Petition — Insurance Co. of North America v. Farmer's Home Mutual Insurance

Supreme Court, U.

FILED

IN THE

APR 30 1979

Supreme Court of the United Stat

ICHABL RODAK, JR., CLER

OCTOBER TERM 1978

10. S"1655

INSURANCE COMPANY OF NORTH AMERICA,

Petitioner,

V.

FARMER'S HOME MUTUAL INSURANCE COMPANY

Respondent.

PETITION FOR A WRIT OF CERTIORARI 70

THE WASHINGTON STATE COURT OF APPEALS

DIVISION I

Office and Post GERALD W. GELFAND

Office Address: Counsel for Petitioner

2201 Exchange 8lda.

Seattle, WA 98104

Telephone: (206) 682-9790

Page

A al ae we wn ee we l

I ee Ne tg ew ew 8 2

Se ee ee ee ee 3

ge 3

Reasons for Granting the Writ. ....... 8

1. The Washington Court of Appeals

Has Decided a Federal Question

of Substance In a Way Probably

Not In Accord With Applicable

Decisions of This Court ...... 8

2. The Decision Below Misinterpreted

Wilburn Boat Co. v. Fireman's Fund

Ins. G6.; o90 U.d. 310, 735 9.Ct.

meen ee ys ee ee CRO). wt es 12

I ae ee a ke 14

Appendix (Opinion and Judgment of Washington

ES ee A-1

TABLES OF AUTHORITY

Table of Cases

Bromfield Mfg. Co. v. The Brown, Smith

& Jones, 11/ F. Supp. 630 (D.C. Mass.

Carlisle Packing Co. v. Sandanger, 259

U.S. 299, 42 7 Ct. 475, 66 L. Ed.

8 CO as ae ear a ae 8-9,12

ii

Page

Delta Supply Co. v. Liberty Mutual Insur.

Co., 211 F. Supp. 429 (S.D. Tex. 1962) ll

Dow Chemical Co. v. Tug Thomas Allen,

Paes OU. SONS 4ecO. GM. BBE) « 6 ee 10

Employers Mut. Liab. Ins. Co. v. Aetna

Ins. Co., 254 F. Supp. 263

SEU NMR ok re ae ge 8 es 10

Garrett v. Moore-McCormack Co., 317

Ua: Cae; OS ox Ges ene, or &. €6..299. .. 9

Insur. Co. v. Dunham 78 U.S. (11 Wall.) 1,

; “eg BARRENS CRN Hee ier ae 8

Jeffcott v. Aetna Ins. Co., 129 F.2d 582

CE St ag SR ge gisk a ie gee ce 11

Lanasse v. Travelers Ins. Co., 450 F.2d

980 (Sth Cir. 1971), cert. denied, 406

Ua. Sel, OF t. €¢d. Zé teu. Ye 5. Ct.

RMU WEMRGE (qn bug NE cr 10

Lancaster v. Smith, 330 F. Supp. 65 (0D.

eR Og es ce a, Big pe we 11-12

Madruga v. Superior Court, 346 U.S. 556,

74 = + 758. ee AOR sae es 9

Maryland Casualty Co. v. Cushing, 347 U.S.

109; LEE Se 6 ey 9

Milton v. The Blue Goose, 91 F. Supp. 114

(U.C. Va. 1950), rev., 188 F.2d 285

SRN BONES a ee a Ne eke ko 11

Pacific Indemnity Co. v. Hugh Sussex "Yacht

Duet", 1967 KA 1144 ch Wa sees as 2

Pope & Talbot, Inc. v. Hawn, 346 U.S. 406,

ict SE OR FR ee pee |: ee 9

——

Page

Rowe v. Brooks, 329 F.2d 35 (4th Cir.

EE 6 x SER AE Oe ae ae 11

The Armar, 2 Lloyd's List Rep. 95 (N.Y.

‘Se Ube SI ec eon wees eet es a

Watts v. Camors, 115 U.S. 353, 6 S. Ct. 91,

Pd ee. ae Go ea oe Ee eee 8 a

Wigle v. Aetna Cas. & Surety Co., "Yacht

Rowdy" 1959 A.M.C. 2270 (EDs. Div.

