Present: Hassell, C.J., Keenan, Koontz, Kinser, Lemons, and
Agee, JJ., and Compton, S.J.
ASPLUNDH TREE EXPERT COMPANY
OPINION BY
v. Record No. 040797 JUSTICE LAWRENCE L. KOONTZ, JR.
April 22, 2005
PACIFIC EMPLOYERS INSURANCE COMPANY
FROM THE CIRCUIT COURT OF THE CITY OF ROANOKE
William D. Broadhurst, Judge
In this appeal, we consider whether the chancellor erred in
determining that the trial court retained jurisdiction in a
pending declaratory judgment action brought by an insurer to
determine its obligations under its business motor vehicle
liability insurance policy after the insurer funded a settlement
of the underlying tort action brought against the policyholder
by an injured party. We further consider whether the chancellor
erred in determining that the insurer was not liable on the
policy and in directing the policyholder to refund to the
insurer the amount tendered to fund the settlement.
BACKGROUND
While the record in this case is voluminous, we need recite
only those facts necessary to our resolution of the issues
presented in this appeal. 1 See, e.g., WJLA-TV v. Levin, 264 Va.
140, 146, 564 Va. 383, 386 (2002). Under familiar principles,
1
The joint appendix prepared by the parties in this appeal
contains an unwarranted amount of material not germane to the
issues raised in the appeal in violation of Rule 5:32(g).
we will recite those facts in the light most favorable to the
appellee, which prevailed on those issues in the trial court.
Id.
Asplundh Tree Expert Company (Asplundh), a Pennsylvania
corporation, employed Shawn E. Wimmer and Christopher Weeks
through its regional operations office in Roanoke as part of a
brush clearing crew led by Asplundh’s foreman, Robbie W. Pertee.
Pertee and the other members of the crew lived in West Virginia.
The brush clearing work was performed in Virginia under
Asplundh’s contract with the Virginia Department of
Transportation. Asplundh permitted Weeks to drive a company
truck in order to transport the members of the crew to the day’s
worksite in Virginia and to return them to West Virginia at the
end of the work day. Each night, Weeks would park the truck at
a designated meeting place, and members of the crew who wished
to ride to the next day’s worksite in the company truck
understood that they were to meet Weeks there in the morning.
However, members of the crew were not required to ride to the
worksite in the company truck, and Weeks was not permitted to
use the truck for personal business.
On the morning of August 21, 2001, Wimmer, Pertee, and
Jimmy W. Thompson, another member of the crew, met Weeks at the
designated place in order to ride with him to the worksite.
David J. Rose, who previously had been employed by Asplundh on a
2
different crew and was seeking a position on Pertee’s crew, also
rode with Weeks. As was customary, Weeks intended to stop
somewhere along the way so that he and the other passengers
could have breakfast. Pertee intended to contact his supervisor
at that time to set up a meeting for Rose to be reinstated as an
Asplundh employee. While traveling on Interstate 81 in
Botetourt County, Weeks lost control of Asplundh’s vehicle and
it ran off the highway. All the passengers suffered injuries.
Wimmer and Rose were severely injured.
At the time of this accident, Asplundh insured its company
vehicles though a business motor vehicle liability insurance
policy issued by Pacific Employers Insurance Company (Pacific
Employers). In pertinent part, the policy expressly excluded
from coverage any bodily injury to an Asplundh employee “arising
out of and in the course of: . . . [e]mployment by [Asplundh];
or [p]erforming the duties related to the conduct of
[Asplundh’s] business.” A further provision of the policy
excluded from coverage any bodily injury for which Asplundh may
be held liable “under any workers compensation . . . or any
similar law.”
In a letter dated October 9, 2001, Asplundh notified Marsh
Risk Services, an agent for Pacific Employers, of the August 21,
2001 accident. Asplundh advised Pacific Employers in this
letter that following the accident Asplundh had treated all
3
potential claims arising from the accident as being subject to
workers’ compensation.
On October 19, 2001, Wimmer filed suit against Weeks and
Asplundh in the Circuit Court of McDowell County, West Virginia,
seeking unspecified damages for the injuries he suffered in the
August 21, 2001 accident. 2 On November 13, 2001, Asplundh
initiated a proceeding in the Virginia Workers’ Compensation
Commission (Commission) seeking a determination that Wimmer’s
claims were subject to the provisions of the Virginia Workers’
Compensation Act. Wimmer opposed the proceeding, asserting that
the Commission could not exercise jurisdiction over his claims
while the West Virginia civil case was pending. When the
Commission rejected Wimmer’s assertion, Asplundh subsequently
moved for summary judgment in the West Virginia civil case,
contending that Wimmer’s claims therein were barred by the
exclusivity provision of workers’ compensation law and moved to
dismiss the case on that ground. 3
2
Rose also filed suit against Weeks and Asplundh in the
West Virginia court and the two cases were ultimately
consolidated. Although the declaratory judgment action from
which this appeal arises sought a determination as to Pacific
Employers’ liability for the claims of both Wimmer and Rose, for
purposes of this appeal we are concerned only with the
chancellor’s determination as to Wimmer’s claims.
