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Williams v. American States Insurance Company9/29/1999
Argued and submitted April 16, 1999.
Reversed and remanded.
Defendant argues that the trial court should have deducted a workers' compensation settlement plaintiff received as a result of an automobile accident from the damages the trial court awarded him for the same accident. We agree and reverse.
Plaintiff was injured in an automobile accident. The other driver was at fault but had no insurance. As a result of the accident, plaintiff filed two claims. One was a workers' compensation claim. Although SAIF initially denied the claim, SAIF and plaintiff later entered into a disputed claim settlement pursuant to ORS 656.289(4). Plaintiff received a total of $8,600 from SAIF. The settlement agreement stated that a percentage of those proceeds would be paid to plaintiff's attorney as his fee.
Plaintiff also brought a claim against defendant on uninsured motorist coverage defendant had issued. Defendant's policy contained a $25,000 limit on liability for uninsured motorist coverage. Plaintiff's claim against defendant was submitted to arbitration, which resulted in an arbitration award to plaintiff of $14,375. Although defendant argued that the $8,600 workers' compensation settlement should be deducted from the $14,375 in damages the arbitrators awarded plaintiff, the arbitrators expressly declined to decide that issue. When plaintiff filed the arbitration award with the trial court, defendant raised the same issue before the trial court. The trial court disagreed and entered judgment for plaintiff for the full amount of the award.
On appeal, defendant argues that the workers' compensation settlement should be deducted from the $14,375 in damages the arbitrators awarded plaintiff, while plaintiff argues that the settlement should be deducted from the $25,000 policy limit on liability. Defendant argues that the text of ORS 742.504(7)(c)(B) supports its position, while plaintiff responds that our decisions interpreting that statute support his position. In analyzing the parties' claims, we consider the terms of the insurance policy before reaching the statutory issue they raise. See Vega v. Farmers Ins. Co., 323 Or 291, 297-98, 918 P2d 95 (1996); ORS 742.038(2). We follow that methodology because an insurer may provide more favorable uninsured motorist coverage than ORS 742.504 requires, but it may not provide less favorable coverage. Vega, 323 Or at 301-02.
In its policy, defendant agreed to pay all sums that the insured is legally entitled to recover as compensatory damages from the owner or driver of an uninsured motor vehicle up to the $25,000 limit of insurance stated in the policy. The policy provides, however, that the "limit of insurance" shall be reduced by " ll sums paid or payable under any workers' compensation, disability benefits or similar law[.]" It also provides that " n no event will an 'insured' be entitled to receive duplicate payment for the same element of loss."
The provision in the policy that the limit of insurance will be reduced by payments under any workers' compensation law is consistent with plaintiff's position. The second provision, however, is not. It recognizes that " n no event" will the insured be entitled to receive "duplicate payment for the same element of loss." The phrase " n no event" makes clear that the prohibition against double recovery requires that the workers' compensation settlement be deducted from the $14,375 in damages the arbitrators awarded plaintiff, at least to the extent it represents a duplicate payment for the same element of loss.
On the last point, defendant, as the proponent of the offset, had the burden of proving that if no deduction were made, plainti
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