VEL: MU a cncet Ok Gat ci he We ll

Wedlock v. Gulf Mississippi Corp., 554 F.2d :

COU, (aet GI. WIE ROOTED 624 8 ely ee 10

Wilburn Boat Co. v. Fireman's Fund Ins.

GB. 396 Usds Shs Fo os USs Gee,

We hk. Ge oe Ce. SOA ee 8,9,12,13

Constitutional Provisions

U.S. Gamat. Or ce Sea Gea ee ee 2

3. eRe, Ba Va See se ee ee a 2

Statutes

eee Be) re ee Gag a ae 2

oe ee ee Ge: Rae Se Se eee ae ee 12

Other Authority

H.R. Baer, Admiralty Law of the Supreme

Court, 3d ed, pp. 383-390... 1... 2s 13

9 Genedtct,: Admirarty, 99 6. sk 0 tte wt 9

oe Grae ee NE | og 0s sh we eee 12

Oe Cit Re Be EAs ey SOF hs hee Sle 4

Gilmore & Black, The Law of Admiralty, 2d

ee es ETE. Ob Ole ee At AL a bo ees 13

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM 1978

NO.

INSURANCE COMPANY OF NORTH AMERICA,

Petitioner,

V.

FARMER'S HOME MUTUAL INSURANCE COMPANY

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO

THE WASHINGTON STATE COURT OF APPEALS

DIVISION I

The petitioner Insurance Company of North

America respectfully prays that a writ of certio-

rari issue to review the judgment of the Washington

State Court of Appeals, Division I entered in this

proceeding on 31 July 1978.

OPINION BELOW

The Washington Court of Appeals opinion

reported in 20 Wn. App. 815, 583 P.2d 644 appears

2

in Appendix A. No opinion was given by the Wash-

ington Supreme Court.

JURISDICTION

The Washington Court of Appeals judgment

was entered on 31 July 1978. INA's Motion for

Reconsideration was timely filed and denied on 6

September 1978. A timely Petition for Review was

filed on 3 October 1978 with the Washington Supreme

Court and y gga entered on 2 February 1979, 91

Wn.2d 1014, P.2d _. This petition for certio-

rari was filed within 90 days of that date. This

Court's jurisdiction is invoked under 28 U.S.C.

§1257(3), U.S. Constitution, Art. III, §2 cl. 12,

Art. VI, cl. 22.

l'~he Judicial Power shall extend ... .to

all Cases of admiralty and maritime Jurisdiction. .

"

2"This Constitution, and the Laws of the

United States which shail be made in Pursuance

thereof; and all Treaties made, or which shall be

made, under the Authority of the United States,

shall be the supreme Law of the Land; and the

Judges in every State shall be bound thereby, any

Thing in the Constitution or Laws of any State to

the Contrary notwithstanding."

“J

QUESTIONS PRESENTED

~

1. Whether a state court can apply different

law than a federal admiralty court would

in a case involving concurrent admiralty

jurisdiction.

2. Whether a state court can decline to apply

federal admiralty law construing a marine

insurance policy because the insured

vessel is a pleasure yacht and not a

commercial vessel.

STATEMENT OF THE CASE

Farmer's Home Mutual Insurance Co. (Farmer's)

insured Mr. and Mrs. Robert Lindrud under a home-

owner's policy which provided personal liability

coverage for bodily injury occurring on their

Mercer [sland property. Insurance Company of North

America (INA), insured the Lindrud's yacht under

its yacht policy containing a P & I clause which

stated.

If the assured shall by reason of his

interest in the insured yacht become liable

4

to pay and shall pay any sum or sums in

respect of any responsibility, claim,

demand, damages or reasonable expense

arising from or occasioned by any of the

following matters or things during the

currency of this policy in respect of the

yacht hereby insured, that is to say: ...

bodily injury ....

The Lindrud's 50 ft. yacht is usually moored

at a Lake Washington dock which is part of the

residential premises located on the Mercer Island

property which was insured by Farmer's. Lake

Washington interconnects with Puget Sound via the

Lake Washington Ship Canal and at all times mate-

rial hereto is navigable in fact by commercial and

recreational vessels. Lake Washington waters are

navigable waters of the U.S. and within the admir-

alty and maritime jurisdiction of the United

States. The Code of Federal Reguiations applies to

the operation of bridges crossing Lake Washington,

33 C.F.R. §§117.800, 117.801.

On 6 August 1973, Mr. and Mrs. Clifford

Thorson went on a cruise accompanied by the Lind-

ruds. Upon return to the Lindruds' dock, Mr.

