State Auto. Mut. Ins. Co. v. Youler
| Citation | 396 S.E.2d 737,183 W.Va. 556 |
| Decision Date | 20 July 1990 |
| Docket Number | No. 19373,19373 |
| Parties | STATE AUTOMOBILE MUTUAL INSURANCE COMPANY v. Anthony B. YOULER and Mildred S. Youler. |
| Court | Supreme Court of West Virginia |
Syllabus by the Court
1. The notice provisions of an automobile insurance policy ordinarily are activated in a case of uninsured or underinsured motorist coverage, not when there has been an accident, but when the insured, with reasonable diligence, ascertains that the alleged tortfeasor is uninsured or underinsured.
2. In an uninsured or underinsured motorist case, prejudice to the investigative interests of the insurer is a factor to be considered, along with the reasons for delay and the length of delay, in determining the overall reasonableness in giving notice of an accident. In the typical case, the insured must put on evidence showing the reason for the delay in giving notice. Once this prerequisite is satisfied, the insurer must then demonstrate that it was prejudiced by the insured's failure to give notice sooner. If the insurer fails to present evidence as to prejudice, then the insured's failure to give notice sooner will not be a bar to the insured's recovery. If the insurer puts on evidence of prejudice, however, the reasonableness of the notice ordinarily becomes a question of fact for the fact finder to decide.
3. So-called "antistacking" language in automobile insurance policies is void under W.Va.Code, 33-6-31(b), as amended, to the extent that such language is purportedly applicable to uninsured or underinsured motorist coverage, and an insured covered simultaneously by two or more uninsured or underinsured motorist policy endorsements may recover under all of such endorsements up to the aggregated or stacked limits of the same, or up to the amount of the judgment obtained against the uninsured or underinsured motorist, whichever is less, as a result of one accident and injury.
4. W.Va.Code, 33-6-31(b), as amended, on uninsured and underinsured motorist coverage, contemplates recovery, up to coverage limits, from one's own insurer, of full compensation for damages not compensated by a negligent tortfeasor who at the time of the accident was an owner or operator of an uninsured or underinsured motor vehicle. Accordingly, the amount of such tortfeasor's motor vehicle liability insurance coverage actually available to the injured person in question is to be deducted from the total amount of damages sustained by the injured person, and the insurer providing underinsured motorist coverage is liable for the remainder of the damages, but not to exceed the coverage limits.
Dale Buck, Jackson & Kelly, Martinsburg, for State Auto. Mut. Ins. Co.
D. Michael Burke, Lawrence M. Schultz, Askin, Pill, Scales & Burke, L.C., Martinsburg, for Anthony B. Youler and Mildred S. Youler.
James C. Peterson, amicus chair, Charleston, G. David Brumfield, President, Welch, Vincent J. King, Member, Charleston, for West Virginia Trial Lawyers Ass'n, filed an amicus curiae.
This case is before this Court upon certified questions from the Circuit Court of Berkeley County, West Virginia. 1 The case presents issues of first impression to this Court pertaining to underinsured motorist coverage. The three general areas of concern are: (1) delay in giving notice of an automobile accident to one's own insurer providing underinsured motorist coverage; (2) antistacking language in the policies; and (3) policy language allegedly requiring a setoff of the tortfeasor's liability insurance coverage against the underinsured motorist coverage. We believe the circuit court answered the primary issues correctly in part and incorrectly in part, and the case is remanded for further proceedings consistent with this opinion.
On May 9, 1985, Anthony Youler was struck and injured by a car driven by an individual named Clifford Moore. On May 20, 1985, Anthony Youler and Mildred Youler, his mother whose business premises were also damaged by the incident, brought a civil action against Clifford Moore. The complaint against Moore sought recovery of $500,000 of compensatory damages for Anthony Youler's personal injuries. The complaint against Moore also sought recovery of $5,000 of property damage as well as $10,000 of consequential damages (loss of business profits) sustained by Mildred Youler.
On February 24, 1988, Moore's automobile liability insurance carrier, Nationwide Mutual Insurance Company, offered to the Youler's $50,000, the liability policy's bodily injury limits for one person. The Youlers refused to accept the offer of $50,000 as full satisfaction of their claim. The Youler's action against Moore has not yet gone to trial.
