Opinion
47225 Record No. 901541
September 20, 1991
Present: Carrico, C.J., Compton, Stephenson, Russell, Whiting, and Lacy, JJ., and Poff, Senior Justice
Justice Russell participated in the hearing and decision of this case prior to the effective date of his retirement on July 1, 1991.
Since the primary rather than the secondary underinsured Motorist carrier is entitled to credit under Code Sec. 38.2-2206(B) for the tort-feasor's liability coverage payment, the trial court erred in holding the primary insurer responsible for payment of the injured party's underinsured motorist claim and that decision is reversed and the case remanded.
Insurance — Automobile — Underinsured — Uninsured — Allocation of Liability Coverage — Primary and Secondary Carriers of Underinsured Coverage — Statutory Construction (Code Sec. 38.2-2206(B))
The insured was injured when the motorcycle he was driving was struck by an automobile. Three insurance policies were possibly involved: that which insured the driver of the automobile against liability for bodily injury up to $25,000, a policy providing the motorcycle driver with $25,000 uninsured motorist coverage while he was operating his motorcycle, and another which provided an equal amount of uninsured coverage to the motorcyclist as a named insured on his wife's policy. The insurance companies and the injured party agreed that the liability coverage on the automobile should be credited against his claim for underinsured motorist coverage and that, because of that credit, he was entitled to recover only $25,000 under his underinsured motorist coverage. The only issue submitted to the trial court was the priority of the underinsured coverages and any credits as determined in accordance with Code Sec. 38.2-2206(B). The trial court held that the insurer which carried the policy on the motorcycle was primarily responsible for the payment of the underinsured motorist payment. That insurance company appeals.
1. Code Sec. 38.2-2206(B) provides that a motor vehicle is underinsured when, and to the extent that, the total amount of bodily injury coverage available is less than the total amount of uninsured motorist coverage afforded any person injured. If the person is entitled to such coverage under more than one policy, an order of priority is established by the code.
2. The first priority under the statute is the policy covering a motor vehicle occupied by the injured person at the time of the accident. Next is a policy covering another motor vehicle under which the injured person is the named insured. After that is a policy covering another motor vehicle not involved under which the injured person is an insured other than the named insured.
3. If statutory language is clear and unambiguous, there is no need for construction by the court; the plain meaning and intent of the enactment will be given it. Unless a literal construction of that language would result in internally conflicting statutory provisions amounting to a manifest absurdity, the courts cannot adopt a construction which amounts to holding the legislature did not mean what it has actually expressed.
4. Here the language of the code is clear and it makes the insurer of the motorcycle the primary uninsured/underinsured motorist carrier and requires that the automobile driver's liability coverage be credited against the other two insurers' respective coverages in the order set forth in the code.
5. Any statutory credit a particular carrier receives against liability is a discretionary matter to be determined by the legislature, and not by the courts.
6. The clear and unambiguous statutory language requires allocation of the credit to the insurer of the motorcycle, the carrier that had to primary obligation to pay the injured's underinsured motorist claim.
Appeal from a judgment of the Circuit Court of the City of Norfolk. Hon. Leonard B. Sachs, judge presiding.
Reversed and remanded.
James A. Howard, II (Howard Howard, on brief), for appellant.
Lance A. Jackson (Edward L. Breeden, III, on brief), for appellee Allstate Insurance Company.
No brief or argument for appellee Nickolas Anthony Sylva.
In this declaratory judgment suit we determine whether the primary or the secondary underinsured motorist carrier is entitled to the Code Sec. 38.2-2206(B) credit for the tort-feasor's liability coverage payment.
On July 2, 1989, Nickolas Anthony Sylva was injured when the motorcycle that he was operating was struck by a car driven by Matthew Rockstroh. Three insurance policies are involved in this case.
Allstate Insurance Company (Allstate) insured Rockstroh against liability for bodily injury, with a single bodily injury limit of $25,000. Dairyland Insurance Company (Dairyland) provided $25,000 uninsured motorist coverage to Sylva while operating his motorcycle, and Allstate provided an identical amount of the same coverage to Sylva as a named insured in a policy issued to Sylva's wife.
During settlement negotiations, the parties tentatively agreed to settle Sylva's claim for $50,000. The insurance companies and Sylva agreed that, pursuant to the provisions of Code Sec. 38.2-2206(B), if Allstate's $25,000 liability coverage on Rockstroh's vehicle were tendered to Sylva, it should be credited against Sylva's claim for underinsured motorist coverage. They also agreed that, because of the credit, Sylva was entitled to recover only $25,000 of his underinsured motorist coverage.
Because Allstate and Dairyland each claimed the benefit of the credit, they could not agree which of them would be liable to pay the remaining $25,000 of the proposed $50,000 settlement. Accordingly, Sylva filed this suit against Allstate and Dairyland to obtain a construction of the statute and a determination of which carrier was obligated to pay his underinsured motorist claim should Sylva's case be settled for $50,000.
The parties submitted the matter to the trial court on the pleadings, stipulations of fact, and argument of counsel. The parties also stipulated "that the only issue to be determined by the court was the priority of said underinsured coverages and any credits on same as determined in accordance with [Code Sec. 38.2-2206(B)]."
