Court Opinion

ID: 9633362
Source: CourtListenerOpinion
Date Created: 2023-08-22 11:44:35.878459+00
Date Added: 2024-06-11T13:29:11.062134
License: Public Domain

TONGUE, J.,
specially concurring.
Following denial of a petition for rehearing, plaintiff requested, and was granted, a stay of the mandate for the purpose of filing in the Supreme Court of the United States a petition for writ of certiorari. Instead, plaintiff has now filed a “Request for Reconsideration and Alternative Motions to Remand and for Remitittur [sic] and Motion to Stay Mandate.”
After the denial of a petition for rehearing, such further “requests” and motions have no standing under the- Rules of Procedure of this court and must, therefore, be denied, as held by the majority. Because of the serious nature of the charges made by plaintiff in support of her present motions, however, I am of the view that these charges should be set forth, together with a statement of further reason why plaintiff’s present motions must be denied.
Plaintiff’s charge that “the determinations of this court on the issues of (1) prejudice to the defendant insurance company and (2) its right to rely on its investigation (i.e., whether it performed its duty to-*231make a reasonably diligent investigation) constitutes reversals of findings of fact by a trial court based upon legally sufficient evidence” and, therefore, not only “exceed the constitutional and statutory review-power of this court,” but violate the “due process” guarantees of the Fourteenth Amendment to the Constitution of the United States, by taking away from this seriously injured plaintiff a judgment for $19,957.72 and by depriving plaintiff of the opportunity to present evidence on the issue of prejudice.
In particular, plaintiff complains that although it was held by this court that defendant had the burden to establish prejudice, that “prejudice from this source was never pleaded by defendant” and “defendant had never put in any evidence of prejudice” and made no assignment of error on that issue. Thus, plaintiff contends that this court erred in concluding that because a trial court was not required to set aside the default judgment upon a motion made by defendant, either directly or through its insured, Wilbert Steele, it followed that defendant was prejudiced as a matter of law by the entry of that judgment, despite express findings by the trial court that defendant was not prejudiced.
To the same effect, plaintiff moves, in the alternative, that the case either be remanded to the trial court in order that evidence may be offered on the issue of prejudice or that it be “remitted” so as to permit the parties to stipulate that the default judgment taken by plaintiff against Wilbert Steele, defendant’s insured, be set aside “in order to permit a trial on the merits of that cause,” at which plaintiff would make available to defendant “all statements of witnesses taken in connection with her investigation of the accident,” among other things. Plaintiff con*232tends that sneh a “remittitur” is authorized by Art VII, § 3 (Amended) of the Constitution of Oregon.
Plaintiff’s counsel also has submitted an affidavit setting forth various facts not of record in that case and stating that unless this court grants the relief demanded by plaintiff he will have “no alternative” but to file an action “at the federal district court level” against the members of this court for “exceeding their jurisdictional limitations.”
First of all, it should be made clear, in view of the nature of the charges made by plaintiff (and I am sure that the majority will agree), that it gives this court no pleasure to set aside a judgment for an injured plaintiff in a personal injury case and that this court also does not claim the gift of infallibility. It is our duty, however, to apply the law of Oregon, as best we can, to all cases coming before this court, regardless of the outcome.
Next, it should be noted that in this case defendant’s answer, after alleging that Wilbert Steele had represented to defendant that he (instead of Kellum Motors, the named insured) was the owner of the vehicle involved in the accident, expressly pleaded prejudice, including prejudice from entry of the default judgment, as follows:
“That said representations were material, false and fraudulent, and were willfully made with intent to deceive defendant, and in reliance thereon the defendant was led to conclude that its policy did not afford coverage for the said Wilbert Steele, after an investigation was made by the defendant’s representative; that the defendant in reliance on said representations was not afforded the opportunity to investigate and defend said action and a default judgment was entered against the defendant Wilbert Steele; that it was not afforded an *233opportunity to properly and adequately place a claim reserve on the file, all to the defendant’s prejudice.” (Emphasis added)
During the course of the trial a copy of that default judgment was offered in evidence by plaintiff’s counsel in his opening case. Thus, there was evidence to support this allegation without offer of that evidence by defendant. Also, defendant’s first assignment of error on appeal was that the trial court erred, among other things, in refusing to adopt defendant’s proposed conclusion of law that “prejudice to the defendant has in fact been shown.”
