Firemen's Insurance v. Motors Insurance , 245 Or. 601 ( 1967 )

DENECKE, J.

This is a suit by the plaintiff, Firemen’s Insurance Company, to require the defendant, Motors Insurance Corporation, to contribute pro rata to an automobile collision loss. The trial court sustained a demurrer to plaintiff’s complaint and when plaintiff refused to plead further, dismissed the action. Plaintiff appeals.

Plaintiff’s policy was issued to Courtesy Chevrolet Company and provided $100 deductible collision coverage for a 1964 Chevrolet automobile described in the policy. The automobile was damaged by collision while it was being driven by Eddie Lee Counts. The defendant, Motors Insurance, had issued a policy to Counts, providing $100 deductible collision coverage for a particular automobile, “the owned automobile,” described in its policy. The defendant’s policy provided it would pay for “loss caused by collision to the owned automobile or to a non-owned automobile” while being driven by Counts. The automobile owned by Courtesy Chevrolet Company was such a nonowned automobile within the terms of defendant’s policy.

Initially, we considered that this case presented the issue of whether or not Lamb-Weston v. Oregon Auto Insurance Co., 219 Or 110, 341 P2d 110, 346 P2d 643, 76 ALR2d 485 (1959), should be applied in view of the language of the “other insurance” clauses in the two policies. We asked for and received from amici curiae helpful briefs upon this issue. We have, however, determined that the issue which first must be solved is whether Courtesy Chevrolet or its insurer Firemen’s is entitled to any benefits under Motors’ policy, irrespective of the “other insurance” issue, i.e., is Courtesy an “insured” under Motors’ policy?

Unfortunately, the policies were not made part of the complaint and all we judicially know is what is alleged in the complaint, including those portions of the policies which are quoted and made part of the complaint. However, we must decide this issue on the allegations of the complaint.

When a demurrer is sustained and the pleader chooses not to plead further, the pleading is construed most strongly against the pleader:

“* * * [I] t is presumed that the pleader has stated his case as strongly as the facts will permit. * * *. This is the rule when a complaint is ambiguous and susceptible of two constructions, one of which would not state a cause of action. * * *” Mezyk v. National Repossessions, 241 Or 333, 338, 405 P2d 841 (1965).

In the instant case we must determine whether the complaint is susceptible of two constructions. The two possibilities are: (1) that Courtesy was an insured of Motors; and (2) that Courtesy was not an insured; only Counts is an insured. If it is equally susceptible to either of such constructions, we must, under the rule above stated, construe the complaint against the pleader and hold that the complaint does not state a cause of action. It is only if we conclude that the complaint clearly and unambiguously alleges that Courtesy is an insured that we can hold that the pleading states a cause of action.

Ordinarily, the benefits of an insurance contract, like any other contract, inure only to the contracting party, usually labeled the “insured.” In Willamette Nav. Co. v. Hartford Fire Ins. Co., 287 F 464, 467 (9th Cir 1923), Judge Wolverton quoted the following with approval:

“ ‘If an insurance is made by a person in his own name only, without any indication in the policy that any other is interested, it can be applied only to his own proper interest in the subject, or his interest as trustee, or in some other way.’ ”

The exception to the above statement is a contract, insurance or otherwise, for the benefit of a third person, i.e., a third person not a party to the contract. Such third person is denominated a third-party beneficiary.

We have adopted the third-party-beneficiary principles stated in § 133, 1 Restatement, Contracts. Waterway Terminals v. P. S. Lord, 242 Or 1, 28-32, 406 P2d 556 (1965). Section 133 is to the effect that a third-party-beneficiary contract exists if it appears from the terms of the contract, interpreted in light of the accompanying circumstances, that the purpose of the person securing the insurance was to benefit, at least in part, someone in addition to, or other than, himself. As related to the present case the question is: Is it unambiguously pleaded that Counts intended Courtesy to have a right against Motors to collect the amount of the damage to Courtesy’s car?

In the usual instance the policy itself spells out what persons are protected by the policy. (This policy probably does the same, but, unfortunately, we have very little of the policy in the pleading and that creates the problem.) The “other insurance” eases we have previously had concerned the liability coverage of the policy. No one questions that persons other than the named insured are covered by the liability coverage of such policies. The policy expressly extends its benefits to others. The usual clause states: “The following are insured under Part I: * « * (2) any other person using such automobile, provided the actual use thereof is with the permission of the named insured: # * * »

Here, the complaint contains no statement or policy provision that Courtesy is an insured under this policy or that Courtesy is covered under the policy, or any similar provision or allegation. Any interest in Courtesy must be found by implication. The most likely provision from which such implication may possibly be garnered is as follows:

“COVERAGE E — COLLISION: To pay for loss caused by collision to the owned automobile or to a non-owned automobile * *

This provision, however, is an insuring clause and ordinarily the persons intended to he insureds are set forth in another part of the policy. The provision does not indicate whose “loss” it refers to. Counts is the named insured and, obviously, his loss would be covered. As a bailee of the vehicle he would have an interest in the vehicle which could be insured and damage to the vehicle could cause him personal loss. Courtesy, as owner, also has an interest in the vehicle and would suffer loss if the car were damaged; however, the above-quoted clause is completely devoid of any expression of intention upon Counts’ part to provide insurance to Courtesy to cover Courtesy’s loss.

One other clause in the policy is set out in the complaint and plaintiff contends that it has some bearing. That clause states: “The company may settle any claim for loss either with the insured or the owner of the property.” It is applicable to all coverages in the policy.

That clause could indicate, in the event of a collision loss, that the owner of the property, Courtesy Chevrolet in this case, has a claim under the policy and the insurer can pay it directly without going through Counts. Or, the clause just as reasonably can be interpreted to mean that when the named insured, Counts, is legally liable for property damage, the insurer can pay the owner of the damaged property directly and not wait to indemnify the owner for a loss he has paid.

We surmise that if the entire policy were before us the issue now confronting us would easily be resolved. We hold that the few policy provisions that are before us, plus the allegations of the complaint, which complaint was directed to the issue presented by Lamb-Weston, not the issue with which we are now concerned, are at least ambiguous upon the issue of whether Courtesy is an insured under Motors’ collision coverage. We,-therefore, construe the ambiguous complaint most strongly against the pleader and decide that Courtesy is not an insured under the Motors’ policy.

Affirmed.