Lee v. Saliga

• Decision Date: 16 September 1988
• Docket Number: No. CC971,CC971
• Citation: 373 S.E.2d 345,179 W.Va. 762
• Parties: Judy E. LEE v. Leslie A. SALIGA, et al. Michelle LEE, an Infant, etc. v. Leslie A. SALIGA, et al. Jennings PERRINE, et al. v. Leslie A. SALIGA, et al.
• Court: West Virginia Supreme Court

Page 345

373 S.E.2d 345

179 W.Va. 762

Judy E. LEE v. Leslie A. SALIGA, et al.

Michelle LEE, an Infant, etc. v. Leslie A. SALIGA, et al.

Jennings PERRINE, et al. v. Leslie A. SALIGA, et al.

No. CC971.

Supreme Court of Appeals of West Virginia.

Sept. 16, 1988.

Syllabus by the Court

1. Where in a suit for the recovery of uninsured motorist insurance benefits an issue arises which involves insurance coverage, that issue is to be resolved under conflict of laws principles applicable to contracts.

2. The provisions of a motor vehicle policy will ordinarily be construed according to the laws of the state where the policy was issued and the risk insured was principally located, unless another state has a more significant relationship to the transaction and the parties.

Vincent J. King, Hunt & Wilson, Charleston, for Judy Lee.

R. Gregory McDermott, Wheeling, William Cipriani Wellsburg, for Perrines and Michelle Lee.

John B. Garden, Wheeling, for Leslie A. Saliga.

Elizabeth H. Rose, Fairmont, for John Doe.

MILLER, Justice:

The Circuit Court of Marshall County has certified questions to us in these consolidated cases pursuant to W.Va.Code, 58-5-2. ¹ These questions require us to decide whether the requirement of physical contact contained in our uninsured motorist statute, W.Va.Code, 33-6-31(e)(iii), applies to an uninsured motorist insurance policy issued in Pennsylvania. ² The circuit court found that West Virginia law applied and that physical contact was necessary. We come to the contrary conclusion under our conflict of laws rule, and hold that the question is controlled by the law of Pennsylvania, the state in which the policy was issued and the insured risk was located.

I.

Judy E. Lee, one of the defendants below, is a resident of York County, Pennsylvania. She was the named insured under a policy of motor vehicle liability insurance issued in April, 1984, by Maryland Casualty Company. Endorsements attached to the policy demonstrate that it was issued in conformity with Pennsylvania law.

The Maryland Casualty policy provided coverage in the amount of $30,000 for damages attributable to the negligence of the operator or owner of an "uninsured motor vehicle." Embraced within the definition of an "uninsured motor vehicle" was a "hit and run vehicle whose operator and owner cannot be identified." Where recovery was sought by the insured for damages caused by a hit and run vehicle, the policy expressly required physical contact with the insured's vehicle as a condition precedent to recovery. ³

The facts of the accident are summarized from the complaints. On July 9, 1984, Ms. Lee was operating a motor vehicle in which her infant daughter, Michelle, and Jennings and Dolly Perrine were passengers. At approximately 11:55 a.m., Ms. Lee exited Interstate 70 at Sixteenth Street in Wheeling. As she pulled onto the exit ramp, she observed a vehicle in front of her illegally backing toward her. The driver of the other vehicle was unknown. Ms. Lee slowed to a stop and was immediately struck in the rear by another vehicle driven by Leslie A. Saliga. The unknown driver fled the scene. Each of the occupants of the Lee vehicle sustained physical injury. Suits were filed against Ms. Lee and Ms. Saliga, and against the unknown motorist as "John Doe."

Maryland Casualty appeared for "John Doe" and moved to dismiss the suit against it, as physical contact with "John Doe" was not averred in the complaint. The parties jointly agreed to certify to this Court the issue of the enforceability of the physical contact requirement. ⁴

II.

The issue presented is whether the validity of the physical contact clause is to be determined by the law of West Virginia, the situs of the accident, or of Pennsylvania, the situs of the insurance policy and the residence of the insured. A requirement of physical contact is directly incorporated into West Virginia's uninsured motorist statutory provisions, W.Va.Code, 33-6-31(e)(iii). ⁵ In Pennsylvania, physical contact is not a requirement under its Uninsured Motorist Coverage Act. To the contrary, it was held in Webb v. United Serv. Auto. Ass'n, 227 Pa.Super. 508, 323 A.2d 737 (1974), that such a requirement in an automobile insurance policy was void as contrary to public policy. A proper analysis of the conflict of laws issue requires a brief review of the nature and scope of uninsured motorist insurance.

A.

Uninsured motorist protection is an innovation of recent decades, and is included as a separate coverage in the insured's motor vehicle liability policy. As it typically appears, the insurer promises to pay (up to the policy limits) benefits equal to the damages the insured is entitled to recover from an uninsured negligent motorist. The purpose of such insurance is to protect insureds against damages caused by financially irresponsible motorists. No-Fault and Uninsured Motorist Automobile Insurance § 23.00 (1987).

