Erie Insurance Property & Casualty Company v. James Cooper
140 F.4th 608
4th Cir.2025Background
- James Cooper, an employee of Pison Management, LLC, was injured in a car accident while riding in a co-worker's vehicle (not owned by Pison) during work.
- Cooper's damages exceeded available third-party insurance coverage, so he sought underinsured motorist (UIM) benefits under a commercial auto policy Pison had with Erie Insurance.
- Pison’s insurance policy provided UIM coverage only for two vehicles it owned, but not for the broader class of "non-owned" vehicles (like those owned by employees and used for business).
- Erie Insurance denied Cooper’s claim for UIM coverage on the non-owned vehicle and filed a declaratory action for clarification.
- The district court ruled for Cooper, but the Fourth Circuit certified a legal question to the West Virginia Supreme Court of Appeals about whether UIM coverage must be offered for non-owned vehicles under state law.
- The West Virginia court answered "no," prompting the Fourth Circuit to vacate the district court’s ruling and remand with instructions to enter judgment for Erie.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Must insurers offer UIM coverage for non-owned vehicles covered by liability policies under WV law? | Cooper claimed WV law required UIM coverage to be offered for both owned and non-owned vehicles covered by the policy. | Erie argued UIM coverage is only required for vehicles specifically owned by the named insured and not for non-owned vehicles. | The court held UIM coverage need not be offered for non-owned vehicles; only for vehicles owned by the insured. |
| Was Cooper an "insured" entitled to UIM benefits under the policy/statute? | Claimed as a "Class II insured" because he used a covered vehicle with the named insured’s consent. | Erie countered that the named insured cannot give consent for vehicles it does not own or control. | The court ruled Cooper was not an insured under the policy for non-owned vehicles. |
| Should policy be reformed to include UIM coverage for non-owned vehicles as a matter of law? | Argued coverage exists by operation of law, since Erie failed to offer required UIM coverage. | Denied, since statute does not mandate UIM coverage for non-owned vehicles. | Court held policy need not be reformed; no statutory basis. |
| Was the policy ambiguous regarding UIM coverage for non-owned vehicles? | Claimed policy ambiguity should resolve in Cooper’s favor. | Denied ambiguity; argued terms were clear. | The court rejected contract ambiguity arguments. |
Key Cases Cited
- Starr v. State Farm Fire & Cas. Co., 423 S.E.2d 922 (W. Va. 1992) (discusses classification of insureds under UIM statutes)
- Progressive Max Ins. Co. v. Brehm, 873 S.E.2d 859 (W. Va. 2022) (explains UIM coverage purpose, who is covered)
- Deel v. Sweeney, 383 S.E.2d 92 (W. Va. 1989) (UIM intended to protect insured from underinsured drivers)
- Alexander v. State Auto Mut. Ins. Co., 415 S.E.2d 618 (W. Va. 1992) (UIM coverage intent is to benefit policy buyer)