Conrad v. Jackson County et al

Filing 34

ORDER: For the reasons stated in this Order, the Court GRANTS the Motion for Partial Summary Judgment 17 ). Please access entire text by document number hyperlink. Signed on 02/19/2014 by Magistrate Judge Mark D. Clarke. (rsm)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

ERIC CONRAD,
Case No. 1:13-cv-0756-CL
Plaintiff,
V.

ORDER

JACKSON COUNTY, a political subdivision
ofthe State of Oregon and JACKSON
COUNTY MASTER GARDNER ASSOC., an
unincorporated association,

Defendants.

CLARKE, Magistrate Judge.
This matter comes before the court on defendant Jackson County's motion for partial
summary judgment (#17) against defendant Jackson County Master Gardner Association. The
Association filed a response (#24), and oral argument occurred on February 12, 2014. For the
reasons stated below, Jackson County's motion is GRANTED.

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BACKGROUND
Except where noted, the material facts are not in dispute. Plaintiff Eric Conrad
("plaintiff') filed this personal injury action on May 3, 2013, alleging that he sustained injuries
while acting as a vendor and in operation of his booth during the Jackson County Master
Gardeners Association ("JCMGA") Show at the Jackson County Fairgrounds on May 7, 2011.
Campi,~

2. The JCMGA's 2011 Show was conducted at the Compton Arena, which is within

the Exposition Park in Jackson County. Plaintiffs complaint alleges that he tripped over a pipe
after leaving the Compton Arena on his way to the vendor parking lot designated by JCMGA.
The vendor lot is located within the Exposition Park in the Jackson County Fairgrounds. Compl,
~

3. Plaintiff allegedly fell on his right side and sustained injuries, and asks for economic and

non-economic damages. Compl,

~~

3-6.

The JCMGA is an unincorporated association of individuals who have received the
master gardener certificate from Oregon State University. Decl. Ella

Self,~

5. The JCMGA puts

on a Master Gardener Show and Sale annually at the Exposition Park in Jackson County
Fairgrounds. ld.

at~

3. On or about October 27, 2010, defendant Jackson County ("County")

executed a written agreement with JCMGA ("Agreement"). The purpose of the Agreement was
to allow JCMGA to use premises owned by the County ("Premises") on May 5-8, 2011, for the
Master Gardeners Show and Sale. The Agreement provides, in pertinent part':
Permittee [JCMGA] to do own setup and cleanup. This includes ... policing areas used
to be sure that all trash and debris has been properly disposed of.

PERMITTEE [JCMGA] agrees to conduct its activities upon the premises so as not to
endanger any person lawfully thereon and to indemnify and save harmless the JACKSON
The Agreement was drafted by the County. See becl. Self,~ 31. JCMGA alleges that the
County refused their attempts to negotiate the terms of the Agreement. Mem. in Opp., 4. JCMGA also
alleges that the Exposition Park is the only venue in Jackson County suitable to hold the Master Gardner
Show and Sale. Dec!. Self, ~ 3 I.
1

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COUNTY FAIR BOARD, JACKSON COUNTY BOARD OF COMMISSIONERS,
AND JACKSON COUNTY EXPO/FAIRGROUNDS employees against any and all
claims for loss, injury, or damage to persons or property damage ... arising out of
activities conducted by PERMITTEE and its employees.
PERMITTEE agrees that it accepts the premises in the condition in which they are found
and agrees the premises are adequate and safe for PERMITTEE'S purposes.

