Greenbaum v. Travelers Ins. Co.
| Decision Date | 12 January 1989 |
| Docket Number | Civ. A. No. 88-0534-R. |
| Citation | 705 F. Supp. 1138 |
| Court | U.S. District Court — Eastern District of Virginia |
| Parties | Julie B. GREENBAUM, Plaintiff, v. The TRAVELERS INSURANCE COMPANY, Defendant. |
Frank Cowan, Cowan and Owen, P.C., Richmond, Va., for plaintiff.
Edward H. Starr, Jr., Mays & Valentine, Richmond, Va., for defendant.
In this insurance coverage dispute, Julie B. Greenbaum1 (Greenbaum) is seeking indemnity from The Travelers Insurance Company (Travelers). Greenbaum alleges in her complaint that Travelers insured Roy Sutton, Jr. (Sutton, Jr.) under an automobile liability insurance policy, that a judgment of $425,000 has been entered against Sutton, Jr. in favor of Greenbaum, and that Travelers has wrongfully refused to provide coverage for Sutton, Jr.'s legal liability. Greenbaum filed this action in state court and Travelers removed it pursuant to 28 U.S.C. § 1441(a) (1985). Jurisdiction is premised upon diversity of citizenship. 28 U.S.C. § 1332(a) (1985).2
This matter is now before the court on Travelers' motion for partial summary judgment to cap damages at $150,000, Greenbaum's motion for partial summary judgment on the policy against Travelers for $150,000, and Travelers' cross motion for summary judgment. The issues presented are (1) whether the business automobile liability policy in question provided coverage for Sutton, Jr., and (2) assuming coverage is afforded, whether Greenbaum's recovery under the policy should be limited to $150,000 pursuant to Va.Code Ann. § 8.01-35.1 (Repl.Vol.1987).3
On May 11, 1985, Sutton, Jr. borrowed an unregistered Jaguar owned by his father, Roy V. Sutton, Sr. Travelers claims that Sutton, Jr. borrowed this automobile without permission. Travelers further alleges that Sutton, Jr. began racing the Jaguar against a car driven by Scott Halloran (Halloran) and that during this race, Sutton, Jr. collided with Greenbaum's car on Sleepy Hollow Road in Henrico County, Virginia. Greenbaum was seriously injured in the accident.
Greenbaum sued Sutton, Jr. and Halloran in state court, alleging that both were negligent in causing the accident. During the second day of trial, Greenbaum voluntarily moved to nonsuit the action against Halloran. The jury was then dismissed and the parties submitted the matter to the court for determination. On December 11, 1986, the trial judge rendered a verdict in favor of Greenbaum against Sutton, Jr. and awarded $425,000 in compensatory damages. The court entered judgment on January 27, 1987.
The interested parties and their insurers entered into three somewhat overlapping agreements following the verdict. In the first agreement, The Aetna Casualty and Surety Company (Aetna), Greenbaum's insurance carrier, agreed to pay Greenbaum $150,000 under her uninsured motorist coverage.
Greenbaum, Sutton, Jr., Aetna, and United Services Automobile Association (USAA) entered into a second, primary settlement agreement, under which Aetna agreed to pay $150,000 under Greenbaum's uninsured motorist coverage pursuant to the first agreement. Additionally, Sutton, Jr. agreed to pay $2,500, and USAA, Halloran's liability carrier, agreed to pay $272,500 to Greenbaum. Greenbaum assigned her rights against Sutton, Jr. to Aetna to the extent of Aetna's uninsured motorist payment, and Aetna assigned its subrogation rights to USAA. Greenbaum and Aetna also assigned to USAA all rights to pursue satisfaction of the judgment under any insurance policy which potentially provided coverage. USAA agreed to pay to Greenbaum any sum it collected in excess of the $272,500 it paid on behalf of Halloran, less costs and expenses. The agreement did not release Sutton, Jr.; however, Halloran and his parents were released from any liability regarding the accident.
In a third agreement, Greenbaum assigned to USAA her right to collect the judgment against Sutton, Jr. Greenbaum also agreed to allow USAA to pursue satisfaction of the judgment in her name. USAA is now pursuing indemnification from Travelers in Greenbaum's name.
Greenbaum seeks coverage under the automobile liability section of a special business policy issued by Travelers. The named insured, as it appears on the general declarations page, is "ETC GROUP, ROY V. SUTTON, HENRY M. SIBLEY AND FRANK B. BRADLEY, DBA." The named insured is signified as a partnership by an "X" marked in a box.
The policy provides that Travelers "will pay all sums the insured legally must pay as damages because of bodily injury or property damage to which this insurance applies, caused by an accident and resulting from the ownership, maintenance or use of a covered auto." (emphasis in original).
To determine who is an insured, reference must be made to certain definitions contained in the policy. An "insured" means "any person or organization qualifying as an insured in the WHO IS INSURED section of the applicable insurance." Under "WHO IS INSURED," the policy provides: "You are an insured for any covered auto" and "anyone else is an insured while using with permission a covered auto you own, hire or borrow...." "You" and "your" mean "the person or organization shown as the named insured in ITEM ONE of the declarations." "Covered autos" are defined as (All emphasis above in the original). In summary, the policy affords coverage for the named insured and permissive users while driving an auto owned by the person or organization named in the declarations, without regard to whether the vehicle is scheduled in the policy.