Lindrud and Mr. Thorson secured the mooring lines

and then talked on the shore near the slip for the

yacht.

5

After 20 or 30 minutes, Mr. Lindrud returned

to the vessel to ascertain that the electrical

switches had been turned off. Mr. Thorson also

returned to the vessel. During the 20 to 30 minute

period, the wives had remained aboard the yacht to

clean up. Mr. Thorson was nearby when Mrs. Lindrud

was ready to disembark and extended his hand to

assist Mrs. Lindrud step down a ladder located on

the side of the boat. As she stepped onto the

pier, Mr. Thorson stepped back into the utility

well on the dock whicit. had been left uncovered.

Mr. Thorson fell, injuring a rib and finger. The

utility well was located on a 5 ft. pier extending

over the water from a concrete bulkhead. When the

yacht was moored, one disembarked the yacht by

climbing down a ladder to the edge of the bulkhead

next to the utility well.

Thorson filed a verified complaint for per-

sonal injuries which did not mention the yacht nor

the activities at the end of the cruise. Thorson

only alleged that he fell off a dock situated on

the Lindruds' property and that:

6

Said fall was due entirely to a dangerous

and hazardous condition on defendant's

premises and to the negligence of defendant

Robert M. Lindrud in maintaining the same.

Farmer's defended the lawsuit and incurred

settlement costs, including attorney fees, totaling

$2,341.44. INA refused to defend or pay any part

of the settlement on the ground that its policy did

not cover this accident.

Farmer's brought this action against INA to

recover its settlement costs. Farmer's alleged

that INA's yacht policy covered the accident, and

both parties agree that if the P & I clause in the

yacht policy applied to this loss, INA had primary

coverage and must reimburse Farmer's3. Both

parties sought summary judgment on the agreed

facts. The trial court concluded that the yacht

policy did not cover the loss, and the summary

judgment was entered for INA. Farmer's appealed

and the court of appeals reversed the trial court.

Petitioner INA raised federal admiralty

questions at the trial level (King County Superior

3a ppendix A, p.3

_— _

e

7

Court). In its Memorandum Brief in support of

Motion for Summary Judgment, INA argued that Lake

Washington was a U.S. navigable waterway used by

pleasure and commercial vessels, that the court had

to apply federal admiralty law as would an admir-

alty court, and that the federal law construing the

liabilities “in respect of the vessel" was dispos-

itive of the case. The trial court granted INA

Summary Judgment without stating the precise

reasons.

The same federal admiralty questions were

again raised in INA's brief in the Washington Court

of Appeals. The federal law was considered but jot

followed because the court of appeals opined that

there was no well-established rule in the non-com-

mercial field and therefore "the interpretation of

marine insurance policies is left to the states."

Appendix A, p.4.

After entry of the court of appeals judgment

reversing the trial court, INA filed a Petition for

Review again contending that federal admiralty law

was applicable and setting forth the specific

United States cases.

8

Following the court of appeals opinion distin-

guishing commercial vessels from yachts, INA's

Petition for Review also contained additional

federal admiralty cases which applied admiralty

principles to cases involving yachts. (Pet. for

Rev. pp 12-14).

REASONS FOR GRANTING THE WRIT

1. The Washington Court of Appeals Has Decided

a Federal Question of Substance In a Wa

robably No n Accor ] pplicable

Decisions of [This Court

This Court has historically held that a

marine insurance policy is within the admiralty and

maritime jurisdiction of the United States courts.

Insur. Co. v. Dunham, 78 U.S. (11 Wall.) 1, 20 L.

Ed. 90 (1870) and more recently Wilburn Boat

Co. v. Fireman's Fund Ins. Co., 348 U.S. 310, 75 S.

Ct. 368, 99 L. Ed. 337 (1955).

Earlier in this century, this Court stated

that the general rules of the maritime law apply

whether tne proceeding be instituted in an admir-

alty or common law court. Carlisle Packing Co.

v. Sandanger, 259 U.S. 255, 259, 42 S. Ct. 475, 66

ee -

9

L. Ed. 927 (1922). In the Wilburn case, supra, at

314, it was stated: "And States can no more

override such judicial rules validly fashioned than

they can override Acts of Congress." Justice

Reed's dissent succinctly stated:

One rule of laws stands unquestioned.

