OPINION AND ORDER
Plaintiff Factory Mutual Insurance Company (“Factory Mutual”) sued Defendant PERI Formworks Systems, Inc. (“PERI”) in state court, seeking reimbursement from PERI for payment Factory Mutual made under a Builder’s Risk insurance policy. PERI removed the case to federal court under diversity jurisdiction and brought a third-party complaint against McClone Construction Co. (“McClone”). PERI alleges that any harm to Factory Mutual for which PERI may be liable is the result of McClone’s negligence or fault and that McClone is obligated to indemnify PERI under PERI’s contract with McClone.
Before the Court is McClone’s motion for summary judgment against PERI’s third-party claims. McClone argues that Factory Mutual is asserting claims against PERI as a subrogee of McClone because McClone is an insured in the policy under which Factory Mutual made the payments for which it is seeking reimbursement. Because it is an insured, McClone argues, a doctrine known as the “antisubrogation rule” bars PERI’s claims. McClone adds that even if it were not an insured under the policy, Factory Mutual’s claim against PERI would still necessarily fail and because PERI’s third-party complaint is derivative it too must fail. PERI responds to McClone’s first argument by asserting that McClone is not an insured under the relevant policy, and thus the antisubrogation rule does not apply. For the reasons discussed below, the Court finds that McClone is an insured under the Builder’s Risk policy at issue and thus the antisub-rogation rule applies. Accordingly, the Court grants McClone’s motion for summary judgment, Because the Court finds that McClone is an insured, the Court does not reach McClone’s alternative argument that even if McClone were not an insured, PERI necessarily would prevail against Factory Mutual’s claims, rendering moot PERI’s derivative claims against McClone.
STANDARDS
A party is entitled to summary judgment if the “movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The moving party has the burden of establishing the absence of a genuine dispute of material fact. Celotex Corp. v. Catrett,
BACKGROUND
This case involves a dispute arising out of the construction of a building on the Hillsboro Oregon campus of Intel Corporation (“Intel”). A problem developed during the pouring of certain concrete floors. Construction was halted, the already-poured concrete was broken and discarded, the shoring and concrete forms were adjusted, and new concrete was poured. This caused a loss for two of the contractors on the project, Turner Construction Company (“Turner”), the general contractor, and McClone, a subcontractor.
One aspect of the project for which Turner hired McClone related to the concrete flooring. McClone, in turn, subcontracted ■with PERI to provide, among other things, design services, advice, and oversight for the use of certain equipment owned by PERI in the construction of the building, including the shoring and supports for the concrete floor.
Intel sponsored an Owner Controlled Insurance Program (“OCIP”) for the construction project. Marsh Risk & Insurance Services (“Marsh”) administered the OCIP. Approved Contractors could participate in the OCIP. Both Turner and McClone enrolled in the OCIP as approved contractors. The OCIP included insurance coverage for worker’s compensation, general liability, and builder’s risk. On September 18, 2013, McClone received a Certificate of Liability Insurance (“Certificate”) under the OCIP. PERI did not enroll in the OCIP.
Factory Mutual provided the relevant OCIP Builder’s Risk insurance policy. After a claim was made and adjusted under that policy, Factory Mutual paid $1,681,888.90. According to the OCIP, for claims made under the Builder’s Risk policy, loss shall be payable to Intel as “Trustee for all insured parties,” and Intel shall “coordinate distribution of insurance proceeds.” ECF 24-1 at 14. Intel instructed Factory Mutual to make payment directly to Turner and McClone. Accordingly, Factory Mutual paid $1,108,639.40 to McClone and $573,249.50 to Turner, as losses relating to the concrete floor. Factory Mutual then commenced this action as subrogation claim against PERI, alleging that the loss was caused by PERI’s negligence. PERI, in turn, asserted third-party claims against McClone for contractual indemnity and statutory contribution.
DISCUSSION
McClone argues that it is entitled to summary judgment under the antisub-rogation rule. This rule prohibits an insurer from seeking subrogation from its own insured. McClone argues that because Factory Mutual is asserting its claims against PERI as a subrogee of McClone and “while standing in McClone’s shoes,” PERI’s attempt to hold McClone liable for any damages for which PERI may be found to owe Factory Mutual is essentially seeking to hold McClone liable to its insurer. This case involves an unusual procedural posture for the application of the an-tisubrogation rule. Here, the insurance company is not directly seeking contribution from its insured. Instead, the insurance company plaintiff is suing a defendant that is not the plaintiffs insured, but the defendant is then seeking indemnity and contribution, to the extent the defendant may be liable to the insurance company, from a party that contends it is an insured of the plaintiff. The third-party
McClone further moves for summary judgment against PERI’s claim that McClone has a duty to defend PERI against Factory Mutual’s claims, based on the separate contract between McClone and PERI. McClone argues that no duty to defend has been triggered because Factory Mutual has not alleged that McClone was negligent, nor could Factory Mutual maintain such an allegation in light of the antisubrogation rule.
