Farmers Ins. Co. of Oregon v. Mowry
261 P.3d 1
| Or. | 2011Background
- Farmers issued a motor vehicle liability policy with $100,000 per person/$300,000 per occurrence and an exclusion stating 'coverage does not apply to liability for bodily injury to an insured person.'
- An insured, a family member or other insured using the vehicle, sought coverage after a friend drove the policyholder's car and injured the insured.
- Dispute centered on whether the policy provides minimum FRL coverage ($25,000) for insured-versus-insured claims or the higher $100,000 per-person limit stated on theDeclarations page.
- Collins v. Farmers Ins. Co. held that an absolute insured-versus-insured exclusion is effective only to the extent it exceeds the FRL minimum, allowing minimum coverage but excluding excess.
- Hamilton, Wright, and North Pacific later addressed notice and interpretive issues with exclusions and minimum coverage, creating a nuanced landscape for insured-versus-insured exclusions.
- The Court of Appeals affirmed Collins-based reasoning; the Oregon Supreme Court affirmed, applying a nuanced stare decisis analysis and distinguishing Hamilton from Collins.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Should Collins be overruled as binding precedent? | Mowry argues Collins is wrongly decided and in conflict with Hamilton. | Mowry contends Collins remains good law under stare decisis. | No; Collins remains controlling precedent for insured-versus-insured exclusions. |
| How should stare decisis be applied to statutory and common-law precedents here? | Collins should be reconsidered due to changes in statutory context and reliance. | Stable precedent and reliance justify adherence to Collins. | Stare decisis allows reconsideration when justified; here Collins remains valid under balanced considerations. |
| Does Hamilton concisely conflict with Collins on exclusions limiting coverage beyond FRL minimum? | Hamilton undermines Collins's reach and rationale. | Hamilton is distinguishable and does not require overruling Collins. | Hamilton and Collins are distinct and do not require overruling Collins. |
| What is the effect of ORS 742.450 and ORS 742.464 on enforceability of insured-versus-insured exclusions? | Bad policy wording fails to satisfy statutory disclosure; Collins applies to limit to FRL minimum only. | Exclusion remains effective for excess coverage under proper statutory framework. | Exclusion is enforceable to the extent of excess coverage beyond FRL minimum; Collins controls the minimum. |
Key Cases Cited
- Collins v. Farmers Ins. Co., 312 Or. 337 (1991) (establishes partial enforcement of insured-versus-insured exclusion to FRL minimum)
- North Pacific Ins. Co. v. Hamilton, 332 Or. 20 (2001) (distinguishes Collins; ambiguity defeats broad exclusion; notices and wording matter)
- Wright v. State Farm Mut. Auto. Ins. Co., 332 Or. 1 (2001) (exemption deemed ambiguous and unenforceable for limiting minimum coverage)
- Severy/Wilson v. Bd. of Parole, 349 Or. 461 (2010) (reaffirms flexibility in reconsidering statutory interpretations)
- Holcomb v. Sunderland, 321 Or. 99 (1995) (contextual basis to reconsider precedent when statutory context changes)
- G.L. v. Kaiser Foundation Hospitals, Inc., 306 Or. 54 (1988) (identifies bases for reconsidering nonstatutory rules)