484 F.Supp.3d 946
D. Or.2020Background
- Columbia Knoll owns two adjacent, income-restricted apartment complexes constructed in 2005; construction defects produced ongoing water intrusion and damage discovered over time.
- GAIC insured the property June 30, 2011–June 30, 2014; Philadelphia insured it June 30, 2014–June 20, 2019.
- Columbia Knoll sued its contractors in 2016 and reported the loss to its broker in October 2016; GAIC denied coverage after a 2018 proof-of-loss.
- GAIC sued for declaratory relief (May 2018); Columbia Knoll counterclaimed and later added Philadelphia as third-party defendant after Philadelphia denied coverage.
- Disputed expert evidence: Felix Martin (structural engineer) opined a covered “collapse”; Matthew Anderson (wood scientist) offered retroactive decay timing estimates. Insurers moved to exclude parts of both experts’ testimony.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Motion to strike Mitchson declaration | Columbia Knoll: declaration contains hearsay and misstates a call | GAIC/Philadelphia: Rule 104 allows consideration of such evidence on preliminary questions | Denied (court declines to strike; hearsay rule not mandatory under Rule 104; credibility/contradictions go to weight) |
| Exclusion of Felix Martin (collapse opinion) | Columbia Knoll: Martin’s structural-collapse definition supports coverage | GAIC/Philadelphia: Martin uses an incorrect collapse definition and speculates about unseen areas | Martin’s opinions relying on his non-policy “substantial impairment” collapse definition are excluded as irrelevant; other extrapolations not excluded at this time (questions of weight) |
| Exclusion of Matthew Anderson (retroactive decay timing) | Columbia Knoll: Anderson used accepted methods, site testing, and peer-reviewed models to estimate past decay | GAIC/Philadelphia: retroactive application of service-life models is untested, lacks error rates, and is not accepted for backdating decay | Excluded: court finds Anderson’s backward-looking decay timing methodology unreliable under Daubert (no testing, error rate, or peer-reviewed support for retroactive use) |
| GAIC: whether loss "commenced" during GAIC policy period (coverage) | Columbia Knoll: ongoing water intrusion since 2005 makes it reasonable that damage commenced during policy periods | GAIC: no specific identifiable collapse or damage commencing during GAIC policy period | Summary judgment: GAIC entitled to judgment re: collapse claim (no covered collapse established); but denied as to non-collapse water-damage claims (genuine dispute over ongoing damage commencing in policy) |
| GAIC: prompt notice and two-year suit limitation | GAIC: insured failed to give prompt notice and suit is time-barred under policy | Columbia Knoll: discovered hidden damage in 2016; notice was within a reasonable time; policy limitation ambiguous and should follow discovery | Notice: summary judgment denied (reasonableness/prejudice factual); Two-year limitation: denied — court adopts view that policy term "occurred" is ambiguous and limitation runs from discovery (question of fact) |
| GAIC/Philadelphia: exclusions and efficient proximate cause (defective construction, continuous seepage, fungus, etc.) | Insurers: excluded causes (defective workmanship, continuous seepage, decay) were the efficient proximate cause | Columbia Knoll: rain/weather was the efficient proximate cause and is a covered peril | Court: where defects enabled rain to penetrate, no reasonable trier could find rain was the dominant efficient proximate cause; summary judgment for insurers on loss causation/exclusions (coverage barred) |
| Philadelphia: long-term water intrusion and known-loss doctrine | Philadelphia: policy does not cover long-term water intrusion; insured knew of loss before Philadelphia policy | Columbia Knoll: policy is all-risk; no express exclusion for long-term intrusion; disputed knowledge of hidden damage | Court: rejects the inference that long-term rain is categorically excluded; but grants summary judgment on proximate-cause/exclusion grounds (defects, not storm, drove loss); known-loss: denied (factual dispute and no evidence of fraudulent concealment) |
Key Cases Cited
- Malbco Holdings, LLC v. AMCO Ins. Co., 629 F. Supp. 2d 1185 (D. Or. 2009) (interpreting policy definition of "collapse" and finding partial falling that prevents occupancy can constitute collapse)
- Hennessy v. Mutual of Enumclaw Ins. Co., 228 Or. App. 186 (Or. Ct. App. 2009) (construction of "collapse"—falling need not be total; object must descend under gravity some distance)
- Ass’n of Unit Owners of Nestani v. State Farm Fire & Cas. Co., 670 F. Supp. 2d 1156 (D. Or. 2009) ("commencing" may include identifiable instances during policy period)
- Tento Int’l Inc. v. State Farm Fire & Casualty Co., 222 F.3d 660 (9th Cir. 2000) (efficient proximate cause principles may be resolved on summary judgment in some cases)
- Moore v. Mutual of Enumclaw Ins. Co., 317 Or. 235 (Or. 1993) (Oregon two-year suit limitation interpreted without a discovery rule for statutory language)
- Naumes, Inc. v. Landmark Ins. Co., 119 Or. App. 79 (Or. Ct. App. 1993) (defines efficient proximate cause as the active force setting a train of events in motion)