Diaz v. National Car Rental Systems, Inc. , 96 Wash. App. 142 ( 1999 )

Baker, J.

Marilyn Walker and Betty Pulliam, together with David Diaz, and Walker’s minor children (collectively “appellants”), were injured when an uninsured motorist struck the National Car Rental Systems (National) rental car they were in. The appellants had purchased liability insurance from National, and supplemental liability insurance (SLI) from Philadelphia Indemnity Insurance Company (Philadelphia), brokered by National.

Appellants filed suit against National and Philadelphia demanding underinsured motorist (UIM) coverage in the amount of one million dollars, equal to the liability limit of the supplemental liability policy. The trial court granted National’s summary judgment motion, ruling that National was liable only for up to $50,000 in UIM coverage, as provided in its policy. The trial court also granted Philadelphia’s summary judgment motion, ruling that “the subject SLI Policy does not provide any coverage for any of the Plaintiffs’ claims . . . ,”¹ Appellants appeal the summary judgment orders.

Vehicle liability policies are required to provide underin-surance coverage unless the coverage is specifically rejected in writing by the insured.^{2 3}The National policy contained the following UIM provision:

I understand [and] agree that the Company and I reject “Uninsured Motorist”, “Underinsured Motorist protection” or minimum “No Fault” or any supplementary No-Fault protection, unless such protections are required to be provided by applicable law and cannot be rejected. If required and not rejectable, the limits will be the minimum required by law in the state in which the Vehicle is rented. These protections, if required by law, shall be provided on the same basis as the liability protection provided in this Agreement.[³]

Although the policy contained this standard UIM rejection language, the appellants did not specifically reject UIM.⁴

RCW 48.22.030(3) provides that UIM “[c]overage required under subsection (2) of this section shall be in the same amount as the insured’s third party liability coverage . . .” The National policy provided liability coverage at “the minimum limits required by the automobile financial responsibility or compulsory insurance laws of the state in which the Vehicle is rented.”⁵ Because the appellants rented the car at Seattle-Tacoma International Airport, Washington’s financial responsibility statute applies.⁶ That statute requires a minimum of $50,000 of liability coverage, per accident, where two or more persons are injured.⁷ Thus National is required to provide up to $50,000 to the appellants for UIM coverage.

National does not dispute that it must provide $50,000 of UIM coverage to the appellants. Rather, the dispute surrounds the SLI policy the appellants purchased from Philadelphia, through National, at the same time that they purchased National’s policy. The SLI policy provides up to $1,000,000 in supplemental liability coverage. Appellants argue that National must provide $1,000,000 of UIM coverage under RCW 48.22.030(3) because the SLI policy qualifies as third party liability coverage.

Philadelphia’s policy is a supplemental, or excess policy, which is excluded from the UIM statute. Specifically, “[t]he coverage required to be offered under this chapter is not applicable to . . . policies which apply only as excess to the insurance directly applicable to the vehicle insured.”⁸

The insurance policy is clear and precise in its language, that it provides only excess coverage. The capitalized, bold title of Philadelphia’s policy reads “RENTAL SUPPLEMENTAL LIABILITY INSURANCE EXCESS POLICY.”⁹ In the definition section of the policy, “Rental supplemental liability insurance” is defined as “optional excess liability coverage elected by a ‘renter’ at the origin of a ‘rental agreement’ and for which premium is paid.”¹⁰ Under the capitalized title “EXCLUSIONS,” the second provision excludes “Liability arising out of, or benefits payable under, any uninsured or underinsured motorist law, first party benefit law or no-fault law, or any similar law to the foregoing, in any jurisdiction.”¹¹ Further, directly above appellants’ signatures on the rental form is a capitalized portion which states that they “HAVE RECEIVED AND AGREE TO: ALL TERMS AND CONDITIONS OF THIS RENTAL AGREEMENT INCLUDING THE SEPARATE FOLDER DELIVERED TO ME WITH THIS RENTAL DOCUMENT . . . ,”¹² This uncomplicated folder states that the SLI coverage applies only to renter liability to third parties and specifically excludes “[ljiability arising out of, or benefits payable under, any uninsured or'under-insured motorist law, first party benefit or no-fault in any state.”¹³ Under the rental agreement, National’s minimum limits liability policy is primary whenever the renter opts to purchase the SLI coverage. The SLI coverage, then, is excess to National’s coverage whenever it is in existence.

In summary, the SLI policy issued by Philadelphia does not provide UIM coverage to the appellants by the express terms of its contract. Philadelphia is not required to provide UIM coverage because this policy is an excess policy, which is exempted from the UIM requirement. National is not required to provide UIM coverage up to Philadelphia’s liability coverage because of the excess nature of the SLI policy, and because the third party liability level is established within National’s policy.

The appellants argue that the clerk at National told them they had “full” coverage and thus, despite the plain language of the policy, Philadelphia and National are estopped from utilizing RCW 48.22.030(2)’s exemption for excess policies. The general rule for equitable estoppel in insurance cases is that “while an insurer may be estopped, by its conduct or its knowledge or by statute, from insisting upon a forfeiture of a policy, yet [sic] under no conditions can the coverage or restrictions on the coverage be extended by the doctrine of waiver or estoppel.”¹⁴ There are exceptions to this general rule; however in order for the appellants to prevail on their equitable estoppel argument, they must prove that National’s agent’s “full” coverage comment was inconsistent with its later denial of full coverage and that they “reasonably relied on the statements or conduct and would he injured by a contradiction or repudiation of them.”¹⁵

If the appellants did rely on the full coverage statement, it was unreasonable. This case is similar to Shows v. Pem-berton, where this court declined to extend UIM coverage to Ms. Shows simply because she relied on the agent’s statement that she had full coverage.¹⁶ The appellants’ misplaced reliance cannot expand very clear language in the policy and accompanying brochure that explained and limited the coverage.

Affirmed.

Kennedy, C.J., concurs.

1 Clerk’s Papers at 310-11.

2 See Cann v. King County, 86 Wn. App. 162, 163, 937 P.2d 610 (1997) (citing RCW 48.22.030(2)); Galbraith v. National Union Fire Ins. Co., 78 Wn. App. 526, 531, 897 P.2d 417, review denied, 128 Wn.2d 1005 (1995).

3 Clerk’s Papers at 122.

4 See Alamo Rent Á Car, Inc. v. Schulman, 78 Wn. App. 412, 415, 897 P.2d 405 (1995) (citing Corley v. Hertz Corp., 76 Wn. App. 687, 693, 887 P.2d 401 (1994), review denied, 128 Wn.2d 1007 (1996)).

5 Clerk’s Papers at 121.

6 See Corley v. Hertz Corp., 76 Wn. App. at 691-92.

7 RCW 46.29.090(1).

8 RCW 48.22.030(2).

9 Clerk’s Papers at 125.

10 Clerk’s Papers at 126.

11 Id.

12 Id. at 120.

13 Id. at 123.

14 Shows v. Pemberton, 73 Wn. App. 107, 111, 868 P.2d 164 (1994) (citing Carew, Shaw & Bernasconi, Inc. v. General Cas. Co. of Am., 189 Wash. 329, 336, 65 P.2d 689 (1937)).

15 Shows, 73 Wn. App. at 110 (citing Robinson v. Seattle, 119 Wn.2d 34, 82, 830 P.2d 318 (1992)).

16 73 Wn. App. 107, 112-13, 868 P.2d 164 (1994).