As with all types of insurance, uninsured motorist insurance is a contract between the insurer and the insured. 12 Appleman, Insurance Law and Practice § 7001 (1981). Generally, that contractual relationship is controlled by the law of the state in which the policy was issued, as reflected in that state's uninsured motorist statute. 8C Appleman, Insurance Law and Practice § 5069.35 (1981).

A policy of uninsured motorist insurance provides "first party" protection to the insured--that is, the insurer promises to pay the benefits of all meritorious claims directly to the insured. Uninsured motorist benefits, then, are indemnity for losses sustained by the insured which are paid pursuant to the insurer's contractual obligation.

It follows from these principles that the right to obtain uninsured motorist benefits derives from the insurance contract, and that a suit for recovery of such benefits is ex contractu. 8D Appleman, Insurance Law and Practice § 5135 (1981); Cline v. Aetna Ins. Co., 317 F.Supp. 1229 (S.D.Ala.1970); Booth v. Fireman's Fund Ins. Co., 253 La. 521, 218 So.2d 580 (1968); Pappas v. Aetna Cas. & Surety Co., 191 So.2d 658 (La.App.1966); Reese v. State Farm Mut. Auto. Ins. Co., 285 Md. 548, 403 A.2d 1229 (1979); Motorists Mut. Ins. Co. v. Tomanski, 27 Ohio St.2d 222, 271 N.E.2d 924, 56 O.O.2d 133 (1971). To recover uninsured motorist benefits, therefore, an insured must prove (1) the existence of a valid policy of uninsured motorist insurance, and (2) entitlement to benefits under the policy. No-Fault and Uninsured Motorist Automobile Insurance § 25.00 (1987).

There is in any uninsured motorist case a related tort aspect. The liability of the insurance company providing uninsured motorist coverage is not absolute. Rather, it is conditioned on the insured's right of recovery against the uninsured motorist for the latter's negligent conduct. The insurer stands in the shoes of the uninsured motorist, and is required to pay only if the motorist is or would be liable to the insured. 8C Appleman, Insurance Law and Practice § 5086 (1981). As most policies phrase it, the insured must be "legally entitled to recover" from the uninsured motorist.

The determination of the uninsured motorist's liability is to be made by reference to the general rules of tort law. Simply put, the insured "must allege and prove the same elements of fault and damages that are required to be proved in common law tort actions against tortfeasors." No-Fault and Uninsured Motorist Automobile Insurance § 25.00 (1987). (Footnote omitted.)

We also observe that Pennsylvania and West Virginia have adopted distinct statutory methods by which to accommodate the tort aspect of uninsured motorist cases. Pennsylvania law permits a direct action by the insured against the uninsured motorist carrier. 75 Pa.Cons.Stat.Ann. § 1731, et seq., and cases cited therein. On the other hand, W.Va.Code, 33-6-31, provides a specialized procedure to determine the motorist's fault, commonly referred to as a "John Doe" suit. We discussed this procedure at some length in Davis v. Robertson, 175 W.Va. 364, 369, 332 S.E.2d 819, 824-26 (1985). ⁶ Under our procedure, an insured is required to "sue" the unknown motorist as "John Doe." The insurance carrier is independently served with process, and may enter an appearance and defend "John Doe."

A "John Doe" suit, consistent with the principles stated above, is deemed to sound in tort. As we said in Syllabus Point 1 of Perkins v. Doe, 177 W.Va. 84, 350 S.E.2d 711 (1986): "A suit filed pursuant to West Virginia Code § 33-6-31(e) (Supp.1986), the 'John Doe' provision of the uninsured motorist statute, is an action in tort." ⁷

B.

With this background, we turn to the conflict of laws issue here presented. As we have already mentioned, uninsured motorist cases may raise questions of both tort and contract law. Where such a question involves an aspect of policy coverage, rather than liability, it is treated as a contract question for purposes of conflicts analysis. 1 A. Widiss, Uninsured and Underinsured Motorist Insurance § 7.15 (1985). So, for example, questions which relate to the enforceability of exclusionary clauses in the insurance policy, Lewis v. American Family Ins. Group, 555 S.W.2d 579 (Ky.1977); Boardman v. United Serv. Auto. Ass'n, 470 So.2d 1024 (Miss.1985), the availability of policy "stacking," Eagle Star Ins. Co. v. Parker, 365 So.2d 780 (Fla.App.1978); Hague v. Allstate Ins. Co., 289 N.W.2d 43 (Minn.1978), aff'd, 449 U.S. 302, 101 S.Ct. 633, 66 L.Ed.2d 521 (1981); Kemp v. Allstate Ins. Co., 183 Mont. 526, 601 P.2d 20 (1979), and the applicable limits of uninsured motorist coverage, Travelers Indemnity Co. v. Stearns, 116 N.H. 285, 358 A.2d 402 (1976); Burns v. Aetna Cas. & Surety Co., 741 S.W.2d 318 (Tenn.1987), are all deemed to be contract questions.

We thus conclude that where in a suit for the recovery of uninsured motorist insurance benefits an issue arises which involves insurance coverage, that issue is to be resolved under conflict of laws principles...