PRESENT: All the Justices
VIRGINIA FARM BUREAU MUTUAL
INSURANCE COMPANY
v. Record No. 081900 OPINION BY
JUSTICE BARBARA MILANO KEENAN
June 4, 2009
VIRGINIA C. WILLIAMS,
AN INFANT WHO SUES BY HER
FATHER AND NEXT FRIEND,
ROBERT WILLIAMS, ET AL.
FROM THE CIRCUIT COURT OF THE CITY OF NORFOLK
John C. Morrison, Jr., Judge
In this appeal, we consider whether an exclusion in an
automobile insurance policy prohibited an insured party from
“stacking,” or combining, the uninsured/underinsured motorist
coverage for bodily injury (UM/UIM coverage) on the three
separate vehicles listed in the policy.
The facts of this case are not in dispute. Virginia C.
Williams, who was then a minor, was injured in an automobile
accident while riding as a passenger in a vehicle. Both the
vehicle in which Williams was riding and a second vehicle
involved in the accident were underinsured.
Williams qualified as an insured of the first class under
her father’s automobile insurance policy issued by Virginia Farm
Bureau Mutual Insurance Company (the policy). The policy
provides coverage for three separate vehicles, none of which was
involved in the accident. The UM/UIM coverage portion of the
policy states under the heading entitled “Schedule Limit of
Liability:”
Bodily Injury $ See Declarations each person
$ See Declarations each accident
Property Damage $ See Declarations each accident.
Several paragraphs later, in the same UM/UIM section of the
policy, the policy states:
Limits of Liability: Regardless of the number of
. . . motor vehicles to which this insurance applies,
a) [i]f the schedule or declarations indicates split
limits of liability, the limit of liability for
bodily injury stated as applicable to “each person”
is the limit of the company’s liability for all
damages because of bodily injury sustained by one
person as the result of any one accident and, subject
to the above provision respecting “each person” the
limit of liability for bodily injury stated as
applicable to “each accident”, is the total limit of
the company’s liability for all damages because of
bodily injury sustained by two or more persons as the
result of any one accident.
The policy “declarations” page lists in the “limits of
liability” section one premium paid for a vehicle having UM/UIM
coverage of $250,000 for each person and $500,000 coverage for
each accident. Two additional premiums paid on two other listed
vehicles each provide UM/UIM coverage of $300,000 for each
person and $500,000 for each accident.
Williams, by her father as next friend, filed a complaint
in the circuit court seeking a declaration of her rights under
the policy, asserting that she was entitled to UM/UIM coverage
in the total amount of $850,000, which represents the combined
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UM/UIM bodily injury coverage for each person for the three
insured vehicles. * Virginia Farm Bureau Mutual Insurance Company
(Farm Bureau) filed an answer and a motion for summary judgment
asserting that the terms of the policy’s UM/UIM coverage
prohibited “intrapolicy stacking” and, thus, that the maximum
potential UM/UIM coverage for Williams was $300,000. Williams
also filed a motion for summary judgment asking the circuit
court to declare that she was entitled to UM/UIM coverage of
$850,000 under the policy.
After conducting a hearing on the cross-motions for summary
judgment, the circuit court entered an order granting each of
the motions in part. The circuit court determined that the
total UM/UIM coverage afforded to Williams under the policy was
$550,000. We granted Farm Bureau’s petition for appeal, and
also granted Williams’ assignment of cross-error.
On appeal, Farm Bureau contends that the circuit court
erred in interpreting the policy’s UM/UIM coverage. Farm Bureau
argues that although Virginia law permits “intrapolicy stacking”
of UM/UIM coverage, the policy at issue expressly prohibits such
stacking. Farm Bureau relies on our decision in Goodville
Mutual Cas. Co. v. Borror, 221 Va. 967, 275 S.E.2d 625 (1981),
*
The complaint also named as defendants the two drivers
involved in the automobile accident, the policyholders through
whom those drivers had coverage, and the companies providing
those policies. This appeal, however, relates only to the
Virginia Farm Bureau Mutual Insurance Company policy.
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in which we held that unambiguous language in the policy at
issue prohibited the stacking of UM/UIM coverage for the two
vehicles listed in the policy. Farm Bureau contends that its
policy contains substantially similar language prohibiting the
stacking of UM/UIM coverage. In addition, Farm Bureau argues
that any alleged ambiguity regarding whether Williams is
entitled to $250,000 or $300,000 in UM/UIM coverage has been
resolved in Williams’ favor, because Farm Bureau agreed to pay
Williams the larger of the two amounts listed for each person in
the declarations page of the policy.
