                             UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT


                             No. 04-2004



FEDERAL INSURANCE COMPANY, a/s/o Transworld
Connection, Limited,

                                               Plaintiff - Appellant,

           versus

THERESA ANN WARD; PAT BONDURANT,

                                              Defendants - Appellees.



Appeal from the United States District Court for the Western
District of Virginia, at Lynchburg.  Norman K. Moon, District
Judge. (CA-03-102)


Argued:   October 26, 2005                 Decided:   January 24, 2006


Before LUTTIG, MICHAEL, and GREGORY, Circuit Judges.


Reversed and remanded by unpublished opinion. Judge Gregory wrote
the opinion, in which Judge Luttig and Judge Michael joined.


ARGUED: Daniel    J.   Luccaro,  COZEN   O’CONNOR,  Philadelphia,
Pennsylvania, for Appellant. Henry Moseley Sackett, III, EDMUNDS
& WILLIAMS, P.C., Lynchburg, Virginia; John Tandy Cook, CASKIE &
FROST, Lynchburg, Virginia, for Appellees. ON BRIEF: Robert M.
Caplan, COZEN O’CONNOR, Philadelphia, Pennsylvania; Elisabeth
Ayyildiz, MORIN & BARKLEY, L.L.P., Charlottesville, Virginia, for
Appellant.


Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
GREGORY, Circuit Judge:

     Federal    Insurance    Company     (“Federal”)    as   subrogee   of

Transworld Connection, Ltd. (“Transworld”), appeals the district

court’s grant of summary judgment in favor of Theresa Ann Ward and

Pat Bondurant (collectively “the Employees”), former employees of

Transworld.    The resolution of this dispute turns on whether the

district court properly considered the Employees to be insured

under a policy issued to Transworld by Federal (“the Policy”) and

thus immune from suit under Virginia’s anti-subrogation rule.1          On

appeal,   Federal   argues    that     the   district   court   erred   in

interpreting the Policy under Virginia’s “course of employment”

test and in awarding summary judgment to the Employees on that

basis.    Federal further contends that had the court applied the

correct tests of coverage, the award of summary judgment in favor

of the Employees would not have been appropriate. Because we agree

that the district court applied the wrong test and that the

Employees’ alleged act of negligence is not covered by the Policy,

we reverse the grant of summary judgment in favor of the Employees,




     1
      Virginia’s anti-subrogation rule provides that an insurance
company may not seek indemnification from its insured. Walker v.
Vanderpool, 302 S.E.2d 669, 672 (Va. 1983) (“where the plaintiff
has contracted to protect the defendant from a loss by procuring
insurance, the plaintiff (or his subrogee) may not recover for that
loss from the defendant even if the loss is caused by the
defendant’s negligence.”); see also Sherwood Trucking, Inc. v.
Carolina Cas. Ins. Co., 553 F.2d 568, 572 (4th Cir. 1977).

                                     2
hold that they are not immune from suit, and remand for further

consideration.



                                 I.

       On September 9, 2003, Transworld’s facility located at 260

Fastener Drive in Lynchburg, Virginia, caught fire.   J.A. 129.   At

the time, Transworld had property and liability coverage through

the Policy issued by Federal. Id. The Policy insured Transworld’s

employees when performing two classes of covered acts:        “acts

within the scope of their employment by [Transworld]” or “duties

related to the conduct of [Transworld’s] business.”    Id. at 502.

Under the Policy, for which Transworld paid $14,269 annually, id.

at 337, Federal reimbursed Transworld for $352,832.34 and $240,000

in property and personal property losses, respectively.     Id. at

129.     Because the Policy, in limited instances, also covered

Transworld’s employees’ personal property, a portion of Federal’s

payments to Transworld was for damage to the personal effects of

Transworld’s employees.    Id. at 352, 335-37.   Ward, for example,

received $230 as compensation for her personal property losses.

Id. at 33, 333.

       Federal maintains that the fire resulted from the Employees’

negligent disposal of smoking materials.     At approximately 6:00

p.m. on the evening of the fire, after everyone except for the

Employees and two waiting children had left the building, Ward shut


                                  3
down her computer and lit a cigarette as she prepared to leave

work.2   Id. at 200, 570-74.   After Bondurant completed her work and

shut down her computer, she entered Ward’s office, observed Ward

smoking, and lit her own cigarette.      Id. at 192-93, 204, 570-74.

