Present: All the Justices
ALLSTATE INSURANCE COMPANY
OPINION BY JUSTICE LEROY R. HASSELL, SR.
v. Record No. 001349 April 20, 2001
MARCELLUS D. JONES
FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND
Melvin R. Hughes, Jr., Judge
In this appeal, we consider whether a passenger in a car
that was insured at the time of an accident is entitled to
enforce a judgment entered against a named insured driver
pursuant to the uninsured motorist provisions of the driver's
automobile liability insurance policy even though the
insurance company which issued the policy denied liability
coverage to its named insured driver for failure to cooperate.
The relevant facts are not in dispute. On May 14, 1996,
Marcellus D. Jones was injured when he was a passenger in an
automobile owned and operated by Christopher D. Robinson.
Allstate Insurance Company (Allstate) had issued a policy of
automobile liability insurance to Robinson, a named insured
under the provisions of the policy.
Jones filed a negligence action against Robinson in the
circuit court. During the pendency of the negligence action,
Allstate informed Jones and his counsel that it denied
liability coverage to Robinson because of his lack of
cooperation. Jones served Allstate with process in the tort
action. Jones obtained a judgment against Robinson in the
tort action in the amount of $55,000 with costs and interest.
Jones initiated this proceeding by filing a separate
motion for judgment against Allstate. He alleged that when
Allstate denied liability coverage to Robinson, Robinson
became an uninsured motorist pursuant to the provisions of
Code § 38.2-2206 and that Allstate was required to pay the
$25,000 uninsured motorist insurance limit prescribed in the
policy that Allstate had issued to Robinson as partial
satisfaction of Jones' judgment. Allstate denied that it had
any obligation to satisfy any part of the judgment. Both
litigants filed motions for summary judgment. The circuit
court held that pursuant to Code § 38.2-2206, Allstate had an
obligation to pay its uninsured motorist policy limit, and the
court entered summary judgment in favor of Jones in the amount
of $25,000. Allstate appeals.
Allstate contends that it has no obligation to pay its
prescribed policy limit to satisfy a portion of the judgment
that Jones obtained against Robinson. Allstate says that to
recover under its insurance policy, Jones "must first qualify
as an 'insured' at the time the vehicle became uninsured.
Only as an insured under said policy can [Jones] avail himself
of the coverage imbued via its uninsured motorist
endorsement." Allstate observes that "[t]he policy
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endorsement relating to uninsured motorists provides coverage
to, inter alia, persons occupying insured motor vehicles.
Hence, the analysis which counsels reversal of the [c]ircuit
[c]ourt's judgment requires this [C]ourt to . . . determine
whether . . . Robinson's vehicle constituted an insured motor
vehicle at the time [Jones] served Allstate." Furthermore,
Allstate asserts that as a condition precedent to uninsured
motorist coverage, there must be both an insured motor vehicle
and an uninsured motor vehicle. Allstate, relying upon our
decision in Superior Insurance Company v. Hunter, 258 Va. 338,
520 S.E.2d 646 (1999), contends that an automobile cannot be
deemed both "an insured motor vehicle and an uninsured motor
vehicle."
Responding, Jones contends that Allstate has an
obligation to pay the limits of its insurance policy to
partially satisfy the judgment pursuant to the uninsured
motorist provisions of the policy because he is an insured as
defined by Code § 38.2-2206(B). Continuing, Jones argues that
our decision in Superior Insurance Company is not applicable
to the facts and circumstances of this proceeding.
Code § 38.2-2206 provides in relevant part:
"A. . . . [N]o policy or contract of bodily
injury or property damage liability insurance
relating to the ownership, maintenance, or use of a
motor vehicle shall be issued or delivered in this
Commonwealth to the owner of such vehicle or shall
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be issued or delivered by any insurer licensed in
this Commonwealth upon any motor vehicle principally
garaged or used in this Commonwealth unless it
contains an endorsement or provisions undertaking to
pay the insured all sums that he is legally entitled
to recover as damages from the owner or operator of
an uninsured motor vehicle . . . .
"B. . . . .
" 'Insured' as used in subsections A, D, G, and
H of this section means the named insured and, while
resident of the same household, the spouse of the
named insured, and relatives, wards or foster
children of either, while in a motor vehicle or
otherwise, and any person who uses the motor vehicle
to which the policy applies, with the expressed or
implied consent of the named insured, and a guest in
the motor vehicle to which the policy applies or the
personal representative of any of the above.
" 'Uninsured motor vehicle' means a motor
vehicle for which (i) there is no bodily injury
liability insurance and property damage liability
insurance in the amounts specified by § 46.2-472,
(ii) there is such insurance but the insurer writing
the insurance denies coverage for any reason
whatsoever, including failure or refusal of the
insured to cooperate with the insurer . . . ."
In applying the statutory definitions contained in Code
§ 38.2-2206(B), we must consider whether, at the time of the
accident, Jones was a guest in Robinson's motor vehicle and
whether, at the time of the accident, there was a bodily
injury liability insurance policy in effect, but the insurer
writing the insurance subsequently denied coverage for any
reason whatsoever.
Applying the plain and unambiguous language in Code
§ 38.2-2206, we hold that Allstate is required to pay the
limit of its uninsured motorist insurance coverage policy
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toward the judgment that Jones obtained against Robinson.
Even though Allstate had issued a policy of automobile
liability insurance to Robinson, its named insured, which was
in effect at the time Jones was injured, Allstate denied
coverage to Robinson because Allstate believed that he had
breached his duty to cooperate as required by the terms of
that policy.
