The appellant, Nationwide Insurance Company (hereinafter "Nationwide"), appeals the December 8, 1994 order of the Circuit Court of Kanawha County which resolved two insurance coverage issues in favor of the appellees, Glenna Griffith Cox and James F. Cox, the administrator and personal representative for the estate of John Carl Cox. For reasons explained below, we reverse the order of the circuit court.
This action arose out of an automobile accident which occurred on March 27, 1992, on U.S. Route 21 in Kanawha County when a vehicle driven by Brian Amick crossed the center line of the highway and struck a vehicle driven by John Carl Cox head on. John Carl Cox was killed and his wife, Glenna Griffith Cox, who was a passenger in the car, was seriously injured.
The facts leading up to the accident are in dispute; however, it is not necessary for us to resolve the disputed issues of fact as they will be resolved at trial. For purposes of this opinion, we will briefly discuss what is alleged to have occurred.
Evidently, Brian Amick and three other Sissonville High School students, Shane Wilkinson, Chad Wines, and Clifford Reed, decided to skip school before the first period class began on the day of the accident. Allegedly, the four boys shared two or three marihuana joints and drank a liter of vodka while driving around in Amick's car that morning.
The four boys also allegedly broke into a motor vehicle and robbed items which were within the motor vehicle. Subsequently, the four boys took the stolen items to a pawn shop in Charleston. After receiving money for the pawned items, Amick drove his car to a gas station. At the gas station Reed got out of Amick's car and allegedly was to take the money received from the pawn shop and buy concert tickets. Amick drove off with Wilkinson and Wines in the car. The accident occurred within minutes after Amick left Reed at the gas station.
The two insurance coverage issues relating to the car accident arose in a declaratory judgment action filed by the appellees in order to enforce uninsured and underinsured motorists coverage in a policy issued by Nationwide to John Carl Cox, the decedent. The declaratory judgment action had been filed as a third amended complaint in a pending tort action which sought recovery for the death of John Carl Cox and the personal injuries of Glenna Griffith Cox.
In the December 8, 1994 order which Nationwide appeals, the circuit court resolved one of the insurance coverage issues by entering a declaratory judgment that Nationwide must provide underinsured motorists coverage to Glenna Cox because Nationwide failed to show that Glenna Cox, as an "insured" under Nationwide's policy, was offered and rejected underinsured motorists coverage. In that same order the circuit court resolved the other insurance coverage issue by granting summary judgment against Nationwide upon determining that Clifford
At the outset, we note that "`[a] circuit court's entry of summary judgment is reviewed de novo.' Syl. pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994)." Syl. pt. 1, Davis v. Foley, 193 W.Va. 595, 457 S.E.2d 532 (1995). Furthermore, "`"[s]ummary judgment is appropriate where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, such as where the nonmoving party has failed to make a sufficient showing on an essential element of the case that it has the burden to prove." Syl. pt. 4, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994).' Syl. pt. 3, Cannelton Industries, Inc. v. Aetna Casualty & Surety Co. of America, 194 W.Va. 203, 460 S.E.2d 18 (1994)." Syl. pt. 3, Davis, supra.
On the other hand, the purpose of a declaratory judgment
Harrison v. Town of Eleanor, 191 W.Va. 611, 615, 447 S.E.2d 546, 550 (1994) (quoting Crank v. McLaughlin, 125 W.Va. 126, 133, 23 S.E.2d 56, 60 (1942)) (emphasis provided). See W.Va.Code, 55-13-1  ("Courts of record within their respective jurisdictions shall have power to declare rights, status and other legal relations[.]"). This Court has stated that "[i]t is generally within the discretion of the court as to whether it will take jurisdiction to enter or decline to enter a declaratory judgment, and also the manner in which it is done, but such discretion cannot be abused." Hall v. Hartley, 146 W.Va. 328, 332, 119 S.E.2d 759, 762 (1961) (citations omitted). Furthermore, the Uniform Declaratory Judgments Act provides that "[a]ll orders, judgments and decrees under this article may be reviewed as other orders, judgments and decrees." W.Va.Code, 55-13-7 . This Court has previously stated that when it reviews orders, judgments or decrees entered by a circuit court the findings of fact are reviewed under a clearly erroneous standard. However, questions of law are reviewed de novo. See Phillips v. Fox, 193 W.Va. 657, 661, 458 S.E.2d 327, 331 (1995). See also, Burnside v. Burnside, 194 W.Va. 263, 265, 460 S.E.2d 264, 266 (1995) and W.Va.R.Civ.P. 52(a).
