Court Opinion

ID: 1059854
Source: CourtListenerOpinion
Date Created: 2013-10-09 18:40:15.792901+00
Date Added: 2024-06-11T13:08:17.622923
License: Public Domain

Present:    All the Justices

SHARLET S. SCARBROW
                        OPINION BY JUSTICE CYNTHIA D. KINSER
v. Record No. 972435                   September 18, 1998

STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY

             FROM THE CIRCUIT COURT OF THE CITY OF NORFOLK
                      John C. Morrison, Jr., Judge

     Sharlet S. Scarbrow (Scarbrow) filed suit against State Farm

Mutual Automobile Insurance Company (State Farm) after State Farm

refused to pay medical expenses incurred by Scarbrow as a result

of a work-related automobile accident.   The circuit court held

that a provision in State Farm’s automobile insurance policy

excluding coverage for medical expenses that are payable under a

workers’ compensation statute is valid and enforceable.      Because

we have previously held that such an exclusion does not conflict

with Code § 38.2-2201, we will affirm the judgment of the circuit

court.

                                  I.

     On December 15, 1994, Scarbrow was involved in an automobile

accident while operating her employer’s truck.   Scarbrow sustained

physical injuries as a result of the accident and incurred medical

expenses.   The employer’s workers’ compensation insurance carrier

paid Scarbrow’s medical expenses arising out of the accident.
        At the time of the accident, Scarbrow was also insured under

a Family Automobile Policy (the Policy) issued by State Farm.         An

endorsement in the Policy affords coverage to Scarbrow for medical

expenses incurred by her for injuries sustained in an automobile

accident. 1        The endorsement, however, contains an exclusion (the

Exclusion) for medical expenses payable under any workers’

compensation law.         The Exclusion specifically states:

        This insurance does not apply:

               *      *    *

        (b)    to bodily injury sustained by any person to the extent
               that benefits therefore are in whole or in part payable
               under any workmen’s compensation law, employer’s
               disability benefits law or any other similar law.

Following the accident, Scarbrow submitted a claim to State Farm

under the medical expense benefits endorsement for a portion of

the medical bills that she incurred as a result of the automobile

accident.       State Farm refused to pay Scarbrow on the basis of the

Exclusion.         Consequently, on November 12, 1996, Scarbrow filed a

notice of motion for judgment against State Farm in the General

District Court for the City of Norfolk.         After removal of the case

        1
              The medical expense benefits endorsement states that State
Farm:

    [W]ill pay, in accordance with Section[] 38.2-2201
    . . . of the Code of Virginia, to or on behalf of each injured
    person, medical expense benefits as a result of bodily injury
    caused by accident and arising out of the ownership,
    maintenance or use of a motor vehicle as a motor vehicle.

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to the circuit court, State Farm filed a motion for summary

judgment.   In its motion, State Farm asserted that the Exclusion

bars Scarbrow from recovering under the Policy’s medical expense

benefits endorsement since her medical bills were paid by workers’

compensation insurance.

     After hearing argument, the circuit court granted State

Farm’s motion in an order dated August 20, 1997.   Relying on our

decisions in Baker v. State Farm Mut. Auto. Ins. Co., 242 Va. 74,

405 S.E.2d 624 (1991), and Cotchan v. State Farm Fire & Cas. Co.,

250 Va. 232, 462 S.E.2d 78 (1995), the court concluded that State

Farm was entitled to enforce the Exclusion in its Policy and found

“no reason to diverge” from this Court’s controlling precedent.

Scarbrow appeals.

                                 II.

     Code § 38.2-2201 provides, in pertinent part, that:

          A. Upon request of an insured, each insurer licensed in
     this Commonwealth issuing or delivering any policy or
     contract of bodily injury or property damage liability
     insurance covering liability arising from the ownership,
     maintenance or use of any motor vehicle shall provide on
     payment of the premium, as a minimum coverage . . . to the
     named insured . . . the following health care and disability
     benefits for each accident:
          1. All reasonable and necessary expenses for medical,
     chiropractic, hospital, dental, surgical, ambulance,
     prosthetic and rehabilitation services, and funeral expenses,
     resulting from the accident and incurred within three years
     after the date of the accident, up to $2,000 per person
     . . . .

                                  3
Scarbrow contends that this section does not authorize an insurer

to limit or exclude coverage once an insured has elected to

purchase medical expense benefits.      Thus, according to Scarbrow,

State Farm cannot enforce the Exclusion because it is inconsistent

with Code § 38.2-2201 and, therefore, void as against public

policy.   We disagree.

     This Court has sanctioned an insurer’s use of reasonable

policy provisions that exclude specific risks from coverage.

State Farm Mut. Auto. Ins. Co. v. Gandy, 238 Va. 257, 261, 383

S.E.2d 717, 719 (1989).    If an insurer uses exclusionary language

that is clear and unambiguous and that does not conflict with

statutory provisions, then the exclusion will be enforced.      Id.

     Our decision in Baker dictates the outcome of this case

because Baker involved the same issue and coverage exclusion

presently before us.     In Baker, we addressed the question whether

Code § 38.2-2201 permits an insurer to exclude coverage for

medical expense benefits in the absence of express statutory

authorization.   The policy provision at issue in Baker, identical

to the Exclusion in the instant case, precluded payment of medical

expenses when those expenses were payable under a workers’

compensation statute.    We found the exclusion in Baker to be a

“clear and unambiguous provision [that] reasonably excludes

medical payments coverage where those benefits are payable under a

workers’ compensation statute,” and that no conflict or

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inconsistency existed between Code § 38.2-2201 and the policy

exclusion.   242 Va. at 76, 405 S.E.2d at 625; see also Cotchan,

250 Va. at 236, 462 S.E.2d at 80-81.    Thus, for the reasons

enunciated in Baker, we conclude that the Exclusion is a

reasonable policy provision containing clear and unambiguous

language and that it is not inconsistent with Code § 38.2-2201.

Therefore, State Farm may enforce the Exclusion against Scarbrow.

     Scarbrow concedes that the instant case and Baker are

indistinguishable. 2   Nevertheless, Scarbrow urges this Court to

reverse its prior decision and find the Exclusion inconsistent

with Code § 38.2-2201 and, therefore, void.    However, we perceive

no reason to depart from our holding in Baker.    See Selected Risks

Ins. Co. v. Dean, 233 Va. 260, 265, 355 S.E.2d 579, 581 (1987)

(stating that “when a court of last resort has established a

precedent, after full deliberation upon the issue by the court,

the precedent will not be treated lightly or ignored”).

     Accordingly, we will affirm the judgment of the circuit

court.

                                                             Affirmed.

     2
        This case and Baker do differ in that Scarbrow asserted a
claim against a third party tortfeasor for the injuries that she
sustained in the automobile accident. However, this distinction
does not affect our decision.

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