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IN THE COURT OF APPEALS FOR THE STATE OF WASHINGTON

SETH LAYMAN and MOLLY LAYMAN, husband and wife, Appellants,

21st CENTURY NORTH AMERICA INSURANCE CO.; and FARMERS INSURANCE COMPANY OF WASHINGTON, Respondents. No. 70540-7-I DIVISION ONE

UNPUBLISHED OPINION FILED: July 7, 2014

Leach, J. — Seth and Molly Layman appeal the trial court's summary dismissal of their claims against 21st Century North America Insurance 

### Company. They raise multiple issues, including a claim that 21st Centuryfailed to inform them properly about renewal of their automobile insurance as required 

### byRCW48.18.292. Becausethe Laymanshave demonstrated a genuine issue of material fact about whether they agreed to receive policy renewal 

### communications from 21st Century through its paperless delivery system, the trial courterred in granting summaryjudgment. We reverse.No. 70540-7-1/2

FACTS The Laymans first purchased auto insurance from 21st Century in July 

### 2008. In May 2010, they renewed this policy, effective July 3, 2010, through January 3, 2011. The insurance policy included this provision: C. Automatic Termination 1. If we offer to renew or continue your policy and you or your representative do not accept by making timely payment of the 

### premium due, this policywill automatically terminate at the end ofthe current policy period. Failure to pay the required renewal or continuation premium when due shall mean that you have not accepted ouroffer. 

### 21st Century offers its policyholders a paperless delivery system. A policyholder can elect to receive policy, billing, and/or correspondence documents through this system. A policyholder participating in the system 

### affirmativelychooseswhich categoriesofdocumentsto receiveelectronicallyand does notreceivethe selected categories ofdocuments through the UnitedStates 

### Postal Service, unless required by law or unless 21st Century needs to deliver 

### physical documents, such as an insurance identification card.1 To access electronically delivered documents, a policyholder mustlog onto a 21st Century website. 21st Century does notsend the documents directly to the policyholder, either as an attachmentto an e-mail orotherwise. 

### On November 17, 2010, Molly Layman enrolled in 21st Century's 

### paperless delivery system. As explained more fully later in this opinion, the 121stCentury mailed an insurance identificationcard to the Laymans.
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parties dispute which categories of documents she elected to receive 

### electronically. The Laymans never logged into the paperless delivery system between November 17, 2010, and February24, 2011. On December 1, 2010, 21st Century processed and posted to its web site a policy renewal offer to the Laymans for the period January 3, 2011, through July 3, 2011. This document required the Laymans to pay a $494.12 renewal payment before January 3, 2011, to avoid expiration of their policy. Once 21st Century posted the renewal offer, the paperless system automatically generated,
on December 2, 2010, a generic e-mail to the Laymans notifying them that documents were available on line for their review. The e-mail provided no information about the nature of these documents and contained no reference to the subject of policy renewal. At the same time, 21st Century mailed an insurance identification card to the Laymans as part of this renewal offer. The Laymans received the identification card, but the record is silent about what information, ifany, 21stCentury provided with it. On January 7, 2011, after receiving no renewal premium, 21st Century 

### processed and posted to its web site a second billing invoice. This document notified the Laymans that their policy had expired for failure to pay the renewal premium. Italso notifiedthe Laymans thatthey could avoid a lapse incoverage 

### if21st Century received the premium before January 26, 2011. 21st CenturyNo. 70540-7-1/4

sent an e-mail to the Laymans on January 8, 2011, indicating that documents
were available online for review. As with the earliere-mail, this one provided no information about the nature ofthese documents and contained no reference to the subjectof policy renewal. 21stCentury received no renewal premium. 

