Court Opinion

ID: 9503370
Source: CourtListenerOpinion
Date Created: 2023-08-06 19:43:19.70543+00
Date Added: 2024-06-11T09:03:25.158372
License: Public Domain

K3STLER, J.,
dissenting.
The majority holds that, in computing uninsured motorist benefits, a statutory offset for workers’ compensation payments should be deducted from the amount of the damages that the insured sustained. In my view, the text and the context of the governing statute require a different result. They require that any workers’ compensation payments be deducted from the amount of the insured’s damages up to the limits of liability. I respectfully dissent.
ORS 742.504(7)(c) provides that a statutory offset for workers’ compensation payments shall be deducted from “[a]ny amount payable under the terms of this coverage.” The question that this case presents is what that quoted phrase means. See PGE v. Bureau of Labor and Industries, 317 Or 606, 859 P2d 1143 (1993) (explaining statutory construction methodology). The text of ORS 742.504(7)(c) does not answer that question. The text does not identify the type of coverage to which “this coverage” refers, nor does it identify what “the terms” of that coverage are. The context, however, resolves both those issues.
ORS 742.502(1) requires that every motor vehicle liability policy provide uninsured motorist coverage — coverage for bodily injuries that the insured sustains in a motor vehicle accident with an uninsured driver. In addition to requiring uninsured motorist coverage, ORS 742.504 sets out the minimum terms and conditions of that coverage that every motor vehicle liability policy must contain. See Vega v. Farmers Ins. Co., 323 Or 291, 301-02, 918 P2d 95 (1996) (explaining that motor vehicle liability policies may not contain less favorable terms than those set out in ORS 742.504).1
Two propositions follow from this statutory context. First, the phrase “this coverage” in ORS 742.504(7)(c) refers *612to uninsured motorist coverage. Second, the phrase “the terms of this coverage” refers to the terms and conditions of coverage set out in ORS 742.504. ORS 742.500(1) makes that point clear. ORS 742.500(1) provides that “ [u]ninsured motorist coverage’ means coverage within the terms and conditions specified in ORS 742.504.” (Emphasis added.) As the emphasized portion of ORS 742.500(1) demonstrates, when the legislature referred to the “amount payable under the terms of this coverage” in ORS 742.504(7)(c), it meant the amount payable under all the terms and conditions specified in ORS 742.504.
Two of those terms are relevant here. First, ORS 742.504(1)(a) defines the scope of uninsured motorist coverage as “all sums [that] the insured * * * shall be legally entitled to recover as general and special damages” because of bodily injury caused by an accident with an uninsured driver. Second, ORS 742.504(7)(a) recognizes that the limit of liability stated in the declarations is the upper limit that an insurer must pay each insured for the damages that he or she sustains. Reading those two provisions together, the terms of the coverage stated in ORS 742.504 require an insurer to pay the amount of the insured’s damages up to the insurer’s limit of liability.
The text and context of ORS 742.504(7)(c) thus yield a straightforward rule: The “amount payable under the terms of this coverage” is the amount of the insured’s damages up to the insurer’s limit of liability. It follows that, if the insured’s damages are less than the limit of liability, then the “amount payable” is the amount of the damages that the insured sustained and any workers’ compensation payments should be deducted from that amount. If, however, the insured’s damages exceed the limit of liability, then the “amount payable” is the limit of liability and any workers’ compensation payments should be deducted from that amount.
In this case, the insured’s damages exceed $650,000, and the insurer’s limit of liability is $100,000. Under the terms of the coverage stated in ORS 742.504, the amount that the insurer has to pay is $100,000 (the amount of the insured’s damages up to the limit of liability). That is the *613“amount payable” from which ORS 742.504(7)(c) requires that the statutory offset for workers’ compensation payments be deducted. Although the legislature could have adopted a different rule, the text and context of ORS 742.504(7)(c) demonstrate that this is the rule that it adopted. Accord Williams v. American States Ins. Co., 163 Or App 179, 986 P2d 1260 (1999) , adh’d to on recons, 166 Or App 145, 997 P2d 892 (2000) (adopting same interpretation of ORS 742.504(7)(c)); Pitchford v. State Farm Mutual Auto. Ins. Co., 147 Or App 9, 16, 934 P2d 616, rev den, 325 Or 621 (1997) (same); California Casualty Indemnity Exchange v. Maritzen, 123 Or App 166, 171, 860 P2d 259, rev den, 318 Or 97 (1993) (same).
