The opinion
PRESENT: Hassell, C.J., Lacy, Keenan, Kinser, Lemons, and Agee,
JJ., and Stephenson, S.J.
FREDERICK COUNTY SCHOOL BOARD
OPINION BY
v. Record No. 022984 JUSTICE G. STEVEN AGEE
January 16, 2004
JOHN HARRIS HANNAH, JR., ETC., ET AL.
FROM THE CIRCUIT COURT OF FREDERICK COUNTY
Jay T. Swett, Judge Pro Tempore
I.
The dispositive issue in this appeal is whether the trial
court erred in denying a school board's motion to reduce the
plaintiffs' ad damnum clause to $50,000, the limit on liability
the school board alleged was set by Code § 22.1-194. For the
reasons that follow, we will affirm the judgment of the trial
court.
II.
John Harris Hannah, Jr. ("Hannah"), a minor who sues by his
mother and next friend, Barbara Foster, now Barbara Ruffner
("Ruffner"), and Ruffner, individually (collectively, "the
Plaintiffs"), instituted an action against the Frederick County
School Board ("the School Board"), seeking damages for personal
injuries and other loss sustained by Hannah and Ruffner as a
result of a school bus accident. The School Board admitted its
negligence caused the accident, but contended damages were
limited to $50,000 by Code § 22.1-194. Alternatively, the
School Board asserted the Plaintiffs' right to recover was
barred by the doctrine of sovereign immunity if the $50,000
limit did not apply.
The School Board is a member of the Virginia School Board
Association ("VSBA") which operates a self-insurance pool (the
"Pool"), as authorized by Code § 15.2-2703. The School Board is
a member of the Pool, which provides various lines of self-
insurance to the School Board, including liability coverage of
up to $1,000,000 for motor vehicle accidents.
The School Board filed a motion to reduce the Plaintiffs'
ad damnum clause to $50,000, arguing Code § 22.1-194 limited its
liability in this case to $50,000 because the School Board met
the self-insurance qualification of Code § 22.1-190(D). Even
though the School Board admitted it had never obtained the
certificate of self-insurance from the Commissioner of the
Department of Motor Vehicles required by Code § 22.1-190(D), it
contended members of the Pool were exempt from that requirement
by Code § 15.2-2704.
The trial court disagreed and found the specific statutory
provision of Code § 22.1-190(D) controlling. The trial court
ruled that a certificate of self-insurance from the Commissioner
of the Department of Motor Vehicles is required when the
liability limit of Code § 22.1-194 is to be claimed by reference
to Code § 22.1-190. The trial court therefore denied the motion
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to reduce the ad damnum and awarded Hannah damages of $74,500
and Ruffner damages of $4,510. We awarded the School Board this
appeal.
A.
The resolution of the issues on appeal depends on the
statutory interpretation of three different Code sections which
state in pertinent part:
A. Every vehicle shall be covered in a policy of
liability and property damage insurance issued by
an insurance carrier authorized to transact
business in this Commonwealth, in the amounts of
at least $50,000 for injury, including death, to
1 person, $200,000 for injury, including death,
to all persons injured in any 1 accident, and
$10,000 for damage, including destruction, to the
property of any person, other than the insured
. . . .
. . . .
D. This insurance shall not be required in cases
where pupils are transported in vehicles which
are owned or operated by a . . . school board
which has qualified for and received a
certificate of self-insurance from the
Commissioner of the Department of Motor Vehicles,
following a certification of financial
responsibility equal to that required under
subsection A of this section.
Code § 22.1-190(A) and (D) (emphasis added).
In case the locality or the school board is the
owner, or operator through medium of a driver,
of, or otherwise is the insured under the policy
upon, a vehicle involved in an accident, the
locality or school board shall be subject to
action up to, but not beyond, the limits of valid
and collectible insurance in force to cover the
injury complained of or, in cases set forth in
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subsection D of § 22.1-190, up to but not beyond
the amounts of insurance required under
subsection A of § 22.1-190 and the defense of
governmental immunity shall not be a bar to
action or recovery.
