Court Opinion

ID: 4116580
Source: CourtListenerOpinion
Date Created: 2017-01-18 20:02:02.778855+00
Date Added: 2024-06-11T07:46:17.006700
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                             No. 16-1150

JOHN CORRADI,

                Plaintiff – Appellant,

          v.

OLD UNITED CASUALTY COMPANY,

                Defendant – Appellee,

          and

FOREST AGENCY, INC.,

                Defendant.

Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Gerald Bruce Lee, District
Judge. (1:15-cv-00488-GBL-MSN)

Submitted:   December 30, 2016             Decided:   January 18, 2017

Before NIEMEYER, KING, and FLOYD, Circuit Judges.

Affirmed by unpublished per curiam opinion.

Lee Robert Arzt, Richmond, Virginia, for Appellant.    Donald R.
Anderson, Catherine M. Banich, TAYLOR ENGLISH DUMA LLP, Atlanta,
Georgia, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

      John Corradi appeals the district court’s orders denying

his motion for nonsuit under Virginia state law and granting

summary judgment in favor of the defendant, Old United Casualty

Company   (“Old    United”).       On    appeal,   Corradi    argues     that   the

district court erred in granting summary judgment in favor of

Old United because, although the terms of the insurance policy

(“Policy”) excluded coverage for damages to Corradi’s aircraft

(“Aircraft”)      while   the   Aircraft     was   piloted    by   non   approved

pilots, that provision is void pursuant to Va. Code Ann. § 38.2-

2204 (2014).      Corradi also argues that the district court erred

in refusing to allow voluntary dismissal of the case pursuant to

Virginia’s nonsuit statute.             Corradi contends that this ruling

was erroneous because Erie R.R. Co. v. Tompkins, 304 U.S. 64

(1938), requires a federal court sitting in diversity to apply

all substantive state laws, and Va. Code Ann. § 8.01-380 (2015)

is substantive rather than procedural.

      “We review the district court’s grant of summary judgment

de   novo,   applying     the   same    standard   as   the   district    court.”

Walker v. Mod-U-Kraf Homes, LLC, 775 F.3d 202, 207 (4th Cir.

2014).    We construe the evidence in the light most favorable to

Corradi and draw all reasonable inferences in his favor.                        Id.

“The court shall grant summary judgment if the movant shows that

there is no genuine dispute as to any material fact and the

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movant is entitled to judgment as a matter of law.”                                Fed. R.

Civ. P. 56(a).

        “Under   Virginia      law,       courts          must    interpret       insurance

policies consistent with the parties’ intent.”                            Liberty Univ.,

Inc. v. Citizens Ins. Co. of Am., 792 F.3d 520, 532 (4th Cir.

2015).        “Ambiguities     in   the    instrument            must   be   construed   in

favor of the insured.          But we do not entertain an absurd result—

one that would ‘enlarge the obligations undertaken originally by

the insurer, and would permit a windfall to the insured.’”                               Id.

(quoting Transit Cas. Co. v. Hartman's, Inc., 239 S.E.2d 894,

897 (Va. 1978)) (brackets omitted).

        The Policy provided that “the aircraft must be operated

in-flight only by the ‘Approved Pilots’ shown [in Item 7 of the

Policy] . . . . There is no coverage under the policy if the

pilot does not meet these requirements.”                          The language of the

Policy is not ambiguous, and the parties clearly intended to

provide coverage only when the Aircraft was operated by one of

the two pilots listed in Item 7.                        The accident occurred with a

non approved pilot flying the Aircraft, and therefore, under the

terms    of    the   Policy,    Corradi            is    not   entitled      to   recovery.

Moreover, the restriction encompassed in the Policy does not

conflict      with   the   language       of       the    Virginia      omnibus    statute,

which was passed with the “purpose of protecting the public from

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loss caused by the negligence of permissive users of insured

vehicles.”         Hartman’s, 239 S.E.2d at 897.