Just before leaving Ward’s office, Ward and Bondurant flicked ashes

from the ends of their cigarettes into a trash can filled with

paper.   Id. at 193, 206-10, 574.      Bondurant claims that she then

peered into the trash can and observed that nothing was smoldering

or smoking before allowing Ward to place the trash can back under

the desk.   Id. at 193.   Thereafter, Ward and Bondurant left Ward’s

office, Ward set the burglar alarm, and she, Bondurant, and the

children exited the building.     Id. at 196-97, 570-74.

     Transworld did not have any written rules regarding smoking

prior to the fire, but there was an informal policy that employees

were not to smoke in the building during business hours as a

courtesy to non-smokers.       J.A. 223-24, 229.   The president and

owner of Transworld, Joe Tubbs, was aware that employees smoked

inside the facility after hours, and allowed the practice so long

as no one objected.   Id. at 226-27.

     Tubbs has made contradictory statements as to whether the

Employees were acting for the benefit of the company while smoking



     2
      Ward testified that she could not remember the exact order of
her activities, i.e., whether she shut down the computer before or
after lighting her cigarette.    J.A. 203.   The precise order of
Ward’s activities, however, is immaterial to our discussion.

                                   4
on the night of the fire.        He testified that he considered Ward to

be “on company time,” “doing her job” until she left the building

because she was expected to set the building alarm.           J.A. 321-22.

In a letter mailed to Federal upon learning that Federal was

pursuing legal action against the Employees, Tubbs stated that both

Ward   and   Bondurant    were    acting   within   “the   scope    of   their

employment” on the night of the fire as they were “working overtime

on company business.”       Id. at 334.      At the same time, however,

Tubbs acknowledged that the Employees did not need to smoke to

perform their job-related duties, id. at 228, and that smoking was

not listed in their job descriptions, id. at 229.                  During his

deposition, he also admitted that on the night of the fire, he left

the building before the Employees and could not state from personal

knowledge “whether or not Ms. Ward and Ms. Bondurant were finished

working before they began smoking . . . .”          Id. at 252-53.

       On December 9, 2003, Federal filed suit against the Employees,

seeking indemnification for the costs of the fire damage.             J.A. 7-

11.    The Employees responded by filing individual motions for

summary judgment based on their assertion that they were insured

under the Policy and hence immune from suit under Virginia’s anti-

subrogation rule.        Id. at 12-13, 34-35.        After reviewing the

parties’ briefs and hearing oral argument, the district court

entered summary judgment in the Employees’ favor.           Id. at 135.




                                      5
       The district court held that Virginia’s anti-subrogation rule

barred Federal from bringing suit against the Employees. J.A. 134.

According to the court, the Employees were covered under the

liability section of the Policy, which provided that “employees .

. . are insured, but only [1] for acts within the scope of their

employment by [Transworld] or [2] while performing duties related

to the conduct of [Transworld’s] business.”               Id. at 502.       The

district court found that the Policy’s phrase “while performing

duties related to the conduct of [Transworld’s] business” was

synonymous with the definition of “course of employment.”              Id. at

133.       Accordingly, the court referenced Virginia’s definition of

“course of employment,” as elucidated in the workers’ compensation

context,3 in determining whether the Employees were insured under

the Policy.       Id.    The district court concluded that the Employees

were acting within the “course of their employment” at the time

they       discarded    their   ashes,   and   accordingly,   held   that   the

Employees were insured under the Policy, immune from suit under

Virginia’s anti-subrogation rule, and thus entitled to summary

judgment.       Id. at 133-34.

       Federal timely appealed.          Id. at 136-37.


       3
      Under Virginia law, an act is within the “course of
employment,” where it occurs during the period of employment, at a
place where the employee is reasonably expected to be, and while
the employee is reasonably fulfilling the duties of his employment
or an act reasonably incidental thereto, such as going to and from
work. J.A. 132-33 (citing Conner v. Bragg, 123 S.E.2d 393, 396
(Va. 1962); Brown v. Reed, 165 S.E.2d 394, 397 (Va. 1969)).

