CRAIG v. DYE, et al.

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subject to formal revision. If you find a typographical error or
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DYE, et al.

March 3, 2000

Record No. 991043





Michael Patrick McWeeney, Judge

Present: Carrico, C.J., Compton,[1] Lacy, Keenan, Koontz and Kinser, JJ.


In this appeal, we construe a personal
liability umbrella insurance policy provision stating that the
insurer may not provide coverage if an insured
"refuse[s]" to perform certain required duties. Because
the insureds in this case merely failed to perform those duties
but did not refuse to do so, we will reverse the circuit
court’s judgment in favor of the insurance company.


Robert V. Dye (the father), and his wife, Mary
L. Dye (collectively, the parents), were the named insureds of a
personal liability umbrella insurance policy (the policy), issued
by State Farm Fire and Casualty Company (State Farm). Their son,
Robert Glenn Dye (the son), was a resident of their household,
and thus was also an insured under the policy.

The son was the driver of a vehicle that
allegedly struck and killed Jose Salvadore Antonio on April 1,
1995. Lou Ann Craig, personal representative of Antonio’s
estate, filed this declaratory judgment action in the circuit
court, seeking a declaration, inter alia, that the
son is covered under the policy with regard to that accident.

State Farm denied coverage to the son because
of the insureds’ alleged failure to timely comply with the
following policy provision contained in the section titled

These are things you [3]
must do for us. We may not provide coverage if you refuse to:

1. notify us of an accident. If something
happens that might involve this policy, you must let us know
promptly. Send written notice to us or our agent. Include the
names and addresses of the injured and witnesses. Also include
the time, place and account of the accident.


State Farm first received notice of the 1995
accident from the father on April 10 or 11, 1997, more than two
years after the accident occurred. In a letter to State Farm, the
father stated that the parents "never had the slightest
idea" that the policy would cover the son. The father
further advised State Farm that he delivered a letter from an
attorney representing Antonio’s estate to State Farm’s
agent as soon as the father received the letter. The father got
that letter at the same time Antonio’s estate filed the
wrongful death action against the son. That is also when the
father first learned that the policy might extend coverage to the
son with regard to the 1995 accident.

Soon thereafter, State Farm sent a reservation
of rights letter to the parents, stating that "delay by or
on behalf of the insured in giving prompt, written notice
. . . concerning the accident" may have violated
the conditions of the policy. State Farm had no contact with the
son prior to sending that letter.

After State Farm answered the declaratory
judgment action, Craig filed a motion for partial summary
[5] State Farm responded by filing a motion for summary
judgment based upon the allegedly untimely notice of the
accident. After considering stipulated facts, the parties’
memoranda, and oral argument, the trial court denied Craig’s
motion but granted State Farm’s motion. The court concluded
that the son "is not covered under State Farm’s
Umbrella Policy and there is no coverage applicable to [the son] under the policy in question for failure to provide timely notice
. . . ." This appeal followed.


We review the decision of the trial court under
well-settled principles. "An insurance policy is a contract,
and, as in the case of any other contract, the words used are
given their ordinary and customary meaning when they are
susceptible of such construction." Hill v. State Farm
Mut. Auto. Ins. Co.
, 237 Va. 148, 152, 375 S.E.2d 727, 729
(1989). Similarly, "[i]f the language of an insurance policy
is unambiguous, we will give the words their ordinary meaning and
enforce the policy as written." United Services Auto.
Ass’n v. Webb
, 235 Va. 655, 657, 369 S.E.2d 196, 198
(1988). Finally, "[s]ince the interpretation of a contract
is a question of law, we are not bound by the trial court’s
conclusions on this issue, and we are permitted the same
opportunity as the trial court to consider the contract
language." C.F. Garcia Enterprises, Inc. v. Enterprise
Ford Tractor, Inc.
, 253 Va. 104, 107, 480 S.E.2d 497, 498-99
(1997) (citing Langman v. Alumni Ass’n of the Univ. of
, 247 Va. 491, 498, 442 S.E.2d 669, 674 (1994); Wilson
v. Holyfield
, 227 Va. 184, 187-88, 313 S.E.2d 396, 398

