S054652, Opinion — Mid-Century Ins. Co. v. Perkins

196
Argued and submitted October 3 , 2007, decisions of Court of Appeals
affirmed February 28, 2008
MID-CENTURY INSURANCE COMPANY,
Respondent on Review,
v.
Elij ah PERKINS,
Petitioner on Review.
(CC 04- 1834-E7 ; CA A127522; SC 8054652)
Dennis W. PHILLIPS,
Petitioner on Review,
v.
SAFECO INSURANCE COMPANY OF OREGON,
Respondent on Review.
(CC 0504-03584; CA A130265; SC 8054660)
(Consolidated for Opinion)
179 P3d 633

Cite as 344 Or 196 197
CJS, Insurance § 56.
En Banc
On petitions for review of the decisions of the Court of
Appeals.*
* Appeal from Jackson County Circuit Court, Mark S. Schiveley, Judge. 209
Or App 613, 149 P3d 265 (2006}. Appeal from Multnomah County Circuit Court,
Jean K Maurer, Judge. 209 Or App 815, 149 P3d 3 16 (2006).

198 Mid-Century Ins. Co. v. Perkins
Thomas N. Petersen, of Black Chapman Webber &
Stevens, Medford, argued the cause for petitioner on review
Perkins. Meagan A. Flynn, Preston Bunnell & Flynn, LLP,
Portland, filed the brief for petitioner on review Perkins.
Thomas M. Christ, of Cosgrave Vergeer Kester LLP,
Portland, argued the cause and filed the brief for respondent
on review Mid-Century Insurance Company. With him on
the brief was Thomas W. Brown.
Randall J. Wolfe, of Randall J. Wolfe, PC, Lake Oswego,
argued the cause and filed the brief for petitioner on review
Phillips.
Barbara L. Johnston, of Brisbee & Stockton, LLC,
Hillsboro, argued the cause and filed the brieffor respondent
on review Safeco Insurance Company of Oregon. With her on
the brief was Matthew J. Yiurn.
Kathryn H. Clarke, Portland, filed the brief for amicus
curiae Oregon Trial Lawyers Assocation.
Joel S. DeVore, ofLuvaas Cobb, Eugene, filed the brief for
amici curiae Allstate Ins . Co., State Farm Mutual Auto Ins.
Co., Country Mutual Ins. Co., American Family Ins. Co., and
The Property C asualty Insurers Association of America.
DURHAM, J.
The decisions of the Court of Appeals are affirmed.

Cite as 344 Or 196 199
DURHAM, J.
We consolidate in this opm1on our review of two
actions for the recovery of underinsured motorist (UIM)
insurance benefits . In Mid-Century Ins. Co. v. Perkins, 209
Or App 613, 149 P3d 265 (2006), the Court of Appeals
reversed a trial court order allowing the insured to recover
DIM benefits. In Phillips v. Safeco Ins. Co. of Oregon , 209 Or
App 815, 149 P3d 3 16 (2006), the Court of Appeals affirmed
an order denying recovery of DIM benefits. Both cases center
on the interpretation of ORS 742.502(2)(a) in light of this
court's decision in Bergmann v. Hutton, 337 Or 596, 101 P3d
353 (2004). We now affirm both decisions of the Court of
Appeals.
Before addressing the facts of these cases, we
summarize the statutes that govern UIM benefits.1 ORS
742.502(1 ) requires all motor vehicle liability policies issued
in Oregon to provide uninsured motorist (UM) coverage, as
defined by ORS 742.500(1):
" 'Uninsured motorist coverage' means coverage within
the terms and conditions specified in ORS 742. 504 insuring
the insured, the heirs or legal representative of the insured
for all sums which the insured or they shall be legally enti
tled to recover as damages for bodily injury or death caused
by accident and arising out of the ownership, maintenance
or use of an uninsured motor vehicle in amounts or limits
not less than the amounts or limits prescribed for bodily
injury or death under ORS 806.070."
ORS 742. 502(2)(a) provides, in part:
"* * * Uninsured motorist coverage larger than the
amounts required by ORS 806.070 shall include under
insurance coverage for damages or death caused by acci
dent and arising out of the ownership, maintenance or use
of a motor vehicle that is insured for an amount that is less
1 All citations to ORS chapter 742 refer to the 2001 versions of the statutes,
unless otherwise noted. At the time of Perkins's accident in 2001 , and Phillips's
accident in 2003, the legislature had last modified ORS 742.502 and ORS 742.504
in 1997. See Or Laws 1 997, ch 808, §§ 1, 2. The legislature made minor amend
ments to those statutes in the 2003 session, but those amendments were not effec
tive until January 1, 2004, and, in any event, they do not appear to have any bear
ing on this case. See Or Laws 2003, ch 1 75, § 2; Or Laws 2003, ch 220, § 1 .

