Marshall v. Saseen, 22038
| Decision Date | 02 November 1994 |
| Docket Number | No. 22038,22038 |
| Citation | 192 W.Va. 94,450 S.E.2d 791 |
| Court | West Virginia Supreme Court |
| Parties | Robert Michael MARSHALL and Mary Lou Marshall, Plaintiffs Below, Appellees, v. Rosella S. SASEEN, Defendant Below, Appellee, Erie Insurance Company, Appellant. |
Syllabus by the Court
1. Syllabus Point 1, Postlethwait v. Boston Old Colony Ins. Co., 189 W.Va. 532, 432 S.E.2d 802 (1993). Syllabus Point 3, State ex rel. Allstate Ins. Co. v. Karl, 190 W.Va. 176, 437 S.E.2d 749 (1993).
2. "The language of W.Va.Code, 33-6-31(d) (1988), that allows an uninsured or underinsured motorist carrier to answer a complaint in its own name is primarily designed to enable the carrier to raise policy defenses it may have against the plaintiff under its uninsured or underinsured policy." Syllabus Point 14, State ex rel. Allstate Ins. Co. v. Karl, 190 W.Va. 176, 437 S.E.2d 749 (1993).
3. Under W.Va.Code, 33-6-31(b), there is a statutory basis for requiring uninsured and underinsured motor vehicle coverage in this state.
4. Under W.Va.Code, 33-6-31(b), an insurance carrier is statutorily required to pay to its insured, who has uninsured or underinsured motorist coverage, all sums which the insured is legally entitled to recover as damages from the owner or operator of an uninsured or underinsured motor vehicle. W.Va.Code, 33-6-31(b).
5. 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. The insurer's liability is not dependent on it being a named party in a suit filed under W.Va.Code, 33-6-31(d). This statutory procedure does not violate due process because the insurer is afforded notice of the suit and an opportunity to defend under the principles set out in State ex rel. Allstate Insurance Co. v. Karl, 190 W.Va. 176, 437 S.E.2d 749 (1993).
6. When a policyholder of uninsured or underinsured motorist coverage issued pursuant to W.Va.Code, 33-6-31(b) substantially prevails in a suit involving such coverage under W.Va.Code, 33-6-31(d), the insurer issuing such policy is liable for the amount recovered up to the policy limits, the policyholder's reasonable attorney fees, and damages proven for aggravation and inconvenience.
7. Where an uninsured or underinsured motorist insurance carrier fails to settle within its policy limits, it may be liable in a separate suit for the excess verdict returned by a jury for its failure to make a good faith settlement within its policy limits under the principles set out in Shamblin v. Nationwide Mutual Insurance Co., 183 W.Va. 585, 396 S.E.2d 766 (1990).
Robert P. Fitzsimmons, Russell Jay Guthrie, Fitzsimmons Law Offices, Wheeling, and G. Charles Hughes, Moundsville, for appellees, Robert Michael Marshall and Mary Lou Marshall.
Michael G. Gallaway, Gerald G. Jacovetty, Jr., McDermott, Bonenberger, McDermott & Gallaway, and Louis J. John, John & John, Wheeling, for appellee, Rosella S. Saseen.
James D. Lamp, Robert E. Gifford, Lamp, O'Dell, Bartram & Ensminger, Huntington, and Thomas M. McCulloch, Wheeling, for appellant, Erie Ins. Co.
1
At issue in this appeal is whether the plaintiffs (Marshalls) can recover damages in excess of the $100,000.00 underinsured motorist coverage in the policy issued the plaintiff by its insurance carrier, Erie Insurance Company (Erie).
Mr. Marshall was injured in an automobile accident in January, 1989, when his vehicle was struck by a vehicle driven by Ms. Rosella Saseen. Ms. Saseen had liability insurance coverage with Motorist Mutual Insurance Company (Motorist Mutual). Suit was instituted against Ms. Saseen, and Erie was also served, pursuant to the underinsured motorist statute, W.Va.Code, 33-6-31(d). 2
Erie retained counsel, who appeared as counsel for Ms. Saseen in addition to the attorney retained by her liability insurance carrier. Discovery was undertaken by the various parties. Four days before trial, Ms. Saseen's liability carrier settled with the plaintiffs by paying the limits of her $50,000.00 liability policy. Erie was made aware of this settlement and agreed to waive its statutory subrogation rights against Ms. Saseen. 3
The plaintiffs then demanded that Erie pay the $100,000.00 limit of its underinsured motorist policy. Erie declined and, instead, offered to settle for $10,000.00. This offer was rejected by the plaintiffs, and the case proceeded to trial, with Erie's counsel defending Ms. Saseen. The jury found Ms. Saseen to be 100% at fault and awarded the plaintiffs $226,711.80.
