Viking Ins. Co. of Wisconsin v. Petersen
| Decision Date | 26 May 1989 |
| Docket Number | CV-201 |
| Citation | 96 Or.App. 46,771 P.2d 1022 |
| Parties | VIKING INSURANCE COMPANY OF WISCONSIN, a foreign corporation, Respondent, v. Tammie PETERSEN, Lyonel E. Randle and Barbara J. Cooper, Personal Representative of the Estate of Luis Arthur Medina, Defendants, and Joe Thompson, Personal Representative of the Estate of Patricia Dianne Medina, Appellant. 87-; CA A47926. |
| Court | Oregon Court of Appeals |
R. Daniel Simcoe, Grants Pass, argued the cause for appellant. With him on the briefs was Brown, Hughes, Bird, Lane & Simcoe, Grants Pass.
Joel DeVore, Eugene, argued the cause for respondent. With him on the brief was Luvaas, Cobb, Richards & Fraser, P.C., Eugene.
Before BUTTLER, P.J., and WARREN and ROSSMAN, JJ.
Viking Insurance Company of Wisconsin (Viking) sought a declaratory judgment that its policy provides no coverage for its named insured, Randle, and Petersen for matters alleged in an action brought by the personal representatives of the estates of Patricia Medina and Luis Medina, who were killed when the motorcycle on which they were riding collided with a car owned by Randle and driven by Petersen, who was under the age of 25. The trial court granted a summary judgment to Viking, ruling that its policy provides no coverage for Randle or Petersen, because a policy endorsement excludes from coverage all accidents occurring while the "car is being driven by a person under the age of 25." The estate of Patricia Medina appeals, arguing that the trial court erred in relying on facts contained in unsworn statements referred to in an affidavit and in determining that the policy endorsement excludes coverage.
The estate alleged in the complaint in the underlying action that Petersen, age 19, was negligent in the operation of Randle's car, which collided with the motorcycle on which Medina was a passenger, resulting in her injury and death. It further alleged that, at all relevant times, Petersen was a member of Randle's family and household and was using the vehicle with the express knowledge and consent of Randle and that she was his agent. It alleged that Randle was negligent in his entrustment of the car to Petersen, whom he knew to be so incompetent to drive as to be likely to drive negligently and that Randle was liable for damages suffered by Medina under the family purpose doctrine.
The policy issued by Viking to Randle contains a clause insuring members of Randle's family and household and those using the car with his permission. It also contains the following amendatory endorsement:
"This policy won't provide any insurance while the car is being driven by a person under the age of 25 unless that person is named in the declaration page."
Petersen was not named as an insured or on the declaration page of the policy. On its face, the effect of the endorsement is to exclude coverage for the accident, both as to Petersen and Randle. The estate contends that the policy endorsement is inconsistent with the Financial Responsibility Law, ORS chapter 806.
Neither Randle nor Petersen appeared in this proceeding. The trial court entered an order of default against them. In Grange Insurance Association v. Beleke, 90 Or.App. 416, 752 P.2d 864, rev. den. 306 Or. 101, 757 P.2d 1362 (1988), the insurer asserted in its action for declaratory judgment of the coverage of its policy that the misrepresentations of the insured in obtaining the policy provided an excuse for the insurance company to avoid the policy. The insured did not appear in the declaratory judgment proceeding, and the trial court entered an order of default, determining that the policy provided no coverage. The trial court held that, because the injured party's rights cannot be greater than the rights of the insured, the default judgment against the insured determining that the policy provided no coverage was binding on the injured party. We affirmed.
Arguably, Grange Insurance Association v. Beleke, supra, would require that we affirm the trial court here on the ground that, because the rights of the estate are derived from the rights of Randle and Petersen and because Randle and Petersen have not appeared and the court has entered an order of default against them, they have no rights under the policy and, therefore, neither does the estate. Grange is distinguishable, however. There, due to the misrepresentations of the insured in obtaining the policy, the insurer was excused from providing any coverage. The final outcome of the litigation of those facts concerning the insured's conduct was binding on the injured party. 1 Here, however, there is no contention that Randle does not have insurance or that Viking should be able to avoid the policy due to some conduct of the insured. The only argument made by Viking is that the scope of coverage is limited by the terms of the policy. The estate's argument concerning the requirements of the Financial Responsibility Law raises a legal question about the construction of the policy and the insurance statutes. Although neither Randle nor Petersen appeared, the estate, as a party to the declaratory judgment proceeding and as a potential judgment creditor of both Randle and Viking, has a sufficient interest in the outcome to contest that legal determination. As a matter of law, the policy and statutes either provide coverage or they do not. Randle's and Petersen's failure to appear cannot deprive the estate of the right to obtain a correct determination as to the scope of coverage. We therefore consider whether the law requires that the policy provide coverage for either Randle or Petersen.
We first consider whether, under the requirements of the Financial Responsibility Law, the policy could exclude direct coverage of Petersen. ORS 743.776(1) provides:
"Every motor vehicle liability insurance policy issued for delivery in this state shall state the name and address of the named insured, the coverage afforded by the policy, the premium charged therefor, the policy period, and the limits of liability, and shall contain an agreement or endorsement which provides that the insurance is provided thereunder in accordance with the coverage described under ORS 806.070, 806.080 and 806.270 as respects bodily injury and death or property damage, or both, and is subject to all the provisions of the Oregon Vehicle Code relating to financial responsibility requirements as defined in ORS 801.280 and future responsibility filings as defined under ORS 801.290." (Emphasis supplied.)
ORS 806.080(1) provides:
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