Tort Claim fund is not insurance: Lawyers Weekly Article on Coleman Allen’s Case

UIM liability still holds

Source: Virginia Lawyers Weekly

By Alan Cooper
October 22, 2007

The $100,000 available for personal injury under the Virginia Tort Claims Act is not insurance and cannot be considered as a credit against underinsured motorist coverage, a King William County judge has ruled in a case of apparent first impression.

The issue arose from a crash in January 2004 at state Route 611 and U.S. 360 in the county. Daniel Drewry was driving south on Route 611 and state Trooper Dennis Wilson was driving his cruiser west on U.S. 360.

Drewry’s attorney, W. Coleman Allen Jr. of Richmond, originally alleged that Wilson was grossly negligent because he was speeding without using his flashing lights or siren. Allen later amended the complaint to allege only simple negligence and sought $650,000 in damages. He served Drewry’s UIM carrier, Virginia Farm Bureau.

The Tort Claims Act made Wilson absolutely immune from suit and potentially made the state vicariously liable for no more than $100,000.

The Farm Bureau policy covering Drewry’s car had $100,000 in UIM coverage, and the insurer’s attorneys, Harley W. Duane III and Justin S. Gravatt of Richmond, filed a complaint seeking a declaratory judgment that the insurer had no liability.

Under Virginia Code Sect. 38.2-2206(B), Farm Bureau could be liable only if the underlying coverage is “less than the total amount of uninsured motorist coverage,” Duane and Gravatt said in a motion for summary judgment. Because the amount available under the Tort Claims Act and Farm Bureau’s UIM coverage are the same, the insurer has no liability to Drewry, the defendants contended.

“[T]he police cruiser is not an ‘uninsured motor vehicle’ because the Commonwealth remains vicariously liable to Drewry, irrespective of Wilson’s immunity,” the attorneys argued. “To interpret Sect. 38.2-2206 to mandate UM coverage when Wilson is immune, even though the Commonwealth is not, would defeat the intent of statute to insure against ‘uninsured motor vehicles,’ and would lead to an absurd result.”

Allen responded that the argument was based on “the fatal defect of mischaracterizing the Commonwealth of Virginia Division of Risk Management as an insurance company and the Commonwealth of Virginia Risk Management Plan as providing insurance coverage.”

According to the plan, “The Division of Risk management (DRM) is not an insurance company and this Plan is not insurance, as those terms are defined in Sect. 38.2-100 of the Code. DRM is, instead, a division of a state agency, the Department of the Treasury, that finds its authority to act from the statutory provisions of the Code.”

Moreover, Allen argued, Wilson’s cruiser was an uninsured motor vehicle under the definitions of the term in Drewry’s policy. There is no property damage liability bond or insurance policy covering the vehicle, and Wilson is immune from liability for simple negligence.

Ruling from the bench, Circuit Judge Thomas B. Hoover agreed with Allen in Virginia Farm Bureau Town and Country Insurance Company v. Drewry, Case No. CL07000043-00.

Allen said he believes the decision to be the first such ruling in the state.

Duane said he and his client are considering an appeal to the Supreme Court of Virginia.

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