T-Mobile USA, Inc. v. Selective Ins. Co. of Am. ( 2019 )

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IN CLERKS OFFICE
This opinion was
filed for record
8UPRBE COURT,SIXTE OF \A2ALSH!HeT0ll at ?S^on .ID
DATE "'7 I fl f||Q
^ax^ Susan L. Carlson
GHieF JUSTICE Supreme Court Clerk
IN THE SUPREME COURT OF THE STATE OF WASHINGTON
CERTIFICATION FROM THE UNITED No. 96500-5
STATES COURT OF APPEALS FOR THE
NINTH CIRCUIT IN EN BANC
T-MOBILE USA INC, a Washington
corporation, Filed OCT 1 0 2019
Plaintiff-Appellant,
SELECTIVE INSURANCE COMPANY
OF AMERICA,
Defendant-Appellee.
GORDON McCLOUD,J.—The Ninth Circuit has asked this court whether
an insurance company is bound by its agent's written representation—made in a
certificate of insurance—that a particular corporation is an additional insured under
a given policy. The question arises in a case where: (1)the Ninth Circuit has
already ruled that the agent acted with apparent authority, but(2)that agent's
representation turned out to be inconsistent with the policy and (3)the certificate
included additional text broadly disclaiming the certificate's ability to "amend.
extend or alter the coverage afforded by" the policy.
T-Mobile USA, Inc. v. Selective Ins. Co. ofAm.,^o. 96500-5
Under this state's law, the answer is yes: an insurance company is bound by
the representation of its agent in those circumstances. Otherwise, an insurance
company's representations would be meaningless and it could mislead without
consequence.
Factual and Procedural History
At the heart of this case are two T-Mobiles: T-Mobile USA and T-Mobile
Northeast(T-Mobile NE). They are distinct legal entities.' T-Mobile USA, Inc. v.
Selective Ins. Co. ofAm., 908 F.3d 581, 583 n.l (9th Cir. 2018).
T-Mobile NE wanted to construct a cell phone tower on a rooftop in New
York City. Id. at 583-84. It engaged the services of a contractor to help it do so.
Id.; see also 3 Excerpts of Record(ER)at 499-516 (agreement). The contract
between T-Mobile NE and the contractor required the contractor to obtain a
general liability insurance policy, to annually provide T-Mobile NE "with
certificates of insurance evidencing [that policy's] coverage," and to name
T-Mobile NE as an additional insured under the policy. 3 ER at 504-05. T-Mobile
'"T-Mobile Northeast LLC . .. is a limited liability company organized under the
laws of the State of Delaware. T-Mobile[USA] is the sole member of T-Mobile NE,
which is a wholly-owned subsidiary of T-Mobile [USA]." 4 Excerpts of Record at 817-
18 (declaration of T-Mobile USA's employee); see also id. at 821-24 (T-Mobile NE's
formation documents).
T-Mobile USA, Inc. v. Selective Ins. Co. ofAm., 96500-5
USA was not a party to the contract, id. at 503, but was nonetheless aware of it and
approved the contract as to form, id. at 516.
The contractor obtained the required insurance policy from Selective
Insurance Company of America. T-Mobile USA,908 F.3d at 583; see also 3 ER at
518-639 (policy). The policy was—and remains—a claims-made policy. 3 ER at
532. It provided that a third party would automatically become an additional
insured under the policy if the contractor and the third party entered into their own
contract and that contract required the contractor to add the third party to its
insurance policy as an additional insured. T-Mobile USA,908 F.3d at 583.
T-Mobile NE therefore became an additional insured under the policy by virtue of
its contract with the contractor. T-Mobile NE and the contractor worked together
to build the cell phone tower on the New York City rooftop. Id. at 584.
