Ara v. Erie Ins. Co.
| Citation | 387 S.E.2d 320,182 W.Va. 266 |
| Decision Date | 29 November 1989 |
| Docket Number | No. 18485,18485 |
| Court | Supreme Court of West Virginia |
| Parties | Drema Carole ARA v. ERIE INSURANCE COMPANY and Guy Amato Insurance Agency, Inc. and Drema C. ARA v. Ronald N. ROSE and Robert L. Rose. |
2. Although the doctrines of waiver and estoppel are both grounded in equity, they differ significantly in application. To effect a waiver, there must be evidence which demonstrates that a party has intentionally relinquished a known right. Estoppel applies when a party is induced to act or to refrain from acting to her detriment because of her reasonable reliance on another party's misrepresentation or concealment of a material fact.
3. When an insured is wrongfully lulled into a belief that no coverage exists, the doctrine of equitable estoppel will preclude the insurer from raising the insured's failure to comply with the statutory notice requirements as a bar to enforcement of the uninsured motorist statute.
Ralph C. Young, Hamilton, Mooney, Burgess, Young & Tissue, Oak Hill, for Drema Carole Ara.
Robert A. Burnside, Beckley, for Erie Ins. and Ronald N. Rose.
Charles E. Hurt, Charleston, for Amato Ins.
This is a consolidated appeal of two civil actions arising from an automobile accident which involved an uninsured motorist. The issue before this Court on appeal is whether Erie Insurance Company ("Erie"), the insurance carrier, is estopped from relying on appellant Ara's failure to comply with the notice provision of the uninsured motorist statute, W.Va.Code § 33-6-31(d) (Supp.1989), when the carrier had affirmatively declared that Ara's coverage had lapsed for non-payment of the premium. A procedural review of each of these underlying cases is necessary to fully understand the issues before this Court. For the sake of clarity, we will refer to the two Ara cases by designating the initial civil action filed by Ara against the uninsured motorist as Ara I and the second civil action filed by Ara against Erie as Ara II.
On August 9, 1985, an uninsured motorist collided with the automobile which appellant Ara was driving. When Ara contacted her insurance agent, Guy Amato Insurance Agency, Inc. (Guy Amato), she was informed that her policy had lapsed for non-payment of the premium on July 30, 1985. 1 After verifying the policy cancellation with the insurance carrier, Ara filed a personal injury action against the driver and owner of the automobile which struck her. Based on the representation by Erie's agents that her automobile policy was not in effect as of the date of the accident 2, Ara did not serve a copy of the summons and complaint on Erie as required by W.Va.Code § 33-6-31(d) 3 to invoke the statutory
[182 W.Va. 268] uninsured motorist coverage. Ara obtained a default judgment for the sum of $19,927.78 against the uninsured motorist on June 19, 1986.
When the uninsured motorist failed to satisfy the default judgment, Ara filed a separate civil action against Erie and Guy Amato in an attempt to recover the judgment obtained in Ara I. 4 The complaint filed against Erie and Guy Amato included three separate causes of action. Count 1 sought recovery of the judgment obtained in Ara I based on the uninsured motorist coverage contained in Ara's insurance policy. Count 2 set forth grounds of negligent cancellation and Count 3 sought damages for emotional distress and other intangible injuries.
In response to this complaint, defendant Erie filed a motion for summary judgment predicated on the following three grounds:
(A) The plaintiff failed to give the defendant the notice required pursuant to Chapter 33, Article 6, Section 31(d) of the West Virginia Code.
(B) The judgment obtained against the uninsured motorist was void for lack of proper service of process upon the uninsured motorist.
(C) The plaintiff had permitted her insurance policy with this defendant to lapse prior to the occurrence of the accident which was the subject of her [action] against the uninsured motorist, and was not in effect as of the date of that accident.
The trial court granted Erie's motion for summary judgment on the ground that Ara failed to give the insurer the mandatory notice required by W.Va.Code § 33-6-31(d). 5 The circuit court ruled that the granting of defendant's motion for summary judgment on the failure to give notice theory was dispositive of the whole case and dismissed Ara's action with prejudice.
Subsequent to the granting of Erie's motion for summary judgment, Ara had a new summons issued in the uninsured motorist action (Ara I). Appellant served the summons along with a copy of the Ara I complaint on Erie in an attempt to comply with W.Va.Code § 33-6-31(d) ex post facto. Ara then obtained an ex parte order setting aside the default judgment which she had obtained in Ara I. In response to Erie's motions, however, the circuit court quashed the summons and vacated the order which had set aside the default judgment.
After consolidating Ara I and Ara II, Ara appealed to this Court on the grounds that Erie waived its right to the statutory notice required by the uninsured motorist act by its denial that there was any policy in effect at the time of the accident. Alternatively, Ara assigned as error the circuit court's vacation of its own order setting aside the default judgment and the granting of Erie's motion to quash the summons.
