Ross v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 17 July 1997
• Docket Number: No. 64564-7
• Citation: Ross v. State Farm Mut. Auto. Ins. Co., 132 Wn.2d 507, 940 P.2d 252 (Wash. 1997)
• Court: Washington Supreme Court
• Parties: Clyde ROSS and Betty L. Ross, A Marital Community, Respondents, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Petitioner.

Page 507

132 Wn.2d 507

940 P.2d 252

Clyde ROSS and Betty L. Ross, A Marital Community, Respondents, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Petitioner.

No. 64564-7.

Supreme Court of Washington En Banc.

Argued May 21, 1997.

Decided July 17, 1997.

Reed McClure, William R. Hickman, Danielle A. Hess, Seattle, for Petitioner.

Lee, Michaud & Isserlis, P.S., Kenneth L. Isserlis, Spokane, for Respondents.

Bryan P. Harnetiaux, Debra L. Stephens, Spokane, amicus curiae on behalf of Washington State Trial Lawyers Ass'n SMITH, Justice.

Petitioner State Farm Mutual Automobile Insurance Company seeks review of a Court of Appeals decision which affirmed a summary judgment by the Spokane County Superior Court which granted underinsured motorist insurance coverage to Respondents Clyde and Betty L. Ross, husband and wife, under a policy on an automobile registered in the wife's name and insured in Washington for an accident the wife had in Washington while driving an automobile registered in the husband's name and insured in Montana. This Court granted review. We reverse.

QUESTION PRESENTED

The question presented in this case is whether a Washington resident, a married woman, injured in the State of Washington while driving an automobile insured in her name and the name of her husband by State Farm Insurance Company (State Farm) and registered only in the name of her husband in Montana, may recover Underinsured Motorist (UIM) benefits under another policy issued to them by State Farm covering an automobile registered and insured only in her own name in the State of Washington when that policy provides no UIM coverage for a "motor vehicle owned or available for the regular use of [the insured], [the insured's] spouse or any other relative, if it is not insured under the liability coverage of [the] policy."

STATEMENT OF FACTS

The facts in this case were stipulated by the parties. ¹ Respondent Betty L. Ross was driving a 1980 AMC Eagle in Spokane, Washington on February 19, 1987 when she was injured in a collision with a Pizza Haven vehicle. ²

Respondents Ross at all times material were husband and wife, living in the State of Washington and maintaining their family residence in Spokane. Because of work opportunities Respondent Clyde Ross maintained a temporary residence in Libby, Montana. His wife maintained the family residence in Spokane.

After moving to Washington about five years earlier, Respondents acquired a 1977 Chevrolet Monte Carlo, registered to Respondent Betty L. Ross and licensed in the State of Washington; and a 1980 AMC Eagle, registered to Respondent Clyde Ross and licensed in the State of Montana where he was employed. ³ Both automobiles were insured by State Farm:

The vehicles were insured under two separate State Farm policies because State Farm would not insure the two automobiles under the same policy.

The 1980 AMC Eagle had a Montana certificate of title showing the owner's name and address as "Ross, Clyde E Box 375, Libby, MT 59923." ⁴ It was purchased on September 30, 1986 in Montana and principally garaged there. ⁵ State Farm of Montana insured the Eagle for liability and uninsured motorist coverage, but not for underinsured motorist coverage. ⁶ Although Mr. Ross maintained a temporary residence in Montana, he would return to Washington on weekends to spend time with his wife. ⁷

Respondents Ross could have elected to have underinsured motorist coverage under the Montana policy. They did not. ⁸ Under Montana law, they would not then be covered for it. ⁹ Respondents could have elected not to have underinsured motorist coverage under the Washington policy. They did not. ¹⁰ But under Washington law, they would have underinsured motorist coverage. ¹¹ Thus the State Farm of Washington policy on the 1977 Chevrolet Monte Carlo does provide underinsured motorist coverage while the State Farm of Montana policy on the 1980 AMC Eagle does not. ¹²

Because of her employment, Ms. Ross lived in Spokane, Washington where she maintained the family residence. She usually drove the Chevrolet Monte Carlo which was registered in her name and principally garaged in Washington. State Farm of Washington insured the Monte Carlo for liability and uninsured and underinsured motorist coverage. ¹³

The weekend before the accident the Rosses exchanged automobiles because the Monte Carlo required repairs and Mr. Ross took it to Montana for that purpose. ¹⁴ Ms. Ross was driving the Eagle in Spokane when she was involved in the accident. Respondents stipulated the Eagle was available for Ms. Ross' regular use "either as a driver or passenger, when she and her husband were together either in Washington or Montana." ¹⁵ She stated that even though she could have driven the Eagle during her infrequent visits to Montana, she actually only drove it during the week the Monte Carlo was in Montana for repairs.

