Continental Casualty Insurance Company v. Zurich American Insurance Company et al

Filing 109

OPINION AND ORDER. Defendant TCR's Motion for Relief from the Court's January 29, 2009 Opinion and Order (#102) is granted as explained above. I again ask the parties to attempt to propose a joint Judgment by March 4, 2009, or submit separate judgments along with arguments supporting their positions. IT IS SO ORDERED. Signed on 02/23/09 by Judge Garr M. King. (pvh)

IN THE UNITED STATES DISTRICT COURT DISTRICT OF OREGON CONTINENTAL CASUALTY INSURANCE COMPANY, an Illinois Corporation, Plaintiff, vs. ZURICH AMERICAN INSURANCE COMPANY, a New York Corporation, and TCR PACIFIC NORTHWEST CONSTRUCTION 2002 LIMITED PARTNERSHIP, a foreign limited partnership, and SAFEWAY SERVICES, INC., a Delaware Corporation, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Civil Case No. 07-913-KI OPINION AND ORDER

David E. Prange Aaron C. Denton Pra nge Law Group, LLC 111 SW 5th Avenue, Suite 2120 Portland, Oregon 97204 Attorneys for Plaintiff Page 1 - OPINION AND ORDER

Thomas W. Brown Robert E. Sabido Cosgrave Vergeer Kester LLP 805 SW Broadway, 8th Floor Portland, Oregon 97205 Attorneys for Defendant Zurich American Insurance Company James P. Murphy Lybeck Murphy, LLP 7525 SE 24th Street, Suite 500 Mercer Island, Washington 98040-2334 Attorney for Defendant TCR Pacific Northwest Construction 2002 Limited Partnership John L. Langslet Ismail M. Pekin Mar tin Bischoff Templeton Langslet & Hoffman, LLP 888 SW Fifth Avenue, Suite 900 Portland, Oregon 97204 Attorneys for Defendant Safway Services, Inc.

KING, Judge: On January 29, 2009, I filed an Opinion and Order concluding that Safway breached its contract to purchase insurance and must pay the defense costs incurred in the underlying action. I also dismissed all claims against Zurich and dismissed TCR's counterclaims against Continental for a declaratory judgment that Continental has a duty to defend and indemnify TCR and for breach of contract as an additional insured under the policy between Continental and PCI. TCR now asks me to reconsider its counterclaims against Continental. After concluding that Safway breached its contract, I did not address whether there were additional enforceable legal obligations. Thus, I will reconsider the prior ruling.

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TCR contends that Safway's breach of its agreement to procure insurance for the benefit of TCR and PCI does not bear upon or extinguish Continental's duty to provide TCR a complete defense in the underlying action. TCR is an additional insured under the Blanket Additional Insured Endorsement in the Continental Policy, based on the requirements in the PCI/TCR subcontract. Moreover, the coverage is on a primary basis, also due to the subcontract requirements. Continental paid only a portion of TCR's defense costs. I now conclude that Continental had the obligation to pay all of TCR's defense costs and thus breached the insurance contract when it paid only half. Further, TCR could be entitled to its attorney fees in this action under ORS 742.061, assuming that the timing provisions of the statute are met. If TCR and Continental cannot resolve that issue, TCR may petition for attorney fees once Judgment is entered. I will address any disputes concerning the attorney fee statute then. Defendant TCR's Motion for Relief from the Court's January 29, 2009 Opinion and Order (#102) is granted as explained above. I again ask the parties to attempt to propose a joint Judgment by March 4, 2009, or submit separate judgments along with arguments supporting their positions. IT IS SO ORDERED. Dated this 23rd day of February, 2009.

/s/ Garr M. King Garr M. King Unit ed States District Judge

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