Title: Virginia Farm Bureau Mutual Ins. v. Williams

State: virginia

Issuer: Virginia Supreme Court

Document:

PRESENT:  All the Justices 
 
 
VIRGINIA FARM BUREAU MUTUAL  
INSURANCE COMPANY 
 
v.   Record No. 081900 
 
 
 
 
OPINION BY 
JUSTICE BARBARA MILANO KEENAN 
 
 
  June 4, 2009 
VIRGINIA C. WILLIAMS, 
AN INFANT WHO SUES BY HER 
FATHER AND NEXT FRIEND, 
ROBERT WILLIAMS, ET AL. 
 
 
FROM THE CIRCUIT COURT OF THE CITY OF NORFOLK 
John C. Morrison, Jr., Judge 
 
In this appeal, we consider whether an exclusion in an 
automobile insurance policy prohibited an insured party from 
“stacking,” or combining, the uninsured/underinsured motorist 
coverage for bodily injury (UM/UIM coverage) on the three 
separate vehicles listed in the policy. 
 
The facts of this case are not in dispute.  Virginia C. 
Williams, who was then a minor, was injured in an automobile 
accident while riding as a passenger in a vehicle.  Both the 
vehicle in which Williams was riding and a second vehicle 
involved in the accident were underinsured. 
 
Williams qualified as an insured of the first class under 
her father’s automobile insurance policy issued by Virginia Farm 
Bureau Mutual Insurance Company (the policy).  The policy 
provides coverage for three separate vehicles, none of which was 
involved in the accident.  The UM/UIM coverage portion of the 
policy states under the heading entitled “Schedule Limit of 
Liability:” 
 
Bodily Injury   $  See Declarations    each person 
 
                $  See Declarations    each accident 
Property Damage $  See Declarations    each accident. 
 
 
Several paragraphs later, in the same UM/UIM section of the 
policy, the policy states: 
Limits of Liability: Regardless of the number of 
. . . motor vehicles to which this insurance applies, 
a) [i]f the schedule or declarations indicates split 
limits of liability, the limit of liability for 
bodily injury stated as applicable to “each person” 
is the limit of the company’s liability for all 
damages because of bodily injury sustained by one 
person as the result of any one accident and, subject 
to the above provision respecting “each person” the 
limit of liability for bodily injury stated as 
applicable to “each accident”, is the total limit of 
the company’s liability for all damages because of 
bodily injury sustained by two or more persons as the 
result of any one accident. 
 
The policy “declarations” page lists in the “limits of 
liability” section one premium paid for a vehicle having UM/UIM 
coverage of $250,000 for each person and $500,000 coverage for 
each accident.  Two additional premiums paid on two other listed 
vehicles each provide UM/UIM coverage of $300,000 for each 
person and $500,000 for each accident. 
 
Williams, by her father as next friend, filed a complaint 
in the circuit court seeking a declaration of her rights under 
the policy, asserting that she was entitled to UM/UIM coverage 
in the total amount of $850,000, which represents the combined 
 
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UM/UIM bodily injury coverage for each person for the three 
insured vehicles.*  Virginia Farm Bureau Mutual Insurance Company 
(Farm Bureau) filed an answer and a motion for summary judgment 
asserting that the terms of the policy’s UM/UIM coverage 
prohibited “intrapolicy stacking” and, thus, that the maximum 
potential UM/UIM coverage for Williams was $300,000.  Williams 
also filed a motion for summary judgment asking the circuit 
court to declare that she was entitled to UM/UIM coverage of 
$850,000 under the policy.  
 
After conducting a hearing on the cross-motions for summary 
judgment, the circuit court entered an order granting each of 
the motions in part.  The circuit court determined that the 
total UM/UIM coverage afforded to Williams under the policy was 
$550,000.  We granted Farm Bureau’s petition for appeal, and 
also granted Williams’ assignment of cross-error. 
 
