Ross v. State Farm Mut. Auto. Ins. Co.
| Decision Date | 30 July 1996 |
| Docket Number | No. 14515-8-III,14515-8-III |
| Citation | 919 P.2d 1268,82 Wn.App. 787 |
| Parties | Clyde ROSS and Betty L. Ross, a Marital Community, Respondents and Cross Appellants, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant. |
| Court | Washington Court of Appeals |
Kenneth L. Isserlis, Lee, Michaud & Isserlis, P.S., Spokane, for Respondents.
Betty Ross had an accident in 1987 with an underinsured motorist (UIM) while driving her nonresident husband's car as a substitute for her own. State Farm Mutual Automobile Insurance Company invoked "owned by" or "available for regular use of" exclusions in Mrs. Ross's policy and denied her UIM claim on the basis her husband's car, which was not insured under the policy, was both owned by her and her "spouse," and available for her and his regular use. The Rosses filed suit, and on cross motions for summary judgment, the court determined Mrs. Ross had coverage: it found her nonresident husband was not a "spouse" within the terms of the policy and resolved a perceived policy ambiguity in the definition of "temporary substitute car" in her favor. The court dismissed the Rosses' claim for bad faith damages and awarded the Rosses their attorney fees without a requested enhancement. State Farm appeals the determination of UIM coverage and award of attorney fees. The Rosses cross-appeal the dismissal of their damages claim At the time of the accident, Mrs. Ross was driving her husband Clyde's AMC Eagle because he had taken her Chevrolet Monte Carlo to Montana for service and repairs. Mr. Ross was living in Libby, Montana, because he had a job there, but he often spent weekends with Mrs. Ross, who lived and worked in Spokane. Both vehicles were insured by State Farm, but under separate policies because State Farm did not permit the Rosses to purchase one policy insuring both vehicles. The Washington policy insuring the Monte Carlo included UIM coverage, but the Montana policy insuring the Eagle did not. 1 State Farm denied coverage, contending Mrs. Ross's claims were not covered under either policy.
and denial of their request for a 50 percent attorney fees enhancement. We affirm, though we decide the coverage issue in part on different grounds: because Mrs. Ross did not own her husband's car within the meaning of the policy and it was neither owned nor available for her regular use, the UIM exclusion did not apply.
In January 1993 Mr. and Mrs. Ross commenced this action seeking a declaration of coverage, damages for violations of an insurer's duty of good faith under the Washington insurance code and the Consumer Protection Act (CPA), and attorney fees. The parties filed cross motions for summary judgment, and submitted two stipulated statements of facts. The court granted judgment to the Rosses on coverage, finding the Eagle was a covered temporary substitute car, and awarded them prevailing party costs of $120 and attorney fees of $13,194.50. The
court granted judgment to State Farm on the claim for bad faith damages. Both parties appeal.
When reviewing an order of summary judgment, this court engages in the same inquiry as the trial court. RAP 9.12; Wilson v. Steinbach, 98 Wash.2d 434, 437, 656 P.2d 1030 (1982). After considering all evidence and reasonable inferences in the light most favorable to the nonmoving party, summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. CR 56(c); Wilson, 98 Wash.2d at 437, 656 P.2d 1030.
Interpretation of an insurance policy is a matter of law, reviewed de novo. Mutual of Enumclaw Ins. Co. v. Jerome, 122 Wash.2d 157, 160, 856 P.2d 1095 (1993). Insurance policies should be construed in a fair, reasonable and sensible manner, consistent with the construction that would be given the policy by the average person purchasing insurance. Id. at 160, 856 P.2d 1095. The purpose of insurance is to insure; therefore, inclusionary clauses are construed liberally in favor of coverage and exclusionary clauses are construed narrowly. See McGreevy v. Oregon Mut. Ins. Co., 74 Wash.App. 858, 865, 876 P.2d 463 (1994), aff'd, 128 Wash.2d 26, 904 P.2d 731 (1995); Prosser Comm'n Co. v. Guaranty Nat'l Ins. Co., 41 Wash.App. 425, 430, 700 P.2d 1188 (citing Phil Schroeder, Inc. v. Royal Globe Ins. Co., 99 Wash.2d 65, 68-69, 659 P.2d 509 (1983), modified on reconsideration, 101 Wash.2d 830, 683 P.2d 186 (1984)), review denied, 104 Wash.2d 1016 (1985).
