Source: http://courts.mrsc.org/supreme/121wn2d/121wn2d0243.htm
Timestamp: 2019-04-20 04:29:32+00:00

Document:
121 Wn.2d 243, P.2d 1298, CLEMENTS v. TRAVELERS INDEM. CO.
CLEMENTS v. TRAVELERS INDEM. CO.
ROBERT CLEMENTS, Petitioner, v. TRAVELERS INDEMNITY COMPANY, Respondent.
 Judgment – Summary Judgment – Review – In General. When reviewing a summary judgment, an appellate court engages in the same inquiry as the trial court. It applies the standard set forth in CR 56(c) after considering the facts submitted and the reasonable inferences from those facts most favorably toward the nonmoving party. Summary judgment is proper if reasonable persons could reach only one conclusion from all the evidence.
 Insurance – Underinsured Motorist – Waiver – Statutory Authority. RCW 48.22.030, the underinsured motorist statute, does not mandate underinsured motorist coverage. Although insurers must make such coverage available, insureds are free to waive it.
 Insurance – Underinsured Motorist – Public Policy – In General. RCW 48.22.030, the underinsured motorist statute, was enacted to increase and broaden the protection of insufficiently compensated persons involved in automobile accidents with underinsured motorists.
 Insurance – Underinsured Motorist – Statutory Provisions – Construction – Liberal Construction. RCW 48.22.030, the underinsured motorist statute, must be liberally construed to provide broad protection against financially irresponsible motorists.
 Appeal – Record on Appeal – Limitation to Matters in Record. An appellate court may not look to evidence not in the record.
 Statutes – Construction – Ambiguity – Purpose of Act. Ambiguities in statutes are resolved in favor of the construction that carries out the manifest legislative purpose. If statutory language is susceptible of two constructions, one which will carry out its manifest purpose and one which will defeat its manifest purpose, the former construction prevails.
 Statutes – Construction – Considered as a Whole – In General. Statutory language is construed as a whole.
 The requirement of a written rejection", rejection of underinsured motorist coverage must be in writing. Rejection in writing is not accomplished by an insured's not intending to purchase and not asking or paying for underinsured motorist coverage.
 Insurance – Statutory Provisions – Effect. Insurance regulatory statutes are a part of all insurance policies.
Nature of Action: An employee injured in an automobile collision while driving a company vehicle within the scope of his employment sought a declaratory judgment of coverage under his employer's underinsured motorist insurance.
Superior Court: The Superior Court for King County, No. 90-2-09386-7, James J. Dore, J., on November 7, 1990, entered a summary judgment in favor of the employee.
Court of Appeals: The court at 63 Wn. App. 541 reversed the judgment and granted judgment in favor of the insurer, holding that the employer's insurance policy waived underinsured motorist coverage.
SupremeCourt: Holding that the employer had not rejected underinsured motorist coverage "in writing" as required by statute, the court reverses the decision of the Court of Appeals and reinstates the judgment.
Treece, Richdale, Malone, Corning & Abbott, P.S., and Gary Krohn, for petitioner.
Ogden Murphy Wallace, by Steven A. Reisler, for respondent.
Bryan P. Harnetiaux and Gary N. Bloom on behalf of Washington State Trial Lawyers Association, amicus curiae for petitioner.
SMITH, J. – Petitioner Robert Clements seeks review of a decision by the Court of Appeals, Division One, which reversed a King County Superior Court summary judgment order in petitioner's favor upon his claim for underinsured motorist coverage under his employer's insurance policy following his injury in an automobile collision while driving a company automobile within the scope of his employment. We reverse the Court of Appeals and uphold the judgment of the Superior Court.
«1» Clerk's Papers, at 13.
«2» Clerk's Papers, at 13.
«3» Petition for Review, at 2.
«4» Bard is headquartered in New Jersey, but does business throughout the United States. Respondent's Brief Opposing Petition for Discretionary Review, at 1.
«5» Clerk's Papers, at 3.
«6» Clerk's Papers, at 14.
«7» Clerk's Papers, at 14.
«8» Clerk's Papers, at 33.
«9» Clerk's Papers, at 34. Uninsured motorist coverage applies when at least one person legally responsible for an accident does not have liability coverage. Underinsured motorist coverage permits recovery for the insured when the tort-feasor has insurance, but in an insufficient amount. The 1980 amendment to RCW 48.22.030 includes uninsured vehicles within the definition of underinsured vehicles. See Britton v. Safeco Ins. Co. of Am., 104 Wn.2d 518, 707 P.2d 125 (1985); Comment, Washington's Underinsured Motorist Statute: Balancing the Interests of Insurers and Insured, 55 Wash. L. Rev. 819 (1979-1980).
«10» Clerk's Papers, at 36.
«11» The states listed by abbreviation are AZ, IL, CT, KS, MD, MN, MO, OR, WI, NH, NJ, PA, SC, NY, and VA.
«12» Brief of Appellant, at 8.
«13» Brief of Appellant, at 6.
