Court Opinion

ID: 9849147
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:35:19.360449+00
Date Added: 2024-06-11T09:19:02.380208
License: Public Domain

*345WARREN, P. J.,
concurring.
I agree with the majority and the trial court that North Pacific’s policy may and does limit its liability limits to the statutory minimum of $25,000 with respect to plaintiff. I do not agree that the balance of the majority opinion’s analysis is correct or necessary.
The trial court was correct that ORS 742.544 does not apply because that statute deals with reimbursement. Here, there was no reimbursement but a pro tanto reduction of available limits based on payments made under PIP. The policy provides:
“Any payments made by us under this insurance to an insured shall be applied in reduction of the amount of damages which, because of bodily injury sustained in the same accident, the insured may be entitled to recover from us for bodily injury liability insurance.” (Emphasis in original.)
The effect of this provision is to reduce liability limits below the minimum, $25,000, required by the financial responsibility law, ORS 806.070(2)(a). That is impermissible. See Collins v. Farmers Ins. Co., 312 Or 337, 346, 822 P2d 1146 (1991) (holding that insurance companies may exclude some persons from higher coverage limits so long as the policy provides the minimum coverage required by the financial responsibility statutes); United Services Auto. Ass’n v. Reilly, 122 Or App 459, 463, 858 P2d 457 (1993) (when an insurance policy is obtained to satisfy financial responsibility laws, the policy must provide the coverage required by ORS 806.070).
The majority is correct that the total available insurance to plaintiff is $50,000 ($25,000 in PIP already paid and $25,000 in liability not yet recovered), not, however, because of an unlawful intra-company reimbursement, but because the enforcement of the policy would reduce liability limits below the statutory minimum.1
*346Because I conclude that this case is not covered by the reimbursement statute, ORS 742.544 is not implicated. The majority’s discussion of that issue is unnecessary. The policy provisions, which reduce liability coverage below the minimum allowed by statute, are impermissible. I concur with the majority’s result, however, that total coverage in this case is $50,000.

 The majority opinion concludes that my position was rejected by the Supreme Court in Edwards v. Bonneville Auto. Ins. Co., 299 Or 119, 699 P2d 670 (1985). However, in Edwards, the plaintiff did not, and could not, make the same argument. The briefs before the court in Edwards did not raise the argument because the facts of that case foreclosed it. There, the insurance company first paid to the plaintiff its maximum amount of liability under its liability insurance policy. Id. at *346122. Thus, the court was not presented with the situation where PIP benefits were used to reduce the amount of liability limits below those that were required by law. Here, the PIP benefits were paid first and North Pacific then argued that it had satisfied its liability limits. However, that stance reduces North Pacific’s liability coverage below that allowed by law.