Present: All the Justices
TRANSCONTINENTAL INSURANCE COMPANY
v. Record No. 002894
RBMW, INC., t/a JORDAN POINT
YACHT HAVEN, et al.
OPINION BY JUSTICE DONALD W. LEMONS
September 14, 2001
ROBINS INSURANCE AGENCY, INC., et al.
v. Record No. 002532
TRANSCONTINENTAL INSURANCE COMPANY, et al.
FROM THE CIRCUIT COURT OF PRINCE GEORGE COUNTY
James A. Luke, Judge
In this opinion we consider two appeals arising out of
the same case in the trial court. In the first appeal, we
consider whether the trial court erred in ruling that an
exclusion in a Piers, Wharfs, and Docks Coverage Form (“PWD”)
contained in an insurance policy issued by Transcontinental
Insurance Company (“Transcontinental”) to RBMW, Inc. (“RBMW”),
t/a Jordan Point Yacht Haven (“Jordan Point”) did not apply.
In the second appeal, we consider whether the trial court
erred in permitting RBMW to take a nonsuit of its cause of
action against Robins Insurance Agency, Inc. (“Robins
Insurance”) and William Raleigh Robins (“Mr. Robins”).
I. Facts and Proceedings Below
RBMW is a Virginia corporation which operates a marina
known as Jordan Point on the James River near the Benjamin
Harrison Bridge in Hopewell, Virginia. William Michael Winn
(“Winn”) is the president of RBMW and manages Jordan Point.
On March 20, 1995, Robins Insurance, through its agent
Mr. Robins, sold a commercial package policy to RBMW. The
policy included workers’ compensation, automobile, property,
general liability, and various other coverages, and was
underwritten by Transcontinental. In addition, the policy
offered the option of purchasing PWD coverage. RBMW purchased
PWD coverage at an annual cost of $4,231.
The PWD policy provides in pertinent part:
A. COVERAGE
We will pay for “loss” to Covered
Property from any of the Covered Causes
of Loss.
1. COVERED PROPERTY, as used in this
Coverage Form means:
a. Floating or fixed piers, wharfs
and docks;
. . . .
3. COVERED CAUSES OF LOSS
Covered Causes of Loss means RISKS
OF DIRECT PHYSICAL “LOSS” to Covered
Property except those causes of
“loss” listed in the exclusions.
4. a. ADDITIONAL COVERAGE – COLLAPSE
2
We will pay for direct “loss”
caused by or resulting from risks
of direct physical “loss”
involving collapse of all or part
of a building or structure caused
by one or more of the following:
(1) Fire; lightning; windstorm;
hail; explosion; smoke;
aircraft; vehicles; riot;
civil commotion; vandalism;
breakage of glass; falling
object; weight of snow, ice
or sleet; water damage; all
only as covered in the
Coverage Form;
. . . .
B. EXCLUSIONS
1. We will not pay for a “loss” caused
directly or indirectly by any of the
following. Such “loss” is excluded
regardless of any other cause or event
that contributes concurrently or in any
sequence to the “loss”:
. . . .
e. WATER
. . . .
(4) Flood, surface water, waves,
tides, tidal waves, overflowing
of any body of water, or their
spray, all whether driven by wind
or not.
Additionally, the PWD policy defines “loss” as “accidental
loss or damage.” Transcontinental and RBMW agree that the
Transcontinental policy, including PWD coverage, was in effect
at the time of the loss on September 6, 1996.
3
In early September 1996, Hurricane Fran battered the east
coast of the United States. On September 6, 1996, the storm
reached Hopewell and severely damaged Jordan Point. RBMW
submitted a claim to Transcontinental for $139,712.17.
However, Transcontinental only paid $18,143.80 and denied the
remainder of RBMW’s claim relating to damage to its piers,
wharves, and docks along with damage to a boathouse and
replacement of a sign. 1
On June 22, 1998, RBMW filed a motion for judgment in the
trial court against Transcontinental, Robins Insurance, and
Mr. Robins. 2 RBMW alleged Transcontinental breached its
contract when it failed to pay the entire claim.