PERI does not dispute that if McClone is an insured under the Builder’s Risk policy, the antisubrogation rule would bar PERI’s third-party claim against McClone. Instead, PERI argues that based on the unambiguous text of the Builder’s Risk policy issued by Factory Mutual, McClone is not an insured under that policy. PERI asserts that only Intel (including certain of its affiliates) is an insured under Factory Mutual’s Builder’s Risk policy. Thus, the primary question for the Court is whether McClone is an “insured” under Factory Mutual’s Builder’s Risk policy. In addition, PERI argues that regardless of whether McClone is an insured, McClone’s duty to defend has been triggered.
A. Standards for Interpreting Insurance Policies
1. Governing Law
Both parties agree that Oregon law applies in interpreting the Builder’s Risk policy. Although the Builder’s Risk policy does not contain an express choice of law provision, it directs a court to look, at least in certain circumstances, to the insurance law of the jurisdiction in which the relevant insured property is located. See ECF 24-6
Here, the property at issue is located in Oregon. Further, because this is a diversity case, state substantive law applies. See Conrad v. Ace Prop. & Cas. Ins. Co.,
2. Oregon Insurance Contract Interpretation
In Oregon, the interpretation of an insurance policy is a question of law. Hoffman Construction Co. v. Fred S. James & Co.,
First, if the terms of the policy are unambiguous, the analysis ends and the unambiguous terms control. Andres v. Am. Standard Ins. Co. of Wis.,
Second, if a term has more than one plausible interpretation and thus is ambiguous, the court next examines the term in light of the “particular context in which that term is used in the policy and the broader context of the policy as a whole.” Id. Finally, “[i]f the ambiguity remains after the court has engaged in those analytical exercises, then ‘any reasonable doubt as to the intended meaning of such [a] term[] will be resolved against the insurance company and in favor of extending coverage to the insured.’ ” N. Pac. Ins. Co. v. Hamilton,
B. The Relevant Provisions
1. Provisions of the Builder’s Risk Policy
The Definition section of the Builder’s Risk policy does not define either “insured” or “named insured.” EOF 24-6 at 38-41 ¶ 13. The cover, or declarations, page, however, lists only “Intel Corporation” in the box labelled “INSURED.” Id. at 1. Additionally, the Declarations section of the policy states:
1. NAMED INSURED AND MAILING ADDRESS
Intel Corporation and any subsidiary, and Intel Corporation’s interest in any partnership or joint venture in whichIntel Corporation has management control or ownership as now constituted or hereafter is acquired, as the respective interest of each may appear, all hereafter referred to as the “Insured,” including legal representatives.
Id, at 7 (emphasis in original).
Later, the Declarations section provides:
6. LOSS ADJUSTMENT/PAYABLE
Loss, if any, will be adjusted with and payable to Intel Corporation, or as may be directed by Intel Corporation. Additional insured interests will also be included in loss payment as their interests may appear when named as additional named insured, lender, mortgagee and/or loss payee either on a Certificate of Insurance or other evidence of insurance on file with the Company or named below.
When named on a Certificate of Insurance or other evidence of insurance, such additional interests are automatically added to this Policy as their interests may appear as of the effective date shown on the Certificate of Insurance or other evidence of insurance. The Certificate of Insurance or other evidence of insurance will not amend, extend or alter the terms, conditions, provisions and limits of this Policy.
Id. at 8 (emphasis in original).
In the Property Damage section of the Builder’s Risk policy, the Property Insured is described as:
This Policy insures Real Property and Personal Property intended to become a permanent part of, or consumed in, the fabrication, assembly, installation, erection or alteration of the Insured Project, unless otherwise excluded elsewhere in this Policy, located at an insured location or within 1,000 feet/300 metres thereof, to the extent of the interests of the Insured in such property.
This Policy also insures the interest of contractors and subcontractors that are enrolled in the Intel Corporation sponsored Owner Controlled Insurance Program (OCIP), in insured property during construction at an insured location or within 1,000 feet/300 metres thereof, to the extent of the Insured’s legal liability for insured physical loss or damage to such property. Such interest of contractors and subcontractors that are enrolled in the Intel Corporation sponsored Owner Controlled Insurance Program (OCIP) is limited to the property for which they have been hired to perform work.
