Supreme Court of Virginia Issues Three Insurance Coverage Opinions in September Session

Last Friday marked the close of the Supreme Court of Virginia’s September session.  The Court issued three insurance coverage opinions addressing important issues: (1) vehicle “occupancy” and vehicle “use” for purposes of UIM Coverage (2) whether bad faith is a question for the judge or the jury; and (3) whether use of a nonsuit extends the contractual period of limitations contained in the standard fire insurance policy.  Summaries of the three decisions are provided below.

Bratton v. Selective Ins. Co., Record No. 141358 (Sept. 17, 2015)

A Road Construction Worker Was “Getting out of” a Dump Truck and “Using” a Pickup Truck When He Was Fatally Struck While Standing on the Road, and Thus Was Entitled to UIM Coverage for Both Vehicles.

In Bratton, the Supreme Court of Virginia analyzed whether a road construction worker was “occupying” a dump truck, a pickup truck, or both, for purposes of Underinsured Motorist Coverage under a commercial auto policy.   At the time of the accident, Richard Slone was working as a dump truck driver for a paving company.  As part of a road paving job, Slone operated the dump truck, which would haul loads of hot asphalt to the jobsite and pour the asphalt into a front-loader.  After pouring, he occasionally would exit the vehicle to check for spillage.  In addition to the dump truck and the front-loader, James Harmon, another paving company employee, operated a pickup truck.  Harmon used the pickup truck to transport men and materials to the job site and as a “safety tool,” a safety barrier between oncoming traffic and the employees in the work zone.  The pickup truck was outfitted with a safety strobe light for that purpose.

On the night of the accident the pickup truck was parked at the worksite with all of its lights turned on, including headlights, hazard lights, and the safety strobe light.  The last time anyone saw Slone before the accident, he was in the dump truck cab and had just finished pouring asphalt into the front-end loader. According to the majority’s recitation of the facts, Slone departed from the dump truck’s cab and, with the engine still running, closed the door behind him.  He descended the stairs from the raised cab to the ground and walked toward the vehicle’s rear tires.  Within 30 seconds of pouring the asphalt, two drunk drivers crashed into the front-end loader, spinning it into the dump-truck and killing Slone. Slone was discovered pinned between one of the drunk driver’s vehicles, the front-end loader, and the dump truck.  The pickup truck was located 200 feet away.

The dispositive coverage issue was whether Slone was “occupying” the dump truck, the pickup truck, or both, for purposes of Underinsured Motorist Coverage.  The policy at issue defined “occupying” as “in, upon, using, getting in, on, out of or off” a covered auto (which included both vehicles).   After a bench trial on the factual issues, the trial court ruled that Slone was not “occupying” either vehicle at the time of the accident and thus was outside the scope of coverage.

On appeal, the Supreme Court of Virginia overturned the trial court in a  4-3 decision and held that Slone was “occupying” both vehicles, as he was “getting out of” the dump truck and “using” the pickup truck.  In finding that Slone was “getting out of” the dump truck at the time of the accident, the Court held that, because Slone was last seen in the dump truck pouring asphalt and 30 seconds later was found pinned between the vehicles, the “inferences drawn from the direct evidence in the record establish[ed] that Slone still was vehicle-oriented and therefore was ‘getting out of’ the dump truck . . . .”  The Court held that the inference from Slone’s actions (pouring, exiting the vehicle, and moving towards the rear tires) “sufficiently establishe[d] that Slone did not have enough time to begin a new activity separate from getting out of the vehicle.”  Thus, held the Court, Slone was “occupying” the dump truck at the time he was struck.

The Court also held that Slone was “using” the pickup truck.  Relying on previous “use” holdings, the Court held that the truck was a “specialized vehicle” designed for more than simply transportation and Slone was “using” that specialized purpose during the course of his mission at the time of the accident. Because Slone was “using” the pickup truck, he was entitled to coverage for use of the pickup truck in addition to that of the dump truck.