2. [I]n my discussions with our broker the question of uninsured motorist insurance came up, but I have no recollection of our specific discussion, nor do I know specifically when we talked about it. I do know our intent has been to have uninsured motorist insurance on our automobile fleet only to the extent any particular state made it compulsory. If we had the option not to have uninsured motorist insurance, we did not want it nor did we want to pay for it.
3. I have reviewed policy number TRCAP-196T1368 and its endorsements. It provided uninsured motorist insurance only for certain states where, as the policy states, uninsured motorist insurance was required and could not be waived. The state of Washington is not included on the endorsement listing the states for which the policy provided uninsured motorist insurance.
«14» (Italics ours.) Clerk's Papers, at 48-49.
«15» Clerk's Papers, at 2.
«16» Clerk's Papers, at 9.
«17» Clerk's Papers, at 63.
«18» Clerk's Papers, at 66.
«19» Clements v. Travelers Indem. Co., 63 Wn. App. 541, 821 P.2d 517 (1991).
Here, as indicated in the record before the trial court, Bard's intent is clear. The company did not intend to provide UM coverage in those states where coverage could be declined. Further, Bard did not pay a premium for UM coverage in Washington.
On January 17, 1992, Petitioner Clements filed a petition for review in this court. We granted review on April 1, 1992.
This case involves two principal issues: (1) whether UIM coverage may be rejected in the state of Washington; and (2) whether the insured in this case, C. R. Bard, Inc., rejected UIM coverage under its policy with Travelers Indemnity Company in a manner sufficient to meet the statutory requirement for written waivers under RCW 48.22.030(4).
«21» Marincovich v. Tarabochia, 114 Wn.2d 271, 787 P.2d 562 (1990).
«23» Jacobsen v. State, 89 Wn.2d 104, 569 P.2d 1152 (1977).
«24» Wilson v. Steinbach, 98 Wn.2d 434, 656 P.2d 1030 (1982).
Petitioner Clements argues that RCW 48.22.030 (the UIM statute) mandates UIM coverage. To support his argument, he relies on RCW 48.22.030(2) and public policy.
«25» Laws of 1980, ch. 117, § 1, p. 361; Laws of 1981, ch. 150, § 1, p. 717; Laws of 1983, ch. 182, § 1, p. 996; Laws of 1985, ch. 328, § 1, p. 1124.
«26» 104 Wn.2d 518, 707 P.2d 125 (1985).
«27» Britton v. Safeco Ins. Co. of Am., supra.
«28» Petitioner's argument that as an "insured" he is entitled to UIM coverage presupposes UIM coverage under the Bard policy, even though Bard and Travelers assert there was no coverage and none intended.
«29» (Italics ours.) Laws of 1985, ch. 328, § 1.
«30» Millers Cas. Ins. Co. v. Briggs, 100 Wn.2d 1, 665 P.2d 891 (1983).
«31» Johnson v. Farmers Ins. Co., 117 Wn.2d 558, 817 P.2d 841 (1991).
«32» See Progressive Cas. Ins. Co. v. Jester, 102 Wn.2d 78, 81, 683 P.2d 180 (1984) (on the issue of the validity of a motorcycle insurance policy exclusion, this court said "[s]ince the Legislature has not seen fit to require mandatory insurance coverage, we will not replace its assessment of public policy with our own.").
The evidence presented by Respondent Travelers suggests tangentially that UIM coverage was discussed between the insurer, Travelers, and its insured, Bard. The affidavit of Stuart Storch, corporate risk manager for Bard, at least tends to support Respondent Travelers' position that Bard neither wanted nor paid for UIM coverage and that Bard intended to exercise rejection under the Washington statute. This does not, however, respond to the question whether that rejection was in writing.
Petitioner Clements also argues that the UIM provisions reflect a public policy in favor of assuring full compensation to victims of motor vehicle accidents.
«33» Touchette v. Northwestern Mut. Ins. Co., 80 Wn.2d 327, 335, 494 P.2d 479 (1972).
«34» Kenworthy v. Pennsylvania Gen. Ins. Co., 113 Wn.2d 309, 313, 779 P.2d 257 (1989) (quoting Finney v. Farmers Ins. Co., 92 Wn.2d 748, 600 P.2d 1272 (1979)).
«35» Dellwo & Conniff, The Washington Underinsured Motor Vehicle Insurance Statute: Reading the Legislature's Mind, 23 Gonz. L. Rev. 235 (1987-1988).
«37» Stanton v. PEMCO, 39 Wn. App. 904, 697 P.2d 259 (1985) (UIM coverage present when insured paid premium and effective date of policy was after amendment of UIM statute); Britton v. Safeco Ins. Co. of Am., 104 Wn.2d 518, 707 P.2d 125 (1985) (exclusion under an uninsured/underinsured motorist policy endorsement); First Nat'l Ins. Co. of Am. v. Perala, 32 Wn. App. 527, 648 P.2d 472 (UIM coverage exists for a passenger in a vehicle covered by a UIM policy in which passenger is a named insured), review denied, 98 Wn.2d 1002 (1982); Dairyland Ins. Co. v. Uhls, 41 Wn. App. 49, 702 P.2d 1214 (1985) (exclusion under a UIM policy for persons under 25 invalid); Signal Ins. Co. v. Walden, 10 Wn. App. 350, 517 P.2d 611 (1973) (invalidity of 1-year statute of limitation provision under a UIM policy).
