Christal v. Farmers Ins. Co. of Washington

• Decision Date: 04 April 2006
• Docket Number: No. 33584-1-II.,33584-1-II.
• Citation: 133 Wn. App. 186,135 P.3d 479
• Court: Washington Court of Appeals
• Parties: Kerry CHRISTAL, personal representative of the Estate of Richard Christal, Appellant, v. FARMERS INSURANCE COMPANY OF WASHINGTON, Defendant, Farmers Insurance Exchange, Respondent.

Page 479

135 P.3d 479

133 Wn. App. 186

Kerry CHRISTAL, personal representative of the Estate of Richard Christal, Appellant, v. FARMERS INSURANCE COMPANY OF WASHINGTON, Defendant, Farmers Insurance Exchange, Respondent.

No. 33584-1-II.

Court of Appeals of Washington, Division 2.

April 4, 2006.

Publication Ordered and As Amended May 23, 3006.

Ben Shafton, Attorney at Law, Vancouver, WA, for Appellant.

Nancy Katherine McCoid, Soha & Lang PS, Seattle, WA, for Respondent.

HOUGHTON, P.J.

¶ 1 Kerry Christal, as personal representative of the Estate of Richard Christal (the Estate), appeals from a trial court summary judgment order denying insurance coverage for Richard Christal's death. We affirm.

FACTS

¶ 2 An underinsured motorist struck and killed Richard Christal (Christal) while he was riding his motorcycle. At the time of the accident, the Christals owned various insurance policies issued by Farmers Insurance Company of Washington and Farmers Insurance Exchange (Farmers).¹ Four policies covered different passenger cars and one covered Christal's motorcycle. Each passenger car policy provided underinsured motorist (UIM) coverage, but the motorcycle policy did not.

¶ 3 The Christals also purchased an umbrella policy, the interpretation of which is at issue in this appeal. The umbrella policy provides up to $1,000,000 in liability coverage. It also includes a UIM endorsement for coverage "to the extent" such coverage is part of underlying policies listed in the umbrella policy. Clerk's Papers (CP) at 30. The endorsement states:

For the additional premium paid, it is agreed that this policy will provide [UIM] Coverage(s) payable to you and any other insured under this policy, to the extent that either or both coverages are part of the underlying insurance. The limit of liability for [UIM] Coverage is equal to the coverage limit shown in the Limits of Liability section of the policy Declarations Page. The [UIM] Coverage limit applicable in the event of an occurrence is not increased regardless of the number of covered autos, insureds, claims made or vehicles involved in the accident.²

CP at 30. The UIM endorsement excludes coverage for recreational vehicles. Except for the recreational vehicle exclusion, the UIM endorsement is otherwise unqualified. The policy defines "underlying insurance" as "the insurance scheduled in the Declarations." CP at 24.

¶ 4 The declarations page of the umbrella policy schedules the four passenger car policies but does not schedule the motorcycle policy. Each of the four passenger car policies provide for UIM insurance but exclude coverage for incidents related to uninsured vehicles "owned or available for regular use" of the insured. CP at 43. Two of these policies list Christal as a named insured.

¶ 5 After filing a claim that Farmers denied, the Estate sued for a judgment declaring the availability of UIM coverage under one or more of the policies. Following discovery, the Estate voluntarily dismissed its claim for UIM coverage under any of the four passenger car policies. But the Estate pursued its claim that the umbrella policy provided such coverage for the motorcycle accident. Both sides moved for summary judgment. The trial court granted Farmers' motion and denied the Estate's.

¶ 6 The Estate appeals.

ANALYSIS

¶ 7 We review an order on summary judgment de novo and engage in the same inquiry as the trial court. Butzberger v. Foster, 151 Wash.2d 396, 401, 89 P.3d 689 (2004). Summary judgment is appropriate only when there are no genuine issues of material fact, and the moving party is entitled to judgment as a matter of law. CR 56(c); Butzberger, 151 Wash.2d at 401, 89 P.3d 689. We consider all facts and reasonable inferences in the light most favorable to the nonmoving party. N. Pac. Ins. Co. v. Christensen, 143 Wash.2d 43, 47, 17 P.3d 596 (2001). Summary judgment is appropriate in this case because there are no disputed facts, and coverage depends solely on the insurance policy language. Allstate Ins. Co. v. Peasley, 131 Wash.2d 420, 423-24, 932 P.2d 1244 (1997).

¶ 8 We interpret an insurance policy de novo as a question of law. Butzberger, 151 Wash.2d at 401, 89 P.3d 689. We construe an insurance policy as a whole, giving full force and effect to each clause. Overton v. Consol. Ins. Co., 145 Wash.2d 417, 424, 38 P.3d 322 (2002).

