Case Title: School Board v. Commonwealth

Citation: 

Docket Number: 090313

State: virginia

Court: Virginia Supreme Court

Date: 2010-02-25T00:00:00Z

Document:
Present:  Hassell, C.J., Keenan, Koontz, Kinser, Lemons, and 
Millette, JJ., and Carrico, S.J. 
 
SCHOOL BOARD OF THE CITY OF NEWPORT NEWS 
 
v.  Record No. 090313  
OPINION BY JUSTICE DONALD W. LEMONS 
 
 
 
February 25, 2010 
COMMONWEALTH OF VIRGINIA 
 
 
FROM THE CIRCUIT COURT OF THE CITY OF NEWPORT NEWS 
H. Vincent Conway, Jr., Judge 
 
 
In this appeal, we consider whether the trial court erred 
in holding that an insurance policy administered by the 
Commonwealth did not cover a claim made by the School Board of 
the City of Newport News (“the School Board”). 
I. 
FACTS AND PROCEEDINGS BELOW 
 
The Commonwealth, through its Division of Risk Management 
(“Risk Management”), established and administers an insurance 
plan known as the Virginia Local Government Risk Management 
Plan (“VaRISK 2” or “the Plan”).  The School Board paid annual 
premiums in return for its coverage under the Plan.  The 
underlying claim in this case concerns a judgment obtained in 
the United States District Court for the Eastern District of 
Virginia (“District Court”) by Stefan Jaynes (“Stefan”) and 
his family (collectively, “the Jaynes family”) against the 
School Board.   The School Board petitioned the trial court to 
order the Commonwealth, through the Plan, to indemnify the 
School Board for the judgment obtained by the Jaynes family in 
the District Court, and to reimburse the School Board for the 
attorney’s fees incurred by the School Board in defense of the 
Jaynes family’s action. 
A.  The Underlying Claim 
 
The Jaynes family initiated their claim as a Special 
Education Due Process Hearing, alleging that Stefan, a student 
with a diagnosis of autism, was denied a free appropriate 
public education as required by the Individuals with 
Disabilities Education Act (“IDEA”), codified at 20 U.S.C. 
§ 1400 et seq. (1994 & Supp. IV 1998).  At the conclusion of 
the Special Education Due Process Hearing, the local hearing 
officer found that the Newport News Public Schools “maintained 
a pattern and practice . . . of failing to follow the 
procedures set forth in” IDEA.1 
 
The local hearing officer observed that Stefan “suffered 
a loss of an educational opportunity as a result of the 
procedural violations,” and the Newport News Public Schools 
“seriously infringed upon [the Jaynes family’s] participation 
in the [individualized education program] process.”  The local 
hearing officer also found that the Jaynes family “incurred 
expenses for therapy and legal services related to [Stefan’s] 
education from October 8, 1993 through August, 1998,” and as a 
result “Stefan was damaged by the acts and omissions” of the 
staff of the Newport News Public Schools.  Accordingly, on 
 
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June 11, 1999, the local hearing officer held that the Jaynes 
family was entitled to “reimbursement for the costs, legal and 
educational, incurred in seeking to provide an education for 
their son, in the sum of $117,979.78.” 
 
The Newport News Public Schools appealed the local 
hearing officer’s decision to a State Level Administrative 
Review, and on September 14, 1999, the appeal hearing officer 
issued his opinion.  Based on his review of the record, the 
appeal hearing officer upheld the award of educational costs 
to the Jaynes family, however he reduced the reimbursement sum 
to $56,090.84, finding that the statute of limitations 
operated to bar a portion of the expenses sought by the Jaynes 
family.  The appeal hearing officer’s opinion provided, 
“[e]ither party is entitled to appeal this decision to either 
a state court of competent jurisdiction or a federal district 
court within one year of the date of this decision.” 
 
