Dooley v. Hartford Accident & Indem. Co.

• Decision Date: 22 June 2012
• Docket Number: Civil Action No. 7:11–cv–00149.
• Citation: 892 F.Supp.2d 762
• Parties: Ronnie Steve DOOLEY, Plaintiff, v. HARTFORD ACCIDENT AND INDEMNITY COMPANY, et al., Defendants.
• Court: U.S. District Court — Western District of Virginia

892 F.Supp.2d 762

Ronnie Steve DOOLEY, Plaintiff,

v.HARTFORD ACCIDENT AND INDEMNITY COMPANY, et al., Defendants.

Civil Action No. 7:11–cv–00149.

United States District Court,

W.D. Virginia,

Roanoke Division.

June 22, 2012.

John J. Rasmussen, Insurance Recovery Law Group, PLC, Richmond, VA, Jeffrey Harry Krasnow, Krasnow Law Firm, Roanoke, VA, for Plaintiff.

John Becker Mumford, Jr., Kathryn Elizabeth Kasper, Hancock Daniel Johnson & Nagle PC, Glen Allen, VA, for Defendants.

MEMORANDUM OPINION

SAMUEL G. WILSON, District Judge.

This is an action pursuant to the court's diversity jurisdiction by plaintiff, Ronnie Steve Dooley, against defendant, Hartford Accident and Indemnity Company (“Hartford”), seeking a declaratory judgment that his personal automobile insurance policy with Hartford affords him $200,000 in underinsured motorist coverage in connection with injuries he received in a motor vehicle accident in February of 2009 with a driver who had liability limits of $100,000.¹ Hartford has counterclaimed for a declaratory judgment that its limit of liability for underinsured motorist coverage is $100,000 per person and, consequently, that there is no underinsured motorist coverage available to Dooley for the accident. In 2003, Dooley and his wife applied with Hartford for a personal automobile policy containing personal liability and uninsured and underinsured motorist limits of $100,000 per person and $300,000 per accident. Hartford issued the policy with the requested limits and renewed it five times. Due to a computer programming error, the declarations page for the fifth renewal—the 20082009 policy period when the accident occurred—specified the policy's liability limits but not its uninsured and underinsured motorist limits. Dooley, who has three listed, insured motor vehicles, now claims that Hartford's failure to specify uninsured and underinsured limits for the fifth renewal policy created an ambiguity as to his policy's coverage limits. He argues that due to the resulting ambiguity, the Supreme Court of Virginia's decision in Virginia Farm Bureau Mutual Insurance Co. v. Williams, 278 Va. 75, 677 S.E.2d 299 (2009), permits him to stack underinsured motorist coverage for each of the three vehicles, producing $200,000 in underinsurance coverage ($300,000 total less the other driver's $100,000 liability limit). The court rejects that argument because the court finds that, here, Virginia Code § 38.2–2206(A), which provides that a policy's uninsured and underinsured motorist limits equal that policy's liability limits unless explicitly rejected by the insured, properly supplies inadvertently omitted underinsured motorist limits. In that important respect, the case before the court is quite unlike Williams, which involved an internal inconsistency—conflicting limits of liability on the declarations page—that could not be harmonized by resorting to Virginia's uninsured motorist statute, which ordinarily “is as much a part of the policy as if incorporated therein.” Bray v. Ins. Co. of Penn., 917 F.2d 130, 132 (4th Cir.1990) (quoting State Farm Mut. Auto. Ins. Co. v. Duncan, 203 Va. 440, 443, 125 S.E.2d 154 (1962)). Accordingly, the court will enter summary judgment declaring that underinsured motorist coverage is not available to Dooley for the accident under his policy with Hartford.

I.

In October of 2003, Dooley and his wife obtained a personal automobile insurance policy from Hartford with liability and uninsured and underinsured motorist limits of $100,000 per person and $300,000 per accident. The Dooleys renewed their policy, effective November 1, 2004 through November 1, 2005, with the same policy limits and added a third vehicle. The Dooleys renewed their policy for each succeeding policy period through 2008–2009.² The declarations page for the initial policy and each succeeding renewal, except the 2008–2009 renewal, continued to specify liability and uninsured and underinsured motorist limits of $100,000 per person and $300,000 per accident. However, while the declarations page for the policy renewal period effective November 1, 2008 through November 1, 2009 specified those limits for liability coverage, it did not specify uninsured and underinsured motorist limits. Nor were uninsured or underinsured motorist limits specified elsewhere in the 2008–2009 policy documents. The policy includes a liability limits anti-stacking provision, and, using virtually identical language, an uninsured and underinsured motorist limits anti-stacking provision that states:

The limit of Bodily Injury Liability shown in the Declarations for each person for Uninsured Motorists Coverage is our maximum limit of liability for all damages, including damages for care, loss of services or death, arising out of bodily injury sustained by any one person in any one accident. Subject to this limit for each person, the limit of Bodily Injury Liability shown in the Declarations for each accident for Uninsured Motorists Coverage is our maximum limit of liability for all damages for bodily injury resulting from any one accident.

