Humleker v. Gallagher Bassett Serv. Inc.

• Decision Date: 25 January 2011
• Docket Number: No. 39947–4–II.,39947–4–II.
• Citation: 159 Wash.App. 667,246 P.3d 249
• Court: Washington Court of Appeals
• Parties: Thomas HUMLEKER, Appellant,v.GALLAGHER BASSETT SERVICES INC., Zurich American Insurance Company, John Doe Insurance Company 1 and John Doe Insurance Company 2, Respondents.

159 Wash.App. 667

246 P.3d 249

Thomas HUMLEKER, Appellant,

v.GALLAGHER BASSETT SERVICES INC., Zurich American Insurance Company, John Doe Insurance Company 1 and John Doe Insurance Company 2, Respondents.

No. 39947–4–II.

Court of Appeals of Washington, Division 2.

Jan. 25, 2011.

Joseph P. Lawrence Jr., Lawrence & Versnel PLLC, Seattle, WA, Vanessa Vanderbrug, Hanis Irvine Prothero PLLC, Kent, WA, for Appellant.Jacquelyn A. Beatty, Walter Eugene Barton, Attorney at Law, Seattle, WA, for Respondents.VAN DEREN, J.

[159 Wash.App. 670] ¶ 1 Thomas Humleker appeals the trial court's order granting summary judgment to Zurich American Insurance Company, his employer's insurer, from whom Humleker sought underinsured motorist coverage following an accident he had while driving a vehicle owned by United States Bakery Inc. dba Franz Bakery (USB). Humleker, a USB employee, argues that the form signed by USB limiting the policy's underinsured motorist coverage to $60,000 was legally inadequate to reduce the coverage for his accident below the $1 million liability coverage limit. Humleker also seeks attorney fees. We hold that by signing the form that expressly limited underinsured motorist coverage in Washington to $60,000, USB, with knowledge of the maximum available policy limits and the effect of the form's lower limit selection, waived the maximum policy limits in writing as required by RCW 48.22.030(4).¹ We, therefore, affirm the trial court's summary judgment order and deny Humleker's request for attorney fees.

FACTS

¶ 2 Zurich issued a vehicle insurance policy to USB that provided uninsured motorist vehicle insurance (UM) coverage and underinsured motorist vehicle insurance (UIM) coverage to vehicles operated by USB employees in the course of their employment in all 50 states, the District of Columbia, and Puerto Rico. The instant claim arose because Humleker, while in the course of his employment for USB, suffered injuries in a car accident on August 28, 2005, in Clallam County, Washington.

¶ 3 After exhaustion of the tortfeasor's policy, Humleker sought UIM coverage under USB's UIM policy with Zurich. Zurich responded that USB had waived all UIM coverage above $60,000 for its vehicles operated in Washington and that the effective USB policy had an endorsement limiting UIM coverage for bodily injury and property damage to $60,000 per accident.

¶ 4 Jerry Boness, USB's chief financial officer, procured the corporate insurance coverage for USB's entire fleet of vehicles. Boness testified by declaration that he discussed at length UM and UIM coverage with insurance broker Sharon Livas and, based on that discussion, decided to elect “lower limits for UM and UIM coverage, rather than the $1 million limit that was available and offered.” Clerk's Papers (CP) at 328.

¶ 5 Following Boness's waiver election, Boness received correspondence and forms from Zurich account executive Bill Ennis. The document packet included prepared (filled in), state specific rejection forms and a form entitled Uninsured/Underinsured Motorists Coverage Option II Selection/Rejection Limits Summary Form (summary form), listing all 50 states, the District of Columbia, and Puerto Rico and the coverage limits selected for each by Boness. For Washington, the summary form indicated a “Selected Limit[ ]” for $60,000 of UIM coverage. CP at 290. Ennis's accompanying letter explained that the summary form and the state specific forms “have been prepared ... to reflect the coverage limits [USB] requested for [UIM c]overage” and that “[t]he limits [USB] ha[d] chosen for [UIM] coverage ha[d] been entered as applicable on the summary form.” ² CP at 419.

¶ 6 Ennis's letter listed the states that required separate signatures to show the amount of coverage selected. Likewise, the summary form indicated with an asterisk which states required Boness to sign and return the included state forms. Washington was neither listed in the letter nor distinguished with an asterisk on the summary form. Thus, Boness did not sign a separate Washington specific UM and UIM waiver form and no such form is contained in the USB underwriting file. Ennis's letter further directed Boness to review all documents carefully and to sign and return the summary form and all state specific forms that required signatures. It advised, “By signing and dating the summary form, you agree that you have read and understand each state specific form and the selections or rejections marked on the state forms have been accepted by you without signing and dating each form individually.” CP at 420.

