Submitted: September 16, 1992
Filed: November 13, 1992
Monty L. Preiser
Preiser, Tabor, Lindsay & Coltelli
Charleston, West Virginia
Attorney for the Plaintiffs
J. Peter Richardson
Richardson, Kemper, Hancock & Davis
Bluefield, West Virginia
Attorney for Defendant
JUSTICE MILLER delivered the Opinion of the Court.
1. "Where in a suit for the recovery of uninsured motorist insurance benefits an issue arises which involves insurance coverage, that issue is to be resolved under conflict of laws principles applicable to contracts." Syllabus Point 1, Lee v. Saliga, 179 W. Va. 762, 373 S.E.2d 345 (1988).
2. "The provisions of a motor vehicle policy will
ordinarily be construed according to the laws of the state where
the policy was issued and the risk insured was principally located,
unless another state has a more significant relationship to the
transaction and the parties." Syllabus Point 2, Lee v. Saliga, 179
W. Va. 762, 373 S.E.2d 345 (1988).
3. The mere fact that the substantive law of another
jurisdiction differs from or is less favorable than the law of the
forum state does not, by itself, demonstrate that application of
the foreign law under recognized conflict of laws principles is
contrary to the public policy of the forum state.
4. Where a choice of law question arises with regard to the interpretation of coverage provisions in a motor vehicle insurance policy executed in another state, the public policy considerations inherent in the fact that the substantive law of the other state differs from our own will ordinarily be adequately addressed by application of the significant relationship conflict of laws test enunciated in Syllabus Point 2 of Lee v. Saliga, 179 W. Va. 762, 373 S.E.2d 345 (1988).
This case involves a question certified to us by the
United States Court of Appeals for the Fourth Circuit pursuant to
W. Va. Code, 51-1A-1, et seq.See footnote 1 We are asked to decide whether the
substantive law of Ohio or the substantive law of West Virginia is
to be applied to determine the rights of the parties under a
contract for underinsured motorist coverage.
This dispute arose out of an automobile accident which occurred on March 27, 1988, on U.S. Route 60 in Greenbrier County when a tractor-trailer owned by Benjamin Thomas, Sr., d/b/a Thomas Trucking Company, and operated by Benjamin Thomas, Jr., crossed the center line and collided with a vehicle owned and operated by James A. Schoettker of West Chester, Ohio. Mr. Schoettker's wife, Sylvia, and their six children were passengers in the Schoettker vehicle at the time of the accident. Mr. Schoettker and his daughter, Sara, were killed. Mrs. Schoettker and the other children suffered serious bodily injury. In addition, Mrs. Schoettker lost an unborn child as a result of the accident.
Both vehicles were insured by Liberty Mutual Fire
Insurance Company (Liberty Mutual). The Thomas policy, which was
issued in West Virginia, provided liability insurance with a single
accident limit of $325,000. This amount was paid to the
plaintiffs.See footnote 2
The Schoettker policy was issued in Ohio, where the
plaintiffs lived and where the vehicle was registered. The policy
provided underinsured motorist coverage on two vehicles, including
the vehicle involved in the accident, in the amount of $300,000.
The policy also contained provisions, however, which expressly
denied coverage when the amount of liability insurance available
from another source was equal to or greater than the amount of
underinsured motorist coverage available under the policy and
provided for a set-off for any liability insurance received by the
insured.See footnote 3
When the plaintiffs attempted to recover underinsured
motorist benefits under the Schoettker policy, Liberty Mutual
denied coverage. The plaintiffs subsequently brought a declaratory
judgment action in the United States District Court for the
Southern District of West Virginia to adjudicate the parties'
rights and responsibilities under the contract of insurance. The
complaint alleged that the plaintiffs were entitled to underinsured
motorist benefits under the policy in reliance on West Virginia
law. Liberty Mutual responded that the plaintiffs were not
entitled to benefits because the amount of the liability insurance
paid under the Thomas policy exceeded the per accident limitation
of the underinsured motorist coverage under the Schoettker policy
in reliance on Ohio law. The parties agreed that there were no
material issues of fact and submitted the case for decision on
cross-motions for summary judgment.
