Court Opinion

ID: 9620105
Source: CourtListenerOpinion
Date Created: 2023-08-22 05:38:31.201976+00
Date Added: 2024-06-11T13:07:28.182331
License: Public Domain

Shields, C.J.
Larry McLanahan filed suit against Farmers Insurance Company of Washington after it denied coverage for damages allegedly arising from the theft of his automobile. At the close of Mr. McLanahan's evidence during a bench trial, the court granted Farmers' CR 41(b)(3) motion for dismissal of the case on the basis he breached the insurance contract by selling the vehicle before Farmers could inspect and appraise the damage. Mr. McLanahan appeals, contending his evidence was sufficient for the trier of fact to determine whether: (1) Farmers unreasonably delayed the handling of his claim; (2) his sale of the vehicle was reasonable and not a breach of contract; and (3) Farmers violated certain regulatoiy insurance statutes, including the Consumer Protection Act (CPA) RCW 19.86. We affirm.
The court entered unchallenged findings which set forth the relevant facts. Farmers insured Mr. McLanahan's 1985 Lamborghini Countach under a policy providing comprehensive coverage, including theft, until the policy expired and was nonrenewed by the company in July 1987. In August 1986, Mr. McLanahan, a resident of Benton County, took his Lamborghini to an automobile dealer in Santa Monica, California, for sale on consignment. In March 1987, Mfr McLanahan submitted a claim to Farmers alleging theft of *38the vehicle after the dealer delivered it to a third person without Mr. McLanahan's consent and after demand for its return was refused.
As a consequence of the reported theft, Farmers undertook adjustment of the loss and was prepared to pay Mr. McLanahan the reasonable value of the Lamborghini. Meanwhile, with the assistance of California counsel, Mr. Mc-Lanahan retrieved the vehicle and submitted a claim to Farmers for damage to it which occurred during the third party's wrongful possession.
On April 10, 1987, Farmers agreed to pay for damages proven to have resulted from the theft. Mr. McLanahan had the damage evaluated on May 17 and 19, but was unable to obtain a firm repair estimate. Because of this, and due to the highly unusual nature of the vehicle, Farmers referred the matter to its attorney, who corresponded with Mr. McLanahan's attorney.
In a letter dated August 21, 1987, Mr. McLanahan's attorney acknowledged his client agreed to have the vehicle inspected at a location to be specified by Farmers. On September 3, Farmers' attorney wrote to Mr. McLanahan's attorney requesting the vehicle be made available for an independent inspection within the next several weeks by two mechanics — one in the Tri-Cities and another to be flown in by Farmers from Portland. This letter was forwarded to Mr. McLanahan by his attorney on September 16. However, on October 7, without seeking further advice from his attorney or affording Farmers any notice or opportunity to inspect the vehicle, Mr. McLanahan sold it to the first cash buyer — a wholesale car dealer.
Mr. McLanahan's policy with Farmers provided coverage for theft damages, subject to certain terms and conditions, including:
Other Duties
A person claiming any coverage of this policy must also:
7. If claiming car damage coverage:
c. Allow us to inspect and appraise the damaged vehicle before its repair or disposal.
*39Payment of Loss
We may pay the loss in money or repair or replace damaged or stolen property.
Mr. McLanahan was aware of these conditions, but nonetheless attempted to justify selling the car by his frustration with delay in adjusting the loss and concern that the vehicle was uninsured after Farmers did not renew his policy.
Upon Farmers' motion for dismissal at the close of Mr. McLanahan's case, the court as the trier of fact concluded Farmers had a contractual right to inspect and appraise the damaged vehicle as a term and condition of coverage. Therefore, Mr. McLanahan's sale of the vehicle was a breach of the contract, which forfeited his right to coverage. The court also concluded Mr. McLanahan's claim of inordinate delay by Farmers and his inability to obtain other insurance on the vehicle provided him no legal basis for noncompliance with the conditions of coverage, particularly in light of his attorney's agreement to arrange for inspection of the vehicle. The court finally concluded the denial of benefits to Mr. McLanahan was neither frivolous nor unfounded and, thus, Farmers did not violate the CPA.
