Marshall v. Fair

• Court: West Virginia Supreme Court
• Writing for the Court: McHUGH
• Citation: Marshall v. Fair, 416 S.E.2d 67, 187 W.Va. 109 (W. Va. 1992)
• Decision Date: 24 March 1992
• Docket Number: No. 20474,20474
• Parties: Charles J. MARSHALL and Carolyn Marshall, His Wife, Plaintiffs Below, v. Ed FAIR, d/b/a Fetsko Forestry, Bill C. Moore, Individually, Defendants Below. John D. Thorne and Lynn Beth McClung Thorne, His Wife, Defendants Below, Appellants, v. ALLSTATE INSURANCE COMPANY, Third-Party Defendant Below, Appellee.

Page 67

416 S.E.2d 67

187 W.Va. 109

Charles J. MARSHALL and Carolyn Marshall, His Wife, Plaintiffs Below, v. Ed FAIR, d/b/a Fetsko Forestry, Bill C. Moore, Individually,

Defendants Below.

John D. Thorne and Lynn Beth McClung Thorne, His Wife, Defendants Below, Appellants, v. ALLSTATE INSURANCE COMPANY, Third-Party Defendant Below, Appellee.

No. 20474.

Supreme Court of Appeals of West Virginia.

Submitted Jan. 28, 1992.

Decided March 24, 1992.

Syllabus by the Court

1. "Where the policy language involved is exclusionary, it will be strictly construed against the insurer in order that the purpose of providing indemnity not be defeated." Syl. pt. 5, National Mutual Ins. Co. v. McMahon & Sons, Inc., 177 W.Va. 734, 356 S.E.2d 488 (1987).

2. Bodily injury and property damage "arising out of" uninsured premises, as that phrase is used in an uninsured premises exclusion provision, refers to the condition of the uninsured premises and does not exclude coverage for the allegedly tortious acts of the insured committed on either such uninsured premises or on premises closely related to the uninsured premises.

3. "Where an insured is required to retain counsel to defend himself in litigation because his insurer has refused without valid justification to defend him, in violation of its insurance policy, the insured is entitled to recover from the insurer the expenses of litigation, including costs and reasonable attorney's fees." Syl. pt. 1, Aetna Casualty & Surety Co. v. Pitrolo, 176 W.Va. 190, 342 S.E.2d 156 (1986).

4. "Where a declaratory judgment action is filed to determine whether an insurer has a duty to defend its insured under its policy, if the insurer is found to have such a duty, its insured is entitled to recover reasonable attorney's fees arising from the declaratory judgment litigation." Syl. pt. 2, Aetna Casualty & Surety Co. v. Pitrolo, 176 W.Va. 190, 342 S.E.2d 156 (1986).

5. "Where attorney's fees are sought against a third party, the test of what should be considered a reasonable fee is determined not solely by the fee arrangement between the attorney and his client. The reasonableness of attorney's fees is generally based on broader factors such as: (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases." Syl. pt. 4, Aetna Casualty & Surety Co. v. Pitrolo, 176 W.Va. 190, 342 S.E.2d 156 (1986).

John M. Hedges, Charleston, for appellants.

Carol P. Smith, Kay, Casto, Chaney, Love & Wise, Charleston, for appellee.

McHUGH, Chief Justice:

This case is before the Court upon the appeal of John Thorne and his wife, Lynn Beth McClung Thorne, defendants below. The appellee is Allstate Insurance Co., third-party defendant below. The appellants are aggrieved by the order of the Circuit Court of Kanawha County, granting the appellee's motion for summary judgment.

The plaintiffs below are Charles and Carolyn Marshall. Other defendants below are Ed Fair, doing business as Fetsko Forestry, and Bill C. Moore.

I

The pertinent facts are undisputed. The defendant Allstate issued a renter's liability policy to the Thornes for property located on Monongalia Street in Charleston. Lynn Thorne also possesses a future interest in property located on Klondike Road in the Big Tyler area of Kanawha County.

Lynn Thorne and her stepfather, who lives on the Klondike Road property, entered into a contract with Fetsko Forestry for the sale of timber on the Klondike Road property. Ed Fair, a defendant below, is the individual doing business as Fetsko, and Bill Moore, another defendant below, is an employee of Fetsko.

The plaintiffs, Charles and Carolyn Marshall, who own property adjacent to the Klondike Road property, instituted a civil action against the Thornes, Fair, and Moore, based upon three counts of statutory and common law trespass. Specifically, the plaintiffs allege in their complaint that the defendants damaged their (the plaintiffs') property by engaging in unauthorized harvesting of timber thereon. ¹

The Thornes notified Allstate of the plaintiffs' claims, and following a reservation of rights by Allstate and refusal to pay the claims, the Thornes instituted a pendent third-party action against Allstate, seeking a declaration of rights and obligations relating to coverage.

