Craig v. Dye

Present: Carrico, C.J., Compton, 1 Lacy, Keenan, Koontz and
Kinser, JJ.

LOU ANN CRAIG, PERSONAL
REPRESENTATIVE OF THE ESTATE
OF JOSE SALVADORE ANTONIO

v. Record No. 991043 OPINION BY JUSTICE CYNTHIA D. KINSER
March 3, 2000
ROBERT GLENN DYE, ET AL.

FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
Michael Patrick McWeeney, Judge

In this appeal, we construe a personal liability

umbrella insurance policy provision stating that the

insurer may not provide coverage if an insured “refuse[s]”

to perform certain required duties. Because the insureds

in this case merely failed to perform those duties but did

not refuse to do so, we will reverse the circuit court’s

judgment in favor of the insurance company.

FACTS AND PROCEEDINGS

Robert V. Dye (the father), and his wife, Mary L. Dye

(collectively, the parents), were the named insureds of a

personal liability umbrella insurance policy (the policy),

issued by State Farm Fire and Casualty Company (State

Farm). Their son, Robert Glenn Dye (the son), was a

1
Justice Compton participated in the hearing and
decision of this case prior to the effective date of his
retirement on February 2, 2000.
resident of their household, and thus was also an insured

under the policy.

The son was the driver of a vehicle that allegedly

struck and killed Jose Salvadore Antonio on April 1, 1995.

Lou Ann Craig, personal representative of Antonio’s estate,

filed this declaratory judgment action in the circuit

court, seeking a declaration, inter alia, that the son is

covered under the policy with regard to that accident. 2

State Farm denied coverage to the son because of the

insureds’ alleged failure to timely comply with the

following policy provision contained in the section titled

“YOUR DUTIES TO US”:

These are things you[ 3 ] must do for us. We may not
provide coverage if you refuse to:

1. notify us of an accident. If something happens
that might involve this policy, you must let us
know promptly. Send written notice to us or our
agent. Include the names and addresses of the
injured and witnesses. Also include the time,
place and account of the accident.[ 4 ]

2
Prior to filing this action, Craig, in her capacity
as personal representative of Antonio’s estate, filed a
wrongful death action against the son.
3
The policy provides that the terms “you” and “your”
refer to the named insureds, as well as the named insureds’
relatives who are residents of the named insureds’
household.
4
In this opinion, we will refer to this provision as
“paragraph 1.”

2
 State Farm first received notice of the 1995 accident

from the father on April 10 or 11, 1997, more than two

years after the accident occurred. In a letter to State

Farm, the father stated that the parents “never had the

slightest idea” that the policy would cover the son. The

father further advised State Farm that he delivered a

letter from an attorney representing Antonio’s estate to

State Farm’s agent as soon as the father received the

letter. The father got that letter at the same time

Antonio’s estate filed the wrongful death action against

the son. That is also when the father first learned that

the policy might extend coverage to the son with regard to

the 1995 accident.

Soon thereafter, State Farm sent a reservation of

rights letter to the parents, stating that “delay by or on

behalf of the insured in giving prompt, written notice

. . . concerning the accident” may have violated the

conditions of the policy. State Farm had no contact with

the son prior to sending that letter.

After State Farm answered the declaratory judgment

action, Craig filed a motion for partial summary judgment. 5

5
In her motion, Craig stated that she sought a
judgment with regard to State Farm’s notice defense. She
acknowledged that State Farm has additional defenses and

3
State Farm responded by filing a motion for summary

judgment based upon the allegedly untimely notice of the

accident. After considering stipulated facts, the parties’

memoranda, and oral argument, the trial court denied

Craig’s motion but granted State Farm’s motion. The court

concluded that the son “is not covered under State Farm’s

Umbrella Policy and there is no coverage applicable to [the

son] under the policy in question for failure to provide

timely notice . . . .” This appeal followed.

ANALYSIS

We review the decision of the trial court under well-

settled principles. “An insurance policy is a contract,

and, as in the case of any other contract, the words used

are given their ordinary and customary meaning when they

are susceptible of such construction.” Hill v. State Farm

Mut. Auto. Ins. Co., 237 Va. 148, 152, 375 S.E.2d 727, 729

(1989). Similarly, “[i]f the language of an insurance

policy is unambiguous, we will give the words their

ordinary meaning and enforce the policy as written.”

