Wright v. State Farm Mut. Auto. Ins. Co.

• Citation: 196 P.3d 1000,223 Or. App. 357
• Decision Date: 29 October 2008
• Docket Number: CV05080601; A132898.
• Parties: Linda WRIGHT, Guardian Ad Litem of Devin Wright, a Minor, Plaintiff-Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Respondent.
• Court: Court of Appeals of Oregon

196 P.3d 1000

223 Or. App. 357

Linda WRIGHT, Guardian Ad Litem of Devin Wright, a Minor, Plaintiff-Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Respondent.

CV05080601; A132898.

Court of Appeals of Oregon.

Argued and submitted on May 08, 2008.

Decided October 29, 2008.

Kathryn H. Clarke argued the cause for appellant. With her on the brief was Gideon D. Caron.

R. Daniel Lindahl argued the cause for respondent. With him on the brief were John R. Bachofner and Bullivant Houser Bailey, PC.

Before HASELTON, Presiding Judge, and ARMSTRONG, Judge, and ROSENBLUM, Judge.

HASELTON, P.J.

The plaintiff insured, as guardian ad litem for her minor son, appeals, challenging the allowance of summary judgment in favor of defendant, plaintiff's underinsured motorist (UIM) insurance carrier, as well as the trial court's denial of plaintiff's cross-motion for summary judgment. The underlying accident occurred in January 2000, and this action for declaratory relief was filed in August 2005. The trial court agreed with defendant that the "minority tolling" provisions of ORS 12.160 did not operate to extend the time limitation provision, predicated on ORS 742.504(12)(a), that certain events occur within two years of the date of the accident. The court further determined that plaintiff, in opposing summary judgment, had failed to adduce evidence raising a disputed issue of material fact as to whether defendant had waived the two-year limitation. On appeal, plaintiff challenges both of those determinations. As amplified below, we conclude that (1) the trial court correctly determined that the time limitation provision was not tolled, but (2) the court erred in granting summary judgment because (a) the two-year limitation of ORS 742.504(12)(a) can be waived by the UIM insurer and (b) there is a material issue of disputed fact as to whether defendant waived its right to rely on that time limitation. Accordingly, we reverse and remand.

We review a grant of summary judgment "to determine whether any genuine issue of material fact exists and whether defendant is entitled to judgment as a matter of law." Herman v. Valley Ins. Co., 145 Or.App. 124, 127-28, 928 P.2d 985 (1996), rev. den., 325 Or. 438, 939 P.2d 621 (1997). See also ORCP 47 C. We view the evidence and make all reasonable inferences in favor of the nonmoving party. Moore v. Mutual of Enumclaw Ins. Co., 317 Or. 235, 237, 855 P.2d 626 (1993).

Here, the historical facts are not disputed.¹ On January 18, 2000, plaintiff and her minor son, D, were involved in an auto accident involving another motorist, Watts, in which D was allegedly injured. Watts had liability insurance with limits of $25,000 per person and $50,000 per accident. At the time of the accident, defendant provided UIM coverage to plaintiff with limits of $50,000 per person and $100,000 per accident.

Plaintiff's UIM policy with defendant, in general conformance with ORS 742.504(12)(a), which we address in detail below, included the following provision:

"c. nor shall we have to make any payment under uninsured motor vehicle coverage unless within two years from the date of the accident:

"(1) the insured and we agree to the amount due;

"(2) the insured or we have formally instituted arbitration proceedings;

"(3) the insured has filed an action against us in a court of competent jurisdiction; or

"(4) a suit for bodily injury has been filed against the uninsured motorist in a court of competent jurisdiction and, within two years from the date of settlement or final judgment against the uninsured motorist, the insured has formally instituted arbitration proceedings or filed an action against us in a court of competent jurisdiction."

(Original emphasis omitted; emphasis added.) There were some preliminary communications between plaintiff and defendant regarding a potential claim, but plaintiff did not take any of the requisite actions within two years of the accident.

On March 19, 2005, plaintiff's attorney contacted defendant, informing defendant that he had been retained to represent D's interests and requesting information pertaining to defendant's personal injury protection (PIP) coverage.² Defendant responded, by letter, on April 26, 2005. That letter, which was signed by one of defendant's "claim representatives," identified plaintiff as the insured and the "date of loss" as January 18, 2000. After replying to plaintiff's attorney's request for PIP-related information, the letter then proceeded to address plaintiff's potential UIM claim:

"We understand that your client is interested in pursuing an underinsured motorist claim regarding [the] motor vehicle accident. We have determined that our insured, [plaintiff], does have coverage under her policy for such a claim and we will make every attempt, once we have adequate information supporting [D's] claim, to reach an agreement with you as to the amount of benefits due under the policy. The only remaining issues are liability and damages due to your client. If for some reason we are not able to reach an agreement as to the amount of benefits due under [plaintiff's] coverage, then please be advised that [we do] hereby consent to submit your client's underinsured motorist claim to arbitration as provided by the policy and that the arbitration be binding."