The trial court held that Dairyland "is the company which is primarily responsible for the payment of the underinsured motorist payment . . . ." Dairyland appeals.
[1-2] In pertinent part, Code Sec. 38.2-2206(B) provides:
A motor vehicle is "underinsured" when, and to the extent that, the total amount of bodily injury . . . coverage applicable to the operation or use of the motor vehicle and available for payment for such bodily injury . . . is less than the total amount of uninsured motorist coverage afforded any person injured as a result of the operation or use of the vehicle.
"Available for payment" means the amount of liability insurance coverage applicable to the claim of the injured person for bodily injury . . .
If an injured person is entitled to underinsured motorist coverage under more than one policy, the following order of priority of policies applies and any amount available for payment shall be credited against such policies in the following order of priority:
1. The policy covering a motor vehicle occupied by the injured person at the time of the accident;
2. The policy covering a motor vehicle not involved in the accident under which the injured person is a named insured;
3. The policy covering a motor vehicle not involved in the accident under which the injured person is an insured other than a named insured.
Where there is more than one insurer providing coverage under one of the payment priorities set forth, their liability shall be proportioned as to their respective underinsured motorist coverages.
Recovery under the endorsement or provisions [of the policies providing underinsured motorist protection] shall be subject to the conditions set forth in this section.
(Emphasis omitted; emphasis added.)
If statutory "language is clear and unambiguous, there is no need for construction by the court; the plain meaning and intent of the enactment will be given it." Brown v. Lukhard, 229 Va. 316, 321, 330 S.E.2d 84, 87 (1985). And, unless a literal construction of that language would result in internally conflicting statutory provisions amounting to a manifest absurdity, the "courts cannot [adopt] a construction which amounts to holding the legislature did not mean what it has actually expressed." Watkins v. Hall, 161 Va. 924, 930, 172 S.E. 445, 447 (1934) (quoting Floyd v. Harding, 69 Va. (28 Gratt.) 401, 405 (1877)); accord, Barr v. Town Country Properties, 240 Va. 292, 295, 396 S.E.2d 672, 674 (1990).
We find the language of Code Sec. 38.2-2206(B) to be clear and unambiguous. Read literally, it makes Dairyland the primary uninsured/underinsured motorist carrier and requires that Rockstroh's $25,000 liability coverage be credited against Dairyland's and Allstate's respective $25,000 underinsured motorist coverages "in the following order of priority: [first to] [t]he policy covering a motor vehicle occupied by the injured person . . . ." Here, Dairyland's policy covered the motorcycle "occupied" (ridden) by Sylva and, under a literal reading of the statute, Dairyland would thus be entitled to priority in the credit for Rockstroh's liability coverage.
Allstate, however, contends that because Sylva was not "entitled to underinsured motorist coverage under more than one policy," the statutory priority provisions do not apply in this case. Under Allstate's theory, the credit is first deducted from Sylva's entitlement to underinsured motorist coverage, reducing that entitlement to $25,000, the coverage of only one policy — that of Dairyland, the primary carrier.
There are two flaws in this reasoning. First, the emphasis of the disputed portion of the statute is upon an injured person's entitlement to multiple underinsured motorist coverage. After a determination of such an entitlement, the statute then fixes the multiple carriers' order of liability and finally designates the priority of each carrier in the credit. Second, Allstate's premise confuses Sylva's entitlement to underinsured motorist coverage with his entitlement to payment from one of his underinsured motorist carriers. Sylva is entitled to coverage under both policies, but he may be paid under only one of them because of the statute's credit allocation.
Next, Allstate contends that if, as we have held, the provisions of the statute are read to give Dairyland priority in the credit, it would create a conflict in its provisions and thus result in an absurdity. We do not agree.
A conflict arises in a document only when it deals inconsistently with the same subject matter. Here, the statutory allocation of liability among the members of the group is one matter and the allocation of a credit against that liability arising from an outside source is a different matter.
Finally, Allstate argues that because of Dairyland's primary liability to pay Sylva's underinsured motorist claim, an award of the credit to Dairyland would be illogical. However, where the disputed provisions of a statute are plain and unambiguous, as these are, we are not concerned with the logic or wisdom of the legislature; we apply the statute as written. See City of Portsmouth v. City of Chesapeake, 232 Va. 158, 163, 349 S.E.2d 351, 353 (1986); Carter v. Nelms, 204 Va. 338, 346, 131 S.E.2d 401, 406 (1963). And, any statutory credit a particular carrier receives against that liability is a discretionary matter to be determined by the legislature, and not by the courts. See Heublein, Inc. v. Department of Alcoholic Beverage Control, 237 Va. 192, 201, 376 S.E.2d 77, 81 (1989).
In sum, we are of opinion that the clear and unambiguous statutory language requires allocation of the credit to Dairyland, the carrier that had the primary obligation to pay Sylva's underinsured motorist claim. Accordingly, we conclude that the trial court erred in holding that Dairyland would be responsible for payment of Sylva's underinsured motorist claim, should his claim against Rockstroh be settled for $50,000.
Therefore, we will reverse the judgment of the trial court and remand the case for entry of a declaratory judgment consistent with this opinion.
Reversed and remanded.