State ex rel. Universal Underwriters Ins. Co. v. Wilson

• Decision Date: 08 March 2019
• Docket Number: No. 18-0509,18-0509
• Court: West Virginia Supreme Court
• Parties: STATE of West Virginia EX REL. UNIVERSAL UNDERWRITERS INSURANCE COMPANY and Zurich American Insurance Company, Petitioners v. The Honorable Patrick N. WILSON, Judge of the Circuit Court of Marion County, West Virginia, Christina M. Varvel, Administratrix of the Estate of David Ralph Allen, Deceased, Salvatore Cava, Dan's Car World, LLC, Dan Cava's Toyota World, and Daniel A. Cava, Respondents

825 S.E.2d 95

STATE of West Virginia EX REL. UNIVERSAL UNDERWRITERS INSURANCE COMPANY and Zurich American Insurance Company, Petitioners

v.The Honorable Patrick N. WILSON, Judge of the Circuit Court of Marion County, West Virginia, Christina M. Varvel, Administratrix of the Estate of David Ralph Allen, Deceased, Salvatore Cava, Dan's Car World, LLC, Dan Cava's Toyota World, and Daniel A. Cava, Respondents

No. 18-0509

Supreme Court of Appeals of West Virginia.

Submitted: February 5, 2019

Filed: March 8, 2019

Arie M. Spitz, Esq., Jill C. Rice, Esq., Dinsmore & Shohl, LLP, Charleston, West Virginia, Attorneys for Petitioners

Dino S. Colombo, Esq., Travis T. Mohler, Esq., Colombo Law, Morgantown, West Virginia, Attorneys for Respondent, Christina M. Varvel

Hutchison, Justice:

This matter was brought under the original jurisdiction of this Court as a petition for a writ of prohibition, by Universal Underwriters Insurance Company and Zurich American Insurance Company (hereinafter "Petitioners").¹ The Petitioners seek to have this Court prohibit enforcement of a ruling by the Circuit Court of Marion County that denied their motion for summary judgment against the Respondent, Christina M. Varvel, administratrix of the estate of David Ralph Allen. Upon careful review of the briefs, the appendix record, the arguments of the parties, and the applicable legal authority, we grant the writ.

I.FACTUAL AND PROCEDURAL HISTORY

On May 30, 2014, in the town of Bridgeport, West Virginia, Salvatore Cava pulled out of the parking lot of a McDonald's restaurant and collided with a motorcycle being driven by David Ralph Allen. Mr. Allen sustained injuries and was taken to a hospital. He died several days later. The car that was driven by Salvatore Cava was owned by an auto dealership called Dan's Car World. Salvatore Cava's father, Dan Cava (Mr. Cava), owned the auto dealership.² Petitioners provided an insurance policy for Dan's Car World. Under Part 500 of the policy, entitled Garage Operations and Auto Hazard, a limit of $ 300,000 in liability coverage was provided. Part 980 of the policy, entitled Commercial Umbrella, provided up to $ 5,000,000 in liability coverage.

In December of 2014, Respondent brought a civil action initially against Salvatore Cava and Dan's Car World. The Respondent also asserted a declaratory judgment action against Petitioners to determine the amount of insurance coverage available. The complaint was eventually amended in January of 2016, to add Mr. Cava as a defendant. The Petitioners offered to settle the matter for $ 300,000, the limit under the garage coverage provision of the policy. The Petitioners took the position that the umbrella coverage part of the policy did not cover the Respondent's claims against Salvatore Cava, because he was not a designated person under that provision. The Respondent rejected the settlement offer and argued that the umbrella portion of the policy provided additional liability coverage for the claims asserted against Salvatore.

In March of 2016, Mr. Cava, Salvatore Cava and Dan's Car World filed individual cross-claims against the Petitioners, asserting bad faith, breach of contract and other claims. Petitioners filed a motion to dismiss the cross-claims. The circuit court denied the motion. The Petitioners filed a writ of prohibition with this Court challenging the denial of its motion to dismiss. This Court granted Petitioners relief in that proceeding, after it was determined that the circuit court lacked subject matter jurisdiction over the cross-claims because those claims were not ripe.³ See State ex rel. Universal Underwriters Ins. Co. v. Wilson , 239 W. Va. 338, 801 S.E.2d 216 (2017).

After our decision in Wilson , the Petitioners filed a motion for summary judgment in the declaratory judgment case.⁴ Mr. Cava and Dan's Car World also filed a motion for summary judgment on the tort claims. In an opinion letter dated May 29, 2018, the circuit court denied Petitioners' motion for summary judgment on the coverage issue.⁵ The circuit court denied summary judgment based upon two dispositive factors. First, it was found that a material issue of fact was in dispute regarding the reasonable expectation of coverage for Salvatore Cava under the umbrella provision of the policy. Second, the court found that judicial estoppel could not be invoked by Petitioners to preclude Mr. Cava from testifying about an alleged conversation he had with Petitioners' agent regarding umbrella coverage for Salvatore Cava. Petitioners filed the instant matter after the circuit court denied their motion for summary judgment in the opinion letter.⁶

