*1 (сid:127)m April Argued 5, 1967, affirmed October Respondent, v. ALLSTATE SPARLING, Appellant. COMPANY, INSURANCE 2d 616 439 P. argued
James H. Clarke, Portland, cause for *2 appellant. Wayne With him on the briefs were Hil- Spears, liard, McColloch, Dezendorf & Portland. argued Francis F. Marsh, McMinnville, cause respondent. for him With on the brief were Marsh, Dashney Cushing, Marsh, & McMinnville.
Before Perry, Chief Justice, and McAllister, Hot Sloan, O’Connell, Denecke Goodwin, .man, Justices.
HOLMAN, J. declaratory judgment proceeding seeking This ais a construction of the uninsured motorist of policy liability a of automobile insurance. by negligence
Plaintiff’s decedent met his death occupant anof uninsured motorist while he Oregon. aof vehicle owned the State of At the time of his death state was the insured named of liability policy a of insurance issued Continental Casualty Company. policy contained uninsured an provision per- with limits of for each motorist $5,000 injured a state vehicle who was killed or son within policy negligence of uninsured motorist. following provision: “other insurance” contained “* * * if the insured has оther similar in- applicable him available to to the ac- surance * * * company not shall be liable cident, proportion greater which of loss to this for a liability Coverage applies limit than the here- applicable to the sum of the limits of bears under liability insurance and such other insur- of this ance.” Casualty paid plaintiff policy
Continental its limits provision. under the uninsured motorist At time the same decedent was the named insured policy of a insurance issued defendаnt provision insuring contained decedent against injury by negligence death or of an un- insured motorist with limits This $5,000. section following of the contained the “other insurance” provision:
“Exclusions—what this Section does not cover Policy apply: This Section does not bodily injury 1. to of an insured sustained * * * any while in automobile, other than an owned if the owner automobile, has insurance sim- ilar to that afforded this Section and in- such surance is available to the insured;” The trial court construed the uninsured motorist plain- of defendant’s to have covered *3 tiff’s decedent at the time of his death and entered judgment plaintiff plus for in the sum of $5,000 at- torney’s judgment appeals. Prom fees. this defendant policy quoted
The
of defendant’s
above
escape
is
known as
clause and defendant contends
giving
trial
was in
court
error in not
effect to it
absolving
responsibility
defendant of all
under
damage
plain
for
caused
its
death of
presented
tiff’s decedent.
first issue
is whether
the “Larnb-Weston” ‹
what
known in this
state
applied
present
be
doctrine should
to the
state facts. In six eases ›
applied
court
this
has
it and has
‹
Lamb-Weston,
Co.,
110,
et al v. Ore. Auto. Ins.
219 Or
(1959).
110,
643,
P2d
346 P2d
76 ALR2d 485
› Liberty
Ins.,
(1966);
(1966);
Ins.
Truck
245 Or
Mut.
v.
held there is two insurers of attempt the same loss and both to limit the extent of coverage their there when is other one insurance, pro a rata clause and other an excess clause, repugnant incapable logical clauses are apрlication. respec In therefore, that situation, disregarded tive clauses have been and held of no effect. Defendant contends that the doctrine has no application may repug here while there be because, nancy pro between a rata clause and an clause, excess repugnancy escape there is no between an clause and pro present a rata which is the clause situation. policy provides
In effect, defendant’s
if
coverage,
insurnace,
there is other
there is no
while
policy provides that where there
Continental’s
is other
pay only part
it will
of the loss. Each
insurance
complete
except
policy.
gives
for the other’s
says
responsible
it
than the
Each
for less
loss where
give
In order to
there is other insurance.
effect to
necessary
provisions
respective
it is
to determine
primary obligation.
