788 S.E.2d 286
W. Va.2015Background
- U.S. Silica sought coverage from Travelers for pre-2010 silica claim costs after ITT’s indemnity expired and policies were not discovered until September 2005.
- U.S. Silica sent coverage requests on September 20, 2005, and November 22, 2005; Travelers denied coverage in August 2010 arguing policy defenses and late notice.
- A Morgan County jury awarded U.S. Silica $8,037,745 for breach of Travelers’ duties; the circuit court denied post-trial motions and awarded fees and prejudgment interest.
- On appeal, Travelers challenged multiple rulings but the court focused on whether notice provisions were satisfied and whether late notice barred coverage.
- The court framed notice as a condition precedent to coverage and adopted a two-step test for late-notice determinations: reasonableness of delay, then prejudice to insurer.
- The WV Supreme Court reversed, held no coverage due to unreasonable, substantial delay in notice, and remanded for judgment as a matter of law in Travelers’ favor.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did U.S. Silica’s notice comply with the policy’s notice clause? | Silica notified in 2005 seeking pre-2005 costs. | Notice was late and prejudiced Travelers. | No coverage; notice not satisfied; discovery and substantial delay bar coverage. |
| Was the delay in notice reasonable and did it prejudice the insurer as required by Dairyland Voshel? | Delay was reasonable given lack of policy knowledge; insurer failed to show prejudice. | Delay was egregious and unreasonable; prejudice shown by investigation disruption. | Delay unreasonable; burden not shifted; coverage foreclosed. |
Key Cases Cited
- Dairyland Ins. Co. v. Voshel, 189 W. Va. 121 (1993) (two-step test for late notice: reasonableness then prejudice)
- Colonial Ins. Co. v. Barrett, 208 W. Va. 706 (2000) (notice within reasonable time generally a question of fact)
- Riffe v. Home Finders Assocs., Inc., 205 W. Va. 216 (1999) (contract interpretation de novo; policy ambiguity analyzed as a legal question)
- Tennant v. Smallwood, 211 W. Va. 703 (2002) (determination of proper coverage when facts are not in dispute is a question of law)
- Soliva v. Shand, Morahan & Co., Inc., 176 W. Va. 430 (1986) (plain meaning governs unambiguous insurance terms)
- Keffer v. Prudential Ins. Co. of Am., 153 W. Va. 813 (1970) (ambiguous terms construed against insurer)