Articles Posted in Virginia Supreme Court

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An employee of the general contractor on a construction site was allegedly injured by the negligent act of the employee of a subcontractor who carried no workers' compensation insurance. Plaintiff, the injured party, brought a common-law action against Defendants, the uninsured subcontractor and its employee, the alleged tortfeasor. The Defendants filed a plea in bar, asserting that the Virginia Workers' Compensation Act was Plaintiff's sole remedy. The circuit court held that Defendants' failure to carry workers' compensation insurance deprived them of the protections afforded by the Act because they were not participants in the statutory workers' compensation system. The court denied the plea in bar, permitting the action to go forward, but certified the case for an interlocutory appeal. The Supreme Court reversed the judgment appealed from and entered final judgment dismissing the case, holding that the circuit court erred in denying Defendants' plea in bar because Defendants were entitled to the exclusivity protection provided by the Act notwithstanding their lack of workers' compensation insurance.

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Kivalina, a native community located on an Alaskan barrier island, filed a lawsuit (Complaint) in a California district court against The AES Corporation, a Virginia-based energy company, and numerous other defendants for allegedly damaging the community by causing global warming through emission of greenhouse gases. Steadfast Insurance, which provided commercial general liability (CGL) to AES, provided AES a defense under a reservation of rights. Later AES filed a declaratory judgment action, claiming it did not owe AES a defense or indemnity coverage in the underlying suit. The circuit court granted Steadfast's motion for summary judgment, holding that the Complaint did not allege an "occurrence" as that term was defined in AES's contracts of insurance with Steadfast, and that Steadfast, therefore, did not owe AES a defense or liability coverage. The Supreme Court affirmed, holding that Kivalina did not allege that its property damage was the result of a fortuitous event or accident, but rather that its damages were the natural and probable consequence of AES's intentional actions, and such loss was not covered under the relevant CGL policies.

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In 2002, Pauline Dabney was attacked by two pit bull dogs owned by Elease Otey, who had recently died. Otey held an insurance policy issued by Augusta Mutual Insurance Company that contained a condition requiring the insured to give written notice of an accident "as soon as is practical." In 2003, Dabney filed a personal injury action against the administrator of Otey's estate. Although a letter was sent to Augusta in 2004 notifying the insurance company of Dabney's lawsuit, Augusta did not receive it. The circuit court held in favor of Augusta, ruling as a matter of law that Augusta did not receive notice of Dabney's claim before 2005, and therefore notice of the accident and claim was untimely under the terms of the policy. The Supreme Court held that (1) the circuit court did not err in barring the jury from considering whether Augusta discovered the claim in early 2005 when Dabney's amended complaint only alleged that the insurer discovered the claim in 2004; and (2) given the extenuating circumstances in this case, whether the notice was timely was a question of fact upon which reasonable minds could disagree. Affirmed in part, reversed in part, and remanded.

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Bataa Baasanjav rented an automobile from Appellant Enterprise Leasing Company (Enterprise). Baasanjav declined to purchase supplemental liability insurance for the rental. The lease agreement contained an indemnification provision in which the renter would have financial responsibility to Enterprise for any losses associated with the rental. Baasanjav was insured under an automobile insurance policy issued by Appellee Farmers Insurance for his own automobile. The Farmers policy would pay for "all sums which the insured shall become legally obligated to pay. . .because of injury to or destruction of property. . .arising out of the ownership, maintenance or use of the owned vehicle." Under the terms of the policy, "owned vehicle" included the rental. Baasanjav was involved in an accident with another driver while driving the Enterprise rental. The parties stipulated Baasanjav was liable for damages to the other driver's car; Enterprise paid the damages to the other driver. Enterprise sought indemnification from Baasanjav; Baasanjav refused. Farmers filed a complaint for declaratory relief asking the court to determine whether Enterprise had a right to recover from Farmers or Bassanjav or both, under the terms of the Farmers policy and the Enterprise lease agreement. The circuit court ruled that Farmers is liable to Enterprise for the amount paid to the other driver; Farmers appealed. On review, the Supreme Court affirmed the lower court's decision.

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In 1999, Thomas Laffey was injured when his car was hit by a car owned by Sharon Bass. Sharon's daughter Krystal was the car's primary user; Steven Parent was driving the car at the time of the accident. Sharon had a family automobile insurance policy issued by Appellee Government Employees Insurance Company (GEICO), which listed the car. The policy insured Sharon, or any resident in her household, or any other person using the car with permission of the named insured, provided his actual use of the car was within the scope of such permission. Steven's mother Annie also had an automobile insurance policy with GEICO. Annie's policy covered bodily injury for those it insured while they operated a car owned by another. After the accident, Laffey presented claims to GEICO under Sharon's and Annie's policies. The claims were denied on the ground that Steven lacked permission to operated the car at the time of the accident. Laffey also submitted a claim to his own automobile insurer, Appellant United Services Automobile Association (USAA), and filed a motion for judgment alleging Steven had been negligent in his operation of the car. GEICO filed a declaratory judgment action against USAA, Annie, Steven, Sharon, Krystal and Laffey seeking a determination that it was not obligated to pay for the accident. The court held that Steven was entitled to coverage under both Sharon's and Annie's policies. GEICO appealed. On review, the Supreme Court reversed the lower court's holding and entered final judgment in favor of GEICO.