Sears v. Grange Ins. Ass'n

Decision Date27 October 1988
Docket NumberNo. 55131-6,55131-6
Citation762 P.2d 1141,111 Wn.2d 636
CourtWashington Supreme Court
PartiesBarbara SEARS and Bradley Sears, wife and husband, Petitioners, v. GRANGE INSURANCE ASSOCIATION, a Washington corporation, Respondent.

Thomas B. Nast, Seattle, for petitioners.

Murray, Dunham & Murray, Harold B. Field, Seattle, for respondent.

Bryan P. Harnetiaux, Robert H. Whaley, Gary N. Bloom, Spokane, amicus curiae, Washington Trial Lawyers Ass'n for petitioners.

DOLLIVER, Justice.

On November 12, 1983, Barbara Sears was injured in an automobile accident while a guest passenger in an automobile owned and operated by Ryan Egerdahl. The accident was caused by Lorenzo Iglesias who negligently drove his vehicle into the Egerdahl vehicle. Sears has recovered the $25,000 limit under Iglesias' liability policy and the $50,000 limit under Sears' underinsured motorist (UIM) coverage. Sears then sought to recover under the UIM coverage of the Egerdahl vehicle, which was insured by Grange. Grange denied UIM coverage claiming Sears, as a mere passenger, was not exercising control over the vehicle and therefore was not "using" the vehicle within the policy definition of insured.

Sears brought a declaratory judgment action in the Superior Court for King County. Summary judgment was awarded in favor of Sears; Grange appealed. The Court of Appeals reversed; we granted Sears' petition for review. Prior to oral argument, Grange made a motion to introduce a personal injury protection (PIP) endorsement into the record under RAP 9.11. This motion was passed to the merits.

The issue is whether a passenger "uses" a vehicle for purposes of underinsured motorist (UIM) coverage. The Grange policy provides UIM coverage for any "insured" and defines insured as "each person covered as an insured under the bodily injury liability protection of the policy ..." There is no specific provision regarding protection for bodily injury liability. However, the liability section defines an insured as "the person(s) or group(s) protected under the policy coverage." "Covered person" is defined as "anyone using your covered auto with your permission." "Using" is not defined in the policy. Relying on Dobosh v. Rocky Mt. Fire & Cas. Co., 43 Wash.App. 467, 717 P.2d 793, review denied, 106 Wash.2d 1011 (1986), the Court of Appeals held the term "using" excluded passive use by a passenger. We reverse.

The interpretation of insurance policy language is a question of law. State Farm Gen. Ins. Co. v. Emerson, 102 Wash.2d 477, 480, 687 P.2d 1139 (1984). In construing the language of an insurance policy, the court will examine the contract as a whole. See RCW 48.18.520; E-Z Loader Boat Trailers, Inc. v. Travelers Indem. Co., 106 Wash.2d 901, 907, 726 P.2d 439 (1986) (quoting Morgan v. Prudential Ins. Co. of Am., 86 Wash.2d 432, 434-35, 545 P.2d 1193 (1976)). The entire contract should be interpreted together in construing the effect of each clause. Neer v. Fireman's Fund Am. Life Ins. Co., 103 Wash.2d 316, 692 P.2d 830 (1985). The policy should be given a fair, reasonable, and sensible construction as would be given to the contract by the average person purchasing insurance. E-Z Loader, 106 Wash.2d at 907, 726 P.2d 439.

In construing the Grange policy, we note there is no definition of "use" in the UIM endorsement or in the remainder of the policy. Therefore, "use" will not be interpreted to have a unique meaning. Rather, the general criteria for determining whether a person is using a vehicle and thus insured under a UIM endorsement will be followed. Rau v. Liberty Mut. Ins. Co., 21 Wash.App. 326, 334, 585 P.2d 157 (1978) sets out the relevant criteria (1) [T]here must be a causal relation or connection between the injury and the use of the insured vehicle; (2) the person asserting coverage must be in a reasonably close geographic proximity to the insured vehicle, although the person need not be actually touching it; (3) the person must be vehicle oriented rather than highway or sidewalk oriented at the time; and (4) the person must also be engaged in a transaction essential to the use of the vehicle at the time.

(Citations omitted.) In the factual context of this case, we find all four criteria are met. See Dobosh, 43 Wash.App. at 474, 717 P.2d 793 (Petrich, J., dissenting). Thus, we find Barbara Sears was using the vehicle as a passenger when her injury occurred. Furthermore, the weight of authority from other jurisdictions supports the proposition that passengers are users of a motor vehicle. See, e.g., DeJarnette v. Federal Kemper Ins. Co., 299 Md. 708, 721, 475 A.2d 454 (1984); State Farm Mut. Auto. Ins. Co. v. Francis, 669 S.W.2d 424, 427 (Tex.Ct.App.1984); Orrill v. Garrett, 100 Ill.App.2d 194, 241 N.E.2d 1 (1968); National Union Fire Ins. Co. v. Bruecks, 179 Neb. 642, 139 N.W.2d 821 (1966); Metcalf v. Hartford Accident & Indem. Co., 176 Neb. 468, 126 N.W.2d 471 (1964); Indemnity Ins. Co. v. Metropolitan Cas. Ins. Co., 33 N.J. 507, 513-14, 166 A.2d 355 (1960); Maryland Cas. Co. v. Marshbank, 226 F.2d 637 (3d Cir.1955).

Grange's contention, agreed to by the majority in Dobosh, that passengers cannot be insureds under the liability section of the policy because passengers cannot be subject to liability, confuses liability with coverage. See Kowal v. Grange Ins. Ass'n, 110 Wash.2d 239, 243-44, 751 P.2d 306 (1988). While we were able in Kowal to distinguish Dobosh and although its continued vitality is questionable given that current insurance policies provide UIM coverage to passengers, we now face the issue. Dobosh is overruled. See Hickman, No UIM for Auto Guests, Washington Insurance Law Letter, at 26 (April/May 1986).

On September 9, 1988, nearly 5 years after the accident, Grange sought to introduce the PIP endorsement under RAP 9.11(a) so it could argue, as in Dobosh, that construing language in the PIP endorsement results in an interpretation of "use" which excludes occupancy, and that this interpretation should control the interpretation of "use" in the UIM endorsement. See Dobosh...

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