11. EXHIBITORS: If Permittee makes any part of the premises under this agreement
available to other persons as exhibitors as part of this use, the exhibitors shall be subject
to all of the provisions of this agreement and to the authority of the JCEP under those
conditions, but in any event, Permittee shall be fully responsible for all acts or omissions
ofthe exhibitors as if they were its agents or employees.
13. RESPONSIBILITY FOR PROPERTY: JCEP assumes no responsibility to Permittee
for any property placed on the premises by Permittee, or exhibitors, or for any loss
incurred by Permittee as the result of any injury or damage to persons or property
sustained during or by reason of the occupancy of the premises by Permittee under this
agreement, it being understood that Permittee accepts the premises as-is and based upon
Permittee's own inspection of them as to their condition of safety.
14. INSURANCE AND INDEMNITY: Permittee agrees to conduct its activities upon
the premises so as not to endanger any person lawfully thereon and to indemnify and save
harmless JCEP against any and all claims of employees of Permittee or any contractor or
subcontractor arising out of the activities conducted by Permittee, its employees, patrons,
guests or exhibitors. Permittee shall deliver to JCEP, not less than fourteen (14) days
before the opening of the first day of use and occupancy, satisfactory evidence of liability
insurance, including a copy of the endorsement adding JCEP as an additional insured;
liability minimum shall be $1,000,000, combined single limit bodily injury and property
damage per occurrence including $100,000, fire, legal liability for damage or injury to ·
premises, building or grounds of JCEP in the care, custody and control of Permittee ....
Decl. Koellermeier, Ex. 1.
The County filed cross-claims for defense and indemnity from JCMGA and now moves
for partial summary judgment on its cross-claims, arguing that it is entitled to defense and
indemnity under the Agreement.
SUMMARY JUDGMENT
The court must grant summary judgment if there is no genuine issue of material fact for
trial and the moving party is entitled to judgment as a matter oflaw. FED. R. CIV. P. 56( c). An
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issue is "genuine" if a reasonable jury could return a verdict in favor of the non-moving party.
Rivera v. Philip Morris, Inc., 395 F.3d 1142, 1146 (9th Cir. 2005) (citing Anderson v. Liberty
Lobby, Inc., 477 U.S. 242,252 (1986)). A fact is "material" if it could affect the outcome ofthe
case. !d. The court views the evidence in the light most favorable to the non-moving party and
draws "all justifiable inferences" in that party's favor. Miller v. Glenn Miller Prods., Inc., 454
F.3d 975, 988 (9th Cir. 2006) (quoting Hunt v. Cromartie, 526 U.S. 541, 552 (1999)). When the
moving party has met its burden, the non-moving party must present "specific facts showing that
there is a genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 587 (1986) (quoting FED. R. CIV. P. 56(e)). Conclusory allegations, unsupported by factual
material, are insufficient to defeat a motion for summary judgment. Taylor v. List, 880 F.2d
1040, 1045 (9th Cir. 1989) (quoting Angel v. Seattle-First Nat'! Bank, 653 F.2d 1293, 1299 (9th
Cir. 1981)).
DISCUSSION
JCMGA argues that the County's motion must be denied because (1) the indemnity
provisions of the Agreement do not apply to plaintiffs claims; (2) the indemnity provisions are
unenforceable because ambiguous; (3) the indemnity provisions are unenforceable because they
would create harsh results contrary to public policy. In this diversity action under Oregon law,
the substantive law governing a claim or defense determines whether a fact is material. T W
Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir.1987).
Under Oregon law, whether a duty to defend exists is a question of law for the court.
Nat 'l Fire Union Ins. Co. of Pittsburgh v. Starplex Corp., 220 Or. App. 560, 573 (Or. App.
2008). The Oregon Supreme Court uses the "eight corners" rule for determining whether a duty
to defend exists. Ledford v. Gutoski, 319 Or. 397, 399-400 (1994). Under the eight corners rule,

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an insurer may only look at the complaint and the insurance policy to decide if "the complaint
could, without amendment, impose liability for conduct covered in the policy." !d. The Ledford
court also held that an insurer owes a duty to defend if the claimant provides any basis for
recovery against the insured. !d. at 400. Further, the insurer has the duty to defend the entire
action "[if] the complaint alleges facts, that if proved, would impose liability covered by the
policy ... even if some of the conduct alleged would not be covered." Drake v. Mut. of
Enumclaw Ins. Co., 167 Or. App. 475, 478 (2000).

The County argues that under Ledford and Starplex, a contractual indemnitor owes a duty
to defend once the plaintiff provides some basis for recovery. De f. Mem., 5. The County argues
that JCMGA is obligated to indemnify the County for any and all claims and associated damages
flowing from an award in favor of plaintiff against Jackson County. JCMGA argues that there is
no duty to indemnify the County, and that the duty to defend therefore does not attach. Because
the duty to indemnify depends on the proper interpretation of the Agreement, we turn to the
Agreement terms.
I.

