This section contains the nature of the case and procedural background.

P was injured in a collision with an automobile driven by D's insured, Mrs. Linnie Ames. The jury returned verdicts against Mrs. Ames for $70,000 in compensatory damages and $25,000 in punitive damages. The award of punitive damages, based on evidence that D's insured had been guilty of reckless driving after drinking, was affirmed by this court. D paid the $70,000 in compensatory damages, but not the $25,000 in punitive damages. D's insured assigned to P all rights against D. This is an action to collect from D a judgment of $ 25,000 in punitive damages entered against D's insured for reckless driving. The court then ruled that the insurance policy did not cover punitive damages, for two reasons: (1) that the 'language' of the insurance policy 'does not provide coverage for punitive damages,' and (2) that such coverage would be 'contrary to the expressed Oregon public policy.' P appealed.

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