DUNCAN, J.
In this insurance-coverage dispute, defendant, Friend, was injured in an automobile accident. At the time, Friend was driving a 1967 Ford Mustang whose registered owner was Tamer Kehkia, the owner and president of TWW, Inc. (TWW), an auto dealer.
On appeal of a grant of summary judgment, we review the record in the light most
As mentioned, Friend was injured while driving the Mustang, which was registered to Kehkia. Friend and Kehkia assert that TWW owned the Mustang. Friend was the registered secretary of TWW. Friend and Kehkia were also friends and partners in another business, Ground Zero Motor Sports. Friend did mechanical work at TWW approximately 10 to 12 hours per week, but he was not an employee of TWW.
Truck filed this declaratory judgment action because it believed that TWW did not own the Mustang and, therefore, that the policy it issued to TWW did not provide UIM benefits for Friend. In response, Friend asserted three counterclaims, each seeking a declaration that he was entitled to UIM benefits under the policy. On Truck's motion, the trial court dismissed Friend's second counterclaim. Then Friend moved for summary judgment, and the trial court granted that motion and entered a general judgment in favor of Friend. Truck appeals.
Truck argues that the trial court erred in granting summary judgment to Friend because genuine issues of material fact had to be resolved before the court could determine whether the policy provided UIM coverage for Friend.
Second, Friend argues that TWW owned the Mustang as a matter of law under ORS 822.040(1)(d), which provides that an auto dealer "shall be considered the owner * * * of all vehicles in the dealer's possession and operated or driven by the dealer or the dealer's employees." Truck responds that ORS 822.040(1)(d) is not relevant to the meaning of the term "owned" in the policy and, regardless, that application of that statute involves genuine issues of material fact.
Finally, Truck notes that another statutory provision regarding UIM, ORS 742.504,
In keeping with the parties' arguments, we address three questions: First, did the policy provide liability coverage for Friend as a matter of law?
As mentioned, Friend asserts that the policy provided liability coverage for him. Consequently, he argues, he had UIM coverage under the policy because, in his view, ORS 742.502(2)(a) requires a policy's UIM coverage to mirror its liability coverage. Accordingly, we begin by interpreting the policy to determine whether, as Friend contends, it provided liability coverage for Friend. Interpretation of an insurance policy is a matter of law. Hoffman Construction Co. v. Fred S. James & Co., 313 Or. 464, 469, 836 P.2d 703 (1992). Our goal is to determine the parties' intentions. Totten v. New York Life Ins. Co., 298 Or. 765, 770, 696 P.2d 1082 (1985). The policy "`must be viewed by its four corners and considered as a whole.'" North Pacific Ins. Co. v. Hamilton, 332 Or. 20, 24, 22 P.3d 739 (2001) (quoting Denton v. International Health & Life, 270 Or. 444, 449-50, 528 P.2d 546 (1974)). All parts of the policy "must be construed to determine if and how far one clause is modified, limited, or controlled by others." Denton, 270 Or. at 450, 528 P.2d 546.
The policy provides coverage for two categories of "insureds." The first category is "you." The policy states, "Throughout this policy the words `you' and `your' refer to the Named Insured[,]" and the policy identifies the "named insured" as "TWW Inc" and "Cornelius Auto Sales." Under the policy, "you" is an insured "for any covered `auto[.]'" The "schedule of coverage and covered autos" indicates that "covered autos" for liability coverage is "any auto." Thus, under the policy "you"—that is, TWW — has liability coverage for "[a]ny [a]uto."
The second category of insured is "[a]nyone else while using with your permission a covered `auto' you own, hire, or borrow with [certain exceptions.]" Thus, the policy provides, with certain exceptions, liability coverage for "anyone else" while using, with TWW's permission, any auto that TWW owns, hires, or borrows. Specifically, the policy provides:
Thus, in order to have liability coverage for "any auto," Friend must be "you" under section 3a(1). Otherwise, he is "[a]nyone else" under section 3a(2) and is covered only "while using with your permission a covered `auto' you own, hire or borrow." (Emphasis added.) The policy language unambiguously indicates that Friend is not "you." The policy provides that "you" is "the Named Insured." The named insured is "TWW Inc" and "Cornelius Auto Sales." Thus, the corporation, not Friend, is "you."
Nevertheless, Friend contends that he is "you" because he is the secretary of TWW, the named insured. He argues that an understanding of the policy that limits "you" to the corporation itself — rather than to the corporation acting through its agents — would render the policy a nullity, because "corporations lack the ability to drive motor vehicles." We reject that argument for two reasons.
First, the text of section 3a(2) demonstrates that "you" means only the corporation itself, not people who run or participate in the business.
Second, as Truck points out, although it is true that a corporation cannot drive a car, a corporation can be liable for bodily injury and property damage arising from an accident, and that is the risk that the policy covers as to "you." Consequently, understanding the policy according to its plain meaning does not render its coverage illusory.
