LaPoint v. Richards

• Decision Date: 08 July 1965
• Docket Number: No. 37593,37593
• Citation: 403 P.2d 889,66 Wn.2d 585
• Court: Washington Supreme Court
• Parties: Mae LaPOINT and Mildred Winchester and Tim LaPoint by his Guardian Ad Litem, Donald LaPoint, Respondents, v. Robert W. RICHARDS and Jane Doe Richards, his wife, Defendants, Temperance Insurance Exchange, Appellant.

Page 585

66 Wn.2d 585

403 P.2d 889

Mae LaPOINT and Mildred Winchester and Tim LaPoint by his Guardian Ad Litem, Donald LaPoint, Respondents, v. Robert W. RICHARDS and Jane Doe Richards, his wife, Defendants Temperance Insurance Exchange, Appellant.

No. 37593.

Supreme Court of Washington, Department 2.

July 8, 1965.

Weyer, Sandelin, Sterne & Gaskill,

D. Scott Sandelin, Seattle, for appellant.

David L. Jamieson, Tacoma, for respondents.

BARNETT, Judge. ^*

The stipulated facts reveal that about June 2, 1959, one Stanton Weston, an agent of the garnishee defendant, Temperance Insurance Exchange (hereinafter referred to as Temperance), received an application for automobile liability insurance submitted with $30.80 in cash by one Norman Becker in behalf of Robert W. Richards. The form on which the application was made was that of another company, not upon a Temperance form, but used by a Mr. Thompson who originally took the application from Mr. Richards. Weston informed Thompson that he needed additional information concerning the policy; and on June 11, 1959, Weston deposited in the mail a letter ¹ to Richards at his last known address, requesting additional information as to his occupation, license number, wife's name and license number, date of birth, and number of citations in the past 3 years; and that, if this information was submitted, the policy would be in effect at the time of the postmarked date on the return envelope. As part of the stipulated facts it is stated that there is no evidence in the record as to whether or not this letter was received by Richards.

On June 17, 1959, Weston learned that Richards had had an automobile accident the day before. On June 18, 1959, Weston sent a letter to Richards returning the premium of $30.80, stating that there was no coverage for the June 16th accident because he had not received the information requested in the June 11th letter. Subsequently, in a reservation of rights agreement dated October 1, 1959, between Richards and Temperance, wherein Temperance reserved the right to deny all coverage to Richards, the parties agreed to investigate the facts surrounding the application for insurance and Richards reserved the right to maintain that he was insured by Temperance. Temperance also agreed to make a filing with the Financial Responsibility Division of the Department of Licenses (hereinafter called the department) to the effect that a policy of insurance was in force with Temperance for Richards in order to preserve his driving privileges while the matter was being investigated. It was further agreed that Temperance had the right to negotiate or settle any claim without waiver of its rights, including the right to deny any liability to Richards.

Temperance made a filing with the department, and the Washington Financial Responsibility Insurance Certificate (SR 22) showed it to be 'Effective from 6--11--59 to 12--11--59.' However, on the SR 22, the space after the phrase 'Certificate Required because of' is left blank. It is emphasized that the filing was made in order to preserve Richards' driving privileges under the Financial Responsibility Act of this state. There is no evidence in the record as to Temperance receiving any consideration for the filing, other than the October 1st reservation of rights agreement.

In the trial which litigated the issues involved in the June 16, 1959, accident, a judgment was obtained against Robert Richards and wife for $3,500 in favor of Mildred Winchester, $4,000 for Mae LaPoint, and $100 to the guardian ad litem for Tim LaPoint, together with their costs. The judgment was not appealed.

There was a tender of defense to Temperance, but the same was duly refused. The judgment was entered after the time for appeal had expired. The judgment apparently was unsatisfied, hence this garnishment proceeding.

The trial court concluded that there was insurance coverage under a valid policy at the time of the accident in question. We disagree.

The existence of an insurance policy is a matter of contract law, since insurance involves a contractual relationship between the insurer and the insured. Ohio Cas. Ins. Co. v. Nelson, 49 Wash.2d 748, 306 P.2d 201 (1957); McGregor v. Inter-Ocean Ins. Co., 48 Wash.2d 268, 292 P.2d 1054 (1956); Trinity Universal Ins. Co. v. Willrich, 13 Wash.2d 263, 124 P.2d 950, 142 A.L.R. 1 (1942). Under the stipulated facts, there is no evidence that the June 11th letter was received by Richards. Also, there is not a scintilla of evidence that Richards sent back the information requested in the June 11th letter. The letter specified the date when the policy would become effective, i.e., '* * * at the time of the post marked date on the return enveloped (sic).' If the return letter was never sent, and there was no evidence that it was, there could have been no postmarked date and hence no contract. The retention of a premium in and of itself does not constitute a contract. Basinsky v. National Cas. Co., 122 Wash. 1, 209 P. 1077 (1922). We hold that there was no existing insurance contract between the parties.

