Nationwide Mutual Insurance Company v. Raiford et al

Filing 23

MEMORANDUM OPINION. See for complete details. It is so ORDERED. Signed by District Judge Robert E. Payne on 02/06/2017. (nbrow)

Download PDF
IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Richmond Division FEB - 7 20l7 NATIONWIDE MUTUAL INSURANCE COMPANY, CLERK, U.S. DISTRICT COURT RICHMOND, VA Plaintiff, v. Civil Case No. 3:16cv340 AMY JO RAIFORD, Administrator of the Estate of Nancy Sue Walton, and JOSEPH EARL WALTON, Jr. Defendants. MEMORANDUM OPINION This matter is before the Court following a bench trial on a stipulated Judgment record ("Complaint") Insurance Company and on filed the by ("Nationwide") set forth below, Nationwide, held Complaint Plaintiff (ECF No. for Declaratory Nationwide 1) . For the Mutual reasons the Court will grant declaratory judgment for order that it has no duty to defend or to indemnify Joseph Walton in the lawsuit that underlies this case. BACKGROUND Nationwide's under 28 U.S.C. §§ Complaint seeks a judicial determination, 2201 and 1332, that it owes no duty to defend or indemnify Joseph Earl Walton ("Walton") in an action filed in state court against Wal ton by Amy Jo Raiford, Administrator of the Estate of Nancy Sue Walton (the "underlying action") . 1 purposes of this declaratory judgment action, For the parties have stipulated to the facts respecting Nationwide's insurance policy and the allegations (ECF 13) in the complaint ("Stipulated Facts"). in the underlying action Based on the NATIONWIDE' S OPENING PRETRIAL BRIEF stipulated facts, (ECF No. 14) ("Pl. Br."), the OPPOSITION BRIEF OF DEFENDANT JOSEPH EARL WALTON JR. (ECF No. 18) ("Def. Resp."), and NATIONWIDE'S REPLY BRIEF (ECF No. 19) ("Pl. Reply") were filed, and a bench trial ( ECF No. 22) was held on January 31, 2017. THE STIPULATED FACTS Walton and Nancy Sue Walton, his wife, were the named insureds in the homeowners insurance policy issued by Nationwide for the Facts period of 1). At all May 15, times 2014 leading to May up to 15, 2015. January (Stipulated 19, 2015, the Waltons were husband and wife and shared the insured home. Id. On January 19, 2015, Mrs. Walton died. Id. Amy Jo Raiford, daughter of Mrs. Walton, subsequently became administrator of Mrs. Walton's estate and brought a tort suit against Walton on behalf of the estate. Id. at 1-2. After Both Walton and Raiford are named as defendants. Raiford, who has been properly served herein, has declined to file an Answer or participate in any way. Nationwide has not moved for entry of default or for default judgment, preferring instead to have Raiford bound by the result of this trial. 1 2 receiving notice of the suit, under a Nationwide began defending Walton full and complete reservation of rights and filed this declaratory judgment action seeking a declaration that it had no duty to defend, and therefore no duty to indemnify, Wal ton in the underlying action. Id. at 2. In Virginia, def end . it is well-settled that an "insurer's duty to is broader than [the] obligation to pay, and arises whenever the complaint alleges facts and circumstances, which would, policy." (2010). if Copp proved, v. fall Nationwide Consequently, within Mut. the Ins. risk Co., to def end. the 67 5, Va. by 682 the parties agreed at trial that there is They also that there exists a covered 27 9 no duty to indemnify if the Court determines duty some of agreed that, duty to defend, a if that there the Court is no decides decision on the duty to indemnify must be deferred until after the underlying action is determined. The analysis in this case therefore rests on the content of the insurance policy and the facts and circumstances alleged in the complaint in the underlying documents are part of the stipulated record. action. Id. Both (Stipulated Facts, Exhibit A-B). A. The Complaint In the Underlying Action (ECF No. 13-2) In that relevant Mrs. negligent part, Walton's conduct of the death underlying was Walton. caused (UC 3 <JI<JI complaint by the 26-27). ("UC") alleges intentional Specifically, and it alleges that Walton intentionally and severely abused Mrs. Walton in the days leading up to and including January 3, 2015, thereby causing condition from an "exacerbation which she died." of (UC <JI a treatable