Oregon Court Interprets Insurance Contact for Injury Motorcyclist

Posted on Feb 21, 2014

In a recent Oregon Court of Appeals decision, the Court found that an insurance contract included coverage for a claim from an injured motocross rider. This particular case shows how an injured plaintiff and the responsible defendant may have a unified interest in seeking insurance coverage.

A motocross facility owner purchased an insurance policy which covered any claims for “bodily injury” or “property damage” liability. However, the insurance contract included an exclusion that prevented coverage of any claims arising from bodily injury to any person who was “practicing for, or participating in a sports or athletic contest or exhibition.”

A customer at the motocross facility suffered a serious injury when another motorcycle rider collided with him, and filed a lawsuit against the owner of the motocross facility. However, the insurance company denied coverage of the claim, finding that the exclusion of any claims arising from practice for an athletic event applied to the facts of this case. As a result, the motocross facility owner was forced to defend the claim without the benefit of insurance coverage. After a court determined that there was sufficient evidence to present the injured motorcyclist’s claim to a jury, the motocross facility owner and the injured motorcyclist entered into a settlement agreement. Part of that agreement involved what is known as an “assignment.” The motcross facility owner had a potential claim against the insurance company for excluding coverage.  The motocross facility gave the injured motorcyclist his rights in this potential claim, and agreed to enter into a judgment awarding money to the injured motorcyclist.  In exchange, the motorcyclist promised that he would not execute any judgment against the motocross facility owner.  This allowed the injured motorcyclist to fight the insurance company for coverage of the claim, and enfocement of the judgment.

The injured motorcyclist then filed a lawsuit directly against the liability insurance carrier for the motocross facility, arguing that the claim should have been covered.  The trial court granted a motion for summary judgment, finding that the insurance contract's exclusion for injuries arising from a practice for an athletic event applied to the claim, and therefore, the insurance company did not have to provide coverage.  The injured motorcyclist then appealed to the Court of Appeals.

The Court of Appeals looked at the insurance contract, and when comparing all of the different provisions within the insurance policy, found that the insurance company was required to provide coverage for the type of claim arising from this motorcycle accident. In addition, the Court of Appeals found that the agreement between the motocross facility owner and the injured motorcyclist did not extinguish or prevent the insurance company’s responsibility to cover the injured motorcyclist’s claim.

Some of the injury cases we work on involve a central issue of whether a liability insurance policy provides appropriate coverage. If you have an Oregon or Washington injury claim, and insurance coverage is in issue, call us at 503-325-8600 with your questions. We can help you know where you stand with your injury claim, and insurance coverage issues.

Joe Di Bartolomeo
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