The opinion
Filed: February 24, 1998
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 96-2722
(CA-96-949-A)
Gates, Hudson & Associates, Incorporated,
Plaintiff - Appellant,
versus
The Federal Insurance Company,
Defendant - Appellee.
O R D E R
The Court amends its opinion filed October 9, 1997, as
follows:
On the cover sheet, section 1 -- the status is changed from
UNPUBLISHED to "PUBLISHED."
On the cover sheet, section 6 -- the decision line is changed
to read "Affirmed by published opinion. Senior Judge Michael wrote
the opinion, in which Judge Widener and Judge Niemeyer joined ."
On page 2, section 1 -- the reference to use of unpublished
opinions as precedent is deleted.
- 2 -
On page 2, beginning of opinion -- "PER CURIAM" is changed to
read "M(CHAEL, Senior District Judge ."
For the Court - By Direction
/s/ Patricia S. Connor
Clerk
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
GATES, HUDSON & ASSOCIATES,
INCORPORATED,
Plaintiff-Appellant,
No. 96-2722
v.
THE FEDERAL INSURANCE COMPANY,
Defendant-Appellee.
Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Claude M. Hilton, District Judge.
(CA-96-949-A)
Argued: June 5, 1997
Decided: October 9, 1997
Before WIDENER and NIEMEYER, Circuit Judges, and
MICHAEL, Senior United States District Judge for the
Western District of Virginia, sitting by designation.
_________________________________________________________________
Affirmed by published opinion. Senior Judge Michael wrote
the opinion, in which Judge Widener and Judge Niemeyer
joined.
_________________________________________________________________
COUNSEL
ARGUED: Michael Letaw Shor, SWIDLER & BERLIN, Washing-
ton, D.C., for Appellant. Jonathan Adrian Constine, HOGAN &
HARTSON, L.L.P., Washington, D.C., for Appellee. ON BRIEF:
Peter Barnes, SWIDLER & BERLIN, Washington, D.C., for Appel-
lant.
_________________________________________________________________
_________________________________________________________________
OPINION
MICHAEL, Senior District Judge:
I. Jurisdiction
Gates, Hudson & Associates, Inc. (GHA) is a Virginia corporation
with its principal place of business in Virginia. Defendant-Appellee
Federal Insurance Company ("Federal") is an Indiana corporation
with its principal place of business in New Jersey. Because the parties
had diverse citizenship and the amount in controversy exceeded the
statutory requirement, GHA brought this matter in the District Court
of the Eastern District of Virginia, pursuant to 28 U.S.C. § 1331(a)(1).
This court has jurisdiction over the appeal pursuant to 28 U.S.C.
§ 1291.
II. Introduction
This case arises out of a disagreement as to the coverage provided
by an insurance policy issued by Federal to GHA. GHA purchased a
Commercial Excess Umbrella Policy ("Policy") from Federal in May
1994. The Policy insured GHA for "damages when liability is
imposed on the insured [GHA] by law ... because of personal injury
... to which this coverage applies, caused by an offense committed
during the policy period." Joint Appendix (JA) at 58 (emphasis in
original). Further, Federal obligated itself to"assume charge of the
settlement or defense of any claim or suit against[GHA]" when
"damages are sought for bodily injury, personal injury, property dam-
age, or advertising injury covered by this policy and to which no ...
other insurance applies." JA at 59 (emphasis in original). "Personal
injury" was defined to include "humiliation or discrimination." The
policy contained various exclusions; the one at issue in this litigation
("the employment exclusion") stated: "This policy will NOT apply ...
to any liability of [GHA] arising out of injury of an employee in the
course of employment by you ... whether [GHA] may be liable as an
employer or in any other capacity." JA at 62, 64 (emphasis added).
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During the period of coverage under the Policy, a former employee
of GHA, Valorie Brown, filed a charge with the Equal Employment
Opportunity Commission (EEOC) alleging that she had been subject
to sexual harassment by her supervisor at GHA, subject to a pattern
or practice of discrimination, and constructively discharged because
of said harassment and discrimination, all in violation of Title VII, 42
U.S.C. § 2000e et seq. GHA disputed the allegations. It hired counsel
and prepared a response to an Information and Records Request as
ordered by the Fairfax County Human Rights Commission which,
along with EEOC was conducting an investigation. Before the investi-
gation was completed, Ms. Brown requested a "Notice of Right to
Sue," halting further investigations. She then sent a draft complaint to
GHA, seeking a monetary settlement. GHA conferred further with its
counsel and refused such settlement. Ms. Brown did not file suit
before the time for filing expired. GHA sought, beginning on March
17, 1995* and pursuant to the Policy, to induce Federal to defend or
indemnify the claim. Federal refused to defend or indemnify GHA
based on the employment exclusion in the policy. On July 12, 1996,
GHA filed a civil action seeking a declaratory judgment that Federal
had breached its contractual obligations under the Policy to defend
GHA, compensatory damages for the breach, and costs. Federal
moved for summary judgment claiming that it had no duty to defend
GHA as a matter of law. GHA cross-moved for summary judgment
claiming that, as a matter of law, Federal did indeed have a duty.
The district court found that the term "injury" was not ambiguous
in the context of the policy, and that the employment exclusion
relieved Federal of any obligation to defend GHA. The district court,
therefore, granted Federal's motion for summary judgment, denied
GHA's, and dismissed GHA's complaint with prejudice. This appeal
followed. This court reviews de novo the district court's grant of sum-
mary judgment and denial of the cross motion for summary judgment.
