McGreevy v. Oregon Mut. Ins. Co.

• Decision Date: 12 July 1994
• Docket Number: No. 13037-1-III,13037-1-III
• Citation: 74 Wn.App. 858,876 P.2d 463
• Parties: Christine A. McGREEVY, individually and as Personal Representative of the Estate of William J. McGreevy, Respondent and Cross Appellant, v. OREGON MUTUAL INSURANCE COMPANY, an Oregon corporation, Appellant.
• Court: Washington Court of Appeals

Page 858

74 Wn.App. 858

876 P.2d 463

Christine A. McGREEVY, individually and as Personal Representative of the Estate of William J McGreevy, Respondent and Cross Appellant, v. OREGON MUTUAL INSURANCE COMPANY, an Oregon corporation, Appellant.

No. 13037-1-III.

Court of Appeals of Washington, Division 3 Panel One.

July 12, 1994.

Christopher J. Moore, Theodore O. Creason, Ware, O'Connel & Creason, Lewiston, ID, for appellant.

Richard D. Burns, Pomeroy, Darrell W. Aherin, Aherin & Rice, Lewiston, ID, for respondent.

SWEENEY, Acting Chief Judge.

William J. McGreevy was killed when the vehicle he was driving struck an uninsured flatbed truck. He and his wife, Christine, were insured by Oregon Mutual Insurance Company. Their policy provided combined single limit liability coverage of $100,000. Mrs. McGreevy insisted the coverage limits for the four vehicles under the policy could be stacked, thereby increasing the policy limits to $400,000. Oregon Mutual maintained that the policy as originally issued to the McGreevys, and as amended by a later endorsement, OMG-24, limited the uninsured motorists (UIM) benefits to $100,000. The trial court concluded that the policy language limiting stacking was ambiguous and an issue of fact was presented as to whether the McGreevys had received OMG-24. Following a 2-day trial, a jury determined by special verdict that Oregon Mutual had not mailed OMG-24 to the McGreevys. An arbitration panel subsequently determined Mrs. McGreevy was entitled to $650,000 less 30 percent for the comparative fault of Mr. McGreevy. The court entered a final judgment confirming the award. Mrs. McGreevy was awarded taxable costs and attorney fees of $2,559.38. Oregon Mutual appeals the judgment; Mrs. McGreevy cross-appeals the denial of reasonable attorney fees and costs. We affirm that portion of the judgment affirming the arbitration award and reverse that portion denying the award of reasonable attorney fees and costs.

FACTS & PROCEDURAL HISTORY

In the mid-1970s, the McGreevys bought an automobile insurance policy from Oregon Mutual. From time to time, they received declaration pages and policy endorsements. Although the policy initially covered only one automobile, it was expanded to eventually cover the McGreevys' four vehicles. The policy provided $15,000 of liability insurance per vehicle.

Beginning on September 1, 1980, Washington required that all automobile insurance policies provide minimum liability limits of $25,000 per person and $50,000 per accident and that insurers offer uninsured/underinsured motorist coverage. Laws of 1980, ch. 117, §§ 1(2), 3(1). As amended, the statute required UIM coverage in the same amount as third party liability coverage, here $100,000. Laws of 1980, ch. 117, § 1(3). The Legislature in 1980 also enacted RCW 48.22.030(5) which allowed insurers to limit the stacking of coverage. ¹ Laws of 1980, ch. 117, § 1(5). These changes applied to policies issued after September 1, 1980 or renewed after that date. See RCW 48.22.030(2).

Oregon Mutual attempted to amend the UIM coverage in its Washington policies as permitted by the new law by mailing an endorsement--OMG-24--to all of its Washington policyholders. The endorsement stated:

In accordance with the laws of the State of Washington it is agreed that PART III--PROTECTION AGAINST UNINSURED MOTORISTS, COVERAGE D--UNINSURED MOTORISTS is deleted and replaced with the following language:

....

Regardless of the number of Insureds under this policy, the Company's liability is limited as follows:

(a) The maximum limit of liability of all damages resulting from any one accident is the limit of liability stated in the declarations regardless of the number of covered persons claims made or vehicles or premiums shown on the policy, or premiums paid, or vehicles involved in the accident.

On November 12, 1980, the McGreevys renewed their policy. Oregon Mutual changed the coverage to a single limit of $100,000 and increased the premium.

After Mr. McGreevy was killed on April 2, 1988, Mrs. McGreevy filed a claim with Oregon Mutual, claiming the right to stack four $100,000 limits. Oregon Mutual denied the claim. It maintained that both the original pre-1980 policy and the policy as amended by endorsement OMG-24 prohibited stacking. RCW 48.22.030(5). Mrs. McGreevy brought this declaratory judgment action claiming the 1980 insurance contract did not preclude stacking and since she had not received a copy of OMG-24, she was not bound by the language of the amended policy.