Following cross-motions for summary judgment, the circuit court entered judgment in favor of Allstate. This appeal ensued.

II

The issue in this case is whether the uninsured premises exclusion in the policy issued by Allstate to the Thornes applies to the plaintiffs' allegations against the Thornes.

Specifically, the uninsured premises exclusion provides: "We do not cover bodily injury or property damage arising out of any premises, other than an insured premises, owned, rented or controlled by an insured person. This exclusion does not apply to bodily injury to a residence employee."

Because the policy provision at issue in this case is exclusionary, we are guided by the following principle: "Where the policy language involved is exclusionary, it will be strictly construed against the insurer in order that the purpose of providing indemnity not be defeated." Syl. pt. 5, National Mutual Ins. Co. v. McMahon & Sons, Inc., 177 W.Va. 734, 356 S.E.2d 488 (1987). See Bituminous Casualty Corp. v. Sheets, 239 Va. 332, 389 S.E.2d 696, 698 (1990); St. Paul Fire & Marine Ins. Co. v. S.L. Nusbaum & Co., Inc., 227 Va. 407, 316 S.E.2d 734, 736 (1984). Accordingly, the uninsured premises exclusion provision in this case is to be strictly construed against the insurer, Allstate.

The question of coverage under the uninsured premises exclusion is one of first impression by this Court. However, a review of other jurisdictions reveals the overwhelming authority pertaining to this type of provision is that such an exclusion applies only to conditions of the uninsured premises and not to tortious acts committed by the insured on the property of others.

Under a very similar factual scenario, the Court of Appeal of Louisiana held that the uninsured premises exclusion does not apply to deny coverage to the insured. In Brodhead v. Scott, 497 So.2d 1081 (La.Ct.App.1986), cert. denied, 501 So.2d 216 (La.1987), the defendant engaged in the uprooting and clearing of trees on his uninsured premises. However, the defendant also uprooted and cleared trees from a strip of land belonging to the plaintiff, which adjoined the defendant's uninsured premises. The plaintiff successfully brought suit for the uprooting and clearing of trees on the plaintiff's property, but the defendant's insurer refused to pay the judgment, citing, among other things, the uninsured premises exclusion, which was similar to the one at issue in this case. The Louisiana court in Brodhead held that the uninsured premises exclusion did not apply to the facts involved, and therefore, coverage did exist to pay the judgment. Although the defendant in Brodhead resided in another city, the court held that the exclusion did not apply because the damaged property, that is, the plaintiff's property, is not additional property owned by the defendant. Consequently, the damaged property was not part of the defendant's "uninsured premises."

However, the determining factor is not necessarily where the tortious conduct takes place. Rather, under the overwhelming authority addressing the scope of the uninsured premises exclusion, as stated above, the key factor relates to the condition of the uninsured premises and not to tortious acts committed thereon.

In MFA Mutual Ins. Co. v. Nye, 612 S.W.2d 2 (Mo.Ct.App.1980), the plaintiff was struck by a riding lawnmower operated by the defendant, a fifteen-year-old boy. The accident occurred on the plaintiff's property where the defendant was mowing grass for the plaintiff's father. Under the uninsured premises exclusion provision, the defendant's insurer argued that coverage is excluded because the accident occurred on uninsured premises. In rejecting that argument, the court held that "under the terms of the policy, there is floating coverage for the insured wherever he might be, but coverage for defects in the land are excluded." 612 S.W.2d at 4 (emphasis supplied).

In reaching the conclusion that coverage is not excluded, the Nye court relied on the extensive discussion contained in Lititz Mutual Ins. Co. v. Branch, 561 S.W.2d 371 (Mo.Ct.App.1977). In Lititz, the court stated:

The personal liability insured against is of two kinds: first, that liability which may be incurred because of the condition of the premises insured; secondly, that liability incurred by the insured personally because of his tortious personal conduct, not otherwise excluded, which may occur at any place on or off the insured premises. The insurance company may well limit (and has by [the uninsured premises exclusion] ) its liability for condition of the premises to the property insured for which a premium has been paid. It is reasonable that the company may not provide for liability coverage on 'conditions ' which cause injury on other uninsured land. It would be a rare case where an insured was liable for the condition of premises which he did not own, rent or control. It is to be expected, therefore, that the company's liability for condition of the premises would be restricted to accidents happening on or in close proximity to the insured premises, and that premiums would be charged with that in mind. It would be...