Therefore, because the purpose of a declaratory judgment action is to resolve legal questions, a circuit court's ultimate resolution in a declaratory judgment action is reviewed de novo; however, any determinations of fact made by the circuit court in reaching its ultimate resolution are reviewed pursuant to a clearly erroneous standard. Accordingly, we hold that a circuit court's entry of a declaratory judgment is reviewed de novo.
The first issue raised by Nationwide on appeal is whether the circuit court erred by holding that Glenna Cox was entitled to underinsured motorists coverage in spite of the signed rejection of said coverage for all vehicles under the policy by the named policyholder, John Cox. The trial judge concluded that Nationwide was required to offer not only to John Cox, but also to Glenna Cox, the option of purchasing underinsured motorists coverage simply because she met the definition of an "insured" under the policy. Before addressing this issue, an understanding of the facts regarding the rejection of underinsured motorists coverage by John Cox is important.
When John Cox became a policyholder with Nationwide he had coverage on only one automobile. On December 1, 1987, John Cox married Glenna Cox. At the time of their marriage, Glenna Cox owned a 1986 Chevrolet Cavalier which was insured by Kentucky Central Insurance Company.
On January 3, 1992, John Cox added Glenna Cox's 1986 Chevrolet Cavalier to the Nationwide policy which he had prior to the marriage. On that day John Cox completed an insurance form requesting uninsured motorists coverage in the amount of $100,000.00 per person, $300,000.00 per accident and rejected underinsured motorists coverage.
Glenna Cox was not asked whether she waived underinsured motorists coverage. Moreover, Glenna Cox did not become a named policyholder on the declarations sheet, nor did she submit an application when her vehicle was added to the policy.
The Nationwide policy at issue provides: "For the payment of premiums in amounts we require and subject to all of the terms and conditions of this policy, we agree to provide the coverages selected by the policyholder." (emphasis added). Moreover, the Nationwide policy at issue defines "policyholder" as "the first person named in the declarations. The policyholder is the named insured under this policy and does not include the policyholder's spouse."
Clearly, the insurance policy issued to John Cox, the decedent, specifically and unambiguously addresses the issue before us: John Cox, as the policyholder, could elect not to select underinsured motorists coverage for every person, including his spouse, who would be an insured under the policy.
We are mindful that "`"[w]here the provisions of an insurance policy contract are clear and unambiguous they are not subject to judicial construction or interpretation, but full effect will be given to the plain meaning intended." Syllabus, Keffer v. Prudential Ins. Co., 153 W.Va. 813, 172 S.E.2d 714 (1970).' Syl. pt. 1, Russell v. State Auto. Mut. Ins. Co., 188 W.Va. 81, 422 S.E.2d 803 (1992)." Syl. pt. 1, Miller v. Lemon, 194 W.Va. 129, 459 S.E.2d 406 (1995). Furthermore, "`"[l]anguage in an insurance policy should be given its plain, ordinary meaning." Syl. Pt. 1, Soliva v. Shand, Morahan & Co., 176 W.Va. 430, 345 S.E.2d 33 (1986).' Syl. pt. 2, Russell v. State Auto. Mut. Ins. Co., 188 W.Va. 81, 422 S.E.2d 803 (1992)." Syl. pt. 2, Miller, supra. However, this Court will not give effect to language in an insurance policy which conflicts with the intent of the uninsured and underinsured motorists statutes: "`"Insurers may incorporate such terms, conditions and exclusions in an automobile insurance policy as may be consistent with the premium charged, so long as any such exclusions do not conflict with the spirit and intent of the uninsured and underinsured motorists statutes." Syl. Pt. 3, Deel v. Sweeney, 181 W.Va. 460, 383 S.E.2d 92 (1989).' Syl. pt. 4, Russell v. State Auto. Mut. Ins.