On appeal, State Farm argues that timely notice
of an accident is a condition precedent to an insurance
company’s obligation to provide coverage, and that an
insured must therefore substantially comply with an insurance
policy’s notice requirements. Thus, State Farm contends
that, in this case, the insureds’ failure to timely
perform the duties listed in paragraph 1 warrants State
Farm’s denial of coverage to the son. The cases cited by
State Farm in support of its position involved insurance policies
that contained a common provision mandating that in the event of
an accident, "written notice . . . shall be given
. . . to the company or any of its authorized agents as
soon as practicable." State Farm Fire and Cas. Co. v.
, 236 Va. 116, 119, 372 S.E.2d 383, 384 (1988); accord
Liberty Mut. Ins. Co. v. Safeco Ins. Co. of America, 223
Va. 317, 323, 288 S.E.2d 469, 473 (1982); Lord v. State Farm
Mut. Auto. Ins. Co.
, 224 Va. 283, 285-86, 295 S.E.2d 796, 798
(1982); State Farm Mut. Auto. Ins. Co. v. Porter, 221 Va.
592, 596, 272 S.E.2d 196, 198 (1980).
[6] We held that
compliance with such a notice provision is a condition precedent
to coverage, with which the insured must substantially comply. Scott,
236 Va. at 120, 372 S.E.2d at 385.

However, those cases are not dispositive of the
question before us because there is an important difference
between the language utilized in the notice provision found in
those insurance policies and the terms of the provision at issue
in the present case. The instant policy, like those in the cases
cited by State Farm, requires the insureds to perform certain
duties, such as notifying State Farm of an accident and sending
written notice. However, in contrast to the notice provision in
those other policies, the policy at issue today specifically
states that if the insureds "refuse" to perform the
duties contained in paragraph 1, State Farm may not provide
coverage. A similar provision incorporating the term
"refuse" in conjunction with an insured’s duties to the
insurance company does not appear in those other policies.

Furthermore, we find it significant that, in
the provision at issue, State Farm used only the verb
"refuse" and did not include the verb "fail."
In other words, the policy does not state that if an insured
refuses or fails to perform the required duties, State
Farm may deny coverage. State Farm acknowledged that there is no
evidence in the record of a "refusal" by the parents or
the son to perform the duties required of them. Thus, unless the
terms "refuse" and "fail" are synonymous, the
insureds’ failure in this case to perform the duties in
paragraph 1 would not justify State Farm’s denial of coverage to
the son.

To answer this inquiry, we look to the
definitions of these terms. Since the policy does not define the
term "refuse," we give the word its "ordinary and
accepted meaning." Scottsdale Ins. Co. v. Glick, 240
Va. 283, 288, 397 S.E.2d 105, 108 (1990). The verb
"refuse" is defined as a "positive unwillingness
to do or comply with" something demanded or expected.
Webster’s Third New International Dictionary 1910 (1993). A
"refusal" is "[t]he denial or rejection of
something offered or demanded." Black’s Law Dictionary
1285 (7th ed. 1999). These definitions denote an element of
intent, manifested by a volitional act. See Meeks v.
, 785 S.W.2d 18, 20 (Ark. 1990) (noting that
definitions of term "‘refuse’ stress the active
element of refusal[,] . . . expressing . . .
a determination not to do a particular thing"); Nebraska
v. Medina
, 419 N.W.2d 864, 867 (Neb. 1988) ("‘To
refuse[]’ . . . requires that a person understand
what is being asked of him and then in some way manifest
nonacceptance, nonconsent, or unwillingness.").

By comparison, to "fail" to do some
act denotes a deficiency; and a "failure" is "[a]n
omission of an expected action . . . or
performance[,]" Black’s Law Dictionary 613, or the
neglect of an assigned or expected action, Webster’s Third
New International Dictionary 815. See Laubach v.
Franklin Square Hosp.
, 556 A.2d 682, 690 n.11 (Md. Ct. Spec.
App. 1989), aff’d, 569 A.2d 693 (1990)
(distinguishing "[f]ailed" from "refused" on
basis that "refused" "involves an act of the
will," while "[f]ailed" may be "an act of
inevitable necessity") (quoting Black’s Law Dictionary
1152-53 (5th ed. 1979)).

