State Farm Mutual Automobile Insurance Company v. Virginia Farm Bureau Mutual Insurance Company

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 10-1227
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,
Plaintiff - Appellant,
v.
VIRGINIA FARM BUREAU MUTUAL INSURANCE COMPANY; NATIONWIDE
MUTUAL FIRE INSURANCE COMPANY; STEVEN IVEY,
Defendants – Appellees,
and
JOHN A. ROBINS,
Defendant.
Appeal from the United States District Court for the Eastern
District of Virginia, at Newport News. Henry Coke Morgan, Jr.,
Senior District Judge. (4:09-cv-00047-HCM)
Argued: December 9, 2011 Decided: February 2, 2012
Before WILKINSON, MOTZ, and SHEDD, Circuit Judges.
Reversed and remanded by unpublished per curiam opinion.
ARGUED: Alexander Spotswood de Witt, BRENNER, EVANS & MILLMAN,
P.C., Richmond, Virginia, for Appellant. C. Jay Robbins, IV,
MIDKIFF, MUNCIE & ROSS, P.C., Richmond, Virginia, for Appellees.
ON BRIEF: Suzanne B. Teumer, JOHNSON GARDY & TEUMER, P.C.,

-- 1 of 11 --

2
Suffolk, Virginia, for Appellee Virginia Farm Bureau Mutual
Insurance Company.
Unpublished opinions are not binding precedent in this circuit.

-- 2 of 11 --

3
PER CURIAM:
This case concerns which insurer, State Farm Mutual
Automobile Insurance Company or Nationwide Mutual Fire Insurance
Company, is obligated to cover John A. Robins’s liability for
property damage resulting from a fire that originated in his
vehicle. In a declaratory judgment action, the district court
found that the incident was covered by the terms of Robins’s
insurance policy with State Farm and excluded from coverage by
Nationwide because the fire damage “resulted from the ownership
or use of” Robins’s vehicle under Virginia law. State Farm Mut.
Auto. Ins. Co. v. Robins, 680 F. Supp. 2d 761, 772 (E.D. Va.
2010). Because at the time of the fire Robins’s van had been
functioning for some time as a storage shed for his business
equipment and not as a vehicle, we reverse the judgment of the
district court.
I.
A.
The relevant facts are undisputed. On August 17, 2008, a
fire destroyed Robins’s 1988 Ford Econoline 350 Box Van and
caused approximately $292,850 in damage to Steven and Cathy
Ivey’s residential property, which was under construction and
vacant at the time. Robins, a self-employed interior trim
carpenter and sole proprietor of JAR Custom Building and

-- 3 of 11 --

4
Remodeling, had been performing construction work at the Ivey
residence for several weeks. At the construction project’s
inception approximately one month prior to the fire, Robins
drove his box van to the work site and parked it in front of the
Ivey residence. He did not drive the vehicle in the intervening
month before the fire. Instead, as the parties stipulated,
during those weeks Robins used the cargo section at the rear of
the van “solely as a storage compartment or tool shed for [his]
business tools and equipment.”
Robins kept the van’s cargo area padlocked and opened it
only to access the tools and equipment stored inside, none of
which were attached to the van itself. Among the items stowed
in the van, Robins kept a battery charger and an electric
splitter that he connected to an extension cord to power
equipment inside the Ivey property. Robins last visited the
Ivey work site on Friday, August 15, 2008, padlocking the van’s
cargo compartment before he left. The fire occurred that
Sunday.
Three fire “cause and origin” investigators examined the
cause of the fire. Each independently concluded that the fire
originated in the rear of the van, but found no evidence to
suggest that the box van itself caused the fire. Rather, the
investigative reports suggested that the fire was caused by the
malfunction of equipment kept in the rear of the van, most

-- 4 of 11 --

5
likely an electrical problem with an extension cord or battery
charger.
B.
Virginia Farm Bureau Mutual Insurance Company paid Steven
Ivey $292,850 for the fire damage to his property pursuant to a
homeowner’s insurance policy. Farm Bureau subsequently claimed
subrogation rights against Robins for the money it paid to Ivey
on the grounds that the fire damage was the proximate result of
his negligence. Robins, in turn, sought coverage for his
potential liability to Farm Bureau under a business auto
insurance policy issued by State Farm and a commercial general
liability insurance policy issued by Nationwide.
As relevant here, Robins’s auto insurance policy for his
box van provides that State Farm will pay “all sums an ‘insured’
legally must pay as damages because of . . . ‘property damage’
to which this insurance applies, caused by an ‘accident’ and
resulting from the ownership, maintenance or use of a covered
‘auto.’” Conversely, the terms of his policy with Nationwide
exclude from coverage “‘property damage’ arising out of the
ownership, maintenance, [or] use” of a vehicle owned by the
insured. The relevant language in the two policies is therefore
such that if one policy covers the fire damage to the Ivey
property, the other excludes it.