Despite the procedural complexity of the cases on appeal, the primary issue before this Court is whether the circuit court properly interpreted the notice provision of the uninsured motorist act, W.Va.Code § 33-6-31(d), in determining that Ara's failure to comply with the notice requirements stood as a bar to proceeding against Erie on any theory, including negligent policy cancellation. Because we conclude that the issue of negligent cancellation may be determinative regarding the issue of statutory notice in this case, we must remand this case to the circuit court for further proceedings.
Viewing the statute without reference to the facts of this case, we are inclined to agree with the circuit court's conclusion that because the notice requirement of W.Va.Code § 33-6-31(d) is mandatory, failure to comply with this provision precludes recovery under the act. 6 The statute plainly and unmistakably provides that any insured intending to invoke the statutory uninsured motorist coverage "shall" serve the insurer with a copy of the summons and a copy of the complaint when an action is instituted against the owner or operator of an uninsured automobile. We have previously concluded that: "The word 'shall', in the absence of language in the statute showing a contrary intent on the part of the legislature, should be afforded a mandatory connotation." Syl.Pt. 2, Terry v. Sencindiver, 153 W.Va. 651, 171 S.E.2d 480 (1969). The statutory provision at issue presents no occasion for interpretation as it is free from ambiguity and its intent is plain. See Russell Transfer, Inc. v. Moore, 158 W.Va. 534, 212 S.E.2d 433, 435 (1975).
Although statutory interpretation is unnecessary, summary judgment was improperly granted because an inquiry into the facts giving rise to the unresolved issue of the alleged negligent or improper cancellation is necessary for a correct application of the law. See Syl.Pt. 3, Aetna Cas. & Sur. Co. v. Federal Ins. Co., 148 W.Va. 160, 133 S.E.2d 770 (1963). The clarification necessary here is the effect which such negligent or improper cancellation of Ara's policy may have on the application of the notice requirements of the uninsured motorist statute. If in fact Erie negligently or improperly cancelled Ara's policy and the appellant did have coverage on the date of the accident, then the issue of mandatory notice must be analyzed with equitable principles in mind.
Ara contends that Erie waived the notice requirement of the uninsured motorist statute by its denial of coverage. To support its claim of waiver, appellant cites numerous cases which hold that an insurance company may waive a contractual policy provision such as proof of loss requirements. See e.g. Willey v. Travelers Indem. Co., 156 W.Va. 398, 193 S.E.2d 555 (1972); Maynard v. National Fire Ins. Co., 147 W.Va. 539, 129 S.E.2d 443 (1963). Notwithstanding an insurer's right to waive a policy requirement, nothing in the cases cited by Ara supports the proposition that an insurer can waive a statutory duty imposed by the West Virginia Legislature. Furthermore, to effect a waiver, there must be evidence which demonstrates an intentional relinquishment of a known right. Dye v. Pennsylvania Cas. Co., 128 W.Va. 112, 35 S.E.2d 865, 868 (1945). Waiver may be established by express conduct or impliedly, through inconsistent actions. Creteau v. Phoenix Assurance Co., 202 Va. 641, 119 S.E.2d 336, 339 (1961) (quoting 19 Michie's Jurisprudence, Waiver § 2 (1970 & Supp.1987)).
The facts of this case are noticeably devoid of any act or conduct on the part of Erie which would indicate an intention to affirmatively waive the notice requirement of the uninsured motorist act. By its representations that the insurance policy at issue had been cancelled for non-payment, the insurance company was not, either expressly or impliedly, waiving its right to service of the summons and complaint pertaining to Ara I. However, by responding to informal notice of a potential claim by informing the insured that coverage did not exist, essentially denying any obligation under a policy which they claimed no longer existed, the insurer may be...
To continue reading
Request your trial
-
Potesta v. US Fidelity & Guaranty Co.
...because of her reasonable reliance on another party's misrepresentation or concealment of a material fact. Syl. Pt. 2, Ara v. Erie Ins. Co., 182 W.Va. 266, 387 S.E.2d 320 (1989). Because our holding in Jarvis is unclear with respect to the distinction between estoppel and waiver, we will re......
-
Parsons v. Halliburton Energy Servs., Inc.
...evidence which demonstrates that a party has intentionally relinquished a known right.” Syllabus Point 2, in part, Ara v. Erie Ins. Co., 182 W.Va. 266, 387 S.E.2d 320 (1989). “There must be first, the existence of the right; second, knowledge of the existence of such right; and third, volun......
-
Fair Value of Shares of Bank of Ripley, Matter of
...Annot., 40 A.L.R.3d 260, 284 (1971). We recently summarized the doctrines of waiver and estoppel in Syllabus Point 2 of Ara v. Erie Insurance Co., --- W.Va. ----, 387 S.E.2d 320 (1989): "Although the doctrines of waiver and estoppel are both grounded in equity, they differ significantly in ......
-
Antco, Inc. v. Dodge Fuel Corp.
...be estopped from pursing a cause of action against Dodge Fuel to collect for its subsidence damages. See Ara v. Erie Ins. Co., 182 W.Va. 266, 270, 387 S.E.2d 320, 324 (1989) ("Estoppel is properly invoked to prevent a litigant from asserting a claim or a defense against a party who has detr......