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

• Decision Date: 06 December 1989
• Docket Number: No. CC995,CC995
• Citation: 387 S.E.2d 556,182 W.Va. 320
• Court: West Virginia Supreme Court
• Parties: Katherine L. CROSS, Executrix of the Estate of Miriam Tate, Deceased, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY.

Page 556

387 S.E.2d 556

182 W.Va. 320

Katherine L. CROSS, Executrix of the Estate of Miriam Tate, Deceased, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY.

No. CC995.

Supreme Court of Appeals of West Virginia.

Dec. 6, 1989.

Syllabus by the Court

1. The testimony of a witness which is adverse to the interests of insurance beneficiaries in a declaratory judgment action brought on their behalf by the personal representative of the deceased insured against the insurer is testimony which is "against the executor [or] administrator," within the meaning of the Dead Man's Statute, W.Va.Code, 57-3-1 [1937].

2. A witness' status as an agent of a party, without more, does not make him or her a "person interested," within the meaning of W.Va.Code, 57-3-1 [1937], and his or her testimony is not on that basis precluded by that statute.

3. The Dead Man's Statute, W.Va.Code, 57-3-1 [1937], does not bar the testimony of an insurer's agents that they orally informed the decedent of the costs of various levels of uninsured motorist coverage, where the only assertion is that the insurer's agents are incompetent witnesses by virtue of their interests as agents.

Lane O. Austin, Sanders, Austin & Swope, Princeton, Richard G. Rakes, Gentry, Locke, Rakes & Moore, Roanoke, for Katherine L. Cross, plaintiff.

Ben B. White, III, Princeton, for State Farm Mut. Auto. Ins. Co.

McHUGH, Justice:

This case is before this Court upon certified questions from the United States Court of Appeals for the Fourth Circuit, pursuant to W.Va.Code, 51-1A-1 to 51-1A-12 [1976], the Uniform Certification of Questions of Law Act. ¹ The two questions involve the Dead Man's Statute, W.Va.Code, 57-3-1 [1937]. While we conclude that the Dead Man's Statute applies to the declaratory judgment action of the executrix against the insurer, we also conclude that the Dead Man's Statute does not bar the testimony in question.

I

The plaintiff, Katherine L. Cross, the executrix of the estate of the decedent, Miriam Tate, brought a declaratory judgment action in the United States District Court for the Southern District of West Virginia against the insurer, State Farm Mutual Automobile Insurance Company, to construe the decedent's insurance contract with the insurer in order to ascertain the amount of uninsured motorist coverage. The decedent had been killed on June 26, 1986, in an automobile accident allegedly due to the negligence of a certain uninsured motorist driving another vehicle.

The decedent had executed an insurance form entitled "Acknowledgment of Coverage Selection and Rejection (West Virginia Uninsured and Underinsured Motorist Coverage)." The form stated that the insurer had offered to the decedent the opportunity to purchase uninsured motorist coverage up to the amount of $100,000 for bodily injury to one person, $300,000 for bodily injury to two or more persons per accident and $50,000 for property damage (or up to the decedent's liability coverage limits, whichever was greater). See W.Va.Code 33-6-31(b) [1982, 1988]. ² The form also indicated that the decedent had elected to purchase uninsured motorist coverage with limits of $20,000 for bodily injury to one person, $40,000 for bodily injury to two or more persons per accident and $15,000 for property damage. The form did not contain the respective premium costs for the various coverage levels which the decedent could have chosen. The decedent had also executed a second policy form of this nature, selecting the identical limits of coverage.

The plaintiff argued before the federal district court that the aforesaid form provided by the defendant insurer was insufficient as a matter of law to show a knowing and intelligent waiver of the decedent's statutory right to uninsured motorist coverage at $100,000/$300,000/$50,000 limits. The plaintiff relied upon Bias v. Nationwide Mutual Insurance Co., 179 W.Va. 125, 365 S.E.2d 789 (1987). ³ Upon cross-motions for summary judgment the federal district court granted the plaintiff's motion for summary judgment and denied such motion of the defendant. The federal district court ruled that the written form was, under Bias, an insufficient waiver of the decedent's statutory right to the $100,000 coverage for bodily injury to one person (for each of the two policies), as argued by the plaintiff, because the form omitted cost information. The federal district court also ruled that the Dead Man's Statute, W.Va.Code, 57-3-1 [1937], precluded the insurer's agents from testifying that such cost information was orally given to the decedent. Thus, the coverage to be provided as a result of the decedent's death was held to be $100,000 for each of the two policies, instead of $20,000 for each of the two policies.

