Firemen's Ins. Co. v. St. Paul Fire & Marine Ins. Co.

Decision Date24 February 1966
Citation243 Or. 10,411 P.2d 271
PartiesFIREMEN'S INSURANCE COMPANY, Appellant, v. ST. PAUL FIRE & MARINE INSURANCE COMPANY, an insurance corporation, Respondent.
CourtOregon Supreme Court

Olywn E. Kennedy, Portland, argued the cause for appellant. With him on the brief were Hurlburt, Kennedy, Peterson, Bowles & Towsley, Portland.

Raymond J. Conboy, Portland, argued the cause for respondent. On the brief were Hollister & Thomas and Robert H. Hollister, Portland.

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

HOLMAN, Justice.

This case involves a dispute between insurance companies. The plaintiff, Firemen's Insurance Company (Firemen's), issued a policy of automobile insurance to Leta Free. In addition to Mrs. Free, the policy also insured--by what is known as an omnibus clause--any other person using her automobile with her consent. Mrs. Free loaned her car to Albert Carter. Carter, while using the vehicle, negligently caused an accident and resultant damages to third parties. Carter was also insured under a policy of automobile insurance issued to his parents by the defendant, St. Paul Fire and Marine Insurance Company (St. Paul), covering him when he was driving a vehicle other than the one owned by his parents.

Both policies had identical provisions relative to their coverage in case there was other insurance. It was as follows:

'If the Insured has other insurance against a loss covered by Part I of this policy, the Company shall not be liable under this policy for a greater proportion of such loss than the applicable limit of liability stated in the declarations bears to the total applicable limit of liability of all valid and collectible insurance against such loss; provided, however, the insurance with respect to a temporary substitute automobile or non-owned automobile shall be excess over any other valid and collectible insurance.'

Firemen's asked St. Paul to participate on a pro rata basis in defending the actions brought by the injured parties and St. Paul refused. Firemen's settled the cases and brought this action in an attempt to require St. Paul to pay a pro rata share of the cost of the settlements and resultant expenses. St. Paul demurred to the complaint and the demurrer was sustained. Firemen's appealed.

Firemen's policy issued to Mrs. Free provided that if the insured (Carter) had other insurance it was liable pro rata for any loss. St. Paul's policy, which also insured Carter, provided that if he was driving a non-owned vehicle (which he was), it was responsible only for the excess over any other insurance he might have. Firemen's contends these 'other insurance' provisions are repugnant and must be ignored and therefore the insurers have equal coverage and must pro rate the loss. It argues that it is entitled to contribution under the doctrine of Lamb-Weston, Inc. v. Oregon Auto. Ins. Co., 219 Or. 110, 341 P.2d 110, 346 P.2d 643, 76 A.L.R.2d 485 (1959).

In Lamb-Weston the owner of a vehicle leased it to another. An employee of the lessee was involved in an accident. Under the circumstances, the operator was covered by the policies of both lessor and lessee. The owner's policy had a pro rata 'other insurance' clause, the lessee's an excess clause. The court found the provisions conflicting and therefore repugnant and required contribution. The existing conflict was that both companies had contracted to pay the entire loss up to policy limits unless other insurance covered the risk. Each independently attempted to limit its liability because of the existence of other insurance.

St. Paul attempts to distinguish the facts of Lamb-Weston from the present case on the basis that the vehicle involved was described in both policies in Lamb-Weston, while in the present case this was not true. The vehicle was described in Firemen's policy only. St. Paul contends that automobile liability insurance is usually recognized as primary with respect to vehicles designated in the policy and that, therefore, in Lamb-Weston both policies were primary and proration was the correct conclusion. It argues this is not so where, as here, only one policy describes the vehicle. As long as there was duplicate coverage of the operator, we fail to see that it makes any difference whether the vehicle was described in both policies or only one. The policies did not insure the vehicle against loss; they insured the operator and his employer against loss.

In Cimarron Ins. Co. v. Travelers Ins. Co., 224 Or. 57, 355 P.2d 742 (1960), the owner of a vehicle permitted its use by another. The owner's policy, which described the vehicle, had a pro rata clause. The permissive user's policy, which did not describe the vehicle,...

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    ...110, 346 P.2d 643, 76 A.L.R.2d 485 (1959).2 Liberty Mut. Ins. v. Truck Ins., 245 Or. 30, 420 P.2d 66 (1966); Firemen's Ins. v. St. Paul Fire Ins., 243 Or. 10, 411 P.2d 271 (1966); Smith v. Pacific Auto. Ins. Co., 240 Or. 167, 400 P.2d 512 (1965); Gen. Ins. Co. v. Sask. Gov. Ins. Office, 238......
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    ...P.3d 111 (2011). Sometimes such issues are raised by way of equitable claims for contribution. See, e.g. , Firemen's Ins. v. St. Paul Fire Ins. , 243 Or. 10, 411 P.2d 271 (1966). Sometimes, as in this case, the issue is raised by way of garnishment. See, e.g. , A&T Siding, Inc. v. Capitol S......
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