Mutual of Enumclaw Ins. Co. v. Grimstad-Hardy

• Decision Date: 07 September 1993
• Docket Number: No. 29635-3-I,GRIMSTAD-HARDY and J,29635-3-I
• Citation: 71 Wn.App. 226,857 P.2d 1064
• Court: Washington Court of Appeals
• Parties: MUTUAL OF ENUMCLAW INSURANCE COMPANY, a Washington corporation, Respondent, v. Barbaraohn Doe Hardy, her husband, and the marital community composed thereof; Ronald E. Grimstad and Jane Doe Grimstad, husband and wife, and the marital community composed thereof, Appellants. Division 1

Page 226

71 Wn.App. 226

857 P.2d 1064

MUTUAL OF ENUMCLAW INSURANCE COMPANY, a Washington corporation, Respondent, v. Barbara GRIMSTAD-HARDY and John Doe Hardy, her husband, and the marital community composed thereof; Ronald E. Grimstad and Jane Doe Grimstad, husband and wife, and the marital community composed thereof, Appellants.

No. 29635-3-I.

Court of Appeals of Washington,

Division 1.

Sept. 7, 1993.

Charles K. Wiggins, John Hathaway, and Edwards, Sieh, Wiggins & Hathaway, Seattle, James L. Holman, Tacoma, for appellants.

Harold B. Field, Ronald Unger, Murray Dunham & Murray, Seattle, for respondent.

GROSSE, Judge.

The appellants, Barbara Grimstad-Hardy and her father, Robert E. Grimstad, appeal from a summary judgment proceeding in favor of the respondent, Mutual of Enumclaw Insurance Company. Grimstad-Hardy was injured when an uninsured motorist struck the vehicle in which she was a passenger. Grimstad-Hardy asserts that under the underinsured motorist (UIM) statute, RCW 48.22.030, she may "stack" coverage for the three vehicles insured under her policy. Grimstad-Hardy alternatively argues that the UIM provisions of the policy contain ambiguous language and should be construed to allow stacking. Moreover, Grimstad-Hardy asserts that the "per accident" liability limit of $200,000 is applicable rather than the "per person" liability of $100,000. We affirm.

Barbara Grimstad-Hardy was a passenger in a vehicle owned and operated by Henry Blair. The car was struck by an uninsured driver. Grimstad-Hardy was seriously injured and asserts that her damages exceed $300,000. Grimstad-Hardy received $50,000 from Blair's insurance company, United Services Automobile Association (USAA), pursuant to Blair's UIM policy. Grimstad-Hardy also has UIM coverage through a policy of insurance issued to her father, Ronald Grimstad, by Mutual of Enumclaw Insurance Company (Mutual of Enumclaw). The Mutual of Enumclaw policy covers four vehicles, three of which have UIM coverage. The coverage page of the policy states the amount of uninsured coverage for those three vehicles as follows:

UNINSURED MOTORIST $100,000 EACH PERSON

BI = $200,000 PD = 25,000 EACH ACCID

The UIM section of the policy contains a limit on liability as follows:

C. OUR LIMIT OF LIABILITY

1. Regardless of the number of covered cars, insureds, claims made or vehicles involved in the accident or premiums shown on the Coverage Page, the most we will pay for bodily injury or property damage resulting from any one accident is the Underinsured Motorist limit shown for the covered car on the Coverage Page.

No one will be entitled to receive duplicate payments for the same elements of loss as a result of the application of this provision.

If an injured person has other similar insurance available under other policies, the total limits of liability of all coverage shall not exceed the higher of the applicable limits of the respective coverages.

The policy further explains "covered car":

A. The Coverage Page shows cars that are covered cars. With respect to this insurance car means:

1. Any vehicle you own which is shown on the Cover Page with a "policy form" of "P" denoting Personal Car. Insurance applies only where a specific premium charge indicates there is coverage.

The general provisions of the policy also contain a separability clause:

5. Two or More Cars Insured.

a. If this policy and any other car insurance policy issued to you by us apply to the same accident, the maximum limit of our liability shall not exceed the highest applicable limit for any one car.

b. When two or more cars are insured by this policy, the policy terms apply separately to each car....

The parties disputed the amount of UIM coverage available to Grimstad-Hardy, and Mutual of Enumclaw filed a declaratory judgment action in King County Superior Court. Grimstad-Hardy asserted she should be able to recover the $200,000 per accident limit for her injuries rather than the $100,000 per person limit. Grimstad-Hardy also argued that she could stack UIM coverage for all three vehicles, thus receiving total coverage of $600,000. Both parties moved for summary judgment. The trial court granted Mutual of Enumclaw's motion for summary judgment and denied Grimstad-Hardy's motion. The order granting summary judgment provided that the maximum coverage available to Grimstad-Hardy is the $100,000 per person limit on the coverage page, the policies could not be "stacked", and the $50,000 already paid by USAA was to be deducted from Mutual of Enumclaw's liability. Grimstad-Hardy appeals the trial court order for summary judgment.

