Vol. 54 October 31, 2014
An Insurance Industry Newsletter of Recent Issues and Opinions in Virginia Law
WHAT, ME WORRY? THE DECISION IS IN THE DETAILS
Underinsured Motorist Coverage, when is it available to a plaintiff and how this is decided, can provide a thorny issue for insurers and for the courts. Judge Charles Dorsey’s opinion letter from a Roanoke Circuit Court decision in two declaratory judgment actions may shed some light on this issue. In Selective Ins. Co. of Am. v. Karen Slone Bratton, Administrator of the Estate of Richard Linwood Slone, et al. and Karen Slone Bratton, Administrator of the Estate of Richard Linwood Slone v. Selective Ins. Co., et al., (2014 Va. Cir. LEXIS 12 (Roanoke 2014)), Judge Dorsey carefully explains the steps taken by the Court in determining that the plaintiff is not entitled to underinsured motorist coverage.
The decedent, Mr. Slone, worked for S.R. Draper Paving, one company involved in the night time work of laying water lines along Route 419 in Roanoke County. Mr. Slone’s job was to bring dump-truck loads of asphalt to the jobsite and off-load the asphalt into the bucket of a front-end loader which then dumped the asphalt into the water-line channel. This was not the normal procedure for this type of job, but the company’s road widener had malfunctioned forcing the use of the front-end loader. This adjustment created two fatal consequences. First, Mr. Slone had to exit the dump truck periodically to check for asphalt spillage onto the road. Second, the front loader needed to swing into the left traffic lane in order to dump the asphalt correctly and the company in charge of traffic safety was never informed of this, they continued to simply block traffic from the right lane of Route 419. Although a Draper Paving employee would grab a stop/slow sign to guide traffic whenever the front loader needed to cross into the left lane, drivers received no advanced warning of the periodic left lane closure.
On the second night of road work, February 20, 2008, two drunk drivers, after ignoring the flagger, crashed consecutively into the front-loader as it was dumping its load of asphalt. The loader spun into the dump truck, pinning Mr. Slone between the two vehicles and killing him. In the ensuing civil jury trial, Ms. Bratton was awarded joint- and-several judgment in the amount of $4.35 million against the two drivers. However, the drivers’ combined insurance was insufficient to satisfy this judgment, and Ms. Bratton sought payment from Selective Insurance, the underinsured motorist insurer for Draper Paving. The paving company had two insured vehicles on the scene that night, the dump truck used by Slone and a pick-up truck driven to the site by another employee.
In deciding this case, the Court enumerated three issues. First, in post trial proceedings, can a party rely on testimony from a deposition that was not introduced at trial? A Draper employee testified in his deposition that he shouted a warning when the drivers drove through the stop sign. However, this testimony was never introduced at trial since the employee testified live, but was not asked that specific question. Therefore, testimony about this shout was not part of the trial record. Judge Dorsey states that three factors must be present before the Court can exercise estoppel. There must be inconsistent factual positions, “the parties must be the same and the estopped party must have previously convinced the trial court to accept its original factual position.” Since the Draper employee’s deposition testimony was not submitted at trial, the third factor is not met and the Court cannot stop Selective Insurance from asserting that it was Mr. Sloan who shouted just before the accident.
The second issue involves the UIM coverage. Judge Dorsey starts with the Virginia Code § 38.2- 2206(A)(B) which, “requires that all motor-vehicle liability insurance policies provide uninsured and underinsured coverage to persons insured under the policies. An ‘insured’ person is ‘any person who uses the motor vehicle to which the policy applies’ with the express or implied consent of the ‘named insured’.” The Court’s next step is to look at the policy language to determine how “uses” is defined. The Selective policy states that coverage is available for anyone “occupying a covered auto” at time of the incident. The policy further defines “occupying” as “in, upon, using, getting in, on, out of, or off” an insured vehicle. Selective v. Bratton, et al. at 10. The only condition that might apply is if Mr. Slone was “using” either of the Draper Paving vehicles at the time of his death. The plaintiff contends that Mr. Sloan was using the dump truck as he needed to check for spilled asphalt from its transfer to the front-end loader, that this was the only reason that he ever exited the truck and it was his habit to do so after every second, third or fourth pour. Selective contends that no one knew or was even aware that Mr. Slone was out of the dump truck, therefore, no one can verify that he was checking for spilled asphalt and that this was in fact the first pour, so his “habit” would not apply. The Court found that because the plaintiff could not conclusively prove that the decedent was checking for spilled asphalt, she could not assert that he was “using” the dump truck.
