Kagele v. Aetna Life and Cas. Co.

• Decision Date: 04 April 1985
• Docket Number: No. 5826-III-3,5826-III-3
• Citation: 698 P.2d 90,40 Wn.App. 194
• Court: Washington Court of Appeals
• Parties: Norman and Ursula KAGELE, a marital community, Appellants, v. AETNA LIFE AND CASUALTY COMPANY, a foreign insurer; and Andre Romberg Insurance Agency, a Washington corporation, Respondents, Gordon Curry and Jane Doe Curry, d/b/a Excell Construction, Defendants.

Page 194

40 Wn.App. 194

698 P.2d 90

Norman and Ursula KAGELE, a marital community, Appellants, v. AETNA LIFE AND CASUALTY COMPANY, a foreign insurer; and Andre Romberg Insurance Agency, a Washington corporation, Respondents Gordon Curry and Jane Doe Curry, d/b/a Excell Construction Defendants.

No. 5826-III-3.

Court of Appeals of Washington Division 3, Panel One.

April 4, 1985.

Review Denied June 7, 1985.

Gerald W. Gelfand, Seattle, for appellants.

William F. Etter, Raymond F. Clary, Witherspoon, Kelley, Davenport & Toole, Spokane, for Aetna.

Constance D. Gould, Anderson, Evans, Craven & Lackie, P.S., Spokane, for Andre.

GREEN, Chief Judge.

Norman and Ursula Kagele appeal a summary judgment dismissing their assigned claim against Aetna Life and Casualty Company and Andre Romberg Insurance Agency.

The Currys, d/b/a Excell Construction Company, purchased through Andre Romberg a comprehensive liability policy with Aetna. In 1978 the Kageles contracted with Curry to build them a house in Ritzville. On December 13, 1978, a fire destroyed the Kageles' home. They filed suit naming various defendants, including the Currys as general contractor. On November 13, 1982, the Kageles and Currys executed an agreement entitled "Covenant Not to Sue or Execute and Assignment". Under this agreement, the Currys were dismissed from the suit with prejudice and without admitting any liability. In exchange, the Currys assigned their rights, if any, against Aetna under its insurance policy to the Kageles. The agreement also provided that if the insurance proceeds from Aetna were unavailable to satisfy the Kageles' claim, the Currys agreed to pay $20 in full satisfaction of the claim. The agreement states that Aetna denied coverage. At a settlement hearing, the Kageles established damages in excess of $220,000; but the amount received in settlement from the other defendants was $120,000.

On August 26, 1982, the Kageles brought this action in Adams County against Aetna alleging it wrongfully denied its policy covered the fire damage and it violated the Consumer Protection Act, RCW 19.86, in filing evidence of insurance when in fact insurance does not exist. On March 3, 1983, Aetna commenced a declaratory judgment action in Spokane County to determine whether the policy covered the Kageles' damage. The Kageles' action in Adams County was summarily dismissed as to both Andre Romberg and Aetna for the reason the Kageles did not establish liability or damages. The Kageles appeal.

ANDRE ROMBERG INSURANCE AGENCY

While the Kageles assign error to the court's dismissal of Andre Romberg, they neither cite authority nor present argument in support of the claimed error. RAP 10.3(a)(5) requires an appellate brief to contain argument in support of the issues presented for review, together with citation to legal authority. See also RAP 13.4(c)(7). Consequently, this assigned error will not be considered. Orwick v. Seattle, 103 Wash.2d 249, 256, 692 P.2d 793 (1984). ¹

AETNA LIFE AND CASUALTY COMPANY

Aetna asserts that since the settlement agreement between the Kageles and the Currys states the Currys are not liable and did not obligate the Currys to pay anything, then it, the insurer, is not obligated to pay anything. Aetna argues an insurer is not liable to a claimant if the insured is not. ² We disagree.

First, the agreement between the Currys and Kageles does not determine the Currys' liability:

WHEREAS, all parties wish to fully settle their dispute without defendants [Currys] admitting any liability and with plaintiffs [Kageles] reserving any and all causes of action or rights which may otherwise accrue to [Kageles] against any other entities whatsoever; ...