¶ 7 As explained in Zurich underwriter Curt Shipton's declaration, Boness was to return only those forms that he was required to sign, according to each individual state's insurance code requirements. Thus, Zurich's “underwriting file does not contain copies of [any] state-specific forms that Mr. Ennis would have sent to Mr. Boness but which Mr. Boness was not required to sign and return.” CP at 196.

¶ 8 Andrea Burns, a Zurich commercial lines underwriting manager, testified by declaration that “under Zurich's standard protocols,” the state specific form for Washington entitled, “Washington Rejection of Underinsured Motorists Coverage or Selection of Lower Limit of Liability” (Washington rejection form), would have been provided to Boness and filled out “to reflect the coverage selection Mr. Boness had made with respect to [USB]'s UM [and] UIM coverage in Washington—in this case, $60,000 for UM [and] UIM coverage.” ³ CP at 486–87.

¶ 9 Zurich relied on its summary form when rejecting Humleker's claim for coverage in excess of $60,000 under USB's UIM policy. The summary form stated that the named insured's signature on the summary form “indicates that you have read and understand each state form and that the selections or rejections marked on the state forms have been accepted by you without signing and dating each form.” CP at 289. The summary form also stated, “This form provides a summary of the selected Limits by State.” CP at 289.

¶ 10 Humleker sued Zurich.⁴ The parties' summary judgment arguments focused on whether the summary form constituted a rejection as contemplated by Washington's UIM statute, RCW 48.22.030. The trial court ruled that Zurich was entitled to summary judgment on the issue because the summary form was sufficient to meet the statutory requirement for rejection of full UIM coverage in Washington, and denied Humleker's motion for reconsideration.

¶ 11 Humleker appeals.

ANALYSIS

I. Standard of Review

¶ 12 When reviewing an order granting summary judgment, we engage in the same inquiry as the trial court. Marincovich v. Tarabochia, 114 Wash.2d 271, 274, 787 P.2d 562 (1990). Summary judgment is appropriate if the pleadings, depositions, and affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. See CR 56(c). “A material fact is one upon which the outcome of the litigation depends.” Clements v. Travelers Indem. Co., 121 Wash.2d 243, 249, 850 P.2d 1298 (1993). We must consider the facts submitted and all reasonable inferences from those facts in the light most favorable to the nonmoving party. Clements, 121 Wash.2d at 249, 850 P.2d 1298. Summary judgment is proper only if, from all the evidence, reasonable persons could reach but one conclusion. Stenger v. State, 104 Wash.App. 393, 398, 16 P.3d 655 (2001).

II. UIM Requirements in Washington

¶ 13 In Washington, insurers must provide UIM coverage and must offer UIM coverage limits equal to the insured's liability coverage limits unless the coverage or the liability coverage limits are specifically rejected. RCW 48.22.030(2)–(3). Insureds may reject UIM coverage altogether or may reject limits as high as the third party liability limits, provided they reject coverage in writing.⁵ RCW 48.22.030(4). Under these provisions, “UIM coverage becomes part of [all] automobile liability coverage by operation of law unless the insured party in writing agrees to a waiver or rejection.” Clements, 121 Wash.2d at 255, 850 P.2d 1298.

III. Waiver or Rejection of UIM Coverage

¶ 14 Any written rejection or waiver of coverage under RCW 48.22.030(4) “must be ‘specific and unequivocal.’ ” Cochran v. Great W. Cas. Co., 116 Wash.App. 636, 642, 67 P.3d 1123 (2003) (quoting Galbraith v. Nat'l Union Fire Ins. Co. of Pittsburgh, 78 Wash.App. 526, 532, 897 P.2d 417 (1995) (quoting Weir v. Am. Motorists Ins. Co., 63 Wash.App. 187, 190, 816 P.2d 1278 (1991))). Here, we must decide whether the written rejection contained in Zurich's summary form satisfies the rejection requirements of RCW 48.22.030(4).⁶ The relevant analysis regarding the rejection requirements of RCW 48.22.030(4) have been fleshed out in several Washington cases, including our Supreme Court's decision in Clements.

[159 Wash.App. 676] ¶ 15 In Clements, as here, an underinsured motorist injured the plaintiff, who was driving his employer's vehicle. 121 Wash.2d at 245, 850 P.2d 1298. There was no specific written waiver of UIM coverage in the employer's insurance file. See Clements, 121 Wash.2d at 250, 254, 850 P.2d 1298 (although insured employer did not contract for UIM coverage in Washington, neither did the insured specifically decline such coverage in writing or otherwise). The employer's policy stated that UIM coverage only applied in those states that required it, “ ‘Only those autos you own which, because of the law in the state where they are licensed or principally garaged, are required to have and cannot reject uninsured motorists insurance.’ ” Clements, 121 Wash.2d at 246, 850 P.2d 1298. The insurer argued that the contracting party's intent was the sole determinative issue in such cases, but our Supreme Court rejected that argument and held that RCW 48.22.030(4) evinced a legislative intent that an insured must decline UIM coverage in writing and by “an affirmative and conscious...