There is
insurer bears
a determination other than аn arbi
no basis for such
trary designation. There is no rational basis for dis
escape
tinguishing
present
of an
clause
situation
pro
rata clause from that
Lamb-Weston
versus a
pro
rata
an excess clause versus
where there was
anticipated
disposition
this
case
clause.
page
in Lamb-Weston at
110:
the dictum
all
clauses of
are
“The ‘other insurance’
*4
167,
(1965);
Co., 240 Or
475 but methods used insurers to limit their liabil- using ity, language whether that relieves them from liability (usually ‘escape all clause’) referred to as an (usually or that used Paul St. referred clause’) Oregon an to as ‘excess or that used (usually ‘prorata clause’). to referred as a In our policy opinion, whether one one clause or an- uses other, when come conflict with the ‘other regardless insurance’ clause of another insurer, they of the nature of are in fact re- clause, pugnant rejected and eaсh should be in toto. provisions escape Where one of the clause, present exactly one runs into the same case, circularity reasoning attempting to determine given preference which be should as one would pro provision. Regard it if were a rata or an excess type policy attempts less of the each to limit its where there is other insurance. Bach complete coverage affords in the absence of the compаny’s policy. impossible, other It is therefore, say regardless is no other there insurance being considered. Lamb-Weston is still a minority holding following adopted but the eases have the rule. fi ance” clauses has become extensive. fl The literature on the effect of “other insur fi Travelers Co., Insurance Peerless Insurance Co. v. 287 F2d Oregon (9th 1961); Fidelity Cir Ins. Co. v. United 742 Auto. States (9th 1952); Indemnity Co., 195 F2d 958 Cir Globe & Guar. Co. Supp Capital Surety Co., (D 228 F 494 C v. Insurance & Guam (1965); grounds, 1964), 352 F2d 236 New Amster vacated on other App Lloyd’s Underwritеrs, 56 Ill 2d dam Cas. v. NE2d Co. Company, (1965); Traders & General Insurance Graves v. (1 1967); App, Cir Construction La 200 So 2d 67 Woodrich Co. v. (1958). Indemnty Co., 252 Minn Insurance NW2d fl Billings, The “Other Insurance” Provision Automobile (July 1949); Rollins, Conflicting Policy, Ins L J 498 Automo (1941); Russ, Coverage, 64 N J L J 329 Double Insur- bile
476 determining primary responsibility of
Means sneli purely an as whether owned automobile was involved is arbitrary. urged It has been the use of that, sub- stantially language attempting in to limit or identical injury escape in their when the occurred other than an owned the two insurance com- automobile, paniеs intended that the insurer of the owner of the responsibility. place, primary vehicle have In the first contrary expressed pres- their intent. In the this is to demonstrated ent situation the intent, factual escape liability policies, in one instance the was to it in other if there was other insurance. and limit the extremely Secondly, it difficult to understand how it is companies, have no con- that the two who can be said priority relationship, governed are in their of tractual given resрonsibility sort of a for a accident some understanding presumed intent or arose mutual language in their with used each contracts from always parties. be remembered that, It must third the owned-automo- occurred, that factual situation the applicable provision is while the of one bile applies. If the other the terms non-owned repugnant provisions applicable it are is of the consequence are identical and that the little parallel. provisions their application the contends
Defendant to eontro- be limited should doctrine Lamb-Weston (1961); Watson, Proposal, Hast L Rev 183 13 anee Problem —A (March 1966); L J 151 Con- Dilemma, 518 Ins Insurance” “Other Liability Insurance, 65 L Coverage Col Automobile current Conflicting Interpretations of “Other Insurance” (1965); 319 Rev Liability (1953); Insurance— Automobile L 429 Clauses, Ind J Coverage Clauses,” “Other Insurance Double Effect of (1952); Comments, (1954); L Rev 1063 52 Col Rev 839 Minn L (1968); (1942); L Rev 433 5 Stan 46 N Car L Rev 1218 Harv (1959). (1952); L Rev 409 13 Vand L Rev concerning allocation of losses between insurеrs versies in- application action to an have no and should policy against insurer. Allocation his his sured on respective in- is based on what insurers between policies. their What owe the insured under surers issue the insurers owes insured one of plain- present litigation. to Because the issued insurance, other deceased is conditioned on tiff’s plaintiff obligation cannot determined until be respective “other insurance” clauses effect of *6 case in this is identical situation established. supra, Ins. Co., in v. Auto. with Smith that Pacific pro- except other insurance that Smith the note plaintiff’s policy was treated as an excess vision of escape rather and the clause, than clause recovery all in- that the total from had regardless of its was limited to surance, source, $5,0Q0. if also that even the clauses Defendant contends repugnant, holding plain are the court that erred tiff to recover from defendant be was entitled $5,000 judgment plaintiff nоt seek for sum cause did stipulation proof nor and there neither of dam ques ages and therefore the record submits liability. complaint Plaintiff’s contained the tion of allegation prayer: following and
“X disagree and Defendant to the con- “Plaintiff legal interpretation and effect of the struction, provisions of the insurance’ herein- ‘other paid Plaintiff is entitled to be above mentioned. for bene- $5,000.00 the defendant sum of dependent George and child of fit of widow G. plaintiff’s Sparling. has claim Defendant denied pay any portion or has refused to that sum and thereof.
