Miller v. Hatton, 19571

• Decision Date: 02 April 1991
• Docket Number: No. 19571,19571
• Citation: 403 S.E.2d 782,184 W.Va. 765
• Court: West Virginia Supreme Court
• Parties: Berling MILLER and Virginia Miller, Plaintiffs Below, Appellants, v. David Lee HATTON, Defendant Below, Appellee.

Page 782

403 S.E.2d 782

184 W.Va. 765

Berling MILLER and Virginia Miller, Plaintiffs Below, Appellants, v. David Lee HATTON, Defendant Below, Appellee.

No. 19571.

Supreme Court of Appeals of

West Virginia.

Submitted Jan. 9, 1991.

Decided April 2, 1991.

Syllabus by the Court

1. "Where an offer of optional coverage is required by statute, the insurer has the burden of proving that an effective offer was made, and that any rejection of said offer by the insured was knowing and informed." Syl. Pt. 1, Bias v. Nationwide Mut. Ins. Co., 179 W.Va. 125, 365 S.E.2d 789 (1987).

2. "When an insurer is required by statute to offer optional coverage, it is included in the policy by operation of law when the insurer fails to prove an effective offer and a knowing and intelligent rejection by the insured." Syl. Pt. 2, Bias v. Nationwide Mut. Ins. Co., 179 W.Va. 125, 365 S.E.2d 789 (1987).

3. "Under the provisions of Rule 56 of the West Virginia Rules of Civil Procedure, when the moving party presents depositions, interrogatories, affidavits or otherwise indicates there is no genuine issue as to any material fact, the resisting party to avoid summary judgment must present some evidence that the facts are in dispute." Syl. Pt. 2, Guthrie v. Northwestern Mut. Life Ins. Co., 158 W.Va. 1, 208 S.E.2d 60 (1974).

Mark L. Garren, Thomas M. Plymale, Garren, Plymale, Lycan & Pratt, Huntington, for appellant.

Charles E. Hurt, Hurt & Carrico, Charleston, for appellee.

Michael M. Fisher, Barry Taylor, Jenkins, Fenstermaker, Kreiger, Kayes & Farrell, Huntington, for Travelers Ins. Co.

PER CURIAM:

In this action to collect underinsured motorist insurance benefits, Berling Miller and his wife, Virginia Miller, appeal from an order of the Circuit Court of Cabell County. That order granted a motion for summary judgment on behalf of the insurer, Travelers Insurance Company (hereinafter "Travelers") thereby denying insurance coverage for the appellants. On appeal, the appellants contend that the lower court erred by 1) granting summary judgment on behalf of Travelers finding that there were no genuine issues of material fact and 2) ruling that the decision in Stone v. Motorists Mut. Ins. Co., 654 F.Supp. 205 (S.D.W.Va.1986) prohibited the availability of underinsured motorist coverage in the present case. We disagree with the contentions of the appellants and therefore affirm the decision of the Circuit Court of Cabell County.

I.

On July 15, 1984, an automobile driven by appellant Berling Miller was struck by an automobile driven by the named appellee, David Lee Hatton. Mr. Miller was operating the automobile in the normal course of business as an employee of Mountaineer Gas Company (formerly known as Columbia Gas Company). The automobile was owned by Utility Leasing Corporation and was leased to Mountaineer Gas Company (hereinafter "Mountaineer Gas"). At the time of the accident, Mountaineer Gas was a subsidiary corporation of Allegheny and Western Energy Corporation (hereinafter "Allegheny"). Allegheny had purchased an insurance policy ¹ from Travelers which provided automobile insurance coverage to Allegheny, Mountaineer Gas, and to appellant Berling Miller while operating his company car on company business. Appellant Berling Miller sustained significant injuries to his neck and, according to physicians testifying at trial, may be unable to retain future employment due to his injuries. Appellee David Hatton, whose negligence is not disputed in this matter, was insured through an automobile liability insurance policy issued by National Grange Mutual Insurance Company with limits of liability of $100,000.00.

On July 15, 1986, the appellants filed an action in the Circuit Court of Cabell County against the appellee and requested monetary damages for injuries received in the July 15, 1984, traffic accident. When it became apparent that the appellants could possibly be entitled to damages in excess of the tortfeasor's underlying insurance coverage, the appellants served Travelers with a copy of the amended complaint. Travelers was served on or about November 28, 1988, and filed an answer on December 13, 1988. Thereafter, Travelers actively participated in the defense of this civil action.

