216 W. Va. 91 602 S.E.2d 534

602 S.E.2d 534

Anthony MIRALLES, III and Madeline Miralles, Plaintiffs Below, Appellants, v. Lloyd L. SNODERLY, Penelope Sue Zangari, dba P & R Trucking, Inc., a West Virginia corporation, and National Union Fire Insurance Company of Pittsburgh, PA., a corporation, Defendants Below. National Union Fire Insurance Company of Pittsburgh, Pa., a corporation, Defendant Below, Appellee.

No. 31554.

Supreme Court of Appeals of West Virginia.

Submitted Feb. 10, 2004.

Decided June 30, 2004.

*93William L. Frame, Esq., Paul T. Farrell, Jr., Esq., Wilson, Frame, Benninger & Metheney, Morgantown, for Appellants.

Ancil 6. Ramey, Esq., Jennifer R. Anderson, Esq., Steptoe & Johnson, Charleston, for Appellee.

PER CURIAM:

Anthony Miralles, III and Madeline Mi-ralles, plaintiffs below and appellants herein, appeal an order of the Circuit Court of Mo-nongalia County, West Virginia, which granted summary judgment in favor of National Union Fire Insurance Company of Pittsburgh, Pa. (hereinafter “National Union”), a defendant below and appellee herein. o At issue in this appeal is whether, under the National Union policy issued to Mr. Miralles’ employer, underinsurance motorist benefits are available to Mr. Miralles for injuries he received during the course of his employment as the result of the negligence of a third-party tortfeasor and for which injuries Mr. Miralles received workers’ compensation benefits.

For the reasons discussed herein, the circuit court’s order granting summary judgment in favor of National Union is hereby reversed and this case is remanded for further proceedings.

I.

FACTS

Mr. Miralles was employed as a Community Services Specialist with the Northern West Virginia Center for Independent Living (hereinafter “Center for Independent Living”), a non-profit organization.1 On November 18, 1999, Mr. Miralles was driving his own automobile from meetings he attended on behalf of his employer when he was involved in a serious automobile accident. As a result of the accident, Mr. Miralles sustained grave and permanent injuries.2 To date, Mr. Miralles has incurred medical expenses in excess of $780,000.00.

Following the accident, Mr. Miralles made claims against Lloyd L. Snoderly, the at-fault driver, and Mr. Snoderly’s employer, Penelope Sue Zangari, doing business as P & R Trucking, Inc.3 Mr. and Mrs. Miralles entered into a settlement agreement with these defendants on or about October 5, 2000, for $1 million, which represents the applicable insurance policy’s limits of liability. On or about October 25, 2000, Mr. and Mrs. Mi-ralles also settled their claim for underin-sured motorist (“UIM”) benefits under their own automobile insurance policy, for $100,000.00. Additionally, Mr. Miralles, whose injuries occurred in the course of his employment with the Center for Independent Living, received workers’ compensation benefits.4

Eventually, Mr. Miralles sought UIM benefits under the Center for Independent Living’s automobile insurance policy, which was purchased from National Union through the West Virginia Board of Risk and Insurance Management (hereinafter “the Board”), pursuant to W.Va.Code § 29-12-5 [1996]. More precisely, the Center for Independent Living was issued a “Certificate of Liability Insurance” by the Board pursuant to the insur-*94anee policy issued to the State of West Virginia. The circuit court found that the subject “policy included ‘business auto’ coverage with an underinsured [UIM] endorsement.” Finding of Fact No. 6, December 4, 2002 Order.5 The comprehensive business automobile policy issued to the Center for Independent Living included, in relevant part, “West Virginia Uninsured and Underinsured Motorists Coverage”:

We will pay all sums the ‘insured’ is legally entitled to recover as compensatory damages from the owner or driver of an ‘uninsured’ or ‘underinsured motor vehicle.’

It is undisputed that Mr. Miralles is an “other insured” as defined in the “Certificate of Liability Insurance” issued to the Center for Independent Living.6 -

The policy at issue also includes Endorsement # 11, “Amendments to Uninsured Motorists and Underinsured Motorists Coverage,” which provides:

Section C-Exclusions is amended to add:
[This insurance does not apply to any of the following:]
8. Any obligation for which the ‘insured’ may be held liable under any workers’ compensation, disability benefits or unemployment compensation law or any similar law.

