Title: Salzi v. Virginia Farm Bureau Insurance
Citation: N/A
Docket Number: 010438
State: Virginia
Issuer: Virginia Supreme Court
Date: January 11, 2002

Present:  All the Justices 
 
VICTOR H. SALZI, ET AL. 
 
OPINION BY JUSTICE LEROY R. HASSELL, SR. 
v.  Record No. 010438 
January 11, 2002 
 
VIRGINIA FARM BUREAU MUTUAL 
INSURANCE COMPANY 
 
FROM THE CIRCUIT COURT OF CHARLOTTE COUNTY 
Charles L. McCormick, III, Judge 
 
 
In this appeal, we consider whether a provision in an 
insurance contract is ambiguous and, therefore, unenforceable. 
 
Victor H. and Lorraine Salzi filed their amended motion 
for judgment against Virginia Farm Bureau Mutual Insurance 
Company (Virginia Farm Bureau).  They alleged that Virginia 
Farm Bureau breached its insurance contract by failing to 
indemnify them for damages sustained to a barn as a result of 
a hurricane.  The parties entered into a stipulation of facts, 
and the litigants submitted the matter to the circuit court 
for summary judgment on the issue whether a business use 
exclusion in the contract absolved Virginia Farm Bureau of any 
obligation to pay the stipulated damages.  The circuit court 
held that the exclusion was clear and unambiguous and that 
Virginia Farm Bureau had no duty to indemnify the Salzis for 
their loss.  The circuit court entered a final judgment, and 
the Salzis appeal. 
 
Victor H. and Lorraine Salzi were the named insureds 
under a homeowners insurance policy issued by Virginia Farm 
Bureau.  The property insured included a barn that had an 
actual cash value in excess of $16,120. 
 
On September 15, 1996, the barn collapsed.  "At the time 
of the [l]oss, the barn contained between 1,500 and 3,000 
bales of hay, which measured approximately 2' x 4' each."  
James Renneth Marston owned the hay that was stored in the 
barn.  Marston operates a tobacco farm "with a profit motive 
in Charlotte County."  Marston raised tobacco "over more than 
115 acres in Charlotte, Appomattox and Campbell Counties."  He 
raised the hay stored in the Salzis' barn "as part of his 
normal crop rotation in his tobacco farming operation."  
Marston did not have sufficient space on his own farm to store 
the hay, and he "asked for and received permission from Victor 
Salzi to store hay in the barn."  Marston had "free access to 
the barn."  Marston did not need permission from the Salzis 
when he wanted access to the barn. 
 
Marston had not used the Salzis' barn in the past.  
Marston did not rent the barn from the Salzis, nor had he 
discussed rental terms with them.  "Marston thanked Salzi for 
allowing him to use the barn, and gave Salzi $100 as a 
neighborly gesture."  Marston had intended to sell the hay 
stored in the barn to a buyer, but the buyer no longer desired 
 
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to purchase the hay after it was damaged in the hurricane that 
caused the barn to collapse.  The Salzis filed a claim with 
Virginia Farm Bureau for damages to the barn. 
 
Virginia Farm Bureau denied the claim on the basis that 
the barn was used "for business" at the time of the loss.  
Virginia Farm Bureau's insurance contract that had been issued 
to the Salzis contained the following pertinent provisions: 
"The following definitions apply to this policy. 
 
. . . . 
 
 
"Business means a trade, profession, or other 
occupation including farming, all whether full 
or part time, or the rental of any property to 
others.  (However, business does not include 
the occasional rental, for residential 
purposes, of the portion of the insured 
premises normally occupied exclusively by your 
household.) 
 
. . . . 
 
"PRINCIPAL PROPERTY COVERAGES 
 
. . . . 
 
"Coverage B – Related Private Structures on the 
Premises – This policy covers related private 
structures on the insured premises which are not 
attached to your residence.  (Structures connected 
to the residence by only a fence, utility line or 
similar connection are considered to be related 
private structures.) . . . . 
 
"Coverage B does not cover: 
"1.  structures used for business." 
 
 
The Salzis argue that the definition of the word 
"business" in the insurance contract is vague, ambiguous, and 
 
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susceptible to two reasonable interpretations.  The Salzis 
contend that the language in the policy "speaks in specific 
terms of the insured's activity, use or ownership, not that of 
a third party.  The business use exclusion applies . . . to 
Salzi's business, not Marston's temporary, one time use of the 
barn to store hay."  Continuing, the Salzis argue that even 
though Virginia Farm Bureau "is clearly attempting to limit 
its liability by excluding coverage for the commercial use of 
the barn . . . the limitation applies to the insured's 
business use of the structure, for the insured's trade, or the 
insured's profession, or the insured's other occupation or the 
insured's rental to others.  The use of the word 'others' in 
the sentence limits the applicability of the exclusion to the 
insureds."  The Salzis contend that the policy's definition of 
business could mean one of two things: (i) the business 
exclusion only applies if the Salzis use the barn in their 
trade, profession, or occupation, or (ii) the exclusion 
applies if the Salzis and Marston used the barn in their 
trades, professions, or occupations.  We disagree with the 
Salzis. 
 