Because T-Mobile USA did not have a contract with the contractor, it did
not automatically become an additional insured under the policy. Nonetheless,
over the course of approximately seven years, Selective's agent issued a series of
certificates of insurance, including the one underlying this dispute, to "T-Mobile
USA Inc., its Subsidiaries and Affiliates" that stated that those entities were
"included as an additional insured [under the policy] with respect to" certain areas
of coverage. 2 ER at 132 (certificate at issue); see also 3 ER at 642-52; 4 ER at
T-Mobile USA, Inc. v. Selective Ins. Co. ofAm.,^0. 96500-5
833 (other certificates). The agent signed those certificates as Selective's
'"Authorized Representative.'" 4 ER at 827.
The agent explained that it "began issuing the T-Mobile Additional Insured
[certificates of insurance] because [the contractor] informed us that its agreements
with T-Mobile required that T-Mobile be named as an additional insured under
[the contractor's] insurance policies and that T-Mobile qualified as an additional
insured per the standard terms of Selective's policies for that reason." Id.
Selective never objected to the agent's issuance of the certificates. Id. at 826
(declaration of agent's principal).
Given those facts, the Ninth Circuit held that the agent acted with apparent
authority in issuing the certificate at issue, which "clearly lists T-Mobile USA as
an additional insured under the policy."^ T-Mobile USA,908 F.3d at 586 n.5.
But the certificate was issued on an industry-standard form and included
preprinted industry-standard disclaimers. 2 B.R. at 132; Br. of Amicus Curiae Am.
Prop. & [Gas.] Ins. Ass'n at 4(explaining this). It stated in bold capital letters that
the certificate "is issued as a matter of information only and confers no rights upon
the certificate holder," "does not affirmatively or negatively amend, extend or alter
^ The Ninth Circuit left unresolved whether the agent was acting with actual
authority. T-Mobile USA, 908 F.3d at 586 n.5.
T-Mobile USA, Inc. v. Selective Ins. Co. ofAm., No. 96500-5
the coverage afforded by the" insurance policy, and "does not constitute a contract
between the issuing insurer(s), authorized representative or producer, and the
certificate holder." 2 ER at 132(formatting omitted). It also stated in bold,"If the
certificate holder is an ADDITIONAL INSURED,the policy(ies) must be
endorsed. ... A statement on this certificate does not confer rights to the
certificate holder in lieu of such endorsement(s)." Id. (boldface omitted).
Eventually, the owner of the New York City rooftop on which T-Mobile NE
and the contractor had constructed the cell phone tower sued the contractor and
T-Mobile in federal district court in New York for damages associated with the
construction. T-Mobile USA,908 F.3d at 584 & n.4. But the owner sued T-Mobile
USA, not T-Mobile NE. Id.
T-Mobile USA and the contractor each tendered the building owner's claim
to Selective. Id. at 584. Selective accepted the contractor's tender but rejected
T-Mobile USA's tender. Id. at 584-85.
Following T-Mobile USA's motion for summary judgment in the New York
litigation, the building owner amended its complaint, naming T-Mobile NE (and
dropping T-Mobile USA)as the defendant. 4 ER at 678. Because Selective had
not accepted T-Mobile USA's tender, though, T-Mobile USA incurred expenses
defending itself up to that point of the New York litigation.
T-Mobile USA,Inc. v. Selective Ins. Co. ofAm., No. 96500-5
T-Mobile USA,which is headquartered in Washington, sued Selective in
King County Superior Court. T-Mohile USA,908 F.3d at 585. It "assert[ed]
claims for breach of contract, declaratory judgment, common law insurance bad
faith, common law attorney's fees, and violation of consumer fraud statutes." Id.
All of those claims were based on the fact that Selective failed to recognize
T-Mobile USA as an additional insured. Id.
Selective, which is headquartered in New Jersey, removed the case to federal
district court.^ Id.
After discovery. Selective moved for summaryjudgment,"requesting that T-
Mobile USA's claims be dismissed in their entirety because ... the 2012
[certificate ofinsurance] could not confer coverage on T-Mobile USA." Id. The
district court granted the motion and dismissed all of T-Mobile USA's claims. Id.
