an appeal from a judgment rendered by the Circuit Court of
Hanover County, No. CL17001049-00
Present: Chief Justice Lemons, Justice Mims, Justice
McClanahan, Justice Powell, Justice Kelsey, Justice
McCullough, and Senior Justice Lacy.
consideration of the record, briefs, and argument of counsel,
the Court is of the opinion that there is reversible error in
the judgment of the circuit court.
Truck Stop, LLC ("DTS") operates a truck stop in
Doswell, Virginia. The truck stop premises include a gas
station/convenience store, a hotel, a repair garage/truck
wash, and approximately 24 acres of vacant land. At all times
relevant to the present case, DTS was insured under a
Commercial General Liability Policy (the "Policy"),
issued by James River Insurance Company ("James
River"). The Policy contained an Absolute Auto, Aircraft
and Watercraft Exclusion endorsement (the "Auto
Exclusion") which precludes coverage for bodily injury
and property damage arising out of the maintenance of any
"auto." The Auto Exclusion specifically stated:
"Bodily injury" or "property damage"
arising out of the ownership, maintenance, use or entrustment
to others of any aircraft, "auto" or watercraft.
Use includes operation and "loading or unloading".
Use also includes the handling and placing of persons by an
insured into, onto or from an aircraft, "auto" or
This exclusion applies even if the claims against any insured
allege negligence or other wrongdoing in the supervision,
hiring, employment, training or monitoring of others by that
insured, if the "occurrence" which caused the
"bodily injury" or "property damage"
involved the ownership, maintenance, use or entrustment to
others of any aircraft, "auto" or watercraft.
2016, James T. Smith ("Smith") filed a personal
injury lawsuit against DTS for injuries he allegedly suffered
as a result of a tire explosion. According to Smith's
complaint, he sought to have DTS repair or replace a tire on
his tractor-trailer. During the course of the repair, a DTS
employee invited Smith into the garage area. The tire was
secured within an OSHA-compliant steel cage designed for
inflating damaged truck tires. However, while Smith was
present, the DTS employee over-inflated the tire, causing it
to explode and injure Smith.
filed an insurance claim with James River, but James River
denied coverage on the basis that DTS's claim was
precluded by the Auto Exclusion. DTS filed a declaratory
judgment action against James River, seeking a determination
of whether the Policy covered Smith's injury. DTS and
James River both filed motions for summary judgment. In its
motion, DTS argued that the term "maintenance" in
the Auto Exclusion was ambiguous because it is subject to two
meanings: (1) regular repair operations and (2) a possessory
interest other than ownership or use. DTS asserted that both
definitions of maintenance are equally possible in the
context of the Auto Exclusion and, therefore, the circuit
court should adopt the construction that is most likely to
effectuate coverage. Alternatively, DTS contended that an
independent basis existed for coverage under the Policy.
Specifically, DTS claimed that Smith's complaint
contained a premises liability claim that would not be
precluded by the Auto Exclusion.
circuit court ruled in favor of DTS. In a letter opinion, the
circuit court determined that the Auto Exclusion was
ambiguous with respect to the meaning of
"maintenance" of an auto. It also adopted DTS's
argument on premises liability as an alternative basis for
granting summary judgment. The circuit court further awarded
DTS $7, 000 in attorneys' fees as compensation for the
fees DTS had already incurred in defending Smith's claim.
Ambiguity of the word "Maintenance"
River first assigns error to the circuit court's
determination that the term "maintenance," as used
in the Policy, is ambiguous. In determining whether a term is
ambiguous, a court cannot look at the term in isolation; it
must look at the term in the context of the entire contract.
See Babcock & Wilcox Co. v. Areva NP, Inc., 292
Va. 165, 180 (2016) (recognizing that the proper
interpretation of a contract requires a court to avoid
placing emphasis on individual terms "wrenched from the
larger contractual context"). In other words, a
contractual term is not ambiguous merely because it is
subject to multiple interpretations when viewed in isolation.
Rather, a contractual term is ambiguous when it is subject to
multiple interpretations in view of the entire contractual
Under Virginia law, conflicting interpretations reveal an
ambiguity only where they are reasonable. A
"reasonable" or "fairly claimed"
interpretation is one of two competing interpretations that
are "equally possible" given the text and context
of the disputed provision.
Erie Ins. Exch. v. EPC MD 15, LLC, 297 Va. 21, 29
(2019) (citations omitted).
the fact that "maintenance" is the term at issue in
the present case, DTS focuses its argument on the meaning of
its root word: maintain. As DTS correctly notes, the term
"maintain" is used throughout the Policy in a
manner indicating that it should be interpreted as meaning
"to keep." According to DTS, this interpretation of