                                          6
                                          II.

       We review the district court’s grant of summary judgment de

novo, viewing all factual inferences in the light most favorable to

the nonmovant. Cont’l Airlines, Inc. v. United Airlines, Inc., 277

F.3d   499,    508     (4th    Cir.    2002).        Summary    judgment    is    only

appropriate         where   “the      pleadings,      depositions,    answers      to

interrogatories,        and    admissions       on   file,     together    with   the

affidavits, if any, show 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).         Once the party moving

for summary judgment has shown that there are no genuine issues of

material fact, the nonmoving party has a burden to “set forth

specific facts showing that there is a genuine issue for trial.”

Fed. R. Civ. P. 56(e).          If a nonmoving party, in opposing summary

judgment, does not provide evidence on which a jury can rely to

rule    in    the     nonmoving    party’s      favor,    summary    judgment      is

appropriate.        Barwick v. Celotex Corp., 736 F.2d 946, 958-59 (4th

Cir. 1984).

       This case involves a question of contract interpretation,

which is also subject to de novo review.               Seabulk Offshore Ltd. v.

Am. Home Assurance Co., 377 F.3d 408, 418 (4th Cir. 2004).                    We are

not constrained by the district court’s interpretation of the

Policy, because “[t]he interpretation of a written contract is a

question of law that turns upon a reading of the document itself,


                                           7
and a district court is in no better position than an appellate

court to decide such an issue.”      Id.

     Where, as here, our subject-matter jurisdiction is premised on

diversity of citizenship, we must apply the substantive law of the

forum state.    See Hitachi Credit America Corp. v. Signet Bank, 166

F.3d 614, 623-624 (4th Cir. 1999).         Under the law of the forum

state, here Virginia, “the law of the place where an insurance

contract was written and delivered governs questions of insurance

coverage.”     See Buchanan v. Doe, 431 S.E.2d 289, 291 (Va. 1993)

(citing Lackey v. Virginia Sur. Co., 167 S.E.2d 131, 133 (Va.

1969)).    Because the insurance contract at issue was delivered in

Virginia, see J.A. 454, the parties correctly agree that their

dispute should be resolved in accordance with Virginia law.         With

these principles in mind, we proceed to determine whether the

Employees were insured under the Policy and thus immune from suit.



                                  III.

                                   A.

     Federal argues that the district court erred in applying the

concept of “course of employment,” as elucidated in the workers’

compensation context, to the facts of this case.         In particular,

Federal asserts that the court erred at the outset in equating the

phrase    “while   performing   duties   related   to   the   conduct   of

[Transworld’s] business,” with the phrase “course of employment.”


                                    8
We agree.    In reading the contract as a whole, as we must, see

Transit Casualty Co. v. Hartman’s, Inc., 239 S.E.2d 894, 896 (Va.

1978), it is apparent that “course of employment” and “while

performing    duties   related   to   the   conduct   of   [Transworld’s]

business” are not synonymous.

     The Policy expressly distinguishes these two phrases.            In

setting forth exclusions from coverage, the Policy provides that no

employee is insured for bodily injuries occurring “while in the

course of his or her employment or while performing duties related

to the conduct of [Transworld’s] business.”           J.A. 502 (emphasis

added).    As the two phrases are set off by the word “or,” we are

persuaded that they are intended to express distinct concepts.

Moreover, the Policy’s incorporation of the phrase “course of

employment” indicates that the Policy’s drafters employed that term

where they sought to invoke that concept.             Consequently, the

suggestion that they would employ a wordier phrase to express the

“course of employment” concept elsewhere in the Policy defies

logic.    Accordingly, the district court erred in equating “course

of employment” with “while performing duties related to the conduct

of [Transworld’s] business,” and in applying the definition of

“course of employment” elucidated in the workers’ compensation

context to the facts of this case.




                                      9
                                  B.

     We thus examine whether the court’s grant of summary judgment

was appropriate when the correct tests of coverage are considered.

Because we find, as explained below, that the Employees’ alleged

act of negligence does not fall under either of the two classes of

acts covered in the Policy, we hold that they were not insured

under the liability section of the Policy.

                                  1.