“XI “Defendant’s pay- refusal and failure to make ment has been vexatious and without reasonable * * *” cause.
& # & # # plaintiff prays
“WHEREFORE, that the court declaratory make and judgment enter a constru- ing interpreting and provi- the ‘other insurance’ sions plain- of the contract of insurance between declaring tiff’s decedent and the defendant and and decreeing plaintiff paid that is entitled to be under contract sum of $5,000.00 for the benefit George Sparling depend- widow of G. and his entering judgment ent and child, in favor of the plaintiff against plaintiff’s the defendant for attorney’s together fees in the sum of $2,125.00 plaintiff’s with costs and disbursements incurred herein.” allegations
Defendant’s answer denied the set forth prayed plaintiff nothing by take her com- plaint. following The trial court’s order contained the recitation:
“The above entitled action came on for trial on day August, the 26th before the Honorable Sloper, Judge, plaintiff ap- Val D. peared by Circuit and the *7 attorney,
Francis E. Marsh, his and the by Wayne appeared defendant its attor- Hilliard, agreed ney, parties and it was between the that judge action tried the should be before the without jury; a appearing parties “It to the court that the had only
stipulated that the issue involved was one court law for the to determine whether or not of policy is liable under its the defendant the view of * * provision contained therein, agreement stipulation of facts contained no A written concerning damages. sufficient to sus- complaint were and answer
The requesting between judgment. distinction The a tain paid plaintiff declaring to be judgment was entitled a judgment requesting is- too for $5,000 $5,000 appreciate. court to fine for this stipulation contained that the written The fact negate damages-does not the agreement relative to no represented parties to possibility otherwise the that only of involved was the one issue the court that stipulation. judgment presented order law agreed parties this was the that that the recites any transcript proceedings no We have issue. transcript of a In the absence show the court. before contrary, judgment ing in the concern the recitals occurring open import ing court absolute events ' verity. judgment the trial is affirmed. court dissenting. Mc TER, J., ALLIS require The Lamb-Weston doctrine was devised to companies, covering both thе same risk, two insurance conflicting policies contained “other insurance” whose provisions prorate In this ease the Lamb- to loss. permitting rule is extended to extreme of Weston recover the full limit of an insured to companies ($5,000) from each of the two involved. recovery permitted though even This double any clauses are the easiest of “other insurance” necessary. reconciliation is indeed, reconcile, if, agree exception the authorities without Almost typical where a no real conflict case there is driving a his own non- driver covered and is also covered automobile owned the owner.
