UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

COMMERCE AND INDUSTRY INSURANCE
COMPANY,
Plaintiff-Appellee,

v.

VALERO TERRESTRIAL CORPORATION,
d/b/a Brooke County Sanitary
Landfill; SOLID WASTE SERVICES OF
WEST VIRGINIA, INCORPORATED; SOLID
                                                               No. 95-1874
WASTE SERVICES, INCORPORATED;
DOMINICK TANTALO,
Defendants-Appellants,

and

RICHARD SIX; DONNA SIX, his wife;
RICHARD GILBERT SIX; JAMIE LEE
KOONS, their children,
Defendants.

Appeal from the United States District Court
for the Northern District of West Virginia, at Wheeling.
Frederick P. Stamp, Jr., Chief District Judge.
(CA-93-103-5)

Argued: December 4, 1995

Decided: May 6, 1996

Before WILKINSON, Chief Judge, RUSSELL, Circuit Judge, and
THORNBURG, United States District Judge for the Western
District of North Carolina, sitting by designation.

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Affirmed by unpublished per curiam opinion.

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COUNSEL

ARGUED: Albert Anthony DeGennaro, Harleysville, Pennsylvania,
for Appellants. John Wilbur Alderman, III, STEPTOE & JOHNSON,
Charleston, West Virginia, for Appellee. ON BRIEF: William F.
Fox, Jr., Harleysville, Pennsylvania, for Appellants. Martin R. Smith,
Jr., STEPTOE & JOHNSON, Charleston, West Virginia, for Appel-
lee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

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OPINION

PER CURIAM:

In this insurance dispute, we must determine the liability of Com-
merce and Industry Insurance Co. ("Commerce") under a commercial
general liability policy issued to Valero Terrestrial Corporation d/b/a
Brooke County Sanitary Landfill ("Valero"). One of Valero's employ-
ees who was injured in a work-related accident sued Valero and one
of its supervisors, alleging that the accident was caused by the inten-
tional conduct of Valero and the supervisor. Valero filed a claim with
Commerce under its commercial general liability insurance policy to
pay for the costs of defense. Commerce denied coverage but under-
took the defense with a reservation of rights. Commerce brought this
action, seeking a declaratory judgment that Commerce had no obliga-
tion under the insurance policy to provide a defense for an action
alleging intentional conduct. The district court granted summary judg-
ment in Commerce's favor. We affirm.

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I.

Commerce issued to Valero a policy of commercial general liabil-
ity insurance, Policy No. GLCM 340-43-30 RA (the"policy")1 The
period of the policy was from December 1, 1992, to December 1,
1993.

On October 5, 1991, Richard Six, an employee of Valero, was
operating a dump truck in the course of his employment. As Six was
carrying a load of dirt up a steep hill, the vehicle lost its acceleration.
Six attempted to use the brakes, but the vehicle drifted down the hill
and rolled backward over a six-foot embankment. Because of the
accident, Six incurred back injuries.

Six applied for and received workers' compensation benefits. On
March 12, 1993, Six filed an action in West Virginia state court alleg-
ing that the intentional conduct of Valero (his employer) and Domi-
nick Tantalo (his supervisor) caused his injuries. Six named both
Valero and Tantalo as defendants. In West Virginia, a personal injury
action relating to an employer's intentional infliction of injuries upon
an employee is commonly referred to as a "Mandolidis action,"
named after the West Virginia Supreme Court's decision in
Mandolidis v. Elkins Industries, Inc., 246 S.E.2d 907 (W. Va. 1978).

Valero filed a claim with Commerce under the policy for coverage
of its defense costs in Six's Mandolidis action. Commerce agreed to
assume Valero's defense while reserving its right to contest its obliga-
tion to cover Valero's claim. Commerce subsequently filed this
declaratory judgment action in United States District Court for the
Northern District of West Virginia,2 claiming that the policy did not
cover Valero for the defense of a Mandolidis action.
_________________________________________________________________

1 Valero was one of several named insureds on the policy.

2 Commerce named Valero and Tantalo as defendants. It also named
Solid Waste Services, Inc. and Solid Waste Services of West Virginia,
Inc. as defendants. These two corporations were also named insureds on
the insurance policy with Commerce, but they had no involvement in the
accident.