Benner v. Nationwide Mut. Ins. Co., 93 F.3d 1228, 1239-40 n.13 (4th
Cir. 1996).
_________________________________________________________________
* On March 17, 1995, Charles E. Hudson, Executive Vice President of
GHA, wrote to Robert P. Moltz, President of Weaver Brothers Insurance,
to ask him to alert Federal to the claims of Ms. Brown, pursuant to the
Policy.
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III. Discussion
The central issue in this case, therefore, is whether the term "in-
jury" is ambiguous in the context of the insurance policy. Virginia
courts have made clear the manner in which a court should construe
a contract for insurance. The court must read the terms of the policy
as part of the document as a whole, not "in isolation." Nationwide
Mut. Ins. Co. v. Akers, 340 F.2d 150, 154 (4th Cir. 1965); Suggs v.
Life Ins. Co. of Va., 147 S.E.2d 707, 709 (Va. 1966); Quesenberry v.
Nichols, 159 S.E.2d 636, 638 (Va. 1968). Exclusions in particular are
read narrowly and "are enforceable only when the exclusions `unam-
biguously bring the particular act or omission within its [sic] scope.'"
Fuisz v. Selective Ins. Co. of America, 61 F.3d 238, 242 (4th Cir.
1995), citing Floyd v. Northern Neck Ins. Co., 427 S.E.2d 193, 196
(Va. 1993). If a term is ambiguous, Fuisz directs that the conflict be
resolved in favor of the insured. Id. at 242. Ambiguity is determined
from "the face of the policy" and exists if the language used "may be
understood in more than one way or when it refers to two or more
things at the same time." Smith v. Allstate Ins. Co., 403 S.E.2d 696,
697 (Va. 1991); see also Nationwide Mut. Ins. Co. v. Wenger, 278
S.E.2d 874, 877 (Va. 1981). A term is unambiguous only if, within
its context, it is not susceptible to more than one meaning.
Common sense suggests that "injury" is a broad term encompassing
many types of injury. A common sense reading of the policy at issue
in this matter suggests that its use of the term "injury" does not depart
from the "ordinary and accepted meaning" of the word. See Scottsdale
Ins. Co. v. Glick, 397 S.E.2d 105, 108 (Va. 1990). Rather, in the con-
text of the policy and in accordance with its ordinary meaning, "in-
jury" in the policy encompasses the subsets of "personal injury,"
"bodily injury," and "advertising injury." Although "injury" is not
defined by the policy, the other terms: "bodily injury," "personal
injury," and "advertising injury;" are carefully defined. Throughout
the policy, "injury" is used to refer to all covered injuries--bodily,
personal, or advertising. When the insurer intends in the policy to
limit the types of injury discussed it does so by adding qualifying
words and clauses. Federal's careful delineations of specific types of
injuries at other points in the policy suggest that the insurer knew how
to limit the term when it desired to do so. In the absence of such qual-
ifiers at this point in the policy, this court interprets "injury" accord-
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ing to its plain meaning. Black's Law Dictionary defines injury as
"Any wrong or damage done to another, either in his person, rights,
reputation, or property." Black's Law Dictionary 785 (6th ed. 1990).
Webster's Third New International Dictionary defines "injury" as "a
violation of another's rights for which the law allows an action."
Webster's Third New Int'l Dictionary 1164 (1976). Even the dictio-
nary cited by appellants defines "injury" as "wrong or damage done
to a person or his property, reputation or rights." Webster's II New
Riverside University Dictionary 629 (1984). As Appellee aptly points
out, if "personal injury" were not a subset of injury, an individual
could suffer personal injury, but no injury. Such an interpretation
does violence to the plain meaning of the word "injury."
Atlantic Life Insurance Co. v. Greenfield supports Appellee's posi-
tion. In that case, the insurer agreed to provide insurance against
"loss," including "Loss of Life by Accident." The policy excluded
from coverage, however, "disability or loss resulting from ... illegal
acts of any person." 100 S.E.2d 717, 719 (Va. 1957). Despite the
exclusion, the insured's estate sought to recover for the insured's
death by manslaughter. The trial court held that the insured was enti-
tled to coverage because the term "loss" in the exclusion was ambigu-
ous as to whether it included death. The Virginia Supreme Court
disagreed.
It is perfectly plain then that the word "loss" as frequently
used throughout the policy, includes the death of the
insured. Indeed, the very basis of the plaintiff's claim is that
such death was a "loss" which was insured against by the
first line of the policy. If it is plain that "loss" means loss
of life or death under the insuring clause ... it is equally
plain that it means loss of life or death under the exclusion
clause.
Id. at 510 (emphasis added). The reasoning in Atlantic Life Ins. Co.
v. Greenfield applies squarely to the case before the court. To reject
the common sense definition of "injury" as appellant urges the court
to do abandons not only the unambiguous meaning of the policy but
would produce the anomalous result noted supra, that one could suf-
fer "personal injury" but not "injury." The court cannot adopt the rea-
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soning of the appellant, where such reasoning would leave the court
with the anomalous result noted.
IV. Conclusion
For the reasons stated, the district court's grant of summary judg-
ment to Federal Insurance Company is
AFFIRMED.
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