334 P.3d 973
Or. Ct. App.2014Background
- FountainCourt sought garnishment against American Family to collect a judgment Sideco incurred for property damage during construction project.
- Sideco was insured by American Family (policy May 1, 2004–May 1, 2006) with exclusions including damage to your work and products-completed operations.
- Jury found Sideco negligent for property damage; judgment against Sideco totaled $485,877.84 with 22.65% fault attributed to Sideco.
- Garnishment sought to attach American Family’s potential liability for Sideco’s judgment under ORS 18.352 et seq.; American Family denied owing any debt.
- Trial court (Oct–Nov 2010) held FountainCourt met prima facie coverage; American Family liable for the full unsatisfied judgment ($433,958.16) plus later fees.
- FountainCourt sought attorney fees under ORS 742.061; court awarded $68,538, which American Family challenged as improper under ORCP 68.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Garnishment proper against insurer | FountainCourt argues insurer must pay the judgment under policy terms. | American Family contends burden and exclusions bar coverage or require timing limits. | Garnishment proper; insurer may be liable for covered amounts. |
| Prima facie proof of coverage for property damage | FountainCourt proved damages were caused by property damage under insuring agreement. | American Family contends damages may include non-property-damage elements or not all within policy period. | FountainCourt satisfied prima facie coverage; burden shifted to American Family to prove exclusions. |
| Timing and policy-period trigger for coverage | Damages occurred progressively during American Family’s policy period, so they fall within coverage. | Some damage occurred outside the policy period; FountainCourt must show all damage during risk. | Damages could be within coverage during American Family’s period; not required to exclude all outside-period damage. |
| Issue preclusion in garnishment | Prevailing jury determination as to property damage binds interpretation under policy. | Reservation of rights defeats issue preclusion in garnishment. | Not proper issue preclusion; analysis is contract-based, legal interpretation of the judgment under the insurance contract. |
| Attorney fees under ORS 742.061 and ORCP 68 C(2) | Fees may be awarded; show-cause motion sufficed to request fees under ORS 742.061. | OrCP 68 C(2) requires explicit pleading or motion alleging entitlement to attorney fees; amendment post-judgment improper. | Trial court erred awarding attorney fees; ORCP 68 C(2) required proper pleading; fees reversed. |
Key Cases Cited
- ZRZ Realty v. Beneficial Fire and Casualty Ins. Co., 349 Or 117 (2010) (burden allocation depends on policy structure (broad grant vs. exclusion))
- Jarvis v. Indemnity Ins. Co., 227 Or 508 (1961) (burden shifting in insurance coverage cases)
- Harris v. Suniga, 180 P.3d 12 (2008) (negligence damages to real property basis for recovery)
- Doe v. Medford School Dist. 549C, 232 Or App 38 (2009) (no proper relation to the present; not a key holding here)