-- 5 of 11 --

6
State Farm sought a declaratory judgment in the United
States District Court for the Eastern District of Virginia that
it had no obligation to defend, indemnify, or provide insurance
coverage to Robins for his alleged liability to Farm Bureau
because the relevant loss did not result “from the ownership,
maintenance or use of a covered auto.” Nationwide responded,
asking the court instead to declare that the incident at issue
arose from the “ownership or use” of Robins’s vehicle and was
therefore excluded from Nationwide’s general commercial
coverage. The parties stipulated to all pertinent facts and
State Farm and Nationwide filed cross-motions for summary
judgment. The district court denied State Farm’s motion and
granted Nationwide’s motion in part, “to the extent that it asks
the Court to find that the property damage arose out of the
ownership or use of the van.” Robins, 680 F. Supp. 2d at 772.
This appeal by State Farm followed.
Nationwide contends that we must review the district
court’s grant of summary judgment under a “clearly erroneous”
standard because it was based on findings of fact. But summary
judgment is awarded only if “there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a). And Nationwide
misstates the judgment of the district court, which specified:
“As the parties have stipulated the facts in this case, only

-- 6 of 11 --

7
legal issues remain to be decided.” Robins, 680 F. Supp. 2d at
764. The sole issue for consideration in this appeal, whether
the fire damage arose out of the “ownership or use” of Robins’s
vehicle, is one of Virginia law. We therefore review the
district court’s grant of summary judgment de novo. See Norfolk
S. Ry. Co. v. City of Alexandria, 608 F.3d 150, 156 (4th Cir.
2010).
II.
The district court erred in finding that the damage to the
Ivey property resulted from the ownership or use of Robins’s
vehicle such that his potential liability was insured by State
Farm and excluded from coverage by Nationwide. It is clear that
there is no liability coverage under State Farm’s policy for the
subject fire loss. As a matter of well-settled Virginia law, to
constitute “ownership or use” of a vehicle for purposes of
insurance coverage “there must be a causal relationship between
the accident and employment of the insured motor vehicle as a
vehicle.” State Farm Mut. Auto. Ins. Co. v. Powell, 318 S.E.2d
393, 397 (Va. 1984) (emphasis added). In Powell, the Virginia
Supreme Court held that a death resulting from the accidental
discharge of a shotgun, which was resting on a gun rack fastened
to the insured pickup truck, did not arise from use of the
vehicle within the meaning of an auto insurance policy or a

-- 7 of 11 --

8
corresponding exclusion in a homeowner’s policy. The discharge
occurred while the truck was parked and a group of friends,
including the victim, was congregated in and around the vehicle.
The court emphasized that the vehicle was not functioning as a
truck, but “merely was the situs for a social gathering.” Id.
at 398. It “was equivalent to a park bench, a picnic shelter, a
tent, or a shed in that it was being employed as a gathering
place for friends and not for any specific enterprise usually
associated with use of a” vehicle, such as transportation. Id.
Under the facts in this case, the fire damage likewise did
not arise from the ownership or use of the insured vehicle,
where the box van was functioning as the “equivalent to . . . a
shed.” Id. Nationwide contends that Robins employed the box
van as a vehicle because he drove it to the work site at the
start of the construction project. But the relevant inquiry is
how the vehicle was being used at the time of loss. See, e.g.,
Simpson v. Va. Mun. Liab. Pool, 692 S.E.2d 244, 248 (Va. 2010)
(concluding that the relevant vehicle was not being used as a
vehicle at the time of injury); U.S. Fire Ins. Co. v. Parker,
463 S.E.2d 464, 466 (Va. 1995) (same). And at the time of the
fire, the van was not being used in any way commonly associated
with the function of a vehicle.
As Nationwide conceded in the joint stipulation of facts,
during the weeks before the fire the van was operating “solely

-- 8 of 11 --

9
as a storage compartment or tool shed for Robins’ business tools
and equipment.” It had been parked and stationed in front of
the Ivey residence for approximately one month. In that time,
Robins opened and padlocked the van only to access his equipment
and to safely store it near the work site. On the day of the
fire, Robins was absent from the work site and the rear of the
van, where the fire originated, was padlocked. Accordingly, the
van “merely was the situs” of the fire, which was not caused by
the van itself but by an electrical problem with equipment that
happened to be kept there. Powell, 318 S.E.2d at 398. As the
district court emphasized in Doe v. State Farm Fire & Cas. Co.,
878 F. Supp. 862, 864 (E.D. Va. 1995), under Virginia law
“[u]sing a vehicle as a heavy stationary object or as an
enclosure, rather than as a means of transportation, does not
constitute a contemplated ‘use’ under the terms” of an insurance
policy.
The district court attempted to distinguish this case from
Powell, noting that here the van was “specifically built with a
cargo space intended to hold cargo” and State Farm “was
therefore on notice, from the moment it agreed to insure the
vehicle, that the van would be used to hold foreign objects
within its cargo space.” Robins, 680 F. Supp. 2d at 769. But
the vehicle’s cargo space does not provide a basis to circumvent

-- 9 of 11 --

10
the requirement that the vehicle be used “as a vehicle” at the
time of the accident.
Of course, the expectations of the parties to the insurance
contract are relevant to interpretation of its coverage. See
Powell, 318 S.E.2d at 397. As the Virginia Supreme Court
explained in Powell, the “ownership, maintenance, or use”
provision “should be construed in the light of the subject
matter with which the parties are dealing.” Id. But read in
the context of an automobile liability policy, the provision’s
“natural and ordinary meaning” requires use of a vehicle as a
vehicle. Id. The van’s cargo capacity may be relevant only
within this common sense parameter. For example, if equipment
caught on fire while being transported in the van, the outcome
might be different. But by contracting to insure a cargo van,
State Farm nevertheless insured only damage arising from its
function as a vehicle. Under these facts, where the vehicle had
been converted to a shed and had not been used for
transportation for approximately one month, the van’s capacity
to carry cargo cannot bear the weight the district court
assigned it.
III.
For the foregoing reasons, the district court erred in
denying State Farm’s motion for summary judgment and granting in

-- 10 of 11 --

11
part Nationwide’s motion for summary judgment. We therefore
reverse these determinations and remand the case to the district
court for further proceedings in accordance with this decision.
REVERSED AND REMANDED

-- 11 of 11 --