Code § 22.1-194 (emphasis added).
A group self-insurance pool shall be deemed a
self-insurer for motor vehicle security under
§ 46.2-368. Members of the pool participating in
the motor vehicle self-insurance provided by the
pool shall be deemed to meet the requirements of
security as required and an application for a
certificate of self-insurance under § 46.2-368
shall not be required.
Code § 15.2-2704 (emphasis added).
Pursuant to Code § 22.1-194, a school board is subject to a
limited waiver of sovereign immunity when its vehicle is
"involved in an accident." Immunity is waived either to "the
limits of valid and collectible insurance in force to cover the
injury" or the coverage set by Code § 22.1-190(A) when the
certificate of self-insurance under Code § 22.1-190(D) has been
obtained.
The School Board argues that it is entitled to the
liability limit derived from Code § 22.1-190(A), $50,000 in this
case, although it has not obtained the certificate of self-
insurance required by Code § 22.1-190(D). The School Board
avers that, as a member of the Pool, Code § 15.2-2704 exempts it
from the self-insurance certificate requirement of Code § 22.1-
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190(D), and thus, that it qualifies for the Code § 22.1-190(A)
limitation level.
The question to be answered is whether the School Board,
without meeting the requirements of Code § 22.1-190(D), may
nonetheless qualify for the limited liability by virtue of Code
§ 15.2-2704. Application of accepted rules of statutory
construction answer that inquiry in the negative.
B.
"[W]hen one statute speaks to a subject in a general way
and another deals with a part of the same subject in a more
specific manner, the two should be harmonized, if possible, and
where they conflict, the latter prevails." Virginia Nat'l Bank
v. Harris, 220 Va. 336, 340, 257 S.E.2d 867, 870 (1979); accord
County of Fairfax v. Century Concrete Servs., 254 Va. 423, 427,
492 S.E.2d 648, 650 (1997); Dodson v. Potomac Mack Sales &
Service, 241 Va. 89, 94-95, 400 S.E.2d 178, 181 (1991).
Code § 15.2-2703 authorizes a variety of designated
political subdivisions 1 to join self-insurance pools while Code
§ 15.2-2704 establishes the powers of those pools. Code § 15.2-
1
Political subdivision, for purposes of Code § 15.2-2703,
"means any county, city, or town, school board, Transportation
District Commission, or any other local governmental authority
or local agency or public service corporation owned, operated or
controlled by a locality or local government authority, with
power to enter into contractual undertakings." Code § 15.2-
2701.
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2704 exempts all covered political subdivisions in such self-
insurance pools from obtaining a certificate of self-insurance
under Code § 46.2-368. 2 Neither the self-insurance pool statutes
nor Code § 46.2-368 reference the self-insurance certificate
requirement set out in Code § 22.1-190(D).
By contrast, Code § 22.1-190 sets forth insurance
requirements, specific only to school boards, that must be met
with respect to vehicles used in the transportation of students.
One of these requirements is that a school board obtain a
certificate of self-insurance from the Department of Motor
Vehicles, set out in Code § 22.1-190(D), in order to benefit
from the lower statutory liability limits available in Code
§ 22.1-194.
Other noteworthy evidence exists demonstrating the General
Assembly's intent to differentiate between the use of insurance
pools by political subdivisions generally and by school boards
specifically. For example, Code § 15.2-2704, the more general
statute, exempts the Pool from providing uninsured motorist
coverage otherwise mandated by Code § 38.2-2206. In comparison,
2
A certificate of self-insurance under Code § 46.2-368
refers to Chapter 3 of Title 46.2, but does not address the
particular requirements of insurance coverage for specific
categories or functions of political subdivisions. By contrast,
Code § 22.1-190 and Code § 22.1-194 are located in Chapter 12,
Article 2 of Title 22.1, which deals specifically with insurance
provisions for pupil transportation.