By letter dated June 22, 2000, National Union, through its authorized representative, AIG Claim Services, Inc., “disclaimed [UIM] coverage” to Mr. Miralles based upon Endorsement # 11, above (hereinafter “the workers’ compensation exclusion”). As a result, Mr. and Mrs. Miralles instituted the instant declaratory judgment action in the Circuit Court of Monongalia County for the purpose of determining whether Mr. Miralles is entitled to UIM benefits in this ease.

By order entered December 4, 2002, the circuit court granted summary judgment in favor of National Union, concluding, inter alia, that because Mr. Miralles received workers’ compensation benefits for his injuries resulting from the subject automobile accident, the workers’ compensation exclusion in the subject insurance policy clearly and unambiguously precludes Mr. and Mrs. Miralles from also receiving underinsured motorist benefits.7

*95It is from this December 4, 2002 order that Mr. and Mrs. Miralles now appeal.

II.

STANDARD OF REVIEW

In this appeal, this Court conducts a dr novo review of the circuit court’s December 4, 2002 order granting summary judgment in favor of National Union: “ ‘A circuit court’s entry of summary judgment is reviewed de novo.’ Syl. pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994).” Syl. pt. 1, Glascock v. City Nat. Bank of W.Va., 213 W.Va. 61, 576 S.E.2d 540 (2002).

Furthermore, whether the workers’ compensation exclusion at issue precludes Mr. and Mrs. Miralles from receiving UIM benefits for Mr. Miralles’ work-related injuries caused by a third-party tortfeasor because Mr. Miralles received workers’ compensation benefits as a result of these injuries involves the interpretation of an insurance contract. In Murray v. State Farm Fire & Cas. Co., 203 W.Va. 477, 482, 509 S.E.2d 1, 6 (1998), we reiterated the appliea-ble standard of review in such cases, stating that “‘[t]he interpretation of an insurance contract ... is a legal determination which, like the court’s summary judgment, is reviewed de novo on appeal.’ ” (quoting Payne v. Weston, 195 W.Va. 502, 506-07, 466 S.E.2d 161, 165-66 (1995).). “ ‘Language in an insurance policy should be given its plain, ordinary meaning.’ Syllabus Point 1, Soliva v. Shand, Morahan & Co., Inc., 176 W.Va. 430, 345 S.E.2d 33 (1986).” Murray, at syl. pt. 1. Moreover, “ ‘[w]here the provisions of an insurance policy contract are clear and unambiguous they are not subject to judicial construction or interpretation, but full effect will be given to the plain meaning intended.’ Syllabus, Keffer v. Prudential Ins. Co. of America, 153 W.Va. 813, 172 S.E.2d 714 (1970).” Murray, 203 W.Va. at 482, 509 S.E.2d at 6.

III.

DISCUSSION

A.

At issue in this appeal is whether the workers’ compensation exclusion to the unin*96sured/underinsured motorist coverage in the commercial business auto policy covering the Center for Independent Living precludes Mr. and Mrs. Miralles from receiving UIM benefits for injuries Mr. Miralles sustained during the course of his employment as the result of the negligence of a third-party tortfeasor and for which injuries Mr. Miralles also received workers’ compensation benefits. National Union argues (and the circuit court agreed) that the denial of UIM coverage in this case is dictated by this Court’s decision in Trent, which involved similar facts and an insurance policy with a similar exclusion. See n. 7, supra. Importantly, however, we must acknowledge the fact that resolution of the instant case hinges on the language of the workers’ compensation exclusion and whether it applies to an employee’s UIM claim under his employer’s insurance policy to compensate the employee for work-related injuries caused not by a co-employee or his employer, but by a third party. The omission, in Trent, of any analysis of (or argument regarding)8 this exclusionary language in light of the crucial fact that the plaintiff employee in that case was injured by a third party does not alter our conclusion that the language of the workers’ compensation exclusion does not preclude UIM coverage in this case.