medical The further 27) . UC alleges that, on January 8, 2015, the date on which the decedent "became physically sick and Walton incapacitated," was instructed by Raiford to take Mrs. Walton to Patient First, but that Wal ton "negligently unattended." (UC <JI seek medical Walton's <JI 11) . home Mrs. decedent to remain after being told of Walton's refusal treatment, and the 9). Later that same day, to allowed found Wal ton was Raiford her mother allegedly in a went the state. serious to (UC flown to VCU Medical Center, where she was diagnosed as having suffered a stroke and where a forensic nurse allegedly "took photographs of all the bruises caused by [Mr. Walton's] beatings." hospice care at 2015. 14) . (UC wrongful Walton. daughter, loss of <JI home, The death, (UC !! solace, Mrs. 12-13). After being returned to <JI Walton passed away on January 19, underlying action seeks pain, 25-27). Raiford, (UC and It mental also anguish alleges damages suffered that the by and comfort of the the Mrs. decedent's has suffered "severe mental anguish, companionship for sorrow, decedent as well as loss of her company and love and has otherwise suffered 4 decedent's medical expenses and funeral expenses which Defendant has refused to pay." (UC B. The record, 24). ~ The Insurance Policy (ECF No. 13-1) insurance policy and Nationwide is also a part argues that of the stipulated it has no duty to defend primarily on the strength of three of its provisions: Paragraphs l(a) and l(i) page H2. on pages Hl of the policy, and Paragraph 2(f) on (Pl. Br. 9-18). The relevant provisions state: 1. Coverage E Personal liability and Coverage F Medical Payments to others do not apply to bodily injury or property damage: a) caused intentionally by or at the direction of an Insured, including willful acts the result of which the insured knows or ought to know will follow from the Insured's conduct . . . . relating omissions i) resulting from acts or directly or indirectly to sexual molestation, physical or mental abuse, harassment, including sexual harassment, whether actual, alleged or threatened. ***** 2. Coverage E - Personal liability does not apply to . . . f) bodily injury to an insured as defined in Section II- Liability definitions 5.a) and 5.b). (ECF No. 13-2, Hl) goes to on (emphases in original). The insurance policy define "bodily injury" to "mean[] including resulting care, sickness or disease, or does death. Bodily mental anguish, injury humiliation, not include bodily loss of services emotional distress, mental distress or injury, 5 harm, or any similar injury unless the direct result of bodily harm." Id. at Gl, ~ 1 (emphasis in original). ANALYSIS In Virginia, than [the] an "insurer's duty to def end obligation to pay, is broader and arises whenever the complaint alleges facts and circumstances, some of which would, if proved, fall within the risk covered by the policy." Copp v. Nationwide Mut. Ins. Co., 279 Va. Ins. Co. of Am., referred to as 675, 683 (2010); 219 Va. 101, 104 the "eight see also Lerner v. Gen. (1978). This test is commonly corners rule" because it "concerns only the four corners of the policy and the four corners of the complaint." Copp, clear Nationwide that 279 Va. has at 682. no duty Applying to this defend test, Walton it in is the underlying action in this case, because no combination of facts alleged proven, in the UC would, if "fall within the risk covered by the policy." Id. at 683. The UC clearly asserts that Wal ton caused "bodily injury" to Mrs. Walton within the meaning of the insurance policy. (UC ~ 26-27). But, both parties agree that both Walton and Mrs. Walton are the "named Insured" of the insurance policy in this case. (Stipulated Facts 1) . Therefore, the liability exclusions provided on pages Hl and H2 of the insurance policy apply. Under a plain reading of those exclusions, 6 it is clear that no set of facts found by the jury would trigger coverage under the policy, even when construing the exclusionary language in the light most favorable to the insured as required by Virginia law. Elec. & Power Co. v. Northbrook Prop. & Cas. Ins. Virginia Co., 252 Va. 265, 270 (1996). If the jury were to find that Walton intentionally caused bodily injury to Mrs. Walton, Paragraph l(a) of