Court Opinion

ID: 9883305
Source: CourtListenerOpinion
Date Created: 2023-10-06 01:39:50.978229+00
Date Added: 2024-06-11T07:48:22.551914
License: Public Domain

TANZER, J.,
dissenting.
The majority errs in treating the issue solely as a matter of fact. It is elementary that before we can review the sufficiency of any finding, we must first determine what legal issue the facts must be sufficient to establish. This case presents a preliminary legal issue of what is meant by the phrase "relative * * who is a permanent resident of the same household [as the insured].” Only after determining as a matter of law the definitional requirements of the term is it proper to proceed to the factual issue of whether the finding is supported by the evidence. That is essentially what the Supreme Court did in Schehen v. North-West Insurance, 258 Or 559, 484 P2d 836 (1971).
The fallacy of the majority is that it treats the "permanent resident” clause as having a fixed legal meaning which is the same in all situations, contexts and jurisdictions as a matter of law and then holds that we cannot say there was no evidence to support a *386finding because other states have so held. Were that so, we would be bound by analogy to reverse the trial court based on the authority of Garrow v. Pennsyl. Gen. Ins. Co., 288 Or 215, 603 P2d 1175 (1979). There, the Supreme Court construed the term "members of [the insured’s] family residing in the same household” in ORS 743.800 (which governs personal injury protection coverage) to not include persons not actually residing in the home of the insured. The term in this case is not only analogous, but somewhat narrower because it requires permanence.
The term "permanent resident” is material in this case because it is used in an insurance contract, not in a statute. Accordingly, it should be construed under the well-established principles of contract law applicable to insurance policies. Those principles are well summarized in Shadbolt v. Farmers Insur. Exch., 275 Or 407, 410-11, 557 P2d 478 (1976):
"We have said, however, that when words or terms of a general nature are used in an insurance policy, such words or terms may be ambiguous, in the legal sense, when they could reasonably be given a broader or a narrower meaning, depending upon the intention of the parties in the context in such words are used by them.
"We have also said that an insurance policy should be construed 'according to its character and its beneficent purposes, and in the sense that the insured had reason to suppose that it was understood.’
"Finally, we have said many times that if there is an ambiguity in the terms of an insurance policy, any reasonable as to the intended meaning of such terms will be resolved against the insurance company and in favor of extending coverage to the insured.” (Footnotes omitted.)
The intention of the parties and the sense in which the insured must have understood the term is demonstrated beyond serious question by the father’s conscious decision not to insure his son. On the order for insurance, he listed himself as the only driver. Where asked to list "Ages of children residing in household,” *387the father left the "Males” blank empty and, after "Females,” named his 16-year-old daughter to be excluded as a nondriver. The father testified forthrightly regarding his intention and understanding: (1) that his children had always been required to insure themselves or pay the cost increment on his policy as the price they paid for driving; (2) that he had not listed his son as a resident because the son had been away from the home for almost a year and because he did not consider his son a resident of his household ("If I did, I would have included him here, also.”); and (3) he did not desire or intend that his son be covered because he wanted the lower premium based on coverage of himself only and that had he listed his son, the premium would have been higher. It is clear from the testimony of the father that neither the insured nor the insurer regarded the son as a permanent resident of the household of the insured.
Applying the principles of Shadbolt, there is no reason for us to construe the contract differently than the parties did. Under the legal meaning of the term which was understood and intended by the parties to the contract, the facts in this case are insufficient to support a finding of coverage.
Schwab, C. J., and Buttler and Gillette, JJ., join in this dissent.