Once Allstate decided to deny coverage to its named
insured, Robinson, because of lack of cooperation, the vehicle
which Robinson was operating at the time of the accident met
the statutorily prescribed definition of an uninsured motor
vehicle. Code § 38.2-2206(B) expressly provides that an
uninsured motor vehicle means a motor vehicle for which there
is insurance, "but the insurer writing the insurance denies
coverage for any reason whatsoever, including failure or
refusal of the insured to cooperate with the insurer." And,
we observe that Jones, a passenger in the car at the time of
the accident, was an insured within the meaning of Code
§ 38.2-2206 because he was a guest in the motor vehicle.
In Superior Insurance Company v. Hunter, supra, we
considered whether the underinsured motorist provision of a
tortfeasor's automobile liability insurance policy was
available to satisfy claims of passengers in the tortfeasor's
vehicle who were insured under the same policy and whose
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claims for damages exceeded the limits of the policy's
liability coverage. Purcell Hunter and his daughter, Lekedra
D. Hunter, were passengers in a vehicle owned by Purcell
Hunter and driven by his wife, Eva L. Hunter. The vehicle
collided with a car driven by Ikesha M. Dye. Purcell Hunter,
Lekedra Hunter, Dye, and a passenger in Dye's vehicle were
injured in the accident.
At the time of the accident, Purcell Hunter was a named
insured under an automobile insurance policy issued by
Superior Insurance Company (Superior). Eva Hunter and Lekedra
Hunter were also named insureds under the terms of the policy,
which provided liability coverage of $25,000 for each person
injured, limited to $50,000 per accident. The policy also
contained uninsured/underinsured motorist coverage with the
same limits.
Dye and her passenger filed claims for their damages with
Superior and alleged that Eva Hunter was negligent in her
operation of the vehicle. Superior paid these claims, which
totaled $38,500. Purcell Hunter and Lekedra Hunter filed
claims with Superior for damages resulting from their personal
injuries, and they filed an action against Eva Hunter,
alleging that her negligence was a proximate cause of their
injuries. Because Superior had previously paid $38,500 to
settle the claims of Dye and her passenger, only $11,500 in
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total liability coverage remained available to satisfy the
claim submitted by Purcell Hunter and Lekedra Hunter.
Lekedra Hunter and Purcell Hunter filed actions against
Superior and sought declaratory judgments that Superior was
required to satisfy their claims in excess of $11,500 by
paying pursuant to the policy's underinsured motorist
coverage.
Rejecting their contentions, we stated:
"[I]n construing Code § 38.2-2206 as a whole, we
conclude, even under the facts of this case when
only one insurance policy is involved, that the
General Assembly did not intend that a vehicle could
be 'underinsured' with respect to itself. In light
of the provisions of subsection (A), it is clear
that subsection (B) contemplates a situation in
which there are at least two applicable insurance
policies at issue — the liability coverage provided
by a tortfeasor's insurance policy, and the
uninsured/underinsured motorist coverage provided by
an injured party's insurance policy.
"Subsection (A) provides that the limits of the
uninsured/underinsured coverage of any policy issued
in Virginia 'shall equal but not exceed the limits
of the liability insurance provided.' It does not
permit the amount of liability coverage provided by
a policy to be less than uninsured/underinsured
motorist coverage provided by that policy. The
total amount of this coverage necessarily is to be
determined at the time the policy is issued by the
insurance company.
"The definition of 'underinsured' in subsection
(B), however, contemplates just such a scenario,
that is, where the amount of the liability coverage
is less than the amount of the uninsured/
underinsured motorist coverage. The two subsections
can be reconciled only if it is assumed, as we do
here, that subsection (B) contemplates a situation
in which there are two insurance policies at issue.
Moreover, subsection (A) states that the
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underinsured motorist coverage must 'obligate the
insurer to make payment for bodily injury or
property damage caused by the operation or use of an
underinsured motor vehicle.' The reference to 'an
underinsured motor vehicle' contemplates the
existence of a second insurance policy.
"Read together, subsection (A) and subsection
(B) do not contemplate that, under the circumstances
of this case, a claimant would be permitted to
recover under both the liability and
uninsured/underinsured motorist coverages of a
single policy. In the present case, the
uninsured/underinsured motorist coverage provided by
Superior's policy would not be 'afforded to'
[Lekedra Hunter and Purcell Hunter]. Thus, there
are no underinsured motorist coverages afforded to
[Lekedra Hunter and Purcell Hunter] to compare with
the amount of liability coverage 'available for
payment.' "
Superior Insurance Company, 258 Va. at 344-45, 520 S.E.2d at
649.
As the aforementioned discussion clearly indicates, our
holding in Superior Insurance Company is not dispositive of
the issue in this appeal. In Superior Insurance Company, we
held, under the facts and circumstances of that case, that the
underinsured motorist provisions of a tortfeasor's automobile
liability insurance policy could not be used to satisfy claims
of passengers who are insureds under the same policy and whose
claims exceed the limits of the policy's liability insurance
coverage. Here, however, we are concerned with a completely
different factual scenario. Unlike Superior Insurance
Company, we are not confronted with a situation in which an
insurance company, that had issued an automobile liability
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insurance policy, could be required to pay its contracted
limits of liability coverage and also pay underinsured
motorist coverage from the same policy. Jones seeks to
recover solely on the uninsured motorist provisions and,
hence, Allstate cannot be subject to liability beyond its
contractual limits.
In view of our holding, we need not consider Allstate's
remaining arguments. Accordingly, we will affirm the judgment
of the circuit court.
Affirmed.
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