7 Wash. App. 241 | Wash. Ct. App. | 1972
Lead Opinion
— This appeal involves the application of the formula for contribution between two automobile liability insurers who insure the same risk. The formula was laid down in a prior declaratory judgment suit between the insurers. Pacific Indem. Co. v. Fedetated Am. Ins. Co., 76 Wn.2d 249, 456 P.2d 331 (1969).
At issue is the proper determination of the insurance policy limits of each policy issued by the insurers here insuring the same insured. The parties agreed that the determination should be made by motion and, in effect, on the basis of the record below. They make no different contention on appeal.
On February 12,1966, Wendy Bundt, was driving William Farrimond’s car while Farrimond was giving her driving
[T]he parties intended and did in fact settle said cases on the theory and belief that if the Plaintiffs recovered judgment they would recover judgment against both Defendants; . . . and it was further the parties intention that said settlement would operate 'as a complete release and discharge of the liability or potential liability of Farrimond and Bundt in both cases.
Pacific also incurred $440 in attorney’s fees in the Pike case for which Federated reimbursed Pacific $220. The insurers, in making these several payments, agreed that the payments would be made “without prejudice to the rights of [the insurers] as they might ultimately be declared in the pending Declaratory Judgment action . . .”
At the time of the accident, Federated had issued an insurance policy naming William Farrimond as the insured and covering Wendy Bundt as a permissive insured. Part of Federated’s policy is in evidence; Pacific’s policy is not. A supplemental showing was made, however. According to an affidavit filed on behalf of Federated, its policy insured Farrimond “with $10,000 bodily injury coverage for injury to one person, $20,000 bodily injury coverage to two or more persons . . .” The trial court treated the showing made as meaning that Wendy Bundt, as a permissive insured under Federated’s policy, had the same insurance coverage as that provided for Farrimond. Federated does not contend otherwise. Pacific insured Wendy Bundt, its policy containing a limitation of liability for injury to one
Pacific later brought an action for declaratory relief which was ultimately disposed of in Pacific Indent. Co. v. Federated Am. Ins. Co., supra. In that case the court held:
[T]hat Pacific and Federated are legally obligated to the limits of liability of their respective policies on a pro rata basis; and if
the limit of liability coverage of said two insurance companies are equal, then the two companies shall share equally the cost of defense and discharge of the legal responsibility of the said Wendy J. Bundt arising out of said automobile accident on February 12, 1966, up to the limits of liability of each policy.
After the remittitur went down, Pacific filed a “Motion to Enter Judgment Pursuant to Declaratory Judgment Action” seeking contribution recovery from Federated. The trial court granted Pacific judgment for $2,112.24 after giving Federated credit for an offset not here in dispute. Federated appeals, claiming that, on the record, judgment should have been entered in its favor for $1,256.76.
Before examining Federated’s sole contention on which it seeks reversal, it is helpful to describe just how the trial court arrived at the amount of the judgment entered in
The court, after deducting Farrimond’s half share of each settlement, treated Federated and Pacific as if their respective policies had equal applicable policy limits of $10,000 on the Wendy Bundt insurance risk. In conformity with the Pacific formula, the court then required each insurer to share half of the remaining settlement liabilities of each lawsuit. The court also required each insurer to share equally Pacific’s attorney’s fees incurred in the Pike settlement on behalf of Pacific’s insured Wendy Bundt. The court’s action with respect to the sharing of attorney’s fees was required both by Pacific Indem. Co. v. Federated Am. Ins. Co., supra, and Greater Seattle Youth for Christ v. Colonial Ins. Co., 76 Wn.2d 253, 456 P.2d 333 (1969). The foregoing calculations, after giving credit for payments made by each insurer, show a balance in Pacific’s favor of $2,369. Pacific owed Federated $256.76 for appeal costs in the prior declaratory judgment case. By offsetting such costs against $2,369, Pacific received judgment for the remaining balance of $2,112.24.
Federated contends the court’s application of the Pacific
There was but one accident and each company had the duty of paying and discharging the obligations equally since the limits of their coverage were equal.