On appeal, Farm Bureau contends that the circuit court 
erred in interpreting the policy’s UM/UIM coverage.  Farm Bureau 
argues that although Virginia law permits “intrapolicy stacking” 
of UM/UIM coverage, the policy at issue expressly prohibits such 
stacking.  Farm Bureau relies on our decision in Goodville 
Mutual Cas. Co. v. Borror, 221 Va. 967, 275 S.E.2d 625 (1981), 
                     
* The complaint also named as defendants the two drivers 
involved in the automobile accident, the policyholders through 
whom those drivers had coverage, and the companies providing 
those policies.  This appeal, however, relates only to the 
Virginia Farm Bureau Mutual Insurance Company policy. 
 
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in which we held that unambiguous language in the policy at 
issue prohibited the stacking of UM/UIM coverage for the two 
vehicles listed in the policy.  Farm Bureau contends that its 
policy contains substantially similar language prohibiting the 
stacking of UM/UIM coverage.  In addition, Farm Bureau argues 
that any alleged ambiguity regarding whether Williams is 
entitled to $250,000 or $300,000 in UM/UIM coverage has been 
resolved in Williams’ favor, because Farm Bureau agreed to pay 
Williams the larger of the two amounts listed for each person in 
the declarations page of the policy. 
In response, Williams asserts that the policy language 
regarding UM/UIM coverage is ambiguous and, therefore, must be 
construed to afford Williams the maximum combined UM/UIM bodily 
injury coverage listed in the declarations page.  In her 
assignment of cross-error, Williams asserts that the circuit 
court should have stacked the UM/UIM coverage available for all 
three insured vehicles and declared that Williams is entitled to 
UM/UIM coverage in the amount of $850,000, rather than $550,000. 
Williams argues that the provisions of the policy before us 
are materially different from the policy provisions at issue in 
Goodville.  Williams argues that, in the policy considered in 
Goodville, the unambiguous language prohibiting intrapolicy 
stacking was found entirely in the UM/UIM coverage provision 
section that also included a schedule listing available coverage 
 
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of $25,000 for each person, and of $50,000 for each accident.  
Williams observes that, in contrast, the policy at issue in this 
case does not provide limits for each person and each accident 
in a designated schedule stated within the UM/UIM section of the 
policy. 
Williams additionally asserts that the language in the 
policy limiting UM/UIM coverage to the amount designated for 
“each person,” as stated in the declarations page, does not 
distinguish among the three separate UM/UIM coverage amounts for 
“each person” listed for the three insured vehicles.  Thus, 
Williams argues that because the policy does not indicate which 
vehicle’s coverage is applicable in the present case, the policy 
when read as a whole does not unambiguously prohibit stacking 
the UM/UIM coverage for the three separate vehicles listed in 
the policy. 
 
In resolving this issue, we consider established principles 
of insurance law.  The interpretation of an insurance policy 
presents a question of law that we review de novo on appeal.  
Seals v. Erie Ins. Exch., 277 Va. 558, 562, 674 S.E.2d 860, 862 
(2009); Lower Chesapeake Assocs. v. Valley Forge Ins. Co., 260 
Va. 77, 88, 532 S.E.2d 325, 331 (2000); Craig v. Dye, 259 Va. 
533, 537, 526 S.E.2d 9, 11 (2000).  Courts interpret insurance 
policies, like other contracts, by determining the parties’ 
intent from the words they have used in the document.  Seals, 
 
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277 Va. at 562, 674 S.E.2d at 862; Lower Chesapeake, 260 Va. at 
87-88, 532 S.E.2d at 331; Floyd v. Northern Neck Ins. Co., 245 
Va. 153, 158, 427 S.E.2d 193, 196 (1993).  Provisions of an 
insurance policy must be considered and construed together, and 
any internal conflicts between provisions must be harmonized, if 
reasonably possible, to effectuate the parties’ intent.  Seals, 
277 Va. at 562, 674 S.E.2d at 862; Floyd, 245 Va. at 158, 427 
S.E.2d at 196; Suggs v. Life Ins. Co. of Virginia, 207 Va. 7, 
11, 147 S.E.2d 707, 710 (1966). 
 
