Johnson v. Windsor Ins. Co.

PRESENT: Hassell, C.J., Lacy, Koontz, Kinser, Lemons and Agee,
JJ., and Stephenson, S.J.

RICHARD JOHNSON
OPINION BY
v. Record No. 031537 SENIOR JUSTICE ROSCOE B. STEPHENSON, JR.
June 10, 2004
WINDSOR INSURANCE COMPANY

FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
Arthur B. Vieregg, Judge

In this appeal, the sole assignment of error states:

The trial court erred when it ruled that an insurer
under an automobile liability insurance policy was not
required to provide coverage for the named insured who
allegedly negligently entrusted the insured vehicle to
a permissive user after the insurer settled a part of
the claim against the permissive user where the
insurance policy failed to limit its liability
pursuant to [Code] § 38.2-2204.

The assignment of error presents for our consideration three

issues, framed as follows:

1. "Whether Virginia law requires coverage under an

automobile liability insurance policy for both a named insured

who negligently entrusts his automobile to a permissive user and

for the permissive user?"

2. "Whether the omnibus clause, [Code] § 38.2-2204, . . .

in effect at the time of the collision, requires an insurer to

provide coverage for each of two independent tortfeasors whose

separate negligent actions caused injury to another?"

3. "Whether the language of the Windsor policy which

provides for $300,000 coverage for 'each accident' can be
relieved of that obligation when it fails to meet the simple

strictures of the 1999 amendment to the omnibus clause?"

I

On July 12, 2000, Richard Johnson was a passenger in a

vehicle that was struck in the rear by an automobile operated by

Quang Huynh (Q. Huynh), and owned by his father, Thien Huynh

(T. Huynh). Johnson sustained serious, permanent injuries.

Windsor Insurance Company (Windsor) had issued a Virginia

automobile liability insurance policy to T. Huynh as the named

insured. Q. Huynh was also insured under the policy as a

resident of T. Huynh's household and also as a permissive user

of the automobile. The policy limits are $100,000 for each

person and $300,000 for each accident. The policy provides that

the liability insurance coverage afforded "applies separately to

each insured against whom claim is made or suit is brought, but

the inclusion herein of more than one insured shall not operate

to increase the limits of the company's liability." The policy

further provides that

[t]he limit of bodily injury liability stated . . . as
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; the limit of such liability
stated . . . as applicable to "each occurrence" is,
subject to the above provision respecting each person,
the total limit of the company's liability for all
such damages arising out of bodily injury sustained by
two or more persons as the result of any one
occurrence.

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 Johnson filed a motion for judgment against Q. Huynh and

T. Huynh, alleging a separate count of negligence against each.

Johnson alleged that T. Huynh had negligently entrusted his

automobile to Q. Huynh and that Q. Huynh had negligently

operated the vehicle.

Following commencement of the action, Johnson settled his

negligent-operation claim against Q. Huynh for $100,000, and

Windsor paid $100,000 to Johnson. Johnson, however, continued

to look to Windsor to provide further coverage in the amount of

$100,000 for his negligent-entrustment claim against T. Huynh.

Windsor denied further obligation and filed a motion for

declaratory judgment, seeking a declaration that the maximum of

its liability for the accident is $100,000, regardless of the

number of insureds who may be held liable for Johnson's

injuries. The trial court agreed with Windsor and granted

summary judgment in its favor. This appeal ensued.

II

Johnson contends that our 1997 decision in Haislip v.

Southern Heritage Insurance Co., 254 Va. 265, 492 S.E.2d 135

(1997), requires a reversal of the trial court's judgment.

Windsor, on the other hand, contends that a 1999 amendment to

Code § 38.2-2204 (the Omnibus Clause) allows an insurer "to

limit exposure exactly the way Windsor has limited exposure."

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 In Haislip, we considered whether the Omnibus Clause

required a liability insurer "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."

254 Va. at 266, 492 S.E.2d at 136. The proceedings and facts in

Haislip are analogous to those in the present case, except as to

the policies' limits.

In Haislip, an injured plaintiff brought an action to

recover damages resulting from an automobile accident. The

plaintiff alleged that the insured owner had negligently

entrusted her automobile to an uninsured permissive user who

negligently operated the vehicle. The owner's liability

insurance policy provided for $25,000 of coverage "per

occurrence." The insurer settled the plaintiff's claim against

the permissive user for $25,000, which the insurer believed was

the maximum amount of coverage available to the plaintiff under

the terms of the policy. The plaintiff also sought payment of

$25,000 from the insurer for the owner's negligent entrustment

of the vehicle. Id. at 267, 492 S.E.2d at 136.

Thereafter, the insurer filed a motion for declaratory

judgment, requesting that the trial court declare that the

maximum amount of coverage available to the plaintiff under the

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policy was $25,000, that the policy had been exhausted by reason

of the settlement paid on behalf of the permissive user, and

that the insurer had no duty to pay any amount related to the

plaintiff's claim against the owner. The trial court agreed and

entered a judgment declaring that the coverage available under

the policy had been exhausted by the settlement on behalf of the

permissive user. Id.

We reversed the trial court's judgment, holding that the

insurer could not deny coverage to the named insured who had

purchased the policy, even though the "per occurrence" limit had

already been paid on behalf of the permissive user. Id. at 269-

70, 492 S.E.2d at 138. We noted that the plain language in the

Omnibus Clause requires a liability insurance policy to contain

"'a provision insuring the named insured, and any other person

using . . . the motor vehicle.'" Id. at 269, 492 S.E.2d at 137.

The Omnibus Clause was amended in 1999, subsequent to our

decision in Haislip, and now reads, in pertinent part, as

follows:

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 . . .
in this Commonwealth to the owner of such vehicle
. . . , 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 . . . ; however, nothing contained in this
section shall be deemed to prohibit an insurer from

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 limiting its liability under any one policy for bodily
injury or property damage resulting from any one
accident or occurrence to the liability limits for
such coverage set forth in the policy for any such
accident or occurrence regardless of the number of
insureds under that policy.

Code § 38.2-2204(A) (emphasized language reflects amendment).

III

It is firmly established that, in determining the meaning

of a statute, we must consider the plain language that the

General Assembly used when the statute was enacted. Thus,

" '[w]here 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.' " 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)).

We are of opinion that the plain language of the 1999

amendment to the Omnibus Clause clearly enables an insurer to

limit its liability even if more than one insured is liable for

the accident or occurrence. However, such limit is that stated

as the "per accident or occurrence" limit, rather than the "per

person" limit. Thus, in the present case, Windsor's total

obligation under its policy is its "per accident" limit of

$300,000, and Windsor must provide further coverage for the

negligent-entrustment claim against its named insured. We hold,

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therefore, that the trial court erred in ruling that Windsor was

not required to provide coverage to T. Huynh after it settled

the claim against Q. Huynh.

IV

For the reasons stated, we will reverse the trial court's

judgment and remand the case for the entry of a judgment

consistent with the view expressed herein.

Reversed and remanded.

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