Court Opinion

ID: 9848482
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:20:39.173147+00
Date Added: 2024-06-11T09:18:20.333356
License: Public Domain

McALLISTER, J.,
dissenting.
The Lamb-Weston doctrine was devised to require two insurance companies, both covering the same risk, whose policies contained conflicting “other insurance” provisions to prorate the loss. In this ease the Lamb-Weston rule is extended to the extreme of permitting an insured to recover the full policy limit of liability ($5,000) from each of the two companies involved. This double recovery is permitted even though the “other insurance” clauses are the easiest of any to reconcile, if, indeed, any reconciliation is necessary. Almost without exception the authorities agree that there is no real conflict in the typical case where a driver covered by his own policy is driving a non-owned automobile and is also covered by the policy of the owner.
George C. Sparling was killed in an automobile *480collision in January, 1965, while driving an automobile owned by the State of Oregon. The accident was caused by the negligence of an uninsured motorist.
Sparling was the named insured under a policy of insurance issued by the defendant, Allstate Insurance Company. That policy provided that it did not apply to an injury sustained by Sparling while in an automobile not owned by Sparling, if the owner had insurance similar to that afforded by Sparling’s policy, and such insurance was available to Sparling.①
It is stipulated that the owner of the automobile driven by Sparling did have other insurance similar to that afforded by Sparling’s policy, and that such insurance was available to Sparling. The automobile driven by Sparling was owned by the State of Oregon. The state was the named insured under an insurance policy issued by Continental Casualty Company which contained uninsured motorist coverage similar to the coverage of Sparling’s policy. The limits of liability under both policies were the same, $5,000 for each person, and $10,000 for each accident.
The majority opinion quotes only a part of the “other insurance” clause of the Continental policy issued to the State of Oregon. The entire clause reads as follows:
• “Other insurance. With respect to bodily injury to an insured while occupying an automobile not *481owned by tbe principal named insured, the insurance under this endorsement shall apply only as excess insurance over any other similar insurance available to such insured and applicable to such automobile as primary insurance, and this insurance shall then apply only in the amount by which the limit of liability for this coverage exceeds the applicable limit of liability of such other insurance.
“Except as provided in the foregoing paragraph, if the insured has other similar insurance available to him and applicable to the accident, the damages shall be deemed not to exceed the higher of the applicable limits of liability of this insurance and such other insurance, and the company shall not be liable for a greater proportion of any loss to which this Coverage applies than the limit of liability hereunder bears to the sum of the applicable limits of liability of this insurance and such other insurance.”
The provisions of the first paragraph are important in this case. They provide that as to automobiles not owned by its insured, Continental’s policy will apply only as excess insurance. Continental recognized that in the converse situation where the vehicle involved was owned by its principal named insured, it provided the primary coverage. Continental, therefore, in accordance with standard insurance practice, paid to plaintiff as executrix of the estate of George Sparling the limit of its coverage in the sum of $5,000. Mrs. Sparling then brought this action to require the defendant Allstate to pay another $5,000, being the limit of Allstate’s policy.
To summarize the factual situation, we find that Sparling had a contract with Allstate which provided clearly that the policy should not apply if (a) Sparling was injured while driving an automobile not owned by him, if (b) the owner had insurance similar to Spar-*482ling’s insurance, and (e) such insurance was available to Sparling. The three stipulated conditions, injury-in a non-owned automobile, similar insurance carried by the owner, and the availability of such insurance to Sparling, are all present. Can we refuse to enforce contract provisions so explicit, so precise, and admittedly applicable to the facts of this case?
Conceding that Lamb-Weston should apply when the “other insurance” clauses of two policies are irreconcilable, this is not such a case. Here the companies themselves have answered the riddle of which should first enter “the door of responsibility.”② Each company has provided that as to non-owned automobiles it should have no liability or that its coverage should be excess. Each company has contracted that “non-ownership” shall be the touchstone by which primary and secondary liability shall be determined. Allstate contracted in precise terms with Sparling that its liability should turn on ownership or non-ownership. Continental recognized that it insured the ownet automobile and paid the limits of its liability without protest. Why should Sparling’s estate get a double recovery windfall because this court stubbornly applies Lamb-Weston when the reason for the rule is not present.