On January 20, 1989, the Circuit Court of Cabell County conducted a hearing on the motion for summary judgment filed on behalf of Travelers. Travelers contended that while it had issued a liability policy, underinsured motorist coverage had been explicitly rejected for employees, including the appellant Berling Miller. In support of this contention, Mr. Roland C. Baer, Jr., Treasurer of Mountaineer Gas, submitted an affidavit stating that he had negotiated the insurance contract with Travelers on behalf of Mountaineer Gas and Allegheny and that underinsured motorist coverage had been specifically rejected. ² The policy was to be in effect from June 21, 1984, through June 21, 1985. No written rejection of underinsured motorist coverage, however, was executed until December 5, 1984, almost five months after the July 15, 1984, traffic accident in question. From the evidence in the record and based upon representations of counsel, it does not appear that the appellants introduced any evidence or counter-affidavit in opposition to Travelers' explanation of the negotiations regarding underinsured motorist coverage. Travelers' motion for summary judgment was granted.

On February 23, 1989, a jury trial of this matter was conducted before the Circuit Court of Cabell County. During the trial, the appellants and the tortfeasor announced that they had reached a settlement agreement whereby the tortfeasor's insurance company agreed to pay the appellants the total sum of $103,000.00, to be paid over a fifteen-year period, in exchange for the appellants' covenant not to execute against the assets of the tortfeasor.

Subsequent to the settlement agreement, the tortfeasor and his counsel departed, the lower court dismissed the jury, and testimony was presented to establish all elements of liability and damages in this matter. At the conclusion of the presentation of such evidence, the lower court held that the appellants had proven by a preponderance of the evidence that the tortfeasor was wholly negligent and that as a direct and proximate result thereof, the appellants had suffered and in the future would continue to suffer damages in the amount of $514,479.67. ³ Accordingly, the lower court, by order dated April 24, 1989, awarded the appellants the sum of $514,479.67.

In order to preserve their rights to proceed against any underinsured motorist coverage in effect through the policy issued by Travelers, the appellants have appealed from the lower court's order granting Travelers' motion for summary judgment. They now contend that the lower court erred by 1) granting summary judgment on behalf of Travelers finding that there were no genuine issues of material fact and 2) ruling that the decision in Stone prohibited the availability of underinsured motorist coverage in the present case. ⁴

II.

West Virginia Code § 33-6-31(b) (1982) ⁵ requires insurance companies to provide an insured with the opportunity to procure optional underinsured motorist coverage up to an amount not less than the limits of bodily injury liability insurance purchased by the insured. We addressed this issue in Bias v. Nationwide Mut. Ins. Co., 179 W.Va. 125, 365 S.E.2d 789 (1987). In syllabus point 1 of Bias, we stated the following: "Where an offer of optional coverage is required by statute, the insurer has the burden of proving that an effective offer was made, and that any rejection of said offer by the insured was knowing and informed." 179 W.Va. at 125, 365 S.E.2d at 789. In syllabus point 2 of Bias, we continued: "When an insurer is required by statute to offer optional coverage, it is included in the policy by operation of law when the insurer fails to prove an effective offer and a knowing and intelligent rejection by the insured." Id., 179 W.Va. at 126, 365 S.E.2d at 790.

The appellants contend that Travelers did not prove that there was an effective offer and a knowing and intelligent waiver by the insured at the time the insurance was procured. The appellants further contend that because no waiver was proven, Bias mandates automatic inclusion of underinsurance coverage. The affidavit and exhibits offered by Travelers, the appellants argue, do not sufficiently establish that an offer of underinsured coverage was made and rejected. The appellants insist that the lower court erred by granting summary judgment because genuine issues of material fact existed regarding an offer of underinsurance coverage, the nature of the coverage offered, the coverage limits, the costs involved with such coverage, the exact date that underinsurance coverage was allegedly rejected, and whether the insured adequately and timely rejected underinsurance coverage prior to the accident in question.

The appellants, however, presented no evidence in opposition to Travelers' explanation of the negotiations regarding underinsurance coverage. Travelers contended, as evidenced by the affidavit of Mr. Baer, the individual who procured the insurance, that the issue of underinsured motorist coverage was discussed and that underinsured coverage was explicitly rejected. Furthermore, Mr. Baer stated that it is customary for negotiations to be held in this manner and...