In this case the majority opinion found that
the circuit court correctly determined that Ohio law applied to this case and
that there was no liability coverage for the claims asserted. I agree completely
with these conclusions. I write separately to express my view that when litigation
occurring in West Virginia involves a household exclusion contained in an automobile
liability policy that is issued in another state and is valid under the laws
of that state, the exclusion should not be automatically rejected on public policy
grounds.
As Justice Albright's dissent correctly observes,
this Court has limited the applicability of household exclusions with respect
to a named insured by holding that such an exclusion is invalid up to the minimum
coverage amounts required under West Virginia law. See Syl. pt. 2, Dairyland
Ins. Co. v. East, 188 W. Va. 581, 425 S.E.2d 257 (1992) (“A named
insured exclusion endorsement is invalid with respect to the minimum coverage
amounts required by the West Virginia Motor Vehicle Safety Responsibility Law,
West Virginia Code §§ 17D-1-1 to 17D-6-7 (1991 & Supp. 1992).
Above the minimum amounts of coverage required by West Virginia Code § 17D-4-12
(1992), however, the endorsement remains valid.”). (See
footnote 1) It must not be overlooked, however, that, unlike the
case at bar, Dairyland did not involve residents of another state who
contracted for their policy of insurance under the laws of that other state.
Rather, the insured in Dairyland, was a resident of West Virginia, the
parties contracted for the insurance policy in West Virginia, and, therefore,
they were on notice that the policy would be subject to the laws of this State.
For this reason, I find that Dairyland is not persuasive authority in
deciding the case presently before the Court.
Notably, during the same term that this Court
handed down the Dairyland decision, it also handed down its decision in Nadler
v. Liberty Mutual Fire Insurance Company, 188 W. Va. 329, 424 S.E.2d
256 (1992). Nadler involved a two vehicle accident
that occurred in West Virginia. A tractor trailer crossed the center line and
collided with a vehicle that was owned an occupied by a family who were residents
of Ohio. Nadler, 188 W. Va. at 331-32, 424 S.E.2d at 258-59. Both
parties were insured by Liberty Mutual Fire Insurance Company, but the tractor
trailer was insured by a policy that was issued in West Virginia, while the
policy covering the Ohio vehicle was issued in Ohio. Id. 188 W. Va.
at 332, 424 S.E.2d at 259. Subsequently, a declaratory judgment action was
filed in the United States District Court for the Southern District of West
Virginia raising questions involving only the Ohio policy. (See
footnote 2) Id. The District Court ultimately certified
a question to this Court asking which state's law should be applied. Id. It
was undisputed that the Ohio family would not be able to recover under their
policy if Ohio law was applied. (See
footnote 3) Id. at 332-33, 424 S.E.2d at 259-60. However,
the set-off provision in the policy, which would prevent the Ohio family from
recovering under their policy if Ohio law applied, was not enforceable in West
Virginia as such provisions had been found to be against public policy. Id. at
333, 424
S.E.2d at 260. In it's discussion of the issues presented by the certified
question, the Nadler Court surveyed how other jurisdictions handled
choice of law questions where a court was being asked to enforce a provision
of an insurance policy that violated the forum state's public policy, when
the policy of insurance had been issued in another state to residents of the
other state, and was enforceable under the law of the other state. Id. at
336-37, 424 S.E.2d at 263-64. The Nadler Court then explained that
[o]ur substantive law governing uninsured and underinsured motorist coverages in motor vehicle insurance policies is intended to apply only to insurance transactions which occur in West Virginia or which affect the rights and responsibilities of West Virginia citizens. For this reason, the public policy of full compensation underlying our uninsured/underinsured motorist law is implicated only when the parties and the transaction have a substantial relationship with this state. The importance of the public policy is directly proportional to the significance of that relationship. The more marginal the contact West Virginia has with the parties and the insurance contract, the less reason there is to consider the public policy behind our uninsured/underinsured motorist law as a factor bearing on the choice of law determination.
When
the issue is viewed in this light, it is clear that the public policy concerns
raised by the plaintiffs are adequately addressed by application of the significant
relationship test approved by this Court in Lee v. Saliga. This approach
provides an answer to questions which inevitably arise any time there is a conflict
between the laws of one state and the laws of another. It is also consistent
with promoting the reasonable expectations of the parties to the insurance contract,
an important premise for our adoption of the conflicts rule stated in Lee
v. Saliga. The reasonable expectations of the parties with respect to the
terms of an insurance contract should not be lightly disregarded. See National
Mut. Ins. Co. v. McMahon & Sons, Inc., 177 W. Va. 734, 356 S.E.2d
488 (1987). Finally, we believe that this
approach is not inconsistent with the results reached by the majority of courts
that have addressed the issue. See, e.g., Andrews v. Continental Ins. Co.,
supra; Draper v. Draper, 115 Idaho 973, 772 P.2d 180 (1989); Boardman
v. United Servs. Auto. Ass'n, supra; Sotirakis v. United Serv. Auto.
Ass'n, 106 Nev. 123, 787 P.2d 788 (1990); State Farm Mut. Auto. Ins.
Co. v. Simmons' Estate, supra; Dairyland Ins. Co. v. State Farm Mut.
Auto. Ins. Co., 41 Wash. App. 26, 701 P.2d 806, review denied,
104 Wash. 2d 1016 (1985).
Nadler, 188 W. Va. at 337, 424 S.E.2d at 264. The significant relationship
test of Lee v. Saliga, to which the Nadler Court referred, holds
that:
[t]he provisions of a motor vehicle policy will ordinarily be construed according to the laws of the state where the policy was issued and the risk insured was principally located, unless another state has a more significant relationship to the transaction and the parties.
Syl. pt. 2, Lee v. Saliga, 179 W. Va. 762, 373 S.E.2d 345 (1988). Finally, the Nadler Court held, at Syllabus point 4, that
[w]here a choice of law question arises with regard to the interpretation of coverage provisions in a motor vehicle insurance policy executed in another state, the public policy considerations inherent in the fact that the substantive law of the other state differs from our own will ordinarily be adequately addressed by application of the significant relationship conflict of laws test enunciated in Syllabus Point 2 of Lee v. Saliga, 179 W. Va. 762, 373 S.E.2d 345 (1988).
188 W. Va. 329, 424 S.E.2d 256. Applying this holding, the Nadler Court
concluded that Ohio law governed the interpretation of the contract at issue.
Nadler is the controlling case for
resolving the instant appeal. In the present
case, the insureds are residents of Ohio, and the insurance policy was contracted
under the laws of Ohio with no expectation that West Virginia law would be
applied to the contract. West Virginia has no significant relationship to the
transaction or the parties. Therefore, the majority opinion was correct in
concluding that West Virginia public policy should not be applied to void the
household exclusion contained in the Howe's insurance policy. Thus, for the
reasons herein explained, I respectfully concur with the majority opinion.