Vo v. Federal Ins. Co. ( 2015 )

Present: All the Justices
CHRISTOPHER BARTOLOMUCCI
OPINION BY
v. Record No. 140275 JUSTICE LEROY F. MILLETTE, JR.
April 16, 2015
FEDERAL INSURANCE COMPANY, ET AL.
VU VO
v. Record No. 140297
FEDERAL INSURANCE COMPANY, ET AL.
FROM THE CIRCUIT COURT OF LOUDOUN COUNTY
Thomas D. Horne, Judge
In these appeals we consider the scope and application of
an insurance policy that provides coverage for a law firm
partner's vehicle only when that vehicle is "used in" a law
firm's business or personal affairs.
I. Facts And Proceedings
Vu Vo and Christopher Bartolomucci were involved in a
vehicle collision. Based on his injuries, Vo filed a lawsuit
against Bartolomucci seeking $1,000,000 in damages. The
vehicle which Bartolomucci was driving was insured under an
Allstate Insurance Company insurance policy with a $100,000
liability limit (the "Allstate Policy"). Vo is unwilling to
settle his suit within the Allstate Policy's limit.
Because his potential liability exceeds the Allstate
Policy's limit, Bartolomucci filed a declaratory judgment
action in the Circuit Court of Loudoun County. Bartolomucci
sought to establish that his vehicle fell within the scope of
Federal Insurance Company's insurance policy issued to
Bartolomucci's law firm, Hogan Lovells US, LLC (the "Federal
Policy"). 1 During the course of these proceedings, the circuit
court ruled on the demurrer to the amended complaint filed by
Federal Insurance and Hogan Lovells. The circuit court
sustained that demurrer in part, overruled it in part, and
allowed Bartolomucci's suit to continue on the theory that he
was covered by the Federal Policy.
The case went to trial. The matter was submitted to the
jury on a special interrogatory asking the question whether
Bartolomucci was using his vehicle in Hogan Lovells's business
or personal affairs at the time of the collision. The jury
responded "yes." However, the circuit court then granted
Federal Insurance's and Hogan Lovells's motion to strike, and
set aside the jury's finding as not being supported by the
evidence. The court entered final judgment in favor of Federal
Insurance and held that the Federal Policy did not cover
Bartolomucci's use of the vehicle at the time of the collision.
Bartolomucci and Vo timely filed separate petitions for
appeal with this Court, and we granted all six assignments of
error. These assignments require us to address four issues:
1
At the time of the collision, Hogan Lovells US, LLC was
Hogan Hartson, LLC. All instances of Hogan Hartson are
referred to as Hogan Lovells.
2
1. Whether the Federal Policy automatically
provided excess liability coverage unrestricted
by any other requirements of the policy?
2. Whether the Federal Policy provided coverage
because Bartolomucci is a "Named Insured"?
3. Whether the Federal Policy provided coverage
because it is ambiguous?
4. Whether the Federal Policy provided coverage
because Bartolomucci's use of the vehicle fell
within the scope of the policy?
II. Discussion
A. The Role Of The Jury In A Declaratory Judgment Action
The parties dispute the preliminary issue of whether the
jury's answer of "yes" to the special interrogatory was binding
or advisory. Throughout the proceedings, the circuit court
treated the jury's answer as arising under Code § 8.01-188, and
as binding subject to being set aside only in the limited
circumstances set forth in Code § 8.01-680. Federal Insurance
argues that this was error because no constitutional,
statutory, or consent basis allowed the court to employ a
binding jury, and therefore the jury's answer was only advisory
under Code § 8.01-336(E). See Angstadt v. Atlantic Mut. Ins.
Co., 254 Va. 286, 291-92, 492 S.E.2d 118, 120-21 (1997); Wright
v. Castles, 232 Va. 218, 222, 349 S.E.2d 125, 128 (1986). This
argument impacts our review of the circuit court's treatment of
the jury answer. If the jury's answer was binding rather than
advisory, the court's setting aside that answer is analyzed
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under a more stringent standard. Compare DeJarnette v. Thomas
M. Brooks Lumber Co., 199 Va. 18, 21, 97 S.E.2d 750, 752 (1957)
(standard of review applicable to the rejection of an advisory
determination), with Wooldridge v. Echelon Service Co., 243 Va.