200 Mid-Century Ins. Co. v. Perkins
than the insured's uninsured motorist coverage. Under
insurance benefits shall be equal to uninsured motorist cov
erage benefits less the amount recovered from other auto
mobile liability insurance policies."2
We now turn to the facts of these cases, none of
which are in dispute. Mid-Century Ins. Co. involves a motor
vehicle insurance policy that Mid-Century Insurance
Company (Mid-Century) issued to Elijah Perkins and his
mother in 1997.3 The policy provided UM and UIM coverage
up to a limit of $ 100,000 per person and $300,000 per occur
rence. Perkins renewed the policy every six months until
March 2002. The policy initially covered a 1979 Chevrolet
Blazer but, in 1999, Perkins changed the policy to cover a
1986 Toyota pickup. Perkins moved to Seattle, Washington
at some point thereafter and kept the Toyota in Washington,
but never registered it there. In October 2001, Perkins sus
tained injuries in a car accident in Washington. The other
driver, Gretchen Elster, was at fault. Elster had an automo
bile insurance policy that provided $ 100,000 of liability cov
erage . Perkins recovered that entire amount from Elster's
policy. Perkins then sought UIM benefits from Mid-Century,
claiming that the $100,000 that he had received from Elster
did not cover his total damages from the accident. Mid
Century denied his claim and filed an action for a declaratory
judgment stating that Perkins was not entitled to recover
UIM benefits. Perkins counterclaimed for those benefits.
Both p arties filed cross motions for summary judgment.
2 The legislature amended ORS 742.502(2)(a) in 2005 and 2007. Or Laws 2005,
ch 235, § l; Or Laws 2007, ch 287, § 2. That subsection now provides:
"A motor vehicle bodily injury liability policy shall have the same limits for
uninsured motorist coverage as for bodily injury liability coverage unless a
named insured in writing elects lower limits. The insured may not elect limits
lower than the amounts prescribed to meet the requirements of ORS 806.070
for bodily i njury or death. Uninsured motorist coverage shall include underin
surance coverage for bodily injury or death caused by accident and arising out
of the ownership, maintenance or use of a motor vehicle with motor vehicle lia
bility insurance that provides recovery in an amount that is less than the
insured's uninsured motorist coverage. Underinsurance coverage shall be
equal to uninsured motorist coverage less the amount recovered from other
motor vehicle liability insurance policies."
'3 To avoid confusion, we refer to the parties by name rather than by the terms
"plaintiff' and "defendant."

Cite as 344 Or 196 (2008) 201
The trial court initially disposed of the matter as a
choice of law question. Perkins argued that the law of the
state where the accident occurred governed his eligibility for
DIM benefits and that, under Washington law, Elster was
an underinsured motorist because his damages exceeded the
liability limits in Elster's policy. See Wash Rev Code
48.22.030( 1).4 Mid-Century argued that Oregon law gov
erned the dispute and that, under Oregon law, Elster was not
an underinsured motorist because the liability limits in her
policy were equal to Perkins's own policy limits for DIM cov
erage. The trial court ruled that the policy was governed by
Oregon law and, therefore, because Elster's liability policy
limit was equal to Perkins's DIM policy limit, Perkins was
not entitled to recover DIM benefits. On November 16, 2004,
the court issued an order granting Mid-Century's motion for
summary judgment.
On December 2, 2004, this court issued its decision
in Bergmann. On December 7, Perkins filed a motion
requesting reconsideration of his case in light of Bergmann.
The trial court granted the motion and determined that
Bergmann controlled the outcome of the case, stating:
"The Supreme Court's analysis and interpretation of under
insured motorist coverage sets forth that it is determined
by the damages suffered by the insured, not by the limits of
the policy. Thus, in order that this policy not be less favor
able to the insured than the provisions required by ORS
742.504, the determination of whether a vehicle is under
insured must start with a determination of the total dam
ages the insured would be entitled to recover from the other
driver, and a comparison of those damages to the policy lim
its. * * *
"Thus, this court finds that the ruling in [Bergmann] affects
the legal analysis of the issue raised by the parties in their
original motions for summary judgment. * * * The court
4 Wash Rev Code 48.22.030 provides, in part:
"( 1} 'Underinsured motor vehicle' means a motor vehicle with respect to
the ownership, maintenance, or use of which either no bodily injury or property
damage liability bond or insurance policy applies at the time of an accident, or
with respect to which the sum of the limits of liability under all bodily injury or
property damage liability bonds and insurance policies applicable to a covered
person after an accident is less than the applicable damages which the covered
person is legally entitled to recover."

202 Mid-Century Ins. Co. v. Perkins
therefore finds that, should defendant Perkins's damages
exceed $100,000.00 (the amounts paid by the other driver),
the policy taken out by defendant Perkins with plaintiff
Mid-Century Insurance would require further under
insured coverage, up to the underinsured motorist policy
limits of $ 100,000."
Accordingly, the trial court set aside its earlier order (aside
from its ruling that Oregon law applies to the policy) and
granted Perkins's motion for summary judgment. Mid
Century appealed.
The Court of Appeals reversed. Mid-Century Ins.
Co. , 209 Or App at 636. The court affirmed the trial court's
holding that Oregon law governed the policy. Id. at 620. The
court then noted that, under ORS 742. 502(2)(a), an insured
may recover DIM benefits when he is injured in an accident
and recovers, in the words of the statute, "an amount that is
less than the insured's uninsured motorist coverage." After
analyzing the text of ORS 742 .502(2)(a), the court held that
"an amount that is less than the insured's uninsured motor
ist coverage" referred to an amount that is less than the
insured's policy limit for uninsured motorist coverage. Id. at
634-35. Because Perkins had recovered $100,000 from Elster,
and $ 1 00,000 was the policy limit for his UM coverage, the
court concluded that Perkins was not entitled to recover any
further benefits from Mid-Century. Id. at 636. We granted
Perkins's petition for review.
The facts of Phillips are similar to those of Mid
Century Ins. Co. Because Phillips comes before this court on
a motion to dismiss under ORCP 2 1 A, "we assume the truth
of all well-pleaded facts alleged in the complaint." Juarez u.
Windsor Rock Products, Inc. , 341 Or 160, 163, 144 P3d 2 1 1
(2006). Safeco Insurance Company of Oregon (Safeco) issued
Phillips an automobile insurance policy that included DIM
and UM coverage with limits of $ 1 00,000 per occurrence.5 In
2003, Phillips was inj ured in a car accident. The other driver,
' The complaint states that at the time of the accident, Safeco "was contract
ing" with Phillips "and/or [Phillips's] spouse" to provide an automobile insurance
policy. For purposes of this appeal, however, the parties do not dispute that Safeco
issued a policy to Phillips.