Additionally, RBMW alleged, in the alternative, that Robins
Insurance and Mr. Robins (collectively, “Robins”)
intentionally or negligently misrepresented to RBMW that storm
damage was covered under the PWD policy.
1
In its motion for judgment, RBMW stated that its damages
totaled $139,712.17. This amount included the $18,143.80 that
Transcontinental subsequently paid. Later, Transcontinental
and RBMW stipulated that the amount of the damage claim that
Transcontinental did not pay was $111,597.55.
2
The motion for judgment named 18 defendants, including
Robins Insurance, Mr. Robins, Transcontinental, and additional
insurance companies. By stipulation, Transcontinental agreed
that it underwrote the only insurance policy in question in
this case and the trial court, with the exception of Robins
Insurance, dismissed with prejudice the remaining 15 insurance
companies.
4
At a bench trial on May 1, 2000, Winn testified
concerning the damage that occurred to Jordan Point as a
result of the hurricane. On cross-examination, the following
colloquy took place between counsel for Transcontinental and
Winn:
Q: And also, as I understand from your
deposition, the waves or the wave action
on the boat did most of the damage to what
occurred to the docks and to the
boathouse?
A: That was my opinion.
The trial court also viewed a video tape that was a
compilation of different video tapes people took the night of
the hurricane. Additionally, the trial court received as
evidence the insurance policy, including the PWD form.
After Winn testified, counsel for Transcontinental and
RBMW agreed that it was an appropriate time to argue whether
the exclusions in Section B(1)(e)(4) of the PWD policy
precluded coverage. The trial court concurred, “with the
understanding that we are excluding from this [RBMW’s] claim
against Robins.”
The trial court ultimately ruled that the exclusions in
the PWD policy did not apply. Specifically, the trial court
stated:
the beginning of the rider under coverage,
it says we’ll pay for loss of covered property.
For many of the covered causes, under covered
5
causes, we find subsection A to be floating or
fixed piers, wharves, and docks.
In section 4 under A dealing with
coverages, we get specific as to collapse, and
it talked about direct loss caused by or
resulting from a risk of direct physical loss,
involving collapse of all or part of a building
or structure caused by one or more of the
following: And it lists several things; 2 of
which are windstorm and water damage.
That gets us to the exclusions section.
In number one under exclusions, it says we will
not pay for a loss caused directly or
indirectly by any of the following: Subsection
E there says water.
And that gets us to the crux of this
matter where under E4, it excludes flood,
surface water, waves, tides, tidal waves
overflowing of any body of water, or their
spray, all [whether] driven by wind or not.
The first word there is flood.
Black’s Law Dictionary defines flood as an
inundation of water over land not usually
covered by it. And flood water is defined as
water which escapes from a stream or other body
and overflows adjacent territory.
By definition, this ain’t a flood.
Because the damage is over water where water
not only flows, over the stream. In this case,
the stream is rather large. It’s the James
River.
Then we get to waves and tides overflowing
of any body of water. Turning to Black’s
again, overflow, the dictionary says, is to
flow or spread beyond the limits. These piers
and docks and wharves were not beyond the
limits of the river. They were in the river.
It can’t be a flood. Its waves and tides were
not beyond the limit; not up on the beach
somewhere. It’s in the river.
So if I were to take waves and tides, it’s
not those overflowing of the body of water.
Counsel for Transcontinental argued that under the clear
language of the policy, “overflow is not a requirement for the
6
wave to be excluded” and suggested that, at the very least,
the issue should be briefed before the trial court rendered a
final decision. However, the trial court disagreed, stating,
“I don’t see where anything is going to be gained by briefing
it. This thing is written with each one of these: Flood,
surface, waves, tides, tidal waves. Comma after each one.
And then saying overflowing of any body of water.”