(Emphasis added.)

On April 28, 2005, plaintiff filed a personal injury action on D's behalf against Watts.³

On July 22, 2005, defendant notified plaintiff that it was withdrawing its offer of UIM arbitration because it had determined that none of the requisite events had occurred within the two-year period allowed in the policy. Plaintiff then brought this action, seeking a declaration of UIM coverage under the policy.

The parties filed cross-motions for summary judgment, with their dispute centering on two issues: (1) Did the "minority tolling" provisions of ORS 12.160 apply to and, thus, extend the UIM policy's two-year limitation period, as specified in ORS 742.504(12)(a)? (2) Even if ORS 12.160 did not apply, was the two-year limitation waivable, and, if so, had plaintiff adduced evidence raising a disputed issue of material fact as to whether defendant had waived that limitation? The trial court resolved both of those questions adversely to plaintiff and, consequently, allowed defendant's motion for summary judgment and denied plaintiff's cross-motion.

On appeal, the parties essentially reprise their arguments to the trial court. We address the tolling and waiver arguments in turn.

Under ORS 742.504, insurance policies that include uninsured motorist benefits must provide coverage that is no less favorable to the insured or any beneficiary than the sample policy provisions set forth in ORS 742.504(1) to (12).⁴ ORS 742.504(12)(a) provides:

"The parties to this coverage agree that no cause of action shall accrue to the insured under this coverage unless within two years from the date of the accident:

"(A) Agreement as to the amount due under the policy has been concluded;

"(B) The insured or the insurer has formally instituted arbitration proceedings;

"(C) The insured has filed an action against the insurer; or

"(D) Suit for bodily injury has been filed against the uninsured motorist and, within two years from the date of settlement or final judgment against the uninsured motorist, the insured has formally instituted arbitration proceedings or filed an action against the insurer."

(Emphasis added.)⁵ Plaintiff concedes that none of the four requisites, (A)-(D), was satisfied within two years of the date of the accident. She argues, however, that defendant was obligated to provide UIM benefits because the two-year period was tolled by ORS 12.160.⁶

ORS 12.160 (2005) provides, in part:

"If, at the time the cause of action accrues, any person entitled to bring an action mentioned in ORS 12.010 to 12.050, 12.070 to 12.250 and 12.276 is within the age of 18 years * * * the time of such disability shall not be a part of the time limited for the commencement of the action * * *."

(Emphasis added.)⁷ With certain exceptions not applicable here, ORS 12.080 establishes the time for commencing contract actions. Claims for UIM benefits arise from contract. As a result, ORS 12.160 is potentially applicable in the context of an action concerning UIM coverage. We conclude, however, that ORS 12.160 does not apply to toll the two-year period set forth in ORS 742.504(12)(a) for two related reasons.

First, ORS 12.160, by its plain terms, applies only "at the time the cause of action accrues." A cause of action "accrues" when it "come[s] into existence as an enforceable claim[.]" Webster's Third New Int'l Dictionary 13 (unabridged ed 2002). However, under ORS 742.504(12)(a), "no cause of action shall accrue to the insured" for UIM coverage unless one of the four events specified in the statute occurs within two years from the accident date. If none of the events occurs in the permitted time period, the cause of action never accrues.

In this case, plaintiff's cause of action against defendant never accrued because none of the events specified in ORS 742.504(12)(a)(A) to (D) occurred within two years from the date of the accident. Because the cause of action did not accrue, the disability tolling provision set forth in ORS 12.160 cannot apply. See also ORS 12.170 ("No person shall make use of a disability unless it existed when the right of action of the person accrued." (Emphasis added.)).

Second, ORS 12.160 provides that the time of the applicable disability "shall not be a part of the time limited for the commencement of the action." (Emphasis added.) ORS 742.504(12)(a) establishes a time limitation for accrual of a cause of action, not for commencement of an action. Therefore, ORS 12.160 has no application.

The context of ORS 742.504(12)(a) corroborates our construction. In interpreting a statute, our task is to determine the intent of the legislature. PGE v. Bureau of...