Gulf Insurance Company v. Jeanette S. Davis, Guardian for Melvin W. Davis, Jr., IncapacitatedGulf Insurance Company v. Jeanette S. Davis, Guardian for Melvin W. Davis, Jr., Incapacitated
NOTICE: Fоurth Circuit Local Rule 36(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.
GULF INSURANCE COMPANY, Plaintiff-Appellee,
v.
Jeanette S. DAVIS, Guardian for Melvin W. Davis, Jr.,
Incapacitated, Defendant-Appellant.
No. 94-2123.
United States Court of Appeals, Fourth Circuit.
Argued: June 5, 1995.
Decided: August 15, 1995.
ARGUED: Gene Raye Jones, Zwerdling, Oppleman & Paciocco, Richmond, VA, for appellant. Robert Barnes Delano, Jr., Sands, Anderson, Marks & Miller, Richmond, VA, for appellee. ON BRIEF: Kenneth W. Paciocco, Zwerdling, Oppleman & Paciocco, Richmond, VA, for Appellant. John A. Conrad, Sands, Anderson, Marks & Miller, Richmond, Virginia, for Appellee.
Before HAMILTON and LUTTIG, Circuit Judges, and FABER, United States District Judge for the Southern District of West Virginia, sitting by designation.
OPINION
PER CURIAM:
Appellant Jeanette Davis, appointed guardian for Melvin Davis (Davis),* appeals from a judgment declaring that Davis is not entitled to receive any underinsured or uninsured motorist benefits under a policy issued by Appellee Gulf Insurance Company (Gulf). Because we conclude the district court erred in failing to apply the conflict of law provision contained in Virginia Code section 38.2-2206, see Va.Code Ann. Sec. 38.2-2206A (Michie Supp.1995), and its accompanying substantive provisions, we reverse and hold that Davis is afforded underinsured and uninsured motorist coverage up to $1,000,000 under the policy issued by Gulf.
I.
On June 29, 1993, Davis, a resident of Virginia, and Winona Campbell (Campbell) were involved in a serious automobile collision in Virginia with Amy Rutherford (Rutherford). This collision proved fatal to Campbell and caused serious injury to Davis and the passengers in Rutherford's car. At the time of the collision, Davis was driving Campbell's car with her permission. The parties do not dispute the fact that Rutherford negligently causеd the accident. Rutherford was insured by Aetna Casualty and Surety Company under a motor vehicle liability policy providing liability coverage up to $300,000 per accident. As a result of the settlement of claims with other passengers, only $187,414 of coverage under Rutherford's policy remained available for pаyment of any claims asserted by Davis. In an attempt to recover his damages, Davis brought an action against Rutherford in Virginia state court, alleging he sustained injuries and damages as a result of her negligence. Davis' medical expenses and claims for pain and suffering are expected to far exceеd the remaining amount of Rutherford's coverage.
Consequently, Davis sought recovery from Gulf, his insurer, under the uninsured (UM) and underinsured (UIM) motorist provisions of a motor vehicle liability policy covering his 1985 Kenworth Tractor-Trailer (the Gulf Policy), which policy by its stated terms provides up to $50,000 in UM and UIM coverage. The Gulf Policy was issued in Missouri tо the National Association of Independent Truckers (NAIT), which has its principal place of business in Missouri and provides various benefits to independent owner/operators, such as Davis. NAIT was the named insured under the Gulf Policy for owner/ operators as declared. Gulf issued Davis a Certificate of Insurance (the Certificate), which was proof of his insured status under the Gulf Policy and thus was tantamount to the Gulf Policy with respect to Davis. When Gulf issued Davis his Certificate, it did so without providing him any notice of an option to apply for or reject higher limits for his UM/UIM coverage. The Certificate reflected coverage for Dаvis' tractor-trailer with liability coverage of $1,000,000 and UM and UIM coverage of $50,000. At all relevant times, Davis' tractor-trailer was principally garaged in Virginia and Gulf was licensed to transact business in Virginia. According to Davis, Virginia Code section 38.2-2206A requires that the Gulf Policy provide him with UM and UIM coverage equal to his liability covеrage of $1,000,000.
Gulf denied Davis benefits under the Gulf Policy, because $187,414 remained available under Rutherford's policy. Subsequently, Gulf filed a declaratory judgment action in federal district court in Virginia, seeking a declaration that "the total amount of uninsured/underinsured motorist coverage, if any, for which it is liable under the certifiсate of insurance issued to Davis is limited to $50,000.00...." (J.A. 8). Davis answered and sought the following declarations: (1) Virginia Code section 38.2-2206A required Gulf to provide him with notice that his UM and UIM coverage would equal the amount of his liability coverage unless he rejected such coverage; (2) Gulf failed to provide such an option; (3) thе Gulf Policy must be reformed to provide UM and UIM coverage of $1,000,000.
On cross motions for summary judgment, the district court granted Gulf's motion for summary judgment and denied Davis' motion. Ruling from the bench, the district court held Missouri law governed the interpretation of the Gulf Policy and that under Missouri law, Davis was not entitled to recover any UM or UIM cоverage under the Gulf Policy because Rutherford's policy provided liability coverage in the amount of $300,000, of which $187,414 remained available for payment to Davis. Davis appeals.
II.
Fed.R.Civ.P. 56(c) requires that the district court enter judgment against a party who, "after adequate time for discovery ... fails to make а showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett,
A.