The Jaynes family then brought an action in the District 
Court against the School Board in December of 1999.  The 
School Board timely and properly notified Risk Management of 
the Jaynes family’s claim.  The Jaynes family sought 
reinstatement of the local hearing officer’s decision and 
award, which included “$117,979.89, plus interest, and . . . 
court costs, witness fees, expenditures and reasonable 
                                                                
1 Appellant School Board is responsible for the 
 
3
attorney’s fees, pursuant to” IDEA, 20 U.S.C. § 1415.  The 
Jaynes family then filed a motion for summary judgment, which 
the trial court granted in part pending resolution of the 
issue of damages.  The District Court ordered the Jaynes 
family to submit a verified claim for damages if no 
stipulation to the amount of damages could be reached by the 
parties.  Unable to stipulate to the amount of damages, the 
Jaynes family filed a claim for damages in the District Court, 
in which they sought $102,929.45, plus interest, from the 
School Board. 
 
On November 17, 2000, the District Court issued its 
opinion and order on the Jaynes family’s claim for damages.  
After its review of the record, the District Court found that 
the award by the local hearing officer “was adequately 
supported by the record and was not arbitrary,” and it entered 
judgment in the amount of $102,929.45, plus interest at the 
judgment rate from September 14, 1999 and taxable costs, in 
favor of the Jaynes family.2  Throughout its opinion, the 
District Court repeatedly referred to the “amount of damages” 
and the “issue of damages,” while only once referring to the 
local hearing officer’s finding that the Jaynes family was 
                                                                
supervision of the Newport News Public Schools. 
2 The District Court ordered that the taxable costs would 
be calculated following the Jaynes family’s “timely submission 
of a bill of costs.”  Subsequently, the District Court 
determined that the bill of costs was untimely filed.   
 
4
entitled to “reimbursement.”  The United States Court of 
Appeals for the Fourth Circuit (“Fourth Circuit”) affirmed the 
District Court’s decision in Jaynes v. Newport News Sch. Bd., 
13 Fed. Appx. 166, 173 (4th Cir. 2001). 
B.  The Present Litigation 
 
In December of 2002, the School Board filed a petition in 
the Circuit Court of the City of Newport News against the 
Commonwealth alleging that the Commonwealth breached its 
contractual duty under the Plan to provide coverage for 
monetary liability arising out of the underlying litigation, 
and breached its contractual duty to defend the School Board 
against claims.  The School Board sought indemnification in 
settlement of the judgment paid to the Jaynes family in March 
of 2002.  The School Board alleged it paid the Jaynes family 
the sum of $102,929.45, interest thereon of $10,001.65, and 
“$29,325.50 in settlement of the [Jaynes family’s] claim for 
attorney’s fees.”  The School Board also sought the $49,229.07 
it expended in defense of the underlying litigation.  The 
School Board sought an aggregate amount of damages of 
$191,485.67. 
 
The Coverage section of the Plan states that the Plan 
will pay all sums, except as herein limited, on 
behalf of the ENROLLED COVERED PARTY which the 
Enrolled Covered Party is legally obligated to 
pay on all claims, either first made or arising 
from any act occurring during the term of the 
coverage on causes of action established by law 
 
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by reason of liability arising out of acts or 
omissions of any nature while acting in an 
authorized governmental or proprietary capacity 
and in the course and scope of employment or 
authorization. 
 
 
The Plan provided for a maximum compensation of one 
million dollars per claim, and defined a “[c]laim” as “any 
demand, suit or legal action.”  This definition of “claim” 
excluded “administrative hearings or procedures . . . 
regardless of whether or not monetary relief is sought.”  The 
Plan defined “[c]ompensation” to “include compensatory or 
punitive damages awarded by a court of competent 
jurisdiction.” 
 