It is true that the trial court purported to make a finding of fact that defendant was not prejudiced because it had “ample opportunity under Oregon law to set aside the default judgment upon showing of good cause which would have existed in this case.” In my view, however, this was not a true finding of fact, but was, at most, a conclusion of law, and an incorrect conclusion of law.
When a plaintiff in an action for personal injuries against a defendant who is covered by insurance takes a default judgment against the defendant, the insurance company is thereby prejudiced, as a matter of law. This might not be true if the insurance company had a right to demand that the default judgment be set aside, but failed to exercise such a right. In Oregon, however, for reasons pointed out in our original opinion, an insurance company has no such right and, in addition, the court which entered the default judgment has discretion whether or not to set a default judgment aside.
For these very reasons, counsel who represent plaintiffs in personal injury cases in which it appears *234that there may be possible grounds for so-called “policy defenses” by insurance companies based on “non-cooperation” by insured drivers by the making of statements to the insurance companies which may be false, usually proceed with extreme caution so as not to provide such a defense to the insurance company. Cases in which the insured has falsely stated that another person was the driver of the insured vehicle are one example of such cases. In such a case plaintiff’s counsel who learns of such a false statement may deem it advisable to inform the insurance company of the possible falsity of such a statement, in order to forestall such a defense.
In this case, however, plaintiff’s attorney, by his present affidavit, was suspicious that Steele falsely stated that he was the purchaser and owner of the insured vehicle long before the entry of the default judgment, so as to be fully aware of the possibility of a “policy defense.” He nevertheless proceeded to take the default judgment and then filed an action against the insurance company for the amount of the judgment before informing counsel for the insurance company of his suspicions.
As stated in our previous opinion, the trial judge was not required to set aside that judgment, but retained the discretion to decline to do so, particularly since the insurance company was not a party to this action against Steele and Steele, since he had lied, was hardly in a position to ask that the default judgment be set aside. Thus, as held in that opinion, the entry of that judgment, on request of plaintiff, against the driver of the vehicle covered by insurance resulted in substantial prejudice to the insurance company.
*235For reasons stated in onr previous opinion, however, this court then went on to hold that even if an insurance company is prejudiced as the result of “non-cooperation” by an insured, the company may not be entitled to claim such a “policy defense” if it has failed to make a diligent investigation of the facts. Thus, if such an investigation would have disclosed the false statement by Steele, defendant can hardly complain of the entry of the default judgment. The application of such a rule depends, of course, upon the facts of each particular case.
It is true, of course, that the trial judge made a finding of fact that further investigation by defendant would have revealed discrepancies in the statement by Steele that he had purchased the car from Kellum Motors prior to the accident and was its owner at that time. It is also true, as stated in our previous opinion, that it was a very close question whether there was substantial evidence to support a finding, as required under Art VTI, § 3 (Amended), that defendant failed to perform its duty to make a reasonably diligent investigation of the facts of this case. On petition for rehearing three members of the court, including the writer of this opinion, were of the view that a rehearing should have been granted so as to reconsider that question. The remaining members of the court, however, were of the contrary view.
In my opinion, however, while both our original decision, as well as our disposition of plaintiff’s subsequent petition and motions, may be subject to criticism by plaintiff, there is no basis for the suggestion that this court has exceeded its “review powers” or “jurisdictional limits,” as now contended by plaintiff. While such powers should be exercised *236with, restraint, it is always a matter for judicial determination by this court whether evidence contended to support a finding of fact by a trial judge is substantial evidence, just as it is always a matter for judicial determination whether a jury verdict is supported by substantial evidence. Neither can we agree with plaintiff’s contention that it is the duty of this court “to remedy the unhappy situation it has created.” "While I fully agree that this is an “unhappy situation,” it is one for which the parties themselves, including plaintiff, must acknowledge at least substantial responsibility.
For all of these reasons, I concur with the decision of the majority that this court, having previously denied plaintiff’s petition for rehearing, cannot properly reconsider the same questions for a third time under plaintiff’s present motions, particularly at this late date.