As indicated above, pursuant to the disputed exclusionary language in the Center for Independent Living’s business auto policy, uninsured and underinsured motorist coverage does not apply to:

[a]ny obligation for which the ‘insured’ may be held liable under any workers’ compensation, disability benefits or unemployment compensation law or any similar law.

In Henry v. Benyo, 203 W.Va. 172, 506 S.E.2d 615 (1998), this Court examined comparable statutory language in the context of a similar factual scenario. Even though the disputed language in Henry was statutory rather than contractual, considering their parity, we are constrained to apply the plain meaning of the instant workers’ compensation exclusion in a manner consistent with our holding in Henry.

In Henry, a construction company employee was injured in the course of his employment while operating a crane owned by his employer. The employee’s injuries were caused by a third party, who had no employment relationship with the injured employee’s employer. The injured employee received workers’ compensation benefits as a result of his injuries. Additionally, the employee noticed his employer and its insurer that he intended to seek UIM benefits under the employer’s motor vehicle insurance policy covering the crane on which he was injured in the event judgment against the third-party tortfeasor exceeded the limits of the tortfea-sor’s automobile insurance coverage.

Although the insurance policy at issue in Henry did not include a workers’ compensation exclusion, the employer’s insurer denied UIM coverage, inter alia, on the ground that, under the employer immunity provisions of this state’s workers’ compensation statutes, the injured employee was barred from seeking damages from his employer because he had received workers’ compensation benefits.9 This Court, in Henry, held that although UIM coverage would not be available to an employee who receives workers’ compensation benefits for injuries caused by a co-employee, the employee could seek UIM coverage if his injuries were caused by *97a third-party tortfeasor. Id., at syl. pt. 4. In so holding, we relied, in part, on the following statutory language:

The provisions of subsections (a) and (b) of this section shall not apply to any policy of insurance to the extent that it covers the liability of an employer to his employees under any workers’ compensation law.

W.Va.Code § 33-6-31(h) (Emphasis added). See Henry, 203 W.Va. at 177, 506 S.E.2d at 620. We explained in Henry that

[t]he plain language of [W.Va.Code § 33-6-31(h)] prohibits an employee from collecting from his/her employer’s underin-sured motorist insurance coverage if his/ her injuries are already covered by workers’ compensation and if the accident is a result of the employer’s or a coemployee’s actions (i.e., “the employer’s liability”). Stated otherwise, if the employee’s injuries were caused by the employer, a coemploy-ee, or, possibly, by some inadvertence of the employee him/herself (as compared to a third-party stranger to the employment relationship) thereby rendering the employer ‘liable, ’ or ‘atfatdt, ’for the accident, the employee cannot collect workers’ compensation benefits and then seek an additional recovery from the employer just because the employer has motor vehicle insurance that coincidentally also covers the employee’s injuries. Rather, the employee is limited in his/her recovery to workers’ compensation benefits because of the immunity provided to employers and coemployees by the workers’ compensation statutes.
‡ $ $ $
Where, however, an employee’s work-related injuries are caused by a third-patty... [W.Va.Code § 33-6-31(h)] does not apply because the employer is not ‘liable’ for the accident. In this scenario, it is the third-patty who is technically ‘at fault’ fw the collision and residtant damages. Therefore, while the employee may recover workers’ compensation benefits for his/her injuries resulting from the accident which occurred in the course and scope of his/her employment, he/she is not statutorily barred from also pursuing his/her claims against the third-party as this individual does not enjoy the immunity afforded by the workers’ compensation statutes.

Id., 203 W.Va. at 177-78, 506 S.E.2d at 620-21 (emphasis provided and added; footnote omitted).10

Just as in Henty, Mr. Miralles’ work-related injuries were caused by a third party; consequently, Mr. Miralles’ employer was not “liable,” or otherwise “at fault,” for the subject accident or for the resultant injuries. Therefore, because Mr. Miralles was injured by a third-party tortfeasor and the Center for Independent Living, Mr. Miralles’ employer (the “insured”), was not “liable” for the subject accident and injuries under any workers’ compensation law, the workers’ *98compensation exclusion does not apply.11 Accordingly, the circuit court committed error in granting summary judgment in favor of National Union.

B.