Pacts similar to those in the case at bar were considered by the Supreme Court of California in American Automobile Ins. Co. v. Republic Indemn. Co., 52 Cal2d 507, 341 P2d 675 (1959). In adopting the rule which I think should apply here, the court, at 52 Cal2d 511-12, 513, 341 P2d 677, 678-79, said:
“The language of the ‘other insurance’ clauses contained in both policies is substantially the same.
*483The clauses consist of two parts; the first provides generally for prorating where there is other insurance covering the loss, and the second provides, as a specific exception, that when the named insured is driving a car not owned by him the insurance will be excess over all other insurance. ** # *
“Where ‘other insurance’ clauses of this type appear in the automobile liability policies of both the driver and the owner, the cases have generally given effect to the excess provision in the policy of the driver and have held that the insurer of the owner is primarily liable and must bear the whole loss, within the limits of its policy, [cases cited]
“* * * The only construction of the ‘other insurance’ clause under which both its parts will be meaningful is that the excess provision alone controls in every situation which falls within its terms, such as when a person is driving the car of another and both the driver and the owner have insurance, and that the prorate provision alone governs in all other situations, for example, when more than one policy has been issued to the same person. When the driver’s insurance is excess, it necessarily follows that the insurance of the owner is primary, and therefore the owner’s insurer must bear the entire loss to the extent of the limits of the policy.”
Commentators have pointed out that the Lamb-Weston rationale is unnecessary in the simple case of a non-owned automobile used by a driver who is covered both by his own policy and by the owner’s policy. If the policies contain similar non-owner clauses there is really no conflict. I quote the following from Watson, The “Other Insurance” Dilemma, 518 Ins L J 151, 157 (March 1966):
“In this situation it seems obvious that each company has made exactly the same distinctions, *484with exactly the same intent, in each policy, that is, as to other insurance generally it will prorate, but as to that one situation where its assured is driving a nonowned vehicle it will be excess only. Neither policy intended to prorate where its assured was driving a nonowned vehicle and both policies spelled out this intent clearly. How, then, can Company B now be heard to say that it cannot see any distinction in the language!”
I also quote a similar statement found in Russ, The Double Insurance Problem — A Proposal, 13 Hast L Rev 183, 190 (1961):
“Some courts, however, have shown a reluctance to follow the Oregon Auto approach in all cases, preferring instead, to continue fixing responsibility on one insurer or the other. This hesitancy is greatest in eases where the loss results from operation of a borrowed vehicle and the' owner’s automobile policy has a pro rata clause while the operator’s automobile policy has an excess clause applicable to non-owned vehicles. These courts either reject the idea that a conflict exists in the particular situation, or rely on a presumed intent of the insurers.”
Our objective in all cases should be to give full effect to the intent of the parties as expressed in the contracts. It is only when this cannot be done that we should declare the contracts mutually repugnant. In Liberty Mutual Ins. Co. v. Truck Insurance Exch., 245 Or 30, 420 P2d 66, 70 (1966), we said that Lamb-Weston should not be applied if there is “language in either policy which would show which clause should be entitled to preference.”
In this case the intent of the companies can be determined from the use by each in its own policy of two different limits of liability, one general and one spe*485cific. Certainly the company insuring the owned automobile cannot complain if the specific provision of the other policy is given the same meaning as it obviously intended the specific provision of its own policy to have.
The majority opinion claims that several cited cases have adopted the Lamb-Weston rule. One of the cases, Oregon Auto Ins. Co. v. United States Fidelity & Guar. Co., 195 F2d 958 (9th Cir 1952), was decided seven years before Lamb-Weston. It was the “chicken” which laid the Lamb-Weston “egg.” In the second case, Travelers Insurance Co. v. Peerless Insuramce Co., 287 F2d 742 (9th Cir 1961), the court indicated clearly that it applied the minority Lamb-Weston rule only because it was required to do so by our decision in Lamb-Weston. The District Court of Guam, Globe Indemnity Co. v. Capital Insurance and Surety Co., 228 FS 494 (DC Guam 1964), also preferred the majority rule, but felt bound by the Ninth Circuit decision in Travelers Insurance Co. v. Peerless Insurance Co., supra. The adoption of the Lamb-Weston rule by the Appellate Court of Illinms in New Amsterdam Gas. Co. v. Lloyds’ Underwriters, 56 Ill App2d 224, 205 NE2d 735 (1965), was not in a “non-owned” automobile case. In any event, the District Court has been reversed sub silentio by the Supreme Court of Illinois in New Amsterdam Cas. Co. v. Certain Underwriters, 34 Ill2d 424, 216 NE2d 665 (1966), which expressly rejected the Lamb-Weston rule.
