Court: West Virginia Supreme Court; May 18, 1995; West Virginia; State Supreme Court
West Virginia Insurance Company (WV Insurance) appeals a Circuit Court decision that denied its request for a judgment notwithstanding the verdict or a new trial after a jury found its insured, Darryl W. Lambert, negligent for allowing a refuse fire to spread and damage a neighbor's barn. The jury ruled that Lambert's actions did not fall under the "business pursuits" exclusion of his insurance policy, thus confirming coverage.
The facts reveal that Lambert, an unemployed carpenter, was asked by his neighbors, Robert W. and Linda J. Schellhaas, to perform various odd jobs around their home, including work on their outbuilding, which served multiple purposes. The relationship was described as one of charitable support rather than a business arrangement.
On January 28, 1991, Lambert was tasked with cleaning up construction debris from the Schellhaas's yard and ignited a fire in a trench designated for burning. While monitoring the fire, he left to gather more debris, and upon returning, found the fire had escaped the pit and consumed the barn. Despite his attempts to extinguish the fire, the barn was completely destroyed.
WV Insurance initiated a legal action to ascertain its liability under Lambert’s homeowner's policy, while the Schellhaas's insurance carriers sought subrogation for damages paid and filed crossclaims against Lambert for negligence. The Supreme Court of Appeals of West Virginia reviewed the case and affirmed the Circuit Court’s judgment.
Mr. Lambert admitted full responsibility for the barn fire, acknowledging his duty to monitor it and confirming his guilty plea to charges related to the fire's escape, for which he paid a fine. The jury found him negligent but determined he was not engaged in a business pursuit when cleaning the yard debris.
WV Insurance claimed that the trial court erred by not bifurcating the coverage and liability issues, arguing that mentioning insurance prejudiced the jury. Prior to the trial, WV Insurance had requested bifurcation, which the circuit court granted, scheduling the coverage and liability issues for trial together. On the trial morning, WV Insurance's counsel objected, believing the coverage issue should precede liability and damages. The circuit court disagreed, stating that both parties were associated with insurance, and the jury would naturally be aware of this fact.
WV Insurance contended that a joint trial on coverage and liability was improper, referencing the precedent in Christian v. Sizemore, where the court acknowledged potential jury prejudice from knowing a plaintiff sought damages from an insurance carrier. However, it was noted that the decision to sever issues is at the trial judge's discretion. ITT Hartford Group and USAA argued that WV Insurance waived its objection by combining the negligence claim with the declaratory judgment in its amended complaint and that the jury would recognize coverage existed regardless of bifurcation. They also pointed out that WV Insurance waited until the trial commenced, three years post-filing, to request separation of issues.
The court concluded that the trial court did not abuse its discretion in joining the coverage and liability issues, emphasizing that awareness of insurance in such cases is not inherently prejudicial. The jury's finding of Mr. Lambert's negligence was supported by substantial evidence, including his acceptance of responsibility for the fire.
The trial court bifurcated the issue of damages to mitigate WV Insurance's concerns about potential jury bias due to insurance involvement. WV Insurance contributed to the alleged error by seeking more than a declaratory judgment and naming ITT Hartford Group and USAA as defendants, claiming negligence by Mr. and Mrs. Schellhaas for failing to supervise Mr. Lambert. Additionally, WV Insurance delayed its motion for bifurcation until the trial morning, despite misunderstanding the court's order.
WV Insurance argued that the court erred in rejecting its motion for judgment notwithstanding the verdict or for a new trial, asserting that Mr. Lambert was engaged in a business pursuit at the time of the fire, which should be excluded under the insurance policy. Citing previous rulings, the court established that exclusionary language must be strictly interpreted against the insurer to uphold the indemnity principle.
However, evidence supported the jury's conclusion that Mr. Lambert was not involved in a business pursuit as defined by the policy exclusion. His sporadic, minimally compensated tasks for the Schellhaas family lacked the regularity and profit motive required for such classification. His activities were more akin to friendly assistance rather than a consistent business endeavor. In reviewing the trial court's motion ruling, the appellate court emphasized that it must assess whether a reasonable jury could have reached the original verdict, affirming that the evidence was sufficient to support the jury's decision.
Sufficient evidence exists to uphold the jury's verdict, leading to the refusal to reverse the trial court's denial of WV Insurance's motion for judgment notwithstanding the verdict. WV Insurance claimed the trial court erred by granting a directed verdict for Mr. and Mrs. Schellhaas regarding liability and argued for jury instruction on joint and several liability. WV Insurance contended that Mr. and Mrs. Schellhaas were responsible for the fire due to their supervision of Mr. Lambert, who was tasked with cleaning debris. However, the trial court found no evidence of negligence by the Schellhaas, asserting that allowing the case to go to the jury would result in speculation and confusion. The trial court correctly directed a verdict in favor of the Schellhaas, as the evidence indicated Mr. Lambert's actions alone caused the fire, with Mr. Schellhaas not monitoring Lambert's activities. The remaining three assignments of error by WV Insurance were deemed meritless and not addressed further. The judgment of the Circuit Court of Berkeley County is affirmed. Additionally, the trial court properly admitted testimony regarding the relationship between Mr. Schellhaas and Mr. Lambert, as well as a videotape of the barn's remains, which was relevant and not unduly prejudicial. The evidence supported that the case was not meritless and involved legitimate claims for subrogation by ITT Hartford and USAA.
Undue concern over collusive or meritless lawsuits undermines the intelligence of jurors and the effectiveness of the adversary system. The distinction between filing a suit and achieving a successful outcome is noted, emphasizing that the merits of a case are determined during litigation. WV Insurance challenges the trial court's jury instruction on the business pursuit exclusion as unduly prejudicial, but it is found that the instruction accurately reflected the policy's language and properly informed the jury. Under West Virginia law, a "business pursuits" clause excludes personal injury coverage for injuries arising from regular activities conducted for profit. The jury must determine whether Darrell M. Lambert's services to the Schellhaas defendants were continuous and profit-driven for the exclusion to apply. Factors for consideration include Lambert's licensing, advertising, and compensation. The jury is also instructed that activities typically performed by minors or viewed as non-business do not constitute "business." Lambert's attorney acknowledged a lack of evidence for the Schellhaas' negligence, indicating a strategic choice to mitigate potential liability. Additional assignments of error include the trial court's admission of evidence regarding WV Insurance's claim handling, statements from defense counsel about the jury's role in determining coverage, and comments made during opening statements regarding the denial of coverage by WV Insurance.
