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Loran v. Dairyland Insurance
Citations: 42 Wash. App. 17; 707 P.2d 1378; 1985 Wash. App. LEXIS 2963Docket: No. 7403-6-II
Court: Court of Appeals of Washington; October 18, 1985; Washington; State Appellate Court
Rebel Loran's appeal against Dairyland Insurance Company involves an order granting summary judgment for the insurer and denying Loran's own motion for summary judgment. The incident occurred on March 16, 1983, when Loran, a passenger in a car accident, was receiving $180 per week in unemployment benefits, which were terminated shortly after the accident due to his inability to work. Both Loran and the driver, Ed Bradley, were insured by Dairyland, which paid Bradley's policy limit of $25,000 to Loran. Loran sought additional benefits under his own Dairyland policy's personal injury protection, claiming entitlement to 85% of his lost unemployment compensation as an income continuation benefit. However, the policy stipulates these benefits apply only to individuals "usually engaged in a remunerative occupation" at the time of the accident. The court determined that Loran had been unemployed for nearly two years leading up to the accident, and thus, he did not meet the policy's criteria. Despite Loran's affidavit stating he is "usually employed in construction work," the court felt that the determination of whether a two-year unemployment period disqualifies him from being classified as "usually engaged" should be resolved by a trial, not through summary judgment. The appellate court upheld the summary judgment for Dairyland, concluding that even if the factual dispute regarding Loran's employment status were resolved in his favor, the terms of the insurance policy would still preclude him from receiving benefits. The court emphasized that insurance contract terms should be interpreted reasonably, aligning with the understanding of the average policyholder. An ambiguous clause in an insurance contract must be interpreted in favor of the insured, but courts cannot impose ambiguity where it does not exist. In this case, unemployment compensation benefits are not classified as "income from work." While these benefits differ from public assistance or welfare, they serve to alleviate economic insecurity due to unemployment, as defined in RCW 50.01.010. The legislation consistently refers to these payments as "benefits" rather than "income." The requirement for individuals to be ready and able to work does not change the fact that these benefits are tied to unemployment rather than employment. The referenced case of Mazza v. Insurance Co. of N. Am. is deemed irrelevant due to significant factual and policy differences. Therefore, the court maintains that loss of unemployment benefits does not equate to loss of income from work, leading to the conclusion that Loran is not entitled to 85 percent of such benefits as income continuation. The trial court's decision is affirmed, with no further review from the Supreme Court. Loran's last employment was as a construction worker in Wyoming from January 7, 1981, to April 3, 1981. He also sought recovery for potential income loss after his unemployment benefits expired but abandoned this claim due to a lack of employment prospects.