Herrmann v. Grange Ins. Ass'n

• Decision Date: 18 January 1983
• Docket Number: No. 4500-1-II,4500-1-II
• Citation: 657 P.2d 346,33 Wn.App. 734
• Parties: Karl HERRMANN, Appellant, v. GRANGE INSURANCE ASSOCIATION, Respondent.
• Court: Washington Court of Appeals

Page 734

33 Wn.App. 734

657 P.2d 346

Karl HERRMANN, Appellant, v. GRANGE INSURANCE ASSOCIATION, Respondent.

No. 4500-1-II.

Court of Appeals of Washington,

Division 2.

Jan. 18, 1983.

Charles Herrmann, Tacoma, for appellant.

Wayne Murray, Seattle, for respondent.

PETRIE, Judge.

Plaintiff, Karl Herrmann, appeals a summary judgment dismissing his amended complaint against defendant, Grange Insurance Association, and denying his own motion for summary judgment. He had sought income continuation benefits under an automobile personal injury protection (P.I.P.) endorsement to an automobile insurance policy issued to him as named insured by defendant. We reverse.

Herrmann was seriously injured in a head-on collision while driving a vehicle not owned by him but which was insured by Unigard Insurance Group. His affidavit in support of his motion averred a loss of income in excess of $26,000 for the year following the collision. The Unigard and Grange policies provide identical personal injury protection endorsements.

The endorsement provides benefits for loss and expense incurred because of bodily injury caused by accident and arising out of the ownership, maintenance or use of an automobile:

(a) medical and hospital benefits to or on behalf of each injured person;

(b) income continuation benefits to or on behalf of each injured person who at the time of the accident was usually engaged in a remunerative occupation;

(c) loss of services benefits to each named insured who sustains bodily injury caused by accident while occupying, or while a pedestrian through being struck by, an automobile.

Another paragraph lists "exclusions," in part as follows:

This insurance does not apply:

(h) to income continuation benefits to any injured person while occupying, or as a pedestrian through being struck by, a vehicle insured for AUTOMOBILE PERSONAL INJURY PROTECTION, which is either not owned by the named insured or is a temporary substitute automobile.

In the present case, Unigard paid Herrmann loss of income benefits to the extent of its policy limits, $10,400. The automobile used in the accident was owned by the insured named in the Unigard policy; thus income continuation benefits were not excluded under Unigard's exclusions clause. Herrmann was covered as an "injured person" as he was using the insured automobile with the permission of the named insured. Unigard, therefore, provided Herrmann primary coverage for income continuation benefits.

Herrmann agrees that primary coverage is excluded under his Grange policy for income continuation benefits because he was in a nonowned auto, excluded under (h) of the exceptions clause. But he contends that an "other insurance" provision restored a limited, secondary excess coverage under that fact pattern where the loss of income exceeds the policy limits of liability of the "other insurance." Grange does not challenge, through any countering affidavit, Herrmann's assertion that his loss of income for the year following the collision exceeded $26,000. Grange does not agree, however, that the "other insurance" provision adds secondary coverage for income continuation benefits.

If a clause in an insurance policy is ambiguous, the court must apply a meaning and construction most favorable to the insured, even though the insurer may have intended another meaning. Morgan v. Prudential Ins. Co., 86 Wash.2d 432, 435, 545 P.2d 1193 (1976). This long-standing rule applies with added force in construing exceptions and limitations to the policy's coverage. Shotwell v. Transamerica Title Ins. Co., 91 Wash.2d 161, 588 P.2d 208 (1978). In the present case, because we find the language in the "other insurance" clause is ambiguous, we apply the construction most favorable to the insured.

The "other insurance" clause provides:

If there is other automobile medical payments coverage for medical and hospital expenses otherwise covered by this endorsement, the Company shall not be liable under this endorsement for a greater proportion of such expenses than the applicable limits of liability stated herein bear to the total applicable limits of liability of all such other valid and collectible coverage; provided, however, with respect to losses resulting from an accident while occupying, or as a pedestrian through being struck by, a temporary substitute or non-owned automobile, this insurance shall be excess insurance over any other valid and collectible automobile medical payments or Personal Injury Protection Insurance.

(Italics ours.)

We note initially that the event referred to in the proviso is the same event which is set forth in exclusion (h), which excluded income continuation benefits. It seems reasonable, therefore, to assume that the proviso is meant to modify exclusion (h). Grange contends, however, that the entire "other insurance" clause refers solely to medical and hospital expenses. Close examination of the clause does not clearly support that contention. The meaning of "this insurance" in the "other insurance" clause is unclear. Grange argues the last antecedent rule as set forth in Davis v. Gibbs, 39 Wash.2d 481, 236 P.2d 545 (1951), is controlling. The last antecedent is the last word or phrase which can be made an antecedent without impairing the meaning of the sentence. Davis v. Gibbs, 39 Wash.2d at 483, 236 P.2d 545. Grange also relies on Ames v. Baker, 68 Wash.2d 713, 415 P.2d 74 (1966). The defendant in Ames also took the position there was no ambiguity in the insurance policy at issue because modifying clauses generally modify the nearer antecedent. Ames v. Baker, 68 Wash.2d at 716, 415 P.2d 74. Applying the last antecedent rule here, Grange argues, "this insurance" in the "other insurance" clause refers back to "automobile medical payments coverage for medical and hospital expenses" in the first part of the clause. The effect of the proviso, therefore, would only be to provide medical coverage as excess insurance when the insured is in a nonowned automobile.

Although Grange relies on Ames, that court did not find the last antecedent rule dispositive. Ames found the rule "but one of a series of interpretative guides" and not ...