Cite as 344 Or 196 (2008) 203
Alana Dianatkhah, was at fault. Dianatkhah had an auto
mobile insurance policy with a liability limit of $100,000 and
Phillips recovered that entire amount from her. Phillips then
submitted a claim for UIM benefits to Safeco, claiming that
the $100,000 that he had recovered from Dianatkhah's policy
was less than the sum of his total damages. Safeco denied the
claim. Phillips sued to recover the UIM benefits that he had
claimed.
Safeco moved to dismiss the claim under ORCP 2 1
A(8), arguing that, in order to recover UIM benefits,
Phillips had to plead that the $ 100,000 that he had recovered
was less than his policy limit for his UIM coverage. Safeco
asserted that because Phillips already had recovered an
amount equal to the limit of his UIM coverage, he was not
entitled to further recovery from Safeco. After examining the
text of ORS 742. 502(2)(a) and Bergmann, the trial court con
cluded that Safeco was correct and that Phillips had failed to
plead ultimate facts sufficient to constitute a claim. Accord
ingly, the trial court dismissed Phillips's claim. The Court of
Appeals affirmed, citing Mid-Century Ins. Co. We granted
review. The primary issue on review is whether Oregon law
allows the recovery of UIM benefits when an insured is
injured in an accident and the insured's UIM policy limit is
equal to the other motorist's liability policy limit, but the
insured's damages exceed the other motorist's policy limit.
Before we reach that issue, however, Perkins pres
ents another argument that is potentially dispositive of his
claim. Perkins argues that the trial court and the Court of
Appeals erred in ruling that Mid-Century's liability for UIM
benefits is governed by Oregon law. Instead, Perkins con
tends that the law of the state where his accident occurred
Washington, in this case-determines the amount that he
may recover. Because Perkins's argument and the holdings
below are based on interpretations of Perkins's insurance
policy, we review those interpretations for errors of law.
Holloway v. Republic Indemnity Co. of America, 341 Or 642,
649, 147 P3d 329 (2006).
Perkins's argument is based on the following section
of the policy, which appears under "PART II-UNIN
SURED MOTORIST":

204 Mid-Century Ins. Co. v. Perkins
"Limits of Liability
"The limits ofliability shown in the Declarations apply sub
ject to the following:
" l . The limit for 'each person' is the maximum for bodily
injury sustained by any person in any one occurrence.
Any claim for loss of consortium or injury to the relation
ship arising from this inj ury shall be included in this limit.
"If the financial responsibility law of the place of the
accident treats the loss of consortium as a separate claim,
financial responsibility limits will be furnished.
"2. Subject to the limit for 'each person,' the limit for 'each
occurrence' is the maximum combined amount for bodily
injury sustained by two or more persons in any one occur
rence.
"3. Subject to the law of the state of the occurrence, we
will pay no more than these maximums regardless of the
number of vehicles insured, insured persons, claims,
claimants, policies, or vehicles involved in the occurrence.
"4. Any amount payable by us to or for an insured per
son under this coverage shall be reduced by:
"a. the amount payable to an insured person under
Coverage A-Bodily Injury;
"b. all amounts paid by or for the owner or operator of
an uninsured or underinsured motor vehicle and
any other person or organization who may be held
legally liable for bodily injury to an insured person;
and
"c. the amount paid and the present value of all
amounts payable on account of bodily injury under
any workers' compensation law, disability benefits law
or any similar law.
"5. The amount of underinsured motorist coverage we will
pay shall be reduced by the amount of any other bodily
injury coverage available to any person or entity liable for
the accident."
(Boldface in original; emphasis added.) Perkins argued that
the third paragraph "clearly states that UIM benefits are to
be paid according to the law of the state of the occurrence."
The Court of Appeals rejected that argument and held that

