First Nat. Ins. Co. of America v. Perala

Decision Date15 July 1982
Docket NumberNo. 3914-III-5,3914-III-5
Citation32 Wn.App. 527,648 P.2d 472
PartiesFIRST NATIONAL INSURANCE COMPANY OF AMERICA, a stock insurance company, and Safeco Insurance Company of America, Appellants, v. Paki D. PERALA and Jane Doe Perala, his wife; and Joann E. Perala and John Doe Perala, husband and wife, Respondents.
CourtWashington Court of Appeals

Walter G. Meyer, Halverson, Applegate & McDonald, Yakima, for appellants.

Lonny R. Suko, James E. Baker, Lyon, Beaulaurier, Weigand, Suko & Gustafson, Yakima, for respondents.

GREEN, Judge.

First National Insurance Company of America and Safeco Insurance Company of America appeal from the court's granting summary judgment in favor of Paki Perala and his mother, JoAnn E. Perala (Beaulaurier) in a declaratory judgment action. The question presented is whether the companies are required to provide uninsured motorist coverage under their policies.

On April 22, 1978, Paki Perala was riding as a passenger in a 1968 Chevrolet Malibu owned by his mother and provided for his principal use. The driver was Michael R. Johnson, age 16, who was uninsured. A single vehicle accident occurred and Paki was severely injured.

The Peralas presented a claim to First National and Safeco for Paki's injuries under the uninsured motorist provisions of their policies. First National insured the Malibu and Safeco insured another vehicle owned by Mrs. Perala, a 1973 Oldsmobile station wagon. These policies provided liability coverage for Mrs. Perala, as the named insured, Paki, as a relative residing in the same household, and any person using the automobile with the permission of the named insured. The First National policy contained an endorsement excluding liability coverage for drivers under 25 years of age who are not members of the insured's family. 1

First National rejected the claim and brought a declaratory judgment action to establish its uninsured motorist provisions do not apply. The Peralas answered and cross claimed for declaratory judgment against Safeco, who was joined as a party plaintiff. All parties moved for summary judgment. It was stipulated for purposes of these motions that Michael Johnson, the driver of the Malibu, was negligent in causing the accident. The court interpreted both policies to provide uninsured motorist coverage, granted summary judgment in favor of the Peralas, and ordered arbitration over the liability and damage issues as provided by the policies. The companies appeal.

Both companies claim the uninsured motorist provisions in the policies are inapplicable here because coverage is afforded only for bodily injury caused by an "owner or operator of an uninsured motor vehicle." (Italics ours.) They argue the Malibu was an insured vehicle because it was specifically named in First National's policy and, under Safeco's policy, was furnished for Paki's regular use. Also, First National claims its liability coverage exclusion for drivers who are under the age of 25 would be nullified if it is required to provide uninsured motorist coverage.

On the other hand, the Peralas contend the underlying public policy of the uninsured motorist statute is to provide coverage for uninsured motorists, not vehicles, and the statute supersedes contrary language in the insurance policies. They argue, as an insured, Paki is entitled to uninsured motorist coverage regardless of the under-25 exclusion because the driver was uninsured. We agree with the Peralas' position and affirm.

Our state has not specifically addressed the issue presented. The companies rely upon cases from other jurisdictions which have held an injured person may be excluded from uninsured motorist coverage where the automobile in which the person was a passenger was insured. 2 Those cases, however, are all based upon the particular language of the insurance policies and uninsured motorist statutes in those jurisdictions. It would serve no useful purpose to compare them with Washington's statute or the insurance policies here. 3 We are governed by the public policy expressed in Washington's uninsured motorist statute, RCW 48.22.030, and the decisions interpreting it. Rau v. Liberty Mut. Ins. Co., 21 Wash.App. 326, 585 P.2d 157 (1978). Our statute and those decisions mandate coverage here.

While insurance policies are private contracts and the insurer may bargain for exclusions in a policy, uninsured motorist coverage is mandatory unless the insured specifically and unequivocally rejects such coverage. RCW 48.22.030(4). Mutual of Enumclaw Ins. Co. v. Wiscomb, 97 Wash.2d 203, 210, 643 P.2d 441 (1982); Touchette v. Northwestern Mut. Ins. Co., 80 Wash.2d 327, 332, 494 P.2d 479 (1972); Brummett v. Grange Ins. Ass'n, 4 Wash.App. 979, 981, 485 P.2d 88 (1971). The public policy favoring uninsured motorist coverage controls over the express terms in the contract. Rau v. Liberty Mut. Ins. Co., supra 21 Wash.App. at 328, 585 P.2d 157. Any ambiguities in the policy provisions are interpreted in favor of the insured. McDonald Indus., Inc. v. Rollins Leasing Corp., 95 Wash.2d 909, 913, 631 P.2d 947 (1981); Frontier Lanes v. Canadian Indem. Co., 26 Wash.App. 342, 345-46, 613 P.2d 166 (1980); Nationwide Mut. Ins. Co. v. Kelleher, 22 Wash.App. 712, 715, 591 P.2d 859 (1979).

