Neer v. Fireman's Fund American Life Ins. Co.

• Decision Date: 03 January 1985
• Docket Number: No. 50534-9,50534-9
• Citation: 692 P.2d 830,103 Wn.2d 316
• Parties: , 51 A.L.R.4th 149 Willis D. NEER, Petitioner, v. FIREMAN'S FUND, AMERICAN LIFE INSURANCE COMPANY, Respondent.
• Court: Washington Supreme Court

Page 316

103 Wn.2d 316

692 P.2d 830, 51 A.L.R.4th 149

Willis D. NEER, Petitioner, v. FIREMAN'S FUND, AMERICAN LIFE INSURANCE COMPANY, Respondent.

No. 50534-9.

Supreme Court of Washington En Banc.

Jan. 3, 1985.

Calbom, Pond, Falkenstein, Warme & Engstrom, James E. Warme, Longview, for petitioner.

Walstead, Mertsching, Husemoen, Donaldson & Barlow, D.L. Donaldson, Longview, for respondent.

UTTER, Justice.

Willis D. Neer petitions for reversal of a decision by the Court of Appeals, Division Two, affirming a trial court decision granting summary judgment to Fireman's Fund Insurance Company. The trial court and Court of Appeals held that petitioner was not entitled to benefits under an insurance policy covering loss of both feet by complete severance because he did not suffer a dismemberment. The sole issue before this court involves interpretation of the extent of coverage of an insurance policy purchased by Neer from Fireman's Fund. The Loss of Life Accident Indemnity policy provides, as part of a list of insured losses, coverage for loss of both feet. Although there was no dismemberment in this case, we hold, consistent with our earlier case of Morgan v. Prudential Ins. Co. of Am., 86 Wash.2d 432, 545 P.2d 1193 (1976), that the policy covers Neer's loss because the term "loss" as described by the policy does not require dismemberment or amputation.

The facts are undisputed. On July 8, 1981, Willis Neer, while assisting a neighbor in topping a tree, fell 50 to 60 feet to the ground. As a result, his spinal column was severed depriving him of all nerve and muscle function below his midback. Neer v. Fireman's Fund Am. Life Ins. Co., 36 Wash.App. 834, 835, 677 P.2d 796 (1984); Transcript of Proceedings, at 35, 37.

At the time of the injury, Willis Neer owned an insurance policy issued by Fireman's Fund which provided that Fireman's Fund would pay him $150,000 for loss of both feet. The policy defined "Loss" as "complete severance through or above the ... ankle joint." Transcript of Proceedings, at 32. Neer made a claim on the policy for the injuries which was denied.

Petitioner moved for summary judgment, supported by affidavits of three physicians. These doctors agreed that he had lost the use of his feet and that this loss of use is permanent. They also agreed that, although they could not determine whether the spinal cord had been actually severed in the accident, the absence of actual severance was medically insignificant since there is obviously no functioning of the spinal cord below Neer's mid-back. Two of the three stated that some vertebrae were severed.

No material issue of fact was found by the trial court which dismissed the complaint agreeing with Fireman's Fund that the policy required entire separation of the feet from the body. On appeal to the Court of Appeals, the trial court judgment was affirmed.

Respondent urges the court to uphold the Court of Appeals and adopt an interpretation that requires a complete separation of the feet from the body before payment on the policy must occur. Several cases which appear to so require are cited. Sitzman v. John Hancock Mut. Life Ins. Co., 268 Or. 625, 522 P.2d 872 (1974) (no coverage for loss of use of feet as the result of injury to the spinal cord under Accidental Death or Dismemberment policy); Perrilloux v. First Standard Life Ins. Co., 396 So.2d 427 (La.Ct.App.1981) (no coverage for amputation of a leg after the prescribed period following injury when the policy is for Accidental Death or Dismemberment and loss is defined as dismemberment by severance); Reid v. Life Ins. Co. of North Am., Inc., 718 F.2d 677 (4th Cir.1983) (no coverage where the severance was the result of reconstructive surgery and function was actually improved after the surgery); Cunninghame v. Equitable Life Assur. Soc'y of United States, 652 F.2d 306 (2d Cir.1981) (no coverage under Accidental Death and Dismemberment policy for spinal injury resulting in loss of function of both feet when loss is described as dismemberment by severance); Traverse v World Serv. Life Ins. Co., 436 F.Supp. 810 (W.D.Okla.1977) (no coverage for loss of function of hands as the result of an assault where the policy covers loss defined as actual severance through or above the hands, there was no allegation of severance, and the court held that loss means severance as opposed to loss of use).

These cases are distinguishable from the present case. In several, the policy under consideration was for dismemberment; in some, loss was described as dismemberment and in one there was no allegation of severance. They are therefore unpersuasive.

One case cited by Fireman's Fund appears to be similar but, on close examination, is not. The Minnesota Supreme Court has held that a Loss of Life, Limb or Sight policy did not cover accidental injury to the spinal cord resulting in paralysis of the legs. Juhlin v. Life Ins. Co. of N. Am., 301 N.W.2d 59 (Minn.1980). The court, relying primarily on Sitzman v. John Hancock Mut. Life Ins. Co., supra, found the term "actual severance" unambiguous and further found the policy required dismemberment or a severe wounding of the limb. However, the policy in Sitzman provided coverage for accidental death or dismemberment, and the Juhlin court was construing substantially different policy coverage. As a result, we do not find the Juhlin court's reasoning persuasive in this case.

Washington has adopted as a definition of loss, loss of use or function. Morgan, 86 Wash.2d at 435, 545 P.2d 1193. This definition of loss incorporates within it the idea that by purchasing coverage for loss of a foot or hand the insured intends " '... to provide for financial security in the event of the loss of use of' his hands [or feet], 'thus precluding him from pursuing his livelihood.' " Morgan, 86 Wash.2d at 436, 545 P.2d 1193, quoting Crawford v. Lloyds London, 275 Cal.App.2d 524, 530, 80 Cal.Rptr. 70 (1969). See also Moore v. Aetna Life Ins. Co., 75 Or. 47, 53, 146 P. 151 (1915). In so doing, this court rejected a line of cases requiring dismemberment. Although the insurance policy at issue in Morgan covered "loss by severance of both hands at or above the wrists," we held that there was coverage for loss of use which occurred as the result of amputation of several fingers and did not require the complete amputation of both hands at or above the wrist. Morgan, 86 Wash.2d at 433-34, 545 P.2d 1193. The question of whether severance occurs, within the meaning of an insurance policy, when there is not even a partial amputation, however, still remains.

When interpreting language of an insurance contract, the entire contract is to be construed together for the purpose of giving force and effect to each...