United Services Auto. Ass’n v. Webb, 235 Va. 655, 657, 369

S.E.2d 196, 198 (1988). Finally, “[s]ince the

interpretation of a contract is a question of law, we are

______________________
that those would be addressed in a subsequent motion for
partial summary judgment.

4
not bound by the trial court’s conclusions on this issue,

and we are permitted the same opportunity as the trial

court to consider the contract language.” C.F. Garcia

Enterprises, Inc. v. Enterprise Ford Tractor, Inc., 253 Va.

104, 107, 480 S.E.2d 497, 498-99 (1997) (citing Langman v.

Alumni Ass’n of the Univ. of Virginia, 247 Va. 491, 498,

442 S.E.2d 669, 674 (1994); Wilson v. Holyfield, 227 Va.

184, 187-88, 313 S.E.2d 396, 398 (1984)).

On appeal, State Farm argues that timely notice of an

accident is a condition precedent to an insurance company’s

obligation to provide coverage, and that an insured must

therefore substantially comply with an insurance policy’s

notice requirements. Thus, State Farm contends that, in

this case, the insureds’ failure to timely perform the

duties listed in paragraph 1 warrants State Farm’s denial

of coverage to the son. The cases cited by State Farm in

support of its position involved insurance policies that

contained a common provision mandating that in the event of

an accident, “written notice . . . shall be given . . . to

the company or any of its authorized agents as soon as

practicable.” State Farm Fire and Cas. Co. v. Scott, 236

Va. 116, 119, 372 S.E.2d 383, 384 (1988); accord Liberty

Mut. Ins. Co. v. Safeco Ins. Co. of America, 223 Va. 317,

323, 288 S.E.2d 469, 473 (1982); Lord v. State Farm Mut.

5
Auto. Ins. Co., 224 Va. 283, 285-86, 295 S.E.2d 796, 798

(1982); State Farm Mut. Auto. Ins. Co. v. Porter, 221 Va.

592, 596, 272 S.E.2d 196, 198 (1980). 6 We held that

compliance with such a notice provision is a condition

precedent to coverage, with which the insured must

substantially comply. Scott, 236 Va. at 120, 372 S.E.2d at

385.

However, those cases are not dispositive of the

question before us because there is an important difference

between the language utilized in the notice provision found

in those insurance policies and the terms of the provision

at issue in the present case. The instant policy, like

those in the cases cited by State Farm, requires the

insureds to perform certain duties, such as notifying State

Farm of an accident and sending written notice. However,

in contrast to the notice provision in those other

policies, the policy at issue today specifically states

that if the insureds "refuse" to perform the duties

contained in paragraph 1, State Farm may not provide

coverage. A similar provision incorporating the term

6
Similar language also appears in the policies at
issue in State Farm Fire and Cas. Co. v. Walton, 244 Va.
498, 503, 423 S.E.2d 188, 191 (1992), and Dan River, Inc.
v. Commercial Union Ins. Co., 227 Va. 485, 489, 317 S.E.2d
485, 487 (1984), two other cases upon which State Farm
relies.

6
“refuse” in conjunction with an insured's duties to the

insurance company does not appear in those other policies.

Furthermore, we find it significant that, in the

provision at issue, State Farm used only the verb "refuse"

and did not include the verb "fail." In other words, the

policy does not state that if an insured refuses or fails

to perform the required duties, State Farm may deny

coverage. State Farm acknowledged that there is no

evidence in the record of a “refusal” by the parents or the

son to perform the duties required of them. Thus, unless

the terms “refuse” and “fail” are synonymous, the insureds’

failure in this case to perform the duties in paragraph 1

would not justify State Farm's denial of coverage to the

son.

To answer this inquiry, we look to the definitions of

these terms. Since the policy does not define the term

“refuse,” we give the word its “ordinary and accepted

meaning.” Scottsdale Ins. Co. v. Glick, 240 Va. 283, 288,

397 S.E.2d 105, 108 (1990). The verb “refuse” is defined

as a “positive unwillingness to do or comply with”

something demanded or expected. Webster’s Third New

International Dictionary 1910 (1993). A “refusal” is

“[t]he denial or rejection of something offered or

demanded.” Black’s Law Dictionary 1285 (7th ed. 1999).

