United Servs. Auto. Ass'n v. Lucas

233 W.Va. 68

754 S.E.2d 754

UNITED SERVICES AUTOMOBILE ASSOCIATION, Defendant Below, Petitioner

v.Kimberly LUCAS, Plaintiff Below, Respondent.

No. 12–1500.

Supreme Court of Appeals of West Virginia.

Submitted Jan. 14, 2014.

Decided Feb. 5, 2014.

Syllabus by the Court

1. “A statute that is ambiguous must be construed before it can be applied.” Syllabus Point 1, Farley v. Buckalew, 186 W.Va. 693, 414 S.E.2d 454 (1992).

2. “Where a statute is of doubtful meaning, the contemporaneous construction placed thereon by the officers of government charged with its execution is entitled to great weight, and will not be disregarded or overthrown unless it is clear that such construction is erroneous.” Syllabus Point 7, Evans v. Hutchinson, 158 W.Va. 359, 360, 214 S.E.2d 453, 456 (1975).

3. “Once a disputed regulation is legislatively approved, it has the force of a statute itself. Being an act of the West Virginia Legislature, it is entitled to more than mere deference; it is entitled to controlling weight. As authorized by legislation, a legislative rule should be ignored only if the agency has exceeded its constitutional or statutory authority or is arbitrary or capricious.” Syllabus Point 2, W.Va. Health Care Cost Review Auth. v. Boone Mem'l Hosp., 196 W.Va. 326, 472 S.E.2d 411 (1996).

4. When a motor vehicle liability policy has been in existence for a continuous period of two or more years, W.Va.Code § 33–6–36 [1993] requires an insurer to notify a named insured and the spouse of a named insured, upon any change or termination in coverage, of the right of the named insured or spouse to request a separate policy in the event of either: (a) the named insured's death; (b) the legal separation of the named insured and spouse; or (c) the termination of the named insured and spouse's marital relationship.

5. When a motor vehicle liability policy has been in existence for a continuous period of two or more years, W.Va.Code § 33–6–36 [1993] requires an insurer, upon request, to issue a separate policy to a named insured or the spouse of a named insured when either: (a) the named insured has died; (b) the named insured and spouse have legally separated; or (c) the named insured and spouse have terminated their marital relationship. The named insured or spouse must request their own separate policy within 30 days of the expiration or termination of the policy.

6. “Where there has been an invalid cancellation of an automobile liability insurance policy, the policy remains in effect until the end of its term or until a valid cancellation notice is perfected, whichever event first occurs.” Syllabus Point 4, Dairyland Ins. Co. v. Conley, 218 W.Va. 252, 624 S.E.2d 599 (2005).

Daniel J. Konrad, Esq., Anna M. Price, Esq., Huddleston Bolen LLP, Huntington, WV, for Petitioner.

Neil R. Bouchillon, Esq., Amy C. Crossan, Esq., Bouchillon, Crossan & Colburn, L.C., Huntington, WV, for Respondent.

Justice KETCHUM:

In this appeal from the Circuit Court of Cabell County, we are asked to review a declaratory judgment order against a motor vehicle liability insurer. As set forth below, we affirm the circuit court's declaratory judgment order.

I.FACTUAL AND PROCEDURAL BACKGROUND

On October 23, 2007, Francis McComas, Jr., lost control of his vehicle, hydroplaned on a rain-slicked road, and collided head-on with plaintiff Kimberly Lucas's vehicle. Mr. McComas was killed in the collision. Ms. Lucas was seriously injured, and she later filed a lawsuit against the estate of Mr. McComas. In her lawsuit, she included a declaratory judgment count against an insurance company, defendant United Services Automobile Association (“USAA”). The plaintiff contended that a USAA motor vehicle policy provided liability coverage for Mr. McComas's negligence.

In this case, we are asked to interpret W.Va.Code § 33–6–36 [1993], a statute which, in certain circumstances, requires insurance companies to continue motor vehicle liability coverage for a spouse after the death of, or separation or divorce from, the named insured. Shortly before the collision with plaintiff Lucas, Mr. McComas had separated from and then divorced a USAA named insured, and USAA had cancelled Mr. McComas's liability coverage. The parties ask us to discern whether USAA was required by this statute to notify Mr. McComas of his right to buy a separate liability insurance policy.

The USAA motor vehicle policy in question was issued to Felecity Cooper in 2004. On February 18, 2006, Felecity and Mr. McComas were married, and Mr. McComas was added to Felecity's USAA policy as an “operator.” Felecity was listed on the policy's declarations page as the “Named Insured,” and both Felecity and Mr. McComas were listed as “operators.”

