State Farm Fire and Cas. Co. v. Walton, 920145
| Decision Date | 06 November 1992 |
| Docket Number | No. 920145,920145 |
| Citation | 244 Va. 498,423 S.E.2d 188 |
| Parties | STATE FARM FIRE AND CASUALTY CO. v. Wade WALTON, et al. Record |
| Court | Virginia Supreme Court |
Theodore I. Brenner, Richmond (Scott W. Lechner, Bremner, Baber & Janus, on briefs), for appellant.
Joseph W. Milam, Jr., Roanoke (Anthony H. Monioudis, Woods, Rogers & Hazlegrove, on brief), for appellees William E. Bumpass and Imogene O. Bumpass.
No brief or argument on behalf of appellees Wade Walton, Roy Hammock, Jr. and Margaret Hammock.
Present: All the Justices.
The primary issue in this case is whether the language in a homeowner's liability insurance policy requires an additional insured to give the insurance company notice of an "accident or occurrence."
On November 28, 1985, about 6:30 p.m., four teenagers, Angela White, Wade Walton, Mike Trevillian, and Ronnie Alan Cox, entered a partially completed house in Pittsylvania County owned by William E. Bumpass and Imogene E. Bumpass. After the teenagers left, a fire destroyed the house and its contents.
Some time later, the Cincinnati Insurance Company (Cincinnati), the property damage insurance carrier for the Bumpasses, made a claim against Ronnie Cox for the loss. Ronnie's mother, Linda D. Davidson, referred the matter to her homeowner's liability insurance carrier, State Farm Fire and Casualty Company (State Farm). In a letter dated August 1, 1986, L. Wayne Dalton, an insurance adjuster for State Farm, advised Cincinnati that Ronnie was not an additional insured under his mother's policy because he did not meet the policy requirement of living in her household at the time of the fire. However, Dalton advised Cincinnati that his investigation indicated Wade, Angela, and Mike were present at the Bumpass house with Ronnie on the night of the fire.
The following month, Frank O. Meade, of the law firm of Meade, Tate and Daniel, wrote Roy Hammock, Jr., Wade's stepfather, advising Hammock of Cincinnati's fire coverage and Meade's representation of Cincinnati. Meade also stated:
I am advised that your child, Wade Walton, on or about November 28, 1985, may have been involved in a reported negligent setting of a fire on the premises, causing substantial damage to the dwelling.
You probably have a homeowners' insurance policy on your home. If so, you will have liability affording protection for your child, as to a claim which will be filed against him for damages resulting from the fire.
The purpose of this letter is to suggest that you immediately report this matter to your homeowners' insurance company, if you have not already done so, so that you can protect your child financially. Please ask the company to contact me.
Meade wrote a similar letter to Richard White, Angela's father, on the same day he wrote Mr. Hammock. Angela's parents and Wade's stepfather and mother had State Farm homeowner's policies, with liability provisions similar to those of Mrs. Davidson's policy. However, because Angela and Wade were living in the homes of the insureds, the State Farm policies covered them as additional insureds. Although the Hammocks did not "report the matter" to State Farm after receiving Meade's letter, Angela's father did.
On November 16, 1987, the Bumpasses sued Wade, Angela, and Mike to recover damages for their fire losses. Because Wade had enlisted in the United States Navy on September 8, 1987, he was apparently absent from the Pittsylvania County area for some time and was not served with process until November 29, 1988. On December 9, 1988, over three years after the fire, and over two years after Wade's stepfather received Meade's letter, the stepfather reported the claim and transmitted Wade's copy of the motion for judgment to State Farm.
Upon being advised that the Hammocks had a State Farm homeowner's liability policy that included Wade as an additional insured thereunder, State Farm conducted a third investigation. On December 15, 1988, Dalton recorded an interview with Mrs. Hammock, who repeated what Wade had told her and the investigating fire chief about the incident.
On May 1, 1989, State Farm filed this suit for declaratory judgment against Wade, the Hammocks, and the Bumpasses to determine whether the delayed notice breached a policy condition that relieved it of its duty to provide coverage to Wade. In its motion for summary judgment, State Farm contended that the delayed notice was such a policy breach; in cross-motions for summary judgment, the defendants contended that it was not.
The parties filed a joint stipulation of the facts, with exhibits attached. Two of the exhibits were transcripts of Dalton's recorded interviews with Angela and Mrs. Hammock, Wade's mother. The only evidence of what Angela and Wade knew about the fire, about the subsequent investigations, and about the notices from Meade came from these interview statements. The parties also stipulated that the statements in the interviews were deemed to be true for the purposes of the motions for summary judgment.
We will summarize pertinent parts of those statements. Angela said that Wade and Ronnie had built a fire in a bathtub that was stored in the living room on the first floor. Wade told his mother that someone had placed a piece of sheet metal over the bathtub after the fire went out, and that the four teenagers had hurriedly left the house shortly thereafter, when they heard a car approaching. The sheriff and the fire chief questioned Wade in his mother's presence a short time after the fire. Wade's mother said that when the fire chief told Wade that the fire had started in the upstairs part of the house and in the basement, Wade denied that he had been in either of these locations.
Angela said that Wade admitted that he had received a copy of Meade's letter. The only explanation in the record for the Hammocks' failure to notify State Farm after they knew of Cincinnati's claim is contained in the following pertinent portion of Mrs. Hammock's recorded statement:
[A]bout a week after the questioning [by the sheriff and fire chief] this lawyer, Meade and Tate I believe, is that right, called me and told me that my child was responsible for this and I was going to be held responsible and that I should get in touch with my homeowner's insurance. Well I told him that my child had not been convicted of anything that you know why should I do that and he kind of got smart and hung up.
Without giving a reason, the chancellor denied State Farm's motion for summary judgment and sustained the defendants' cross-motions for summary judgment. * State Farm appeals.
Well-settled rules govern our decision. An insurance policy is a contract; therefore, we give the words used in...
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