Clements v. Thornton

• Jurisdiction: Oregon
• Parties: William T. CLEMENTS, Respondent, v. James E. THORNTON et al., Appellants.
• Citation: 268 Or. 367,520 P.2d 893
• Court: Oregon Supreme Court
• Decision Date: 11 April 1974

Page 893

520 P.2d 893

268 Or. 367

William T. CLEMENTS, Respondent, v. James E. THORNTON et al., Appellants.

Supreme Court of Oregon, In Banc.

Argued and Submitted Dec. 5, 1973.

Decided April 11, 1974.

Eldon F. Caley, Roseburg, argued the cause for appellants. With him on the briefs were Thomas W. Kolberg, and Long, Neuner, Dole & Caley, Roseburg.

Lynne W. McNutt, Coos Bay, argued the cause for respondent. With him on the brief were McNutt, Gant, Ormsbee & Gardner, Coos Bay.

HOLMAN, Justice.

This is an action for damages for breach of an oral contract to procure and maintain insurance in force. Plaintiff claims defendants, who are independent insurance agents, agreed to keep him covered by temporary coverage through binders until permanent coverage could be obtained but failed to do so. During the time he claims he was to have been covered he had an accident in which he demolished his vehicle and suffered other losses for which he seeks reimbursement. Defendants appealed from a judgment for plaintiff entered pursuant to a jury verdict.

Because plaintiff received a verdict, the evidence must be evaluated in the light most favorable to him. Plaintiff was employed in Pennsylvania. While there he purchased a Prosche automobile and called the defendant Thornton in Oregon to secure coverage on the vehicle. He testified he was told by Thornton that he was covered and at that time was given a policy number in the Maryland Casualty Company. Shortly thereafter he returned to his parents' home in Oregon for a Christmas vacation visit.

While plaintiff was at home, he and his father called upon Thornton. Plaintiff's father had had word from Thornton indicating he was having difficulty placing plaintiff's coverage because of plaintiff's driving record. At that time, at approximately 3:00 p.m., Thornton executed a binder in the Hartford company which stated as follows:

'PENDING ISSUANCE OF A POLICY, and in consideration of the stipulation herein contained, the Company listed below is hereby bound to the insured for a maximum of 30 days, and fewer if so stipulated under 'days effective,' from _ _ A.M. P.M. (standard time) on the effective date until 12:01 A.M. P.M. (standard time) on the date of expiration.

'EFFECTIVE DATE 1/1/70 DAYS EFFECTIVE 30

'* * *.

'* * * In no event shall this binder continue in force beyond thirty (30) days from the effective date of this binder * * *.

'* * *.'

Thornton told plaintiff that if the 30-day binder expired and no insurance had been obtained he could issue another binder. However, plaintiff and Thornton agreed they would both continue to look for permanent coverage. Plaintiff testified Thornton agreed to keep him covered until permanent insurance was secured. Thornton testified he agreed to cover plaintiff for only 30 days.

Thereafter, plaintiff returned to his work in Pennsylvania where the accident in question occurred on February 1, at 2:30 a.m. (January 31, 11:30 p.m., Pacific standard time). There was a dispute about whether the meeting and execution of the binder occurred on January 1, which was the day the binder was dated, or on January 2 and the binder misdated. The particular issue was submitted to the jury under instructions that if the document was executed January 1, there was no coverage; but if it was executed January 2, there was coverage and defendants were not liable. The jury must have found that the document was signed on January 1 because they returned a verdict for plaintiff.

Defendants contend that even if the binder was executed January 1 they were entitled to a directed verdict because as a matter of law the binder provided coverage at the time of the accident and therefore plaintiff suffered no damage. Defendants do not contend that because of the ambiguous terms of the binder and the conflicting evidence concerning what was intended by it, the trial judge should have submitted the entire issue of its coverage to the jury. Apparently, the parties agreed that the decision as to the coverage of the binder would be left to the trial judge, except the issue concerning the date the binder was signed. Defendants give the following reasons they believe there was coverage by the Hartford binder as a matter of law:

1. There was no immediate need for coverage because the plaintiff was in Oregon and the vehicle in Pennsylvania where plaintiff could not immediately drive it. Therefore, it was unlikely the parties intended the 30 days' coverage to commence the day the instrument was signed;

2. Thornton said he had agreed to give plaintiff 30 days to see if plaintiff could get coverage and there was no opportunity for plaintiff to get coverage on New Year's Day, so January 1 should be excluded from the 30 days covered by the binder;

3. Plaintiff and his father testified that Thornton said the binder would be good until the end of January;

4. The use of the word 'from' in the following language, 'from _ _ A.M. P.M. (standard time) on the effective date of' excludes January 1, the 'effective date';

5. The binder was signed 3:00 p.m., January 1, and provided that it should terminate at 12:01 a.m. If it was to have terminated at 12:01 a.m., January 31, there would be less than 30 full days of coverage. The only way it could terminate at 12:01 a.m. and give 30 days' coverage was if it was intended to terminate at 12:01 on February 1, in which case it was in effect at the time of the accident.

The above reasons may be persuasive, but they do not require a finding of coverage as a matter of law. There was a basis for finding that the binder did not provide coverage on January 31 at 11:30 p.m., Pacific standard time, if, as the jury found, it was executed on the date it bore, January 1. The document is ambiguous. The effective date was stated to be January 1. The factfinder (in this case the trial judge) could have found that the binder was intended to afford coverage for that date and provided for a maximum of 30 days' coverage. In such a case there was a basis for him to decide it was intended to expire on January 31 at 12:01 a.m. or at 3:00 p.m. and that it was not in effect at 11:30 p.m. on that date.

Defendants next assert that as a matter of law plaintiff failed to perform his part of the contract and they are therefore entitled to a directed verdict. The testimony is somewhat confusing, but there is evidence from which it could have been found that although both plaintiff and Thornton were to continue to search for permanent coverage, the onus was on plaintiff to do so. After plaintiff returned to the East Coast he found coverage, but did not take advantage of it because, he said, he wanted to place his coverage with defendants, if possible. Defendants take the position that because plaintiff had insurance available to him and failed to notify defendants at the end of 30 days that he had not secured coverage, he did not perform his part of the contract.

We do not construe the testimony To require a finding that plaintiff was obligated to take any coverage he could find or that the claimed obligation to keep plaintiff covered until permanent coverage was secured required a notification by plaintiff that he had not secured coverage elsewhere during the 30 days. We believe these were questions for the jury.

Defendants also contend that the trial court erred because it did not give the following instruction on the subject...