Court Opinion

ID: 9760333
Source: CourtListenerOpinion
Date Created: 2023-08-29 00:48:16.164405+00
Date Added: 2024-06-11T07:29:10.925689
License: Public Domain

PRYOR, Associate Judge,
with whom NEWMAN, Chief Judge, and MACK, Associate Judge, join, dissenting:
This case involves perplexing questions raised by “other insurance” clauses in separate insurance policies which insure the same risk. Appellees argue, and the majority accepts, the premise that construing the respective clauses in a manner which would require both companies to share the coverage of the loss which they insured, overrides the contractual intent of the parties and places the court in the role of the legislature.
A closer look at this area of insurance coverage reveals a myriad of variables which are sometimes confusing and often impose the greatest hardship on the consumer, the insured:
1. Initially there is the question of primary and secondary coverage. Does the language of the policy purport to insure a given risk unconditionally and simply limit the amount of the insurer’s liability or is the policy intended solely as a secondary source of insurance?
2. Where the policies purport to afford coverage to a given event but are nonetheless limited by “other insurance” clauses, there are, of course several possibilities, i. e., pro rata v. pro rata; pro rata v. excess; and excess v. excess.
3. As a means of determining priority, the question is sometimes raised, as here, whether the person claiming coverage was individually insured by one policy as compared to group coverage by another company.
Most of the commentators who have studied this question perceive, and the majority acknowledges,1 that the labyrinth which the consumer sometimes encounters, is largely attributable to the continuing practice of the insurance industry in drafting “other insurance” clauses which often defy definition.
This case is illustrative. Both companies purported to insure the same risk: the negligence of a nurse. Each policy contained an “other insurance” clause. Because the insurers were themselves uncertain as to the resolution of this question in this jurisdiction, this litigation evolved. In support of their position, appellees first point out that their coverage was directed to a group of hospital employees whereas the other insurance protected the insured individually. Utilizing still another rationale, it is urged that the excess clause can be reconciled with the pro rata provision of the other policy and that the court should remain passive in interpreting the clauses. Interestingly, appellees concede, as they must, that this same approach cannot prevail when we confront two excess provisions. In that circumstance, either the insurance companies must arrange a settlement or the court must intercede. Otherwise the language of the contracts would indicate no coverage by either company. When a court attempts to construe these provisions, drafted by the insurers, in an orderly and predictable fashion, it is hardly the “sweeping away of the negotiated intents” of the parties; rather I suggest, it is simply an interpretation within reasonable judicial restraint, which along with the legitimate concerns of the insurance companies, takes into account the public interest. An Oregon court described the situation aptly:
This court believes it is good public policy not to put an insured plaintiff, or a defendant who is fortunate enough to have duplicate coverages, in a position where there is any possibility one insurer can say, “After you, my dear Alphonse!” while the other says, “Oh, no, after you my dear Gaston.” They must walk arm in arm through the door of responsibility. [Firemen's Insurance Co. v. St. Paul Fire & Marine Insurance Co., 243 Or. 10, 15, 411 P.2d 271, 274 (1966).]
*496Thus, a different approach, sometimes called the Lamb-Weston2 rule, is considered by some to be a more balanced and equitable solution.
It does not arbitrarily pick one of the conflicting clauses and give effect to it; it does not deprive the insured of any coverage; it is not prejudicial in giving a windfall to one insurer at the expense of another; it does not encourage litigation between insurers. It does not delay settlements. On the other hand, it does enable underwriters to predict the losses of the insurers more accurately; it does preclude the use of illogical rules developed by the courts (e. g., first in time, specific v. general and primary tort-fea-sor doctrines); and it does give a basis for uniformity of result. In addition, prorating the loss among all insurers is a rule that can be applied regardless of the number of insurers involved and regardless of the type of conflicts that are created by the “other insurance” clauses. Finally, the rule is simpler, more convenient, and easier to apply than the majority rule. [Note, Conflicts Between “Other Insurance” Clauses in Automobile Liability Policies, 20 Hastings L.J. 1292, 1304 (1969), cited in Werley v. United Services Automobile Association, 498 P.2d 112, 117 (Alaska 1972).]
For the reasons set forth in the opinion of the division, Jones v. Medox, Inc., D.C.App., 413 A.2d 1288 (1980), vacated by our en banc order May 5, 1980, the Lamb-Weston rule is favored. It should not prove burdensome to insurance companies. They need only avoid the present practices and state in a clearer fashion the extent of their intended coverage.

. Majority opinion at 490-491.

. Lamb-Weston, Inc. v. Oregon Auto. Ins. Co., 219 Or. 110, 341 P.2d 110 (1959).