Blake v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 02 November 2009
• Docket Number: No. 34725.,34725.
• Citation: 685 S.E.2d 895
• Court: West Virginia Supreme Court
• Parties: Richard BLAKE, Jr. and John T. Parker, Plaintiffs Below, Appellees v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant Below, Appellant.

685 S.E.2d 895

Richard BLAKE, Jr. and John T. Parker, Plaintiffs Below, Appellees v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant Below, Appellant.

No. 34725.

Supreme Court of Appeals of West Virginia.

Submitted October 7, 2009.

Decided November 2, 2009.

Syllabus by the Court

1. "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).

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

3. "Language in an insurance policy should be given its plain, ordinary meaning." Syl. Pt. 1, Soliva v. Shand, Morahan & Co., 176 W.Va. 430, 345 S.E.2d 33 (1986), overruled, in part, on other grounds by National Mut. Ins. Co. v. McMahon & Sons, Inc., 177 W.Va. 734, 356 S.E.2d 488 (1987).

4. "The mere fact that parties do not agree to the construction of a contract does not render it ambiguous. The question as to whether a contract is ambiguous is a question of law to be determined by the court." Syl. Pt. 1, Berkeley County Pub. Serv. Dist. v. Vitro Corp. of America, 152 W.Va. 252, 162 S.E.2d 189 (1968).

Michael M. Stevens, Esq., E. Kay Fuller, Esq., Martin & Seibert, LC, Charleston, WV, for the Appellant, State Farm Mutual Automobile Insurance Company.

Scott S. Blass, Esq., Bordas & Bordas, PLLC, Wheeling, WV, for the Appellees.

PER CURIAM:

This case is before the Court upon the June 30, 2008, Order of the Circuit Court of Marshall County, West Virginia, wherein the circuit court granted Partial Summary Judgment to the Appellees, Richard Blake, Jr., and John T. Parker and determined that the Appellant, State Farm Mutual Automobile Insurance Company (hereinafter sometimes referred to as "State Farm"), was required to defend and indemnify Mr. Blake against property damage claims arising out of the loss of a trailer that were made by Mr. Parker. The Appellant asserts that the circuit court erred: 1) in refusing to apply the plain language of West Virginia Code § 17D-4-12(e) (2009), which specifies an insurer is not required to extend liability coverage to property "transported by" or "in charge of" the insured; 2) in finding State Farm's policy language, which likewise limits the extension of property damage liability coverage in accordance with the provisions of West Virginia Code § 17D-4-12(e), was ambiguous and internally inconsistent with other policy provisions; 3) in finding the insured had a reasonable expectation of property damage liability coverage for the loss of the trailer; and, 4) in finding State Farm had a duty to defend the suit brought by Mr. Parker. In opposition, the Appellees argue that the circuit court correctly determined that State Farm's exclusionary policy language was ambiguous. Moreover, the Appellees maintain that assuming, arguendo, the State Farm exclusionary language is clear and unambiguous, the exclusionary language is void and unenforceable below the mandatory limits of property damage coverage required by West Virginia Code § 17D-4-12. Based upon the Court's review of the briefs and arguments of the parties, the record, and all other matters before the Court, the Court finds that the circuit court's determination regarding the subject language in the State Farm policy is erroneous. Accordingly, the Court reverses the decision of the circuit court and remands the case for entry of an order consistent with this opinion.

I. Procedural and Factual History

On March 31, 2005, the Appellee, Richard Blake, Jr., borrowed a 1999 Hudson trailer from his neighbor, the Appellee, John T. Parker. Mr. Blake attached the trailer to his vehicle, which was a 1997 Dodge Ram pick-up truck. Mr. Blake was involved in a single vehicle accident while driving his truck, which also was towing Mr. Parker's trailer. Both the truck and trailer were total losses.

At the time of the accident, Mr. Blake was insured by a State Farm policy of insurance, which provided property damage liability coverage in the amount of $25,000 per accident. It is undisputed that the policy did not provide comprehensive or collision coverage because Mr. Blake had declined to purchase these coverages.

The policy issued to Mr. Blake was on Form 9848.3 and was approved by the Office of the West Virginia Insurance Commissioner on July 1, 2001. The policy provided under Section 1—Liability-Coverage A that State Farm will:

1. pay damages which an insured becomes legally liable to pay because of:

a. bodily injury to others, and b. damage to or destruction of property including loss of its use, caused by accident resulting from the ownership, maintenance or use of your car; and

2. defend any suit against an insured for such damages with attorneys hired and paid by us. We will not defend any suit after we have paid the applicable limit of our liability for the accident which is the basis of the lawsuit.

