Reed v. Orme, No. 33291

            1.      “A circuit court's entry of summary judgment is reviewed de novo.” Syllabus Point 1, Painter v. Peavy, 192 W. Va. 189, 451 S.E.2d 755 (1994).

            2.      “A motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law.” Syllabus Point 3, Aetna Casualty & Surety Company v. Federal Insurance Company of New York, 148 W. Va. 160, 133 S.E.2d 770 (1963).

            3.      “'Determination of the proper coverage of an insurance contract when the facts are not in dispute is a question of law.' Syllabus Point 1, Tennant v. Smallwood, 211 W. Va. 703, 568 S.E.2d 10 (2002).” Syllabus Point 2, Howe v. Howe, 218 W. Va. 638, 625 S.E.2d 716 (2005).

            4.      “If the moving party makes a properly supported motion for summary judgment and can show by affirmative evidence that there is no genuine issue of a material fact, the burden of production shifts to the nonmoving party who must either (1) rehabilitate the evidence attacked by the moving party, (2) produce additional evidence showing the
existence of a genuine issue for trial, or (3) submit an affidavit explaining why further discovery is necessary as provided in Rule 56(f) of the West Virginia Rules of Civil Procedure.” Syllabus Point 3, Williams v. Precision Coil, Inc., 194 W. Va. 52, 459 S.E.2d 329 (1995).

            5.      “An insurance company may incorporate limiting terms and conditions that violate W. Va. Code, 33-6-31 into a governmental entity's insurance policy. However, to be permissible under W. Va. Code, 29-12A-16(a) [2003], the limiting terms and conditions in the insurance policy must clearly be “determined by the political subdivision in its discretion.” The limiting terms and conditions must herefore be the result of some choice, judgment, volition, wish or inclination as a result of investigation or reasoning by the governmental entity. The terms and conditions are not enforceable merely because they are different from those found in the typical insurance policy. To the extent that Trent v. Cook, 198 W. Va. 601, 482 S.E.2d 218 (1996) says otherwise, it is modified.” Syllabus Point 5, Gibson v. Northfield Insurance Company, et al., 219 W. Va. 40, 631 S.E.2d 598 (2005).

            6.      “'West Virginia Code § 29-12A-16(a) (1992) conveys broad discretion to both the West Virginia State Board of Risk and Insurance Management, as well as governmental entities, with regard to the type and amount of insurance to obtain.
Consequently, when an insurer issues a custom-designed insurance policy to a governmental entity pursuant to the Governmental Tort Claims and Insurance Reform Act, West Virginia Code §§ 29-12A-1 to -18 (1992), that entity may incorporate language absolutely limiting liability under the policy, even if such language would otherwise violate the provisions of West Virginia Code § 33-6-31(b) (1996).' Syllabus Point 1, Trent v. Cook, 198 W. Va. 601, 482 S.E.2d 218 (1996).” Syllabus Point 4, Gibson v. Northfield Insurance Company, et al., 219 W. Va. 40, 631 S.E.2d 598 (2005).

Per Curiam:

            On June 5, 2001, Ms. Reed was involved in a motor vehicle accident with Walter Jason Orme while she was operating a school bus owned by the Board. As a result of injuries sustained in this automobile accident, Ms. Reed applied for and collected workers' compensation benefits because she was injured while working within the scope of her employment. Additionally, on June 4, 2003, Ms. Reed and her husband, Kermit Reed, initiated the underlying lawsuit in the Circuit Court of Logan County seeking compensation for injuries incurred as the result of Mr. Orme's negligence. On November 9, 2004, the Logan County Circuit Clerk issued a summons to National Union. Shortly thereafter, the summons and a copy of the complaint were served upon National Union placing it on notice of a potential claim for underinsured motorist benefits under its policy insuring the Board. At some point in time, not clear from the record before this Court, Appellants settled their claims against Mr. Orme for $25,000.00, the limits of his automobile liability insurance policy. As a result, the underlying action proceeded as a claim for underinsured motorist benefits under the National Union policy.

