International Health & Life Ins. Co. v. Lewis

• Decision Date: 07 January 1975
• Citation: 271 Or. 35,530 P.2d 517
• Parties: INTERNATIONAL HEALTH AND LIFE INSURANCE COMPANY, Respondent, v. Robert D. LEWIS, Appellant, and Ethel Davidson, Administratrix of the Estate of Thomas M. Davidson, Defendant.
• Court: Oregon Supreme Court

Page 517

530 P.2d 517

271 Or. 35

INTERNATIONAL HEALTH AND LIFE INSURANCE COMPANY, Respondent, v. Robert D. LEWIS, Appellant and Ethel Davidson, Administratrix of the Estate of Thomas M Davidson, Defendant.

Supreme Court of Oregon.

Argued and Submitted Nov. 5, 1974.

Decided Jan. 7, 1975.

James H. Spence, Roseburg, argued the cause for appellant. With him on the briefs were Farrell & Spence and Verden L. Hockett, Jr., Roseburg.

Ridgway K. Foley, Jr., Portland, argued the cause for respondent. With him on the brief were Souther, Spaulding, Kinsey, Williamson & Schwabe and James F. Spiekerman, Portland.

Before HOLMAN, P.J., and HOWELL, BRYSON and SLOPER, JJ.

SLOPER, Justice Pro Tem.

This is a proceeding brought under Oregon declaratory judgment statutes (ORS 28.010 et seq.) by plaintiff, International Health and Life Insurance Company, hereinafter referred to as IHA, in which plaintiff seeks to have a life insurance policy which it had issued on the life of Thomas M. Davidson, deceased, declared to be null and void by reason of material misrepresentations made by the defendant in the application concerning his employment and further requesting an adjudication as to which party IHA should repay the premiums, and, in the alternative, a declaration as to which of the defendants should be paid the proceeds of the insurance. Defendant Ethel Davidson is the personal representative of decedent and defendant Robert D. Lewis is the named beneficiary under the policy. Both defendants claim the proceeds and defendant Lewis filed a cross-complaint seeking payment of the policy proceeds. Trial was had before the court and judgment was entered in favor of plaintiff and against both defendants declaring the insurance policy null and void and that plaintiff have its costs and disbursements. Defendant Lewis appeals.

Although there has been no assignment of error directed at the trial court's conclusion of law that 'All parties waived any right to a trial by jury in this matter and the court tried this as a legal matter without a jury,' plaintiff and defendant in their briefs, as well as at the time of oral argument, have taken opposing views of the trial court's description of the nature of the proceedings. It is necessary for us to make an initial determination as to whether this is a legal or an equitable proceeding so that we may apply the appropriate scope of our appellate review. If it is an equitable proceeding, the factual issues are tried de novo. If it is a legal proceeding, the court is bound by the trial court's factual determinations if there is sufficient evidence to sustain them. Truck Ins. Exch. v. Olinger Mercury, 262 Or. 8, 10, 495 P.2d 1201 (1972). Declaratory judgment proceedings will be treated as either legal or equitable, depending upon the essential nature of the case. Hartford v. Aetna/Mt. Hood Radio, Or., 527 P.2d 406 (1974); May v. Chicago Insurance Co., 260 Or. 285, 291--292, 490 P.2d 150 (1971); Mayer v. First National Bk. of Oregon, 260 Or. 119, 133, 489 P.2d 385 (1971).

The development of the law on this issue is clearly set forth in May v. Chicago Insurance Co., supra (260 Or. at 291--292, 490 P.2d at 153):

'The parties' contentions on this question are applicable only to declaratory judgment proceedings which are basically equitable in nature. The broad language in Consolidated Freightways on which plaintiffs rely, 180 Or. (442) at 458, 176 P.2d 239, 177 P.2d 422, is no longer controlling in all declaratory judgment proceedings. It is now clear that such proceedings will be treated as either legal or equitable, depending upon their nature. Mayer v. First National Bank of Oregon, (260 Or. 119, 133), 93 Or.Adv.Sh. 554, 565, 489 P.2d 385, 392 (September 29, 1971); Oregon Farm Bureau v. Thompson, 235 Or. 162, 179, 378 P.2d 563, 384 P.2d 182 (1963). We have treated declaratory judgment proceedings to determine coverage under insurance policies as legal in nature, rather than equitable, with the consequence that the trial court's findings of fact in such cases are binding on us if supported by any substantial evidence. Falk v. Sul America Terrestres, 255 Or. 246, 248, 465 P.2d 714 (1970); Oregon Farm Bureau v. Thompson, supra, 235 Or. at 199, 200--205, 378 P.2d 563, 384 P.2d 182 (concurring and dissenting opinions on rehearing, representing the views of five members of the court on this question). See, also, Reif v. Botz, 241 Or. 489, 406 P.2d 107 (1965). We cannot, therefore, accept the parties' invitation to review the evidence in this case de novo. We must accept the trial court's findings of fact if those findings have adequate support in the evidence.'

In Oregon Auto Ins. Co. v. Watkins, 264 Or. 464, 467, 506 P.2d 179, 180 (1973), which was a declaratory judgment action brought by plaintiff for a declaration that it was not liable for a judgment against its insured contractor, we said:

'We have consistently held that a declaratory judgment proceeding to determine the liability of the insurer to its insured under its policy is in the nature of an action at law and governed by the same rules. This proceeding is in reality an action by Watkins to collect the protection due him from Oregon Auto under his policy. The parties appear in inverse order only because Oregon Auto initiated the action.'

We conclude from our examination of the pleadings and the conduct of the parties...