The Agreement Terms

The parties dispute the proper interpretation of the Agreement's terms. After careful
consideration of the complaint and the Agreement, the courts makes findings following the eight
corners standard employed under Oregon law. See Ledford, 319 Or. at 399-400.
1. Plaintiff's Status

As noted, plaintiffs complaint alleges that he acted as a "vendor/representative" at the Master
Gardner Show on the date of the alleged injury. Plaintiff also alleges that he was a "business
invitee" of JCMGA. The Agreement states that JCMGA "shall be fully responsible for all acts
or omissions of the exhibitors as ifthey were its agents or employees." Decl. Koellermeier, Ex.

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1, ~11. Moreover, the Agreement provides that the County "assumes no responsibility to
Permittee ... for any loss incurred by Permittee as the result of any injury or damage to persons
or property sustained during or by reason of the occupancy of the premises by Permittee under
this agreement." ld. at ~13. Plaintiff is therefore included in the list of potential claimants or
"guests" as set out in the Agreement's indemnity provision.Jd. at ~14.
2. Premises Covered

The Agreement states that JCMGA is responsible for ensuring the safety of the areas used
for the Show. DecI. Koellermeier, Ex. 1, ~11. Plaintiffs complaint does not limit JCMGA' s
management and operation of the Show to the confines ofthe Compton Arena. Plaintiff was
allegedly injured as he was walking towards his vehicle at the end of the day after participating
in the Show. Plaintiff alleges that "as a condition of his participation in said Show, plaintiff ...
was required to park and leave [his] vehicle[] in a dirt lot designated for that purpose." The
Agreement does not exclude the vendor parking lot and access paths from its definition of the
premises to be used by the JCMGA. Based on the complaint and Agreement, JCMGA appears to
be responsible for management and operation of reasonable ingress and egress routes to and from
the designated parking lot to be used for the Show. The alleged injury thus occurred in an "area"
in "use" by JCMGA. On this record, the court finds that the Agreement's indemnity and
defense provisions cover the area where plaintiff allegedly sustained an injury. See Decl.
Koellermeier, Ex. 1, ~~13, 14.
3. Acceptance of Premises "As Is"

JCMGA argues that the "as is" provisions in the Agreement do not apply to the portion of the
premises where the alleged injury occurred, because the pipe was placed there after the parties
executed the Agreement. As noted above, the Agreement contains the following provision:

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"[JCMGA agrees to] accept the premises in the condition in which they are found and agrees the
premises are adequate and safe for PERMITTEE's purpose." Dec!. Koellermeier, Ex. 1. This
provision includes any conditions to the ingress and egress paths to the parking area that JCMGA
used for its vendors. Moreover, JCMGA was required by the terms of the Agreement to
"[police] areas used to be sure that all trash and debris has been properly disposed of." !d.
Under the eight comers of the complaint and Agreement, the court can find no indication that the
"as is" language in the Agreement was intended to apply to the condition ofthe premises only at
the time the Agreement was signed, to the exclusion of the premises' condition at the time ofthe
Show. Therefore, the court finds that JCMGA assumed liability for the conditions of the path to
the vendor parking area at the time of the Show.

4. Parties Covered
JCMGA argues that the first indemnity provision does not include the County in its list of
entities covered. The County points out that the Agreement is expressly entered into between
"JACKSON COUNTY, acting by and through its Jackson County Fair Board Manager and
authorized employees, hereinafter referred to as JCEP," and JCMGA. The court finds that
Jackson County is thus expressly included in the definition of"Jackson County Fair Board
Manager" or "JCEP," and is covered by the Agreement's indemnity and defense provisions.

5. Activities Covered
JCMGA argues next that the provision entitled "INSURANCE AND INDEMNITY" does
not apply to plaintiff's claim because it arises out of an activity of the County. JCMGA contends
that plaintiff's accident occurred in an area where Jackson County had recently performed
construction activities, and appear to infer that the pipe which plaintiff allegedly tripped over is
part of a County activity.

