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De Zafra v. Farmers Insurance Co.

Court of Appeals of Oregon

March 25, 2015

Jessica Gonzalez DE ZAFRA, Plaintiff-Appellant,
v.
FARMERS INSURANCE COMPANY, Defendant-Respondent

Argued and Submitted May 20, 2014.

Multnomah County Circuit Court 110506648. Edward J. Jones, Judge.

Travis Eiva argued the cause and filed the briefs for appellant.

Thomas M. Christ argued the cause for respondent. With him on the brief was Cosgrave Vergeer Kester LLP.

Before Ortega, Presiding Judge, and DeVore, Judge, and Garrett, Judge.

OPINION

Page 653

[270 Or.App. 78] DEVORE, J.

Plaintiff was the victim of a drive-by shooting. As an insured under an auto policy, she sought uninsured motorist (UM) benefits in a contract action against defendant, Farmers Insurance Company (Farmers). After cross-motions for summary judgment, the trial court dismissed her claim on the basis that her injury did not " arise out of the * * * use of [an] uninsured vehicle," as provided in ORS 742.504(1)(a) and Farmers' policy. On appeal, the issue is whether this case is governed by our decision 22 years ago interpreting policy language in a claim for UM benefits or is governed by a more recent decision of the Supreme Court interpreting similar statutory language in a claim for personal injury protection (PIP) benefits. Because statutory language prevails over policy language and the Supreme Court's interpretation of similar terms is dispositive, we conclude that the trial court erred in part and that Farmers' policy may cover plaintiff's injuries, although other issues remain for decision. Therefore, we reverse and remand for further proceedings.

The relevant facts are undisputed. Two cars traveled the same direction on a street in northeast Portland. Plaintiff was a passenger in a car insured by Farmers with UM coverage required by ORS 742.504.[1] In the next lane, Jesse Guerrero drove a vehicle alongside plaintiff's car. Gunshots were fired from Guerrero's vehicle into plaintiff's car, causing her serious injuries. Because Guerrero's insurer denied coverage for his liability, his vehicle was deemed an [270 Or.App. 79] " uninsured motor vehicle" under the terms of plaintiff's policy and statute.[2] Plaintiff made a claim for UM benefits with Farmers. The insurer denied her claim, and she commenced an action against Farmers for breach of contract.

The parties filed cross-motions for summary judgment on coverage. Farmers contended that our decision in Worldwide Underwriters, Ins. Co. v. Jackson, 121 Or.App. 292, 855 P.2d 166, rev den, 318 Or. 26, 862 P.2d 1306 (1993) ( Jackson ), should control because the decision construed the same phrase in a UM policy (" arising out of" ); determined a gunshot, not a vehicle, to be the " direct cause" of injury; and upheld the denial of coverage. Plaintiff contended that a more recent Supreme Court decision in Carrigan v. State Farm Mutual Auto. Ins. Co., 326 Or. 97, 949 P.2d 705 (1997), should control, because the court construed similar language in the PIP statute and rejected a " direct cause" interpretation. Plaintiff reasoned that Carrigan portends that ORS 742.504(1)(a) should require UM coverage for plaintiff's injuries. Farmers responded that Carrigan 's interpretation should be limited to PIP coverage as a different form of coverage that provides no-fault coverage for medical bills and wage loss. The trial court deemed Carrigan distinguishable, found Jackson to be on point, denied plaintiff's motion, granted Farmers' motion, and entered judgment dismissing plaintiff's action.

On appeal, plaintiff assigns error to the order granting defendant summary

Page 654

judgment and denying plaintiff summary judgment. Plaintiff argues that our earlier decision in Jackson did not consider the controlling terms of ORS 742.504(1)(a) on mandated UM coverage and that the Supreme Court construed the parallel terms of ORS 742.520 on PIP coverage. Farmers responds that Jackson is still good law and, if nothing else, the doctrine of stare decisis counsels adherence to Jackson as to UM coverage for a drive-by shooting. Resolution of the dispute turns upon whether our prior conclusion remains true in light of the mandatory terms of the UM statute, ORS 742.504(1)(a).

Our decision in Jackson and the cases on which it relied were indeed cases that construed policies without [270 Or.App. 80] considering a statutory mandate for coverage, if any pertained. Based in policy language, those cases developed a standard for the causal connection between an injury and use of a vehicle. We first recap Jackson in order ...


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