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Erie Insurance Co. v. Dolly

Supreme Court of West Virginia

March 12, 2018

Erie Insurance Company, Defendant Below, Petitioner,
v.
Ricky A. Dolly, Plaintiff Below, Respondent.

          Submitted: January 9, 2018

         Appeal from the Circuit Court of Hampshire County Honorable Charles E. Parsons, Judge Civil Action No. 14-C-62

          Ancil G. Ramey, Esq. Hannah C. Ramey, Esq. Steptoe & Johnson, PLLC Huntington, West Virginia Eric J. Hulett, Esq. Steptoe & Johnson, PLLC Martinsburg, West Virginia Counsel for Petitioner

          Jonathan G. Brill, Esq. Jonathan G. Brill, PLLC Romney, West Virginia Counsel for Respondent

         SYLLABUS

         1. "Statutory provisions mandated by the Uninsured Motorist Law, W.Va. Code § 33-6-31 [1988] may not be altered by insurance policy exclusions." Syl. Pt. 1, Deel v. Sweeney, 181 W.Va. 460, 383 S.E.2d 92 (1989).

         2. "Insurers may incorporate such terms, conditions and exclusions in an automobile insurance policy . . . so long as any such exclusions do not conflict with the spirit and intent of the uninsured . . . motorists statutes." Syl. Pt. 3, in part, Deel v. Sweeney, 181 W.Va. 460, 383 S.E.2d 92 (1989).

         3. "An 'owned but not insured' exclusion to uninsured motorist coverage is valid and enforceable above the mandatory limits of uninsured motorist coverage required by W.Va. Code §§ 17D-4-2 (1979) (Repl.Vol. 1996) and 33-6-31(b) (1988) (Supp. 1991). To the extent that an 'owned but not insured' exclusion attempts to preclude recovery of statutorily mandated minimum limits of uninsured motorist coverage, such exclusion is void and ineffective consistent with this Court's prior holding in Syllabus Point 2 of Bell v. State Farm Mutual Automobile Insurance Company, 157 W.Va. 623, 207 S.E.2d 147 (1974)." Syl. Pt. 4, Imgrund v. Yarborough, 199 W.Va. 187, 483 S.E.2d 533 (1997).

         4. Syllabus point eight of Boniey v. Kuchinski, 223 W.Va. 486, 677 S.E.2d 922 (2009), is hereby modified to provide that a provision in a motor vehicle liability insurance policy excluding an off-road all-terrain vehicle or ATV from being an uninsured motor vehicle does not violate the intent and purpose of the uninsured motorist statute at West Virginia Code § 33-6-31(b) (1998).

         5. "'Where neither party to an appeal raises, briefs, or argues a jurisdictional question presented, this Court has the inherent power and duty to determine unilaterally its authority to hear a particular case. Parties cannot confer jurisdiction on this Court directly or indirectly where it is otherwise lacking.' Syllabus point 2, James M.B. v. Carolyn M., 193 W.Va. 289, 456 S.E.2d 16 (1995)." Syl. Pt. 1, C & O Motors, Inc. v. West Virginia Paving, Inc., 223 W.Va. 469, 677 S.E.2d 905 (2009).

         6. "'Under W.Va. Code, 58-5-1 [1998], appeals only may be taken from final decisions of a circuit court. A case is final only when it terminates the litigation between the parties on the merits of the case and leaves nothing to be done but to enforce by execution what has been determined.' Syllabus point 3, James M.B. v. Carolyn M., 193 W.Va. 289, 456 S.E.2d 16 (1995)." Syl. Pt. 2, C & O Motors, Inc. v. West Virginia Paving, Inc., 223 W.Va. 469, 677 S.E.2d 905 (2009).

          7. "The key to determining if an order is final is not whether the language from Rule 54(b) of the West Virginia Rules of Civil Procedure is included in the order, but is whether the order approximates a final order in its nature and effect. We extend application of this rule to a motion to dismiss under Rule 12(b)(6) of the West Virginia Rules of Civil Procedure." Syl. Pt. 1, State ex rel. McGraw v. Scott Runyan Pontiac-Buick, Inc., 194 W.Va. 770, 461 S.E.2d 516 (1995).

