Case Name: WARM SPRINGS FOREST PRODUCTS INDUSTRIES, Petitioner on Review, v. EMPLOYEE BENEFITS INSURANCE CO., Respondent on Review
Court: Oregon Supreme Court
Jurisdiction: Oregon
Decision Date: 1986-03-25
Citations: 300 Or. 617
Docket Number: TC No. A8010-05866; CA A24017; SC S32081
Parties: WARM SPRINGS FOREST PRODUCTS INDUSTRIES, Petitioner on Review, v. EMPLOYEE BENEFITS INSURANCE CO., Respondent on Review.
Judges: Before Peterson, Chief Justice and Lent, Linde, Campbell, Carson and Jones, Justices.
Reporter: Oregon Reports
Volume: 300
Pages: 617–636

Head Matter:
Argued and submitted December 4, 1985,
affirmed March 25, 1986
WARM SPRINGS FOREST PRODUCTS INDUSTRIES, Petitioner on Review, v. EMPLOYEE BENEFITS INSURANCE CO., Respondent on Review.
(TC No. [ AXXXX-XXXXX ]; CA A24017; SC S32081)
716 P2d 740
Howard G. Arnett of Bend argued the cause for Petitioner on Review. With him on the petition were Dennis C. Karnopp, Ronald L. Marceau, and Johnson, Marceau, Karnopp and Petersen of Bend.
James N. Westwood of Portland argued the cause for Respondent on Review. With him on the response were Bruce A. Rubin, P. Conover Mickiewicz, and Miller, Nash, Yerke, Wiener & Hager of Portland.
Before Peterson, Chief Justice and Lent, Linde, Campbell, Carson and Jones, Justices.
PER CURIAM.
Carson, J., filed a dissent.

Opinion:
PER CURIAM
In Mountain Fir Lbr. Co. v. EBI Co., 296 Or 639, 679 P2d 296 (1984), we held that an insurer's oral promise to rebate part of the premium for workers' compensation coverage could not be enforced by the insured, because the promise was not "plainly expressed in the policy," as required by ORS 746.035. We remanded the present case, in which the same insurer had made similar promises, to the Court of Appeals for consideration of a claim by the insured, an enterprise owned and operated by the Confederated Tribes of the Warm Springs Reservation of Oregon, that the prohibition against rebates did not apply to its transactions with the insurer. Warm, Springs Forest Products Ind. v. EBI Co., 296 Or 708, 678 P2d 266 (1984).
Warm Springs Forest Products Industries (hereafter Warm Springs) maintained that the contract must be enforced under the Confederated Tribes' Indian law and under federal Indian law. The Court of Appeals rejected this claim. The court held that Warm Springs agreed that its contract with the insurer (EBI) would be governed by Oregon law by virtue of two provisions of the policy. Condition 1 of the policy calls for changes in "classifications, or rating plans" required "under any law regulating this insurance" or affecting "the benefits provided by the Workman's Compensation Law" to be stated in an endorsement to the policy. The court read this policy provision as referring to some system of law that regulates insurance classifications and rating plans as well as workers' compensation benefits, which in the context of this transaction could only mean Oregon laws. The second provision is an endorsement to the policy noting that "[i]t is unlawful in Oregon for an insurer to promise to pay policyholder dividends for any unexpired portion of the policy term or to misrepresent the conditions for dividend payments." The court held that the two provisions evidenced a choice of the contracting parties to have the insurance contract governed by Oregon law and also a consent by plaintiff, "as required by Indian law principles," to the application of Oregon law. Warm Springs Forest Products Ind. v. EBI Co., 74 Or App 422, 428, 703 P2d 1008 (1985).
We do not think this holding depends on parsing the precise terms of the two quoted provisions. The provisions show that the existence of Oregon law regulating compensation insurance policies was not an unknown or unforeseen circumstance, and it is far more plausible to infer from their inclusion that the parties expected Oregon law to apply to the entire policy than that they chose Oregon law for some of its clauses and Warm Springs law for other clauses.
Warm Springs contends that only the tribal council, the governing body of the Confederated Tribes, could consent to the application of the Oregon insurance code on the Warm Springs Indian Reservation, and that nothing in the record shows that the council approved this insurance contract entered by the management of Warm Springs and EBI. EBI responds that approval by the tribal council is irrelevant, because Warm Springs necessarily claimed authority to enter into the contract for workers' compensation insurance on which it was bringing this action, and such contracting authority would extend to agreeing to a choice of the law governing the contract.
Warm Springs denies that it had authority to agree to the application of Oregon law to this insurance contract, and it relies on elaborate dicta in the opinion of the Court of Appeals for the proposition that without such a contractual choice of law, the rebate agreement "might well be enforceable." 74 Or App at 431.
These dicta assume that the Confederated Tribes have adopted some system of contract law that differs from Oregon contract law and that would sanction insurance contracts that would be illegal in Oregon. The assumption is not necessarily correct. EBI points to a provision of the tribal code that, at the relevant time, stated:
"Law Applicable in Civil Actions.