Id. at 13 (emphasis in original).
2. Provisions of Intel’s OCIP Manual
Marsh, the administrator of Intel’s OCIP, produced a “Policies, Procedures and Guidelines Manual” on the construction project at issue (the “Manual”). ECF 24-1. The Manual states that its purpose is to provide general information regarding the insurance afforded under the OCIP. Id. at 3. The Manual informs contractors and subcontractors that the OCIP provides a certain level of coverage and that the contractors may carry “additional insurance” if they deem it necessary. Id. The Manual explains that Intel “does not warrant or represent that the OCIP coverage constitutes an insurance portfolio which adequately addresses all the risk faced by the Contractor and Subcontractors” and that contractors should satisfy themselves as to the adequacy of the provided OCIP coverage. Id. at 6.
In describing the enrollment procedures, the Manual provides that contractors must submit complete applications with all required information in order to permit “approval of your enrollment and issuance of your insurance policy.” Id. at 7. The Manual further explains that upon approval, Marsh will furnish approved contractors with a Certifícate of Insurance “evidencing Commercial General and Excess Liability, Worker’s Compensation and Builder’s Risk coverages.” Id. A Worker’s Compensation policy will be issued by the insurance company directly to each contractor, but the remaining policies, including Builder’s Risk, only will be on file with Intel and available for review by approved contractors. Id.
The Manual notes that although Intel will pay the full insurance premium, an approved contractor will be responsible for a share of the premium and that such amount will be deducted from the contractor’s bid and from any change orders. Id. at 8. Finally, the Manual provides a specific procedure for reporting claims under the Builder’s Risk policy, including tasks the contractor must perform. Id. at 13-14. This section also explains that “Loss, if any, under Builder’s Risk policies shall be adjusted with, and payable to, Intel Corporation as Trustee for all insured parties. Intel Risk Management shall coordinate distribution of insurance proceeds.” Id. at 14.
3. Analysis
a. Step one analysis: Whether the term “Insured” is ambiguous
The parties dispute the meaning of the term “Insured” in the Builder’s Risk policy and whether McClone is entitled to coverage under the policy. The term “Insured” is not defined in the Definitions section of the policy. Thus, the Court looks to whether that word has a plain meaning—namely, whether it is susceptible to only one plausible interpretation. Groshong,
b. Step two
i. Context: How “Insured” is used in the Builder’s Risk policy
PERI primarily relies on two provisions to support its interpretation that “Insured” means only Intel (and its affiliates) and thus McClone is not entitled to coverage under the policy. First, PERI relies on the Property Insured clause, which states that the interest of contractors and subcontractors are only covered “to the extent of the Insured’s legal liability for insured physical loss or damage to [] property.” ECF 24-6 at 13 ¶ 1 (emphasis added). Then, PERI relies on paragraph one in the Declarations section, which states that Intel and its affiliates are “all hereafter referred
PERI’s interpretation of the Property Insured clause is unreasonable. If the Property Insured clause only covers losses to the extent of Intel’s legal liability for the loss, then there is no “interest” of the contractors and subcontractors that is being insured under the policy. The Property Insured clause states that the policy “also insures the interest of [OCIP-en-rolled] contractors and subcontractors” and that this insured interest is “limited to the property for which [the contractors and subcontractors] have been hired to perform work.” Id. at 13 ¶ 1. This text would be rendered meaningless under PERI’s interpretation that the property is only insured to the extent of Intel’s legal liability because that is not insuring the contractors’ and subcontractors’ interest; it is insuring only Intel’s interest. When interpreting insurance contracts, courts must “assume that parties to an insurance contract [did] not create meaningless provisions.” Hoffman,
In addition, McClone argues that the term “Insured” is not limited to Intel and its affiliates. McClone notes that the clause discussing Intel and its affiliates is titled “Named Insured” and that later in the policy the term “Named Insured” is used. Thus, according to McClone, the term “Insured” must necessarily refer to something other than simply the “Named Insured.” McClone’s argument also is not persuasive. Although the heading of the relevant paragraph states “Named Insured,” the clause itself states that Intel and its affiliates shall be referred to as “Insured,” not “Named Insured.”
McClone, however, also argues that the Loss Adjustment clause demonstrates that approved contractors are automatically added as “Insureds” under the policy and thus the term “Insured” must be understood as including such enrolled contractors. This provision, paragraph six of the Declarations section, states that additional insured interests are included when named on a Certificate of Insurance, and that once named on a Certificate of Insurance “such additional interests are automatically added to this Policy.” Id. at 8 ¶ 6.