The District Court determined that the substantive law of
Ohio, rather than the law of West Virginia, governs the
interpretation of the insurance policy and granted Liberty Mutual's
motion for summary judgment. See Nadler v. Liberty Mut. Fire Ins.
Co., 770 F. Supp. 294 (S.D. W. Va. 1990). The plaintiffs' motion
to alter judgment was denied, and the plaintiffs appealed to the
Court of Appeals for the Fourth Circuit. By order dated February
25, 1992, the Court of Appeals certified to this Court the question
of whether the application of Ohio law to interpret the terms of
the Schoettker insurance policy violates the public policy of this
The parties agree that under Ohio law, the plaintiffs are not entitled to recover any underinsured motorist benefits under the Schoettker policy. By statute, Ohio requires insurers to offer optional underinsured motorist coverage, but specifies the limits of the insurer's liability therefor as "the limits of such coverage, less those amounts actually recovered under all applicable bodily injury liability bonds and insurance policies covering persons liable to the insured." Ohio Rev. Code § 3937.18(A)(2) (1988). The Ohio courts have interpreted this provision as allowing insurers to deny coverage where the amount of the tortfeasor's liability insurance is equal to or greater than the amount of the injured party's underinsured motorist coverage and to take a set-off for the amount of liability insurance paid. See James v. Michigan Mut. Ins. Co., 18 Ohio St. 3d 386, 18 O.B.R. 440, 481 N.E.2d 272 (1985); Ohio Casualty Ins. Co. v. Yoby, 23 Ohio App. 3d 51, 23 O.B.R. 96, 491 N.E.2d 360 (1985).
It is equally clear that application of West Virginia law
leads to a different result. In State Automobile Mutual Insurance
Co. v. Youler, 183 W. Va. 556, 564, 396 S.E.2d 737, 745 (1990), we
concluded that by enacting our uninsured/underinsured motorist
coverage statute, W. Va. Code, 33-6-31(b) (1982), our legislature
had "articulated a public policy . . . that the injured person be
fully compensated for his or her damages not compensated by a
negligent tortfeasor, up to the limits of the uninsured or
underinsured motorist coverage." (Emphasis in original). In
Youler, we held that set-off provisions, such as those contained in
the Schoettker policy, which allow the insurer to reduce the amount
of the insured's underinsured motorist benefits by any amounts paid
under the tortfeasor's liability coverage, violate this public
policy and are void.See footnote 4 See also Bell v. State Farm Mut. Auto. Ins.
Co., 157 W. Va. 623, 207 S.E.2d 147 (1974).
Later, in Pristavec v. Westfield Insurance Co., 184
W. Va. 331, 400 S.E.2d 575 (1990), we held that in furtherance of
this public policy of full compensation for the victims of
underinsured drivers, our statute requires the insurer to pay
underinsured motorist benefits even when the amount of the
plaintiff's underinsured motorist coverage is equal to or less than
the amount available to the plaintiff under the tortfeasor's
liability insurance coverage.See footnote 5 Thus, under West Virginia law, the
plaintiffs in this case would be entitled to underinsured motorist
benefits under the Schoettker policy so long as the liability
insurance available to them under the Thomas policy was inadequate
to compensate them for their injuries.See footnote 6
In determining which law applies, we must first consider the type of issue involved. In Lee v. Saliga, 179 W. Va. 762, 766, 373 S.E.2d 345, 349 (1988), we recognized that cases involving uninsured motorist coverage "may raise questions of both tort and contract law. Where such a question involves an aspect of policy coverage, rather than liability, it is treated as a contract question for purposes of conflicts analysis. 1 A. Widiss, Uninsured and Underinsured Motorist Insurance § 7.15 (1985)." (Emphasis in original). In Syllabus Point 1 of Lee, we stated:
"Where in a suit for the recovery of uninsured motorist insurance benefits an issue arises which involves insurance coverage, that issue is to be resolved under conflict of laws principles applicable to contracts."
Accord Liberty Mut. Ins. Co. v. Triangle Indus., Inc., 182 W. Va.
580, 390 S.E.2d 562 (1990). In Lee, we noted that "questions of
coverage" include issues relating to enforceability of exclusions
in the policy, the availability of stacking, and the applicable
limits of coverage. The parties apparently admit that the issues
raised in the declaratory judgment action are questions of coverage
warranting application of contracts principles of conflict of laws.
