302 P.3d 1198
Or. Ct. App.2013Background
- This is a home construction defect case where Ater Construction settled with plaintiffs under a Mary Carter agreement capping Ater's exposure at $100,000.
- Marvin Windows and Medallion Industries moved for summary judgment against Ater on third-party claims, arguing the Mary Carter settlement extinguished only Ater’s liability, not theirs.
- Trial court granted summary judgment; on appeal, plaintiffs settled with Ater and the Mary Carter arrangement remained in effect, with Ater continuing in the case but with limited exposure.
- Ater asserted claims for contribution and indemnity against Marvin and Medallion, and a negligence claim seeking damages for Ater’s own costs incurred defending the underlying suit.
- The trial court later vacated the limited judgment and issued summary judgment in Marvin and Medallion’s favor on all third-party claims, including the negligence claim.
- Court held that Ater’s contribution and indemnity claims were barred and that Ater’s negligence claim sought purely economic losses, which are not recoverable under Oregon law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ORS 31.800(3) bars contribution when settlement does not extinguish co-defendants' liability. | Ater argues settlement need not extinguish third parties' liability to support contribution. | Marvin/Medallion contend the Mary Carter settlement did not extinguish their liability, so contribution is barred. | Yes; contribution barred when settlement does not extinguish co-defendants' liability. |
| Whether Ater can pursue indemnity where it settled but did not extinguish third parties' liability. | Ater asserts indemnity available under Moore Excavating, as it discharged its own obligation. | Moore Excavating requires extinguishment of third parties' liability to support indemnity; ORCP 22 C does not override this. | Indemnity barred; settlement did not extinguish Marvin/Medallion liability. |
| Whether ORCP 22 C(l) allows third-party claims to proceed irrespective of extinguishment of liability. | Ater relies on ORCP 22 C(l) to pursue third-party claims without extinguishment. | Rule 22 is procedural about timing and does not create independent liability or erase extinguishment requirements. | ORCP 22 C(l) does not override substantive extinguishment requirements for third-party claims. |
| Whether Ater's negligence claim against Marvin and Medallion seeks purely economic losses barred by the economic loss doctrine. | Ater characterizes the claim as property-damage-related, not purely economic loss. | Claim seeks Ater’s own economic losses from defending the underlying suit, not property damage, thus barred. | Claim seeks purely economic losses; barred. |
| Whether the trial court correctly granted summary judgment on Ater's third-party claims. | Ater contends genuine issues of material fact exist about extinguishment and duty. | No genuine issues; settlement did not extinguish liability, and negligence is economic loss. | Summary judgment affirmed; Ater's third-party claims are barred. |
Key Cases Cited
- Moore Excavating, Inc. v. Consolidated Supply Co., 186 Or App 324 (2003) (indemnity requires discharge of obligation to third party to extinguish liability)
- Savelich Logging v. Preston Mill Co., 265 Or 456 (1973) (settlement extinguishes liability to plaintiff must extinguish defendant's liability)
- Fulton Ins. v. White Motor Corp., 261 Or 206 (1972) (elements of common-law indemnity including discharge of obligation)
- Freeport Investment Co. v. R.A. Gray & Co., 94 Or App 648 (1989) (ORCP 22 C governs timing of third-party claims, not substance)
- Lasley v. Combined Transport, Inc., 351 Or 1 (2011) (contribution under comparative fault remains available in narrow circumstances)
- Onita Pac. Corp. v. Trustees of Bronson, 315 Or 149 (1992) (economic loss rule and duty to recover economic damages)
- Harris v. Suniga, 344 Or 301 (2008) (recovery for purely economic loss generally not allowed)
- Simpkins v. Connor, 210 Or App 224 (2006) (economic losses recovery framework in derivative claims)
- Allstate Ins. Co. v. Tenant Screening Services, Inc., 140 Or App 41 (1996) (economic loss damages in certain claims)
- Ammons v. Jackson County, 116 Or App 106 (1992) (defendant's costs as economic losses)