Friend is not "you," and, as a result, he had liability coverage under the policy only if he was "using with [TWW's] permission a covered `auto' [TWW] own[ed], hire[d] or borrow[ed]." As noted above, the parties dispute whether TWW or Kehkia owned the Mustang. Consequently, whether Friend was covered under the policy is a disputed issue of fact, even in light of ORS 742.502(2)(a).
Next we address Friend's proffered alternative basis for affirmance. Friend contends that ORS 822.040(1)(d) mandates, as a matter of law, the conclusion that TWW owned the Mustang.
In interpreting a statute, our task is to discern the intent of the legislature. State v. Gaines, 346 Or. 160, 171, 206 P.3d 1042 (2009); PGE v. Bureau of Labor and Industries, 317 Or. 606, 610, 859 P.2d 1143 (1993). To determine what the legislature intended, we first consider the text of a statute in context. Gaines, 346 Or. at 171, 206 P.3d 1042; see also State v. Cloutier, 351 Or. 68, 100, 261 P.3d 1234 (2011) (explaining that courts consider prior cases construing a statute at the first level of analysis). "[O]nce the meaning and application of a statute have been put before us, we have an obligation to correctly construe and apply that statute." Wilson v. Tri-Met, 234 Or.App. 615, 624, 228 P.3d 1225, rev. den., 348 Or. 669, 237 P.3d 824 (2010); see also Stull v. Hoke, 326 Or. 72, 77, 948 P.2d 722 (1997) ("In construing a statute, this court is responsible for identifying the correct interpretation, whether or not asserted by the parties.").
ORS 822.040(1) provides, in part:
Friend argues that "the evidence is uncontradicted that the Mustang was one `dealt in by the dealer' and was `in the dealer's possession and operated or driven by the dealer or the dealer's employees.'" Consequently, he asserts, TWW "owned" the Mustang as that term is used in the policy.
Truck responds that ORS 822.040 is irrelevant to the meaning of the term "owned" as it is used in TWW's policy. Truck also argues that, even if ORS 822.040 were relevant to the meaning of the policy, the factual questions whether the Mustang was in TWW's possession and whether Friend was "the dealer or the dealer's [employee]" still precluded summary judgment.
To address Friend's argument, in addition to construing ORS 822.040, we must interpret the term "owned" as it appears in the insurance policy. As noted above, we review interpretations of insurance policies for errors of law and our goal is to determine the intent of the parties. Hoffman, 313 Or. at 469, 836 P.2d 703. We interpret the text of the policy "from the perspective of the `ordinary purchaser of insurance.'" Farmers Ins. Exchange v. Crutchfield, 200 Or.App. 146, 154, 113 P.3d 972, rev. den., 339 Or. 609, 127 P.3d 650 (2005) (quoting Totten, 298 Or. at 771, 696 P.2d 1082). "If the term at issue is not defined in the policy, then the next step is to look to the plain meaning of the term." North Clackamas School Dist. No. 12 v. OSBA, 164 Or.App. 339, 344, 991 P.2d 1089 (1999), rev. den., 330 Or. 361, 6 P.3d 1102 (2000).
We have previously addressed the meaning of "owned" in a policy whose operative language was identical to the language of the policy before us here. In Crutchfield, the plaintiff, Farmers, had issued an insurance policy to Guthrie Motors, an auto dealer. 200 Or.App. at 149, 113 P.3d 972. As relevant here, the policy defined "insured" as follows:
Id. at 149-50, 113 P.3d 972 (emphasis in original).
The defendant, Crutchfield, had traded in a car and received a truck from Guthrie Motors. Later the same day, he caused an accident while driving the truck. At the time of the accident, the paperwork for the purchase was not completed, and, after the accident, but before Guthrie Motors learned of the accident, Guthrie Motors attempted to unwind the sale because Crutchfield had failed to disclose a lien on the car that he had traded in. Id. at 149, 113 P.3d 972.
Farmers brought an action against Crutchfield, seeking a declaration that he did not have coverage under Guthrie Motors's policy because, at the time of the accident, Guthrie Motors no longer owned the truck and, consequently, Crutchfield was not an "insured" as defined in the policy. The trial court granted summary judgment for Farmers, and Crutchfield appealed, arguing, inter alia, that Guthrie Motors owned the truck as a matter of law. Id. at 153, 113 P.3d 972.
