Progressive Max Ins. Co. v. Brehm

873 S.E.2d 859

PROGRESSIVE MAX INSURANCE COMPANY, Defendant Below, Petitioner

v.Christine BREHM, Plaintiff Below, Respondent.

Progressive Max Insurance Company, Defendant Below, Petitioner

v.Amber R. Hess, Plaintiff Below, Respondent.

No. 20-0850

No. 20-0851

Supreme Court of Appeals of West Virginia.

Submitted: February 15, 2022

Filed: April 14, 2022

Susan R. Snowden, Esq., Jackson Kelly PLLC, Martinsburg, West Virginia, Counsel for Petitioner

Chad C. Groome, Esq., John R. Angotti, Esq., David J. Straface, Esq., ANGOTTI & STRAFACE, L.C., Morgantown, West Virginia, Counsel for Respondents

WALKER, Justice:

Christine Brehm and Amber R. Hess were injured when another driver crashed into the Toyota Camry in which they rode, a rental vehicle operated by Susan Bindernagel. Brehm and Hess sought coverage under Bindernagel's underinsured motorist (UIM) coverage.

Bindernagel's insurer, Progressive Max Insurance Company, denied coverage to Brehm and Hess because the rented Camry was not a "covered auto" under the policy. Brehm and Hess filed suits for declarations of coverage and Progressive counterclaimed. The circuit court granted summary judgment in favor of Brehm and Hess and against Progressive, finding that because they had been Bindernagel's guest passengers in the rented Camry when the crash occurred, Brehm and Hess were entitled to payment under the Bindernagel UIM coverage.

On appeal, Progressive argues that clear statutory language and the terms of Bindernagel's UIM coverage mandate reversal of summary judgment in favor of Brehm and Hess and entry of summary judgment in favor of Progressive. We agree. Brehm and Hess are neither "insured persons" under the terms of Bindernagel's UIM coverage, nor "insureds" as that term is defined in the relevant statute, West Virginia Code § 33-6-31(c) (2015). So, we reverse the grant of summary judgment to Brehm and Hess and remand this case for entry of summary judgment in favor of Progressive.

I. FACTUAL AND PROCEDURAL HISTORY

The facts in this case are cut-and-dried. Bindernagel purchased a West Virginia policy of auto insurance from Progressive effective April 29, 2017 to October 29, 2017 (Auto Policy). Bindernagel was the named insured and the only vehicle listed on the Auto Policy's declarations page was a 2011 Subaru Legacy. Bindernagel also purchased optional UIM coverage with bodily injury limits at $25,000 each person/$50,000 each accident (Bindernagel UIM Coverage).¹

In July 2017, Bindernagel rented a Toyota Camry from Enterprise LLC. She was driving the rented Camry in Morgantown when a Subaru Outback operated by Dana Miller rear-ended the car. Bindernagel and her two passengers in the rented Camry, Brehm and Hess, were injured in the collision. Miller's insurer, USAA, offered the women policy limits ($50,000), to be split three ways, in exchange for releases. The women accepted the offer, conditioned upon certain assurances by Progressive.

The payment from Miller's policy did not fully compensate Bindernagel, Brehm, or Hess for their injuries. The three notified Progressive that they intended to make claims against the Bindernagel UIM Coverage. Progressive paid Bindernagel's claim but denied coverage to Brehm and Hess. In July 2019, Brehm and Hess filed complaints seeking declarations of coverage under the Bindernagel UIM Coverage. Progressive answered the following month and counterclaimed for declarations of no-coverage.

In its motions for summary judgment in June 2020, Progressive argued that neither Brehm nor Hess was an "insured person" under the Bindernagel UIM Coverage because the rented Camry was not a "covered auto" as defined in the Auto Policy; for the same reason, Progressive argued that Brehm and Hess did not meet the definition of "insured" found in West Virginia Code § 33-6-31(c) (2015).² Brehm and Hess responded that they were "insureds" entitled to coverage under the Bindernagel UIM Coverage because West Virginia Code § 33-6-29(b) (2015) operated to extend the Auto Policy to the rented Camry, which, in turn, made the rented Camry a vehicle to which "the policy" applied and them "insureds" under § 33-6-31(c). Brehm and Hess filed motions for summary judgment the next month with arguments mirroring those made in response to Progressive's motions.

