Daily Blast February 24, 2014

Javier’s father, Jorge, applied for car insurance with Patriot General Insurance Company. The application listed Jorge as the named insured and he and his wife as authorized drivers. Jorge initialed a paragraph on the application stating that he had listed on his application everyone living with him age 14 or older. At the time of the application, Jorge’s 18-year old son Javier was living at home. Javier was not listed on the application. According to Jorge, he wanted full coverage for the family and relied on Patriot’s agent to translate and help him complete the insurance application. Jorge is a monolingual Spanish-speaker. He insisted he did not understand that the application asked him to certify that his children would not be using the vehicles. He recalled telling the agent that his children would also be drivers. Patriot issued an auto policy to Jorge, which listed only Jorge and his wife as authorized drivers. The policy included an underinsured motorists coverage endorsement (“endorsement”).

Javier suffered serious injuries as a passenger in a single-car rollover accident. He was 19-years old at the time and living with his parents. The driver of the car was uninsured. Javier tendered an uninsured motorist claim under the Patriot policy. Patriot denied coverage because Javier was over the age of 14 years, was living at home, and was not listed on the application; accordingly, he did not qualify as an insured. Patriot filed a declaratory judgment action against Jorge and Javier, seeking a declaration that it had no duty to pay uninsured motorist benefits to Javier because he was not covered by Jorge’s policy. Javier counter-claimed for coverage, breach of contract, bad faith, and violations of Washington’s Consumer Protection Act. Patriot moved for summary judgment. The trial court granted judgment to Javier and to Jorge, determining that the definition of “insured” provided in Washington’s casualty insurance statute, RCW 48.22.005, should be read into the Patriot policy and replaced the policy’s definition of “insured person.” Patriot sought discretionary review, which the Court of Appeals granted.

On appeal, Patriot claimed that Jorge’s failure to list Javier precluded coverage. Jorge and Javier argued that the policy did not expressly exclude from coverage any family member older than 14 years not listed on the application. Rather, Jorge’s failure to disclose Javier was only a breach of a duty to disclose and did not preclude coverage under the plain language of the policy. They also argued the statutory definition of “insured” under RCW 48.22.005 should be read into the policy to afford Javier uninsured motorist coverage. The Court of Appeals declined to address the application of RCW 48.22.005, relying instead on the plain language of the policy and the endorsement to conclude that Patriot’s policy did not explicitly state that undisclosed relatives were not covered. The endorsement listed exclusions from coverage, but did not specify whether household members above the age of 14, and not listed on the application or policy, were excluded from coverage. According to the Court, Patriot controlled the language in its policy. If it wished to exclude underinsured motorist coverage to a household member above the age of 14, who was not disclosed on the insurance application, it could have expressly so stated in the policy. The Court refused to assist Patriot in re-writing the policy. The Court granted reasonable attorney fees and costs to Jorge and to Javier under Olympic S.S. Co. v. Centennial Ins. Co., 117 Wn.2d 37, 52-53, 811 P.2d 673 (1991) since they were required to litigate to gain coverage under the policy.
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The opinion, authored by Judge Fearing and joined by Judges Siddoway and Korsmo, can be found at http://www.courts.wa.gov/opinions/pdf/321096.pub.pdf.

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