The Plan also provided that it would pay, in addition to 
compensation for liability, “[a]ll expenses incurred by the 
[Plan], including defense costs.”  The Plan defined “[d]efense 
[c]osts” as, 
all fees and expenses relating to the 
adjustment, investigation, defense or 
litigation of a claim including attorney’s fees 
incurred by the [Plan], court costs applicable 
to the defense and interest on judgments 
accruing after entry of judgment.  Defense 
costs shall not include the office expense of 
the Covered Party nor the salaries of employees 
of any Covered Party. 
 
 
The Plan contained a subsection entitled “DEFENSE,” which 
read, “[o]n matters covered by this [Plan], VaRISK 2 shall have 
the right and duty to defend any suit against the Covered 
 
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Party, even if any allegations are groundless, false or 
fraudulent.” 
The Plan contained 14 exclusions, two of which are at the 
center of this litigation.  Plan § IV.A. states that the Plan 
does not apply to: 
1. 
Any obligation under workers’ 
compensation, unemployment compensation, 
disability benefits, administrative hearings or 
procedures or any similar law or proceeding. 
 
. . . . 
 
10.  Claims, demands or other actions seeking 
relief or redress in any form other than 
monetary damages, including, but not limited to 
injunctive relief.  For the purposes of this 
exclusion, a claim for attorney’s fees, costs 
or expenses shall not be construed as a claim 
for monetary damages. 
 
(Emphasis added.) 
 
In May of 2008, the School Board submitted its brief in 
support of its claim for coverage under the Plan.  The School 
Board argued that the amount paid to the Jaynes family is 
within the scope of the insuring agreement and is not 
otherwise excluded by the Plan. 
 
The Commonwealth filed a response to the School Board’s 
brief, in which it argued that the Plan did not indemnify the 
School Board for, nor did it impose a duty upon the 
Commonwealth to defend against, the Jaynes family’s claim.  
The Commonwealth argued that the Plan excludes “‘other than 
monetary damages’ from its coverage” and “[r]eimbursement is 
 
7
not damages under IDEA,” rather it is a remedy.  The 
Commonwealth also argued that the action brought by the Jaynes 
family was “an administrative procedure throughout,” and 
therefore not a claim covered by the Plan.  Finally, the 
Commonwealth argued that “because the [School] Board was never 
exposed to damages under IDEA, [the Commonwealth] had no duty 
to provide a defense to the” School Board. 
 
In September of 2008, the School Board filed a motion to 
amend its petition to account for additional attorney’s fees 
incurred by the School Board in defense of the Jaynes family’s 
claim.  The School Board’s amended petition now sought 
$53,295.54 for attorney’s fees, raising the total ad damnum 
clause to $195,552.14.  On October 28, 2008, the trial court 
heard argument on the School Board’s petition, and the School 
Board’s motion to amend its petition to include the additional 
attorney’s fees. 
 
On November 6, 2008, the trial court issued an order 
granting the School Board’s motion to amend the ad damnum to 
$195,552.14, and denying the School Board’s petition for the 
trial court to find coverage under the Plan.  The trial court 
held that the Jaynes family’s 
action giving rise to the Board’s request for 
coverage is an administrative action for its 
entirety and, as such, was not a claim as defined 
by [the Plan]; that the underlying action was for 
“other than money damages” and, as such, fell 
 
8
under an exclusion of the Plan; and that the Plan 
was not ambiguous. 
 
 
The School Board timely filed its notice of appeal and we 
granted an appeal on the following assignments of error: 
I. A.  The court erred when it determined that the process in 
the United States District Court was simply an appeal of 
an administrative action rather than a civil action. 
 
B.  The court erred in determining that the language of 
the insuring agreement was equivalent to that in a 
liability insurance policy and would not allow coverage 
for an award of damages based on reimbursement. 
 
