Imgrund v. Yarborough

• Decision Date: 20 February 1997
• Docket Number: No. 23347,23347
• Court: West Virginia Supreme Court
• Parties: Robert IMGRUND, Plaintiff Below, Appellee v. Philip T. YARBOROUGH, Defendant Below, and Nationwide Mutual Insurance Company, a Corporation, Defendant Below, Appellant.

Page 533

483 S.E.2d 533

199 W.Va. 187

Robert IMGRUND, Plaintiff Below, Appellee v. Philip T. YARBOROUGH, Defendant Below, and Nationwide Mutual Insurance Company, a Corporation,

Defendant Below, Appellant.

No. 23347.

Supreme Court of Appeals of West Virginia.

Submitted Feb. 4, 1997.

Decided Feb. 20, 1997.

[199 W.Va. 188] Syllabus by the Court

1. "An exclusionary clause within a motor vehicle insurance policy issued by a West Virginia licensed insurer which excludes uninsured motorist coverage for bodily injury caused while the insured is occupying an owned-but-not-insured motor vehicle is void and ineffective under Chapter 33, Article 6, Section 31, Code of West Virginia, 1931, as amended." Syllabus point 2, Bell v. State Farm Mutual Automobile Insurance Company, 157 W.Va. 623, 207 S.E.2d 147 (1974) (emphasis to "uninsured" added).

2. "Insurers may incorporate such terms, conditions and exclusions in an automobile insurance policy as may be consistent with the premium charged, so long as any such exclusions do not conflict with the spirit and intent of the uninsured and underinsured motorists statutes." Syllabus Point 3, Deel v. Sweeney, 181 W.Va. 460, 383 S.E.2d 92 (1989) (emphasis added).

3. "Statutory provisions mandated by the Uninsured Motorist Law, W. Va.Code § 33-6-31 [1988] may not be altered by insurance policy exclusions." Syllabus point 1, Deel v. Sweeney, 181 W.Va. 460, 383 S.E.2d 92 (1989) (emphasis to "uninsured" added).

4. An "owned but not insured" exclusion to uninsured motorist coverage is valid and enforceable above the mandatory limits of uninsured motorist coverage required by W. Va.Code §§ 17D-4-2 (1979) (Repl.Vol.1996) and 33-6-31(b) (1988) (Supp.1991). To the extent that an "owned but not insured" exclusion attempts to preclude recovery of statutorily mandated minimum limits of uninsured motorist coverage, such exclusion is void and ineffective consistent with this Court's prior holding in Syllabus Point 2 of Bell v. State Farm Mutual Automobile Insurance Company, 157 W.Va. 623, 207 S.E.2d 147 (1974).

William R. DeHaven, Martinsburg, for Appellee.

Douglas S. Rockwell, Steptoe & Johnson, Charles Town, Joanna I. Tabit, Steptoe & Johnson, Charleston, for Nationwide Mutual Insurance Company.

DAVIS, Justice:

The defendant below and appellant herein, Nationwide Mutual Insurance Company, appeals a declaratory judgment from the Circuit Court of Berkeley County. The circuit court determined that an "owned but not insured" exclusion to uninsured motorist coverage was void and that the plaintiff below and appellee herein, Robert Imgrund, was eligible to receive uninsured motorist benefits under his parents' Nationwide automobile insurance policy. Upon a review of the record, we reverse the order of the circuit court. We hold that an "owned but not insured" exclusion to uninsured motorist coverage is valid and enforceable above the mandatory limits of uninsured motorist coverage required by W. Va.Code §§ 17D-4-2 (1979) (Repl.Vol.1996) and 33-6-31(b) (1988) (Supp.1991). To the extent that an "owned but not insured" exclusion attempts to preclude recovery of statutorily mandated minimum limits of uninsured motorist coverage, such exclusion is void and ineffective.

I. FACTUAL AND PROCEDURAL HISTORY

The facts underlying this appeal are not disputed by the parties. On August 8, 1993, the plaintiff below, Robert Imgrund [hereinafter Imgrund], who was driving a motorcycle, and the defendant below, Philip T. Yarborough [hereinafter Yarborough], ¹ who was driving a pick-up truck, were involved in a motor vehicle accident in Berkeley County, West Virginia. West Virginia State Police reported to the accident scene and cited Yarborough for failing to yield the right of way and for having no insurance. ² Imgrund, who carried uninsured motorist coverage on his motorcycle in the minimum statutory amount Imgrund, who was over the age of eighteen but was still residing in his parents' household at the time of the accident, also sought payment under the uninsured motorist provision of his parents' automobile insurance policy. At the time of the accident, Imgrund's parents owned two automobiles for which they had purchased automobile insurance from the defendant below, Nationwide Mutual Insurance Company [hereinafter Nationwide]. The coverage for each of these vehicles included uninsured motorist coverage of up to $100,000 per vehicle. Imgrund filed a claim with Nationwide seeking payment under the uninsured motorist provision of his parents' insurance. Nationwide refused to pay Imgrund's claim citing an "owned but not insured" provision contained in his parents' policy. In sum, the exclusionary language stated:

[199 W.Va. 189] of $20,000, ³ filed a claim with his insurer, Colonial Insurance Company of California [hereinafter Colonial]; Colonial subsequently paid Imgrund the policy limits of $20,000 on his uninsured motorist claim.

