Present: Carrico, C.J., Compton, Stephenson, * Lacy,
Hassell, Keenan and Koontz, JJ.
MICHAEL F. HAISLIP
OPINION BY JUSTICE LEROY R. HASSELL, SR.
v. Record No. 962214 September 12, 1997
SOUTHERN HERITAGE INSURANCE
COMPANY, ET AL.
FROM THE CIRCUIT COURT OF HENRICO COUNTY
Buford M. Parsons, Jr., Judge
In this appeal, we consider whether Code § 38.2-2204
requires an insurance company, which had issued an
automobile liability insurance policy, to provide full and
separate coverage to its named insured who was allegedly
guilty of negligent entrustment of a vehicle, even though
the insurer had already paid the insurance policy limits on
behalf of a permissive user who negligently operated the
insured vehicle.
Michael F. Haislip filed a motion for judgment against
Raymond L. Goode and Tina L. Price to recover damages he
incurred as a result of an automobile accident. Haislip
alleged that Price negligently entrusted her car to Goode,
who negligently operated the vehicle.
At the time of the accident, Price's car was insured
under an automobile liability policy issued to her by
Southern Heritage Insurance Company. Apparently, Goode did
not have an automobile liability insurance policy, and
Southern Heritage settled Haislip's claim against Goode and
*
Justice Stephenson participated in the hearing and
decision of this case prior to the effective date of his
retirement on July 1, 1997.
issued a settlement check to Haislip in the amount of
$25,000, which Southern Heritage believes is the maximum
amount of insurance coverage available to Haislip under the
terms of the policy of insurance.
Subsequently, Southern Heritage filed a motion for
declaratory judgment, asking that the trial court declare
that: the maximum amount of coverage available to Haislip
under the policy is $25,000; the policy had been exhausted
by reason of the settlement paid on behalf of Goode and;
Southern Heritage has no duty to defend or pay any amounts
related to the claim Haislip made against Price. Haislip
filed a motion for summary judgment, asserting that the
maximum amount of coverage available to him under the
insurance policy is $50,000. The trial court considered
argument of counsel and entered an order denying Haislip's
motion for summary judgment and granting Southern Heritage's
motion for declaratory judgment. The trial court entered a
judgment declaring that the insurance coverage available to
Haislip under the insurance policy had been exhausted by the
payment of $25,000 to him in settlement of his claim against
Goode. Haislip appeals.
Haislip argues that even though the automobile
liability insurance contract provided $25,000 of coverage
per occurrence, Code § 38.2-2204 requires Southern Heritage
to provide $25,000 of liability coverage to Goode and
another $25,000 of coverage to Price. Haislip contends that
Goode and Price are persons insured within the meaning of
the policy and, as a result, Southern Heritage is required
to provide a maximum of $25,000 of coverage to Price for her
negligent entrustment of the vehicle and another $25,000 of
coverage to Goode for his negligent operation of the insured
vehicle. Continuing, Price asserts that Code § 38.2-2204
"provides that all contracts of bodily injury liability
insurance must contain a provision insuring the named
insured, as well as any other person using the motor vehicle
with the express or implied consent of the named insured."
Southern Heritage argues, however, that Code § 38.2-
2204 "was not created for the benefit of the insured, nor
was it created in order to allow double recovery to the
party who has suffered damage by the negligent use of the
insured's car when operated by another with the owner's
permission." Southern Heritage asserts that the purpose of
Code § 38.2-2204 is to protect the injured party who has
suffered damage "by allowing that party a single recovery
under the insured's policy."
Code § 38.2-2204, commonly referred to as the omnibus
clause, states in part:
"A. No policy or contract of bodily injury
or property damage liability insurance, covering
liability arising from the ownership, maintenance,
or use of any motor vehicle . . . shall be issued
or delivered in this Commonwealth to the owner of
such vehicle . . . or shall be issued or delivered
by any insurer licensed in this Commonwealth upon
any motor vehicle . . . that is principally
garaged, docked, or used in this Commonwealth,
unless the policy contains a provision insuring
the named insured, and any other person using or
responsible for the use of the motor vehicle . . .
with the expressed or implied consent of the named
insured, against liability for death or injury
sustained, or loss or damage incurred within the
coverage of the policy or contract as a result of
negligence in the operation or use of such vehicle
. . . by the named insured or by any such person."
(Emphasis added).
In deciding the meaning of the statute, we must
consider the plain language that the General Assembly
employed when enacting this statute. For example, we stated
in Barr v. Town & Country Properties, 240 Va. 292, 295, 396
S.E.2d 672, 674 (1990) (quoting Watkins v. Hall, 161 Va.