... This is the most we will pay regardless of the number of:

1. Insureds;

2. Claims made; or

3. Vehicles or premiums shown in the Declarations.

(Policy 21–22, ECF No. 30–10) (emphasis removed).

On February 25, 2009, a vehicle driven by Wilmer David Phillips, Jr. struck Dooley while Dooley was driving one of his three Hartford-insured vehicles. Dooley sustained serious spinal and other injuries, forcing him to incur over $100,000 in medical and related expenses. Phillips was a named insured under a personal automobile insurance policy issued by Nationwide Mutual Insurance Company (“Nationwide”) with a per person liability limit of $100,000. Dooley has filed a personal injury suit against Phillips in the Circuit Court of the County of Roanoke, and Nationwide has offered to pay its liability limit of $100,000.

In support of its motion for summary judgment here, Hartford submitted an affidavit from Bill Patton, a Hartford employee with personal knowledge of the Dooleys' policy. Patton states that a computer programming error caused the omission of the uninsured and underinsured motorist limits from the declarations page and that Hartford failed to notice that omission until Dooley commenced this suit. (Patton Aff. 2, March 26, 2012, ECF No. 30–9.) According to Patton, the Dooleys had not requested any change to their policy's uninsured and underinsured motorist limits, and it was not Hartford's intent to effect any change. ( Id.) The parties have submitted a stipulation that there were no oral communications between Hartford and the Dooleys regarding the 2008–2009 policy terms and no written communications other than the delivery of policy documents to the Dooleys. (Stipulation of Uncontested Facts 1, ECF No. 30–8.)

II.

In Williams, a declarations page specified different underinsured motorist limits for different vehicles, creating an ambiguity that the Supreme Court of Virginia found it was required to resolve against the insurer by stacking underinsured coverage limits. According to Dooley, it follows, based on Williams, that his policy's failure to specify any underinsured motorist limits, a fortiori, creates an ambiguity that also must be resolved against the insurer by stacking. Hartford responds that Dooley's policy, construed as a whole, clearly and unambiguously bars stacking. The court agrees with Hartford.³

Under the Virginia Code, an insurer may not issue an automobile liability insurance policy on a “vehicle principally garaged or used in the Commonwealth” unless “it contains an endorsement or provisions undertaking to pay the insured all sums that he is legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle.” Va.Code § 38.2–2206(A). Unless the insured explicitly requests lower coverage, “[t]hose limits shall equal but not exceed the limits of the liability insurance provided by the policy.” Id. That is, if the insured does not request other limits, uninsured and underinsured motorist limits default to the policy's liability limits. By operation of law, Virginia Code § 38.2–2206's default limits “[are] as much a part of the policy as if incorporated therein.” Bray, 917 F.2d at 132 (quoting Duncan, 203 Va. at 443, 125 S.E.2d 154).⁴

Insurance policies are contracts and, in interpreting a policy, the court will determine “the parties' intent from the words they have used in the document,” as it would for any other contract. Williams, 278 Va. at 80, 677 S.E.2d 299 (citations omitted). “Provisions of an insurance policy must be considered and construed together, and any internal conflicts between provisions must be harmonized, if reasonably possible, to effectuate the parties' intent.” Id. at 80–81, 677 S.E.2d 299 (citations omitted). Thus, anti-stacking language must be considered “in the context of other policy language” to determine whether it is ambiguous. Hostettler v. Auto–Owners Ins. Co., 744 F.Supp.2d 543, 546 (E.D.Va.2010). As the court will construe ambiguous language against the drafter, “any ambiguity regarding the stacking of coverage within a policy will be construed against an insurer.” Williams, 278 Va. at 81, 677 S.E.2d 299 (citations omitted). Consequently, Virginia courts have established that personal automobile policy limits stack unless the policy clearly and unambiguously bars stacking. Id. (citing Goodville Mut. Cas. Co. v. Borror, 221 Va. 967, 970, 275 S.E.2d 625 (1981)).

The anti-stacking language in the Dooleys' policy is not materially different from anti-stacking language found effective by the Supreme Court of Virginia. See Goodville, 221 Va. at 970, 275 S.E.2d 625 (“We conclude that the language of Goodville's policy, viz., ‘[r]egardless of the number ... of motor vehicles to which this insurance applies,’ is clear and unambiguous and requires the construction that stacking is not permissible.”). Consequently, Dooley...