857 P.2d 852 (Or.App. 1993), CA A71037, Mathews v. Federated Service Ins. Co.

Docket Nº:9008-05231 and 9104-02484; CA A71037 (Control) and CA A71041.
Citation:857 P.2d 852, 122 Or.App. 124
Opinion Judge:De MUNIZ, J.
Party Name:Michael A. MATHEWS, Appellant, v. FEDERATED SERVICE INSURANCE COMPANY, Respondent. Michael A. MATHEWS, Appellant, v. CARLSON CHEVROLET COMPANY, Respondent.
Attorney:Stephen C. Hendricks, Portland, argued the cause for appellant. With him on the briefs was Zack M. Lorts, Oregon City. Stuart D. Jones, Portland, argued the cause for respondents. With him on the brief were I. Franklin Hunsacker, Ronald E. Bailey and Bullivant, Houser, Bailey, Pendergrass & Hoffm...
Case Date:July 28, 1993
Court:Court of Appeals of Oregon
 
FREE EXCERPT

Page 852

857 P.2d 852 (Or.App. 1993)

122 Or.App. 124

Michael A. MATHEWS, Appellant,

v.

FEDERATED SERVICE INSURANCE COMPANY, Respondent.

Michael A. MATHEWS, Appellant,

v.

CARLSON CHEVROLET COMPANY, Respondent.

9008-05231 and 9104-02484; CA A71037 (Control) and CA A71041.

Court of Appeals of Oregon.

July 28, 1993

Argued and Submitted Oct. 30, 1992.

Reconsideration Denied Oct. 13, 1993.

Page 853

[122 Or.App. 126] Stephen C. Hendricks, Portland, argued the cause for appellant. With him on the briefs was Zack M. Lorts, Oregon City.

Stuart D. Jones, Portland, argued the cause for respondents. With him on the brief were I. Franklin Hunsacker, Ronald E. Bailey and Bullivant, Houser, Bailey, Pendergrass & Hoffman, Portland.

[122 Or.App. 126A] Before ROSSMAN, P.J., and DE MUNIZ and PUESON, [*] JJ.

Page 854

[122 Or.App. 127] DE MUNIZ, Judge.

Plaintiff was injured when he was struck by an automobile owned by defendant Carlson Chevrolet and insured by defendant Federated Service Insurance (Federated). Plaintiff filed a complaint against Federated for declaratory judgment and to enforce Carlson Chevrolet's insurance contract with Federated. He also filed a complaint against Carlson Chevrolet for negligent entrustment. The trial court granted Federated's motion for summary judgment, granted Carlson Chevrolet's motions to dismiss and entered judgments of dismissal in both cases. Plaintiff appeals. We reverse the summary judgment in favor of Federated and affirm the judgment in favor of Carlson Chevrolet.

In his first assignment of error, plaintiff contends that the court erred by granting Federated's motion for summary judgment. Federated had the burden of demonstrating that there was no disputed issue of material fact and that it was entitled to judgment as a matter of law. ORCP 47 C; Tolbert v. First National Bank, 312 Or. 485, 494, 823 P.2d 965 (1991). In reviewing the court's summary judgment, we view the facts in the light most favorable to plaintiff, the party who opposed the motion. McCabe v. State of Oregon, 314 Or. 605, 608, 841 P.2d 635 (1992).

Stanley Carlson is the owner of Carlson Chevrolet. His son, Jerry, works for Carlson Chevrolet and sold a Corvette to his friend, Ghiglieri, in mid-1988. On November 16, 1988, Ghiglieri came to Carlson Chevrolet and told Jerry that he wanted to rent a car to drive to California, because he did not want to put so many miles on his Corvette. Ghiglieri told Jerry that he wanted his girlfriend, Hutchinson, to drive the car. Jerry knew that Ghiglieri was 22 years old at the time and that Hutchinson was younger. Jerry told Ghiglieri that Hutchinson should not drive the car, because she was under 25 years old, and "there was a 25-years-of-age deal on it."

In his deposition, Ghiglieri testified:

"I told [Jerry] that I was not going to be driving the vehicle, and he indicated that he wasn't supposed to know that, that 'I don't know this, but, you know, just take it and get out of here,' basically.

[122 Or.App. 128] "And so I said, 'Where do I sign?' And I signed [the contract.]

"I said that [Hutchinson] was going to be driving the car. He said, 'I don't know that, so don't tell me that. * * * I said, again, I wasn't going to be driving the car and I was getting it for [Hutchinson]."

Jerry's deposition testimony indicates that he did not agree to allow Hutchinson to use the car. He testified:

"I told him, if he wanted to [have a car for Hutchinson to drive], he would have to give her the Corvette to drive and use the rental car to go to California with it; and I stuck with it until he got it in his head, until I knew that he understood what I meant.

" * * * * *

"Q. Did he specifically ask for a Camaro?

"A. He wanted a sporty-type car.

"Q. For his girlfriend?

"A. No, no. For him to drive, because he was going to California."

Ghiglieri signed a "Car Rental Agreement" form without reading it and took the car. The form includes these terms:

"(3) Renter agrees * * * not to operate the automobile beyond the boundaries of the State of Oregon.

"(4) Permission to drive and use the vehicle is limited exclusively to renter, unless written consent of Carlson Leasing is endorsed hereon.

" * * * * *

"(11) The vehicle described * * * shall not be operated * * * by any person under the age of twenty-five (25) years."

The next day, as Hutchinson drove the car, she struck plaintiff, a Washington County Sheriff's deputy who was investigating a traffic accident. Plaintiff, who was seriously injured, sued Hutchinson and obtained a judgment against her. Plaintiff

Page 855

agreed not to enforce his judgment against Hutchinson. In exchange, she assigned to him all her rights of recovery against any person, including Federated, "having any responsibility or liability for the judgment [against her]."

[122 Or.App. 129] Carlson Chevrolet is insured by Federated under a "Garage Coverage" policy. The insurance policy contains an exclusions section, which provides:

"This insurance does not apply to any of the following:

" * * * * *

"7. LEASED AUTOS

"Any covered 'auto' while leased or rented to others. But this exclusion does not apply to a covered 'auto' you rent to one of your customers while their 'auto' is left with you for service or repair."

The trial court granted Federated's motion for summary judgment on the grounds that Hutchinson had used the car without Carlson Chevrolet's permission, that Carlson Chevrolet leased or rented the car to Ghiglieri and that the insurance...

To continue reading

FREE SIGN UP