Cite as 344 205
paragraph 3 did not refer generally to the insurer's limits for
UIM liability. Instead, according to the court, paragraph 3
referred back to paragraphs 1 and 2 and "addresses a partic
ular issue that arises in situations involving multiple claim
ants," namely, the question of what the policy limits are
when multiple insured vehicles, insured persons, claims,
claimants, policies, or vehicles are involved in one accident.
Mid-Century Ins. Co. , 209 Or App at 618-19. The court found
no policy provision indicating that the parties had agreed on
the applicable law for adopting the policy, and held that in
the absence of such an election, "conflict oflaw principles dic
tate that Oregon law applies to the interpretation of the pol
icy." Id. at 619. The court then noted that the policy was
issued in Oregon under Oregon law when Perkins and his
mother were Oregon residents, and that, at the time of the
accident, Perkins's mother was still a resident of Oregon and
the vehicle was registered in Oregon.6 Citing Davis u. State
Farm Mut. Ins. , 264 Or 547, 507 P2d 9 ( 1973), the court con
cluded that, under those facts, "Oregon has the more signifi
cant relationship to the insurance policy," and Perkins's enti
tlement to UIM benefits under the policy was governed by
Oregon law. Id. at 620.
On review, instead of repeating his argument that
paragraph 3 clearly states that Washington law governs the
availability of UIM benefits, Perkins argues that paragraph
3 creates an ambiguity as to which state's law governs the
determination of UIM benefits, and that this court must
resolve any reasonable doubt about the intended meaning of
that paragraph against the insurer. Holloway, 341 Or at 650
(citing North Pacific Ins. Co. u. Hamilton, 332 Or 20, 25, 22
P3d 739 (200 1)).
We disagree. A phrase in an insurance policy is
ambiguous only if, after a reviewing court examines the
phrase's text and context, "two or more plausible interpreta
tions of that term withstand scrutiny, i.e. , continue [ ] to be
reasonable * * *." Hoffman Construction Co. u. Fred S. James
6 The Court of Appeals decision and the record below do not make it clear
whether Perkins himself was a resident ofWashington or Oregon at the time of the
accident. In an affidavit filed with the trial court, Perkins declared that he had
been living in Washington since May 200 1 , had found employment there, and had
obtained a Washington driver's license.

206 Mid-Century Ins. Co. v. Perkins
& Co. , 3 1 3 Or 464, 470, 836 P2d 703 ( 1992). After reviewing
the text and context of paragraph 3, the Court of Appeals con
cluded that it had nothing to do with the question of"whether
defendant is entitled to UIM benefits when his UM/UIM pol
icy limits are identical to the tortfeasor's policy limits ." After
reviewing the record, we conclude that the Court of Appeals
was correct and that Perkins's interpretation of paragraph 3
is neither correct nor plausible when we view the policy in
context. The introductory clause in paragraph 3 ("Subject to
the law of the state of the occurrence, * * *") serves only to
insure that the policy will remain in compliance with the law
of the state where an accident occurs if that state's law
requires the payment of benefits in excess of the "maximums"
stated in the policy and regardless of the other circumstances
set out in paragraph 3. We conclude that Perkins's contention
that paragraph 3 is ambiguous in the way that we have
described is not well taken. Furthermore, the Court of
Appeals appears to have correctly determined that Oregon
law governs Perkins's policy. Accordingly, we affirm that
holding of the Court of Appeals.
We now turn to the question whether Perkins and
Phillips are entitled to receive UIM benefits for their injuries.
Both Perkins and Phillips claim that their injuries resulted
from accidents with motorists who were "underinsured"
under Oregon law.7 They argue that, when an insured is
involved in an accident with a motorist, the motorist is
underinsured if the limit of his or her liability policy is less
than the sum of the damages sustained by the insured. In
short, they argue that a court must determine whether a
motorist is underinsured by means of a "limits-to-damages"
comparison. Because they both claim to have sustained dam
ages beyond the limits of the liability policies of the motorists
who caused their injuries, Perkins and Phillips conclude that
they were injured by underinsured motorists and are entitled
to collect UIM benefits.
7 Perkins conceded before the Court of Appeals that he was not injured by an
underinsured motorist as his policy defines that term. Mid-Century Ins. Co. , 209
Or App at 620. He argues, however, that the definition in his policy is invalid
because it is inconsistent with the requirements of ORS 742.502 and ORS 742.504.
Accordingly, Perkins and Mid-Century focus their dispute on what those statutes
require :'.VIid-Century to provide.

Cite as 344 Or 196 207
Mid-Century and Safeco, in response, assert that
Perkins and Phillips are not entitled to UIM benefits because
the motorists who caused their injuries were not under
insured. Mid-Century and Safeco argue that, under Oregon
law, one determines whether a motorist is underinsured by
comparing the limits of that motorist's liability policy to the
limits of the insured's UM policy, i.e. , a "limits-to-limits" com
parison. Because Perkins and Phillips both were inj ured by
motorists whose liability policies had limits equal to the lim
its on Perk.ins's and Phillips's policies, Mid-Century and
Safeco conclude that Perkins and Phillips were not injured by
underinsured motorists and are not entitled to recover any
benefits .
The question before this court is what the legislature
intended by the requirement that insurers issuing policies in
Oregon must provide "underinsurance coverage. " As always,
we begin our inquiry into legislative intent with the text of a
statute. PGE v. Bureau of Labor and Industries, 3 17 Or 606,
6 10, 859 P2d 1 143 ( 1 993) . The parties' arguments turn on
this court's interpretation of ORS 742.502(2)(a), which
provides:
"A motor vehicle bodily injury liability policy shall have the
same limits for uninsured motorist coverage as for bodily
injury liability coverage unless a named insured in writing
elects lower limits. The insured may not elect limits lower
than the amounts prescribed to meet the requirements of
ORS 806.070 for bodily injury or death. Uninsured motorist
coverage larger than the amounts required by ORS 806.070
shall include underinsurance coverage for damages or
death caused by accident and arising out of the ownership,
maintenance or use of a motor vehicle that is insured for an
amount that is less than the insured's uninsured motorist
coverage. Underinsurance benefits shall be equal to unin
sured motorist coverage benefits less the amount recovered
from other automobile liability insurance policies."
The third sentence of that paragraph states that UIM cover
age is triggered by damages or death caused by accidents
with motor vehicles that are insured for less than "the
insured's uninsured motorist coverage." The meaning of that
phrase determines the outcome of this case. lf "the insured's
uninsured motorist coverage" refers to the damages that the