That is that all courts, state and federal,

which have jurisdiction to enforce maritime

or admiralty substantive rights must do so

according to federal admiralty law.

Wilburn, supra at 327.4

In the case sub judice, the Washington court

of appeals recognized that the federal cases cited

by INA held that the P & I clause in the subject

INA policy would be inapplicable to losses incurred

4also cited in footnote No. 6 of Justice

Reed's dissenting opinion in the Wilburn cases

were: Watts v. Camors, 115 U.S. 353, 6 S. Ct. 91,

29 L. Ed. 406; Garrett v. Moore-McCormack Co., “317

U.S. 239, 243, 63 S. Ct. 246, 87 L. Ed. 239;

Pope & Talbot, Inc. v. Hawn, 346 U.S. 406, 409-410,

74 S$. Ct. 202, 205, 98 L. Ed. 143; Madruga v.

Superior Court, 346 U.S. 556, 561, 74 §. Ct. 298,

301, 98 L. Ed. 290; Maryland Casualty Co. v.

Cushing, 347 U.S. 409, 413-419, and concurring

Opinion 423 et seq., 74 S. Ct. 608, 610-613, 615,

98 L. Ed. 306 CE. The Armar , 2 Lloyd's List

Rep. 95, 101 (N.Y. Sup. Ct. 1954). See 9 Benedict,

Admiralty, 55, n. 77.

10

under similar circumstances involving commercial

vessels.” Appendix A. p.4. In all of the cases

cited in footnote 5, the courts recognized the

principle that either the vessel, its crew, or its

owner must be at fault with respect to the vessel

itself. Insurance coverage cannot be afforded the

insured simply because the vessel happened to be

there.

No federal admiralty court would have made

an exception in this case because a 50 foot yacht

was the vessel and not a 50 foot tug. Other cases

have arisen in which federal admiralty courts have

applied admiralty principles to cases involving

non-commercial vessels or yachts. A yacht was the

SLanasse v. Travelers Ins. Co., 450 F.2d

580 (5th Cir. 1971), cert. denied, 406 U.S. 921,

32 L. Ed. 2d 120, 92 S. Ct. 1779 (1972); Dow

Chemical Co. v. Tug Thomas Allen, 349 F. Supp. 1354

(E.D. La. 1972); Employers Mut. Liab. Ins. Co. v.

Aetna Ins. Co., 254 F. Supp. 263 (E.D. Mich. 1966),

Wedlock v. Gulf Mississippi Corp., 554 F.2d 240,

242 (5th Cir. June 1977) is a similar case but was

reported after argument before the court of appeals.

11

subject of litigation in Delta Supply Co. v.

Liberty Mutual Insur. Co., 211 F. Supp. 429 (S.D.

Tex 1962) and the court applied principles relating

to constructive total loss and hull coverage.

Principles concerning abandonment, construc-

tive total loss and cost of repair were applied in

a yacht loss in Jeffcott v. Aetna Ins. Co., 129

F.2d 582 (2d Cir. 1942). Also see Pacific Indem-

nity Co. v. Hugh Sussex “Yacht Duet", 1967 A.M.C.

1144 (D. Ore. 1967) and Wigle v. Aetna Cas. &

Surety Co., “Yacht Rowdy", 1959 A.M.C. 2270 (E.D.S.

Div. Mich. 1959).

In other categories of maritime law, admiralty

principles developed in a commercial context are

applied to pleasure vessels when there is admiralty

jurisdiction. Maritime lien, Bromfield Mfg. Co.

v. The Brown, Smith & Jones, 117 F. Supp. 630

(D.C. Mass. 1954); navigation, Rowe v. Brooks,

329 F.2d 35 (4th Cir. 1964); salvage, Milton v.

The Blue Goose, 91 F. Supp. 114 (D.C. Va. 1950),

rev., 188 F.2d 285 (4th Cir. 1951); Lancaster

12

v. Smith, 330 F. Supp. 65 (D. Ala. 1971). Further-

more the Lindruds' 50 foot yacht must comply with

the Inland Navigation Rules promulgated by the

Coast Guard. 33 C.F.R. §§ 80-01-80.45, parts 86,

87; 33 U.S.C. $151.