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Code § 22.1-190(A), the specific statute, sets a minimum
required liability coverage of $50,000 for school boards and
mandates that "the policy of insurance shall provide coverage
for loss or damage caused by an uninsured motorist . . . ."
The School Board argues that Code § 15.2-2704 and Code
§ 22.1-190(D) "can be reasonably construed to give full force
and effect to each." The School Board does so by reading the
exemption for a certificate of self-insurance in Code § 15.2-
2704 as an implied exemption to the Code § 22.1-190(D)
certificate requirement. It is incongruous for the School Board
to rely on Code § 15.2-2704, the statute of general application,
to waive the certification requirement but then claim that Code
§ 22.1-190, the statute of specific application, establishes the
ad damnum limitation of $50,000. As noted above, the School
Board's reasoning creates a conundrum in the case of uninsured
motorist coverage.
The School Board's proposed reading ignores the General
Assembly’s expressed intent to regulate the insurance
requirements for motor vehicles used to transport students by a
specific statutory framework as opposed to the general
requirements of the Pool for all other permitted political
subdivisions. The more specific statutory provisions must
prevail. The General Assembly has specifically required school
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boards to meet different requirements regarding motor vehicle
insurance than other political subdivisions. Among those
requirements is obtaining a certificate of self-insurance where
the liability limit of Code § 22.1-194 is to be claimed by
reference to Code § 22.1-190.
Construing the statutes in this manner "harmonize[s] Code
§ 22.1-190(D) and Code § 15.2-2704 so as to give full force and
effect to both" without undermining the important governmental
purpose and benefit that self-insurance pools provide. Such a
construction has no effect on any political subdivision, other
than school boards, which is the evident intent of the General
Assembly through its more specific statutes in Title 22.1.
School boards who wish to join self-insurance pools and take
advantage of the liability limit under Code § 22.1-194, as in
this case, need only apply for a certificate of self-insurance
from the Commissioner of the Department of Motor Vehicles as
mandated by the plain language of the statute.
C.
The School Board alternatively argues that if it is not
entitled to the $50,000 statutory liability cap, the Plaintiffs'
claims are barred by the doctrine of sovereign immunity.
Initially, the School Board argues the reference to "the
policy" in the first sentence of Code § 22.1-194 means only a
policy as set out in Code § 22.1-190(A) which must be "issued by
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an insurance carrier authorized to transact business in this
Commonwealth." In reliance upon Code § 15.2-2709, which
provides group self-insurance pools are not an insurance company
or an insurer, the School Board then reasons the Code § 22.1-194
provision for "valid and collectible insurance in force" must
come only from "the policy". In other words, since the Pool's
self-insurance is not insurance in the form of "the policy",
then Pool funds cannot be "valid and collectible insurance."
The School Board, however, reads only part of the first
sentence in Code § 22.1-194. The plain reading of the statute
reflects that a school board is "subject to action up to . . .
the limits of valid and collectible insurance in force" in two
circumstances. The first instance is where "the school board is
the owner . . . of . . . a vehicle involved in an accident
. . . ." The second instance is where the school board
"otherwise is the insured under the policy upon[] a vehicle
involved in an accident . . . ." (emphasis added).
By writing the statute in the disjunctive, the General
Assembly has clearly provided that the School Board, solely by
virtue of its ownership of "a vehicle involved in an accident"
is liable up to "the limits of valid and collectible insurance."
While a school board may also be liable when it "otherwise is
the insured under the policy," that circumstance is not a
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condition precedent for the School Board's liability when it
owns "a vehicle involved in an accident."
It is uncontested that the School Board owned the vehicles
involved in the accident in this case. By the plain language of
the statute, that is sufficient to subject the School Board to
liability up to "the limits of valid and collectible insurance."
