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HAISLIP v. SOUTHERN HERITAGE INSURANCE COMPANY, et al.


HAISLIP v. SOUTHERN
HERITAGE INSURANCE COMPANY, et al.


September 12, 1997
Record No. 962214

MICHAEL F. HAISLIP

v.

SOUTHERN HERITAGE INSURANCE
COMPANY, ET AL.

OPINION BY JUSTICE LEROY R. HASSELL, SR.
FROM THE CIRCUIT COURT OF HENRICO COUNTY

Buford M. Parsons, Jr., Judge
Present: Carrico, C.J., Compton, Stephenson,[1] Lacy, Hassell, Keenan
and Koontz, JJ.


In this appeal, we consider whether Code ? 38.2-2204 requires an
insurance company, which had issued an automobile liability
insurance policy, to provide full and separate coverage to its
named insured who was allegedly guilty of negligent entrustment
of a vehicle, even though the insurer had already paid the
insurance policy limits on behalf of a permissive user who
negligently operated the insured vehicle.

Michael F. Haislip filed a motion for judgment against Raymond
L. Goode and Tina L. Price to recover damages he incurred as a
result of an automobile accident. Haislip alleged that Price
negligently entrusted her car to Goode, who negligently operated
the vehicle.

At the time of the accident, Price’s car was insured under an
automobile liability policy issued to her by Southern Heritage
Insurance Company. Apparently, Goode did not have an automobile
liability insurance policy, and Southern Heritage settled
Haislip’s claim against Goode and issued a settlement check to
Haislip in the amount of $25,000, which Southern Heritage
believes is the maximum amount of insurance coverage available to
Haislip under the terms of the policy of insurance.

Subsequently, Southern Heritage filed a motion for declaratory
judgment, asking that the trial court declare that: the maximum
amount of coverage available to Haislip under the policy is
$25,000; the policy had been exhausted by reason of the
settlement paid on behalf of Goode and; Southern Heritage has no
duty to defend or pay any amounts related to the claim Haislip
made against Price. Haislip filed a motion for summary judgment,
asserting that the maximum amount of coverage available to him
under the insurance policy is $50,000. The trial court considered
argument of counsel and entered an order denying Haislip’s motion
for summary judgment and granting Southern Heritage’s motion for
declaratory judgment. The trial court entered a judgment
declaring that the insurance coverage available to Haislip under
the insurance policy had been exhausted by the payment of $25,000
to him in settlement of his claim against Goode. Haislip appeals.

Haislip argues that even though the automobile liability
insurance contract provided $25,000 of coverage per occurrence,
Code ? 38.2-2204
requires Southern Heritage to provide $25,000 of liability
coverage to Goode and another $25,000 of coverage to Price.
Haislip contends that Goode and Price are persons insured within
the meaning of the policy and, as a result, Southern Heritage is
required to provide a maximum of $25,000 of coverage to Price for
her negligent entrustment of the vehicle and another $25,000 of
coverage to Goode for his negligent operation of the insured
vehicle. Continuing, Price asserts that Code ? 38.2-2204
"provides that all contracts of bodily injury liability
insurance must contain a provision insuring the named insured, as
well as any other person using the motor vehicle with the express
or implied consent of the named insured." Southern Heritage
argues, however, that Code ? 38.2-2204
"was not created for the benefit of the insured, nor was it
created in order to allow double recovery to the party who has
suffered damage by the negligent use of the insured’s car when
operated by another with the owner’s permission." Southern
Heritage asserts that the purpose of Code ? 38.2-2204 is to
protect the injured party who has suffered damage "by
allowing that party a single recovery under the insured’s
policy."

Code ? 38.2-2204,
commonly referred to as the omnibus clause, states in part:

"A. No policy or contract of bodily injury or
property damage liability insurance, covering liability
arising from the ownership, maintenance, or use of any motor
vehicle . . . shall be issued or delivered in this
Commonwealth to the owner of such vehicle . . . or
shall be issued or delivered by any insurer licensed in this
Commonwealth upon any motor vehicle . . . that is
principally garaged, docked, or used in this Commonwealth,
unless the policy contains a provision insuring the named
insured, and any other person using or responsible for
the use of the motor vehicle . . . with the
expressed or implied consent of the named insured, against
liability for death or injury sustained, or loss or damage
incurred within the coverage of the policy or contract as a
result of negligence in the operation or use of such vehicle
. . . by the named insured or by any such
person."

(Emphasis added).

In deciding the meaning of the statute, we must consider the
plain language that the General Assembly employed when enacting
this statute. For example, we stated in Barr v. Town
& Country Properties
, 240 Va. 292, 295, 396 S.E.2d 672,
674 (1990) (quoting Watkins v. Hall, 161 Va.
924, 930, 172 S.E. 445, 447 (1934)):

"’While in the construction of statutes the constant
endeavor of the courts is to ascertain and give effect to the
intention of the legislature, that intention must be gathered
from the words used, unless a literal construction would
involve a manifest absurdity. Where the legislature has used
words of a plain and definite import the courts cannot put
upon them a construction which amounts to holding the
legislature did not mean what it has actually
expressed.’"

