State Farm Mut. Auto. Ins. Co. v. Brower

• Decision Date: 20 January 1964
• Docket Number: No. 5690,5690
• Court: Virginia Supreme Court
• Parties: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. CLIFFORD C. BROWER. Record

Page 277

134 S.E.2d 277

204 Va. 887

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. CLIFFORD C. BROWER.

Record No. 5690.

Supreme Court of Appeals of Virginia

January 20, 1964.

W. Worth Martin and Phillips M. Dowding (Martin & Dowding, on brief), for the plaintiff in error.

Edward A. Marks, Jr. (Frank H. Pitchford; Sands, Anderson, Marks & Clarke; Pitchford & Sarfan, on brief), for the defendant in error.

JUDGE: BUCHANAN

BUCHANAN, J., delivered the opinion of the court.

The question for decision in this case is whether the appellant, State Farm Mutual Automobile Insurance Company, is liable to the appellee, Clifford C. Brower, its policyholder, under the 'uninsured motor vehicle' provisions of Virginia Code § 38.1-381.

On June 19, 1960, Brower was injured when his automobile driven by him was struck by an automobile being driven by Louis J. Mazza, in York county, Virginia. Afterwards, on January 6, 1961, Brower sued Mazza for damages, and on July 11, 1961, recovered a judgment against him for $2,500 with interest and costs. In that action a copy of Brower's motion for judgment was served on his own insurance carrier, State Farm, pursuant to subsection (e)(1) of § 38.1-381, and State Farm filed pleadings for Mazza but under a reservation of rights.

Brower's judgment against Mazza was not paid and in August 1961 Brower brought the present action against State Farm on the ground that Mazza was an uninsured motorist and State Farm in its policy issued to Brower had undertaken to pay the amount he was so entitled to recover from Mazza.

A jury was waived and all questions of law and fact were submitted to the trial court. The evidence, which was without any material conflict, consisted of the deposition of Mazza, stipulations of facts and exhibits, and upon consideration thereof the court, for reasons stated in a written opinion, granted judgment against State Farm for $2,500 with interest and costs, which is now before us on appeal.

Section 38.1-381(b) provides that in all bodily injury and property damage liability insurance policies the insurer shall undertake to pay the insured all sums which he shall be legally entitled to recover as damages from the owner or operator of 'an uninsured motor vehicle,' within prescribed limits. Subsection (c) of § 38.1-381 provides in pertinent part:

'* * * the term 'uninsured motor vehicle' means a motor vehicle as to which there is no (i) bodily injury liability insurance and property damage liability insurance both in the amounts specified by § 46.1-1(8), as amended from time to time, or (ii) there is such insurance but the insurance company writing the same denies coverage thereunder, * * *.'

At the time of the accident Mazza was a resident of New York but was in military service and stationed in Virginia. His automobile was not registered in Virginia but was covered by a liability insurance policy issued by National Automobile Insurance Company while Mazza was stationed in Alabama. National was a Delaware corporation not licensed or authorized to do business in Virginia. The trial court found that this policy complied with the Virginia requirements as to coverage and was in force at the time of the accident. It also found that Mazza had complied with the terms of the policy with respect to notice and otherwise, but that National made no appearance and offered no defense to the action brought by Brower against Mazza.

The record shows that on September 6, 1960, four months before Brower instituted his action against Mazza, the Insurance Commissioner of the State of Delaware entered an order reciting that after a hearing held on April 11, 1960, and a subsequent examination of the affairs of the National Automobile Insurance Company, which had its home office in Delaware, it appeared that said company 'is hopelessly insolvent,' and ordering that its certificate of authority to do business be thereby revoked. Thereupon the Attorney General of Delaware filed in the Court of Chancery of the State of Delaware for New Castle County, a complaint setting forth the action of the Insurance Commissioner and praying, inter alia, that a receiver be appointed to take charge and close up the affairs of the company, and that it be restrained from doing business.

Thereafter, on September 14, 1960, the Delaware court entered an order which set forth that the National Automobile Insurance Company consented to the appointment of a receiver. It appointed a receiver and directed him to take charge of and close up the business and affairs of said company, with power to prosecute and defend all claims or suits, and to compromise and settle all claims against the company or its insured. Neither the company nor the receiver appeared or defended the suit of Brower against Mazza, and neither has paid Brower's judgment against Mazza or any part thereof. Mazza testified that the receiver had advised him to file proof of claim and he had done so.

Section 38.1-381(f) provides that any insurer paying a claim under the uninsured motorist provision 'shall be subrogated to the rights of the insured to whom such claim was paid against the person causing such injury, death or damage to the extent that payment was made; * * *.'

State Farm contends that it is not liable to its insured, Brower, under the uninsured motorist provision of its policy, whereby it agreed to pay to Brower all sums he was legally entitled to recover as damages from Mazza, ascertained to be $2,500 with interest and costs as aforesaid. It says this is so because Mazza's car was not an uninsured motor vehicle as defined by ...