Farmers Ins. Exch. v. Crutchfield

Decision Date15 June 2005
Citation200 Or. App. 146,113 P.3d 972
PartiesFARMERS INSURANCE EXCHANGE, Respondent, v. Jeffrey Scott CRUTCHFIELD, Defendant, and Holliann Nelson, aka Holliann Heatherly, nka Holliann Kaiser, Appellant.
CourtOregon Court of Appeals

Jay D. Enloe, Portland, argued the cause for appellant. With him on the opening brief was Julie E. Dutton. With him on the reply brief was Lachenmeier Enloe Rall & Heinson.

Thomas M. Christ, Portland, argued the cause for respondent. With him on the brief was Cosgrave Vergeer Kester LLP.

Before HASELTON, Presiding Judge, and LINDER and ORTEGA, Judges.

HASELTON, P.J.

This appeal presents an issue of insurance coverage: Did a liability policy covering an automobile dealership obligate the issuing insurance company to defend or indemnify a person who ostensibly purchased a vehicle from the dealer and shortly thereafter was involved in an accident? Plaintiff Farmers Insurance Exchange brought an action seeking a declaration that the insurance policy it issued to Guthrie Motors, Inc., did not extend to liability incurred when a pickup truck sold by Guthrie Motors was involved in an accident in which defendant Nelson suffered serious injuries.1 On cross-motions for summary judgment, the trial court granted plaintiff's motion and denied defendant's motion, concluding that, because Guthrie Motors did not own the pickup at the time of the accident, the insurance policy issued by plaintiff did not cover the accident. Defendant appeals and, for the reasons set forth below, we affirm.

The trial court described the events that led to this action:

"[O]n November 8, 1996, defendant Jeffrey Crutchfield drove his 1993 Mitsubishi automobile to Guthrie Motors, where he entered into a contract to trade that car for a 1986 Toyota pickup. This contract required Guthrie Motors to pay some cash back to Mr. Crutchfield because the car he traded in was worth more than the pickup he was purchasing. Guthrie gave Crutchfield a check at the time the contract was entered into in the amount of $1,690.00 with a written understanding that Guthrie would pay a remaining balance of $500.00 once Crutchfield produced clear title to the Mitsubishi. Crutchfield took possession of the pickup pursuant to the contract entered into with Guthrie Motors and later that day was involved in a collision wherein defendant [Nelson] was seriously injured."

Other uncontroverted facts provide context for our analysis. The contract between Guthrie Motors and Crutchfield for the sale of the Toyota pickup included the following notice: "WARNING: There is NO PUBLIC LIABILITY OR PROPERTY DAMAGE INSURANCE included in this transaction." It also provided that the "purchaser will bear the entire expense of repairing or correcting any defects that presently exist or that may occur in the vehicle." On the day that Crutchfield left the car lot with the pickup, Guthrie Motors prepared a standard form "Application for Title and Registration," listing Crutchfield as the owner. The following day — after the accident in which defendant was injured, but before Guthrie Motors learned of the accident — a Guthrie Motors employee signed the section of the application that states, "I hereby release all rights, title and interest in this vehicle except as otherwise noted on the application for title."

Unbeknownst to Guthrie Motors, there was a lien on the Mitsubishi that Crutchfield had traded in for the Toyota pickup. When a Guthrie Motors salesperson discovered the lien the day after the accident, shortly after executing the "Application for Title and Registration," the salesperson told Crutchfield that "the deal was off" and demanded that Crutchfield return the pickup and Guthrie Motors's partial payment of cash. Otherwise, the salesperson said, Guthrie Motors would "press charges for stealing" the pickup.

By then, of course, the pickup had been wrecked and could not be returned. Nonetheless, Crutchfield returned $700 of the $1,690 that Guthrie Motors had paid him. Eventually — roughly six months after Crutchfield drove off with the pickup — Guthrie Motors was able to clear title to the Mitsubishi and sell it. It then gave Crutchfield a check for $1,200, representing the sum of the $500 balance due under the original agreement and the $700 that Crutchfield had returned after the accident.

At the time of the accident, Crutchfield had no automobile insurance. However, Guthrie Motors was insured under a liability insurance policy issued by plaintiff. That policy included a provision that plaintiff would pay all sums that an "insured" legally must pay as damages because of bodily injury caused by an accident. The policy also provided:

"1. WHO IS AN INSURED
"a. The following are `insureds' for covered `autos'.
"(1) You for any covered `auto'.
"(2) Anyone else while using with your permission a covered `auto' you own, hire or borrow except:
"* * * * *
"(d) Your customers, if your business is shown in the Declarations as an `auto' dealership. However, if a customer of yours:
"(i) Has no other available insurance * * *, they are an `insured'[.]"

(Emphasis added.)

