United States District Court, D. Oregon, Eugene Division
OPINION AND ORDER
Aiken United States District Judge.
diversity action, plaintiff Sabino Veloz moves for partial
summary judgment against defendant Foremost Insurance Company
for damages relating to the flooding of plaintiffs property.
Defendant cross-moves for summary judgment, citing three
provisions from the parties' insurance policy ("the
policy") that purportedly exclude the flood damage from
coverage. For the reasons set forth below, plaintiffs motion
is granted in part and denied in part. Defendant's motion
is also granted in part and denied in part.
following facts are undisputed. Plaintiff owns a rental
property in Eugene, Oregon. On September 4, 2016, a water
main owned and regulated by the Eugene Water and Electric
Board ("EWEB"), located on a hill behind plaintiffs
house, burst. The water flowed downhill onto plaintiffs land
and caused damage to the residence. Plaintiff filed a claim
with defendant, On September 16, 2017, after an inspection of
the damage, defendant denied plaintiffs claim.
Defendant's denial letter cited three provisions of the
policy: Insured Peril subsection 15 and Exclusions 7 and 17.
Plaintiff then filed this action, asserting claims for breach
of contract and breach of the duty of good faith and fair
judgment is appropriate if "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). A fact
is material if it "is relevant to an element of a claim
or defense and [its] existence might affect the outcome of
the suit." T.W. Elec. Serv., Inc. v. Pac. Elec.
Contractors Ass'n 809 F.2d 626, 630 (9th Cir. 1987).
A dispute is genuine "if the evidence is such that a
reasonable jury could return a verdict for the nonmoving
party." Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986). Special rules of construction apply
when evaluating a summary judgment motion: (1) all reasonable
doubts as to the existence of genuine issues of material fact
should be resolved against the moving party; and (2) all
inferences to be drawn from the underlying facts must be
viewed in the light most favorable to the nonmoving party.
T.W. Elec, 809 F.2d at 630. "Summary judgment
is inappropriate if reasonable jurors, drawing all inferences
in favor of the nonmoving party, could return a verdict in
the nonmoving party's favor." Diaz v. Eagle
Produce Ltd. P'ship, 521 F.3d 1201, 1207 (9th Cir.
cross-motions for summary judgment are presented, the court
must "review the evidence properly submitted in support
of [each] motion to determine whether it present[s] a
disputed issue of material fact[.]" Fair Hous.
Council of Riverside Cty., Inc. v. Riverside Two, 249
F.3d 1132, 1135 (9th Cir. 2001). The court must evaluate each
motion independently on its own merits. See Id. at
interpretation of an insurance policy is a matter of law.
Emp'rs Ins. of Wausau v. Tektronix,
Inc., 156 P.3d 105, 116 (Or. Ct. App. 2007). The
court's objective in construing an insurance contract is
to determine the intent of the parties. Hoffman Constr.
Co. of Alaska v. Fred S. James & Co., 836 P.2d 703,
706 (Or. 1992). To make that determination, the court uses a
three step process. Id. at 706-07. The first step is
to examine the text of the policy to determine whether it is
ambiguous, that is, whether it is susceptible to more than
one plausible interpretation. Tualatin Valley Hous. v.
Truck Ins. Exch, 144 P.3d 991, 993 (Or. Ct. App. 2006).
The court will apply any definitions that are supplied by the
policy itself and will otherwise presume that words have
their plain, ordinary meanings. Id. If a term has
only one plausible interpretation, it is interpreted in
accordance with that unambiguous meaning. Andres v. Am.
Standard Ins. Co., 134 P.3d 1061, 1063 (citing
Hoffman, 836 P.2d at 706). If the wording of the
policy is susceptible to more than one plausible
interpretation, the court must examine the disputed terms in
the context of the policy as a whole. Id. As a last
resort, the court resolves ambiguity by construing the term
against the drafter-generally, the insurance company.
Hoffman, 836 P.2d at 706-07. In the context of
insurance contracts, courts determine plain meaning from the
perspective of a reasonable insured, Id.
insured bears the initial burden of proving that a loss is
covered under an insurance policy, while the insurer bears
the burden of proving that a loss is excluded from coverage.
Wausan, 156 P.3d at 119. It is also the
insured's burden to establish that a claim is within an
exception to an exclusion. Id. at 121-22.
moves for partial summary judgment and defendant cross-moves
for summary judgment. Plaintiff contends that defendant
breached the policy by denying coverage for damage to the
structure as well as by denying coverage for mitigative
repairs, lost rent, and debris removal. Defendant asserts
that the water damage to the structure falls within two
policy exclusions-7 and 17-and that there is no coverage for
mitigative repairs, rent, and debris removal because no
Insured Peril caused the damage.
pertinent sections of Exclusions 7 and 17 state We do not
insure loss caused directly or indirectly by any of the
following regardless of any other cause of event contributing
concurrently or in any sequence to the loss:
7. Loss caused by:
a. Flood Water, surface water, waves, tidal water, tidal
waves, storm surge, tsunami or overflow of a body of water or
spray from any of these whether or not driven by wind ....
This exclusion applies whether or not there was widespread
damage and whether or not it was caused by a human activity
or an act of nature.
17. Loss caused by:
a. The conduct, act, failure to act or decision of any
person, group, organization or governmental body whether
intentional, wrongful, negligent or without fault.
b. A defect, weakness, inadequacy, fault or unsoundness in:
(1) Planning, zoning, development, surveying, siting;
(2) Design, specifications, workmanship, construction,
grading, compaction during construction;
(3) Materials used in construction or repair; or
of any property, including but not limited to, land,
structures, or improvements of any kinds, whether on or ...