The issue is whether the court erred in granting Farm-ers' motion. Mr. McLanahan contends he produced sufficient evidence to permit the trier of fact to determine whether Farmers unreasonably delayed the handling of his claim, and whether his sale of the vehicle was justified and not a breach of the insurance contract. The contention is correct in a nonjury case if the motion is made as a matter of law; it is not correct if the motion is made on the merits. As pointed out in 4 L. Orland, Wash. Prac., Rules Practice § 5502, at 243-44 (3d ed. 1983):
The trial court may pass upon a motion to dismiss at the close of plaintiff's case and grant the motion as a matter of law or fact. The trial court need not enter findings of fact if it decides as a matter of law that plaintiff has not made out a case. The entry of findings is an indication that the court weighed the evidence and made a decision as the trier of facts.
(Citation omitted.) See also RCW 4.56.120(8).
*40The dissent makes it clear that Mr. McLanahan's evidence, if accepted as factually true, would result in a legal conclusion he had established a prima facie case. In that case no findings of fact were necessary or required. N. Fiorito Co. v. State, 69 Wn.2d 616, 620, 419 P.2d 586 (1966). Here, the trial court entered findings and weighed the evidence. In doing so, the trial court makes "a factual determination that plaintiff has failed to establish a prima facie case by credible evidence, or that the credible evidence establishes facts which preclude plaintiff's recovery." N. Fiorito Co., at 618. Here, the trial court determined Farmers had established facts precluding Mr. McLanahan's recovery because he breached a duty to allow Farmers to appraise the damaged vehicle before it was sold. Whether Mr. McLanahan established a prima facie case is immaterial because his acts preclude recovery.
 This court will accept the findings on appeal if they are supported by substantial evidence. N. Fiorito Co., at 619; Nelson Constr. Co. of Ferndale, Inc. v. Port of Bremerton, 20 Wn. App. 321, 326-27, 582 P2d 511, review denied, 91 Wn.2d 1002 (1978). The question then is whether the findings of fact support the conclusions of law and the judgment. Nelson Constr., at 327.
 The unchallenged findings, which are verities on appeal, Metropolitan Park Dist. v. Griffith, 106 Wn.2d 425, 433, 723 P.2d 1093 (1986), establish that Mr. McLanahan knew of, and agreed to abide by, the requirement under the policy that Farmers be allowed to inspect the damaged Lamborghini as a condition precedent to recovery for damage due to theft. Instead, he sold the vehicle. Accordingly, the court's findings support its conclusion that Mr. McLanahan breached the contract, thus relieving Farmers of any obligation to pay. See Gipps Brewing Corp. v. Central Mfrs.' Mut. Ins. Co., 147 F.2d 6 (7th Cir. 1945); Delta Lumber & Box Co. v. Lobaugh, 64 F. Supp. 51 (N.D. Cal. 1946).
In these circumstances, the court also correctly determined Farmers did not unreasonably delay adjusting Mr. McLanahan's loss in violation of RCW 48.30 and WAC 284-30 and did not violate the CPA, RCW 19.86. Hangman *41Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778, 719 P.2d 531 (1986).
Although the dissent relies on the proposition that forfeitures in contract, insurance or otherwise, are not favored, the proposition does not operate unless there is evidence of conduct suggesting a waiver of strict performance. There is no evidence of waiver by Farmers; in fact, the exchange of letters between counsel for the parties in August and September 1987 establish the expected strict performance of the contractual duty to permit appraisal of the damage before the vehicle was sold, and Mr. McLanahan's knowledge of that expectation.
We hold the court's grant of Farmers' motion for dismissal was correct and affirm.
Mitchell, J. Pro Tern., concurs.