Freimuth v. Glens Falls Ins. Co.
| Decision Date | 25 July 1957 |
| Docket Number | No. 33849,33849 |
| Citation | 314 P.2d 468,50 Wn.2d 621 |
| Parties | Delmer C. FREIMUTH, Appellant, v. GLENS FALLS INSURANCE COMPANY, a corporation, Respondent. |
| Court | Washington Supreme Court |
Lundin, Barton & Goucher, Seattle, for appellant.
Bogle, Bogle & Gates, Seattle, for respondent.
This appeal brings here for review a judgment of dismissal, pursuant to respondent's challenge to the sufficiency of the evidence at the close of the plaintiff's case, in an action on a policy of marine insurance on a yacht.
In passing upon the challenge to the sufficiency of the evidence, it must be remembered that the motion admits the truth of all of the plaintiff's evidence and requires the court to draw every favorable inference from it, and must be construed most strongly against the moving party. La Moreaux v. Fosket, 45 Wash.2d 249, 273 P.2d 795; Hardung v. Green, 40 Wash.2d 595, 244 P.2d 1163.
On December 1, 1953, respondent Glens Falls Insurance Company by its general agent executed a policy of insurance on appellant's yacht, which policy, however, was limited to the Ketchikan harbor and did not cover a voyage from Alaska to Seattle. Consequently, on May 17, 1954, appellant's insurance broker in Seattle by telephone ordered from appellant's general agent there an endorsement on the policy for a one-way trip from Alaska to Seattle between May 20, 1954 and July 20, 1954, and confirmed by a written order, the pertinent portion of which is set out in the margin, 1 in which the policy number, the name of the yacht, and the time and place of the voyage were identified. It is plain beyond cavil that the general agent at all times was fully aware of the impending trip and that it would not be undertaken unless the perils of the voyage were insured against. The following day, upon receipt of that memorandum, the respondent's general agent transcribed it on its own stationery and sent it to the respondent's underwriter, who advised that a survey was a prerequisite to the trip endorsement.
Thereupon, respondent's general agent in Seattle by letter the pertinent portion of which is set out in the margin, 2 employed a marine surveyor in Ketchikan, Alaska, for the purpose.
The general agent knew the appellant was then in Ketchikan to bring the boat down as soon as the insurance was effected, and in said letter directed the surveyor to arrange with the owner for the survey, and specifically commissioned the surveyor, without exception or limitation, to approve or disapprove the trip, and declared unequivocally that the existence of coverage was dependent upon his survey. Pursuant to such directions, the surveyor delivered appellant a copy of the letter and made the survey. He ordered the anchor line replaced and that because the appellant intended to travel alone, he run only during daylight hours. That change having been made and appellant having agreed to restrict travel to daylight hours, the surveyor approved the trip. The following day, Friday, May 28, 1954, the survey report with covering letter, the pertinent portion of which is set out in the margin, 3 was air mailed to the respondent's general agent in Seattle.
Appellant believed and testified he thought he was covered and would not have otherwise undertaken the trip but would have called his broker in Seattle. The surveyor, likewise, thought the insurance was in force because in the covering letter transmitting the report of his survey, he advised appellant intended to leave on the following day.
Upon completion of the change indicated by the marine surveyor, appellant left for Seattle on Saturday, May 28, 1954. When the covering letter and survey were received by the respondent's general agent in Seattle, it attached a longhand note thereto reading: and dispatched the same by special messenger to the respondent's marine office in Seattle. On Thursday, June 3, 1954, two days following the receipt of the survey and the covering letter, and five days after departure, the yacht was destroyed by fire.
In spite of the urgency of the situation and actual knowledge of the impending voyage, respondent did nothing further until fire destroyed the yacht when it denied coverage.
While appellant contends there was a contract of insurance, the respondent contends, and the trial court held, there was no contract.
Did the respondent, through its general agent, owe the appellant any duty? If so, is there liability for the breach of that duty?
On May 17, 1954, respondent was apprised that the appellant, then a policyholder, desired coverage for the trip from Ketchikan, Alaska, to Seattle 'in the immediate future,' between May 20, 1954 and July 20, 1954. Respondent so advised its marine surveyor. 2
In cases of an impending hazard, many courts have held that there is a duty on the part of the insurance company to act with dispatch. The United States supreme court in National Union Fire Ins. Co. v. Wanberg, 260 U.S. 71, 43 S.Ct. 32, 67 L.Ed. 136, sustained the constitutionality of a North Dakota statute requiring acceptance or rejection of an application for hail insurance within twenty-four hours. In the absence of statute, the supreme court of Kansas found such a duty in Boyer v. State Farmers' Mut. Hail Ins. Co., 86 Kan. 442, 121 P. 329, 40 L.R.A.,N.S., 164, Ann.Cas. 1915A, 671. See, also, Security Ins. Co. of New Haven, Conn. v. Cameron, 85 Okl. 171, 205 P. 151, 27 A.L.R. 444; Kukuska v. Home Mut. Hail-Tornado Ins. Co., 204 Wis. 166, 235 N.W. 403.
Tort liability for negligence in failing to act upon an application was sustained in Dyer v. Missouri State Like Ins. Co., 132 Wash. 378, 232 P. 346. While tort liability has recently received widespread judicial sanction, 4 it is unnecessary to resolve it here because the appellant's complaint, brief, and his counsel's oral argument at our bar proceed only upon the theory of contract, and we have reached the conclusion the evidence discloses a completed contract.
Respondent's underwriter advised that the trip endorsement would not be made without a new survey which its general agent ordered forthwith by letter, a copy of which was delivered to appellant. The letter advised that the appellant planned the trip 'in the immediate future,' and commissioned the surveyor selected by it to approve or disapprove the trip. He approved it. The appellant believed he was insured and said that he would not have undertaken the trip otherwise, but would have called his broker in Seattle. The surveyor was the agent of the respondent and not appellant.
By the survey order appellant was advised that his 'coverage' was dependent upon a favorable survey report. It was favorable. In the field of insurance, 'coverage' is not an ordinary word, but one of very precise meaning. The supreme court of Colorado in Federal Life Ins. Co. v. Wells, 98 Colo. 455, 56...
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