458, 461, 416 S.E.2d 441, 443 (1992) (standard of review
applicable to the setting aside of a binding verdict).
We decline to resolve this issue because we need not do so
to decide this appeal. See Woodard v. Commonwealth, 287 Va.
276, 280-81, 754 S.E.2d 309, 312 (2014). For the reasons set
forth in this opinion, the circuit court's action was without
error even under the more stringent standard of review. For
purposes of this appeal, we assume without deciding that the
jury's answer to the special interrogatory was binding.
B. The Federal Policy And Final Judgment
1. Standard Of Review
Because we treat the jury's answer to the special
interrogatory as binding rather than advisory, "the jury
verdict must be reinstated and judgment entered on the verdict
if there is any credible evidence in the record to support the
jury verdict." Wooldridge, 243 Va. at 461, 416 S.E.2d at 443.
To the extent we interpret and apply the terms of an
insurance contract, we address those issues of law de novo.
Doctors Co. v. Women's Healthcare Assocs., 285 Va. 566, 571,
740 S.E.2d 523, 525 (2013).
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2. The Federal Policy
The Federal Policy is comprised of two documents: the
Business Auto Declarations and the Business Auto Coverage Form.
The Business Auto Declarations instrument sets forth the basics
of the Federal Policy, such as the Named Insured, endorsements,
and a schedule of coverages. The Business Auto Coverage Form
instrument sets forth the terms of the policy and resembles a
traditional contract. We review these documents "as if their
several provisions were in one and the same instrument."
Bailey v. Town of Saltville, 279 Va. 627, 633, 691 S.E.2d 491,
493 (2010) (internal quotation marks and citation omitted).
a. The Excess Coverage Provision Does Not Provide An
Independent Basis To Establish Excess Coverage
In provision IV.B.5.a., the Business Auto Coverage Form
provides: "For any covered 'auto' you don't own, the insurance
provided by this Coverage Form is excess over any other
collectible insurance." Bartolomucci assigns error to the
circuit court's failure to hold that he fell within this
language, as in his view the Federal Policy operates as excess
insurance for vehicles not owned by Hogan Lovells.
Bartolomucci's argument is that the Federal Policy applied to
Bartolomucci's vehicle because, in the absence of "business or
personal affairs" language in this excess coverage provision,
the Federal Policy operates as excess insurance in addition to
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Bartolomucci's Allstate Policy independent of any other
provision in the Federal Policy and without any need to show
that his vehicle was used in Hogan Lovells's business or
personal affairs. The circuit court did not err in rejecting
this argument.
Bartolomucci argues that the Federal Policy is a "follow
form" policy for all vehicles not owned by Hogan Lovells. "The
phrase 'follow form' refers to the practice, common in excess
policies, of having the second-layer coverage follow
substantively the primary layer provided by the main insurer."
Insituform Techs., Inc. v. American Home Assur. Co., 566 F.3d
274, 278 (1st Cir. 2009); see also, e.g., Providence Wash. Ins.
Co. v. Gheen, 247 Va. 73, 76-77, 439 S.E.2d 333, 334-35 (1994)
(addressing a "follow form" provision). However, Bartolomucci
ignores the language in the Federal Policy directing excess
coverage to apply only to "any covered 'auto' you don't own."
Therefore, this provision applies to a vehicle not owned
by Hogan Lovells only if that non-owned vehicle is a "covered
auto," as defined by the Federal Policy, instead of applying as
excess coverage to non-owned vehicles as a matter of course.
This language which the parties' contracted to "cannot simply
be ignored." First Am. Title Ins. Co. v. Seaboard Sav. & Loan
Ass'n, 227 Va. 379, 386, 315 S.E.2d 842, 846 (1984).
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The Federal Policy covers non-owned vehicles that fall
within the terms of symbol 8, which governs "Hired 'Autos'
Only," and symbol 9, which governs "Nonowned 'Autos' Only."
