Seneca Insurance Company v. James River Insurance Company, No. 3:2014cv00108 - Document 22 (D. Or. 2014)
Court Description: OPINION AND ORDER ON MOTION FOR SUMMARY JUDGMENT: Plaintiff's Motion for Summary Judgment 10 is granted in part and reserved in part. The court finds James River has a duty to defend Superwall, and the duty commenced upon the filing of the underlying action. The court reserves ruling on the amount of Senecas damages until Seneca files its detailed motion for defense costs. Signed on 7/17/14 by Magistrate Judge Dennis J. Hubel. (kb)
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1 2 UNITED STATES DISTRICT COURT 3 DISTRICT OF OREGON 4 PORTLAND DIVISION 5 6 7 8 9 10 11 SENECA INSURANCE COMPANY, a New York corporation, ) ) ) Plaintiff, ) No. 03:14-cv-00108-HU ) vs. ) ) JAMES RIVER INSURANCE COMPANY, ) OPINION AND ORDER ON an Ohio corporation, ) MOTION FOR SUMMARY JUDGMENT ) Defendant. ) _____________________________ 12 13 14 John Loring Langslet Martin Bischoff Templeton Langslet & Hoffman 888 SW Fifth Avenue, Suite 900 Portland, OR 97204 15 Attorney for Plaintiff 16 17 18 Elizabeth E. Lampson davis Rothwell Earle & Xochihua, PC 111 SW 5th Avenue, Suite 2700 Portland, OR 97204 19 Attorney for Defendant 20 21 22 23 HUBEL, Magistrate Judge: 24 The plaintiff Seneca Insurance Company ( Seneca ) brings 25 this action against the defendant James River Insurance Company 26 ( James River ), seeking a declaratory judgment that James River 27 has 28 ( Superwall ), a duty to in defend an 1 - OPINION AND ORDER its action insured pending Superwall in the Design, Multnomah LLP County 1 Circuit Court entitled S.D. Deacon Corp. of Oregon v. Superwall 2 Design, 3 Seneca also seeks a money judgment for 50% of its defense costs 4 in defending Superwall and one of its principals, Paul Maughan, 5 in the underlying action. 6 LLP, Case No. 1209-11587 (the underlying action ). The case is before the court on Seneca s motion for summary 7 judgment, Dkt. #10. The motion is fully briefed, and the court 8 heard oral argument on the motion on July 17, 2014. 9 have consented to jurisdiction and the entry of final judgment 10 by a United States Magistrate Judge, in accordance with Federal 11 Rule of Civil Procedure 73(b). 12 consideration of the motion. The parties Accordingly, the court turns to 13 Notably, as James River pointed out during oral argument, 14 Seneca s Complaint only makes a claim for relief regarding James 15 River s duty to defend Superwall; the Complaint asks nothing 16 with regard to Maughan. 17 to amend its Complaint to include a claim for Maughan s defense, 18 without prejudice to the filing of a formal motion to amend, 19 should Seneca so desire. 20 current 21 River s duty to defend Superwall, not Maughan. motion for The court denied Seneca s oral motion Similarly, the court s ruling on the summary judgment applies only to James 22 I. 23 SUMMARY JUDGMENT STANDARDS 24 Summary judgment should be granted if the movant shows that 25 there is no genuine dispute as to any material fact and the 26 movant is entitled to judgment as a matter of law. 27 Civ. P. 56(c)(2). 28 the court must not weigh the evidence or determine the truth of Fed. R. In considering a motion for summary judgment, 2 - OPINION AND ORDER 1 the matter but only determine whether there is a genuine issue 2 for trial. Playboy Enters., Inc. v. Welles, 279 F.3d 796, 800 3 (9th Cir. 2002) (citing Abdul-Jabbar v. General Motors Corp., 85 4 F.3d 407, 410 (9th Cir. 1996)). 5 The Ninth Circuit Court of Appeals has described the 6 shifting burden of proof governing motions for summary judgment 7 as follows: 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 The moving party initially bears the burden of proving the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). Where the non-moving party bears the burden of proof at trial, the moving party need only prove that there is an absence of evidence to support the non-moving party s case. Id. at 325, 106 S. Ct. 2548. Where the moving party meets that burden, the burden then shifts to the nonmoving party to designate specific facts demonstrating the existence of genuine issues for trial. Id. at 324, 106 S. Ct. 2548. This burden is not a light one. The non-moving party must show more than the mere existence of a scintilla of evidence. