Title: Jaynes v. Becker
Citation: N/A
Docket Number: 971959
State: Virginia
Issuer: Virginia Supreme Court
Date: June 5, 1998

Present:  Carrico, C.J., Compton, Lacy, Hassell, Keenan and Kinser, 
JJ., and Poff, Senior Justice. 
 
CORRIE L. JAYNES, ET AL. 
 
 
 
OPINION BY 
v.  Record No. 971959 
SENIOR JUSTICE RICHARD H. POFF 
 
 
 
June 5, 1998 
JON D. BECKER, ET AL. 
 
FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH 
A. Bonwill Shockley, Judge 
 
 
In their principal assignment of error, the several appellants 
contend that “[t]he trial court erred in finding that Ford [Motor] 
Credit [Company] is in the business of leasing within the meaning of 
Virginia Code § 38.2-2205 and that the limitation of liability 
coverage provided therein applies.” 
 
The appellants, plaintiffs in this action for declaratory 
judgment, include two students injured and the estates of two 
students killed in a collision between the vehicle they occupied and 
a pickup truck driven by John Brian Haigh.1  The appellants are also 
plaintiffs in tort actions seeking damages against Haigh who was 
convicted and incarcerated for involuntary manslaughter of the 
decedents. 
                     
1 The appellants are Corrie L. Jaynes, by her next friend and 
guardian, David H. Jaynes, David H. Jaynes, individually, James W. 
Raney, Administrator of the Estate of Brian Kent Raney, deceased, 
John Partilla and Marlise Partilla, Administrators of the Estate of 
Jason Scott Partilla, deceased, and Joseph Allen, individually. 
The appellees, defendants in the declaratory judgment action, 
are Haigh, Jon D. Becker, Haigh’s Committee, Ford Motor Company 
(Ford Motor), Ford Motor Credit Company (Ford Credit), and Michigan 
Mutual Insurance Company (Michigan Mutual). 
 
 
The accident occurred in November 1993 when the Ford pickup 
truck operated by Haigh crossed the center line of the road and 
collided head-on with the car occupied by the four students.  Haigh 
had leased that truck on March 11, 1993 for a two-year term from 
Beach Ford, Inc. (Beach Ford), a car dealership.  By language and 
signatures incorporated in the body of the lease document, Beach 
Ford assigned “all of Lessor’s right, title and interest in and to 
the Lease and the Vehicle described therein” to Ford Credit.  The 
Virginia Department of Motor Vehicles issued an owner’s certificate 
of title to Ford Credit, and Ford Credit paid the property taxes 
assessed upon the truck. 
 
At the time of the accident, Ford Motor was the primary named 
insured under an automobile insurance policy issued by Michigan 
Mutual providing a maximum liability coverage of $12 million.2  A 
policy endorsement defined “Named Insured” as “Ford Motor Company, 
its subsidiary, associated and affiliated companies, and its owned 
or controlled companies as are now or may hereafter be constituted.”  
Ford Credit is a wholly-owned subsidiary of Ford Motor. 
 
Appellants asked the trial court to declare that “the [Michigan 
Mutual] insurance policy affords liability coverage which would be 
available to satisfy plaintiffs’ claims . . . or to pay any 
                     
2 Although the lease agreement required the lessee to maintain 
liability coverage on the pickup, Haigh’s own insurance policy was 
cancelled for failure to pay premiums approximately two months 
before the accident. 
 
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judgments recovered by plaintiffs against Haigh in the lawsuits”.  
The appellants filed a motion for summary judgment.  The appellees, 
having filed their grounds of defense and a cross-motion for summary 
judgment, joined with the appellants in a “STATEMENT OF FACTS NOT IN 
DISPUTE”. 
 