3
Asplundh based its motion on the application of Virginia
law as the locus of the injury, but contended that West Virginia
law would also bar the claim. The workers’ compensation laws of
both states contain exclusivity provisions exempting employers
4
During the proceedings in the West Virginia civil case and
before the Commission, Asplundh was represented by its own
counsel. Although it maintained intermittent communications
with Pacific Employers concerning the civil case, Asplundh did
not demand that Pacific Employers provide Asplundh with a
defense. On October 24, 2002, Pacific Employers, pursuant to
Code § 8.01-184, filed a bill of complaint in the Circuit Court
of the City of Roanoke seeking a declaratory judgment that it
was not liable on its policy of insurance with Asplundh for
Wimmer’s claims in the West Virginia civil case. 4
Asplundh filed a grounds of defense and a separate motion
to dismiss on November 19, 2002. Asplundh contended that the
issue was whether Weeks’ injuries arose out of his employment
thereby causing workers’ compensation to be the exclusive
remedy. Accordingly, Asplundh maintained that declaratory
judgment was not appropriate because Pacific Employers sought a
“determination of disputed issues that must be determined in
some future litigations between the parties.” Asplundh relied
from civil liability for injuries covered by workers’
compensation. See Code § 65.2-307(A) and West Virginia Code
§ 23-2-6.
4
Pacific Employers was subsequently granted leave to file
an amended bill of complaint to correct a reference to the
applicable section of the insurance policy in the original bill
of complaint.
5
upon USAA Cas. Insurance Co. v. Randolph, 255 Va. 342, 497
S.E.2d 744 (1998), for these assertions.
In the meantime, on November 22, 2002, Asplundh’s counsel
in the West Virginia civil case notified Asplundh that the
motion previously filed in that case for summary judgment based
on a workers’ compensation bar had been denied. 5 Apparently as a
result of this denial, Asplundh’s counsel entered into
settlement negotiations with Wimmer. During this process there
was a continual exchange of communications between
representatives for Asplundh and Pacific Employers. The parties
characterize the nature of these communications differently with
respect to whether Pacific Employers was a willing participant
in the settlement efforts, or was doing so solely in an effort
to limit its potential liability and to avoid an allegation of
bad faith by Asplundh. Regardless, Pacific Employers repeatedly
asserted that its participation was subject to a reservation to
stand on its rights as determined in the pending declaratory
judgment proceeding.
5
We are unable to determine the precise date of the West
Virginia trial court’s denial of this motion from the record.
Although Asplundh contended in the Virginia trial court that the
ruling had occurred prior to the filing of the declaratory
judgment action, it now concedes that the ruling, and the
settlement it engendered, occurred after Pacific Employers
initiated the declaratory judgment action that is the subject of
this appeal.
6
On December 23, 2002, Pacific Employers agreed to fund a
potential settlement of Wimmer’s claims in the West Virginia
case. Pacific Employers continued to maintain, however, that it
was not abandoning any right it had to contest its liability
under the insurance policy in question. Asplundh ultimately
settled Wimmer’s claim for $325,000 sometime in late 2002 or
early 2003 with the funds provided by Pacific Employers.
The focus of the parties’ dispute then returned to the
declaratory judgment action in Virginia. On February 5, 2003,
Asplundh filed a brief in support of its pending motion to
dismiss. Asplundh abandoned its prior contention that under
USAA the trial court lacked jurisdiction from the outset.
Instead, Asplundh contended that under Liberty Mutual Ins. Co.
v. Bishop, 211 Va. 414, 177 S.E.2d 519 (1970), the settlement of
Wimmer’s underlying tort claim eliminated the trial court’s
jurisdiction because there was no longer an actual controversy
between Asplundh and Pacific Employers. Pacific Employers
opposed the motion to dismiss contending that Liberty Mutual is
distinguishable and that it had properly reserved its right to a
determination of coverage under its policy in the pending
declaratory judgment action.