924, 930, 172 S.E. 445, 447 (1934)):
"'While in the construction of statutes the
constant endeavor of the courts is to ascertain
and give effect to the intention of the
legislature, that intention must be gathered from
the words used, unless a literal construction
would involve a manifest absurdity. Where the
legislature has used words of a plain and definite
import the courts cannot put upon them a
construction which amounts to holding the
legislature did not mean what it has actually
expressed.'"
Accord Abbott v. Willey, 253 Va. 88, 91, 479 S.E.2d 528, 530
(1997); Weinberg v. Given, 252 Va. 221, 225-26, 476 S.E.2d
502, 504 (1996); Dominion Trust Co. v. Kenbridge Constr.
Co., 248 Va. 393, 396, 448 S.E.2d 659, 660 (1994).
Additionally, in interpreting Code § 38.1-381, the
predecessor to the current omnibus statute, we stated that
the omnibus statute "is by force of its provisions made a
part of a liability policy, and is to be liberally construed
to accomplish its intended purpose. However, . . . we must
look to the words used in the statute to determine its
meaning, and only the meaning of the statute as determined
should be given effect." Grange Mutual v. Criterion Ins.
Co., 212 Va. 753, 756, 188 S.E.2d 91, 93 (1972); accord City
of Norfolk v. Ingram, 235 Va. 433, 437, 367 S.E.2d 725, 727
(1988); Storm v. Nationwide Ins. Co., 199 Va. 130, 135, 97
S.E.2d 759, 762 (1957).
We are of opinion that the plain language contained in
Code § 38.2-2204(A) requires Southern Heritage to provide
$25,000 of insurance coverage for any claim or judgment that
Price may be legally obligated to pay to Haislip for claims
arising out of the underlying automobile accident, even
though Southern Heritage has already paid $25,000 to settle
Haislip's claims against Goode. The plain language
contained in the omnibus clause requires the Southern
Heritage policy to contain "a provision insuring the named
insured, and any other person using . . . the motor
vehicle. . . ."
The General Assembly's use of the word "and" in Code
§ 38.2-2204(A) means that Southern Heritage is required to
provide insurance coverage to both Price, who is the named
insured, and Goode, who was driving the motor vehicle with
Price's consent. The word "and" is unambiguous. "And"
means "along with or together with . . . added to or linked
to." Webster's Third New International Dictionary, p. 80
(1986). Even though Southern Heritage's insurance policy
contains a limitation of $25,000 per occurrence, that
limitation, if applied, would violate the omnibus clause
because once Southern Heritage paid the $25,000 to settle
Haislip's claims against Goode, Price, the named insured,
who paid the policy premiums, would not receive any
liability insurance coverage. Thus, Southern Heritage's
interpretation of its policy and the omnibus clause would
render the word "and" used in the statute meaningless.
Accordingly, we will enter a declaration here that Code
§ 38.2-2204 requires Southern Heritage to provide a maximum
of $25,000 in coverage for any claim that Haislip may make
against Price in addition to the $25,000 that Southern
Heritage has already paid to settle Haislip's claims against
Goode.
Reversed and final judgment.
JUSTICE COMPTON, with whom CHIEF JUSTICE CARRICO and JUSTICE
STEPHENSON join, dissenting.
The issue in this case, involving allegations of
negligent operation by a permissive user and of negligent
entrustment by a named insured, is whether the policy's
liability limits are to be paid for each accident or for
each act of negligence that may result in injuries to the
claimant.
Of course, under the omnibus clause, Code § 38.2-
2204(A), the policy in question must contain a provision
insuring the named insured "and" any other person using the
insured's motor vehicle with the expressed or implied
consent of the named insured against liability for injury
sustained as a result of negligence in the operation or use
of the vehicle. Manifestly, Price, the named insured, "and"
Goode, the permissive user, were "insured" under the policy;
the insurer was obligated to provide a defense to both Price
"and" Goode and, if the policy's monetary limits had not
been exhausted, to pay the claimant's damages upon
establishment of legal liability.
But employment of the word "and" in the omnibus clause
does not mandate or require payment of the policy's
liability limits for each act of negligence, that is, both
negligent driving and negligent entrustment. The insurer's
policy unambiguously provided that "the limit of bodily
injury liability . . . applicable to `each person' is the
limit of the company's liability for all damages . . .
arising out of bodily injury sustained by one person as the
result of any one occurrence." Nothing in the omnibus clause
annuls that policy provision. "Simply put, the liability
limits are per accident, not per act of negligence. Any
contrary interpretation of the policy language would be
unfounded." Helmick v. Jones, 452 S.E.2d 408, 411 (W. Va.
1994); accord Mid-Century Ins. Co. v. Shutt, 845 P.2d 86
(Kan. App. 1993). But see Iaquinta v. Allstate Ins. Co.,
510 N.W.2d 715 (Wis. App. 1993).
Accordingly, the maximum amount that the claimant
Haislip may recover under the insurance contract is $25,000.
Thus, I would affirm the judgment of the trial court in
favor of the insurer.