Touchette v. Northwestern Mut. Ins. Co., 42062

• Decision Date: 02 March 1972
• Docket Number: No. 42062,42062
• Citation: 80 Wn.2d 327,494 P.2d 479
• Parties: William C. TOUCHETTE, Respondent, v. NORTHWESTERN MUTUAL INSURANCE COMPANY, Appellant.
• Court: Washington Supreme Court

Page 327

80 Wn.2d 327

494 P.2d 479

William C. TOUCHETTE, Respondent, v. NORTHWESTERN MUTUAL INSURANCE COMPANY, Appellant.

No. 42062.

Supreme Court of Washington, En Banc.

March 2, 1972.

Hugh R. McGough, Seattle, for appellant.

Vaughn E. Evans, Seattle, for respondent.

HALE, Associate Justice.

Is the statute (RCW 48.22.030) relating to uninsured motorist coverage of such overriding consequence as to govern the express terms of an insurance contract? Without determining the precise meaning of the contract's language, we are of the opinion that the declared public policy of the state as set forth in RCW 48.22.030 must be given controlling effect.

Claude and Alice Touchette lived in King County; their regularly employed 22-year-old son, William C. Touchette, lived with them as a member of their household. February 1, 1968, the Touchettes purchased an automobile casualty insurance policy (No. FW 74894) from defendant, Northwestern Mutual Insurance Company. The first page of the contract recited that Clause M. and Alice K. Touchette were the named insureds and described their automobile as '63 Volk 1 Priv Passenger.' Also on this first page, the policy stated, 'Insurance is afforded only as to the coverage or where applicable to the car and coverage for which a premium charge is indicated.' A 1958 Cadillac was subsequently substituted for the Volkswagen.

The policy continues:

A. Bodily Injury $50,000 each person $100,000 each occurrence $92.50

B. Property Damage $10,000 each occurrence $40.50

C. Medical Payments $1,000 each person $14.50 D. Uninsured Motorist Financial Responsibility Limits $3.00

Elsewhere in larger print than the standard clauses were captions declaring the contract to be a 'Family Automobile Policy' or 'Your Family Auto Policy.'

Plaintiff, July 27, 1969, while a member of his parents' household, was driving a 1962 Triumph car, a vehicle not described in his parents' policy of insurance, when his car collided with an automobile being driven by an uninsured motorist. Asserting coverage as a relative and member of his parents' household, plaintiff brought this action against defendant insurance company seeking recovery under the uninsured motorist provision.

In one of those transactions which seem to trial off into thin air but is of little moment here, the Touchettes, in a vague sort of deal at an auto repair shop in early July, got rid of the Cadillac and their son emerged with the Triumph. Although the Cadillac was the named vehicle, its disposition would not, the parties agreed for this appeal, affect the uninsured motorist coverage afforded by the policy. An invoice or receipt recorded the Cadillac transaction as it related to the insurance policy:

Effective Date 3--10--69 Policy Number FW 74894 Coverage change of cars to 1958 Cad. Addition of Comprehensive Coverage-Premium $25.00; Addition of Uninsured Motorists Premium $2.50

The question before us, therefore, in reviewing a summary judgment, is not whether the Triumph became substituted for the 1958 Cadillac designated in the policy, but rather whether the contract of insurance afforded plaintiff uninsured motorist coverage.

The court granted plaintiff's motion for a summary judgment and held the insurance company liable upon principles of public policy as declared in RCW 48.22.030 requiring uninsured motorist coverage unless specifically rejected by the insured. It rules as a matter of law that plaintiff, as a relative and member of insureds' household was entitled to the same uninsured motorist coverage as his parents, the named insureds. In effect, the summary judgment allowed the son the same uninsured motorist protection as his parents even though he and not his parents owned the vehicle he was driving at the time of the accident.

As augmented by RCW 48.22.030, the 'Uninsured Motorists Section' upon which recovery was allowed read:

Coverage B--Uninsured Motorists (Damages for Bodily Injury): To pay all sums which the Insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of bodily injury, sickness or disease, including death resulting therefrom, hereinafter called 'bodily injury,' sustained by the Insured, caused by accident and arising out of the ownership, maintenance or use of such uninsured automobile; . . .