II. The court erred in not ordering that the defendant had a 
duty to defend under the policy. 
 
II. ANALYSIS 
A. 
Standard of Review 
The issue in this case is whether the Jaynes family’s 
claim against the School Board is covered by the Plan.  “The 
interpretation of a contract presents a question of law 
subject to de novo review.”  PMA Capital Ins. Co. v. U.S. 
Airways, Inc., 271 Va. 352, 357-58, 626 S.E.2d 369, 372 
(2006).  Familiar principles guide this Court’s interpretation 
of a contract. 
An insurance policy is a contract, and, as in 
the case of any other contract, the words used 
are given their ordinary and customary meaning 
when they are susceptible of such construction.  
Additionally, in the absence of an ambiguity 
. . . we must interpret the contract by 
examining the language explicitly contained 
therein.  [W]here an agreement is complete on 
its face, [and] is plain and unambiguous in its 
terms, the court is not at liberty to search 
for its meaning beyond the instrument itself. 
 
9
 
Graphic Arts Mut. Ins. Co. v. C.W. Warthen Co., 240 Va. 457, 
459, 397 S.E.2d 876, 877 (1990) (internal citation and 
quotation marks omitted). 
B. 
The Nature of the Underlying Litigation 
 
The trial court held that “the action giving rise to the 
[School] Board’s request for coverage is an administrative 
action for its entirety and, as such, was not a claim as 
defined by the Risk Management Plan.”  We disagree. 
 
The question whether an action filed in state or federal 
court pursuant to IDEA, following exhaustion of state 
administrative procedures, remains an administrative action is 
a question of first impression for this Court.3  However, the 
Fourth Circuit has addressed this precise issue in Kirkpatrick 
v. Lenoir County Board of Education, 216 F.3d 380, 382 (4th 
Cir. 2000), in which it held, after detailed analysis, that an 
action brought in federal district court “by a party aggrieved 
by a state administrative agency decision . . . is an original 
civil action.” 
                     
3 We are aware of the decision of the Court of Appeals of 
Virginia in Beasley v. School Bd. of Campbell County, 6 Va. 
App. 206, 210, 367 S.E.2d 738, 740 (1988), rev’d on other 
grounds by School Bd. of Campbell County v. Beasley, 238 Va. 
44, 380 S.E.2d 884 (1989).  To the extent Beasley suggests 
that an action brought pursuant to IDEA – or its state 
analogue, Code §§ 22.1-213 through 221 – in state or federal 
court remains an administrative action, it is expressly 
overruled. 
 
10
In Kirkpatrick, the Fourth Circuit looked first to the 
language of the statute.  Id. at 383-84.  20 U.S.C. 
§ 1415(i)(2)(A) states that any party aggrieved by the 
findings and decision of the local or state administrative 
agency “shall have the right to bring a civil action with 
respect to the complaint presented . . . which action may be 
brought in any State court of competent jurisdiction or in a 
district court of the United States.”  Kirkpatrick, 216 F.3d 
at 384.  The Fourth Circuit concluded that while “the statute 
explicitly affords an aggrieved party a right to appeal from 
the local educational agency to a state review officer . . . 
it explicitly gives an aggrieved party who has exhausted his 
administrative remedies the right to bring a civil action in 
federal or state court.”  Id. (citation and quotation marks 
omitted). 
 
In Kirkpatrick, the Fourth Circuit also noted that 20 
U.S.C. § 1415(i)(2)(B)(ii)4 provides that the state or district 
court reviewing an action “shall hear additional evidence at 
the request of a party.”  Id.  This procedure stands in 
contrast to a true appellate court, which is limited by the 
record developed below.  Likewise, reviewing courts under IDEA 
“are not limited to the parameters of the remedies issued by 
the state administrative agency below.”  Id.  Therefore, 
 
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rather than simply affirming, reversing, or vacating a 
decision of a state administrative agency, the reviewing court 
“offers its own independent de novo review and conclusion.”  
Id.  While the Fourth Circuit acknowledged that deference is 
given to the state administrative officer’s findings of fact, 
that deference “is merely a recognition that state educational 
administrative agencies possess a level of expertise and 
familiarity with educational standards.”  Id. at 385. 
Finally, the Fourth Circuit relied on principles of 
federalism in reaching its conclusion that a proceeding in 
state or federal court is not an administrative proceeding.  
In Rooker v. Fidelity Trust Co., 263 U.S. 413, 416 (1923), the 
United States Supreme Court established that “[l]ower federal 
courts lack jurisdiction to entertain appeals from state court 
judgments because that power is reserved exclusively to the 
United States Supreme Court.”  Kirkpatrick, 216 F.3d at 386. 
 
