PRESENT: Kinser, C.J., Lemons, Goodwyn, Millette, and Mims,
JJ., and Russell and Lacy, S.JJ.
PAULINE DABNEY
OPINION BY
v. Record No. 100841 JUSTICE LEROY F. MILLETTE, JR.
June 9, 2011
AUGUSTA MUTUAL INSURANCE
COMPANY, ET AL.
FROM THE CIRCUIT COURT OF THE CITY OF ROANOKE
Paul M. Peatross, Jr., Judge Designate
In this appeal, we consider two issues. First, whether
the circuit court erred in barring the jury from considering
whether an insurer discovered a claim under an insured’s policy
in early 2005 when the plaintiff’s amended complaint only
alleged that the insurer discovered the claim in 2004. Second,
whether the circuit court erred in ruling as a matter of law
that an insured’s notice of a claim to its insurer was not made
“as soon as is practical,” as required by the insurance policy.
I. BACKGROUND
On April 9, 2002, Pauline Dabney was in her yard when she
was approached by two pit bull dogs roaming freely through her
neighborhood. The dogs lunged toward her, and she fell while
attempting to escape from them. Her shoulder was “knocked
. . . out of place” and her arm was broken in three places as a
result of the fall.
Shortly after the attack, Dabney sought help from a
friend, William D. Adams, who attempted to locate the owner of
the dogs. After investigating for a few months, Adams finally
discovered that the dogs lived at the home of Elease Otey.
Otey, however, had died a few weeks earlier. In July 2002,
Adams went to Otey’s house and spoke with Dwight Reynolds,
Otey’s former boyfriend, who owned the dogs. Adams confirmed
that Reynolds’ dogs were the dogs that attacked Dabney.
In November 2002, Thelma Jenkins, Otey’s mother and
housemate, qualified as the administrator of Otey’s estate. At
the time of the attack, Otey held an insurance policy (the
Augusta policy) issued by Augusta Mutual Insurance Company
(Augusta). Jenkins did not discover the Augusta policy until
March 2003, when she made a claim under the policy for damages
resulting from a house fire. The Augusta policy was cancelled
shortly thereafter.
The Augusta policy, which was in effect at the time of
Dabney’s injury, provides that, as a condition of coverage,
“[i]n case of an accident or ‘occurrence,’ the ‘insured’ ” must
“[g]ive written notice to us or our agent as soon as is
practical.” The policy also requires that the insured
“[p]romptly forward to us every notice, demand, summons or
other process relating to the accident or ‘occurrence.’ ” 1
1
For purposes of our discussion, we assume that the attack
that caused Dabney’s injuries constitutes an “accident” or
“occurrence” under the Augusta policy.
2
In June 2003, Dabney filed a motion for judgment against
Reynolds and Jenkins, as the administrator of Otey’s estate,
seeking damages for the injuries Dabney sustained in the
attack. Jenkins was served in August 2003 and retained a
lawyer, Lance Hale, to represent her. On May 5, 2004, Hale
sent a letter to Augusta notifying Augusta of Dabney’s lawsuit.
Hale sent the letter to the address provided in the Augusta
policy, but Augusta had moved before the letter was sent and
had not notified Otey or Jenkins of its change of address.
Hale received no response from Augusta, and the letter was not
returned to his office.
On January 18, 2005, Dabney’s friend Adams contacted
Augusta on Dabney’s behalf, and spoke with a representative in
the claims department. Adams told the representative about the
lawsuit and faxed the May 2004 letter sent by Hale, which the
representative said Augusta had not received.
On April 6, 2005, Dabney’s counsel, Randy Cargill, in an
attempt to settle the claim, sent Augusta a letter, which
included Dabney’s medical records documenting her injuries. By
April 15, Augusta had created an internal office memorandum
that contained a narrative of the attack.
On May 13, 2005, Cargill sent Augusta copies of the
pleadings in Dabney’s personal injury action. On June 20,
2005, Augusta notified Cargill that it would not provide
3
coverage based on the insured’s (Jenkins’) alleged failure to
timely notify Augusta of the claim.