Three Justices dissented to the majority’s finding that Slone was “using” the pickup truck, and two Justices dissented to the finding that Slone was “occupying” the dump truck.  With respect to the dump truck, the dissenting Justices noted that the majority’s “vehicle-oriented” standard had never before been applied in Virginia.  In addition to questioning the majority’s application of burdens of proof and review, the dissenting Justices opined that getting out of a vehicle, closing the door, and walking at least nine feet away is not an incidence of “getting out,” but “gotten out.”  With respect to the pickup truck, the dissenting Justices noted that no evidence suggested that Slone was even aware that the pickup truck was there, nor did any evidence prove that his employer had authorized his or any other employee’s use of the unoccupied truck as a safety vehicle.

The full text of this opinion can be found here.


Revi, LLC v. Chicago Title Ins. Co., Record No. 141562 (Sept. 17, 2015)

Bad Faith is a Question for the Judge, Not the Jury.

In Revi, the Supreme Court of Virginia addressed whether Virginia Code Section 38.2-209(A) requires a trial judge, rather than a jury, to determine whether an insurer committed bad faith.  The question stems from the use of the word “court” in the statute.  Section 38.2-209(A) states that “the court” may award costs and attorneys’ fees if the insurer is found to have acted in bad faith.  The question raised in Revi is whether “court” means only the judge, or also includes the jury.  The Court held that “court” means trial judge.

Tracing the statutory history, the Court noted that the statute previously used the words “trial judge” instead of “the court.”   The change occurred when Virginia’s Insurance Code was recodified.  Plaintiff argued, because the language was changed, that the Court could presume the legislature intended a substantive change in the law.  The Court noted, however, that there is a presumption that a recodified statute does not make substantive changes to the former statute unless a contrary intent plainly appears in the recodified statute.

The Court then looked to Section 38.2-807, another insurance statute governing the court’s authority to award attorney’s fees when an insurer breaches its contract.  That statute specifically differentiates between “court” and “jury” indicating that “court” was not intended to mean jury.  Because all statutes must be construed in such a manner to reconcile them, if possible, the Court determined that the term “court” in Section 38.2-209(A) should likewise be interpreted as meaning the trial judge.

The Court also rejected the plaintiff’s argument that the right to a jury trial applies to Section 38.2-209.  The Court noted that the bad faith statute does not create an independent cause of action, thus it is neither a contractual nor a common law claim.  Instead, it is merely a vehicle for shifting attorneys’ fees and costs.  Because the Virginia Constitution only requires jury trials for causes of action that required jury trials at the time the Constitution was adopted, and attorneys’ fees was not one of those claims, the Court held that claimants have no constitutional right to a jury trial on the issue of attorneys’ fees under Section 38.2-209.

The full text of this opinion can be found here.


Allstate Prop. & Cas. Ins. Co. v. Ploutis, Record No. 141536 (Sept. 17, 2015)

A Nonsuit Does Not Toll or Extend the Contractual Limitations Period Contained in the Standard Fire Insurance Policy.

In Ploutis, the insureds’ home suffered damage due to burst pipes.  After being unable to come to an agreement as to the cost of repairs, the insureds sued their insurer shortly before the two-year contractual limitation period contained in their homeowners’ policy.  Almost a year after filing suit, the insureds nonsuited. They re-filed the lawsuit six months later, over three years after the loss.

The insurer filed a demurrer, asserting that because the re-filed suit was filed after the two-year contractual limitations period had expired, the insureds failed to comply with the conditions precedent of the policy.  The trial court overruled the demurrer, essentially finding that because the contractual limitations period was substantively the same as that included in the Virginia standard form (which is statutory in origin), a nonsuit tolled that limitations period pursuant to Section 8.01-229(E)(3) of the Virginia Code.

On appeal, the Supreme Court of Virginia reversed the trial court and held that the insureds’ re-filed suit was barred by the contractual limitations period.  Relying on precedent, the Court stated that nonsuits do not toll contractual limitations periods.  The Court went on to hold that the “policy’s adoption of the statutorily-imposed minimum period of limitations did not alter the contractual nature of the policy’s limitations period.”  In other words, the limitations period contained in Code Section 38.2-2105 is not a statutory limitations period, but instead prescribes standard fire insurance forms to be used by insurers.  In sum, held the Court, because neither Section 38.2-2105 nor the contractual limitations period in the policy was a “statute of limitations” within the meaning of the nonsuit statute, a nonsuit could not toll the limitations period.

The full text of this opinion can be found here.


For more information about these three important opinions, or any other insurance coverage issues, please contact a member of HCCW’s Coverage Team.