SER State Auto Mutual v. Steptoe
Annotate this CaseSeptember 1993 Term
___________
No. 21817
___________
STATE OF WEST VIRGINIA EX REL.
STATE AUTO MUTUAL INSURANCE COMPANY,
Relator
v.
HONORABLE THOMAS W. STEPTOE JR., JUDGE OF THE
CIRCUIT COURT OF JEFFERSON COUNTY;
BRENDA TWIGG, INDIVIDUALLY AND AS NEXT
FRIEND OF ASHLEY TWIGG AND STEPHEN TWIGG, INFANTS,
Respondents
_______________________________________________________
Petition for Writ of Prohibition
WRIT DENIED
________________________________________________________
Submitted: October 5, 1993
Filed: November 23, 1993
William Richard McCune, Jr.
Dale Buck
Tammy Mitchell Bittorf
Jackson & Kelly
Martinsburg, West Virginia
Attorney for Relator
Lawrence M. Schultz
Askin, Burke & Schultz
Martinsburg, West Virginia
Attorney for Respondents Brenda Twigg,
individually and as next friend of
Ashley Twigg and Stephen Twigg, infants
The Opinion of the Court was delivered PER CURIAM.
SYLLABUS BY THE COURT
1. "The prohibition standard set out in Syllabus Point
1 of Hinkle v. Black, 164 W. Va. 112, 262 S.E.2d 744 (1979),
permits an original prohibition proceeding in this Court to correct
substantial legal errors where the facts are undisputed and
resolution of the errors is critical to the proper disposition of
the case, thereby conserving costs to the parties and economizing
judicial resources." Syllabus Point 1, State ex rel. Allstate
Insurance Co. v. Karl, ___ W. Va. ___, ___ S.E.2d ___ (No. 21818
10/29/93).
2. "'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.' Syllabus Point 4, State Automobile Mutual Insurance Co.
v. Youler, 183 W. Va. 556, 396 S.E.2d 737 (1990)." Syllabus Point
2, State ex rel. Allstate Insurance Co. v. Karl, ___ W. Va. ___,
___ S.E.2d ___ (No. 21818 10/29/93).
3. "'W. Va. Code, 33-6-31(d) (1988), outlines certain
rights given to an uninsured/underinsured insurance carrier where
a tortfeasor who is uninsured or underinsured is sued by a
plaintiff. It requires that a copy of the complaint be served upon
the insurance carrier. It also allows the carrier "the right to
file pleadings and to take other action allowable by law in the
name of the owner, or operator, or both, of the uninsured or
underinsured vehicle or in its own name."' Syllabus Point 1,
Postlethwait v. Boston Old Colony Insurance Co., ___ W. Va. ___,
432 S.E.2d 802 (1993)." Syllabus Point 3, State ex rel. Allstate
Insurance Co. v. Karl, ___ W. Va. ___, ___ S.E.2d ___ (No. 21818
10/29/93).
4. "An underinsured motorist carrier occupies the
position of an excess or additional insurer in regard to the
tortfeasor's liability carrier, which is deemed to have the primary
coverage. Consequently, the tortfeasor's liability carrier, having
primary coverage, should ordinarily control the litigation on
behalf of the tortfeasor insured." Syllabus Point 4, State ex rel.
Allstate Insurance Co. v. Karl, ___ W. Va. ___, ___ S.E.2d ___ (No.
21818 10/29/93).
5. "A primary insurance carrier has a duty to act in
good faith with respect to an excess or additional insurance
carrier when defending a claim on behalf of the primary insurance
carrier's insured." Syllabus Point 5, State ex rel. Allstate
Insurance Co. v. Karl, ___ W. Va. ___, ___ S.E.2d ___ (No. 21818
10/29/93).
6. "If an underinsured motorist carrier can demonstrate
that the liability insurance carrier of the tortfeasor is defending
the claim in a bad faith manner, the underinsured motorist carrier
may petition the court to allow it to assume primary control of the
defense." Syllabus Point 6, State ex rel. Allstate Insurance Co.
v. Karl, ___ W. Va. ___, ___ S.E.2d ___ (No. 21818 10/29/93).
7. "'A consent-to-settle provision of an automobile
insurance policy pertaining to underinsured motorist coverage
whereby an insured voids his underinsurance coverage by settling a
claim with a tortfeasor without first obtaining the insurer's
written consent when such claim involves either the insured's
underinsurance coverage or potentially involves that coverage is a
valid and enforceable means by which an insurer may protect its
statutorily-mandated right to subrogate claims pursuant to West
Virginia Code § 33-6-31(f) (1992).' Syllabus Point 3, Arndt v.