Having so concluded, the question remains whether or not the filing of SR 22 by Temperance with the director in accordance with RCW 46.28.010 et seq., infra, prevents it from thereafter raising the defense that the certified policy is not in truth and in fact a policy of insurance as to the public, the director, and third parties.

The relevant portion of the pertinent statutes as they existed in June, 1959, at the time of the accident, follow:

RCW 46.28.010:

(1) The operator of any motor vehicle involved in an accident * * * shall * * * report the matter in writing to the director. The form of such report shall be prescribed by the director, shall require facts to enable the director to determine whether the requirements for deposit of security under RCW 46.28.020 are inapplicable by reason of the existence of insurance or other exceptions specified in this chapter * * *.

RCW 46.28.020:

Within thirty days after receipt of a report of such an accident the director shall determine, with respect to both the operator and the owner of each motor vehicle involved in the accident and reported upon, except as to persons exempt from the requirement of security under this chapter, the amount of security sufficient, in his judgment, but within the limits prescribed in this chapter, to satisfy all judgments for damages resulting from such accident as may be recovered against such operator or owner or both. Upon making such determination the director shall in writing forthwith notify each such operator and owner of the security so required. If within thirty days after the date of mailing of notice by the director of the requirement of security such operator or owner has not deposited with the director the kind and amount of security so required, and except as provided in RCW 46.28.030 and 46.28.040, the director shall forthwith suspend the operator's license or nonresident's operating permit of such operator or owner. * * *

RCW 46.28.040:

(1) The requirements as to security and suspension in RCW 46.28.020 shall further not apply to:

(a) Any operator or owner if such owner had in effect at the time of the accident an automobile liability policy with respect to the motor vehicle involved in such accident.

(b) Any operator, if not the owner of the motor vehicle, if there was in effect at the time of the accident an automobile liability policy or bond with respect to his operation of motor vehicles not owned by him.

RCW 46.28.050:

No insurance policy or bond shall be deemed effective under RCW 46.28.040 unless such policy or bond:

(1) Is subject, if the accident has resulted in bodily injury or death, to a limit, exclusive of interest and cost, of not less than ten thousand dollars because of bodily injury to or death of one person in any one accident and, subject to said limit for one person, to a limit of not less than twenty thousand dollars because of bodily injury to or death of two or more persons in any one accident, and, if the accident has resulted in damage to or destruction of property, to a limit of not less than five thousand dollars because of damage to or destruction of property of others in any one accident.

Manifestly the purpose of the Financial Responsibility Act is for the protection of the public. We observed in State ex rel. Ralston v. Department of Licenses, 60 Wash.2d 535, 541, 374 P.2d 571, 574 (1962):

The need for reasonably effective regulatory procedures with respect to those who operate motor vehicles is indeed great. Furthermore, the magnitude of the problems involved increases with each year. * * *

The sections of our statutes involved here, (now recodified as RCW 46.29.060 et seq.), like their California counterpart, are directly intended for the benefit of owners and drivers of motor vehicles as a means of forestalling suspension of the license of the driver and of the registration of the vehicle and, more fundamentally, designed to give monetary protection to that ever changing and tragically large group of persons who, while lawfully using the highways themselves, suffer serious injury through the negligent use of those highways by others. Bonfils v. Pacific Auto. Ins. Co., 165 Cal.App.2d 152, 331 P.2d 766 (1958); Continental Cas. Co. v. Phoenix Constr. Co., 46 Cal.2d 423, 296 P.2d 801, 57 A.L.R.2d 914 (1956).

It is evident that the purpose of the SR 22 form filed in conformance with the above statutes was to protect Richards' driving privileges by proving insurance in lieu of security or bond. The state has another purpose too. The state has an interest in the giving of monetary protection to persons using the highways themselves who suffer injury through the negligent use of those highways by others.

Appellant contends that it secured the certificate of insurance in order to permit Richards to retain his driving privileges and for no other purpose....