIELD COUNTY 
Herbert C. Gill, Jr., Judge 
 
 
In this appeal we determine whether the plaintiff’s 
recovery for the negligence of one tortfeasor under the 
liability provision of an automobile insurance policy precludes 
recovery under the underinsured motorist provision of the same 
policy for the negligence of a joint tortfeasor. 
I. BACKGROUND AND PROCEEDINGS BELOW 
Lenna Jo Dyer (“Dyer”) was the passenger on a motorcycle 
owned and operated by Kerry B. Atkinson (“Atkinson”).  
Atkinson’s motorcycle was involved in a collision with a 
motorcycle owned and operated by Ricky M. Roberts (“Roberts”).  
As a result of the collision, Dyer received injuries and 
suffered damages in excess of $100,000.  Atkinson and Roberts 
were jointly and concurrently negligent and their negligence was 
the proximate cause of the collision. 
Dairyland Insurance Company (“Dairyland”) insured the 
Atkinson motorcycle under a policy providing bodily injury 
liability coverage in the amount of $100,000 per claimant and 
uninsured/underinsured motorist (“UM” or “UIM” respectively) 
coverage of $100,000 per claimant.  Under the Atkinson policy, 
Dairyland tendered to Dyer the full $100,000 of bodily injury 
liability coverage based on Atkinson’s liability.  Dairyland 
also insured the Roberts motorcycle under a policy providing 
$25,000 of bodily injury liability coverage per claimant and 
UM/UIM coverages in the same amount.  Dairyland tendered the 
full $25,000 of bodily injury liability coverage to Dyer based 
on Roberts’ liability under his policy. 
Dyer obtained a judgment against Roberts in the amount of 
$275,000.  She then argued in the trial court that she was 
entitled to $75,000 in UIM coverage under the Atkinson policy.  
Dyer averred Roberts was underinsured in an amount equal to the 
difference between his $25,000 of bodily injury liability 
coverage and the $100,000 of UIM coverage under the Atkinson 
policy.  Dairyland responded that it was not obligated to 
provide Dyer with UIM coverage under the Atkinson policy because 
it had already tendered the full amount of the bodily injury 
liability coverage under that policy.  On cross-motions for 
summary judgment the trial court held that Dairyland was not 
obligated to provide UIM coverage to Dyer under the Atkinson 
policy.  We awarded Dyer this appeal. 
 
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II. ANALYSIS 
Code § 38.2-2206(A) requires an insurer under a motor 
vehicle liability policy “to make payment for bodily injury 
. . . caused by the operation or use of an underinsured motor 
vehicle to the extent the vehicle is underinsured, as defined in 
subsection B.”  Under that subsection: 
A motor vehicle is “underinsured” when, and to 
the extent that, the total amount of bodily 
injury and property damage coverage applicable to 
the operation or use of the motor vehicle and 
available for payment for such bodily injury or 
property damage . . . is less than the total 
amount of uninsured motorist coverage afforded 
any person injured as a result of the operation 
or use of the vehicle. 
 
Dyer argues she is underinsured under the Atkinson policy 
as to the Roberts vehicle within the meaning of Code § 38.2-
2206(B).  She further contends the resolution of this case is 
governed by this Court’s decision in Nationwide Mutual Ins. v. 
Hill, 247 Va. 78, 439 S.E.2d 335 (1994).  We agree with Dyer. 
In Hill, Rebecca H. Henley (“Henley”), a passenger in a 
vehicle driven by Mary Ann Forsyth (“Forsyth”), died in an 
automobile accident involving another vehicle driven by Martin 
W. Jones (“Jones”).  Henley’s estate obtained judgment in the 
amount of $1,000,000, jointly and severally, against Forsyth’s 
estate and Jones.  247 Va. at 80-81, 439 S.E.2d at 336. 
The Forsyth vehicle was insured under an automobile 
liability policy issued by Nationwide Mutual Insurance Company 
 
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(“Nationwide”) which provided $50,000 of bodily injury liability 
coverage per claimant and UM/UIM coverage of the same amount.  
Jones was uninsured.  Nationwide paid the full $50,000 of its 
bodily injury liability to the Henley estate based on Forsyth’s 
negligence, but denied UM coverage attributable to Jones’ 
negligence.  Id. at 81, 439 S.E.2d at 336. 
The administrator of Henley’s estate then filed a 
declaratory judgment action asking for a determination that 
Henley was insured under the UM provision of the Nationwide 
policy because Jones was an uninsured motorist.  Nationwide 
argued that the provisions in its UM endorsement required a set-
off of any payments received from the bodily injury liability 
coverage against any recovery payable under the UM coverage.  
Id. at 83, 439 S.E.2d at 338.  We approved the trial court’s 
determination that the set-off provisions of the Nationwide UM 
endorsement violated Code § 38.2-2206 and were contrary to 
public policy.  Nationwide was liable for payment of the full 
policy amount as to each tortfeasor: $50,000 of bodily injury 
liability coverage attributable to Forsyth and $50,000 of UM 
coverage attributable to Jones.  Id. at 86, 439 S.E.2d at 339. 
Dairyland asserts on appeal that the outcome of this case 
is not governed by Hill, but instead by two more recent cases, 
Superior Insurance Co. v. Hunter, 258 Va. 338, 520 S.E.2d 646 
(1999) and Kramer v. Commonwealth, 263 Va. 128, 556 S.E.2d 761 
 