After the trial court’s ruling, counsel for RBMW stated
the following:
Your Honor, I don’t think we have a further
cause of action against the agency based on
that ruling, and I suggest that they be allowed
to leave. If the court’s ruling is that the
coverage applies, then our allegation to the
agency should have told us it didn’t. It’s
been decided by the court’s opinion.
The trial court agreed and excused counsel for Robins from the
remainder of the proceedings.
On May 8, 2000, counsel for Robins received a nonsuit
order from RBMW that had not been endorsed by all counsel of
record. Robins filed a motion for entry of a dismissal order,
asserting that because the trial court determined that there
was coverage under the Transcontinental policy, Robins should
be dismissed from the case with prejudice. The trial court
heard argument and issued a letter opinion on June 30, 2000,
stating that it would permit RBMW to nonsuit Robins.
Specifically, the trial court noted that RBMW’s intentional or
7
negligent misrepresentation count against Robins had not been
presented to the trial court for decision and therefore, under
Code § 8.01-380, the granting of a nonsuit was appropriate. A
July 26, 2000 order memorialized this decision.
Both Transcontinental and RBMW stipulated that the amount
of the damage claim that Transcontinental did not pay was
$111,597.55. On September 11, 2000, the trial court issued an
order that reiterated its ruling that the exclusion in the PWD
policy relied upon by Transcontinental did not apply and
awarded RBMW $111,597.55 plus interest in damages.
Transcontinental and Robins appeal the respective adverse
rulings of the trial court. In its brief before this Court,
RBMW states that “[a]ll Jordan Point seeks is to retain its
status quo in this case against Robins pending this Court’s
decision on the appeal of Transcontinental’s case.” RBMW
merely seeks to “preserve its causes of action against Robins
if this Court should reverse or remand the Judgment Order
entered against Transcontinental.”
II. The PWD Coverage Exclusion
a. Standard of Review
The trial court’s determination that the exclusion in the
PWD policy did not apply to the damage sustained by Jordan
Point presents a mixed question of law and fact. The factual
findings of the trial court are entitled to the same weight as
8
a jury verdict and will not be set aside unless it appears
from the evidence that the judgment is plainly wrong or
without evidence to support it. Code § 8.01-680; Cardinal
Dev. Co. v. Stanley Constr. Co., 255 Va. 300, 302, 497 S.E.2d
847, 849 (1998). However, interpretation of the provisions of
an insurance contract presents a question of law that we
consider de novo. See C.F. Garcia Enters., Inc. v. Enterprise
Ford Tractor, Inc., 253 Va. 104, 107, 480 S.E.2d 497, 498-99
(1997).
b. Analysis
The trial court heard testimony from Winn regarding the
hurricane on Jordan Point and viewed a video tape depicting
the same. Neither RBMW nor Transcontinental disputes the
events causing the damages sustained by Jordan Point and both
parties stipulated to the amount of damages Transcontinental
refused to pay. Therefore, the only issue before us on appeal
is the trial court’s interpretation of the exclusions
contained in Section B(1)(e)(4) of the PWD policy.
Both RBMW and Transcontinental assert on appeal that our
recent decision in Lower Chesapeake Assocs. v. Valley Forge
Ins. Co., 260 Va. 77, 532 S.E.2d 325 (2000), governs the
resolution of this case. Transcontinental posits that in
Lower Chesapeake we specifically upheld an exclusion,
virtually identical to the one present in the case at bar,
9
holding that it was clear and unambiguous. RBMW disagrees and
claims that we ruled in Lower Chesapeake that the exclusion
was ambiguous when read in conjunction with the portion of the
insurance policy regarding “Additional Coverage – Collapse.”
RBMW’s interpretation of our decision in Lower Chesapeake is
the more accurate of the two positions.
Lower Chesapeake involved a dispute over whether a PWD
policy, virtually identical to the policy at issue in the
present case, covered damage sustained during Hurricane Fran
to four docks at a marina. Initially, we considered the
meaning of the word “collapse” as it was used in Section
A(4)(a), “Additional Coverage – Collapse,” of the PWD policy.
