108 Wash. App. 468 | Wash. Ct. App. | 2001
After cooperatively funding a $1.5 million settlement with the victims of a single-car accident, three insurance companies now dispute how payment of the
I
The Berman family nanny was driving the Bermans’ car when it was involved in a single-car accident. Janet Berman, who was a passenger at the time, died. Her two children, also passengers, were seriously injured. The estate of Janet Berman and the Berman children asserted claims for damages against the nanny.
As a permissive driver in the Berman household, the nanny was insured through the Bermans’ $500,000 auto liability policy underwritten by Safeco of Illinois. At the time of the accident, the Bermans also owned a $1 million umbrella policy through Safeco of America. The policy excluded from coverage injuries to members of the Berman household. The nanny was also insured as a driver under her parents’ auto liability policy and their umbrella policy, with limits of $500,000 and $1 million, respectively. These policies were issued by Automobile Club Insurance Company.
The insurance companies agreed to a $1.5 million settlement with the Bermans. Safeco of Illinois acknowledged
Because sufficient insurance existed to pay the entire settlement, the trial court ruled on summary judgment that the Berman UIM policy did not apply. It also ruled that ACIC’s primary and umbrella policies were solely responsible for the balance of the claim because the Safeco of America umbrella policy expressly excluded from coverage injuries to household members. ACIC appeals.
II
We review an order on summary judgment de novo, performing the same inquiry as the trial court.
ACIC argues that the household member exclusion clause in the Safeco of America umbrella policy violates public policy and is therefore void. The policy covers, inter alia, personal injury or property damage arising out of an automobile accident, but excludes from coverage the insured and members of the insured’s household.
The validity of a household member exclusion in an umbrella policy is an issue of first impression in Washington, and the parties have cited no cases from other states that have addressed the question. But the Washington Supreme Court has long held that the household member exclusion clause is void as against public policy in the context of automobile liability insurance. In Mutual of Enumclaw Insurance Co. v. Wiscomb,
In considering the validity of the exclusion, the Supreme Court found its analytical genesis in our state’s financial responsibility act,
In Tissell v. Liberty Mutual Insurance Co.,
The court’s lead opinion in Tissell based its analysis on the public policy in favor of full compensation for accident victims, and the exclusion’s singling out of a class of victims, the identity of which had no bearing on the nature of the insurer’s risk. But, as pointed out by seven justices in a concurring opinion, the statutory purpose of UIM coverage is to provide a dual layer of coverage, sometimes described as a second layer of floating protection for the UIM insured. The court later reemphasized the position taken in the Tissell concurrence in Greengo v. Public Employees Mutual Insurance Co.
Nevertheless, the different policy basis embraced by the concurring justices in Tissell should not be read as a rejection of the public policy of full compensation in the auto liability coverage context. Rather, the concurring justices were restating the different public policy applicable in the uninsured motorist coverage context. This was made clear in the later case of Mendoza v. Rivera-Chavez, in which the Supreme Court struck down a felony exclusion clause which would have prevented recovery for a passenger who died when the intoxicated driver of the car caused an accident. The court declared that both the financial responsibility act and the mandatory liability insurance act express a strong public policy in favor of full compensation,
Based upon our Supreme Court’s repeated characterization of the relevant public policy as one of full compensation for innocent victims of automobile accidents, we conclude that the household member exclusion in Safeco of America’s
Safeco argues that under Thompson v. Grange Insurance Ass’n
We likewise reject Safeco of America’s argument that the public policy stemming from the mandatory liability insurance act and the financial responsibility act applies only to the minimum levels of coverage mandated by statute.
Finally, we are unpersuaded by Safeco of America’s assertion that RCW 46.29.490(7) supports its position. The statute simply provides that excess liability coverage need not conform to all the requirements of the chapter. In no manner does it purport to authorize the arbitrary exclusion of a class of victims from coverage expressly bargained for and otherwise provided. We hold that a household member exclusion clause in umbrella or other excess insurance policies, which include coverage for damages from vehicular accidents, is void as against public policy as to such damages.
Ill
ACIC next argues that the “other insurance” clause in its primary policy renders its coverage excess to Safeco of America’s umbrella policy and consequently, Safeco must
Insurance policies are contracts and courts therefore interpret them according to the rules of contract construction.
ACIC’s “other insurance” clause states in relevant part:
Any insurance we provide with respect to a vehicle you do not own shall be excess over any other collectible insurance ....
The “other insurance” clause of Safeco of America’s umbrella policy states:
If other valid and collectible insurance is available to the insured covering a loss also covered by this policy, other than insurance that is in excess of the insurance afforded by this policy, the insurance afforded by this policy shall be in excess of and shall not contribute with such other insurance.
ACIC contends that the language of both provisions plainly places ACIC’s automobile liability policy excess over the Safeco of America umbrella policy. It supports its position by citing Unigard Insurance Group v. Royal Globe Insurance Co.
We are not persuaded by the Idaho court’s analysis in Unigard. Instead, we adopt the majority view that we cannot interpret the competing clauses of these policies in a vacuum, but must instead consider them in light of the total insuring intent of all the parties.
Primary policies are exactly that, the first line of defense in the event of accident or injury. Because multiple insurance policies often apply to the same accident,
In light of the different purposes of primary and excess coverage policies, we hold that the “other collectible insurance” referenced in ACIC’s primary automobile liability policy was intended to refer to other primary automobile liability policies, not to umbrella policies such as Safeco of America’s. Therefore, ACIC’s primary automobile liability policy must next apply to the settlement amount.
