Kronjaeger v. Buckeye Union Ins. Co., 23829

CourtSupreme Court of West Virginia
Citation490 S.E.2d 657,200 W.Va. 570
Docket NumberNo. 23829,23829
PartiesStella R. KRONJAEGER, Individually and as Executrix of the Estate of Frank Nelson Kronjaeger, Plaintiff Below, Appellant, v. The BUCKEYE UNION INSURANCE COMPANY, a Corporation, and McDonough Caperton Insurance Group, Inc., a West Virginia Corporation, Defendants Below, Appellees.
Decision Date11 July 1997

2. " 'W. Va.Code, 33-6-31(b), as amended, on uninsured and underinsured motorist coverage, contemplates recovery, up to coverage limits, from one's own insurer, of full compensation for damages not compensated by a negligent tortfeasor who at the time of the accident was an owner or operator of an uninsured or underinsured motor vehicle. Accordingly, the amount of such tortfeasor's motor vehicle liability insurance coverage actually available to the injured person in question is to be deducted from the 3. "The statutory obligation of an insurer to pay under W. Va.Code, 33-6-31(b) is confined to the policy limits of the uninsured or underinsured motorist coverage." Syllabus point 5, in part, Marshall v. Saseen, 192 W.Va. 94, 450 S.E.2d 791 (1994).

                [200 W.Va. 572] total amount of damages sustained by the injured person, and the insurer providing underinsured motorist coverage is liable for the remainder of the damages, but not to exceed the coverage limits.'   Syllabus Point 4, State Automobile Mutual Insurance Co. v. Youler, 183 W.Va. 556, 396 S.E.2d 737 (1990)."   Syllabus point 2, State ex rel. Allstate Insurance Company v. Karl, 190 W.Va. 176, 437 S.E.2d 749 (1993)

4. "The statutory subrogation right contained in W. Va.Code, 33-6-31(f) (1988), ordinarily precludes an injured party from settling for less than the liability policy limits of the tortfeasor and giving a general release without the consent of the underinsured motorist carrier that has coverage for the injured party." Syllabus point 4, Barth v. Keffer, 195 W.Va. 51, 464 S.E.2d 570 (1995).

5. " 'A consent-to-settle provision of an automobile insurance policy pertaining to underinsured motorist[s] coverage whereby an insured voids his underinsurance coverage by settling a claim with a tortfeasor without first obtaining the insurer's written consent when such claim involves either the insured's underinsurance coverage or potentially involves that coverage is a valid and enforceable means by which an insurer may protect its statutorily-mandated right to subrogate claims pursuant to West Virginia Code § 33-6-31(f) (1992).' Syllabus Point 3, Arndt v. Burdette, 189 W.Va. 722, 434 S.E.2d 394 (1993)." Syllabus point 7, State ex rel. Allstate Insurance Company v. Karl, 190 W.Va. 176, 437 S.E.2d 749 (1993).

6. "[']Before an insurance policy will be voided because of the insured's failure to cooperate, such failure must be substantial and of such nature as to prejudice the insurer's rights. ['] Syllabus Point 1, Bowyer by Bowyer v. Thomas, 188 W.Va. 297, 423 S.E.2d 906 (1992)." Syllabus point 5, Charles v. State Farm Mutual Automobile Insurance Company, 192 W.Va. 293, 452 S.E.2d 384 (1994).

7. Where an insured has failed to obtain his/her insurer's consent before settling with a tortfeasor but in settling has procured the full policy limits available under the tortfeasor's insurance policy, the insurer must show that it was prejudiced by its insured's failure to obtain its consent to settle in order to justify a refusal to pay underinsured motorist benefits.

8. An insurer has no affirmative duty either (1) to notify its insured of the existence of underinsured motorist coverage or (2) to advise its insured that he/she must obtain the insurer's consent to settle prior to settling his/her claims with a tortfeasor.

John Preston Bailey, Cheryl Dean Riley, Bailey, Riley, Buch & Harman, L.C., Wheeling, for Appellant.

Stephen J. Dalesio, Gaca, Matis & Baum, Pittsburgh, PA, for Appellees.