Burdette, ___ W. Va. ___, 434 S.E.2d 394 (1993)." Syllabus Point
7, State ex rel. Allstate Insurance Co. v. Karl, ___ W. Va. ___,
___ S.E.2d ___ (No. 21818 10/29/93).
8. "An underinsured motorist carrier may assume control
of the litigation on behalf of the tortfeasor where the
tortfeasor's liability carrier has declined to defend. An
underinsured motorist carrier is not foreclosed from filing an
answer on behalf of the tortfeasor when it appears that a default
judgment might be entered against the tortfeasor." Syllabus Point
8, State ex rel. Allstate Insurance Co. v. Karl, ___ W. Va. ___,
___ S.E.2d ___ (No. 21818 10/29/93).
9. "A liability carrier and an underinsured motorist
carrier may agree to jointly defend an action by having their
respective attorneys participate together in the defense. This
does not mean that they may file separate pleadings, indulge in
separate discovery, or examine witnesses separately." Syllabus
Point 9, State ex rel. Allstate Insurance Co. v. Karl, ___ W. Va.
___, ___ S.E.2d ___ (No. 21818 10/29/93).
10. "'"'Subrogation, being a creation of equity, will
not be allowed except where the subrogee has a clear case of right
and no injustice will be done to another.' Syllabus, Buskirk v.
State-Planters' Bank & Trust Co., 113 W. Va. 764, 169 S.E. 738
(1933)." Syllabus point 6, Fuller v. Stonewall Cas. Co. of W. Va.,
172 W. Va. 193, 304 S.E.2d 347 (1983).' Syllabus Point 2, Kittle
v. Icard, 185 W. Va. 126, 405 S.E.2d 456 (1991)." Syllabus Point
10, State ex rel. Allstate Insurance Co. v. Karl, ___ W. Va. ___,
___ S.E.2d ___ (No. 21818 10/29/93).
11. "The right of subrogation in W. Va. Code, 33-6-31(f)
(1988), is not available where the policyholder has not been fully
compensated for the injuries received and still has the right to
recover from other sources. Subrogation is permitted only to the
extent necessary to avoid a double recovery by such policyholder."
Syllabus Point 11, State ex rel. Allstate Insurance Co. v. Karl,
___ W. Va. ___, ___ S.E.2d ___ (No. 21818 10/29/93).
12. "An underinsured motorist carrier does not have a
due process right to assume independent control of the defense of
a tortfeasor who is represented by a liability carrier." Syllabus
Point 12, State ex rel. Allstate Insurance Co. v. Karl, ___ W. Va.
___, ___ S.E.2d ___ (No. 21818 10/29/93).
13. "W. Va. Code, 33-6-31(d) (1988), does not give an
underinsured motorist carrier the absolute right to file pleadings
on behalf of a tortfeasor who has liability coverage and is being
defended by a liability insurance carrier." Syllabus Point 13,
State ex rel. Allstate Insurance Co. v. Karl, ___ W. Va. ___, ___
S.E.2d ___ (No. 21818 10/29/93).
14. "The language of W. Va. Code, 33-6-31(d) (1988), that allows an uninsured or underinsured motorist carrier to answer a complaint in its own name is primarily designed to enable the carrier to raise policy defenses it may have against the plaintiff under its uninsured or underinsured policy." Syllabus Point 14, State ex rel. Allstate Insurance Co. v. Karl, ___ W. Va. ___, ___ S.E.2d ___ (No. 21818 10/29/93).
Per Curiam:
The issues raised in this original proceeding in
prohibition are virtually identical to those we recently discussed
in State ex rel. Allstate Insurance Co. v. Karl, ___ W. Va. ___,
___ S.E.2d ___ (No. 21818 10/29/93). The relator, State Auto
Mutual Insurance Company (State Auto), seeks to prohibit the entry
of an order by the respondent judge that foreclosed it from
participating in litigation as an underinsured motorist carrier.
The underlying case involves a civil action brought by
the respondent and plaintiff below, Brenda Twigg, individually and
as next friend of Ashley Twigg and Stephen Twigg, infants. The
Twiggs were passengers in a vehicle driven by a Danette Thomas,
when the Thomas vehicle was rear-ended by a car being driven by
Chad Buckhault. State Auto insures the Thomas vehicle, and that
policy has an underinsured motorist endorsement that provides
coverage for the Twiggs.
Consequently, when the Twiggs sued Mr. Buckhault, they
also served a copy of the complaint upon State Auto seeking payment
from Thomas's underinsured motorist coverage.See footnote 1 Mr. Buckhault's
automobile liability insurance carrier answered the complaint and
served interrogatories and a request for production of documents on
the Twiggs.
Thereafter, State Auto also served the Twiggs with a set
of interrogatories and a request for production of documents on
behalf of Mr. Buckhault. When the Twiggs objected to State Auto's
discovery request, the relator filed a motion to compel responses
under Rule 37 of the West Virginia Rules of Civil Procedure. In an
order dated February 26, 1993, the trial court denied that motion.
It is this order that State Auto seeks to prohibit.