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). The non-moving party must do more than show there is some metaphysical doubt as to the material facts at issue. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S. Ct. 1348, 89 L. Ed. 2d 528 (1986). In fact, the non-moving party must come forth with evidence from which a jury could reasonably render a verdict in the non-moving party s favor. Anderson, 477 U.S. at 252, 106 S. Ct. 2505. In determining whether a jury could reasonably render a verdict in the nonmoving party s favor, all justifiable inferences are to be drawn in its favor. Id. at 255, 106 S. Ct. 2505. 25 In re Oracle Corp. Securities Litigation, 627 F.3d 376, 387 (9th 26 Cir. 2010). 27 28 3 - OPINION AND ORDER II. 1 2 Both Seneca and CHOICE OF LAW James River are foreign corporations 3 authorized to write insurance in Oregon. It is undisputed that 4 both Superwall s conduct, and the resulting injury alleged in 5 the underlying action, occurred in Oregon. 6 law controls the resolution of the parties dispute. 7 § 15.440(3)(a). Therefore, Oregon See ORS 8 III. 9 BACKGROUND FACTS 10 The underlying action alleges construction defects in the 11 Sand & Sea Condominiums, a 60-unit complex located in Seaside, 12 Oregon. In its original Complaint in the underlying action, S.D. 13 Deacon Corp. 14 entered into 15 association 16 renovation of various portions of Sand & Sea, including to the 17 curtain wall assemblies at the Project[.] 18 Deacon subcontracted with Superwall for work on the Curtain 19 Wall Renovation. . . . Id., ¶ 6. 20 At ( Deacon ) a (the some alleged contract with Association ) point not that the February Sand for specified in & the in Sea 2011, unit it owners reconstruction and Dkt. #11-1, ¶ 5. the Complaint, the 21 Association notified Deacon of property damage and construction 22 defect issues 23 Curtain Wall Renovation at Sand & Sea. 24 investigated the Association s allegations, a process in which 25 Deacon claims Superwall declined to participate. 26 10. 27 alleged property damage was the result of . . . construction 28 defects, allegedly arising out of, or relating Id., ¶ 8. to, the Deacon Id., ¶¶ 9 & As a result of its investigations, Deacon concluded the inadequate 4 - OPINION AND ORDER or inappropriate usage of materials, 1 violations of the applicable state and local building codes, and 2 violations of the relevant industry standards, arising from, or 3 relating to, the work performed by Superwall as part of the 4 Curtain Wall Renovation. 5 problems resulting from Superwall s work). 6 Deacon claimed Id., ¶ 11 (listing over 50 alleged these conditions caused significant and 7 ongoing property damage at Sand & Sea, including damage to the 8 structure, damage to the exterior and interior components, and 9 damage to various other components of the Project, as well as 10 loss of use and enjoyment damages. 11 alleged all of the listed defects, deficiencies, and property 12 damage 13 faulty workmanship; inadequate or inappropriate application and 14 usage of 15 local building 16 specifications and/or installation instructions; and, violation 17 of relevant industry standards. 18 were directly materials; and proximately noncompliance codes; Id., ¶ 12. violation caused with of by Superwall s applicable relevant state and manufacturers Id., ¶ 13. Deacon claimed it incurred costs exceeding $1.78 million to 19 effect repairs to Sand & Sea. 20 declined to participate in any of the repairs. 21 Further, Deacon It appears Deacon put It further claimed Superwall Superwall on Id., ¶¶ 14 & 15. notice of the 22 construction defect claims in a letter dated January 24, 2012. 23 See Dkt. #11-5, p. 1 (referencing the letter). 24 2012, 25 Insurance Company of America ( Travelers ), Deacon tendered its 26 claim as additional insured on Superwall s policy of insurance 27 issued by James River and Travelers. 