We applied the ordinary and customary meaning of the word as
it was defined in the dictionary and held that “collapse”
means “ ‘to break down completely: fall apart in confused
disorganization: . . . disintegrate.' ” Id. at 86, 532 S.E.2d
at 330 (quoting Webster’s Third New International Dictionary
443 (1993)). Under this definition, only part of one dock in
Lower Chesapeake suffered a “collapse.” Id. at 86-87, 532
S.E.2d at 331.
In Lower Chesapeake, we also considered the application
of the exclusions in the PWD policy. We held that the damage
incurred by the docks that were battered by the storm, but did
not collapse, resulted from excluded causes. Id. at 87, 532
10
S.E.2d 331. Specifically, we said that the evidence amply
supported the trial court’s finding that the damage to these
docks “resulted, at least in part, from the excluded causes of
‘[f]lood, . . . waves, tides, tidal waves, . . . all whether
driven by wind or not.’ ” Id. As to the one dock that
suffered a “collapse,” Valley Forge, the insurance carrier,
argued that the same exclusions that nullified coverage to the
docks that had not collapsed applied to the dock that did.
Id. We disagreed, holding that “[b]ecause these provisions of
the dock coverage form are ambiguous, we construe the policy
in favor of providing coverage and hold that the exclusions in
Section B are inapplicable to the collapse coverage of Section
A(4)(a)[Additional Coverage – Collapse].” Id. at 88, 532
S.E.2d at 332. We based this decision on the fact that the
disputed policy language permitted more than one reasonable
interpretation of the application of the exclusion provision
in Section B to the collapse provision in Section A(4)(a).
Id.
The trial court’s decision in the present case occurred
about one month prior to our decision in Lower Chesapeake.
Despite RBMW’s argument that they were covered by either
direct loss caused by the storm or collapse of structures due
to windstorm, the trial court made no factual findings
regarding collapse. Instead, the trial court merely held that
11
the exclusion in Section B(1)(e)(4) did not apply to RBMW’s
claims. Therefore, on appeal, we consider only the trial
court’s interpretation of this exclusion.
In general, “[c]ourts interpret insurance policies, like
other contracts, in accordance with the intention of the
parties gleaned from the words they have used in the
document.” Floyd v. Northern Neck Ins. Co., 245 Va. 153, 158,
427 S.E.2d 193, 196 (1993). Each component of an insurance
contract “should be considered and construed together and
seemingly conflicting provisions harmonized when that can be
reasonably done, so as to effectuate the intention of the
parties as expressed therein.” Suggs v. The Life Ins. Co. of
Virginia, 207 Va. 7, 11, 147 S.E.2d 707, 710 (1966). When a
policy does not define a given term, we give the word its
“ordinary and accepted meaning.” Scottsdale Ins. Co. v.
Glick, 240 Va. 283, 288, 397 S.E.2d 105, 108 (1990).
With regard to the exclusions in the PWD coverage, our
consideration is governed by well-settled principles.
Exclusionary language in an insurance policy
will be construed most strongly against the
insurer and the burden is upon the insurer to
prove that an exclusion applies. Reasonable
exclusions not in conflict with statute will be
enforced, but it is incumbent upon the insurer
to employ exclusionary language that is clear
and unambiguous.
12
American Reliance Ins. Co. v. Mitchell, 238 Va. 543, 547, 385
S.E.2d 583, 585 (1989) (internal citations omitted).
Exclusion B(1)(e)(4) excludes from coverage direct or
indirect loss caused by “[f]lood, surface water, waves, tides,
tidal waves, overflowing of any body of water, or their spray,
all whether driven by wind or not.” Initially, the trial
court found that the damage to Jordan Point was not caused by
a flood. 3
However, instead of considering the remaining excluded
causes of loss on an individual basis, the trial court read
the exclusion as if the phrase “overflowing of any body of
water” modified the words “flood,” “surface water,” “waves,”
“tides,” and “tidal waves.” As such, the trial court held
that because the waves and tides were “not beyond the limits
of the river,” they were not “overflowing of the body of
water.” 4
3
The trial court based its finding on the fact that
Black’s Law Dictionary defined “flood” as “an inundation of
water over land not usually covered by it.” This definition
is found in the sixth edition of Black’s. The seventh, and
most current, edition does not contain a definition for
“flood.” However, Webster’s Collegiate Dictionary defines
“flood” as “a rising and overflowing of a body of water esp.
onto normally dry land.”