T-Mobile USA appealed on several grounds. The Ninth Circuit certified
only the following question to this court:
"Under Washington law, is an insurer bound by representations
made by its authorized agent in a certificate of insurance with respect
^ Selective then filed several motions. The district court denied the motion to
transfer venue to New Jersey, 1 ER at 96(order), and denied the motion to apply New
Jersey law to the breach of contract claim, id. at 90-91. But that court granted the motion
to apply New Jersey law to the common law, bad faith, and statutory consumer fraud
claims. Id. at 96. The parties did not challenge those rulings on this appeal. Br. ofPl.-
Appellant at 1-3 (9th Cir. Docket No. 17-35932 (2018)); Appellee's Responsive Br. at 1
(9th Cir. Docket No. 17-35932(2018)).
T-Mohile USA, Inc. v. Selective Ins. Co. ofAm., No. 96500-5
to a party's status as an additional insured under a policy issued by the
insurer, when the certificate includes language disclaiming its
authority and ability to expand coverage?"
Id. at 588. The Ninth Circuit noted that "T-Mobile USA does not contend that the
[certificate of insurance] is relevant to interpreting the Policy. Rather, T-Mobile
USA contends that Selective is bound by [the agent's] representation in the
[certificate of insurance] that T-Mobile USA is an additional insured." Id. at 585.
Discussion
A certified question presents a question of law. RCW 2.60.020; RAP 16.16.
This court "consider[s] the legal issues presented based on the certified record
provided by the federal court." Wright v. Lyft, Inc., 189 Wash. 2d 718, 722, 406 P.3d
1149(2017)(citing Bradburn v. N. Cent. Reg'l Library Dist., 168 Wash. 2d 789, 799,
231P.3dl66 (2010)).
I. Selective Is Bound by the Representations of Its Agent
The general rule in Washington is that
"an insurance company is bound by all acts, contracts, or
representations of its agent, whether general or special, which are
within the scope of[the agent's] real or apparent authority
notwithstanding they are in violation of private instructions or
limitations upon [the agent's] authority, of which the person dealing
with [the agent], acting in good faith, has neither actual nor
constructive knowledge."
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T-Mobile USA, Inc. v. Selective Ins. Co. ofAm., No. 96500-5
Pagniv. N.Y. Life Ins. Co., 173 Wash. 322, 349-50, 23 P.2d 6(1933)(quoting
32 C.I.Insurance § 140, at 1063 (1923)); see also Chi. Title Ins. Co. v. Office of
Ins. Comm 'r, 178 Wash. 2d 120, 136, 309 P.3d 372(2013).
The Ninth Circuit made clear that Selective is an insurance company, that it
had an agent, and that the agent acted with apparent authority when it issued the
certificate to T-Mobile USA. T-Mobile USA,908 F.3d at 586 n.5. In these
circumstances, under Washington law. Selective is bound by the representations its
agent made in the certificate of insurance.
Selective argues that its agent's representation should not bind it because
T-Mobile USA's alleged reliance on the representation, see 2 ER at 121-24, was
unreasonable. The reliance was unreasonable, according to Selective, because
T-Mobile USA knew that it was not a party to a contract with the contractor—and
therefore not an additional insured under the contractor's policy. As Selective
correctly notes, T-Mobile USA approved T-Mobile NE's contract with the
contractor. That contract explicitly stated that T-Mobile USA was not a party to
the contract.
But the Ninth Circuit has already ruled that Selective's agent acted with
apparent authority. That ruling conclusively resolves this argument. Apparent
authority "depend[s] upon objective manifestations made by the principal." King
T-Mobile USA, Inc. v. Selective Ins. Co. ofAm.,lAo. 96500-5
V. Riveland, 125 Wash. 2d 500, 507, 886 P.2d 160(1994)(citing Smith v. Hansen,
Hansen & Johnson, Inc., 63 Wash. App. 355, 363, 818 P.2d 1127 (1991)). Those
objective manifestations by the principal "must cause the [third party] to actually,
or subjectively believe, that the agent has authority to act for the principal" and ''be
such that the [third party'5] actual, subjective beliefis objectively reasonable''' Id.
