Reed v. Orme, No. 33291.

• Court: Supreme Court of West Virginia
• Writing for the Court: Per Curiam
• Citation: 655 S.E.2d 83
• Docket Number: No. 33291.
• Decision Date: 08 November 2007
• Parties: Yvonne REED and Kermit Reed, her husband, Plaintiffs Below, Appellants, v. Walter Jason ORME, Defendant Below, Appellee.

655 S.E.2d 83 Yvonne REED and Kermit Reed, her husband, Plaintiffs Below, Appellants,
v.
Walter Jason ORME, Defendant Below, Appellee. No. 33291. Supreme Court of Appeals of West Virginia. Submitted September 11, 2007. Decided November 8, 2007.

[655 S.E.2d 84]

Syllabus by the Court

1. "A circuit court's entry of summary judgment is reviewed de novo." Syllabus Point 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994).

2. "A motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law." Syllabus Point 3, Aetna Casualty & Surety Company v. Federal Insurance Company of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963).

3. "`Determination of the proper coverage of an insurance contract when the facts are not in dispute is a question of law.' Syllabus Point 1, Tennant v. Smallwood, 211 W.Va. 703, 568 S.E.2d 10 (2002)." Syllabus Point 2, Howe v. Howe, 218 W.Va. 638, 625 S.E.2d 716 (2005).

4. "If the moving party makes a properly supported motion for summary judgment and can show by affirmative evidence that there is no genuine issue of a material fact, the burden of production shifts to the nonmoving party who must either (1) rehabilitate the evidence attacked by the moving party, (2) produce additional evidence showing the existence of a genuine issue for trial, or (3) submit an affidavit explaining why further discovery is necessary as provided in Rule 56(f) of the West Virginia Rules of Civil Procedure." Syllabus Point 3, Williams v. Precision Coil, Inc., 194 W.Va. 52, 459 S.E.2d 329 (1995).

5. "An insurance company may incorporate limiting terms and conditions that violate W. Va.Code, 33-6-31 into a governmental entity's insurance policy. However, to be permissible under W. Va.Code, 29-12A-16(a) [2003], the limiting terms and conditions in the insurance policy must clearly be `determined by the political subdivision in its discretion.' The limiting terms and conditions must herefore be the result of some choice, judgment, volition, wish or inclination as a result of investigation or reasoning by the governmental entity. The terms and conditions are not enforceable merely because they are different from those found in the typical insurance policy. To the extent that

[655 S.E.2d 85]

Trent v. Cook, 198 W.Va. 601, 482 S.E.2d 218 (1996) says otherwise, it is modified." Syllabus Point 5, Gibson v. Northfield Insurance Company, et al., 219 W.Va. 40, 631 S.E.2d 598 (2005).

6. "`West Virginia Code § 29-12A-16(a)(1992) conveys broad discretion to both the West Virginia State Board of Risk and Insurance Management, as well as governmental entities, with regard to the type and amount of insurance to obtain. Consequently, when an insurer issues a custom-designed insurance policy to a governmental entity pursuant to the Governmental Tort Claims and Insurance Reform Act, West Virginia Code §§ 29-12A-1 to -18 (1992), that entity may incorporate language absolutely limiting liability under the policy, even if such language would otherwise violate the provisions of West Virginia Code § 33-6-31(b) (1996).' Syllabus Point 1, Trent v. Cook, 198 W.Va. 601, 482 S.E.2d 218 (1996)." Syllabus Point 4, Gibson v. Northfield Insurance Company, et al., 219 W.Va. 40, 631 S.E.2d 598 (2005).

Michael A. Esposito, Logan, WV, for Appellants.

R. Carter Elkins, Andrew P. Ballard, for Appellee National Union Fire Insurance Company of Pittsburgh, PA.

PER CURIAM.

Appellants Yvonne E. Reed and Kermit E. Reed, her husband, appeal to this Court seeking reversal of an order entered by Circuit Court of Logan County on June 19, 2006. In that order, the circuit court found that underinsured motorist coverage did not exist under a policy of insurance issued to the State of West Virginia by Appellee National Union Fire Insurance Company of Pittsburgh, PA (hereinafter "National Union") for injuries sustained by Ms. Reed in a June 5, 2001, automobile accident. The policy at issue names Ms. Reed's employer, the Logan County Board of Education (hereinafter the "Board"), as an additional insured. Upon considered review of the record before this Court, the arguments of the parties and applicable precedent, we affirm the lower court's ruling.