          LOUGHRY JUSTICE

         Erie Insurance Property and Casualty Company ("Erie") appeals two orders of the Circuit Court of Hampshire County entered in a civil action instituted by Ricky A. Dolly, Erie's insured. First, Erie appeals the November 10, 2016, Order Granting Plaintiff's Petition for Declaratory Judgment, wherein the circuit court held that Erie was required to provide Mr. Dolly with the statutory minimum amount of uninsured motorist coverage[1] for a trailer and all-terrain vehicle ("ATV") that Mr. Dolly was towing when he was struck by an at-fault, uninsured motorist. Second, Erie appeals the July 11, 2016, order through which the circuit court denied Erie's motion to dismiss Mr. Dolly's separate claims for common law bad faith and violation of the Unfair Trade Practices Act ("UTPA")[2] (collectively referred to herein as "the bad faith claims"). Upon a review of this matter, we conclude that the circuit court correctly granted declaratory judgment in favor of Mr. Dolly on the coverage issue. We also determine that Erie's challenge to the order denying its motion to dismiss the bad faith claims is an interlocutory matter not subject to appeal at this time. Accordingly, we affirm the declaratory judgment ruling and remand the case to the circuit court for further proceedings.

         I. Factual and Procedural Background

         On September 13, 2013, Mr. Dolly was driving his pick-up truck along a highway in Hampshire County. The truck was towing a trailer that carried an ATV, both of which were owned by Mr. Dolly. Emily M. Cole, while operating a sports utility vehicle owned by her father, negligently struck the side of Mr. Dolly's vehicle. Mr. Dolly was not injured but he suffered the total loss of his truck, trailer, and ATV as the result of this collision.

         The Coles failed to maintain any liability insurance on their sports utility vehicle, and Mr. Dolly filed a claim with his own automobile insurance carrier, Erie. His Erie automobile policy provided $10, 000 in uninsured motorist coverage for property damage. Soon after the collision, Erie paid Mr. Dolly for the loss of his truck.[3] However, relying on policy exclusions, [4] Erie denied coverage and refused to pay for the trailer and ATV.[5]

         Mr. Dolly filed suit against the Coles in May 2014. In December 2014, the complaint was amended to name Erie as a notice party, but no claims were asserted against Erie.[6] In or about September 2015, Mr. Dolly and Ms. Cole entered into a settlement agreement whereby Ms. Cole admitted liability, confirmed that she was an uninsured motorist, and conceded that Mr. Dolly's uncompensated property damages were $19, 420.72. Erie did not object to the settlement agreement; therefore, by order entered November 2, 2015, the circuit court adopted the settlement terms and entered judgment in favor of Mr. Dolly for $19, 420.72 plus interest.

         On March 9, 2016, Mr. Dolly moved the circuit court for leave to amend his complaint to add claims against Erie; this motion was granted on March 17, 2016. In this amended complaint, Mr. Dolly sought a declaratory ruling that Erie was responsible for paying for the trailer and the ATV pursuant to his uninsured motorist coverage. In separate counts, he also alleged and sought damages for common law bad faith and violation of the UTPA. Erie filed a motion to dismiss this amended complaint as time-barred, which the circuit court denied by order of July 11, 2016. Thereafter, Erie filed a counterclaim for declaratory relief arguing that there was no uninsured motorist coverage for the trailer and the ATV because of the policy exclusions.[7] In cross motions, Mr. Dolly and Erie each argued in support of their respective petitions for declaratory judgment on the coverage issue.

         After considering the parties' arguments, the circuit court entered its declaratory judgment order on November 10, 2016. The court concluded that despite the exclusionary language in the policy, Mr. Dolly was entitled to recover up to the statutorily-mandated uninsured motorist coverage minimum limit for the loss of his trailer and for the ATV that was being hauled on the trailer. See W.Va. Code § 33-6-31(b) (1998) (requiring uninsured motorist coverage in minimum amount specified by W.Va. Code § 17D-4-2 (1979)). At the time of this collision and the effective dates of Mr. Dolly's policy, the mandatory minimum for property damage coverage was $10, 000. See id. However, the circuit court also determined that Erie was not required by law to provide uninsured motorist coverage for amounts in excess of the statutorily-mandated minimum. Accordingly, the circuit court entered judgment against Erie in the amount of $10, 000.[8] By separate order, the circuit court stayed its consideration of the common law bad faith and UTPA claims pending Erie's appeal of the declaratory judgment order.[9]

         II. Standard of Review

         The coverage issue that Erie brings before this Court presents a question of law arising from a declaratory judgment order. "A circuit court's entry of a declaratory judgment is reviewed de novo." Syl. Pt. 3, Cox v. Amick, 195 W.Va. 608, 466 S.E.2d 459 (1995). Moreover, it is well-settled that "[w]here the issue on an appeal from the circuit court is clearly a question of law or involving an interpretation of a statute, we apply a de novo standard of review." Syl. Pt. 1, Chrystal R.M. v. Charlie A.L., 194 W.Va. 138, 459 S.E.2d 415 (1995). With this plenary standard in mind, we consider Erie's petition for appeal.

         III. Discussion

         A. Uninsured motorist coverage ...


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