The Harper Law Blog

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Insurance Policies and Anti-Stacking Clauses

Posted Saturday, February 03, 2018 by Ed Harper

Under RCW 48.22.030(6) anti-stacking exclusions are allowed. Insurance polices often include statements limiting the highest possible amount of coverage of liability that applies. In the case of Greengo v. Pemco, 135 Wn. 2d 790 (1998) Justice Sanders stated (1) – the anti-stacking provision in the passengers policy did not violate the UIM statute or public policy; (2) the provision would not bar coverage if the facts showed that more than one “accident” had occurred.

In Greengo, because there were two collisions, and Ms. Greengo was rendered a permanent quadriplegic, she could recoup two UIM claims which she made against Pemco. Factually, in Greengo, 27-year-old Lori Greengo was severely injured when the car in which she was riding as a passenger driven by David Frawley and owned by Kerry Carefree, rear-ended another car on Interstate 5 as the Frawley vehicle was itself rear-ended by a third car driven by Michael Hampshire. While the precise sequence of events is disputed, all agree there were two collisions and Ms. Greengo was rendered permanently quadripelic. Greengo at 658.

The issue is as follows if there were two accidents, then Ms. Greengo is entitled to UIM recovery from Pemco for the second accident.

In retrospect, Pemco had an exclusion which was authorized by RCW 48.22.030(6) the statute mentioned above. “To the extent it limits the total UIM liability per accident to the single highest UIM liability limit when an insured is covered under more than one UIM policy.”

The statute authorizes insurers to set liability limits on a per accident basis regardless of the number of vehicles involved in the accident. The court determined this exclusion did not violate the public policy underlying the UIM statute. The court articulated the public policy underlying UIM is to create a second layer of floating protection, not full compensation. (See Elovich case mentioned in a previous blog post.) Additionally, the court supported that this position in this anti-stacking clause applies only after the insured has received a full UIM recovery, thus satisfying the requirement that the insured receive a second layer of protection.

In Greengo the question was in a chain reaction type collision – how many accidents were there? Ms. Greengo asserted that she was “was involved in two accidents for purposes of her Pemco policy because two drivers proximately caused her injuries in two collisions.”

The court determined when there are two collisions it should be determined if each accident has its own proximate cause. If so then there are two accidents. Greengo, at 663 – 64.

“Under our approach if each accident, collision, or injury has its own proximate cause, then each will be deemed a separate accident for insurance policy purposes even if the two accidents occurred coincident, or nearly coincident in time.” The court in Greengo relied on Transcontinental Insurance Company v. Public Utility District, 111 Wn. 2d 452 (1988), “(t)he number of triggering events for insurance policy purposes depends on the number of causes underlying the alleged damage and resulting liability.” Transcontinental, at 467.

The Washington Supreme Court submitted this case Greengo v. Pemco back to the trial court to determine if there were two separate collisions each with their own inherent proximate cause.

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Underinsured Motorist Coverage Provides a Floating Layer of Coverage

Posted Thursday, January 25, 2018 by Ed Harper

In the State of Washington, underinsured motorist (UIM) insurance provides coverage above any liability coverage for an at-fault party. This can be beneficial to provide more available funds to an injred person and may be the only avenue of insurance to collect for a personal injury.

RCW 48.22.030 (1) requires insurers to provide a layer of coverage which “floats” above any liability insurance available to the tortfeasors. (Elovich v. Nationwide Insurance Company, 104 Wn. 2d 543 [1985]). The UIM coverage provides a secondary layer of protection over and above the recovery from other sources.

The Supreme Court of Washington in interpreting RCW 48.22.030(1) stated “UIM vehicle means a motor vehicle…with no bodily injury…liability…insurance policy which applies at the time of the accident, or with respect to which the some of the limits of liability under all bodily injury…insurance policies applicable to a covered person after an accident is less than the applicable damages which the covered person is legally entitled to recover.” Elovich, supra. Thus, when an at-fault party has no insurance or limited insurance, you can ask for UIM benefits.

In Elovich, which involved a two car accident, on July 12, 1981, 6 persons were riding in the Elovich vehicle. The at-fault vehicle collided with the Elovich vehicle. This at-fault driver was un-insured driver with negligible financial assets. Two of the six persons died, two suffered serious injuries, and two were less seriously injured. The parties settled with several defendants, including the governmental entity responsible for road design. The plaintiffs then asserted they were entitled to UIM coverage up to the policy limits or full compensation for their injuries. The plaintiffs asserted the settlement figure should be subtracted from the total damages, and Nationwide must pay the difference up to the policy limit.