INA submits that given the facts of this case,

if a federal admiralty would find that the INA

policy does not provide coverage, a state court

action must yield the same result. Carlisle

Packing Co. v. Sandanger, supra. Even if there

were no federal cases applying admiralty insurance

principles to yachts, INA contends that a state

court cannot decline to apply clearly stated

precedent simply because a yacht was involved.

The opinion below conflicts with prior law,

and in conflicting with the uniformity principle.

justifies the grant of certiorari to review the

judgment below.

2. The Decision Below Misinterpreted Wilburn

Boat Co. v. Fireman's Fund Ins. Co., 348

U.5. 310, /5 S. Ct. 368, 99 L. Ed. 337 (1955)

The distinction made by the court of appeals

is not in keeping with the spirit and intent of

13

the Wilburn Boat case, supra. When Wilburn was

decided, this Court concluded that there was no

judicially established federal rule which was

applicable and therefore resorted to an existing

Texas statute to decide the case. (348 U.S. at

316) In this instance, there was no applicable

statute or regulation in existence. It was also a

case of first impression for the Washington courts.

Commentators have criticized Wilburn and

suggested that it has created a nightmare for

insurers and lawyers. See Gilmore & Black, The

Law of Admiralty, 2d ed, pp. 68-71, and H. R.

Baer, Admiralty Law of the Supreme Court, 3d

ed, pp. 383-390. Both authors recognize the need

for further clarification of its meaning.

Numerous legal principles have been estab-

lished by the federal admiralty courts relating to

marine insurance, salvage, liens, and navigation.

All are often inter-related. The opinion below

implicitly means that in pleasure vessel cases of

concurrent admiralty jurisdiction, state ccurts are

14

free to disregard established principles, although

the federal courts apply them. The correctness of

such a policy should be reviewed by this Court

prior to its further expansion.

CONCLUSION

The decision below raises significant and

recurrent problems in the resolution of admiralty

principles as they relate to pleasure vessels. For

the reasons stated, a writ of certiorari should

issue to review the judgment and opinion of the

Washington Court of Appeals.

Respectfully submitted,

GERALD W. GELFAND

Counsel for Petitioner

APPENDIX A

IN THE COURT OF APPEALS

OF THE STATE OF WASHINGTON

FARMERS HOME MUTUAL INSURANCE

COMPANY ,

Appel lant, No. 4922-1

DIVISION ONE

INSURANCE COMPANY OF NORTH

ue eee ee

AMERICA,

Respondent. FILED July 31, 1978

DORE, J. -- This case concerns the coverage of

a protection and indemnity (hereafter P & I) clause

in a yacht insurance policy.

FACTS

Farmers Home Mutual Insurance Company insured

Mr. and Mrs. Robert Lindrud under a homeowner's

policy which covered bodily injury occurring on

their Mercer Island property. Insurance Company of

North America (INA) insured the Lindruds under a

yacht policy containing a P & I clause which

stated:

If the assured shall by reason of his

interest in the insured yacht become liable to

pay and shall pay any sum or sums in respect

of any responsibility, claim, demand, damages

or reasonable expense -arising from or occa-

sioned by any of the following matters or

things during the currency of this policy in

respect of the yacht hereby insured, that is

to say: .. . bodily injury...

The Lindruds' yacht was usually moored at a Lake

Washington dock located on the Mercer Island

property insured by Farmers.

A-2

On August 6, 1973, Mr. and Mrs. Clifford

Thorson went on a cruise accompanied by the Lind-

ruds. Upon returning to the Lindruds' dock, Mr.

Lindrud and Mr. Thorson secured the mooring lines

and then talked on the shore near the slip for the

yacht. After twenty or thirty minutes, Mr. Lindrud

returned to the vessel to check whether the

switches on the vessel had been turned off.

During this time, their wives remained on the

yacht and cleaned the galley. Mr. Thorson was

nearby when they were ready to leave, and he

extended his hand to assist Mrs. Lindrud step down

a ladder located on the side of the boat. As she

stepped onto the pier, Mr. Thorson stepped back

into a utility well which had been left uncovered.

He fell ana injured a rib and a finger.

