State ex rel. Allstate Ins. Co. v. Karl, 21818
| Court | Supreme Court of West Virginia |
| Citation | 190 W.Va. 176,437 S.E.2d 749 |
| Decision Date | 29 October 1993 |
| Docket Number | No. 21818,21818 |
| Parties | STATE of West Virginia ex rel. ALLSTATE INSURANCE COMPANY, A Corporation, Relator, v. Honorable Mark A. KARL, Judge of the Circuit Court of Marshall County; Jamie Lynn Brooks; James E. Brooks; and Naomi Carr, Respondents. |
Page 749
Corporation, Relator,
v.
Honorable Mark A. KARL, Judge of the Circuit Court of
Marshall County; Jamie Lynn Brooks; James E.
Brooks; and Naomi Carr, Respondents.
Decided Oct. 29, 1993.
Page 751
[190 W.Va. 178] Syllabus by the Court
1. The prohibition standard set out in Syllabus Point 1 of Hinkle v. Black, 164 W.Va. 112, 262 S.E.2d 744 (1979), permits an original prohibition proceeding in this Court to correct substantial legal errors where the facts are undisputed and resolution of the errors is critical to the proper disposition of the case, thereby conserving costs to the parties and economizing judicial resources.
2. " 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." Syllabus Point 4, State Automobile Mutual Insurance Co. v. Youler, 183 W.Va. 556, 396 S.E.2d 737 (1990).
3. "W.Va.Code, 33-6-31(d) (1988), outlines certain rights given to an uninsured/underinsured insurance carrier where a tortfeasor who is uninsured or underinsured is sued by a plaintiff. It requires that a copy of the complaint be served upon the insurance carrier. It also allows the carrier 'the right to file pleadings and to take other action allowable by law in the name of the owner, or operator, or both, of the uninsured or underinsured vehicle or in its own name.' " Syllabus Point 1, Postlethwait v. Boston Old Colony Insurance Co., 189 W.Va. 532, 432 S.E.2d 802 (1993).
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.
5. A primary insurance carrier has a duty to act in good faith with respect to an excess or additional insurance carrier when defending a claim on behalf of the primary insurance carrier's insured.
6. If an underinsured motorist carrier can demonstrate that the liability insurance carrier of the tortfeasor is defending the claim in a bad faith manner, the underinsured motorist carrier may petition the court to allow it to assume primary control of the defense.
7. "A consent-to-settle provision of an automobile insurance policy pertaining to underinsured motorist coverage whereby an insured voids his underinsurance coverage by settling a claim with a tortfeasor without first obtaining the insurer's written consent when such claim involves either the insured's underinsurance coverage or potentially involves that coverage is a valid and enforceable means by which an insurer may protect its statutorily-mandated right to subrogate claims pursuant to West Virginia Code § 33-6-31(f) (1992)." Syllabus Point 3, Arndt v. Burdette, 189 W.Va. 722, 434 S.E.2d 394 (1993).
8. An underinsured motorist carrier may assume control of the litigation on behalf of the tortfeasor where the tortfeasor's liability carrier has declined to defend. An
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[190 W.Va. 179] underinsured motorist carrier is not foreclosed from filing an answer on behalf of the tortfeasor when it appears that a default judgment might be entered against the tortfeasor.9. A liability carrier and an underinsured motorist carrier may agree to jointly defend an action by having their respective attorneys participate together in the defense. This does not mean that they may file separate pleadings, indulge in separate discovery, or examine witnesses separately.
10. " ' "Subrogation, being a creation of equity, will not be allowed except where the subrogee has a clear case of right and no injustice will be done to another." Syllabus, Buskirk v. State-Planters' Bank & Trust Co., 113 W.Va. 764, 169 S.E. 738 (1933).' Syllabus point 6, Fuller v. Stonewall Cas. Co. of W. Va., 172 W.Va. 193, 304 S.E.2d 347 (1983)." Syllabus Point 2, Kittle v. Icard, 185 W.Va. 126, 405 S.E.2d 456 (1991).
11. The right of subrogation in W.Va.Code, 33-6-31(f) (1988), is not available where the policyholder has not been fully compensated for the injuries received and still has the right to recover from other sources. Subrogation is permitted only to the extent necessary to avoid a double recovery by such policyholder.