208 Mid-Century Ins. Co. v. Perkins
insured is legally entitled to recover from a motorist, then a
motorist is underinsured when those damages exceed the
limits of his liability policy, as Perkins and Phillips claim. If
"the insured's uninsured motorist coverage" refers to the pol
icy limits on the insured's UM coverage, then a motorist is
underinsured when those policy limits exceed the limits of
his own liability policy, as Mid-Century and S afeco claim.
To determine the meaning of the phrase "the
insured's uninsured motorist coverage," we first examine the
statutory definition of the phrase "uninsured motorist cover
age" in ORS 742.500(1), which we again quote to aid our
analysis:
" 'Uninsured motorist coverage' means coverage within the
terms and conditions specified in ORS 742.504 insuring the
insured, the heirs or legal representative of the insured for
all sums which the insured or they shall be legally entitled
to recover as damages for bodily injury or death caused by
accident and arising out of the ownership, maintenance or
use of an uninsured motor vehicle in amounts or limits not
less than the amounts or limits prescribed for bodily injury
or death under ORS 806.070."
Perkins and Phillips claim that the phrase "all sums which
the insured * * * shall be legally entitled to recover as dam
ages for bodily injury" in ORS 7 42.500(1) reveals that "unin
sured motorist coverage" refers to the insured's total dam
ages arising from an accident and not to the insurer's limit
of liability for uninsured motorist coverage. The text of
ORS 742. 500( 1) undermines that claim somewhat.
ORS 742.500(1) defines uninsured motorist coverage as
coverage "in amounts or limits not less than the amounts or
limits prescribed" under ORS 806.070.8 In other words,
ORS 742.500( 1) presumes that an insurer will provide unin
sured motorist coverage only up to stated limits, and sets
minimum limits on that coverage.
Perkins and Phillips insist, however, that when the
legislature uses the term "coverage," it intends to refer to the
8 ORS 806.070(2) requires minimum limits of"$25,000 because of bodily injury
to or death of one person i n any one accident" and "$50,000 because of bodily injury
to or death of two or more persons in any one accident * * *."

Cite as 344 Or 196 (2008) 209
insured's damages arising from an accident without refer
ence to the insurer's limits of liability. Perkins and Phillips
claim that this court's decision in Bergmann interpreted "cov
erage" in a way that mandates that reading of that term.
Accordingly, we review Bergmann to determine ifit supports
that claim.
Like Perkins and Phillips, the plaintiff in Bergmann
had an automobile insurance policy that provided UIM cov
erage with a limit of $100,000. She was severely injured in an
automobile accident caused by a driver who had a policy with
a liability limit of only $25,000. After recovering the limits of
the other driver's policy and receiving $ 107,652 in workers'
compensation benefits, the plaintiff made a claim for dam
ages under the UIM provision of her insurance policy, claim
ing that her total damages exceeded the amount of her recov
ery by over $500,000. The insurer denied the claim, asserting
that it was entitled to reduce the amount owed to the plaintiff
by the amounts that she had received from workers' compen
sation and from the other driver. Because those amounts
totaled over $ 100,000, the insurer maintained that it owed
the plaintiffnothing. The plaintiff filed an action for breach of
contract, the insurer moved for summary judgment, and the
trial court granted the motion. The Court of Appeals affirmed
without opinion.
This court reversed the grant of summary j udgment
and held that the plaintiff could still recover UIM benefits
despite her receipt of workers' compensation. The case cen
tered on the interpretation of ORS 742.504(7)(c), which
provided:
"Any amount payable under the terms of this coverage
because of bodily injury sustained in an accident by a per
son who is an insured under this coverage shall be reduced
by:
"(A) All sums paid on account of such bodily injury by or
on behalf of the owner or operator of the uninsured vehicle
and by or on behalf of any other person or organization
jointly or severally liable together with such owner or oper
ator for such bodily injury including all sums paid under
the bodily injury liability coverage of the policy; and

