Atlas Underwriters, Ltd. v. Meredith-Burda, Inc., MEREDITH-BURD

• Decision Date: 25 April 1986
• Docket Number: MEREDITH-BURD,No. 830360,INC,830360
• Parties: , 60 A.L.R.4th 977 ATLAS UNDERWRITERS, LTD. v. Record
• Court: Virginia Supreme Court

Page 65

343 S.E.2d 65

231 Va. 255, 60 A.L.R.4th 977

ATLAS UNDERWRITERS, LTD. v. MEREDITH-BURDA, INC.

Record No. 830360.

Supreme Court of Virginia.

April 25, 1986.

Wm. Rosenberger, Jr., Lynchburg, for appellant.

Gregory P. Cochran (Caskie, Frost, Hobbs, Thompson, Knakal & Alford, Lynchburg, on brief), for appellee.

Present: All the Justices.

COMPTON, Justice.

In this insurance case, we interpret deductible provisions applicable to the property damage liability portion of a policy furnishing manufacturers' and contractors' liability coverage.

In October 1978, Rust Control, Inc., a Roanoke contractor, was engaged in spray painting two water towers on the premises of appellee Meredith-Burda, Inc. in Lynchburg. Particles of paint were blown by wind upon motor vehicles parked by Meredith-Burda employees on company property. Meredith-Burda paid about 40 persons for damage to their vehicles caused by the paint and took an assignment from each of any claim such individual had against Rust Control. One vehicle was damaged in the amount of $350; none of the others was damaged more than $250 each. The total damages represented by the assignments exceeded $4,000. Subsequently, Meredith-Burda filed a suit against Rust Control on the assignments and obtained a judgment in January 1981 for $4,386.75, which apparently was not satisfied.

On the day of the accident, Rust Control was covered by a policy of insurance which, among other things, furnished protection for property damage liability, with deductible. On the "Certificate" page of the policy, the deductible language provided, "$250 deductible per claim, per claimant including claims expense." On another page of the policy, labeled "Deductible Endorsement," the following language appeared:

"In consideration of the premium for which this policy is written, it is hereby understood and agreed that there is $250.00 deductible for each and every claim on the annexed policy to which this endorsement pertains. The insured warrants and represents as follows with respect thereto:

1. Insured shall contribute amount of deductible within 10 days from date of request by Underwriters or its representatives.

2. The deductible shall apply toward adjusting expenses as well as toward any settlement of the claim.

3. In the event of failure of the insured to pay the deductible within 10 days as herein above set forth, Underwriters shall exercise its cancellation rights as provided in the policy...."

In September 1981, Meredith-Burda, again utilizing the assignments, instituted the present action on the insurance policy against appellant Atlas Underwriters, Ltd. for $5,000 seeking recovery in a lump sum of the amounts represented by the assignments. ^* Responding to the suit, Atlas contended there was no coverage for any of the individual claims, except the claim for $350, because none exceeded the deductible amount of $250. It argued that 40 assignments could not convert 40 non-recoverable claims into 40 recoverable claims.

The trial court, upon consideration of various exhibits and the testimony of one witness called by Atlas, decided in favor of Meredith-Burda and entered judgment against Atlas for $4,386.75, plus interest and costs. The court ruled that the individual claims were assigned validly and that the "per claim, per claimant" language of the policy was "inherently ambiguous and clearly subject to two logical interpretations or constructions." The court concluded, relying on cases from other jurisdictions, that Meredith-Burda was "one claimant asserting one claim against the defendant," fully recognizing "that the one claim asserted by plaintiff is an amalgam of forty smaller claims and which would, if asserted individually, be non-recoverable claims."

We are of opinion that the trial court erred in its interpretation of the policy. As a basic proposition, the parties do not dispute that Meredith-Burda, the assignee, stands in the shoes of the vehicle owners, the assignors, and that Atlas, the defendant, may assert defenses available against the assignors in this suit by the assignee. Thus, we focus on the meaning, as between the parties to the insurance contract, of the pertinent terms of that contract.

The terms "claim" and "claimant" are not defined in the policy. Nonetheless, we hold that in the context of this insurance contract these crucial words are clear and unambiguous, that is, they are "[s]usceptible of but one meaning." Black's Law Dictionary 1366 (5th ed. 1979). "Claim" contemplates the assertion of a legal right by a third person for damages caused by conduct of the named insured. It means a demand by one to whom a right has accrued for payment of a loss suffered due to acts of the insured that are covered by the policy. "Claimant" is one who asserts that right or demand. See ...