The general rule with regard to choice of law in
contracts cases was stated in Syllabus Point 2 of General Electric
Co. v. Keyser, 166 W. Va. 456, 275 S.E.2d 289 (1981):
"'The law of the state in which a contract is made and to be performed governs the construction of a contract when it is involved in litigation in the courts of this state'. Syl. pt. 1 (in part) Michigan National Bank v. Mattingly, 158 W. Va. 621, 212 S.E.2d 754 (1975)."
In Syllabus Point 2 of Lee v. Saliga, we modified this rule
somewhat to reflect the modern approach to conflict of laws
analysis contained in the Restatement (Second) of Conflict of
Laws:See footnote 7
"The provisions of a motor vehicle policy will ordinarily be construed according to the laws of the state where the policy was issued and the risk insured was principally located, unless another state has a more significant relationship to the transaction and the parties."See footnote 8 (Emphasis added).
Our approval of this rule was motivated, in part, by the fact that
it vindicates the reasonable expectations of the parties to the
"The usual coincidence of the insurance agent, insured, and the risk in the same state dictates that the parties would be more familiar with that state's insurance statutes, which often supplement or control the policy provisions. This law should control the reasonable expectation of the parties, rather than that of another state whose only connection to the dispute is the fortuity that the accident occurred there." Lee v. Saliga, 179 W. Va. at 769, 373 S.E.2d at 352.
It is apparently undisputed that Ohio has the more
significant relationship with the parties and the transaction at
issue in this case. The plaintiffs and their decedents were
residents of Ohio at the time of the accident. The insurance
policy in question was issued in Ohio, and it appears that the
vehicles covered thereby were registered and garaged in Ohio. In
the absence of evidence to the contrary, we can assume that Ohio
was "the principal location of the insured risk during the term of
the policy." Rest. (Second) Conflict of Laws § 193.
By comparison, the parties' contacts with West Virginia
were minor. The accident occurred here, and the owner and driver
of the truck were West Virginia residents. These occurrences,
however, have no bearing on the extent of the coverage afforded the
plaintiffs under the terms of their insurance contract issued in
Ohio. Upon these facts, we conclude that the parties reasonably
expected the law of Ohio to control the interpretation of the
insurance contract rather than the law of West Virginia, "whose
only connection to the dispute is the fortuity that the accident
occurred there." Lee v. Saliga, 179 W. Va. at 769, 373 S.E.2d at
352. See Johnson v. Neal, ___ W. Va. ___, 418 S.E.2d 349 (1992);
Liberty Mut. Ins. Co. v. Triangle Indus., Inc., supra.
The plaintiffs assert, however, that application of Ohio law in this case offends our public policy of full compensation for those injured by underinsured motorists underlying State Automobile Mutual Insurance Co. v. Youler, supra. They contend that fulfillment of this public policy should override the general conflict of laws principles enunciated in Lee v. Saliga and warrants application of West Virginia law in this case.
We have rarely discussed the effect of the forum state's
public policy on the choice of law to be applied in insurance
contract cases. In note 19 of Lee v. Saliga, 179 W. Va. at 770,
373 S.E.2d at 353, we recognized the general "conflict of laws
principle that a state may ignore the laws of another state if it
is contrary to its own public policy. Paul v. National Life Ins.
Co., [177 W. Va. 427, 352 S.E.2d 550 (1986)]; State v. Hall, 91
W. Va. 648, 114 S.E. 648 (1922); 2 Couch on Insurance § 16.48 (2d
ed. 1984)." No public policy issue was raised in Lee, however, and
we offered no further discussion of the issue.
In several cases following Lee, we mentioned in passing
that public policy considerations may affect the choice of law in
an insurance contract case. In Liberty Mutual Insurance Co. v.
