Cook v. McDowell County Emergency Ambulance Service Authority, Inc.

• Decision Date: 24 May 1994
• Docket Number: No. 21749,21749
• Citation: 445 S.E.2d 197,191 W.Va. 256
• Court: West Virginia Supreme Court
• Parties: Sadie COOK, as Committee for Deborah Patricia Cook, an Incompetent, and as Next Friend for Bridget Maureen Cook, Joshua Hobert Cook, and James Johnny Cook, Infants, Plaintiffs Below, Appellees, v. The McDOWELL COUNTY EMERGENCY AMBULANCE SERVICE AUTHORITY, INC., and Continental Casualty Company, Defendants Below, Appellants.

Page 197

445 S.E.2d 197

191 W.Va. 256

Sadie COOK, as Committee for Deborah Patricia Cook, an

Incompetent, and as Next Friend for Bridget

Maureen Cook, Joshua Hobert Cook, and James Johnny Cook, Infants, Plaintiffs Below, Appellees, v. The McDOWELL COUNTY EMERGENCY AMBULANCE SERVICE AUTHORITY, INC., and Continental Casualty Company, Defendants

Below, Appellants.

No. 21749.

Supreme Court of Appeals of

West Virginia.

Submitted Jan. 19, 1994.

Decided May 24, 1994.

Syllabus by the Court

" 'Where the provisions of an insurance policy contract are clear and unambiguous they are not subject to judicial construction or interpretation, but full effect will be given to the plain meaning intended.' Syllabus, Keffer v. Prudential Ins. Co., 153 W.Va. 813, 172 S.E.2d 714 (1970)." Syllabus point 1, Russell v. State Auto Mutual Insurance Co., 188 W.Va. 81, 422 S.E.2d 803 (1992).

C. William Davis, Richardson, Jemper, Hancock & Davis, Bluefield, and P. Brent Brown, Carter, Brown & Osborne, Roanoke, VA, for appellees.

David L. Shuman, Jay W. Craig, Shuman, Annand & Poe, Charleston, for appellants.

PER CURIAM:

This is an appeal by the McDowell County Emergency Ambulance Authority, Inc., and by Continental Casualty Company, from a final judgment entered on March 1, 1993, by the Circuit Court of McDowell County in a personal injury action. The circuit court ruled that the plaintiff below, and the appellee in the present proceeding, Sadie Cook, who was acting as committee for her daughter, and as next friend for her grandchildren, was entitled to recover $1,000,000.00 under the underinsured motorist indorsement to an insurance policy issued by Continental Casualty Company. ¹ The court also ruled that Ms. Cook was entitled to recover $333,333.33 in attorney's fees over and above $390,000.00 in fees previously paid, and prejudgment interest.

In reaching the conclusion that the appellee was entitled to recover under the underinsured motorist provision, the circuit court, in effect, found that the underinsured motorist indorsement was not subject to the maximum liability limit which was included in the policy to which the indorsement was appended.

On appeal, the appellants claim that the circuit court erred in failing to recognize, and in failing to give effect to, the maximum liability provision in the general policy. They also argue that the court erred in making its attorney fee and prejudgment interest award. After reviewing the questions presented, this Court agrees with the appellants and reverses the decision of the Circuit Court of McDowell County.

On November 16, 1989, the appellee's daughter, Deborah Patricia Cook, and Deborah Patricia Cook's daughter, Bridget Maureen Cook, were passengers in an ambulance owned and operated by the McDowell County Emergency Ambulance Service Authority, Inc. In the course of the ambulance trip, the ambulance swerved and struck two parked automobiles. Deborah Patricia Cook suffered severe head injuries, and her daughter, Bridget Cook, received minor injuries.

On October 31, 1991, the appellee, Sadie Cook, acting in behalf of her daughter, Deborah Patricia Cook, and also acting as next friend on behalf of the infant children of Deborah Patricia Cook, Bridget Maureen Cook, who had been injured in the ambulance, and Joshua Hobert Cook, and James Johnny Cook, instituted the present personal injury action against the McDowell County Emergency Ambulance Authority, Inc., in the Circuit Court of McDowell County. The complaint alleged that driver of the ambulance, Benny Wilson, an employee of the McDowell Emergency Ambulance Authority, Inc., negligently drove the ambulance into the two automobiles and consequently caused severe and permanent injuries to Deborah Patricia Cook.

The original complaint named the McDowell County Emergency Ambulance Service Authority, Inc., Benny Wilson, the driver of the ambulance, and an unidentified "John Doe" driver as defendants. The complaint also named Continental Casualty Company as a party defendant and sought a declaration of coverage under the uninsured and/or underinsured motorist coverage provisions of a policy issued by Continental Casualty Company.