The Elovich court was concerned with resolving an ambiguity in the statute: whether the UIM coverage is a “decreasing” layer of coverage that guarantees a minimum payment, or a “floating” layer of coverage that applies up to the total of damages suffered.” Elovich, supra.

The court determined RCW 48.22 030 shifted the emphasis from minimum recovery defined by policy limits to the total damages the party had suffered. This amendment indicates that the floating layer theory applies. Here, the court understood the legislative’s purpose was to focus on full compensation for the insured and that when an insurance policy is less than the damages which the covered person legally may recover, the UIM coverage must step in.

This does not mean the insured person is allowed full compensation, but the UIM carrier is responsible for damages up to their liability limits. Another way to look at UIM claims is to consider insurance coverages as building blocks. In a no-fault accident, the injured person has as a first layer of coverage, the personal injury protection (PIP) coverage. The second layer is the liability coverage for the at-fault vehicle or driver. And the third layer is UIM coverage, which stacks on top of the PIP and liability coverages.

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A UIM Insurance Carrier Receives Full Credit for Underlying Insurance Limits

Posted Monday, January 15, 2018 by Ed Harper

A UIM claimant must be aware when settling their liability claim for less than the full policy limits, the UIM carrier obtains a set-off and is allowed to deduct the underinsured’s full policy limits from the claimant’s underinsured motorist benefits. This issue arose with DeVany v. Farmers Insurance Company 134 Wn.App 204 (2006), when plaintiff Mary DeVany argued that Farmers Insurance Company should not be allowed to deduct the underinsured’s full policy limits from her UIM benefits.

In Devany, the plaintiff was injured in a car accident when her car collided with a car driven by Noah Bowling. Mr. Bowling (the underinsured tortfeasor) was insured by Allstate with liability limits of $25,000. DeVaney was insured by Farmers Insurance with UIM coverage of $100,000. After the accident, DeVaney sued Bowling and ultimately settled her third-party claims with Allstate for $23,000. Ms. DeVaney then filed a UIM claim with Farmers. An arbitrator determined that her total damages were $44,838. Devaney and Farmers disagreed on whether Farmers as the UIM carrier could deduct the underinsured tortfeasor’s full $25,000 liability limits. Farmers paid her the undisputed amount. However, $2,000 remained in dispute.

The rule in UIM claims are as follows “for purposes of UIM coverage, the insurance carrier is said to stand in the shoes of the tortfeasor, and payments made by the UIM carrier are treated as if they are made by the tortfeasor.” Hamm v. State Farm Mutual Auto Ins. Company, 151 Wn.2d 303, 308 (2004).

DeVany settled short, $2,000 less than the tortfeasor’s available insurance policy maximum ($23,000 v. $25,000). However, in this case it would be unfair as the UIM carrier gets credit for the full $25,000. “Farmers should not be penalized for DeVany accepting a settlement amount less than the full $25,000 policy limit. The under insurer always is allowed to credit the full amount of the tortfeasor’s liability coverage against the insured damages.” Hamilton v. Farmers Insurance Company, 107 Wn.2d 721, at 728 (1987).

In conclusion, Farmers is entitled to a set off in the tortfeasor’s full policy limits. This case exemplifies the set off rule, but also demonstrates a UIM claimant need not receive the full underlying policy limit prior to pursuing and obtaining a UIM settlement.

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Parental Responsibility for the Child’s Negligent Entrustment of their Car

Posted Saturday, January 06, 2018 by Ed Harper

In the State of Washington, law the owner of a car may incur liability under the family car doctrine for injuries caused by third person to whom a family member has entrusted the car if the car was used for the pleasure and convenience of a family member. Cameron v. Downs, 32 Wn.App. 875, at 880. See prior blog post 10/9/2009: Family Car – Liability Issues,

http://edharperlaw.com/blog/2009/10/familycar__lia/ (1982).

In Cameron v. Downs, Steven Downs was driving a van in which Stephen Cameron was a passenger. Cameron was killed due to the negligence of Downs. Cameron’s father brought a wrongful death action for his son’s death. Brenda Downs, the daughter of A. E. Downs, the owner of the vehicle, loaned the vehicle to Steven Downs, her brother. Brenda Downs knew her father had rules prohibiting Steven to drive due to a bad driving history. The question arose whether the parent as owner of the vehicle should be found responsible as the father had forbidden and established rules to prevent Steven Downs from driving.