2 10 Mid-Century Ins. Co. v. Perkins
"(B) The amount paid and the present value of all
amounts payable on account of such bodily injury under
any workers' compensation law, disability benefits law or
any similar law."
The plaintiff contended that the "amount payable under the
terms of this coverage" referred to the insured's total dam
ages, while the insurer maintained that that term referred to
the policy's liability limit. Bergmann, 337 Or at 603. We held
that the plaintiff was correct. We based that holding on the
observation that, for purposes of ORS 742 .504( 7)(c), there is a
difference between an amount that is payable under terms of
"coverage" and an amount payable under terms of a "policy."
A "policy'' refers to "the specific contract between the insurer
and the insured," and includes limits on the insurer's liabil
ity. Bergmann, 337 Or at 604. "Coverage" refers to "the uni
verse of people, vehicles, and events that trigger the insurer's
obligation to pay under the policy [,]" and does not include
limits on the insurer's liability. Id. We concluded that, under
ORS 742.504(7 )(c), the "amount payable under the terms of
this coverage" is equal to all sums that the insured is "legally
entitled to recover" as a result of bodily inj ury arising from an
accident with an uninsured or underinsured motorist, i.e. ,
the insured's damages.9 Id. at 6 10.
Perkins and Phillips contend that Bergmann
requires this court to hold that, in ORS 7 42. 502(2)(a), the
phrase "an amount that is less than the insured's uninsured
motorist coverage" refers to an amount that is less than the
insured's damages. First, they point out Bergmann's holding
that the term "coverage" does not include limits on an
insurer's liability. lfthat term does not include those limits in
one portion of the statutes governing uninsured motorist cov
erage, they reason, it should not include those limits in
another. Accordingly, "the insured's uninsured motorist cov
erage" cannot refer to the insured's policy limits. Second,
Perkins and Phillips argue that, if this court were to accept
Mid-Century's and Safeco's argument that "an amount that
is less than the insured's uninsured motorist coverage" refers
9 The holding was based on ORS 742.504( 1 )(a), which requires the insurer to
pay "all sums which the insured * "' shall be legally entitled to recover as general
and special damages" for bodily injury resulting from an accident with an unin
sured vehicle. Bergmann, 337 Or at 605.

Cite as 344 Or 196 2 1 1
to an amount that i s less than the insured's policy limit, then
an inconsistency in the statutes would result. The term "cov
erage" would incorporate limits on the insurer's liability in
ORS 742.502(2)(a), but not in ORS 742.504(7)(c). Again,
Perkins and Phillips note that this court assumes that the
same term has the same meaning throughout a statutory
scheme, and thus they conclude that "coverage" must mean
the same thing in ORS 7 42 .502(2)(a) and ORS 7 42.504(7)(c).
We disagree. Perkins and Phillips are correct to
assert that " [w]hen the legislature uses the identical phrase
in related statutory provisions that were enacted a * * * part
of the same law, we interpret the phrase to have the same
meaning in both sections." Tharp v. PSRB, 338 Or 413, 422,
1 10 P3d 103 (2005). However, the statutory phrase that was
at issue in Bergmann is not identical to the phrase that is at
issue in the present case. Bergmann concluded that, in ORS
742. 504(7 )(c), the phrase "amount payable under the terms
of this coverage" refers to an insured's total damages.
Bergmann, 337 Or at 605. ORS 7 42.502(2)(a), however, asks
whether a vehicle is insured for "an amount that is less than
the insured's uninsured motorist coverage," not an amount
that is less than the amount payable under the insured's
uninsured motorist coverage. Bergmann stated that the
latter phrase refers to an insured's damages, but made no
such statement regarding the phrase quoted from ORS
742. 502(2)(a). Accordingly, we need not assume that each
phrase means the same thing.
Perkins and Phillips also argue that "uninsured
motorist coverage" must refer to an insured's damages and
not to his policy limits because, as we stated in Bergmann,
terms of coverage do not include limits on an insurer's liabil
ity. 337 Or at 604. "Coverage," Perkins and Phillips argue,
must mean the same thing in both ORS 7 42 .504(7)(c) and
ORS 742.502(2)(a). We disagree. We will assume that the
same word has the same meaning in related statutory provi
sions, but we are not bound by that assumption if an exami
nation of the text and context of the statute reveals that the
word, in fact, does have more than one meaning. See Enertrol
Power Monitoring Corp. v. State of Oregon, 3 14 Or 78, 84, 836
P2d 123 ( 1992) ("The legislature's definition of a term made
applicable to one portion of the statutes does not control on

2 12 Mid-Century Ins. Co. v. Perkins
the meaning of the term in another portion of the statutes.").
Moreover, we do not read the word "coverage" in a vacuum,
but in the context of the statutory text that surrounds it. See
Vsetecka v. Safeway Stores, Inc. , 337 Or 502, 508, 98 P3d
1 1 16 (2004) (illustrating principle). In this case, that context
gives us several reasons not to agree with Perkins and
Phillips.
First, we did not define "coverage" as "damages" in
Bergmann. We held that coverage refers to the external fac
tors , i.e. , "people, vehicles, and events, that trigger an
insurer's obligation to pay under the policy." Bergmann, 337
Or at 604. Nothing in that statement indicates that "cover
age" refers only to the amount that the insurer is obligated to
pay. As mentioned above, the phrase "amount payable under
the terms of this coverage" designated that amount.
Second, were we to assume that "uninsured motorist
coverage" means "damages," then the statutory provision at
issue would become nonsense. The third sentence of ORS
7 42.502(2)(a) provides :
"Uninsured motorist coverage larger than the amounts
required by ORS 806.070 shall include underinsurance cov
erage for damages or death caused by accident and arising
out of the ownership, maintenance or use of a motor vehicle
that is insured for an amount that is less than the insured's
uninsured motorist coverage."
Because the phrase "uninsured motorist coverage" appears
at both the beginning and end of that sentence, reading that
phrase to refer to the insured's damages would give the sen
tence the following meaning:
" [The insured's damages] larger than the amounts required
by ORS 806.070 shall include underinsurance coverage for
damages or death caused by accident and arising out of the
ownership, maintenance or use of a motor vehicle that is
insured for an amount that is less than [the insured's
damagesJ."
Perkins and Phillips offer no explanation for why an
insured's damages would include "underinsurance coverage"
for damages, or why his entitlement to damages would
depend on the amount of insurance on the motor vehicle that
injured him. At best, that interpretation of ORS 7 42.502(2)(a)