Based on this analysis, we adopt the conclusion reached 
in Kirkpatrick.  The plain language of IDEA labels the review 
of the administrative process a “civil action” and the 
substantive commands of IDEA further support that conclusion.  
As the court in Kirkpatrick concluded, 
while a federal district court may review a 
state review officer’s decision and even defer 
to that decision, the federal district court 
                                                                
4 This provision is currently set out in 20 U.S.C. 
§ 1415(i)(2)(C)(ii)(2006 & Supp. II 2008). 
 
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does not sit as an appellate court.  Federal 
district courts are courts of limited, original 
jurisdiction with no power to sit as appellate 
tribunals over state court or administrative 
proceedings.  Federal district courts cannot 
directly supervise and supplant state 
administrative action by affirming, reversing, 
or modifying administrative decisions. 
 
Id. at 387.  Commencement of an action in a state court rather 
than in a federal district court does not change the nature of 
the process employed.  In both state and federal court, an 
action filed pursuant to IDEA is an independent civil action, 
and not an administrative action. 
 
Turning to the facts of this case, the Plan contains very 
broad coverage language that includes within its ambit “causes 
of action established by law by reason of liability arising 
out of acts or omissions of any nature.”  (Emphasis added.)  
The local hearing officer determined that “Stefan was damaged 
by the acts and omissions” of the staff of the Newport News 
Public Schools.  The action brought by the Jaynes family in 
District Court was a “claim” as contemplated by the Plan 
because it was a “demand, suit or legal action” and, as 
discussed above, it was not an “administrative hearing[] or 
procedure[].”  Therefore, under the plain language of the 
Plan, the action brought by the Jaynes family in District 
Court was a “claim” and not excluded on the grounds that it 
was an administrative action. 
 
 
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C. 
The Plan’s Exclusion of Non-Monetary Damages 
 
The trial court held that the Jaynes family’s claim was 
excluded by the Plan because “there’s a difference between a 
monetary claim and reimbursement under IDEA” and under the 
Plan, reimbursement expenses are not covered.  The trial court 
noted that the City’s failure to provide a free appropriate 
public education to Stefan Jaynes “should have been 
anticipated and should have been taken care of so that no 
administrative proceeding was necessary.”  However correct 
that sentiment may be, our review is confined to the language 
of the Plan, and we hold that the trial court erred when it 
ruled that the relief sought by the Jaynes family was in a 
form “other than monetary damages” and therefore excluded by 
the Plan. 
 
Under the Plan, “[c]ompensation shall include 
compensatory . . . damages awarded by a court of competent 
jurisdiction.”  “Compensatory damages are those allowed as a 
recompense for loss or injury.”  Virginia Highlands Airport 
Auth. v. Singleton Auto Parts, Inc., 277 Va. 158, 169, 670 
S.E.2d 734, 740 (2009).  As a noun, “recompense” is defined as 
“an equivalent or a return for something done, suffered, or 
given:  a repayment made :  compensation .”  Webster’s Third New 
International Dictionary 1897 (1993). 
 
