Docket – January 17, 2019

Supreme Court of Virginia

Erie Ins. Exchange v. EPC MD 15 LLC (P), SCV (Kelsey) from Winchester (Athey).

A limited liability company was insured on a commercial-property policy issued by the appellant. The LLC sued for policy coverage for fire damage to a building owned by its subsidiary, which was not a named insured. The circuit court erred in holding that the LLC’s ability to control its subsidiary meant that, for insurance-coverage purposes, the LLC acquired all of the subsidiary’s property under a coverage-extension provision in the policy.

The policy’s declarations, the language in the coverage and coverage-extension provisions, and the language in the subrogation and exclusion provisions all undermine the reasonableness of the “ability to control” argument. The declarations imply that the “interest” of the named insured is its ownership interest in the premises covered by the policy. Others’ covered interests (in personal property only) are specifically described elsewhere, and applying the subrogation and intentional-loss exclusion provisions as the LLC proposes would lead to peculiar results.

Because the policy didn’t cover the subsidiary’s damaged property, the circuit could should have granted the insurer’s motion for summary judgment.

Reversed and final judgment.

Virginia Circuit Courts

Swahn v. Hussain, Fairfax (Oblon).

In protracted litigation between townhome neighbors, the defendants/counter-plaintiffs’ losses on two issues offset their success on a third. The plaintiffs sued the defendants for public and private nuisance based on alleged operation of an illegal commercial catering business out of the home; the defendants counterclaimed for trespass.

Analyzing the claim results overall, the defendants are not “prevailing parties” and therefore are not entitled to the attorneys’ fees for their one success.

In addition, the plaintiffs/counter-defendants attempted to abandon the claim they lost, having waived the only available remedy. However, they were unable to non-suit it only because the defendants refused to dismiss their counterclaim for attorneys’ fees. Thus, they had no incentive to argue it at trial, and the defendants’ “victory” on that count is inconsequential.

Finally, the defendants/counter-plaintiffs failed to prove that their claimed attorneys’ fees were reasonable and necessary to their success. The fee award requested is the full amount of attorneys’ fees incurred in the litigation; the proffered fees aren’t segregated by claim.

Petition for attorneys’ fees denied.

Categories: Daily Dockets

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