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After discovery, on June 23, 1994, Commerce filed a motion for
summary judgment. On August 8, Valero and Tantalo filed a memo-
randum in opposition to Commerce's motion for summary judgment.
The defendants also filed a cross-motion for summary judgment in its
favor. The defendants did not file a memorandum in support of its
cross-motion, but instead incorporated by reference its memorandum
in opposition to Commerce's motion. On September 1, Commerce
filed its reply memorandum in support of its motion for summary
judgment.

The district court granted Commerce's motion for summary judg-
ment on March 22, 1995. The district court did not rule on the defen-
dants' cross-motion for summary judgment, which the district court
deemed withdrawn for failure to file a supporting memorandum under
Local Rule 2.07(e) of the United States District Court for the North-
ern District of West Virginia. The defendants appeal.

II.

This court reviews de novo the district court's granting or denying
of summary judgment. Lone Star Steakhouse & Saloon, Inc. v. Alpha
of Virginia, Inc., 43 F.3d 922, 928 (4th Cir. 1995). Summary judg-
ment is appropriate where the record shows that"there is no genuine
issue as to any material fact and that the moving party is entitled to
a judgment as a matter of law." Fed. R. Civ. P. 56(c).

A.

The policy covered Valero for any damages and defense costs
resulting from "bodily injury" or "property damage," as defined in the
policy. Section I.A.2.e(1) of the policy specifically excludes coverage
of "bodily injury" to "[a]n employee of the insured arising out of and
in the course of employment by the insured . . . ."3 Valero, however,
paid an additional premium for a stop-gap endorsement, which pro-
vided that:
_________________________________________________________________

3 Endorsement 13 amended § I.A.2.e of the Policy, but the quoted por-
tion was not changed.

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          In consideration of the premium herein provided, it is agreed
          that if, under any circumstances, it is determined that any
          employee of the insured, who is reported and declared under
          the workers' compensation law or laws of the State(s) of
          . . . West Virginia . . . is injured in the course of his
          employment but is not entitled to receive (or elects not to
          accept) the benefits provided by the aforementioned law,
          then this policy shall cover the legal liability of the insured
          for such bodily injury, disease or death.

The stop-gap endorsement extends coverage of the policy to damages
resulting from "bodily injury" to employees acting in the course of
their employment. Thus, while the policy expressly excludes coverage
of damages resulting from an injury to an employee, the endorsement
removes this barrier to Valero's claim.

Both the policy and the endorsement, however, exclude coverage
of damages arising from the insured's intentional conduct. Section
I.A.2.a of the policy provides that the insurance does not apply to
"`[b]odily injury' or `property damage' expected or intended from the
standpoint of the insured." The policy also implicitly excludes cover-
age of intentional conduct. Section I.A.1.b(1) of the policy provides
that "[t]his insurance applies to `bodily injury' and `property damage'
only if . . . [t]he `bodily injury' or`property damage' is caused by an
`occurrence' that takes place in the `coverage territory.'" Section VI.9
of the policy defines "occurrence" as "an accident, including continu-
ous or repeated exposure to substantially the same general harmful
offenses." Although the policy does not define"accident," we gener-
ally understand the term to refer to unintentional conduct. See The
American Heritage Dictionary 71 (2d college ed.) (1982) (defining
"accident" as "[s]omething that occurs unexpectedly or unintention-
ally"). Because the policy covers damages resulting from occurrences,
which by definition do not include intentional acts, the policy does
not cover damages resulting from the insured's intentional conduct.

The stop-gap endorsement, similarly, is limited to occurrences. The
endorsement provides (emphasis added):

          The [insurer's] liability under this endorsement on account
          of bodily injury, disease, or death of one person, including

                    5
          damages for care and loss, as the result of one occurrence,
          is limited to the sum of $1,000,000 and subject to the same
          limit for each person, the [insurer's] total limit of liability
          for bodily injury, disease, or death as result of one
          occurrence is limited to the sum of $1,000,000.

Thus, the endorsement, like the policy, does not extend coverage to
damages resulting from Valero's intentional conduct.