The other vehicle that the plaintiff contends Mr. Slone was using is the Draper Paving pick-up truck which was parked just inside the traffic cones set up in the right-hand lane of Route 419 with all lights, to include a strobe light, turned on. The plaintiff argues that this constituted a “shadow vehicle”, “a parked vehicle that serves as a traffic barrier”, and falls within the insurance policy’s meaning. Id. at 16. The Court finds that this is not the case for two reasons. The vehicle must be used for the purpose for which it was designed. In this case, the truck was primarily used to transport employees and tools to the jobsite. The driver was simply in the habit of parking it with the lights on as an extra safety precaution for the workers. Secondly, the truck was not in the correct position to qualify as a shadow vehicle according to the Virginia Work Area Protection Manual (WAPM) which defines work-zone safety precautions. In accordance with the WAPM standard, “a shadow vehicle must be parked within 50-100 feet of the first work crew”, but the Draper truck was 200 feet from the first work crew. Also, the Court held that this vehicle was not essential to Mr. Slone’s mission of transporting asphalt since Draper was not responsible for the lane closing safety and the vehicle was merely parked in a lighted manner out of the driver’s habit. Finally, the Court finds that use of the pick-up truck as a shadow vehicle was beyond the “objective and reasonable” contemplations of the parties. Id. at 11. “Selective had no reason to believe that it was providing UIM coverage to every worker on the jobsite that night” due to the driver’s habit of parking his truck at the start of the jobsite with all lights on. Id. at 24.
The issue of UIM coverage is destined to be litigated over and over again as each case presents a unique set of circumstances. The key ingredient is the use of the vehicle and, as we see from this example, “use” often depends on the parties’ points of view. However, this case also reveals how the Court proceeds in these matters. First, the Virginia Code § is applied, followed by the exact wording of the insurance policy. When applicable, WAPM standards are considered. All of these factors are applied to the exact, not speculative, facts of the case. The devil, and therefore the decision, is in the details.
DECISIONS BY THE SUPREME COURT OF VIRGINIA REGARDING INSURANCE INDUSTRY ISSUES
OCTOBER 27-31, 2014 SESSION
130633 RGR, LLC v. Settle 10/31/2014 In a wrongful death action arising out of a collision at a private railroad crossing, the circuit court did not err in holding that the defendant lumber loading business owed a duty of reasonable care to plaintiff's decedent or in instructing the jury on that duty, finding that plaintiff's decedent was not contributorily negligent as a matter of law, and that the defendant business' negligence was a proximate cause of the collision. The circuit court's judgment sustaining the jury's verdict is affirmed; however, the circuit court erred in calculating the offset for prior amounts received as required under Code § 8.01-35.1. On that issue, the circuit court's judgment is reversed and the case is remanded for further proceedings.
131301 McBride v. Bennett 10/31/2014 In a wrongful death action brought by the administrator of the estate of a cyclist killed around 1:00 a.m. after being struck by one of two speeding police cars driven by officers responding to a domestic disturbance call, the officers were engaged in a governmental function and the operation of their respective vehicles entailed special risks arising from the governmental activity and the exercise of judgment or discretion about the proper means of effectuating the governmental purpose. For that reason, the circuit court did not err in ruling that they are entitled to the protection of sovereign immunity. The judgment of the circuit court is affirmed.
132048 Lasley v. Hylton 10/31/2014 In a personal injury case brought on behalf of a minor who was injured while being supervised by her own parent during a visit to the defendant’s property and while using the defendant's motorized all-terrain vehicle, it is held that a host owes a child social guest a legal duty to exercise reasonable care for the child's safety. Here the defendant satisfied this duty when he ensured that the child was being supervised by her father and had his permission to ride the ATV.If a child's parent is present and supervising, and knows or should know of open and obvious risks associated with an activity, a host does not breach the duty of reasonable care when he or she allows the child to participate in an activity with the parent's permission. The judgment of the circuit court dismissing the case on a motion to strike plaintiff’s evidence is affirmed.
140171 Owens v. DRS Automotive FantomWorks, Inc. 10/31/2014 In a contract fraud and Virginia Consumer Protection Act suit, arising out of the repair and renovation of an antique automobile, the circuit court did not err in granting a motion to strike at the conclusion of plaintiffs' case. Plaintiffs were bound by uncontradicted testimony they elicited in their case in chief, and the trial court's comment that the testimony of two witnesses was credible did not usurp the function of the jury. Protection afforded under the Virginia Consumer Protection Act extends beyond fraud, and it does not require the consumer to prove in every case that misrepresentations were made knowingly or with the intent to deceive. Code § 59.1-204(A), however, requires proof in misrepresentation cases of the elements of reliance and damages. Here, plaintiffs failed to produce evidence of misrepresentations concerning the purchase price of the "donor car" purchased for its components, which were to be installed in the antique vehicle. If there were other misrepresentations, the plaintiffs offered no evidence of any loss suffered from reliance upon them. The evidence on the Consumer Protection Act claim was insufficient to go to the jury and no error is found in the rulings of the circuit court. The judgment is affirmed.
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