Oregon Court of Appeals addressed an alleged third-party beneficiary’s claim for coverage

In Smith v. Truck Ins. Exchange, Inc., No. A142954 (Or App Apr 20, 2011), the Oregon Court of Appeals addressed an alleged third-party beneficiary’s claim for underinsured motorist (“UIM”) coverage. Plaintiff was injured while driving a vehicle owned by MD&D Construction (“MD&D”). She made a claim for UIM coverage to the insurer, Truck Insurance Exchange, alleging that it had issued insurance on the vehicle. When the insurer denied the claim, plaintiff sued the insurer, asserting claims for breach of contract and declaratory relief alleging that she was a third-party beneficiary on the policy. In addition she sued the broker, alleging that the broker had negligently failed to obtain the insurance. The trial court dismissed the suit on the pleadings, holding that she was not the real party in interest and that she had failed to state facts sufficient to constitute claims for relief in the complaint.

The Court of Appeals reversed on the claims against the insurer and affirmed on the claim against the broker. It first held that the complaint alleged that plaintiff was a permissive user of the vehicle and therefore adequately alleged that she was a third-party beneficiary for the purpose of the breach of contract theory. Next, the court held that plaintiff had no claim against the broker because nothing indicated that she was an intended beneficiary of the broker’s promise to obtain insurance. Finally, the court held that plaintiff’s declaratory judgment claim was insufficient because she had failed to name the insured, MD&D, as a party in the suit. Nonetheless, the court declined to affirm the dismissal but instead gave plaintiff the opportunity on remand to add MD&D.