Woman can’t tap UIM policy of business

After Tawny Grossberg was injured in a car wreck in 2005, a Richmond jury gave her a $615,000 verdict against the driver who hit her, plus $123,000 in interest.

The defendant’s carrier paid its limits — $300,000.

To recoup the remaining money, Grossberg sought to tap the underinsured motorist policy maintained by her husband’s business, a popular barbecue restaurant in Richmond.

The policy, issued by Traveler’s, provides uninsured and underinsured motorist coverage to the named insured, “U.S. Vittles Inc. t/a Buz and Ned’s Real Barbeque,” and to any “family member.”

Grossberg tried to argue that since a company can’t have a family, the language was ambiguous and therefore should be construed in favor of providing insurance.

But U.S. Magistrate Judge Dennis W. Dohnal, while sympathetic, ruled in Grossberg v. Traveler’s Indemnity Co. (VLW 011-3-627) that he was compelled to apply Virginia law and find no UIM coverage.

The Supreme Court of Virginia never has addressed the question of whether an individual can get “family” coverage from an insurance policy maintained by a business.

However, in 2008, a Prince William County circuit judge faced the issue and answered the question in the negative. Judge Rossie D. Alston Jr., now a member of the Court of Appeals, wrote in Elkins v. Erie Insurance Exchange (VLW 009-8-011) that the “vast” majority of jurisdictions that had considered whether a person can be a “family member” of a commercial insurance policy have ruled this way.

Dohnal noted that as a federal judge handling a question of state law, his job was to determine how the state’s highest court might rule.

Lacking a ruling from such a court, he said decisions from lower court “ought to be given due consideration in the analysis.”

He noted the Supreme Court of Virginia refused to grant a petition for appeal in the Elkins case, finding “no reversible error in the judgment.”

Dohnal was quick to point out that he did not view this as precedent. He simply was including those factors in the analysis of trying to glean how the high court would rule.

Grossberg’s lawyer argued one of the cases from the minority of jurisdictions, a 1993 decision from Connecticut, Ceci v. Nat’l Indemnity Co., 622 A.2d.545. The Ceci found, faced with this fact pattern, found there was an ambiguity, and therefore found insurance applied.

Dohnal acknowledged that Grossberg’s lawyer, P. Christopher Guedri of Richmond, made “a well-reasoned, persuasive argument in favor of coverage.”

But the Elkins court, “applying Virginia law to policy language indistinguishable from that now before the court” found no ambiguity, Dohnal wrote. Therefore, he said, “the inquiry ends there.”

Glen Allen attorney John B. Mumford represented Traveler’s in the case.