Based on the distinction between the terms
"refuse" and "fail," we conclude that State
Farm’s attempt to equate the insureds’ failure
to timely comply with the requirements of paragraph 1 with a refusal
to do so does not comport with the ordinary and customary meaning
of the term "refuse." Thus, the insureds’ mere
failure to timely perform the duties was not a refusal to do so
and, therefore, did not trigger State Farm’s option to deny
coverage to the son.

We are also not persuaded by State Farm’s
argument that the phrase "if you refuse to:" applies
only to the duty immediately listed thereafter, i.e.,
"notify us of an accident." According to State Farm,
the other requirements in paragraph 1 are separate duties of the
insured that are not modified by that phase. However, the phrase
"if you refuse to:" introduces and precedes all the
duties listed in paragraph 1.
[8] See Webster’s Third New International
Dictionary 47a (colon "indicates that what follows it
coordinates with some element of what precedes" it); see
also H.W. Fowler, A Dictionary of Modern English Usage 589
(Sir Ernest Gowers ed., 2d ed. 1996); Thomas S. Kane, The New
Oxford Guide to Writing 144, 282 (1988). Thus, we conclude that
the phrase modifies, and applies to, all those duties.

Accordingly, we conclude that the policy
requires a "refusal" to perform the duties listed in
paragraph 1, not merely a negligent delay or failure to do so,
before State Farm can deny coverage. For these reasons, we will
reverse the judgment of the circuit court, enter partial final
judgment for Craig on the basis that the insureds did not
"refuse" to perform their duties to State Farm, and
remand for such further proceedings as are necessary. See
note 5, supra.

Reversed and remanded.



[1] Justice Compton participated in
the hearing and decision of this case prior to the effective date
of his retirement on February 2, 2000.

[2] Prior to filing this action,
Craig, in her capacity as personal representative of
Antonio’s estate, filed a wrongful death action against the

[3] The policy provides that the
terms "you" and "your" refer to the named
insureds, as well as the named insureds’ relatives who are
residents of the named insureds’ household.

[4] In this opinion, we will refer to
this provision as "paragraph 1."

[5] In her motion, Craig stated that
she sought a judgment with regard to State Farm’s notice
defense. She acknowledged that State Farm has additional defenses
and that those would be addressed in a subsequent motion for
partial summary judgment.

[6] Similar language also appears in
the policies at issue in State Farm Fire and Cas. Co. v.
, 244 Va. 498, 503, 423 S.E.2d 188, 191 (1992), and Dan
River, Inc. v. Commercial Union Ins. Co.
, 227 Va. 485, 489,
317 S.E.2d 485, 487 (1984), two other cases upon which State Farm

[7] In four of this Court’s prior cases, Angstadt
v. Atlantic Mut. Ins. Co.
, 254 Va. 286, 292-93, 492 S.E.2d
118, 121-22 (1997); State Farm Mut. Auto. Ins. Co. v. Davies,
226 Va. 310, 319, 310 S.E.2d 167, 172 (1983), Cooper v.
Employers Mut. Liab. Ins. Co. of Wisc.
, 199 Va. 908, 915, 103
S.E.2d 210, 215 (1958), and State Farm Mut. Auto. Ins. Co. v.
, 189 Va. 913, 929-30, 55 S.E.2d 16, 23 (1949), we
discussed an insured’s willful failure to cooperate with the
insurer. Also, in Porter, we concluded that the insured
willfully violated several policy provisions, including the
notice and cooperation requirements. 221 Va. at 599, 272 S.E.2d
at 200. However, the policies in those cases did not contain any
language referring to an insured’s refusal to perform
certain duties while the instant policy contains such language.
Thus, the Court did not discuss whether a "willful
failure" to perform a particular duty was comparable to a
"refusal" to perform that duty. Therefore, none of
those cases guide our decision today.

[8] The phrase precedes not only paragraph 1 but also
several other enumerated paragraphs that list additional duties
of the insureds. However, those duties are not at issue in this