715 P.2d 1112 (Or. 1986), SC S30122, Utah Home Fire Ins. Co. v. Colonial Ins. Co. of California

Docket Nº:A8202-00958, CA A26054, SC S30122.
Citation:715 P.2d 1112, 300 Or. 564
Party Name:UTAH HOME FIRE INSURANCE COMPANY, a corporation; and Georgia Andrews, Respondents on Review, v. COLONIAL INSURANCE COMPANY OF CALIFORNIA, a corporation, Petitioner on Review.
Case Date:March 11, 1986
Court:Supreme Court of Oregon
 
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Page 1112

715 P.2d 1112 (Or. 1986)

300 Or. 564

UTAH HOME FIRE INSURANCE COMPANY, a corporation; and

Georgia Andrews, Respondents on Review,

v.

COLONIAL INSURANCE COMPANY OF CALIFORNIA, a corporation,

Petitioner on Review.

A8202-00958, CA A26054, SC S30122.

Supreme Court of Oregon, En Banc

March 11, 1986

Argued and Submitted April 4, 1984.

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[300 Or. 565] John C. Mercer, Portland, argued the cause for petitioner on review. On the petition were James M. Callahan and Landis, Aebi & Bailey, P.C., Portland.

Randall B. Kester, Portland, argued the cause for respondents on review. With him on the response was Cosgrave, Kester, Crowe, Gidley & Lagesen, Portland.

[300 Or. 566] CARSON, Justice.

This is a claim for reimbursement for payments made for personal injury protection (PIP) benefits paid by Utah Home Fire

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Insurance Company (Utah) to its insured, Andrews. The question is whether another insurance company, Colonial Insurance Company (Colonial), is responsible for the payment of PIP benefits to Andrews. The answer to that question depends upon whether the liability insurer of the driver of another's vehicle that is not described in the declaration section of the driver's policy must pay PIP benefits to the owner of the vehicle who was injured while a passenger in the vehicle. We answer both questions affirmatively in the circumstances of this case.

Andrews was injured while riding as a passenger in her own vehicle. Barron, Colonial's insured, was driving Andrews' vehicle with her permission on October 24, 1980, when it collided with the vehicle of an uninsured motorist. Andrews was both the owner of and a passenger in the vehicle in which the injury occurred. Andrews' liability insurance was with Utah. Only the "face sheet" of her Utah policy and a specimen of the broad form named operator endorsement to that policy are included in the record. The driver of the vehicle, Barron, had a liability policy with Colonial, and that policy is in evidence. Barron's liability policy covers Barron's use of Andrews' vehicle as a temporary substitute vehicle. However, Barron's own vehicle, a 1968 Plymouth Fury, was the only vehicle listed in Barron's liability policy.

Utah paid PIP benefits to Andrews in the amount of $6,430.20. Utah and Andrews sued Colonial, alleging that the vehicle driven by Barron was "the insured vehicle" under Colonial's insurance policy, ORS 743.800, and that Andrews was entitled to PIP benefits from Colonial, pursuant to Colonial's insurance policy and Oregon law. They further alleged that Colonial refused to pay PIP benefits to Andrews and that, as a result thereof, Utah was required to provide PIP coverage under its policy with Andrews. 1 Utah has maintained [300 Or. 567] throughout that its first position is that Colonial's PIP obligation is primary as to Andrews and that Utah's PIP coverage of Andrews is excess.

Each party moved for summary judgment. The trial court entered summary judgment for Colonial. The Court of Appeals reversed and remanded. 64 Or.App. 617, 669 P.2d 381 (1983). The Court of Appeals found that PIP benefits should be afforded Andrews pursuant to Colonial's policy with Barron as interpreted in light of the public policy behind the PIP statutes. The court then applied the rule of Lamb-Weston v. Oregon Auto Ins. Co., 219 Or. 110, 341 P.2d 110, 346 P.2d 643 (1959), and required the two insurance companies to prorate the loss "in the ratio which the limits of the policies bear to the total coverage." 219 Or. at 137, 346 P.2d at 647. Here, the applicable policy limits are those for PIP benefits. 64 Or.App. at 622-23, 669 P.2d 381. The Court of Appeals then reconsidered its opinion solely to correct the amount of money involved in its review. 65 Or.App. 812, 672 P.2d 71 (1983).

PIP COVERAGE

As stated, Utah's policy with Andrews is not included in the record, other than the "face sheet" and a specimen of the endorsement to which reference is made on the "face sheet," which indicate that the policy provides broad form named operator coverage for Andrews. Under that type of policy, the insured has coverage while she is driving any vehicle, regardless of ownership. The determination by the Court of Appeals that Utah was partially responsible for payment of PIP benefits to Andrews is not challenged in this review. For that reason, we do not reach that issue. We assume that Andrews is entitled to PIP benefits from Utah.

