Christopher J. Heavens, Esq. Charles
S. Piccirillo, Esq.
Heavens Law Offices Kelly R. Charnock, Esq.
Charleston, West Virginia Shaffer & Shaffer
Attorney for Appellant Madison, West Virginia
Attorneys for Appellees
The Opinion of the Court was delivered PER CURIAM.
circuit court's entry of summary judgment is reviewed de novo. Syllabus
point 1, Painter v. Peavy, 192 W. Va. 189, 451 S.E.2d 755 (1994).
the moving party makes a properly supported motion for summary judgment and
can show by affirmative evidence that there is no genuine issue of a material
fact, the burden of production shifts to the nonmoving party who must either
(1) rehabilitate the evidence attacked by the moving party, (2) produce additional
evidence showing the existence of a genuine issue for trial, or (3) submit
an affidavit explaining why further discovery is necessary as provided in
Rule 56(f) of the West Virginia Rules of Civil Procedure. Syllabus
point 3, Williams v. Precision Coil, Inc., 194 W. Va. 52, 459 S.E.2d
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. Syllabus
point 2, Riffe v. Home Finders Associates, Inc., 205 W. Va. 216, 517
S.E.2d 313 (1999).
4. When the words of an insurance policy are, without violence, susceptible of two or more interpretations, that which will sustain the claim and cover the loss must be adopted. Syllabus point 2, Farmers Mutual Insurance Co. v. Tucker, 213 W. Va. 16, 576 S.E.2d 261 (2002).
Janice Sharon Drake, as the Administratrix of the estate of Nannie Hager, appellant/plaintiff below, (hereinafter Ms. Drake) appeals from an order of the Circuit Court of Mingo County granting summary judgment in favor of Richard Snider (See footnote 1) and State Farm Mutual Automobile Insurance Company (hereinafter State Farm), appellees/defendants below. Ms. Drake makes two assignments of error: (1) discovery was needed prior to deciding State Farm's summary judgment motion, and (2) the circuit court misunderstood the law applicable to a bad faith claim under W. Va. Code § 33-11-4(9). After a careful review of the briefs and record, the circuit court's order granting summary judgment is reversed.
Subsequent to Ms. Hager's
death, Ms. Drake filed a wrongful death claim in 2001 against Ms. Muncy and
others. During the pendency of the action, Ms. Drake learned that Ms. Muncy's
biological father, Willard Muncy (hereinafter Mr. Muncy), also
had two vehicles insured with State Farm. (See
footnote 3) Consequently, on February 27, 2002, Ms. Drake
filed a separate action which is the focus of this appeal against State Farm.
This new action alleged that Ms. Drake was entitled to liability coverage
under Mr. Muncy's policies. (See
footnote 4) The new action also asserted that State Farm
acted in bad faith by failing to disclose Mr. Muncy's policies.
In October of 2002, Ms. Muncy settled the wrongful death claim with Ms. Drake. In that settlement agreement, Ms. Muncy agreed to a stipulated judgment against her in the amount of $800,000. Ms. Muncy further agreed to assign any rights she had against State Farm to Ms. Drake, so long as Ms. Drake did not execute the stipulated judgment against her. In July of 2003, the circuit court entered an order approving the wrongful death settlement and dismissed the action.
On October 11, 2002, and prior to the dismissal of the wrongful death action, State Farm filed a motion for summary judgment in the separate action against State Farm. In its motion, State Farm asserted that Ms. Muncy did not qualify as an insured under Mr. Muncy's policies. Alternatively, should Ms. Muncy qualify as an insured, there was still no coverage because the car she was driving did not qualify for coverage under the policies. Ms. Drake filed a response to the motion for summary judgment wherein she argued that she needed time to conduct discovery. Pursuant to Rule 56(f) of the West Virginia Rules of Civil Procedure, Ms. Drake attached an affidavit to her response. After a hearing on the motion, the circuit court entered an order on March 14, 2003, granting summary judgment to State Farm. From this ruling, Ms. Muncy now appeals.
The first issue raised by Ms. Drake is that the circuit court erred by granting summary judgment based upon her Rule 56(f) affidavit wherein she indicated the need for discovery in order to resist the summary judgment motion. (See footnote 5) In Syllabus point 3 of Williams v. Precision Coil, Inc., 194 W. Va. 52, 459 S.E.2d 329 (1995), we addressed the burden on a party opposing a motion for summary judgment:
If the moving party makes a properly supported motion for summary judgment and can show by affirmative evidence that there is no genuine issue of a material fact, the burden of production shifts to the nonmoving party who must either (1) rehabilitate the evidence attacked by the moving party, (2) produce additional evidence showing the existence of a genuine issue for trial, or (3) submit an affidavit explaining why further discovery is necessary as provided in Rule 56(f) of the West Virginia Rules of Civil Procedure.