The District Court, in its “Opinion and Order on 
Plaintiffs’ Claim for Damages,” held that the Jaynes family 
“may only receive indemnification for educational expenses 
incurred after June 30, 1995,” and granted judgment in their 
favor.  Based on the District Court’s finding, the School 
Board violated IDEA by failing to provide a free appropriate 
public education to Stefan, and the Jaynes family sought 
“recompense for [the] loss or injury” Stefan suffered by the 
acts and omissions of the staff of the Newport News Public 
Schools.  See 277 Va. at 169, 670 S.E.2d at 740. 
The Commonwealth argues that the “reimbursement the 
[School Board] was ordered to pay is ‘other than monetary 
damages,’” and therefore the School Board’s claim is excluded 
by the policy.  In support of its position, the Commonwealth 
cites the United States Supreme Court’s decision in School 
Committee of Burlington v. Department of Education, 471 U.S. 
359 (1985); the relevant passage relied upon reads, “the Town 
repeatedly characterizes reimbursement as ‘damages,’ but that 
simply is not the case.  Reimbursement merely requires the 
Town to belatedly pay expenses that it should have paid all 
along and would have borne in the first instance had it 
 
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developed a proper” individualized education program.  Id. at 
370-71.  
IDEA, in 20 U.S.C. § 1415(i)(2)(C)(iii), states that the 
reviewing court “shall grant such relief as the court 
determines is appropriate.”  In Burlington, the United States 
Supreme Court granted certiorari to answer two questions 
related to what constitutes “appropriate relief” under IDEA:  
(i) “whether the potential relief available under [IDEA] 
includes reimbursement to parents for private school tuition 
and related expenses;” and (ii) “whether [IDEA] bars such 
reimbursement to parents who reject a proposed [individualized 
education program] and place a child in private school without 
the consent of local school authorities.”  Id. at 367. 
The United States Supreme Court stated in Burlington, “we 
are confident that by empowering the court to grant 
‘appropriate’ relief Congress meant to include retroactive 
reimbursement to parents as an available remedy in a proper 
case.”  Id. at 370.  The Court also noted that the “ordinary 
meaning of these words confers broad discretion on the court.  
The type of relief is not further specified, except that it 
must be ‘appropriate.’  Absent other reference, the only 
possible interpretation is that the relief is to be 
‘appropriate’ in light of the purpose of the Act.”  Id. at 
369.  Burlington did not hold, as a matter of law, that a 
 
16
school board’s payment of the educational expenses incurred by 
a family is the equitable remedy of reimbursement.  Rather, it 
held that a trial court deciding a claim under IDEA is left 
with “broad discretion” in fashioning relief.  Therefore, the 
dictum relied upon by the Commonwealth does not control 
contract interpretation under Virginia law. 
 
In light of this analysis, we turn to the District 
Court’s Opinion and Order.  In its opinion, the District Court 
employed the word “reimbursement” only once to refer to the 
Jaynes family’s claim for relief, instead choosing to refer to 
that claim as the “amount of damages” and the “issue of 
damages.”  For the purposes of interpreting this Virginia 
insurance contract according to its “ordinary and customary 
meaning,” Graphic Arts Mut. Ins. Co., 240 Va. at 459, 397 
S.E.2d at 876, we hold that the District Court’s award of 
damages to the Jaynes family was an award of compensatory 
damages as defined by the Plan, and not an award in some “form 
other than monetary damages.”  Accordingly, the Jaynes 
family’s claim was not excluded by the Plan. 
D. 
The Commonwealth’s Duty to Defend 
The School Board assigns error to the trial court’s 
failure to hold that under the Plan the Commonwealth had a 
duty to defend the School Board.  The “obligation to defend is 
broader than [the] obligation to pay, and arises whenever the 
 
17
complaint alleges facts and circumstances, some of which 
would, if proved, fall within the risk covered by the policy.”  
Virginia Elec. & Power Co. v. Northbrook Prop. & Cas. Ins. 
Co., 252 Va. 265, 268, 475 S.E.2d 264, 265 (1966). 
[I]f it is doubtful whether the case alleged is 
covered by the policy, the refusal of the 
insurer to defend is at its own risk.  And, if 
it be shown subsequently upon development of 
the facts that the claim is covered by the 
policy, the insurer necessarily is liable for 
breach of its covenant to defend. 
 