Triangle Industries, Inc., supra, we indicated, without discussion,
that we would not follow the conflict of laws rule enunciated in
Lee where application of foreign law violates the public policy of
this state.See footnote 9 The matter also surfaced in our per curiam opinion
in Johnson v. Neal, supra, in which we concluded that Virginia law
concerning stacking of uninsured motorist coverages was applicable
under the rule enunciated in Lee v. Saliga. In Johnson, we also
cited Lee for the proposition that we would reject the application
of foreign law when it violates our public policy, but offered no
discussion except this brief statement: "[W]e decline to stretch
West Virginia's public policy to require such an interpretation of
an insurance contract made in Virginia between a Virginia company
and a Virginia resident, especially when Virginia reached a
different conclusion when it has addressed the specific issue of
benefit stacking." ___ W. Va. at ___, 418 S.E.2d at 352. See also
Joy v. Chessie Employees Fed. Credit Union, 186 W. Va. 118, 411
S.E.2d 261 (1991).
Obviously, the few cases in which we have mentioned
public policy considerations with regard to the choice of law in an
insurance contract case have not articulated a standard for
applying such principles. A review of the decisions in other
jurisdictions provides some help.
Most courts that have addressed the issue agree that the
mere fact that the substantive law of another jurisdiction differs
from or is less favorable than the law of the forum state does not,
by itself, demonstrate that application of the foreign law under
recognized conflict of laws principles is contrary to the public
policy of the forum state. See, e.g., Bethlehem Steel Corp. v.
G.C. Zarnas & Co., 304 Md. 183, 498 A.2d 605 (1985); Myers v.
Government Employees Ins. Co., 302 Minn. 359, 225 N.W.2d 238
(1974); Boardman v. United Servs. Auto. Ass'n, 470 So. 2d 1024
(Miss. 1985); State Farm Mut. Auto. Ins. Co. v. Simmons' Estate, 84
N.J. 28, 417 A.2d 488 (1980); Cooney v. Osgood Mach., Inc., 179
A.D.2d 240, 582 N.Y.S.2d 873 (1992); DeSantis v. Wackenhut Corp.,
793 S.W.2d 670 (Tex. 1990), cert. denied, ___ U.S. ___, 111 S. Ct.
755, 112 L. Ed. 2d 775 (1991). See generally 16 Am. Jur. 2d
Conflict of Laws §§ 18, 20 (1979).See footnote 10 In practice, however, courts
have had difficulty applying this principle in insurance contract
cases where the parties' contacts with another state would
otherwise warrant application of foreign law.
In Andrews v. Continental Insurance Co., 444 So. 2d 479
(Fla. App.), review denied, 451 So. 2d 847 (Fla. 1984), for
example, the court found no Florida public policy implicated in the
enforcement of the uninsured motorist provisions of an insurance
policy issued in Maine to a Maine resident, even though the
accident occurred in Florida and enforcement of the contract was
contrary to Florida's collateral source statute. In Wille v. Farm
Bureau Mutual Insurance Co., 432 N.W.2d 784 (Minn. App. 1988), on
the other hand, the court refused to enforce anti-stacking
provisions of an insurance contract issued in Iowa to a resident of
Iowa, concluding that because Minnesota was the site of the
accident and the domicile of the other driver and because the
insurer was licensed to do business there, Minnesota had a
governmental interest in construing the contract according to
Minnesota law, which the court termed the "better rule."
Some states have attempted to clarify this issue by focusing on the nature of the public policy underlying the substantive law of the forum state. In Hart v. Allstate Insurance Co., 33 Md. App. 642, ___, 577 A.2d 373, 375 (1990), rev'd on other grounds, 327 Md. 526, 611 A.2d 100 (1992), the court stated: "[M]erely because Maryland law is dissimilar to the law of another jurisdiction does not render the latter contrary to Maryland public policy and thus unenforceable in our courts. Rather, for another state's law to be unenforceable, there must be 'a strong public policy against its enforcement in Maryland[.]" Quoting Bethlehem Steel Corp. v. G. C. Zarnas & Co., 304 Md. at 189, 498 A.2d at 608. (Emphasis added). A similar statement appears in Boardman v. United Services Automobile Association, 470 So. 2d at 1038, where the Mississippi Supreme Court held: "[O]ne of the important principles we enforce is that no foreign state's substantive law will be enforced in courts of this state where to do so would be offensive to the deeply ingrained or strongly felt public policy of the state."