The principles of contract interpretation that guide our 
resolution of this appeal are well established.  "Reasonable 
policy exclusions not in conflict with statute[s] will be 
enforced; to be effective, the exclusionary language must 
 
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clearly and unambiguously bring the particular act or omission 
within its scope."  Floyd v. Northern Neck Ins. Co., 245 Va. 
153, 158, 427 S.E.2d 193, 196 (1993).  Additionally, " '[a]n 
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.' "  Graphic Arts Mutual Ins. v. C.W. Warthen 
Co., 240 Va. 457, 459, 397 S.E.2d 876, 877 (1990) (quoting 
Hill v. State Farm Mutual Auto. Ins., 237 Va. 148, 152, 375 
S.E.2d 727, 729 (1989)). 
 
We have also stated that "an ambiguity, if one exists, 
must be found on the face of the policy."  Nationwide Mutual 
Ins. v. Wenger, 222 Va. 263, 268, 278 S.E.2d 874, 877 (1981); 
accord S.F. (Jane Doe) v. West American Ins. Co., 250 Va. 461, 
464, 463 S.E.2d 450, 452 (1995).  Language is ambiguous when 
it may be understood in more than one way or when such 
language refers to two or more things at the same time.  
Lincoln National Life Ins. Co. v. Commonwealth Corrugated 
Container Corp., 229 Va. 132, 136-37, 327 S.E.2d 98, 101 
(1985). 
 
The insurance contract at issue in this appeal plainly 
states that the coverage does not include "structures used for 
business."  As we have already stated, the word "business" is 
defined in the insurance contract as "a trade, profession, or 
 
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other occupation including farming, all whether full or part 
time, or the rental of any property to others."  The phrase 
"structures used for business" is unambiguous.  And, the 
insurance contract's definition of business is unambiguous. 
 
We find no language in the insurance contract that 
permits us to conclude that the definition of business is 
limited to the Salzis' business activities as opposed to the 
business activities of others, in this instance, Marston's 
business activities.  The Salzis' barn is a structure within 
the plain meaning of the insurance contract.  Their barn was 
"used for business" within the plain meaning of the insurance 
contract because the Salzis permitted a farmer to store in 
their barn between 1,500 and 3,000 bales of hay related to the 
farmer's tobacco business. 
 
Finding no merit in the Salzis' remaining contentions, we 
will affirm the judgment of the circuit court. 
Affirmed. 
JUSTICE KINSER, with whom JUSTICE KEENAN and JUSTICE LEMONS 
join, dissenting. 
 
 
I do not agree with the statement in the majority opinion 
that the barn belonging to the appellants, Victor H. and 
Lorraine Salzi, “was ‘used for business’ . . . because the 
Salzis permitted a farmer to store in their barn between 1,500 
and 3,000 bales of hay related to the farmer’s tobacco 
 
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business.”  In my opinion, a one-time, gratuitous use of a 
barn to store a neighbor’s hay does not turn that barn into a 
“structure[] used for business.” 
 
The storing of hay in this barn on one occasion lacks the 
continuity necessary to constitute a business use.  See 
Virginia Mut. Ins. Co. v. Hagy, 232 Va. 472, 475, 352 S.E.2d 
316, 318 (1987) (defining, as the law of the case, the term 
“business pursuit” as requiring both continuity and profit 
motive).  “[T]he term business . . . mean[s] more than a 
single act.”  Nationwide Ins. Co. v. Hill, 307 F. Supp. 801, 
804 (W.D. Va. 1969), aff’d, Nationwide Ins. Co. v. Aetna 
Casualty & Surety Co., 426 F.2d 313 (4th Cir. 1970). 
 
The appellee, Virginia Farm Bureau Mutual Insurance 
Company, argues that the Salzis did not assign error to the 
trial court’s factual finding that the Salzis permitted their 
neighbor “to use their barn to store hay in his farming 
business.”  I do not agree.  The question whether the barn was 
a “structure[] used for business” is a mixed question of law 
and fact, and resolution of the question depends upon the 
construction placed on that phrase in the policy.  The Salzis 
objected to the final order, in part, on the basis that the 
trial court misconstrued the policy’s language, and, on 
appeal, they challenged the trial court’s construction of the 
 
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phrase “structures used for business.”  Thus, I conclude that 
this question is properly before this Court. 
 
For these reasons, I respectfully dissent and would 
reverse the judgment of the circuit court. 
 
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