(emphasis added)(citing Smith, 63 Wash. App. at 364). Thus, in ruling that the
agent acted with apparent authority, the Ninth Circuit necessarily decided that
T-Mobile USA's belief that the agent was authorized to issue a certificate naming
it as an additional insured was "objectively reasonable.'"^ T-Mobile USA's
objectively reasonable belief that the agent had authority to issue the certificate
necessarily makes its reliance on that certificate reasonable.
As noted, there is a factual basis for the Ninth Circuit's determination. The
Ninth Circuit pointed out that Selective appointed the agent as its agent and that the agent
signed the certificates of insurance "as Selective's 'Authorized Representative.' [The
agent] also testified that [the agent] had previously issued [certificates of insurance] for
[the contractor's] policies directly to T-Mobile USA on Selective's behalf, and that
Selective never objected to [the agent's] issuance ofthose [certificates]." T-Mobile USA,
908 F.3d at 586 n.5. Additionally, as T-Mobile USA points out, one of Selective's
employees appears to have admitted that it would have been reasonable for T-Mobile
USA "to understand that it was an additional insured under the very Selective policy at
issue in this case." 5 ER at 1021.
T-Mobile USA, Inc. v. Selective Ins. Co. ofAm.,']Ao. 96500-5
Accordingly, under the general rule, Selective is bound by the
representations that its agent made to T-Mobile USA when the agent issued the
certificate of insurance.
11. The Certificate's General Disclaimers Are Not Effective
We therefore turn to the certificate of insurance to determine what promises
Selective, through its authorized agent's representations, made. That certificate of
insurance actually contains contradictory representations. On the one hand, it says
that T-Mobile USA was an additional insured under the policy, i.e., that the policy
covers T-Mobile USA. On the other hand, it says that nothing in the certificate
changes the policy—and the policy does not cover T-Mobile USA. So which of
those contradictory representations binds Selective?
Selective argues that the preprinted disclaimers made all the specific,
written-in, additional statements about coverage completely ineffective. It points
out that the certificate stated that it was issued as a matter of"information only."
Def.-Appellee, Selective Ins. Co. of Am.'s, Answering Br. at 46. And as amicus
notes,"The specific form used here, the ACORDl^l 25, is a [certificate of
insurance] that was 'developed as a non-binding form issued to third parties as
The Association for Cooperative Operations Research and Development.
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T-Mobile USA, Inc. v. Selective Ins. Co. ofAm., No. 96500-5
evidence of insurance of the named insureds.'" Br. of Amicus Curiae Am. Prop. &
[Cas.] Ins. Ass'n at 4.
T-Mobile USA counters that the preprinted disclaimers were ineffective
because they were general boilerplate, whereas the additional insured statement
had been specifically written into the certificate. Opening Br. ofPI.-Appellant T-
Mobile USA,Inc. at 29.
T-Mobile USA is correct. A basic rule of textual interpretation is that the
specific prevails over the general. Residents Opposed to Kittitas Turbines v. State
Energy Facility Site Evaluation Council, 165 Wash. 2d 275, 309, 197 P.3d 1153
(2008). We follow this rule when we interpret statutes and contracts, see, e.g.,
Ohio Sec. Ins. Co. v. AXIS Ins. Co., 190 Wash. 2d 348, 353, 413 P.3d 1028 (2018)
(statutes); McGary v. Westlake Inv'rs, 99 Wash. 2d 280, 285-86, 661 P.2d 971 (1983)
(contracts), and for that reason, we follow this rule when we interpret certificates
of insurance. As this court has explained, we inteipret "the language of the
certificate in a manner understandable to the average person." Fittro v. Lincoln
Nat'I Life Ins. Co., Ill Wn.2d 46, 50, 757 P.2d 1374(1988){CXmg State Farm
Gen. Ins. Co. v. Emerson, 102 Wn.2d 477,687 P.2d 1139 (1984)). The average
person's '"[ajttention and understanding are likely to be in better focus when
language is specific or exact.'" Foote v. Viking Ins. Co. ofWis., 57 Wash. App.
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T-Mobile USA, Inc. v. Selective Ins. Co. ofAm., No. 96500-5
831, 834-35, 790 P.2d 659(1990)(quoting Restatement(Second)of
Contracts § 203 cmt. e(Am.LawInst. 1981)).