Cite as 344 Or 196 2 1 3
results in a circular statement that an insured's damages will
include his damages. This court assumes that the legislature
did not intend for any part of its enactments to convey that
kind of contradictory message. See Bolt v. lnfiuence, Inc. , 333
Or 572, 581, 43 P3d 425 (2002) (discussing principle). The
redundancy and confusion that follow from the assumption
that "uninsured motorist coverage" refers to "damages" sug
gest that, in this context, that is not the phrase's intended
meaning.
Third, the first sentence of ORS 742.502(2)(a) estab
lishes that, within that subsection, "coverage" does include
limits on an insurer's liability:
"A motor vehicle bodily injury liability policy shall have the
same limits for uninsured motorist coverage as for bodily
injury liability coverage unless a named insured in writing
elects lower limits."
That sentence requires a "policy" to have the same "limits"
for uninsured motorist "coverage" that the policy places on
bodily injury liability "coverage." As mentioned in Bergmann,
a "policy'' ordinarily includes limits on an insurer's liability,
while "coverage" does not. 337 Or at 604. The premise of that
sentence, however, is that a policy provides coverage and, in
that context, coverage has limits. The second sentence of that
subsection also concerns limits: "The insured may not elect
limits lower than the amounts prescribed to meet the
requirements of ORS 806.070 for bodily injury or death."
The two sentences just examined strongly suggest
that, when the third sentence mentions "coverage," it refers
to coverage within the context of a policy. Therefore, contrary
to Perkins's and Phillips's assertions, the phrase "uninsured
motorist coverage" can incorporate the limits on an insurer's
liability without creating any inconsistency with Bergmann.
The statutory subsection at issue in Bergmann contained no
wording indicating that the "coverage" that it referred to was
subject to any kind of"limits," while the first two sentences of
ORS 742.502(2)(a) establish that the stated limits do apply to
and govern "coverage." Viewed in that light, the third sen
tence effectively reads:
"Uninsured motorist coverage [under a given policy with
limits] larger than the amounts required by ORS 806.070

2 14 Mid-Century Ins. Co. v. Perkins
shall include underinsurance coverage for damages or
death caused by accident and arising out of the ownership,
maintenance or use of a motor vehicle that is insured for an
amount that is less than the insured's uninsured motorist
coverage [under that policy] ."
An "amount that is less than the insured's uninsured motor
ist coverage" refers to an amount that is less than the
insured's uninsured motorist coverage as the terms of the
policy limit that coverage. That interpretation does not cre
ate any inconsistency with Bergmann and avoids the same
problems of confusion and surplusage that arise when we
interpret "uninsured motorist coverage" to mean "damages."
Finally, the statutory context of ORS 742.502(2)(a)
also supports Mid-Century's and Safeco's argument, because
related statutory provisions use limits-to-limits comparisons
to determine the required extent of "coverage." ORS
742.502(3) also uses the term "coverage" to refer to coverage
in the context of a policy that provides limits on that
coverage:
"The insurer issuing such policy may offer one or more
options of uninsured motorist coverage larger than the
amounts prescribed to meet the requirements of ORS
806.070 and in excess of the limits provided under the pol
icy for motor vehicle bodily injury liability insurance. Offers
of uninsured motorist coverage shall include underinsur
ance coverage for bodily injury or death caused by accident
and arising out of the ownership, maintenance or use of a
motor vehicle with motor vehicle liability insurance that
provides recovery in an amount that is less than the
insured's uninsured motorist coverage. Underinsurance
benefits shall be equal to uninsured motorist coverage ben
efits less the amount recovered from other motor vehicle
liability insurance policies."10
That subsection allows an insurer issuing a "policy" to offer
"coverage" that is greater than the "amounts" required under
rn The legislature has made minor amendments to the subsection since 2001.
See Or Laws 2007, ch 287, § 2, which altered the last sentence of the subsection to
read: "Underinsurance coverage shall be equal to uninsured motorist coverage less
the amount recovered from other motor vehicle liability insurance policies."
(Emphases added.) Those later amendments do not affect our analysis in this case.

as 344 0r 2 1 5
ORS 806.070 and the "limits" provided for bodily injury lia
bility under the policy. If "coverage" refers to the insured's
damages, then that offer is impossible to make: an insurer
cannot offer coverage greater than the insured's damages in
some future accident at the time it offers the policy to the
insured, because neither the insured nor the insurer could be
aware of those damages. But if "coverage" refers to coverage
within the context of a policy, with limits on liability, then the
meaning of the subsection becomes clear: the insurer may
offer uninsured motorist coverage and underinsurance cov
erage with liability limits greater than those required by
ORS 806.070 or those provided for bodily injury liability. In
other words, the subsection makes use of a limits-to-limits
comparison to describe the permissible range of coverage
that an insurer may offer. Using a limits-to-damages compar
ison to determine the insurer's actual liability would contra
dict the subsection.
ORS 742.500( 1) also uses a limits-to-limits compari
son to determine whether a vehicle uninsured, which is a
necessary prerequisite for the application of uninsured
motorist coverage. The statute provides that uninsured
motorist coverage insures for all sums that the insured is
entitled to recover as dama ges c aused by an accident with an
"uninsured motor vehicle." ORS 742.504(2)(d)(A) defines an
"uninsured vehicle," in part, as follows:
"(d) 'Uninsured vehicle,' except as provided in para
graph (e) of this provision, means:
"(A) A vehicle with respect to the ownership, mainte
nance or use of which there is no collectible automobile bod
ily injury liability insurance or bond, in at least the amounts
or limits prescribed for bodily injury or death under ORS
806. 070 applicable at that time of the accident with respect
to any person or organization legally responsible for the use
of such vehicle * * * ."
(Emphasis added. ) Courts and insurers must determine
whether a vehicle is uninsured by comparing the limits of the
insurance on that vehicle to the limits prescribed by ORS
806.070 and calculating whether the former exceed the
latter-in other words, by engaging in a limits-to-limits com
parison, as opposed to a limits-to-damages comparison.

