Case Bulletin – West Virginia Supreme Court of Appeals Upholds Clear and Unambiguous Exclusion of Coverage in Homeowner’s Policy
The West Virginia Supreme Court of Appeals recently decided a case in which an insured, Robert Nelson, sought declaratory judgment from State Farm stating that he was entitled to coverage under his State Farm’s homeowner policy when his wife negligently shot him. The case went before the Circuit Court of Harrison County, and State Farm filed a motion for summary judgment arguing that it was not obligated to provide Mr. Nelson with coverage. The Petitioner appealed to the West Virginia Supreme Court of Appeals.
State Farm provided a homeowner’s insurance policy to Robert Rector and his wife, Kimberly Rector, which covered their martial home. Their homeowner policy stated:
COVERAGE L- PERSONAL LIABILITY
If a claim is made or suit is brought against an insured for damages because of bodily injury or property damage, to which this coverage applies, caused by an occurrence we will:
- Pay up to our limit of liability for the damages for which the insured is legally liable, and
- Provide a defense at our expense by counsel of our choice.
SECTION II- EXCLUSIONS
- Coverage L and Coverage M [above] do not apply to . . . h. bodily injury to you or any insured within the [Definitions].
DEFINTIONS : ”You” and “your” means the “named insured” shown in the Declarations. Yours spouse is included if a resident of your household. “We,” “us” and “our” mean the Company shown in the Declarations.
- “insured” means you and if residents of your household;
a. your relatives; and
b. any other person under the age of 21 who is in the care of a person described above.
Mr. Nelson claimed that he moved out of his home on July 17, 2015. His wife remained in the home as the sole occupant. Eighteen days after Mr. Nelson moved out of the home, his wife shot him in the abdomen as he exited a tavern. He filed a complaint in December of 2015, seeking that the court enter declaratory judgment in his favor stating that State Farm was obligated to provide coverage to Mr. Rector for his medical expenses and other damages proximately caused from the shooting.
Four days after Mr. Nelson served his first set of discovery requests upon State Farm, State Farm filed a motion for summary judgment seeking a dismissal of the declaratory judgment action. It argued that Mr. Nelson was not entitled to coverage under the homeowner’s policy because the policy contained an exclusion for “bodily injury or personal injury to any insured.” It argued that Mr. Nelson was an “insured” under the policy and his status as an “insured” excluded him for coverage for personal injury. In response to the motion for summary judgment, Mr. Nelson argued that he needed additional time to conduct discovery to depose his wife so that she could testify that Mr. Nelson was not living in the home at the time of the shooting. Mr. Nelson hoped that this testimony would establish that he was not a “resident” of the home; thus, he argued that he would not be bound by the policy exclusion that excluded coverage for injuries to “insured.” The circuit court granted State Farm’s motion for summary judgment holding that the policy contained a “clear and unambiguous” exclusion of coverage for “bodily injury or personal injury to any insured,” and Mr. Nelson was named an insured under the policy. Mr. Nelson appealed the decision.
On appeal, the West Virginia Supreme Court of Appeals first reviewed the application of Rule 56(f) of the West Virginia Rules of Civil Procedure, which governs a party’s request for additional discovery. Under Rule 56(f) a party must satisfy four requirement so that the court will grant him additional discovery time: 1) articulate some plausible basis for the party’s belief that the specified “discoverable” material facts likely exist and have not yet become accessible to the party; 2) demonstrate some realistic prospect that the material facts can be obtained within a reasonable additional time period; 3) demonstrate that the material facts will, if obtained, suffice to engender an issue both genuine and material; and 4) demonstrate good cause for failure to have conducted discovery earlier.
The Supreme Court of Appeals declined the Petitioner’s request for additional discovery time. It held that the Petitioner only baldly alleged that additional discovery time was necessary to afford him a reasonable opportunity to respond to the motion for summary judgment. The Petitioner failed to identify any facts to articulate how additional discovery would assist the Petitioner in overcoming the burden of proof for summary judgment.
The Petitioner next argued that the circuit court wrongfully viewed the facts in the motion for summary judgment in the light most favorable to State Farm, instead of the light most favorable to the Petitioner, the non-movant. However, the Supreme Court of Appeals held that the Petitioner again failed to identify any factual finding that the court viewed in light most favorable to State Farm. Because the Petitioner did not specifically identify any facts, the court dismissed this claim.
Additionally, the Petitioner argued that the severability clause in the homeowner’s policy resulted in his wife being the only “named insured” in the policy and eliminated the Petitioner’s status as the “insured.” The policy stated, “[t]his insurance applies separately to each insured. This condition shall not increase our limit of liability for any one occurrence.” The Petitioner argued that the severability clause caused him to lose his status as the insured, and the exception that excludes “bodily injury or personal injury to any insured” did not apply to him, because he was no longer an “insured” under the policy when the accident occurred. Nevertheless, the Supreme Court of Appeals held that the Petitioner did not provide any explanation or argument about how this language provided a mechanism by which his wife could gain status as an insured and the Petitioner lose his status. The Petitioner also did not cite any other clause in his homeowner’s policy that would have triggered the status change. The court held that “speculation does not override the application of the clearly unambiguous, exclusionary language contained in the subject insurance policies.” Absent facts beyond speculation, the court failed to read meaning into the unambiguous policy language.
Finally, the Petitioner asked the court to revisit two West Virginia cases that addressed insurance policies’ “criminal act exclusions.” The Petitioner held that the “criminal acts exclusion” precludes liability insurance coverage from compensating an insured for an injury that occurred during the violation of a criminal statute. The Petitioner argued that this exclusion violated public policy that favors recovery for those who are injured by the negligence of another. The West Virginia Supreme Court of Appeals noted that State Farm had not raised an intentional or criminal act exclusion in neither its motion for summary judgment nor on appeal. Further, the court held that public policy simply cannot create insurance coverage where coverage does not exist.
As a result, the West Virginia Supreme Court of Appeals upheld the circuit court’s holding that granted State Farm’s motion for summary judgment and found that the exclusion of coverage for the Petitioner’s injuries was proper under the language of the policy.