A more detailed analysis of this approach was attempted
by the New Jersey Supreme Court in State Farm Mutual Automobile
Insurance Co. v. Simmons' Estate, supra, where the issue was
whether the decedents had the insured's permission to use the
covered vehicle so as to entitle their estates to benefits under
the insured's motor vehicle liability policy. The insured was a
resident of Alabama and the policy was issued there, but the
accident occurred in New Jersey. New Jersey and Alabama had
virtually identical statutes on the subject, but the interpretation
placed on the Alabama statute by the courts of that state was more
restrictive and would have precluded recovery.
After determining that Alabama had the more significant
contacts with the parties and the transaction, the New Jersey court
turned to the argument that application of Alabama law violated New
Jersey public policy:
"Even though Alabama decisional law is considerably more restrictive and narrow than is New Jersey law with regard to the extent of insurance coverage, . . . it has been recognized that not all differences in the laws of two states demonstrate inconsistent public policies or interests. . . . Unless such differences are fundamental, foreign law need not be considered offensive or repugnant to local public policy. . . .
"Here the difference in the
insurance laws of each state as to the extent
of coverage accorded to an insured's permittee
does not implicate the fundamental public
policy of these states. Both states recognize
that persons are entitled to the benefits of
liability insurance when injured in accidents
in which the vehicle was being driven by one
who had obtained the use of the vehicle with
the consent or permission of the insured.
While each state differs as to the duration
and character of that permission or consent,
the public policy of each state nevertheless
seeks to achieve the same fundamental goals
"The distinctions between these
states as to the extent of coverage do not in
the context of this case demand the full and
literal application of the insurance laws of
New Jersey to determine the obligations of the
parties in order to vindicate the public
policy of this State." 84 N.J. at ___, 417
A.2d at 495. (Citations omitted).
The obvious disadvantage to this approach is that it
requires a subjective analysis of the nature of the particular
public policy asserted. We do not believe that such an analysis is
necessary in this case.
Our substantive law governing uninsured and underinsured
motorist coverages in motor vehicle insurance policies is intended
to apply only to insurance transactions which occur in West
Virginia or which affect the rights and responsibilities of West
Virginia citizens. For this reason, the public policy of full
compensation underlying our uninsured/underinsured motorist law is
implicated only when the parties and the transaction have a
substantial relationship with this state. The importance of the
public policy is directly proportional to the significance of that
relationship. The more marginal the contact West Virginia has with
the parties and the insurance contract, the less reason there is to
consider the public policy behind our uninsured/underinsured
motorist law as a factor bearing on the choice of law
When the issue is viewed in this light, it is clear that
the public policy concerns raised by the plaintiffs are adequately
addressed by application of the significant relationship test
approved by this Court in Lee v. Saliga. This approach provides an
answer to questions which inevitably arise any time there is a
conflict between the laws of one state and the laws of another. It
is also consistent with promoting the reasonable expectations of
the parties to the insurance contract, an important premise for our
adoption of the conflicts rule stated in Lee v. Saliga. The
reasonable expectations of the parties with respect to the terms of
an insurance contract should not be lightly disregarded. See
National Mut. Ins. Co. v. McMahon & Sons, Inc., 177 W. Va. 734, 356
S.E.2d 488 (1987). Finally, we believe that this approach is not
inconsistent with the results reached by the majority of courts
that have addressed the issue. See, e.g., Andrews v. Continental
Ins. Co., supra; Draper v. Draper, 115 Idaho 973, 772 P.2d 180
(1989); Boardman v. United Servs. Auto. Ass'n, supra; Sotirakis v.
United Serv. Auto. Ass'n, 106 Nev. 123, 787 P.2d 788 (1990); State
Farm Mut. Auto. Ins. Co. v. Simmons' Estate, supra; Dairyland Ins.
Co. v. State Farm Mut. Auto. Ins. Co., 41 Wash. App. 26, 701 P.2d
806, review denied, 104 Wash. 2d 1016 (1985).
Consequently, we conclude that where a choice of law
question arises with regard to the interpretation of coverage
provisions in a motor vehicle insurance policy executed in another
state, the public policy considerations inherent in the fact that
the substantive law of the other state differs from our own will
ordinarily be adequately addressed by application of the
significant relationship conflict of laws test enunciated in
Syllabus Point 2 of Lee v. Saliga.