### On February 23, 2011, the Laymans' son was involved in a motor vehicle accident. The other driver's insurance company filed a claim with 21st Century


### on February 24, 2011. In a letter mailed to the Laymans' home dated February 25, 2011, 21st Century denied the claim, stating, "Our records reveal and 

### investigation confirms your policycancelledfornonpaymentof premium effective 

### January 3, 2011. Therefore, since the cancellation was prior to the loss, wewill be unable to consider any claims made by or against you as a result of this loss."2 

### On March 2, 2011, the Laymans complained to the Washington State Office of the Insurance Commissioner about the denial of the insurance claim. 

### 21st Century responded to thiscomplaint, asserting, "Mrs. Layman signed upfor the paperless system and in doing so agreed to receive policy notifications via

2After 21st Century notified the other driver's insurance company that no 

### coverage was available, that insurance company sought payment from the Laymansdirectly. TheLaymans have notpaidtheclaim. We note thatalthough both the insurance policy and the legislature use the British spelling, "cancellation," we usetheAmerican English spelling, "cancelation."No. 70540-7-1/5

e-mail." The Office of the Insurance Commissioner found no violation of the Washington insurance regulations, explaining, [21st Century] has provided a brief chronology of the handling of your account. They have concurred that you switched your account to paperless billing, policy and correspondence on November 17, 2010. The company sent you an email that advised that those items would now be sent electronic paperless. The company sent a notice that you had electronic documents to view in your account. The company included copies of the policy renewal notice, reminder and notice that your policy had expired effective 1-3-11. The company is maintaining the denial of coverage for your accident as yourpolicy was not inforce atthetime ofthe accident. On February 29, 2012, the Laymans filed this lawsuit against 21st Century. They requested a declaration that 21st Century's paperless delivery system did not satisfy the notice requirements of RCW 48.18.291 for policy cancelation and that 21st Century's policy provided coverage for the February 

### 23, 2011 claim. They also asserted claims forbreach ofcontract, violation ofthe Consumer Protection Act,3 violation ofthe Insurance Fair ConductAct,4 and bad faith.5

3Ch. 19.86 RCW. 4 Ch. 48.30 RCW. 

### 5 21st Century removed this action to federal court. At the close of 

### discovery, the parties filed cross motions forsummaryjudgment. On March 12, 2013, the United States District Court for the Western District of Washington remanded the case to state courtfor lackofsubjectmatterjurisdiction. The court 

### concluded thatthe disputed coverage amountwas $15,000. 21st Centuryfailed to show by a preponderance of the evidence that the amount in controversy exceeded $75,000.No. 70540-7-1/6

The parties filed cross motions for summary judgment. The trial court denied the Laymans' motion for partial summary judgment and granted 21st 

### Century's motion forsummaryjudgment, dismissingthe casewith prejudice.6 The Laymans appeal.
STANDARD OF REVIEW We review summary judgment orders de novo, engaging in the same 

### inquiryas the trial court.7 Summaryjudgment is proper if, viewing the facts and reasonable inferences in the light most favorable to the nonmoving party, no genuine issues ofmaterial fact exist and the moving party is entitled tojudgment


### as a matter oflaw.8 Agenuine issue of material fact exists ifreasonable minds 

### could differaboutthe facts controlling the outcome of the litigation.9 In reviewing summaryjudgment orders, we consider supporting affidavits 

### and otheradmissibleevidence based upon the affiant's personal knowledge.10 A party opposing a motion for summaryjudgment may not rely upon speculation, 

### argumentative assertions that unresolved factual issues remain, or its affidavits

6The courtawarded no costs orattorneyfees. 7 Michak v. Transnation Title Ins. Co.. 148 Wn.2d 788, 794, 64 P.3d 22 (2003).8CR 56(c); Michak, 148Wn.2d at794-95. 9Martin v. Dematic. 178 Wn. App. 646, 653, 315 P.3d 1126(2013) (citing Hulbert v. Port ofEverett. 159 Wn. App. 389, 398, 245 P.3d 779 (2011)), review granted, 180Wn.2d 1009 (2014). 10 Int'l Ultimate. Inc. v. St. Paul Fire & Marine Ins. Co.. 122 Wn. App. 736, 744, 87 P.3d 774 (2004).
-6-No. 70540-7-1/7



