300 P.3d 1224
Or. Ct. App.2013Background
- Zidell and London dispute coverage and indemnity for environmental contamination from Zidell's ship dismantling along the Moody Avenue site.
- Policies include implied fortuity (pre-1968) and express fortuity (post-1966) as to environmental damage; also marine insurance forms like bumbershoot and protection-and-indemnity policies.
- Supreme Court remanded after affirming burden allocation but limited remand to express fortuity issues and attorney-fee rulings; further assignments were sent back for development.
- Trial court found London had a duty to defend DEQ's enforcement action; it allocated damage attributions for contaminants, including arsenic from anti-fouling paint, and determined London must indemnify some remediation costs.
- On remand, this court affirms the implied-fortuity rulings, vacates the initial attorney-fee award due to inclusion of indemnity-time, declines to resolve the allocation issue pending a better record, and leaves defense-cost issues under ship-dismantling policies resolved against Zidell absent insurer consent.
- The overall posture remains that several core issues require a more developed record before final determinations on allocation and some fee issues can be made.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Burden of proof for express vs implied fortuity policies | Zidell argues burden allocation error infected trial and review. | London argues remand should limit reassessment to express fortuity issues. | Implied-fortuity issues affirmed; limited remand governs express fortuity. |
| Defenses costs under ship dismantling policies | Zidell contends defense costs up to policy limits should be paid. | London contends defense costs require liability to be contested with consent. | Court adopts the trial court’s interpretation: defense costs are payable only when liability has been contested with written consent. |
| Allocation of indemnity costs (straight-time-on-the-risk vs all-sums) | Zidell advocates all-sums allocation under later law. | London supports straight-time-on-the-risk per prior framework. | Remanded for development; not decided on remand record. |
| Attorney-fee award correctness (indemnity vs defense) | Zidell seeks broader recovery under ORS 742.061 for indemnity-related fees. | London urges limitation to defense-related fees; prior rulings apply. | Initial award remanded; post-summary-judgment indemnity-fee recovery deferred for better record. |
| Bumbershoot/“expected but unintended” losses | Zidell seeks broader bumbershoot coverage for expected losses. | London argues limits apply under general law. | Court declines to revisit merits on remand; retrial scope limited and interconnected issues await record. |
Key Cases Cited
- A-1 Sandblasting & Steamcleaning Co. v. Baiden, 293 Or 17 (1982) (intent to injure inferred only in narrow circumstances; factual questions remain for jury/trier of fact)
- Allstate Ins. Co. v. Stone, 319 Or 275 (1994) (subjective intent required; not merely objective consequences)
- Nielsen v. St. Paul Companies, 283 Or 277 (1978) (some acts imply intent to injure; depends on circumstances)
- McGraw v. Gwinner, 282 Or 393 (1978) (recovery of attorney fees tied to defense/duty to defend; money judgment principle)
- ZRZ Realty v. Beneficial Fire and Casualty Ins., 349 Or 117 (2010) (Supreme Court remand limits; burden allocation and fee issues clarified)
- ZRZ Realty v. Beneficial Fire and Casualty Ins. (II), 225 Or App 257 (2009) (reconsideration and remand handling of issues)
- ZRZ Realty v. Beneficial Fire and Casualty Ins. (III), 349 Or 117 (2010) (affirmed burden allocation; remand limited to express fortuity issues)
- Hartford v. Aetna/Mt. Hood Radio, 270 Or 226 (1974) (illustrates fees when insured prevails on counterclaim)
- Cascade Corp. v. American Home Assurance Co., 206 Or App 1 (2006) (all-sums allocation context in fee recovery)