The policy of the uninsured motorist statute is to protect victims of uninsured drivers, not vehicles. Finney v. Farmers Ins. Co., 92 Wash.2d 748, 751, 600 P.2d 1272 (1979); Cammel v. State Farm Mut. Auto. Ins. Co., 86 Wash.2d 264, 270, 543 P.2d 634 (1975). Finney is controlling here. In that case the passenger in a vehicle was killed in an accident due to the fault of the operator of the vehicle. The operator had liability insurance but the owner of the vehicle did not. Because the operator's policy was insufficient to pay for the damages, the passenger's estate sought recovery under the uninsured motorist provisions of the deceased passenger's policy. The company asserted its uninsured motorist provisions were not applicable because liability insurance covered the operator and the vehicle was therefore insured. The court rejected this assertion holding uninsured motorist coverage exists where either the owner or the operator is uninsured. It reasoned:

We have previously held RCW 48.22.030 is to be liberally construed in order to provide broad protection against financially irresponsible motorists. Touchette v. Northwestern Mut. Ins. Co., (supra). The purpose of the statute is to allow an injured party to recover those damages which would have been received had the responsible party maintained liability insurance. Touchette v. Northwestern Mut. Ins. Co., supra.

The insurance carrier which issued the policy stands, therefore, in the shoes of the uninsured motorist to the extent of the carrier's policy limits.

State Farm Mut. Auto. Ins. Co. v. Bafus, 77 Wn.2d 720, 724, 466 P.2d 159 (1970).

The statute was designed to protect innocent victims of uninsured negligent motorists, not to protect vehicles. Cammel v. State Farm Mut. Auto. Ins. Co., (supra). Where an insurance policy does not provide the protection mandated by RCW 48.22.030, the offending portion of the policy is void and unenforceable. Touchette v. Northwestern Mut. Ins. Co., supra; Federated Am. Ins. Co. v. Raynes, 88 Wn.2d 439, 563 P.2d 815 (1977); Grange Ins. Ass'n v. Great Am. Ins. Co., 89 Wn.2d 710, 575 P.2d 235 (1978).

The statute does not contemplate a piecemeal whittling away of liability for injuries caused by uninsured motorists. First Nat'l Ins. Co. of America v. Devine, 211 So.2d 587, 589 (Fla.Dist.Ct.App.1968); Touchette v. Northwestern Mut. Ins. Co., supra.

Finney, at 751-52, 600 P.2d 1272. We find no valid distinction between Finney and this case. Even though an insurance policy existed for the Malibu here, the vehicle was uninsured as to Paki because its operator had no insurance.

The fact that Paki was a passenger in an automobile covered by a policy in which he is a named insured does not justify refusing uninsured motorist protection. As stated in Grange Ins. Ass'n v. Great Am. Ins. Co., 89 Wash.2d 710, 718, 575 P.2d 235 (1978):

(U)ninsured motorists coverage (is) applicable if, at the time of sustaining injury ... a named insured, was occupying the (vehicle) described in his policy, or was on foot, or on horseback, or while sitting in his rocking chair on his front porch or while occupying a nonowned automobile furnished for his regular use ... This socalled uninsured protection is limited personal accident insurance chiefly for the benefit of the named insured.

As pointed out by the Peralas, this approach has been taken by other jurisdictions when faced with virtually identical facts. Barnes v. Powell, 49 Ill.2d 449, 275 N.E.2d 377 (1971); Bowsher v. State Farm Fire & Cas. Co., 244 Or. 549, 419 P.2d 606 (1966). We agree with the court's reasoning in Bowsher, at 552-53, 419 P.2d 606:

There is no doubt that if (the uninsured motorist) had been driving some other automobile with (the insured) as his passenger, and had injured (the insured) in exactly the same manner as he injured him in his own automobile, any applicable "uninsured-automobile" coverage paid for by (the insured) would have been available to (him). Nothing in (the Oregon uninsured motorist statute) suggests an intent to treat an owner of an insurance policy differently when he is injured riding in his own automobile than when he is injured riding in another automobile.

... We believe, ... that the proper focus of inquiry in such cases is to ascertain whether the injury for which a claim is made was covered by liability insurance, assuming that liability can be established. Such a focus seems more relevant than a general inquiry whether some kind of insurance covered, for some purposes, the automobile involved in the accident, regardless of the applicability of such insurance to the injuries sustained. The availability of...

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