Miller v. Indiana Ins. Companies, 4309-III-6

• Decision Date: 30 March 1982
• Docket Number: No. 4309-III-6,4309-III-6
• Citation: 642 P.2d 769,31 Wn.App. 475
• Parties: John E. MILLER, a single man, d/b/a Hudson Bay Leather Processors, Respondent, v. INDIANA INSURANCE COMPANIES, a foreign corporation, Appellant, Richard B. Hopp and Lee Templeton, d/b/a Interstate Insurance Adjusters, Respondents.
• Court: Washington Court of Appeals

Page 475

31 Wn.App. 475

642 P.2d 769

John E. MILLER, a single man, d/b/a Hudson Bay Leather Processors, Respondent, v. INDIANA INSURANCE COMPANIES, a foreign corporation, Appellant Richard B. Hopp and Lee Templeton, d/b/a Interstate Insurance Adjusters, Respondents.

No. 4309-III-6.

Court of Appeals of Washington, Division 3, Panel One.

March 30, 1982.

Stephen C. Haskell, MacGillivray & Jones, Spokane, for appellant.

Bruce R. Boyden, Parry & Esposito, Spokane, for Miller.

Robert J. Crotty, Lukins, Annis, Shine, McKay, Van Marter & Rein, Spokane, for Hopp, Templeton & Interstate Ins.

MUNSON, Judge.

Indiana Insurance Companies appeals a summary judgment holding that Indiana's policy of insurance covered losses sustained by Miller, that Indiana had breached the Consumer Protection Act, and that Indiana must pay attorneys' fees to Miller and to Interstate Insurance Adjusters. We affirm on coverage, but reverse as to the Consumer Protection Act. The case is remanded to determine any remaining issues and all parties will pay their own attorneys' fees.

There is no material dispute as to the facts. Miller operates a business known as Hudson Bay Leather Processors which does cleaning and other work on leather goods consigned from various cleaning establishments in Eastern Washington and Idaho. In the course of his business, Miller drove a van ¹ filled with consigned leather goods to Idaho and left the van in a designated parking space in his motel lot overnight. During the night the van was broken into and 34 leather goods taken. Miller sought coverage from Indiana pursuant to a policy which provided in pertinent part:

1. This policy covers on all kinds of lawful goods ... which are the property of insured's customers, against direct loss or damage caused by the perils specifically insured against, while contained in the premises occupied by the insured situated at N. 710-12 Monroe St., Spokane, WA and while being transported to and from its customers.

3. THIS POLICY INSURES AGAINST:

D. Theft, Burglary, and Holdup, except as hereinafter excluded; ...

4. THIS POLICY DOES NOT INSURE AGAINST:

E. Theft of goods left on delivery vehicles overnight unless locked in insured's private garage or building occupied by insured.

6. ... Notwithstanding anything contained herein to the contrary, it is a condition hereof that the liability of this company shall be limited to not exceeding ($)5,000. while in transit and not exceeding ($)18,000. by any one disaster at any one time while otherwise in the custody of the insured in their own premises.

Indiana retained Interstate to investigate; Miller alleges Interstate told him to go ahead and settle with his customers. Miller settled with 26 customers in the amount of $3,489.32. However, Indiana denied Miller's claim on December 8, 1978, resulting in Miller's suit against Indiana and Interstate. Interstate cross claimed against Indiana for the costs and expenses of defending the action. All parties sought summary judgment. The court granted summary judgment to Miller against Indiana, found the Consumer Protection Act breached by Indiana and awarded attorney's fees to Interstate. This appeal ensued.

The threshold issue is whether the above-quoted policy provides coverage for Miller's loss. We find coverage. An insurance policy must be interpreted by the plain meaning of its language. Farmers Home Mut. Ins. Co. v. Insurance Co. of North America, 20 Wash.App. 815, 583 P.2d 644 (1978), cert. denied 442 U.S. 942, 99 S.Ct. 2885, 61 L.Ed.2d 312 (1979). The policy should be read as a whole and any ambiguities resolved in favor of the insured. Morgan v. Prudential Ins. Co. of America, 86 Wash.2d 432, 545 P.2d 1193 (1976); Dairyland Ins. Co. v. Ward, 83 Wash.2d 353, 517 P.2d 966 (1974). However, the court may not construe a contract to create an ambiguity; if the meaning of the policy is clear, the language must be followed. Milliron v. United Benefit Life Ins. Co., 18 Wash.App. 68, 566 P.2d 582 (1977).

The policy specifically covers goods being transported to and from Miller's customers. The reasonable interpretation is that while the goods were in transit, the van would occasionally be parked elsewhere than Miller's business establishment. Exclusions from coverage are disfavored in the law and will be strictly construed in favor of the insured. Riordan v. Commercial Travelers Mut. Ins. Co., 11 Wash.App. 707, 525 P.2d 804 (1974). Thus, this exclusion must be deemed intended to apply only to goods held in trucks overnight while in the home city where Miller's business is located. While on his interstate delivery route, Miller could not be expected to return to his "private garage or building." To hold...