Here, the preprinted disclaimers are general in nature. They purport to
disclaim virtually every bit of information provided by the certificate. By contrast,
the additional insured statement that the agent wrote in specifically refers to certain
areas of policy coverage and makes a discrete representation that "T-Mobile USA
Inc., its Subsidiaries[,] and Affiliates" "is included as an additional insured." 2
ER at 132. This specific written-in additional insured statement thus prevails over
the preprinted general disclaimers.
That conclusion respects the specific purpose for which the certificate was
issued: to inform T-Mobile USA, its subsidiaries, and its affiliates that they are
additional insureds under the policy.^ Giving effect to the disclaimers, by contrast,
would render issuance of the certificate—and the specific representation within
it—^pointless. Contrary to Selective's argument, the certificate would have no
^ As amici note, this is not an uncommon arrangement. Certificates of insurance
play an important role in facilitating commerce because they inform certificate holders,
who are frequently outsiders to the relationship between the insurance company and its
primary insured, that an insurance relationship exists—whether that is between the
insurer and its primary insured or between the insurer and an additional insured. Amicus
Curiae Br. of Associated Gen. Contractors of Wash, at 2-3; cf. Br. of Amicus Curiae Am.
Prop. & [Cas.] Ins. Ass'n at 4("Under normal circumstances, [certificates of insurance]
are issued as a service to policyholders who need to demonstrate the existence of
insurance coverage to a third party.").
12
T-Mobile USA, Inc. v. Selective Ins. Co. ofAm.,lAQ. 96500-5
informational value at all. All it would do is '"set a trap'" for the certificate
holder.^ Fittro, 111 Wash. 2d at 53 (quoting Riske v. Nat'I Gas. Co., 268 Wis.
199, 207,67 N.W.2d 385 (1954)).«
III. Representing a Fact in a Certificate of Insurance Does Not Render the
Representation Meaningless
The Ninth Circuit was unsure whether the line of decisions discussed above
governed the outcome of this case, in light of the fact that this court has also stated,
"[T]he purpose of issuing a certificate of insurance is to inform the recipient
thereof that insurance has been obtained; the certificate itself, however, is not the
equivalent of an insurance policy." Postlewait Constr., Inc. v. Great Am. Ins. Co.,
106 Wash. 2d 96, 100-01 & n.7, 720 P.2d 805 (1986)(citing cases).
The quoted statement from Postlewait is accurate. But it addressed a
different situation. In Postlewait, a crane owner leased its cranes to a construction
company. 106 Wash. 2d at 97. The lease required the construction company to
obtain insurance for the cranes, and the construction company did so. Id. at 97-98.
^ To be clear, we do not hold that all disclaimers are ineffective. We hold that the
disclaimers at issue here are ineffective because they completely and absolutely
contradict the other, more specific promises in that same certificate.
^ We recognize that Fittro posed a different question that arose in the context of a
different statutory scheme. See 111 Wash. 2d at 52 (stating that its holding applies "when
the certificate is issued under statutory mandate and is the only document the insured is
likely to see").
13
T-Mobile USA, Inc. v. Selective Ins. Co. ofAm., No. 96500-5
The construction company's policy did not, however, cover the crane owner's
losses. Id. at 98. It covered the construction company's losses. Id. at 100.
Critically, the certificate of insurance did not even purport to cover the crane
owner's losses either. The construction company's broker—who was not an agent
of the insurance company—provided two certificates of insurance to the crane
owner. Both certificates stated that the construction company had obtained
coverage for the cranes, id. at 98, 100; neither certificate represented that the crane
owner was an additional insured. Nevertheless, the crane owner cancelled its own
insurance policy covering the cranes. Id. at 98.
"Then later yet,[one of the cranes] was damaged in two separate arson fires
while it was in the [construction company's] care." Id. The crane owner "sought
payment for the damage directly from the insurer." Id. When the crane owner and
the insurance company were unable to agree, the crane owner sued. Id. The
insurance company defended on the ground that the crane owner was not an
insured or a third-paity beneficiary to the policy. Id.
