Title: Viking Ins. Co. v. Petersen

State: oregon

Issuer: Oregon Supreme Court

Document:

784 P.2d 437 (1989)
308 Or. 616
VIKING INSURANCE COMPANY OF WISCONSIN, a Foreign Corporation, Petitioner On Review/Respondent On Review,
v.
Tammie PETERSEN, Lyonel E. Randle and Barbara J. Cooper, Personal Representative of the Estate of Luis Arthur Medina, Defendants, and
Joe Thompson, Personal Representative of the Estate of Patricia Dianne Medina, Respondent On Review/Petitioner On Review.
CC 87-CV-201; CA A47926; SC S36176; S36177.

Supreme Court of Oregon, In Banc.
Argued and Submitted October 3, 1989.
Decided December 28, 1989.
Joel S. DeVore, of Luvaas, Cobb, Richards & Fraser, P.C., Eugene, argued the cause and filed the petition for petitioner/respondent on review Viking Ins. Co.
Frank C. Rote, Grants Pass, argued the cause for respondent/petitioner on review Joe Thompson. R. Daniel Simcoe, of Brown, Hughes, Bird, Lane & Simcoe, Grants Pass, filed the petition for review and response to Viking Ins. Co.'s petition.
Thomas M. Christ, Portland, filed a brief on behalf of amicus curiae Oregon Ass'n of Defense Counsel.
JONES, Justice.
This case presents two issues: (1) whether a motor vehicle liability insurance policy with an endorsement excluding drivers under the age of 25 is valid under the Financial Responsibility Law, ORS chapter 806; and (2) whether a motor vehicle liability *438 insurance policy must provide coverage to an insured owner for a claim of negligent entrustment of the insured vehicle.[1] The circuit court concluded that the under-age-25 endorsement was valid and that Viking Insurance Company's policy provided no coverage for Randle, the car owner. The Court of Appeals affirmed in part, holding that it was permissible to exclude coverage of the under-age-25 driver, and reversed in part, holding that the owner of the vehicle had coverage for a claim of negligent entrustment. Viking Ins. Co. v. Petersen, 96 Or. App. 46, 771 P.2d 1022 (1989). We reverse the decision of the Court of Appeals as to the validity of the under-age-25 driver endorsement and affirm its decision as to coverage for the owner on the claim of negligent entrustment.
We take the facts from the Court of Appeals opinion:
The personal representative of the estate also claimed that Randle, the owner, negligently entrusted the use of the car to Petersen.
Viking sought a declaratory judgment releasing it from liability to defend or provide coverage.
As mentioned, the driver of the insured's car was under the age of 25. Viking contends that if the "under 25 driver exclusion" is valid, there is no basis for imposing liability under Randle's insurance policy.
ORS 742.450(1) provides:
ORS 806.080(1) provides:
ORS 806.270 provides in pertinent part:
ORS 806.070 provides for minimum limits of coverage.
Viking and amicus, Oregon Association of Defense Counsel, argue that the Financial Responsibility Law only applies to persons who are required to be financially responsible  that is, those persons who are required to prove financial responsibility for a number of reasons. For instance, ORS 806.150 provides that the Motor Vehicles Division shall select at various times not more than 10 percent of the vehicles registered in the state for verification of financial responsibility. Under ORS 811.720 and 811.725, persons involved in vehicle accidents must prove compliance with financial responsibility requirements. Under ORS 803.460, vehicle owners seeking to renew their registrations must certify compliance with the financial responsibility requirements by one of the methods in ORS 806.060(2): (a) by buying an automobile insurance policy; (b) by posting a bond; (c) by depositing cash or securities; or (d) by becoming self-insured. Viking's and amicus's position appears to be that the legislature intended to require financial responsibility only from certain categories of persons, to wit, those called upon by the Motor Vehicles Division to prove financial responsibility under the minimum standards of ORS 806.080(1).
We interpret these statutes to require every motor vehicle liability insurance policy issued in this state to provide for statutory minimum limits of coverage. In this case Viking must provide statutory minimum limits of coverage for the vehicle owned by Randle and described in the policy. The policy must cover not only the named insured but also must provide coverage for all persons who operate the insured vehicle with the consent of the insured. In this case, the 19-year-old driver allegedly *440 was driving the automobile with the consent of the insured and the endorsement attempting to restrict coverage to only those 25 years or older violates the minimum requirements of Oregon's financial responsibility laws.
ORS 742.450 requires that all motor vehicle liability insurance policies issued in Oregon contain insurance coverage in accordance with ORS 806.070, 806.080, and 806.270. This means that such policies must include the same provisions required by financial responsibility requirements. In other words, the minimum requirements of ORS 806.270 are equally applicable to coverage required under ORS 742.450. ORS 806.270(3)(a) requires that the policy must cover all persons who, with the consent of the insured, use the vehicle (Petersen) owned by the person making the filing (Randle). That requirement applies whether Randle was filing for future responsibility (as he probably was since all evidence indicates this was a renewed registration vehicle) or whether he was making an original application for registration. ORS 806.270(3)(b) is inapplicable in that it applies only to coverage for persons operating motor vehicles not owned by the named insured. Therefore, the policy must cover Petersen, who was using a vehicle owned by Randle with Randle's consent, up to the minimum limits required by ORS 806.070.
The claims in this case include not only the claims against Petersen, for which there must be coverage, but also an independent claim against Randle, the owner of the car, for negligent entrustment of the vehicle to Petersen.
ORS 806.080(1) requires that the policy designate the motor vehicle which is covered. There is no question in this case that Randle's vehicle was described and designated as covered by the policy.
If the personal representative of the estate is able to prove his negligent entrustment claim, Randle would be liable for damages which may be imposed upon him by virtue of his ownership of the insured vehicle. ORS 806.080(1) requires that policies insure the named insured for liability arising out of his "ownership" of the insured vehicle. A claim of negligent entrustment by the owner of the vehicle is precisely such a claim arising out of ownership of the insured vehicle, for which the statute mandates coverage. The policy is construed to include whatever coverage the statute requires. See State Farm Fire and Casualty Co. v. Jones, 306 Or. 415, 759 P.2d 271 (1988).
The decision of the Court of Appeals is affirmed in part and reversed in part. Viking must provide coverage for Petersen as a permissive user and to Randle for any negligent entrustment liability arising out of the use of the vehicle. The judgment of the circuit court is reversed.
[1]  The personal representative of the estate of Patricia Dianne Medina petitions for review of the portion of the Court of Appeals decision which concludes that unsworn statements in support of a motion for summary judgment were admissible. Viking Insurance Company petitions claiming that the policy's under-age-25 endorsement excludes any coverage for either the driver or the owner of the vehicle.