Rones v. Safeco Ins. Co. of America

• Decision Date: 10 September 1992
• Docket Number: No. 58145-2,58145-2
• Citation: 835 P.2d 1036,119 Wn.2d 650
• Court: Washington Supreme Court
• Parties: Sylvia RONES, a single woman, Petitioner, v. SAFECO INSURANCE COMPANY OF AMERICA, a Washington corporation, Respondent.

Page 650

119 Wn.2d 650

835 P.2d 1036

Sylvia RONES, a single woman, Petitioner, v. SAFECO INSURANCE COMPANY OF AMERICA, a Washington

corporation, Respondent.

No. 58145-2.

Supreme Court of Washington,

En Banc.

Sept. 10, 1992.

Prince, Kelley, Newsham & Marshall, P.S., J. Porter Kelley, Seattle, for petitioner.

Gordon, Thomas, Honeywell, Malanca, Peterson & Daheim, Timothy J. Whitters, Tacoma, for respondent.

William R. Hickman, Pamela A. Okano, Seattle, amici curiae, for respondent on behalf of Pemco, State Farm and Mut. of Enumclaw Ins. Cos.

DURHAM, Justice.

Sylvia Rones, the named insured under an insurance policy with Safeco Insurance Company, seeks recovery from Safeco for an automobile accident where she was a passenger in her own car. The Court of Appeals, holding that the 3-year statute of limitation for torts and the policy's "no action" clause prevented her suit, reversed a summary judgment in Rones' favor. We affirm the Court of Appeals.

Sylvia Rones was injured in an auto accident on November 6, 1984, while riding as a passenger in her own car. At the time of the accident, she was the named insured under a Safeco insurance policy covering the car. The driver of the car, Eric Carlson, carried no other liability insurance. The accident occurred when Carlson crossed the center line and collided with another car.

Rones' auto insurance policy coverage included liability, underinsured motorist (UIM), and personal injury coverage. Because Carlson was the driver of Rones' car at the time of the accident, he was a "covered person" under the terms of the policy. The liability portion of the policy provided that:

We will pay damages for bodily injury or property damage for which any covered person becomes legally responsible because of an auto accident. We will settle or defend, as we consider appropriate, any claim or suit asking for these damages.

Clerk's Papers, at 51. Rones sought coverage for her own personal injuries under this provision of her Safeco policy.

Her claim was handled primarily by Jerry Faulkner, a Safeco insurance adjuster. Between 1985 and 1987, numerous letters were exchanged between Faulkner and Rones' attorney regarding the scope of the policy's coverage. Eventually, Safeco recognized that Carlson was a covered person under the terms of the insurance policy. It also recognized that Rones' claim came within the liability provisions of her policy. As Faulkner stated in a July 1987 letter, "Rones' claim for this accident comes under the liability portion of the policy". Clerk's Papers, at 97. Throughout this period, Safeco paid Rones' medical bills under the personal injury protection portion of its policy.

Rones, however, did not present a demand for settlement under the policy's liability provision until December 1987. Safeco denied this claim on January 8, 1988, stating that the statute of limitation for Rones' claim against Carlson had expired during the previous November. Safeco claimed that it was not liable for payment under the policy because Rones' claim "is a third party claim directed against Mr. Carlson".

Rones filed suit, claiming breach of contract, violation of the Consumer Protection Act (RCW 19.86), and outrage. Her breach of contract claim was premised on the theory that Safeco breached its insurance contract with her by denying liability coverage. Safeco moved for summary judgment, claiming that the 3-year statute of limitation for torts barred the action. See RCW 4.16.080. Rones brought a cross motion for summary judgment claiming that her action came within the 6-year statute of limitation for contracts. See RCW 4.16.040. The trial court granted Rones' motion for summary judgment, finding that the 6-year contract limitation period applied, and that Rones was entitled to coverage under the policy. It denied the balance of the summary judgment motions and entered a final judgment pursuant to CR 54(b).

The Court of Appeals reversed in Rones v. Safeco Ins. Co. of Am., 60 Wash.App. 496, 804 P.2d 649 (1991). It held that Rones' claim was subject to the 3-year statute of limitation. According to the Court of Appeals, the decision in Safeco Ins. Co. v. Barcom, 112 Wash.2d 575, 773 P.2d 56 (1989), which applied the 6-year statute of limitation to an underinsured motorist claim, was not applicable to a liability claim. It could be distinguished because:

Rones is not asserting a first party UIM claim, but a claim based on the fact that Safeco insured the liability of Carlson.

In pursuing this claim, Rones is in the status of a third party claimant.

Rones, 60 Wash.App. at 500-01, 804 P.2d 649. The Court of Appeals stated that "[t]here is no contractual relationship between a third party claimant and the tortfeasor's insurer." Rones, at 501, 804 P.2d 649. The Court of Appeals also held that the insurance policy's "no action" clause defeated Rones' action for coverage under the policy. Rones, 60 Wash.App. at 502-03, 804 P.2d 649. It remanded the UIM issue for further consideration by the trial court. This court accepted Rones' petition for review.

The primary issue presented by this appeal is whether the 3-year statute of limitation for torts, RCW 4.16.080, or the 6-year statute for contracts, RCW 4.16.040(1), applies to Rones' action against Safeco. Rones argues that her cause of action is contractual in nature. She is suing Safeco, she says, because it breached its contractual promise to "pay damages ... for which any covered person becomes legally responsible because of an auto accident." Safeco, on the other hand, argues that Rones is not suing in her capacity as the named insured, but as a third party claimant. As a result, her suit derives from her claim against the tortfeasor--Carlson--rather than from her contractual relationship with Safeco.

Interpretation of an insurance contract is a matter of law. State Farm Gen. Ins. Co. v. Emerson, 102 Wash.2d 477, 480, 687 P.2d 1139 (1984). When construing an insurance policy, "the goal is to give effect to the apparent clear intention of the parties." Eurick v. Pemco Ins. Co., 108 Wash.2d 338, 341, 738 P.2d 251 (1987). Although public policy counsels interpreting policies to favor insureds, we "will not modify clear and unambiguous language under the guise of construing the policy." O'Neal v. Legg, 52 Wash.App. 756, 760, 764 P.2d 246 (1988), review denied, 112 Wash.2d 1013 (1989).

Although we have never addressed the statute of limitation issue in a liability context, a similar question was presented in Barcom. There, two separate claimants who were insureds sought coverage under the underinsured motorist (UIM) provisions of their respective...