Whistman v. West American of Ohio Cas. Group of Ins. Companies
| Citation | 686 P.2d 1086,38 Wn.App. 580 |
| Decision Date | 26 June 1984 |
| Docket Number | No. 5472-III-1,5472-III-1 |
| Court | Court of Appeals of Washington |
| Parties | Earl WHISTMAN and Gracie Carrico, as Personal Representatives for the Estate of Ray W. Whistman, deceased, Respondents, v. WEST AMERICAN OF the OHIO CASUALTY GROUP OF INSURANCE COMPANIES, Appellant. |
Patrick R. Acres, Moses Lake, for appellant.
Jerry L. Sorlien, Moses Lake, for respondents.
Plaintiffs, Earl Whistman and Gracie Carrico, are the personal representatives of the estate of Ray Whistman who died on November 15, 1980. They brought this action against West American of the Ohio Insurance Group of Insurance Companies (West) seeking a declaratory judgment that Ray Whistman's homeowner's policy through West provided coverage for the destruction of his house by fire on February 28, 1981. The complaint also sought damages for West's alleged violation of the Unfair Insurance Practices Act, the Unfair Claims Practice Regulations, and the Consumer Protection Act. The court granted the personal representatives summary judgment on the issue of coverage, but denied them summary judgment on the second cause of action. Subsequently, the court granted West summary judgment on this issue. Both parties appeal.
The events leading to the claim for coverage are:
November 15, 1980 --Ray Whistman died.
December 23, 1980 --Insurance agent Robert Trask sent a notice of renewal of the insurance policy then in effect from February 2, 1980 until February 2, 1981, to Ray Whistman at his address. Trask attested that he knew Mr. Whistman had died, and the letter was his attempt to contact the person caring for his estate. The letter was returned to his office. He then contacted the lienholder who informed him that Earl Whistman was the personal representative.
February 19, 1981 --Trask sent the following letter to Earl Whistman:
[A]s of February 2, 1981, have requested cancellation of the policy due to the fact that we have been unable to contact anyone with an interest in the house.
If you do have an interest in the house and wish it insured, please let me know so I can rewrite the policy for you.
On the same date, Trask also sent the following memo to West:
I am returning this policy to you for flat cancellation. Both Mr. and Mrs. Whistman are deceased. The bank's interest has been satisfied and no one seems to know who the house belongs to at this time.
February 25, 1981 --Mrs. Earl Whistman made the following reply to Trask's letter:
The house is empty at present.... We feel the insurance policy should be renewed. Please renew it and send us a copy along with the bill.
That same day West addressed a notice of cancellation to Ray Whistman. The notice was sent to the lienholder, but not to Ray Whistman's address. The notice stated:
Cancellation will take effect on the following date at the same hour on which the policy became effective: 3-9-81.
* * *
You are hereby notified in accordance with the terms and conditions of the above-mentioned policy, that your insurance will cease the hour and on the date mentioned above.
February 27, 1981 --Trask acknowledged receipt of Mrs. Whistman's letter of February 25 stating:
We have already cancelled the present policy; the cancellation will become effective March 9, 1981. Due to the fact that we have no other insurance as supporting business and that the house is vacant, we cannot write the insurance. I am therefore suggesting that you contact your local agent and have him insure the house for you.
February 28, 1981 --Fire destroyed the house which was the subject of the insurance policy. The personal representatives had received neither West's nor Trask's notices of cancellation by the time of the fire.
The insurance policy provides:
5. Cancellation.
* * *
(b) We may cancel this policy only for the reasons stated in this condition by notifying you in writing of the date cancellation takes effect.... Proof of mailing shall be sufficient proof of notice:
(1) when you have not paid the premium ... we may cancel at any time by notifying you at least 10 days before the date cancellation takes effect.
The sole issue in West's appeal is whether the Superior Court erred when it determined as a matter of law that the insurance policy provided coverage for the loss caused by the fire on February 28, 1981. We find no error.
As noted above, the policy states: "When you have not paid the premium ... we may cancel at any time by notifying you at least 10 days before the date cancellation takes effect." The reference to "premium" is not limited to premiums paid during the term of the insurance and reasonably could be read as including premiums due in order to effect renewal. 1 See State Farm Mut. Auto. Ins. Co. v. O'Brien, 24 Ariz.App. 18, 535 P.2d 46, 49 (1975). It is a well- settled rule of construction that ambiguities in insurance policies are resolved in favor of the interpretation which provides coverage. Shotwell v. Transamerica Title Ins. Co., 91 Wash.2d 161, 167, 588 P.2d 208 (1978). Accordingly, we construe the policy language here as requiring West to give 10 days notice prior to cancellation for failure to pay a renewal premium. Since West's notice of cancellation was not effective prior to the date of the fire loss, that loss is covered by the policy. We therefore affirm the judgment of the Superior Court respecting coverage. 2
The issue in the personal representatives' appeal is whether the court erred when it determined that West's actions did not constitute a violation of the Unfair Insurance Practices Statute, the Unfair Claims Practices Regulations and the Consumer Protection Act. They contend the court should have granted them summary judgment on this issue. We hold summary judgment should have been denied both parties because there existed a material dispute concerning West's good faith in denying coverage.
RCW 48.01.030 provides:
The business of insurance is one affected by the public interest, requiring that all persons be actuated by good faith, abstain from deception, and practice honesty and equity in all insurance matters. Upon the insurer, the insured, and their representatives rests the...
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