We agreed with the insurance company. We held that the crane owner did
not have an action against the insurance company because it was not an additional
insured, a loss payee, or an intended third-party beneficiary. Id. at 99. We based
this decision on the fact that neither the policy itself nor the certificates of
14
T-Mobile USA, Inc. v. Selective Ins. Co. ofAm., No. 96500-5
insurance conferred such status on the crane owner. In that context, we stated that
a certificate of insurance '"is not, and does not purport to be, a policy, but states
that a policy covering the goods is in existence.'" Id. at 100 (quoting Postlewait
Constr., Inc. v. Great Am. Ins. Cos., 41 Wash. App. 763, 767, 706 P.2d 636 (1985)).
We agreed with other courts that "the purpose of issuing a certificate of insurance
is to inform the recipient thereof that insurance has been obtained; the certificate
itself, however, is not the equivalent of an insurance policy." Id. at 100-01 & n.7
(citing cases).
Selective relies on those observations. But they don't apply here. They
applied in Postlewait because the insurance company's agent had no role in the
representations at all, the certificates of insurance contained no representation
about the status of the certificate holder (the crane owner), and the certificates
contained only a representation of the insured status of another entity (the
construction company). This case, in contrast, is about an agent's representation—
which the agent happened to make in a certificate of insurance—^that explicitly
names T-Mobile USA as the additional insured.
15
T-Mobile USA, Inc. v. Selective Ins. Co. ofAm., No. 96500-5
Our decision in Postlewait is therefore completely consistent with our
decision today.^ An agent's authorized or apparently authorized representation is a
representation, whether it is transmitted via letter, e-mail, certificate of insurance,
or something else.'®
IV. Public Policy Supports Application of the Rule That Selective Is
Bound by Its Agent's Representation
Amicus American Property and Casualty Insurance Association argues that
holding Selective to the representation of its agent would conflict with public
policy. "In essence, this would permit the [certificate of insurance] to completely
supplant the policy terms." Br. of Amicus Curiae Am. Prop, & [Gas.] Ins. Ass'n at
14. "If fundamental contract certainty can be so easily undermined, individual
issuers will presumably be forced to consider declining to authorize the use of any
^ The other decision cited by the Ninth Circuit, International Marine
Underwriters v. ABCD Marine, LLC, 165 Wash. App. 223, 267 P.3d 479 (2011), aff'd
179 Wash. 2d 274, 313 P.3d 395 (2013)(plurality opinion), is similarly distinguishable. In
that case, the Court of Appeals held that two certificates of insurance did not confer
additional insured status on a particular corporation, NSI (Northland Services Inc.). 165
Wash. App. at 232-33. But the certificates at issue had been issued to two different
corporations, Naknek and Northland Holdings; contained no representations about NSI;
and were not issued by the insurance company or its agent. Id.; see also Int'l Marine,
179 Wn.2d at 277(describing the certificates).
'® To be sure, all the information contained within the transmittal document, along
with how that information is arranged within the transmittal document, can affect the
interpretation of what was actually represented to the party receiving the document. See
Part II, supra.
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T-Mobile USA, Inc. v. Selective Ins. Co. ofAm., No. 96500-5
[certificates of insurance], which would represent an unfortunate—and
unnecessary—end to the use of a tool that many stakeholders find useful when
appropriately limited to its intended use as an 'information-only' communication
that clearly explains that status." Id. at 15.
The public policy of the State of Washington actually compels the opposite
conclusion. Insurance companies act through, and are bound by, the
representations of their agents made with actual or apparent authority. Enforcing
those authorized representations has a modest aim: it provides the principal with
an additional incentive to ensure that the agent's representations—made in person,
on the phone, or in writing—are true. Even though American Property and
Casualty Insurance Association frames its argument in terms of certificates of
insurance, the argument is actually an attack on the rule that an insurance company
is bound by the acts and representations of its agent. But this court adopted that
rule in 1933 because it was good public policy then, and we hold that it remains
good policy now." See Pagni, 173 Wash, at 349-53.'^
" Because our state's long-standing public policy favors holding Selective to the
authoritative representation of its agent, we find Seleetive and American Property and
Casualty Insurance Association's numerous citations to out-of-state authority
unpersuasive in this case.
