Viking Ins. Co. of Wisconsin v. Petersen

• Decision Date: 28 December 1989
• Docket Number: CV-201
• Citation: 308 Or. 616,784 P.2d 437
• Parties: VIKING INSURANCE COMPANY OF WISCONSIN, a foreign corporation, Petitioner on review/Respondent on review, 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, Respondent on review/Petitioner on review. CC 87-; CA A47926; SC S36176; S36177.
• Court: Oregon Supreme Court

Page 437

784 P.2d 437

308 Or. 616

VIKING INSURANCE COMPANY OF WISCONSIN, a foreign corporation, Petitioner on review/Respondent on review, 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, Respondent on review/Petitioner on review.

CC 87-CV-201; CA A47926; SC S36176; S36177.

Supreme Court of Oregon In Banc.

Argued and Submitted Oct. 3, 1989.

Decided Dec. 28, 1989.

Joel S. DeVore, of Luvaas, Cobb, Richards & Fraser, P.C., Eugene, argued the cause and filed the petition for petitioner/respondent on review Viking Ins. Co.

Frank C. Rote, Grants Pass, argued the cause for respondent/petitioner on review Joe Thompson. R. Daniel Simcoe, of Brown, Hughes, Bird, Lane & Simcoe, Grants Pass, filed the petition for review and response to Viking Ins. Co.'s petition.

Thomas M. Christ, Portland, filed a brief on behalf of amicus curiae Oregon Ass'n of Defense Counsel.

JONES, Justice.

This case presents two issues: (1) whether a motor vehicle liability insurance policy with an endorsement excluding drivers under the age of 25 is valid under the Financial Responsibility Law, ORS chapter 806; and (2) whether a motor vehicle liability insurance policy must provide coverage to an insured owner for a claim of negligent entrustment of the insured vehicle. ¹ The circuit court concluded that the under-age-25 endorsement was valid and that Viking Insurance Company's policy provided no coverage for Randle, the car owner. The Court of Appeals affirmed in part, holding that it was permissible to exclude coverage of the under-age-25 driver, and reversed in part, holding that the owner of the vehicle had coverage for a claim of negligent entrustment. Viking Ins. Co. v. Petersen, 96 Or.App. 46, 771 P.2d 1022 (1989). We reverse the decision of the Court of Appeals as to the validity of the under-age-25 driver endorsement and affirm its decision as to coverage for the owner on the claim of negligent entrustment.

We take the facts from the Court of Appeals opinion:

"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 * * *.

"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."

The personal representative of the estate also claimed that Randle, the owner, negligently entrusted the use of the car to Petersen.

Viking sought a declaratory judgment releasing it from liability to defend or provide coverage.

As mentioned, the driver of the insured's car was under the age of 25. Viking contends that if the "under 25 driver exclusion" is valid, there is no basis for imposing liability under Randle's insurance policy.

ORS 742.450(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 therefore, the policy period, and the limits of liability, and shall contain an agreement or indorsement 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 filing as defined under ORS 801.290."

ORS 806.080(1) provides:

"A motor vehicle liability insurance policy used to comply with financial responsibility requirements under ORS 806.060 must meet all of the following requirements:

"(1) It must be a policy or part of a policy designating, by explicit description or by appropriate reference, all motor vehicles for which coverage is provided by the policy and insuring the named insured and all other persons insured under the terms of the policy against loss from the liabilities imposed by law for damages arising out of the ownership, operation, use or maintenance of those motor vehicles." (Emphasis added.)

ORS 806.270 provides in pertinent part:

"A certificate of insurance that is used to comply with future responsibility filing requirements under ORS 806.240 is subject to all of the following:

"(1) Except as provided by ORS 806.280, the certificate must be issued by an insurance carrier doing business in this state.

"(2) The certificate must show that the person required to make the future responsibility filing is covered by insurance that provides minimum coverage necessary for payment of the schedule of payments under ORS 806.070.

"(3) The certificate must show that the person required to make the future responsibility filing is either:

"(a) Insured by a policy meeting the requirements under ORS 806.080 that also covers all other persons who, with the consent of the insured, use the vehicles owned by the person making the filing; or

"(b) Insured against...