John Corradi v. Old United Casualty Company , 675 F. App'x 296 ( 2017 )

UNPUBLISHED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Affirmed by unpublished per curiam opinion.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Unpublished opinions are not binding precedent in this circuit.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. § 38.2-
2204 (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
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movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a).
“Under Virginia law, courts must interpret insurance
policies consistent with the parties’ intent.” Liberty Univ.,
Inc. v. Citizens Ins. Co. of Am., 792 F.3d 520, 532 (4th Cir.
2015). “Ambiguities in the instrument must be construed in
favor of the insured. 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
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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.’” Id. at
896. The court concluded that “the insured” referred to the
individual claiming coverage, and the policy excluded coverage
for damage to Hartman’s own property. Id. at 896-97. Id. at
897. In reaching that conclusion, the court noted 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 by the
negligence of permissive users of insured vehicles.” Id. In
Hartman’s case, however, “only the interests of 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., 785 F.2d 480, 481 (4th Cir. 1986), this court
addressed a provision of an insurance contract that denied
coverage for injuries sustained by the insured. The appellant
argued that the contract provision limiting coverage was void in
light of the omnibus statute. Id. After analyzing the statute,
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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. Id.
Corradi next claims that the district court erred in
relying on the Federal Rules of Civil Procedure rather than
Virginia’s nonsuit statue. As the Supreme Court has noted,
“Congress has undoubted power to supplant state law, and
undoubted power to prescribe rules for the courts it has
created, so long as those rules regulate matters rationally
capable of classification as procedure.” Shady Grove Orthopedic
Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 406 (2010)
(internal quotation marks omitted). Consequently, “[w]e must
first determine whether Rule [41] answers the question in
dispute.” Id. at 398. “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
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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 which the court will adjudicate those
rights, it is not.” 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.” Fed. R. Civ. P. 41. The relevant Virginia Code
provision answers the same 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 the rules of decision for adjudicating those
rights unchanged. Therefore, the district court correctly
applied Rule 41 to Corradi’s motion to voluntarily dismiss.
Accordingly, we affirm the district court’s judgment. We
dispense with oral argument because the facts and legal
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contentions are adequately presented in the materials before
this court and argument would not aid the decisional process.
AFFIRMED
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