Nationwide Mutual Fire Insurance Co. v. Watson11/19/1992
Petitioner Nationwide Mutual Fire Insurance Company seeks review of a decision of the Court of Appeals, Division Three, which reversed the trial court's summary judgment in favor of petitioner and granted summary judgment in favor of Respondent Mark Watson in a declaratory judgment proceeding relating to underinsured motorist (UIM) coverage arising out of an injury suffered by respondent while a passenger in an automobile driven by Michael Owens, petitioner's insured. We reverse the Court of Appeals.
Statement of Facts
On April 8, 1984, Respondent Mark Watson, while riding as a passenger, was injured in a 1-car accident. He sustained a significant laceration to his right palm, damaging two tendons. The vehicle was driven by Michael Owens, an insured of Petitioner Nationwide Mutual Fire Insurance Company (Nationwide). The Nationwide policy had various
provisions for coverage, including comprehensive, collision, liability for both bodily injury and property damage, personal injury protection (PIP) and underinsured motorist (UIM) coverage. Respondent Watson was entitled to PIP and UIM coverage under the policy because he was a passenger in the insured vehicle. Nationwide paid Respondent Watson's medical bills and wage loss claim under the PIP coverage. His medical expense claim totaled $3,952.17 and his wage loss claim totaled $2,529.60.
On July 22, 1986, the attorney for Respondent Watson, Richard C. Feltman, made a claim on respondent's behalf for UIM benefits against Farmers Insurance Group, respondent's own insurer. On July 29, 1986, Respondent Watson filed a lawsuit against Michael Owens and his parents for damages resulting from the accident. Nationwide engaged an attorney, Harold D. Clarke, to represent its interests and the interests of its insured. In August 1987 a settlement was negotiated in which Nationwide agreed to pay the policy limit of $25,000. This amount was in addition to the $6,481.77 which had been paid for medical expenses and wage loss. Nationwide evaluated Respondent Watson's damages as substantially less than $25,000.
On August 18, 1987, a check for $25,000, which was subsequently negotiated, was issued by Nationwide to
Respondent Watson and his attorney. On or about August 26, 1987, Nationwide's attorney prepared and submitted to respondent a release which read:
FOR THE SOLE CONSIDERATION of the sum of Twenty-Five Thousand and No/100 Dollars ($25,000.00) . . . the undersigned hereby releases and forever discharges JACK OWENS, JANE DOE OWENS, MICHAEL OWENS and NATIONWIDE INSURANCE COMPANY, their heirs, executors, administrators, agents, legal representatives, assigns, employees, insurers, and all other persons, firms or corporations liable or who might be claimed to be liable, none of whom admit any liability to the undersigned but all expressly deny any liability, from any and all claims, demands, damages, actions, causes of action or suits of any kind or nature whatsoever, and particularly on account of all injuries to MARK WATSON, known and unknown, both to person and property, which have resulted or may in the future develop from an accident which occurred on or about the 8th day of April, 1984, in Spokane, Washington, and including any and all claims, demands, damages, actions, causes of actions or suits of any kind or nature arising on or after said date relating to the manner in which any such claims, suits, etc., were evaluated, handled and/or processed.
Undersigned hereby agrees to indemnify, hold harmless and defend JACK OWENS, JANE DOE OWENS, MICHAEL OWENS and NATIONWIDE INSURANCE COMPANY, together with their respective agents, assigns, members, stockholders, employe
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