The chancellor received oral argument from the parties and,
on May 5, 2003, issued an opinion letter addressing Asplundh’s
motion to dismiss. The chancellor ruled that Pacific Employers’
7
provision of funds for the settlement of Wimmer’s claims in the
West Virginia litigation did not bar Pacific Employers from
seeking relief through declaratory judgment. The chancellor
reasoned that because Pacific Employers was not a party to the
West Virginia litigation, it had no opportunity to assert its
position that Wimmer was an employee acting within the scope of
his employment at the time of the accident. Accordingly, the
chancellor concluded that it was proper for the trial court to
retain jurisdiction over the declaratory judgment action to
decide that issue. On May 19, 2003, the chancellor entered an
order denying Asplundh’s motion to dismiss and adopting by
reference the rationale of the May 5, 2003 opinion letter.
The declaratory judgment action then proceeded ponderously,
with the parties conducting exhaustive discovery and filing
motions with supporting briefs and counter-briefs. Ultimately,
the chancellor received ore tenus evidence in a four-day hearing
beginning on October 6, 2003. In addition, the chancellor
received some 18 depositions totaling approximately 2500 pages.
The evidence in this exhaustive record was mostly duplicative or
related to issues not raised in this appeal. Summarizing it in
detail here would add nothing to the summary of the pertinent
facts already given above.
On November 25, 2003, the chancellor issued an opinion
letter stating the rationale for his decision on the merits of
8
the declaratory judgment action. 6 Relevant to the issues raised
in this appeal, the chancellor found that “[b]oth for worker’s
compensation purposes and for the purposes of the policy
language excluding coverage . . . Wimmer was in fact an employee
acting within the scope of his employment at the time that his
injuries were received.” For this reason, the chancellor
further found that Pacific Employers’ policy did not obligate it
to pay damages for the injuries suffered by Wimmer in the August
21, 2001 accident.
On January 13, 2004, the chancellor entered a final order,
adopting by reference the reasoning of the November 25, 2003
opinion letter, and ordering that Pacific Employers recover from
Asplundh the $325,000 Pacific Employers had contributed toward
the settlement of Wimmer’s claims. We awarded Asplundh this
appeal.
DISCUSSION
Asplundh initially contends that the chancellor erred in
denying its motion to dismiss the declaratory judgment action
because the trial court did not have subject matter jurisdiction
over the declaratory judgment action once Pacific Employers had
6
On July 11, 2003, a final order was entered by the
Commission dismissing the proceedings before it and expressly
providing that it “makes no determination of Shawn Wimmer’s
status as an employee under the Act.” Wimmer v. Asplundh Tree
Expert Company, VWC File No. 207-02-37 (July 11, 2003).
9
contributed funds, even under a reservation of rights, toward
the settlement of the underlying tort claim filed by Wimmer. 7 As
it did in the trial court, Asplundh relies principally on
Liberty Mutual for its assertion that a trial court lacks
subject matter jurisdiction over a declaratory judgment action
when an insurance company seeks a declaration of its obligations
under an insurance policy after making a voluntary payment to
resolve the underlying tort claim. In such instances, Asplundh
maintains, the real purpose of the suit is to obtain a money
judgment, and declaratory judgment is not a proper procedure for
7
We refused a separate petition for appeal in this case
filed by Pacific Employers assigning error to certain aspects of
the chancellor’s final judgment that were unfavorable to Pacific
Employers with respect to its liability for the claims asserted
by Rose. Pacific Employers Insurance Co. v. Asplundh Tree
Expert Company, No. 040821 (October 22, 2004). In briefing this
appeal, Pacific Employers contends that by refusing its appeal
from the same record, this Court has implicitly addressed the
jurisdictional issue, as the trial court must have had proper
jurisdiction to render judgment on those issues addressed in its
appeal. We reject this contention. While a decision to refuse
a petition for appeal is a decision upon the merits of the
issues raised therein, Saunders v. Reynolds, 214 Va. 697, 700-
01, 204 S.E.2d 421, 424 (1974), it is also limited in its effect
to the express language of the order denying the appeal. Sheets
v. Castle, 263 Va. 407, 411-12, 559 S.E.2d 616, 619 (2002).
Moreover, the refusal of a petition for appeal carries no
precedential value, except as to the issues addressed within
“the four corners of the Court’s order.” Id. at 412, 559 S.E.2d
at 619. The order refusing Pacific Employers’ appeal stated
that “there is no reversible error in the judgment complained
of.” See Shiflett v. Eller, 228 Va. 115, 122-23 n.2, 319 S.E.2d
750, 755 n.2 (1984).
