eNotes: Liability – April 2023 – Virginia

SIGNIFICANT CASE SUMMARIES

Virginia Case Summaries

Moore v. Progressive Universal Ins. Co.
United States District Court for the Eastern District of Virginia
2023 U.S. Dist. LEXIS 41983

Decided: March 13, 2023

A tow truck driver can be covered by the insurance policy of the vehicle he is towing if he is injured while affixing the towed vehicle to his own truck.

Background

Joshua Moore, a tow truck operator, was responding to a call of a disabled RV on the right shoulder of Interstate 95 in Henrico County, Virginia. After parking his truck in front of the RV and speaking to the owner, he began to work on the RV. In order to properly affix it to his truck, Moore entered and exited the RV a total of four times and manipulated various controls therein each time. Moore also altered components on the underside of the RV, and added additional flashing red lights to its rear. After using his truck to lift the front of the RV off the ground, Moore towed the RV twenty feet further down the road, to a safer part of the shoulder. As Moore was strapping the front driver’s side wheel to a wheel grid in the bed of his truck, he was struck by a passing vehicle.

Moore was injured extensively, incurring approximately $1.3 million in medical bills and lost wages. The liability policy of the at-fault driver contained limits of $100,000. The RV owner had a policy through Progressive Universal Insurance Company that carried Underinsured Motorist limits of $250,000. Other applicable policies were not discussed in the Court’s Opinion. Moore filed this action against Progressive, pre-emptively seeking a declaratory judgment stating that he was entitled to coverage under the RV owner’s policy. Both the statute and the policy required that a person be using or occupying the vehicle in order to qualify for coverage. As such, Moore argued that he was both using and occupying the RV, while Progressive argued that he was doing neither.

Holding

The Court determined that Moore was covered by the Progressive policy under either term as he was both using and occupying the RV at the time of the crash. The Virginia courts have applied expansive definitions to both terms: “use” refers to using a vehicle as a vehicle and as an integral part of the user’s mission, though the use need not be related to transportation or be the cause of the injury; and “occupancy” can include the taking of any vehicle-oriented actions shortly before entering or after exiting a vehicle. The Court determined that Moore was using the RV as, although he was not using it for transportation, he was using the emergency lights and other components as a part of his mission to safely tow it. Similarly, the Court ruled that Moore was occupying the RV, although he had just exited it, as strapping its wheel to the bed of his truck was a vehicle-oriented task.

Questions about this case can be directed to John Lyding at (571) 470-0395 or jlyding@tthlaw.com.

Sedaghatpour v. Lemonade Ins. Co.
United States District Court for the Eastern District of Virginia
No. 1:22-cv-00355

Decided: February 6, 2023

Cryptocurrency stolen from insured’s hot wallet not covered by homeowner’s policy.

Background

Plaintiff, Ali Sedaghatpour, owned approximately $170,424.67 of various cryptocurrencies, which he stored in a “hot wallet,” a virtual storage option wherein cryptocurrency is stored on a third-party’s servers and accessed via internet. Plaintiff used APYHarvest as his hot wallet, and he alleged that all of his cryptocurrency was stolen. He made a claim under his homeowner’s insurance policy for $160,000.00, the policy’s limit. His claim was denied on the ground that the only property covered by the policy are physical items damaged directly by one of the specific losses contemplated by the policy. In the alternative, if the policy did provide coverage for the loss, Plaintiff’s recovery would be limited by the $500.00 of coverage available for losses “resulting from theft or unauthorized use of an electronic fund transfer card or access device used for deposit.” Plaintiff received $500.00 for his stolen cryptocurrency.

Plaintiff filed a Complaint in the Fairfax County Circuit Court, seeking $159,500.00 in damages. The Defendant insurer removed the matter to Federal Court and filed a successful motion to dismiss for failure to state a valid claim for breach of contract, as the policy didn’t include coverage for theft or loss of cryptocurrency. Plaintiff filed an Amended Complaint, which the Defendant again moved the Court to dismiss, arguing that the policy does not cover the loss of cryptocurrency or that the policy limits coverage for the loss of cryptocurrency to $500.00.

Holding

The policy clearly provides that it insures against “direct physical loss” to an insured’s personal property “caused by any of the following perils,” one of which is theft. This would apply to any personal property owned or used by the insured while it is anywhere in the world. Cryptocurrency exists only virtually or digitally and has no physical or tangible existence. Consequently, the theft of loss of cryptocurrency cannot constitute a “direct physical loss.” The Court considered prior case law where damage to computer files was a covered loss. In that prior case, the damage was covered because there was resulting damage to a computer system, which constituted damage to tangible property the insured personally owned. The Court here found that the critical difference between that case and this one was that the insured didn’t own any tangible personal property that was damaged as a result of the cryptocurrency theft.

Questions about this case can be directed to Mackenzie Payne at (571) 470-1906 or mpayne@tthlaw.com.