Opinion ID: 1343596
Heading Depth: 2
Heading Rank: 1

Heading: Policy Definition versus Statutory Requirements

Text: The first issue we address concerns whether the trial court erroneously concluded that Appellee was insured under Appellant's policy on the basis that the term insured, as defined within the insurance policy, contravened the statutory language of West Virginia Code § 33-6-31. Appellant argues that underinsured motorist coverage is only invoked if Appellee was occupying, as that term is defined within the policy, [5] a covered auto when he was hit by Ms. Cook. Appellant maintains that the facts undisputedly demonstrated that Appellee was not occupying his police cruiser at the time of the accident. Appellant further argues that the custom-designed [6] state insurance policy is immune from the requirements of West Virginia Code § 33-6-31. Conceding that he was not occupying the police cruiser at the time of the accident, Appellee advocates a liberal construction of the term use, [7] as found in West Virginia Code § 33-6-31(c) and as interpreted by this Court, rather than the policy definitions of insured and occupy, based on the remedial nature of the underinsured motorist statute. See State Auto. Mut. Ins. Co. v. Youler, 183 W.Va. 556, 564, 396 S.E.2d 737, 745 (1990) (stating purpose of W. Va.Code § 33-6-31 is that the injured person be fully compensated for his or her damages, not compensated by a negligent tortfeasor, up to the limits of the uninsured or underinsured motorist coverage); Syl. Pt. 7, Perkins v. Doe, 177 W.Va. 84, 85, 350 S.E.2d 711, 712 (1986) (holding that [t]he uninsured motorist statute, West Virginia Code § 33-6-31 (Supp.1986), is remedial in nature and, therefore, must be construed liberally in order to effect its purpose). Appellee maintains that the policy language is void as against public policy because it is more restrictive than the statutory language. See Syl. Pt. 2, Universal Underwriters Ins. Co. v. Taylor, 185 W.Va. 606, 408 S.E.2d 358 (1991); Syl. Pt. 1, Bell v. State Farm Mut. Auto. Ins. Co., 157 W.Va. 623, 207 S.E.2d 147 (1974). [8] We begin by examining the pertinent policy provisions in relation to West Virginia Code § 33-6-31. The policy provides, in pertinent part, that the following individuals are considered to be insured for purposes of the policy: 1. You 2. If you are an individual, any family member 3. Anyone else occupying a covered auto or a temporary substitute for a covered auto.... 4. Anyone for damages he is entitled to recover because of bodily injury sustained by another insured. The policy proceeds to define the term occupying as in, upon, getting in, on, out or off of the covered vehicle. It is undisputed that, under the literal terms of the policy, Appellee was not occupying the vehicle at the time of the accident. [9] Since Appellee clearly was not an insured under the express policy terms, Appellee can only secure coverage under the policy if this Court determines that Appellant's policy is not a custom-designed state insurance policy immune from the requirements of West Virginia Code § 33-6-31. See Cook v. McDowell County Emergency Ambulance Serv. Auth., 191 W.Va. 256, 445 S.E.2d 197 (1994). Such a determination would result in Appellant not being entitled to incorporate a more restrictive definition of an insured into the policy than is found in the statutory definition. See id. West Virginia Code § 33-6-31(c) defines insured as follows: the term insured shall mean the named insured and, while resident of the same household, the spouse of any such named insured and relatives of either, while in a motor vehicle or otherwise, and any person, except a bailee for hire, who uses, with the consent, express or implied, of the named insured, the motor vehicle to which the policy applies or the personal representative of any of the above. Id. (emphasis added). Although the Legislature did not define the term uses as it appears in the above-mentioned statute, we discussed the term use as it was employed in an Intentional Acts Exclusion of an insurance policy in Baber v. Fortner ex rel. Poe, 186 W.Va. 413, 412 S.E.2d 814 (1991). Under the terms of the policy, the incident had to arise out of the `ownership, maintenance or use' of a covered vehicle for coverage to apply. Id. at 416, 412 S.E.2d at 817. In ascertaining what the term use meant, we relied upon the Michigan Court of Appeal's decision in Detroit Automobile Inter-Insurance Exchange v. Higginbotham, 95 Mich.App. 213, 290 N.W.2d 414 (1980), which