The appellees argue, in effect, that the provisions of Nationwide's policy at issue conflict with the spirit and intent of W.Va. Code, 33-6-31(b)  which details when and how an insurer shall offer the optional uninsured and underinsured motorists coverages.
In syllabus points 1 and 2 of Bias v. Nationwide Ins. Co., 179 W.Va. 125, 365 S.E.2d 789 (1987), this Court explained the insurer's obligation pursuant to W.Va.Code, 33-6-31(b) :
The appellees focus on the use of the term "insured" by the legislature in W.Va. Code, 33-6-31(b)  and by this Court in the above syllabus points and conclude that the spirit and intent of W.Va.Code, 33-6-31(b)  mandate that every insured covered by a certain insurance policy must be offered the optional coverages provided under that policy. If the insurer fails to prove that an effective offer was made to every insured and fails to prove that such offer was knowingly and intelligently rejected by every insured, then the insurer must provide the minimum coverage required to be offered pursuant to W.Va.Code, 33-6-31(b)  to those insureds who did not reject the optional coverage.
We disagree with the appellees' contention. We acknowledge that the legislature and, thus, this Court, use the term "insured" when discussing the insurer's duty to offer the optional coverages pursuant to W.Va. Code, 33-6-31(b) . However, the legislature left unanswered in W.Va.Code, 33-6-31(b)  the question of whether one insured could reject the optional coverages for all insureds covered under the policy.
This Court has held that "`[a] statute that is ambiguous must be construed before it can be applied.' Syl. pt. 1, Farley v. Buckalew, 186 W.Va. 693, 414 S.E.2d 454 (1992)." Syl. pt. 1, State ex rel. Water Development Authority v. Northern Wayne County Public Service District, 195 W.Va. 135, 464 S.E.2d 777 (1995). Furthermore, "`"[t]he primary object in construing a statute is to ascertain and give effect to the intent of the Legislature." Syllabus Point 1, Smith v. State Workmen's Compensation Commissioner, 159 W.Va. 108, 219 S.E.2d 361 (1975).' Syl. pt. 2, Farley v. Buckalew, 186 W.Va. 693, 414 S.E.2d 454 (1992)." Syl. pt. 2, State ex rel. Water Development Authority, supra.
W.Va.Code, 33-6-31d(c) .
We point out that because there is no question that both W.Va.Code, 33-6-31  and W.Va.Code, 33-6-31d  relate to the provision of uninsured and underinsured motorists coverages, it is appropriate for this Court to review those code sections in pari materia in order to ascertain the legislature's intent:
The appellees acknowledge the above language in W.Va.Code, 33-6-31d(c) , but argue that because it was enacted in 1993, one year after the accident occurred, it is new law which does not apply to them. We disagree. We believe the above quoted language from W.Va.Code, 33-6-31d(c)  merely clarifies the legislature's original intent when it enacted W.Va.Code, 33-6-31 . Cf. State Auto. Mut. Ins. Co. v. Youler, 183 W.Va. 556, 569, 396 S.E.2d 737, 750 (1990) (This Court rejected a similar argument that a 1988 amendment to W.Va. Code, 33-6-31(b) was a change in the law rather than a clarification of existing law). Moreover, as a practical matter, it would be very time consuming and unreasonable to expect an insurer to offer every person who would be an insured under the policy the optional coverage and then ascertain whether the optional coverage was rejected.
