Insurance policies are often rather complete and precise in what exactly they will cover.  When a policy fails to include a definition to a potentially vague term, Washington courts will look to the intent of the laws guiding a definition, while also seeking to incorporate the definition most favorable to plaintiff.

McLaughlin v. Travelers Commercial Insurance Company

Background

Mr. McLaughlin was a cyclist.  While riding his bicycle in Seattle, a vehicle door opened into his path of travel, causing Mr. McLaughlin to fall and suffer injuries.  Mr. McLaughlin was covered by an automobile insurance policy he purchased while living in California.  For all intents and purposes, the insurer agreed Washington law would control the case.  McLaughlin v. Travelers Commercial Ins. Co., 2020 No. 97652-0 (2020), examines how a cyclist may become a pedestrian under Washington law with a California insurance policy.

Mr. McLaughlin’s insurance policy provided in pertinent part, “You…as a pedestrian when struck by [] a motor vehicle.”  The policy did not define “pedestrian.”  Mr. McLaughlin filed a claim with Travelers, which Travelers promptly denied.  It reasoned Mr. McLaughlin was not a pedestrian at the time of the incident, citing both Washington and California vehicle codes, and coverage was therefore precluded.  The trial court ruled Travelers did not breach contract by denying coverage, and the Court of Appeals agreed.  The Washington Supreme Court granted review.

Mr. McLaughlin’s policy defined “insured” as follows:

“Insured” as used in this Coverage Section means:

1. You or any “resident relative”:

1. 1. While “occupying”; or
   2. As a pedestrian when struck by a motor vehicle designed for use mainly on public roads or a trailer of any type.

Washington code, RCW 48.22.005(11), defines “pedestrian” for purposes of casualty insurance in Washington as follows: “‘Pedestrian’ means a natural person not occupying a motor vehicle as defined in RCW 46.04.320.”  RCW 46.04.320 defines a motor vehicle as “every vehicle which is self-propelled…” Mr. McLaughlin was not occupying a motor vehicle, as his bicycle was not a self-propelled vehicle.  Therefore, under Washington law, he was a pedestrian.  Additionally, RCW 48.22.005 provides express language explaining, “[t]he definitions in this section apply throughout this chapter” and apply “[u]nless the context clearly requires otherwise.”

The court analyzed RCW 47.04.010(23), which defines “pedestrian” as excluding bicyclists.  This subsection defines “pedestrian” as “[a]ny person afoot or who is using a wheelchair, power wheelchair…, or a means of conveyance propelled by human power other than a bicycle.”  However, this definition is found under “Public Highways and Transportation.”  Further, RCW 47.04.010(23) begins with the following limitation: “The following words and phrases, wherever used in this title, shall have the meaning as in this section ascribed to them, unless where used the context thereof shall clearly indicate to the contrary or unless otherwise defined in the chapter of which they are a part.”

The court believed application of RCW 48.22.005(11) was proper, as it unified with Washington’s strong public policy in favor of the full compensation of medical benefits for victims of road accidents.  The court reasoned the application of RCW 48.22.005(11)’s definition of “pedestrian” provided an insured the maximum protection provided by the insurance policy without being unfair to the insurer.  “[I]t is not unfair to require an insurer to pay a coverage amount that the insurer agreed to pay (in exchange for the insured’s premium payment) when the insured suffers a covered injury.”

Takeaway

Washington courts have held, “any ‘legal ambiguity’ must be resolved in favor of the insured.[i]  This longstanding rule has changed law to incorporate cyclists into the definition of “pedestrian” when a cyclist is involved in an incident with a motor vehicle.  Care must be taken during contract formation to specifically define any term(s) potentially carrying ambiguity.  With Washington courts trending towards favoring plaintiffs, it may be increasingly difficult to defend contracts without the required verbiage and definitions.

[i] Webb v. USAA Cas.  Ins. Co., 12 Wn. App. 2d 433, 445, 457 P.3d 1258 (2020); see also Mesa Oil Co. v. Bus.  Men’s Assur.  Co. of Am., 476 F.2d 491, 492 (9th Cir. 1973) (undefined terms in an insurance policy are to be construed in favor of the insured); Holden, 169 Wn.2d at 755-56; Robbins v. Mason County Title Ins. Co., 195 Wn.2d 618, 626, 462 P.3d 430 (2020) (“Any ambiguity in the policy is interpreted in favor of the insured.”)

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