USAA Casualty Insurance v. Randolph

Present:   All the Justices

USAA CASUALTY INSURANCE
COMPANY, ET AL.

v.   Record No. 971083  OPINION BY JUSTICE BARBARA MILANO KEENAN
                                    February 27, 1998
TRACY LEE RANDOLPH, ET AL.

               FROM THE CIRCUIT COURT OF LOUDOUN COUNTY
                    Carleton Penn, Judge Designate

     In this appeal, we consider a procedural challenge to the

use of a declaratory judgment proceeding for resolving the issue

whether an employee’s injury arose out of and in the course of

his employment.

     In October 1995, Kevin Martin was working as a truck driver

for Southern States Cooperative, Inc., t/a Southern States

Leesburg Petroleum Services (Southern States).    Martin’s job

required him to be “on call” to respond to customer requests for

service during the weekend beginning Friday, October 13, 1995.

Pursuant to company policy, Martin planned to use a company-

owned truck for the period he was “on call.”

     At the end of his regular work shift on October 13, Martin

began to transfer his personal belongings from his car, which

was in Southern States’ employee parking lot, to the company-

owned truck.    During this process, Martin noticed that his

hunting rifle was in the trunk of his car and that the rifle

case was open.    When Martin attempted to close the rifle case,

the rifle discharged a bullet which traveled through the wall of
the trunk and struck Tracy Lee Randolph, another Southern States

employee, in the left leg.    There is no allegation that this

shooting was intentional.

     At the time of the shooting, Martin’s car was insured by a

motor vehicle liability insurance policy issued by USAA Casualty

Insurance Company (USAA), which provided coverage for injuries

caused by Martin’s negligent or reckless use of the car.

Martin’s homeowner’s liability insurance policy, also issued by

USAA, provided coverage for injuries resulting from Martin’s

negligent or reckless acts.   USAA denied liability under each

policy for Randolph’s injury on the ground that Randolph was

injured on Southern States’ property while Martin was in the

course of his employment.    Southern States’ workers’

compensation carrier, Southern States Underwriters, Inc., t/a

Southern States Insurance Exchange (Underwriters), also denied

liability for Randolph’s injury, stating that the injury did not

arise out of or in the course of Randolph’s employment.

     Randolph filed a bill of complaint for declaratory judgment

in the trial court against several defendants, including USAA,

Southern States, Underwriters, and Kevin Martin.   The bill of

complaint requested a declaration that USAA was liable for

Randolph’s injury under either or both of the insurance policies

issued by USAA.




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     At a bench trial, Randolph’s counsel informed the

chancellor that the sole issue he was asking the chancellor to

decide was “whether the Workers’ Compensation bar applies.”

Randolph’s counsel further stated that he “was not going to get

into which one of the various USAA policies might apply.”    USAA

and Martin (collectively, USAA) objected to Randolph’s use of a

declaratory judgment proceeding to resolve the issue concerning

the workers’ compensation bar.

     After hearing the evidence, the chancellor ruled that the

request for declaratory relief was appropriate because the suit

involved an “antagonistic assertion and denial of right.”    The

chancellor then held that the injury did not arise out of

Randolph’s employment and, thus, that the Virginia Workers’

Compensation Act, Code §§ 65.2-100 through -1310, did not bar

Randolph from filing a tort action.

     On appeal, USAA contends that the chancellor erred in

entering a declaratory judgment on the issue whether Randolph’s

injuries arose out of and in the course of his employment.    USAA

argues that declaratory judgment did not lie in this case

because the suit raised an issue to be decided in a future tort

action and did not involve a determination of Randolph’s rights

under a written instrument.

     Southern States and Randolph (collectively, Randolph)

contend that the trial court did not err in entering a


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declaratory judgment because the bill of complaint requested a

determination whether Randolph had a right to file a workers’

compensation claim or a right to institute a personal injury

action.   Randolph also asserts that the declaratory judgment

suit was an appropriate and efficient mechanism for joining all

parties in interest for the conclusive determination of these

rights.   We disagree with Randolph.

     Under the Declaratory Judgment Act, Code §§ 8.01-184

through –191, circuit courts have the authority to make “binding

adjudications of right” in cases of “actual controversy” when

there is “antagonistic assertion and denial of right.”   Code §

8.01-184; Blue Cross & Blue Shield v. St. Mary’s Hosp., 245 Va.

24, 35, 426 S.E.2d 117, 123 (1993); Erie Ins. Group v. Hughes,

240 Va. 165, 170, 393 S.E.2d 210, 212 (1990); Reisen v. Aetna

Life & Cas. Co., 225 Va. 327, 331, 302 S.E.2d 529, 531 (1983).

The purpose of this enactment is to provide relief from the

uncertainty arising out of controversies over legal rights.

Code § 8.01-191; Erie, 240 Va. at 170, 393 S.E.2d at 212;

Reisen, 225 Va. at 331, 302 S.E.2d at 531.

