*1 167 Aрril 2, Argued February 1, affirmed as modified v. PACIFIC AUTOMOBILE SMITH CO.
INSURANCE P. 2d 512 *2 Wheatley, Eugene, argued William the cause for G. appellant cross-respondent. and On the were briefs Wheatley, Eugene. Jaqua & argued Eugene, Arthur Johnson, C. the cause for respondent cross-appellant. and theOn briefs were Harrang, Eugene. Johnson & Johnson, Before Chief and Justice, McAllister, Perry, and Sloan, Denecke O’Connell, Goodwin, Hot,mаn, Justices. J.
GOODWIN, proceeding declaratory judgment This for a concerning rights parties the under an auto- liability policy. mobile insurance the Smith, insured, seeks $5,000. defendant-insurer contends that it nothing. judgment аwarding owes Smith Prom a attorney’s parties appeal. Smith and $2,500 fees, both dispute. injured The facts are not in Smith was riding while in an automobile owned Donald Dame- injuries wood. The were the result оf a collision be- tween Damewood’s automobile and a vehicle driven by an uninsured motorist. Damewood was killed in the Smith’s collision. conceded to have been in excess $30,000. vehicle Damewood the accident, time of the
At the Oregon Insurance Com- Mutual was passenger auto- pany, in the Damewood aas and, an “insured” was mobile, Smith policy. Damewood’s uninsured-mоtorist Under “in- its Oregon each of afforded Mutual person per coverage within a limit of $5,000 sureds” per gross limit of accident. $10,000 Oregon litigation, Mutual exhausted Without way: following liability by distributing in the $10,000 occupants the other to one of $2,500 Smith; $2,500 and to Damewood’s $5,000 of the Damewood vehicle; question we ex- us, not before estate. Because the press opinion upon propriety of this distribu- no tion. an auto-
At the time of the Smith accident, owned Dame- mobile which was insured the defendant. policies respective wood’s Smith’s *3 only protec- “uninsured-motorist” contained similar policy with similar but each contained tion, limits, upon Because “other-insurance” clauses. the case turns the construction and interaction of these “other-insur- ance” we will set them out. clauses, language policy
The relevant in as follows:
* [*] * “With [Smith] respect through being to bodily injury struck to an insured an unin- [Smith] if such automobile, sured is a named insured under other similar insurance avail- able to then the shall be deemed not him, * * * company and the [$5,000], to exceed shall part greater propor- be liable under this for * * * than such limit bears [$5,000] tion applicable limits of this to the sum of the and such other insurance [$10,000].” language The relevant in Smith’s with Pacific is as follows: * * * respect bodily injury [Smith] “With to * * * occupying [Damewood’s] while automobile apply only the insurance hereunder shall as excess any
insurance over other similar insurance avail- * * * able to [Smith], and this insurance shall * * * apply only then in the amount applicable exceeds the sum of the [$5,000] of all such other insurance.” The Pacific clause is standard “excess-insurance” purporting obligate pay only the carrier the amount which its limits exceed the limits of all applied other available insurance. If to the facts in way interpreted by the case at bar the it is the de- fendants, clause “excess-insurance” would allow liability. the defendant to avoid all assigns The defendant error to the refusal to treat escape excess clause Pacific’s clause. The de says fendant that its excess clause means that under particular part the defendant has only agreed assumе risk as an excess insurer to exposure may the extent that its $5,000 exceed the limits of $5,000 Damewood’s insurance. The defendant interpretation contends that its of the “excess” clause binding uрon pro the insured whether or not the ceeds of Damewood’s insurance are collectible. This respectable view of an sup “excess” clause has port. e.g., Indemnity Travеlers See, Co. Hartford, (4th 1963); Wells, Conn. v. F2d Cir and see (1965). cases noted 65 Colum L Rev 319 Indemnity Travelers case is not, however, the law in Oregon.