28 underlying action against Superwall, and provided James River in a letter 5 - OPINION AND ORDER to James River and Id. On June 18, Travelers Casualty Deacon filed the 1 with a copy of the Complaint via e-mail on October 25, 2012. 2 See Dkt. #11-6. 3 first notice that the underlying action had been filed. According to James River, the e-mail was its Id. 4 Deacon amended its Complaint in the underlying action twice; 5 its First Amended Complaint is not part of the record before 6 this court. 7 defendant one of Superwall s principals, Paul Maughan. 8 alleged Maughan s 9 financial problems that materially affected the outcome of the 10 Project as Superwall was incapable of paying the wages of [its] 11 employees and/or laborers and the material suppliers for the 12 Project. 13 Beeline Glass Company of Oregon ( Beeline ), which Deacon hired 14 [o]n or about July 8, 2011, . . . to supplement and assist 15 Superwall s labor needs. . . . 16 In its Second Amended Complaint, Deacon added as a under-funding Dkt. #11-2, ¶ 5. Superwall of caused Superwall Deacon also added as a defendant Id., ¶ 9; see id., ¶ 4. filed third-party the project s 18 numerous subcontractors and materials suppliers. 19 1. In its pleading, Superwall alleged that after it was notified 20 by 21 Superwall both performed extensive investigations to find the 22 causes 23 alleged 24 allegedly 25 improper design, oversight, and administration of the project, 26 and defects in the work and/or materials supplied by the other 27 third-party defendants. Id. 28 performed Project, of leaks the leaking. deficiencies resulting work in on 6 - OPINION AND ORDER in the property against architect, of Association s claims 17 Deacon the Superwall Deacon curtain Id., its therefrom, the ¶ work, manager, wall 10. Beeline, See Dkt. #16- system, Superwall and the resulted from and Deacon claims property the and the damage architect s On the issue of when Superwall Superwall alleged it was 1 subcontractor on the Project [i]n 2011, id., ¶ 1; and it 2 performed work on the Project in the summer of 2011, id., ¶ 9. 3 Superwall alleged remedial work was performed on the Project in 4 the fall of 2011, id., ¶¶ 2 & 3; late 2011, id., ¶ 10; in 5 2012, id., ¶ 5; and between March and June 2012, id., ¶ 12. 6 See id., ¶¶ 15, 20. 7 twice, but did not clarify its allegations regarding when its 8 work was performed or when any damage allegedly occurred. 9 Dkt. ##16-2 & 16-3. Superwall amended its Third-Party Complaint See 10 On October 11, 2013, Deacon, through its attorney, issued 11 a supplemental tender of defense and indemnity to James River. 12 Dkt. #18, ECF p. 3. 13 had insured Superwall from September 16, 2011, to January 11, 14 2012, under policy number 00050164-0. 15 requested a formal coverage decision from James River. 16 In response, on December 5, 2013, James River issued a denial of 17 coverage, [b]ased on the allegations [in the underlying action] 18 and policy terms, with no accompanying explanation. 19 p. 9. In the letter, Deacon indicated James River Id., ECF p. 4. Deacon Id. Id., ECF Seneca filed the present action on January 21, 2014. 20 IV. 21 RELEVANT POLICY PROVISIONS 22 James River insured Superwall under commercial general lia- 23 bility policy No. 00050164-0 (the Policy ), evidencing a policy 24 period of September 26, 2011, to September 26, 2012. 25 3, ECF p. 1. 26 2012. Id., ECF p. 63. 27 28 In their Dkt. #11- The policy was canceled effective January 11, summary judgment papers, the parties identify several policy provisions as relevant to Seneca s motion for 7 - OPINION AND ORDER 1 summary judgment. The court 2 policy provisions 3 which those 4 shown below are in the policy itself.) identified provisions has by appear quoted, in the below, parties the Policy. all in the SECTION I - COVERAGES 6 COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY 7 Insuring Agreement 8 a. 14 We will pay those sums that the insured becomes legally obligated to pay as damages because of bodily injury or property damage to which this insurance applies. We will have the right and duty to defend the insured against any suit seeking those damages. However, we will have no duty to defend the insured against any suit seeking damages for bodily injury or property damage to which this insurance does not apply. . . . 