De Zafra v. Farmers Insurance Company

Under ORS 742.504, an insurer must “pay all sums that the insured . . . is legally entitled to recover . . . from the owner or operator of an uninsured vehicle because of bodily injury sustained by the insured caused by accident and arising out of the ownership, maintenance or use of an uninsured vehicle,” which does not restrict a claimant to coverage for injury caused only directly by the use of a motor vehicle.

De Zafra was injured by a gunshot fired from a vehicle covered under a policy by Farmers Insurance Company (Farmers). After denial of De Zafra’s claim for uninsured motorist (UM) benefits, De Zafra filed an action against Farmers for recovery. Farmers argued Worldwide Underwriters, Ins. Co. v. Jackson, 121 Or App 292 (1993) controlled and because the vehicle was not the direct cause of injury, coverage should be denied. De Zafra argued Carrigan v. State Farm Mutual Auto. Ins. Co., 326 Or 97 (1997) controlled and that a direct cause interpretation was erroneous. Both parties filed motions for summary judgment; Farmers’ motion was granted and De Zafra’s motion was dismissed. On appeal, the parties renewed their arguments based on Worldwide and Carrigan. The Court held that in the instant case, as in Carrigan, the legislature did not restrict coverage to those accidents that were directly caused by use of a vehicle when it drafted ORS 742.504, which mandates an insurer “pay all sums that the insured . . . is legally entitled to recover . . . from the owner or operator of an uninsured vehicle because of bodily injury sustained by the insured caused by accident and arising out of the ownership, maintenance or use of an uninsured vehicle.” Consequently, the Court held the trial court erred in granting Farmers’ motion for summary judgment but did not err in dismissing De Zafra’s cross-motion. Reversed and remanded.