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Lewis v. Allstate Insurance Co.
December 23, 1996
MAYNARD LEWIS AND RUTH LEWIS, HUSBAND AND WIFE, APPELLANTS,
ALLSTATE INSURANCE COMPANY, A FOREIGN CORPORATION DOING BUSINESS IN WASHINGTON STATE, RESPONDENT.
Appeal from Superior Court of Skagit County. Docket No: 93-2-00759-3. Date filed: 02/09/95. Judge signing: Hon. Anita L. Farris.
Authored by William W. Baker. Concurring: Walter E. Webster, Faye C. Kennedy
The opinion of the court was delivered by: Baker
BAKER, C.J. - Washington has long recognized that while an insurer may be estopped from insisting on forfeiture of an insurance policy, coverage may not be extended, or in effect created, by equitable estoppel. Ruth and Maynard Lewis ask this court to overrule or to expand this long-standing rule. The circumstances of this case do not fit any of the limited exceptions to the rule, nor do the facts warrant modification of the rule.
We hold that equitable estoppel is inapplicable to the Lewis's claim seeking a declaratory judgment that automobile liability coverage existed, and that the trial court did not err by summarily dismissing the claim.
Because this opinion will not be published, we proceed without an introductory summary of the facts.
Equitable estoppel may not be invoked to bring into existence a contract not made by the parties or to create a liability contrary to the express provisions of the contract made by the parties. *fn1 The general rule is that "while an insurer may be estopped . . . from insisting upon a forfeiture of a policy, . . . under no conditions can the coverage or restrictions on the coverage be extended by the doctrine of waiver or estoppel." *fn2 The Lewises argue that the rule set down in Carew offers little guidance in identifying the situations where estoppel will be applied to allow deviations from the written contract based on the conduct of a party. Subsequent case law, however, provides guidance as to the application of equitable estoppel in the insurance realm.
The underlying rational for the Carew rule is that "an insurance company should not be required to pay for a loss for which it received no premium." *fn3 The courts have recognized limited exceptions to the Carew rule. For example, estoppel is appropriate when an insurer's bad faith conduct is established. *fn4 Estoppel may also apply when the insurer engages in an established course of conduct of accepting late payment of renewal premiums and thereby accepting payment for periods for which no coverage was provided. *fn5 The Lewises have not alleged that Allstate acted in bad faith. Nor is equitable estoppel necessary to prevent Allstate from denying paid coverage. Allstate did not assume responsibility for liability insurance and it did not charge or receive payment for liability coverage. An insurance contract may be varied by operation of law through estoppel or waiver, "but this variance must be construed narrowly." *fn6 An insurer should be precluded from asserting a right only when it would be inequitable to permit assertion of that right. *fn7 The circumstances of this case do not warrant the creation of a new exception to the rule or extension of the existing exceptions to include this factual situation. Equity simply does not mandate a Conclusion, contrary to the Carew rule, that would create or extend the insurance contract between the Lewises and Allstate to include liability coverage when only comprehensive coverage existed.
As a matter of law, equitable estoppel is inapplicable to the Lewis's claim. We hold that the trial court did not err by summarily dismissing the Lewis's claim seeking a declaratory judgment that automobile liability coverage existed.
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