While not the proceeds of an insurance "policy," in the
strictest sense of that term, the insurance protection provided
by the Pool is nonetheless "valid and collectible insurance in
force to cover the injury complained of." See generally USAA
Casualty Insurance v. The Hertz Corp. 265 Va. 450, 578 S.E.2d
775 (2003).
Finally, the School Board argues that since it did not
satisfy the requirements of Code § 22.1-190(D), it cannot be
required to pay the judgment because Code § 22.1-194 prohibits
using school funds to satisfy motor vehicle claims "except where
approved self-insurance has been provided pursuant to § 22.1-190
D." Requiring the School Board, via Pool payment, to pay the
appellees' judgment does not violate Code § 22.1-194's
prohibition against using school funds to satisfy motor vehicle
claims. Payments from the assets of the Pool are no longer
"school funds," but are Pool funds. To hold otherwise would be
tantamount to holding that a school board's insurance premiums
paid to an insurance company constitute "school funds," for
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purposes of Code § 22.1-194, when the insurance company pays a
motor vehicle claim.
III.
For the reasons set forth above, the School Board is not
entitled to the $50,000 liability limit of Code § 22.1-190(A) as
derived through Code § 22.1-194 because it failed to obtain a
certificate of self-insurance from the Department of Motor
Vehicles as required by Code § 22.1-190(D). Code § 22.1-194
abrogated the School Board's sovereign immunity up to the limits
of its coverage through the Pool, which is sufficient to satisfy
the Plaintiff's award in this case. Accordingly, the judgment
of the trial court will be affirmed.
Affirmed.
SENIOR JUSTICE STEPHENSON, with whom JUSTICE LACY and JUSTICE
KEENAN join, dissenting.
I respectfully dissent. It is well established that, when
two statutes are in apparent conflict, a court, if reasonably
possible, must give them such a construction as will give force
and effect to both. Commonwealth v. Zamani, 256 Va. 391, 395,
507 S.E.2d 608, 609 (1998); Board of Supervisors v. Marshall,
215 Va. 756, 761, 214 S.E.2d 146, 150 (1975).
In the present case, it is reasonably possible to construe
and harmonize Code § 22.1-190(D) and Code § 15.2-2704 so as to
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give full force and effect to both. Code § 22.1-190(D)
reasonably can be read to govern school boards that are
individually self-insured for school bus accidents, requiring
such school boards to apply for and receive a certificate of
self-insurance. However, when a school board is not
individually self-insured but is a member of a self-insurance
pool, Code § 15.2-2704 provides that it "shall be deemed to meet
the requirements of security as required and an application for
a certificate of self-insurance . . . shall not be required."
(Emphasis added.) Therefore, the School Board qualified for the
limit on liability despite its lack of a certificate of self-
insurance.
In reaching this conclusion, I have given weight to the
intent of the General Assembly in approving self-insurance pools
for political subdivisions such as school boards. That intent
is expressed in Code § 15.2-2700 as follows:
The General Assembly hereby finds and determines that
insurance protection is essential to the proper functioning
of political subdivisions; that the resources of political
subdivisions are burdened by the high cost of and frequent
inability to secure such protection through standard
carriers; that proper risk management requires the
spreading of risk so as to minimize fluctuation in
insurance needs; and that, therefore, all contributions of
financial and administrative resources made by a political
subdivision pursuant to an intergovernmental contract as
authorized by this chapter are made for a public and
governmental purpose, and that such contributions benefit
each contributing political subdivision.
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The trial court's ruling and the holding of the majority in
the present case undermine the important governmental purpose
and benefit that self-insurance pools provide. School boards,
without the $50,000 limit on liability, would be reluctant to
become members of and reap the benefit from a self-insurance
pool.
I would hold, therefore, that the trial court erred in
denying the School Board's motion to reduce the Plaintiffs' ad
damnum to $50,000 and in awarding damages in excess of the
$50,000 limit. Accordingly, I would reverse the trial court's
judgment and remand the case for a redetermination of damages.
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