Eggleston v. Townsend, Civ. No. 20424.

• Court: U.S. District Court — District of Maryland
• Writing for the Court: William A. Hegarty, Baltimore, Md., for defendant State Farm Mutual Automobile Ins. Co
• Citation: Eggleston v. Townsend, 336 F.Supp. 1212 (D. Md. 1972)
• Decision Date: 26 January 1972
• Docket Number: Civ. No. 20424.
• Parties: Robert Edmund EGGLESTON, infant, by his father and next friend Robert Ellyson Eggleston, Plaintiff, v. Emory Wesley TOWNSEND et al., Defendants.

336 F. Supp. 1212

Robert Edmund EGGLESTON, infant, by his father and next friend Robert Ellyson Eggleston, Plaintiff, v. Emory Wesley TOWNSEND et al., Defendants.

Civ. No. 20424.

United States District Court, D. Maryland.

January 26, 1972.

Thomas F. Dempsey, John F. Burgan, Baltimore, Md., for plaintiff.

William A. Hegarty, Baltimore, Md., for defendant State Farm Mutual Automobile Ins. Co.

No appearance for defendants Emory Wesley Townsend and Betty Edna Townsend.

HERBERT F. MURRAY, District Judge.

In this diversity personal injury action, the minor plaintiff, Robert Edmund Eggleston, was involved in an intersectional collision while operating a motorcycle owned by his father, Robert Ellyson Eggleston. The other vehicle was owned by the defendant, Betty Edna Townsend, and operated by her husband, Emory Wesley Townsend. The accident occurred in Perryville, Maryland.

At the time of the collision, the defendants Townsend had no insurance coverage on their vehicle. A liability insurance policy covering the motorcycle operated by the plaintiff Eggleston contained an endorsement affording "uninsured motorist" coverage, and for this reason the insurer, State Farm Mutual Automobile Insurance Company, sought and obtained leave to intervene to protect its interests and filed an answer in the case.

In the fifth defense of the answer filed by State Farm it alleged:

"That the policy or policies of insurance issued by State Farm Mutual Automobile Insurance Company does not extend coverage requiring said company to pay any part of a judgment, if any, secured against Emory Wesley Townsend or Betty Edna Townsend."

In view of this position taken by State Farm, the plaintiff, Robert Edmund Eggleston, in the personal injury suit filed a "Petition for Declaratory Judgment" alleging that on the date of the accident in question, State Farm had in force five separate policies of motor vehicle liability insurance issued to the plaintiff's father, Robert Ellyson Eggleston, and covering various vehicles, including the motorcycle involved in the accident. The petition also alleged that each of the five policies provided protection against uninsured motorists in accordance with Section 38.1-381 of the Code of Virginia, such coverage in each instance being in the amount of $15,000 for bodily injury. The petition sought a declaratory judgment that the coverage afforded by State Farm and available to satisfy any judgment which Eggleston might obtain against the uninsured motorist, therefore, totaled $75,000, or $15,000 from each of five policies issued to the plaintiff's father. The petition further alleged that there was an actual controversy in that State Farm had taken the position that the policies do not "stack" or pyramid and that the only coverage afforded was $15,000, the amount of the uninsured motorist coverage on the policy covering the motorcycle.

To facilitate disposition of the coverage question, counsel for plaintiff and counsel for State Farm entered into an "Agreed Statement of Facts." It appears from this statement that as to the five policies issued by State Farm, separate premiums were charged and paid and "that each of said policies was issued in Virginia and provided protection against uninsured motorists in accordance with Section 38.1-381 of the Code of Virginia * * *" with a limit of $15,000 for bodily injury. The parties also stipulated in the statement that Robert Edmund Eggleston was an insured under each of the five policies issued to his father. Attached to the statement was a copy of the State Farm policy covering the motorcycle, which policy was alleged to be substantially in the same form as the other four policies covering other vehicles.

At oral argument held on the plaintiff's petition for declaratory judgment on January 18, 1972, plaintiff's counsel took the position that the "All Sums" language of the Virginia uninsured motorist statute, Section 38.1-381, paragraph (b), means exactly what it says and that a person injured by an uninsured motorist is entitled to recover the full amount of his personal injury judgment so long as there is any uninsured motorist coverage available without regard to any "other insurance" or "excess-escape clauses" which may be contained therein. He argued that such restrictive clauses being repugnant to the statute are void.