* * *

IT IS HEREBY AGREED that plaintiffs shall agree or stipulate to the entry of an order dismissing their claims against Gordon Curry and Betty Lou Curry, d/b/a Excell Construction Company with prejudice and setting forth the reasonableness of this settlement....

* * *

IT IS FURTHER AGREED that Norman and Ursula Kagele ... will not execute, levy, attach or garnish any property, assets or funds belonging to Gordon Curry and Betty Lou Curry, d/b/a Excell Construction by virtue of any judgment or settlement in Adams County Cause Number 13696, Kagele v. Aetna Casualty and Surety, et al.;

* * *

IT IS FURTHER AGREED that nothing in this Covenant Not To Sue or Execute and Assignment shall in any way limit or waive the rights which Norman and Ursula Kagele may have against the Aetna Casualty and Surety Company, Andre-Romberg Insurance Agency, Inc., ...

(Italics ours.)

Second, Aetna concedes the Currys could assign to the Kageles any potential cause of action they had against Aetna. Rightly so as it is well established that a claim by an insured against his insurer may be assigned to the injured party. State Farm Mut. Auto. Ins. Co. v. Paynter, 122 Ariz. 198, 593 P.2d 948 (App.1979); Damron v. Sledge, 105 Ariz. 151, 460 P.2d 997, 999 (1969); Zander v. Casualty Ins. Co., 259 Cal.App.2d 793, 66 Cal.Rptr. 561 (1968); Critz v. Farmers Ins. Group, 230 Cal.App.2d 788, 41 Cal.Rptr. 401, 12 A.L.R.3d 1142 (1964); American Family Mut. Ins. Co. v. Kivela, Ind.App., 408 N.E.2d 805 (1980); Miller v. Shugart, 316 N.W.2d 729 (Minn.1982); Metcalf v. Hartford Accident & Indem. Co., 176 Neb. 468, 126 N.W.2d 471 (1964); Griggs v. Bertram, 88 N.J. 347, 443 A.2d 163 (1982); Groce v. Fidelity Gen. Ins. Co., 252 Or. 296, 448 P.2d 554 (1968); Annot., Assignability of Insured's Right to Recover Over Against Liability Insurer for Rejection of Settlement Offer, 12 A.L.R.3d 1158 (1967) and cases cited therein. Contra, Bendall v. White, 511 F.Supp. 793, 795 (N.D.Ala.1981); American Cas. Co. v. Griffith, 107 Ga.App. 224, 129 S.E.2d 549 (1963); Huffman v. Peerless Ins. Co., 17 N.C.App. 292, 193 S.E.2d 773 (1973).

Third, a covenant not to execute coupled with an assignment and settlement agreement is not a release permitting the insurer to escape its obligation. State Farm Mut. Auto. Ins. Co. v. Paynter, supra; Globe Indem. Co. v. Blomfield, 115 Ariz. 5, 562 P.2d 1372 (1977); Steil v. Florida Physicians' Ins. Reciprocal, 448 So.2d 589, 591 (Fla.Dist.Ct.App.1984); see also Zander v. Casualty Ins. Co., supra.

If ... the insureds are offered a settlement that effectively relieves them of any personal liability, at a time when their insurance coverage is in doubt, surely it cannot be said that it is not in their best interest to accept the offer. Nor, do we think, can the insurer who is disputing coverage compel the insureds to forego a settlement which is in their best interests.

Miller v. Shugart, supra at 733-34.

In Steil v. Florida Physicians' Ins. Reciprocal, supra, the insurer denied coverage. The insured and injured party entered into a written settlement. The insured acknowledged he was obligated to the injured party and gave her a written assignment of all his rights and causes of action against the insurer, while the injured party released the insured and dismissed her claim against him. The insurer argued that since the insured had neither paid nor become obligated to pay and the insurer's policy obligations were predicated upon the insured's liability, it could not be held responsible. The court disagreed holding the insurer was not exonerated because the insured was able to obtain his own discharge from liability....