Oregon Mutual's motion for summary judgment was denied. The court concluded that the language of the pre-1980 policy was ambiguous and an issue of fact was presented as to whether the revisions set out in OMG-24 were in effect. At trial, Mrs. McGreevy denied receiving the endorsement. Her testimony, however, was contradictory as to whether she had received OMG-28, an informational sheet mailed with OMG-24.

After Mrs. McGreevy rested her case in chief, Oregon Mutual moved for dismissal pursuant to CR 41(b)(3) arguing that OMG-24 is effective because issuance of a policy rather than delivery renders coverage effective. Webster v. State Farm Mut. Auto. Ins. Co., 54 Wash.App. 492, 774 P.2d 50, review denied, 113 Wash.2d 1018, 781 P.2d 1321 (1989). The motion was denied. Oregon Mutual then presented evidence that OMG-24 was mailed with OMG-28 to all policyholders in Washington. Mrs. McGreevy was permitted, in rebuttal, over the objection of Oregon Mutual, to testify she had not received OMG-28.

Oregon Mutual moved for a directed verdict at the close of all the evidence. The court denied the motion. By special verdict, the jury found that Oregon Mutual had not mailed OMG-24 to the McGreevys. Judgment was entered on the verdict. Oregon Mutual's motion for judgment notwithstanding the verdict or for a new trial was denied.

Mrs. McGreevy's liability and damage claims were presented to an arbitration panel which awarded $455,000 ($650,000 less 30 percent contributory negligence). Based on agreement between the parties, the court entered judgment against Oregon Mutual confirming an arbitration award in the amount of $402,000 (policy limits plus funeral expenses) less the $102,000 already paid. It refused a later request by Mrs. McGreevy for an award of attorney fees of $145,000 and costs of $14,559.77. She was awarded costs and attorney fees in the amount of $2,559.38.

Oregon Mutual appeals. Mrs. McGreevy cross-appeals the denial of attorney fees and costs.

DISCUSSION

A. Coverage Under the Pre-1980 Policy

1. Standard of Review. On summary judgment we engage in the same inquiry as the trial court. Grimsrud v. State, 63 Wash.App. 546, 548, 821 P.2d 513 (1991); Kennedy v. Sea-Land Serv., Inc., 62 Wash.App. 839, 855, 816 P.2d 75 (1991). Summary judgment is only appropriate when the record demonstrates there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Meaney v. Dodd, 111 Wash.2d 174, 177-78, 759 P.2d 455 (1988). The evidence is considered in a light most favorable to the nonmoving party. Stephens v. Seattle, 62 Wash.App. 140, 143, 813 P.2d 608, review denied, 118 Wash.2d 1004, 822 P.2d 289 (1991).

2. Policy Language. Oregon Mutual first notes that as of September 1, 1980, antistacking clauses are valid if they comply with the statutory provisions of RCW 48.22.030(5). Vadheim v. Continental Ins. Co., 107 Wash.2d 836, 839, 734 P.2d 17 (1987). Even assuming that the McGreevys did not receive OMG-24, Oregon Mutual argues the court erred in denying the motion for summary judgment because the pre-1980 policy unambiguously prohibited stacking.

The pre-1980 policy language (without the OMG-24 endorsement) at issue is:

Regardless of the number of Insureds under this policy, the Company's liability is limited as follows:

(a) The limit of liability stated in the declarations as applicable to "each person" is the limit of the Company's liability for all damages because of bodily injury sustained by one person as the result of any one accident and subject to the above provision respecting "each person," the limit of liability stated in the declarations as applicable to "each accident" is the total limit of the Company's liability for all damages because of bodily injury sustained by two or more persons as the result of any one accident.

(Policy, at 5.) A similar limitation, at page 10 of the Oregon Mutual policy, prohibited stacking of other automobile insurance policies.

Oregon Mutual relies on Safeco Corp. v. Kuhlman, 47 Wash.App. 662, 737 P.2d 274, review denied, 108 Wash.2d 1037 (1987) to support its argument that the McGreevys' pre-1980 policy is not ambiguous. In Kuhlman, at 664, 737 P.2d 274, the Safeco policy under "Part C--Uninsured Motorists Coverage" provided, in language very similar to Oregon Mutual's policy, that:

The limit of liability stated in the Declarations for "each person" for Uninsured Motorists Coverage is our maximum limit of liability for all damages for bodily injury sustained by any one person in any one auto accident. Subject to this limit for "each person," the limit of liability stated in the Declarations for "each accident" for Uninsured Motorists Coverage is our maximum limit of liability for all damages for bodily injury resulting from any one auto accident.

But the policy language at issue in Kuhlman was different from the Oregon Mutual policy language in that it included an additional limitation. It provided under "Part F--General Provisions--paragraph 7" that "[i]f this policy insures two or more autos or if any other auto insurance policy issued to you by us applies to the same accident, the maximum limit of our liability shall not exceed the highest limit applicable to any one auto." (Italics ours.) Kuhlman, at 664-65, 737 P.2d 274. In contrast, there is no limitation on UIM coverage in the Oregon Mutual policy based on the number of vehicles....