In March 2006, Dabney filed a separate action for
declaratory relief against Augusta and Jenkins in her capacity
as administrator of Otey’s estate. Dabney sought a declaration
that Augusta had a duty to defend and indemnify Otey’s estate
against the claims alleged by Dabney in her motion for
judgment. In 2008, the underlying personal injury action
settled. Jenkins confessed judgment for $78,000 and assigned
to Dabney the estate’s claims against Augusta.
Before trial, Augusta filed a motion for summary judgment.
Augusta argued that it had no duty to defend or indemnify
Otey’s estate because Jenkins breached the terms of the Augusta
policy by failing to provide Augusta with timely written notice
of Dabney’s injury and subsequent claim. Dabney responded that
whether Jenkins gave timely written notice of Dabney’s claim to
Augusta was a matter that must be determined by the trier of
fact. Dabney also asserted that Augusta waived its right to
deny Dabney’s claim due to the insured’s failure to provide
timely notice. According to Dabney, when Augusta failed to
provide her or her counsel timely notice of its intention to
rely on a defense of Jenkins’ alleged breach of the policy, as
4
required by Code § 38.2-2226, 2 Augusta waived its defense based
on that breach. The circuit court denied Augusta’s motion.
Thereafter, the circuit court, over Augusta’s objection,
granted Dabney leave to file an amended complaint, which added
the following language: “The June 2005 notice by defendant
Augusta Mutual was untimely and its failure to timely determine
the question of coverage for the Otey Estate acts as a waiver
of any right it may have to deny coverage.” The amended
complaint also stated that Jenkins provided Augusta with the
required timely notice of a claim through Hale’s May 2004
letter to Augusta. The amended complaint did not allege any
other act as constituting notice to Augusta of Dabney’s
injuries and subsequent claim.
At trial, Augusta made a motion to strike at the close of
Dabney’s evidence. Augusta first argued that the evidence
2
Code § 38.2-2226, entitled “Insurer to give notice to
claimant of intention to rely on certain defenses and of
execution of nonwaiver rights of agreement,” provides in
pertinent part:
Whenever any insurer on a policy of liability
insurance discovers a breach of the terms or
conditions of the insurance contract by the insured,
the insurer shall notify the claimant or the
claimant’s counsel of the breach. Notification shall
be given within forty-five days after discovery by
the insurer of the breach or of the claim, whichever
is later . . . . Failure to give the notice within
forty-five days will result in a waiver of the
defense based on such breach to the extent of the
claim by operation of law.
5
showed that Jenkins did not notify Augusta of Dabney’s claim
until Hale’s May 2004 letter - 254 days after service of
Dabney’s personal injury action pleading was effected upon
Jenkins, on August 26, 2003. Augusta asserted that this was a
clear breach of the Augusta policy, which requires the insured
to give written notice “as soon as [is] practical.” Given the
length of the delay, Augusta argued that Jenkins’ notice was
unreasonable as a matter of law.
Second, Augusta addressed Dabney’s claim that Augusta
waived its defense of lack of timely notice, pursuant to Code
§ 38.2-2226, by not notifying Dabney of its intent to rely on
the defense of Jenkins’ breach of the Augusta policy within 45
days of receiving the allegedly untimely notice of the claim
from Jenkins. Although the evidence showed that Augusta
received information regarding Dabney’s personal injury action
in January and April 2005, Augusta argued that the jury should
not be allowed to consider this evidence because Dabney’s
amended complaint did not allege that Augusta received notice
of Dabney’s claim in 2005. According to Augusta, Dabney’s
amended complaint only alleged that Jenkins provided notice to
Augusta in May 2004. For this reason, Augusta contended that
the issue submitted to the jury should be limited to whether
Augusta had notice of Dabney’s claim in May 2004.
