Spada v. Unigard Insurance

232 F. Supp. 2d 1155, 2002 U.S. Dist. LEXIS 2282, 2002 WL 31433662
CourtDistrict Court, D. Oregon
DecidedJanuary 15, 2002
DocketCIV.00-1657-BR
StatusPublished
Cited by2 cases

This text of 232 F. Supp. 2d 1155 (Spada v. Unigard Insurance) is published on Counsel Stack Legal Research, covering District Court, D. Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Spada v. Unigard Insurance, 232 F. Supp. 2d 1155, 2002 U.S. Dist. LEXIS 2282, 2002 WL 31433662 (D. Or. 2002).

Opinion

OPINION AND ORDER

BROWN, District Judge.

This matter comes before the Court on Defendant Unigard Insurance Company’s Motion for Partial Summary Judgment Pursuant to FRCP 56(b) (# 26), Plaintiffs’ Request for Judicial Notice (# 44), Defendant’s Motion to Strike Plaintiffs’ Exhibits and Affidavits (# 65), and Defendant’s Motion to Strike Plaintiffs’ Response to Uni-gard’s Concise Statement of Material Facts and Plaintiffs’ Separate Concise Statement of Material Facts (# 67).

Plaintiffs bring this diversity action for breach of an insurance contract and restitution. This Court has jurisdiction pursuant to 28 U.S.C. § 1332.

For the reasons that follow, the Court GRANTS Defendant’s Motion for Partial Summary Judgment, GRANTS in part and DENIES in part Plaintiffs Request for Judicial Notice, and DENIES Defendant’s Motions to Strike.

FACTUAL BACKGROUND

The following facts are undisputed except when otherwise noted. Plaintiffs own undeveloped property in Southwest Portland that is adjacent to land and a home owned by William and Jani McCormick. 1 Unigard provided liability insurance coverage to Plaintiffs during the relevant period. In February 1996, heavy rains caused landslides on both Plaintiffs’ property and the McCormick property.

The City of Portland Letters

By letter dated February 22, 1996, the City informed Plaintiffs their property presented a hazard to other properties and/or the public right of way and directed Plaintiffs to remove the hazard by stabilizing the slope on Plaintiffs’ property. On February 28, 1996, the City sent another letter to Plaintiffs and again stated it was Plaintiffs’ responsibility to provide permanent repairs to the slope “to prevent further landslides and to mitigate the potential for future damage to the public right-of-way.” The City sent a third letter to Plaintiffs on August 28, 1996, in which it stated a recent inspection had revealed the hazardous conditions continued to exist on Plaintiffs’ property. The City instructed Plaintiffs to take action to correct the conditions on their property within 30 days. The City further notified Plaintiffs that the City would “take appropriate legal action to correct the conditions” if Plaintiffs failed to take the required remedial action within 30 days. The letter also informed Plaintiffs that “property owners found in viola *1158 tion of City Code may be fined up to $1,000 per day for each day of continuing violation” in addition to being liable for all of the City’s costs of remediation.

The Underlying Litigation

By letter dated March 28, 1996, the McCormicks’ attorney informed Plaintiffs the McCormicks believed the landslide on their property was caused by conditions on Plaintiffs’ property. In a written response to the McCormicks’ attorney, Mr. Spada stated:

Regarding your letter of March 28, we were out of town, but it was on the national news that it rained here pretty heavily.
You might try God. I think he caused it.

By letter dated June 3, 1996, Plaintiffs informed their insurance agent of the McCormicks’ possible claim and asked if they had liability coverage. Even though the McCormicks had not yet filed a formal complaint against Plaintiffs, Unigard retained attorney Jeffrey Kilmer to develop a plan for addressing the McCormicks’ anticipated claim. In July 1996, the McCormicks sued the City in state court for negligence and inverse condemnation, but did not sue Plaintiffs. In October 1996, the City filed a third-party complaint against Plaintiffs for indemnity from the McCormicks’ claim. In the alternative, the City alleged it was entitled to contribution from Plaintiffs. Unigard defended Plaintiffs in these actions under a reservation of rights.

In March 1997, the McCormicks amended their complaint in the underlying litigation to add Plaintiffs as defendants. The McCormicks alleged Plaintiffs caused the landslide that resulted in damages to the McCormicks’ property. The McCormicks also claimed Plaintiffs failed to complete the remediation required by the City, which caused additional damage to the McCormicks’ property. Unigard continued to defend Plaintiffs under its reservation of rights via Attorney Kilmer.

In August 1997, Plaintiffs filed counterclaims against the McCormicks and cross-claims ¿gainst the City. The cross-claims against the City included claims for indemnity or contribution for the remediation costs; a breach of contract claim related to a sewer pipe that allegedly led to the need for remediation; a claim for restitution of remediation costs expended for the City’s benefit; claims for negligence, trespass, and nuisance; and a claim under 42 U.S.C. § 1983. Unigard informed Plaintiffs their pursuit of affirmative claims against both the City and the McCormicks were not within the insurance policy’s duty to defend.

The City dismissed its third-party complaint against Plaintiffs without prejudice in November 1997. In 1998, Unigard negotiated with the McCormicks and obtained a settlement of the McCormicks’ claims against Plaintiffs. The settlement allowed Plaintiffs to pursue their affirmative claims against the McCormicks and the City.

Plaintiffs’ claims against the City and the McCormicks went to trial in 1999. The Multnomah County Circuit Court entered a Judgment in favor of Plaintiffs for $98,688 for remediation costs, 63% against the City and 37% against the McCormicks, plus costs. In September 1999, the City paid $50,000 toward its share of the judgment. In May 2000, the McCormicks’ insurer paid Plaintiffs $13,333.20 of its share of the Judgment. Plaintiffs then settled with the McCormicks on the basis of a covenant not-to-sue and a covenant not-to-execute. The remaining portions of the Judgment remain unpaid. Plaintiffs’ appeal and the City’s cross-appeal of the Judgment remain pending before the Oregon Court of Appeals.

*1159 STANDARDS

Under Fed.R.Civ.P. 56:

Summary judgment should be granted if “there is no genuine issue as to any material fact and [ ] the moving party is entitled to judgment as a matter of law.” If the moving party shows that there are no genuine issues of material fact, the non-moving party must go beyond the pleadings and designate facts showing an issue for trial. A scintilla of evidence or evidence that is merely colorable or not significantly probative does not present a genuine issue of material fact. The underlying substantive law governing the claims determines whether or not it is material. Reasonable doubts as to the existence of material factual issue[s] are resolved against the moving parties and inferences are drawn in the light most favorable to the non-moving party.

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232 F. Supp. 2d 1155, 2002 U.S. Dist. LEXIS 2282, 2002 WL 31433662, Counsel Stack Legal Research, https://law.counselstack.com/opinion/spada-v-unigard-insurance-ord-2002.