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Levine v. Employers Insurance Co.

United States Court of Appeals, Fourth Circuit

April 12, 2018

BRUCE LEVINE, Administrator of the Estate of Carlos Bolanos Castillo, deceased, Plaintiff - Appellant,
v.
EMPLOYERS INSURANCE COMPANY OF WAUSAU, Defendant-Appellee, and MARCO A. GABARETTE, Plaintiff, and JESSICA LYNN COBLE; PURNELL FURNITURE SERVICES, INC.; PENSKE TRUCK LEASING COMPANY, INCORPORATED, Defendants. VIRGINIA TRIAL LAWYERS ASSOCIATION, Amicus Supporting Appellant, VIRGINIA ASSOCIATION OF DEFENSE ATTORNEYS, Amicus Supporting Appellee. MARCO A. GABARETTE, Plaintiff - Appellant, and BRUCE LEVINE, Administrator of the Estate of Carlos Bolanos Castillo, deceased, Plaintiff,
v.
EMPLOYERS INSURANCE COMPANY OF WAUSAU, Defendant-Appellee, and JESSICA LYNN COBLE; PURNELL FURNITURE SERVICES, INC.; PENSKE TRUCK LEASING COMPANY, INCORPORATED, Defendants. VIRGINIA TRIAL LAWYERS ASSOCIATION, Amicus Supporting Appellant, VIRGINIA ASSOCIATION OF DEFENSE ATTORNEYS, Amicus Supporting Appellee.

          Appeals from the United States District Court for the Eastern District of Virginia, at Alexandria. Gerald Bruce Lee, District Judge. (1:16-cv-00355-GBL-TCB)

          Argued: January 23, 2018

         ARGUED:

          Eugene C. Miller, WEINER, SPIVEY & MILLER, PLC; Kevin Michael Leach, TURBITT, O'HERRON & LEACH, PLLC, Burke, Virginia, for Appellants.

          Edwin Ford Stephens, CHRISTIAN & BARTON, LLP, Richmond, Virginia, for Appellee.

          Dominick Michael Mullori, Jr., Woodbridge, Virginia, for Amicus Virginia Trial Lawyers Association.

         ON BRIEF:

          Alexander S. de Witt, FREEBORN & PETERS LLP, Richmond, Virginia, for Amicus Virginia Association of Defense Attorneys.

          Before WILKINSON, AGEE, and WYNN, Circuit Judges.

         Affirmed by published opinion. Judge Agee wrote the majority opinion, in which Judge Wilkinson joined. Judge Wynn wrote a dissenting opinion.

          AGEE, Circuit Judge:

         Carlos Bolanos Castillo was killed and Marco A. Gabarette was injured in a motor vehicle accident during the course of their employment. Castillo's estate and Gabarette filed declaratory judgment actions seeking coverage under the uninsured/underinsured motorists endorsement of a third party's insurance policy for payment of the wrongful death and personal injury damages from the accident. The district court held that the policy did not extend coverage to Castillo's estate or Gabarette and granted summary judgment to the insurer. They now appeal. Because the plain language of the policy supports the district court's determination, we affirm the judgment of the district court.

         I.

         Purnell Furniture Services, Inc. ("Purnell"), a Virginia company, hired Castillo and Gabarette (collectively, the "Plaintiffs") as independent contractors to deliver furniture in northern Virginia.[1] Purnell regularly hired such independent contractors to deliver its furniture in the contractors' vehicles. For this particular delivery, the originally scheduled contractors were unable to fulfill the order, and Purnell inquired whether the Plaintiffs could do the job. Due to Purnell's last-minute request, the Plaintiffs did not have a sufficient vehicle available, so Purnell permitted them to use a truck for that delivery that Purnell had rented from Penske.

          Gabarette drove the truck with Castillo as passenger. En route to their destination, they pulled over on the side of the interstate so Castillo could check on the security of the furniture load. Another driver then struck the rented Penske truck, killing Castillo and injuring Gabarette.[2]