In this case we need not decide whether “other occupant” similar insurance available to such means
171 may spend, proceeds that an or simply, the defendant “other-insurance” contends, existing only paper. on There another reason why disregarded. defendant’s excess clause be must
If the two “other-insurance” clauses, which we quoted, repugnant other, are to each have clauses disregraded proratеd and the are loss is between car arbitrary equitable for riers. The rationale but give multiple rule is that literal effect to each given “other-insurance” clauses in a case cоuld result coverage in no at all. Lamb-Weston et al v. Ore. Auto. 219 341 Co., Ins. Or P2d P2d 110, 110, 346 76 643, (1959). ALR2d 485 Lamb-Weston formula has subsequent e.g., been followed in cases. See, Gen. Ins. Co. v. Sask. Gov. Ins. Or Adv Sh Office, 679, 391 (1964). fully P2d 616 We now committed to the that аn rule “excess-insurance” clause in a will, pro-rata disregarded. with a conflict be may engage the carriers in a Otherwise, circular con troversy “primary” coverage over and “excess” seniority dispute is reminiscent of the between the egg. Oregon chicken and the Auto. Ins. Co. v. United Fidelity (9th 1952), Co., Guar. F2d 958 Cir (1954), L noted in 38 Minn Rev and 28 838, Ind (1953). L J 429 argues
The defendant the two clauses are repugnant “рri because the Pacific affords mary” coverage to an “owned” automobile, while as coverage to “nonowned” automobiles is intended to only “secondary” be and therefore “excess.” Conse quently, policy protects because Smith only when is an Smith insured Damewood’s “owned” automobile, the defendant contends that under the usages of the insurance businеss Damewood’s carrier “primary” is the insurer and Smith’s carrier is a *5 “secondary” whatever the that, insurer. We believe may usages assertion the defendant’s trade be, by v. in Ins. Co. our recent decisiоn Gen. answered supra. in that case We held Gov. Ins. Office, Sash. “other-insurance” of two or more that the interaction repugnancy there is an a whenever creates clauses In the open first. of which clause to invoke choice operate upon to and at clauses refer bar, case both availability insurance. One clause seeks the of othеr prorate portion other while the seeks of the loss any portion paying if the limits of loss to avoid the “primary” policy limits of are the same the circularity “secondary” poliсy. of the inter- The the claiming policies, the that other two each action of the repugnant. pay makes them must is what first, requires repugnancy, both Lamb-Weston, that entirety. disregarded In their the instant clauses be in repugnant and that the two clauses are case, we hold may given be effect. not, therefore, objection appeal to the
The defendant’s cross person named insured under that a who is a operation the with written to cover risks associated happens who also to be own automobile and his written cover an insured” under “omnibus oрeration the of another auto with risks associated may, injured passenger if he is in he is a mobile which recover twice as much as motorist, uninsured an injured in if he had been the he could havе recovered riding way by in his the same tort-feasor while same upon argument to be based an seems own car. This something assumption offensive about that there is “stacking” insurance benefits. recovery against multiple was derived
The rule In the of a loss cases. from fire-insurance usually easily monetary measured, loss is the fire, and in certain instances it can total be shown the damage plaintiff suffered the was less than the proceeds sought be combined recovered. in field life and accident the However, insurance, person readily measured money, likеlihood there is little either of fraud profit through or overinsurance. Furthermore, mere assertion that one would seek an out accident upon with uninsured motorist in order to collect *6 someone else’s insurance contains its own deny answer. In the case at bar, there is no reason to the insured the for which benefits he has contracted simply own his insurance because he also has rights third-party some incidental beneficiary as person’s under another insurance.
Under the Lamb-Weston formula, the various prorate carriers must their share of the not loss, their share of one carrier’s limits. If this were between each would carriers, exhaust its limits paying pro-rata before a full share of the loss. The intercompany fact that the case at is dispute bar not an paying should not excuse the pro from defendant up rated share of the loss to limits of the risk it carry. contracted judgment
The below should be amended to award plaintiff $5,000instead $2,500allowed in the trial court.
Affirmed as modified. dissenting.
DENECKE, J., only part majority I dissent from that de- cision which modifies the trial court’s decision and plaintiff awards $2,500. additional Lamb-Weston et al. v. Ore. Auto. Ins. Co., 210 Or 341 P2d 110, 346 P2d (1959), 110, 643, ALR2d 485 disregarding justifiably, of action, the drastic
takes repugnant such terms because terms contractual applied. I However, cannot both be therefore, and, parts disregard contract those no reason see repugnant. Both the “other-insurance” which are not they provide that if there in that clauses are similar recovery from all insur- other the total Oregon provision Mutual The $5,000. аnce limited accomplishing provides, “then the shall * * * Pacific [$5,000].” exceed be deemed policy provides, shall then “this insurance Automobile * * * only apply [$5,000] in the amount applicable of all such sum of the exceeds the insurance.” other provide, plain- the contracts
I would hold, recovery $5,000. total of is limited to tiff’s