Am. States Ins. Co. v. Surbaugh

• Decision Date: 06 February 2013
• Docket Number: No. 11–1186.,11–1186.
• Citation: 231 W.Va. 288,745 S.E.2d 179
• Court: West Virginia Supreme Court
• Parties: AMERICAN STATES INSURANCE COMPANY, Defendant Below, Petitioner, v. Barbara SURBAUGH, Administrator of the Estate of Gerald Kirchner, Plaintiff Below, Respondent.

231 W.Va. 288

745 S.E.2d 179

AMERICAN STATES INSURANCE COMPANY, Defendant Below, Petitioner,

v.Barbara SURBAUGH, Administrator of the Estate of Gerald Kirchner, Plaintiff Below, Respondent.

No. 11–1186.

Supreme Court of Appeals of

West Virginia.

Submitted Jan. 15, 2013.

Decided Feb. 6, 2013.

Concurring Opinion of Justice Ketchum

Feb. 6, 2013.

Concurring Opinion of Chief Justice Benjamin

July 16, 2013.

Syllabus by the Court

1. “Determination of the proper coverage of an insurance contract when the facts are not in dispute is a question of law.” Syllabus point 1, Tennant v. Smallwood, 211 W.Va. 703, 568 S.E.2d 10 (2002).

2. “An insurer wishing to avoid liability on a policy purporting to give general or comprehensive coverage must make exclusionary clauses conspicuous, plain, and clear, placing them in such a fashion as to make obvious their relationship to other policy terms, and must bring such provisions to the attention of the insured.” Syllabus point 10, National Mutual Insurance Co. v. McMahon & Sons, Inc., 177 W.Va. 734, 356 S.E.2d 488 (1987), overruled on other grounds by, Potesta v. United States Fidelity & Guaranty Co., 202 W.Va. 308, 504 S.E.2d 135 (1998).

3. As a general rule, the issue of whether an insurer has brought a policy exclusion to the attention of an insured is to be resolved by the trial court.

4. “A party to a contract has a duty to read the instrument.” Syllabus point 5, Soliva v. Shand, Morahan & Co., Inc., 176 W.Va. 430, 345 S.E.2d 33 (1986), overruled on other grounds by National Mutual Insurance Co. v. McMahon & Sons, Inc., 177 W.Va. 734, 356 S.E.2d 488 (1987).

Avrum Levicoff, Julie A. Brennan, Levicoff, Silko & Deemer, P.C., Pittsburgh, PA, for Petitioner.

Barry L. Bruce, Barry L. Bruce and Associates, L.C., Lewisburg, WV, for Respondent.

DAVIS, Justice:

American States Insurance Company (“American States”), defendant below, appeals from an adverse jury verdict in an insurance coverage declaratory judgment action brought by Barbara Surbaugh (“Ms. Surbaugh”),¹ plaintiff below. Before this Court, American States contends that the circuit court erred in submitting the insurance coverage issue to a jury as a matter of law and erred in denying its motion for summary judgment.² After a careful review of the briefs and record on appeal, and listening to the arguments of the parties, we reverse and remand.

I.FACTUAL AND PROCEDURAL HISTORY

This case began on or about June 6, 1997, when Gerald Kirchner was accidentally shot and killed by Robbie Bragg. At the time of the shooting, Mr. Kirchner and Mr. Bragg were both employees of Grimmett Enterprises, a sporting goods store located in Rainelle, West Virginia. Grimmett Enterprises was owned by David Grimmett (“Mr. Grimmett”). Mr. Kirchner was shot accidentally while Mr. Bragg was showing a customer how to load a handgun that was for sale in the store.

On or about December 19, 1997, the mother of Mr. Kirchner, Ms. Surbaugh, filed a wrongful death action against Mr. Bragg and a workers' compensation deliberate intent cause of action against Grimmett Enterprises. In 2002, Mr. Bragg and Grimmett Enterprises entered into a settlement with Ms. Surbaugh. Under the terms of the settlement, Mr. Bragg and Grimmett Enterprises agreed to a judgment against them for $1.5 million. Ms. Surbaugh agreed to not execute the judgment against the defendants in exchange for the defendants assigning all claims they might have against their respective insurers for refusing to provide a defense and coverage.

In 2005, Ms. Surbaugh filed an amended complaint to assert a declaratory judgment action against Grimmett Enterprises' insurer, American States. ³ The amended complaint sought a determination of whether the insurance policy issued by American States to Grimmett Enterprises provided coverage for the claim against Grimmett Enterprises.⁴ By order entered April 19, 2010, the circuit court bifurcated the declaratory judgment action from the underlying wrongful death/deliberate intent action. Subsequently, on or about July 20, 2010, Ms. Surbaugh filed a motion for summary judgment on the declaratory judgment claim.⁵ American States filed a cross motion for summary judgment. Ms. Surbaugh argued that an employee exclusion in the policy was ambiguous, was not conspicuous, and had not been brought to the attention of Mr. Grimmett.⁶ American States argued that the policy was unambiguous and conspicuous. The record reflects that the circuit court entered an order on September 24, 2010, denying, in part, Ms. Surbaugh's motion.⁷ The order made two dispositive rulings. First, the circuit court held as a matter of law that the exclusionary language contained in the policy was not ambiguous. Second, the court ruled that the issue of whether the exclusion was disclosed to Mr. Grimmett was to be resolved by a jury.