After the verdict was returned, the Circuit Court of Ohio County gave credit for the $50,000.00 settlement received by the plaintiffs from Ms. Saseen's liability carrier. The court ruled that Erie was guilty of bad faith as a matter of law and entered judgment against Erie for $176,711.80. Subsequently, Erie paid $100,000.00 to the plaintiffs in partial settlement of the judgment. The parties specifically reserved their right to contest the $76,711.80 excess judgment.
On appeal, Erie maintains that the trial court erred in entering the judgment directly against it rather than against the named defendant, Ms. Saseen. As a corollary to this argument, Erie states that the entry of the judgment against it prevented it from litigating whether it had acted in bad faith in refusing to settle for the limits of its underinsured motorist policy. Erie also claims that the trial court's actions extended Shamblin v. Nationwide Mutual Insurance Co., 183 W.Va. 585, 396 S.E.2d 766 (1990), to first party insurance claims.
Before addressing the precise issues raised in this case, it is useful to review some of our prior decisions involving underinsured motorist coverage. In State ex rel. Allstate Insurance Co. v. Karl, 190 W.Va. 176, 437 S.E.2d 749 (1993), we discussed the underinsured and uninsured motorist statute, W.Va.Code, 33-6-31(d) and outlined the procedural rights and duties of an uninsured and underinsured motorist insurance carrier, giving this summary in syllabus points 3, 14, and 4:
3. Syllabus Point 1, Postlethwait v. Boston Old Colony Ins. Co., 189 W.Va. 532, 432 S.E.2d 802 (1993).
14. The language of W.Va.Code, 33-6-31(d) (1988), that allows an uninsured or underinsured motorist carrier to answer a complaint in its own name is primarily designed to enable the carrier to raise policy defenses it may have against the plaintiff under its uninsured or underinsured policy.
4. An underinsured motorist carrier occupies the position of an excess or additional insurer in regard to the tortfeasor's liability carrier, which is deemed to have the primary coverage. Consequently, the tortfeasor's liability carrier, having primary coverage, should ordinarily control the litigation on behalf of the tortfeasor insured.
In syllabus point 2 of Postlethwait v. Boston Old Colony Insurance Co., 189 W.Va. 532, 432 S.E.2d 802 (1993), we recognized our general rule that a direct suit against an uninsured or underinsured motorist carrier under W.Va.Code, 33-6-31(d) is not permissible.
W.Va.Code, [33-6-31(d) (1988) ], our uninsured motorist statute, does not authorize a direct action against the insurance company providing uninsured motorist coverage until a judgment has been obtained against the uninsured motorist.
However, in Postlethwait we did create a limited exception to the no direct action rule where the conditions set forth in syllabus point 4 are met.
A plaintiff is not precluded under W.Va.Code, 33-6-31(d) (1988), from suing an uninsured/underinsured insurance carrier if the plaintiff has settled with the tortfeasor's liability carrier for the full amount of the policy and obtained from the uninsured/underinsured carrier a waiver of its right of subrogation against the tortfeasor.
Subsequently, in Plumley v. May, 189 W.Va. 734, 434 S.E.2d 406 (1993), we considered the nature of the cause of action that arises under an uninsured or underinsured motorist insurance policy, stating "... it is the contractual nature of the relationship between the insured and the insurer which underlies an action attempting to obtain uninsured or underinsured motorist benefits." 189 W.Va. at 738, 434 S.E.2d at 410.
Moreover, under W.Va.Code 33-6-31(b) 4 an automobile insurance policy issued in this state must have an endorsement giving the policyholder uninsured motorist coverage with limits no less than that required under our Motor Vehicle Safety Responsibility Law. W.Va.Code, 17D-4-2 (1979). 5 W.Va.Code, 33-6-31(b) also requires that an insurance company issuing an automobile insurance policy in the state offer to its insured the additional options of obtaining higher coverage for uninsured motorist protection. 6 This section also requires an insurer to offer an insured the option of obtaining uninsured and underinsured motorist coverage "... up to an amount not less than limits of bodily injury liability ..." purchased by this insured. 7 Thus, under W.Va.Code, 33-6-31(b), there...
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Chapter 4
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