848 F. Supp. 2d 1229
D. Or.2012Background
- Century sues TM G, Northwest Marine, and NWMIW for declaratory relief regarding an NWMIW insurance policy.
- Excess Insurers (Federal, Chicago, Arrowood) issued excess policies above $20.5 million for NWMIW.
- TPPs allege CERCLA site damages at Portland Harbor exceed primary coverage and may reach excess policies.
- Excess Insurers move for summary judgment arguing TPPs’ breach claim is not ripe because underlying policies are not exhausted.
- TPPs contend the court may decide the declaratory judgment issue; Excess Insurers argue ripeness and economy concerns.
- The court holds the breach claim not ripe and dismisses it without prejudice, but finds the declaratory judgment request ripe and exercises discretion to proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the breach of contract claim ripe for adjudication? | TPPs argue repudiation may exist and breach may be determined notwithstanding exhaustion. | Excess Insurers contend no breach until exhaustion; action premature. | Not ripe; dismissed without prejudice. |
| Is the declaratory judgment claim regarding excess insurers ripe? | Ripeness exists due to substantial likelihood excess coverage will be triggered. | Ripeness not met; depends on future exhaustion and speculative damages. | Ripe; court will exercise jurisdiction over declaratory relief. |
| Should the court exercise its discretion to entertain declaratory relief? | Declaratory relief serves judicial economy and clarifies duties now. | Litigation should be restrained until real disputes arise. | Court exercises discretion to entertain declaratory relief. |
Key Cases Cited
- Hoffman Construction Co. of Alaska v. Fred S. James & Co. of Oregon, 313 Or. 464 (1992) (describes tiers of insurance: primary, excess, umbrella)
- North Pacific Insurance Co. v. Wilson's Distributing Service, Inc., 138 Or. App. 166 (1995) (duty to defend vs. indemnify distinction)
- Ledford v. Gutoski, 319 Or. 397 (1994) (scope of indemnification when liability shown)
- American States Insurance Co. v. Kearns, 15 F.3d 142 (9th Cir. 1994) (Declaratory Judgment Act discretion; factors of administration and comity)
- Portman v. County of Santa Clara, 995 F.2d 898 (9th Cir. 1993) (ripeness framework for declaratory judgments)
- E.R. Squibb & Sons, Inc. v. Lloyd’s & Companies, 241 F.3d 154 (2d Cir. 2001) (substantial likelihood excess coverage may be reached justifies declaratory relief)
- Iolab Corp. v. Seaboard Surety Co., 15 F.3d 1500 (9th Cir. 1994) (primary exhaustion prerequisite; declaratory relief not tenable when excess triggers unlikely)
- Hoechst Celanese Corp. v. National Union Fire Insurance Co. of Pittsburgh, 623 A.2d 1133 (Del. Super. Ct. 1992) (balancing declaratory judgment ripeness; magnitude of potential claims)