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The court disagrees. By its terms, the insurance and indemnity paragraph applies to
"claims of employees of Permittee or any contractor or subcontractor arising out of the activities
conducted by Permittee, its employees, patrons, guests, or exhibitors." Decl. Koellermeier, Ex.
1, ~14. The Complaint indicates that JCMGA instructed plaintiff to park in a designated vendor
parking lot. As noted, plaintiff allegedly sustained injuries when he tripped on a pipe on his way
to the vendor parking lot. Further, JCMGA had knowledge of the County's construction
activities prior to the date of the show, and by the Agreement was responsible for the policing the
area and ensuring the safety of the premises. Self Decl.,

~~18,

22; Decl. Koellermeier, Ex. 1. On

this record, the Show is the relevant "activity" contemplated by the Agreement, and that
plaintiffs injury arose out of his participation in the Show. The court thus finds that plaintiffs
claim arises from the Show, considered in its entirety.
Based on these findings, the court rejects JCMGA's argument that the indemnity
provisions in the Agreement do not apply to plaintiffs claims. In so doing, the court finds that
the Agreement terms are sufficiently clear for the purposes of adjudicating the County's motion,
and therefore also rejects the JCMGA's argument that the indemnity provisions are
unenforceable because ambiguous.

III.

Oregon Indemnity Law
JCMGA argues that Oregon law precludes this court from enforcing a contract that

indemnifies a party for its own negligence, citing Southern Pacific v. Layman, 173 Or. 275,
(1944). Layman held that an indemnity contract would not be construed to cover lossess caused
by the indemnitee's own negligence, unless such intention was expressed in clear terms in the
agreement. !d. at 279-80; see also Waterway Terminals Co. v. P.S. Lord Mech. Contractors, 242
Or. 1 (1965); Estey v. MacKenzie Engineering Incorporated, 324 Or. 372, 376 (1996)

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("Agreements to exonerate a party from liability or to limit the extent of the party's liability for
tortious conduct are not favorites of the courts but neither are they automatically voided. The
treatment courts accord such agreements depends upon the subject and terms of the agreement
and the relationship of the parties"). The Layman court explained that indemnity contracts are
generally intended to provide against liability ofthe indemnitee through the operations of the
indemnitor, or caused by physical conditions that are under the indemnitor's control. Layman,
173 Or. at 281-82.
Here, plaintiffs alleged injury was caused by the operations of JCMGA together with
physical conditions for which JCMGA assumed full responsibility. Decl. Koellermeier, Ex. 1.
JCMGA exercised control over the premises by directing its exhibitors to park in the vendor lot,
which was connected to the Compton arena by the path where plaintiff fell. The safety of the
premises and the obligations owed for any claims brought by JCMGA's "guests" and
"exhibitors" to the County is expressly provided for in the Agreement. Layman and its progeny,
therefore, do not preclude partial summary judgment in favor of the County on the issues
presented.

IV.

Harsh Results and Public Policy
JCMGA next argues that if the court finds that the indemnity provisions apply, it "would

impose a particularly harsh and unequitable obligation" on JCMGA. Mem. in Opp., 14.
JCMGA asks that the court defer ruling on the County's motion to allow time for more discovery
on the issue of just "how harsh and unequitable the application of this indemnity provision would
be." !d. at 15. JCMGA, however, does not cite any legal authority to suggest that holding a
nonprofit organization to the terms on an indemnity and defense agreement is unusually harsh.
In this case, JCMGA made a business decision to enter an agreement with the County that

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involved acceptance of risk, and purchased an insurance policy to protect against that risk. The
2011 Master Gardener Show and Sale was not the first or last planned JCMGA event that
contemplated an indemnity and defense agreement with the County. See Decl. Koellermeier, Ex.
1. On this record, the court rejects the contention that enforcement of the Agreement imposes a

"harsh and unequitable obligation."
Finally, JCMGA argues that the indemnity provisions are void as against public policy.
To that end, JCMGA argues that the County provides an important public service in operating
the Exposition Park, and as such cannot "contract away its duties to provide reasonable safe
premises to organizations which rent facilities." Mem. in Opp., p. 15. Even if the County was
somehow negligent in conducting construction activities at the Exposition Park, however,
JCMGA had knowledge of the County's construction activities prior to the date ofthe show.
Self Decl.,

~~18,

22. As discussed above, JCMGA contractually agreed to inspect and police the

areas used for the Show, and insured against the risks accepted in the Agreement. Decl.
Koellermeier, Ex. 1. The court therefore cannot find that enforcement of the indemnity and
defense provisions would be against public policy.

CONCLUSION
For the foregoing reasons, Jackson County's motion for partial summary judgment is
GRANTED.

IT IS SO ORDERED.

United States Magistrate Judge

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