Eclectic Investment, LLC v. Patterson
323 P.3d 473
Or. Ct. App.2014Background
- Eclectic Investment, LLC owned the property; McAllister excavated to enlarge Eclectic’s parking lot and increased the slope of a dirt bank.
- County inspected work and issued preliminary/final permits after two inspections, with concerns noted (site plan, erosion, gravel compaction, retaining wall).
- Significant rainfall caused topsoil to wash onto Eclectic’s lot and a building, damaging property in December 2005.
- Eclectic sued McAllister, the county, and neighbors for negligence; the jury allocated 55% fault to Eclectic, 7% county, 4% McAllister, 34% neighbors; Eclectic recovered nothing due to contributory fault rules.
- County sought indemnity from McAllister for its litigation costs, arguing county’s negligence was passive/secondary and McAllister’s was active/primary.
- Trial court held the county was not entitled to indemnity; the appellate court affirmed, distinguishing Astoria and considering equity and the totality of circumstances.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether indemnity to county is allowed | County argues McAllister should indemnify for defense costs. | McAllister argues county’s conduct was passive or secondary and thus not indemnifiable. | No indemnity to county. |
| Role of active/passive and primary/secondary in indemnity | Active/primary conduct by McAllister favors indemnity; county’s inspections show some activity. | Indemnity requires inequitable allocation; county’s actions still not fully passive. | Equitable factors control; county not entitled to indemnity. |
| Standard of review for indemnity determination | Should defer to trial court’s factual findings on activity level. | Legal standard should clearly distinguish active vs passive; review is for law whether entitled to indemnity. | Legal-error review; findings supported by a preponderance of the evidence. |
Key Cases Cited
- Astoria v. Astoria & Columbia River R. Co., 67 Or 538 (1913) (distinguishes active vs passive negligence for indemnity)
- General Ins. Co. v. P. S. Lord, 258 Or 332 (1971) (active/positive vs passive/secondary as indemnity factor)
- Fulton Ins. v. White Motor Corp., 261 Or 206 (1972) (indemnity requires primary/secondary distinction in some formulations)
- Kennedy v. Colt, 216 Or 647 (1959) (misrepresentation and primary responsibility can justify indemnity)
- Scott v. Francis, 314 Or 329 (1992) ()
- Piehl v. The Dalles General Hospital, 280 Or 613 (1977) (indemnity doctrine involves equitable distribution; no universal rule)
- Maurmann v. Del Morrow Construction, Inc., 182 Or App 171 (2002) (indemnity is grounded in injustice and equitable considerations)
- PGE v. Construction Consultants Assoc., 57 Or App 116 (1982) (one defendant can indemnify another for defense costs even if both are not liable)
- Brennen v. City of Eugene, 285 Or 401 (1979) (licensing duty to avoid creating foreseeable harm supports indemnity considerations)