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State Farm Mutual Automobile Insurance Co. v. Cuffee6/10/1994
OPINION BY CHIEF JUSTICE HARRY L. CARRICO
We must decide in this appeal the extent to which an uninsured motorist carrier is entitled to defend its interests in a personal injury case when the uninsured motorist admits liability. Because we think the trial court improperly limited the carrier's ability to defend, we will reverse.
The controversy stems from an automobile accident that occurred in the City of Chesapeake on September 26, 1990. On that date, Dorothea Cuffee was riding in an automobile operated by Etta Sivels, her cousin, when the vehicle was struck head-on by a car driven by Connie Harris. Seeking damages for her injuries, Cuffee brought an action in negligence against both Sivels and Harris.
Sivels did not have liability insurance, and Cuffee served a copy of her motion for judgment upon State Farm Mutual Automobile Insurance Company in an attempt to take advantage of the uninsured motorist provisions of two insurance policies issued by State Farm to relatives living in Cuffee's household. Pursuant to Code § 38.2-2206(F), infra, State Farm filed grounds of defense in its own name. Sivels retained separate counsel, who filed grounds of defense on her behalf. Both State Farm and Sivels denied liability for Cuffee's injuries and asserted the defenses of contributory negligence and assumption of risk.
In bankruptcy court, Sivels received a discharge from contingent liability for Cuffee's injuries. She then retained new counsel. State Farm was informed that Sivels intended to "admit liability" and that Cuffee would "non-suit case against Harris." State Farm moved for a pretrial conference "to determine . . . what . . . 'action' available to State Farm." A pretrial conference was held, and, after argument, the trial court ordered that
in the trial of the case State Farm by its attorney is prohibited and barred from presenting any testimony, evidence, objections or argument on the issues of contributory negligence and assumption of the risk since that would be in conflict with the admission of liability by the defendant, Etta Sivels.
In a later order, the trial court stated that State Farm "may participate in the trial of this case with regard to damages only."
When the case was called for trial, Sivels admitted liability for Cuffee's injuries, and Cuffee thereupon nonsuited Harris. Following a bench trial on the issue of damages, the court entered judgment against Sivels in the sum of $871,000. We awarded State Farm this appeal.
In pertinent part, Code § 38.2-2206(F) provides as follows:
The insurer shall . . . have the right to file pleadings and take other action allowable by law in the name of the owner or operator of the uninsured . . . motor vehicle or in its own name. Nothing in this subsection shall prevent the owner or operator of the uninsured motor vehicle from employing counsel of his own choice and taking any action in his own interest in connection with the proceeding.
State Farm contends the trial court erroneously determined that Code § 38.2-2206(F) created an irreconcilable conflict between the rights of Sivels and State Farm and that, as a result, Sivels alone should control the defense of the case. State Farm argues that the statute should be applied as it is drafted, giving both the uninsured motorist and the insurer the right to participate in the defense of the case, with neither party having the right to bind the other to any particular position or course of action. When the statute is correct
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