These "symbols" are descriptive categories of vehicles listed
in the Business Auto Coverage Form. For example, symbol 8
describes vehicles that are "lease[d], hire[d], rent[ed,] or
borrow[ed]." And symbol 9 describes vehicles that are "not
own[ed], lease[d], hire[d], rent[ed,] or borrow[ed]" but that
are nonetheless still used "in connection with" the Named
Insured's business or personal affairs. Thus, the circuit
court properly decided whether Bartolomucci's vehicle fell
within coverage described by those symbols instead of holding
that the Federal Policy automatically covered Bartolomucci's
vehicle by operation of provision IV.B.5.a.
b. The Named Insured Was Hogan Lovells
In describing the scope of the Federal Policy's coverage,
the Business Auto Coverage Form refers to "you" and "your."
For example, under the terms of symbol 9, potential coverage
includes "those 'autos' you do not own . . . that are used in
connection with your business." Bartolomucci assigns error to
the circuit court's holding that these instances of "you" and
"your" refer to the law firm Hogan Lovells, rather than to that
law firm's partners, such as Bartolomucci himself. The circuit
court did not err in its holding.
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The Business Auto Coverage Form states: "Throughout this
policy the words 'you' and 'your' refer to the Named Insured
shown in the Declarations." The first page of the Business
Auto Declarations includes a line reading "NAMED INSURED" that
names only Hogan Lovells. Additional sections of the Business
Auto Declarations that identify the Named Insured also name
only Hogan Lovells. Thus, throughout the Federal Policy, the
terms "you" and "your" are pronouns operating as a substitute
for the stated name of the Named Insured, Hogan Lovells.
Moreover, Hogan Lovells is a limited liability partnership
law firm. "A partnership is an entity distinct from its
partners." Code § 50-73.87; see also Jimenez v. Corr, __ Va.
__, __, 764 S.E.2d 115, 122 (2014) (observing that a "legal
entity" has a "separate legal status" from its owners,
shareholders, agents, or members). A partner of the Named
Insured law firm such as Bartolomucci is not also a Named
Insured simply because of his partner status.
Acknowledging this, Bartolomucci argues that he is a Named
Insured because of other portions of the Business Auto Coverage
Form. Specifically, in the Definitions section the term
"Insured" includes "any person . . . qualifying as an insured
in the Who Is An Insured provision of the applicable coverage."
In turn, a portion of the relevant Who Is An Insured provision
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includes "[a] partner . . . for a covered 'auto' owned by him
or her." Bartolomucci argues that he is therefore an Insured.
Assuming Bartolomucci's argument is correct, however, only
means that Bartolomucci is an "Insured" under the policy. 2 The
words "you" and "your" do not refer to the parties who are an
"Insured," but only to the "Named Insured [as] shown in the
Declarations." This distinction based upon the word choice
utilized in the instrument must be recognized because "all
words used in [the written instrument] must be given effect if
reasonably possible." Barrett v. Vaughan & Co., Bankers, 163
Va. 811, 817, 178 S.E. 64, 66 (1935) (internal quotation marks
and citations omitted). Different terms given special meanings
by the parties are reasonably understood to mean different
things. Bartolomucci may be an "Insured," but he is not a
"Named Insured [as] shown in the Declarations."
c. Coverage For "Autos . . . While Used In Your Business Or
Your Personal Affairs" Is Not Ambiguous
In the Business Auto Declarations, the Federal Policy's
$1,000,000 liability coverage extends to "Covered Autos"
falling within symbols 8 and 9. Only symbol 9 is relevant to
whether the Federal Policy covered Bartolomucci's vehicle at
the time of the collision. Symbol 9, describing "Nonowned
'Autos' Only," extends coverage, in part, to "'autos' owned by
2
We do not rule on whether a partner of the Named Insured
is actually an "Insured" for purposes of the Federal Policy.
