Hartford Acc. & Indem. Co. v. Novak, 43028

Decision Date04 April 1974
Docket NumberNo. 43028,43028
Citation520 P.2d 1368,83 Wn.2d 576
PartiesHARTFORD ACCIDENT AND INDEMNITY COMPANY, Respondent, v. Stanley NOVAK and Jane Doe Novak, husband and wife, Appellants.
CourtWashington Supreme Court

McGavick & Felker, Robert S. Felker, Tacoma, for appellants.

F. Ross Burgess, Tacoma, Lycette, Diamdon & Sylvester, Edwon, J. Snook, Seattle, for respondent.

HUNTER, Associate Justice.

This case involves a complaint for declaratory judgment filed by the plaintiff (respondent), Hartford Accident and Indemnity Company, against the defendants (appellants), Stanley and Jane Doe Novak, concerning the coverage and rights of the defendants under an 'uninsured motorist' portion of an insurance policy with the plaintiff. The defendants appeal from an order by the trial court granting the plaintiff's motion for summary judgment.

On December 11, 1970, the defendants were involved in an automobile accident with a second vehicle, which struck the defendants' vehicle as the second vehicle swerved to avoid colliding with another third vehicle, which had unexpectedly pulled out into the lane of traffic. At the time of the accident the third vehicle failed to make any 'physical contact' with either the second vehicle or the defendants' vehicle, but rather fled the scene without leaving any means of identification available to anyone involved.

The accident was immediately investigated by the Washington State Patrol. The drivers and witnesses in both the defendants' vehicle and the second vehicle maintained without question that the accident was the unavoidable result of the actions of an unknown and unidentifiable vehicle which had fled the scene without a scratch. No accident report was ever filed by the fleeing driver, and neither the plaintiff, which insures the defendants, nor the insurer for the second vehicle, had received any correspondence from any insurance company regarding the role of the third vehicle in this accident.

As a result of the accident, the defendants allegedly received certain injuries asserted to have been proximately caused by the operation of the hit-and-run vehicle, and filed a demand with the American Arbitration Association on August 16, 1972, for the matter to be arbitrated. The section of the insurance policy upon which the defendants relied in asserting a right to arbitrate provides as follows:

6. Arbitration: If any person making claim hereunder and the company Do not agree that such person is legally entitled to recover damages from the owner or operator of an uninsured automobile because of bodily injury to the insured, or do not agree as to the amount of payment which may be owing under this Section, then, upon written demand of either, the matter or matters upon which such person and the company do not agree shall be settled by arbitration in accordance with the rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Such person and the company each agree to consider itself bound to be bound by any award made by the arbitrators pursuant to this Section.

(Italics ours.)

Subsequent to the filing of the defendants' demand for arbitration, the plaintiff filed a complaint for declaratory judgment in the Superior Court for Pierce County, seeking a judgment declaring that no coverage was available under the 'uninsured motorist' provisions of their policy for the defendants and that the plaintiff should not have to arbitrate the matter. Section 3, subdivision 2 of the insurance contract, defines 'uninsured automobile' as follows:

(a) an automobile or trailer with respect to the ownership, maintenance or use of which there is, in at least the amounts specified by the financial responsibility law of the state in which the insured automobile is principally garaged, no bodily injury liability bond or insurance policy applicable at the time of the accident with respect to any person or organization legally responsible for the use of such automobile, or with respect to which there is a bodily injury liability bond or insurance policy applicable at the time of the accident but the company writing the same denies coverage thereunder or

(b) a hit-and-run automobile;

The insurance policy further defines a 'hit-and-run automobile' as follows:

. . . an automobile which causes bodily injury to an insured Arising out of physical contact of such automobile with the insured or with an automobile which the insured is occupying at the time of the accident . . .

(Italics ours.)

After considering the language of the sections of the insurance policy referring to arbitration and uninsured motorist coverage, the trial judge, upon motion by the plaintiff, entered an order staying the arbitration proceedings. Subsequently, on February 20, 1973, the trial judge entered an order granting the plaintiff's motion for summary judgment, holding: (1) that the plaintiff had no coverage under the insurance policy for the defendants as a result of the accident; and (2) that the plaintiff need not arbitrate the matter in question with the defendants through the American Arbitration Association. Thereafter, the defendants took this appeal.

The primary issue in this case is whether the defendants would be covered under the uninsured motorist provision of their insurance policy, should it be determined that the injuries or damages sustained by the defendants were proximately caused by a hit-and-run vehicle, which failed to make physical contact with the vehicle of the insured.

This issue was first considered by this court under a different factual situation in Johnson v. State Farm Mut. Auto. Ins. Co., 70 Wash.2d 587, 424 P.2d 648 (1967). In that case the same limiting language was in the policy requiring physical contact by the hit-and-run vehicle with the vehicle of the insured to afford coverage. Under the facts, however, the hit-and-run vehicle did not collide with the car of the insured, but struck a second car that was propelled into the vehicle of the insured.

We considered the diverse views on the issue of whether physical contact was required under decisions in the states of New York and California, and stated on page 589, 424 P.2d on page 649:

Where an unknown vehicle has struck a second vehicle and caused it to strike the insured vehicle, there is 'physical contact' between the unknown vehicle and the insured vehicle within the meaning of the clause quoted above.

On pages 590--591, 424 P.2d on page 650, we then stated the purpose of the uninsured motorist clause, the basis for the physical contact requirement, and the extent to which it should be applied:

Such provisions are intended to protect the insured against losses occasioned under circumstances where recovery cannot be had against the party causing the injury. Those circumstances are:

(1) where the offending party is uninsured; and

(2) where the identity of the offending party cannot be ascertained.

Loss occurs, and for the same reasons, whether the contact between the hit-and-run automobile and the insured's vehicle be 'physical' or 'actual.'

In Inter-Insurance Exchange of the Auto. Club of Southern Cal. v. Lopez, 238 Cal.App.2d 441, 47 Cal.Rptr. 834 (1965), the court, in interpreting the pertinent provisions of the California Insurance Code, noted at 446, 47 Cal.Rptr. 834 at p. 837:

The requirements of physical contact . . . are intended to prevent frauds, not to lessen the coverage extended to innocent motorists. We believe the physical contact requirement, designed to prevent false claims, should not be extended to defeat recovery in cases where fraud clearly does not exist.

(Italics ours.)

Subsequent to the above decision, in the following year our legislature, apparently having in mind our enunciations in Johnson, enacted the uninsured motorist act. RCW 48.22.030 provides as follows:

On and after January 1, 1968, no new policy or renewal of an existing policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death set forth in RCW 46.29.490, for the Protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles and hit-and-run motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom, except that the named insured may be given the right to reject such coverage, and except that, unless the named insured requests such coverage in writing, such coverage need not be provided in or supplemental to a renewal policy where the named insured had rejected the coverage in connection with a policy previously issued to him by the same insurer.

(Italics ours.)

It is significant in the above statute that the legislature omitted the limitation of 'physical contact' by hit-and-run motor vehicles.

In Touchette v. Northwestern Mut. Ins. Co., 80 Wash.2d 327, 332, 494 P.2d 479, 482 (1972), we stated in clear and concise language the purpose of the above enactment:

The statute (RCW 48.22.030) requiring that uninsured motorist coverage shall be provided . . . is but one of many regulatory measures designed to protect the public from the ravages of the negligent and reckless driver. It was enacted to expand insurance protection for the public in using the public streets, highways and walkways and at the same time cut down the incidence and consequences of risk from the careless and insolvent drivers. The statute is both a public safety and a financial security measure. Recognizing the inevitable drain upon the public treasury through accidents caused by insolvent...

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