Humleker v. Gallagher Basset Services, Inc. (Wash. Ct. App. Division Two, January 25, 2011)
In this case on the sufficiency of an underinsured motorist coverage waiver, an employee of Franz Bakery, Thomas Humleker, was injured in an accident while driving a Franz-owned vehicle. Humleker sought underinsured motorist coverage under Franz’s insurance policy with Zurich American. Zurich responded that, although Franz had liability coverage limits of $1 million, Franz had waived UIM coverage in excess of $60,000. Zurich relied upon a “summary form” of waiver executed by Franz that was intended to apply to all 50 states, with certain exceptions. Humleker sued Zurich, alleging that Franz’s waiver was invalid. The trial court granted summary judgment to Zurich, and the Court of Appeals affirmed.
Under Washington law, every automobile insurance policy must include UIM coverage limits equal to the liability coverage limits unless the insured waived UIM coverage or equal limits in writing. The waiver must be “specific and unequivocal” and must be the result of an “affirmative and conscious act.” The Court of Appeals held that the Franz waiver form satisfied Washington law because it was “a specific writing, …signed by the insured, [that] designated $60,000 as the selected limit of UIM coverage in Washington.” The Court rejected several arguments by Humleker, including that recognizing the waiver was against public policy; that the form was invalid because Zurich, rather than Franz, filled it out; and that the trial court had considered extrinsic evidence of intent. On the last point, the Court held that, where a written rejection exists, extrinsic evidence is admissible to demonstrate the parties’ intent.