Once its policy limits are exhausted, then the insurers under each umbrella policy should contribute dollar for dollar on the balance of the claim.
Reversed.
Becker, A.C.J., and Coleman, J., concur.
Pemco Mut. Ins. Co. v. Utterback, 91 Wn. App. 764, 767, 960 P.2d 453 (1998), review denied, 137 Wn.2d 1009 (1999).
CR 56(c); Pemco, 91 Wn. App. at 767.
Pemco, 91 Wn. App. at 767.
The policy states: ‘We will pay on behalf of the insured . .. damages because of covered personal injury or property damage.” “Insured” is defined as: “[Y]ou and . .. any member of your household.” The policy excluded coverage for “Any personal injury to you or a member of your household.”
Mendoza v. Rivera-Chavez, 140 Wn.2d 659, 662, 999 P.2d 29 (2000).
Mendoza, 140 Wn.2d at 662-63.
Mendoza, 140 Wn.2d at 663.
97 Wn.2d 203, 643 P.2d 441 (1982).
Ch. 46.29 RCW.
Wiscomb, 97 Wn.2d at 206-07.
Wiscomb, 97 Wn.2d at 207.
See St. Paul Fire & Marine Ins. Co. v. Circle Bar J Boys’ Ranch, Inc., 1 Wn. App. 377, 461 P.2d 567 (1969) (exclusion upheld for drivers under 25 years of age); Royse v. Boldt, 80 Wn.2d 44, 491 P.2d 644 (1971) (exclusion upheld for drivers other than named insured, resident of household, or driver specifically named in policy); Barkwill v. Englen, 57 Wn.2d 545, 358 P.2d 317 (1961) (exclusion upheld for vehicle operated by any person other than named insured or family member).
Wiscomb, 97 Wn.2d at 208.
Wiscomb, 97 Wn.2d at 208.
Wiscomb, 97 Wn.2d at 208.
115 Wn.2d 107, 795 P.2d 126 (1990).
Tissell, 115 Wn.2d at 114.
135 Wn.2d 799, 809, 959 P.2d 657 (1998).
Mendoza v. Rivera-Chavez, 140 Wn.2d 659, 664, 999 P.2d 29 (2000).
Mendoza, 140 Wn.2d at 670 (injuries sufficient to warrant felony proceedings against the driver were not covered, but lesser injuries warranting misdemeanor proceedings would be covered).
60 Wn.2d 535, 540, 374 P.2d 571 (1962).
Ralston, 60 Wn.2d at 540.
34 Wn. App. 151, 660 P.2d 307 (1983) (RCW 48.22.030 does not require that UIM insurance be read into an umbrella policy).
113 Wn.2d 754, 782 P.2d 1063 (1989) (so long as primary automobile insurance provides UIM coverage, excess automobile insurance policies are not statutorily required to provide UIM insurance coverage).
$25,000 for one person or $50,000 per accident. RCW 46.29.090.
Mendoza, 140 Wn.2d at 671.
Mendoza, 140 Wn.2d at 671.
Farmers Ins. Co. of Wash. v. Miller, 87 Wn.2d 70, 73, 549 P.2d 9 (1976).
Farmers, 87 Wn.2d at 73; Cont’l Volvo, Inc. v. Ross, 17 Wn. App. 316, 317-18, 562 P.2d 1002 (1977).
Diaz v. Nat’l Car Rental Sys., 143 Wn.2d 57, 67, 17 P.3d 603 (2001).
100 Idaho 123, 594 P.2d 633 (1979) (owner/passenger killed in single-car accident while friend was driving and court determined that plain and ordinary
Allstate Ins. Co. v. Frank B. Hall & Co. of Cal., 770 P.2d 1342, 1346 (Colo. 1989) (driver’s primary auto liability policy held to respond to accident before car rental agency’s excess policy, despite the primary policy’s language describing its coverage as excess to all other collectible insurance, because primary policy exists at a different level of insurance than an umbrella policy and consequently, its “other insurance” clause was intended to refer only to other primary insurance policies, not to other true excess policies (true excess defined as those policies requiring underlying insurance)). See also Ill. Emcasco Ins. Co. v. Cont’l Cas. Co., 139 Ill. App. 3d 130, 487 N.E.2d 110 (driver’s primary auto policy required to pay before car owner’s umbrella policy because primary policy is at a different level than umbrella policy, rendering the usual rule regarding interpretation of “other insurance” clauses inapplicable); Metro. Prop. & Life Ins. Co. v. Chicago Ins. Co., 479 So. 2d 114 (Fla. 1985) (primary policies of driver and owner must be exhausted before excess policy is applicable); 8A John Alan Apfleman & Jean Appleman, Insurance Law and Practice § 4909.85, at 452 (1981).
15 Lee R. Russ, Couch on Insurance 3d § 217:3 (2000).
Couch, supra, § 217:3.
Couch, supra, § 220:32.
Russ, supra, § 220:32.
Neither party disputes the equal responsibility of both umbrella policies in light of our holdings in this case. See Mission Ins. Co. v. Allendale Mut. Ins. Co., 95 Wn.2d 464, 626 P.2d 505 (1981).