In response, Williams asserts that the policy language
regarding UM/UIM coverage is ambiguous and, therefore, must be
construed to afford Williams the maximum combined UM/UIM bodily
injury coverage listed in the declarations page. In her
assignment of cross-error, Williams asserts that the circuit
court should have stacked the UM/UIM coverage available for all
three insured vehicles and declared that Williams is entitled to
UM/UIM coverage in the amount of $850,000, rather than $550,000.
Williams argues that the provisions of the policy before us
are materially different from the policy provisions at issue in
Goodville. Williams argues that, in the policy considered in
Goodville, the unambiguous language prohibiting intrapolicy
stacking was found entirely in the UM/UIM coverage provision
section that also included a schedule listing available coverage
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of $25,000 for each person, and of $50,000 for each accident.
Williams observes that, in contrast, the policy at issue in this
case does not provide limits for each person and each accident
in a designated schedule stated within the UM/UIM section of the
policy.
Williams additionally asserts that the language in the
policy limiting UM/UIM coverage to the amount designated for
“each person,” as stated in the declarations page, does not
distinguish among the three separate UM/UIM coverage amounts for
“each person” listed for the three insured vehicles. Thus,
Williams argues that because the policy does not indicate which
vehicle’s coverage is applicable in the present case, the policy
when read as a whole does not unambiguously prohibit stacking
the UM/UIM coverage for the three separate vehicles listed in
the policy.
In resolving this issue, we consider established principles
of insurance law. The interpretation of an insurance policy
presents a question of law that we review de novo on appeal.
Seals v. Erie Ins. Exch., 277 Va. 558, 562, 674 S.E.2d 860, 862
(2009); Lower Chesapeake Assocs. v. Valley Forge Ins. Co., 260
Va. 77, 88, 532 S.E.2d 325, 331 (2000); Craig v. Dye, 259 Va.
533, 537, 526 S.E.2d 9, 11 (2000). Courts interpret insurance
policies, like other contracts, by determining the parties’
intent from the words they have used in the document. Seals,
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277 Va. at 562, 674 S.E.2d at 862; Lower Chesapeake, 260 Va. at
87-88, 532 S.E.2d at 331; Floyd v. Northern Neck Ins. Co., 245
Va. 153, 158, 427 S.E.2d 193, 196 (1993). Provisions of an
insurance policy must be considered and construed together, and
any internal conflicts between provisions must be harmonized, if
reasonably possible, to effectuate the parties’ intent. Seals,
277 Va. at 562, 674 S.E.2d at 862; Floyd, 245 Va. at 158, 427
S.E.2d at 196; Suggs v. Life Ins. Co. of Virginia, 207 Va. 7,
11, 147 S.E.2d 707, 710 (1966).
When a disputed policy term is unambiguous, we apply its
plain meaning as written. Virginia Farm Bureau Mutual Ins. Co.
v. Gile, 259 Va. 164, 170, 524 S.E.2d 642, 645 (2000); Osborne
v. National Union Fire Ins. Co., 251 Va. 53, 56, 465 S.E.2d 835,
837 (1996). However, if disputed policy language is ambiguous
and can be understood to have more than one meaning, we construe
the language in favor of coverage and against the insurer.
Seals, 277 Va. at 562, 674 S.E.2d at 862; Virginia Farm Bureau,
259 Va. at 169, 524 S.E.2d at 645; see also Lower Chesapeake,
260 Va. at 88, 532 S.E.2d at 331-32; Granite State Ins. Co. v.
Bottoms, 243 Va. 228, 234, 415 S.E.2d 131, 134 (1992); Caldwell
v. Transportation Ins. Co., 234 Va. 639, 642-43, 364 S.E.2d 1, 3
(1988); St. Paul Fire & Marine Ins. Co. v. S.L. Nusbaum & Co.,
227 Va. 407, 411, 316 S.E.2d 734, 736 (1984); Goodville, 221 Va.
at 970, 275 S.E.2d at 627.
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Because insurance policies usually are drafted by insurers,
we construe ambiguous policy language purporting to exclude
certain occurrences from coverage most strongly against the
insurer. Seals, 277 Va. at 562, 674 S.E.2d at 862; Government
Employees Ins. Co. v. Moore, 266 Va. 155, 165, 580 S.E.2d 823,
828-29 (2003); Caldwell, 234 Va. at 642-43, 364 S.E.2d at 3; St.
Paul, 227 Va. at 411, 316 S.E.2d at 736. Thus, when an insurer
seeks to limit coverage under a policy, the insurer must use
language that is reasonable, clear, and unambiguous. Lower
Chesapeake, 260 Va. at 88, 532 S.E.2d at 331; Granite State, 243
Va. at 233, 415 S.E.2d at 134.