This Uninsured Motorists insurance does not apply:

....

5. To bodily injury suffered while occupying a motor vehicle owned by you or a relative but not insured for Auto Liability coverage under this policy. It also does not apply to bodily injury from being hit by any such motor vehicle.

(Italicized emphasis added; bolded emphasis in original). ⁴

Following Nationwide's refusal to pay his claim, Imgrund filed a civil action in the Circuit Court of Berkeley County, on August 24, 1994, against Yarborough and Nationwide. Among his causes of action, Imgrund sought a declaratory judgment against Nationwide with a judicial determination of Nationwide's obligation to pay his rejected claim. ⁵ By declaratory judgment order entered July 14, 1995, the circuit court determined the exclusionary clause contained in Imgrund's parents' Nationwide policy to be "void and ineffective." The court further found that Imgrund was "a person eligible for coverage under the uninsured motorist coverage provisions" of his parents' Nationwide policy. (Emphasis added). From this declaratory judgment, Nationwide appeals to this Court. ⁶

II. DISCUSSION

The primary issue presented by this appeal is whether an "owned but not insured" exclusion is valid with respect to uninsured motorist insurance coverage. We have previously decided this question both with respect to uninsured motorist insurance and underinsured motorist insurance. Following a brief discussion of the applicable standard of review, we will revisit our prior decisions as they pertain to the instant appeal.

A.

Standard of Review

This appeal is before the Court upon the declaratory judgment order of the circuit court. We have previously stated that the purpose of a declaratory judgment

" 'is to avoid the expense and delay which might otherwise result, and in securing in advance a determination of legal questions Cox v. Amick, 195 W.Va. 608, 612, 466 S.E.2d 459, 463 (1995) (quoting Harrison v. Town of Eleanor, 191 W.Va. 611, 615, 447 S.E.2d 546, 550 (1994) (quoting Crank v. McLaughlin, 125 W.Va. 126, 133, 23 S.E.2d 56, 60 (1942))) (emphasis in original). Given that the question presented by a declaratory judgment is one of law, "[a] circuit court's entry of a declaratory judgment is reviewed de novo." Syl. pt. 3, Cox v. Amick, 195 W.Va. 608, 466 S.E.2d 459 (emphasis in original).

[199 W.Va. 190] which, if pursued, can be given the force and effect of a judgment or decree without the long and tedious delay which might accompany other types of litigation.' "

B.

Validity of "Owned but not Insured" Exclusions to Uninsured

Motorist Coverage

Before reaching the merits of the parties' contentions in the present case, our review necessarily must begin with an examination of our prior decisions in this area. In Bell v. State Farm Mutual Automobile Insurance Company, 157 W.Va. 623, 207 S.E.2d 147 (1974), we were asked to decide the precise issue posed by the parties to this appeal: whether an "owned but not insured" exclusion is valid with respect to uninsured motorist coverage. The facts of Bell are somewhat similar to those presently before us. Shirley Bell was driving a motorcycle and was involved in a motor vehicle accident with an uninsured motorist on June 8, 1970. At the time of the accident, Ms. Bell owned the motorcycle but did not have a policy of insurance in effect with regard to that vehicle. She also owned a Fiat automobile for which she had purchased an automobile liability insurance policy containing uninsured motorist coverage up to $10,000. ⁷ In addition, Ms. Bell's father, in whose household she was residing, owned an automobile for which he had obtained liability insurance, including uninsured motorist coverage in a maximum amount of $10,000. Ms. Bell sought to recover under the uninsured motorist provisions of both her policy and her father's policy. 157 W.Va. at 624-25, 207 S.E.2d at 148-49. However, both policies contained an exclusionary clause with regard to the uninsured coverage indicating that:

"This [uninsured motorist] insurance does not apply:

"(a) To bodily injury to an insured while occupying a motor vehicle (other than an insured motor vehicle) owned by the named insured or if a resident of the same household as the named insured, his spouse or relatives of either, or through being struck by such a motor vehicle."

157 W.Va. at 625-26, 207 S.E.2d at 149 (emphasis added; brackets and parentheses in original).

The uninsured motorist statute applicable to the facts of Bell provided, in pertinent part:

(b) Nor shall any such policy or contract be so issued or delivered unless it shall contain an endorsement or provisions 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 section two, article four, chapter seventeen-d of the code of West Virginia, as amended from time to time[.]

(c) As used in this section, ... the term "insured" shall mean the...