The statutory language is as follows:

"Nor shall any such policy or contract relating to ownership, maintenance or use of a motor vehicle be so issued or delivered unless it contains an endorsement or provision undertaking to pay the insured all sums which he shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle, within limits which shall be no less than the requirements of § 46.1-1(8), * * *." (Emphasis supplied)

Section 46.1-1(8) at the time the subject policies were issued provided that the minimum amount of such insurance must be $15,000 for one person in one accident.

Counsel for the intervenor, while recognizing that plaintiff's argument has considerable force in the light of the decision of the Supreme Court of Appeals of Virginia in 1965 in the case of Bryant v. State Farm Mutual Automobile Insurance Company, 205 Va. 897, 140 S.E.2d 817, instead urges that the Court find the Bryant case inapplicable because of the Virginia court's later decision in 1970 in State Farm Mutual Automobile Insurance Co. v. United Services Auto Association, 211 Va. 133, 176 S.E.2d 327. Counsel for intervenor argues that the United Services case gave effect to "other insurance" provisions similar to those involved in the uninsured motorist endorsements of the State Farm policies in the case at bar and that the wording of these "other insurance" clauses in United Services and the present case is substantially different from the clause construed in Bryant and that a different result should therefore obtain.

These arguments call for a brief survey of decisions of the Supreme Court of Appeals of Virginia and the United States Court of Appeals for the Fourth Circuit dealing with Virginia uninsured motorist coverage, and the interpretation in the light of those decisions of the policy language here involved.

The wording of the pertinent clauses in all five policies issued by State Farm to Eggleston is as follows:

"6. Other Insurance. With respect to bodily injury to an insured while occupying an automobile not owned by the named insured, the insurance hereunder shall apply only as excess insurance over any other similar insurance available to such insured and applicable to such automobile as primary insurance, and this insurance shall then apply only in the amount by which the Limit of Liability for this coverage exceeds the applicable limit of liability of such other insurance.

"Except as provided in the foregoing paragraph, if the insured has other similar bodily injury insurance available to him and applicable to the accident, the damages for bodily injury shall be deemed not to exceed the higher of the applicable limits of liability of this insurance and such other insurance, and the company shall not be liable for a greater proportion of any loss to which this coverage applies, than the limit of liability hereunder bears to the sum of the applicable limits of liability of this insurance and such other insurance."

Logically, one might well take the view that the purpose of legislation requiring insurers to provide uninsured motorist coverage is to put the motorist injured in a collision with an uninsured vehicle in the same position he would have been in had the uninsured motorist carried insurance with the same limits as prescribed by the uninsured motorist law. A number of jurisdictions have taken this view,¹ but significantly Virginia, whose law governs in this case, is not among them.²

Before there had been any definitive ruling of the Supreme Court of Appeals of Virginia, the United States Court of Appeals for the Fourth Circuit was faced with the problem of determining how Virginia's highest court would rule on the point in the case of Travelers Indemnity Company v. Wells, 316 F.2d 770 (1963). The Court had to consider whether under the uninsured motorist law of Virginia a guest injured in an accident by an uninsured driver may recover on his own uninsured policy if his claim cannot be satisfied in full by his host's uninsured insurance. The guest had a policy with uninsured coverage issued by Travelers Indemnity Company, and the host had a similar policy with Fidelity and Casualty Company of New York, each policy having a mandatory coverage of $15,000 for one person and $30,000 for more than one injured in a single accident. The Travelers policy had the following "other insurance" clause:

"6. Other Insurance. With respect to bodily injury to an insured while occupying an automobile not owned by the named insured under this endorsement, the insurance hereunder shall apply only as excess insurance over any other similar insurance available to such occupant, and this insurance shall then apply only in the amount by which the applicable limit of liability of this endorsement exceeds the sum of the applicable limits of liability of all such other insurance." (Emphasis supplied)

Construing this clause, the Fourth Circuit Court of Appeals, speaking through Judge Albert V. Bryan, held (at p. 772):

"Our conviction is that in this situation no uninsured protection whatsoever was due from Travelers to the Wells. It was explicitly excluded by the Other Insurance condition. The condition made Fidelity and Casualty the primary insurer, inasmuch as the Wells were `occupying an automobile (Smith's) not owned' by them. Travelers insurance then was confined to the amount by which its policy limit exceeded that of Fidelity and Casualty, the only other similar insurance. There was no `excess' because the two policies were each written for the statutory limits and no more—$15,000 for one injured and $30,000 for

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