### considered at face value.11 Rather, the nonmoving party must setforth specific facts that sufficiently rebut the moving party's contentions and disclose that a 

### genuineissue of a material factexists.12 The denial of a summary judgment "has no preclusive effect on further proceedings
.... It does not end proceedings, but rather permits them to proceed. The denial of a summaryjudgmentmotion is not a final orderthat can 

### be appealed."13 ANALYSIS 

### The trialcourt accepted 21stCentury's argumentthat it had fully complied with the statute it claimed controls this case, RCW 48.18.292, titled "Refusal to 

### renew private automobile insurance by insurer—Change in amount of premium
ordeductibles." (Boldface omitted.) The Laymans make 11 assignments of error to the dismissal of their claims. These include claims that (1) RCW 48.18.291 

### instead of RCW 48.18.292 applies, (2) 21st Century cannot comply with RCW 

### 48.18.292 by electronic delivery of documents, and (3) the record shows a 

### genuine issue ofmaterial fact about what documents the Laymans agreed to

11 Herman v. Safeco Ins. Co. of Am.. 104Wn. App. 783, 787-88, 17 P.3d 

### 631 (2001) (quoting Seven Gables Corp. v. MGM/UA Entm'tCo.. 106Wn.2d 1, 13,721 P.2d 1 (1986)). 

### 12 Herman. 104 Wn. App. at 788 (quoting Seven Gables. 106 Wn.2d at 13). 

### 13 In re Estate ofJones. 170 Wn. App. 594, 605, 287 P.3d 610 (2012) 

### (citingZimnvv. Lovric. 59Wn. App. 737,739, 801 P.2d 259(1990)); Rothv. Bell, 24 Wn. App. 92, 104, 600 P.2d 602 (1979)); RAP 2.2(a).No. 70540-7-1/8


### receive electronically. Because we agree with the Laymans that the record 

### shows a genuine issue of material fact about what documents they agreed to receive electronically, we reverse and remand without deciding many of the issues they present. 

### As a threshold matter, we agree with 21st Century that RCW 48.18.292 instead ofRCW48.18.291 applies to this case. RCW48.18.291(1) states: A contract of insurance predicated wholly or in part upon the use of a 

### private passenger automobile may not be terminated by cancellation by the insurer until at least twenty days after mailing written notice of cancellation to the named insured at the latest address filed with the 

### insurerby or on behalfofthe named insured, accompanied bythe reason therefor. Ifcancellation is for nonpaymentofpremium, or is withinthefirst 

### thirtydays afterthe contract has been in effect, at leastten days['] notice of cancellation, accompanied by the reason therefor, shall be given. In case of a contractevidenced by a written binderwhich has been delivered 

### to the insured, ifthe binder contains a clearly stated expiration date, no 

### additional notice ofcancelation ornonrenewal isrequired.[14] In Safeco Insurance Co. v. Irish.15 the court explained that the term "cancellation" "refers to a unilateral actofthe insurerterminating coverage during the policy term." The court determined that neither RCW 48.18.291 nor insurance policy provisions addressing cancelation applied to a situation where

14 

### The Laymans do not allege that 21st Century unilaterally refused to renew their insurance contracteither underthe terms ofthe policy or under RCW 48.18.292(1)(a). 

### 15 37 Wn. App. 554, 558, 681 P.2d 1294 (1984).
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### the insured fails to pay a premium as a condition ofrenewal.16 The court held, 

### "Thus, the general rule is thatfailure of an insured to pay a renewalpremium by the due date results in a lapse of coverage as of the last day of the policy period."17 

### The court in Irish held that RCW 48.18.292(1)(b) governs situations involving nonrenewal of continuous private automobile insurance.18 This provision states, 

### Each insurer shall be required to renew any contract ofinsurance subject to RCW 48.18.291 unless one ofthefollowing situations exists: (b) At leasttwenty days prior to its expiration date, the insurer has communicated its willingness to renew in writing to the named insured, 