The threshold issue that we must resolve is the appropriate choice of law rule. Pursuant to Erie Railroad v. Tompkins,
The parties agree that Virginia's choice of law rule applies, but they urge different choice of law rules under Virginia law. According to Gulf, the common law rule appliеs, and under this rule, "the law of the place where an insurance contract is written and delivered controls issues as to its coverage," Buchanan v. Doe,
Section 38.2-2206A provides in pertinent part:
Except as provided in subsection J of this section, no policy or contract of bodily injury or property damage liability insurance relating to thе ownership, maintenance, or use of a motor vehicle shall be issued or delivered in this Commonwealth to the owner of such vehicle or shall be issued or delivered by any insurer licensed in this Commonwealth upon any motor vehicle principally garaged or used in this Commonwealth unless it contains an endorsemеnt or provisions undertaking to pay the insured all sums that he is legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle, within limits not less than the requirements of Sec. 46.2-472. Those limits shall equal but not exceed the limits of the liability insurance provided by the policy, unless the insured rejеcts the additional uninsured motorist insurance coverage by notifying the insurer as provided in subsection B of Sec. 38.2-2202. This rejection of the additional uninsured motorist insurance coverage by any one named insured shall be binding upon all insureds under such policy as defined in subsection B of this section. The endorsement or provision shall also obligate the insurer to make payment for bodily injury or property damage caused by the operation or use of an underinsured motor vehicle to the extent the vehicle is underinsured, as defined in subsection B of this section.
Va.Code Ann. Sec. 38.2-2206A (Michie Supp.1995) (emphasis added). The courts of Virginiа have not stated explicitly that section 38.2-2206A is a choice of law provision, but in Rose v. Travelers Indemnity Co.,
Likewise, in Bray v. Insurance Co. of the State of Pennsylvania,
In addition to Rose and Bray, The Restatement (Second) of Conflicts Sec. 6(1) (1971) articulates principles to employ in determining whether a statute is or contains a choice of law provision. Section 6(1) provides: "[a] court, subject to constitutional restrictions, will follow a statutory directive of its own state on choice of law." Thus, if a state statute provides for choice of law, it is dispositive, rather than the state common law rule. The comment to section 6(1) provides:
The cоurt should give a local statute the range of application intended by the legislature when these intentions can be ascertained and can constitutionally be given effect. If the legislature intended that the statute should be applied to the out-of-state facts involved, the court should so apply it unlеss constitutional considerations forbid.
Id. cmt. b. Applying the principles of Rose, Bray, and Sec. 6(1) of The Restatement (Second) of Conflicts and its accompanying comment b, we conclude that section 38.2-2206A is a choice of law provision which mandates that Virginia law apply if the facts of the case come within its purview. Accordingly, the district court erred in applying Virginia's common law choice of law rule to find that Missouri law controlled the disposition of this suit. As recognized by Virginia courts, uninsured motorist statutes are remedial in nature and are to be construed liberally in favor of insurance protection for quаlified claimants. See, e.g., Tudor v. Allstate Ins. Co.,
Having concluded Virginia Code section 38.2-2206A is a statutory choice of law provision, we conclude further that the facts of this case come within its purview: Gulf was licensed to transact business in Virginia and Davis' tractor-trailer was principally garaged in Virginia. Accordingly, before Davis became an insured under the Gulf Policy, Gulf was bound to notify him that his UM and UIM coverage would equal the amount of his liability coverage unless he rejected such amount of coverage. See Va.Code Ann. Secs. 38.2-2206A, 38.2-2202B.
B.
Having concluded that Virginia Code section 38.2-2206A is a choice of law provision mandating that Virginia law applies, we turn to an analysis of whether Gulf complied with the substantive provisions of this statute. At the time Gulf issued Davis the Certificate, which, as stated, was tantamount to issuing him the Gulf Policy, Virginia law required that every insurance policy issued to the owner of a motor vehicle principally garaged in Virginia provide bоth personal injury liability coverage of at least $25,000/$50,000 per accident and an equal amount of UM and UIM coverage. See Va.Code Ann. Secs. 38.2-2206A, 46.2-472. If a motorist carries more than the minimum liability limits of coverage, then an insurance policy issued to the owner of a motor vehicle principally garaged in Virginia by an insurance company licensed to transact business in Virginia must furnish UM and UIM coverage in an amount equal to the limits of liability insurance provided by the policy, see Va.Code Ann. Sec. 38.2-2206A, unless the named insured rejects the additional UM or UIM coverage by notifying the insurer in writing, see Va.Code Ann. Sec. 38.2-2202B; State Farm Mut. Auto. Ins. Co. v. Wеisman,
Here, Gulf failed to notify Davis of his option to reject UM and UIM coverage in an amount equal to his liability coverage, and thus, Davis never had the opportunity to reject such coverage. Section 38.2-2206A, therefore, mandates that Davis' UM and UIM coveragе "shall equal ... the limits of the liability insurance provided by the policy." Accordingly, we reform the Gulf Policy to provide Davis with UM and UIM coverage in an amount up to $1,000,000. See Bray,
III.
In sum, we hold that Virginia Code section 38.2-2206A is a statutory choice of law provision that supplants Virginia's common law choice of law rule. The district court, therefore, erred in applying the common law choice of law rule rather than Sec. 38.2-2206A. Applying the substantive provisions of this section, we hold that Davis was entitled to notice that his UM and UIM coverage would equal his liability coverage unless he rejected such coverage in writing. Gulf having failed to provide Davis with the statutory notice of his оption to purchase/reject the higher UM and UIM coverage, the Gulf Policy is reformed to provide Davis UM and UIM coverage in an amount up to $1,000,000. The judgment of the district court is reversed.
REVERSED.
Notes
Because of the incapacity of Melvin Davis, Jeanette Davis was appointed his guardian and defended this declaratory judgment action on his behalf. Because the facts of this case concern Melvin Davis, we refer to him as defending this suit