A & T Siding, Inc. v. Capitol Specialty Insurance

637 F. App'x 393

• Court: Court of Appeals for the Ninth Circuit
• Decided: February 23, 2016
• Docket: 12-35180
• Status: Unpublished

Opinion

MEMORANDUM *

A & T Siding appeals the district court’s order granting summary judgment in favor of Capitol Specialty Insurance Corporation. A & T maintains that Capitol, its insurer, is liable for the $1.1 million balance of an amended settlement agreement between A & T and the Brownstone Homes Condominium Association. We certified the following question to the Oregon Supreme Court:

The parties’ original settlement agreement, under which Brownstone Homes Condominium Association released A & T from liability and signed a covenant not to execute the stipulated judgment against A & T, was construed pursuant to Stubblefield v. St. Paul Fire & Marine Ins. Co., [267 Or. 397] 617 P.2d 262 (Or.1973), also to release A & T’s insurer, Capitol Specialty Insurance Co., from liability. The parties assert that such a construction was contrary to the parties’ original intent. Under Oregon law, may the parties amend the settlement agreement to reflect their original intent, and thereby restore the insurer’s duty to provide coverage for A & T’s resulting liabilities to the extent its poli cy provides coverage for the loss alleged by Brownstone?

The Oregon Supreme Court answered the question in the negative, ruling that A & T and Brownstone’s amendment did not reform the agreement so as to restore any liability released by the original settlement agreement. A & T Siding, Inc. v. Capitol Specialty Ins. Corp., 358 Or. 32, 48, 359 P.3d 1178 (2015). But the Oregon Supreme Court later overruled Stubblefield and held that A & T and Brownstone’s original settlement agreement did not extinguish Capitol’s liability. Brownstone Homes Condo. Ass’n v. Brownstone Forest Heights, LLC, 358 Or. 223, 246-47, 363 P.3d 467 (2015). We vacate the order granting summary judgment to Capitol because the original settlement agreement did not extinguish whatever liability Capitol may have to A & T under the insurance policy. We recognize that, upon remand, there will be parallel federal and state suits litigating Capitol’s liability to A & T. We leave it to the district court to decide on remand whether to exercise its discretion to abstain in favor of the parallel state proceedings. See Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 817-18, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976).

We VACATE and REMAND for proceedings consistent with this disposition.

Each party shall bear its own costs and fees in this case.

* This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3.