Court Opinion

ID: 9540434
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:15:58.348002+00
Date Added: 2024-06-11T14:57:21.024570
License: Public Domain

Carrico, J.,
concurring in part and dissenting in part.
I concur in the result reached by the majority, that is, to affirm the judgment of the trial court, but I cannot agree with the holding of the majority that the misrepresentation here involved was not material to the risk insured against.
The representation made by the defendant, in his application for insurance under the Virginia Automobile Assigned Risk Plan, was that he was or soon would be the registered owner of the vehicle to be covered by the policy. That statement was false.
The uncontradicted evidence was that, had it been known that title to the vehicle was in the mother’s rather than in the defendant son’s name, the application would not have been assigned by the supervisor of the Assigned Risk Plan because “the applicant was not eligible” and “the policy could not have been issued without the assignment.” It was also uncontradicted that Buckeye “would not have issued the policy if they had known he [the defendant] was not the registered owner.” It was undisputed that Buckeye would not have insured the defendant voluntarily because a male driver under twenty-one years of age “is on our prohibited list ... is categorically excluded . . . the companies feel that a male driver under 21 is a poor risk.”
When Buckeye proved that it would have rejected the risk if furnished with the true information, it met the number one, prime test of materiality. It is completely beside the point whether the same or a different rate or premium would have applied had the vehicle, *869in fact, been registered in the defendant’s name. And we should not speculate, as the defendant would have us do, as to what would have taken place if the application had been in the name of the mother, the real registered owner.
The inescapable fact in this case is that no policy would have been issued without the title in the defendant’s name. Eligibility for insurance, not rate or premium, is of first and exclusive importance in determining materiality here.
Since it was conclusively shown that, had there been a true disclosure of the facts, the defendant’s application would not have been assigned under the Assigned Risk Plan and that Buckeye, in any event, would have rejected the risk, it necessarily follows, as a matter of law, that the misrepresentation was material to the risk.
I would base my decision solely upon the proposition that the misrepresentation, although material to the risk, was not willfully made.
As was noted in Insurance Company v. Saccio, 204 Va. 769, 775-776, 133 S. E. 2d 268, there are, in Virginia, what may be described as three classes of automobile liability risks.
The first class is composed of the “desirable risks,” that is, those, who are eligible for insurance and who desire, but are not legally compelled, to procure coverage and to whom the insurance carriers are fully willing to grant insurance. If a misrepresentation material to the risk is made by a member of this class, the insurance contract is rendered void. State Farm Mutual v. Butler, Adm’r, 203 Va. 575, 578, 125 S. E. 2d 823. And it makes no difference whether the misrepresentation be willfully or innocently made. Inter-Ocean Ins. Co. v. Harkrader, 193 Va. 96, 100, 67 S. E. 2d 894.
The second class is composed of the “statutory risks,” that is, those who may or may not desire but who, in any event, are legally compelled to procure liability insurance or to furnish other proof of financial responsibility, pursuant to the provisions of the Motor Vehicle Safety Responsibility Act. Code, §§ 46.1-388 to 46.1-514. The insurance carriers doing business in this state are compelled by law to provide coverage to the “statutory risks,” when such risks are assigned to them by the State Corporation Commission pursuant to what is known as the Virginia Statutory Assigned Risk Procedure. Code, §§ 46.1-497 to 46.1-503.
If a misrepresentation, even though it is material to the risk and even though it is willful, is made by a member of the “statutory *870risk” class, the carrier cannot assert such misrepresentation as a defense, once the policy is certified to the Commissioner of Motor Vehicles. Code, §§ 46.1-509 and 46.1-511 (f).
The third class is composed of the “poor risks,” that is, those who desire, but are not legally compelled, to procure liability insurance but who, for one reason or another, such as age as was the case with the defendant here, are unable to procure coverage through ordinary means.
The Virginia Automobile Assigned Risk Plan, or the Voluntary Plan, under which the policy before us was issued, was devised by the carriers to provide relief to the “poor risk” class.
The plan is a voluntary agreement of all of the carriers licensed to write direct automobile liability insurance in Virginia, entered into pursuant to the authority of Code, § 38.1-264. One of the provisions of that agreement is that an applicant for assignment under the Plan “shall be considered for assignment upon making application in good faith to the Plan. The applicant shall be considered in good faith if he reports all information of a material nature, and does not wilfully make incorrect and misleading statements in the prescribed application form.” [Emphasis added.]
Thus, the carriers, by their agreement, have established a different rule with respect to misrepresentations made by an applicant for assignment under the Voluntary Plan — a rule which falls midway between the rule applicable to “desirable risks” and the one applicable to “statutory risks.” While a misrepresentation, if material, whether willfully or innocently made, is available to the carrier as a defense against a policy issued to one who is a “desirable risk,” such a misrepresentation is not available at all against a policy issued to a “statutory risk.” But as to a misrepresentation made by an applicant under the Voluntary Plan, it is available as a defense, according to the terms of the Plan, only if it is made willfully.
The carriers are bound by their agreement setting up the Voluntary Plan. As a result of it, they are able to secure considerable additional business at rates, premiums and surcharges greatly in excess of what may be charged “desirable risks.” And the agreement, doubtless, is but one more effort on the part of the carriers to forestall the enactment, in Virginia, of what is to them an unwanted compulsory insurance law, existent in some states.
The carriers, by their agreement, established willfullness as the test of defensibility, cancelability and rescindability with respect to *871misrepresentations in applications filed under the Voluntary Plan. Having laid down that test as the ground rule, relief ought not be granted to a carrier against a policy issued under the Voluntary Plan unless it appears clearly that the misrepresentation was willful.
The majority opinion states, “If there was any concealment under the facts and circumstances here he [the defendant] was not responsible for it.” I disagree with that statement. Certainly the defendant was responsible for what he did. But I agree that his misrepresentation, although chargeable to him and albeit material, was innocently, and not willfully, made. In fact, Buckeye does not contend, in its briefs, that there was any willfulness on the part of the defendant. That being true, the evidence did not meet the test of the rule established by the Voluntary Plan and Buckeye should not escape liability under its policy. For that reason, and that reason alone, I would affirm the judgment of the trial court.
Gordon, J., concurs in this opinion.