In addition to these basic principles governing our
interpretation of insurance policies, we also have articulated a
general rule that we apply to issues involving the stacking of
UM/UIM coverage. We stated in Goodville that “it is now the
rule in Virginia that the stacking of UM[/UIM] coverage will be
permitted unless clear and unambiguous language exists on the
face of the policy to prevent such multiple coverage.” 221 Va.
at 970, 275 S.E.2d at 627; accord Lipscombe v. Security Ins.
Co., 213 Va. 81, 84, 189 S.E.2d 320, 323 (1972). Thus, under
previously stated general principles, any ambiguity regarding
the stacking of coverage within a policy will be construed
against the insurer. See Seals, 277 Va. at 562, 674 S.E.2d at
862; Lower Chesapeake, 260 Va. at 88, 532 S.E.2d at 331-32;
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Virginia Farm Bureau, 259 Va. at 169, 524 S.E.2d at 645; Granite
State, 243 Va. at 234, 415 S.E.2d at 134; Caldwell, 234 Va. at
642-43, 364 S.E.2d at 3; St. Paul, 227 Va. at 411, 316 S.E.2d at
736; Goodville, 221 Va. at 970, 275 S.E.2d at 627.
In resolving the present policy dispute, we compare the
policy provisions before us with those we reviewed in Goodville.
The policy in Goodville included the following language in its
UM/UIM coverage section. In the first paragraph, the “[l]imits
of [l]iability” provided:
Bodily injury $25,000 each person; $50,000 each accident
Property Damage $5,000 each accident.
Several paragraphs later, the policy read:
Limits of Liability
Regardless of the number of . . . motor vehicles to
which this insurance applies, (a) the limit of
liability for bodily injury stated in the schedule as
applicable to “each person” is the limit of the
company’s liability for all damages because of bodily
injury sustained by one person as the result of any
one accident and, subject to the above provision
respecting “each person”, the limit of the liability
stated in the schedule as applicable to “each
accident” is the total limit of the company’s
liability for all damages because of bodily injury
sustained by two or more persons as the result of any
one accident.
Goodville, 221 Va. at 970, 275 S.E.2d at 627.
The policy considered in Goodville included separate
premiums for the two vehicles listed in that policy.
Nevertheless, we held that the policy language in Goodville
unambiguously prohibited stacking and limited the plaintiff’s
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coverage to $25,000. Id. at 970-71, 275 S.E.2d at 627-28. We
stated that the phrase “[r]egardless of the number of . . .
motor vehicles to which this insurance applies” was a clear and
unambiguous provision prohibiting stacking. Id. at 970-71, 275
S.E.2d at 628.
Although the policy that is the subject of the present
appeal contains this same phrase, that similarity must be
considered in the context of the other policy language. In
reviewing the balance of the policy language, we observe that
the present policy contains a significant difference from the
policy we considered in Goodville. There, the UM endorsement
contained a schedule stating the limits of liability for “each
person” at $25,000. This statement was clearly and
unambiguously set forth at the beginning of the UM endorsement,
and no other portions of the policy addressed this same subject.
Unlike the policy in Goodville, the present policy does not
state the limits of liability for “each person” in a schedule
within the UM/UIM endorsement. Instead, the UM/UIM endorsement
refers the reader to the “[d]eclarations” page of the policy, in
which there are three references to the term “each person.” Two
of those references state a limit of liability for “each person”
in the amount of $300,000, while the third reference states a
limit of liability for “each person” in the amount of $250,000.
These different sets of coverage, when considered along
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with the “anti-stacking” language of the UM/UIM endorsement,
leave unresolved the question whether all three separate limits
for “each person” apply and, if not, which of the single
separate limits for “each person” is applicable. This disparity
in the stated limits of liability for “each person” manifests an
ambiguity regarding the extent of total coverage for “each
person” under the policy.
Contrary to Farm Bureau’s assertion, this disparity cannot
be resolved by selecting arbitrarily the higher of the two
amounts listed for bodily injury for “each person.” To do so
would ignore the fact that the declarations have three separate
entries for “each person,” and the “anti-stacking” language in
the UM/UIM endorsement only limits coverage to the amount stated
for “each person” in the declarations portion of the policy.
Because we must construe this ambiguity in Williams’ favor,
we hold that Williams is entitled to “stack” the UM/UIM coverage
for all three vehicles listed in the policy. Therefore, in
accordance with Williams’ assignment of cross-error, we hold
that the circuit court erred in failing to declare that Williams
is entitled to total UM/UIM coverage in the amount of $850,000
under the policy.
For these reasons, we will affirm the part of the circuit
court’s judgment holding that Williams was afforded UM/UIM
coverage under the policy, and will reverse the part of the
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circuit court’s judgment limiting the UM/UIM coverage afforded
to $550,000. We will enter final judgment declaring that the
policy afforded to Williams, at the time of the accident
underlying this action, UM/UIM coverage in the total amount of
$850,000.
Affirmed in part,
reversed in part,
and final judgment.
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