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Certain Underwriters at Lloyd's London v. Massachusetts Bonding and Insurance Co.

Court of Appeals of Oregon

August 16, 2017

CERTAIN UNDERWRITERS AT LLOYD'S LONDON and EXCESS INSURANCE COMPANY, LIMITED, Plaintiffs-Appellants,
v.
MASSACHUSETTS BONDING AND INSURANCE COMPANY, succeeded in interest by Hanover Insurance Company, et al., Defendants, and BENEFICIAL FIRE AND CASUALTY INSURANCE COMPANY, succeeded in interest by JC Penney Life Insurance Company, then succeeded in interest by Stonebridge Life Insurance Company, a Vermont corporation; Industrial Indemnity Company, succeeded in interest by United States Fire Insurance Company, a New York corporation; Glens Falls Insurance Company, a Delaware corporation, dba CNA Insurance Companies; and Continental Insurance Company, a New Hampshire corporation, dba CNA Insurance Companies, Defendants-Respondents.

          Argued and submitted December 17, 2015.

         Multnomah County Circuit Court 030403995 Youlee Y. You, Judge.

          Michael B. King, Washington, argued the cause for appellants. With him on the opening brief were Linda B. Clapham, Jeffrey D. Laveson, and Carney Badley Spellman, [287 Or. 280] PS. With him on the reply brief were Linda B. Clapham and Carney Badley Spellman, PS.

          Christopher T. Carson argued the cause for respondent Benefcial Fire and Casualty Insurance Company. With him on the brief were Kilmer, Voorhees & Laurick, P.C.; Eliot R. Hudson, California, and DLA Piper LLP.

          Thomas M. Christ argued the cause for respondent Industrial Indemnity Company. With him on the brief were Cosgrave Vergeer Kester LLP; Richard A. Lee and Bodyfelt Mount.

          Andrew S. Moses, Diane L. Polscer, and Gordon & Polscer, L.L.C., fled the brief for respondents Glens Falls Insurance Company and Continental Insurance Company.

          Before DeVore, Presiding Judge, and DeHoog, Judge, and Sercombe, Senior Judge. [*]

         Case Summary: This is the second time this case, an action for contribution between insurance companies, has been before the Court of Appeals. The issue presented is whether plaintiffs Certain Underwriters at Lloyd's London and Excess Insurance Company, Limited (collectively, London) can maintain their contribution action against defendants in light of the 2013 amendments to the Oregon Environmental Cleanup Assistance Act (OECAA), ORS 465.475 to 465.484. See Or Laws 2013, ch 350, §§ 4, 8. Under the OECAA, the contribution action is precluded unless the underlying environmental claim or claims for which London sought contribution had, before the effective date of the 2013 amendments, become subject to a "fnal judgment, after exhaustion of all appeals." Or Laws 2013, ch 350, § 8(2). The trial court concluded that no such judgment had been entered before the effective date of the 2013 amendments and, accordingly, London's contribution rights were extinguished. London appeals the resulting judgment dismissing this action, contending that the trial court erred. Held: The trial court correctly concluded that the 2013 amendments to the OECAA apply to London's contribution action. Accordingly, it did not err in dismissing the case.

         Affirmed.

          [287 Or. 281] SERCOMBE, S. J.

         This is the second time this case, an action for contribution between insurance companies, has been before us. See Certain Underwriters v. Mass. Bonding and Ins. Co.. 235 Or.App. 99, 230 P.3d 103, rev den, 349 Or. 173 (2010), adh'd to as modified on recons, 245 Or.App. 101, 260 P.3d 830 (2011). The issue presented in this case is whether plaintiffs Certain Underwriters at Lloyd's London and Excess Insurance Company, Limited (collectively, London) can maintain their contribution action against defendants in light of the 2013 amendments to the Oregon Environmental Cleanup Assistance Act (OECAA), ORS 465.475 to 465.484. See Or Laws 2013, ch 350, §§ 4, 8.[1] Under the OECAA, the contribution action is precluded unless the underlying environmental claim or claims[2] for which London sought contribution had, "before the effective date of th[e] 2013 Act" become subject to a "final judgment, after exhaustion of all appeals." Or Laws 2013, ch 350, § 8(2). The trial court concluded that no such judgment had been entered before the effective date of the 2013 amendments and, accordingly, London's contribution rights against defendants were extinguished. London appeals the resulting judgment dismissing this action, contending that the trial court erred. We affirm.

         London and defendants are companies that issued insurance policies to a common insured, Zidell.[3] After Zidell, which operated a scrap metal business along the Willamette River, became the subject of a Department of Environmental Quality (DEQ) environmental cleanup action, it sought coverage from its insurers, including London and defendants and, in 1997, filed claims against them "seeking a declaration of coverage relating to the cleanup action, as well as reimbursement for defense and indemnity costs already [287 Or. 282] incurred." Certain Underwriters, 235 Or.App. at 102. We refer to that underlying coverage action as the "Moody Avenue" action. Between 1997 and April 2003, when the trial court entered its judgment, defendants settled with Zidell and were dismissed from the case. As we explained in Certain Underwriters:

"Defendants Beneficial Fire, National Union, and Industrial Indemnity Company (U.S. Fire) were among those who settled first, which left defendants Glen Falls and Continental Insurance Company (collectively CNA), defendant Century Indemnity Company (CIGNA), and [London] as the only remaining insurers in the coverage case.
"In October 1999, the Moody Avenue court ruled on a series of summary judgment motions filed by Zidell and the remaining insurers. The court ruled that 'the duty to defendant is a joint and several obligation, which will be allocated among the Defendant Insurers. Allocation should not be any hindrance to the duty to defend.' The court further ordered that 'the Defendant Insurers'-at that time, CNA, CIGNA, and [London]-were to 'make payment of past defense costs submitted by [Zidell] to date' and that, 'with respect to ongoing defense costs, ' the parties were to put in place a 'reasonable system for submission, review and payment of these costs.'
"The remaining insurers paid Zidell's accrued defense costs-approximately $771, 000-as ordered. Of that amount, [London] paid approximately $578, 000, and CNA and CIGNA paid the rest. The payments were made by [London] with the understanding that they were 'subject to a full reservation of each insurer's rights.'
"After the start of trial in the Moody Avenue action, CNA settled out. The settlement then left [London] and CIGNA as the only insurers subject to the court's order to pay Zidell's remaining defense costs. Together, [London] and CIGNA paid another $619, 982 in defense costs, with [London] again paying the lion's share-approximately $566, 000. Then, after trial but while the court was ...

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