United States District Court, E.D. Virginia, Alexandria Division
M. HILTON, UNITED STATES DISTRICT JUDGE
MATTER comes before the Court on the parties'
Cross-Motions for Summary Judgment (Dkts. 7 &
pursuant to Federal Rule of Civil Procedure 56.
American Insurance Company, Plaintiff, brings this suit in
order to receive a declaratory judgment that Grady Beck,
Defendant, is not covered by an underinsured motorist policy
(the "Zurich Policy") held by Defendant's
employer, the Potomac Family Dining Group ("Potomac
Family") for an accident which occurred on June 7, 2017.
was a district manager employed by Potomac Family and
frequently drove as part of his job. At the time of the
accident, Defendant was driving a 2010 Toyota Prius that was
owned by and registered to himself. Defendant's vehicle
was not listed in any schedule of the Zurich Policy.
Defendant's vehicle was allegedly struck by a third party
causing the accident. Defendant has since filed suit against
this third party in state court and the complaint in that
case has an ad damnum clause of $1, 500, 000.00.
parties believe that Defendant is likely to attempt to file a
claim under the Zurich Policy as the third party who
allegedly caused the accident only had liability coverage for
$100, 000.00 and Defendant has uninsured/underinsured
motorist coverage up to $250, 000.00. The two policies
combined would leave a significant shortfall in
Defendant's claimed damages. The Zurich Policy has
liability coverage and uninsured/underinsured coverage with
limits of $1, 000, 000.00 per person for each coverage and
was in full effect as of the date of the accident.
Two of the Zurich Policy is the "Schedule of Coverages
and Covered Autos." At the beginning of the schedule a
paragraph states as follows: "This policy provides only
those coverages where a charge is shown in the premium column
below. Each of these coverages will apply only to those
'autos' shown as covered 'autos'.
'Autos' are shown as covered 'autos' for a
particular coverage by the entry of one or more of the
symbols from the Covered Autos Section of the Business Auto
Coverage Form next to the name of the coverage."
Schedule of Coverages, numeric symbols are used to indicate
what vehicles are considered "covered autos" for
each type of coverage under the Zurich Policy. The key to the
symbols is found on the first page of the Business Auto
Coverage Form. The key informs the reader that the symbol
"1" refers to "Any 'Auto'" and
the symbol "2" refers to "Owned
'Autos' Only." Owned Autos Only is described as
"Only those 'autos' you own (and for Liability
Coverage any 'trailers' you don't own while
attached to power units you own). This include those
'autos' you acquire ownership of after the policy
Schedule of Coverages, there is a numeric symbol of
"1" next to "Liability" coverage
indicating that it extends to all autos regardless of
ownership. Further down, one finds that next to
"Uninsured Motorists" ("UM") coverage
there is a "2" indicating that the coverage applies
only to owned autos, i.e. those owned by Potomac Family. In
the row directly below that, there is a "2" next to
"Underinsured Motorists (when not included in Uninsured
Motorists Coverage)" ("UIM"), again indicating
that this form of coverage only applies to owned autos.
Further over in the UIM row, it says "SEE ENDT" in
the column discussing the limit of coverage and
"INCL" in the column discussing the premium amount.
UM/UIM Endorsement to the Zurich Policy includes UIM
coverage. At the top of the first page of the UM/UIM
Endorsement a notice reads "THIS ENDORSEMENT CHANGES THE
POLICY. PLEASE READ IT CAREFULLY."
(emphasis in original) The UM endorsement continues on to
include a definition that "'Covered auto' means
a motor vehicle, or a 'temporary substitute', with
respect to which the 'bodily injury' or 'property
damage' liability coverage of the policy applies."
The language of the UM/UIM Endorsement was drafted and
mandated by the Virginia State Corporation Commission as the
only language approved for uninsured motorist endorsements.
parties have filed cross-motions for summary judgment which
have been fully briefed and oral argument was heard on the
judgment may only be granted when there is "no genuine
issue as to any material fact and that moving party is
entitled to a judgment as a matter of law." Fed.R.Civ.P.
56(c). A court must "view the evidence in the light most
favorable to . . . the nonmovant, and draw all reasonable
inferences in her favor without weighing the evidence or
assessing the witness' credibility." Dennis v.
Columbia Colleton Med. Ctr., Inc., 290 F.3d 639, 644-45
(4th Cir. 2002). This review must be done without
contradicting the "affirmative obligation of the trial
judge to prevent factually unsupported claims and defenses
from proceeding to trial." Bouchat v. Bait. Ravens
Football Club, Inc., 346 F.3d 514, 526 (4th Cir. 2003)
(internal quotation marks omitted). A "mere existence of
a scintilla of evidence in support of the [non-movant's]
position will be insufficient" to find an issue of
material fact. Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 252 (1986). There must instead be evidence by which
a reasonable jury could find for either side in order for
summary judgment to be appropriate. Id. When
reviewing cross-motions for summary judgment, a court must
review each motion separately on its own merits and make a
determination whether either of the parties deserves judgment
as matter of law. Rossignol v. Voorhaar, 316 F.3d
516, 523 (4th Cir. 2003).
ultimate question in this case is whether the vehicle
Defendant was driving at the time of the accident was a
"covered auto" under the terms of the Zurich Policy
and the UM/UIM Endorsement. As this Court sits in diversity
jurisdiction, it must apply Virginia law to arrive at the
answer. Levine v. Emplrs. Ins. Co., 887 F.3d 623,
627 (4th Cir. 2018).
in Virginia apply traditional contract principles to
"interpret insurance policies ... in accordance with the
intention of the parties gleaned from the words that have
been used in the documents." Floyd v. Northern Neck
Ins. Co., 245 Va. 153, 158, 427 S.E.2d 193, 196 (1993).
Clear and unambiguous terms of the policy are to be construed
according to their plain meaning. TravCo Ins. Co. v.
Ward, 284 Va. 547, 554, 736 S.E.2d 321, 325
(2012).v,, No word or clause in the contract will
be treated as meaningless if a reasonable meaning can be
given to it, and there is a presumption that the parties have
not used words needlessly.'" Id. (quoting
City of Chesapeake v. States Self-Insurers Risk Retention
Grp., Inc., 271 Va. 574, 579, 628 S.E.2d 539, 541
(2006)). Exclusionary language "will be construed most
strongly against the insurer." Allstate Ins. Co. v.
Gauthier, 273 Va. 416, 641 S.E.2d 101, 104 (2007).
urges the Court to find that he is covered by the Zurich
Policy due to the language of the UM/UIM Endorsement.
Defendant heavily relies on two parts of the UM/UIM
Endorsement when making this contention. First, the
definition of "Covered auto" as meaning "a
motor vehicle . . . with respect to which the 'bodily
injury' or 'property damage' liability coverage
of the policy applies." Second, the notice at the top of