* * *

* * *

'Insured' means:

(a) the named Insured and any relative;

And, under the Automobile Liability Section, the term 'relative' was defined as a 'relative of the named Insured who is a resident of the same household.'

Defendant insurance company relies principally on an exclusionary subsection of the uninsured motorist section of the policy, which says:

Exclusions--This policy does not apply under the Uninsured Motorists Section:

(a) to bodily injury to an Insured while occupying an automobile (other than an insured automobile) owned by the named Insured or a relative, or through being struck by such an automobile;

Defendant contends that, because plaintiff was driving his Triumph, an automobile which was neither described in nor carried a specific premium charge in his parents' insurance policy, the exclusionary language of the above subsection cuts off his entitlement to uninsured motorist coverage. Plaintiff rests his claim, however, not on the Triumph as a replacement vehicle for the Cadillac under the terms of the policy but squarely upon what he asserts to be a binding public policy declared by statute, a public policy which, he contends, overrides the exclusionary language and has the effect of broadening the uninsured motorist protection so as to cover a relative of the named insureds residing with them even though driving an automobile not specifically described in their insurance policy.

We need not decide whether the terms of the contract alone without reference to the statutorily declared public policy afforded the coverage plaintiff seeks, for we think that the court correctly held that plaintiff was, as a matter of law, entitled to the same coverage as his parents under the uninsured motorist provision of their contract.

RCW 48.22.030 reads:

On and after January 1, 1968, no new policy or renewal of an existing policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be delivered or issue for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death set forth in RCW 46.29.490, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles and hit-and-run motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom, Except that the named insured may be given the right to reject such coverage, and except that, unless the named insured requests such coverage in writing, such coverage need not be provided in or supplemental to a renewal policy where the named insured had rejected the coverage in connection with a policy previously issued to him by the same insurer.

(Italics ours.)

Neither of the named insureds had ever requested in writing--as the statute provides--that uninsured motorist coverage not be provided, nor had they ever rejected such coverage. And the record shows, too, that a specific premium charge was made at least once and possibly twice for that coverage.

The weight of modern authority supports plaintiff's position, we think. It bespeaks a public policy declared by statute which, when applied to this contract of insurance, would extend to this plaintiff uninsured motorist coverage even though he and not his parents was the owner of the automobile he was driving at the time of the accident. The statute (RCW 48.22.030) requiring that uninsured motorist coverage shall be provided unless the insured overtly rejects it in writing--or, it might be added, expressly communicates to the company his refusal to pay the premium for it--is but one of many regulatory measures designed to protect the public from the ravages of the negligent and reckless driver. It was enacted to expand insurance protection for the public in using the public streets, highways and walkways and at the same time cut down the incidence and consequences of risk from the careless and insolvent drivers. The statute is both a public safety and a financial security measure. Recognizing the inevitable drain upon the public treasury through accidents caused by insolvent motor vehicle drivers who will not or cannot provide financial recompense for those whom they have negligently injured, and contemplating the correlated financial distress following in the wake of automobile accidents and the financial loss suffered personally by the people of this state, the legislature for many sound reasons and in the exercise of the police power took this action to increase and broaden generally the public's protection against automobile accidents.

There is no longer any judicial doubt that the state may regulate insurance, so closely is that industry affected with the public interest (43 Am.Jur.2d Insurance § 60 (1969)), and regulatory statutes become a part of the policy of insurance. Occidental Life Ins. Co. v. Powers, 192 Wash. 475, 74 P.2d 27, 114 A.L.R. 531 (1937).

Thus, a valid statute becomes a part of and should be read into the insurance policy. Dowell, Inc. v. United Pac. Cas. Ins. Co., 191 Wash. 666, 72 P.2d 296 (1937); Williams v. Steamship Mut. Underwriting Ass'n, Ltd., 45 Wash.2d 209, 273 P.2d 803 (1954); State Farm Mut Auto. Ins. Co. v. Hinkel, 87 Nev. ---, 488 P.2d 1151 (1971); Hendricks v. Meritplan Ins. Co., 205 Cal.App.2d 133, 22 Cal.Rptr. 682 (1962). Read into the insurance contract as a public policy designed to...