White Tire Distributors, Inc. v. Pennsylvania Nat. Mut. Cas. Ins. Co.

• Decision Date: 22 April 1988
• Docket Number: No. 850705,850705
• Citation: 367 S.E.2d 518,235 Va. 439
• Parties: WHITE TIRE DISTRIBUTORS, INC. v. PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY. Record
• Court: Virginia Supreme Court

Page 518

367 S.E.2d 518

235 Va. 439

WHITE TIRE DISTRIBUTORS, INC. v. PENNSYLVANIA NATIONAL MUTUAL CASUALTY INSURANCE COMPANY.

Record No. 850705.

Supreme Court of Virginia.

April 22, 1988.

William W. Terry, III (Lawrence H. Bryant, Wetherington & Melchionna, Roanoke, on brief), for appellant.

Susan Waddell Spangler (Fox, Wooten & Hart, P.C., Roanoke, on brief), for appellee.

Present: All the Justices.

WHITING, Justice.

White Tire Distributors, Inc. (White) filed a motion for judgment against its insurer, Pennsylvania National Mutual Insurance Company (Penn National), seeking to recover payment for a loss under the comprehensive crime coverage endorsement Penn National had issued to White. Penn National asserted that the terms of the policy did not cover the loss. Stipulating the facts, the parties submitted the case to the trial court, and it entered summary judgment for Penn National. The case is before us on White's appeal.

Penn National provided comprehensive crime coverage to White from April 7, 1982, through November 11, 1982. Unknown to White, during the period of Penn National's coverage, an employee forged a number of checks causing a loss of $24,538.28. White obtained similar coverage from another insurance company, INA/Aetna, effective November 12, 1982, to replace Penn National's coverage. The same employee continued to forge checks during the period of INA/Aetna's coverage, causing an additional loss to White of $24,055.22. White did not discover any of these forgeries from the two coverage periods until INA/Aetna's period of coverage had commenced.

Each insurance policy defined a series of related criminal acts by one or more persons as "one occurrence," and provided for a maximum coverage of $20,000 for that occurrence. INA/Aetna paid $20,000 under its policy but Penn National refused to pay the $20,000 coverage of its policy.

Familiar principles guide our consideration of the issues in this case:

Insurance policies are to be construed according to their terms and provisions and are to be considered as a whole. Where there is doubt or uncertainty and where the language of a policy is susceptible of two constructions, it is to be construed liberally in favor of the insured and strictly against the insurer. Where two interpretations equally fair may be made, the one which permits a greater indemnity will prevail because indemnity is the ultimate object of insurance.

Surety Corporation v. Elder, 204 Va. 192, 197, 129 S.E.2d 651, 655 (1963) (citations omitted).

Penn National claims that two provisions in its policy limit White's recovery. Penn National points first to Section 12, which provides, in pertinent part, that recovery for a loss "which occurs partly during the effective period of this endorsement and partly during the period of other bonds or policies issued by the Company ... shall not exceed, in the aggregate ... the amount available to the insured under such other bonds or policies ..."...