Opinion
48024 Record No. 911406
September 18, 1992
Present: Carrico, C.J., Compton, Stephenson, Whiting, Lacy, Hassell, JJ., and Poff, Senior Justice
In a dispute between an insurer and its insured concerning the scope of uninsured motorist coverage afforded by an automobile insurance policy, the trial court judgment is reversed because the stolen automobile was not an uninsured motor vehicle within the intendment of the Uninsured Motorist statute or within the contemplation of the parties to the insurance contract.
Insurance — Automobile — Uninsured Motorist Statute — Damages
The insurer issued an insurance policy providing liability, comprehensive property damage, and uninsured motorist coverage on the insured's automobile. The vehicle was stolen by an unknown thief, damaged in an accident, and recovered by the owner. Under the comprehensive coverage clause, the insurer paid for the cost of repairs and for the expense of a rental car used while the vehicle was being repaired. The insured then filed a motion for judgment against "John Doe", alleging that when her car was stolen and damaged, it was being operated by an uninsured driver. She demanded compensatory damages for repair, loss of value, loss of use, and potential loss of warranty and demanded punitive damages for the defendant's willful, wanton and reckless conduct. The insurer filed a separate motion for declaratory judgment against the insured and against John Doe, asking the court to declare that the uninsured motorist coverage is inapplicable and that the insurer is not obligated to pay any judgment that the insured might obtain against John Doe. The trial court concluded that Code Sec. 38.2-2206(B) states that a motor vehicle shall be deemed uninsured if its owner or operator is unknown, and ruled that there is nothing in the statute or the policy that would preclude the insured from invoking uninsured motorist coverage. The insurer appeals.
1. It was not within the contemplation of the contracting parties that an automobile involved in an accident be both insured and uninsured against damages sustained in that accident and that the insured owner be entitled to recovery under both types of coverage.
2. A person is entitled to uninsured motorist coverage if he is the named insured in a policy and he is entitled to recover from the uninsured motorist insurer all sums that he is legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle. Virginia's uninsured motorist insurance statute is, more precisely, an uninsured motor vehicle insurance statute.
3. The uninsured motorist coverage in the insurer's policy defines the term "insured motor vehicle" to exclude a vehicle being used without the permission of the owner, but the function of the exclusion is to disqualify a nonpermissive user such as a thief as an insured for purposes of uninsured motorist coverage.
4. Even if the effect of the exclusion is to make the vehicle an uninsured motor vehicle for all purposes while it is being operated by a thief, the insured is not entitled to uninsured motorist coverage for the damages she seeks because the uninsured motorist endorsement she invokes defines the term "property damage" as "injury or destruction of an insured motor vehicle".
Appeal from a judgment of the Circuit Court of the City of Charlottesville, Hon. Jay T. Swett, judge presiding.
Reversed and final judgment.
John W. Zunka (Jane P. Long; Taylor Zunka, on briefs), for appellant.
F. Guthrie Gordon, III (Janice L. Redinger; Gordon Wyatt, on brief), for appellee Mary K. Clatterbuck.
No brief or argument on behalf of John Doe.
This appeal grows out of a dispute between an insurer and its insured concerning the scope of uninsured motorist (UM) coverage afforded by an automobile insurance policy.
The parties have stipulated the facts relevant to resolution of the appeal. State Farm Mutual Automobile Insurance Company (State Farm) issued Mary E. Clatterbuck (Clatterbuck) a policy providing liability, comprehensive physical damage, and uninsured motorist coverages on her Pontiac automobile. The insured vehicle was stolen by an unknown thief, damaged in an accident, and recovered by the owner. In response to Clatterbuck's claim under the comprehensive theft coverage clause of her policy, State Farm paid $4,408.44 for the cost of repairs and $522.42 for the expense of a rental car used while the Pontiac was being repaired.
Clatterbuck then filed a motion for judgment against "John Doe", alleging that, when her car was stolen and damaged, it was being operated by an uninsured driver. Clatterbuck demanded $10,000 in compensatory damages for "repair, . . . loss of value . . . , loss of use of the vehicle, . . . [and] potential loss of the warranty" of the Pontiac and $100,000 in punitive damages for "the Defendant's willful, wanton and recklessness [sic] conduct." Served with process in that suit, State Farm filed a separate motion for declaratory judgment against Clatterbuck and John Doe, asking the court to declare that its "uninsured motorist coverage is inapplicable and . . . that State Farm is not obligated to pay any judgment which Mary K. Clatterbuck may obtain against 'John Doe '."
In a letter opinion the trial court ruled that
there is nothing in the statute or the policy that would preclude Ms. Clatterbuck from invoking uninsured motorist coverage. All of this assumes that she will be legally entitled to and be able to recover a monetary judgment from "John Doe" having already received payment for damage to her vehicle.
In a final declaratory judgment order, the court reaffirmed that ruling and dismissed the case from the docket. We awarded State Farm an appeal.
The dispositive issue framed by the parties requires an analysis of Clatterbuck's State Farm automobile insurance policy. In effect, the trial court concluded that an automobile involved in an accident can be both insured and uninsured against damages sustained in that accident and that the insured owner is entitled to a recovery under both types of coverage. In our view, such a conclusion was not within the contemplation of the contracting parties.
As stated on brief, Clatterbuck's sole argument in support of the trial court's ruling is that "[u]nder the uninsured motorist provisions of Clatterbuck's policy, an insured motor vehicle is defined as one 'registered in Virginia with respect to which the bodily injury and property damage liability coverage of the policy applies but shall not include a vehicle while being used without the permission of the owner.' " (Emphasis in original). Specifically, she contends that, "[a] thief is simply a non-permissive user, and . . . under the definitions of State Farm's own policy, a non-permissive user operating the vehicle makes it an uninsured vehicle during that period of time."
It is true that the UM coverage endorsement in State Farm's policy defines the term "insured motor vehicle" to exclude "a vehicle while being used without the permission of the owner." However, Clatterbuck misconceives the purpose and effect of the exclusionary language. The definition of an "insured" contained in the UM coverage endorsement includes any person "while occupying an insured motor vehicle." Obviously, the function of the exclusion is to disqualify a non-permissive user (such as a thief) as an insured for purposes of UM coverage.
Moreover, even if, as Clatterbuck seems to suggest, the effect of the exclusion is to make the Pontiac an uninsured motor vehicle for all purposes while it is being operated by a thief, she is not entitled to UM coverage for the damages she seeks because the very UM coverage endorsement she invokes defines the term "property damage" as "injury to or destruction of . . . an insured motor vehicle [emphasis added]."
Accordingly, we will reverse the judgment entered below and enter final judgment declaring that Clatterbuck's automobile is not an uninsured motor vehicle within the contemplation of the parties to the insurance contract.
Reversed and final judgment.