6
The circuit court granted Augusta’s motion to strike
Dabney’s evidence regarding Augusta’s discovery of the claim in
2005. The court ruled that Dabney was bound by the allegations
in her amended complaint, which only alleged that Jenkins gave
Augusta notice of Dabney’s claim in May 2004. Because the
amended complaint did not allege that Augusta discovered the
claim at any time in 2005, the court ruled that the jury could
not consider whether Augusta had notice of the claim in 2005
for purposes of Dabney’s waiver argument under Code § 38.2-
2226.
The circuit court stated that the only issue submitted to
the jury would be whether Augusta received Hale’s May 2004
letter as notice of Dabney’s claim. If Augusta did not receive
the letter, then the court, based on Dabney’s pleading, would
conclude that Augusta’s defense of Jenkins’ breach of the
policy was not waived under Code § 38.2-2226. But, if the jury
determined that Augusta did receive Hale’s May 2004 letter,
then the court would conclude that Augusta waived its defense
of a breach of the policy because Augusta conceded that there
was no communication to Dabney within 45 days of receipt of the
May 2004 letter, as required by Code § 38.2-2226. The court
took under advisement Augusta’s motion that Jenkins’ notice
under the Augusta policy was untimely as a matter of law.
7
At the close of all evidence, Augusta renewed its motion
to strike on the same grounds, and the court confirmed its
earlier ruling. Consistent with its ruling, the court refused
Dabney’s proposed jury instructions and verdict form that would
have allowed the jury to decide whether Augusta discovered
Dabney’s personal injury action in early 2005, and thus waived
its defenses by operation of Code § 38.2-2226. The jury was
instructed to make a factual finding whether Augusta received
Hale’s May 2004 letter. In a “special interrogatory to the
jury,” the jury found that Augusta did not receive Hale’s May
2004 letter.
As a result of this finding, the circuit court ruled as a
matter of law that notice of Dabney’s claim was never received
by Augusta at any time in calendar year 2004, and therefore
notice of the accident and claim was untimely under the terms
of the Augusta policy. The court also ruled that the waiver
provisions of Code § 38.2-2226 did not apply because the jury
found that Augusta did not receive Hale’s May 2004 letter,
which was the alleged notice of the claim. The court entered
judgment in favor of Augusta, ruling that it had no obligation
to defend or indemnify Otey’s estate because Jenkins’ notice of
a claim under the policy, which is a condition precedent to
coverage, was untimely. We awarded Dabney this appeal.
II. DISCUSSION
8
A. Augusta’s Discovery of Dabney’s Claim in Early 2005
Dabney argues that the circuit court erred by refusing to
allow the jury to consider whether Augusta discovered Dabney’s
claim in early 2005. Dabney asserts that the jury should have
been allowed to consider whether Augusta was notified of
Dabney’s claim on January 18, 2005, when Adams contacted an
Augusta representative about Dabney’s claim or on April 6,
2005, when Cargill sent Augusta a letter regarding Dabney’s
claim. It is Dabney’s contention that had the jury determined
that Augusta received such notice on either date, Augusta’s
defense of breach of the policy would have been waived by
operation of Code § 38.2-2226 because Augusta’s notice to
Dabney of Jenkins’ breach of the policy would have been sent
more than 45 days after it discovered Dabney’s claim. In
support of this argument, Dabney notes the extensive evidence
presented at trial regarding Augusta’s discovery of Dabney’s
personal injury action in early 2005.
Dabney argues that her amended complaint sufficiently
pleaded that Augusta’s notice to Dabney of a breach of the
policy was untimely. Dabney contends that the language in the
amended complaint, which states that “[t]he June 2005 notice by
defendant Augusta Mutual was untimely and its failure to timely
determine the question of coverage for the Otey Estate acts as
a waiver of any right it may have to deny coverage” supports
9
her argument. Dabney concedes that the only date alleged in
the complaint regarding Jenkins’ notice to Augusta regarding
Dabney’s action was Hale’s May 2004 letter. Dabney argues,
however, that her allegation that Augusta’s notice to her of a
breach was untimely was sufficient to allow the jury to
consider whether Augusta “discovered” Dabney’s claim in early
2005.