            On March 23, 2006, National Union filed a motion for summary judgment before the circuit court arguing that Ms. Reed's receipt of workers' compensation benefits precludes recovery of underinsured motorists benefits under the terms of the policy. Specifically, National Union argued that the following exclusion, added by endorsement to the underinsured motorist coverage provisions, precluded Appellants' claim: “8. Any obligation for which the 'insured' may be held liable under any workers' compensation, [d]isability benefits or unemployment compensation law or any similar law.” National Union argued that because the policy at issue was a custom-designed policy, this provision was valid and enforceable pursuant to this Court's prior decision in Trent v. Cook, 198 W. Va. 601, 482 S.E.2d 218 (1996), modified, Gibson v. Northfield Insurance Company, 219 W. Va. 40, 631 S.E.2d 598 (2005), wherein this Court found that a virtually identical exclusion contained in the State's insurance policy precluded a claim for underinsured motorists benefits. Trent, 198 W. Va. at 609, 482 S.E.2d at 226. Admitting that the accident at issue occurred during the scope of Ms. Reed's employment, Appellants argued in response that summary judgment was inappropriate because this Court's decisions in Henry v. Benyo, 203 W. Va. 172, 506 S.E.2d 615 (1998), and Miralles v. Snoderly, 216 W. Va. 91, 602 S.E.2d 534 (2004) (per curiam), permit the recovery of underinsured motorists coverage benefits afforded under an employer's policy of insurance where an employee while acting within the scope of employment is injured by a third-party.

            By order dated June 19, 2006, the circuit court granted National Union's motion for summary judgment after full hearing. In that order, the circuit court specifically found that policy satisfied the custom-designed policy requirement of Gibson based upon the unopposed affidavit of Bob Mitts, an underwriting manager for the Board of Risk and Insurance Management (“BRIM”). The affidavit established that BRIM had caused the workers' compensation exclusion to be included in the policy after researching and investigating its need. Therefore, according to the circuit court, this Court's opinion in Trent controlled and the workers' compensation exclusion precluded underinsured motorist coverage for Appellants' claims arising from the June 5, 2001, accident. The circuit court rejected Appellants' arguments in opposition to the motion which relied upon Henry and Miralles by noting that the policy in Henry did not include a similar workers' compensation exclusion and that neither Henry nor Miralles involved a policy insuring a West Virginia political subdivision.

            Appellants timely appealed the circuit court's summary judgment order to this Court. In their Petition for Appeal, Appellant's argued that the circuit court's decision was in error “because there existed genuine issues of material fact which precluded Summary Judgment and the facts of this case did not meet the criteria for the exception set forth in the insurance policy.” By order dated January 10, 2007, we accepted this matter for review.

The primary issue before this Court is whether the Circuit Court of Logan County properly granted summary judgment on the dispositive issue of whether underinsured motorist coverage existed under the National Union policy for the Appellants' claims. (See footnote 1) It is well settled in this jurisdiction that “[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). Pursuant to Rule 56(c) of the West Virginia Rules of Civil Procedure, summary judgment “shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.” This Court has previously held that “[a] motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law.” Syl. Pt. 3, Aetna Casualty & Sur. Co. v. Federal Ins. Co. of New York, 148 W. Va. 160, 133 S.E.2d 770 (1963). Further, it is well settled in this jurisdiction that the “'[d]etermination of the proper coverage of an insurance contract when the facts are not in dispute is a question of law.' Syllabus Point 1, Tennant v. Smallwood, 211 W. Va. 703, 568 S.E.2d 10 (2002).” Syl. Pt. 2, Howe v. Howe, 218 W. Va. 638, 625 S.E.2d 716 (2005). See also Payne v. Weston, 195 W. Va. 502, 506-07, 466 S.E.2d 161, 165-66 (1995) (“The interpretation of an insurance contract . . . is a legal determination which . . . is reviewed de novo on appeal.” (citation omitted)). With these principles in mind, we turn to the issues presented in this case.

            On appeal, Appellants assign as error the grant of summary judgment where there existed genuine issues of material fact and that the facts of the case do not fall within the policy exclusion. However, careful examination of the Appellants' petition, appellate brief and the record created below indicate no disputed issues of fact. (See footnote 2) To the contrary, Appellants have either admitted or failed to challenge all relevant factual matters and are, at best, attempting to argue that the circuit court misapplied the law. In their brief before this Court, Appellants admit that Ms. Reed was acting within the course and scope of her employment when she was injured in a motor vehicle accident and that she received workers' compensation benefits for the injuries she sustained in the subject accident. However, they argue that the receipt of workers' compensation benefits does not preclude coverage under the National Union policy pursuant to this Court's decisions in Henry and Miralles. Although the circuit court found that the policy at issue was a custom-designed policy such that Gibson and Trent controlled the coverage determination, Appellants do not address these cases nor the circuit court's determination that the policy was a custom-designed policy. In response, National Union argues that the circuit court decision should be upheld because no genuine issues of material fact exist and the circuit court correctly decided the coverage issue under the precedent of Gibson and Trent.