Ms. Surbaugh filed a renewed motion for summary judgment on May 4, 2011. In response, American States filed a renewed cross motion for summary judgment. American States argued that it was entitled to summary judgment because of the court's earlier ruling that the exclusion was unambiguous. By order entered June 17, 2011, the circuit court denied both summary judgment motions.

On June 23, 2011, a jury trial was held to determine coverage under the policy. The only witness called during the trial was Mr. Grimmett. At the conclusion of the evidence, the case was submitted to the jury with a special verdict form that had only one question: “Was the exclusionary language at issue in this case brought to the attention of the insured, Grimmett Enterprises, Inc.” ⁸ On June 24, 2011, the jury returned a verdict answering the question in the negative. The circuit court thereafter, on June 30, 2011, entered a final order concluding that, based upon the jury's answer to the special verdict question, the employee policy exclusion was unenforceable. This appeal followed.

II.STANDARD OF REVIEW

This is an appeal from a jury verdict in a declaratory judgment action. In addition to appealing the jury verdict, American States also has assigned error to the trial court's denial of its motions for summary judgment. With respect to a jury verdict in a declaratory judgment proceeding, we have held,

[t]his Court reviews a circuit court's entry of a declaratory judgment de novo, because the principal purpose of a declaratory judgment action is to resolve legal questions.... Any determinations of fact made by the circuit court or jury in reaching its ultimate judgment are reviewed under a clearly erroneous standard.

Joslin v. Mitchell, 213 W.Va. 771, 775, 584 S.E.2d 913, 917 (2003).

This Court's standard of review concerning summary judgment is well-settled. Upon appeal, “[a] circuit court's entry of summary judgment is reviewed de novo.” Syl. pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994). In conducting our de novo review, we are mindful that “[a] motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law.” Syl. pt. 3, Aetna Cas. & Sur. Co. v. Federal Ins. Co. of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963). In other words, “[t]he circuit court's function at the summary judgment stage is not to weigh the evidence and determine the truth of the matter, but is to determine whether there is a genuine issue for trial.” Syl. pt. 3, Painter, 192 W.Va. 189, 451 S.E.2d 755.

With these standards of review in mind, we address the dispositive issues presented.

III.DISCUSSION

In this case, we are presented with two dispositive issues. First, we must determine whether the trial court was correct in finding, as a matter of law, that a jury had to decide if an insurance policy's exclusionary language was adequately brought to the attentionof Mr. Grimmett. Second, we must decide whether the trial court erred in denying summary judgment in favor of American States. We will address both issues separately.

A. Ordinarily the Trial Court Should Decide Whether a Policy's Exclusionary Language Was Brought to the Attention of an Insured

The trial court determined that it was for the jury to decide whether the exclusionary language at issue in this case was brought to the attention of Mr. Grimmett. American States argued below, and in this appeal, that this issue was for the trial court and not a jury.⁹ We agree with American States.

We previously have held that “when a declaratory judgment proceeding involves the determination of an issue of fact, that issue may be tried and determined by a judge or jury in the same manner as issues of fact are tried and determined in other civil actions.” Erie Ins. Prop. & Cas. Co. v. Stage Show Pizza, 210 W.Va. 63, 66, 553 S.E.2d 257, 260 (2001). Our declaratory judgment act provides that, “ ‘[w]hen a proceeding under this article involves the determination of an issue of fact, such issue may be tried and determined in the same manner as issues of fact are tried and determined in other civil actions in the court in which the proceeding is pending.’ W. Va.Code § 55–13–9 (1941).” Syl. pt 15, Mountain Lodge Ass'n v. Crum & Forster Indem. Co., 210 W.Va. 536, 558 S.E.2d 336 (2001). Moreover, in Syllabus point 16 of Mountain Lodge we held that

West Virginia Code § 55–13–9 and Rules 38, 39 and 57 of the West Virginia Rules of Civil Procedure, read and considered together, operate to guarantee that any issue triable by a jury as a matter of right in other civil actions cognizable by the circuit courts shall, upon timely demand in a declaratory judgment proceeding, be tried to a jury. As to other issues, Rule 39 of the Rules of Civil Procedure expressly authorizes trial by the court, with or without an advisory jury.

Id.

It is clear from the above authorities that issues of fact, that are normally tried by a jury, may be submitted to a jury in a declaratory judgment action. However, in the context of a declaratory...