In a Washington, D.C. car crash case requiring a court to interpret a contract, general contract principles must be applied. Under Washington, D.C. law, courts will look at the contract’s written language, regardless of the parties’ intent at the time the contract was made. If a contract is not clear based on the contract’s written language, courts will consider the contract as a whole and will determine the meaning of the contract and its terms based on all of the surrounding circumstances when the contract was made. In considering the surrounding circumstances, courts will allow external evidence to be admitted to help explain and determine the parties’ beliefs and actions at the time. Courts will generally consider what a reasonable person in the parties’ positions would have thought the terms in dispute meant—unless the terms clearly had a technical or specialized meaning. In addition, if the language of a contract is open to two interpretations, courts will interpret the contract in favor of the insured.
Insurance policies also may contain exclusions, but exclusions must be strictly construed in favor of the insured. Further, if an insurer tries to avoid liability under an insurance policy by claiming that an exclusionary clause applies, the insurer has the burden to prove that the case falls under the specified exclusion.
In a recent case before another state’s appeals court, the court considered whether an exclusionary clause in a contract relieved the insurer after a woman was killed in a car crash. In that case, the woman was killed in a crash with another vehicle driven by a volunteer employee working for an animal welfare organization. GEICO provided personal vehicle insurance to the volunteer employee and paid out up to its policy limit of $25,000. The organization also had a commercial insurance policy with a policy limit of $1,000,000. The woman’s estate obtained a judgment against the organization of $5,000,000 and filed a claim under the commercial insurance policy. The insurer denied coverage, asserting that the coverage did not apply because the GEICO policy covered the crash.