            The mere assertion that there exists a “genuine issue of material fact” without a corresponding demonstration of what specific factual issues remain to be resolved is insufficient to avoid summary judgment. This is particularly true when the issue to be resolved is one of insurance coverage, which is a question of law where the facts are not in dispute. Our decisions interpreting and applying Rule 56 of the West Virginia Rules of Civil Procedure, which governs summary judgment, demonstrate both the importance of its role in our litigation system and the parties' respective burdens regarding the same. As Justice Cleckley stated in Williams v. Precision Coil, Inc., 194 W. Va. 52, 459 S.E.2d 329 (1995),

              Rule 56 of the West Virginia Rules of Civil Procedure plays an important role in litigation in this State. It is designed to effect a prompt disposition of controversies on their merits without resort to a lengthy trial, if there essentially is no real dispute as to salient facts or if it only involves a question of law. Indeed, it is one of the few safeguards in existence that prevent frivolous lawsuits from being tried which have survived a motion to dismiss. Its principal purpose is to isolate and dispose of meritless litigation.

Williams, 194 W. Va. at 58, 459 S.E.2d at 335 (internal quotations and citations omitted). Pursuant to Rule 56(e),

              When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party.

In Powderidge Unit Owners Association v. Highland Properties, Ltd., 196 W. Va. 692, 474 S.E.2d 872 (1996), Justice Cleckley discussed the parties' burdens relative to motions for summary judgment. Therein he stated:

              Under our summary judgment standard, a party seeking summary judgment must make a preliminary showing that no genuine issue of material fact exists. This means the movant bears the initial responsibility of informing the circuit court of the basis of the motion and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact. However, the movant does not need to negate the elements of claims on which the nonmoving party would bear the burden at trial.

              The movant's burden is only [to] point to the absence of evidence supporting the nonmoving party's case. If the moving party fails to meet this initial burden, the motion must be denied, regardless of the nonmovant's response. If the movant, however, does make this showing, the nonmovant must go beyond the pleadings and contradict the showing by pointing to specific facts demonstrating a “trialworthy” issue. To meet this burden, the nonmovant must identify specific facts in the record and articulate the precise manner in which that evidence supports its claims. As to material facts on which the nonmovant will bear the burden at trial, the nonmovant must come forward with evidence which will be sufficient to enable it to survive a motion for directed verdict at trial. If the nonmoving party fails to meet this burden, the motion for summary judgment must be granted.

Powderidge, 196 W. Va. at 698-9, 474 S.E.2d at 878-9 (internal quotations and citations omitted) (emphasis in original). Addressing the burden imposed by Rule 56 on a party opposing a summary judgment motion, we held in Syllabus Point 3 of Williams that:

              If the moving party makes a properly supported motion for summary judgment and can show by affirmative evidence that there is no genuine issue of a material fact, the burden of production shifts to the nonmoving party who must either (1) rehabilitate the evidence attacked by the moving party, (2) produce additional evidence showing the existence of a genuine issue for trial, or (3) submit an affidavit explaining why further discovery is necessary as provided in Rule 56(f) of the West Virginia Rules of Civil Procedure.

Syl. Pt. 3, Williams. “The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Williams, 194 W. Va. at 61, 459 S.E.2d at 338, quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-8, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202, 211 (1986)(emphasis in original). As Justice Cleckley stated in Williams,

              To be specific, the party opposing summary judgment must satisfy the burden of proof by offering more than a mere “scintilla of evidence” and must produce evidence sufficient for a reasonable jury to find in a nonmoving party's favor. The evidence illustrating the factual controversy cannot be conjectural or problematic. It must have substance in the sense that it limns differing versions of the truth which a factfinder must resolve. The evidence must contradict the showing of the moving party by pointing to specific facts demonstrating that, indeed, there is a “trialworthy” issue. A “trialworthy” issue requires not only a “genuine” issue but also an issue that involves a “material” fact.

Id. at 60, 459 S.E.2d at 337 (internal citations omitted).

            The only arguable issue of material fact potentially relevant to this appeal, though not raised by Appellants, is whether the circuit court correctly found that the policy qualified as a custom-designed policy under Gibson. In Syllabus Point 5 of Gibson v. Northfield Insurance Company, et al., 219 W. Va. 40, 631 S.E.2d 598 (2005), this Court held:

              An insurance company may incorporate limiting terms and conditions that violate W. Va. Code, 33-6-31 into a governmental entity's insurance policy. However, to be permissible under W. Va. Code, 29-12A-16(a) [2003], the limiting terms and conditions in the insurance policy must clearly be “determined by the political subdivision in its discretion.” The limiting terms and conditions must herefore be the result of some choice, judgment, volition, wish or inclination as a result of investigation or reasoning by the governmental entity. The terms and conditions are not enforceable merely because they are different from those found in the typical insurance policy. To the extent that Trent v. Cook, 198 W. Va. 601, 482 S.E.2d 218 (1996) says otherwise, it is modified.