9
your . . . partners . . . but only while used in your business
or your personal affairs." Bartolomucci and Vo assign error to
the circuit court's failure to hold that this provision is
ambiguous. If this phrase is ambiguous, then the language must
be construed "in favor of coverage and against the insurer."
Virginia Farm Bureau Mut. Ins. Co. v. Williams, 278 Va. 75, 81,
677 S.E.2d 299, 302 (2009).
"Contract language is ambiguous when it may be understood
in more than one way or when it refers to two or more things at
the same time." Robinson-Huntley v. George Washington Carver
Mut. Homes Ass'n, 287 Va. 425, 429, 756 S.E.2d 415, 418 (2014)
(internal quotation marks and citation omitted). Contract
language is not ambiguous simply because the parties or courts
in different jurisdictions disagree about how to understand the
language. Id.; Floyd v. Northern Neck Ins. Co., 245 Va. 153,
158, 427 S.E.2d 193, 196 (1993). Pursuant to these principles,
symbol 9 is not ambiguous and the circuit court did not err.
Bartolomucci and Vo argue that the phrase "your business
or your personal affairs" is ambiguous, if "your" refers to
Hogan Lovells, because a legal entity cannot have truly
"personal" affairs. See FCC v. AT&T Inc., 562 U.S. 397, __,
131 S. Ct. 1177, 1185 (2011) ("[We] far more readily think of
corporations as having 'privileged or confidential' documents
than personally private ones."). We reject this narrow
10
construction of this undefined contract language because it
ignores the context in which the language is used.
We give undefined contract terms "their ordinary meaning"
in light of "the contract as a whole." Schuiling v. Harris,
286 Va. 187, 193, 747 S.E.2d 833, 836 (2013). The Federal
Policy is an insurance contract executed by a legal entity to
provide coverage in specific, limited circumstances for its
employees and partners. When used in this type of contract,
the understanding of the ordinary meaning of "business affairs"
refers to a legal entity's income-producing activities, and
"personal affairs" refers to a legal entity's non-income-
producing activities that benefit the business.
Consequently, symbol 9 is not ambiguous just because it
refers to the "personal affairs" of Hogan Lovells, a law firm.
In light of this "plain reading of the disputed provision
[that] effectuat[es] the intention of the parties," our holding
is not altered by the fact that courts in other jurisdictions
disagree as to whether this contract language is ambiguous.
Floyd, 245 Va. at 158, 427 S.E.2d at 196.
d. Symbol 9 Does Not Cover Bartolomucci's Vehicle
Symbol 9 reads in its entirety:
[1] Only those "autos" you do not own, lease, hire,
rent or borrow that are used in connection with your
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business. [2] This includes "autos" owned by your
"employees," partners (if you are a partnership),
members (if you are a limited liability company), or
members of their households but only while used in
your business or your personal affairs.
(Bracketed numbers added.) Bartolomucci and Vo assign error to
the circuit court's failure to consider the first sentence,
Sentence [1], as an independent basis for holding that the
Federal Policy covers Bartolomucci's vehicle. Bartolomucci and
Vo also assign error to the circuit court's entry of final
judgment in favor of Federal Insurance, because some evidence
supported the jury's answer that Bartolomucci used his vehicle
within the scope of the second sentence, Sentence [2]. The
circuit court did not err on either basis.
Sentence [1] applies, generally, to vehicles not owned by
Hogan Lovells. But Sentence [2] applies to a specific subset
of non-owned vehicles, that is, vehicles that are not owned by
Hogan Lovells but that are owned by a Hogan Lovells's employee,
partner, member, or members of an employee's, partner's, or
member's household. Thus, vehicles governed by Sentence [2]'s
specific provision are carved out from the scope of
Sentence [1]'s general provision. See Jimenez, __ Va. at __,
764 S.E.2d at 121. Because Bartolomucci was a Hogan Lovells
partner and was driving a vehicle he owned, Bartolomucci's
vehicle is governed by Sentence [2] rather than Sentence [1].