7
These definitions denote an element of intent, manifested

by a volitional act. See Meeks v. Stevens, 785 S.W.2d 18,

20 (Ark. 1990) (noting that definitions of term “‘refuse’

stress the active element of refusal[,] . . . expressing

. . . a determination not to do a particular thing”);

Nebraska v. Medina, 419 N.W.2d 864, 867 (Neb. 1988) (“‘To

refuse[]’ . . . requires that a person understand what is

being asked of him and then in some way manifest

nonacceptance, nonconsent, or unwillingness.”).

By comparison, to “fail” to do some act denotes a

deficiency; and a “failure” is “[a]n omission of an

expected action . . . or performance[,]” Black’s Law

Dictionary 613, or the neglect of an assigned or expected

action, Webster’s Third New International Dictionary 815.

See Laubach v. Franklin Square Hosp., 556 A.2d 682, 690

n.11 (Md. Ct. Spec. App. 1989), aff’d, 569 A.2d 693 (1990)

(distinguishing “[f]ailed” from “refused” on basis that

“refused” “involves an act of the will,” while “[f]ailed”

may be “an act of inevitable necessity”) (quoting Black’s

Law Dictionary 1152-53 (5th ed. 1979)).

Based on the distinction between the terms “refuse”

and “fail,” we conclude that State Farm’s attempt to equate

the insureds’ failure to timely comply with the

requirements of paragraph 1 with a refusal to do so does

8
not comport with the ordinary and customary meaning of the

term “refuse.” Thus, the insureds’ mere failure to timely

perform the duties was not a refusal to do so and,

therefore, did not trigger State Farm’s option to deny

coverage to the son. 7

We are also not persuaded by State Farm’s argument

that the phrase “if you refuse to:” applies only to the

duty immediately listed thereafter, i.e., “notify us of an

accident.” According to State Farm, the other requirements

in paragraph 1 are separate duties of the insured that are

not modified by that phase. However, the phrase “if you

refuse to:” introduces and precedes all the duties listed

7
In four of this Court’s prior cases, Angstadt v.
Atlantic Mut. Ins. Co., 254 Va. 286, 292-93, 492 S.E.2d
118, 121-22 (1997); State Farm Mut. Auto. Ins. Co. v.
Davies, 226 Va. 310, 319, 310 S.E.2d 167, 172 (1983),
Cooper v. Employers Mut. Liab. Ins. Co. of Wisc., 199 Va.
908, 915, 103 S.E.2d 210, 215 (1958), and State Farm Mut.
Auto. Ins. Co. v. Arghyris, 189 Va. 913, 929-30, 55 S.E.2d
16, 23 (1949), we discussed an insured’s willful failure to
cooperate with the insurer. Also, in Porter, we concluded
that the insured willfully violated several policy
provisions, including the notice and cooperation
requirements. 221 Va. at 599, 272 S.E.2d at 200. However,
the policies in those cases did not contain any language
referring to an insured’s refusal to perform certain duties
while the instant policy contains such language. Thus, the
Court did not discuss whether a “willful failure” to
perform a particular duty was comparable to a “refusal” to
perform that duty. Therefore, none of those cases guide
our decision today.

9
in paragraph 1. 8 See Webster’s Third New International

Dictionary 47a (colon “indicates that what follows it

coordinates with some element of what precedes” it); see

also H.W. Fowler, A Dictionary of Modern English Usage 589

(Sir Ernest Gowers ed., 2d ed. 1996); Thomas S. Kane, The

New Oxford Guide to Writing 144, 282 (1988). Thus, we

conclude that the phrase modifies, and applies to, all

those duties.

Accordingly, we conclude that the policy requires a

“refusal” to perform the duties listed in paragraph 1, not

merely a negligent delay or failure to do so, before State

Farm can deny coverage. For these reasons, we will reverse

the judgment of the circuit court, enter partial final

judgment for Craig on the basis that the insureds did not

“refuse” to perform their duties to State Farm, and remand

for such further proceedings as are necessary. See note 5,

supra.

Reversed and remanded.

8
The phrase precedes not only paragraph 1 but also
several other enumerated paragraphs that list additional
duties of the insureds. However, those duties are not at
issue in this appeal.

10