Based upon that statement, exhibits related to the several 
stipulations, other exhibits filed with the cross-motions, and oral 
argument by counsel, the trial court issued a letter opinion 
sustaining the cross-motions in part and denying them in part.  In a 
final judgment order entered June 20, 1997, the court ruled: (1) 
that “Haigh is an insured under the subject Michigan Mutual . . . 
policy . . . as a permissive user of the vehicle owned by Ford 
Credit, as provided in Va. Code § 38.2-2204”; (2) that, “because 
Haigh was a permissive user, liability coverage under the Policy 
extends to claims of the plaintiffs arising from the accident which 
prompted this suit for declaratory judgment”; and (3) that “the 
Defendants in this case are entitled to the limitation on liability 
set forth in Va. Code § 38.2-2205 and . . . the amount of liability 
coverage under the Policy applicable to any liability of Haigh 
arising from the accident which prompted this suit for declaratory 
judgment is limited to $25,000 per person and $50,000 per accident 
as set forth in, and subject to the provisions of, Va. Code §§ 38.2-
2205 and 46.2-472”. 
I. 
 
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Appellants’ first assignment of error addresses the trial 
court’s third ruling.  They contend that the appellees are not 
eligible for the coverage limitation fixed in Code § 46.2-472 
because, they say, Ford Credit is not engaged in the business of 
leasing vehicles within the intendment of Code § 38.2-2205 but only 
in the business of financing leases.  In pertinent part, § 38.2-
2205(A)(1) provides: 
Each policy . . . of bodily injury . . . liability 
insurance which provides insurance to a named insured in 
connection with the business of . . . leasing . . . motor 
vehicles, against liability arising from the . . . use of 
any motor vehicle incident thereto shall contain a 
provision that the insurance coverage . . . shall not be 
applicable to a person other than the named insured . . . 
if there is any other valid and collectible insurance 
applicable to the same loss covering the other person 
under a policy with limits at least equal to the financial 
responsibility requirements specified in § 46.2-472.  Such 
provision shall apply to motor vehicles which are . . . 
leased to the other person for a period of six months or 
more. . . . 
 
 
In the language of this statute, Ford Credit is a “named 
insured” under Michigan Mutual’s policy covering a vehicle leased to 
the “other person [Haigh] for a period of six months or more” and 
Haigh is the “person other than the named insured” covered under 
that policy because there is no “other valid and collectible 
insurance . . . covering the other person under a policy with limits 
at least equal to the financial responsibility requirements 
specified in § 46.2-472.” 
 
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The dispositive question, then, is whether Michigan Mutual’s 
policy provides insurance to a named insured “in connection with the 
business of . . . leasing”.  The appellants insist that Ford 
Credit’s very name identifies it as an entity engaged in the 
business of financing rather than leasing.  The trial court ruled 
that “Ford Credit did more than just ‘finance’ the lease of the 
subject truck.”  As explained in its letter opinion, the court’s 
ruling was based upon the record and the stipulated facts before it: 
Ford Credit provides the blank lease documents for use by 
Ford dealerships, approves the leases before the 
dealerships enter into them, purchases the vehicles, takes 
assignments of the leases, assumes all of the duties and 
rights of ownership of the leased vehicles, and performs 
administrative duties during the term of the leases.  
Under the terms of the . . . leases, Ford Credit becomes 
the lessor of the vehicles, not just a financial backer. 
 
 
We agree with the trial court’s ruling that Michigan Mutual’s 
policy provides insurance within the intendment of Code §§ 38.2-
2205(A)(1) and 46.2-472. 
II. 
 
Yet, appellants maintain that Ford Credit is bound by an 
admission stated in its “Annual Report on Form 10-K” filed in 1993 
with the federal Securities and Exchange Commission that it was in 
the business of financing.  In an alternative assignment of error, 
they contend that, if that admission was not sufficient to 
“establish conclusively that Ford Credit is in the business of 
financing rather than leasing, then the trial court erred in 
 
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granting [the appellees] summary judgment . . . because a material 
fact is genuinely in dispute.” 
 
We disagree.  Ford Credit’s acknowledgement that it was “in the 
business of financing” is not factually inconsistent with its 
contention that it is a “named insured” in Michigan Mutual’s 
insurance policy issued “in connection with the business of . . . 
leasing . . . motor vehicles”.  Consequently, we agree with the 
trial court that Ford Credit was a lessor of the vehicle and that 
“no material facts remain in dispute.”   
 
Finding no merit in the appellants’ assignments of error, we 
will affirm the final judgment entered June 20, 1997. 
Affirmed. 
 
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