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Further, Bartolomucci's use of the vehicle did not satisfy
all of the requirements of Sentence [2], which covers non-owned
vehicles that are "used in [Hogan Lovells's] business or [Hogan
Lovells's] personal affairs." 3 At the time of the collision,
Bartolomucci was using his vehicle to commute from his home to
Hogan Lovells's office, which was not a "use[] in" Hogan
Lovells's business or personal affairs. To avoid this
conclusion, Bartolomucci and Vo emphasize two aspects of this
commute.
First, Bartolomucci and Vo argue that Bartolomucci's home
operated as a Hogan Lovells work location because Bartolomucci
did not have set work hours, and Bartolomucci was allowed and
encouraged to work at his home office where he would engage in
Hogan Lovells's business "[q]uite a lot." Bartolomucci thus
contends that he was not commuting from home to work, but was
instead traveling between work locations. Second, Bartolomucci
and Vo argue that the trip itself was more than a typical
commute to work so that the drive was actually "in" Hogan
Lovells's business. Bartolomucci had a Blackberry electronic
device, issued and paid for by Hogan Lovells, turned on and
3
Federal Insurance argues that the phrase "used in your
business or your personal affairs" requires a "course of
employment" or "scope of employment" test. But we evaluate
contracts based on what the instruments actually say, not on
what may have been intended. Jimenez, __ Va. at __, 764 S.E.2d
at 124. As the instruments before us do not include those
phrases, the Federal Policy does not utilize such tests.
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within Bartolomucci's physical reach. Also, although
Bartolomucci could not recall what he was thinking at the time
of the collision, Bartolomucci testified that he habitually
thought about work related issues on his commute to work.
Contrary to these arguments, the facts of this case do not
amount to anything more than a typical commute from home to
work, which was not covered under the terms of the Federal
Policy. The only work related activity that Bartolomucci
accomplished before leaving home was to check his work email
and call his office voicemail. But the record does not
indicate that Bartolomucci read or responded to any work
related emails, that the voicemail itself was work related, or
that Bartolomucci billed his time for these activities. In
addition, beyond the fact that Bartolomucci occasionally worked
at home, the record fails to show any relationship between
Hogan Lovells and Bartolomucci's home to establish that place
as a Hogan Lovells work location.
Moreover, Bartolomucci's use of his vehicle to commute
from home to work was not a "use[] in" Hogan Lovells's business
or personal affairs. Bartolomucci did not use his Blackberry
during the commute. Merely having access to modern technology
such as a Blackberry, which would allow Bartolomucci to conduct
work activity if that device was used, "does not transform" an
employee's "private activity into company business." Le Elder
14
v. Rice, 26 Cal. Rptr. 2d 749, 753 (Cal. Ct. App. 1994). And
merely thinking about work does not make a commute "in" the
business, as contemplated by the policy language. The record
does not indicate that Bartolomucci billed for any activity or
otherwise performed any work during his commute. Also,
Bartolomucci was not reimbursed by Hogan Lovells for his
commute.
In sum, Bartolomucci's use of his vehicle to drive from
home to work did not fall within the coverage described in
symbol 9. "When the sufficiency of a plaintiff's evidence is
challenged upon a motion to strike the evidence at the
conclusion of the plaintiff's case-in-chief, the trial court
should in every case overrule the motion where there is any
doubt on the question." Brown v. Koulizakis, 229 Va. 524, 531,
331 S.E.2d 440, 445 (1985). But based on this record, no
evidence supported Bartolomucci's claim that the Federal Policy
covered his vehicle at the time of the collision, and it was
"conclusively apparent" that Bartolomucci had proven no cause
of action against Federal Insurance. Id. The circuit court
should have granted the motion to strike made at the conclusion
of Bartolomucci's case-in-chief. As the jury finding was
contrary to the evidence, the court properly set aside the jury
finding and entered final judgment in favor of Federal
Insurance. Code § 8.01-680.
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III. Conclusion
The Federal Policy did not cover Bartolomucci's use of the
vehicle at the time of the collision. A morning commute by a
law firm partner from home to work does not constitute "use[]"
of the partner's vehicle "in" a law firm's business or personal
affairs. We affirm the circuit court's entry of final
judgment.
Affirmed.
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