Under CR 56(c), summary judgment is appropriate when no genuine issues of material fact exist and judgment is appropriate as a matter of law. The review of the disposition of a motion for summary judgment assumes facts in a light most favorable to the nonmoving party. Douchette v. Bethel Sch. Dist. 403, 117 Wash.2d 805, 818 P.2d 1362 (1991). This case presents two discrete issues of statutory and contract interpretation: (1) whether the UIM coverage for each individual may be "stacked" under the UIM statute and the limit of liability and separability clauses of the Mutual of Enumclaw policy, and (2) whether the $100,000 per person limit or the $200,000 per accident limit on the coverage page of the Mutual of Enumclaw policy applies under the policy's UIM limit of liability clause.

Automobile insurers must offer UIM coverage as provided in RCW 48.22.030. That statute was enacted by the Legislature in order to assure full compensation, within UIM policy limits, for insured parties injured by underinsured or uninsured tortfeasors. Hamilton v. Farmers Ins. Co., 107 Wash.2d 721, 727, 733 P.2d 213 (1987). The Legislature sought to allow the insured to collect the same amount of damages under underinsured motorist coverage as if the responsible party had been insured with liability insurance with limits equal to the insured's UIM policy. Brown v. Snohomish Cy. Physicians Corp., 120 Wash.2d 747, 756, 845 P.2d 334 (1993); Bates v. State Farm Mut. Auto. Ins. Co., 43 Wash.App. 720, 725, 719 P.2d 171, review denied, 106 Wash.2d 1014 (1986).

Prior to the 1980 amendment of RCW 48.22.030, the Washington Supreme Court interpreted the statute to allow insured parties to "stack" coverage on each vehicle in a policy and collect UIM benefits for each vehicle, even if the policy contained an anti-stacking limiting provision, reasoning that such a result was warranted by the underlying policy of the uninsured motorist statute, former RCW 48.22.030. ¹ See Federated Am. Ins. Co. v. Raynes, 88 Wash.2d 439, 447, 563 P.2d 815 (1977) (allowing insured to stack coverage for two vehicles within a single policy); Cammel v. State Farm Mut. Auto. Ins. Co., 86 Wash.2d 264, 270, 543 P.2d 634 (1975) (allowing stacking of coverage for three vehicles with separate policies).

The Legislature responded in 1980 by amending former RCW 48.22.030 to allow insurers to limit both intrapolicy and interpolicy stacking. The newly enacted provision stated:

The limit of liability under the policy coverage may be defined as the maximum limits of liability for all damages resulting from any one accident regardless of the number of covered persons, claims made, or vehicles or premiums shown on the policy, or premiums paid, or vehicles involved in an accident.

RCW 48.22.030(5). ² See also Edwards v. Farmers Ins. Co., 111 Wash.2d 710, 715, 763 P.2d 1226 (1988); Britton v. Safeco Ins. Co., 104 Wash.2d 518, 531-32, 707 P.2d 125 (1985). This language implicitly overruled both Raynes and Cammel. Millers Cas. Ins. Co. of Texas v. Briggs, 100 Wash.2d 1, 4, 665 P.2d 891 (1983).

Grimstad-Hardy claims this statutory language permits insurers to limit only stacking of "per accident" UIM liability under the policy. Under this interpretation, insurance companies are strictly precluded from limiting stacking of UIM "per person" liability. Accordingly, Grimstad-Hardy contends Mutual of Enumclaw cannot limit its maximum UIM coverage to the "per person" limit. In other words, she claims RCW 48.22.030(5) allows insurance companies to limit only the stacking of "per accident" liability of policies and not "per person" liability. Consequently, because Mutual of Enumclaw contends the limitation of liability clause pertains to both "per person" and "per accident" liability, Grimstad-Hardy maintains the clause is inoperative because it does not comply with the statutory language of RCW 48.22.030(5).

Grimstad-Hardy's interpretation of the statute is based upon its asserted ambiguity in initially referring to the "limit of liability" [singular] and then next referring to "maximum limits of liability" [plural]. If the statute is susceptible of more than one reasonable meaning, and therefore ambiguous, it is subject to rules of statutory construction. Shoreline Comm'ty College Dist. 7 v. Employment Sec. Dep't, 120 Wash.2d 394, 405, 842 P.2d 938 (1992). When a statute is plain and unambiguous in wording, its meaning is to be derived from the wording of the statute. Tellevik v. Real Property, 120 Wash.2d 68, 76, 838 P.2d 111 (1992). The language at issue does not appear to be internally contradictory or ambiguous, however. The initial reference to "limit of liability" refers to the overall extent of liability under the policy. In defining that overall singular liability, the insurance company may use as a reference the "maximum limits of liability" set forth in the policy: If the accident involves one person, then the per person limit is the entire limit of liability. If multiple persons are involved, then the per accident limit applies. A plain reading of the statute leads to such an interpretation. The statute only becomes ambiguous when viewed in conjunction with early legislative materials provided by Grimstad-Hardy. As the Division Two Court of Appeals observed in Berstein v. State, 53 Wash.App. 456, 460, 767 P.2d 958, review...