In Trent, this Court had previously held that:

              West Virginia Code § 29-12A-16(a) (1992) conveys broad discretion to both the West Virginia State Board of Risk and Insurance Management, as well as governmental entities, with regard to the type and amount of insurance to obtain. Consequently, when an insurer issues a custom-designed insurance policy to a governmental entity pursuant to the Governmental Tort Claims and Insurance Reform Act, West Virginia Code §§ 29-12A-1 to -18 (1992), that entity may incorporate language absolutely limiting liability under the policy, even if such language would otherwise violate the provisions of West Virginia Code § 33-6-31(b) (1996). (See footnote 3)

Syl. Pt. 1, Trent v. Cook, 198 W. Va. 601, 482 S.E.2d 218 (1996) (footnote added). See also Syl. Pt. 4, Gibson, 219 W. Va. 40, 631 S.E.2d 598. Ultimately, the Court, in Trent, found that a workers' compensation exclusion virtually identical (See footnote 4) to that at issue herein precluded underinsured motorist coverage under the State's policy of insurance (See footnote 5) for a sheriff's deputy's claim where the deputy had also recovered workers' compensation benefits for the injuries
sustained in an automobile accident. Trent, 198 W. Va. at 609, 482 S.E.2d at 226. The exclusion was found to be enforceable because the policy was custom-designed to insure a governmental entity which had the right to include terms in the policy absolutely limiting its liability even where those terms would otherwise violate W. Va. Code § 33-6-31(b). Id. Accordingly, if the policy at issue sub judice is a custom-designed policy, Trent controls and coverage is precluded for Appellants' claims.

            The National Union policy at issue herein was procured by BRIM pursuant to its authority under W. Va. Code § 29-12A-16(a) (See footnote 6) to obtain insurance on behalf of political subdivisions. Instead of obtaining a separate insurance policy, the Board was added as an additional insured to the State's policy. Relying upon the unopposed affidavit of Bob Mitts,
underwriting manager for BRIM, the circuit court found the affidavit clearly established that BRIM had investigated and researched the need for the workers' compensation exclusion and had caused its inclusion in the National Union policy. Therefore, Gibson's requirement that the policy be found to be custom-designed before provisions contrary to statutory requirements may be enforced was satisfied. We agree. Appellants have produced absolutely no evidence to refute the matters set forth in the Mitts' affidavit. A thorough review of the record below indicates that Appellants did not even attempt to argue that the National Union policy was not a custom-designed policy. Appellants made no attempt to demonstrate a genuine issue regarding this material fact by putting forth any evidence to contradict the Mitts' affidavit. As stated in Williams, a party may not oppose summary judgment by alleging the mere existence of a factual dispute, but must instead point to specific facts demonstrating a genuine issue of material fact worthy of being tried. Williams, 194 W. Va. at 60-1, 459 S.E.2d at 337-8. Appellants did not meet this burden and the circuit court did not err in finding that the National Union policy qualified as a “custom-designed” policy under Gibson.

            Likewise, the circuit court did not err in finding the insurance coverage issue in this matter was controlled by this Court's prior decision in Trent. The question of insurance coverage when the facts are not in dispute is a question of law. Syl. Pt. 1, Tennant v. Smallwood, 211 W. Va. 703, 568 S.E.2d 10 (2002). In Trent, this Court previously found
that a virtually identical workers' compensation exclusion contained within a custom- designed policy precluded coverage where the claimant had received workers' compensation benefits despite any argued conflict with the requirements of W. Va. Code § 33-6-31(b). Trent, 198 W. Va. at 609, 482 S.E.2d at 226. Under the undisputed facts of this case, our decision in Trent precludes coverage for Appellants' claims because the National Union policy qualifies as a custom-designed policy under Gibson.

            Nor did the circuit court err in rejecting Appellants' reliance upon Henry and Miralles as both are easily distinguishable in light of the undisputed facts herein. Henry did not involve a policy issued to a governmental entity. The employer in Henry was a private construction company and the policy at issue therein did not contain a workers' compensation exclusion to underinsured motorist coverage. Henry, 203 W. Va. at 174, 180, n.9, 506 S.E.2d at 617, 623, n. 9. Instead, Henry was decided upon an analysis of the relationship between W. Va. Code § 33-6-31(h) (See footnote 7) and W. Va. Code § 33-6-31(b). While Miralles did involve coverage under a BRIM procured policy, the insured employer was a charitable organization, not a political subdivision. Miralles, 216 W. Va. at 93-4, 602 S.E.2d at 536-7. The Court, in this per curiam opinion, explicitly declined to determine whether BRIM had the authority to procure a custom-designed policy for a non-political subdivision such that Trent would control. Miralles, 216 W. Va. at 94-5, n.7, 602 S.E.2d at 537-8, n.7. Instead, the Court resolved the question under the precedent of Henry. Id. at 97, 602 S.E.2d at 540. Just as Henry is inapplicable to the instant matter, so is Miralles.