Court Opinion

ID: 9619637
Source: CourtListenerOpinion
Date Created: 2023-08-22 05:30:50.26206+00
Date Added: 2024-06-11T18:04:43.059405
License: Public Domain

RICHARDSON, J.,
dissenting.
The issue in this case is whether the policy became effective on the January 1, 1981, “policy date” shown on its face, notwithstanding the provision in the application that defendant
“* * * shall incur no liability under this application until it has been received and approved [and] a policy issued and delivered * * * all while the health, habits and any other condition relating to each person proposed for insurance are as described in this application * * *.”
The majority reasons that that provision was intended by defendant as a condition precedent to coverage, that the provision in itself is unambiguous and that the condition was not satisfied. All of those premises are correct, but they beg the question. The application containing the provision was delivered with and made part of the policy. See ORS 743.045(1). Accordingly, the provision must be read with other relevant provisions of the policy, e.g., the stated effective date,1 to determine if there is an ambiguity as to whether or when coverage became effective. The majority finds no ambiguity, because it concentrates on one of the conflicting provisions and disregards the other. I think the ambiguity is patent and, resolving it in favor of coverage, I would hold that the *96policy became effective on the specified policy date, one day before the insured learned of his disease.
I agree with the majority that no Oregon Supreme Court decision is controlling. However, the majority’s discussion of Stinchcombe v. N. Y. Life Ins. Co., 46 Or 316, 80 P 213 (1905) seems to me to dwell on the factual differences between that case and the present one at the expense of addressing the legal analysis in Stinchcombe. I think that analysis is apposite here. The policy in Stinchcombe specified that May 5, 1894, was the anniversary date for the payment of premiums. However, the application provided that the policy was not to take effect until the “actual payment to and acceptance of the premium” by the insurer, which occurred on July 24, 1894. The insured died on July 3, 1896, without having paid a renewal premium.. The issue was whether the coverage procured through the initial two-year premium payment expired on May 5,1896, or extended to July 24, 1896. The court held that coverage was in effect through the latter date, and explained inter alia:
“* * * [A]s between inconsistent, conflicting, and incongrous provisions, of doubtful and ambiguous significance, in a policy of insurance, it being manifest that the form and all the necessary conditions are the statements [of the insurer], the construction most favorable to the assured will be adopted and applied * * *.” 46 Or at 322.
The majority states that, in Stinchcombe, “there was no question whether the policy ever came into being in the first place.” That is of course correct: in Stinchcombe, the inconsistency between the provisions of the policy related to a different matter. However, the inconsistency in this case is between one provision that says that, under these facts, the policy could not take effect, and a second provision that says that the policy did take effect. The ambiguity here is every bit as subject as the one in Stinchcombe to the principle of construction articulated in that case and in countless cases decided before it and since — that ambiguities in insurance contracts are to be construed against the insurer. That principle and others favorable to coverage have been followed by the preponderance of and the better case authority involving *97issues analogous to the one before us. See Annot., 44 ALR2d 472, 476, 509-11 (1955).
I respectfully dissent. Warden and Rossman, JJ., join in this dissent.

Defendant suggests that the term “policy date” is not synonymous with “effective date.” If that suggestion were correct, defendant would be in violation of ORS 743.054(l)(d). Nothing else in the policy specifies “[t]he time when the insurance thereunder takes effect * * *.”