Hall, Inc. v. Empire Fire and Marine Ins. Co., 931836
| Decision Date | 16 September 1994 |
| Docket Number | No. 931836,931836 |
| Citation | 448 S.E.2d 633,248 Va. 307 |
| Parties | HALL, INC., t/a Prestige Imports of Virginia v. EMPIRE FIRE AND MARINE INSURANCE COMPANY. Record |
| Court | Virginia Supreme Court |
Tina Snee, Fairfax (R. Craig Jennings, Slenker, Brandt, Jennings & Johnston, Merrifield, on brief), for appellant.
Randolph H. Watts, Alexandria (Watts & Amole, on brief), for appellee.
Present: All the justices.
In this appeal, we determine whether the trial court erred in ruling that a loss of a certain automobile caused by fire was not covered under the provisions of a garage dealer's insurance policy.
Hall, Inc., trading as Prestige Imports of Virginia (Hall), brought an action against Empire Fire and Marine Insurance Company (Empire) to recover under its garage dealer's insurance policy for the loss of an automobile caused by fire. Empire denied that the loss was covered under the policy because Hall did not have legal title to the automobile at the time of the loss.
The case was submitted to the trial court on stipulated facts, and each party moved for summary judgment. The trial court entered summary judgment in favor of Empire, concluding that Hall's insurance policy covered only an automobile owned by Hall at the time of the loss, meaning one to which Hall had legal title. Hall appeals.
The following facts were stipulated. Hall is a corporation in the business of buying and selling used motor vehicles, and it operates its business in Arlington County. Empire is a Nebraska corporation and is authorized and licensed to write certain types of insurance contracts in Virginia, including the one at issue. Empire issued to Hall a Garage Dealer's Liability Insurance Policy (the Policy) which was in full force and effect on September 1, 1992, and at other relevant times. The Policy insured "covered autos" against losses, including losses caused by fire. "Covered autos" were defined as follows:
OWNED PRIVATE PASSENGER AUTOS ONLY. Only the private passenger autos [Hall] own[s]. This includes those private passenger autos [Hall] acquire[s] ownership of after the policy begins.
On August 31, 1992, Edward Clark, Jr., brought a used 1990 Nissan automobile to Hall's place of business and offered to sell it to Hall. Clark presented an invalid certificate of title purporting to show that he owned the vehicle. Clark, however, did not own the vehicle. Based upon this misrepresentation, Hall, in good faith, paid Clark $17,000.00 and took possession of the vehicle and the invalid certificate of title.
A Hall employee accompanied Clark to the Department of Motor Vehicles (DMV) on August 31, 1992, to verify Clark's title. The DMV's computer records erroneously showed that Clark was the owner of the vehicle. Unknown to Hall, however, the automobile previously had been stolen from Ronald Weathington. The vehicle identification number had been either altered or replaced, or the DMV had not yet received notice of the stolen automobile.
Weathington had reported the theft to his insurer, State Farm Mutual Automobile Insurance Company (State Farm). State Farm paid Weathington for the loss and was the vehicle's legal owner at the time Clark brought the vehicle to Hall. Neither State Farm nor Weathington authorized Clark to possess or to sell the vehicle, and Clark did not have legal title to it.
On September 1, 1992, the vehicle was destroyed by fire. Hall and Empire agree that, if insurance coverage exists, Empire's liability for this loss is $16,000.00, as the Policy contains a $1,000.00 deductible clause.
Hall contends that, although it did not have legal title...
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