See Syl pt. 3, in part, Crain v. Lightner, 178 W. Va. 765, 364 S.E.2d 778 (1987) (Where a party is unable to resist a motion for summary judgment because of an inadequate opportunity to conduct discovery, that party should file an affidavit pursuant to W. Va.R.Civ.P. 56(f) and obtain a ruling thereon by the trial court.). It has been recognized that [s]ummary judgment is appropriate only after the opposing party has had adequate time for discovery. Cleckley, Litigation Handbook, § 56(f), at 944 (2002). We have also noted that a decision for summary judgment before discovery has been completed must be viewed as precipitous. Board of Educ. of the County of Ohio v. Van Buren & Firestone Architects, Inc., 165 W. Va. 140, 144, 267 S.E.2d 440, 443 (1980).
Here, the issue of discovery
is slightly complicated. The underlying wrongful death case was pending when
the bad faith case was filed. It appears from the record that discovery was
indeed conducted in the wrongful death action. Further, it appears that a
scheduling conference was held in the bad faith case, and dates were set
for discovery and other matters. However, for reasons unclear from the record,
the circuit court never actually entered a scheduling order in the bad faith case. (See
Notwithstanding the fact
that a scheduling order was not entered, State Farm contends that the parties
were on notice of the discovery cutoff dates as they were mentioned during
the scheduling conference. In contrast, Ms. Drake contends that no discovery
was conducted in the bad faith case because the wrongful death action was
being litigated first. Additionally, Ms. Drake contends that about the time
a settlement was reached in the wrongful death action, she attempted to engage
in discovery by deposing defendant Richard Snider. However, State Farm failed
to make Mr. Snider available.
Because no discovery actually
took place in the bad faith case, the factual evidence relied upon by the
circuit court to grant summary judgment was taken from evidence produced
during the wrongful death action. Although it was perfectly appropriate for
the circuit court to consider such evidence, we are disturbed by the fact
that the circuit court failed to grant Ms. Drake's Rule 56(f) motion to specifically
conduct discovery in the bad faith case. Of course, we are also mindful that,
during a scheduling conference, dates were set out for discovery. However,
absent entry of a scheduling order, the discovery requirements were never
formalized. Indeed, we have cautioned that [u]nder Rule 16(b), it is mandatory that trial courts enter a scheduling order that limits
the time to join parties, amend pleadings, file and hear motions, and complete
footnote 7) State ex rel. Pritt v. Vickers,
214 W. Va. 221, 226, 588 S.E.2d 210, 215 (2003) (footnote added) (citing Elliott
v. Schoolcraft, 213 W. Va. 69, 73 n.5, 576 S.E.2d 796, 800 n.5 (2002)
(reversing summary judgment because circuit court failed to enter scheduling
order). Because no scheduling order was entered in this case, we find that
trial court abused its discretion by denying Ms. Drake's Rule 56(f) motion
to conduct discovery in the bad faith case. (See
Although we have determined
that this case must be reversed to permit Ms. Drake to engage in discovery,
we must nevertheless address the merits of the trial court's decision to
grant summary judgment based upon the evidence that was produced in the underlying
wrongful death case.
The record does not indicate
that the circuit court specifically examined the term school as
it was used in the subject policies, however, we are obligated to do so.
This Court has held that [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 Assocs., Inc., 205
W. Va. 216, 517 S.E.2d 313 (1999). For the purposes of the facts in this
case, we find the term school to be ambiguous. This Court has
held that [i]t is well settled law in West Virginia that ambiguous
terms in insurance contracts are to be strictly construed against the insurance
company[.] Syl. pt. 4, in part, National Mut. Ins. Co. v. McMahon & Sons,
Inc., 177 W. Va. 734, 356 S.E.2d 488 (1987). See also Horace
Mann Ins. Co. v. Leeber, 180 W. Va. 375, 378, 376 S.E.2d 581, 584 (1988)
([A]ny ambiguity in the language of an insurance policy is to be construed
liberally in favor of the insured, as the policy was prepared exclusively
by the insurer.).
Simply put, the term school was
not defined by the policies. Such omission is fatal under the facts of this
case because the term school has various meanings. For example,
the term school is defined in the dictionary, in part, as follows: a
place or institution for teaching and learning; establishment for education;
specific, (a) an institution for teaching children, (b) a place for training
and instruction in some special field, skill, etc. [a dancing school], (c)
a college or university[.] Webster's New World Dictionary of American
English, at 1201 (3rd ed. 1988). Under Webster's definition, the
term school encompasses an elementary school, junior high school,
high school, trade school, college and university. The policies at issue
in the instant case do not impose any limitation on the term school. Therefore, we must construe the policies to encompass
all of its possible meanings.
