Court Opinion

ID: 9612625
Source: CourtListenerOpinion
Date Created: 2023-08-22 04:10:11.479999+00
Date Added: 2024-06-11T09:42:41.071604
License: Public Domain

DAVIS, J.,
concurring:
(Filed Dec. 6, 2005)
In this case the majority opinion found that the circuit court correctly determined that Ohio law applied to this case and that there was no liability coverage for the claims asserted. I agree completely with these conclusions. I write separately to express my view that when litigation occurring in West Virginia involves a household exclusion contained in an automobile liability policy that is issued in another state and is valid under the laws of that state, the exclusion should not be automatically rejected on public policy grounds.
As Justice Albright’s dissent correctly observes, this Court has limited the applicability of household exclusions with respect to a named insured by holding that such an exclusion is invalid up to the minimum coverage amounts required under West Virginia law. See Syl. pt. 2, Dairyland Ins. Co. v. East, 188 W.Va. 581, 425 S.E.2d 257 (1992) (“A named insured exclusion endorsement is invalid with respect to the minimum coverage amounts required by the West Virginia Motor Vehicle Safety Responsibility Law, West Virginia Code §§ 17D-1-1 to 17D-6-7 (1991 & Supp. 1992). Above the minimum amounts of coverage required by West Virginia Code § 17D-4-12 (1992), however, the endorsement remains valid.”).1 It must not be over*650looked, however, that, unlike the case at bar, Dairyland did not involve residents of another state who contracted for their policy of insurance under the laws of that other state. Rather, the insured in Dairyland, was a resident of West Virginia, the parties contracted for the insurance policy in West Virginia, and, therefore, they were on notice that the policy would be subject to the laws of this State. For this reason, I find that Dairyland is not persuasive authority in deciding the case presently before the Court.
Notably, during the same term that this Court handed down the Dairyland decision, it also handed down its decision in Nadler v. Liberty Mutual Fire Insurance Company, 188 W.Va. 329, 424 S.E.2d 256 (1992). Na-dler involved a two vehicle accident that occurred in West Virginia. A tractor trailer crossed the center line and collided with a vehicle that was owned an occupied by a family who were residents of Ohio. Nadler, 188 W.Va. at 331-32, 424 S.E.2d at 258-59. Both parties were insured by Liberty Mutual Fire Insurance Company, but the tractor trailer was insured by a policy that was issued in West Virginia, while the policy covering the Ohio vehicle was issued in Ohio. Id. 188 W.Va. at 332, 424 S.E.2d at 259. Subsequently, a declaratory judgment action was filed in the United States District Court for the Southern District of West Virginia raising questions involving only the Ohio policy.2 Id. The District Court ultimately certified a question to this Court asking which state’s law should be applied. Id. It was undisputed that the Ohio family would not be able to recover under their policy if Ohio law was applied.3 Id. at 332-33, 424 S.E.2d at 259-60. However, the set-off provision in the policy, which would prevent the Ohio family from recovering under them policy if Ohio law applied, was not enforceable in West Virginia as such provisions had been found to be against public policy. Id. at 333, 424 S.E.2d at 260. In it’s discussion of the issues presented by the certified question, the Na-dler Court surveyed how other jurisdictions handled choice of law questions where a court was being asked to enforce a provision of an insurance policy that violated the forum state’s public policy, when the policy of insurance had been issued in another state to residents of the other state, and was enforceable under the law of the other state. Id. at 336-37, 424 S.E.2d at 263-64. The Nadler Court then explained that
[o]ur substantive law governing uninsured and underinsured motorist coverages in motor vehicle insurance policies is intended to apply only to insurance transactions which occur in West Virginia or which affect the rights and responsibilities of West Virginia citizens. For this reason, the public policy of full compensation underlying our uninsured/underinsured motorist law is implicated only when the parties and the transaction have a substantial relationship with this state. The importance of the public policy is directly proportional to the significance of that relationship. The more marginal the contact West Virginia has with the parties and the insurance contract, the less reason there is to consider the public policy behind our uninsured/underinsured motorist law as a factor bearing on the choice of law determination.
When the issue is viewed in this light, it is clear that the public policy concerns *651raised by the plaintiffs are adequately addressed by application of the significant relationship test approved by this Court in Lee v. Saliga. This approach provides an answer to questions which inevitably arise any time there is a conflict between the laws of one state and the laws of another. It is also consistent with promoting the reasonable expectations of the parties to the insurance contract, an important premise for our adoption of the conflicts rule stated in Lee v. Saliga. The reasonable expectations of the parties with respect to the terms of an insurance contract should not be lightly disregarded. See National Mut. Ins. Co. v. McMahon & Sons, Inc., 177 W.Va. 734, 356 S.E.2d 488 (1987). Finally, we believe that this approach is not inconsistent with the results reached by the majority of courts that have addressed the issue. See, e.g., Andrews v. Continental Ins. Co., supra; Draper v. Draper, 115 Idaho 973, 772 P.2d 180 (1989); Boardman v. United Servs. Auto. Ass’n, supra [470 So.2d 1024]; Sotirakis v. United Serv. Auto. Ass’n, 106 Nev. 123, 787 P.2d 788 (1990); State Farm Mut. Auto. Ins. Co. v. Simmons’ Estate, supra[, 84 N.J. 28, 417 A.2d 488]; Dairyland Ins. Co. v. State Farm Mut. Auto. Ins. Co., 41 Wash.App. 26, 701 P.2d 806, review denied, 104 Wash.2d 1016 (1985).
Nadler, 188 W.Va. at 337, 424 S.E.2d at 264. The significant relationship test of Lee v. Saliga, to which the Nadler Court referred, holds that:
[t]he provisions of a motor vehicle policy will ordinarily be construed according to the laws of the state where the policy was issued and the risk insured was principally located, unless another state has a more significant relationship to the transaction and the parties.
Syl. pt. 2, Lee v. Saliga, 179 W.Va. 762, 373 S.E.2d 345 (1988). Finally, the Nadler Court held, at Syllabus point 4, that
[w]here a choice of law question arises with regard to the interpretation of coverage provisions in a motor vehicle insurance policy executed in another state, the public policy considerations inherent in the fact that the substantive law of the other state differs from our own will ordinarily be adequately addressed by application of the significant relationship conflict of laws test enunciated in Syllabus Point 2 of Lee v. Saliga, 179 W.Va. 762, 373 S.E.2d 345 (1988).