When a disputed policy term is unambiguous, we apply its 
plain meaning as written.  Virginia Farm Bureau Mutual Ins. Co. 
v. Gile, 259 Va. 164, 170, 524 S.E.2d 642, 645 (2000); Osborne 
v. National Union Fire Ins. Co., 251 Va. 53, 56, 465 S.E.2d 835, 
837 (1996).  However, if disputed policy language is ambiguous 
and can be understood to have more than one meaning, we construe 
the language in favor of coverage and against the insurer.  
Seals, 277 Va. at 562, 674 S.E.2d at 862; Virginia Farm Bureau, 
259 Va. at 169, 524 S.E.2d at 645; see also Lower Chesapeake, 
260 Va. at 88, 532 S.E.2d at 331-32; Granite State Ins. Co. v. 
Bottoms, 243 Va. 228, 234, 415 S.E.2d 131, 134 (1992); Caldwell 
v. Transportation Ins. Co., 234 Va. 639, 642-43, 364 S.E.2d 1, 3 
(1988); St. Paul Fire & Marine Ins. Co. v. S.L. Nusbaum & Co., 
227 Va. 407, 411, 316 S.E.2d 734, 736 (1984); Goodville, 221 Va. 
at 970, 275 S.E.2d at 627. 
 
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Because insurance policies usually are drafted by insurers, 
we construe ambiguous policy language purporting to exclude 
certain occurrences from coverage most strongly against the 
insurer.  Seals, 277 Va. at 562, 674 S.E.2d at 862; Government 
Employees Ins. Co. v. Moore, 266 Va. 155, 165, 580 S.E.2d 823, 
828-29 (2003); Caldwell, 234 Va. at 642-43, 364 S.E.2d at 3; St. 
Paul, 227 Va. at 411, 316 S.E.2d at 736.  Thus, when an insurer 
seeks to limit coverage under a policy, the insurer must use 
language that is reasonable, clear, and unambiguous.  Lower 
Chesapeake, 260 Va. at 88, 532 S.E.2d at 331; Granite State, 243 
Va. at 233, 415 S.E.2d at 134. 
 
In addition to these basic principles governing our 
interpretation of insurance policies, we also have articulated a 
general rule that we apply to issues involving the stacking of 
UM/UIM coverage.  We stated in Goodville that “it is now the 
rule in Virginia that the stacking of UM[/UIM] coverage will be 
permitted unless clear and unambiguous language exists on the 
face of the policy to prevent such multiple coverage.”  221 Va. 
at 970, 275 S.E.2d at 627; accord Lipscombe v. Security Ins. 
Co., 213 Va. 81, 84, 189 S.E.2d 320, 323 (1972).  Thus, under 
previously stated general principles, any ambiguity regarding 
the stacking of coverage within a policy will be construed 
against the insurer.  See Seals, 277 Va. at 562, 674 S.E.2d at 
862; Lower Chesapeake, 260 Va. at 88, 532 S.E.2d at 331-32; 
 
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Virginia Farm Bureau, 259 Va. at 169, 524 S.E.2d at 645; Granite 
State, 243 Va. at 234, 415 S.E.2d at 134; Caldwell, 234 Va. at 
642-43, 364 S.E.2d at 3; St. Paul, 227 Va. at 411, 316 S.E.2d at 
736; Goodville, 221 Va. at 970, 275 S.E.2d at 627. 
 
In resolving the present policy dispute, we compare the 
policy provisions before us with those we reviewed in Goodville.  
The policy in Goodville included the following language in its 
UM/UIM coverage section.  In the first paragraph, the “[l]imits 
of [l]iability” provided: 
 
Bodily injury $25,000 each person; $50,000 each accident 
 
Property Damage $5,000 each accident. 
 