"In all civil cases, the Tribal Court shall apply any laws of the United States that may be applicable, any authorized regulations of the Interior Department and any ordinances or customs of the Tribes not prohibited by such Federal laws.
"Where any doubt arises as to the customs and usages of the Tribes the Court shall request the advice of not less than two impartial counsellors familiar with these customs and usages.
"Any matters that are not covered by this Code, the traditional customs and usages of the Tribe, or by applicable Federal laws and Regulations, shall be decided by the Court according to the laws of the State of Oregon."
Warm Springs responds that this provision states what law shall be applied in cases within the jurisdiction of the tribal court, and that the court's civil jurisdiction is limited to controversies between Indians involving no more than $3,000. The tribal code indeed stated what law should be applied in the tribal court in those cases that would come before it, but we are not persuaded that the substantive rules adopted in the tribal code for civil "matters" were to apply exclusively to transactions or claims of $3,000 or less. It seems wholly anomalous to maintain that the Confederated Tribes would adopt Oregon law (in the absence of contrary provisions of federal or tribal law) to be applied between members of the tribes in the tribes' own court and exclude the application of Oregon law in substantively identical matters when they are brought before an Oregon court, as in this case.
Justice Carson's dissenting opinion sets out in greater detail the reasons why an Oregon court may have to undertake an examination of Indian tribal laws and customs that have the effect of law. The general principles are not disputed. However, Warm Springs is in no position to insist that the circuit court or the appellate courts must seek out and take judicial notice of all possible sources of laws or customs of the Confederated Tribes in order to determine whether or not these hypothetical laws or customs would enforce this insurance contract or deny Warm Springs authority to consent to the application of Oregon law. A court may take judicial notice of the "decisional, constitutional and public statutory law of Oregon, the United States and any state, territory or other jurisdiction of the United States" (as well as of "foreign nations," in case tribal governments were not deemed an "other jurisdiction of the United States"), OEC 202, but a party cannot demand that a court take notice of undocumented law when the party does not supply the court with the necessary information. OEC 201(d). In this case, Warm Springs referred to no tribal "custom or usage" and was unable, in oral argument, to specify any developed body of contract law under which parties should enter into and perform, and Oregon courts should enforce, such commercial or insurance contracts as the contract on which Warm Springs brings this action.
EBI does not dispute that Indian tribes have authority to make laws for persons, property, and transactions on their reservations and that various state taxes and regulations do not apply on Indian reservations. But Warm Springs' argument assumes that the prohibition of rebates by insurance companies is a state law "regulating" the Indian enterprise and that the law of insurance contracts without that prohibition is not such state law. It postulates that there is some difference between common law and statutory law that makes one but not the other applicable to transactions with Indians. The argument does not specify the "common law" of any jurisdiction nor whether "common law" includes or excludes doctrines and remedies of equity such as, for instance, specific performance, reformation, or estoppel. Warm Springs does not explain how this theory would apply to transactions governed by the Uniform Commerciál Code (ORS chapters 71 to 79), the unfair trade practice law (ORS 646.605 to 646.652), or the products liability law (ORS 30.900 to 30.925), many of which a member of the Confederated Tribes might have occasion to invoke.
Warm Springs' argument comes down to a contention that it could not validly agree to such a choice of Oregon law because Oregon's law "has the effect of invalidating the rebate agreement, the main reason plaintiff bought the policy," and that "a contractual choice to apply foreign law which is contrary to the fundamental public policy of the place where the contract is made and performed will not be given effect," citing Restatement, Second, Conflict of Laws § 187(2) (b) (1971). In essence, Warm Springs maintains that it could choose (and enforce in this action) Oregon rules governing insurance contracts to the extent that they protect its interests but could not agree to those rules that proved unfavorable to itself.
We do not believe that Warm Springs' agreement to a choice of Oregon law contravenes the "fundamental public policy" of the Confederated Tribes. It is not contrary to the policy expressed in the tribal code's reference to Oregon law in the absence of governing federal law or Indian written or customary law. To the contrary, we doubt that the Confederated Tribes, which engage in many substantial business transactions with the world outside the reservation, would believe that they would be best served by adopting a public policy that would cast doubt not only on the sources, nature and rules of law governing those business transactions, but even on the ability of tribal enterprises to agree to a choice of the applicable law. We think it is as likely that the tribes would want to be able, and their members to be able, to invoke provisions of Oregon law that are designed to protect consumers and other contracting parties against risks such as, in this instance, the risk of inadequately secure insurance. In any event, Warm Springs presents nothing to show such a "fundamental public policy" invalidating its agreement to a choice of Oregon insurance law beyond the assertion that it might not have chosen EBI's insurance policy if it had known that EBI's promised premium rebate was unenforceable.
For these reasons, we affirm the decision of the Court of Appeals and the judgment of the circuit court.
ORS 746.035 provides:
"Except as otherwise expressly provided by the Insurance Code, no person shall permit, offer to make or make any contract of insurance, or agreement as to such contract, unless all agreements or understandings by way of inducement are plainly expressed in the policy issued thereon."