The law in Virginia is well established that a court
cannot enter judgment based on facts that are not alleged in
the parties’ pleadings:
A litigant’s pleadings are as essential as his
proof, and a court may not award particular relief
unless it is substantially in accord with the case
asserted in those pleadings. Brooks v. Bankson, 248
Va. 197, 206, 445 S.E.2d 473, 478 (1994); Gwinn v.
Collier, 247 Va. 479, 484, 443 S.E.2d 161, 164
(1994); Ted Lansing Supply Co. v. Royal Aluminum &
Constr. Corp., 221 Va. 1139, 1141, 277 S.E.2d 228,
229 (1981). Thus, a court is not permitted to enter
a decree or judgment order based on facts not alleged
or on a right not pleaded and claimed. Hensley v.
Dreyer, 247 Va. 25, 30, 439 S.E.2d 372, 375 (1994);
Harrell v. Woodson, 233 Va. 117, 121, 353 S.E.2d 770,
773 (1987); Ted Lansing Supply Co., 221 Va. at 1141,
277 S.E.2d at 229; see Ainslie v. Inman, 265 Va. 347,
356, 577 S.E.2d 246, 251 (2003); Smith v. Sink, 247
Va. 423, 425, 442 S.E.2d 646, 647 (1994).
The rationale supporting this basic rule is
plain. As we have stated, “[e]very litigant is
entitled to be told by his adversary in plain and
explicit language what is his ground of complaint or
defense. . . . The issues in a case are made by the
pleadings, and not by the testimony of witnesses or
other evidence.” Ted Lansing Supply Co., 221 Va. at
1141, 277 S.E.2d at 230 (quoting Potts v. Mathieson
10
Alkali Works, 165 Va. 196, 207, 181 S.E. 521, 525
(1935)).
Jenkins v. Bay House Assocs., L.P., 266 Va. 39, 43-44, 581
S.E.2d 510, 512 (2003).
In this case, Dabney’s amended complaint alleged that
Hale’s May 2004 letter was Jenkins’ notice to Augusta of
Dabney’s personal injury action. The amended complaint did not
allege any other time when Augusta received notice or
discovered Dabney’s personal injury action. Based on these
allegations, the case pleaded by Dabney was limited to the
theory that Augusta received notice of Dabney’s personal injury
action in May 2004. The absence of any allegation that Augusta
received notice of Dabney’s action at any other time precluded
the jury’s consideration of whether Augusta had notice of
Dabney’s action in early 2005.
The circuit court’s decision properly limited Dabney to
relief based on the allegations in her amended complaint. We
find no merit in Dabney’s argument that the jury should have
been allowed to determine whether Augusta had notice of her
personal injury action in early 2005 because the evidence
presented at trial established such notice. As we stated
previously, “[t]he issues in a case are made by the pleadings,
11
and not by the testimony of witnesses or other evidence.” Id. 3
Because the amended complaint only alleged that Augusta had
notice of Dabney’s personal injury action via Hale’s May 2004
letter, the circuit court did not err in refusing to allow the
jury to determine whether Augusta had notice of Dabney’s action
in early 2005.
B. Jenkins’ Notice to Augusta
Dabney argues that the circuit court erred by refusing to
permit the jury to determine whether Jenkins’ notice of a claim
was made “as soon as is practical,” as required by the Augusta
policy. Dabney asserts that this issue should have been
decided by the jury, not by the circuit court as a matter of
law, in light of the extenuating circumstances as illustrated
by the facts of the case. Specifically, Dabney notes that
there was a delay of “several months” in identifying the
location and owner of the dogs that attacked her. By the time
the dogs were located, Otey, the insured, had died. Jenkins,
as administrator of Otey’s estate, had not discovered the
Augusta policy until after the 2003 fire. And Augusta had
changed its address without notifying Jenkins. In light of
these extenuating circumstances, Dabney contends that the
3
Dabney’s counsel did not argue to the circuit court that,
pursuant to Code § 8.01-377, its pleading could have been
amended to conform to the evidence presented at trial.