THE POLICY
The Washington State Farm policy covering the Monte Carlo, issued to Mrs. Ross at her Spokane address, defines the following relevant terms:
Non-Owned Car--means a car not:
1. owned by,
2. registered in the name of, or
3. furnished or available for the regular or frequent use of:
you, your spouse, or any relatives.
Spouse--means your husband or wife while living with you.
Temporary Substitute Car--means a car not owned by you or your spouse, if it replaces your car for a short time. Its use has to be with the consent of the owner. Your car has to be out of use due to its breakdown, repair, servicing, damage or loss. A temporary substitute car is not considered a non-owned car.
You or Your--means the named insured or named insureds shown on the declarations page.
Your Car--means the car or vehicle described on the declarations page.
The liability coverage of the policy provides Mrs. Ross with coverage for the use of other cars as follows:
The liability coverage extends to the use, by an insured, of a The policy also provides Mrs. Ross with underinsured motor vehicle coverage, but specifically provides:
newly acquired car, [919 P.2d 1273] a temporary substitute car or a non-owned car.
(a) ...
(b) A MOTOR VEHICLE OWNED OR AVAILABLE FOR THE REGULAR USE OF YOU, YOUR SPOUSE OR ANY RELATIVE, IF IT IS NOT INSURED UNDER THE LIABILITY COVERAGE OF THIS POLICY.
We agree with the trial court that the State Farm insurance policy provided UIM coverage for Mrs. Ross's use of her husband's car while her own covered car was being repaired, though our analysis differs.
The purpose of the policy provisions at issue in this case is to provide coverage for a policyholder's isolated use of other automobiles, but to disallow the interchangeable use of other cars that are not covered by the policy. Grange Ins. Ass'n v. MacKenzie, 103 Wash.2d 708, 712, 694 P.2d 1087 (1985); Dairyland Ins. Co. v. Ward, 83 Wash.2d 353, 359, 517 P.2d 966 (1974). See also 7 Am.Jur.2d Automobile Insurance § 236 (2d ed.1980). The purpose of UIM coverage is to allow an insured party to recover those damages they would have received had the responsible party maintained adequate insurance. Public Employees Mut. Ins. Co. v. Kelly, 60 Wash.App. 610, 618, 805 P.2d 822, review denied, 116 Wash.2d 1031, 813 P.2d 582 (1991). Those purposes are met here.
Mrs. Ross's use of her husband's car is precisely the type of use contemplated by the temporary substitute car clause: an isolated use of a noncovered car for a short period during repair of her own covered car. Her use of the Eagle in this manner did not significantly increase the insurer's risk (without a corresponding increase in premiums) or unfairly burden State Farm in any way. She paid premiums for liability and UIM coverage under her policy. The Rosses tried to add the Eagle to Mrs. Ross's policy (in which case it would have had the same coverage as the Monte Carlo), but State Farm would not allow them to do so. Therefore, they purchased the separate Montana policy solely for the Eagle.
State Farm contends the car Mrs. Ross was driving did not qualify as a temporary substitute car or a nonowned car because she and her spouse owned the car; thus, the car was not insured under the liability portion of the policy. Exclusion 1(b) in the UIM portion of the policy provides there is no coverage while Mrs. Ross is operating a car owned by her or her spouse, or a car available for the regular use of her or her spouse, if that car is not insured under the liability portion of the policy.
The trial court correctly concluded, however, that Mr. Ross was not Mrs. Ross's "spouse" as defined in the policy. Although he is her legal spouse, Mr. Ross was not "living with" Mrs. Ross; therefore, he was not her "spouse" within the terms of the policy. See National Gen. Ins. Co. v. Sherouse, 76 Wash.App. 159, 882 P.2d 1207 (1994), review denied, 126 Wash.2d 1009, 892 P.2d 1088 (1995).
The trial court incorrectly concluded that the definition of "temporary substitute car" is internally inconsistent and, therefore, ambiguous, and that the ambiguity must be resolved in Mrs. Ross's favor. 2 The definition does not require that the Eagle both be and not be "a non-owned car." Considered in...
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