Grange Ins. Ass'n v. MacKenzie

• Decision Date: 30 May 1984
• Docket Number: No. 5916-9-II,5916-9-II
• Citation: 683 P.2d 221,37 Wn.App. 703
• Parties: GRANGE INSURANCE ASSOCIATION, Appellant, v. George A. MacKENZIE and Jane Doe MacKenzie, his wife; and Norman Sermonti and Jane Doe Sermonti, his wife, Respondents.
• Court: Washington Court of Appeals

Page 703

37 Wn.App. 703

683 P.2d 221

GRANGE INSURANCE ASSOCIATION, Appellant, v. George A. MacKENZIE and Jane Doe MacKenzie, his wife; and Norman Sermonti and Jane Doe Sermonti, his wife Respondents.

No. 5916-9-II.

Court of Appeals of Washington Division 2.

May 30, 1984.

Review Granted Sept. 7, 1984.

William J. Madden, Atty. at Law, Seattle, for appellant.

Jon Parker, Atty. at Law, Hoquiam, for respondents MacKenzie.

Douglas B. Bitar, Atty. at Law, Hoquiam, for respondents Sermonti.

WORSWICK, Judge.

On July 26, 1980, George MacKenzie collided with Stanley Sermonti's motorcycle while driving his brother James' car. Sermonti was killed. George's insurer, Grange Insurance Association, appealing an adverse summary judgment in its declaratory judgment action, asks us to hold that coverage was excluded by its "use of other automobiles" clause. That clause was contained in a policy covering two vehicles owned by George. It provided:

(d) This insuring agreement does not apply:

(1) To any [other] automobile owned by or furnished for regular or frequent use to either the named insured or a member of the same household other than a private chauffeur or domestic servant of such insured or spouse.

The trial court found the clause ambiguous and resolved the ambiguity in favor of extending coverage to George. We reverse.

At the outset, we reiterate three familiar rules: (1) ambiguities in an insurance contract will be resolved against the insurer; Continental Ins. Co. v. Paccar, Inc., 96 Wash.2d 160, 634 P.2d 291 (1981); (2) where there is no ambiguity, a court need not and will not construe the policy; West Am. Ins. Co. v. State Farm Mutual Automobile Ins. Co. 80 Wash.2d 38, 491 P.2d 641 (1971); Greer v. Northwest Nat'l Ins. Co., 36 Wash.App. 330, 674 P.2d 1257 (1984); and (3) language in the contract must be understood in its plain, ordinary, popular sense as it would be understood by the average person purchasing insurance. Shotwell v. Transamerica Title Ins. Co., 91 Wash.2d 161, 588 P.2d 208 (1978). When examined in accordance with these principles, the clause plainly excludes coverage.

The language is not ambiguous; it is as plain and "popular" as insurance language can be, and there is no need to construe it. First it tells the insured that, if he uses an automobile not listed in the policy, he will not be covered if his use is frequent. It also tells him that he will not be covered if his use is regular, whether or not it is frequent. Second, it tells the insured that if he uses an automobile not listed in the policy which is owned by another member of the household, he will not be covered under any conditions. It is undisputed that George and James were members of the same household.

The trial judge apparently believed--and respondents argue--that Dairyland Ins. Co. v. Ward, 83 Wash.2d 353, 517 P.2d 966 (1974) compels a different result. We disagree.

Dairyland did hold a similar clause ambiguous. However, the majority opinion is less than clear in identifying the ambiguity and we are hard put to see it. We think the majority probably concluded that the term "regular use" in the Dairyland clause was ambiguous when considered in light of the facts of the case, which involved only a single use, inasmuch as the word "regular," when used alone, can mean frequent, or it can mean systematic, even though infrequent. See Webster's Third New Int. Dictionary (1969). Grange's clause eliminates any such ambiguity by modifying "use" by both "regular" and "frequent," set out in the disjunctive.

The trial court here made passing reference in its memorandum opinion to the "member of the household" language which is the same in the Grange clause as it was in the Dairyland clause. The trial judge appears to admit some confusion over the treatment of that language in Dairyland. We fully share this confusion, because that language would have excluded coverage in Dairyland, as it does here, regardless of the nature of the use. Having studied Dairyland carefully, we can only conclude that the majority simply ignored that language because it felt constrained to extend coverage for policy reasons which we do not fully comprehend but are satisfied do not apply here. ¹

We see no policy reasons for avoiding the application of the clause here as written. Such clauses are recognized as serving the legitimate purpose of preventing an insured from receiving coverage on all household cars or another uninsured car of the insured by merely purchasing a single policy, while at the same time providing coverage to the insured when engaged in the casual and infrequent use of nonowned vehicles. Dairyland Ins. Co. v. Ward, 83 Wash.2d at 357, 359, 517 P.2d 966; Rocky Mountain Fire & Cas. Co. v. Goetz, 30 Wash.App. 185, 633 P.2d 109 (1981); Westhaver v. Hawaiian Ins. & Guar. Co., Ltd., 15 Wash.App. 406, 549 P.2d 507 (1976). Broad exclusions of coverage are permissible when the nature of the insurer's risk is altered by factors not contemplated in the computation of premiums, and when the exclusion is spelled out for the policyholder in clear and unmistakable language. Kelly v. Aetna Cas. & Surety Co., 100 Wash.2d 401, 408, 670 P.2d 267 (1983). These policy considerations are satisfied in this case. The holding in Dairyland, as we read it, is limited to the specific clause and circumstances involved in that case.

If George and James were not members of the same household,...