     We begin by examining whether the act of flicking ashes into

a wastebasket qualifies as an “act[] within the scope of [the

Employees’] employment by [Transworld].”     J.A. 502.   Because we

conclude that such an act is necessarily outside the scope of the

Employees’ employment, we are compelled to hold that they were not

performing an act covered under this test when they flicked ashes

into a paper-filled trash can.4

     Under the “scope of employment” test set forth in Virginia, we

think it plain that the act of flicking ashes into a wastebasket



     4
      Federal argues that smoking is necessarily for an employee’s
“external, independent, and personal motive,” and thus outside the
scope of employment. Appellant’s Br. at 18. Because the inquiry
relevant here is not whether smoking is within the scope of the
Employees’ employment, but rather whether flicking ashes into a
paper-filled can is within the scope of employment, we refrain from
deciding whether smoking itself would meet this standard. Thus, we
decline to opine as to whether smoking is necessarily outside the
scope of an employee’s employment in Virginia, an issue that
Virginia has yet to decide.     Likewise, we do not consider what
other states have said regarding whether smoking is within the
scope of employment.

                                  10
cannot be said to be within the scope of the Employees’ employment.

According to the Virginia Supreme Court, an act is within the scope

of employment if:

       (1) it was expressly or impliedly directed by the
       employer, or is naturally incident to the business, and
       (2) it was performed, although mistakenly or ill-
       advisedly, with the intent to further the employer’s
       interest, or from some impulse or emotion that was the
       natural consequence of an attempt to do the employer’s
       business, “and did not arise wholly from some external,
       independent, and personal motive on the part of the
       [employee] to do the act upon his account.”

Kensington       Assocs.     v.   West,   362      S.E.2d    900,   901   (Va.   1987)

(citations omitted). In discarding the ashes as they did, Ward and

Bondurant both engaged in an act independent of any other job-

related function that may have preceded, superceded, or even

occurred simultaneously with the act of disposing of the ashes.

That distinct act, which must be the focus of our inquiry, was not

within the scope of employment.                   Although Transworld permitted

smoking     in   its   buildings,     the        negligent   disposal     of   smoking

materials was not directed by Transworld or naturally incident to

Transworld’s manufacturing business.                 In fact, at the exterior of

its    premises,       Transworld     provided       its     employees    with   urns

specifically designed for the disposal of smoking materials.                      J.A.

224-25.     Nor was the Employees’ act of flicking ashes into a trash

can performed with the intent to further the employer’s interest or

from   an   impulse     to    carry   out    the     employer’s     business.     The

negligent conduct did not promote any business-related interest.


                                            11
Rather, it compromised the employer’s interest in maintaining a

safe working environment.           The Employees’ conduct “ar[o]se wholly

from some external, independent, and personal motive . . . .”

Kensington Assocs., 362 S.E.2d at 901.                We are thus compelled to

conclude as a matter of law that the Employees were not engaged in

an act in the scope of their employment when they flicked ashes

into    a   paper-filled        trash   can    on   the     night    of    the    fire.

Accordingly,       they   were    not   insured     under    the    first       test   of

coverage.

                                         2.

       We now turn to the second test of coverage under the liability

section of the Policy, i.e., whether the Employees were “performing

duties related to the conduct of [Transworld’s] business” when they

discarded their ashes.           J.A. 502.

       Under the plain language of the contract, the question before

us is simply whether in discarding ashes into a paper-filled

container, the Employees were “performing duties related to the

conduct of [Transworld’s] business.”                J.A. 502.       On the night of

the fire, Ward and Bondurant admittedly performed some duties

related to the conduct of Transworld’s business of manufacturing

custom cable molded assemblies.               Id. at 214.     For instance, that

evening,    Ward,    a    purchasing     manager,     carried       out    her   normal

purchasing    duties      and    set    the   burglar     alarm.          Id.    at    31.

Bondurant,     a     quality       control      manager      and     inside       sales


                                         12
representative, was also engaged in a job-related duty, namely the

completion of a report for a client.   Id. at 326.   However, neither

Ward, nor Bondurant can properly characterize the act of concern--

discarding ashes in a wastebasket containing paper--as done in the

performance of a work-related duty.      Indeed, because the act of

smoking was not within the Employees’ job description or needed to

perform a job-related duty, see J.A. 228-29, the subsidiary act of

flicking ashes also cannot be characterized as the exercise of a

duty.     Thus, the even more circumscribed act of disposing ashes

into a paper-filled wastebasket is certainly not the performance of

a duty.     Accordingly, we conclude that by this test, Ward and

Bondurant were not performing a covered act when they discarded

ashes into the wastebasket.

