Travelers Property Cas. of Amer. v. Ely

• Citation: 640 S.E.2d 520,49 Va. App. 271
• Decision Date: 06 February 2007
• Docket Number: Record No. 1056-06-1.,Record No. 1057-06-1.
• Parties: TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA v. Leslie C. ELY, Graycon, Inc., J.F. Schoch Building Corporation and Building Insurance Association, Inc. Travelers Property Casualty Company of America v. Matthew L. Bailey, Willie M. Thomas Home Improvements and Uninsured Employer's Fund.
• Court: Court of Appeals of Virginia

640 S.E.2d 520

49 Va. App. 271

TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA v. Leslie C. ELY, Graycon, Inc., J.F. Schoch Building Corporation and Building Insurance Association, Inc.

Travelers Property Casualty Company of America v. Matthew L. Bailey, Willie M. Thomas Home Improvements and Uninsured Employer's Fund.

Record No. 1056-06-1.

Record No. 1057-06-1.

Court of Appeals of Virginia, Chesapeake.

February 6, 2007.

Gerard E.W. Voyer (Audrey Marcello; Taylor & Walker, P.C., on briefs), Norfolk, for appellant.

Andrew R. Blair (Blair Law Offices, on briefs), for appellees J.F. Schoch Building Corporation, Building Insurance Association, Inc. and Uninsured Employer's Fund.

Lisa Frisina Clement (Kari Lou Frank; PennStuart, on brief), Richmond, for appellee Willie M. Thomas Home Improvement.

No brief or argument for appellees Leslie C. Ely, Graycon, Inc. and Matthew L. Bailey.

Present: FRANK, KELSEY and BEALES, JJ.

FRANK, Judge.

In this consolidated appeal, Travelers Property Casualty Company (Travelers) appeals two decisions of the Workers' Compensation Commission finding that Travelers failed to comply with the notice requirements of Code § 65.2-804(B).¹ On appeal, Travelers contends that upon the insured's/employer's failure to renew policies of insurance, Travelers was not required to file a Form 45H of non-renewal with the commission. We hold the commission properly found that Travelers was required to file a Form 45H in each case, that the failure to do so kept the existing policies in effect, and that Travelers is responsible for the payment of benefits. Therefore, we affirm the awards.

BACKGROUND

Claimant Leslie C. Ely

The material facts are not in dispute. Graycon, Inc., the insured, obtained a workers' compensation insurance policy with Travelers effective from July 30, 2003 through July 30, 2004. Prior to the expiration of the policy, an underwriter from Travelers offered the insured the opportunity to renew the policy. The insured inadvertently did not remit a premium to Travelers, and Travelers took no action to renew the policy. Travelers did not file a Form 45H non-renewal notice with the commission.

Claimant was injured in a work-related accident on September 17, 2004.

Claimant Mathew L. Bailey

The material facts are not in dispute. Travelers issued a workers' compensation insurance policy to Willie M. Thomas Home Improvements, the insured, effective from October 25, 2003 through October 25, 2004. An underwriter for Travelers sent notice to the insured that the policy was about to expire and offered to renew the policy. Travelers received a premium payment on December 18, 2004, after the policy's expiration date. Prior to receiving this late premium payment Travelers did not file a Form 45H non-renewal notice with the commission.

Claimant was injured in a work-related incident on December 16, 2004.

Findings by the Full Commission

In each case, the commission interpreted the language of Code § 65.2-804(B) to determine whether the insured or Travelers was responsible for notifying the commission upon non-renewal of a policy. The full commission found that the operative phrase "non-renewed by the insurer" is ambiguous, stating:

The language of [Code §] 65.2-804 can be interpreted to mean non-renewed at the election of the insurer or that the insurer did not renew the policy, whether it was at the behest of the employer or insurer, as a result of an oversight by the parties, or for other reasons.

In interpreting Code § 65.2-804(B), the commission looked to the intent of the statute and determined that "all non-renewals are `non-renew[als] by the insurer' as contemplated by [Code] § 65.2-804(B)."

The commission found in each case that because Travelers did not file a commission Form 45H, the policies were not effectively terminated and Travelers was responsible for benefits associated with each compensable injury. From these decisions, Travelers appeals.

ANALYSIS

The narrow issue in these consolidated cases is whether the phrase "non-renewed by the insurer" in Code § 65.2-804(B) refers to only when the insurer initiates the non-renewal, or whether it is broad enough to encompass situations where the insured initiates the non-renewal. Put differently, is the insurer obligated to notify the commission and the insured every time the policy is not renewed, or only when the insurer/carrier initiates the non-renewal? In the cases before us, the insured did not pay the insurance premium prior to the expiration date of their respective policies.