Since waiver of UIM coverage is permitted under Washington statutes, waiver by Bard, the named insured in this case, would be neither void nor unenforceable if it meets all statutory requirements.
«40» Grobe v. Valley Garbage Serv., Inc., 87 Wn.2d 217, 551 P.2d 748 (1976).
«42» RCW 48.22.030(4); Johnson v. Farmers Ins. Co., 117 Wn.2d 558, 575, 817 P.2d 841 (1991).
Travelers Insurance argues that the intent of Bard and Travelers at the time of the insurance contract was rejection or waiver of UIM coverage by Bard and that the policy of insurance itself is tantamount to a written waiver of UIM coverage. However, the question still remains whether that rejection met statutory requirements.
«43» The pertinent amendment to RCW 48.22.030(4) was "[t]he named insured may reject, in writing, underinsured coverage for ((either)) bodily injury or death, or property damage, and the requirements of subsections (2) and (3) of this section shall not apply. If the named insured has rejected underinsured coverage, such coverage shall not be included in any supplemental or renewal policy unless the named insured subsequently requests such coverage in writing. The requirement of a written rejection under this subsection shall apply only to the original issuance of policies issued after the effective date of this act and not to any renewal or replacement policy." Laws of 1983, ch. 182, § 1.
«44» State Human Rights Comm'n v. Cheney Sch. Dist. 30, 97 Wn.2d 118, 641 P.2d 163 (1982).
«45» Schillberg v. Williams, 115 Wn.2d 809, 801 P.2d 241 (1990).
«46» PUD 1 v. Public Empl. Relations Comm'n, 110 Wn.2d 114, 120, 750 P.2d 1240 (1988) (quoting Roza Irrig. Dist. v. State, 80 Wn.2d 633, 497 P.2d 166 (1972)).
«47» Service Employees Int'l Union, Local 6 v. Superintendent of Pub. Instruction, 104 Wn.2d 344, 705 P.2d 776 (1985).
The Legislature, by the wording of the UIM rejection clause, intended that a named insured decline UIM coverage by an affirmative and conscious act and that such a rejection be in writing. Bard rejected UIM coverage in Washington only by not asking for it. In this case there was no written rejection of coverage; the policy simply did not include UIM coverage for Bard's Washington vehicles. This does not meet the statutory requirement for rejection in writing.
«48» Johnson v. Farmers Ins. Co., 117 Wn.2d 558, 565, 817 P.2d 841 (1991); Blackburn v. Safeco Ins. Co., 115 Wn.2d 82, 86, 794 P.2d 1259 (1990).
«50» 1 A. Widiss, Uninsured and Underinsured Motorist Insurance § 2.6, at 30 (2d ed. 1990).
«51» RCW 48.22.030(2), (3), (4); First Nat'l Ins. Co. of Am. v. Perala, 32 Wn. App. 527, 531, 648 P.2d 472 (UIM coverage is mandatory unless the insured specifically and unequivocally rejects such coverage), review denied, 98 Wn.2d 1002 (1982); Britton v. Safeco Ins. Co. of Am., 104 Wn.2d 518, 531, 707 P.2d 125 (1985); Van Vonno v. Hertz Corp., 120 Wn.2d 416, 420, 841 P.2d 1244 (1992) (noting the remedy for a failure to comply with Oregon's UIM statute is reformation of the insurance contract to include UIM coverage up to the same limits as the liability protection).
Travelers argues that because it can show that it was the intent of Bard not to purchase UIM coverage, the absence of UIM coverage in the policy should be treated as a written rejection of that coverage. If we were to hold consistent with that assertion, we would then effectively delete the legislatively created requirement for a written rejection.
«52» 5 Cal. App. 3d 304, 306-07, 85 Cal. Rptr. 82, 83-84 (1970).
We agree with this reasoning. A written rejection by the named insured is required by RCW 48.22.030(4) in order for UIM coverage to be legally waived in Washington. The absence of UIM coverage in an insurance policy is insufficient to fulfill the statutory mandate of a "written waiver". If UIM coverage could be waived simply by being left out of the policy, then the written rejection requirement of the statute would be completely meaningless. The Legislature has mandated that UIM coverage can only be waived by and insured by rejection in writing. Therefore, absent such a written rejection, the intent of the various parties is irrelevant to a determination of coverage.
The Legislature has drawn a bright line which we should respect. In this case, there was no written rejection of UIM coverage and therefore coverage was not waived.
Denial of summary judgment to Respondent Travelers was appropriate. RCW 48.22.030 allows for rejection of UIM coverage, but that rejection must be in writing. We reverse the decision of the Court of Appeals and affirm the Superior Court's denial of summary judgment to the Travelers Indemnity Company and its grant of summary judgment to Petitioner Robert Clements.
ANDERSEN, C.J., and UTTER, BRACHTENBACH, DURHAM, GUY, and JOHNSON, JJ., concur.

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