A Carluzzo Rochkind & Smith note: Following is an excellent article by Virginia Lawyers Weekly. Since 1987, our personal injury lawyers in Prince William County have helped clients in Manassas, Fairfax County, and throughout Northern Virginia. If you have any questions or would like to schedule an appointment, please contact our law firm at (703) 361-0776.
Court rules for insurer in UIM dispute
By Virginia Lawyers Weekly – 5/9/2022
The U.S. District Court for the Eastern District of Virginia ruled in favor of a defendant insurance company after the company and the plaintiff both submitted motions for summary judgment to determine the applicable limit for underinsured motorist coverage.
The plaintiff asserted the applicable coverage limit was $1 million, while the defendant contended that the proper limit was $70,000.
Senior U.S. District Judge Henry E. Hudson authored the opinion issued last month in Khattab v. Berkley Regional Insurance Company (VLW 022-3-169).
Background
The plaintiff, Majdoleen A. Khattab, is the widow and administratrix of the estate of Affan Mohamad Khattab, who was killed after being struck by an allegedly negligent driver. The opinion states that the plaintiff is currently pursuing a wrongful death action in Henrico County Circuit Court stemming from her husband’s death.
At the time of the accident, Affan was working as a driver for Richmond Express and operating a vehicle owned by his employer. The vehicle was insured under a policy issued by defendant Berkley Regional Insurance Company in January 2021. Affan was also insured separately by Integon National Insurance Company.
In addition to its policy, Berkley issued an uninsured motorist endorsement, a notice entitled “Virginia Important Notice Regarding Uninsured Motorists Coverage,” and a selection form titled “Virginia Selection of Uninsured Motorists Coverage.” The endorsement document specified details for coverage for uninsured and underinsured motor vehicles, while the notice stated “that uninsured/underinsured motorist coverage would be equal to the liability limits in the Policy unless a named insured expressly selects to reduce those limits via the Selection Form.”
On the selection form, an agent of Richmond Express selected the option to lower the uninsured motorist coverage to $70,000.
Both sides filed motions for summary judgment, with the plaintiff asserting the limit of uninsured motorist coverage in Berkley’s policy was $1 million. The plaintiff also claimed the underinsured motorist coverage included in both the Berkley and Integon policies should supplement the insurance of the alleged negligent driver, as her personal auto liability policy was $100,000 and would “not fully compensate Plaintiff for the damages she is seeking in the underlying suit.” Berkley contended the limit of uninsured motorist coverage was $70,000.
Analysis
At issue in this case was the communication of the reduction of uninsured/underinsured motorist coverage. The plaintiff contended Richmond Express failed to properly communicate a decision to reduce the coverage from $1 million to $70,000 on the selection form, citing Va. Code § 38.2-2202(B). Among other things, the code section “sets out the required notice… notifying the insured of uninsured and underinsured coverage limits and the option to reduce those limits.” The code section also states that an insurer is allowed to require a request to reduce coverage be in writing.
The plaintiff also argued that Virginia law mandates the use of the term “uninsured/underinsured” on the selection form, and because the two are defined separately in Va. Code § 38.2-2206, the terms cannot be used interchangeably. Because the selection form made reference to “uninsured motorists coverage,” the plaintiff argued that the policy at most limited uninsured motorist coverage and “was inadequate to reduce the limits of underinsured motorist coverage.”
Berkley, meanwhile, argued the statute intended for there to be one endorsement providing for both uninsured and underinsured motorist coverage. The defendant added that the statute merely mandates language for the notice to the insured, not for the insured’s selection, asserting that “a written rejection/selection form is not even needed — let alone one with the hyper-specific language [plaintiff] claims is ‘required.’”
The judge agreed with Berkley’s arguments.
“Defendants are correct that the language in § 38.2-2202 only mandates requirements for the notice given to the insured,” Hudson wrote. “In fact, § 38.2-2202 does not even require a written selection of reduced limits at all. Thus, in looking at the plain language of the uninsured motorist coverage statutes, contrary to Plaintiff’s contention, the Selection Form was not required to include any specific language.”
Hudson said that recent case law has “focused on substantial compliance with the statutes,” rather than “hyper-technical compliance.”
“Even if the statute was read to require use of the term ‘uninsured/underinsured,’ which is doubtful, the Selection Form still substantially complied with the statutes,” the judge wrote, noting that the form defined “uninsured motorists coverage” to include coverage for underinsured motor vehicles.
Additionally, Hudson wrote that the endorsement “clearly defines” uninsured motorist coverage to include underinsured motor vehicles, and the selection form defines uninsured motorist coverage the same way.
“The plain meaning of these words, as defined in the Endorsement and Selection Form, clearly indicates that both parties would understand ‘Uninsured Motorist Coverage’ to include underinsured motor vehicles,” Hudson wrote.
The judge went on to cite court precedent that determined Virginia law treats uninsured and underinsured motorists the same, and that the terms are often used interchangeably.
“To find ambiguity… would result in a conclusion that ignores the clearly defined term of ‘Uninsured Motorists Coverage,’” the judge wrote.
He concluded, “The Court recognizes what is at stake for Plaintiff in this case, however, the Court will not find statutory requirements where there are none, nor will the Court read ambiguity into a contract where the plain meaning can be ascertained. Consequently, the Court finds that Richmond Express properly reduced its underinsured motorist coverage limits to $70,000.”
Berkley also asked the court to find that the policy limits were fully offset by the driver’s $100,000 in coverage and that the insurer had no exposure for the accident.
The judge agreed, finding that since the parties agreed the alleged negligent driver’s liability coverage was $100,000, “then the $70,000 coverage in the Policy is offset by [the driver’s] higher coverage.”
Hudson therefore denied the plaintiff’s request for summary judgment and granted Berkley’s summary judgment motion.
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