15 * 9 10 11 12 13 16 b. * * This insurance applies to bodily injury and property damage only if: 17 (1) 18 19 (2) 20 21 22 23 24 25 26 27 28 (3) The bodily injury or property damage is caused by an occurrence that takes place in the coverage territory ; The bodily injury or property damage occurs during the policy period; and Prior to the policy period, no insured listed under Paragraph 1. of Section II - Who Is An Insured and no employee authorized by you to give or receive notice of an occurrence or claim, knew that the bodily injury or property damage had occurred, in whole or in part. If such a listed insured or authorized employee knew, prior to the policy period, that the bodily injury or property damage occurred, then any continuation, change or resumption of such 8 - OPINION AND ORDER the order in (All emphases 5 1. of 1 bodily injury or property damage during or after the policy period will be deemed to have been known prior to the policy period. 2 3 c. Bodily injury or property damage which occurs during the policy period and was not, prior to the policy period, known to have occurred by any insured listed under Paragraph 1. of Section II - Who Is An Insured or any employee authorized by you to give or receive notice of an occurrence or claim, includes any continuation, change or resumption of that bodily injury or property damage after the end of the policy period. d. Bodily injury or property damage will be deemed to have been known to have occurred at the earliest time when any insured listed under Paragraph 1. of Section II - Who Is An Insured or any employee authorized by you to give or receive notice of an occurrence or claim: 4 5 6 7 8 9 10 11 12 13 14 * * * 15 (2) Receives a written or verbal demand or claim for damages because of the bodily injury or property damage ; or (3) Becomes aware by any other means that bodily injury or property damage has occurred or has begun to occur. 16 17 18 19 20 * * * 21 Dkt. #11-3, ECF p. 4. 22 2. Exclusions 23 This insurance does not apply to: 24 * * * 25 j. Damage To Property 26 Property damage to: 27 * * 28 9 - OPINION AND ORDER * (5) That particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the property damage arises out of those operations; or (6) 1 That particular part of any property that must be restored, repaired or replaced because your work was incorrectly performed on it. 2 3 4 5 6 7 8 * 9 Paragraph (6) of this exclusion does not apply to property damage included in the products-completed operations hazard . 10 * * 11 * * * 12 l. Damage To Your Work 13 Property damage to your work arising out of it or any part of it and included in the products-completed operations hazard . 14 15 16 This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor. 17 18 Id., ECF pp. 7-8. 19 SECTION V - DEFINITIONS 20 * * * 21 13. Occurrence means an including continuous or exposure to substantially general harmful conditions. 22 23 24 * 25 17. 26 27 * accident, repeated the same * Property damage means: a. Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to 28 10 - OPINION AND ORDER 1 occur at the time of the physical injury that caused it; or 2 b. Loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the occurrence that caused it. 3 4 5 * * * 6 22. Your work : 7 a. Means: 8 (1) Work or operations performed by you or on your behalf; and (2) Materials, parts or equipment furnished in connection with such work or operations. 9 10 11 12 b. Includes (1) Warranties or representations made at any time with respect to the fitness, quality, durability, performance or use of your work ; and (2) 13 The providing to provide instructions. 14 15 16 17 of or failure warnings or 18 Id., ECF pp. 17-19. 