Several paragraphs later, the policy read: 
 
Limits of Liability 
Regardless of the number of . . . motor vehicles to 
which this insurance applies, (a) the limit of 
liability for bodily injury stated in the schedule as 
applicable to “each person” is the limit of the 
company’s liability for all damages because of bodily 
injury sustained by one person as the result of any 
one accident and, subject to the above provision 
respecting “each person”, the limit of the liability 
stated in the schedule as applicable to “each 
accident” is the total limit of the company’s 
liability for all damages because of bodily injury 
sustained by two or more persons as the result of any 
one accident. 
 
Goodville, 221 Va. at 970, 275 S.E.2d at 627. 
 
The policy considered in Goodville included separate 
premiums for the two vehicles listed in that policy.  
Nevertheless, we held that the policy language in Goodville 
unambiguously prohibited stacking and limited the plaintiff’s 
 
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coverage to $25,000.  Id. at 970-71, 275 S.E.2d at 627-28.  We 
stated that the phrase “[r]egardless of the number of . . . 
motor vehicles to which this insurance applies” was a clear and 
unambiguous provision prohibiting stacking.  Id. at 970-71, 275 
S.E.2d at 628. 
 
Although the policy that is the subject of the present 
appeal contains this same phrase, that similarity must be 
considered in the context of the other policy language.  In 
reviewing the balance of the policy language, we observe that 
the present policy contains a significant difference from the 
policy we considered in Goodville.  There, the UM endorsement 
contained a schedule stating the limits of liability for “each 
person” at $25,000.  This statement was clearly and 
unambiguously set forth at the beginning of the UM endorsement, 
and no other portions of the policy addressed this same subject. 
 
Unlike the policy in Goodville, the present policy does not 
state the limits of liability for “each person” in a schedule 
within the UM/UIM endorsement.  Instead, the UM/UIM endorsement 
refers the reader to the “[d]eclarations” page of the policy, in 
which there are three references to the term “each person.”  Two 
of those references state a limit of liability for “each person” 
in the amount of $300,000, while the third reference states a 
limit of liability for “each person” in the amount of $250,000.
 
These different sets of coverage, when considered along 
 
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with the “anti-stacking” language of the UM/UIM endorsement, 
leave unresolved the question whether all three separate limits 
for “each person” apply and, if not, which of the single 
separate limits for “each person” is applicable.  This disparity 
in the stated limits of liability for “each person” manifests an 
ambiguity regarding the extent of total coverage for “each 
person” under the policy. 
 
Contrary to Farm Bureau’s assertion, this disparity cannot 
be resolved by selecting arbitrarily the higher of the two 
amounts listed for bodily injury for “each person.”  To do so 
would ignore the fact that the declarations have three separate 
entries for “each person,” and the “anti-stacking” language in 
the UM/UIM endorsement only limits coverage to the amount stated 
for “each person” in the declarations portion of the policy. 
 
Because we must construe this ambiguity in Williams’ favor, 
we hold that Williams is entitled to “stack” the UM/UIM coverage 
for all three vehicles listed in the policy.  Therefore, in 
accordance with Williams’ assignment of cross-error, we hold 
that the circuit court erred in failing to declare that Williams 
is entitled to total UM/UIM coverage in the amount of $850,000 
under the policy. 
 
For these reasons, we will affirm the part of the circuit 
court’s judgment holding that Williams was afforded UM/UIM 
coverage under the policy, and will reverse the part of the 
 
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circuit court’s judgment limiting the UM/UIM coverage afforded 
to $550,000.  We will enter final judgment declaring that the 
policy afforded to Williams, at the time of the accident 
underlying this action, UM/UIM coverage in the total amount of 
$850,000. 
 
 
 
 
 
 Affirmed in part, 
 
 
 
 
 
 reversed in part, 
and final judgment. 
 
 
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