Kramer v. Commonwealth

Present: 	All the Justices
ETHEL JUNE KRAMER, ADMINISTRATOR OF THE ESTATE OF
ROBERT JACK KRAMER, DECEASED
v. 	Record No. 010392 	OPINION BY JUSTICE DONALD W. LEMONS
January 11, 2002
COMMONWEALTH OF VIRGINIA, ET AL.
FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH
H. Thomas Padrick, Jr., Judge
On June 17, 1999, Robert Jack Kramer (“Kramer”) was
employed by and acting within the scope of his employment
with the Virginia Department of Transportation. 	Kramer was
in one of the Commonwealth’s trucks when it was struck by
an uninsured motorist and Kramer was killed.
On December 14, 2000 in a separate suit brought on
behalf of the Estate, the Circuit Court of the City of
Virginia Beach entered judgment against the uninsured
motorist in the amount of $650,000 in compensatory damages,
$350,000 in punitive damages and $8,547 in funeral
expenses. 	In this declaratory judgment action brought by
the Commonwealth against Ethel June Kramer, Administrator
of the Estate of Robert Jack Kramer, Deceased
(“Administrator”) the Commonwealth conceded that Kramer’s
estate is entitled to maximum coverage of $25,000 under the
terms of the Commonwealth’s Risk Management Plan (“the
Plan”)for uninsured motorist coverage, but denied that the

Plan is liable for additional underinsured motorist
coverage of $50,000. 	The trial Court1 held that:
[T]he maximum amount of coverage available to
the Estate from the Commonwealth of Virginia in
this matter, pursuant to Section 2.1-526.6 of
the Code of Virginia, 1950, as amended, and
pursuant to the Risk Management Plan of the
Commonwealth of Virginia, is $25,000.00 of
uninsurance coverage, and the Plaintiff is not
entitled to any underinsurance coverage from
the Commonwealth of Virginia.
In this appeal, we consider the dispute between the parties
concerning interpretation of the Plan.
We are not bound by the trial court’s conclusions of
law or its construction of terms of the Plan. 	Rather,
“[w]e have an equal opportunity to consider the words
within the four corners of the disputed provision.” 	Wilson
v. Holyfield, 227 Va. 184, 188, 313 S.E.2d 396, 398 (1984).
Therefore, we review the judgment of the trial court de
novo.
Under the terms of the Plan, the Commonwealth’s
vehicles were insured for $100,000 of liability coverage.
The coverage limits had been increased from $75,000
effective July 1, 1993. 	The entire provision for uninsured
1 The Honorable A. Bonwill Shockley rendered the letter
opinion dated August 9, 2000. 	The final order dated
November 28, 2000 and the Written Statement of Facts dated
January 11, 2001 were signed by The Honorable H. Thomas
Padrick, Jr.
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and underinsured (“UM/UIM”) coverage is contained in a
single paragraph of the Plan that provides:
Coverage applies to uninsured motorists
exposures pursuant to Section 2.1-526.6.C. of
the Code of Virginia. 	Coverage is limited to
$25,000 per person in any one accident, $50,000
for two or more persons in any one accident and
$20,000 for damage to or destruction of the
property of others in any one accident.
Underinsured motorists coverage is limited to
$50,000 per person.
On appeal, the Administrator argues: 	(1) That the
provisions of the Plan are in conflict with the
requirements under Code § 38.2-2206 that UM/UIM coverage
equal liability coverage unless rejected by the insured;2
2 Code § 38.2-2206 (A) provides in pertinent part:
Except as provided in subsection J of
this section, no policy or contract
of bodily injury or property damage
liability insurance relating to the
ownership, maintenance, or use of a
motor vehicle shall be issued or
delivered in this Commonwealth to the
owner of such vehicle or shall be
issued or delivered by any insurer
licensed in this Commonwealth upon
any motor vehicle principally garaged
or used in this Commonwealth unless
it contains an endorsement or
provisions undertaking to pay the
insured all sums that he is legally
entitled to recover as damages from
the owner or operator of an uninsured
motor vehicle, within limits not less
than the requirements of § 46.2-472.
Those limits shall equal but not
exceed the limits of the liability
insurance provided by the policy,
unless any one named insured rejects
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and (2) that UM/UIM coverage may be combined under the
Plan.
The first issue was not presented to or resolved by
the trial court. 	We will not consider the issue for the
first time on appeal. 	Rule 5:25. 	See Nichols v. Kaiser
Found. Health Plan of the Mid-Atl. States, Inc., 257 Va.