19 CLAIM(S) IN PROGRESS EXCLUSION 20 a. 21 22 23 24 25 26 27 28 This policy does not apply to bodily injury , personal and advertising injury or property damage which begins or takes place before the inception date of coverage, whether such bodily injury , personal and advertising injury or property damage is known to an insured, even though the nature and extent of such damage or injury may change and even though the damage may be continuous, progressive, cumulative, changing or evolving, and even though the occurrence causing such bodily injury , 11 - OPINION AND ORDER 1 personal and advertising injury or property damage may be or may involve a continuous or repeated exposure to substantially the same general harm. 2 3 4 b. All property damage to units of or within a single project or development, and arising from the same general type of harm, shall be deemed to occur at the time of damage to the first such unit, even though the existence, nature and extent of such damage or injury may change and even though the occurrence causing such property damage may be or involve a continuous or repeated exposure to substantially the same general harm which also continues or takes place (in the case of repeated exposure to substantially the same general harm) during the policy term. 5 6 7 8 9 10 11 12 13 Id., ECF pp. 46-47. 14 15 V. DISCUSSION 16 A. Duty to Defend 17 The seminal case regarding the duty to defend under Oregon 18 law is Ledford v. Gutoski, 319 Or. 397, 877 P.2d 80 (1994). 19 Fred Shearer & Sons, Inc. v. Gemini Ins. Co., 237 Or. App. 468, 20 475, 240 P.3d 67, 72 (2010). In Ledford, the Oregon Supreme 21 Court explained the general standards for determining whether an 22 insurer has a duty to defend its insured against a particular 23 claim. The Ledford court held the insurer s duty to defend 24 depends on two documents: the complaint and the insurance 25 policy, with the duty to defend arising when the claim against 26 the insured stated in the complaint could, without amendment, 27 impose liability for conduct covered by the policy. 28 12 - OPINION AND ORDER Ledford, 1 319 Or. at 399-400, 877 P.2d at 82 (citations omitted). 2 making this analysis, the court looks only at the facts alleged 3 in the complaint to determine whether they provide a basis for 4 recovery that could be covered by the policy[.] 5 Or. at 400, 877 P.2d at 82 (citations omitted). 6 complaint, itself, should allow the insurer to determine whether 7 it has a duty to defend the insured. 8 Birmingham Fire Ins., 254 Or. 496, 505-06, 460 P.2d 342, 346 9 (1969)). 10 In Ledford, 319 The face of the Id. (citing Ferguson v. The duty to defend arises if the complaint provides any 11 basis for which the insurer provides coverage. 12 Or. 13 omitted). 14 the 15 ambiguity as 16 insured. Id. 17 complaint[] rather than the claims identified in it. 18 Union Fire Ins. Co. of Pittsburgh Pa. v. Starplex Corp., 220 Or. 19 App. 20 original; 21 Anderson Bros., Inc. v. St. Paul Fire & Marine Ins. Co., 729 22 F.3d 923, 936 (9th Cir. 2013) (quoting Starplex). 23 at 400, 877 P.2d at 83 (emphasis in Ledford, 319 original; citation This is true even if some of the conduct alleged in complaint 560, falls to outside coverage the policy s being coverage, resolved in with any of the favor The analysis focuses on the allegations in the 584, 188 P.3d 332, internal quotation 346-47 marks, (2008) citation Nat l (emphasis omitted); in accord The Oregon Supreme Court has rejected the notion that a com- 24 plaint must 25 occurred. In Bresee Homes, Inc. v. Farmers Insurance Exchange, 26 353 27 noteworthy that the insurer could not determine from a reading 28 of Or. the allege 112, 293 complaint the P.3d specific 1036 whether or 13 - OPINION AND ORDER time when (2012), not the the alleged a covered court damage event found it occurred 1 during the policy period. Bresee, 353 Or. at 122, 293 P.3d at 2 1042. 3 for 4 occurred was one that would be determined in the litigation, and 5 its resolution could affect the insurer s duty to indemnify, but 6 the duty to defend was based solely on the language of the 7 complaint and the policy. 