216 Mid-Century Ins. Co. v. Perkins
Using the latter type of comparison would create an internal
inconsistency in the statute.
Likewise, ORS 742.504(9)(b) addresses the applica
tion of underinsured and uninsured motorist coverage as
"excess" insurance by making a limits-to-limits comparison:
"With respect to bodily injury to an insured while occupying
or through being struck by an uninsured vehicle, if such
insured is an insured under other insurance available to
the insured which is similar to this coverage, then the dam
ages shall be deemed not to exceed the higher of the appli
cable limits ofliability of this insurance or such other insur
ance, and the insurer shall not be liable under this coverage
for a greater proportion of the damages than the applicable
limit of liability of this coverage bears to the sum of the
applicable limits of liability of this insurance and such
other insurance."
If an insured is covered by two or more policies, that statute
requires the insurer to determine its liability by comparing
its own policy limit to the limits of the other policies in order
to set a cap on the insured's damages, and then calculating
the insurer's proportion ofliability by making that same com
parison. Again, that is a limits-to-limits comparison.
The statutes governing uninsured and underinsured
motorist coverage use limits-to-limits comparisons to estab
lish whether a vehicle is "uninsured," what policy limits an
insurer may and must offer for uninsured motorist coverage,
and what the extent of an insurer's liability is when there is
more than one source of insurance. Perkins and Phillips
argue that it would create an inconsistency in the statutes to
hold that the question of whether a motorist is underinsured
is determined by a limits-to-limits comparison. In fact, the
prevalence of limits-to-limits comparisons in the statutes
shows that the reverse is true. Our examination of the text
and context of ORS 742 .502(2)(a) makes it clear that when
the Oregon legislature enacted that subsection, it intended
that insurers and courts should determine whether a vehicle
is underinsured by comparing its liability limits with the lim
its on the insured's uninsured motorist coverage.11
" The legislature has amended ORS 742.502(2)(a) since 200L The third and
fourth sentences of that subsection now read:

Cite as 344 Or 196
Perkins and Phillips nonetheless claim that this
interpretation of ORS 742.502(2)(a) is at odds with
Bergmann because of the results that it creates. Specifically,
they argue that it is inconsistent to require an insurer to
deduct "all sums paid on account of such bodily injury by or
on behalf of the owner or operator of the uninsured vehicle"
and other recovery from the insured's damages under ORS
742.504(7)(c), but to establish whether a motorist is under
insured by comparing policy limits under ORS 742.502(2)(a).
We disagree. First, the question of whether a motorist is
"underinsured" is not the question that this court considered
in Bergmann. Bergmann dealt with the question of how
much an insured may recover from an underinsured motorist
in light of benefits that the insured receives from other
sources. This case deals with the threshold question of
whether a motorist is underinsured at all.
Second, we already considered this supposed prob
lem in Bergmann. We noted that ORS 742.502(2)(a) "essen
tially defines the limit of the insurer's liability in the UIM
context" by providing "that UIM benefits are 'equal to unin
sured motorist coverage benefits less the amount recovered
from other automobile liability insurance policies.' "
Bergmann , 337 Or at 608. ORS 742.502(2)(a) establishes
that, regardless of an insured's actual damages, the insurer's
liability will never exceed an amount totaling the benefits
available under uninsured motorist coverage, i.e. , the policy
limit, minus the amount that the insured recovers from other
policies. In other words, UIM benefits are intended to fill the
gap between the limit of an insured's UM coverage and the
amount that he or she actually receives from another
motorist.
· ------- ---- ..·---..
"Uninsured motorist coverage shall include underinsurance coverage for bod
ily injury or death caused by accident and arising out of the ownership, main
tenance or use of a motor vehicle with motor vehicle liability insurance that
provides recovery in an amount that is less than the uninsured's motorist cov
erage. Underinsurance coverage shall be equal to uninsured motorist coverage
less the amount recovered from other motor vehicle liability insurance
policies."
Those amendments may bear on future determinations of whether a vehicle is
underinsured, but the meaning of that amended text is not a question presently
before this court, and therefore we do not address it at this time.

218 Mid-Century Ins. Co. v. Perkins
We hold that, under ORS 742 .502(2)(a), an under
insured motorist is a motorist who is insured for an amount
that is less than the policy limits of the insured's uninsured
motorist coverage. In both of the present cases, Perkins and
Phillips were injured by motorists with liability limits equal
to the limits of their own uninsured motorist coverage.
Accordingly, Perkins and Phillips were not injured by under
insured motorists and, therefore, they are not entitled to
UIM benefits under ORS 742.502(2)(a).
The decisions of the Court of Appeals are affirmed.