Haislip v. Southern Heritage Insurance

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.