Transcontinental Ins. Co. v. Rbmw, Inc.

• Decision Date: 14 September 2001
• Docket Number: Record No. 002532.,Record No. 002894
• Citation: 262 Va. 502,551 S.E.2d 313
• Parties: TRANSCONTINENTAL INSURANCE COMPANY, v. RBMW, INC., t/a Jordan Point Yacht Haven, et al. Robins Insurance Agency, Inc., et al., v. Transcontinental Insurance Company, et al.
• Court: Virginia Supreme Court

551 S.E.2d 313

262 Va. 502

TRANSCONTINENTAL INSURANCE COMPANY, v. RBMW, INC., t/a Jordan Point Yacht Haven, et al.

Robins Insurance Agency, Inc., et al., v. Transcontinental Insurance Company, et al.

Record Nos. 002894, 002532.

Supreme Court of Virginia.

September 14, 2001.

W. Joseph Owen, III (Cowan & Owen, on brief), Richmond, for appellant, Transcontinental Insurance Company (Record No. 002894).

Bruce M. Marshall (Durrette, Irvin & Bradshaw, on brief), Richmond, for appellee RBMW, Inc., d/b/a Jordan Point Yacht Haven (Record No. 002894).

No brief filed on behalf of Robins Insurance Agency and William Raleigh Robins (Record No. 002894).

Scott M. Ford, McLean, (Douglas M. Palais; McCandlish Kaine, Richmond, on briefs), for appellants (Record No. 002532).

Bruce M. Marshall (Barrett E. Pope; Durrette, Irvin & Bradshaw, on brief), Richmond, for appellee RBMW, Inc., d/b/a Jordan Point Yacht Haven (Record No. 002532).

No brief filed on behalf of Transcontinental Insurance Company (Record No. 002532).

Present: All the Justices.

LEMONS, Justice.

In this opinion we consider two appeals arising out of the same case in the trial court. In the first appeal, we consider whether the trial court erred in ruling that an exclusion in a Piers, Wharfs, and Docks Coverage Form ("PWD") contained in an insurance policy issued by Transcontinental Insurance Company ("Transcontinental") to RBMW, Inc. ("RBMW"), t/a Jordan Point Yacht Haven ("Jordan Point") did not apply. In the second appeal, we consider whether the trial court erred in permitting RBMW to take a nonsuit of its cause of action against Robins Insurance Agency, Inc. ("Robins Insurance") and William Raleigh Robins ("Mr. Robins").

I. Facts and Proceedings Below

RBMW is a Virginia corporation which operates a marina known as Jordan Point on the James River near the Benjamin Harrison Bridge in Hopewell, Virginia. William Michael Winn ("Winn") is the president of RBMW and manages Jordan Point.

On March 20, 1995, Robins Insurance, through its agent Mr. Robins, sold a commercial package policy to RBMW. The policy included workers' compensation, automobile, property, general liability, and various other coverages, and was underwritten by Transcontinental. In addition, the policy offered the option of purchasing PWD coverage. RBMW purchased PWD coverage at an annual cost of $4,231. The PWD policy provides in pertinent part:

A. COVERAGE

We will pay for "loss" to Covered Property from any of the Covered Causes of Loss.

1. COVERED PROPERTY, as used in this Coverage Form means:

a. Floating or fixed piers, wharfs and docks;

. . . .

3. COVERED CAUSES OF LOSS

Covered Causes of Loss means RISKS OF DIRECT PHYSICAL "LOSS" to Covered Property except those causes of "loss" listed in the exclusions.

4. a. ADDITIONAL COVERAGE— COLLAPSE

We will pay for direct "loss" caused by or resulting from risks of direct physical "loss" involving collapse of all or part of a building or structure caused by one or more of the following:

(1) Fire; lightning; windstorm; hail; explosion; smoke; aircraft; vehicles; riot; civil commotion; vandalism; breakage of glass; falling object; weight of snow, ice or sleet; water damage; all only as covered in the Coverage Form;

. . . .

B. EXCLUSIONS

1. We will not pay for a "loss" caused directly or indirectly by any of the following. Such "loss" is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the "loss":

. . . .

e. WATER

. . . .

(4) Flood, surface water, waves, tides, tidal waves, overflowing of any body of water, or their spray, all whether driven by wind or not.

Additionally, the PWD policy defines "loss" as "accidental loss or damage." Transcontinental and RBMW agree that the Transcontinental policy, including PWD coverage, was in effect at the time of the loss on September 6, 1996.