     The Declaratory Judgment Act does not give trial courts the

authority to render advisory opinions, to decide moot questions,

or to answer inquiries that are merely speculative.   St. Mary’s,

245 Va. at 35, 426 S.E.2d at 123; Hughes, 240 Va. at 170, 393

S.E.2d at 212; Reisen, 225 Va. at 331, 302 S.E.2d at 531.     The


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Act also is not to be used as an instrument of procedural

fencing, either to secure delay or to choose a forum.     Liberty

Mut. Ins. Co. v. Bishop, 211 Va. 414, 419, 177 S.E.2d 519, 522

(1970); Williams v. Southern Bank, 203 Va. 657, 662, 125 S.E.2d

803, 807 (1962).

     The authority to enter a declaratory judgment is

discretionary and must be exercised with great care and caution.

Bishop, 211 Va. at 421, 177 S.E.2d at 524.    As a rule, this

authority will not be exercised when some other mode of

proceeding is provided.   Id.

     The fact that multiple actions may be avoided if a

declaratory judgment is entered is not always a ground for the

trial court to exercise its jurisdiction.    There must also be

some real necessity for the exercise of jurisdiction on this

basis.   Id. at 419, 177 S.E.2d at 522-23; Williams, 203 Va. at

663, 125 S.E.2d at 807.   Further, when a declaratory judgment

regarding a disputed fact would be determinative of issues,

rather than a construction of definite stated rights, status, or

other relations, commonly expressed in written instruments, the

case is not appropriate for declaratory judgment.    Bishop, 211

Va. at 420, 177 S.E.2d at 523; Williams, 203 Va. at 663, 125

S.E.2d at 807.

     Our decisions in Bishop and Williams illustrate some of

these basic principles.   In Bishop, two insurers which had


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defended and settled a wrongful death action requested entry of

a declaratory judgment against Liberty Mutual Insurance Company

(Liberty Mutual).   The two insurers effectively contended that

Liberty Mutual was liable to them because they defended,

settled, and paid under their policies a claim that should have

been defended, settled, and paid by Liberty Mutual.   The trial

court entered a declaratory judgment decreeing recovery in favor

of the two insurers.

     On appeal, Liberty Mutual maintained that the disputed

claim was not appropriate for resolution by means of declaratory

judgment.   We agreed because, when the petition for declaratory

judgment was filed, the various claims and rights asserted had

accrued and matured, and the wrongs alleged had been suffered.

211 Va. at 421, 177 S.E.2d at 524.   Thus, no rights between the

parties remained unsettled and other modes of proceeding were

available for resolution of the dispute.   See id.

     In Williams, a former customer of a bank threatened to file

eleven actions for malicious prosecution against the bank, based

on information the bank gave to a prosecutor that led to the

indictment of the customer on eleven charges of larceny.    When

the customer was acquitted on two of the larceny charges, the

remaining indictments were terminated by nolle prosequi on

motion by the prosecutor.   The bank filed a petition for

declaratory judgment requesting a determination whether the bank


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could be held liable in a civil suit for the alleged malicious

prosecution.   The trial court entered a declaratory judgment

decreeing that the bank had made a full disclosure of all

material facts to the prosecutor, and the court permanently

enjoined the customer from instituting any malicious prosecution

actions based on the bank’s conduct.    203 Va. at 658-59, 125

S.E.2d at 804-05.

     We reversed the trial court’s decree, holding that

declaratory judgment did not lie because the only controversy in

the suit involved a disputed issue, namely, whether the bank

made a full disclosure of the facts to the prosecutor.     203 Va.

at 663, 125 S.E.2d at 807.   The determination of that issue,

rather than an adjudication of any rights of the parties, was

the true object of the proceeding.     Id.   We also noted that the

trial court’s decree improperly allowed the bank to choose its

own forum in equity.   Id. at 663, 125 S.E.2d at 808.

     The present case suffers from many of the same defects that

required reversal of the decrees in Bishop and Williams.      Like

Bishop, the present case involves claims and rights that had

accrued and matured when the bill of complaint was filed.     Thus,

declaratory judgment did not lie because other remedies were

available to Randolph, namely, a claim for workers’ compensation

benefits or an action at law.   See Bishop, 211 Va. at 421, 177

S.E.2d at 524.


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     Like Williams, the present case is inappropriate for

declaratory judgment because the case does not involve a

determination of rights, but only involves a disputed issue to

be determined in future litigation between the parties, namely,

whether Randolph’s injuries arose out of and in the course of

his employment.   The chancellor’s entry of a declaratory

judgment also improperly allowed Randolph to choose a forum for

the determination of this issue.       See Williams, 203 Va. at 663,

125 S.E.2d at 808.

     We find no merit in Randolph’s contention that the present

case is similar to our decision in Reisen.       There, we were

presented with an actual controversy requiring the

interpretation of rights under an insurance policy.      The

controversy involved the insurer’s duty to defend a pending tort

action.   We held that the determination of this coverage

question was appropriate for declaratory judgment because the

determination guided the parties in their future conduct in

relation to each other, and saved them from jeopardizing their

interests by taking undirected action incident to their rights.

225 Va. at 335, 302 S.E.2d at 533.      The present case is

dissimilar to Reisen because Randolph did not seek any

adjudication of rights but only requested a determination of the




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issue whether his injuries arose out of and in the course of his

employment. *

     For these reasons, we will reverse the trial court’s decree

and dismiss the bill of complaint for declaratory judgment.

                                          Reversed and dismissed.




     *
       Based on our decision, we do not reach USAA’s remaining
assignment of error challenging the merits of the chancellor’s
decision.

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