"If this result injures Selective, which must now treat T-Mobile USA as an
insured even though its policy does not, that problem "should be addressed between the
agent and the principal." Sumitomo Marine & Fire Ins. Co. ofAm. v. So. Guar. Ins. Co.
17
T-Mobile USA, Inc. v. Selective Ins. Co. ofAm.,^o. 96500-5
Conclusion
We answer the Ninth Circuit's certified question this way: an insurance
company's agent who makes an authoritative representation binds the insurance
company, even when that specific representation is transmitted via a certificate of
insurance and accompanied by general disclaimers.
ofGa., 337 F. Supp. 2d 1339, 1350(N. D. Ga. 2004)(citing Hutsell v. U.S. Life Title Ins.
Co., 157 Ga. App. 845, 847, 278 S.E.2d 730 (1981)).
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T-Mobile USA Inc. v. Selective Ins. Co. ofAm., No. 96500-5
WE CONCUR:
19
T-Mobile USA, Inc. v. Selective Ins. Co. ofAm.
No. 96500-5
MADSEN,J.(dissenting)—It is undisputed that T-Mobile USA,Inc. was not
covered as an additional insured under any insurance policy from Selective Insurance
Company of America. See, e.g., 3 Excerpts of Record(ER)at 503 ("Contractor expressly
acknowledges and agrees that T-Mobile USA,Inc. is not a party to this Agreement."),
518-639 (insurance policy). To overcome this lack of coverage, T-Mobile USA relies on
certificates of insurance and an insurance agent's statements to the contrary—statements
indicating that T-Mobile USA was insured. 2 ER at 132; 3 ER at 642-52. T-Mobile
USA contends, and the majority agrees, that these certificates and the agent's statements
are binding on Selective Insurance, requiring it to cover T-Mobile USA. I disagree.
Certificates of insurance cannot supplant a policy that does not award coverage.
Certificates are tools of the insurance trade. They are informational documents only.
E.g., Boseman v. Conn. Gen. Life Ins. Co., 301 U.S. 196, 203, 57 S. Ct. 686, 81 L. Ed.
1036(1937)(stating that a certificate of insurance "served merely as evidence of the
insurance of the employee"); Postlewait Constr., Inc. v. Great Am. Ins. Cos., 106 Wash. 2d
96, 100-01, 720 P.2d 805 (1986)("the purpose of issuing a certificate of insurance is to
No. 96500-5
Madsen, J., dissenting
inform the recipient thereof that insurance has been obtained").' Certificates do not
confer insurance coverage—which is found in the insurance policy itself—nor do they
create a contractual relationship between an insurer and an additional insured. Atlas
Assur. Co. V. Harper, Robinson Shipping Co., 508 F.2d 1381, 1386 (9th Cir. 1975)("[A
certificate] 'is not, and does not purport to be, a policy, but states that a policy covering
goods is in existence.'"); Postlewait, 106 Wash. 2d at 101 ("the certificate itself, however, is
not the equivalent of an insurance policy."); see also 3 CouCH ON INSURANCE § 40:31
(3d ed.)("Generally, a certificate of insurance . . . cannot create a contractual relationship
between an insurer and an alleged additional insured if the policy itself does not provide
for such a relationship."). Moreover, the certificates at issue here contained standard
disclaimer language conferring "no rights upon the certificate holder" or amending,
extending, or altering the coverage. 2 ER at 132; 4 ER at 831. In other words, because
the insurance policy did not recognize T-Mobile USA as an additional insured, the
certificates of insurance have no effect on T-Mobile USA's coverage.^
'Our sister court in New Hampshire has gone as far as to characterize a certificate as "a
worthless document" that "does no more than certify that insurance existed on the day the
certificate was issued." Bradley Real Estate Tr. v. Plummer & Rowe Ins. Agency, Inc., 609 A.2d
1233, 1235 (1992).
