Christy v. Mercury Casualty Company, 722 S.E.2d 256

Accident occurred in course of Christy's employment as a town police officer; Christy was a passenger in a sheriff's vehicle when struck from behind.
Christy incurred medical expenses totaling $16,564; VMLI paid a portion and denied some claims as pre-existing condition related to a SLAP tear.
Christy did not pursue a workers' compensation claim against VMLI for the shoulder injury.
Mercury Casualty's policy excludes coverage for medical expenses to the extent benefits are payable under any workers' compensation law.
The circuit court held the exclusion unambiguously denies Mercury coverage for any expenses that would have been subject to workers' compensation, even if not actually paid by VMLI.
The appellate court affirmed, holding the exclusion limits Mercury's coverage scope rather than merely offsetting paid WC benefits.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does the exclusion bar Mercury coverage when any WC benefit would apply in the accident context?	Christy argues exclusion applies only to amounts actually paid by WC.	Mercury contends exclusion applies if any portion is payable under WC, regardless of actual payment.	Yes; exclusion applies to the extent any WC benefits would be payable.
Does the exclusion function as a set-off or as a limitation on coverage scope?	Christy seeks set-off only against WC paid amounts.	Mercury's exclusion limits the policy's medical expenses coverage.	Exclusion limits coverage scope, not merely offsetting paid WC amounts.
Do Baker and Scarbrow control the interpretation of the exclusion?	Christy distinguishes Baker/Scarbrow since not all expenses were paid by WC.	Baker/Scarbrow approve exclusions but not parse scope of exclusion here.	Baker/Scarbrow do not require parsing; exclusion valid and enforceable as limited scope.
Is the result a double-recovery concern or a broader limitation on coverage?	Exclusion prevents double recovery; no impact on other expenses.	Exclusion precludes Mercury coverage for any WC-eligible expenses.	Exclusion operates as a limitation on coverage, not only double-recovery prevention.

Baker v. State Farm Mutual Automobile Insurance Co., 242 Va. 74 (1991) (exclusions valid to prevent double recovery in work-related injuries)
Scarbrow v. State Farm Mutual Automobile Insurance Co., 256 Va. 357 (1998) (exclusion upheld; focuses on whether exclusion conflicts with statute)
Landmark HHH, LLC v. Gi Hwa Park, 277 Va. 50 (2009) (plain meaning of 'to the extent' limits insurance proceeds)