Erie Insurance Property & Casualty Co. v. Stage Show Pizza, JTS, Inc.

553 S.E.2d 257, 210 W. Va. 63, 2001 W. Va. LEXIS 95
CourtWest Virginia Supreme Court
DecidedJuly 9, 2001
Docket28482
StatusPublished
Cited by31 cases

This text of 553 S.E.2d 257 (Erie Insurance Property & Casualty Co. v. Stage Show Pizza, JTS, Inc.) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Erie Insurance Property & Casualty Co. v. Stage Show Pizza, JTS, Inc., 553 S.E.2d 257, 210 W. Va. 63, 2001 W. Va. LEXIS 95 (W. Va. 2001).

Opinions

STARCHER, Justice.

In this appeal from the Circuit Court of Raleigh County, we are asked to examine a declaratory judgment finding that there was no liability coverage for an employee injured at work under an “employers’ liability” insurance policy purchased by an employer. As set forth below, we reverse the circuit court’s declaratory judgment.

I.

Facts & Background

On February 6, 1997, appellant John Paul Harvey was employed by the defendant below, Stage Show Pizza, JTS, Inc. (“Stage Show Pizza”),1 in Raleigh County, West Vir[66]*66ginia. In the course of his employment, appellant Harvey was involved in an accident where hot grease was spilled on the appellant, causing him serious injuries.

The appellant subsequently sued Stage Show Pizza for common law negligence, alleging it had failed to pay workers’ compensation premiums, and had therefore lost any immunity provided by West Virginia’s workers’ compensation laws. The appellant also alleged that in violation of West Virginia’s “deliberate intention” statute, W.Va.Code, 23-4-2 [1994], Stage Show Pizza had intentionally exposed the appellant to a specific unsafe working condition which violated both generally accepted industry safety standards and specific provisions of the United States Occupational Safety and Health Administration’s regulations.

At the time of the appellant’s injuries, Stage Show Pizza was insured under a policy issued by the appellee, Erie Insurance Property and Casualty Company (“Erie”). Erie had sold to Stage Show Pizza a commercial general liability insurance policy that, the parties agree, specifically excluded from coverage lawsuits filed by employees.2 However, the policy also contained a separate “employers’ liability” endorsement entitled “Employers Liability' — Stop Gap Coverage” with limits of $1,000,000 per person and per accident. Under the heading “Our Promise,” Erie’s endorsement provides that:

We will pay for damages because of bodily injury to your employees for which the law holds you responsible and recovery is permitted by law.

On June 10, 1999, Erie filed the instant declaratory judgment action against Stage Show Pizza and appellant Harvey, seeking a declaration that Erie had no obligation to provide a defense or coverage to Stage Show Pizza for the action filed by the appellant. In support of its action, Erie argued that an exclusion in the employers’ liability policy precluded coverage. That exclusion states: We do not cover: ...

4. any obligation for which you or any insurer may become liable under any workers’ compensation, unemployment compensation, disability benefits law or similar law.

Erie subsequently filed a motion for summary judgment seeking to avoid its obligations under the policy based upon this exclusion.

In an order dated January 31, 2000, the circuit court granted Erie’s motion for summary judgment. The circuit court concluded that the appellant’s “deliberate intention” cause of action and his negligence action would be “obligation[s] for which” Stage Show Pizza “may become liable under any workers’ compensation” law. Erie was therefore released from its obligations under the insurance contract with Stage Show Pizza.

The appellant now appeals the circuit court’s order.

II.

Standard of Review

We review de novo the circuit court’s declaratory judgment order interpreting Erie’s insurance policy. We have previously stated that any circuit court’s entry of a declaratory judgment is reviewed de novo, since the principal purpose of a declaratory judgment action is to resolve legal questions. Syllabus Point 3, Cox v. Amick, 195 W.Va. 608, 466 S.E.2d 459 (1995). Of course, when a declaratory judgment proceeding involves the determination of an issue of fact, that issue may be tried and determined by a judge or jury in the same manner as issues of fact are tried and determined in other civil actions. W.Va.Code, 55-13-9 [1941]. Any determinations of fact made by the circuit court or jury in reaching its ultimate resolution are reviewed pursuant to a clearly erroneous standard. Cox, 195 W.Va. at 612, 466 S.E.2d at 463.

[67]*67In this case we are asked to review the circuit court’s interpretation of an insurance contract. In Syllabus Point 2 of Riffe v. Home Finders Associates, Inc., 205 W.Va. 216, 517 S.E.2d 313 (1999) yre stated 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.” “Determination of the proper coverage of an insurance contract when the facts are not in dispute is a question of law.” Murray v. State Farm Fire & Cas. Co., 203 W.Va. 477, 483, 509 S.E.2d 1, 7 (1998) (citations omitted).

III.

Discussion

In the instant case we are asked to interpret an insurance policy exclusion contained in an “employers’ liability” policy. “[W]e scrutinize more carefully any policy language that has the effect of excluding an insured from coverage.” Riffe v. Home Finders Associates, Inc., 205 W.Va. at 222, 517 S.E.2d at 319. As we held in Syllabus Point 5 of National Mut. Ins. Co. v. McMahon & Sons, Inc., 177 W.Va. 734, 356 S.E.2d 488 (1987), “[w]here the policy language involved is exclusionary, it will be strictly construed against the insurer in order that the purpose of providing indemnity not be defeated.” Where a policy provision will largely nullify the purpose of indemnifying the insured, the application of that provision will be severely restricted. Riffe v. Home Finders Associates, Inc., 205 W.Va. at 222, 517 S.E.2d at 319 (1999).

The appellant argues that the position asserted by Erie regarding its policy language, and subsequently adopted by the circuit court in its January 31, 2000 order, is a “catch twenty-two” position. On the one hand, the appellant contends that Erie promised to Stage Show Pizza that it would “pay for damages because of bodily injury to your employees” — yet on the other hand, Erie excludes from coverage any bodily injuries to employees “in the course of and resulting from their covered employment” with Stage Show Pizza. See W.Va.Code, 23-4-1 [1989].3 The appellant argues that under Erie’s policy, Erie is claiming to provide employers with coverage for employee injuries, but is, through an exclusion “buried in its policy,” always excluding employee injuries from coverage.

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Bluebook (online)
553 S.E.2d 257, 210 W. Va. 63, 2001 W. Va. LEXIS 95, Counsel Stack Legal Research, https://law.counselstack.com/opinion/erie-insurance-property-casualty-co-v-stage-show-pizza-jts-inc-wva-2001.