188 W.Va. 329, 424 S.E.2d 256. Applying this holding, the Nadler Court concluded that Ohio law governed the interpretation of the contract at issue.
Nadler is the controlling case for resolving the instant appeal. In the present case, the insureds are residents of Ohio, and the insurance policy was contracted under the laws of Ohio with no expectation that West Virginia law would be applied to the contract. West Virginia has no significant relationship to the transaction or the parties. Therefore, the majority opinion was correct in concluding that West Virginia public policy should not be applied to void the household exclusion contained in the Howe’s insurance policy. Thus, for the reasons herein explained, I respectfully concur' with the majority opinion.
STARCHER, J.,
dissenting.
(Filed Dee. 16, 2005)
I echo the dissenting opinion of my colleague, Chief Justice Albright. I was struck when I read the majority opinion’s statement that “[a]ppellant cannot point to any decision of this Court that declares ‘household’ exclusions are a violation of West Virginia public policy,” supra, 218 W.Va. at 646, 625 S.E.2d at 724. Like Chief Justice Albright, I too nodded my head in agreement with the majority’s statement and said, “Yes, and this opinion blows a great opportunity to do just that!”
But after doing a little extra research, I discovered just how wrong the majority opinion is in its conclusion that there is no expression of West Virginia public policy disfavoring “household” or “family member” exclusions.
First, this Court suggested that “household” or “family member” exclusions violated West Virginia policy as early as 1978. In Coffindaffer v. Coffindaffer, 161 W.Va. 557, 244 S.E.2d 338 (1978), we abolished immunity between spouses, and said:
*652[T]he door is now open to permit husbands or wives, who in a moment of inadvertence or negligence by their spouse have been substantially injured, to recover from applicable insurance a fair and reasonable amount for the hospital and other medical expenses and for pain and suffering.
161 W.Va. at 567, 244 S.E.2d at 343 (emphasis added). The majority’s opinion overlooked this statement, and now essentially holds that husbands and wives can sue one another for negligence, but cannot recover from applicable insurance a fair and reasonable amount.
Second, even if the Court has never made an explicit expression of public policy, without a doubt the Insurance Commissioner has declared that “household” or “family member” exclusions are a violation of West Virginia public policy. Insurance regulations promulgated by the Commissioner specifically state what can and cannot be in a standard motor vehicle insurance policy. Plain as day, those regulations state:
Motor vehicle liability policies shall not contain family member exclusions.
144 C.S.R. § 63.3.5 [2003]. The majority opinion sidestepped this clear regulatory statement of West Virginia public policy on this exact issue.
Additionally, the majority opinion wrongly mixes apples and oranges in its reasoning upholding the “family member” exclusion. The majority opinion chides the appellant for failing to “address or acknowledge prior decisions of this Court upholding similar family use exclusions as valid and not against the public policy of this State in the context of underinsured motorist coverage.” 218 W.Va. at 646, 625 S.E.2d at 724. The problem is that the “family use”, exclusion is different from the “family member” exclusion. The majority opinion misapprehends West Virginia law and mistakenly merges two completely different insurance concepts.
The instant case involves a “family member” exclusion in a liability policy. A “family member” exclusion prohibits a family member from filing a liability claim against another family member. The cases relied upon by the majority opinion, Thomas v. Nationwide Mutual Ins. Co., 188 W.Va. 640, 425 S.E.2d 595 (1992) and Cantrell v. Cantrell, 213 W.Va. 372, 582 S.E.2d 819 (2003) (per curiam), center upon a “family use” exclusion in an underinsured motorist policy. The “family use” exclusion prohibits a family member who files a liability claim against another family member from also recovering underinsured motorist benefits under the same policy once the liability limits are exhausted. Essentially, the “family use” exclusion prevents a policyholder from receiving a double recovery under one policy.
Both Thomas and Cantrell involved a single-car accident in which the passenger was the wife of the negligent driver. In both cases, this Court permitted the injured passenger/wife to receive payments under the family’s liability coverage for the negligence of the driver/husband. What was prohibited in both cases was recovery by Mrs. Thomas and Mrs. Cantrell against their underinsured motorist coverage once the liability policy limits were exhausted.
In the instant case, appellant Howe is not attempting a double recovery. She is attempting a single recovery against her husband’s liability insurance coverage. If Thomas and Cantrell are controlling, then Mrs. Howe should prevail and be permitted to recover against her husband’s liability insurance policies — not the other way around.
Even though Mr. Howe purchased his liability insurance policies in Ohio, I believe that the Court should have refused to enforce the “family member” exclusion in those policies because the exclusion is offensive to West Virginia’s public policy. The exclusion serves no legitimate purpose. It is “offensive,” 1 “perverse,”2 “deleterious to our community interests” and “socially destructive,”3 is an “anachronism” that violates “fundamen*653tal principles of justice,”4 and “excludes from protection an entire class of innocent victims for no good reason.”5
The Howes were married in Ohio on September 9, 2000, and Mrs. Howe was injured by Mr. Howe’s negligence on September 13th, on the first day of their honeymoon. If Mrs. Howe had been injured five days earlier, before the wedding bells rang, she would have been entitled to coverage. If the Howes had foregone marriage and “shacked-up,” Mrs. Howe would have been protected by her husband’s liability coverage. I cannot see any valid reason why Ohio would permit its citizens to be punished by insurance companies for entering into a state of marriage— unless Ohio’s goal is to discourage marriage. Such insurance policy language is clearly contrary to West Virginia’s laws and public policy, and wholly unenforceable when included in a policy issued under the laws of this State. I therefore cannot understand why the majority opinion refused to protect Mrs. Howe, an individual injured on the roads of West Virginia, and refused to afford her the protection of our laws.
I respectfully dissent.

