Court Opinion

ID: 9628084
Source: CourtListenerOpinion
Date Created: 2023-08-22 09:07:10.368923+00
Date Added: 2024-06-11T09:06:40.672537
License: Public Domain

Dolliver, J.
(dissenting) — The insurance policy provided for proration of premiums in the event of cancellation before the March 1 anniversary date, as required by RCW 48.18.290(4). It did not specify whether the annual retained aggregate limit was to be prorated in the event of cancellation before the anniversary date.
It is not uncommon that in some instances a lay person may easily be confused by a complex insurance policy,
"... and as a result the insured generally makes a request for the kind of insurance he desires and then signs 'on the dotted line' upon a formidable appearing printed form with the provisions of which the average assured has slight, if any, acquaintance. ..."
Labberton v. General Cas. Co. of America, 53 Wn.2d 180, 182-83, 332 P.2d 250 (1958). The insured in this case cannot be categorized as an average lay person. Paccar is an international manufacturing company maintaining its own insurance department, making additional insurance *169arrangements with a brokerage firm. In this case we are dealing with two corporations who have engaged in an arm's length bargaining process.
The majority states at page 166 that:
The only possible ambiguity which we perceive . . . was whether there was to be proration of the annual aggregate, and it is plain that neither party had even considered this question until long after the policy was drafted.
It would seem to me that if the parties did not include any language as to the proration of the annual retained aggregate then there would be no proration and thus no ambiguity.
Where language of an insurance policy is clear, there is no room for construction or determination of ambiguity. Muench v. Oxley, 90 Wn.2d 637, 584 P.2d 939 (1978). Plain language must not be disregarded. Davis v. North Am. Accident Ins. Co., 42 Wn.2d 291, 254 P.2d 722 (1953). The Court of Appeals concluded that a court should not make a different contract for the parties under the guise of construing the contract. Hodges v. Mutual Benefit Health & Accident Ass'n, 15 Wn.2d 699, 131 P.2d 937 (1942). I agree.
Proration of the annual retained aggregate limit in the event of cancellation before the policy date was not specified in the policy; there is no ambiguity.
But the fact that there is no ambiguity and thus there should be no proration does not appear to be crucial to the majority. Rather, its holding for Paccar rests on its conclusion that "... equity calls for proration of the annual retained aggregate liability." If equity plays a part in this case, however, it calls for the court to hold not for Paccar, but for Continental.
General condition No. 11 of the policy states, in part:
Cancellation. This policy may be cancelled by the insured named in Item I of the declarations [Paccar] by surrender thereof to the company [Continental] . . .
In the fall of 1975, the parties began discussing policy changes. In August of 1975, Paccar's brokerage firm (Marsh), acting on behalf of Paccar, notified Continental by *170letter that it wished to have inserted in the policy, a clause providing for proration of the annual retained aggregate if Continental elected to cancel the coverage before the anniversary date of the policy. The letter stated:
We would like to have inserted in the above policy, a clause providing for the pro-rating of the annual aggregate if the company elects to cancel. . .
According to exhibit 131, the agency agreement, Marsh possessed the full power and authority of an agent. Nonetheless, neither Marsh nor Paccar cancelled the insurance policy with Continental prior to the upcoming anniversary date on March 1, 1976. Marsh was aware of the proration problem in August of 1975. The law imputes to the principal, and charges it with all notice or knowledge relating to the subject matter of the agency which the agent acquires or obtains while acting as such agent and within the scope of his authority. American Fidelity & Cas. Co. v. Backstrom, 47 Wn.2d 77, 287 P.2d 124 (1955).
It may be that in the abstract the majority rule is appropriate. If, for example, Continental had cancelled because it appeared the self-insured liability figure was about to be exceeded or if the problem of proration was unknown to the parties prior to the date of cancellation then the rule might be applied. This is not what happened here.
Paccar was aware of the proration problem 7 months before the anniversary date and could have easily cancelled the policy before the annual premium became due. This was not done. Continental cancelled because agreement could not be reached and not because the self-insured liability figure was about to be exceeded. Paccar now argues that the policy should be construed in its favor and the annual retained aggregate limit prorated. I cannot agree. Proration of the annual retained aggregate limit in the event of cancellation before the anniversary date was not specified in the policy. There was no ambiguity. Equity, not in the abstractions of the majority but in the concrete terms of this case, lies not with Paccar but with Continental. No proration should occur.
*171I dissent.
Utter and Dimmick, JJ., concur with Dolliver, J.