A federal district court in Virginia has ruled that a rental truck had been “principally garaged” in Virginia rather than in Maryland, and that the driver therefore was entitled to $2 million in underinsured motorist benefits rather than $75,000.
After Robert Hall was injured in an automobile accident, he filed a lawsuit in a Virginia state court styled as Hall v. El-Ibrahimy (Ibrahimy Lawsuit). The defendant in the Ibrahimy Lawsuit had automobile insurance coverage with bodily injury limits of $25,000; Hall expected that his damages would exceed $25,000, and he sought underinsured motorist (UIM) benefits under an insurance policy that had been issued by Travelers Property Casualty Company of America.
At the time of the accident, Hall was employed by WP Company, LLC, which publishes The Washington Post, and was driving a truck owned by Penske Truck Leasing Company, L.P. Hall was an insured under the insurance policy Travelers had issued to Nash Holdings, LLC, the parent company of WP Company.
The truck that Hall was driving at the time of the accident was a substitute vehicle Penske had rented to WP Company for three days due to the temporary unavailability of another vehicle. The truck was titled and registered in Maryland and had a Maryland license plate; except for the three days when it was rented to WP Company and involved in the accident, it was “principally garaged” at Penske's facility in Capitol Heights, Maryland, during the three-month period when it was a rental vehicle.
WP Company garaged its leased trucks — including the truck Hall was driving at the time of the accident — at its facility in Virginia.
No definition in policy
The Travelers policy provided that the insurance limit depended on where a covered vehicle was “principally garaged,” but it did not define that term. Travelers contended that the truck had been “principally garaged” in Maryland and that, as a consequence, Hall was limited to $75,000 in underinsured motorist benefits.
For his part, Hall argued that the truck had been principally garaged in Virginia, and that he therefore was entitled to $2 million in UIM benefits.
Hall sued, and the parties moved for summary judgment.
The Travelers policy provided that “The LIMIT OF INSURANCE for the coverages shown below is the LIMIT OF INSURANCE shown for the State where a covered 'auto' is principally garaged.”
The district court's decision
The district court granted summary judgment in favor of Hall, ruling that the policy “unambiguously” provided Virginia coverage.
In its decision, the district court held that when the policy referred to “where a covered 'auto' is principally garaged,” the relevant time period was when the truck was a “covered” auto. The truck was “covered” during the three-day period it served as a substitute for the vehicle being serviced, and was not “covered” prior to the three-day rental period. Moreover, the district court observed, WP Company garaged the truck in Virginia during the three-day period.
Therefore, the district court concluded, the truck was “principally garaged” in Virginia for purposes of the policy, and Hall was entitled to UIM coverage up to the $2 million limit applicable for Virginia.
The case is Hall v. Travelers Cas. Ins. Co. of America, No. 1:16-cv-00173 (GBL) (E.D. Va. Sept. 27, 2016).
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