     We would reach the same conclusion even if we read the phrase

“while performing duties related to the conduct of [Transworld’s]

business” to suggest that any act an employee can accomplish as she

performs job-related duties is necessarily covered.     We think this

is a strained reading of the contract given the illogical results

it would engender. Under this temporal interpretation, a virtually

limitless number of activities would be covered merely because they

coincide with a job-related duty.     By this rule, neither Federal,

nor Transworld could ever anticipate the breadth of acts subject to

coverage.    Nonetheless, even under this strained interpretation,

the Employees are still not insured, because they do not insinuate


                                 13
that they were engaged in any simultaneous job-related duty at the

precise moment when they flicked ashes in the trash can.            All

alleged job-related activities took place either before or after

they flicked ashes into the can.

      In sum, we hold as a matter of law that under the language of

the liability section of the Policy, the Employees were not insured

when they flicked ashes into a trash can containing paper.         That

act was neither within the scope of their employment, nor in

performance of a job-related duty.5



                                  C.

      At this time, we consider the Employees’ alternative arguments

in   favor   of   affirmance.6   Because   we   find   these   arguments


      5
      We may conclude as a matter of law that the Employees are not
insured under the two tests set forth in the liability section of
the Policy, because there are no genuine issues of material fact
left for resolution by the district court. Indeed, in moving for
summary judgment, the Employees conceded that there are no facts in
dispute, and that we may resolve the question of whether they are
insured under the Policy on the record as it existed before the
district court. J.A. 16, 40.
      6
      Federal argues that this Court should not entertain the
Employees’ remaining arguments because they were not raised by
Federal on appeal or addressed by the district court. According to
Federal, to preserve their arguments, the Employees should have
cross appealed under Federal Rule of Appellate Procedure 28(h).
Federal, however, misunderstands this Court’s ability to review
arguments not addressed by a district court or briefed by an
appellant.    Although a court of appeals may not consider an
argument not raised by an appellant as grounds for reversal, it may
consider any evidence in the record as grounds for affirmance.
See, e.g., El Paso Natural Gas Co. v. Neztsosie, 526 U.S. 473, 479
(1999) (“Absent a cross-appeal, an appellee may ‘urge in support of

                                  14
unavailing, we reverse the district court’s grant of summary

judgment and hold that the Employees are not insured under the

insurance policy.

                                  1.

     The Employees argue that they are insured under the Policy

because their personal property on Transworld’s premises is covered

under particular circumstances.        We are not persuaded, however,

because the Employees’ argument is contrary to the plain language

of the Policy and not supported by authority in Virginia.

      The personal property section of the Policy provides that

“[Federal] will pay for direct physical loss or damage to personal

property of employees caused by or resulting from a peril not

otherwise   excluded.”   J.A.   352.      Indeed,   Federal   indirectly

compensated Ward for personal property losses totaling $230 by

paying that amount to Transworld, who in turn made payment to Ward.

The Employees derive their argument, in large part, from the

Louisiana Court of Appeals’ decision in State Farm Fire & Casualty


a decree any matter appearing in the record, although his argument
may involve an attack upon the reasoning of the lower court,’ but
may not ‘attack the decree with a view either to enlarging his own
rights thereunder or of lessening the rights of his adversary.’”)
(quoting United States v. Am. Ry. Express Co., 265 U.S. 425, 435
(1924)); accord Oklahoma v. United States Civil Serv. Com., 330
U.S. 127, 135 n.3 (1947); Le Tulle v. Scofield, 308 U.S. 415, 421-
22 (1940); Langnes v. Green, 282 U.S. 531, 538-539 (1931); Landram
v. Jordan, 203 U.S. 56, 62 (1906); United States v. Blackfeather,
155 U.S. 180, 186 (1894); Mount Pleasant v. Beckwith, 100 U.S. 514,
527 (1880); The Stephen Morgan, 94 U.S. 599, 599 (1877); JH v.
Henrico County Sch. Bd., 326 F.3d 560 (4th Cir. 2003); Rhodes v.
Comm’r, 111 F.2d 53, 56 (4th Cir. 1940).

