The Circuit Court For New Kent County Thomas B. Hoover, Judge
JUSTICE D. ARTHUR KELSEY
appeal involves a dispute between two sources of insurance
coverage for claims asserted by a pretrial detainee against
guards and nurses at a regional jail. The circuit court held
that, as a matter of law, one insurance source provided
primary coverage and the other offered only excess coverage.
We hold that both provided concurrent primary coverage. We
thus reverse and remand for the circuit court to determine
the proper contributions of each to the costs of defense and
indemnification associated with settlement of the underlying
Northwestern Regional Jail Authority operates the
Northwestern Regional Adult Detention Center. During the
relevant time frame, the jail authority purchased a general
liability insurance policy ("VaCorp Policy") from
the Virginia Association of Counties Group Self Insurance
Risk Pool ("Risk Pool Association"). See
generally Code §§ 15.2-2700 to -2709
(authorizing local government group self-insurance pools).
The VaCorp Policy stated that the "coverage afforded by
this Contract is primary coverage, " J.A. at 141, with a
$5, 000, 000 limit on liability. The Risk Pool Association
also offered excess liability coverage, but the jail
authority declined to purchase it. Id. at 155,
jail authority also elected to participate in a
government-sponsored insurance program, the VaRISK Plan,
managed by the Division of Risk Management ("DRM"),
a division of the Virginia Department of the Treasury.
See Code § 2.2-1839. The VaRISK Plan capped its
coverage liability at $1, 000, 000. In the event that a claim
against an insured jail defendant involved medical
malpractice by a "healthcare provider, " as defined
by Code § 8.01-581.1, the VaRISK Plan expanded its
coverage limit to the applicable medical malpractice cap
imposed by Code § 8.01-581.15, which at all relevant
times was $2, 000, 000. J.A. at 145.
the VaCorp Policy and the VaRISK Plan addressed the
possibility of multiple sources of applicable insurance. The
VaCorp Policy included an other-coverage clause stating that
the policy provided "primary coverage" except when
another clause stated otherwise. Id. at
141. "When this coverage is
primary and the Participant has other coverage, which is
stated to be applicable to the loss on an excess or
contingent basis, the amount of the Fund's liability
shall not be reduced by the existence of such other
coverage." Id. (emphasis added and clerical
error omitted). The clause went on to apply a liability
contribution formula in the event of concurrent coverage.
Id. at 141-42.
VaRISK Plan included a very different other-coverage clause.
In pertinent part, that clause provided, "if, at that
time of loss, there is any other coverage or insurance
available to a Covered Party which covers such loss or which
could have covered such loss, VaRISK shall not
have any liability for such loss." Id.
at 150 (emphasis added). The forfeiture of coverage, however,
did not apply in two situations:
This condition shall not apply if the Director of DRM
approves in writing, in advance, of the issuance of such
other coverage or insurance designating the Plan as primary.
Further, this condition will not apply unless the Director of
DRM gives written authorization for the Plan to provide the
underlying coverage for any excess or umbrella coverage
purchased by a Constitutional Officer or Regional Jail
Authority that has paid a contribution to the Plan for this
primary coverage and that otherwise meets the terms and
conditions for VaRISK primary endorsement.
Id. at 150-51.
the Risk Pool Association and DRM issued what they considered
to be primary coverages to the jail authority. Id.
at 141, 159, 280, 285, 451. Neither described their coverage
as excess, rather than primary. The jail authority, as the insured, had
the same understanding. See id. at 402 (circuit
court's final order noting that "both coverages have
been contracted for by [the jail authority] for primary
2013, a pretrial detainee in the custody of the jail filed a
federal suit under 42 U.S.C. § 1983 against several
guards and nurses who worked for the jail authority, claiming
that they were deliberately indifferent to his serious
medical needs. See Boren v. Northwestern Reg'l Jail
Auth., No. 5:13-cv-00013, 2013 U.S. Dist. LEXIS 140169
(W.D. Va. Sept. 30, 2013). The detainee's complaint also asserted
state law claims alleging medical malpractice, negligence,
and a due process violation under the Constitution of
detainee alleged that he had been placed in the jail on a
charge of public intoxication. While there, he allegedly
suffered from seizures resulting from alcohol withdrawal. The
detainee claimed that the jail nurses and guards were
deliberately indifferent to his need for prompt medical care,
causing him to suffer multiple untreated seizures due to
"severe metabolic acidosis." J.A. at 19. He alleged
that these seizures left him permanently disabled.