         At the time of the accident, Purnell had a motor vehicle insurance policy (the "Policy") issued by Employers Insurance Co. of Wausau ("Wausau"), which includes an uninsured/underinsured motorists ("UIM")[3] endorsement as required by the applicable state law of Virginia. See Va. Code Ann. § 38.2-2206(A); see also id. § 38.2-2206(B) (mandating that UIM coverage extend to "any person who uses the motor vehicle to which the policy applies, with the expressed or implied consent of the named insured"). The Policy's "Schedule of Coverages and Covered Autos" (i.e., the "Declarations Pages" or "Schedule") lists the insurance coverages that Purnell purchased. These coverages are identified on the Declarations Pages as limited "to those autos shown as covered autos." J.A. 68.[4] Covered autos are designated by a code listed next to a particular coverage on the Schedule, and the "Motor Carrier Coverage Form" defines each code. Under the Schedule, the Policy extends liability coverage to all autos designated by code "61, " which is defined as "Any Auto" on the Motor Carrier Coverage Form. J.A. 134. However, for UIM coverage-as opposed to liability coverage-the Schedule restricts covered autos to those designated by code "62, " which the Motor Carrier Coverage Form defines as "Owned Autos Only." J.A. 134. The Policy lists only three vehicles on the "Schedule of Covered Autos You Own, " none of which are the rented Penske truck.

         The Declarations Pages also reference the UIM endorsement for the limits of that particular coverage, which provides that Wausau would "pay in accordance with the Virginia Uninsured Motorists Law, all sums the insured is legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle." J.A. 105. For UIM purposes, an insured party is defined as "[a]nyone . . . occupying a covered auto." J.A. 105. The UIM endorsement defines "covered auto" as "a motor vehicle, or a temporary substitute, with respect to which the bodily injury or property damage liability coverage of the policy applies." J.A. 104.

         Castillo's estate and Gabarette filed separate suits against the alleged negligent driver in the Fairfax County, Virginia, Circuit Court.[5] Because of the driver's limited insurance coverage, the Plaintiffs also brought an action in the same state court against Wausau for a declaration as to UIM coverage under the Policy and their entitlement to that coverage. Wausau removed the declaratory judgment action to the U.S. District Court for the Eastern District of Virginia on the basis of diversity jurisdiction pursuant to 28 U.S.C. § 1332. Wausau and Castillo's estate filed cross-motions for summary judgment.[6]

         The district court granted Wausau's motion for summary judgment and denied Castillo's estate's motion regarding UIM coverage.[7] Applying Virginia law, the district court analyzed the Policy and held that the plain language of its terms dictated that the UIM coverage applied only to those vehicles that Purnell owned. Because Purnell did not own the Penske truck, it was not a "covered auto, " and therefore the Plaintiffs were not entitled to UIM coverage.

         The Plaintiffs filed a timely notice of appeal, and we have jurisdiction pursuant to 28 U.S.C. § 1291.

         II.

         We review a district court's decision to grant summary judgment de novo. OpenRisk, LLC v. Microstrategy Servs. Corp., 876 F.3d 518, 527 (4th Cir. 2017). "Summary judgment is appropriate when there are no genuine issues of material fact and the moving party . . . is entitled to judgment as a matter of law." Id. The facts in this case are not in dispute.

          Because this case was removed to federal court pursuant to diversity jurisdiction, we apply Virginia law, which governs any substantive issues. Stahle v. CTS Corp., 817 F.3d 96, 99-100 (4th Cir. 2016) ("Because federal jurisdiction in this matter rests in diversity, our role is to apply the governing state law."). Courts in Virginia apply traditional principles of contract interpretation when reviewing insurance policies. TravCo Ins. Co. v. Ward, 736 S.E.2d 321, 324 (Va. 2012). The intent of the parties is the focus of the inquiry. Id. at 325. A court will construe unambiguous terms of the policy according to their plain meaning. Id. Importantly, no contract provision "will be treated as meaningless if a reasonable meaning can be given to it, and there is a presumption that the parties have not used words needlessly." Id. Indeed, "[e]ach phrase and clause of an insurance contract should be considered and construed together and seemingly conflicting provisions harmonized when that can be reasonably done, so as to effectuate the intention of the parties as expressed therein." Id.; accord Nationwide Mut. Ins. Co. v. Akers, 340 F.2d 150, 154 (4th Cir. 1965) ("To construe each clause or endorsement in isolation and without reference to the other policy provisions would do violence to basic contract law for insurance contracts, like other contracts, must be read and construed as a whole and not piecemeal.").

         If an insurance policy is ambiguous, however, it is ordinarily construed against the insurance company. St. Paul Fire & Marine Ins. Co. v. S.L. Nusbaum & Co., 316 S.E.2d 734, 736 (Va. 1984) ("The courts, accordingly, have been consistent in construing the language of such policies, where there is doubt as to their meaning, in favor of that interpretation which grants coverage, rather than that which withholds it. Where two constructions are equally possible, that most favorable to the insured will be adopted. Language in a policy purporting to exclude certain events from ...


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