10
obtaining such relief. Liberty Mutual, 211 Va. at 421, 177
S.E.2d at 524.
Pacific Employers responds that Liberty Mutual is
inapposite because, unlike the circumstances of the present
case, there the settlement of the underlying claim occurred
prior to the filing of the declaratory judgment action. Pacific
Employers further notes that while a monetary judgment cannot be
the sole aim of a declaratory judgment action, a court with
subject matter jurisdiction over a proper declaratory judgment
action may award any “relief essential to making effective the
declaratory judgment entered by the court.” Winborne v. Doyle,
190 Va. 867, 873, 59 S.E.2d 90, 93 (1950). Rather than being
controlled by Liberty Mutual, Pacific Employers contends that
the chancellor’s decision in this case is supported by State
Farm Fire & Cas. Co. v. Mabry, 255 Va. 286, 497 S.E.2d 844
(1998). We agree with Pacific Employers.
In State Farm, the insurer agreed to defend its insured in
a tort action arising from a shooting, while reserving the right
to challenge its liability under policy language excluding
coverage for injuries arising from intentional torts. Id. at
288, 497 S.E.2d at 845. While the tort suit was pending, the
insurer filed a declaratory judgment action seeking to establish
that it was not liable on the policy. The insured subsequently
entered into a consent judgment with the plaintiff in the tort
11
action settling the suit. Id. at 288-89, 497 S.E.2d at 845.
The chancellor ruled that the insurer was collaterally estopped
from challenging the consent judgment and dismissed the
declaratory judgment action. Id. at 289, 497 S.E.2d at 845.
This Court reversed the judgment of the chancellor,
agreeing with State Farm that collateral estoppel did not apply
because State Farm was not a party to the tort litigation and
there was not sufficient privity between State Farm and its
insured because the reservation of rights by State Farm
established that its interests were divergent from that of the
insured. Id. at 289-90, 497 S.E.2d at 846. In reaching this
conclusion, we relied upon our earlier decision in Reisen v.
Aetna Life and Cas. Co., 225 Va. 327, 302 S.E.2d 529 (1983). In
Reisen, we held that a declaratory judgment proceeding to
determine coverage under an insurance policy could be brought by
an insurer while the underlying tort litigation was pending,
even if the ultimate issue of fact in determining coverage was
also at issue in the tort litigation. This is so “because of
the likelihood that the insurer, after judgment in the tort
action, would be entitled to litigate the very same coverage
question it sought to raise before trial.” Id. at 336, 302
S.E.2d at 534.
Asplundh contends that neither State Farm nor Reisen
addressed the specific issue raised in this case, as State Farm
12
addressed only the issue of estoppel, not jurisdiction, while
Reisen addressed only the issue of a court’s concurrent
jurisdiction over pending tort and declaratory judgment
proceedings. Additionally, Asplundh emphasizes that in neither
case was a money judgment for the insurer the object of the
declaratory judgment action. We are unpersuaded by these
contentions.
At the time the declaratory judgment action was filed by
Pacific Employers in this case, the procedural posture of that
action was indistinguishable from the procedural posture of the
declaratory judgment action in Reisen. Similarly, as in the
present case, when the declaratory judgment action was filed in
State Farm there had not yet been any resolution of the related
tort action. It is simply beyond question that in Reisen, in
State Farm, and in the present case, the trial courts were
vested with subject matter jurisdiction at the time the
declaratory judgment actions were filed.
It should be self-evident that after a declaratory judgment
action is filed the circumstances that caused the party seeking
to have its rights and responsibilities determined by the court
in equity may change. Indeed, such circumstances are implicitly
contemplated by the provision in Code § 8.01-184 that grants the
trial court jurisdiction “to make binding adjudications of
right, whether or not consequential relief is, or at the time
13
could be, claimed.” Code § 8.01-191 provides that this statute
is remedial in purpose and expressly directs that it be
“liberally interpreted.”
The chancellor’s determination here regarding the issue of
the trial court’s continuing jurisdiction over the declaratory
judgment action after the settlement of the underlying tort case
was instructed by this clear legislative mandate. As well, we
have consistently held that “when a court of equity has once
acquired jurisdiction of a cause upon equitable grounds, it may
go on to a complete adjudication, even to the extent of
establishing legal rights and granting legal remedies which
would otherwise be beyond the scope of its authority.” Erlich
v. Hendrick Constr. Co., 217 Va. 108, 115, 225 S.E.2d 665, 670
(1976) (quoting Johnston v. Bunn, 108 Va. 490, 493, 62 S.E. 341,
342 (1908)); see also Advanced Marine Enters. v. PRC Inc., 256
Va. 106, 122, 501 S.E.2d 148, 157 (1998); Waskey v. Lewis, 224
Va. 206, 213, 294 S.E.2d 879, 882 (1982); Buchanan v. Buchanan,
174 Va. 255, 279, 6 S.E.2d 612, 622 (1940). In relying upon
Liberty Mutual, Asplundh fails to recognize that there we were
not concerned with the issue of continuing jurisdiction, but
rather whether the trial court had jurisdiction at the outset.