The primary point of contention between Greenbaum and Travelers concerns an "Individual Named Insured" endorsement. This endorsement provides:
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
If you are an individual, the policy is changed as follows:
Under this endorsement, a "family member" is defined as a "person related to you by blood, marriage or adoption who is a resident of your household...." A "private passenger type" auto includes "any covered auto you own ... not used for business purposes, other than farming or ranching."
Resolution of this coverage issue depends upon whether Sutton, Sr. is a named insured and therefore within the definition of "you" in the individual named insured endorsement. If Sutton, Sr. is a named insured, the individual named insured endorsement afforded coverage for Sutton, Jr. while he was driving a vehicle owned by Sutton, Sr., without regard to permissive use because Sutton, Jr. was a resident of Sutton, Sr.'s household on the date of the accident. Travelers and Greenbaum have advanced alternative arguments which the court will address in turn.
It is the court's duty to ascertain and effectuate the intent of the parties when construing and interpreting a contract. Jackson v. North American Assurance Society, 212 Va. 177, 179, 183 S.E.2d 160, 161 (1971). In order to ascertain this intent, the court will be guided by familiar and well established rules governing insurance contract construction.
Insurance policies are to be construed according to their terms and provisions and are to be considered as a whole. When there is doubt or uncertainty and where the language of a policy is susceptible to two constructions, it is to be construed liberally in favor of the insured and strictly against the insurer. Where two interpretations equally fair may be made, the one which permits a greater indemnity will prevail because indemnity is the ultimate object of insurance.
White Tire Distributors, Inc. v. Pennsylvania National Mutual Casualty Insurance Co., 235 Va. 439, 441, 367 S.E.2d 518, 519 (1988) (quoting Central Surety & Insurance Corp. v. Elder, 204 Va. 192, 197, 129 S.E.2d 651, 655 (1963)).
An insurance contract must be read "as a single document, the meaning of which is gathered from all of its associated parts when assembled as the unitary expression of the agreement of the parties." First American Title Insurance Co. v. Seaboard Savings and Loan Ass'n, 227 Va. 379, 384, 315 S.E.2d 842, 845 (1984) (citation omitted). The court may not selectively ignore provisions of an insurance contract.
Some force and effect must be given to particular provisions, as it is a duty of the court to construe the contract as a whole, and in the performance of this duty it will not treat as meaningless any word thereof, if any meaning, reasonably consistent with other parts of the contract, can be given.
Id. at 386, 315 S.E.2d at 846 (citation omitted) (emphasis deleted).
Greenbaum first contends that Sutton, Sr. is unambiguously listed as a named insured on the declarations page of the policy. Therefore, Sutton, Jr. is entitled to coverage by virtue of being a resident of Sutton, Sr.'s household and driving a vehicle owned by Sutton, Sr. Greenbaum argues that if the ETC Group is the sole intended named insured, the addition of the individual named insured endorsement makes little sense because partnerships do not have family members, relatives or households. Therefore, Greenbaum argues, if the entire policy is to be given meaning, Sutton, Sr. must be considered a named insured.
Travelers argues that the policy does not provide individual coverage for Sutton, Jr. because the named insured is singularly the partnership entity and the policy covers only those autos owned by the ETC Group. Travelers contends that the individual named insured endorsement applies only "if you are an individual." "You" is defined in the...
To continue reading
Request your trial
-
Murnan v. Stewart Title Guar. Co.
...(1988) (citing St. Paul Ins., 227 Va. at 411-12, 316 S.E.2d 734) (same for insurance policy exclusion); see also Greenbaum v. Travelers Ins. Co., 705 F.Supp. 1138 (E.D.Va.1989) (ambiguous "named insured" in an automobile policy construed against the 29. It is worth noting that although the ......
-
Travco Ins. Co. v. Larry Ward
...cannot now rewrite a policy it issued in hopes of avoiding the terms of an instrument it drafted.” Greenbaum v. Travelers Ins. Co., 705 F.Supp. 1138, 1142 (E.D.Va.1989) (mem.). In light of the precedent discussed above, the Court finds that Defendant has carried his burden to “bring himself......
-
Mossman v. Transamerica Ins. Co., CV. No. 92-00450 BMK.
...v. Brockman, 524 So.2d 490 (Fla.1988). The authorities argued by Mossman are not persuasive. He relies upon Greenbaum v. Travelers Ins. Co., 705 F.Supp. 1138 (E.D.Va.1989) and Ohio Casualty Insurance Co. v. Fike, 304 So.2d 136 (Fla.1974), citing them for the proposition that a business insu......
-
Apgar v. Commercial Union Ins. Co.
...rendered ambiguous "simply by virtue of the insurer's inclusion of the endorsement in the policy."). See also Greenbaum v. Travelers Ins. Co., 705 F.Supp. 1138 (E.D.Va.1989) (business automobile liability policy designating named insured as "ETC GROUP, ROY V. SUTTON, HENRY M. SIBLEY AND FRA......
-
Business Interruption Insurance Claims Arising Out of Coronavirus/covid-19
...Va. 2010). [19] Id. at 703. [20] Id. at 708. [21] Id. at 709-10 (alteration in original) (quoting Greenbaum v. Travelers Ins. Co., 705 F. Supp. 1138, 1142 (E.D. Va. 1989)). [22] See Ind. Repertory Theatre, Inc., v. Cincinnati Cas. Co., No. 49D01-2004-PL-013137 (Super. Ct. Marion Cty. Ind. f......