                                  15
Co. v Sentry Indemnity Co., 316 So. 2d 185 (La. Ct. App. 1975).7

The Employees’s argument, however misses the point, because as a

federal court sitting in diversity, we are obliged to discern and

apply the law of Virginia, not Louisiana.                See Erie R.R. Co. v.

Tompkins, 304 U.S. 64, 78 (1938); see also United States v. Little,

52 F.3d 495, 498 (4th Cir. 1995).           Yet, the Employees fail to cite

any Virginia case stating categorically that if an employee’s

possessions are covered under certain provisions of a policy, they

are rendered an insured under the entirety of that policy.

      The Employees ask this Court to apply a strained reading of

the   Policy,   which   we    may   not    do.    Pilot    Life   Ins.    Co.   v.

Crosswhite, 145 S.E.2d 143, 146 (Va. 1965) (“It is the function of

the court to construe the language of the contract as written, and

the court cannot make a new contract for the parties different from

that plainly intended and thus create a liability not assumed by

the   insurer.”).       The   Policy      lists   only    one   named    insured,

Transworld.     See, e.g., J.A. 337, 464.         Premiums were paid by that



      7
      In State Farm Fire & Casualty Co., the Louisiana Court of
Appeals held that under Louisiana’s anti-subrogation rule, an
insurance company could not seek indemnification from a pastor (an
employee of the covered church) because although the pastor was not
a named insured, the insurance policy extended coverage to
“[p]ersonal property [or] personal effects while located on the
described premises, belonging to the insured, officers, partners or
employees thereof.” 316 So. 2d at 188. The court affirmed summary
judgment in the pastor’s favor, holding that the fact that the
pastor’s possessions were covered under the policy, rendered him a
co-insured, and thus immunized him from a subrogation action by the
insurance company. Id. at 188-89.

                                       16
named insured, and Federal issued payments to that named insured.

The plain language of the provision imparting protection to the

personal property of employees specifically distinguishes employees

from the insured.       See J.A. 347, 352 (using the terms “you” and

“your” to refer to the named insured and “employees” to refer to a

separate,    uninsured    class).       Also,    nothing    in   the    record

establishes that the parties in entering the insurance contract

intended to convey upon all employees the status of additional or

co-insureds.      The Employees do not indicate that they were the

intended beneficiaries of the contract.          See Walker v. Vanderpool,

302 S.E.2d 669 (Va. 1983) (In interpreting contracts, courts should

enforce the intention of the parties).                When asked whether he

considered employees to be insured under the company’s policy,

Tubbs did not so indicate.       See J.A. 315.

     Moreover, the fact that Transworld’s employees’ possessions

were only protected if under the “care, custody, and control” of

Transworld   suggests    that   Transworld      sought   insurance     for   the

personal effects of employees only to protect itself from liability

to its employees.       J.A. 443 (emphasis added) (defining personal

property of employees as “personal property owned or leased by your

employee    and   in   your   care,   custody    or    control”).      Because

Transworld effectively “assumed responsibility” for the personal

property of employees that remained on the Transworld premises,

Transworld had an independent interest in protecting that property.


                                      17
     We find further support for our conclusion in Virginia Heart

Institute, Ltd. v. Northside Electric Co., No A-908, 1982 WL 215281

(Va. Cir. Ct. Oct. 29, 1982) (unpublished), a Virginia Circuit

Court opinion, which specifically rejects the categorical approach

that the Employees advocate.8   In that case, the court addressed

whether a provision in an insurance policy that extended some

coverage to a subcontractor hired to make improvements on an

existing building rendered that subcontractor a coinsured under the

entire policy.    Va. Heart Inst., 1982 WL 215281, *10-15.       A

building owner brought suit against a subcontractor when a fire,

worsened by the subcontractor’s negligence, destroyed his building.

Id. at *1.   The relevant portion of the insurance policy provided

that “the Owner shall purchase and maintain property insurance upon

the entire Work at the site to the full insurable value thereof.