The endorsement does not provide coverage of Valero's claim for
a second reason. The endorsement provides coverage only where the
injured employee is not entitled to receive workers' compensation
insurance or elects not to accept those benefits. It expressly excludes
coverage where the injured employee accepts workers' compensation
benefits.

Before bringing his Mandolidis action against Valero, Six applied
for and received workers' compensation benefits. Because Six has
sued Valero for its intentional conduct and because Six has already
received workers' compensation benefits for his injuries, neither the
policy nor the stop-gap endorsement cover Valero's defense costs in
Six's action.

B.

Valero contends that it had a reasonable expectation when it pur-
chased the stop-gap endorsement that it would receive coverage of
damages and defense costs resulting from its own intentional conduct.
Valero urges this court to consider its reasonable expectation in pur-
chasing the endorsement.

Under the doctrine of reasonable expectations, #7F 79AD#a]n insurance
contract should be given a construction which a reasonable person
standing in the shoes of the insured would expect the language to
mean.'" National Mutual Ins. Co. v. McMahon & Sons, Inc., 356
S.E.2d 488, 495 (W. Va. 1987) (quoting Soliva v. Shand, Morahan &
Co., 345 S.E.2d 33, 35-36 (W. Va. 1986)). With respect to insurance
contracts, "[t]he objectively reasonable expectations of applicants and
intended beneficiaries regarding the terms of insurance contracts will

                    6
be honored even though painstaking study of the policy provisions
would have negated those expectations." Id . (citation omitted). Under
West Virginia law, however, the doctrine of reasonable expectations
applies only where the policy terms are ambiguous. Id. at 496 (citing
Soliva, 345 S.E.2d at 36).

Although Valero concedes that the language of the stop-gap
endorsement is unambiguous, see Appellant's Brief 12 (stating "while
the lower court may not have been totally without basis in concluding
that the language did not appear to be ambiguous . .."), Valero argues
that we have interpreted the endorsement in a way that creates an
absurd result. Valero contends that the stop-gap endorsement, as we
have interpreted it, does not provide Valero with any coverage not
already included in the policy. According to Valero, the endorsement
does not protect Valero against damages arising from an employee's
accidental injuries because the employee can always seek workers'
compensation benefits and, as we have interpreted it, the endorsement
excludes coverage of Valero's intentional conduct. Because it is
absurd to think that Valero would pay a premium for an endorsement
that never provides coverage, Valero argues that we must interpret the
endorsement in light of Valero's reasonable expectations. Valero
insists that it expected the endorsement to provide coverage of
employee's injuries resulting from its own intentional conduct.

We find no merit in Valero's argument. The endorsement does
cover something: it protects Valero against damages arising from the
accidental injuries to employees who choose not to seek workers'
compensation benefits. Although injured employees have the option
to seek workers' compensation benefits, some may elect not to take
those benefits and to sue his employer directly for his injuries. The
stop-gap endorsement protects Valero against this event. Presumably,
the price of the premium reflects the fact that many employees, when
injured, will settle for workers' compensation benefits.

We have our doubts that Valero, when purchasing the stop-gap
endorsement, believed it was purchasing coverage of bodily injury to
its employees caused by its own intentional conduct. We also doubt
that such an expectation would have been reasonable in light of the
premium that Valero paid for the endorsement. Nonetheless, we need
not consider these factual issues. Because the language of the stop-

                    7
gap endorsement is unambiguous and does not lead to an absurd
result, we enforce its terms without considering the purported expec-
tations of the insured when it purchased the endorsement.

III.

Having concluded that the policy and endorsement do not cover
damages and defense costs resulting from Valero's intentional con-
duct, we need not address the defendants' other substantive argu-
ments. These arguments, even if valid, would not alter the fact that
the policy and endorsement exclude damages and defense costs
resulting from the insured's intentional conduct.

Furthermore, we need not address the defendants' argument that
the district court erred in treating their motion for summary judgment
as withdrawn. Because we affirm the district court's granting of sum-
mary judgment in favor of Commerce, the defendants' motion for
summary judgment is moot.

IV.

For the foregoing reasons, we affirm the district court's granting of
summary judgment in favor of Commerce.

AFFIRMED

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