The policy also provides property damage liability coverage for trailers as follows:

Trailer Coverage

The liability coverage extends to the ownership, maintenance or use, by an insured, of:

1. trailers designed to be pulled by a private passenger car or a utility vehicle....

The policy, however, contained the following provision under the caption "When Coverage A Does Not Apply," which precludes the extension of liability coverage for damage to property as follows:

In addition to the limitations of coverage in Who Is an Insured and Trailer Coverage:

THERE IS NO COVERAGE:

. . .

4. FOR ANY DAMAGES TO PROPERTY OWNED BY, RENTED TO, IN THE CHARGE OF OR TRANSPORTED BY AN INSURED ....

Following the accident, Mr. Blake submitted a claim with State Farm¹ seeking coverage for the loss to Mr. Parker's trailer. Mr. Blake did not submit a claim for the damage to his vehicle. By letter dated April 11, 2005, State Farm denied coverage for Mr. Blake's claim for the damages to Mr. Parker's trailer.

On April 27, 2005, Mr. Parker filed suit against Mr. Blake in the Magistrate Court of Marshall County, West Virginia, seeking property damages for the value of his trailer. The lawsuit ultimately was dismissed when Mr. Blake confessed judgment on May 23, 2005, in the amount of $3,000, plus costs and interests.² Mr. Blake forwarded the confessed judgment to his State Farm agent and again requested that State Farm pay the judgment. State Farm did not alter its position that there was no coverage for Mr. Blake's claim.

On March 16, 2006, Mr. Blake and Mr. Parker jointly filed the instant lawsuit against State Farm and Mr. Blake's State Farm agent, Rosalyn Rhodes, alleging entitlement to property damage liability coverage for the loss of the trailer. Additionally, the Appellees asserted both first-party and third-party bad faith³ claims against State Farm. The Appellees subsequently filed a Motion for Partial Summary Judgment on the issue of whether State Farm had an obligation to provide coverage for the damage caused by Mr. Blake to Mr. Parker's trailer as a result of the March 31, 2005, accident. The circuit court granted the Appellees' motion. It is this ruling that forms the basis for the instant appeal.

II. Standard of Review

State Farm argues that the circuit court erred in granting the Appellees' Motion for Partial Summary Judgment. The Court's standard of review of the circuit court's entry of summary judgment is de novo. Syl. Pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994). Further, "[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).

The instant appeal requires the Court to review the relevant terms of the State Farm insurance policy that is the subject of this litigation. Generally, "[d]etermination of the proper coverage of an insurance contract when the facts are not in dispute is a question of law." Syl. Pt. 1, Tennant v. Smallwood, 211 W.Va. 703, 568 S.E.2d 10 (2002). "[T]he interpretation of an insurance contract, including the question of whether the contract is ambiguous, is a legal determination which, like the court's summary judgment, is reviewed de novo on appeal." Dairyland Ins. Co. v. Fox, 209 W.Va. 598, 601, 550 S.E.2d 388, 391 (2001)(quoting Payne v. Weston, 195 W.Va. 502, 506-07, 466 S.E.2d 161, 165-66 (1995)). Keeping these standards in mind, the Court now examines the issues raised by the Appellant.

III. Discussion of Law

A.

The first issue is whether the policy language in the relevant State Farm policy comports with the provisions of West Virginia Code § 17D-4-12(e). The Appellant argues that the policy language it relied upon to deny coverage for the subject trailer was consistent with the provisions of West Virginia Code § 17D-4-12(e), while the Appellees assert that the policy language is ambiguous. Because these are two separate issues, we first address whether the relevant policy language complies with the provisions of West Virginia Code § 17D-4-12(e).

In defining and establishing the scope and provisions of the motor vehicle liability policy in the provisions West Virginia Code § 17D-4-12(e), the following salient statutory language is found:

(e) Such motor vehicle liability policy need not insure any liability under any workers' compensation law nor any liability on account of bodily injury to or death of an employee of the insured while engaged in the employment, other than domestic, of the insured, or while engaged in the operation, maintenance or repair of any such vehicle nor any liability for damage to property owned by, rented...