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(2002).  Dairyland avers these later cases bar Dyer from 
recovering under both the bodily injury liability and UIM 
provisions of the Atkinson policy.  We disagree.   
The issue in Hunter was whether the UIM “provision of a 
tortfeasor’s automobile liability insurance policy is available 
to satisfy claims of passengers in the tortfeasor’s vehicle who 
are insured under the same policy and whose claims for damages 
exceed the limits of the policy’s liability coverage.”  Hunter, 
258 Va. at 340, 520 S.E.2d at 647.  We concluded that the 
General Assembly, by virtue of Code § 38.2-2206, “did not intend 
that a vehicle could be ‘underinsured’ with respect to itself.”  
Id. at 344, 520 S.E.2d at 649.  Accordingly, the plaintiff in 
Hunter had no claim to UIM coverage where the full bodily injury 
liability coverage limit had been paid and there was only one 
tortfeasor and one insurance policy.∗
Likewise, Kramer involved a state employee killed by an 
uninsured driver.  The Commonwealth’s Risk Management Plan only 
provided $25,000 in UM coverage but allowed for $50,000 of UIM 
coverage.  The decedent’s estate sought to combine and collect 
both the UM and UIM coverages.  We reiterated the principle 
expressed in Hunter that the Commonwealth’s Risk Management Plan 
                     
 
∗ Some language in Hunter could be read to limit recovery 
under both the bodily injury liability coverage and UIM 
provisions of a single policy; however, that language must be 
read in the context of a claim with one policy and one 
tortfeasor. 
 
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could not “be underinsured with respect to itself in order to 
provide additional coverage.”  Kramer, 263 Va. at 133, 556 
S.E.2d at 763. 
In contrast to Hunter and Kramer, the case at bar is the 
result of the joint negligence of two tortfeasors, Atkinson and 
Roberts, who were insured under separate policies.  Under the 
plain terms of Code § 38.2-2206(B), the Roberts vehicle was 
underinsured because his policy’s bodily injury liability 
coverage was “less than the total amount of uninsured motorist 
coverage [under the Atkinson policy] afforded any person [Dyer] 
injured as a result of the operation or use of the vehicle.”  
Dyer’s entitlement to the UIM coverage under the Atkinson policy 
does not mean the Atkinson motorcycle was underinsured as to 
itself.  Instead, it means that Roberts, a joint and several 
tortfeasor, was underinsured and therefore Dyer is entitled to 
the UIM coverage under the Atkinson policy. 
Hill is clear and commanding authority to apply the same 
rule in the UIM setting, where joint tortfeasors and multiple 
policies are present, as already applies to UM coverage.  If we 
determined Hill was inapplicable to the case at bar, it would 
create the discrepant circumstance in which Dyer would be in a 
worse position than if Roberts had been uninsured.  The General 
Assembly specifically eliminated this anomaly in the 1982 
amendments to former Code §§ 38.1-381(b) and (c) which are now 
 
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Code §§ 38.2-2206(A) and (B).  See Nationwide Mutual Insurance 
Company v. Scott, 234 Va. 573, 576, 363 S.E.2d 703, 704 (1988). 
Dairyland also maintains that the Atkinson policy prohibits 
an insured from collecting both liability and UIM coverage.  
Because the policy was not entered into the record, we need not 
address Dairyland’s argument in this regard.  Moreover, such a 
provision would conflict with the requirements of Code §§ 38.2-
2206(A) and (B) as we explained above.  “The provisions of the 
statute [Code § 38.2-2206] are part of [the] contract of 
insurance, and we will not consider language in [a] policy that, 
arguably, is inconsistent with the statute as we have construed 
it.”  Id. at 577, 363 S.E.2d at 705. 
III.  CONCLUSION 
 
This Court’s rationale in Hill applies with as equal force 
to UIM coverage as it does to UM coverage.  We therefore hold 
that Dyer is entitled to UIM coverage under the Atkinson policy 
equal to the difference between Robert’s coverage under his 
policy ($25,000) and the available UIM coverage under the 
Atkinson policy ($100,000), a total of $75,000.  The trial court 
thus erred in granting summary judgment to Dairyland and in 
failing to grant summary judgment to Dyer.  Accordingly, we will 
reverse the judgment of the trial court and enter final judgment 
for Dyer. 
Reversed and final judgment.
 
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