I FACTUAL AND PROCEDURAL BACKGROUND

On June 5, 2001, Ms. Reed was involved in a motor vehicle accident with Walter Jason Orme while she was operating a school bus owned by the Board. As a result of injuries sustained in this automobile accident, Ms. Reed applied for and collected workers' compensation benefits because she was injured while working within the scope of her employment. Additionally, on June 4, 2003, Ms. Reed and her husband, Kermit Reed, initiated the underlying lawsuit in the Circuit Court of Logan County seeking compensation for injuries incurred as the result of Mr. Orme's negligence. On November 9, 2004, the Logan County Circuit Clerk issued a summons to National Union. Shortly thereafter, the summons and a copy of the complaint were served upon National Union placing it on notice of a potential claim for underinsured motorist benefits under its policy insuring the Board. At some point in time, not clear from the record before this Court, Appellants settled their claims against Mr. Orme for $25,000.00, the limits of his automobile liability insurance policy. As a result, the underlying action proceeded as a claim for underinsured motorist benefits under the National Union policy.

On March 23, 2006, National Union filed a motion for summary judgment before the circuit court arguing that Ms. Reed's receipt of workers' compensation benefits precludes recovery of underinsured motorists benefits under the terms of the policy. Specifically, National Union argued that the following exclusion, added by endorsement to the underinsured motorist coverage provisions, precluded Appellants' claim: "8. Any obligation for which the `insured' may be held liable under any workers' compensation, [d]isability benefits or unemployment compensation law or any similar law." National Union argued that because the policy at issue was a custom-designed policy, this provision was valid and enforceable pursuant to this Court's prior decision in Trent v. Cook, 198 W.Va. 601, 482 S.E.2d 218 (1996), modified, Gibson v.

655 S.E.2d 86

Northfield Insurance Company, 219 W.Va. 40, 631 S.E.2d 598 (2005), wherein this Court found that a virtually identical exclusion contained in the State's insurance policy precluded a claim for underinsured motorists benefits. Trent, 198 W.Va. at 609, 482 S.E.2d at 226. Admitting that the accident at issue occurred during the scope of Ms. Reed's employment, Appellants argued in response that summary judgment was inappropriate because this Court's decisions in Henry v. Benyo, 203 W.Va. 172, 506 S.E.2d 615(1998), and Miralles v. Snoderly, 216 W.Va. 91, 602 S.E.2d 534 (2004) (per curiam), permit the recovery of underinsured motorists coverage benefits afforded under an employer's policy of insurance where an employee while acting within the scope of employment is injured by a third-party.

By order dated June 19, 2006, the circuit court granted National Union's motion for summary judgment after full hearing. In that order, the circuit court specifically found that policy satisfied the custom-designed policy requirement of Gibson based upon the unopposed affidavit of Bob Mitts, an underwriting manager for the Board of Risk and Insurance Management ("BRIM"). The affidavit established that BRIM had caused the workers' compensation exclusion to be included in the policy after researching and investigating its need. Therefore, according to the circuit court, this Court's opinion in Trent controlled and the workers' compensation exclusion precluded underinsured motorist coverage for Appellants' claims arising from the June 5, 2001, accident. The circuit court rejected Appellants' arguments in opposition to the motion which relied upon Henry and Miralles by noting that the policy in Henry did not include a similar workers' compensation exclusion and that neither Henry nor Miralles involved a policy insuring a West Virginia political subdivision.

Appellants timely appealed the circuit court's summary judgment order to this Court. In their Petition for Appeal, Appellant's argued that the circuit court's decision was in error "because there existed genuine issues of material fact which precluded Summary Judgment and the facts of this case did not meet the criteria for the exception set forth in the insurance policy." By order dated January 10, 2007, we accepted this matter for review.

II. STANDARD OF REVIEW

The primary issue before this Court is whether the Circuit Court of Logan County properly granted summary judgment on the dispositive issue of whether underinsured motorist coverage existed under the National Union policy for the Appellants' claims.¹ It is well settled in this jurisdiction that "[a] circuit court's entry of summary judgment is reviewed de novo." Syl. Pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994). Pursuant to Rule 56(c) of the West Virginia Rules of Civil Procedure, summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." This Court has previously held that "[a] motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law." Syl. Pt. 3, Aetna Casualty & Sur. Co. v. Federal Ins. Co. of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963). Further, it is well settled in this jurisdiction that the "`[d]etermination of the proper coverage of an insurance...