12
question whether Jenkins’ notice to Augusta was “as soon as is
practical” should have been submitted to the jury.
It is well settled that performance of the notice
provision of an insurance policy is a condition precedent to
coverage, which requires “substantial compliance” by the
insured. State Farm Fire & Cas. Co. v. Scott, 236 Va. 116,
120, 372 S.E.2d 383, 385 (1988). In this case, the Augusta
policy provided that the insured (here, Jenkins as
administrator of Otey’s estate) must give Augusta “written
notice” of an accident “as soon as is practical.” “The
requirement that notice be given ‘as soon as practicable’ means
that it must be given within a reasonable time after the
accident, and what constitutes a reasonable time depends upon
the facts and circumstances of each case.” Id.
“Generally, whether notice has been given to the insurer
‘as soon as practicable’ is an issue to be resolved by a fact
finder.” Id. The issue only becomes one for the circuit court
to decide as a matter of law “when the facts are undisputed and
certain.” State Farm Mut. Auto. Ins. Co. v. Douglas, 207 Va.
265, 268, 148 S.E.2d 775, 777 (1966). But “when the facts are
disputed or the inferences are uncertain, or when there are
extenuating circumstances for the delay,” then the issue is one
of fact for the jury. Id.
13
In Douglas, in addressing whether an insured gave its
insurer notice “as soon as practicable,” we made it clear that
there is not a fixed number of days in which notice must be
given for it to be reasonable. Id. at 268, 148 S.E.2d at 778
(“What may be a reasonable time under some conditions may be
unreasonable under certain other conditions.”). In this case,
however, the circuit court ruled as a matter of law that a 254-
day delay in providing notice was not reasonable. In making
this ruling, the court only focused on the length of the delay,
and failed to consider the facts and circumstances surrounding
the delay.
The language in the Augusta policy that the insured give
notice of an accident “as soon as is practical” means that the
notice must be given within a reasonable time after the
accident. In this case, the “accident” occurred when Dabney
was attacked by the dogs. The timeliness of the notice of the
attack must be considered in light of all the facts and
circumstances presented in the case.
In this case, there is no evidence that the insured, Otey,
knew of the attack before her death. Further, from the
evidence, it is not clear when Jenkins first learned of the
attack. It took Dabney several months to locate the dogs that
attacked her and determine Reynolds to be the owner of the
dogs, and Otey to be the owner of the premises on which the
14
dogs were kept. Also, Jenkins did not discover the Augusta
policy until after she made a claim under the policy for a
house fire that occurred in March 2003. Shortly after that
time, the Augusta policy was canceled. Jenkins attempted to
send Augusta notice of Dabney’s personal injury action in May
2004. The letter, sent by her attorney Hale, was sent to the
address listed in the Augusta policy, which unbeknownst to
Jenkins was not Augusta’s current address at the time the
letter was sent.
Given the extenuating circumstances presented in this
case, whether Jenkins’ notice was timely under the Augusta
policy was a question of fact upon which reasonable minds could
disagree. For this reason, the circuit court erred in ruling
that Jenkins’ notice was untimely under the Augusta policy as a
matter of law. The issue whether Jenkins’ notice
“substantial[ly] compli[ed]” with the Augusta policy’s
condition precedent - that notice of an accident be given “as
soon as is practical” - should have been submitted to the jury.
Scott, 236 Va. at 120, 372 S.E.2d at 385.
III. CONCLUSION
For the foregoing reasons, we will affirm the circuit
court’s judgment barring the jury from considering whether
Augusta discovered Dabney’s personal injury action in early
2005, reverse the judgment of the circuit court ruling that
15
Jenkins’ notice to Augusta was untimely as a matter of law, and
remand the case for further proceedings. On remand, the
question of whether Jenkins substantially complied with the
Augusta policy’s notice requirement shall be decided by the
jury.
Affirmed in part,
reversed in part,
and remanded.
16