George Sparling killed in an automobile C. *8 January, driving
collision in while an automobile by Oregon. owned State of The accident was by negligence caused of an uninsured motorist. Sparling was the named insured under a of insurance issued the defendant, Allstate Insur Company. policy provided ance That that it did not apply injury by Sparling to an sustained an while in by Sparling, autоmobile owned if not had owner by Sparling’s policy, insurance to that similar afforded Sparling. ‹ and such insurance was to available stipulated It is that the owner of the automobile by Sparling did driven have other insurance similar by Sparling’s policy, to that afforded and that in- such Sparling. surance was available to The automobile by Sparling Oregon. driven owned State of The state was the named insured under an insurance Casualty Company Continental issued coverage containеd uninsured motorist similar to policy. Sparling’s The limits of same, under both were the for $5,000 each person, for each accident. $10,000 opinion majority quotes part “other insurance” clause of the Continental Oregon. issued to entire clause reads the State as follows:
(cid:127) respect bodily injury to insurance. With “Other occupying an while not insured automobile insured;’ upon, an afforded “ “ “ owned ‘Exclusions —what ‘This ‘1. to entering "'* ‹ ” Section of automobile, [*] bodily this [*] into Section [*] injury or if the owner has insurance similar to alighting this Section Policy and such of an insured sustained while in from, does not insurance does apply: not cover automobile, is available to other than or (IX Stipulation Facts) to the principal owned tbe named the insur- insured, *9 only apply
ance under this endorsement shall as any excess insurance over available to such insured and automobile as other similar insurance applicable to such primary insurance, and this insur- only apply ance shall then in the amount which liability cоverage the limit of for this exceeds the applicable liability limit of of such other insurance. “Except provided foregoing para- as graph, if the insured has other similar insurance applicable available himto and to the accident, damages shall be deemed not to exceed the higher applicable liability of the limits of of this insurance and such other insurance, the com- pany greater proportion shall not be liable for a Coverage applies loss to which this than liability the limit of hereunder bears to the sum applicable liability limits of of this insurance and such other insurance.” provisions paragraph impor- of the first are They provide
tant in this case. that as to automobiles not owned its insured, Continental’s will apply recog- as excess insurance. Continental nized that in the converse situation where the vehicle principal involved was owned its named insured, provided primary coverage. it there- Continental, in accordance practice, fore, with standard insurance paid plaintiff George to as executrix of the estate of Sparling coverage the limit of its in the sum of $5,000. Sparling brought require Mrs. then this action to pay being defendant Allstate to another $5,000, policy. limit of Allstate’s
To summarize the factual we situation, find that Sparling provided had a contract with Allstate which clearly apply (a) Sparling that the should not if injured driving while an automobile not owned (b) Spar- if owner had him, insurance similar to (e)
ling’s such insurance insurance, was available stipulated injury- Sparling. to The three conditions, in a similar insurance carried automobile, non-owned availability and the of such insurance the owner, present. Sparling, all we to are Can refuse to enforce provisions explicit, precise, so contract so and ad- mittedly applicable to facts this case? apply
Conceding that should Lamb-Weston when clauses of two ir the “othеr insurance” are not such a case. this is Here the com reconcilable, panies themselves have answered the riddle of which responsibility.” › “the door Each should first enter company provided that has non-owned automo no biles it should have or its company Each should be excess. has contracted that *10 by pri “non-ownership” shall be the touchstone which mary secondary liability and be determined. All shall precise Sparling contracted in with that state terms liability оwnership turn on or non-owner its should recognized ship. that it insured the ownet Continental paid automobile and the limits its without protest. Why Sparling’s get a should estate double recovery stubbornly applies court windfall because this for the rule is Lamb-Weston when reason not present. in at bar were
Pacts similar to those the case con- Supreme Ameri- of California sidered Court Republic Co., Indemn. can Automobile Ins. Co. v. (1959). adopting In the rule P2d 675 Cal2d apply at 52 here, court, which think should Cal2d I sаid: P2d 677, 678-79, 511-12,513, language “The of the ‘other insurance’ clauses substantially the same. contained both is › Firemen’s Ins., 10, 15, Paul Fire 243 Or 411 P2d Ins. v. St. (1966). 