Safeco Ins. Co. v. Dairyland Mut. Ins. Co.

• Decision Date: 11 October 1968
• Docket Number: No. 39318,39318
• Citation: 446 P.2d 568,74 Wn.2d 669
• Court: Washington Supreme Court
• Parties: SAFECO INSURANCE COMPANY, an insurance corporation, and Harold S. Waller, Jr., a minor, by his guardian a litem, Harold S. Waller, Respondents, v. DAIRYLAND MUTUAL INSURANCE COMPANY, an insurance corporation, Appellant, Leonard G. Jorgensen, a minor, by John B. Troupe, his guardian ad litem, Respondent.

Page 669

74 Wn.2d 669

446 P.2d 568

SAFECO INSURANCE COMPANY, an insurance corporation, and Harold S. Waller, Jr., a minor, by his guardian a litem, Harold S. Waller, Respondents, v. DAIRYLAND MUTUAL INSURANCE COMPANY, an insurance corporation, Appellant Leonard G. Jorgensen, a minor, by John B. Troupe, his guardian ad litem, Respondent.

No. 39318.

Supreme Court of Washington, Department 1.

Oct. 11, 1968.

Merrick, Burgess & Hofstedt, H. Roland Hofstedt, Seattle, for appellant.

Gordon, Honeywell, Malanca, Peterson & Johnson, Warren R. Peterson, Richard J. Jensen, Tacoma, for respondents.

McGOVERN, Judge.

Plaintiffs brought this action in declaratory form asking the trial court to rule on a question of insurance coverage. Plaintiff Safeco Insurance Company may be referred to as Safeco and defendant Dairyland Mutual Insurance Company referred to as Dairyland Mutual.

On August 22, 1964, J. Viola Benson, then in need of automobile liability insurance, discussed possible coverage with a Dairyland Mutual salesman, Mr. Robert Thompson. They considered the fact that her nephew, Harold S. Waller, Jr., was under the age of 25 years and occasionally used her automobile.

A policy was ordered and the premium paid. The amount of that premium was based partly on a policy exclusion which provided no liability coverage while the automobile was being driven by a person under the age of 25 years.

Subsequently, on October 31, 1964, Harold S. Waller, Jr. was driving the J. Viola Benson automobile with her express permission and was involved in an accident. J. Viola Benson telephoned Mr. Thompson, advised him of the accident and also stated that she had not received her insurance policy. She, as the named insured, then received through the mail a pink-colored copy of a Dairyland Mutual policy marked 'loss payee copy.' It did not contain an exclusion for drivers under the age of 25 years.

When sued on account of the automobile accident, Harold S. Waller, Jr., tendered the defense of the action to his father's liability carrier, Safeco. He is an additional insured under that policy. Safeco, in turn, tendered the defense to Dairyland Mutual, but it declined the tender and denied coverage. Plaintiffs then brought this action, asking the trial court to declare Harold S. Waller, Jr. an additional insured under the J. Viola Benson policy with Dairyland Mutual. The relief prayed for was granted and this appeal taken.

Dairyland Mutual first argues that its motion to dismiss at the close of plaintiffs' case should have been granted. That motion was premised on the argument that the insurance contract in issue was only between J. Viola Benson and Dairyland Mutual and that therefore the plaintiffs had no standing in court to question it. We do not agree.

Dairyland Mutual's argument assumes an answer to the very issue created by the claim. Plaintiffs allege that Harold S. Waller, Jr. is an additional insured under the Dairyland Mutual-Benson policy; Dairyland Mutual claims that he is not. That variance creates an actual, immediate and justiciable issue between them. Many rights and obligations ride on the answer to that question. If he is an additional insured, then Dairyland Mutual is his prime insurer and must defend him in the existing lawsuit. If he is not an additional insured, then Safeco alone insures, and must defend him. We think the issue of coverage and the interests dependent on an answer to the issue create a case that falls squarely within the purposes of our Declaratory Judgments Act ¹ and that the plaintiffs were entitled to be heard. State ex rel. O'Connell v. Dubuque, 68 Wash.2d 553, 413 P.2d 972 (1966); Government Employees Ins. Co. v. Woods, 59 Wash.2d 173, 367 P.2d 21 (1961).

Dairyland Mutual next complains of the trial court's finding that J. Viola Benson did not receive the original insurance policy with a restrictive endorsement. It contends that the policy was mailed to her and must have been received. There was, however, no direct evidence that she did. In fact, she testified that she did not. And the record indicates that her testimony was sufficiently credible to support the court's finding that she had not. We will not disturb that finding and thus substitute our judgment for that of the trial court. N. Fiorito Co. v. State, 69 Wash.2d 616, 419 P.2d 586 (1966); Cowitz v. Miller, 68 Wash.2d 637, 414 P.2d 795 (1966).

Finally, it is argued that the trial court erred in its determination that the terms of the insurance contract in effect at the time of the accident were those contained in the 'loss payee copy' received by J. Viola Benson...