The McDowell County Emergency Ambulance Service Authority, Inc., was, and is, a duly incorporated emergency service organization formed under the provisions of the West Virginia Emergency Ambulance Service Act of 1975, W.Va.Code § 7-15-1, and was, and is, a "political subdivision" as defined by the West Virginia Government Tort Claims and Insurance Reform Act, W.Va.Code § 29-12A-3(c).

Continental Casualty Company was drawn into this action because it had issued an insurance policy to the West Virginia State Board of Risk and Insurance Management for the benefit of the State of West Virginia and its political subdivisions. The policy clearly stated that the maximum payable for a single claim or "occurrence" under the policy was $1,000,000.00. ² The Board of Risk and Insurance Management, pursuant to its authority under W.Va.Code § 29-12A-16(a), had issued a separate certificate of liability insurance under the policy to the McDowell County Emergency Ambulance Service Authority, Inc. The certificate of liability insurance identified various coverages under which the McDowell County Emergency Ambulance Service Authority, Inc., was an "additional insured", including Indorsement No. 11, an uninsured and underinsured motorist coverage indorsement, which was in full force and effect at the time of the November 16, 1989, accident. ³ The certificate further reiterated the provision of the basic policy that the maximum payable was $1,000,000.00 for each occurrence. ⁴

Shortly after the complaint was filed in the present action, the parties negotiated a partial settlement under which Continental Casualty Company agreed to pay a lump sum of $890,686.45 and scheduled payments over 360 months in exchange for a total release of the McDowell County Emergency Ambulance Authority and Benny Wilson and a partial release of Continental Casualty Company. Continental Casualty Company was released from liability except for any liability that it might have under the uninsured/underinsured motorist endorsement. The parties, however, reserved the right to litigate the question of whether the uninsured or underinsured motorist benefits payable were subject to the $1,000,000.00 cap contained in the general policy or created coverage beyond the cap.

The settlement entered into by the parties was approved by the Circuit Court of McDowell County, and a payment of $390,000.00 in attorney's fees was authorized from the settlement proceeds.

Following the settlement, the question of whether the appellee was entitled to recover under the uninsured or underinsured provisions of the policy remained open. At a status conference following the settlement, the court ruled sua sponte that the appellee was entitled to recover underinsured motorist benefits in excess of the primary liability coverage.

At a later hearing conducted on September 30, 1992, the court again ruled that the appellee was entitled to recover underinsured motorist benefits over and above the liability limit contained in the principal policy. Subsequently, the court ruled that the appellee was also entitled to recover attorney's fees, over and above the $390,000.00 paid pursuant to the settlement agreement. The court also awarded the appellee prejudgment interest, starting from the date of the accident.

The appellants moved to have the judgment order entered by the circuit court set aside. The circuit court denied this motion and entered a final judgment order on March 1, 1993, which allowed underinsured motorist benefits above the $1,000,000.00 limit contained in the principal policy and which also allowed the payment of the additional attorney's fees and prejudgment interest.

On appeal, the appellants claim that the circuit court erred in ignoring the $1,000,000.00 maximum limit of liability provision contained in the policy and in allowing the appellee to recover underinsured motorist benefits above this limit.

This Court has rather clearly stated that:

"Where the provisions of an insurance policy contract are clear and unambiguous they are not subject to judicial construction or interpretation, but full effect will be given to the plain meaning intended." Syllabus, Keffer v. Prudential Ins. Co., 153 W.Va. 813, 172 S.E.2d 714 (1970).

Syllabus point 1, Russell v. State Auto Mutual Insurance Co., 188 W.Va. 81, 422 S.E.2d 803 (1992).

In the present case, the policy issued by Continental Casualty Company clearly and unambiguously stated that general policy coverage was limited to $1,000,000.00 for each occurrence. However, there is a question as to whether the language of the uninsured/underinsured indorsement (Indorsement No. 11, referred to in note 3, supra ) creates a liability in excess of the $1,000,000.00 general policy limit or whether it is subject to it.

A close reading of the indorsement shows that its provisions were "incorporated" into the general policy. From the clear meaning of the incorporation language, the Court can only conclude that Indorsement No. 11 was intended by the parties as a part of the general policy, and the clear limit of liability on the general policy is $1,000,000.00. Given this, the Court concludes that the appellee is only entitled to recover $1,000,000.00 and that the circuit court erred in holding that the appellee was entitled to recover in excess of this amount.

In reaching this decision, the Court is aware of the language of W.Va.Code § 33-6-31(b), which relates to uninsured and underinsured motorist provisions in...