The utility well was located on a five foot

pier extending over the water from a concrete

bulkhead. When the yacht was moored, one alighted

from it by climbing down a ladder onto the edge of

the bulkhead next to the utility well.

Thorson filed a verified complaint for per-

sonal injuries which did not mention the yacht nor

the activities at the end of the cruise. He only

alleged he fell off a dock situated on the Lind-

ruds' property and that

said fall was due entirely to a dangerous

and hazardous condition on defendants' prem-

ises and to the negligence of defendant Robert

M. Lindrud in maintaining the same.

Farmers defended the lawsuit and incurred sett le-

ment costs, including attorney's fees, totalling

$2,301.44. INA refused to defend or pay any part

of the settlement on the ground that its policy did

not cover this accident.

Farmers brought this action against INA to

recover its settlement costs. Farmers alleged that

INA's yacht policy covered the accident, and both

parties agreed that if the P & I clause in the

yacht policy applied to this loss, INA had primary

A-3

coverage and must reimburse Farmers. Both

parties sought summary judgment on the agreed

facts. The trial court concluded that the yacht

policy did not cover the loss, and summary judgment

was entered for INA. Farmer appeals.

ISSUE

The sole issue is whether the P & I clause of

the yacht policy covered the Lindruds in.a suit for

damages arising from injuries suffered when a guest

aboard the yacht stepped into an open utility well

On the Lindruds' dock while assisting Mrs. Lindrud

disembark from the yacht.

DECISION

INA contends that Thorson's complaint only

alleged facts tending to show a defective condition

on the dock and, therefore, it had no duty to

defend the lawsuit. The duty to defend is deter-

mined by the allegations in the complaint, but when

as here, they inadequately describe the character

of the claim, the unalleged underlying facts must

be examined. Insurance Co. of North America v.

Insurance Co. of the State of Penns Ivania, I7 Wn.

pp. :

a : ; s duty to

defend and pay requires an analysis of all of the

facts and is not limited to those matters recited

=

1INA's P & I clause was covered by a "pro

rata" provision which prevails over the "excess

clause" in Farmers' policy. General Ins. Co.

of America v. State Farm Ins. Co., 75 Wn.2d 200,

449 P.2d 391 (1969). A primary insurer that stands

aloof from a pending lawsuit upon the basis of a

unilateral but erroneous determination that its

policy does not provide coverage must reimburse a

secondary insurer for its costs in settling the

claim within policy limits. Western Pacific

Ins. Co. v. Farmers Ins. Exchange, 69 Wn.2d 11, 18,

416 P.2d 468 (1966).

A-4

in the injured party's complaint. Ins. Co. of

North America, supra; Yakima Cement Products

Co. v. areat ~merican Ins. Co., 14 Wn. App. 55/7,

563, 544 P.2d 763 (1975).

INA argues that we are bound by federal

admiralty law which consists of several cases

holding P & I clauses inapplicable to losses

incurred under similar circumstances involving

commercial vessels. Lanasse v. Travelers Ins.

Co., 450 F.2d 580 (5th Cir. 1971), cert. denied,

406 U.S. 921, 324. €6.° 2d 120,. 92 5... CEs. 1779

(1972); Dow Chemical Co. v. Tug Thomas Allen,

349 F. Supp. 1354 (E.D. La. 1972); Employers

Mut. Liab. Ins. Co. v. Aetna Ins. Co., 54 F.

Supp. 203 (E£.D. Mich. 1966). The United States

Supreme Court has never addressed this issue, and

no court has considered it in the context of the

private, non-commerical use of pleasure craft. We

reject INA's argument because, at least in the

non-commercial field, there is no well-established

federal rule, and without such a rule, the inter-

pretation of marine insurance policies is left to

the states. Wilburn Boat Co. v. Fireman's Fund

Ins. Co., 348 U.S. 310, 315-21, 99 L. Ed. 3S/,

343-46, 75 S. Ct. 368 (1955); Berkeley v. Fire-

man's Fund Ins. Co., 407 F. Supp. 960, Ts (W.D.

Wash. 1975).

INA urges us to adopt the logic of the federal

cases in our decision. Under their rationale, the

act causing the loss herein would be deemed that of

the Lindruds in their status as owners of the pier

and utility well (rather than as yacht owners)

because the yacht was only incidentally connected

to the accident. Under this analysis there would

be no coverage under a P & I clause which provided

reimbursement only for liability incurred by reason

of the insured's interest in a vessel.