The Court agrees with McClone’s argument that under the Loss Adjustment clause, contractors and subcontractors are automatically added as “Insureds” under the policy when, among other things, they have been issued a Certificate of Insurance. The clause under the policy provides that “additional interests” are added to the policy when a party is “named as [an] additional named insured” on a Certificate of Insurance. Id. The parties do not dispute that McClone was issued a Certificate that named McClone as an “Insured” and specifically identified the Builder’s Risk policy—by policy number
This situation, therefore, is distinguishable from cases in which courts have found certificates of insurance to be ambiguous regarding whether they add a party as an additional insured when the certificate did not expressly identify the underlying insurance policy. See WH Holdings, L.L.C. v. Ace Am. Ins. Co.,
The use of the word “Insured” in other provisions of the policy also supports the reasonableness of McClone’s interpretation. For example, the Loss Adjustment and Settlement provision creates obligations on the “Insured” that, in context, appear only to make sense if the contractor or subcontractor doing the work is included as an additional insured. ECF 24-6 at 30. These obligations include providing verified plans and descriptions, separating the damaged and undamaged property, furnishing a complete inventory of damage and undamaged property, protecting the property from further damage, -and submitting to examination under oath regarding the damage. Id.
Additionally, the Builder’s Risk policy provides coverage for physical damage caused by defective work. Id. at 17 ¶ 3.C. Because Intel is not performing the work, Intel likely would not be liable for any defective work. PERI’s interpretation that Intel and its affiliates are the only Insureds and that property loss is covered only to the extent that Intel and its affiliates are legally liable for the loss would render the policy’s express coverage for physical damage from defective work essentially meaningless.
There are, however, some instances of the term “Insured” in the Builder’s Risk policy where the context supports PERI’s conclusion that Intel and its affiliates are the only Insureds, without the addition of contractors and subcontractors. These include the clauses permitting the “Insured” to request changes to or cancel the policy and to elect not to repair or replace lost property. See id. at 20 ¶5.0.7, 34 ¶ 1, 37 ¶8. The use of “Insured” in these few provisions, however, is insufficient to create an ambiguity in the meaning of the term “Insured” after considering its use throughout the policy. Rather, it shows only that policy was not particularly well written.
ii. Context: The Builder’s Risk policy “as a whole”
Considering the purpose of a builder’s risk policy and generally who is an insured in these types of insurance policies further supports interpreting “Insured” as including OCIP-approved contractors and subcontractors. Notably, “[a] builder’s risk policy ordinarily indemnifies a builder or contractor against the loss of, or damage to, a building he or she is currently in the process of constructing.” 1 Couch on Ins. § 1:53 “Builder’s Risk” (2016) (emphasis
Further, an OCIP, a type of “wrap-up” insurance program, “seeks to distribute, share, and manage risk at construction sites.” Kraft Co. v. J & H Marsh & McLennan of Florida, Inc.,
Finally, the fact that the contractors and subcontractors, including McClone, are required to pay their share of the insurance premiums provides additional context that these contractors and subcontractors are insureds under the policies. It would be unreasonable to conclude that contractors and subcontractors would be expected to pay a portion of insurance premiums if they were not also insureds and entitled to coverage under the policies.
Thus, the Court finds at step two in Oregon’s framework for interpreting insurance contracts that the term “Insured” as used in the Builder’s Risk policy means Intel and its affiliates as well as all OCIP-
c. Extrinsic evidence
At oral argument, PERI and McClone agreed that if the Court finds that who is an “insured” under the policy is ambiguous after considering the four corners of the Builder’s Risk policy, the Court may consider extrinsic evidence. In reaching this agreement, these parties referenced the Oregon Court of Appeals’ decision in Fred Shearer & Sons, Inc. v. Gemini Insurance Co.,
Other decisions from the Oregon Court of Appeals, however, state that a court may not look to extrinsic evidence when construing an insurance policy under Oregon law. See, e.g., Rhiner v. Red Shield Ins. Co.,
The Court, however, need not decide whether it is appropriate under Oregon law to consider extrinsic evidence under the circumstances of this case, notwithstanding the parties’ agreement that the Court may do so. Considering extrinsic
Additionally, Factory Mutual, the insurer of the Builder’s Risk policy, appears to have interpreted the Builder’s Risk policy at issue as covering the damage because it paid the loss, although PERI argues that Factory Mutual paid the loss only as a “volunteer.” Further, in responding to requests for admissions and interrogatories issued in this case, Factory Mutual acknowledged that: (1) McClone was automatically added to the Builder’s Risk policy as an Insured after McClone’s Certificate was issued (ECF 42-1); (2) under the OCIP, coverage is provided for Intel plus enrolled contractors (ECF 35, Interrogatory Nos. 5 & 6); and (3) Factory Mutual brings its claims as a subrogee of McClone and Turner and not as a subro-gee of Intel (ECF 35 at 13, RFAs 1-3). Factory Mutual’s interpretation of the Builder’s Risk policy is fully consistent with McClone’s interpretation that McClone is an “Insured” and is entitled to coverage under the policy. The Court recognizes, however, that Factory Mutual has an interest in making these concessions because if Factory Mutual paid merely as a “volunteer,” that conclusion would jeopardize Factory Mutual’s claim against PERI.