The parties filed cross motions for summary judgment in the Spokane County Superior Court. ¹⁶ On November 18, 1994, the Honorable Richard J. Schroeder granted partial summary judgment in favor of Respondents Ross, determining that the State Farm of Washington policy provided underinsured motorist coverage for the loss incurred by Ms. Ross while driving the Eagle on February 19, 1987. ¹⁷ The court also granted Respondents' request for attorney fees and costs as the prevailing parties on their UIM claim. ¹⁸ The court denied Respondents' claims under the Washington Insurance Act and Washington Consumer Protection Act. Those claims are not before this court.

On December 7, 1994, State Farm filed a notice of appeal to the Court of Appeals, Division III. ¹⁹ That court, the Honorable John A. Schultheis writing, affirmed the trial court. ²⁰ It concluded Respondents Clyde Ross and Betty L. Ross were not "spouses" as defined in the policy because, although Mr. Ross was Ms. Ross' "legal spouse," he was not in fact "living with" her at the time of the accident as the policy required under its definition of "spouse." ²¹ The court considered all the circumstances pertaining to ownership of the Eagle before concluding that, even though it was stipulated that Ms. Ross owned the Eagle, it referred to legal ownership under Washington community property law and not ownership contemplated by the policy. ²² The court also determined the Eagle was a "temporary substitute" vehicle under the policy and was not available for Ms. Ross' regular use and that her isolated use of the automobile did not amount to regular use under terms of the policy. ²³

On August 16, 1996, State Farm filed a "Motion to Reconsider or, in the Alternative, to Depublish [sic] Opinion." On August 29, 1996, Chief Judge Dennis J. Sweeney denied the motion. This Court granted review on January 7, 1997.

DISCUSSION

STANDARD OF REVIEW

This case was decided in the trial court on a motion for summary judgment upon stipulated facts. ²⁴ "A summary judgment may not be granted unless there is no genuine issue as to any material fact." ²⁵ Because the facts were stipulated, there is no dispute of material facts. "Where there are no relevant facts in dispute, the applicable standard of review is de novo review of lower court decisions regarding insurance coverage." ²⁶ The applicable coverage depends upon the language of the insurance policy. "The insurance policy must be given a fair, reasonable, and sensible construction as would be given by an average insurance purchaser." ²⁷ "The interpretation of insurance policy language is a question of law." ²⁸ This court has stated that

In construing the language of an insurance policy, the entire contract must be construed together so as to give force and effect to each clause. If the language in an insurance contract is clear and unambiguous, the court must enforce it as written and may not modify the contract or create ambiguity where none exists. However, if the policy provision on its face is fairly susceptible to two different but reasonable interpretations, the policy is ambiguous and the court must attempt to discern and enforce the contract as the parties intended. ²⁹

If the portion of the policy being considered is an inclusionary clause in the insurance policy, the ambiguity should be liberally construed to provide coverage whenever possible. ³⁰ However, the basic principle that applies to exclusionary clauses in insurance contracts is that any ambiguity should be "most strictly construed against the insurer." ³¹ The fundamental public policy underlying the Washington UIM provision is full compensation for victims of automobile accidents. ³²

ARGUMENTS OF THE PARTIES

Petitioner State Farm argues the Montana policy on the AMC Eagle does not provide underinsured motorist coverage; and because the Pizza Haven driver did have insurance, the uninsured motorist provision in the Eagle policy is not applicable. Petitioner asserts that in order to have underinsured motorist coverage on the Eagle, Respondents were required to specifically request and purchase it under the Montana policy; but they did not. We address only the Washington policy on the Chevrolet Monte Carlo in this opinion because the parties do not otherwise address the Montana policy on the AMC Eagle.

"An underinsured motorist is one causing injury whose [liability] coverage is insufficient to meet the damages inflicted. When an underinsured motorist causes injury, the insurance company of the injured party carrying UIM steps into the shoes of the negligent underinsured and supplements [the] policy." ³³ An uninsured motorist is one who does not have any liability insurance. ³⁴ The purpose of uninsured motorist coverage is to provide an injured party recovery for those damages which would have been recovered if the responsible party had maintained liability insurance. ³⁵

The State Farm of Washington policy for the Monte Carlo provides coverage for an insured driver while driving a temporary substitute vehicle. ³⁶ Because this is an inclusionary...