This is not to say that an analysis of public policy is unnecessary in every conflict of laws case. We adhere to the general principle that a court should not refuse to apply foreign law, in otherwise proper circumstances, on public policy grounds unless the foreign law "is contrary to pure morals or abstract justice, or unless enforcement would be of evil example and harmful to its own people." 16 Am. Jur. 2d Conflict of Laws § 18. (Footnote omitted).
Thus, our conclusion does not foreclose separate
consideration of public policy questions such as the one addressed
in Joy Technologies, Inc. v. Liberty Mutual Insurance Co., ___
W. Va. ___, ___ S.E.2d ___ (No. 20153 7/21/92). In Joy
Technologies, public policy played a part in our rejection of
Pennsylvania law as controlling the meaning of an exclusionary
clause in a commercial liability policy issued in Pennsylvania to
a Pennsylvania corporation. Quite apart from our analysis of the
relationship of the parties and the transaction to this state, we
held that because the insurer, in seeking approval of the
exclusionary clause, had misrepresented to state insurance
officials the meaning and effect of the clause, enforcement of the
contract under Pennsylvania law would be contrary to
"[t]he public policy of the State of West Virginia . . . that the law of the State should be administered in such a way as to insure that corporations which seek to do business in West Virginia act in a manner consistent with their studied, unambiguous, official, affirmative representations to them State, its subdivisions, or its regulatory bodies." Syllabus Point 2, in part.
In Joy Technologies, however, the public policy issue did not arise
from the conflict between the substantive law of Pennsylvania and
West Virginia, but rather from the wrongdoing of the insurer.
No similar public policy is at issue in this case. As we
have already noted, the parties and the insurance transaction
involved in this case have a more significant relationship with
Ohio than with West Virginia. The only contacts with this state
were the fact that the accident occurred here and was caused by a
West Virginia resident. However, the relevant aspects of that
transaction have been settled, and are not at issue in this
proceeding against Liberty Mutual. The real controversy here is
the interpretation of the provisions of the plaintiffs'
underinsured motorist coverage. The insurance contract was
executed in Ohio. The plaintiffs are residents of Ohio, and the
covered vehicles are principally garaged there.
The plaintiffs have not demonstrated that application of
Ohio law in this case will have an adverse impact on the citizens
of this state. If we allow the public policy underlying our
uninsured/underinsured motorist law to control choice of law every
time there is a difference between our law and the law of another
jurisdiction, we will essentially abolish the conflict of laws rule
set forth in Lee v. Saliga. This we decline to do. Consequently,
we conclude that no public policy of this state will be violated by
enforcement of Ohio law with regard to the interpretation of the
insurance contract in question.
For the reasons stated above, we answer the certified question by holding that the substantive law of the State of Ohio governs the interpretation of the insurance agreement between the parties.
Answered and dismissed.
Footnote: 1W. Va. Code, 51-1A-1, provides:
"The supreme court of appeals of
West Virginia may answer questions of law
certified to it by the Supreme Court of the
United States, a court of appeals of the
United States, a United States district court
or the highest appellate court or the
intermediate appellate court of any other
state, when requested by the certifying court
if there are involved in any proceeding
before it questions of law of this State
which may be determinative of the cause then
pending in the certifying court and as to
which it appears to the certifying court
there is no controlling precedent in the
decisions of the supreme court of appeals of
Footnote: 2The plaintiffs are Mrs. Schoettker, individually and as the representative of her five surviving children, and Roger Nadler, personal representative of the estates of James Schoettker and Sara Schoettker.
Footnote: 3The insurance contract states, in pertinent part:
" INSURING AGREEMENT
* * *
" C. 'Uninsured motor vehicle' means a land
motor vehicle or trailer of any type:
* * *
2. To which a bodily injury liability
bond or policy applies at the time of
the accident. In this case its limit
for bodily injury liability must be less
than the limit of liability for this
* * *
" LIMIT OF LIABILITY
"A. The Limit of Liability shown in the
Declarations for this coverage is our maximum
limit of liability for all damages resulting
from any one accident. This is the most we
will pay regardless of the number of:
2. Claims made;
3. Vehicles or premiums shown in the Declarations; or
4. Vehicles involved in the accident.
* * *
"With respect to coverage under Section 2. of the definition of uninsured motor vehicle, the limit of liability shall be reduced by all sums paid because of bodily injury by or on behalf of persons or organizations who may be legally responsible. . . ."