The facts in the case clearly reveal that Ms. Muncy's parents were divorced when she was two years old. Custody of Ms. Muncy was initially granted to her mother. However, when Ms. Muncy turned twelve, Mr. Muncy petitioned for her custody, which was granted. When Ms. Muncy turned fifteen years of age, she wanted to change high schools. Consequently, Mr. Muncy permitted her to live with her mother for the purpose of attending a different high school. Legal custody of Ms. Muncy remained with her father. Ms. Muncy had been living in her mother's home for only a few months prior to the accident in this case. These facts establish that Ms. Muncy was (1) an unemancipated child, (2) whose legal custody was with her father and (3) that she left her father's home for the purpose of attending a different high school. (See footnote 9)
Under the language of Mr. Muncy's policies, coverage is provided for a relative who is an unmarried and unemancipated child away at school. It is clear to this Court that Ms. Muncy met this definition of a relative because the term school was neither defined nor limited. Therefore, the mere fact that Ms. Muncy left her father's home to attend a high school near her mother's home, and to live with her mother while attending that school, did not alter the fact that she was an unemancipated child away at school. Consequently, the trial court was clearly wrong in finding that Ms. Muncy was not an insured under this provision of her father's policies.
Non-Owned Car _ means a car not owned, registered or leased by:
1. you, your spouse;
2. any relative unless at the time of the accident or loss:
a. the car currently is or has within the last 30 days been insured for liability coverage; and
b. the driver is an insured who does not own or lease the car;
3. any other person residing in the same household as you, your spouse or any relative; or
4. an employer of you, your spouse or any relative.
The purpose of a non-owned car
provision is to provide protection to the insured for the occasional or
infrequent use of [a] vehicle not owned by him or her and is not intended as
a substitute for insurance on vehicles furnished for the insured's regular use. New
York Cent. Mut. Fire Ins. Co. v. Jennings, 600 N.Y.S.2d 486, 487 (1993).
The circuit court found the definition of non-owned car to be clear
and unambiguous. In doing so, the circuit court relied upon the language
in section 3 as precluding coverage. This section excludes coverage for a car
owned by someone living in the same household of an insured. Consequently, the
circuit court ruled that because Ms. Muncy's step-father owned the car and Ms.
Muncy was living in his home while attending school, no coverage extended to
Ms. Muncy. We are not persuaded by the circuit court's reasoning because it is
premised upon finding the definition of non-owned car to be unambiguous. We believe
the definition is, in fact, ambiguous.
The ambiguity we find in
the definition of non-owned car is the term household. A
case that illustrates this point is State Farm Mutual Automobile Insurance
Co. v. McGee, 759 So. 2d 358 (Miss. 1999). (See
footnote 10) The underlying facts of McGee indicated
that a minor named Perry McGee was a passenger in a truck when he was injured.
The truck in which Perry was injured was being driven by his cousin, a minor
named Jacob McGee. The truck was owned by Jacob's stepfather. Jacob's parents were divorced. At
the time of the accident, Jacob's father, Harlon McGee, had legal custody
of him. However, Jacob also resided with his mother and stepfather
. . . for visitation at various times throughout the year. McGee,
759 So.2d at 359 (Waller, J., concurring). Perry sued Jacob and his father,
Harlon, seeking to recover damages under Harlon's automobile policy. Harlon's
insurer, State Farm, filed a declaratory judgment action seeking a determination
that there was no coverage under Harlon's policy. The critical issue raised
by State Farm was that the truck driven by Jacob was not a non-owned car
under the policy. Therefore, coverage was excluded. The relevant part of
the non-owned car provision of the policy was exactly the same policy as
that in the instant case. (See
The trial court in McGee found that the term 'same household' with no further definition in the policy is ambiguous and subject to two interpretations. McGee, 759 So. 2d at 362 (Prather, J., dissenting). In resolving the ambiguity, the trial court found that Jacob was a resident of his stepfather's 'house' but nevertheless concluded that they were not members of the same 'household.' Id. The trial court therefore dismissed the declaratory judgment action. State Farm appealed to the Supreme Court of Mississippi which affirmed the lower court's ruling. The concurring opinion of Justice Waller who joined by four other justices, set out the rationale for the Supreme Court's decision:
State Farm argues that when [Jacob] is driving [his stepfather's] truck, a vehicle obviously not listed on Harlon's policy . . ., he is not insured because [the stepfather's] truck is not a not-owned vehicle. In other words, [the stepfather's] truck is a vehicle owned by a member of Harlon's household which is not listed on Harlon's policy and, therefore, not covered.
State Farm's argument is disingenuous at best. To find that [the] truck is a non-owned vehicle, the Court would have to hold that Harlon's household is expanded to include anyone with whom Harlon's spouse or relatives might periodically reside.