       The Virginia Supreme Court’s decision in Hartman’s does not

mandate a different outcome.                  There, the Virginia Supreme Court

analyzed “whether a named insured may recover from his liability

insurance carrier for damage to his own property when the policy

excludes from coverage property owned by ‘the insured.’”                             Id. at

896.    The court concluded that “the insured” referred to the

individual claiming coverage, and the policy excluded coverage

for damage to Hartman’s own property.                       Id. at 896-97.           Id. at

897.      In    reaching    that    conclusion,           the   court   noted       that    in

“earlier case[s], involving claims of injured members of the

public, we construed the omnibus clause to serve its designed

purpose    of       protecting     the    public         from   loss    caused      by     the

negligence of permissive users of insured vehicles.”                                Id.     In

Hartman’s      case,     however,       “only      the    interests     of   the     direct

parties to the insurance contract, the named insured and the

insurer, [were] in issue.”              Id.

       Similarly, in Safeco Ins. Co. of Am. v. Merrimack Mut. Fire

Ins.   Co.,        785 F.2d 480,    481       (4th    Cir.   1986),     this        court

addressed      a    provision     of     an    insurance        contract     that    denied

coverage for injuries sustained by the insured.                            The appellant

argued that the contract provision limiting coverage was void in

light of the omnibus statute.                 Id.    After analyzing the statute,

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we concluded that the appellant, “like the insured in Hartman’s,

. . . [was] attempting to convert a liability policy into a

policy covering first-party loss. . . . [T]he Legislature of

Virginia did not by the enactment of the omnibus clause intend

to accomplish any such result.”                   Id. at 482

      In this case, excluding coverage for first-party losses due

to   the    use    of    the     Aircraft      by     an    unapproved     user    does      not

disrupt the omnibus statute’s stated purpose of protecting “the

public from losses caused by the negligence of permissive users

of insured vehicles,” and therefore does not run afoul of either

the statute’s intent or its plain language.                        Id.

      Corradi       next       claims     that      the     district     court     erred      in

relying     on    the    Federal     Rules       of    Civil    Procedure       rather      than

Virginia’s        nonsuit      statue.       As       the   Supreme    Court     has    noted,

“Congress        has     undoubted       power        to    supplant     state    law,      and

undoubted        power    to     prescribe        rules      for   the    courts       it   has

created,     so    long     as    those     rules       regulate      matters     rationally

capable of classification as procedure.”                        Shady Grove Orthopedic

Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 406 (2010)

(internal quotation marks omitted).                          Consequently, “[w]e must

first      determine      whether       Rule      [41]      answers      the   question       in

dispute.”        Id. at 398.        “If it does, it governs . . . unless it

exceeds statutory authorization or Congress’s rulemaking power.

We do not wade into Erie’s murky waters unless the federal rule

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is inapplicable or invalid.”                 Id. (citations omitted).                    If a

Federal Rule “governs only the manner and the means by which the

litigants’ rights are enforced, it is valid; if it alters the

rules    of   decision      by    which     the    court     will    adjudicate        those

rights, it is not.”         Id. at 407 (brackets omitted).

     The question in dispute here, whether Corradi may as of

right    voluntarily       dismiss    his    case,      is    answered      by    Rule    41,

which provides that a plaintiff may dismiss his complaint after

an answer or motion for summary judgment has been filed only if

he files “a stipulation of dismissal signed by all parties who

have appeared.”       Fed. R. Civ. P. 41.               The relevant Virginia Code

provision     answers      the    same    question      differently,        by     allowing

voluntary dismissal at any time “before a motion to strike the

evidence has been sustained or before the jury retires from the

bar or before the action has been submitted to the court for

decision.”      Va. Code Ann. § 8.01-380.                    But because Rule 41 is

undoubtedly procedural, it controls in this case.                           A rule that

allows for voluntary dismissal if certain conditions are met

alters the manner and means of enforcing the litigant’s rights,

while    leaving     the    rules    of     decision       for     adjudicating        those

rights    unchanged.         Therefore,           the   district     court        correctly

applied Rule 41 to Corradi’s motion to voluntarily dismiss.

        Accordingly, we affirm the district court’s judgment.                              We

dispense      with   oral        argument     because        the    facts        and   legal

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contentions   are   adequately   presented   in   the   materials   before

this court and argument would not aid the decisional process.

                                                                AFFIRMED

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