8 at 1042. 9 focuses on those allegations [in the complaint,] whether or not The court noted that at the time the claim was tendered defense, the issue of when the claimed damage actually Bresee, 353 Or. at 123-24, 293 P.3d The court held, Our analysis of the duty to defend 10 different or additional facts might be 11 adduced at trial. Bresee, 353 Or. at 123, 293 P.3d at 1042. 12 In the present case, the quoted provisions indicate the 13 Policy will pay for property damage that (1) is caused by an 14 occurrence ; (2) occurs during the policy period; and (3) was 15 unknown to the insured prior to the policy period. 16 excludes, among other things, property damage resulting from the 17 insured s work incorrectly performed, except work performed by 18 a subcontractor; and property damage which begins prior to the 19 inception date of the Policy, even though such damage may be 20 continuous, 21 whether or not the damage is known to the insured. progressive, cumulative, changing or The Policy evolving, 22 Seneca argues that under Ledford and its progeny, James 23 River clearly has a duty to defend Superwall in the underlying 24 action. Deacon s Complaint alleges property damage to Sand & Sea 25 caused by an occurrence. 26 Amended Complaint are silent with regard to when the alleged 27 damage occurred, and when Superwall knew of the alleged damage. 28 Thus, Seneca argues, Deacon s claim against Superwall as stated 14 - OPINION AND ORDER Both the original Complaint and the 1 in the Complaint could impose liability for conduct covered by 2 the Policy. 3 Dkt. #10. James River argues Deacon s pleadings contain allegations 4 from which James 5 occurred before the Policy s effective date of September 26, 6 2011, 7 James River relies on Deacon s allegation that it had to hire 8 Beeline to supplement and assist Superwall s work in July 2011. 9 Thus, James River reasons, the fact that Superwall performed 10 work on the Project in the summer of 2011, coupled with Deacon s 11 allegations 12 demonstrates the alleged damage occurred, or began to occur, 13 prior to the Policy s effective date. excluding River such that could damage conclude from Superwall s the coverage work was alleged under the defective, damage Policy. clearly 14 James River further argues it is undisputed that rain fell 15 and air moved in Seaside, Oregon, at some point between the 16 summer of 2011 and the inception of [the Policy] in late Septem- 17 ber. 18 [t]he laws of nature dictate that at least some alleged damage 19 in 20 effective date of [the Policy]. 21 these undisputed facts are not alleged in the Complaint and do 22 not appear in the Policy. 23 might be helpful in considering a duty-to-indemnify question, 24 they are useless when considering the duty to defend. 25 the Dkt. #15, ECF p. 3. form of air and Thus, according to James River, water intrusion Id. occurred before the Whether or true or not, Whether or not the weather conditions James River also argues Superwall s allegations in it third- 26 party pleadings constitute 27 River owes duty 28 Superwall s affirmative allegations . . . that it performed no 15 - OPINION AND ORDER to a judicial defend. admission James River that James argues that 1 work in the summer of 2011 and that remedial work was performed 2 in the fall of that year establish that the damage would have 3 had to occur prior to inception of the James River policy. 4 ECF pp. 7-8. Id., 5 The court finds James River s arguments are inconsistent 6 with Oregon law, and often are looking through the wrong end of 7 the telescope. The fact that Superwall performed work on the 8 Project summer 9 finished prior to inception of the Policy. in the 2011 its work was Nor does the fact began work on the Project and the Policy s issuance reasonably 12 lead 13 occurred 14 above, the Complaint contains no factual allegations regarding 15 the weather.) 