Court Opinion

ID: 3995605
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:54:04.913775+00
Date Added: 2024-06-11T13:55:34.784890
License: Public Domain

The effect of this decision is simply this: That an insurance company, by welshing on its plain obligation, can create a dispute or controversy which will be a sufficient consideration for an agreement with the insured to settle for an amount less than that agreed to be paid under the policy.
Respondent had paid all premiums due under the policy up to the time of his injury. His rights under *Page 293 
the policy had then accrued. He was entitled to the benefits agreed upon in the policy, unless he had become engaged in a more hazardous occupation than that of license inspector. Appellant, however, refused to pay as it agreed under the terms of the policy. Four months after respondent was injured, it presented to him the agreement set out in the majority opinion. For some unexplained reason, that agreement was dated June 30, 1932 — more than four months prior to the time respondent was injured. It was not contended, however, that any settlement was suggested or made until March, 1933.
The applicable rule has been stated by this court in Sanfordv. Royal Ins. Co., 11 Wash. 653, 40 P. 609, the syllabus of which reads as follows:
"Where the relation of debtor and creditor exists between an insurance company and the assured, by reason of the fact that the amount of loss under a policy of insurance had been adjusted and determined and there is no bona fide ground of dispute concerning the company's liability, the release by the assured of the whole claim in consideration of payment of part is not based upon sufficient consideration and the assured may maintain an action for the whole amount due."
Recognizing the necessity of a consideration to sustain the alleged settlement, appellant set up the following facts in an affirmative defense:
"That at the time of plaintiff's accident he was not engaged in the occupation of inspector, nor was he employed by the State of Washington, but at said time, in so far as he had any occupation, he was repairing automobiles and engaged in building operations; that each of said occupations is classified by the Company as more hazardous than that stated in the policy; that upon receiving this information the defendant company endeavored to classify the plaintiff as entitled to indemnity under the classification of said business, which he refused to do, and this resulted in a written settlement between plaintiff and defendant under date *Page 294 
of June 30, 1932, in words and figures as follows, to-wit: . . ."
Then follows the agreement set out in the majority opinion. There was not a scintilla of evidence offered by appellant in support of these allegations. It rested this phase of the case solely on the so-called settlement agreement. The record is bare of any evidence to support a bona fide claim on the part of appellant that respondent had engaged in either of the occupations referred to in the affirmative defense. There is, in fact, no evidence of any dispute on the subject. We have only respondent's version of what occurred between him and appellant's agent when the so-called settlement was made. In effect, respondent was then told he would have to take what he could get. And he did not get that until he brought this action.
TOLMAN, J., concurs with BLAKE, J.