     8
      Although unpublished state cases are not binding on this
Circuit, they can be instructive in resolving a question of state
law. C.F. Trust, Inc. v. First Flight Ltd. P’ship, 306 F.3d 126,
136 (4th Cir. 2002) (finding that no authority prevents a federal
court from relying upon an unpublished state decision to assist in
resolving a question of state law); see also King v. Order of
United Commercial Travelers, 333 U.S. 153, 160-61 (1948) (holding
that unpublished decisions are not binding, but noting that a court
“properly attributed some weight” to an unpublished decision).
Likewise, we may follow the authority of a trial court unless we
are persuaded that the state supreme court would reach a different
conclusion under the same circumstances. See, e.g., Cain v. Sec.
of Health, Educ. & Welfare, 377 F.2d 55, 58 (4th Cir. 1967)
(“Where, as here, the Supreme Court has not had occasion to declare
the law, the Secretary may follow the opinion of a nisi prius
court; but if he believes its decision to be in conflict with what
the Supreme Court ‘would find’ were the point presented to it, he
may disregard that lower court’s decision.”).

                                18
This    insurance       shall    include     the    interest    of    the    Owner,       the

Contractor, Subcontractors, and Sub-subcontractors . . . .” Id. at

*3.    Under the contract, “Work” was defined to include “all labor

necessary to produce the construction required by the Contract

Documents, and all materials and equipment incorporated in such

construction.”            Id.    at    *12.         The   court      found     that       the

subcontractor’s insurable interest in the property only extended to

the    improvements       made    by   the    subcontractor          and    not    to     the

preexisting structure. Id. Thus, the court concluded that even if

the subcontractor was an insured party, its interest was limited to

its insurable interest and hence “it [was] liable for damages

beyond the amount of its insured interest.”                    Id.

       In sum, we find that the Employees were not insured, because

the Policy identifies Transworld as the only insured, extends

protection to Transworld’s employees’ personal property only in an

effort to protect Transworld, the Employees have cited no authority

in    Virginia    for    the    categorical        approach    they    would       have    us

embrace, and because we are persuaded by the reasoning of Virginia

Heart Institute.          We thus conclude that even if the Employees do

have an insurable interest in the Policy, that interest, by the

terms of the Policy, extends only to their personal property, which

plainly    does     not    include      Transworld’s       building.           J.A.       443

(buildings are excluded from the definition of “personal property

of    employees”).        Accordingly,        any    limited      coverage        that    was


                                           19
afforded to the Employees does not serve to shield them from suit

for destruction of the entire Transworld building.9

                                      2.

       Finally, the Employees argue that they are insured because a

corporation can only act through its employees.           Hence, according

to    the   Employees,   to   cover   the   corporation   but   exclude     all

employees from coverage would in effect not cover the corporation.

The    Employees   effectively    suggest    that   whenever    an   employer

purchases insurance, all acts of the employees are necessarily

covered.     However, the policy at issue here, specifically limits

coverage to employees when they are engaged in acts within the

scope of employment or are “performing duties related to the

conduct     of   [Transworld’s]   business.”        Because   the    rule   the

Employees advocate would require us to ignore the plain language of

the Policy, and would do injury to the ability of parties to

control the manner in which they contract for insurance, we find

their argument to be without merit.           See Quesenberry v. Nichols,

159 S.E.2d 636, 640 (Va. 1968) (courts ought not apply a “strained

or unjustified construction of [an insurance] policy . . ., which


       9
      For the same reasons, we are not persuaded by the Employees’
contention that Federal has waived its ability to claim that Ward
is not an insured by virtue of its payment to Ward on account of
Ward’s property damage.     The Employees maintain this argument
applies with equal force to Bondurant because Federal concedes that
had Bondurant also lost personal property during the fire, she too
would have been compensated under the Policy.      J.A. 155.    The
Employees’ argument fails because, as stated above, the fact that
their personal property was protected does not render them insured.

                                      20
disregards the plain meaning and intent of the parties . . . .”

(internal quotation marks and citations omitted)).



                               IV.

     For the reasons stated above, we reverse the district court’s

grant of summary judgment, hold that the Employees were not insured

under the Policy and thus not immune from suit, and remand for

further proceedings consistent with this opinion.



                                             REVERSED AND REMANDED




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