16 performed in the fall of 2011 does not establish when in the 17 fall 18 Hemisphere, fall, or autumn, generally is defined as extending 19 from the autumnal equinox, occurring on September 22nd or 23rd, 20 and the winter solstice, occurring on December 21st or 22nd. 21 See, 22 Autumn, 23 topic/45215/autumn (Jul. 2, 2014). 24 days of the fall season occurred after the inception of the 25 Policy. 26 prior the to at Policy s least the some issuance. time alleged (Further, Superwall damage as noted Similarly, an allegation that remedial work was remedial e.g., the that between mean 11 conclusion moved not that rain a and air does 10 to fell of work Encyclopaedia was performed. Britannica Online In the Academic Northern Edition, http://www.britannica.com/EBchecked/ Thus, all but three or four James River s attempt to rely on Superwall s third-party 27 pleadings is misplaced, for two reasons. 28 only at the language of the applicable policy and the Complaint 16 - OPINION AND ORDER First, the court looks 1 that raises the claim; the allegations of third-party pleadings 2 are irrelevant as to the insurer s original duty to defend. 3 another way, it is the Complaint, if anything, against which 4 James River must defend, not the third-party complaint. Second, 5 Superwall s further 6 clarification regarding when Superwall s work was performed, or 7 when damage allegedly occurred. third-party pleadings do not provide any Put 8 Although the evidence at trial may show that, indeed, damage 9 occurred, or began to occur, prior to the Policy s inception, 10 thereby eliminating James River s duty to indemnify Superwall, 11 nothing in Deacon s or Superwall s pleadings requires such a 12 conclusion. 13 that the alleged damage occurred during the policy period based 14 on the allegations of the Complaint. 15 122, 16 River s 17 Deacon s original Complaint, and the duty was not extinguished 18 by 19 motion for summary judgment on James River s duty to defend is 20 granted. 293 any James River could not eliminate the possibility P.3d duty at to 1042. defend allegation in See Bresee, 353 Or. at Accordingly, was the triggered Deacon s by amended court the finds James allegations pleadings. in Seneca s 21 22 23 B. Participation in Defense Costs The Oregon Supreme Court has long held that the loss as 24 between insurers should 25 limits of the policies bear to the total coverage. 26 Underwriters at Lloyd s London & Excess Ins. Co., Ltd. v. Mass. 27 Bonding & Ins. Co., 235 Or. App. 99, 112, 230 P.3d 103, 112 28 (2010) (quoting Lamb-Weston, Inc. v. Or. Auto Ins. Co., 219 Or. 17 - OPINION AND ORDER be prorated in the ratio which the Certain 1 130, 137, 341 P.2d 643, 647 (1959)). 2 the policy limits of its own policy and the James River policy 3 are $1 million per occurrence, therefore, Seneca and James River 4 each should be responsible for 50% of the defense costs in the 5 underlying action. 6 Seneca argues that because However, the parties have agreed that the court should not 7 decide the issue of 8 juncture, 9 detailed 10 respond. 11 Further, it makes sense, in terms of judicial economy, for the 12 court to take up the matter of damages after ruling on any 13 motion Seneca files to amend its Complaint to add a claim for 14 Maughan s 15 regard to Maughan s defense. reserving motion the that and amount of decision exhibits to defense until which costs Seneca James at has River this filed then a may The court agrees, and reserves ruling on the issue. defense, and any motion for summary judgment with 16 VI. 17 18 CONCLUSION Seneca s motion for summary judgment (Dkt. #10) is granted 19 in part and reserved in part. 20 a duty to defend Superwall, and the duty commenced upon the 21 filing of the underlying action. 22 23 24 The court finds James River has The court reserves ruling on the amount of Seneca s damages until Seneca files its detailed motion for defense costs. IT IS SO ORDERED. 25 Dated this 16th day of July, 2014. 26 27 /s/ Dennis J. Hubel 28 18 - OPINION AND ORDER 1 Dennis James Hubel Unites States Magistrate Judge 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 19 - OPINION AND ORDER
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