Opinion ID: 1801118
Heading Depth: 1
Heading Rank: 2

Heading: lines of authority

Text: This court is for the first time faced with the question presented by two insurance policies covering the same property for the same loss, one containing a pro rata clause and the other an excess clause. The question has been before many other courts and two distinct lines of authority have developed. One says the loss is to be pro rated between the two companies. The leading case expounding this point of view is Lamb-Weston, Inc. v. Oregon Automobile Insurance Co., 219 Or. 110, 341 P.2d 110 (1959). These courts reason that excess and pro rata clauses are both attempts to limit liability; that when a liability limiting clause in one policy conflicts with the liability limiting clause in anotherregardless of the exact nature of the clausethey are repugnant and each should be rejected in toto. The most exhaustive treatment of the majority view is found in Citizens Mutual Automobile Insurance Co. v. Liberty Mutual Insurance Co., 6 Cir., 273 F.2d 189 (1959). These courts basically reason that the pro rata clause by its own terms applies only where there is other valid and collectable insurance; that the policy containing the excess clause affords no coverage until the limits of the policy containing the pro rata clause have been exhausted; and therefore the policy containing the excess clause is not valid and collectable within the meaning of the first company's pro rata clause. Thus the majority view honors the excess clause.