d. Step Three: Construe in favor of expanded coverage
Step three of Oregon’s framework for interpreting insurance contracts instructs a court to construe the policy in favor of expanded coverage. See Hamilton,
This situation is distinguishable from the case in which a plaintiff who was not a party to the insurance contract seeks coverage when the insurance company denies coverage. In such a case, the Ninth Circuit has held that the presumption of construing an insurance policy against the insurer is not warranted. See, e.g., Flexi-Van Leasing, Inc. v. Aetna Cas. & Sur. Co.,
4. Conclusion
The Court finds that McClone is an insured under Factory Mutual’s Builder’s Risk policy. Thus, as conceded by PERI, the antisubrogation rule applies to bar PERI’s contribution claim. Accordingly,
C. Duty to Defend and Indemnification
The separate contract between McClone and PERI includes a contractual indemnification clause. This clause provides that:
INDEMNITY AND HOLD HARMLESS: You agree to indemnify and hold PERI harmless [from] any claim, liability or obligation (including the costs and attorneys’ fees of any suit or claims related thereto) incurred by PERI as a result of persons being injured or property being damaged directly or indirectly in connection with the use of PERI’s equipment to the extent arising, in whole or in part, from (i) The failure to follow or deviation by you or your agents or subcontractors from any design drawing provided by PERI; (ii) the use of PERI equipment, in whole or in part, in accordance with any design not provided by PERI; (iii) the negligent use of PERI equipment with materials not furnished by PERI or otherwise expressly approved in writing by PERI in advance of that use; (iv) your negligence and/or the negligence of your employees, contractors or agents and/or failure by any of the above to follow any applicable laws, rules, regulations, codes and standards relating to the use of the equipment and/or the operation of any jobsite.
EOF 24-7 at 15-16 ¶ 16.
McClone argues that its contractual duty to defend PERI or to provide indemnification has not yet been triggered. McClone notes that Factory Mutual’s Complaint does not allege that McClone was negligent or otherwise improperly used PERI’s equipment or designs. Thus, argues McClone, PERI is not facing a claim for which the indemnification clause applies. PERI responds that under Oregon law, it is not dispositive whether a complaint alleges that a purported indemnitor is at fault, but only whether the complaint could allege facts that impose such liability. In support of this proposition, PERI relies on West Hills Development Co. v. Chartis Claims, Inc.,
The Court agrees with McClone that Factory Mutual’s Complaint does not—and could not—allege that McClone is negligent or otherwise at fault because the antisubrogation rule would then preclude such a claim. Thus, the Court finds that McClone does not currently have a duty to defend or to indemnify PERI. Cf. Hanover Ins. Co. v. Cummins Inc.,
Accordingly, the Court grants summary judgment in favor of McClone on PERI’s claim for indemnification. The Court expressly takes no position, however, on whether, if a factfinder, including the jury in this ease, were to determine that McClone was negligent or otherwise at fault for causing the concrete floor damage at issue in this case, PERI then might have a ripe claim for indemnification against McClone, at least for PERI’s defense costs incurred in these proceedings.
CONCLUSION
McClone’s motion for summary judgment (ECF 23) is GRANTED, and PERI’s third-party claims against McClone are dismissed.
IT IS SO ORDERED.
Notes
. The general background of the dispute is set forth in this section. The relevant provisions of the specific documents at issue are described and discussed in the next section.
. Policy No. US435, issued December 31, 2013 ("Builder’s Risk policy”),
. Page number citations are to the ECF pagination, not to the internal pagination of the cited document.
. For ease of reference, the Court refers to Intel’s subsidiaries as well as Intel's interests in any partnership or joint venture in which Intel Coiporation has management control or ownership collectively as Intel’s “affiliates.”
. The policy number listed on the Certificate of Liability Insurance, US328, was later changed to US435. See ECF 24-6 at 1 (noting that Policy No. US435 had a previous policy number of US328).