Opinion ID: 1452808
Heading Depth: 1
Heading Rank: 1

Heading: Steele was a person insured by the insurance policy.

Text: The trial judge held that Mr. Steele was a person insured under the terms of the policy. We agree. The insurance policy was a comprehensive liability policy (general-automobile), No. 756241, issued to Kellum Motors, Inc. As one of the insuring agreements the policy included an omnibus clause, under which coverage for bodily injury was extended to any person while using an owned automobile or a hired automobile,   , provided the actual use of the automobile is by the named insured or with his permission    followed by certain exceptions not claimed to apply to this case. Attached to this policy are a number of endorsements, most of which provide for additional coverage, with additional premiums. [1] Other endorsements clearly excluded certain hazards. [2] Included with these other endorsements was an endorsement designated as UU-3139, and entitled Garage (premises-operations-automobiles), with the subheading Limited additional interests and covering the hazards described as garage operations hazard. This garage endorsement, by definition of the term insured, limits coverage for automobile hazard to persons such as paid employees or members of the household of the named insured and to any other person only while the automobile is physically operated by persons such as the named insured or his paid employees. It is contended by defendant that the garage endorsement is the meat of the policy and provides that Insuring Agreement III of the policy (the `omnibus clause') does not apply. Thus, defendant contends that this endorsement limits coverage under the basic policy for the purpose of all of the Kellum's garage operations, including the used car lot. The schedule attached to the basic policy as its first endorsement, however, sets forth a breakdown of the premium charged for personal injury and property damage coverage under the basic policy and goes on to state that for non-owned automobiles and hired automobiles there is no coverage for this hazard  except as provided by Garage Endorsement UU-3139. With reference to the coverage for owned automobiles, (as also referred to under the omnibus clause of the basic comprehensive liability policy) there is no provision to the effect that there is no coverage for this hazard, except as provided by garage endorsement. On the contrary, it is expressly provided by this same schedule that coverage for owned automobiles is subject to all the terms and conditions of this policy (referring to policy No. 756241, the `Comprehensive Liability Policy') AND Form No. UU-3139 (the so-called `Garage Endorsement'). We have attempted to follow through the maze of policy provisions, endorsements, exceptions, and seemingly contradictory provisions. These include a broad definition of insured for the purpose of the basic comprehensive liability policy and as stated in its omnibus clause, as compared with a more limited definition of that term in the garage endorsement. They also include an express limitation of coverage for non-owned automobiles and hired automobiles to coverage as provided by the garage endorsement, while omitting any such limitation with respect to coverage for owned automobiles, and providing, on the contrary, that such coverage is subject to all of the terms of both the basic policy and also the garage endorsement. Upon considering the basic comprehensive liability policy and its various endorsements, when considered as a whole (as defendant contends that we must do), we have concluded that the policy is reasonably subject to interpretation to the effect that the garage endorsement was not intended to either repeal or limit the application of the omnibus clause in the basic comprehensive liability policy insofar as owned automobiles were concerned. It is well established, of course, that in the construction of an insurance policy, that interpretation which is most favorable to the insured must be adopted. Reed v. Commercial Insurance Company, 248 Or. 152, 156, 432 P.2d 691 (1967). Accordingly, we hold that even though Steele was not an employee of Kellum, nevertheless, and because at the time of the accident he was driving an automobile owned by Kellum Motors and with the permission of the manager in charge of its used car lot, he was a person insured within the definition of that term in the omnibus clause of the basic comprehensive liability policy and was thus an insured person under the facts of this case, as found by the trial court. Cf. Johnson v. Doughty, 236 Or. 78, 79-80, 385 P.2d 760 (1963). We have read the cases cited by defendant in support of a contrary conclusion and find that they are not in point, either because the policies involved did not contain an omnibus clause, [3] or because the endorsements involved were not garage endorsements, but endorsements which clearly limited the insurance coverage. [4] Defendant also contends that Oregon law does not require an automobile liability policy to contain an omnibus clause, except under certain circumstances not involved in this case. This may be true. The fact remains, however, that the policy in this case does include an omnibus clause and we hold that while coverage under that clause may have been limited by the garage endorsement for some purposes, such as for non-owned automobiles and hired automobiles, the policy is reasonably subject to the interpretation that such coverage was not limited by the garage endorsement in accidents involving owned automobiles, at least under the facts of this case.