We explained that the relevant question was, "[f]rom the perspective of the ordinary purchaser of insurance, what did [Farmers] and Guthrie Motors intend when they entered into their insurance contract?" Id. at 154, 113 P.3d 972 (internal quotation marks omitted). After considering the ordinary meaning of "own" and case law bearing on the issue, we concluded that Crutchfield, not Guthrie Motors, "owned" the truck because "(1) the insured had entered into a sales contract * * * with a buyer; (2) the buyer had taken possession of the automobile; (3) the buyer had performed all then-due obligations under the sales contract; and (4) the insured had no control over how the buyer used the automobile." Id. at 160, 113 P.3d 972. That is, as relevant here, Crutchfield
Then we evaluated the significance of "certain provisions of the Oregon Vehicle Code," ORS 801.375 and ORS 803.010, for our conclusion that Crutchfield owned the truck at the time of the accident. Crutchfield, 200 Or.App. at 160, 113 P.3d 972. Those statutory provisions, respectively, define "owner" and govern the use of a certificate of title as proof of ownership of a vehicle. ORS 801.375; ORS 803.010. We explained that those provisions do not apply to insurance policies:
Crutchfield, 200 Or.App. at 162, 113 P.3d 972 (emphasis and omission in original). Furthermore, we noted, "nothing in this record indicates that the insured and the insurer intended the policy to incorporate definitions or concepts from the Oregon Vehicle Code." Id. at 163, 113 P.3d 972. We concluded that "[t]he vehicle code is inapposite." Id.
Friend attempts to distinguish Crutchfield from the situation before us on the ground that, unlike ORS 801.375 and ORS 803.010, which refer only to vehicle ownership generally, ORS 822.040 is specifically related to insurance. That is so, Friend contends, because ORS 822.040 sets out rights of a dealer who has a "vehicle dealer certificate," and one of the requirements for issuance of a vehicle dealer certificate is a certificate of insurance. Truck responds that ORS 822.040 is not directly related to insurance and, furthermore, even if it is tangentially related to insurance, it is not a "mandatory insurance statute" because it does not require that an insurance policy must "define `owned vehicles' in some manner contrary to common understanding, or that the policy must cover anyone driving a vehicle thus defined."
Truck has the better argument. As in Crutchfield, the relevant question here is, "From the perspective of the ordinary purchaser of insurance, what did [Truck and TWW] intend when they entered into their insurance contract?" 200 Or.App. at 154, 113 P.3d 972 (internal quotation marks omitted). Friend contends that the parties' intentions were set or superseded, as a matter of law, by the terms of ORS 822.040.
As Truck points out, ORS 822.040 does not "[prescribe] the terms and conditions of an insurance policy." Thus, the parties' intentions are not superseded by ORS 822.040. As we explained in Crutchfield, "the content and design of the Oregon Vehicle Code demonstrate that the legislature did not intend [ORS 801.375 and ORS 803.010] to define terms (such as `own') for purposes of contracts between private parties generally, much less for purposes of auto liability policies particularly." 200 Or.App. at 162, 113 P.3d 972. That conclusion is equally true with respect to ORS 822.040. The mere fact that a certificate of insurance is a requirement of obtaining a vehicle dealer certificate does not make that provision of the vehicle code any more applicable to automobile insurance policies than the other provisions of the vehicle code. The code "`provide[s] a comprehensive system for the regulation of all motor vehicles and other vehicles in this state,'" id. (quoting ORS 801.020(1)); it does not dictate the meaning of terms in automobile insurance policies.
Finally, we turn to the requirements of ORS 742.504. Truck asserts that that statute provides basic requirements for the scope of UIM coverage and that, although coverage may be required under that statute, a question of fact must be resolved before it can be applied here.
ORS 742.504 provides a "comprehensive model [UIM] policy," Vega v. Farmers Ins. Co., 323 Or. 291, 301-02, 918 P.2d 95 (1996), which sets out the minimum allowable coverage. A policy need not contain the exact terms of ORS 742.504, but it must provide coverage "no less favorable in any respect to the insured" than the model policy. ORS 742.504. Its basic requirement is that
ORS 742.504(1)(a). ORS 742.504 also provides definitions of the terms used in that basic provision. As relevant here, ORS 742.504(2)(c) provides:
Friend was not an "insured" under subsection (A) or (B). Under ORS 742.504(2)(c)(C), he was an "insured" if he was occupying an insured vehicle "provided the actual use thereof [was] with the permission of [TWW]." Truck asserts that the question of permission implicates the disputed factual question of ownership because "implicit in the use of the term `permission' in the context of an insurance policy is the concept that the one granting permission or giving consent has the authority to do so." North Pacific Ins. v. American Mfrs. Mutual Ins., 200 Or.App. 473, 478-79, 115 P.3d 970 (2005) (holding that, "as a matter of law, the conveyance of all incidents of ownership of [an automobile] deprived [the insured] of any authority to consent to or deny use of that vehicle").
We agree. Although North Pacific Ins. interpreted "permission" in the context of an insurance policy, rather than a statute, it held that the plain meaning of "permission," in the insurance context, requires an ownership or possessory interest in the item regarding which permission is given. Consequently,
Because factual questions remain to be resolved under the theories under which Friend may be entitled to UIM coverage, the trial court erred in granting summary judgment to Friend.
Reversed and remanded.
