Wright v. Turner

• Decision Date: 20 February 2014
• Docket Number: CA A144126,(CC 060403958,SC S060960).
• Citation: 354 Or. 815,322 P.3d 476
• Parties: Martha L. WRIGHT, Petitioner on Review, v. John A. TURNER, Freida Turner, and Sherri L. Oliver, Defendants, and Mutual of Enumclaw Insurance Company, Respondent on Review.
• Court: Oregon Supreme Court

354 Or. 815

322 P.3d 476

Martha L. WRIGHT, Petitioner on Review,

v. John A. TURNER, Freida Turner, and Sherri L. Oliver, Defendants,andMutual of Enumclaw Insurance Company, Respondent on Review.

(CC 060403958; CA A144126; SC S060960).

Supreme Court of Oregon,

En Banc.

Argued and Submitted Sept. 19, 2013.

Decided Feb. 20, 2014.

On review from the Court of Appeals.^*

Rick J. Glantz, Vick & Glantz, LLP, Salem, argued the cause and filed the brief for petitioner on review.

Thomas M. Christ, Cosgrave Vergeer Kester LLP, Portland, argued the cause and filed the brief for respondent on review.

Meagan A. Flynn, Portland, filed a brief for amicus curiae Oregon Trial Lawyers Association.

WALTERS, J.

Plaintiff was injured when one negligent driver and then, in short succession, another negligent driver collided with the truck in which plaintiff was a passenger. The underinsured motorist benefits available to plaintiff under the terms of the insurance policy that she purchased from defendant depend on the meaning of the term “accident” as that term was used in that policy and is used in corresponding Oregon financial responsibility statutes. We conclude that the legislature intended that the term “accident” have its ordinary meaning and that plaintiff presented evidence from which a jury could find that her injuries had been incurred in more than one “accident.” Consequently, we reverse the decision of the Court of Appeals and remand to the trial court for further proceedings.

The procedural facts in this case are idiosyncratic and are set forth in detail in the Court of Appeals opinion. Wright v. Turner, 253 Or.App. 18, 22–27, 289 P.3d 309 (2012). For purposes of our review, it is sufficient to recount that plaintiff filed a complaint against her insurer, defendant Mutual of Enumclaw, seeking underinsured motorist benefits of $979,540. The trial court submitted the question of the amount of plaintiff's damages to a jury, but denied defendant's request that the jury also decide the number of accidents that had occurred. The court reasoned that defendant had failed to raise, or was estopped from raising, an argument that plaintiff's damages had been incurred in one “accident” and that, by the terms of the insurance policy, defendant's liability could not exceed $500,000. The jury returned a verdict for the prayer, and the trial court entered judgment in that sum. On appeal, defendant argued that the trial court had erred in precluding it from litigating the number of accidents that had occurred, and that, “as a matter of law, there was only one accident, and plaintiff had failed to plead or prove otherwise.” The Court of Appeals agreed with both arguments. Id. at 28, 289 P.3d 309. On review, plaintiff contends that defendant's first argument was unpreserved and that defendant's second argument fails on the merits. We decline to address the preservation issue. Instead, we consider plaintiff's contention that the Court of Appeals erred in deciding that plaintiff had not adduced evidence from which a jury could find that more than one “accident” had occurred.

The undisputed facts relevant to that question are as follows. In 2004, plaintiff was a passenger in a truck traveling north on Interstate 5 in a storm of hail and rain. As the truck was descending a steep grade, a vehicle ahead, driven by Turner, spun out of control and collided with the truck. The truck came to a stop on the median strip of the highway, resting against a concrete barrier that blocked the driver's side door. The driver of the truck climbed out her window, told plaintiff to remain inside the truck, and went to check on Turner. The driver then returned to the truck and asked plaintiff to retrieve the driver's cell phone so that the driver could call for help.

During that interval, a number of other vehicles passed the truck without colliding with it. At some point, a second vehicle, driven by Oliver, collided with the truck, pushing it farther down the highway.¹ As a result of the collisions, plaintiff suffered injuries that required multiple surgeries and ongoing treatment.

Plaintiff had purchased underinsured motorist insurance (UIM) from defendant Mutual of Enumclaw. Her policy comported with the requirements of ORS 806.070 and ORS 742.502 through 742.508, which establish required amounts of coverage for Oregon drivers. Her policy provided coverage for damages caused by underinsured motorists up to a limit of $500,000 “for bodily injury and property damage resulting from any one automobile accident * * * regardless of the number of * * * vehicles involved in the automobile accident.” (Emphasis added.)