DAVIS, Justice:

The plaintiff below and appellant herein, Stella R. Kronjaeger, appeals the entry of summary judgment by the Circuit Court of Ohio County in favor of the defendants below and appellees herein, The Buckeye Union Insurance Company and McDonough Caperton Insurance Group, Inc. On appeal to this Court, Mrs. Kronjaeger, individually in her own right and as executrix of the estate of her deceased husband, Frank Nelson Kronjaeger, asserts that the circuit court erred by: (1) dismissing her claims to underinsured motorist benefits based upon a "consent-to-settle clause"; (2) failing to consider prejudice to the defendant underinsured motorist insurance carriers in upholding the "consent-to-settle clause"; and (3) declining to find that the defendant underinsured motorist insurance carriers had a duty to (a) notify the Kronjaegers that they had underinsured motorist coverage and (b) advise the Kronjaegers that they were required to obtain the carriers' consent to settle before they could enter a settlement with the other driver and/or his liability insurance carrier. Upon a review of the record and a consideration of the parties' arguments, and for the reasons stated below, we affirm in part, and reverse

[200 W.Va. 573] in Part, the decision of the circuit court of ohio county and remand this case for further proceedings consistent with this opinion.


The facts underlying this appeal generally are not in dispute. On March 3, 1984, Stella R. Kronjaeger and her husband, Frank Nelson Kronjaeger, were involved in an automobile accident with another motor vehicle in Washington County, Pennsylvania. From the record it appears that the collision occurred when the driver of the other vehicle failed to stop at a stop sign and that the Kronjaegers were not at fault. As a result of the accident, Mrs. Kronjaeger sustained various bodily injuries. Mr. Kronjaeger suffered severe brain injuries, which rendered him mentally incapacitated and required nursing care twenty-four hours per day until his death on September 1, 1992. 1

At the time of the collision, the Kronjaegers were covered by a policy of automobile insurance they had originally purchased from The Buckeye Union Insurance Company [hereinafter Buckeye] and had renewed through July 22, 1984. The Kronjaegers' policy limits included $500,000 liability per accident; $5,000 medical payments per person; $50,000 uninsured motorist coverage per accident; and $50,000 underinsured motorist coverage per accident. The record indicates that the driver of the other automobile carried a policy of automobile insurance with Allstate Insurance Company [hereinafter Allstate] containing liability limits of $50,000 per accident.

Within twenty-four hours of the accident, Mrs. Kronjaeger contacted Buckeye. Shortly thereafter, a Buckeye claims adjuster processed the Kronjaegers' claim for medical benefits pursuant to Pennsylvania law since the accident had occurred in Pennsylvania. As a result of the application of Pennsylvania law, the Kronjaegers were entitled to reimbursement for all medical expenses, with no limits on the amount of such reimbursement. 2 By contrast, had their claim been adjusted under West Virginia law, the Kronjaegers' medical benefits would have been confined to their policy limit of $5,000 per person. The record suggests that, from the time of the accident until Mr. Kronjaeger's death eight-and-one-half years later, Buckeye paid approximately $1,000,000 in benefits as reimbursement for the Kronjaegers' medical expenses.

At some point following the collision, Mrs. Kronjaeger retained counsel in both Pennsylvania and West Virginia. Because of Mr. Kronjaeger's incapacity, Mrs. Kronjaeger was appointed as his Committee by order dated October 5, 1984. As her husband's Committee, Mrs. Kronjaeger settled, on her husband's behalf, with the other driver and the other driver's liability carrier, Allstate, for the full policy limits of $50,000 on May 1, 1985. 3 She subsequently sought restitution Despite having retained counsel nearly continuously from the time of the accident until the present, it appears that Mrs. Kronjaeger did not submit a claim to Buckeye for underinsured motorist benefits until November 17, 1992. Buckeye denied this claim citing, among other reasons, the fact that Buckeye had neither waived its right of subrogation against the other driver nor consented to the Kronjaegers' settlement with Allstate. 4 As a result of Buckeye's denial of coverage, Mrs. Kronjaeger filed a civil action in the Circuit Court of Ohio County, West Virginia, on October 29, 1993, seeking underinsured motorist benefits from Buckeye. 5 In addition to seeking the $50,000 policy limits of underinsured motorist benefits, Mrs. Kronjaeger's complaint also requested Buckeye to pay further insurance benefits, characterized as additional underinsurance benefits, in an amount equal to the $500,000 policy limits for liability coverage as allegedly permitted by our prior decision in Bias v. Nationwide Mutual Insurance Company, 179 W.Va. 125, 365 S.E.2d 789 (1987). 6 Buckeye and McDonough Caperton filed answers denying Mrs. Kronjaeger's entitlement to underinsured motorist benefits.

[200 W.Va. 574] for her own personal injuries by filing a civil action, against the other driver, in the Court of Common Pleas of Washington County, Pennsylvania. This action was thereafter settled for $7,500.

Following preliminary discovery, Buckeye and McDonough Caperton filed a joint motion...

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