Farm Family Casualty Insurance Company v. Edward Sea

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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 21-1281
FARM FAMILY CASUALTY INSURANCE COMPANY,
Plaintiff - Appellee,
v.
EDWARD J. SEA, Personal Representative of Tyrone N. Sea and Administrator of his
Estate; TYRONE N. SEA; EDWARD J. SEA, Personal Representative of Andromeda K.
Kesner and Administrator of her Estate; ANDROMEDA K. KESNER; EDWARD J. SEA,
individually and as guardian and next friend of J.K.; RACHEL KESNER, individually and
as guardian and next friend of J.K.; J.K., a minor,
Defendants - Appellants,
and
JOHN K. ELWOOD, a/k/a Jack Elwood; BETTY ELWOOD; JOHN KEVIN ELWOOD;
STEPHEN LEE DIBLASI; DEBORAH GRACE ELLIOT-SMITH; RUTH EUGENIA
WHITNER; LAURA ANN DINERT; NANCY SUE ELWOOD,
Defendants.
Appeal from the United States District Court for the Southern District of West Virginia, at
Beckley. Frank W. Volk, District Judge. (5:19-cv-00892)
Submitted: November 8, 2022 Decided: January 25, 2023
Before THACKER and RUSHING, Circuit Judges, and FLOYD, Senior Circuit Judge.
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Affirmed by unpublished per curiam opinion.
ON BRIEF: Weldon Mark Burnette, MARK BURNETTE, P.A., Ocala, Florida, for
Appellants. David L. Wyant, Jason P. Pockl, BAILEY & WYANT, PLLC, Wheeling,
West Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
This insurance case arises out of a tragic house fire in which two children died and
two other people were injured. The house was covered by two liability policies (the “Farm
Policy” and the “Commercial Policy”) and one umbrella policy, all issued by Farm Family
Casualty Insurance Company (“FFCIC”). After claimants to the policies sued FFCIC in
state court, the parties reached a settlement agreement in which FFCIC agreed to pay $1
million under the Farm Policy, plus another $1 million under the umbrella policy.
However, the parties could not agree on whether the Commercial Policy was payable;
consequently, the settlement agreement further provided that FFCIC would commence the
instant declaratory judgment action against the claimants (“Defendants”) to resolve this
issue.
The district court granted summary judgment to FFCIC based on the Commercial
Policy’s anti-stacking endorsement, which capped FFCIC’s total per-occurrence liability
at $1 million. Defendants timely appealed, disputing the applicability and enforceability
of the anti-stacking endorsement. For the reasons that follow, we affirm.
“We review de novo a district court’s award of summary judgment, viewing the
facts in the light most favorable to the non-moving party.” Chapman v. Oakland Living
Ctr., Inc., 48 F.4th 222, 228 (4th Cir. 2022). “Summary judgment is appropriate only when
‘the movant shows that there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.’” Id. (quoting Fed. R. Civ. P. 56(a)). As the
parties agree, the substantive law of West Virginia applies here. See Uncork & Create
LLC v. Cincinnati Ins. Co., 27 F.4th 926, 931 & n.5 (4th Cir. 2022).
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Initially, Defendants contend that the anti-stacking endorsement is irrelevant
because, in their view, this case does not involve “stacking” as that term is understood in
West Virginia. We disagree. The Supreme Court of Appeals of West Virginia has
approvingly cited a definition of stacking that covers “an insured’s attempted recovery of
damages under more than one policy, endorsement or coverage.” Starr v. State Farm
Fire & Cas. Co., 423 S.E.2d 922, 925 n.2 (W. Va. 1992) (internal quotation marks
omitted). And recovery under multiple liability policies is exactly what Defendants are
seeking here. For this reason, we conclude that the anti-stacking endorsement applies to
this dispute.
Next, Defendants maintain that West Virginia law broadly proscribes anti-stacking
language in insurance policies. On the contrary, the prohibition to which Defendants refer
is confined to uninsured and underinsured motorist coverage, an area of West Virginia
insurance law that, by statute, contains additional protections for policyholders based on
the state’s public policy. See State Auto. Mut. Ins. Co. v. Youler, 396 S.E.2d 737, 746 (W.
Va. 1990). But “in the case of liability insurance coverage,” “antistacking language . . .
does not violate any applicable insurance statute or regulation.” Id. (cleaned up). Thus,
we reject Defendants’ attempt to import this narrow anti-stacking limitation into the
context of general liability policies.
Turning to the policy language, Defendants assert that the anti-stacking
endorsement is ambiguous when read together with the policies’ other-insurance
provisions. Specifically, Defendants maintain that the endorsement and the other-
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insurance provisions establish separate and conflicting payment schemes for situations in
which multiple policies cover the same loss.
Again, we disagree. When coverage is available from multiple FFCIC policies, the
anti-stacking endorsement caps FFCIC’s total per-occurrence liability without specifying
how much will come from each policy. By contrast, the other-insurance provisions detail
how much each applicable policy will pay without purporting to limit FFCIC’s total
liability. In other words, these provisions are complementary, not conflicting, and we
therefore discern no ambiguity in the anti-stacking endorsement.
Finally, Defendants contend that the anti-stacking endorsement violates West
Virginia public policy against fraudulent insurance contracts, reasoning that the
endorsement effectively renders the Commercial Policy worthless. This argument might
hold water if the two liability policies were merely redundant of one another. But that is
not the case: the Commercial Policy provides coverage for several additional properties
not covered by the Farm Policy. Moreover, the two policies offer different types of
coverage. And, by having both policies, Defendants enjoy greater protection against
multiple, unrelated losses occurring during the same policy period. Thus, we cannot
conclude that the Commercial Policy is so lacking in value that it violates public policy.
Accordingly, we affirm the district court’s judgment. We dispense with oral
argument because the facts and legal contentions are adequately presented in the materials
before this court and argument would not aid the decisional process.
AFFIRMED
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