Accordingly, we hold that under W.Va. Code, 33-6-31d  a knowing and intelligent rejection of optional uninsured and underinsured motorists coverages by any named insured under an insurance policy creates a presumption that all named insureds under the policy received an effective offer of the optional coverages and that such person exercised a knowing and intelligent rejection of such offer. The named insured's rejection is binding on all persons insured under the policy.
Thus, in the case before us, John Cox's rejection of underinsured motorists coverage is binding on Glenna Cox. The circuit court, therefore, erred in entering a declaratory judgment that Nationwide must provide underinsured motorists coverage to Glenna Cox.
The second issue raised by Nationwide on appeal is whether the circuit court erred by holding that the language of the policy issued by Nationwide provides uninsured motorists coverage to the appellees for the actions of Reed even though Reed did not own a vehicle involved in the accident nor was he in a vehicle involved in the accident when the accident occurred. As we previously stated, although allegedly Reed spent most of the day riding around in Amick's car, he got out of the car shortly before the
The Nationwide policy at issue provides for uninsured motorists coverage. More specifically, the coverage agreement states:
(bold indicates emphasis supplied and underlining indicates emphasis added). The above language clearly and unambiguously does not include a person such as Reed. See syl. pt. 1, Miller, supra, (Where provisions of an insurance policy are clear and unambiguous they are not subject to judicial interpretation). In fact, the language above clearly states that the uninsured motorists coverage compensates for damages sustained from the "owner or driver of an uninsured motor vehicle."
The appellees make two arguments in support of their contention that Nationwide's policy is ambiguous, and thus, should be "strictly construed against the insurance company and in favor of the insured."
More specifically, the appellees focus on the phrase "at fault uninsured or at fault hit-and-run driver" found in the acknowledgement form. The appellees argue that the phrase "at fault uninsured" in the acknowledgement form is not immediately followed by the word "driver" or "owner" unlike the phrase "at fault hit-and-run driver"; therefore, the appellees conclude that uninsured motorists coverage exists when there is an at fault uninsured regardless of whether the uninsured is the owner or driver of a motor vehicle involved in the accident.
We disagree with the appellees' contention. As stated by Nationwide, "[u]nder common [E]nglish construction, when two terms modify the same word and are separated by a conjunction, it is not necessary to repeat the modified word along with each term." Clearly, a reasonable person in an insured's position would understand that the word "driver" in the acknowledgement form is modified by both the phrase "at fault uninsured" and the phrase "at fault hit-and-run driver." Thus, we find the appellees' contention to be without merit.
Second, the appellees contend that the Nationwide policy is ambiguous because the coverage is labeled "uninsured motorists coverage" on all forms which may reasonably be construed as providing coverage for damages caused by one other than a driver, owner, or even passenger of a motor vehicle. In other words, the appellees argue that Reed is a "motorist" under the insurance policy because he is a person who travels by automobile.
The appellees rely upon Green v. State Farm Ins. Companies, 206 Ga.App. 478, 426 S.E.2d 3 (1992). In Green the issue was whether a Georgia statute, "which requires that no-fault benefits be provided to non-resident motorists involved in motor vehicle accidents in Georgia and insured by insurers doing business in Georgia, covers `motorists' who are on foot rather than in their cars at the time of the accident." Green, 426 S.E.2d at 4. In arriving at its conclusion the Court of Appeals of Georgia relied upon a dictionary meaning which defines the term "motorist" as "`a person who travels by automobile.'" Id. at 5 (citing Webster's New Collegiate Dictionary, p. 745 (150th anniv. ed. 1981)). The Court of Appeals noted that "`[t]he dictionary does not specify `at the moment of travelling' or `while travelling' in defining motorist,'" and concluded that "the addition of such a restriction ... would be contrary to common usage and understanding of the word." Id. Thus, the Court of Appeals found that the term "motorist" included a pedestrian who was struck by a car while walking back to her car after making a phone call.