In early September 1996, Hurricane Fran battered the east coast of the United States. On September 6, 1996, the storm reached Hopewell and severely damaged Jordan Point. RBMW submitted a claim to Transcontinental for $139,712.17. However, Transcontinental only paid $18,143.80 and denied the remainder of RBMW's claim relating to damage to its piers, wharves, and docks along with damage to a boathouse and replacement of a sign.¹

On June 22, 1998, RBMW filed a motion for judgment in the trial court against Transcontinental, Robins Insurance, and Mr. Robins.² RBMW alleged Transcontinental breached its contract when it failed to pay the entire claim. Additionally, RBMW alleged, in the alternative, that Robins Insurance and Mr. Robins (collectively, "Robins") intentionally or negligently misrepresented to RBMW that storm damage was covered under the PWD policy.

At a bench trial on May 1, 2000, Winn testified concerning the damage that occurred to Jordan Point as a result of the hurricane. On cross-examination, the following colloquy took place between counsel for Transcontinental and Winn:

Q: And also, as I understand from your deposition, the waves or the wave action on the boat did most of the damage to what occurred to the docks and to the boathouse?

A: That was my opinion.

The trial court also viewed a video tape that was a compilation of different video tapes people took the night of the hurricane. Additionally, the trial court received as evidence the insurance policy, including the PWD form.

After Winn testified, counsel for Transcontinental and RBMW agreed that it was an appropriate time to argue whether the exclusions in Section B(1)(e)(4) of the PWD policy precluded coverage. The trial court concurred, "with the understanding that we are excluding from this [RBMW's] claim against Robins."

The trial court ultimately ruled that the exclusions in the PWD policy did not apply. Specifically, the trial court stated:

the beginning of the rider under coverage, it says we'll pay for loss of covered property. For many of the covered causes, under covered causes, we find subsection A to be floating or fixed piers, wharves, and docks.

In section 4 under A dealing with coverages, we get specific as to collapse, and it talked about direct loss caused by or resulting from a risk of direct physical loss, involving collapse of all or part of a building or structure caused by one or more of the following: And it lists several things; 2 of which are windstorm and water damage.

That gets us to the exclusions section. In number one under exclusions, it says we will not pay for a loss caused directly or indirectly by any of the following: Subsection E there says water.

And that gets us to the crux of this matter where under E4, it excludes flood, surface water, waves, tides, tidal waves overflowing of any body of water, or their spray, all [whether] driven by wind or not. The first word there is flood.

Black's Law Dictionary defines flood as an inundation of water over land not usually covered by it. And flood water is defined as water which escapes from a stream or other body and overflows adjacent territory.

By definition, this ain't a flood. Because the damage is over water where water not only flows, over the stream. In this case, the stream is rather large. It's the James River.

Then we get to waves and tides overflowing of any body of water. Turning to Black's again, overflow, the dictionary says, is to flow or spread beyond the limits. These piers and docks and wharves were not beyond the limits of the river. They were in the river. It can't be a flood. Its waves and tides were not beyond the limit; not up on the beach somewhere. It's in the river.

So if I were to take waves and tides, it's not those overflowing of the body of water.

Counsel for Transcontinental argued that under the clear language of the policy, "overflow is not a requirement for the wave to be excluded" and suggested that, at the very least, the issue should be briefed before the trial court rendered a final decision. However, the trial court disagreed, stating, "I don't see where anything is going to be gained by briefing it. This thing is written with each one of these: Flood, surface, waves, tides, tidal waves. Comma after each one. And then saying overflowing of any body of water."

After the trial court's ruling, counsel for RBMW stated the following:

Your Honor, I don't think we have a further cause of action against the agency based on that ruling, and I suggest that they be allowed to leave. If the court's ruling is that the coverage applies, then our allegation to the agency should have told us it didn't. It's been decided by the court's opinion.

The trial court agreed and excused counsel for Robins from the remainder of the proceedings.

On May 8, 2000, counsel for Robins received a nonsuit order from RBMW that had not been endorsed by all counsel of record. Robins filed a motion for entry of a dismissal order, asserting that because the trial court determined that there was coverage under the Transcontinental policy, Robins should be dismissed from the case with prejudice. The trial court heard argument and issued a letter opinion on June 30, 2000, stating that it would permit RBMW to nonsuit Robins. Specifically, the trial court noted that RBMW's intentional or negligent misrepresentation count against Robins had not been presented to the trial court for decision and therefore, under Code § 8.01-380, the granting of a nonsuit was appropriate. A July 26, 2000 order memorialized this decision.

Both Transcontinental and RBMW stipulated that the amount of the damage claim that Transcontinental did not pay was $111,597.55. On September 11, 2000, the trial court issued an order that reiterated its ruling that the exclusion in the PWD policy relied upon by Transcontinental did not apply and awarded RBMW $111,597.55 plus interest in damages.

Transcontinental and Robins appeal the respective adverse rulings of the trial court. In its brief before this Court, RBMW states that "[a]ll Jordan Point seeks is to retain its status quo in this case...