740 S.E.2d 523
Va.2013Background
- TDC sought a declaratory judgment that WHA's policy does not cover the Davidson breach action.
- Birth Injury Fund provides no-fault compensation for birth-related injuries; participation status must be disclosed to patients.
- Davidsons alleged WHA contractually promised to participate in the Birth Injury Fund and to notify if WHA ceased participation.
- WHA allegedly ceased participating and did not notify the Davidsons, affecting the Davidsons' ability to claim under the Fund.
- Underlying breach counts include promises of fund participation and related misrepresentations, now pared to breach of contract claims.
- Policy excludes certain liabilities; dispute centers on whether the breach and damages arise from professional services and/or statutory violation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether breach claims are covered as Professional Services | Davidsons: arises from professional services (delivery) via Fund participation. | WHA/TDC: misrepresentation is not a professional service; no nexus to professional services. | Yes; 'arising from' broad construction includes professional services. |
| Whether liability arises out of a statute violation | Davidsons: liability arises from breach of contract, not statutory violation. | TDC: Exclusion for statute violations applies due to misrepresentation under statute. | Liability arises from contract elements, not statute; exclusion not triggered. |
| What is the governing standard of review | Not applicable beyond contract interpretation. | N/A beyond standard application of contract interpretation rules. | Questions of contract interpretation reviewed de novo. |
Key Cases Cited
- Cappo Mgmt. v. Britt, 282 Va. 33, 711 S.E.2d 209 (2011) (ambiguity construed against drafter; contract construed as a whole)
- Filak v. George, 267 Va. 612, 594 S.E.2d 610 (2004) (elements of a breach of contract: enforceable obligation, breach, damages)
- Bentley Funding Group, L.L.C. v. SK&R Group, L.C., 269 Va. 315, 609 S.E.2d 49 (2005) (plain-meaning interpretation of contract terms)
- LansdowneDev. Co. v. Xerox Realty Corp., 257 Va. 392, 514 S.E.2d 157 (1999) (contract interpretation; plain meaning when unambiguous)
- Vega v. Chattan Assocs., Inc., 246 Va. 196, 435 S.E.2d 142 (1993) (contract interpretation principles)
- St. Paul Fire & Marine Ins. Co. v. Jacobson, 48 F.3d 778 (4th Cir. 1995) (look to nature of insured's act to determine professional service)
- St. Paul Fire & Marine Ins. Co. v. Insurance Co. of North America, 501 F. Supp. 136 (W.D. Va. 1980) (definition of 'arising from' in insurance context)
- Trex Co. v. ExxonMobil Oil Corp., 234 F. Supp. 2d 572 (E.D. Va. 2002) (broader interpretation of 'arising from' in insurance contracts)
- Bridgestone/Firestone, Inc. v. Prince William Square Assocs., 250 Va. 402, 463 S.E.2d 661 (1995) (plain meaning of contract terms when unambiguous)
- Varia (additional Va. authority cited in context), 257 Va. 392, 514 S.E.2d 157 (1999) (contract interpretation framework)