Farmers argues that the logic of the federal

decisions should not be adopted because the P & I

clause is fairly and reasonably susceptible to two

different interpretations and is, therefore,

A-5

ambiguous. Morgan v. Prudential Ins. Co. of

America, 86 Wn.2d 432, 545 P.2d 1193 (1976). It js

Farmers' further contention that the yacht policy

could reasonably be construed to protect the yacht

owner under the facts of this case.

The federal cases found no ambiguity in similar

P & I clauses, and we must not strain to find an

ambiguity in INA's policy where there is none.

United Pac. Ins. Co. v. McCarthy, 15 Wn. App. 70,

> .cd ; e argued ambiguity in

the P & I clause flows from the difficulty with

the meaning of the word "interest". It is a word

of the most general meaning whose interpretation

depends upon the circumstances in which it is used.

Farmers Ins. Co. v. United States Fidelity &

Guar. Co., 13 Wn. App. 836, 841, 537 P.2d 839

, We must determine whether the private,

noncommerc ial context in this case reasonably and

fairly permits the interpretation of the P & I

clause Suggested by Farmers. If so, we must adopt

it even if the insurer intended another meaning.

Morgan v. Prudential Ins. Co. of America, supra.

To determine its meaning, the P & I clause

must be viewed in light of the entire contract

and then be construed in a manner consistent

with the apparent object and intent of the par-

ties. If the clause is found to be ambiguous, the

intent of the insurer does not control, Morgan

v. Prudential Ins. Co. of America, supra, at

434-35, and it must be given the interpretation

that the average man purchasing insurance would

give it. Ames v. Baker, 68 Wn.2d 713, 716, 415

P.2d 74 (1966).

At the time of the injury, all parties were

involved in activities necessary to properly leave

the yacht at the end of a cruise. Such activities

included docking, securing the mooring lines,

Cleaning the galley, checking all the switches, and

climbing down the ladder attached to the yacht. It

was while assisting Mrs. Lindrud as she climbed

down the ladder that Mr. Thorson stepped into the

open utility well on the pier. We hold that under

A-6

these circumstances the owners of a noncommercia?

yacht would reasonably view their resulting liabil-

ity as one arising by reason of their "interest" in

the insured vessel.

Written decisions concerning pleasure craft

are sparse, and marine insurance law has developed

largely in the context of commercial shipping

interest. California Continuing Education of the

Bar, California Pleasure Boating Law, 347-48

(1963). Commercial shippers have been purchasing P

& I insurance for years and are familiar with the

extent of its traditional coverage. It is unrea-

sonable to expect the non-commercial yacht owner to

seek insurance protection for the same reasons,

with the same expectations, and with the same

knowledge of the marine insurance industry as

commercial shippers.

Our decision does not convert the P & I clause

into general liability insurance. It merely

- recognizes that the courts will not blindly apply

esoteric commercial marine standards to noncommer-

cial yacht insurance. If ambiguities arise, we

must resolve them consistent with the reasonable

expectations of the average insurer.

We hold that INA's policy provides coverage,

and we direct entry of summary judgment for Farmers

in the amount of $2,301.44.

Reversed and remanded.

/s/ Dore, Fred, J.

WE CONCUR:

/s/ Callow, J.

PER a ne

FARMERS HOME MUTUAL INSURANCE COMPANY V.

INSURANCE COMPANY OF NORTH AMERICA, NO. 4922-1

ANDERSEN, A.C.J. (concurring in the result).

The central issue in this case is not which of two

insurance companies should pay, but whether Insur-

ance Company of North America (INA) can proper ly

deny coverage for the loss under its yacht insur-

ance policy. The injured party had been a pas-

Senger on the yacht. At the time of his injury, he

was. engaged in assisting another person to alight

from the yacht. His bodily injury claim was

therefore within the coverage of INA's yacht

insurance policy covering claims or damage "arising

from or occasioned by any of the following matters

or things during the currency of this policy in

respect of the yacht hereby insured, that is to

say: .. . bodily'injury .. .*

/s/ Andersen, A.C.Jd.

Andersen, A.C.d.