West Virginia High Court Issues Slew of Rulings – Some For, Some Against Insurers

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The West Virginia Supreme Court has handed down four decisions that could affect insurers’ payouts in auto, homeowners and worker injury claims.

Non-employee Covered

In Ball vs. United Financial Casualty Co., the court found that the insurer must provide coverage for a non-employee who was granted permission to drive a vehicle and caused an accident that injured an insured’s worker.

The state Supreme Court of Appeals answered a certified question from the U.S. 4th Circuit Court of Appeals. The state court essentially agreed with the federal appeals judges and cited a 1987 court ruling that held that West Virginia law specifically indicates “that the legislature has demonstrated a clear intent to afford coverage to anyone using a vehicle with the owner’s permission as a means of giving greater protection to those who are involved in automobile accidents. The statute should be liberally construed to effect coverage.”

The incident happened in 2016. Employees of a hardware store in Milton were doing some construction work at a man’s home. The hardware company owner authorized the homeowner to move one of the company trucks, which was blocking the driveway. When he backed out, though, the man pinned a worker against another truck, causing serious injuries and hospitalization.

Greg Ball, the injured worker, demanded indemnification from United Financial, which was Milton Hardware’s liability insurer. The motor vehicle insurance provided up to $1 million in liability coverage “to any person using Milton Hardware’s vehicles” with permission, Ball’s lawyers argued.

United Financial, a Progressive Insurance company, asked a federal district court to declare that it had no obligation. The policy contained a workers’ compensation exclusion and an exclusion for employee indemnification in such circumstances. The federal district court agreed with the insurance company.

On appeal, though, the 4th Circuit Court of Appeals remanded the case, noting that the workers’ compensation exclusion did not apply because the claim was made against a third party – the homeowner – not the employer. The employee indemnification exclusion also did not apply because it violates state law, the appeal judges said.

On remand, the parties could not agree on the extent of coverage United Financial owed to Ball under West Virginia auto insurance laws: Did the exclusion still apply above the $25,000 in coverage limits? That led to another round of appeals. Finding no precedent in West Virginia court decision, the 4th Circuit asked the state high court to decide.

The justices came down firmly on the side of the injured worker.


“We now hold that when an exclusion in a motor vehicle liability insurance policy violates West Virginia Code § 33- 6-31(a) because it would deny coverage to a permissive user of an insured vehicle, the exclusion is void, and the insurance policy must provide coverage to the permissive user up to the full limits of liability coverage available under the policy,” Supreme Court Chief Justice John Hutchinson wrote in the Nov. 17 majority opinion. Justice Tim Armstead dissented.

The case now goes back to the 4th Circuit for further proceedings.

Air Accident Liability

In another workers’ compensation-related case, the state Supreme Court gave air transport insurer Praetorian Insurance Co. relief on some grounds, but not on others. The case was deemed highly important to the insurance community, and saw amicus briefs filed by the West Virginia Insurance Federation and the state’s Chamber of Commerce.

The case also involved West Virginia jurists applying Wisconsin law to a fatal flight that began in Kentucky, ended in West Virginia and was insured by a Wisconsin carrier owned by an Australian investment company.

The estate of Air Cargo Carriers’ first officer Anh Ho had sued the air delivery company, arguing that it was responsible for the 2017 plane crash in Charleston that killed two pilots, was not immune from tort actions and was not bound by the exclusive remedy of workers’ comp. The reason, the plaintiffs said, is that the air company was negligent and had intentionally disregarded mandatory safety measures.

The National Transportation Safety Board found that the crash was the result of pilot error and a landing descent that was too steep, according to news reports.

Praetorian, owned by QBE Investments, insures homeowners as well as aircraft companies and other businesses. Its lawyers argued that it should be allowed to intervene in the case because it had a vested interest in keeping the case in the less-expensive workers’ comp arena.

The West Virginia high court held that Praetorian had no standing. Although federal Rules of Civil Procedure allow insurers to intervene in actions against the insured, in this case the insurance company sought to intervene only in order to determine if it had a duty to defend.

“Praetorian seeks to intervene to assert Air Cargo’s workers’ compensation immunity. None of the cases cited by Praetorian allowed an insurer to intervene to assert a right belonging to its insured,” Justice Haley Bunn wrote in the Nov. 17 opinion.

But on another issue, the court sided with the insurer and found that the insurance policy excluded coverage for intentional acts by the insured air company. The trial court had erred by finding that the West Virginia statute allowing the exclusion was limited in scope, the justices said.

And, like the United Financial Casualty Co. case, above, questions were raised over whether the exclusion violated state law.

Wisconsin law applies in the case, the Supreme Court justices said and the parties agreed, because case law has long established that the law of the state where the insurance policy was formed shall govern. The trial court in Kanawha County, West Virginia, found that Wisconsin law prohibits denying coverage for aircraft operations that violate air regulations.

But the high court reversed that and found that the Wisconsin statute applied only to aircraft insurance policies, not to workers’ comp and liability policies. The trial court decision was reversed in part, affirmed in part and remanded.

More Deliberate Intent

In another case involving workers’ comp and exceptions to its immunity, the court overturned a trial court’s order from 2021 in a tragedy involving a city worker who was killed digging a drain line trench.

The widow in Edwards v. Star sued her husband’s supervisors, claiming they were liable for his death because of deliberate intent and reckless conduct. But the Supreme Court found that she did not prove intent and that the defendants were insulated from civil suit due to workers’ compensation immunity.

HO Policy Can Be Rescinded

In a fourth case, the court ruled, at least temporarily, against Allstate Vehicle and Property Insurance Co., which had issued a policy for a decrepit house that the homeowner was remodeling.

After a fire damaged the home and its contents, Allstate rescinded the policy, asserting that the homeowner had misrepresented that he planned to live in the house within 30 days. The homeowner sued for breach of contract. The trial court granted Allstate’s motion to rescind the policy, saying no questions of fact existed on the homeowner’s application statements.

The Supreme Court said that questions did, in fact, exist and remanded the case for further deliberations.

Top photo: An Air Cargo Carriers plane in 2022. (Larry MacDougal via AP)


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