During the hole-in-one tournament, two golfers hit a hole-in-one on the designated hole. Old White paid out $200,000 as a result. The hole in question was only 137 yards away from the tee, a fact which is undisputed. All Risks sought a judgment that the policy provided no coverage because Old White failed to comply with the minimum yardage requirement. The district court granted the judgment, and the appellate court affirmed.

Old White first argued that it is entitled to coverage under the terms of the policy and, in the alternative, it had a reasonable expectation of coverage. Old White contends that the district court erred in finding no coverage.

Old White was not able to show a genuine issue of material fact that it was entitled to coverage under the terms of the policies. The applicable West Virginia law states that "where the provisions in an insurance policy contract are clear and unambiguous they are not subject to judicial construction or interpretation, but full effect will be given to the plain meaning intended." The final policies unambiguously state that the designated hole had to be at least 170 yards from the tee, and Old White effectively bound coverage when their agent sent in payment on behalf of Old White after receiving the policies. Even if Old White's application was found to supersede the policy, there would still be no coverage as the application stated a 150 yard minimum and the hole-in-ones were achieved at 137 yards.

Old White also failed to show there was a reasonable expectation of coverage. When talking about insurance contracts, the doctrine of reasonable expectations is that the objectively reasonable expectations of applicants regarding the terms of the insurance policy will be honored, despite whether or not a pointed study of the policy provisions would negate the expectations. In this case the policy language is unambiguous, so Old White is charged with the task of showing that the insurance agents created a reasonable expectation of coverage, which Old White failed to do. In fact, Old White's agent had been in discussion with the insurer about the minimum yardage, and the responsibility to relay notice of a discussion of terms to a principal falls on the agent.

Old White also argued that All Risks was negligent for failing to keep Old White informed during policy negotiations and agreeing to an unauthorized minimum yardage. The Court determined that Old White failed to fulfill all of the elements of a negligence claim.

Editor's Note:

Just because they have an insurance policy covering a specific situation, a prudent insured should pay attention to the policy language and the specific exclusions that may apply, so they can have the appropriate coverage in place in case of an occurrence. In this case, although Old White had a "Hole-In-One" policy in place, they are not entitled to a reward because they did not ensure that all of their holes complied with the insurance contracts terms. The required length of the hole-in-one shot is typical in a hole-in-one policy, because insurers want to protect themselves from having to pay out something that is almost guaranteed to happen. In the case at hand, two individuals were able to get a hole-in-one on the same hole, which probably would not have happened if the hole was 150 yards away from the tee, and would have been even more unlikely 170 yards from the tee. The West Virginia law mentioned in the above analysis was quoted from Aluise v. Nationwide Mut. Fire Ins. Co., 218 W. Va. 498, 625 S.E. 2d 260, 268 (W. Va. 2005), and the discussion of the responsibility of an agent in relaying policy terms to the principal is found in the case State ex rel. Yahn Elec. Co. v. Baer, 148 W. Va. 527, 135 S.E. 2d 687, 690 (W.Va. 1964).