On September 18, 2020, the circuit court denied Progressive's motions, declared there to be coverage for Brehm and Hess under the Bindernagel UIM Coverage, and granted summary judgment in favor of Brehm and Hess. The court described the issue before it as "whether the [rented Camry] involved in the accident is a ‘covered auto’ under the underinsured motorist section of Ms. Bindernagel's Progressive policy and whether Plaintiff[s] meet[ ] the definition of an ‘insured person’ under the underinsured motorist section of Ms. Bindernagel's Progressive policy." But the court did not find that the policy language disposed of the matter; instead, it adopted Brehm and Hess's position that West Virginia Code §§ 33-6-29(b) and - 31(c) "require a guest passenger in a rental vehicle to be afforded underinsured motorist coverage under a policy of insurance that provides coverage to the rental vehicle in which she is a lawful passenger." Progressive now appeals the circuit court's orders of September 18, 2020.

II. STANDARD OF REVIEW

"A circuit court's entry of summary judgment is reviewed de novo. "³ Likewise, " ‘[t]he interpretation of an insurance contract, including the question of whether the contract is ambiguous, is a legal determination that, like a lower court's grant of summary judgement, shall be reviewed de novo on appeal.’ Syl. Pt. 2, Riffe v. Home Finders Assoc., Inc. , 205 W.Va. 216, 517 S.E.2d 313 (1999)."⁴ And, "[i]nterpreting a statute or an administrative rule or regulation presents a purely legal question subject to de novo review."⁵ In sum, our review is plenary.

III. ANALYSIS

Progressive's argument is straightforward: Brehm and Hess are not "insured persons," as that term is defined in the Bindernagel UIM Coverage, so they are not entitled to coverage. Brehm and Hess argue that the coverage definition of "insured person" is void because it conflicts with West Virginia Code §§ 33-6-29(b) and - 31(c). They conclude that when those statutes are read together, their status as UIM "insureds" entitled to payment under the Bindernagel UIM Coverage is clear.

We start with the insurance contract. Under the terms of the Bindernagel UIM Coverage, Progressive is to pay "for damages that an insured person is legally entitled to recover from the owner or operator of ... an underinsured motor vehicle because of bodily injury," and "an underinsured motor vehicle because of property damage," subject to other terms and conditions. Determining whether a person is an "insured person" is the first step to determine whether he or she is entitled to coverage. Under coverage terms,

1. "Insured person" means:

A. you [i.e., "a person shown as a named insured on the declarations page ... and the spouse of the named insured if residing in the same household at the time of the loss"], a relative, or a rated resident^[6];

B. any person while operating a covered auto with the permission of you, a relative, or a rated resident;

C. any person occupying, but not operating a covered auto ....

Neither Brehm nor Hess is named as the insured on the declarations page of the Auto Policy, is related to Bindernagel, resided with Bindernagel, or operated the rented Camry. So, they must be "insured persons" under Subsection C or not at all. Under that subsection, a person's status as an "insured person" hinges on whether he or she was "occupying ... a covered auto." Progressive does not dispute that Brehm and Hess occupied the rented Camry at the time of the crash, so we are left to question whether the rented Camry is a "covered auto." That term is defined in the Auto Policy's General Definitions section as

A. any auto or trailer shown on the declarations page for the coverage applicable to that auto or trailer

B. any additional auto;

C. any replacement auto;

D. a trailer owned by you.

"Additional auto" and "replacement auto" are also defined terms in the Auto Policy. In pertinent part, an "additional auto" is one the insured "become[s] the owner of during the policy period that does not permanently replace an auto shown on the declarations page ...."⁷ And, again, in pertinent part, a "replacement auto" is one "that permanently replaces an auto shown on the declarations page ...."⁸

There is no real dispute that the rented Camry was not a "covered auto." The declarations page of the Auto Policy lists a Subaru Legacy, not a Toyota Camry. The Camry cannot be an "additional auto," as defined in the Auto Policy, because Bindernagel had not purchased it; she merely rented it. And the Camry cannot be a "replacement vehicle," either, because there is no indication in the record that it permanently replaced the Subaru Legacy listed on the Auto Policy's declarations page, and Brehm and Hess do not argue otherwise. So, Progressive is correct that neither woman can be an "insured person" under the plain terms of the Bindernagel UIM Coverage because the rented Camry was not a "covered auto."

"Insurers may incorporate such terms, conditions and exclusions in an automobile insurance policy as may be consistent with the premium charged, so long as any such exclusions do not conflict with the spirit and intent of the uninsured and underinsured motorists statutes."⁹ Here, that rule means that the definition of "insured person" in the Bindernagel UIM Coverage will control (and Brehm and Hess are not entitled to coverage) unless that definition is more restrictive than the statutory definition of a UIM "insured" or it otherwise conflicts with the policy embodied there. If it does, then the conflicting portion of the coverage definition is void, and the policy must be "construed to contain the coverage required by West Virginia law."¹⁰ So, the next step in our inquiry is to determine...