We need not repeat what we recently said in State ex rel.
Allstate Insurance Co. v. Karl, supra. It is sufficient to set out
its Syllabus Points:
"1. The prohibition standard set
out in Syllabus Point 1 of Hinkle v. Black,
164 W. Va. 112, 262 S.E.2d 744 (1979), permits
an original prohibition proceeding in this
Court to correct substantial legal errors
where the facts are undisputed and resolution
of the errors is critical to the proper
disposition of the case, thereby conserving
costs to the parties and economizing judicial
resources.
"2. '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.' Syllabus Point 4, State Automobile
Mutual Insurance Co. v. Youler, 183 W. Va.
556, 396 S.E.2d 737 (1990).
"3. 'W. Va. Code, 33-6-31(d)
(1988), outlines certain rights given to an
uninsured/underinsured insurance carrier where
a tortfeasor who is uninsured or underinsured
is sued by a plaintiff. It requires that a
copy of the complaint be served upon the
insurance carrier. It also allows the carrier
"the right to file pleadings and to take other
action allowable by law in the name of the
owner, or operator, or both, of the uninsured
or underinsured vehicle or in its own name."'
Syllabus Point 1, Postlethwait v. Boston Old
Colony Insurance Co., ___ W. Va. ___, 432 S.E.2d 802 (1993).
"4. An underinsured motorist
carrier occupies the position of an excess or
additional insurer in regard to the
tortfeasor's liability carrier, which is
deemed to have the primary coverage.
Consequently, the tortfeasor's liability
carrier, having primary coverage, should
ordinarily control the litigation on behalf of
the tortfeasor insured.
"5. A primary insurance carrier has
a duty to act in good faith with respect to an
excess or additional insurance carrier when
defending a claim on behalf of the primary
insurance carrier's insured.
"6. If an underinsured motorist
carrier can demonstrate that the liability
insurance carrier of the tortfeasor is
defending the claim in a bad faith manner, the
underinsured motorist carrier may petition
the court to allow it to assume primary
control of the defense.
"7. 'A consent-to-settle provision
of an automobile insurance policy pertaining
to underinsured motorist coverage whereby an
insured voids his underinsurance coverage by
settling a claim with a tortfeasor without
first obtaining the insurer's written consent
when such claim involves either the insured's
underinsurance coverage or potentially
involves that coverage is a valid and
enforceable means by which an insurer may
protect its statutorily-mandated right to
subrogate claims pursuant to West Virginia
Code § 33-6-31(f) (1992).' Syllabus Point 3,
Arndt v. Burdette, ___ W. Va. ___, 434 S.E.2d 394 (1993).
"8. An underinsured motorist
carrier may assume control of the litigation
on behalf of the tortfeasor where the
tortfeasor's liability carrier has declined to
defend. An underinsured motorist carrier is
not foreclosed from filing an answer on behalf
of the tortfeasor when it appears that a
default judgment might be entered against the
tortfeasor.
"9. A liability carrier and an
underinsured motorist carrier may agree to
jointly defend an action by having their
respective attorneys participate together in
the defense. This does not mean that they may
file separate pleadings, indulge in separate
discovery, or examine witnesses separately.
"10. '"'Subrogation, being a
creation of equity, will not be allowed except
where the subrogee has a clear case of right
and no injustice will be done to another.'
Syllabus, Buskirk v. State-Planters' Bank &
Trust Co., 113 W. Va. 764, 169 S.E. 738
(1933)." Syllabus point 6, Fuller v.
Stonewall Cas. Co. of W. Va., 172 W. Va. 193,
304 S.E.2d 347 (1983).' Syllabus Point 2,
Kittle v. Icard, 185 W. Va. 126, 405 S.E.2d 456 (1991).
"11. The right of subrogation in
W. Va. Code, 33-6-31(f) (1988), is not
available where the policyholder has not been
fully compensated for the injuries received
and still has the right to recover from other
sources. Subrogation is permitted only to the
extent necessary to avoid a double recovery by
such policyholder.
"12. An underinsured motorist
carrier does not have a due process right to
assume independent control of the defense of a
tortfeasor who is represented by a liability
carrier.
"13. W. Va. Code, 33-6-31(d) (1988),
does not give an underinsured motorist carrier
the absolute right to file pleadings on behalf
of a tortfeasor who has liability coverage and
is being defended by a liability insurance
carrier.
"14. The language of W. Va. Code,
33-6-31(d) (1988), that allows an uninsured or
underinsured motorist carrier to answer a
complaint in its own name is primarily
designed to enable the carrier to raise policy
defenses it may have against the plaintiff
under its uninsured or underinsured policy."
Under the foregoing law, we hold that the circuit court
was correct in its ruling. Consequently, we refuse to issue a writ
of prohibition.
Writ denied.
Footnote: 1See W. Va. Code, 33-6-31(d) (1988).
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