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Barney v. Safeco Insurance Co.3/22/1994
Ray Barney appeals from a superior court order that allowed Safeco Insurance Company to deduct $5,000 from an uninsured motorist (UIM) arbitration award. We reverse and remand.
On October 4, 1989, Barney was injured in an auto accident caused by an uninsured or underinsured motorist. At the time, he was insured with Safeco. His policy contained medical payments coverage with limits of $5,000, and underinsured motorist coverage with limits of $500,000. The policy did not contain an offset clause; in other words, it did not state that payments made under the medical payments coverage would reduce payments due under the UIM coverage.
After the accident, Barney claimed under both coverages. Safeco paid its medical payments limits of $5,000. The UIM claim was arbitrated, and the arbitrators awarded damages of $329,127.67. Safeco paid the award, except it unilaterally deducted $5,000 on the theory that it had already paid that amount under Barney's medical payments coverage.
Barney sued to confirm the entire award, including the $5,000 that Safeco had deducted. He also sought reasonable attorney's fees under Olympic S.S. Co. v. Centennial Ins. Co., 117 Wash. 2d 37, 811 P.2d 673 (1991). The trial court denied relief.
On appeal, Safeco asserts that Barney will achieve "double" recovery if he is allowed to collect 100 percent of the arbitration award, plus medical payments under his medical payments coverage. Safeco says "double" recovery "violates public policy" and should not be allowed.
In response, Barney asserts there is no "public policy" against "double" recovery. He says he is entitled to have his insurance contract interpreted according to the usual rules of construction, and that his contract gives him the right to collect the sum of the amounts due under the two coverages.
Clearly, there is a "public policy" against "double" recovery. To say this, however, is to say only that recovery should not exceed the applicable measure of damages. Recovery that does not exceed the applicable measure of damages is not "double" recovery. Conversely, recovery that exceeds the applicable measure of damages is "double" recovery. "Double" recovery "violates public policy" because the applicable measure of damages is public policy with respect to how much a claimant should recover.
These observations demonstrate that the phrases "double recovery" and "violates public policy" only obfuscate the real questions in this case. Those questions are (1) what is the applicable measure of damages? and (2) will that measure be exceeded if Barney is permitted to recover the additional $5,000 that he claims?
Generally, the measure of damages in a tort action is the amount needed to compensate the claimant for injuries proximately caused by the tortfeasor. Puget Sound Power & Light Co. v. Strong, 117 Wash. 2d 400, 403, 816 P.2d 716 (1991); Burr v. Clark, 30 Wash. 2d 149, 157, 190 P.2d 769
(1948). Generally, the measure of damages in a contract action is the amount needed to give the claimant the benefit of his or her bargain. Mason v. Mortgage Am., Inc., 114 Wash. 2d 842, 849, 792 P.2d 142 (1990); Eastlake Constr. Co. v. Hess, 102 Wash. 2d 30, 39, 686 P.2d 465 (1984); Platts v. Arney, 50 Wash. 2d 42, 45, 309 P.2d 372 (1957). Here, Barney is not suing a tortfeasor for damages proximately caused by the tortfeasor. Rather, he is suing his
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