State Farm General Ins. Co. v. Emerson, 50459-8

• Decision Date: 06 September 1984
• Docket Number: No. 50459-8,50459-8
• Citation: 102 Wn.2d 477,687 P.2d 1139
• Parties: STATE FARM GENERAL INSURANCE COMPANY, Respondent, v. Golda EMERSON, personally and as personal representative of the Estate of Ronny Dale Emerson; J. Voyt Emerson; Glen Cain and Jane Doe Cain, husband and wife, and the marital community composed thereof; and The Estate of Ronny Dale Emerson, Appellants.
• Court: Washington Supreme Court

Page 477

102 Wn.2d 477

687 P.2d 1139

STATE FARM GENERAL INSURANCE COMPANY, Respondent, v. Golda EMERSON, personally and as personal representative of the Estate of Ronny Dale Emerson; J. Voyt Emerson; Glen Cain and Jane Doe Cain, husband and wife, and the marital community composed thereof; and The Estate of Ronny Dale Emerson, Appellants.

No. 50459-8.

Supreme Court of Washington En Banc.

Sept. 6, 1984.

Thorner, Almon, Kennedy & Gano, Wade Gano, Yakima, for appellant emerson.

Francis, Lopez & Ackerman, Howard Bundy, Seattle, for appellant Cain.

Reed, McClure, Moceri & Thonn, William Hickman, Seattle, for respondent.

Bryan Harnetiaux and Robert Whaley, Spokane, amicus curiae for appellants.

UTTER, Justice.

Appellants Golda Emerson and Glen Cain were insureds in a homeowners policy issued by respondent State Farm which excludes liability coverage for bodily injury to any insured. They appeal from a summary judgment declaring the exclusion relieved the respondent from any duty to defend or pay under the policy for injuries to insureds. The trial court found the policy unambiguous and clear, and not violative of public policy. We affirm.

Appellant Emerson is the named insured in a homeowners policy providing property damage coverage for her mobile home, and liability coverage for all insureds. The policy defined insureds as the named insured, and the named insured's spouse and relatives, if residents of the named insured's household. Residing in Emerson's household at that time were her son, Ronny Dale Emerson, and her then husband, appellant Cain.

On September 4, 1978, within the policy term, Cain was injured and Ronny Emerson killed in an accident when the citizen's band antenna they were installing atop the mobile home came too close to a power line. In July 1981, Emerson, personally and as personal representative of Ronny Emerson, commenced suit against Cain alleging negligence in Ronny Emerson's death. Cain asserted a counterclaim against Emerson for his own injuries. Both demanded from State Farm a defense and coverage under the terms of the policy. The policy contained a family or household exclusion clause. ¹ State Farm filed a declaratory judgment action to establish that the clause excluded coverage. The trial court granted State Farm's motion. Appellants appealed to the Court of Appeals, Division Two. The appeal was certified to this court.

The issues presented to us are (1) whether there were material facts at issue which precluded granting of summary judgment, (2) whether the family exclusion clause in the homeowners policy is void as against public policy, (3) whether the policy was ambiguous or unclear so as to construe coverage in favor of the insureds, and (4) whether State Farm has an independent duty to defend appellant

                Cain.   We answer all issues in the negative, and affirm the trial court
                

I. SUMMARY JUDGMENT

A summary judgment may not be granted if there is a genuine issue of material fact. Jacobsen v. State, 89 Wash.2d 104, 569 P.2d 1152 (1977). If no issue of material fact exists, the court may grant summary judgment as a matter of law. LaPlante v. State, 85 Wash.2d 154, 531 P.2d 299 (1975).

Appellant Emerson raises as an issue of fact, the readability of the policy. She proposed to offer the opinion of a readability expert. Insurance policies are to be construed as contracts, and interpretation is a matter of law. Kelly v. Aetna Cas. & Surety Co., 100 Wash.2d 401, 408, 670 P.2d 267 (1983). We have said that we will interpret an insurance contract according to the way it would be understood by the average insurance purchaser. Phil Schroeder, Inc. v. Royal Globe Ins. Co., 99 Wash.2d 65, 68, 659 P.2d 509 (1983). The readability of an insurance contract is a determination to be made by a court following this principle. Specialized knowledge of an expert is not relevant to the triers' determination of the average person's understanding of the policy and the opinion of a readability expert, therefore, does not present an issue of material fact. See ER 702.

Appellant Cain maintains that an issue of fact was presented under RCW 48.30.300 which prohibits discrimination based on sex or marital status absent bona fide statistical differences. Any question of fact regarding statistical bases for differentiation arises only if the policy discriminated against Cain on the basis of his marital status, as he alleges.

