Parker's Classic Auto Works, Ltd.
Nationwide Mutual Insurance Company
Appeal from Superior Court, Rutland Unit, Civil Division
Helen M. Toor, J. (amended entry regarding motion); Samuel
Hoar, Jr., J. (final judgment)
P. McClallen, Rutland, for Plaintiff-Appellant.
T. Boron and Roy A. Mura of Mura & Storm, PLLC, Buffalo,
New York, for Defendant-Appellee.
PRESENT: Reiber, C.J., Skoglund, Robinson, Eaton and Carroll,
1. Plaintiff appeals a judgment entered in favor of defendant
following a trial in which a jury determined that defendant
breached an insurance contract with plaintiff's
assignors. The jury awarded plaintiff $41, 737.89 in damages.
After the trial the superior court concluded that, as a
matter of law, plaintiff could not show that his assignors
were damaged by a breach of contract by defendant. We reverse
this determination, vacate the judgment that was entered in
favor of defendant, and remand with direction to the superior
court to reinstate the jury's verdict and its award of
Factual and Procedural History
2. The following are the facts from the trial record taken in
the light most favorable to plaintiff. Brueckner v.
Norwich Univ., 169 Vt. 118, 122, 730 A.2d 1086, 1090
(1999) (explaining that we must view evidence in the
"light most favorable to the non-moving party" on
appeal of a motion for judgment as a matter of law)
(quotation omitted). Plaintiff is a car repair business in
Rutland. Defendant insures the vehicles of dozens of
plaintiff's customers ("the insureds") who
hired plaintiff to repair damage to their vehicles between
2009 and 2014. Over seventy insurance claims, which all arise
under identical insurance policies, have been combined in
this breach-of-contract case. For each insurance claim
plaintiff repaired a car belonging to an insured, restoring
it to preaccident condition, and, after receiving a post-loss
assignment from an insured,  submitted itemized bills to
defendant to recover for its services. Plaintiff then
released each vehicle to its owner. In each instance,
defendant paid less than what plaintiff had billed to
complete the repair. The difference between the cost of
repair billed by the repair shop and the amount paid by the
insurance company-to whatever extent it is covered by the
insurance policy-is called a short pay in the
collision-repair industry. Plaintiff submitted to defendant a
final invoice and a "supplemental report" itemizing
each of the repairs performed.
3. For each claim involved in this case, although defendant
did not pay a portion of what the repair shop believed was
owed under the policy, defendant did pay significant sums.
Defendant initially paid what its claims adjuster believed to
be covered by the insurance policy after having conducted a
visual inspection of the damage. Defendant generally would
make at least one additional payment based on information
provided by plaintiff after plaintiff disassembled the
damaged vehicle in preparation to repair it. Payment to
repair additional damage that is not apparent from a visual
inspection of the vehicle is called a supplemental payment.
After the adjuster's initial estimate was paid to
plaintiff and any supplemental payments were made, there was
still an outstanding balance for the repair bill on each
claim involved in this case. Plaintiff believed these were
covered by the insurance policy yet had been unpaid by the
insurer. However, defendant maintained that these unpaid
portions of the repair bill between plaintiff and each
insured were not covered under the policy.
4. Plaintiff filed suit as the insureds' assignee to
recover these purported short pays. The case proceeded to
jury trial. Plaintiff offered a series of documents relating
to each claim brought by each insured, which were admitted
into evidence primarily by stipulation: the final invoice, a
supplemental report itemizing all the work done by plaintiff
and identifying charges made by plaintiff that
defendant's claims adjuster did not believe were covered
by the insurance policy, a separate itemized bill for
painting costs incurred, plaintiff's accounting ledger
for each claim, the contract between plaintiff and the
insured authorizing plaintiff to repair the insured's
vehicle, and the assignment of insurance claims by the
insureds to plaintiff. Mr. Parker, the owner of the repair
shop, testified on direct examination to his experience
repairing vehicles and to the billing and repair processes
employed in his shop. He compared, in some respects, the
practices employed in his shop to those used by
defendant's claims adjuster.
5. After plaintiff rested its case, defendant moved for
judgment as a matter of law. See V.R.C.P. 50(a)(1). The trial
court denied this motion, after which defendant presented
testimony by one witness: claims adjuster Alan Douse. Mr.
Douse explained the procedures that he follows to inspect
damaged vehicles belonging to defendant's insureds,
appraise the amount of damage to a vehicle, and issue
payments to insureds based upon his estimate. After receiving
instructions, the jury returned a verdict finding defendant
liable for breach of the insurance policy and awarding
plaintiff $41, 737.89.
6. Defendant filed a renewed motion for judgment as a matter
of law under Vermont Rule of Civil Procedure 50(b), which the
court granted. The court construed the insurance policy as
requiring defendant to pay "an amount [defendant]
determined was sufficient to do the repairs." It
reasoned that the insureds could not have sued defendant for
sums that were entirely within defendant's discretion to
award. Therefore, the court explained, plaintiff could not
sue defendant as the insureds' assignee. In reaching this
conclusion, the court relied heavily on an out-of-state case
involving an auto-glass repair shop, which sued an insurer as
the insureds' assignee. Cascade Auto Glass, Inc. v.
Idaho Farm Bureau Ins., 115 P.3d 751, 755 (Idaho 2005).
Plaintiff appeals the trial court's order granting
defendant judgment as a matter of law. II. Defendant May Not
Unilaterally Determine the Value of an Insured's Claim
7. We review the interpretation of an insurance policy
without deference. Co- operative Ins. v.
Woodward, 2012 VT 22, ¶ 8, 191 Vt. 348, 45 A.3d 89.
We therefore review anew the trial court's determination
that under the policy the amount owed to an insured is fully
within defendant's discretion to determine. An insurance
policy must be "construed according to its terms and the
evident intent of the parties as expressed in the policy
language." Smith v. Nationwide Mut. Ins., 2003
VT 61, ¶ 11, 175 Vt. 355, 830 A.2d 108 (quotation
omitted). When interpreting an insurance policy, the language
is to be viewed "from the perspective of what a
reasonably prudent person applying for insurance would have
understood it to mean." Shriner v. Amica Mut.
Ins., 2017 VT 23, ¶ 6, 204 Vt. 321, 167 A.3d 326
(quotation omitted). We resolve ambiguity in an insurance
policy in favor of an insured, but we do not rewrite a policy
if it happens to benefit an insurer. Id.
8. The claims in this case arise under defendant's
Century II Collision Insurance Policy ('the policy').
Under the policy, defendant promises to pay for "direct
and accidental loss of, or damage to" an insured
vehicle. However, this is subject to a
limitation-of-liability provision mandating that "direct
and accidental loss" cannot exceed "the cash value
of the auto or its damaged parts at the time of loss."
The calculation of "cash value" where the
limitation-of-liability clause is invoked includes
"consideration of fair market value, age, and condition
of the property in question at the time of loss." The
policy specifies that the insurer has three methods from
which to choose to satisfy its obligation to an insured to
pay for the "loss" or "damage": pay the
insured directly, repair the vehicle, or replace the vehicle.
Here it is undisputed that defendant elected to pay the
insureds directly. The parties dispute how much ...