4
The trial court stated that Black’s defines “overflow”
as “to flow or spread beyond the limits.” Neither the sixth
nor seventh edition of Black’s contains a definition for
“overflow.” Because we disagree with the trial court’s
grammatical reading of the exclusion, we need not consider
13
We disagree with this grammatical construction of the
exclusion. Contrary to the trial court’s finding, the
placement of commas in the exclusion indicates that each
subject matter must be separately considered, including,
“overflowing of any body of water.” In this context, the
phrase, “overflowing of any body of water,” is a verbal noun
known as a gerund. See William Strunk, Jr. & E.B. White, The
Elements of Style 55 (4th ed. 2000). Accordingly, the trial
court erred in failing to consider each of the excluded causes
of loss on an individual basis to determine whether coverage
was excluded.
Having determined that the damage to Jordan Point did not
result from a “flood,” the trial court should then have
considered the remaining excluded causes in Section B(1)(e)(4)
separately, starting with a “wave.” A “wave” is defined in
Webster’s Collegiate Dictionary as “a moving ridge or swell on
the surface of a liquid (as of the sea).” Significantly,
unlike a “flood,” a “wave” does not require movement of water
into an area not typically covered by it. It is clear that
the damage to Jordan Point was caused, at least in part, by
waves. Winn admitted that, in his opinion, waves did most of
the damage to the docks and the boathouse. We therefore hold
whether “to flow or spread beyond the limits” is the ordinary
or accepted meaning of “overflow.”
14
that the trial court erred in ruling that exclusion B(1)(e)(4)
by its terms did not apply to any of the damage to Jordan
Point.
Obviously, the trial court determined that the losses
sustained by Jordan Point were covered losses; however, the
trial court did not determine whether the losses were covered
by provisions A(1),(2), and (3) or by the additional coverage
for collapse provided by A(4)(a). The significance is readily
apparent in light of our decision in Lower Chesapeake,
involving virtually identical policy language, wherein we held
that “the exclusions in Section B are inapplicable to the
collapse coverage of Section A(4)(a).” Lower Chesapeake, 260
Va. at 88, 532 S.E.2d at 332. Accordingly, we will reverse
the judgment of the trial court and remand for determination
of the source of coverage and proper application of
exclusions.
III. RBMW’s Nonsuit
a. Standard of Review
On appeal, Robins maintains that the trial court erred in
permitting RBMW to take a nonsuit of its claim against Robins.
This issue presents a question of law and as such is reviewed
on appeal under a de novo standard.
b. Analysis
Code § 8.01-380(A) provides in pertinent part:
15
A party shall not be allowed to suffer a
nonsuit as to any cause of action or claim, or
any other party to the proceeding, unless he
does so before a motion to strike the evidence
has been sustained or before the jury retires
from the bar or before the action has been
submitted to the court for decision.
We have stated, when construing the nonsuit statute, that
for an action to be “submitted to the court,” it is “necessary
for the parties, by counsel, to have both yielded the issues
to the court for consideration and decision.” Moore v. Moore,
218 Va. 790, 795, 240 S.E.2d 535, 538 (1978). We stated that
this could be accomplished “either as the result of oral or
written argument, formal notice and motion, or by tendering a
jointly endorsed sketch for a decree.” Id. at 795-96, 240
S.E.2d at 538. However, in City of Hopewell v. Cogar, 237 Va.