We decline to apply the reasoning in Green to the facts before us. As we previously stated, the language in the Nationwide policy before us explicitly states that uninsured motorists coverage compensates for damages caused by the owner or driver of an uninsured motor vehicle. Additionally, the policy explicitly states that the damages must result from an accident arising out of the ownership, maintenance or use of an uninsured motor vehicle. Thus, the Nationwide policy clearly and unambiguously does not provide uninsured motorists coverage under the set of facts we have before us.
Moreover, Green is distinguishable from the case before us. In Green the "motorist," who had an insurance policy, was seeking coverage under that policy for damages sustained as a pedestrian while walking back to her car after making a phone call. Reed, the pedestrian in the case before us, was not injured in the accident, and, therefore, is not seeking coverage under his own insurance policy.
Thus, we conclude that the circuit court erred by holding that Reed met the definition of an uninsured motorist pursuant to the Nationwide policy at issue in the case before us even though he was not the owner of a vehicle involved in the accident nor was he in a vehicle involved in the accident at the time of the accident.
Based on all of the above, we reverse the December 8, 1994 order of the Circuit Court of Kanawha County.
CLECKLEY, Justice, concurring:
I am in wholehearted agreement with the excellent majority opinion of Chief Justice McHUGH. Because I question the circuit court's granting of declaratory judgment in this case, I write separately only to underscore the discretionary nature of declaratory judgments.
The Declaratory Judgment Act, W.Va. Code, 55-13-1 (1941), empowers a circuit court to grant declaratory relief in a case of actual controversy. See generally Mongold v. Mayle, 192 W.Va. 353, 452 S.E.2d 444 (1994). To be clear, if there is no "case" in the constitutional sense of the word, then a circuit court lacks the power to issue a declaratory judgment. A declaratory judgment may not be used to secure a judicial determination of moot questions or where no controversy exists.
The Act does not itself mandate that circuit courts entertain declaratory judgments; rather, the Act makes available an added anodyne for disputes that come within the circuit courts' jurisdiction. It serves a valuable purpose. It is designed to enable litigants to clarify legal rights and obligations before acting upon them. Because the Act offers a window of opportunity, not a guarantee of access, the courts, not the litigants, ultimately must determine when declaratory judgments are appropriate and when they are not. Consequently, circuit courts retain substantial discretion in deciding whether to grant declaratory relief. As we have stated in other contexts, the Declaratory Judgment Act neither imposes an unflagging duty upon the courts to decide declaratory judgment actions nor grants an entitlement to litigants to demand declaratory remedies. See Gentry v. Mangum, 195 W.Va. 512, 521, 466 S.E.2d 171, 180 (1995). In Wilton v. Seven Falls Co., ___ U.S. ___, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995), the United States Supreme Court affirmed the uniquely discretionary nature of the federal Declaratory Judgement Act: It is "`an enabling Act, which confers a discretion on the courts rather than an absolute right on the litigant.' When all is said and done ... `the propriety of declaratory relief in a particular case will depend upon a circumspect sense of its fitness informed by the teachings and experience concerning the functions and extent of... judicial power.'" ___ U.S. at ___, 115 S.Ct. at 2143, 132 L.Ed.2d at 223-24, quoting Public Serv. Comm'n v. Wycoff Co., 344 U.S. 237, 241, 243, 73 S.Ct. 236, 240, 97 L.Ed. 291 (1952), and Public Serv. Comm'n v. Wycoff
Because the granting of declaratory relief is not mandatory, circuit courts may limit its use. I believe that limiting the use of declaratory judgment actions serves important policies such as avoiding rendering opinions based on purely hypothetical factual scenarios, discouraging forum shopping, encouraging parties to pursue the most appropriate remedy for their grievances, preserving precious judicial resources, and promoting comity.