We first examine the Colonial policy, for only if Andrews is entitled to PIP benefits under the Colonial policy is it necessary to

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determine what policy, if either, is primary. The Colonial policy extends PIP benefits to the named insured and relatives of the named insured living in the named insured's household while occupying any motor vehicle. It extends PIP benefits to other passengers only while occupying a vehicle owned by the named insured. Andrews is not entitled to PIP coverage under the specific terms of Colonial's PIP benefits because she was not occupying a vehicle owned by Barron.

[300 Or. 568] That is only the beginning of the analysis, however. Utah correctly points out that Oregon statutes require that every motor vehicle liability policy issued for delivery in this state must provide PIP benefits to four classes of persons. Colonial cannot provide fewer benefits than the law requires it to provide.

ORS 743.800 provided: 2

"Every motor vehicle liability policy issued for delivery in this state that covers any private passenger motor vehicle * * * shall provide to the person insured thereunder and members of that person's family residing in the same household injured in a motor vehicle accident, passengers injured while occupying the insured motor vehicle and pedestrians struck by the insured motor vehicle * * * [certain listed benefits]."

The term "the insured motor vehicle" is not defined in the PIP sections of law. In determining whether Colonial's policy must extend coverage to Andrews, we must determine what the legislature meant by the term "the insured motor vehicle."

The meaning of the term "the insured motor vehicle" is not readily apparent from ORS 743.800. The reference in the statute to "the insured vehicle," by necessary implication, means the vehicle insured under the liability policy. However, the legislature may have meant, as argued by Colonial, only the vehicle named on the declarations page of the particular liability policy. On the other hand, the legislature may have meant the vehicle insured by reference to the particular liability policy itself, and not just the vehicle listed on the declarations page.

We look again at ORS 743.800. It required that PIP benefits be provided to four classes of persons:

--"the person insured thereunder [injured in a motor vehicle accident] and

--"members of that person's family residing in the same household injured in a motor vehicle accident,

--"passengers injured while occupying the insured motor vehicle and

--[300 Or. 569] "pedestrians struck by the insured motor vehicle."

All four classes of persons are required to be insured under the PIP policy, in the sense that all are entitled to benefits.

As noted, PIP coverage is statutory. The coverage aspect of this legislation did not provoke much comment when it was proposed as HB 1300 in 1971. The general tenor of comments and submissions was that ORS 743.800 would mandate PIP coverage in all Oregon automobile liability policies. See, e.g., Presentation of HB 1300, Subcommittee on Financial Affairs, House State and Federal Affairs Committee, Exhibit C, 1971 (drafted by Cornelius Bateson, then Insurance Commissioner).

We turn to the basic framework of the statutory scheme involving motor vehicle liability insurance, including PIP, uninsured motorist and financial responsibility. PIP benefits are required to be included in "[e]very motor vehicle liability insurance policy issued for delivery in this state that covers any private passenger motor vehicle." ORS 743.800. Former ORS 486.011(11), repealed by Oregon Laws 1983, chapter 338, section 978, defined "motor vehicle liability insurance policy" to mean:

"* * * a policy or part of a policy either designating by explicit description or by appropriate reference all motor vehicles

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for which coverage is provided by the policy and insuring the named insured and all other persons insured under the terms of the policy against loss from the liabilities imposed by law for damages arising out of the ownership, operation, use or maintenance of those motor vehicles." See ORS 806.080(1).

The contents of a motor vehicle liability policy were also the subject of ORS 743.786 to 743.795. These sections included definitions to be used for the terms of the motor vehicle liability policy. 3 See Minutes, Senate Committee on Highways [300 Or. 570] 1 (May 23, 1967--Testimony of Ed Smith of Farmers Insurance Group) (HB 1506 "defines terms and language used in motor vehicle policies.")

ORS 743.789:

"(1) Every motor vehicle liability policy insuring against loss suffered by any natural person resulting from liability imposed by law for bodily injury or death arising out of the ownership, maintenance or use of a motor vehicle shall provide uninsured motorist coverage therein or by indorsement thereon * * *."

ORS 743.792(2)(b):

"Every [motor vehicle liability] policy required to provide the coverage specified in ORS 743.789 shall provide uninsured motorist coverage which in each instance is no less favorable in any respect to the insured or the beneficiary than if the following provisions were set forth in the policy. However, nothing contained in this section shall require the insurer to reproduce in such policy the...

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