NOT FOR PUBLICATION FILED

UNITED STATES COURT OF APPEALS OCT 28 2024

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

MICHAEL KREMERS, No. 23-35209

Plaintiff-Appellant, D.C. No. 3:21-cv-01717-IM

v.

MEMORANDUM*

HAGERTY INSURANCE AGENCY, LLC;

ESSENTIA INSURANCE COMPANY,

Defendants-Appellees.

Appeal from the United States District Court for the District of Oregon Karin J. Immergut, District Judge, Presiding

Submitted October 23, 2024** Portland, Oregon

Before: LEE, VANDYKE, and H.A. THOMAS, Circuit Judges.

Oregon law mandates certain minimum coverage for uninsured motorists in

all motor vehicle liability insurance policies. Oregon Revised Statutes (“ORS”)

742.504(1)–(12). If a policy provides less favorable coverage than the statutory

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). model policy, Oregon courts invalidate the offending exclusion/provision and

require coverage. In our case, there is no dispute that the insurance policy at issue

would not normally provide coverage because it does not cover the vehicle involved

in the accident. The insured, however, still argues that he is entitled to coverage

because a part of an exclusion that is irrelevant to the facts of the case provides less

favorable coverage than the model policy. We disagree and hold that for a claimant

to benefit from Oregon’s minimum coverage scheme under ORS 742.504, the

allegedly less favorable part of the challenged provision must implicate the facts of

the claimant’s case.

Michael Kremers was struck by an uninsured motorist and sought medical

care for his injuries. At the time of the accident, Kremers was insured under a motor

vehicle liability policy for each of his two cars: (1) Travelers Commercial Insurance

Company covered his 2008 Mercedes 350, and (2) Essentia Insurance Company

insured his 1965 Alfa Romeo Spider. Kremers was driving the Mercedes at the time

of the accident. Kremers first sought Uninsured Motorist (“UM”) coverage from

Travelers, which paid his policy’s limits. Kremers then sought UM coverage from

Essentia, which denied his claim because the Essentia policy covered only his Alfa

Romeo Spider and not his Mercedes. Kremers sued, and the district court granted

summary judgment in favor of Essentia. We have jurisdiction under 28 U.S.C.

§ 1291 and affirm.

2 We review de novo a district court’s order granting summary judgment and

may affirm on any ground supported by the record. Chemehuevi Indian Tribe v.

Newsom, 919 F.3d 1148, 1150–51 (9th Cir. 2019). “Statutory interpretation presents

a question of law, which we also review de novo.” Id. (citations omitted).

The Oregon Supreme Court set forth the overarching framework for analyzing

Oregon’s model UM statute in Vega v. Farmers Insurance Co. of Oregon, 918 P.2d

95 (1996). See Batten v. State Farm Mut. Auto. Ins. Co., 495 P.3d 1222, 1224–25

(Or. 2021) (en banc). As Vega notes, the Oregon legislature has set out “a

comprehensive model” policy of UM coverage at ORS 742.504(1)–(12). 918 P.2d

at 101. The statute requires policies to provide UM “‘coverage that in each instance

is no less favorable in any respect to the insured or the beneficiary than if’ those

model policy terms ‘were set forth in the policy.’” Batten, 495 P.3d at 1224 (quoting

ORS 742.504) (emphasis added).

Kremers does not dispute that the Essentia policy excluded his Mercedes, the

vehicle involved in the accident, under the policy’s “Regular Use Exclusion.”1

Rather, Kremers argues that the Regular Use Exclusion is otherwise broader—and

1 The Regular Use Exclusion states:

“Uninsured Motorist Coverage” does NOT cover “bodily injury” or “property damage” sustained by an “insured” or any person . . . [t]hat occurs while “occupying”, operating or otherwise using any vehicle owned by, or furnished or available for the regular use of you, a “family member” or any other person related to you who resides with you, if that vehicle is not “your covered auto.”

3 thus less favorable—than ORS 742.504 permits. Specifically, Kremers argues that

the Regular Use Exclusion excludes newly acquired and substitute vehicles from

coverage, while the statutory model includes them at ORS 742.504(2)(d)(A).

Therefore, Kremers argues that the Regular Use Exclusion is unenforceable under

ORS 742.504 and he is entitled to coverage—even though the Mercedes was not a

newly acquired or substitute vehicle. Kremers thus argues that the allegedly less

favorable part of the provision he is challenging need not implicate the facts of his

case for the provision to be unenforceable under ORS 742.504.

Kremers is mistaken for several reasons. First, the plain language of ORS

742.504 indicates that we must look at the specific facts of a case—not the policy in

the abstract—to determine whether a policy is “less favorable” than the statutory

model. This is because the statute mandates UM coverage that “in each instance is

no less favorable in any respect” than the statutory model policy’s coverage. ORS

742.504 (emphasis added); see Vega, 918 P.2d at 100–01. An “instance” means an

“example or occurrence,” Black’s Law Dictionary (12th ed. 2024), or “an individual

illustrative of a category,” Merriam-Webster Dictionary, https://www.merriam-

webster.com/dictionary/instance (last visited Oct. 15, 2024). Thus, in the insurance

context, an “instance” of coverage means a specific instance or case in which

4 coverage attaches.2

Next, the statute itself confirms this reading of ORS 742.504 through its use

of the word “insured.” ORS 742.504(2)(c)(A) defines “insured” as “[t]he named

insured as stated in the policy.” In other words, “the insured” in the statute refers to

an actual claimant in an actual claim, not to any potential person in a potential claim.

And a policy must provide UM coverage which is not less favorable to that claimant

than the statutory minimum, judging by if the statutory model provisions were set

forth in that claimant’s policy. Here, Kremers’ coverage is the same whether under

his policy or the statutory model policy.

Finally, a close reading of Vega also confirms this approach. Vega held that

in construing ORS 742.504, “the intent of the legislature . . . controls.” 918 P.2d at

102 (citations omitted). The legislature’s intent was to “protect[] . . . automobile

insurance policyholder[s] against the risk of inadequate compensation” and to “place

the injured policyholder in the same position he would have been in if the tortfeasor

had had liability insurance.” Id. at 103 (citations omitted). Yet the challenged part

of a UM provision that does not implicate the facts of the case cannot, logically

2 The alternative that Kremers suggests would read the phrase “in each instance” out of the statute, because “in any respect” already captures the requirement that a UM policy may not be less favorable than the statutory model generally, in the abstract. “If the legislature desires to restrict the scope of coverage that the statute contemplates, it does not lack the linguistic tools necessary to achieve that outcome.” Carrigan v. State Farm, 949 P.2d 705, 708 (Or. 1997).

5 speaking, impact the policyholder’s “position.” See id. at 103 n.13. Rather than

preventing “inadequate compensation,” knocking out an exclusion on this sort of

abstract basis would provide the insured windfall coverage for which the parties

never contracted.

Together, these principles confirm that Kremers did not receive “less

favorable” coverage under the Essentia policy than ORS 742.504 permits. Even if

the policy had contained the statutory model provisions, Kremers would not have

been covered here because he was not driving a newly acquired or substitute vehicle

at the time of the accident. Accordingly, Essentia was entitled to deny UM benefits

under the policy’s Regular Use Exclusion, and the judgment of the district court

should be

AFFIRMED.

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