Preview:

Present:

All the Justices OPINION BY JUSTICE A. CHRISTIAN COMPTON December 16, 1996

THOMAS M. STONE v. Record No. 960412

LIBERTY MUTUAL INSURANCE COMPANY UPON A QUESTION OF LAW CERTIFIED BY THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT Acting under the provisions of our Rule 5:42, the United States Court of Appeals for the Fourth Circuit certified to this Court a question of Virginia law, the answer to which is determinative of a proceeding pending before the Fourth Circuit. We accepted the certification by order entered in June 1996. The question involves statutory interpretation and a motor vehicle insurance coverage issue arising from an uninsured/underinsured motorist endorsement to an insurance policy. The record establishes the following facts. Thomas M. Stone

was a part-time employee of Tidewater Pizza, Inc., in Virginia Beach, for which he delivered pizzas. In making deliveries,

Stone was responsible for providing his own transportation and used his own vehicle. In October 1992, while Stone was lawfully operating his vehicle in the scope of his employment, a collision occurred between his vehicle and one operated by Carol Drye. Stone

sustained serious personal injuries in the collision. Later, he recovered a judgment against Drye in the Circuit Court of the City of Virginia Beach for $250,000 plus interest and costs. At the time of the collision, only $25,000 of

liability or other coverage was applicable to Drye's use of her vehicle and available to satisfy Stone's judgment. In effect at the time of the collision was a "Business Auto" policy of insurance issued by Liberty Mutual Insurance Company to "Tidewater Pizza, Inc.," as the named insured. The coverage

afforded under the policy included motor vehicle liability insurance with a limit of $350,000 and, by endorsement, uninsured motorist insurance, which included underinsured motorist coverage, carrying the same limit. For clarity, we shall use the

term "uninsured" to include both underinsured and uninsured coverage. Subsequently, Stone filed in the Virginia Beach circuit court a declaratory judgment action against Liberty Mutual seeking a declaration that the insurer was liable to him for $225,000 under the uninsured motorist coverage. Following

removal of the case by the insurer to the United States District Court for the Eastern District of Virginia, the parties stipulated to the facts and submitted the coverage issue to the district court on cross-motions for summary judgment. The district court sustained Stone's contention that the insurer's policy issued to Tidewater conflicted with Code

Download 1960412.pdf

Virginia Law