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United Specialty Insurance Co. v. Jonak

United States District Court, D. Oregon

October 17, 2017

UNITED SPECIALTY INSURANCE COMPANY, a Delaware corporation, Plaintiff,
v.
CLAY JONAK, an Oregon resident, ROGER ISON, an Oregon resident, Defendants, THE STATE OF OREGON, acting by and through its Department of Lands, Applicant for Intervention.

          ORDER

          ANNA J. BROWN United States Senior District Judge.

         Magistrate Judge John V. Acosta issued Findings and Recommendation (#30) on August 28, 2017, in which he recommends the Court grant the State of Oregon's Motion (#14) to Intervene. The Magistrate Judge found the State is a necessary party and is entitled to intervene as a matter of right. The Magistrate Judge, however, also found the State waived its Eleventh Amendment sovereign immunity.

         The parties did not file objections as to the Findings and Recommendation that this Court grant the State's request to intervene. The State, however, filed timely Objections to the Findings and Recommendation that this Court find the State waived its sovereign immunity. That issue is now before this Court pursuant to 28 U.S.C. § 636(b)(1) and Federal Rule of Civil Procedure 72(b).

         Because the parties did not file objections to the Magistrate Judge's- Findings and Recommendation as to the State's request to intervene, this Court is relieved of its obligation to review the record de novo regarding this issue. See Dawson v. Marshall, 561 F.3d 930, 932 (9th Cir. 2009). See also United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc). Having reviewed the legal principles de novo, the Court does not find any error in the Findings and Recommendation as to the State's request to intervene.

         As noted, however, the State filed an Objection to the Findings and Recommendation that this Court find the State waived its sovereign immunity. When any party objects to any portion of the Magistrate Judge's Findings and Recommendation, the district court must make a de novo determination of that portion of the Magistrate Judge's report. 28 U.S.C. § 636 (b)(1). See also Dawson v. Marshall, 561 F.3d 930, 932 (9th Cir. 2009); United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en banc). Accordingly, the only issue before this Court is whether the State waived its sovereign immunity.

         BACKGROUND

         I. Factual Background

         Beginning on April 6, 2012, Defendants leased property on the Columbia River from the State of Oregon. The Lease required Defendants to obtain and to maintain pollution 'liability insurance for bodily injury, property damage, and environmental damage on the leased property.

         On January 5, 2016, Defendants obtained an environmental .policy from Plaintiff covering the leased premises with effective dates from January 5, 2016, to January 5, 2017. Plaintiff alleges Defendants made misrepresentations to Plaintiff in their application for insurance that there were not any prior or pending claims related to the property. The property, however, had actually been subject to multiple complaints and/or claims by various agencies regarding pollution on the leased property since July 1, 2015.

         On November 1, 2016, the State sent a Notice of Claim to Defendants seeking reimbursement for property damage and clean-up costs on the property.

         On November 14, 2016, the State sent a notice to Defendants terminating the lease.

         On December 15, 2016, Plaintiff received a copy of the Notice of Claim.

         On January 19, 2017, Plaintiff sent a letter to Defendants regarding coverage issues for the claim made by the State.

         On March 20, 2017, the State and Defendants entered into a Settlement Agreement regarding the lease. A Final Order terminated the. lease as of May 1, 2017, ...


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