271, parts; pro- The clauses consist of two the first generally prorating vides for where there is other covering pro- insurance vides, insured and that loss, the second specific exception, as a when the named driving is car not owned him the insurance will be over all excess other insurance. [**] “Where # [*] ‘other insurance’ clauses of this type appear liability policiеs in the automobile of both generally the driver and the the cases have owner, given provision effect to the excess of the driver and have held that the insurer of the primarily owner is liable and must bear the whole policy, [cases cited] within loss, the limits of its *“* * construction of the ‘other parts insurance’ clause under which both its will meaningful be that is the excess alone every controls in situation which falls within its person driving such as when a terms, car of another and both the driver and the оwner have prorate provision insurance, governs alone example, in all other for situations, when than more one has been issued to the same person. When the driver’s insurance is excess, it necessarily follows that the insurance of the owner primary, and therefore the owner’s insurer must bear the entire loss to the extent of the limits of policy.” pointed Commentators have out that the Lamb- unnecessary simple Weston rationale is in case of a non-ownеd automobile used a driver who is covered both his own the owner’s *11 policy. If contain similar non-owner really quote clauses there is no I conflict. the follow- ing from Watson, “Other Insurance” Dilemma, (March 1966): 518 Ins L J 157 151, “In this situation it seems obvious that each company exactly has made the same distinctions, policy, exactly in each the same intent,
with generally prorate, it will insurance to other as is, is situation where its assured that one but as to only. driving it will be excess a nonowned vehicle prorate policy as- where its intended to Neither driving vehicle and both a nonowned sured clearly. policies spelled How, then, intent out this say Company heard to that it can- B now be can language!” in the distinction not see in quote Russ, found a statement I similar also Proposal, Hast L Insurance Problem —A Double (1961): 183, Rev have shown a reluctance courts, however, “Some pre- Oregon approach in all cases, Auto to follow the responsibility fixing
ferring on to continuе instead, hesitancy greatest is insurer or the other. This one operation from results in eases where a loss and the' automobile vehicle owner’s borrowed pro operator’s applicable policy a rata clause while has clause has excess automobile reject These courts either vehicles. to non-owned particular exists in the that a conflict the idea rely presumed in- intent of the or on situation, surers.” give objective full all be to cases should
Our expressed parties intent of to the effect done that we this cannot be It when contracts. mutually repugnant. In the contracts declare should Liberty Exch., Insurance Truck Mutual Ins. Co. v. (1966), that Lamb- we said P2d 245 Or “language applied if there not be Weston should which clause should show which would either preference.” be entitled companies can be de- intent of the In case the this each in its own of two the use termined from general spe- liability, and one one limits of diffеrent
485 Certainly company insuring the owned auto- cific. specific provision complain if the of cannot mobile meaning given as it obvi- the same the other ously specific provision of its own intended the to have. majority opinion claims that several cited
The
adopted
rule.
of
have
the Lamb-Weston
One
cases
Oregon Auto Ins.
v. United States
Co.
cases,
(9th
1952),
Fidelity
Co.,
&
195 F2d 958
Cir
Guar.
years
Lamb-Weston. It was
decided seven
before
“egg.” In
“chicken” which laid the Lamb-Weston
Travelеrs Insurance
v. Peerless
the second
Co.
case,
(9th
1961), the court
Co.,
Insuramce
287 F2d 742
Cir
clearly
minority
applied
that it
Lamb-
indicated
required
it was
to do so
Weston rule
because
The District
our decision
Lamb-Weston.
Court
Capital
Indemnity Co. v.
Insurance
of Guam, Globe
(DC
Surety
1964),
Co.,
228 FS 494
Guam
also
majority
preferred the
but felt bound
rule,
in Travelers
Ninth
decision
Insurance Co. v.
Circuit
supra.
adoption
Co.,
Insurance
Peerless
Appellate
rule
of
Lamb-Weston
Court
Illinms
Lloyds’
v.
Underwriters,
in New Amsterdam Gas. Co.
App2d
(1965),
NE2d
was not in a
Ill
205
735
224,
In
automobile case.
the Dis
event,
“non-owned”
sub silentio
has been reversed
Su
trict Court
preme
in New Amsterdam
of Illinois
Cas. Co.
Court
Underwriters, 34 Ill2d
Continental
(1961); American
P2d 455
Automo-
R
12,
17 Cal
Republic
bile Ins. Co. v.
Indemn. Co., 52 Cal2d
507,
(1959);
P2d 675
New Amsterdam Cas.
v.Co. Certain
supra,
Underwriters,
at
“* * * non-ownership coverage if Thus, offered one of the involved is of the type, generally insurance’ ‘excess the conclusion reasoning reached—no matter how various the adopted support may of it in the different cases policy be—that the issued to owner of the ve- ‘primary’ policy, company hicle and the issu- ing up policy it is liable to the limits of the without apportionment, although ‘pro- contains a proposition rata’ clause. To state the in another way: if one has been issued to the owner causing damage, of the vehicle and another covers relationship virtue the same loss accident of to the the one not who is the vehicle owner, at where least its is of insurer, latter’s variety, inis the favorable ‘excess insurance’ position al- and need not assume the loss, ‘pro- though vehicle owner’s contains * * clause. rata’ § Automobile Insurance, Am Jur 2d, See also, page Appleman, Practice Insurance Law and 544;, (1962 ed) page § 400. Oregon all has the
The rule followed courts but enforcing parties. virtue of the contracts made applied I believe it should be in the case at bar and non-owned automobile cases. similar I dissent. concurs in this dissent. J.,
Goodwin,