491, 498, 514 S.E.2d 608, 612 (1999).
The second argument advanced by the Administrator is
that, “[t]he appellant is entitled to combine the uninsured
and underinsured coverage under the plain language of the
Commonwealth’s Risk Management Plan.” 	The Administrator
argues that because the Commonwealth established separate
levels of coverage for UM/UIM, “the implication is that the
UM and UIM coverage[s] were to be treated separately and
aggregated.” 	The Administrator argues that uninsured
the additional uninsured motorist
insurance coverage by notifying the
insurer as provided in subsection B
of § 38.2-2202. 	This rejection of
the additional uninsured motorist
insurance coverage by any one named
insured shall be binding upon all
insureds under such policy as defined
in subsection B of this section. The
endorsement or provisions shall also
obligate the insurer to make payment
for bodily injury or property damage
caused by the operation or use of an
underinsured motor vehicle to the
extent the vehicle is underinsured,
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motorist coverage of $25,000 should be combined with
underinsured motorist coverage of $50,000, for a total of
$75,000 coverage.
The Plan states that “[a]ll terms, phrases and
definitions used in the Plan shall be those used in the
Code of Virginia, as amended.” 	Definitions applicable to
this controversy are found in Code § 38.2-2206 as follows:
“Uninsured motor vehicle” means a motor
vehicle for which (i) there is no bodily
injury liability insurance and property
damage liability insurance in the amounts
specified by § 46.2-472, (ii) there is
such insurance but the insurer writing the
insurance denies coverage for any reason
whatsoever, including failure or refusal
of the insured to cooperate with the
insurer, (iii) there is no bond or deposit
of money or securities in lieu of such
insurance, (iv) the owner of the motor
vehicle has not qualified as a self-
insurer under the provisions of § 46.2-
368, or (v) the owner or operator of the
motor vehicle is immune from liability for
negligence under the laws of the
Commonwealth or the United States, in
which case the provisions of subsection F
shall apply and the action shall continue
against the insurer. 	A motor vehicle
shall be deemed uninsured if its owner or
operator is unknown.
A motor vehicle is “underinsured”
when, and to the extent that, the total
amount of bodily injury and property
damage coverage applicable to the
operation or use of the motor vehicle and
available for payment for such bodily
as defined in subsection B of this
section.
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injury or property damage, including all
bonds or deposits of money or securities
made pursuant to Article 15 (§ 46.2-435 et
seq.) of Chapter 3 of Title 46.2, is less
than the total amount of uninsured
motorist coverage afforded any person
injured as a result of the operation or
use of the vehicle.
Code § 38.2-2206(B).
Given the definitions applicable to this case, Kramer
would have to have been killed by a tortfeasor who was
insured, albeit inadequately so, in order to implicate
underinsured motorist coverage under the Plan. 	The
evidence is to the contrary – Kramer was killed by a
tortfeasor who was uninsured. 	Uninsured coverage under the
Plan is distinct and separate from underinsured coverage.
Finally, in Superior Ins. Co. v. Hunter, 258 Va. 338,
344-45, 520 S.E.2d 646, 649 (1999), we stated:
Nonetheless, in construing Code § 38.2-2206 as
a whole, we conclude, even under the facts of
this case when only one insurance policy is
involved, that the General Assembly did not
intend that a vehicle could be “underinsured”
with respect to itself. 	In light of the
provisions of subsection (A), it is clear that
subsection (B) contemplates a situation in
which there are at least two applicable
insurance policies at issue: the liability
coverage provided by a tortfeasor’s insurance
policy, and the uninsured/underinsured motorist
coverage provided by an injured party’s
insurance policy.
. . . .
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Read together, subsection (A) and
subsection (B) do not contemplate that, under
the circumstances of this case, a claimant
would be permitted to recover under both the
liability and uninsured/underinsured motorist
coverages of a single policy.
Although Hunter involved a single policy and efforts to
invoke both liability coverage and UM/UIM coverage under
the same policy, the principle is nonetheless applicable
here. 	Under the Plan, uninsured coverage is limited to
$25,000, while underinsured coverage is limited to $50,000.
There is no additional policy of insurance against which to
measure underinsured status. 	Consistent with the principle
recited in Hunter, the Plan cannot be underinsured with
respect to itself in order to provide additional coverage.
Accordingly, we hold that the trial court did not err
in holding on this record that the maximum coverage
available in this case under the Plan is $25,000 uninsured
motorist coverage. 	We will affirm the judgment of the
trial court.
Affirmed.
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