Although the policy refers only to "uninsured" motorists and vehicles, it is clear from the provisions discussed above that the policy provides underinsured motorist coverage as well.
Footnote: 4In Syllabus Point 4 of Youler, we stated:
"W.Va.Code, 33-6-31(b), as amended,
on uninsured and underinsured motorist
coverage, contemplates recovery, up to
coverage limits, from one's own insurer, of
full compensation for damages not compensated
by a negligent tortfeasor who at the time of
the accident was an owner or operator of an
uninsured or underinsured motor vehicle.
Accordingly, the amount of such tortfeasor's
motor vehicle liability insurance coverage
actually available to the injured person in
question is to be deducted from the total
amount of damages sustained by the injured
person, and the insurer providing
underinsured motorist coverage is liable for
the remainder of the damages, but not to
exceed the coverage limits."
In 1988, the legislature incorporated these principles into the underinsured motorist statute. See W. Va. Code, 33-6-31(b) (1988).
Footnote: 5In Syllabus Point 5 of Pristavec, we stated:
"In light of the preeminent public
policy of the underinsured motorist statute,
which is to provide full compensation, not
exceeding coverage limits, to an injured
person for his or her damages not compensated
by a negligent tortfeasor, this Court holds
that underinsured motorist coverage is
activated under W.Va.Code, 33-6-31(b), as
amended, when the amount of such tortfeasor's
motor vehicle liability insurance actually
available to the injured person in question
is less than the total amount of damages
sustained by the injured person, regardless
of the comparison between such liability
insurance limits actually available and the
underinsured motorist coverage limits."
Footnote: 6The plaintiffs also assert that under West Virginia law they would be entitled to stack the underinsured motorist coverage on the other vehicle covered by the Schoettker policy. In Syllabus Point 5 of Russell v. State Automobile Mutual Insurance Co., ___ W. Va. ___, ___ S.E.2d ___ (No. 20491 6/29/92), however, we stated:
"West Virginia Code § 33-6-31 (1992) does not forbid the inclusion and application of an anti-stacking provision in an automobile insurance policy where a single insurance policy is issued by a single
insurer and contains an underinsured
endorsement even though the policy covers two
or more vehicles. Under the terms of such a
policy, the insured is not entitled to stack
the coverages of the multiple vehicles and
may only recover up to the policy limits set
forth in the single policy endorsement."
Consequently, on this issue, we would reach the same result whether we applied West Virginia law or Ohio law. See Saccucci v. State Farm Mut. Auto. Ins. Co., 32 Ohio St. 3d 273, 512 N.E.2d 1160 (1987); Benson v. Rosler, 19 Ohio St. 3d 41, 19 O.B.R. 35, 482 N.E.2d 599 (1985); Ohio Rev. Code § 3937.18(G) (1988).
Footnote: 7In note 16 of Lee v. Saliga, 179 W. Va. at 769, 373 S.E.2d at 352, we quoted Section 193 of the Restatement (Second) of Conflict of Laws, which provides:
"'The validity of a contract of
fire, surety or casualty insurance and the
rights created thereby are determined by the
local law of the state which the parties
understood was to be the principal location
of the insured risk during the term of the
policy, unless with respect to the particular
issue, some other state has a more
significant relationship under the principles
stated in § 6 to the transaction and the
parties, in which event the local law of the
other state will be applied."
Footnote: 8It has also been recognized that the parties themselves may defeat the traditional conflict of laws principle applicable in contracts cases by making a choice of law in the contract. See Joy v. Chessie Employees Fed. Credit Union, 186 W. Va. 118, 411 S.E.2d 261 (1991); Lee v. Saliga, supra.
Footnote: 9The Syllabus in Liberty Mutual states:
"In a case involving the
interpretation of an insurance policy, made
in one state to be performed in another, the
law of the state of the formation of the
contract shall govern, unless another state
has a more significant relationship to the
transaction and the parties, or the law of
the other state is contrary to the public
policy of this state."
Footnote: 10A question that is rarely addressed by the courts is what type of statutes, case decisions, or constitutional mandates are sufficiently affected with a general public interest to constitute "public policy."