The West Virginia Supreme Court recently answered the following question certified from the U.S. District Court in that state: Does the insured bear the burden of showing that a jury awarded damages for covered, as opposed to non-covered, claims when the answer is not clear from the award itself? The court’s answer: Yes, at least where the insured controlled the defense of the underlying case. Camden-Clark Memorial Hospital Association v. St. Paul Fire & Marine Ins. Co., No. 33909 (W. Va. June 25, 2009).
At issue is a wrongful death suit against a doctor and hospital alleging both negligent and intentional conduct. The jury awarded over $6.5 million of damages. The jury allocated this award between the various causes of action and between compensatory and punitive damages, but not between intentional and unintentional conduct. Specifically, the award did not specify whether the punitive damages and the damages awarded for the tort of “outrage” were due to intentional or negligent conduct by the defendants. This distinction was crucial for the determination of coverage under the defendants’ insurance policy: If the damages were awarded for intentional conduct, they were excluded for being “expected or intended by the protected person.”
Upon certification from the United States District Court for the District of West Virginia, the West Virginia Supreme Court of Appeals held that the insured’s general burden to “prove both the existence of an applicable insurance contract and its material terms” ordinarily also applies to the allocation of a judgment to covered claims. The court further stated that “the insured’s ordinary burden to allocate a verdict between covered and non-covered claims does not shift to an insurer unless the insurer has an affirmative duty to defend the insured under the policy terms.” The court explained that the party that controls the defense has a better opportunity to ensure that a judgment is allocated between covered and non-covered claims, and therefore that party should bear the burden of proving such allocation after the fact. For a full copy of the opinion, please click here.