The question hinged on whether Brenda had the authority and ability to bind her father, creating liability for him when she loaned the vehicle to her brother. The court determined yes, the owner of the car was still responsible. The family car doctrine is grounded in agency, which creates liability for the principal due to the actions of their agent. One cannot escape liability merely because the automobile was being used in a manner forbidden at the time of the accident. Cameron at 880. (Other cites omitted). It follows that an act although forbidden or done in a forbidden manner, may be within the scope of one’s agency. Restatement 2nd of Agency, section 228 (1958).Among the matters of fact to be considered in determining if an agent’s conduct, although not authorized, is nevertheless within the scope of her agency at the time, place and purpose of the act, and whether or not the master had reason to expect that such act would be done. Restatement 2nd of Agency, section 229 (1958).

In addition a trier of fact should determine if despite his admonitions to his family, A. E. Downs had reason to expect that Brenda might loan the van to Steven. Cameron v. Downs, at 881.

The court held that it was a factual question (so the jury would decide) whether it was foreseeable for Brenda to loan the family vehicle to her brother, someone forbidden to drive at the time of the accident. If it was foreseeable, then the father was or could be found responsible for his daughter’s actions even though he had forbidden her from loaning the vehicle to her brother.

This can be very troubling for parents to comprehend that even if they establish rules they may be responsible for their family members negligent actions.

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Washington Public Policy Encourages Broad Insurance Coverage for Injured Persons

Posted Thursday, January 04, 2018 by Ed Harper

In insurance policy disputes, the court will look to insurance policy, to determine if the policy has the proper phrases and blank which allow the insurance company and the insured to understand their rights and responsibilities

Before an accident occurs, a person should often ask themselves the question, “Will I be covered if a certain event occurs?”

In underinsured motorist claims where an at-fault driver is not insured, or not insured with enough protection, courts will review these claims based on a presumption to protect injured persons from financially irresponsible motorists. The fundamental principle underlying this case is that RCW 48.22.030 expresses a legislative purpose to broaden the protection of injured persons from financially irresponsible motorists. Supra at 289-90.

See Brown v. Snohomish County Physicians Corp, 120 Wn.2d 747 (1993):

“The underinsured motorist statute (RCW 48.22.030) is intended to allow an injured party to recover those damages which that party would have recovered had the responsible party been insured with liability limits as broad as the injured party’s statutorily mandated underinsured motorist coverage limits.”

In Liljestrand v State Farm Ins. Co., 47 Wn.App.283 (1987), the court allowed an underinsured/uninsured (UIM) claim to go forward for a phantom vehicle even though there were no independent witnesses to the accident. The RCW had certain requirements requiring independent verification. The court held that an insurance policy which was more broad than the minimum statutory requirements allowed the claimant’s UIM claim to go forward.

Therefore in the UIM setting, if an insurance policy is silent on certain exclusions or requirements, the court will typically find for the insured. In Liljestrand, David Liljestrand was driving his truck on Interstate 5 when his vehicle left the roadway and rolled over. He was seriously injured. There were no independent witnesses to the accident. Liljestrand claims he was forced off the road by an unidentified motor vehicle which had no contact with his vehicle and had the scene. Liljestrand had had an insurance policy with State Farm insurance company which provided for uninsured motorist coverage. The definition for an uninsured motor vehicle included a motor vehicle which is a hit and run a vehicle, whose operator owner cannot be identified, and which hits or causes an accident resulting in bodily injury (even without hitting you or your vehicle).

The court couched the issue “if the statutory limitations on required coverage for accidents caused by the phantom vehicles automatically apply to an insurance policy that does not contain such limitations”. Liljestrand, page 286. The basic rule for UIM recovery for injuries caused by the actions of phantom vehicles, and as stated by RCW 48.22.030, requires certain proof to be established via corroborating evidence – see previous blog post – http://edharperlaw.com/Blog/2017/12/Phantom-Vehicle-What-is-not-Corroborating-Evidence .

However, when an insurance contract/policy does not have the limiting factors of the requirement for establishing proof with corroborating evidence, then the more broadened perspective on coverage is followed. The insurance contract between the parties did not contain the corroborating evidence requirement, which is a more restrictive limitation. Without the corroborating evidence requirement, the court reasoned allows the plaintiff to bring a UIM claim.

“Under Washington law, an automobile policy must specifically contain the independent corroboration requirement set forth in RCW 48.22.030 (8) for any claim arising from an incident with a phantom vehicle in order to enforce that statutory requirement….“As the insurance policy allows for broader coverage than the statute mandates, we can conclude that, the language of the policy must control over the statute.” Liljestrand page 290.

Finally, the Liljestrand court states “we hold, therefore, that RCW 48.22.030 establishes minimum requirements for coverage of insured persons involved in auto accidents with phantom vehicles.” Supra, page 290.

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