. The named insured exclusion endorsement in Dairyland stated:
NAMED INSURED EXCLUSION ENDORSEMENT [ — ] This endorsement modifies your policy in the following way: LIABILITY INSURANCE [ — ] The liability insurance provided by this policy doesn't apply to injuries to the *650person named on the declarations page. It doesn't apply to the husband or wife of that person if they are living in the same household.
Dairyland Ins. Co. v. East, 188 W.Va. 581, 583, 425 S.E.2d 257, 259 (1992) (footnote omitted).

. The full liability limit of the West Virginia policy, $325,000, had been paid to the Ohio family. Nadler v. Liberty Mut. Fire Ins. Co., 188 W.Va. 329, 332, 424 S.E.2d 256, 259 (1992). The Ohio policy provided underinsured motorist coverage in the amount of $300,000, but contained a provision that "expressly denied coverage when the amount of liability insurance available from another source was equal to or greater than the amount of underinsured motorist coverage available under the policy and provided for a set-off for any liability insurance received by the insured." Id. (footnote omitted). When the Ohio family tried to recover underinsured motorist benefits under their own policy, coverage was denied. Id. The denial of coverage prompted the declaratory judgment action in the United States District Court. Id.

. Under Ohio law, the set-off provision of the insurance policy that prevented the Ohio family from receiving underinsured motorist benefits was valid. For a discussion of the set-off provision, see supra note 2.

. GEICO v. Welch, 135 N.M. 452, 457, 90 P.3d 471, 477 (2004).

. Safeco Ins. Co. v. Auto. Club Ins. Co., 108 Wash.App. 468, 477, 31 P.3d 52, 56 (2001).

. Lewis v. West American Ins. Co., 927 S.W.2d 829, 834 (Ky.1996).

. State Farm Mut. Auto. Ins. Co. v. Ballard, 132 N.M. 696, 699-700, 54 P.3d 537, 540-41 (2002).

. Mutual of Enumclaw Ins. Co. v. Wiscomb, 97 Wash.2d 203, 207, 643 P.2d 441, 443 (1982).