^ This is the prevailing view of courts that have considered the issue. E.g., Mountain Fuel
Supply V. Reliance Ins. Co., 933 F.2d 882, 556 (10th Cir. 1991)(the "majority view is that where
a certificate of insurance . . . expressly indicates it is not to alter the coverage of the underlying
policy, the requisite intent is not shown and the certificate will not effect a change in the
policy"); Steven Plitt, The Impact ofCertificates ofInsurance in Determining the Availability of
Coveragefor Additional Insureds, 30 Ins. Litig. Rep. 461 (2008)("[A] certificate of insurance is
not part of the policy—if it states that there is coverage but the policy does not, the policy
controls. This is the majority view."). Courts have generally held that certificates do not control
over insurance policies for two reasons: (1) certificates are informational only and show
evidence that insurance exits and (2) disclaimers contained in most certificates plainly state that
No. 96500-5
Madsen, J., dissenting
Accordingly, I disagree with the majority that T-Mobile USA's certificates of
insurance take precedence over an insurance policy that simply does not cover T-Mobile
USA. Nor would I apply equitable estoppel principles in this case. Robinson v. City of
Seattle, 119 Wash. 2d 34, 82, 830 P.2d 318 (1992). Equitable estoppel requires (1) a party's
admission, statement, or act inconsistent with its later claim,(2) reasonable reliance on
that act by another party, and (3)injury to the relying party. Id. Assuming the insurance
agent here acted as an agent for Selective Insurance, T-Mobile USA did not "reasonably"
rely on the certificates. The record indicates T-Mobile USA believed the certificates
provided coverage based on one declaration. 2 ER at 121-24 (declaration ofinsurance
and claims manager Lisa Bauer). The certificates' disclaimers clearly stated the
documents did not confer any "rights" or "amend, extend or alter" the terms of the policy.
E.g., Ala. Elec. Coop., Inc. v. Bailey's Constr. Co., 950 So. 2d 280,285-86(Ala. 2006)
(holding it unreasonable to rely on a certificate ofinsurance to confer coverage based on
its disclaimer language). And T-Mobile USA is a sophisticated business entity with
extensive experience dealing with insurance matters.
the terms of the insurance policy control. Plitt, supra. "As a general rule, where a certificate or
endorsement states expressly that it is subject to the terms and conditions ofthe policy, the
language ofthe policy controls." Taylor v. Kinsella, 742 F.2d 709, 711 (2d Cir. 1984)(citing
cases in support); see also Boseman, 301 U.S. at 203 ("[T]he certificate is not a part ofthe
contract of, or necessary to, the insurance.... It served merely as evidence of the insurance.");
Erie Ins. Exch. v. Gosnell, 246 Md. 724, 731, 230 A.2d 467(1967)("If there is a conflict
between the terms ofthe policy and the statements in the certification, the terms ofthe policy
control.").
No. 96500-5
Madsen, J., dissenting
This is not to say that equitable estoppel could never be applicable when a
certificate is alleged to provide more coverage than an underlying policy where a party
can show reasonable reliance. That is not the case here.
Here, T-Mobile USA seeks something it was never entitled to—insurance
coverage. As a sophisticated business entity, T-Mobile USA cannot be said to have
reasonably relied on certificates of insurance proclaiming coverage it did not contract for
or purchase. Awarding coverage to T-Mobile USA now would be a windfall for the
company and a misuse of the tool of certificates of insurance.
Under a different set of facts, a party might have a complaint for coverage. When
a certificate of insurance reflects coverage and an agent of the insurer somehow (either
negligently or intentionally) failed to secure the insurance and the party obligated to
provide insurance is sued for failing to do so, that party is not without recourse. In the
present case, not only did T-Mobile USA have no relationship with Selective Insurance,
it had no right against the insurance purchaser because there was never any agreement
that the insurance would cover T-Mobile USA.
Because I disagree with the majority that a certificate of insurance takes
precedence over an insurance policy and I do not find equitable estoppel principles
applicable, I would answer no to the certified question. With these considerations in
mind, I respectfully dissent.
No. 96500-5
Madsen, J., dissenting
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