Oregon Realty Company v. Greenwich Insurance Company
Filing
59
OPINION AND ORDER: I GRANT the Bankofiers motion 42 for clarification of the judgment. I also GRANT Oregon Realtys motion 22 for summary judgment and its motion 51 for judgment as to its claims. Signed on 6/17/13 by Judge Michael W. Mosman. (dls)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
PORTLAND DIVISION
OREGON REALTY COMPANY,
No. 3:12-cv-00200-MO
Plaintiff,
OPINION AND ORDER
v.
GREENWICH INSURANCE COMPANY,
a foreign corporation,
Defendant.
__________________________________
GREENWICH INSURANCE COMPANY,
a foreign corporation,
Third-Party Plaintiff,
v.
SHARON BANKOFIER, a citizen of Oregon,
and DUANE BANKOFIER, a citizen of Oregon,
Third-Party Defendants.
1 – OPINION AND ORDER
MOSMAN, J.,
A state court action was brought against Sharon and Duane Bankofier and Oregon Realty
that arose out of the sale of real property and the subsequent investment of the sale proceeds in
several tenants-in-common. After the state court lawsuit was filed, the Bankofiers and Oregon
Realty brought this federal action seeking declaratory relief and asserting a claim for breach of
contract against their insurer, Greenwich Insurance Company. Although I ruled [37] on the
cross-motions for summary judgment and entered a judgment [38], this case is not yet resolved
in its entirety. The Bankofiers now move [42] for clarification of the judgment as Greenwich
Insurance disputes the scope of my holding. In addition, Oregon Realty moves [51] for
judgment as to its claims. I grant the Bankofiers’ motion [42] for clarification of judgment and
hold that Greenwich Insurance is liable for the defense costs the Bankofiers’ incurred defending
the state court action. I also grant Oregon Realty’s motion [22] for summary judgment and its
motion [51] for judgment.
BACKGROUND
On January 28, 2013, I heard oral argument on the cross-motions for summary judgment.
I concluded the allegations in the state court complaint included real estate services and neither
Exclusion E nor J barred coverage. (Tr. [47] at 47–50.) Accordingly, I held that Greenwich
Insurance had a duty to defend the Bankofiers, granted the Bankofiers’ motion [15] for summary
judgment as to Greenwich Insurance, and denied as moot their motion as to Oregon Realty. I
also denied Greenwich Insurance’s motion [20] for summary judgment. (Judgment [38].)
DISCUSSION
I.
Bankofiers’ Motion to Clarify Judgment
The Bankofiers ask me to clarify that my previous judgment contemplated an award of
damages, including the amount of costs and attorney fees incurred in the related state court
2 – OPINION AND ORDER
action and the costs of a loan they were required to obtain to finance their defense in the state
court action. (Mot. to Clarify J. [42] at 2.) They claim to have incurred $238,182.50 in attorney
fees and $12,968.38 in costs in the state court action, as well as $3,121.53 in fees and interest on
the loan they obtained to pay for those expenses. (Decl. Larsen [41] ¶¶ 7, 8.)
Greenwich Insurance did not respond to the Bankofiers’ motion to clarify the judgment,
and it did not raise any objection to the Bankofiers’ asserted defense costs.
I grant the Bankofiers’ motion to clarify the judgment. My previous judgment
contemplated an award of damages, which I reiterate now. I held that Greenwich Insurance has a
duty to defend the Bankofiers. (Tr. [47] at 47–50.) Under Oregon law, if the duty to defend is
triggered, the insurer has the duty to pay the defense costs for the entire action. See Timberline
Equip. Co., Inc. v. St. Paul Fire & Marine Ins. Co., 281 Or. 639, 576 P.2d 1244, 1247 (1978). A
defendant who breaches the duty to defend is liable for the costs of the defense undertaken by the
plaintiff. See Northwest Pump & Equip. Co. v. American States Ins. Co., 144 Or. App. 222, 925
P.2d 1241, 1245 (1996). Accordingly, I find that Greenwich Insurance is liable for the costs of
the Bankofiers’ defense in the state court action. At the time this motion was filed, the
Bankofiers had incurred $254,272.41 in defense costs. The record supports these costs. (Decl.
Larsen [41] ¶¶ 7–8 and Exs. 2–3.) Under my ruling, Greenwich Insurance must also pay any
defense costs that the Bankofiers incurred in the state court action subsequent to the filing of this
motion.
II.
Oregon Realty’s Motion for Judgment
Oregon Realty moves [51] for final judgment as to its claims. Greenwich Insurance did
not respond or object to the motion. The Bankofiers conferred with Oregon Realty and indicated
they did not object to the motion. I grant the motion as Oregon Realty was not explicitly
3 – OPINION AND ORDER
included in the earlier judgment in this case. Because the original judgment did not dispose of
all claims and all parties, it was not a final judgment under Federal Rule of Civil Procedure
54(b).
Although the Bankofiers and Greenwich Insurance specifically filed motions for
summary judgment, Oregon Realty did not. Instead, it asked me to sua sponte grant it summary
judgment in response to Greenwich Insurance’s motion. (Op. to Mot. for Summ. J. [22] at 11–
12.) I did not explicitly do so after oral argument on the cross-motions for summary judgment,
but I do so now.
Oregon Realty initiated this lawsuit seeking a declaratory judgment that Greenwich
Insurance owes a duty to defend Oregon Realty in the state court action and alleging a related
claim for breach of contract for Greenwich Insurance’s violation of the Insurance Policy’s terms.
It is undisputed that Oregon Realty was the named Insured on the Greenwich Insurance Policy.
The analysis of the Insurance Policy that I described when granting summary judgment to the
Bankofiers applies equally to Oregon Realty. (See Tr. [47] at 47–50.) Therefore, for the same
reasons that I held Greenwich Insurance has a duty to defend the Bankofiers, it has a duty to
defend Oregon Realty. Accordingly, I grant Oregon Realty’s motion for summary judgment.
Oregon Realty also seeks reimbursement of $69,558.86 in fees and costs incurred to date
for defending the state court action. (Mot. for J. [52] at 8–9.) I find that Oregon Realty’s costs
are supported by the record. (See Decl. Lucas [53] ¶ 2 and Ex. A.) I hold that Greenwich
Insurance is liable for the costs of Oregon Realty’s defense in the state court action, for the same
reasons I described above when considering the Bankofiers’ claims.
4 – OPINION AND ORDER
CONCLUSION
I GRANT the Bankofiers’ motion [42] for clarification of the judgment. I also GRANT
Oregon Realty’s motion [22] for summary judgment and its motion [51] for judgment as to its
claims.
IT IS SO ORDERED.
DATED this 17th
day of June, 2013.
/s/ Michael W. Mosman____
MICHAEL W. MOSMAN
United States District Judge
5 – OPINION AND ORDER
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