Scales v. Skagit County Medical Bureau

• Decision Date: 20 December 1971
• Docket Number: No. 661--41581--I,661--41581--I
• Citation: 6 Wn.App. 68,491 P.2d 1338
• Court: Washington Court of Appeals
• Parties: Roy SCALES and Lena Scales, husband and wife, Respondents, v. SKAGIT COUNTY MEDICAL BUREAU and Grange Insurance Association, Appellants.

Page 68

6 Wn.App. 68

491 P.2d 1338

Roy SCALES and Lena Scales, husband and wife, Respondents, v. SKAGIT COUNTY MEDICAL BUREAU and Grange Insurance Association, Appellants.

No. 661--41581--I.

Court of Appeals of Washington, Division 1, Panel One.

Dec. 20, 1971.

Alfred McBee, Mount Vernon, for appellants.

Welts & Welts, David A. Welts, Mount Vernon, for respondents.

UTTER, Judge.

Skagit County Medical Bureau appeals from a money judgment of $5,241.84 rendered against them and in favor of Lena Scales, the injured party, and Roy Scales, her husband.

They assign error to findings of fact which attribute $2,500 of a $40,000 general verdict against one Larry Jones to property damage and $37,500 of that verdict to recovery for Mrs. Scales' injuries, representing her general and special damages. They further assign error to the court's finding that of the amount actually collected by the Scales, $2,000 was attributable to hospital and medical services; that Skagit owes, in addition, $5,241.84 on its coverage and to the conclusions of law and judgment entered accordingly.

Lena Scales and her husband are third party beneficiaries of a contract entered into between Skagit and Hornbeck Brothers Logging, Roy Scales' employer, by which Skagit agreed to pay certain medical and hospital expenses. Mrs. Scales was injured in an automobile accident caused by Jones' negligence and made a claim to Skagit for payment of her medical expenses pursuant to the contract, which claim was refused. Skagit has paid nothing on the medical claims to date.

The Scales then sued Jones and received a verdict of $40,000. Of the $40,000 verdict, the jury assessed damage for property damage at $2,500 and for all other damage at $37,500. The tort feasor's insurance was limited, however, to $10,000 for bodily injury and $2,500 for property damage, which amounts were paid in their entirety. The court entered findings of fact, which are not contested, finding that the balance of the verdict in the amount of $27,500 is uncollectible. In findings of fact entered pursuant to an order to remand by this court to clarify earlier findings, the court indicated that he arrived at the sum attributable to hospital and medical services of $2,000 by taking the net recovery of $10,000 and dividing it into the amount awarded by the jury as general damages of $37,500 which was a recovery of 26.67 percent on the dollar. Applying this percentage figure to the.$7,241.84 found to be the extent of agreed coverage of Skagit resulted in a figure of $1,942.17 which the trial court rounded off to $2,000. $2,000 subtracted from the agreed coverage of.$7,241.84 resulted in the figure of $5,241.84, the sum the trial court found to be owed by Skagit County Medical to the Scales.

Certain basic principles of construction must be applied to this case. The construction of an insurance policy should be a natural and reasonable one, fairly construed to effectuate its purpose, viewed in the light of common sense so as not to bring about an absurd result. It is a practical rather than a literal or technical construction which is deemed desirable. While courts protect against insurers' unjust claims and enforce regulations necessary for their protection, if must not be forgotten that the primary object of all insurance is to insure. A construction should be taken which will render the contract operative, rather than inoperative. 13 J. Appleman, Insurance, Law & Practice § 7386 (1943); Lawrence v. Northwest Cas. Co., 50 Wash.2d 282, 311 P.2d 670 (1957); Anderson & Middleton Lumber Co. v. Lumbermen's Mutual Cas. Co., 53 Wash.2d 404, 333 P.2d 938 (1959). As further noted in Appleman, at § 7401 p. 50, it has been almost the unanimous holding of all courts that insurance contracts must be liberally construed in favor of a policy holder or beneficiary thereof, whenever possible, and strictly construed against the insurer in order to afford the protection which the insured was endeavoring to secure when he applied for the insurance. Courts have felt that the language of insurance policies is selected by one of the parties alone and the language employed by that party should be construed against it. Thompson v. Ezzell, 61 Wash.2d 685, 379 P.2d 983 (1963); Holter v. National Union Fire Ins. Co., 1 Wash.App. 46, 459 P.2d 61 (1969); Myers v. Kitsap Physicians Serv., 78 Wash.2d 285, 474 P.2d 109 (1970).

Skagit first attacks that action of the court in apportioning the total judgment to reflect that.$7,241.84 as awarded for medical expenses was equivalent to $2,000 of the $10,000 actually received by the Scales in collecting on the judgment. Skagit argues there is no authority in a contract between the parties which would authorize apportionment of the Scales' recovery against the tort feasor and that the court in this action where the Scales seek their money judgment against Skagit is therefore without authority to make such apportionment. We disagree.

Skagit does not contend the present fact pattern, whereby a general verdict covering damages claimed for medical expenses, as well as pain and suffering, would be collectible only in part, could not have reasonably been anticipated at the time the contract was drafted. They now claim, however, in effect, the because Scales did not obtain special interrogatories in the trial of the tort feasor on the various components of the damage issue, which would have segregated the amount awarded for medical expenses, the court is now powerless to make such an apportionment and that the insurance contract is, therefore, a nullity as between these parties. Counsel for Skagit candidly admits he can find no authority to sustain his position that the trial court does not have this power.

We do not believe the court is limited as Skagit argues on this...