stated that: `Cases construing the phrase arising out of the ... use of a motor vehicle uniformly require that the injured person establish a causal connection between the use of the motor vehicle and the injury. Such causal connection must be more than incidental, fortuitous or but for. The injury must be foreseeably identifiable with the normal use of the vehicle. (Citations omitted.) (Emphasis added.)' Baber, 186 W.Va. at 417, 412 S.E.2d at 818 (quoting Higginbotham, 290 N.W.2d at 419). Moreover, we noted in Dotts v. Taressa J.A., 182 W.Va. 586, 390 S.E.2d 568 (1990), that the phrase was not intended to be restrictive. Id. at 592, 390 S.E.2d at 574. Consequently, it is apparent that the term uses as it is employed in West Virginia Code § 33-6-31 is less restrictive than the term occupying as it is defined within the insurance policy at issue. The provisions of West Virginia Code § 33-6-31 are not mandatory for every insurance policy issued in this state, as the following language indicates: Insurance contracts shall contain such standard provisions as are required by the applicable provisions of this chapter pertaining to contracts of particular kinds of insurance. The commissioner may waive the required use of a particular standard provision in a particular insurance policy form, if he finds such provision unnecessary for the protection of the insured and inconsistent with the purposes of the policy, and the policy is otherwise approved by him. W. Va.Code § 33-6-10(a) (1996). Relying on the above-mentioned statutory language, as well as our decisions in Cook and Eggleston v. West Virginia Department of Highways, 189 W.Va. 230, 429 S.E.2d 636 (1993), Appellant argues that since the policy was issued to a governmental entity pursuant to the Governmental Tort Claims and Insurance Reform Act (Act), West Virginia Code §§ 29-12A-1 to -18 (1992), it is immune from the requirements of West Virginia Code § 33-6-31. In Cook, two passengers in an ambulance owned and operated by the McDowell County Emergency Ambulance were injured when the ambulance swerved and struck two parked automobiles. One of the passengers sustained severe head injuries, while the other suffered only minor injuries. 191 W.Va. at 257-58, 445 S.E.2d at 198-99. The issue on appeal concerned whether an underinsured motorist endorsement was subject to the maximum liability limit of $1,000,000 for a single claim or occurrence as provided under the terms of the policy. [10] Id. at 258-59, 445 S.E.2d at 199-200. In determining this issue, we examined West Virginia Code § 29-12A-16(a) (1992): A political subdivision may use public funds to secure insurance with respect to its potential liability and that of its employees in damages in civil actions for injury, death, or loss to persons or property allegedly caused by an act or omission of the political subdivision or any of its employees, including insurance coverage procured through the state board of risk and insurance management. The insurance may be at the limits, for the circumstances and subject to the terms and conditions that are determined by the political subdivision in its discretion. 191 W.Va. at 260, 445 S.E.2d at 201 (emphasis added). Based upon this statutory language, we stated that: [t]he West Virginia State Board of Risk and Insurance Management, under the terms of W. Va.Code § 29-12A-16(a), is granted broad discretion and powers relating to the procurement of insurance, and this Court believes that when a policy is a custom-designed policy procured by a body subject to the Governmental Tort Claims and Insurance Reform Act, the broad discretion granted the West Virginia State Board of Risk and Insurance Management authorizes that body to incorporate language absolutely limiting liability under the policy, even if such language would ordinarily be in violation of the provisions of W. Va.Code § 33-6-31(b).... 191 W.Va. at 260, 445 S.E.2d at 201. We find the Cook decision controlling in the instant case. Accordingly, we hold that West Virginia Code § 29-12A-16(a) conveys broad discretion to both the West Virginia State Board of Risk and Insurance Management, as well as governmental entities, with regard to the type and amount of insurance to obtain. Consequently, when an insurer issues a custom-designed policy to a governmental entity pursuant to the Act, that entity may incorporate language absolutely limiting liability under the policy, even if such language would otherwise violate the provisions of West Virginia Code § 33-6-31(b).