the policy would clearly exclude coverage. to find that Wal ton's remain excluded excludes from bodily (ECF No. conduct the injuries 13-2, Hl) . If the jury were was merely negligent, policy that by are Paragraph the result level abuse." of Id. intent (emphasis found by the added) . jury, And, l(i), of which "acts or . physical or omissions relating directly or indirectly to mental it would regardless of any "bodily injury to any an insured" is excluded from coverage by Paragraph 2(f). Id. at H2. Thus, even if every fact alleged in the UC was proven at trial, the policy would Virginia law, not cover any of it. Accordingly, Nationwide has no duty to defend. under See Copp, 279 Va. at 683. Walton counters these rather obvious results by relying on the allegations contained in Paragraph 24 of the UC, Resp. asserts at 4-7, that but the that reliance decedent's is daughter, misplaced. Raiford, see Def. Paragraph has 24 suffered damages in the form of mental anguish and medical and funeral 7 expenses. (UC ~ 24) . But, while it is true that Raiford is not "an insured" subject to the exclusion in 2(f), she is also not a party to the underlying action. Raiford's mental anguish is only relevant because Va. Code 8. 01-52 allows a § jury to consider the mental anguish of a decedent's beneficiaries, as well as any medical death, and funeral expenses associated with the decedent's in arriving at a "fair and just" award in the wrongful death action brought on behalf of the decedent. Code § 8.01-50. the question See also Va. Paragraph 24 is therefore legally irrelevant to of liability, and therefore irrelevant to the question of Nationwide's duty to defend. Id. During the hypothesized that bench trial in Paragraph 24 this case, could still Walton's trigger a counsel duty to defend in the event that Raiford joined the underlying action in her individual capacity before trial, but that argument is also contrary to Virginia reality, Nationwide law. would Even if still that have no hypothetical duty to became defend. In Virginia, plaintiffs may recover for emotional distress only if they can demonstrate injury, or otherwise prove that the relevant conduct was intentional. See Hughes v. Moore, an accompanying 214 Va. 27, 34 physical (1973). Under Paragraph l(a) the insurance policy, all injuries of (to anyone) are excluded from coverage if they are the consequence of an intentional act of "an Insured." (ECF No. 13-2, Hl) . And, 8 al though Wal ton argues that the jury could find that Raiford's anguish was due to his negligence (and therefore escape provision 1 (a) ) , Raiford would still not recover because she suffered no accompanying physical injury. Thus, even if proven true, the mental anguish alleged in Paragraph 24 of the UC does not "fall within the risk covered by the policy." See Copp, 279 Va. at 683. 2 Therefore, Nationwide has no duty to defend Walton on the basis of Paragraph 24. Because the other facts and circumstances alleged in the UC also do not "fall within the risk covered by the policy," Nationwide has no duty to defend the underlying action in this because the duty to defend is "is broader than to pay," Nationwide Declaratory also judgment in case. [the] has no duty to favor of Nationwide Moreover, obligation indemnify. is Id. therefore appropriate. CONCLUSION For Nationwide with the the has reasons no stated duty underlying to above, def end action in the Court Joseph Wal ton this case, and finds in no that connection duty to Beyond the legal deficiency noted in this paragraph, the Court also notes that, under a plain reading of its provisions, the policy itself precludes recovery for emotional distress except where a covered person's mental suffering is the direct result of a bodily harm he or she sustained. (See ECF 13-1 at Gl, ~1). Thus, even if were possible for Raiford to personally and successfully sue Walton for her emotional distress, Nationwide would still have no duty to defend in that action. 2 9 indemnify in connection with the same. A judgment to effect will be entered. It is so ORDERED. /s/ /2-l-f' Robert E. Payne Senior United States District Judge Richmond, Virginia Date: February ~ , 2017 10 that

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.

Why Is My Information Online?