Our holding in Liberty Mutual does not address the
jurisdictional issue raised in the present case.
14
For these reasons, we are of opinion that the chancellor
properly determined that the trial court retained jurisdiction
over the declaratory judgment action and had the authority to
consider making a monetary award as part of the resolution of
that case. Accordingly, we hold that the chancellor did not err
in denying Asplundh’s motion to dismiss.
Having determined the jurisdictional issue presented in
this appeal, we turn now to consider Asplundh’s contention that
the chancellor erred in finding that Wimmer was within the scope
of his employment at the time of the August 21, 2001 accident
and, therefore, that Pacific Employers had no liability under
its policy to satisfy Wimmer’s claim for damages. The
resolution of this issue is guided by well established
principles invoked by the facts of this particular case.
There is no dispute that at the time of the accident Wimmer
was Asplundh’s employee. “Generally, an employee going to and
from his or her place of employment is not engaged in any
service growing out of and incidental to the employment” and,
thus, an injury that occurs at such time does not arise out of
and in the course of the employment. Barnes v. Stokes, 233 Va.
249, 251, 355 S.E.2d 330, 331 (1987). However, we have long
recognized exceptions to this so-called “going and coming” rule.
In Kent v. Virginia-Carolina Chem. Co., 143 Va. 62, 129
S.E. 330 (1925), we noted that among the recognized exceptions
15
to this rule is “[w]here in going to and from work the means of
transportation is provided by the employer.” Id. at 66, 129
S.E. at 332. We applied this exception in Bristow v. Cross, 210
Va. 718, 173 S.E.2d 815 (1970), holding that the injury to an
employee while going to work in an employer-owned vehicle arises
out of and in the course of his employment “where the
transportation is furnished by custom to the extent that it is
incidental to and part of the contract of employment; or when it
is the result of a continued practice in the course of the
employer’s business which is beneficial to both the employer and
the employee.” Id. at 720-21, 173 S.E.2d at 817; cf. LeWhite
Constr. Co. v. Dunn, 211 Va. 279, 283, 176 S.E.2d 809, 812-13
(1970) (holding that “free transportation” provided for personal
convenience, but without a corresponding benefit to the
employer, does not fall within the exception).
It is not necessary that the employee be compensated for
the time spent traveling to the worksite. Neither is it
necessary that he be required by the employer to use the
proffered transportation. Rather, the question is whether the
practice was customary and conferred a benefit to both the
employer and the employee. Here, the evidence is abundantly
clear that such was the case.
Pertee, the foreman, Wimmer, and Thompson all testified
that it was their usual practice to ride in Asplundh’s company
16
truck from West Virginia to the day’s worksite. Pertee had been
employed by Asplundh for five years and confirmed that this had
been the practice throughout the time of his employment. The
benefit to Asplundh’s employees is patent. Thus, there was
sufficient evidence for the chancellor to conclude that it was a
customary practice for Asplundh to provide transportation to its
employees and that Wimmer derived a benefit from that practice.
The chancellor also correctly concluded that Asplundh
derived a benefit from its customary practice of providing
transportation to its employees. The evidence showed that
Asplundh was required by its contract with the Virginia
Department of Transportation to have a crew of a specific number
available at the worksite before commencing work each day.
Asplundh was assured that it could comply with this requirement
by transporting its employees in its vehicles that were designed
to carry those crews as well as necessary equipment.
Accordingly, we hold that the chancellor correctly ruled
that Wimmer’s injuries arose out of and in the course of his
employment at the time of the August 21, 2001 accident based
upon Asplundh’s customary practice of providing transportation
to its employees. Liability for such injuries was expressly
excluded from the coverage provided in Pacific Employers’
policy. Thus, the chancellor’s determinations that Pacific
Employers is not liable under that policy and that Pacific
17
Employers is entitled to the return of the funds advanced by it
to Asplundh to fund the settlement of those claims are also
correct.
CONCLUSION
For these reasons, we will affirm the judgment of the
chancellor.
Affirmed.
18