Plaintiff filed an action against three defendants—Turner, Oliver, and her insurer, Mutual of Enumclaw. She alleged that both Turner and Oliver had been negligent and that they did not have sufficient insurance to cover her damages; she therefore alleged that Mutual of Enumclaw was liable under the terms of its policy up to a limit of $1 million. Plaintiff settled with Turner and Oliver for the total amount of their insurance policies, and the case was dismissed as to them. Defendant Mutual of Enumclaw (defendant) filed an answer admitting that both Turner and Oliver were negligent, but contesting plaintiff's damages as well as the extent of its liability for those damages. As noted, the trial court entered judgment against defendant for $979,540.

On appeal, the parties and the Court of Appeals considered whether plaintiff had been injured in one “accident” to be a matter of contractual interpretation and applied the methodology for interpreting insurance policies set out in Holloway v. Republic Indemnity Co. of America, 341 Or. 642, 649–50, 147 P.3d 329 (2006). Determining that the policy term “accident” was undefined and that, in the context presented, the meaning of that term was a question of first impression in Oregon, the Court of Appeals considered a California court's interpretation of a similar contract provision to be persuasive. In United Services Automobile Assn. v. Baggett, 209 Cal.App.3d 1387, 1393, 258 Cal.Rptr. 52 (1989), the California Court of Appeal interpreted the term “accident” to mean “a single uninterrupted course of conduct” giving rise to injury and explained that, when the “original cause is interrupted or replaced by another cause, there is more than one ‘accident.’ ” Id.

Persuaded by Baggett, the Court of Appeals concluded that plaintiff had not met her burden to show that the two collisions had distinct causes and that the second collision was “not merely proximately derivative” of the first. Wright, 253 Or.App. at 37, 289 P.3d 309. The court determined that the record was “devoid of any evidence regarding the cause of the second collision,” id., and, therefore, “as a matter of law, only one accident occurred.” Id. at 28, 289 P.3d 309. The court therefore reversed the trial court's judgment and remanded with instructions to apply the $500,000 liability limit to the judgment.

In this court, plaintiff argues that the Court of Appeals was correct to interpret the contractual term one “accident” as the California court did in Baggett, but that the Court of Appeals erred in its application of that interpretation to the facts in this case. Defendant urges that we adopt the reasoning of the Court of Appeals in its entirety.

Although both parties approach the problem as one of contractual interpretation, we think it necessary to correct course. The contractual provision at issue here is a statutorily required provision, and, as a result, “we attempt to determine the legislature's intention in enacting that statute rather than the parties' contractual intention in entering into the insurance contract.” Fox v. Country Mut. Ins. Co., 327 Or. 500, 506, 964 P.2d 997 (1998); see also Moore v. Mut. of Enumclaw Ins. Co., 317 Or. 235, 244–45, 855 P.2d 626 (1993) (where “the language that we must interpret appears in the [insurance] contract because the legislature requires it[,] * * * we must necessarily determine, if possible, the meaning intended by the legislature”).

Oregon statutes require all drivers in the state to demonstrate minimum levels of financial responsibility for any damages that they may cause while operating a motor vehicle. See Viking Ins. Co. v. Perotti, 308 Or. 623, 628, 784 P.2d 1081 (1989) (“The motor vehicle liability insurance statutes * * * and the [Financial Responsibility Law], ORS chapter 806, provide a comprehensive scheme under which both drivers and vehicle owners are required to have liability insurance or a permissible substitute therefor.”). The bulk of those requirements are set out in ORS Chapter 742. ORS 742.502 requires that Oregon automobile liability insurance policies include coverage for damages caused by both uninsured (UM) and underinsured (UIM) drivers.² The limits for UM and UIM coverage must be the same as for bodily injury liability coverage unless a named insured in writing elects lower limits. ORS 742.502(2)(a). ORS 742.504 sets out the terms that must appear in any insurance policy to comply with the terms of ORS 742.502. ORS 742.504(7)(a) provides that “the limit of liability stated in the declarations as applicable to ‘each accident’ is the total limit of the company's liability for all damages because of bodily injury sustained by two or more persons as the result of any one accident.”

The minimum required coverage in ORS chapter 742 is defined by reference to the financial responsibility requirements specified in ORS chapter 806. ORS 806.070 establishes a schedule of payments and requires that insurance policies must provide for payment of at least those amounts to meet the financial responsibility requirements of ORS chapter 806. The schedule of payments is $25,000 for bodily injury to or death of one person in “any one accident,” and $50,000 for bodily injury to or death of two or more persons in “any one accident.” ORS 806.070. Thus, Oregon automobile insurance...