This Court has not had occasion to speak directly to what factors are relevant in determining whether a declaratory judgment action should be heard and decided. I believe there are four factors that are significant. The first critical factor is whether the claim involves uncertain and contingent events that may not occur at all. The second important factor is the extent to which the claim is bound up in facts. Courts are more likely to find a claim is justiciable if it is of an intrinsically legal nature, see, e.g., Pacific Gas & Elec. Co. v. State Energy Resources Conserv. & Dev. Comm'n, 461 U.S. 190, 201, 103 S.Ct. 1713, 1720-21, 75 L.Ed.2d 752, 763 (1983), and less likely to do so if the absence of a concrete factual situation seriously inhibits the weighing of competing interests.
The third factor is the absence or presence of adverseness. The circuit court should ask "whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273, 61 S.Ct. 510, 512, 85 L.Ed. 826, 829 (1941). It would appear that the following is relevant: (1) where all affected parties are before the court and (2) where the issues as framed permit specific relief through a decree of a conclusive nature, as opposed from an opinion advising what the law would be upon an hypothetical state of facts.
The fourth factor is the most important in my judgment. A circuit court should always ask whether granting the relief would serve a useful purpose, or put another way, whether the sought after declaration would be of practical assistance in setting the underlying controversy to rest.
Thus, the factors discussed above must be not be applied mechanically but, rather, with flexibility. In granting declaratory relief, a circuit court should be reasonably convinced that allowing the case to proceed, here and now, would serve a useful purpose and would be of great practical assistance to all concerned. Not only should the utility of the decree be obvious, but the utility should have special force in the challenged and underlying action.
The standard of review that applies to a circuit court's discretionary decision to withhold a declaratory judgment is more problematic. Although I recognize that circuit courts have some discretion to grant or withhold declaratory relief, and that this discretion must be exercised cautiously when matters of either public or constitutional dimension are implicated, the decision ultimately must be based on a careful balancing of efficiency, fairness, and the interests of both the public and the litigants. As to whether to grant or withhold declaratory relief, our review must offer a blend of deference
Some courts afford plenary review, but others affirm unless the circuit court's decision constitutes an abuse of discretion. Compare, e.g., Allstate Ins. Co. v. Mercier, 913 F.2d 273, 277 (6th Cir.1990) (utilizing plenary review), and Gayle Mfg. Co. v. Federal Sav. & Loan Ins. Corp., 910 F.2d 574, 578 (9th Cir.1990) (same), with, e.g., Christopher P. v. Marcus, 915 F.2d 794, 802 (2nd Cir.1990) (utilizing abuse of discretion standard), cert. denied, 498 U.S. 1123, 111 S.Ct. 1081, 112 L.Ed.2d 1186 (1991), and Kunkel v. Continental Cas. Co., 866 F.2d 1269, 1273 (10th Cir.1989) (same). I believe we should capture a middle ground, expressing our preference for a standard of independent review when passing upon a circuit court's decision to eschew declaratory relief. This standard encourages the exercise of independent appellate judgment if it appears that a mistake has been made. See El Dia, Inc. v. Hernandez Colon, 963 F.2d 488, 492 (1st Cir.1992); National R.R. Passenger Corp. v. Providence & Worcester R.R. Co., 798 F.2d 8, 10 (1st Cir.1986). Thus, independent review invokes a standard more rigorous than abuse of discretion but less open-ended than de novo review.
As to rulings made on the merits of the declaratory judgment action, our review should be, as the majority opinion states on the ultimate question presented we will review de novo, but as to questions of fact we utilize Rule 52(a) of the West Virginia Rules of Civil Procedure and apply the clearly erroneous rule.
Considering what I discuss above, I have grave reservations whether the circuit court acted reasonably and wisely in entertaining this declaratory action. Nevertheless, I must respect the circuit court's discretion where error is not obvious, and, accordingly, I concur.