Riverport Insurance v. C&M Industries, Inc.

87 Va. Cir. 281, 2013 Va. Cir. LEXIS 177
CourtNorfolk County Circuit Court
DecidedNovember 26, 2013
DocketCase No. (Civil) CL12-5624
StatusPublished

This text of 87 Va. Cir. 281 (Riverport Insurance v. C&M Industries, Inc.) is published on Counsel Stack Legal Research, covering Norfolk County Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Riverport Insurance v. C&M Industries, Inc., 87 Va. Cir. 281, 2013 Va. Cir. LEXIS 177 (Va. Super. Ct. 2013).

Opinion

By Judge Charles E. Poston

This action is before the Court upon the demurrers of C&M Industries, Inc., JNB Marine, Indemnity Insurance Company of North America, New York Marine & General Insurance Company, and Steadfast Insurance Company. Having considered the written submissions of counsel, the papers filed in this action, and the argument of counsel, the Court will overrule the demurrers. IINA’s motion to stay this action will also be denied.

Facts and Procedural History

For familiar reasons, the facts will be viewed in the light most favorable to the plaintiff, taking all allegations of the complaint as true for purposes of adjudicating the demurrers. In August 2010, Elgin Stodghill was injured while working on a barge owned by JNB Marine (JNB) and chartered by C&M Industries (C&M). Stodghill filed a tort action in this Court against JNB and C&M seeking damages from the accident and pleaded alternatively that he was either a longshoreman or a Jones Act seaman. Riverport, C&M’s insurer, initially filed a petition to intervene as a defendant in that action and the Court denied the prayer of that petition. In August 2012, [282]*282Riverport filed the instant declaratory judgment action against C&M, JNB, and Stodghill seeking a determination of coverage under its policy with C&M as well as Stodghill’s status as either a longshoreman or Jones Act seaman. Subsequently, the Court granted Stodghill’s Motion to Join JNB’s insurer, IINA, IINA’s excess insurer, New York Marine (NYM), and Riverport’s alleged excess insurer, Steadfast, in the declaratory judgment action. Stodghill then filed a counterclaim against Riverport and cross-claims against C&M, JNB, IINA, NYM, and Steadfast seeking a declaratory judgment declaring that he is entitled to payment on any judgment that may be recovered in the underlying tort action against C&M or JNB under the terms of various insurance policies issued by IINA, NYM, Steadfast, and Riverport. In response, C&M, JNB, IINA, NYM, and Steadfast filed demurrers to Stodghill’s cross-claims raising multiple issues. In brief, they argue that declaratory judgment is inappropriate for Stodghill’s cross-claims. Each party offers either its own version of this argument or adopts the arguments of the other defendants in its demurrer.

Discussion

When ruling on a defendant’s demurrer, the court interprets the facts as they are alleged in the pleadings in the light most favorable to the plaintiff and makes all reasonable inferences in the plaintiff’s favor. Tronfeld v. Nationwide Mut. Ins. Co., 272 Va. 709, 713, 636 S.E.2d 447, 449 (2006) (citing Ward’s Equipment, Inc. v. New Holland N. Am., Inc., 254 Va. 379, 382, 493 S.E.2d 516, 518 (1997)). The purpose of a demurrer is to test whether the plaintiff’s claim is legally sufficient to support the relief requested. Id. (citing Welding, Inc. v. Bland County Service Auth., 261 Va. 218, 226, 541 S.E.2d 909, 913 (2001)). Stodghill’s cross-claims allege facts that are legally sufficient to support the relief he requests.

A. C&M & JNB’s Demurrer to Stodghill’s Cross-Claims

C&M and JNB rely on Charlottesville Area Fitness Club Operators Ass’n v. Albemarle County Board of Supervisors, 285 Va. 87, 737 S.E.2d 1 (2013), to argue that this Court lacks jurisdiction over Stodghill’s cross-claim. They contend that, because there is no justiciable controversy, declaratory judgment is inappropriate. In Albemarle County, a private association of fitness clubs brought declaratory judgment actions against county and state officials seeking a declaration that agreements entered into for the development of a recreation center were not valid. Id. at 95-96. The Supreme Court held that a justiciable controversy did not exist because the party seeking a declaratory judgment was a third party challenging governmental action without having statutory authorization to do so. Id. at 105. That holding addresses an issue inapposite to the one presented in the case at bar.

[283]*283The issue now before the Court is whether a justiciable controversy exists for Stodghill’s cross-claims against C&M and JNB, neither of which is a governmental entity but are rather alleged tortfeasors in the underlying tort action. It is well settled that insurance providers raise a justiciable controversy when they seek a declaratory judgment to determine coverage issues under a written instrument. See, e.g., Government Employees Ins. Co. v. Moore, 266 Va. 155, 161, 580 S.E.2d 823, 826 (2003); Reisen v. Aetna Life & Cas. Co., 225 Va. 327, 336, 302 S.E.2d 529, 534 (1983). However, the issue here is whether there is a justiciable controversy concerning rights under a policy for a tort victim’s cross-claim against the tortfeasor in an action that originated when the insurance provider brought the declaratory judgment action. It would be difficult to hold that no controversy exists to support the cross-claim when a controversy clearly exists for Stodghill’s other cross-claims against IINA and NYM. Erie Ins. Group v. Hughes holds that, when all parties to the controversy cannot be bound by a judgment, a court will lack jurisdiction to make a declaratory judgment because, if all parties are not included in a declaratory judgment action, they will later be able to assert the same coverage issues that were litigated in an earlier action against the insurance carriers. 240 Va. 165, 169-70, 393 S.E.2d 210, 212 (1990). JNB is a party to the controversy regarding coverage between Stodghill and IINA. Likewise, C&M is a party to the controversy regarding coverage between Stodghill and Riverport. If, then, a justiciable controversy exists for StodghilPs other cross-claims against IINA, NYM, and Steadfast, it is necessary that C&M and JNB be bound to any declaratory judgment action brought by Riverport or Stodghill. Otherwise, the alleged tortfeasors in this case could re-litigate the same coverage issues against the insurance carriers in a later proceeding.

C&M and JNB also demur to StodghilPs cross-claims against them by arguing that Stodghill fails to state a claim upon which relief can be granted. The Virginia Declaratory Judgment Act states: [284]*284Va. Code § 8.01-184 (2013). In a declaratory judgment action, it is not necessary to seek “consequential relief,” because the purpose of that statute is to allow for the determination of the rights of parties to “guide parties in their future conduct in relation to each other.” Liberty Mut. Ins. Co. v. Bishop, 211 Va. 414, 421, 177 S.E.2d 519, 524 (1970).

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Cite This Page — Counsel Stack

Bluebook (online)
87 Va. Cir. 281, 2013 Va. Cir. LEXIS 177, Counsel Stack Legal Research, https://law.counselstack.com/opinion/riverport-insurance-v-cm-industries-inc-vaccnorfolk-2013.