The defendant insurer timely appealed the federal district court's order to the United States Court of Appeals for the Fourth Circuit. That court certified these two questions to us:

(a) Does West Virginia Code § 57-3-1, commonly referred to as the Dead Man's Statute, have any application in the fact situation present here with respect to the admissibility of evidence?

(b) Does, if applicable, West Virginia Code § 57-3-1 render inadmissible the testimony of agents of State Farm Mutual Automobile Insurance Company concerning certain conversations between such agents and the deceased leading to the alleged waiver of the statutorily mandated uninsured motorist coverage under West Virginia Code § 33-6-31(b)?

II

With respect to the first certified question, the insurer argues that the Dead Man's Statute, W.Va.Code, 57-3-1 [1937], is not applicable because the judgment in the declaratory judgment action would only nominally be for or against the decedent's executrix; the real parties in interest, the insurer argues, are the wrongful death distributees/insurance beneficiaries, not the executrix, and they in that capacity are not protected by the Dead Man's Statute. We disagree with the insurer's argument on this point. ⁴

One of the requirements for applicability of W.Va.Code, 57-3-1 [1937] is that the testimony in question must be against certain persons in designated capacities. Shuman v. Shuman, 79 W.Va. 445, 448, 91 S.E. 264, 265 (1917); Board of Education v. Harvey, 70 W.Va. 480, 481-82, 74 S.E. 507, 508 (1912). For example, "the testimony must be against the deceased's personal representative[.]" Syl. pt. 10, in part, Moore v. Goode, 180 W.Va. 78 , 375 S.E.2d 549 (1988). Accord, syl. pt. 2, Wimer v. Hinkle, 180 W.Va. 660 , 379 S.E.2d 383 (1989). The term "against," as used in the Dead Man's Statute, means that the witness and the representative of the deceased or insane person or lunatic have "opposing interests in the suit[.]" Syl. pt. 12, in part, Seabright v. Seabright, 28 W.Va. 412 (1886). It has been specifically held, therefore, that "[a] witness interested adversely to the administrator, in the result of the action for damages for wrongful death, is incompetent to testify against the latter, in regard to a personal communication between himself and the person alleged to have been wrongfully killed." Syl. pt. 5, Lawrence's Adm'r. v. Hyde, 77 W.Va. 639, 88 S.E. 45 (1916). The West Virginia Dead Man's Statute is not limited in application to cases in which there may be a judgment for or against the estate of the decedent, as are the Dead Man's statutes in some other jurisdictions. Id. 77 W.Va. at 644, 88 S.E. at 47. ⁵

In the declaratory judgment action here the executrix is the plaintiff. The executrix is no more a nominal party in the declaratory judgment action than she is in the wrongful death action, for purposes of the Dead Man's Statute. See supra note 5. Accordingly, the testimony of a witness which is adverse to the interests of insurance beneficiaries in a declaratory judgment action brought on their behalf by the personal representative of the deceased insured against the insurer is testimony which is "against the executor [or] administrator," within the meaning of the Dead Man's Statute, W.Va.Code, 57-3-1 [1937].

The first certified question is answered in the affirmative.

III

With respect to the second certified question, see supra section I (last paragraph), the answer turns on whether an agent of a party, including an agent of a corporate party who is not a shareholder, is, by virtue of the agency, a "person interested" under the Dead Man's Statute. Based upon the authorities cited below, this Court holds that a witness' status as an agent of a party, without more, does not make him or her a "person interested," within the meaning of W.Va.Code, 57-3-1 [1937], and his or her testimony is not on that basis precluded by that statute.

At the outset we note that the Dead Man's Statute is still valid under the language of Rule 601 of the West Virginia Rules of Evidence, entitled "General Rule of Competency": "Every person is competent to be a witness except as otherwise provided for by statute or these rules." In his reporter's notes to the West Virginia Rules of Evidence, Professor Cleckley states: "WVRE 601 is consistent with prior West Virginia law in that it still requires the exclusion of testimony based on grounds covered by the West Virginia Dead Man's Act. W.Va.Code, § 57-3-1."

In syllabus point 9 of Moore v. Goode, 180 W.Va. 78, 375 S.E.2d 549 (1988), this Court recognized that W.Va.Code, 57-3-1 [1937], see supra note 4, which commences with a broad testimonial grant, "was designed to alleviate the harsh common[-]law rule that foreclosed any witness from testifying [in any civil case] if he [or she] had [a disqualifying] interest in the suit." In Moore v. Goode, we emphasized the limited nature of the exception to competency provided by this statute; testimony is barred by the Dead Man's Statute only if there is a concurrence of three conditions:

(1) A witness' testimony is excluded if it relates to a personal transaction or communication with the deceased, insane or lunatic person, and

(2) The witness is either a...