The Youlers were covered by the underinsured motorist provisions of two automobile insurance policies issued by State Automobile Mutual Insurance Company ("State Auto"). Each of these two underinsured motorist policy endorsements contains limits of $100,000 for bodily injury of one person in an automobile accident. 2
Both of the Youlers' automobile insurance policies contain a part, applicable to all coverages, on "Duties After an Accident or Loss[.]" One of the "General Duties" thereunder is that the insurer, State Auto, "must be notified promptly of how, when and where the accident or loss happened." In the same part of the policies, one of the "Additional Duties for Uninsured [or Underinsured] Motorists Coverage" is that a person seeking such coverage must also "[p]romptly send [State Auto] copies of the legal papers if a suit is brought." State Auto received notice of the accident in question, in the form of a copy of the Youlers' complaint against Moore, nearly three years after the accident occurred, specifically, on April 26, 1988. Counsel for the Youlers, who had replaced their prior attorney, furnished the notice to State Auto.
Both of the Youlers' automobile insurance policies also contain what is commonly known as "antistacking" language applicable purportedly to all coverages, including uninsured/underinsured motorist coverages. The antistacking language appears in the "Two or More Auto Policies" section of the "General Provisions" of each policy and reads as follows: "If this policy and any other auto insurance policy issued to you by us apply to the same accident, the maximum limit of our liability under all the policies shall not exceed the highest applicable limit of liability under any one policy." 3
Both of the Youlers' automobile insurance policies further contain what is commonly known as "setoff" or "reduction" language applicable to underinsured (or uninsured) motorist coverage. The setoff language in each policy reads as follows: "Any amounts otherwise payable for damages under this endorsement [on uninsured/underinsured motorist coverage] shall be reduced by all sums paid because of the bodily injury or property damage by or on behalf of persons or organizations who may be legally responsible." (emphasis added)
After receiving notice of the Youlers' claim for underinsured motorist coverage, State Auto brought a declaratory judgment action in the Circuit Court of Berkeley County, West Virginia ("the trial court") to determine the rights and liabilities of the parties under the insurance policies issued by State Auto to the Youlers. The Youlers thereafter answered State Auto's complaint for declaratory relief and subsequently moved for summary judgment on their counterclaim for declaratory relief.
State Auto contended before the trial court, and now contends before us, that: (1) the Youlers are not entitled to any underinsured motorist coverage under the two policies because the Youlers did not promptly notify State Auto of the accident and of the Youlers' action against Moore, as required by such policies; (2) if the Youlers are entitled to any underinsured motorist coverage, such coverage is limited initially by the antistacking language in the policies applicable purportedly to the underinsured motorist coverage, so that the limits of liability for underinsured motorist coverage are $100,000, not $200,000 by stacking or aggregating the limits of the two policies; and (3) Moore's $50,000 liability insurance coverage is to be set off against the $100,000 limits, leaving a $50,000 liability, at the most, of State Auto to the Youlers.
The Youlers, on the other hand, contended before the trial court, and now contend before us, that: (1) they are entitled to underinsured motorist coverage because State Auto was not prejudiced by the delay in receiving notice of the accident and of the Youlers' action against Moore; (2) the antistacking language in the policies applicable purportedly to the underinsured motorist coverage is void as repugnant to the full indemnification public policy of the underinsured motorist statute; and (3) Moore's $50,000 liability insurance coverage is not to be set off against the underinsured motorist coverage limits (of $200,000, by stacking the limits of the two policies), but against Anthony Youler's damages of $500,000, leaving a $450,000 uncompensated loss, $200,000 of which is to be paid by State Auto as within the stacked or aggregated limits of underinsured motorist coverage under the two policies.
The trial court denied the Youlers' motion for summary judgment, and, along with the parties, certified several questions to this Court.
The first two certified questions relate to when an insured's duty arises to notify his or her insurer providing uninsured or underinsured motorist coverage that the insured has sustained a loss as a result of an automobile accident allegedly due to the negligence of a third party. 4
The unanimous opinion of the courts deciding the few reported cases on this particular issue is that the notice provisions of an...
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