As a result of the accident, at least two legal proceedings ensued. In the first, a personal injury liability action, Nelson sought damages for her injuries from, among others, Crutchfield and Guthrie Motors. The latter claim was based on the theory that Guthrie Motors owned the pickup at the time of the accident and that it was negligent in allowing Crutchfield to use it. Guthrie Motors denied that it owned the pickup at the time of the accident and moved for summary judgment. The trial court in the personal injury action ruled that Guthrie Motors did not own the pickup at the time of the accident, and it granted summary judgment in favor of Guthrie Motors. Nelson appealed to this court, but, during the pendency of that appeal, the personal injury action was settled. The settlement included an agreement that the judgment in that case would be set aside by stipulation.2

In the separate case now before us, plaintiff, which was not a party to the personal injury action, brought a declaratory relief action, seeking a declaration that it is not obligated to defend or indemnify Crutchfield against Nelson. Plaintiff moved for summary judgment, arguing that (1) the trial court here was bound by the trial court's determination in the personal injury case that Guthrie Motors no longer owned the pickup at the time of the accident; and (2) in all events, as a matter of law, Crutchfield owned the pickup. Defendant filed a cross-motion for summary judgment, arguing that (1) the determinations underlying the judgment in the personal injury action had no preclusive effect because that judgment had subsequently been vacated; (2) because the sales transaction was "incomplete," Guthrie Motors still owned the pickup at the time of the accident; and (3) because Crutchfield was a "customer" of Guthrie Motors, plaintiff's insurance policy applied to the accident in which she was injured.

The trial court initially granted defendant's motion for summary judgment and denied plaintiff's motion. The court agreed with plaintiff that Guthrie Motors was not the owner of the pickup at the time of the accident. Nonetheless, interpreting the policy language set out above, the court initially concluded that, because Crutchfield was a "customer" of Guthrie Motors at the time of the accident and was uninsured, plaintiff's policy applied. In its initial order, the court stated:

"The second possible basis for coverage rests on a determination of whether Mr. Crutchfield was a `customer' at the time of the November 8, 1996 accident. The policy outlines five exceptions to the requirement that the covered auto be owned by the insured. The fourth exception provides that a `customer' of the insured (Guthrie Motors) is also insured if the business of the insured is shown in the declarations as an auto dealership and if the `customer' has no other available insurance. In this case, this court makes the following findings:
"(1) The declaration sheet * * * shows the insured (Guthrie Motors) as an auto dealership, (2) Jeffrey Crutchfield was a `customer' of Guthrie Motors at the time of the accident on November 8, 1996, and (3) Mr. Crutchfield had no other available insurance. This court finds that a person can be considered a `customer' by doing business with an auto dealership on a regular basis or by actively participating in a business transaction with the dealership. In this case, Mr. Crutchfield was still in the process of completing a business transaction with Guthrie Motors when the accident occurred and, as a result, is considered a customer. This being the case, Jeffrey Crutchfield was covered by the Farmers Insurance policy, according to the language of the policy `up to the compulsory or financial responsibility law limit where the covered "auto" is principally garaged.'"

(Emphasis in original.)

Plaintiff sought reconsideration, arguing that, although the trial court correctly had concluded that Guthrie Motors did not "own" the pickup at the time of the accident, the court had erred in concluding that Crutchfield was nonetheless covered by the policy merely because he was a "customer." Plaintiff asserted that, properly interpreted, the policy provides that "a customer of Guthrie Motors, using a Guthrie Motors-owned vehicle with Guthrie Motors's permission, will qualify as an insured under Guthrie Motors's policy, if the customer does not have his own insurance." (Emphasis added.) In short, plaintiff asserted, its insurance applied only to automobiles owned by Guthrie Motors.

Persuaded by plaintiff's argument, the trial court granted reconsideration in an order that stated, in part:

"(1) The court concludes that Mr. Crutchfield was a `customer' of Guthrie Motors at the time of the accident, but that a `customer' is not an insured under plaintiff's
...

To continue reading

Request your trial
20 cases
  • Hazell v. Brown
    • United States
    • Oregon Court of Appeals
    • November 10, 2010
    ...and the granting of one and denial of the other are both assigned as error, both are subject to review." Farmers Ins. Exchange v. Crutchfield, 200 Or.App. 146, 152-53, 113 P.3d 972, rev. den., 339 Or. 609, 127 P.3d 650 (2005). See also Employers-Shopmens Local 516 v. Travelers, 235 Or.App. ......
  • Bjugan v. State Farm Fire & Cas. Co.
    • United States
    • U.S. District Court — District of Oregon
    • August 28, 2013
    ...term at issue is not defined in the policy, the next step is to look to the plain meaning of the term.” Farmers Ins. Exch. v. Crutchfield, 200 Or.App. 146, 154, 113 P.3d 972 (2005) (citation omitted). “Vandalism” is defined as the “[w]illful or ignorant destruction of public or private prop......
  • Truck Ins. Exch. v. Friend
    • United States
    • Oregon Court of Appeals
    • November 15, 2012
    ...703. We interpret the text of the policy “from the perspective of the ‘ordinary purchaser of insurance.’ ” Farmers Ins. Exchange v. Crutchfield, 200 Or.App. 146, 154, 113 P.3d 972,rev. den.,339 Or. 609, 127 P.3d 650 (2005) (quoting Totten, 298 Or. at 771, 696 P.2d 1082). “If the term at iss......
  • Williams v. Gaylord (In re Estate of Williams)
    • United States
    • Oregon Court of Appeals
    • December 31, 2014
    ...the trial court erred in granting the attorneys' motion for summary judgment and denying the estate's. See Farmers Ins. Exchange v. Crutchfield, 200 Or.App. 146, 152–53, 113 P.3d 972, rev. den., 339 Or. 609, 127 P.3d 650 (2005) (“When there are cross-motions for summary judgment and grantin......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT