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

Supreme Court of Washington

May 16, 2019, Argued; October 10, 2019, Filed

No. 96500-5

Opinion

EN BANC

 [*416]  [**152] 

¶1 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 [***2]  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.

¶2 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

¶3 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. 1 T-Mobile USA, Inc. v. Selective Ins. Co. of Am., 908 F.3d 581, 583 n.1 (9th Cir. 2018).

¶4  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  [*417]  between T‑Mobile NE and the contractor required the contractor to obtain a general liability insurance [***3]  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 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.

¶5 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.

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194 Wn.2d 413 *; 450 P.3d 150 **; 2019 Wash. LEXIS 659 ***; 2019 WL 5076647

Certification from the United States Court of Appeals for the Ninth Circuit inT-Mobile USA, Inc., Appellant, v. Selective Insurance Company of America, Appellee.

Prior History:  [***1] T-Mobile USA Inc. v. Selective Ins. Co. of Am., 908 F.3d 581, 2018 U.S. App. LEXIS 31863 (9th Cir., Nov. 9, 2018)

CORE TERMS

certificate, coverage, contractor, disclaimers, holder, preprinted, Amicus, entity

Business & Corporate Compliance, Insurance Company Operations, Company Representatives, Agents, Civil Procedure, Appeals, Appellate Jurisdiction, Certified Questions, Insurance Law, Agents, Types, Business & Corporate Law, Authority to Act, Apparent Authority, Elements, Third Party Knowledge, Contracts Law, Contract Interpretation, Claim, Contract & Practice Issues, Policy Interpretation, Governments, Legislation, Interpretation, Contract Formation, Business Insurance, Commercial General Liability Insurance, Persons Insured, Agency Relationships, Apparent Authority