Home / Fulltext Opinions / Supreme Court of Virginia / SCARBROW v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY



September 18, 1998

Record No. 972435







John C. Morrison,
Jr., Judge

Present: All the

Sharlet S. Scarbrow
(Scarbrow) filed suit against State Farm Mutual Automobile
Insurance Company (State Farm) after State Farm refused to pay
medical expenses incurred by Scarbrow as a result of a
work-related automobile accident. The circuit court held that a
provision in State Farm's automobile insurance policy excluding
coverage for medical expenses that are payable under a workers'
compensation statute is valid and enforceable. Because we have
previously held that such an exclusion does not conflict with
Code ? 38.2-2201, we will affirm the judgment of the
circuit court.


On December 15, 1994, Scarbrow was involved in an automobile
accident while operating her employer’s truck. Scarbrow sustained
physical injuries as a result of the accident and incurred
medical expenses. The employer’s workers’ compensation insurance
carrier paid Scarbrow’s medical expenses arising out of the
At the time of the accident, Scarbrow was also insured under a
Family Automobile Policy (the Policy) issued by State Farm. An
endorsement in the Policy affords coverage to Scarbrow for
medical expenses incurred by her for injuries sustained in an
automobile accident.[1]
The endorsement,
however, contains an exclusion (the Exclusion) for medical
expenses payable under any workers' compensation law. The
Exclusion specifically states:
This insurance does not apply:
*  *  *

(b) to bodily injury sustained by any person to the extent that
benefits therefore are in whole or in part payable under any
workmen’s compensation law, employer’s disability benefits law or
any other similar law.

Following the accident, Scarbrow submitted a claim to State Farm
under the medical expense benefits endorsement for a portion of
the medical bills that she incurred as a result of the automobile
accident. State Farm refused to pay Scarbrow on the basis of the
Exclusion. Consequently, on November 12, 1996, Scarbrow filed a
notice of motion for judgment against State Farm in the General
District Court for the City of Norfolk. After removal of the case
to the circuit court, State Farm filed a motion for summary
judgment. In its motion, State Farm asserted that the Exclusion
bars Scarbrow from recovering under the Policy’s medical expense
benefits endorsement since her medical bills were paid by
workers’ compensation insurance.
After hearing argument, the circuit court granted State Farm’s
motion in an order dated August 20, 1997. Relying on our
decisions in Baker v. State Farm Mut. Auto. Ins. Co., 242
Va. 74, 405 S.E.2d 624 (1991), and Cotchan v. State Farm Fire
& Cas. Co.
, 250 Va. 232, 462 S.E.2d 78 (1995), the court
concluded that State Farm was entitled to enforce the Exclusion
in its Policy and found "no reason to diverge" from
this Court’s controlling precedent. Scarbrow appeals.


Code ? 38.2-2201 provides, in pertinent part, that:
A. Upon request of an insured, each insurer licensed in this
Commonwealth issuing or delivering any 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 provide on payment of the premium, as a
minimum coverage . . . to the named insured
. . . the following health care and disability benefits
for each accident:
1. All reasonable and necessary expenses for medical,
chiropractic, hospital, dental, surgical, ambulance, prosthetic
and rehabilitation services, and funeral expenses, resulting from
the accident and incurred within three years after the date of
the accident, up to $2,000 per person . . . .

Scarbrow contends that this section does not authorize an insurer
to limit or exclude coverage once an insured has elected to
purchase medical expense benefits. Thus, according to Scarbrow,
State Farm cannot enforce the Exclusion because it is
inconsistent with Code ? 38.2-2201 and, therefore, void as
against public policy. We disagree.
This Court has sanctioned an insurer’s use of reasonable policy
provisions that exclude specific risks from coverage. State
Farm Mut. Auto. Ins. Co. v. Gandy
, 238 Va. 257, 261, 383
S.E.2d 717, 719 (1989). If an insurer uses exclusionary language
that is clear and unambiguous and that does not conflict with
statutory provisions, then the exclusion will be enforced. Id.
Our decision in Baker dictates the outcome of this
case because Baker involved the same issue and coverage
exclusion presently before us. In Baker, we addressed the
question whether Code ? 38.2-2201 permits an insurer to
exclude coverage for medical expense benefits in the absence of
express statutory authorization. The policy provision at issue in
Baker, identical to the Exclusion in the instant case,
precluded payment of medical expenses when those expenses were
payable under a workers’ compensation statute. We found the
exclusion in Baker to be a "clear and unambiguous
provision [that] reasonably excludes medical payments coverage
where those benefits are payable under a workers’ compensation
statute," and that no conflict or inconsistency existed
between Code ? 38.2-2201 and the policy exclusion. 242 Va.
at 76, 405 S.E.2d at 625; see also Cotchan, 250 Va.
at 236, 462 S.E.2d at 80-81. Thus, for the reasons enunciated in Baker,
we conclude that the Exclusion is a reasonable policy provision
containing clear and unambiguous language and that it is not
inconsistent with Code ? 38.2-2201. Therefore, State Farm
may enforce the Exclusion against Scarbrow.
Scarbrow concedes that the instant case and Baker are
indistinguishable. [2] Nevertheless, Scarbrow urges this
Court to reverse its prior decision and find the Exclusion
inconsistent with Code ? 38.2-2201 and, therefore, void.
However, we perceive no reason to depart from our holding in
Baker. See Selected Risks Ins. Co. v. Dean, 233 Va. 260, 265, 355
S.E.2d 579, 581 (1987) (stating that "when a court of last
resort has established a precedent, after full deliberation upon
the issue by the court, the precedent will not be treated lightly
or ignored").
Accordingly, we will affirm the judgment of the circuit court.



[1] The medical expense benefits
endorsement states that State Farm:

[W]ill pay, in accordance with Section[] 38.2-2201
. . . of the Code of Virginia, to or on behalf of each
injured person, medical expense benefits as a result of bodily
injury caused by accident and arising out of the ownership,
maintenance or use of a motor vehicle as a motor vehicle.

[2] This case and Baker do differ in that Scarbrow
asserted a claim against a third party tortfeasor for the
injuries that she sustained in the automobile accident. However,
this distinction does not affect our decision.