the federal suit was pending, the detainee filed a
declaratory judgment action in circuit court against DRM and
the Risk Pool Association, seeking a determination of their
respective liabilities for insuring the jail defendants. The
Risk Pool Association filed a third-party claim against DRM,
seeking a declaration that, pursuant to Code § 2.2-1839,
the VaCorp Policy only provided, at most, excess coverage for
the underlying suit. Id. at 225-26. DRM filed a
corresponding claim against the Risk Pool Association,
contending that the VaCorp policy provided primary insurance
coverage, making the VaRISK Plan an excess policy pursuant to
an other-coverage provision in the VaRISK Plan. Id.
both the federal and state proceedings were pending, the
detainee entered into a settlement with the jail defendants
for an undisclosed amount. DRM and the Risk Pool Association
agreed to fund the settlement contingent upon the final
judicial resolution of their respective liabilities. In the
proceeding for declaratory judgment, the circuit court
dismissed the detainee and jail defendants based upon their
settlement, leaving only DRM and the Risk Pool
Association's opposing claims for declaratory relief.
Id. at 398-99. Both filed motions for summary
judgment based upon undisputed facts.
argued that the VaCorp policy provided sole primary coverage
for the detainee's claims in the federal suit and that
the VaRISK Plan's other-coverage clause extinguished any
DRM liability as a matter of law. DRM also contended that its
$1, 000, 000 policy limit, not the expanded $2, 000, 000
limit applicable to medical malpractice claims, should cap
any coverage liability that the VaRISK Plan might otherwise
have with respect to the detainee's civil rights claims.
In response, the Risk Pool Association claimed that the
VaRISK Plan was the sole primary policy as a matter of law
and that the VaCorp policy provided, at best, excess
circuit court found that "both coverages have been
contracted for by [the jail authority] for primary
coverage." Id. at 402. However, the court interpreted Code §
2.2-1839 to preclude DRM's VaRISK Plan from being
anything other than the sole source of primary
coverage. From this premise, the court reasoned that the jail
authority "was permitted only to secure excess liability
coverage beyond the primary coverage provided by DRM."
Id. After finding the VaRISK Plan to be the sole
primary coverage, the court concluded that DRM had the
exclusive duty to defend the jail defendants.
addition, the circuit court found that the VaRISK Plan's
$2, 000, 000 coverage extension for medical malpractice
claims applied to all of the detainee's claims (whether
based on state tort law, federal § 1983 law, or state
constitutional law) against "the named defendant
healthcare providers, " i.e., the jail nurses. See
id. Turning to the VaCorp Policy, the court held that it
would be converted by operation of law into an excess policy.
In that capacity, the court further concluded, the Risk Pool
Association had no duty to contribute toward the defense
costs incurred by the jail defendants in the federal suit.
argues on appeal that the circuit court misinterpreted Code
§ 2.2-1839 to mandate that the VaRISK Plan be treated as
the sole source of primary coverage and, working
from this faulty premise, erroneously declared void the
other-coverage clause in the VaRISK Plan. DRM also contends that the court erred in
applying to the detainee's federal § 1983 claim the
$2, 000, 000 extended coverage cap applicable only to medical
§ 2.2-1839(A) directs DRM to "establish one or more
risk management plans" for qualified participants, such
as, for example, state officers and agencies, constitutional
officers, political subdivisions, jail authorities, and
certain individuals serving the public interest. The DRM
plans, if approved by the Governor, may include
"purchased insurance, self-insurance ...