12. An underinsured motorist carrier does not have a due process right to assume independent control of the defense of a tortfeasor who is represented by a liability carrier.
13. W.Va.Code, 33-6-31(d) (1988), does not give an underinsured motorist carrier the absolute right to file pleadings on behalf of a tortfeasor who has liability coverage and is being defended by a liability insurance carrier.
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.
Walter M. Jones, III, Paul B. Weiss, Martin & Seibert, Martinsburg, for relator.
Larry W. Blalock, Lucinda L. Fluharty, Jackson & Kelly, New Martinsville, for respondents Jamie Lynn Brooks and James E. Brooks.
Robert P. Fitzsimmons, Fitzsimmons & Associates, Wheeling, G. Charles Hughes, Moundsville, for respondent Naomi Carr.
MILLER, Justice:
We granted this original proceeding in prohibition in order to resolve certain procedural issues with regard to uninsured and underinsured motorist coverage. The basic facts are not in dispute, and the case involves critical legal questions that will substantially impact the underlying civil litigation. Thus, the issues fall within the prohibition standard set out in Syllabus Point 1 of Hinkle v. Black, 164 W.Va. 112, 262 S.E.2d 744 (1979), 1 which permits an original prohibition proceeding in this Court to correct substantial legal errors where the facts are undisputed and resolution of the errors is critical to the proper disposition of the case, thereby conserving costs to the parties and economizing judicial resources.
I.
The relator, Allstate Insurance Company (Allstate), issued an automobile insurance policy with uninsured and underinsured motorist coverage to David A. Carr. The policy also covered Naomi J. Carr, who was his mother, as a member of his household. Ms. Carr was injured while walking across a public
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[190 W.Va. 180] street in Moundsville. 2 She was struck by an automobile operated by Jamie Lynn Brooks and owned by James E. Brooks, her father. The Brooks policy provided for liability coverage in the amount of $250,000 with State Automobile Mutual Insurance Company (State Auto).The claim could not be settled, and Ms. Carr filed suit against the Brookses in the Circuit Court of Marshall County in February of 1993. A copy of the suit papers was also sent to Allstate pursuant to the provisions of W.Va.Code, 33-6-31(d) (1988). This section requires an insured who sues for damages arising from a motor vehicle accident and who desires to recover under the uninsured or underinsured provisions of their insurance policy to "cause a copy of the summons and a copy of the complaint to be served upon the insurance company ... in the manner prescribed by law[.]" 3
After receipt of the complaint, Allstate filed an answer which raised several defenses on behalf of the Brookses. It also issued interrogatories against Ms. Carr and requests for production of documents. An answer was also filed by State Auto, the liability carrier for the Brookses. State Auto also filed interrogatories and requests for production of documents. A number of the requests by State Auto overlapped with Allstate's requests. 4
Ms. Carr's attorneys then moved to restrict the participation by both Allstate and State Auto on behalf of the Brookses. The trial court, after hearing arguments and receiving briefs, by its June 11, 1993 order determined that a unified defense was warranted and required Allstate and State Auto to file a single answer on behalf of the Brookses. It required Allstate, the underinsured motorist carrier, to elect whether it would intervene in the case in its own right or merely in the name of the Brookses.
The trial court also ruled that the plaintiff need not answer Allstate's discovery requests and that State Auto's discovery would control. It also granted Ms. Carr's motion to strike certain defenses asserted by Allstate in its answer on behalf of the Brookses, finding those defenses to be without merit. 5 Following the entry of this order, Allstate filed a petition for a writ of prohibition with this Court claiming statutory and due process violations.
II.
Before we address the relator's claims, it is useful to outline some of the salient features of our uninsured and underinsured insurance law. Its statutory provisions are contained in W.Va.Code, 33-6-31. We recognized in State Automobile Mutual Insurance Co. v. Youler, 183 W.Va. 556, 396 S.E.2d 737 (1990), that the purpose of our statutory requirement that insurers offer uninsured and underinsured protection in motor vehicle liability policies is to protect an
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[190 W.Va. 181] injured insured when the defendant tortfeasor has either no liability insurance...To continue reading
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