II.STANDARD OF REVIEW

This case comes to this Court as a petition for a writ of prohibition. We have long held that "[t]he writ of prohibition will issue only in clear cases, where the inferior tribunal is proceeding without, or in excess of, jurisdiction." Syllabus, State ex rel. Vineyard v. O'Brien , 100 W. Va. 163, 130 S.E. 111 (1925). See Syl. pt. 2, State ex rel. Peacher v. Sencindiver , 160 W. Va. 314, 233 S.E.2d 425 (1977) ("A writ of prohibition will not issue to prevent a simple abuse of discretion by a trial court. It will only issue where the trial court has no jurisdiction or having such jurisdiction exceeds its legitimate powers. W. Va. Code 53–1–1."). In Syllabus point 4 of State ex rel. Hoover v. Berger , 199 W. Va. 12, 483 S.E.2d 12 (1996), we set forth the following standard for issuance of a writ of prohibition when it is alleged a lower court is exceeding its authority:

In determining whether to entertain and issue the writ of prohibition for cases not involving an absence of jurisdiction but only where it is claimed that the lower tribunal exceeded its legitimate powers, this Court will examine five factors: (1) whether the party seeking the writ has no other adequate means, such as direct appeal, to obtain the desired relief; (2) whether the petitioner will be damaged or prejudiced in a way that is not correctable on appeal; (3) whether the lower tribunal's order is clearly erroneous as a matter of law; (4) whether the lower tribunal's order is an oft repeated error or manifests persistent disregard for either procedural or substantive law; and (5) whether the lower tribunal's order raises new and important problems or issues of law of first impression. These factors are general guidelines that serve as a useful starting point for determining whether a discretionary writ of prohibition should issue. Although all five factors need not be satisfied, it is clear that the third factor, the existence of clear error as a matter of law, should be given substantial weight.

With the foregoing in mind, we turn to the parties' arguments.

III.DISCUSSION

The Petitioners argue that the circuit court erred as a matter of law in denying their motion for summary judgment on the grounds that (1) the umbrella coverage provision of the policy was ambiguous therefore the doctrine of reasonable expectations applied, and (2) the doctrine of judicial estoppel did not apply. The Respondent takes the position, as it did below, that summary judgment was properly denied because the doctrine of reasonable expectations applied for two reasons: (1) ambiguity existed as to whether Endorsement No. 043 applied to the umbrella coverage provision; and (2) because of the conflicting evidence as to whether Petitioners' agent informed Mr. Cava that Salvatore was covered under the umbrella provision of the policy. The Respondent also argues that Petitioners failed to satisfy the elements of the doctrine of judicial estoppel.

We begin by setting out the legal principles that guide our resolution of the issue of the application of the doctrine of reasonable expectations to this case. This Court has defined the doctrine of reasonable expectations as follows:

With respect to insurance contracts, the doctrine of reasonable expectations is that the objectively reasonable expectations of applicants and intended beneficiaries regarding the terms of insurance contracts will be honored even though painstaking study of the policy provisions would have negated those expectations.

Syl. pt. 8, Nat'l Mut. Ins. Co. v. McMahon & Sons, Inc ., 177 W. Va. 734, 356 S.E.2d 488 (1987), overruled on other grounds by Parsons v. Halliburton Energy Servs., Inc ., 237 W. Va. 138, 785 S.E.2d 844 (2016) and Potesta v. U.S. Fid. & Guar. Co ., 202 W. Va. 308, 504 S.E.2d 135 (1998). We have also made clear that "[b]efore the doctrine of reasonable expectations is applicable to an insurance contract, there must be an ambiguity regarding the terms of that contract." Syl. pt. 2, Robertson v. Fowler , 197 W. Va. 116, 475 S.E.2d 116 (1996). "When reasonable people can differ about the meaning of an insurance contract, the contract is ambiguous, and all ambiguities will be construed in favor of the insured." Syl. pt. 1, D'Annunzio v. Security–Connecticut Life Insurance Co ., 186 W.Va. 39, 410 S.E.2d 275 (1991). See Syl. pt. 1, Prete v. Merchants Prop. Ins. Co. of Indiana , 159 W. Va. 508, 223 S.E.2d 441 (1976) ("Whenever the language of an insurance policy provision is reasonably susceptible of two different meanings or is of such doubtful meaning that reasonable minds might be uncertain or disagree as to its meaning, it is ambiguous."). In construing the terms of a policy we have held that "[l]anguage in an insurance policy should be given its plain, ordinary meaning." Cherrington v. Erie Ins. Prop. & Cas. Co ., 231 W. Va. 470, 486, 745 S.E.2d 508, 524 (2013) (internal quotation marks and citation omitted). Thus, "[w]here the provisions of an insurance policy contract are clear and unambiguous they are not subject to judicial construction or interpretation, but full effect will be given to the plain meaning intended." Syllabus, Keffer v. Prudential Ins. Co. of America , 153 W. Va. 813, 172 S.E.2d 714 (1970).

As previously stated, the Respondent argues that the policy is ambiguous because it is not clear as to whether Endo...