On September 13, 2013, Respondent, Ricky A. Dolly, was involved in an auto wreck which caused property damage to his vehicle, attached trailer, and an all-terrain vehicle being towed in the trailer. Respondent was struck by an uninsured motorist who was admittedly at fault for all property damages stemming from the wreck. At the time of the wreck, Respondent maintained a policy of auto insurance with Petitioner, Erie Insurance Company, which provided the West Virginia state minimum uninsured motorist coverage: $10,000.
On May 2, 2014, Respondent filed suit in the Circuit Court of Hampshire County, West Virginia, seeking to recover all property damages arising from the wreck. Petitioner accepted coverage for the damages to Respondent’s vehicle under a collision endorsement, but denied coverage for damages to Respondent’s trailer and all-terrain vehicle under the uninsured motorist endorsement. Specifically, Petitioner cited to exclusionary language within the policy that provided as follows: “Uninsured/Underinsured Motorists Coverage is not provided for any “trailer,” whether or not the “trailer” is attached to another “motor vehicle” or “miscellaneous vehicle.” Notably, the policy definition of “miscellaneous vehicle” includes “all terrain vehicle[s] and any similar recreational vehicle[s].”
On March 22, 2016, Respondent amended his complaint to assert statutory and common law bad faith claims against Petitioner. Moreover, Respondent sought declaratory judgment that he was entitled to coverage for the trailer and all-terrain vehicle pursuant to the mandatory minimums outlined within West Virginia’s motor vehicle responsibility statute. Petitioner disagreed, arguing that the bad faith claims violated the applicable one-year statute of limitations, and further, that it was entitled to declaratory judgment of non-coverage under the policy exclusion.
On July 11, 2016, the Circuit Court issued an Order Denying [Petitioner’s] Motion to Dismiss for Violation of the Statute of Limitations and requesting that the parties submit memoranda of law on the declaratory judgment issues.
On November 10, 2016, the Circuit Court of Hampshire County issued an Order Granting [Respondent’s] Petition for Declaratory Judgment, finding that the Respondent was entitled to mandatory minimum coverage of $10,000 for the property damage to his trailer and all-terrain vehicle under West Virginia’s motor vehicle responsibility statute. The Circuit Court reasoned that the all-terrain vehicle should be considered personal property, rather than a “miscellaneous vehicle”, because it was not registered for use on a public highway. Further, the Circuit Court found that Petitioner’s policy exclusion language was “inconsistent with the spirit and intent of the uninsured and underinsured motorist statute.” Petitioner, Erie Insurance Company, appeals.
(1) Does an uninsured motorist policy exclusion purporting to exclude coverage for all-terrain vehicles and trailers conflict with the spirit and intent of minimum mandatory property damage coverages contained within West Virginia’s Motor Vehicle Safety Responsibility Law?
(2) When does the one-year statute of limitations for common law insurance bad faith and Unfair Trade Practices claims begin to run?
The Supreme Court of Appeals AFFIRMED the Circuit Court’s Declaratory Judgment Order in favor of Mr. Dolly, the Respondent. In doing so, the Court stressed that this was not an issue of policy interpretation, but rather, an issue of statutory preemption. Specifically, the Court relied on Syl. Pt. 1, Deel v. Sweeney, 181 W.Va. 460, 383 S.E.2d 92 (1989), which held that “[s]tatutory provisions mandated by the Uninsured Motorist Law . . . may not be altered by insurance policy exclusions.” Further, the Court reaffirmed that “[i]nsurers 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.” Id. at 460-61, 383 S.E.2d at 92-93. Thus, the Court determined that Erie was statutorily required to provide minimum coverage for Mr. Dolly’s ATV as personal property, regardless of any exclusion language to the contrary.
In rendering its ruling, the Court authored a new Syllabus Point that conclusively establishes that an “owned but not insured” exclusion to uninsured motorist coverage is valid and enforceable above the mandatory limits of uninsured motorist coverage required statute; However, any such exclusion that purports to entirely preclude uninsured motorist coverage is void. Importantly, the Court reaffirmed that this mandatory minimum coverage requires “an endorsement or provisions undertaking to pay the insured all sums which he shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle.” W.Va. Code § 33-6-31(b) (emphasis added). Thus, the distinction between motor vehicles as defined in the Uninsured Motorist Law and personal property is inapposite for purposes of damages. When determining whether the minimum uninsured motorist coverage amounts apply, all that matters is whether the injured party would be entitled to recover those damages from the tortfeasor in a civil lawsuit.
Finally, the Court found that the Statute of Limitations issue was an interlocutory appeal not properly before the Court. Accordingly, the Court remanded the matter back to the Circuit Court for further proceedings.
This opinion seems to be more of a housekeeping decision, rather than the creation of new law. The Court took advantage of the opportunity to clarify its interpretation of statutory law so as to avoid future confusion over policy exclusions that purport to preclude mandatory minimum uninsured motorist coverage. The upshot is this: if you are damaged by a driver operating an uninsured vehicle, you will be entitled to recover mandatory minimums under the Uninsured Motorist Law for any damages you would be entitled to in a civil action. The enumerated exception, however, is that ATVs do no count as uninsured motor vehicles for purposes of applying the minimums when the ATV operator is the tortfeasor. Succinctly, if someone operating an ATV crashes into you, an ATV exclusion to your uninsured policy will probably be enforceable.