### and has included therein a statement of the amount of the premium or portion thereof required to be paid by the insured to renew the policy, including the amount by which the premium or deductibles have changed from the previous policy period, and the date by which such paymentmust 

### be made, and the insured fails to dischargewhen due his or her obligation inconnection withthe paymentofsuch premium or portion thereof.1191



### 16jrish, 37 Wn. App. at 558 (citing Shelly v. Strait. 634 P.2d 1017 (Colo. App.1981); Sampson v. State Farm Mut. Ins. Co.. 205 Neb. 164, 286 N.W.2d 746 (1980); Farmers Ins. Co. v. Hall. 263 Ark. 734, 567 S.W.2d 296, (1978); Sereno v. Lumbermens Mut. Cas. Co.. 132 Ariz. 546, 647 P.2d 1144 (1982)). Irish's insurance provision governing cancelation stated, "AUTOMATIC TERMINATION. Ifwe offerto renew and you or your representative do not accept, this policy will automaticallyterminate atthe end ofthe current policy period. Failure to paythe required renewal premium when due shall mean that you have not accepted our offer." Irish. 37Wn. App. at 556 (emphasis omitted). 17 Irish. 37 Wn. App. at 558 (citing Thomason v. Schnorr. 41 Colo. App. 546, 587 P.2d 1205 (1978)). 

### 18Irish, 37 Wn. App. at 558. 19RCW48.18.292(1)(b).No. 70540-7-1/10 

### The Laymans argue, "When the 21st Century Claim Manager was 

### questioned on the reasons why 21st Century denied this claim, he specifically disclaimed non-renewal as a basis for the denial, reiterating that it was canceled by the insurer fornon-payment of the premium." They claim, "21st Century now argues that the Laymans 'elected' not to renew their policy, and that 21st 

### Century's conduct should be evaluated under RCW 48.18.292.
... 21st Century should be estopped from making this argument." The record indicates thatthe claim manager testified in a deposition, in response to a question about the


### reason for denying the insurance claim, "The letter says the policycanceled for nonpaymentof a premium." Although the letter and the claim manager used the term "canceled," the 

### purpose ofthe letterwas to notifythe Laymans that (1) they did not accept 21st Century's offer to renew their automobile insurance policy, (2) the policy lapsed, and (3) 21stCenturywould not coverthe loss, which occurred afterthe automatic termination date. This case involves the Laymans' failure to renewthe insurance contract by failing to pay the premium by the due date, not cancelation. No evidence shows that 21stCenturyterminated the coverage unilaterallyduring the policyterm. As the moving party, 21st Century has the initialburden ofshowing that it complied with RCW 48.18.292 when it did not renew the Layman policy. To

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meet this burden, 21st Century presented to the trial court evidence that it claimed established as a matter of law the Laymans' consent to receive policy renewal information electronically and the electronic delivery ofthat information. This evidence consisted of the declaration of Diana Yeager, a 21st Century employee, and various attachmentsto herdeclaration. 

### Ms. Yeagerstated thatthe Laymans "elected to receive policydocuments, 

### billing documents, and correspondence documents via the paperless delivery 

### system, as shown in their paperless delivery system history." To support this assertion Ms. Yeager identified and described four documents attached to her 

### declaration. The first, a chronological log titled "Paperless Delivery CSR Interface," has four columns, labelled "Date," "Action," "CSRID," and 

### "Comments." Under the action heading, it contains a brief summary of each 

### policyholder action. This is the only document in the record purporting to show which documents Molly Layman elected to receive electronically. It has four entries for November 17, 2010. The first reads, "Customer elects to suppress 

### billing documents paper mailings," and a second reads "Customer elects to 

### suppress policy paper mailings." The third reads, "Customer enrollment with a 

### prerequisite ofaccepting policy Terms and Conditions" and the fourth reads, "Customer elects tosuppress correspondencedocuments papermailings."