264, 268, 377 S.E.2d 385, 387-88 (1989), we stated that “[i]n
Moore, we made no attempt to delineate every possible
situation when an action would or would not be ‘submitted’ to
the court for decision under the nonsuit statute.”
We have previously approved a trial court’s granting of a
nonsuit even though motions had been presented to the court
and argument had occurred. See Kelly v. Carrico, 256 Va. 282,
286, 504 S.E.2d 368, 370 (1998)(holding that there was no
submission because the motion for nonsuit was made before the
court recessed after oral argument to consider the merits of
the motion for judgment on the pleadings); Cogar, 237 Va. at
16
267, 377 S.E.2d at 387 (holding that there was no submission
because the motion for nonsuit was made within period allowed
by court, after oral argument, for litigants to file
additional memoranda in support of their positions on a motion
for summary judgment).
In the present case, RBMW’s motion for judgment contained
alternative causes of action against different parties:
breach of contract against Transcontinental, and intentional
or negligent misrepresentation against Robins. In response,
both Transcontinental and Robins submitted separate grounds of
defense. At trial, Transcontinental argued that the exclusion
in the PWD policy operated to preclude coverage. Prior to
hearing argument on this issue, the trial court specifically
noted that the claims against Robins were being excluded from
consideration at this point. Indeed, as counsel for RBMW
noted, “I don’t think they have a dog in this fight, this
particular fight.” The trial court astutely noted, “[n]ot in
this particular one.” Following the trial court’s decision,
Robins did not present any argument to the trial court.
Instead, Robins was “excused from the remainder of the
proceedings.”
Therefore, at no time was the issue of RBMW’s cause of
action against Robins yielded by both Robins and RBMW to the
trial court for consideration and decision. The only issue
17
considered by the trial court was the application of the
exclusion in the PWD policy; an issue only Transcontinental
and RBMW yielded to the trial court for consideration and
decision. Accordingly, we hold that RBMW’s action against
Robins had not been “submitted to the court for decision”
within the meaning of Code § 8.01-380(A).
Robins also claims that RBMW should not have been
permitted to suffer a nonsuit because the trial court had
already made a ruling that was dispositive as to the cause of
action against Robins. For support of this proposition,
Robins relies upon our decision in Wells v. Lorcom House
Condominiums’ Council of Co-Owners, 237 Va. 247, 377 S.E.2d
381 (1989). In Wells, the plaintiff and defendants had argued
before the trial court defendants’ demurrer attacking the
legal sufficiency of an amended motion for judgment,
defendants’ plea in bar based on various statutes of
limitations, and defendants’ motion to dismiss. Id. at 252,
377 S.E.2d at 384. The trial court took the matters “under
advisement.” Id. at 250, 377 S.E.2d at 382. The plaintiff
requested a nonsuit before the trial court issued its ruling,
but we held that the request came too late, noting:
Any one of those pleadings were case
dispositive if the court ruled in favor of the
defendants. Moreover, the record is clear that
no one, neither the trial judge nor the
attorneys, contemplated that any further
18
action, such as briefing, was necessary in
order to enable the court to decide the issues.
Id. at 252, 377 S.E.2d at 384. Robins also points to RBMW’s
counsel’s assertion, following the trial court’s ruling on the
applicability of the exclusion in the PWD policy, that RBMW
did not have a further cause of action against Robins. Wells
is distinguished from the present case. Unlike Wells, where
all parties had presented argument to the court on all issues,
in the case at bar, RBMW and Robins never yielded the issue of
Robins’ alleged intentional or negligent misrepresentation to
the trial court.
IV. Conclusion
The trial court did not err in granting a nonsuit of
RBMW’s claims against Robins. The trial court erred in its
interpretation of the exclusion in the applicable policy. We
will affirm the trial court’s judgment in the case of Robins
v. Transcontinental (Record No. 002532) and will reverse the
trial court’s judgment in Transcontinental v. RBMW (Record No.
002894) and remand for further proceedings consistent with
this opinion.
Record No. 002894 — Reversed and remanded.
Record No. 002532 — Affirmed.
19