Felecity and Mr. McComas separated in May 2007. Approximately 18 months after adding Mr. McComas to her USAA policy, on August 17, 2007, Felecity contacted USAA by telephone and said that she and Mr. McComas had separated and were getting divorced. She asked USAA to remove Mr. McComas from the policy, and gave USAA an address where Mr. McComas could be contacted. Effective that same day, USAA removed Mr. McComas from Felecity's policy. USAA never sent any notice to Mr. McComas's new address indicating that his coverage had been cancelled.¹ Furthermore, USAA never sent Mr. McComas a notice advising him of his right to purchase a new USAA policy separate from Felecity with the same coverages.

Mr. McComas and Felecity were formally divorced by a family court on October 16, 2007. Seven days later Mr. McComas died in the head-on collision with the plaintiff, Ms. Lucas.

When the plaintiff filed her lawsuit against Mr. McComas's estate and USAA, she asserted in her declaratory judgment count that W.Va.Code § 33–6–36 requires a motor vehicle insurer to notify an insured, “upon any change or termination of the policy” arising from the “separation or termination of the marital relationship of the named insured,” of the insured's right to continue with the same coverage under a new policy. The plaintiff contended that W.Va.Code § 33–6–36 applied to any motor vehicle insurance policy that had been in effect “for a period of two or more years.” The plaintiff asked the circuit court for a declaratory judgment that USAA was obligated to provide liability insurance coverage for the collision because it had failed to properly notify Mr. McComas, after his separation and divorce, that his coverage had been cancelled and that he had a right to purchase a new USAA motor vehicle policy with the same coverage.

USAA filed a motion for summary judgment challenging the plaintiff's interpretation of W.Va.Code § 33–6–36. USAA contended that the statute only applied to a “spouse covered by a motor vehicle liability policy for a period of two or more years.” USAA conceded that its policy with Felecity had been in effect for more than two years in August 2007 when she cancelled coverage for Mr. McComas. However, Felecity only added Mr. McComas to her USAA policy after their February 2006 marriage, and he was removed from the policy 18 months later. Accordingly, USAA argued that it was neither required by the statute to notify Mr. McComas of any right to purchase a new policy, nor was it required to issue such a policy.

In an order entered November 5, 2012, the circuit court denied USAA's motion for summary judgment and granted the plaintiff her sought-after declaratory judgment. The circuit court determined that W.Va.Code § 33–6–36 was intended to warn “a separate insured that his or her spouse has sought to terminate the marital insurance coverage,” and “gives the insured notice that he or she needs to effectuate, timely, a new or different policy.” The circuit court further determined that the statute applies to any motor vehicle policy that has been in existence for a continuous period of two or more years. Because the USAA policy at issue had been in effect for more than two years when coverage for Mr. McComas was cancelled, the circuit court found he was entitled to notice of the right to purchase a new policy. Because that statutory notice was not given to Mr. McComas, the circuit court ruled that USAA was required to provide liability coverage to Mr. McComas's estate.

USAA now appeals the circuit court's November 5, 2012 order.

II.STANDARD OF REVIEW

In this appeal, we are asked to review the circuit court's interpretation of W.Va.Code § 33–6–36 in a declaratory judgment.It is well established that, “Where the issue on an appeal from the circuit court is clearly a question of law or involving an interpretation of a statute, we apply a de novo standard of review.” Syllabus Point 1, Chrystal R.M. v. Charlie A.L., 194 W.Va. 138, 459 S.E.2d 415 (1995). See also, Syllabus Point 1, Appalachian Power Co. v. State Tax Dept. of W.Va., 195 W.Va. 573, 466 S.E.2d 424 (1995) (“Interpreting a statute or an administrative rule or regulation presents a purely legal question subject to de novo review.”). Likewise, “A circuit court's entry of a declaratory judgment is reviewed de novo.” Syllabus Point 3, Cox v. Amick, 195 W.Va. 608, 466 S.E.2d 459 (1995).

III.ANALYSIS

The Legislature adopted W.Va.Code § 33–6–36 in 1993 to provide for “the continuation of coverage under automobile liability policies” in certain circumstances. 1993 Acts of the Legislature, Ch. 72. The statute ensures continuity of coverage for married couples who buy a motor vehicle liability insurance policy. If one spouse should die, then the statute requires an insurer to offer the same coverage to the surviving spouse without any lapse in coverage. If the marriage should dissolve in separation or divorce, then the insurer is required to offer the same coverage to both parties. Whenever the coverage is changed or terminated, the statute requires the insurer to notify the couple of their rights to continue individual coverage. However, the continuation of coverage is not automatic. Either spouse must request that the insurer issue a...