The proper proration should have been on an equal basis; that is, each company pay one-half of the amount to settle each cause of action and each company pay their own costs and attorney’s fees.
Appellant’s brief at 10.
We do not agree with Federated. Its contention fails to give effect to the fact that it insured Farrimond’s obligation to pay for each person injured in the collision and that Pacific did not. The sharing of liability by insurers on a pro rata basis according to the applicable policy limits of their respective automobile insurance policies is predicated on the theory that each insurer insures the same risk. In the language of 8 J. Appleman, Insurance Law and Practice § 4913, at 390 (1962), the insurance must cover “the same loss so as to be true duplicate or overlapping coverage.” Pacific did not address itself to the problem of changing the principle stated in Appleman and did not reject that principle. The risk insured is not the occurrence of an accident, but rather the risk of liability imposed by law upon the insured named or permitted in the automobile liability policy involved. An accident may give rise to more than one liability on the part of the person or persons causing it. One insurer may cover the obligation of one person to pay and not cover the obligation of another. Thus, here Pacific did not cover Farrimond’s obligation to pay. Federated did.
Federated and Pacific furnished duplicate coverage on Wendy Bundt’s obligation to pay for personal injuries. The
Were we to accept Federated’s contention that the risk insured is the risk of accident rather than the risk of liability to an insured resulting therefrom, Pacific would be required to contribute to the payment of Farrimond’s insured risk of liability even though Pacific did not insure that risk.
The judgment is affirmed.
Callow, J., concurs.
In State v. Richard, 4 Wn. App. 415, 426, 482 P.2d 343 (1971), we stated that a fact “must be established below rather than asserted for the first time on appeal by counsel for the party claiming to be adversely affected.” We follow that rule here.
Dissenting Opinion
(dissenting) — The proportionate pecuniary responsibility of the two insurance companies has been fixed upon the basis of the number of joint tort-feasors each company was legally required to shield. I do not believe that this is a correct method of computing the contribution which each company is to make to the losses sustained in the automobile accident.
Generally, joint tort-feasors are each fully liable and there is no right of contribution or indemnity. Duncan v. Judge, 43 Wn.2d 836, 264 P.2d 865 (1953); Mauk Seattle Lumber Co. v. Hoquiam Plywood Co., 5 Wn. App. 577, 489 P.2d 753 (1971). An insurer logically, therefore, cannot
[t]he right to contribution is predicated upon the principle that all insurers are equally liable for the discharge of a common obligation, and arises even though, for the obligation involved, the sureties are bound by separate instruments.
(Footnote omitted.) 16 G. Couch, Insurance § 62:150 (2d ed. R. Anderson 1966). To put it another way, coinsurance of the same risk is prerequisite to a right of contribution among insurers. Galloway v. Southern Farm Bureau Ins. Co., 247 S.C. 288, 147 S.E.2d 271 (1966). 8 J. Appleman, Insurance Law § 4913, at 388, 390 (1962) states:
Where two or more companies fully insure the same risk and one company is compelled to pay the total loss, it is entitled to contribution from the others for the amount of their proportionate shares. . . .
It is immaterial that such insurance was procured by different persons or even by different interests if, in fact, it covers the same loss so as to be true duplicate or overlapping coverage.
See also Vance Trucking Co. v. Canal Ins. Co., 395 F.2d 391 (4th Cir. 1968), cert. denied, 393 U.S. 845, 21 L. Ed. 2d 116, 89 S. Ct. 129 (1968).
Federated and Pacific were coinsurers of the same risk, even though Federated was responsible for protecting Miss Bundt and Mr. Farrimond, whereas Pacific was responsible only for Miss Bundt.
The “Order on Plaintiffs’ Motion for Judgment Pursuant to Declaratory Action” should be vacated. Because the limits of both policies are the same,
Petition for rehearing denied September 5, 1972.
Review granted by Supreme Court October 26, 1972.
On oral argument counsel advised the court that the basic limits of each policy were $10,000 for injury to one person, $20,000 for injury to two or more persons, and $5,000 property damage.