Brenner v. Lawyers Title Ins. Corp., 240 Va. 185, 189, 397 
S.E.2d 100, 102 (1990) (citations omitted). 
In its amended petition, the School Board asserted that 
“the Commonwealth . . . agrees to defend suits against the” 
School Board.  The School Board further alleged that because 
of the Commonwealth’s failure to “provide for the defense” of 
the Jaynes family’s claim, “the School Board was forced to 
undertake a defense of the . . . litigation at its own 
expense,” thereby incurring litigation costs of $53,295.54. 
 
The trial court held that there was no coverage under the 
Plan; consequently, in its order on the School Board’s 
petition, the trial court did not reach the question whether 
the Commonwealth breached its duty to defend.  The School 
Board objected to the trial court’s “overall finding that 
there was no breach of the policy contract pursuant to the 
Plan which would give rise to damages for the School Board['s] 
 
18
attorneys fees incurred in defense of the underlying suit.”  
On brief to this Court, the School Board argued that “the duty 
to defend and the damages sought would be subject to review at 
retrial after remand.” 
 
On brief, the Commonwealth argues that it had “no duty 
under the Plan to provide a defense to the [School] Board or 
to reimburse it for defense costs” because the Jaynes family’s 
claim “was clearly not covered by the Plan.”  The Commonwealth 
does not argue that defense costs are excluded pursuant to the 
Plan; rather, in support of its conclusion, the Commonwealth 
relies on its earlier arguments that the underlying litigation 
is excluded from coverage under the Plan.  However, we hold 
that the Plan covers the Jaynes family’s claim.  Because “the 
claim is covered by the policy, the insurer necessarily is 
liable for breach of its covenant to defend.”  Brenner, 240 
Va. at 189, 397 S.E.2d at 102. 
The Plan contained the following provision:  “On matters 
covered by this [Plan], VaRISK 2 shall have the right and duty 
to defend any suit against the Covered Party, even if any 
allegations are groundless, false or fraudulent.”  In addition 
to providing compensation for liability, the Plan covered 
“[a]ll expenses incurred by the [Plan], including defense 
costs.”  The Plan defined “[d]efense [c]osts” as “all fees and 
expenses relating to the adjustment, investigation, defense or 
 
19
litigation of a claim including attorney’s fees incurred by 
the [Plan], court costs applicable to the defense and interest 
on judgments accruing after entry of judgment.” 
Given the plain meaning of these contract provisions, the 
Commonwealth had the duty to defend the School Board, and bear 
the costs associated with that defense.  Due to its failure to 
comply with the terms of the Plan, the Commonwealth is liable 
for the defense costs incurred by the School Board in defense 
of the Jaynes family’s claim in District Court and on appeal 
to the Fourth Circuit, as well as the costs associated with 
this contract coverage litigation.  Accordingly, the trial 
court erred in failing to hold that the Commonwealth breached 
its duty to defend, and in denying the School Board’s claim 
for attorney’s fees related to the defense of the lawsuit and 
the prosecution of this action to recover its damages. 
III. CONCLUSION 
 
We hold that the trial court erred when it held that the 
Plan did not cover the claim submitted by the School Board.  
We further hold that the Commonwealth breached its contractual 
duty to defend under the Plan and is therefore liable for the 
litigation costs associated with the defense of the Jaynes 
family’s claim in federal court, as well as the costs of 
prosecuting the contract claim in the Circuit Court of the 
City of Newport News, this present appeal, and on remand.  
 
20
Accordingly, we will reverse the judgment of the trial court 
and remand with directions to enter judgment in favor of the 
School Board consistent with this opinion, and including the 
costs associated with the Commonwealth’s breach of its duty to 
defend. 
Reversed and remanded. 
 
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