John Corradi v. Old United Casualty Company, No. 16-1150 (4th Cir. 2017)
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UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 16-1150 JOHN CORRADI, Plaintiff – Appellant, v. OLD UNITED CASUALTY COMPANY, Defendant – Appellee, and FOREST AGENCY, INC., Defendant. Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. Gerald Bruce Lee, District Judge. (1:15-cv-00488-GBL-MSN) Submitted: December 30, 2016 Decided: January 18, 2017 Before NIEMEYER, KING, and FLOYD, Circuit Judges. Affirmed by unpublished per curiam opinion. Lee Robert Arzt, Richmond, Virginia, for Appellant. Donald R. Anderson, Catherine M. Banich, TAYLOR ENGLISH DUMA LLP, Atlanta, Georgia, for Appellee. Unpublished opinions are not binding precedent in this circuit. PER CURIAM: John Corradi appeals the district court’s orders denying his motion for nonsuit under Virginia state law and granting summary judgment in favor of the defendant, Old United Casualty Company (“Old United”). On appeal, Corradi argues that the district court erred in granting summary judgment in favor of Old United because, although the terms of the insurance policy (“Policy”) excluded coverage for damages to Corradi’s aircraft (“Aircraft”) while the Aircraft was piloted by non approved pilots, that provision is void pursuant to Va. Code Ann. § 38.22204 (2014). Corradi also argues that the district court erred in refusing to allow voluntary dismissal of the case pursuant to Virginia’s nonsuit statute. Corradi contends that this ruling was erroneous because Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938), requires a federal court sitting in diversity to apply all substantive state laws, and Va. Code Ann. § 8.01-380 (2015) is substantive rather than procedural. “We review the district court’s grant of summary judgment de novo, applying the same standard as the district court.” Walker v. Mod-U-Kraf Homes, LLC, 775 F.3d 202, 207 (4th Cir. 2014). We construe the evidence in the light most favorable to Corradi and draw all reasonable inferences in his favor. Id. “The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the 2 movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “Under Virginia law, courts must interpret policies consistent with the parties’ intent.” insurance Liberty Univ., Inc. v. Citizens Ins. Co. of Am., 792 F.3d 520, 532 (4th Cir. 2015). “Ambiguities favor of the insured. in the instrument must be construed in But we do not entertain an absurd result— one that would ‘enlarge the obligations undertaken originally by the insurer, and would permit a windfall to the insured.’” Id. (quoting Transit Cas. Co. v. Hartman's, Inc., 239 S.E.2d 894, 897 (Va. 1978)) (brackets omitted). The Policy provided that “the aircraft must be operated in-flight only by the ‘Approved Pilots’ shown [in Item 7 of the Policy] . . . . There is no coverage under the policy if the pilot does not meet these requirements.” The language of the Policy is not ambiguous, and the parties clearly intended to provide coverage only when the Aircraft was operated by one of the two pilots listed in Item 7. The accident occurred with a non approved pilot flying the Aircraft, and therefore, under the terms of the Policy, Corradi is not entitled to recovery. Moreover, the restriction encompassed in the Policy does not conflict with the language of the Virginia omnibus statute, which was passed with the “purpose of protecting the public from 3 loss caused by the negligence of permissive users of insured vehicles.” Hartman’s, 239 S.E.2d at 897. The Virginia Supreme Court’s decision in Hartman’s does not mandate a different outcome. There, the Virginia Supreme Court analyzed “whether a named insured may recover from his liability insurance carrier for damage to his own property when the policy excludes from coverage property owned by ‘the insured.’” 896. Id. at The court concluded that “the insured” referred to the individual claiming coverage, and the policy excluded coverage for damage to Hartman’s own property. 897. In reaching that conclusion, Id. at 896-97. the court noted Id. at that in “earlier case[s], involving claims of injured members of the public, we construed the omnibus clause to serve its designed purpose of protecting the public from loss caused negligence of permissive users of insured vehicles.” Hartman’s case, however, “only the interests of by the Id. In the direct parties to the insurance contract, the named insured and the insurer, [were] in issue.” Id. Similarly, in Safeco Ins. Co. of Am. v. Merrimack Mut. Fire Ins. Co., addressed 785 a F.2d provision 480, of 481 an (4th Cir. insurance 1986), contract coverage for injuries sustained by the insured. this that court denied The appellant argued that the contract provision limiting coverage was void in light of the omnibus statute. Id. 4 After analyzing the statute, we concluded that the appellant, “like the insured in Hartman’s, . . . [was] attempting to convert a liability policy into a policy covering first-party loss. . . . [T]he Legislature of Virginia did not by the enactment of the omnibus clause intend to accomplish any such result.” Id. at 482 In this case, excluding coverage for first-party losses due to the use of the Aircraft by an unapproved user does not disrupt the omnibus statute’s stated purpose of protecting “the public from losses caused by the negligence of permissive users of insured vehicles,” and therefore does not run afoul of either the statute’s intent or its plain language. Corradi relying on Virginia’s next the Federal nonsuit “Congress has undoubted power created, claims so Rules statue. undoubted long that to of As those district Civil court Procedure the Supreme to power prescribe as the Id. supplant rules rules for regulate capable of classification as procedure.” rather Court the erred has state matters than noted, law, courts in it and has rationally Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 406 (2010) (internal quotation marks omitted). first determine dispute.” whether Id. at 398. Rule [41] Consequently, “[w]e must answers the question in “If it does, it governs . . . unless it exceeds statutory authorization or Congress’s rulemaking power. We do not wade into Erie’s murky waters unless the federal rule 5 is inapplicable or invalid.” Id. (citations omitted). If a Federal Rule “governs only the manner and the means by which the litigants’ rights are enforced, it is valid; if it alters the rules of decision by rights, it is not.” which the court will adjudicate those Id. at 407 (brackets omitted). The question in dispute here, whether Corradi may as of right voluntarily dismiss his case, is answered by Rule 41, which provides that a plaintiff may dismiss his complaint after an answer or motion for summary judgment has been filed only if he files “a stipulation of dismissal signed by all parties who have appeared.” provision Fed. R. Civ. P. 41. answers the same The relevant Virginia Code question differently, by allowing voluntary dismissal at any time “before a motion to strike the evidence has been sustained or before the jury retires from the bar or before the action has been submitted to the court for decision.” Va. Code Ann. § 8.01-380. But because Rule 41 is undoubtedly procedural, it controls in this case. A rule that allows for voluntary dismissal if certain conditions are met alters the manner and means of enforcing the litigant’s rights, while leaving rights the unchanged. rules of decision Therefore, the for adjudicating district court those correctly applied Rule 41 to Corradi’s motion to voluntarily dismiss. Accordingly, we affirm the district court’s judgment. dispense with oral argument because 6 the facts and We legal contentions are adequately presented in the materials before this court and argument would not aid the decisional process. AFFIRMED 7
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