•11-No. 70540-7-1/12

The second and third attachments are screen shots of specimen pages from 21st Century's web site purporting to illustrate the forms completed by a policyholder enrolling in the paperless delivery system. The page illustrated by the second attachment allows the policyholder to select the categories of documents to be received electronically by checking a box next to each ofthree 

### categories, "Policy," "Billing," and "Correspondence." The record does not contain any copies ofthese forms as completed by Molly Layman. Ms. Yeager described the process for completing these forms to illustrate her testimony abouthow Ms. Layman enrolled in21stCentury's paperless system. The fourth attachment is a copy of "Paperless Terms and Conditions," which includes thefollowing provisions pertinentto the parties' arguments: Which documents will Ireceive electronically? 

### Youwill onlyreceivethe categories ofdocuments thatyou have elected to receive electronically. There may be some documents that we cannot 

### deliver electronically due to legal and technological constraints in your state. These documents will be delivered to you via USPS to your postal address. How do Iaccess my documents? 

### Yourbills are sent to you via e-mail and provide the option to pay online 

### (login required) or over the phone (via ourAutomated Billing System). If you have selected the documents and bills option, we will send you an email message with a link to our Web site when new documents are available to review, print, or save to your computer. It is your 

### responsibility to log in to our Web site to view yourdocuments. To controvert 21st Century's contention that Molly Layman elected to 

### receive all three categories of documents electronically by checking all three

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### boxes, the Laymans provided the trial court with excerpts from a transcript of Molly Layman's deposition testimony. She testified that she only checked the box for "Correspondence" and not the boxes labelled "Policy" or "Billing" when completing theform shown inattachment2 to Yeager's declaration. 

### 21st Century offers the followingargumentwhy Molly Layman's testimony does not create a disputed issue of fact. 

### Although the Laymans claim they only elected to receive "correspondence" documents via the 21st Century paperless delivery 

### system, their contention is contrary to the unrebutted testimony of how enrollment in the paperless delivery system works and the documented elections that the Laymans made with respect to the enrollment process. 

### The Laymans provide no documentary evidence that they onlysigned up to receive correspondence documents via the paperless delivery system, 

### and they cannot provide competent testimonial evidence because they admit that they never logged on to the system to confirm their delivery elections or reviewthe documents theywere sent. 

### 21st Century offers no explanation why Molly Layman's deposition 

### testimony is not competenttestimonial evidence ofwhich boxes she did anddid not check when she enrolled in the paperless delivery system. 21st Century 

### cites no authority for its claim that the Laymans must produce documentary 

### evidence to dispute how Molly Layman completed the electronic form. We assume that 21st Century searched and found none. We find 21st Century's contention somewhat ironic when, as the party with the burden of proving the contents ofthatcompletedform, ithas notproduced a copy. 

### 21stCentury relies upon theclaimed consent of the Laymanstojustify its 

### purported compliance with the requirements of RCW 48.18.292 with electronic

-13-No. 70540-7-1/14 

### documents. Because the record demonstrates a genuine issue of fact as to whether the Laymans provided this consent, the trial court erred by granting summaryjudgment. In view of our resolution ofthis issue, we do not reach the 

### remaining issues raised by the Laymans, including whether the requirements of RCW48.18.292 can be satisfied with electronic documents.20 

### The Laymans have requested attorney fees and damages under Olympic Steamship Co. v. Centennial Insurance Co..21 RCW 48.30.015, and RCW 19.86.090. Because neither party has yet prevailed in this case, this request is premature. CONCLUSION Because the Laymans raised a genuine of material fact about which documents they agreed to receive electronically from 21st Century, we reverse and remand for further proceedings consistentwith this opinion. 

# vuLase~J(
WE CONCUR: 

# ^

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20 Neitherparty has addressed the applicability of15 USC § 7001 to this issue. 21 117Wn.2d 37, 53-54, 811 P.2d 673 (1991). -14-