The overwhelming weight of authority is opposed to the rule which the majority applies in this case. Continental Cas. Co. v. Zurich Ins. Co., 57 Cal2d 27, 17 Cal R 12, 366 P2d 455 (1961); American Automo*486bile Ins. Co. v. Republic Indemn. Co., 52 Cal2d 507, 341 P2d 675 (1959); New Amsterdam Cas. Co. v. Certain Underwriters, supra, at 216 NE2d 667-68; Consolidated Mut. Ins. Co. v. Bankers Ins. Co. of Pa., 244 Md 392, 223 A2d 594 (1966); Zurich v. Continental Casualty, 239 Md 421, 212 A2d 96 (1965); Fidelity é Casualty Co. of N. Y. v. Western Cas. & 8. Co. (Mo App) 337 SW2d 566 (1960); Mtn. Sts. Casualty v. Amer. Cas., 135 Mont 475, 342 P2d 748 (1959); Turpin v. Standard Reliance Ins. Co., 169 Neb 233, 99 NW2d 26 (1959); Western Pacific Insurance Co. v. Farmers Ins. Exch., 69 Wash2d 11, 416 P2d 468 (1966); Safeco Ins. Co. of Amer. v. Pacific Indemnity Co., 66 Wash2d 38, 401 P2d 205 (1965); Lubow v. Morrissey, 13 Wis2d 114, 108 NW2d 156 (1961); Henderson v. Selective Insurance Company, 369 F2d 143 (6th Cir 1966); Citizens Mutual Auto Ins. Co. v. Liberty Mutual Ins. Co., 273 F2d 189 (6th Cir 1959); American Surety Company of N. Y. v. Canal Ins. Co., 258 F2d 934 (4th Cir 1958), 157 FS 386. The rule applied in the above eases is summarized in Annot. 76 ALR2d 502 at 505 (1961), as follows:
“* * * Thus, if the non-ownership coverage offered by one of the policies involved is of the ‘excess insurance’ type, the conclusion is generally reached — no matter how various the reasoning adopted in support of it in the different cases may be — that the policy issued to the owner of the vehicle is the ‘primary’ policy, and the company issuing it is liable up to the limits of the policy without apportionment, although the policy contains a ‘prorata’ clause. To state the proposition in another way: if one policy has been issued to the owner of the vehicle causing damage, and another covers the same loss by virtue of the relationship to the accident of one who is not the vehicle owner, the latter’s insurer, at least where its coverage is of *487the ‘excess insurance’ variety, is in the favorable position and need not assume any of the loss, although the vehicle owner’s policy contains a ‘prorata’ clause. * *
See also, 7 Am Jur 2d, Automobile Insurance, § 202, page 544;, 8 Appleman, Insurance Law and Practice (1962 ed) § 4914, page 400.
The rule followed by all courts but Oregon has the virtue of enforcing the contracts made by the parties. I believe it should be applied in the case at bar and similar non-owned automobile cases.
I dissent.
Goodwin, J., concurs in this dissent.

 "'* * * *
“ ‘Exclusions — what this Section does not cover
“ ‘This Section of the Policy does not apply:
“ ‘1. to bodily injury of an insured sustained while in or upon, entering into or alighting from, any automobile, other than an owned automobile, if the owner has insurance similar to that afforded by this Section and such insurance is available to the insured;’ ”
(IX Stipulation as to the Facts)

 Firemen’s Ins. v. St. Paul Fire Ins., 243 Or 10, 15, 411 P2d 271, 274 (1966).