As we stated above, our resolution of the issue before us is the meaning of "non-renewed by the insurer." We find that in all cases of non-renewals, the insurer must provide notification pursuant to Code § 65.2-804(B).

This appeal requires that we reconcile two neighboring provisions of the Workers' Compensation Act: Code § 65.2-804(A) dealing with notice requirements when an insured cancels his coverage; and Code § 65.2-804(B) dealing with notice requirements when the insurer cancels or does not renew the coverage. In order to reconcile the statutes, we apply the applicable rules of statutory construction.

It is well established that a statute should be read and considered as a whole, and the language of a statute should be examined in its entirety to determine the intent of the General Assembly from the words contained in the statute. In doing so, the various parts of the statute should be harmonized so that, if practicable, each is given a sensible and intelligent effect. Thus, "[a] statute is not to be construed by singling out a particular phrase; every part is presumed to have some effect and is not to be disregarded unless absolutely necessary." Commonwealth v. Zamani, 256 Va. 391, 395, 507 S.E.2d 608, 609 (1998); accord Jeneary v. Commonwealth, 262 Va. 418, 430, 551 S.E.2d 321, 327 (2001).

Dep't of Med. Assistance v. Beverly Healthcare, 268 Va. 278, 285, 601 S.E.2d 604, 608 (2004) (other citations omitted).

"We consider the language of each statute at issue to determine the General Assembly's intent from the plain and natural meaning of the words used. When the language of a statute is unambiguous, courts are bound by the plain meaning of that language." Hoffman Family, LLC v. City of Alexandria, 272 Va. 274, 284, 634 S.E.2d 722, 727 (2006) (citations omitted). Because statutory interpretation presents a pure question of law, it is subject to de novo review by this Court. Boynton v. Kilgore, 271 Va. 220, 227, 623 S.E.2d 922, 925 (2006).

Our analysis begins with the premise that the Workmen's Compensation Act was adopted for the protection of workers and their dependents. Hartford Co. v. Fidelity, 223 Va. 641, 643, 292 S.E.2d 327, 328 (1982). It is undisputed that Code § 65.2-804(B) includes a notice and delay provision. The notice and delay requirements of Code § 65.2-804(B) protect the worker against a lapse in his employer's insurance coverage where a workers' compensation insurance policy is canceled or not renewed by giving the employer an opportunity to acquire other insurance and by giving the commission the opportunity to timely invoke its enforcement authority. Pennsylvania Mfrs. Ass'n v. Waldron, 16 Va.App. 991, 994, 434 S.E.2d 690, 691 (1993).

In interpreting this statutory language, we must review the entire statutory scheme. We begin by reviewing all subsections of Code § 65.2-804 in order to understand the import of the notice provisions. Code § 65.2-804(A)(1) requires each insured to file annually with the commission evidence of compliance with the insurance requirements of the Act. However, if the employer subsequently cancels the insurance, employer shall immediately notify the commission of such cancellation. Every insurer must also notify the commission "immediately upon the cancellation of any policy issued by it...." Additionally, Code § 65.2-804(A)(2) requires the employer, prior to canceling the insurance, to give employees 30 days written notice of its intent to cancel. "Every employer who received the notice required under subsection (B) of this section shall immediately forward a copy to his employees covered." Thus, subsection (A) addresses notice requirements when the employer cancels the insurance.

Prior to 1993, Code § 65.2-804(B) provided that the insurer notify the commission upon cancellation initiated exclusively by the insurer. During that same time, Code § 65.2-804(A) addressed the notice requirements when the insured exclusively initiated cancellation. In 1993, however, the General Assembly amended the statute to also include notification to the commission upon "non-renewal" of a policy. Importantly, the legislature changed only subsection (B), the provision that deals with cancellation by the insurer. Subsection (A) remained unchanged. We interpret this legislative action to mean that the General Assembly contemplated that in the case of every non-renewal, the insurer was the party responsible for giving notice to the commission. Had the legislature intended that in cases in which the insured initiated a non-renewal, rendering the insured rather than the insurer responsible for giving notice, then the General Assembly would have also amended subsection (A), which addresses actions taken by the insured. Thus, we find that "non-renewal by the insurer" as stated in subsection (B) contemplates all non-renewals.

Claimant Ely's case presents an ideal example in support of the commission's ruling that subsection (B) requires the insurer to notify the commission in all non-renewals. While the insured/employer acknowledged receiving Travelers' renewal package prior to the expiration of the policy, employer erroneously understood the policy had been renewed. A representative from Travelers testified that Travelers never notified employer of non-renewal. Had Travelers complied with the mandate of subsection (B), it would have notified employer and the commission of the status of the policy. Employer...