Broy v. Inland Mut. Ins. Co.

• Decision Date: 15 March 1977
• Docket Number: No. 13757,13757
• Citation: 233 S.E.2d 131,160 W.Va. 138
• Parties: Elsie P. BROY v. INLAND MUTUAL INSURANCE COMPANY.
• Court: West Virginia Supreme Court

Page 131

233 S.E.2d 131

160 W.Va. 138

Elsie P. BROY v. INLAND MUTUAL INSURANCE COMPANY.

No. 13757.

Supreme Court of Appeals of West Virginia.

March 15, 1977.

Syllabus by the Court

1. If an insured with coverage under a liability insurance policy does not pay the underlying judgment entered in a personal injury action, the injured plaintiff may institute a direct action against the insurance company to recover the amount of the judgment up to the limits of the policy.

2. Where an additional insured causes injury to a named insured under an automobile liability policy, the named insured may, in the absence of any exclusionary language to the contrary, maintain a direct action against the insurance company to recover the amount of the judgment rendered against the additional insured.

3. The doctrine of interspousal immunity does not apply where one spouse sues an insurance company to recover a judgment obtained against an additional insured under the insurance policy, where such additional insured is not a spouse and even though both spouses are named insureds on the policy.

4. Admissions made pursuant to Rule 36, West Virginia Rules of Civil Procedure, when offered at trial, are subject to all pertinent objections to admissibility which may be interposed. Once such objections have been settled, it is then appropriate to read the admissions to the jury.

Archibald McDougall, Martinsburg, for appellant.

Clarence E. Martin, Jr., Wm. Richard McCune, Jr., Martinsburg, for appellee.

MILLER, Justice:

On September 11, 1973, the plaintiff, Elsie Broy, recovered a $7,000 jury verdict against Frances J. Miller as a result of injuries received from being struck by a pick-up truck driven by Mrs. Miller with the consent of the owner of the truck, Arthur Broy, plaintiff's husband.

Execution was issued on the judgment and returned "no property found." Mrs. Broy then brought the present action against her husband's insurance carrier, the Inland Mutual Insurance Company, for the amount of money Mrs. Miller had been adjudged liable.

At the conclusion of the plaintiff's evidence the trial court, upon the motion of the defendant insurance company, directed a verdict in defendant's favor, holding that Mrs. Broy could not recover as a matter of law for either of two reasons. First, if she was a jointly named insured with her husband on the policy sued upon, she was, in effect, suing herself. Secondly, if not a named insured, the doctrine of interspousal immunity precluded her suit in that her husband was a named insured. ¹

We reverse as to both theories.

Although the plaintiff did not introduce into evidence the insurance policy in existence at the time of the accident, the insurance agent who had issued the policy was subpoenaed and did give some general testimony concerning its provisions.

It does not appear questioned that the insurance policy was a standard form of liability insurance conforming to the provisions of W.Va.Code, 33-6-31(a), which requires that a vehicular liability policy issued in this State shall contain what is commonly called an "omnibus clause." Such provision mandates that coverage be extended to any person who uses the vehicle with the consent, express or implied, of the named insured. Likewise, it is demonstrated from the record that the operator of the vehicle at the time of the accident, Mrs. Miller, was operating it with the consent of Mr. Broy, a named insured.

This suit brought by Mrs. Broy was based on established law that if an insured with coverage under a liability insurance policy does not pay the underlying judgment entered in a personal injury action, the injured plaintiff may institute a direct action against the insurance company to recover the amount of the judgment up to the limits of the policy. See Hall v. Ocean Accident & Guarantee Corp., 122 W.Va. 188, 9 S.E.2d 45 (1940); Criss v. United States Fidelity & Guaranty Co., 105 W.Va. 380, 142 S.E. 849 (1928); 8 Appleman, Insurance Law and Practice § 4851, et seq.

We find no cases decided by this Court touching on the question of whether a named insured is precluded from maintaining a direct action against an insurance company on a judgment obtained against a tort feasor who is an additional insured under the policy. In other jurisdictions where this question has arisen, the courts have generally held that such suit can be maintained. See Annot., 15 A.L.R.3d 711. The argument usually advanced by the insurance companies in such cases does not appear to be on the basis that the plaintiff, a named insured, is, in effect, suing himself, but is predicated on the idea that to permit a named insured to recover would be to convert the insurance contract from one of indemnity to a personal accident policy for the benefit of the named insured. See Iowa Mutual Insurance Co. v. Meckna, 180 Neb. 516, 144 N.W.2d 73 (1966); 7 Am.Jur.2d Automobile Insurance § 128; 7 Appleman, Insurance Law and Practice § 4409; 12 Couch on Insurance 2d § 45:483.

Even this theory has certain conceptual deficiencies. The indemnity aspect of the policy is still maintained since the person indemnified is the additional insured arising out of the omnibus clause provision. The fact that an injured named insured may receive a pecuniary benefit does not change the basic indemnity contract as to the negligent additional insured. Some courts have settled the problem by observing that an insurance policy is to be strictly construed against the insurer and, in the absence of any exclusionary language, which could easily be placed in a policy to preclude recovery in this type of situation, suit may be maintained. Iowa Mutual Insurance Co. v. Meckna, supra; Farm Bureau Mutual Insurance Co. v. Waugh, 159 Me. 115, 188 A.2d 889 (1963); Bachman v. Independence Indemnity Co., 214 Cal. 529, 6 P.2d 943 (1931).

This Court has consistently followed the general principle that insurance contracts are to be strictly construed against the insurance company and in favor of the insured. Prete v. Merchants Property Insurance Co. of Indiana, W.Va., 223 S.E.2d 441 (1976); Polan v. Travelers Insurance Co., W.Va., 192 S.E.2d 481 (1972).

We, therefore, conclude that where an additional insured causes injury to a named insured under an automobile liability policy, the named insured may, in the absence of any exclusionary language to the contrary, maintain a direct action against the insurance company to recover the amount of the judgment rendered against the additional insured. Here, with no evidence of any exclusionary language and armed with the statutory requirement of the omnibus clause, W.Va.Code,...