The majority reaches a different conclusion. Relying on ORS 742.450(1), it starts from the premise that coverage and limits on liability are separate concepts. It follows, the majority concludes, that the phrase “the terms of this coverage” does not refer to the limit of liability stated in ORS 742.504(7)(a). Rather, it refers to the scope of coverage stated in ORS 742.504(l)(a). The majority also reasons that interpreting the phrase the “amount payable under the terms of this coverage” to mean the amount of the insured’s damages up to the limits of liability impermissibly inserts words into the text of ORS 742.504(7)(c) that the legislature omitted.
The majority’s second point is at odds with its own interpretation. As the majority notes, and I agree, the phrase “the terms of this coverage” gains meaning only from its context. The majority looks to one contextual source — ORS 742.504(l)(a) — and holds that the phrase refers to the total amount of damages that an insured legally may recover from an uninsured driver. I would look to a different source — all the terms in ORS 742.504 — and hold that the phrase refers to the amount of damages that the insured may recover up to the limits of liability. Both interpretations go beyond the words of ORS 742.504(7)(c). Neither, I submit, impermissibly inserts words into the text of ORS 742.504(7)(c). Rather, both look to context to identify the “terms” to which ORS 742.504(7)(c) refers.
The majority’s more substantial point is that, under ORS 742.450(1), coverage and limits of liability are separate concepts. As noted, the majority concludes that, because the *614two concepts are separate, the statutory reference to “the terms of this coverage” does not include any limit on liability. The majority’s reasoning is difficult to square with ORS 742.500(1). As the majority observes, the phrase “this coverage” in ORS 742.504(7)(c) refers to uninsured motorist coverage, and ORS 742.500(1) defines “uninsured motorist coverage” as “coverage within the terms and conditions specified in ORS 742.504.” By definition, the “terms” to which ORS 742.504(7)(c) refers are all the terms in ORS 742.504, which includes both the scope of coverage in ORS 742.504(1)(a) and the limit on liability in ORS 742.504(7)(a).
To be sure, as the majority notes, ORS 742.450(1) provides that every motor vehicle liability policy “shall state [the insured’s name and address], the coverage afforded by the policy, the premium charged therefor, the policy period and the limits of liability.” That subsection thus distinguishes coverage from limits of liability. However, to the extent that ORS 742.450(1) points in a different direction from ORS 742.500(1),2 the latter statute controls. Not only did the legislature enact ORS 742.500(1) after ORS 742.450(1),3 but ORS 742.500(1) is the more specific statute. See Kambury v. DaimlerChrysler Corp., 334 Or 367, 374, 50 P3d 1163 (2002) (explaining methodology for resolving conflicting statutes). By its terms, ORS 742.500(1) defines what uninsured motorist coverage means for the purposes of ORS 742.504(7)(c).
Because the text and context of ORS 742.504(7)(c) demonstrate that the legislature intended that workers’ compensation payments should be deducted from the amount of *615the insured’s damages up to the limit of liability, I respectfully dissent.
Carson, C. J., and Balmer, J., join in this dissent.

 ORS 742.502(2)(a) requires that motor vehicle liability policies also provide underinsured motorist coverage. As the majority notes, underinsured motorist coverage generally is subject to the same statutory requirements as uninsured motorist coverage.

 In my view, the two statutes are not in conflict. As ORS 742.450(1) recognizes, coverage and limits of liability are separate concepts. But ORS 742.504(7)(c) does not refer simply to uninsured motorist coverage. Rather, it refers to “the terms of [uninsured motorist] coverage.” (Emphasis added.) The terms on which an insurer offers coverage typically include limitations, such as limits of liability. The phrase “the terms of [uninsured motorist] coverage” is broad enough to include limits of liability, as ORS 742.500(1) requires, even though coverage and limits of liability are different concepts, as ORS 742.450(1) recognizes.

 The legislature enacted ORS 742.504 in 1967 and ORS 742.450(1) in 1955. Compare Or Laws 1967, ch 482, §§ 1-3 (enacting ORS 742.500 to 742.506), with Or Laws 1955, ch 429, § 23 (enacting ORS 742.450(1)).