Argonaut Ins. Co. v. Ketchen

• Decision Date: 27 April 1966
• Parties: , 19 A.L.R.3d 1386 ARGONAUT INSURANCE COMPANY, a California corporation, Appellant, v. Jack C. KETCHEN, Defendant, Fireman's Fund Insurance Company, Respondent.
• Court: Oregon Supreme Court

Page 613

413 P.2d 613

243 Or. 376, 19 A.L.R.3d 1386

ARGONAUT INSURANCE COMPANY, a California corporation, Appellant, v. Jack C. KETCHEN, Defendant, Fireman's Fund Insurance Company, Respondent.

Supreme Court of Oregon, Department 2.

Argued and Submitted April 8, 1966.

Decided April 27, 1966.

Lloyd W. Weisensee, Portland, argued the cause for appellant. With him on the brief were Gray, Fredrickson & Heath, Portland.

Thomas M. Triplett, Portland, argued the cause for respondent Fireman's Fund Ins. Co. With him on the brief were Mautz, Souther, Spaulding, Kinsey & Williamson and Wayne A. Williamson, Portland.

Before McALLISTER, C.J., and GOODWIN, DENECKE, HOLMAN and LUSK, JJ.

HOLMAN, Justice.

The plaintiff, Argonaut Insurance Company, issued a policy of liability insurance to Idaho Lease and Rental Company. Bethel Reed secured a judgment against Idaho Lease and Rental and its employee, the defendant Ketchen, for injuries received in an automobile accident. Mrs. Reed was a passenger in Ketchen's automobile while he was negligently operating it within the scope of his employment. Plaintiff paid the Reed judgment and, as subrogee of Idaho's rights, instituted this action against Idaho's employee for reimbursement. Plaintiff secured a judgment against defendant. Defendant had a policy of liability insurance issued by Fireman's Fund Insurance Company. Plaintiff levied a garnishment in aid of execution against Fireman's to collect under defendant's policy. Fireman's denied coverage for the accident, claiming Mrs. Reed was an employee of the defendant Ketchen at the time of the accident within the meaning of its policy clause excluding from coverage injuries to 'any employee' of the insured.

The garnishment proceedings were tried by the court without a jury. The court entered findings and conclusions to the effect that at the time of the accident Mrs. Reed was a special employee of the defendant Ketchen; that she was an employee within the meaning of the policy exclusion; that the policy did not extend coverage to defendant for Mrs. Reed's judgment, and that the garnishee Fireman's was not liable on the policy to plaintiff Argonaut. Plaintiff appealed.

Plaintiff first contends error was committed by the trial court because it was deprived of a jury trial on the issues of fact in the garnishment proceeding. The record indicates there was a hearing at which certain records from the litigation in which Mrs. Reed received her judgment were introduced as exhibits and the parties stated their positions. The matter was then continued for the purpose of briefing the legal questions (1) whether the court's decision in which Mrs. Reed secured her judgment was res judicata of her status as an employee of the defendant Ketchen and (2) the meaning and breadth of the words 'any employee' as used in the policy. After the court made its ruling that the prior proceeding was not res judicata and it therefore appeared the hearing would have to be resumed, the plaintiff requested a jury trial on the question of whether Mrs. Reed was an employee within the meaning of the policy exclusion. This request was denied by the court upon the ground that the plaintiff had waived a jury trial by not objecting to the lack of a jury before the commencement of the hearing.

The garnishee argues that plaintiff waived a jury trial. It also contends garnishment proceedings are not triable by juries and that in any event only questions of law are involved.

It is obvious that the question of whether Mrs. Reed was an employee of the defendant Ketchen at the time of the accident is one of fact and not of law. While there is no serious dispute in the testimony, reasonable men can dispute the proper inferences to be drawn therefrom. Rickard v. Ellis, 230 Or. 46, 51, 368 P.2d 396 (1962); Schmitz v. Yant, 81 Or.Adv.Sh. 821, 828--829, 409 P.2d 346 (1965); Ford v. Schall, 114 Or. 688, 690, 236 P. 745 (1925).

Fact issues in a contested garnishment proceeding are triable by a jury. ORS 29.350 states as follows:

'Witnesses, including the defendant and garnishee or officer thereof, may be required to appear and testify, and the issues shall be tried, upon proceedings against a garnishee, As upon the trial of an issue of fact between a plaintiff and defendant.' (Emphasis added)

While a garnishment is a statutory proceeding, it is legal and not equitable in nature, and if tried as any normal issue between a plaintiff and a defendant, as required by the statute, all fact issues must be tried as in an action at law. Case v. Noyes, 16 Or. 329, 333, 19 P. 104 (1888); Caldwell Banking & T. Co. v. Porter, 52 Or. 318, 323, 95 P. 1, 97 P. 541 (1908); Overturff v. Carroll, 109 Or. 326, 329, 330, 219 P. 1081 (1923); Eisele v. Knight, 234 Or. 468, 472, 382 P.2d 416 (1963). This necessarily means such issues are tried with a jury unless the parties waive a jury trial. In Case v. Noyes, supra, the court stated the following dictum:

'Something was said upon the argument as to whether this proceeding is in the nature of an action at law or a suit in equity. The evidence is in writing, and accompanies the transcript, and it was suggested we might examine and retry the questions of fact. The conclusions reached render it unnecessary to decide this question. But we may as well add that, in case of a garnishment, whether upon an attachment or execution in an action at law, the proceeding is strictly at law, and not in equity, and the issues of fact arising therein shall be tried as ordinary issues of fact between plaintiff and defendant.'

Iowa has a statute with language similar to Oregon's in that it provides that garnishment proceedings 'shall be tried in the usual manner.' The Iowa court has held that this statutory language entitled a party to a jury trial. Neff v. Manuel, 121 Iowa 706, 97 N.W. 73 (1903). It appears to be the tendency to construe statutes which do not specifically cover the matter as providing for a jury trial. See Annotation, 88 A.L.R. 1151 (1934).

We believe the trial court was in error in holding the plaintiff waived his right to a jury. ORS 17.035 provides for the manner in which a jury trial may be waived. It states:

'Trial by jury may be waived by the several parties to an issue of fact, in actions on contract, and with the assent of the court in other actions, in the manner following:

'(1) By failing to appear at the trial.

'(2) By written consent, in person or by attorney, filed with the clerk.

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