Cain was an insured under the policy definitions by virtue of his being both the spouse of the named insured and by residing in the named insured's household. Likewise, Ronny Emerson was an insured by virtue of being a relative of the named insured and by living in the named insured's household. The definition language confers insured status on family members who are living in the

                same household.   It does not discriminate on the basis of marital status
                

II. PUBLIC POLICY

Appellants contend that family exclusion clauses in homeowners insurance are contrary to public policy. In support of their position they largely rely on our recent decision which held that family exclusion clauses in automobile policies are contrary to public policy. Mutual of Enumclaw Ins. Co. v. Wiscomb, 97 Wash.2d 203, 643 P.2d 441 (1982); aff'g on rehearing, 95 Wash.2d 373, 622 P.2d 1234 (1980). It is urged that the voiding of family exclusion clauses in automobile insurance applies with equal force to homeowners insurance.

We have said that limitations in insurance contracts which are contrary to public policy and statute will not be enforced, but otherwise insurers are permitted to limit their contractual liability. Wiscomb, 97 Wash.2d at 210, 643 P.2d 441; Trinity Universal Ins. Co. v. Willrich, 13 Wash.2d 263, 124 P.2d 950 (1942). While questioning the wisdom of certain exclusion clauses, we have been hesitant to invoke public policy to limit or avoid express contract terms absent legislative action. Progressive Cas. Ins. Co. v. Jester, 102 Wash.2d 78, 683 P.2d 180 (1984). "In general, a contract which is not prohibited by statute, condemned by judicial decision, or contrary to the public morals contravenes no principle of public policy." 17 C.J.S. Contracts § 211, at 1024 (1963).

In Wiscomb, we specifically stated that our starting point for analyzing public policy was with the financial responsibility act RCW 46.29. Wiscomb, 97 Wash.2d at 206, 643 P.2d 441. We said, "to the greatest extent possible without requiring mandatory insurance coverage, the Legislature has demonstrated its intended policy of providing adequate compensation to those injured through the negligent use of this state's highways." Wiscomb, at 207, 643 P.2d 441. In other cases invalidating agreements between insurers and insureds, we have likewise found statutory evidence of a public policy. We relied on The additional rationales in Wiscomb for overriding family exclusion clauses were not independent of the public policy evidenced by the financial responsibility act. Those rationales, in the context of automobile insurance, are readily distinguishable when applied to homeowners insurance. First, although a factor in Wiscomb, exclusions which focus on persons not party to the contract or contributing to the risk are not solely determinative of legality. See, e.g., Progressive Cas. Ins. Co. v. Jester, supra (bargained-for exclusion of passengers on motorcycles not contrary to public policy). The focus on innocent victims in automobile exclusion clauses is improper because the purpose of the financial responsibility act and uninsured motorist statute is to protect them. Wiscomb, 97 Wash.2d at 207, 643 P.2d 441; Touchette, 80 Wash.2d at 332, 494 P.2d 479 (uninsured motorist coverage to protect victims of negligent drivers). Second, Wiscomb rejected the insurer's freedom of contract argument in light of the widespread use of such clauses in the state. Here, there has been no showing that policies without the family exclusion are generally unavailable. In addition, inability to obtain homeowners liability coverage for one or any class of persons does not result in noncompliance with statutory requirements as may inability to obtain automobile liability coverage. Finally, Wiscomb rejected the insurers' justification of fraud and collusion necessitating such clauses by pointing out that the court had dismissed similar arguments in removing the common law bar to intrafamily tort immunity. See Freehe v. Freehe, 81 Wash.2d 183, 500 P.2d 771 (1972). Contrary to appellants' arguments, the family exclusion clause does not reinstate the common law immunity but rather excludes The use, operation and regulation of automobiles on public highways has been of long-standing concern to the courts and legislatures. In 1916, Justice Cardozo observed that a lower court might have been justified in ruling as a matter of law that "the car was a dangerous thing." MacPherson v. Buick Motor Co., 217 N.Y. 382, 394, 111 N.E. 1050, 1055 (1916). This court noted that "The automobile is a useful machine in our society, but it can also be a deadly weapon." State ex rel. Ralston v. Department of Licenses, 60 Wash.2d 535, 540, 374 P.2d 571 (1962). There we recognized widespread regulation concerning the automobile. While we are not unmindful that serious and costly accidents occur in the home, and that innocent victims may be left without meaningful compensation in the absence of insurance, we do not perceive the same level of concern for financial compensation by negligent homeowners as exists for negligent automobile owners and users.

                the financial responsibility act for striking down an agreement between the parties in contravention of the act.   LaPoint v. Richards, 66 Wash.2d 585, 403 P.2d 889 (1965).   In  Touchette v. Northwestern Mut. Ins. Co., 80 Wash.2d 327, 335, 494 P.2d 479 (1972), we declined to permit "a myriad of legal niceties arising from exclusionary clauses" to defeat the public policy expressed in the uninsured motorist statute,

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