Finally, the remaining issues raised by National Union require further proceedings in the circuit court upon remand. First, National Union argues summary judgment was properly granted because the vehicle involved in the subject accident was Mr. Miralles’ personal vehicle and thus, was not a covered “business auto” under the instant “business auto policy.” Brief of Appellee, p. 16 at n. 9 (quoting Horace Mann Ins. Co. v. Leeber, 180 W.Va. 375, 378, 376 S.E.2d 581, 584 (1988) (“‘[A] liability insurer need not defend a case against the insured if the alleged conduct is entirely foreign to the risk insured against.’ ”).).

Though National Union raised this issue before the circuit court, the court’s December 4, 2002 summary judgment order did not resolve or otherwise address it. It has long been held by this Court that we “‘will not pass on a nonjurisdictional question which has not been decided by the trial court in the first instance.’ ” Syl. pt. 10, Vandevender v. Sheetz, Inc., 200 W.Va. 591, 490 S.E.2d 678 (1997) (quoting syl. pt. 2, Sands v. Security Trust Co., 143 W.Va. 522, 102 S.E.2d 733 (1958).). See Syl. pt. 4, in part, DeVane v. Kennedy, 205 W.Va. 519, 519 S.E.2d 622 (1999) (This Court “ “ ‘is limited in its authority to resolve assignments of nonjurisdictional errors to a consideration of those matters passed upon by the court below and fairly arising upon the portions of the record designated for appellate review.’ ” ” (Internal citations omitted).). Thus, on remand, should National Union again raise the issue of whether Mr. Miralles’ personal vehicle is a “covered auto” under the subject policy, the issue should be considered and resolved by the circuit court.

Additionally, on remand, the circuit court should address National Union’s cross-assignment of error, that is, whether Mi, and Mrs. Miralles waived any claim to underinsured motorist benefits under the subject policy because they failed to obtain National Union’s waiver of subrogation against the tortfeasor. According to National Union, Mr. and Mrs. Miralles provided to the Board a “Notice of Claim,” which indicated the insurer of the third-party tortfeasor would offer to settle for the applicable policy limits; however, National Union argues, the notice provided did not also indicate that any potential settlement was to be “conditioned upon an underinsured motorist coverage carrier waiving its rights of subrogation against the tortfeasor,” as required by W.Va.Code § 33-6-31e(a) [1998].12 See Syl. pt. 3, Arndt v. *99 Burdette 189 W.Va. 722, 434 S.E.2d 394 (1993) (An automobile policy’s consent-to-settle provision regarding UIM coverage “whereby an insured voids his [UIM] coverage by settling a claim with a tortfeasor without first obtaining the insurer’s written consent ... is a valid and enforceable means by which an insurer may protect its ... right to subrogat[ion][.]”). Indeed, National Union argues, it did not waive any subrogation rights it might have had based upon Mr. and Mrs. Miralles’ claim for UIM coverage.

This issue was raised below but was neither addressed nor resolved by the circuit court in its December 4, 2002 order; therefore, this Court will not address it in this appeal. See Vandevender, at syl. pt. 10. However, we note that, on remand, to prevail on this issue, National Union is required to demonstrate that it has been prejudiced by Mr. and Mrs. Miralles’ failure to obtain National Union’s consent to settle with the tortfeasor’s insurance carrier for the full limits of liability under the applicable policy. As we held in syllabus point seven of Kronjaeger v. Buckeye Union Ins. Co., 200 W.Va. 570, 490 S.E.2d 657 (1997),

Where an insured has failed to obtain his/her insurer’s consent before settling with a tortfeasor but in settling has procured the full policy limits available under the tortfeasor’s insurance policy, the insurer must show that it was prejudiced by its insured’s failure to obtain its consent to settle in order to justify a refusal to pay underinsured motorist benefits.

IV.

CONCLUSION

For the reasons stated, the December 4, 2002 order of the Circuit Court of Mononga-lia County is reversed, and this case is remanded for further proceedings.

Reversed and remanded.

Miralles v. Snoderly
216 W. Va. 91 602 S.E.2d 534

Case Details

Name
Miralles v. Snoderly
Decision Date
Jun 30, 2004
Citations

216 W. Va. 91

602 S.E.2d 534

Jurisdiction
West Virginia

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