¶ 9 Where policy language remains clear and unambiguous, we enforce the provisions as written and do not modify the policy or create ambiguity where none exists. Pub. Util. Dist. No. 1 v. Int'l Ins. Co., 124 Wash.2d 789, 797, 881 P.2d 1020 (1994). Ambiguity exists if the policy is susceptible to more than one reasonable interpretation. Transcon. Ins. Co. v. Wash. Pub. Util. Dists'. Util. Sys., 111 Wash.2d 452, 456-57, 760 P.2d 337 (1988). We construe an ambiguous provision in favor of the insured. Transcon., 111 Wash.2d at 457, 760 P.2d 337.

¶ 10 When analyzing an insurance policy and determining whether an ambiguity exists, we view the language as would an average purchaser of insurance. Overton, 145 Wash.2d at 424, 38 P.3d 322 (citing Sears v. Grange Ins. Ass'n, 111 Wash.2d 636, 638, 762 P.2d 1141 (1988)). In doing so, we do not engage in a "strained or forced construction" that would lead to absurd results. Morgan v. Prudential Ins. Co. of Am., 86 Wash.2d 432, 434, 545 P.2d 1193 (1976). Nor do we interpret policy language in a way that extends or restricts the policy beyond its fair meaning or renders it nonsensical or ineffective. Morgan, 86 Wash.2d at 434-35, 545 P.2d 1193.

¶ 11 We must apply the definitions set forth in an insurance policy. Overton, 145 Wash.2d at 427, 38 P.3d 322. But we give undefined terms their plain, ordinary, and popular meaning, as defined in standard English dictionaries. Overton, 145 Wash.2d at 428, 38 P.3d 322.

¶ 12 Both parties agree that the key language of the umbrella policy is that UIM coverage is provided "to the extent that" such coverage is "a part of" the underlying insurance. CP at 30. Farmers emphasizes the former phrase and the Estate emphasizes the latter.

¶ 13 The Estate concedes that neither the motorcycle policy nor any of the four passenger car policies provides UIM coverage for Christal's injuries. It acknowledges that the motorcycle accident falls within the passenger car policies' exclusion for incidents related to an uninsured vehicle owned by an insured. Nevertheless, the Estate argues that the umbrella policy provides such coverage because that policy specifically excludes only recreational vehicles. The Estate reasons that because two of the passenger car policies that provide UIM coverage list Christal as a named insured, the Estate is entitled to UIM coverage under the umbrella policy, except for incidents related to recreational vehicles.

¶ 14 Farmers responds that the umbrella policy plainly provides excess UIM coverage only for incidents that are covered by the underlying insurance policies. In its view, because UIM coverage is not available under those policies for the incident involving Christal's motorcycle, it is not available under the umbrella policy. Farmers asserts that "to the extent that" are clearly words of limitation meaning that the umbrella policy only provides UIM coverage for a particular incident if the underlying policy provides UIM coverage for that incident. In such cases, the umbrella policy provides coverage over and above the limits of the underlying policy.

¶ 15 In the Estate's view, so long as UIM coverage is "a part of" the underlying insurance in any way, the umbrella policy provides UIM coverage for the insured named in the underlying policy for any incident except one related to a recreational vehicle.

¶ 16 The Estate's interpretation might have merit if, instead of "to the extent that," the umbrella policy provided UIM coverage "if" or "when" it was a part of the underlying insurance. But the policy does not so provide.

¶ 17 Webster's Dictionary defines "extent" as "5 a(1): the range (as of inclusiveness or application) over which something extends: SCOPE, COMPASS, COMPREHENSIVENESS. . . the point or degree to which something extends . . . (2): the limit to which something extends." WEBSTER'S THIRD NEW INT'L DICTIONARY 805 (1976). As used in the umbrella policy's UIM endorsement, the phrase "to the extent that" is synonymous with "within the scope of." An average purchaser of insurance would understand that the umbrella policy expands the amount, not the scope, of UIM coverage, thus providing excess UIM coverage over the underlying coverage only if the insured qualifies for UIM coverage through the underlying policy. The UIM endorsement is not fairly susceptible to a contrary interpretation.

¶ 18 Moreover, the Estate's interpretation would lead to absurd results. If it were true that the umbrella policy provided UIM coverage for any incident except one relating to recreational vehicles, an insured could obtain UIM coverage for any number of vehicles for a single premium. This would nullify the underlying policies' exclusion for uninsured vehicles owned by an insured; the Christals would only have to pay one premium for UIM coverage for an unlimited number of vehicles they owned. That the Christals paid four distinct premiums for UIM coverage under each of their four different auto policies suggests that they understood the umbrella policy did not provide such blanket coverage.

¶ 19 The Estate also argues that the underlying policies' exclusion for Christal's motorcycle-related injuries does not apply to the umbrella policy because Farmers did not expressly incorporate the exclusion. The Estate asserts that Farmers could have used language providing UIM coverage "only to the extent that insurance is provided to such additional Insured thereunder." Appellant's Brief at 13 (quoting Estate of Taylor v. St. Paul Fire & Marine Ins. Co., 268 F.Supp.2d 873, 878 (N.D.Ohio 2002)) (holding that an umbrella policy incorporated the exclusions...