Common sense dictates that the insured's household includes the insured, the insured's spouse, if the spouse is living with or dependent upon the insured, and the insured's relatives, if they are living with or dependent upon the insured. [Jacob] is an insured under the policy because he is Harlon's son and because he lives under the same roof as Harlon. A person who does not live with or is not dependent upon Harlon does not become a member of Harlon's household merely because Harlon's son might temporarily reside with him and drive his vehicle.
. . . .
Under Mississippi law, an unemancipated minor is a member of two households when his parents are living separately. However, just because the minor is a member of two households does not mean that the other members of those two households are members of both or that the two households become one.
McGee, 759 So. 2d at 359-58 (Waller, J., concurring).
Although Justice Waller
did not conceptualize the meaning of household in terms of residence and
domicile, this was, in fact, the essence of his analysis. In the case sub judice,
whose facts are identical to those of the McGee case, the question of whether
Ms. Muncy was a member of her father's household boils down to a determination
of her domicile. This Court stated, in Lotz v. Atamaniuk, 172 W. Va.
116, 118, 304 S.E.2d 20, 23 (1983), that [d]omicile and residence are
not synonymous. A man may have several residences, but only one domicile. In
fact, we held in Syllabus point 2 of Lotz that [d]omicile is
a combination of residence (or presence) and an intention of remaining. If
domicile has once existed, mere temporary absence will not destroy it, however
long continued. Thus, in this context, it is quite clear that the court
in McGee concluded that Jacob had two residences, but his domicile
was with his father. Consequently, the court in McGee implicitly defined
household to mean domicile. Therefore, the truck driven by Jacob was a non-owned
vehicle because no one in Jacob's domicile owned the truck. See Menard
v. Zeno, 558 So. 2d 744 (La. Ct. App. 1990) (finding that a
minor who lived with his grandmother for a year was a member of his parent's
household because there was no legal action taken to change his domicile). (See
Based upon the foregoing,
we find that the word household in Mr. Muncy's policies is ambiguous
because it could refer to either residence or domicile. This Court has made
clear that [w]hen the words of an insurance policy are, without violence,
susceptible of two or more interpretations, that which will sustain the claim and cover
the loss must be adopted. Syl. pt. 2, Farmers Mut. Ins. Co. v. Tucker,
213 W. Va. 16, 576 S.E.2d 261 (2002). In view of our controlling law on ambiguity
in insurance policies, we find that the term household can fairly
be interpreted to mean domicile under the circumstances of the instant case.
We further find that, because legal custody of Ms. Muncy was with Mr. Muncy,
her domicile was with him. See Taylor v. State Farm Mut. Auto.
Ins. Co., 178 So. 2d 238, 242 (La. 1965) (Even though a . . .
child might have several residences, despite the fact that he has one domicile,
the legal residence of an unemancipated minor . . . is that of
his [custodial parent] unless changed by law. This is reasonable and understandable
because . . . the [custodial parent] has numerous obligations to
[the] child [including his support and maintenance], is vested with parental
authority, and is responsible in great measure for his actions.). Consequently,
the vehicle that Ms. Muncy was driving qualified as a non-owned car under
the policies because it was clearly not owned by anyone residing in her domicile. (See
Reversed and Remanded.
it appear from the affidavits of a party opposing the motion [for summary
judgment] that the party cannot for reasons stated present by affidavit facts
essential to justify the party's opposition, the court may refuse the application
for judgment or may order a continuance to permit affidavits to be obtained
or depositions to be taken or discovery to be had or may make such other
order as is just.
courts analyzing the word household in insurance policies have
usually concluded that the question of whether a household exists is one
of fact, not law. One court found the term household to be a
chameleon like word, Cobb v. State Security Ins. Co., 576 S.W.2d
726, 738 (Mo.1979), while another found that the terms have no absolute
meaning. Their meaning may vary according to the circumstances. Cal-Farm
Ins. Co. v. Boisseranc, 151 Cal.App.2d 775, 781, 312 P.2d 401, 404 (Cal.App.1957).
A New Jersey court stated:
Household is not a word of art. Its meaning is not confined within certain commonly known and universally accepted limits. True, it is frequently used to designate persons related by marriage or blood, who dwell together as a family under a single roof. . . . But it has been said also that members of a family need not in all cases reside under a common roof in order to be deemed a part of the household.
Mazzilli v. Acc. & Cas. Ins. Co. of Winterthur, Switzerland, 35 N.J. 1, 8, 170 A.2d 800, 804 (1961).
Tucker, 213 W. Va. at 22, 576 S.E.2d at 267. Reaching the merits in this case, we held, in Tucker, that a named insured's adult son, who lived in a separate mobile home on the named insured's property, did not automatically mean that the son was not a member of the named insured's household.