Accord Abbott v. Willey, 253 Va. 88, 91,
479 S.E.2d 528, 530 (1997); Weinberg v. Given, 252
Va. 221, 225-26, 476 S.E.2d 502, 504 (1996); Dominion Trust
Co.
v. Kenbridge Constr. Co., 248 Va. 393, 396, 448
S.E.2d 659, 660 (1994).

Additionally, in interpreting Code ? 38.1-381, the
predecessor to the current omnibus statute, we stated that the
omnibus statute "is by force of its provisions made a part
of a liability policy, and is to be liberally construed to
accomplish its intended purpose. However, . . . we must
look to the words used in the statute to determine its meaning,
and only the meaning of the statute as determined should be given
effect." Grange Mutual v. Criterion Ins. Co.,
212 Va. 753, 756, 188 S.E.2d 91, 93 (1972); accord City
of Norfolk
v. Ingram, 235 Va. 433, 437, 367 S.E.2d
725, 727 (1988); Storm v. Nationwide Ins. Co., 199
Va. 130, 135, 97 S.E.2d 759, 762 (1957).

We are of opinion that the plain language contained in Code ? 38.2-2204(A) requires
Southern Heritage to provide $25,000 of insurance coverage for
any claim or judgment that Price may be legally obligated to pay
to Haislip for claims arising out of the underlying automobile
accident, even though Southern Heritage has already paid $25,000
to settle Haislip’s claims against Goode. The plain language
contained in the omnibus clause requires the Southern Heritage
policy to contain "a provision insuring the named insured, and
any other person using . . . the motor
vehicle. . . ."

The General Assembly’s use of the word "and" in Code
? 38.2-2204(A)
means that Southern Heritage is required to provide insurance
coverage to both Price, who is the named insured, and Goode, who
was driving the motor vehicle with Price’s consent. The word
"and" is unambiguous. "And" means "along
with or together with . . . added to or linked
to." Webster’s Third New International Dictionary, p.
80 (1986). Even though Southern Heritage’s insurance policy
contains a limitation of $25,000 per occurrence, that limitation,
if applied, would violate the omnibus clause because once
Southern Heritage paid the $25,000 to settle Haislip’s claims
against Goode, Price, the named insured, who paid the policy
premiums, would not receive any liability insurance coverage.
Thus, Southern Heritage’s interpretation of its policy and the
omnibus clause would render the word "and" used in the
statute meaningless.

Accordingly, we will enter a declaration here that Code ? 38.2-2204 requires
Southern Heritage to provide a maximum of $25,000 in coverage for
any claim that Haislip may make against Price in addition to the
$25,000 that Southern Heritage has already paid to settle
Haislip’s claims against Goode.

Reversed and final judgment.

 

JUSTICE COMPTON, with whom CHIEF JUSTICE CARRICO and JUSTICE
STEPHENSON join, dissenting.

The issue in this case, involving allegations of negligent
operation by a permissive user and of negligent entrustment by a
named insured, is whether the policy’s liability limits are to be
paid for each accident or for each act of negligence that may
result in injuries to the claimant.

Of course, under the omnibus clause, Code ? 38.2-2204(A), the
policy in question must contain a provision insuring the named
insured "and" any other person using the insured’s
motor vehicle with the expressed or implied consent of the named
insured against liability for injury sustained as a result of
negligence in the operation or use of the vehicle. Manifestly,
Price, the named insured, "and" Goode, the permissive
user, were "insured" under the policy; the insurer was
obligated to provide a defense to both Price "and"
Goode and, if the policy’s monetary limits had not been
exhausted, to pay the claimant’s damages upon establishment of
legal liability.

But employment of the word "and" in the omnibus
clause does not mandate or require payment of the policy’s
liability limits for each act of negligence, that is, both
negligent driving and negligent entrustment. The insurer’s policy
unambiguously provided that "the limit of bodily injury
liability . . . applicable to `each person’ is the
limit of the company’s liability for all damages . . .
arising out of bodily injury sustained by one person as the
result of any one occurrence." Nothing in the omnibus clause
annuls that policy provision. "Simply put, the liability
limits are per accident, not per act of negligence. Any contrary
interpretation of the policy language would be unfounded." Helmick
v. Jones, 452 S.E.2d 408, 411 (W. Va. 1994); accord
Mid-Century Ins. Co. v. Shutt, 845 P.2d 86 (Kan.
App. 1993). But see Iaquinta v. Allstate
Ins. Co.
, 510 N.W.2d 715 (Wis. App. 1993).

Accordingly, the maximum amount that the claimant Haislip may
recover under the insurance contract is $25,000. Thus, I would
affirm the judgment of the trial court in favor of the insurer.

 

 

 

FOOTNOTES:

[1] Justice Stephenson participated
in the hearing and decision of this case prior to the effective
date of his retirement on July 1, 1997.

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