United States District Court, D. Oregon
MICHAEL H. SIMON UNITED STATES DISTRICT JUDGE
Scottsdale Insurance Co. brings this action seeking a
declaration on whether it has either a duty to defend or a
duty to indemnify under the commercial liability policy
(“the Policy”) it issued to Defendant National
Wings & Armor Foundation (National Wings). National Wings
is a defendant in a state court lawsuit for personal injuries
(“Underlying Lawsuit”). The Underlying Lawsuit
stems from the death of Austin Lee, who was killed when he
and Steven Todd Preston attempted to fire a projectile from a
World War II-era tank destroyer and instead the projectile
misfired inside the turret of the tank destroyer. Preston was
also killed. Plaintiff names as Defendants' potential
claimants against Plaintiff's liability policy (the
Policy): National Wings; Robert Lee, as personal
representative for the Estate of Austin Lee; the Estate of
Steven Todd Preston; the Preston Family Revocable Trust; and
Charles Hegele, who was present when the projectile was
States Magistrate Judge Jolie A. Russo issued Findings and
Recommendation in this case on November 7, 2018. ECF 60.
Magistrate Judge Russo recommended that Plaintiff's
motion for summary judgment (ECF 47) be granted as to the
duty to defend and denied as to the duty to indemnify and
that defendants' cross-motion for summary judgment (ECF
52) should be denied.
the Federal Magistrates Act (“Act”), the Court
may “accept, reject, or modify, in whole or in part,
the findings or recommendations made by the
magistrate.” 28 U.S.C. § 636(b)(1). If a party
files objections to a magistrate judge's findings and
recommendations, “the court shall make a de novo
determination of those portions of the report or specified
proposed findings or recommendations to which objection is
made.” Id.; Fed.R.Civ.P. 72(b)(3).
those portions of a magistrate judge's findings and
recommendations to which neither party has objected, the Act
does not prescribe any standard of review. See Thomas v.
Arn, 474 U.S. 140, 152 (1985) (“There is no
indication that Congress, in enacting [the Act], intended to
require a district judge to review a magistrate's report
to which no objections are filed.”); United States.
v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en
banc) (holding that the court must review de novo
magistrate judge's findings and recommendations if
objection is made, “but not otherwise”). Although
in the absence of objections no review is required, the Act
“does not preclude further review by the district
judge sua sponte . . . under a de novo or
any other standard.” Thomas, 474 U.S. at 154.
Indeed, the Advisory Committee Notes to Fed.R.Civ.P. 72(b)
recommend that “[w]hen no timely objection is filed,
” the Court review the magistrate judge's
recommendations for “clear error on the face of the
timely filed an objection, to which Plaintiff responded.
Defendants object to the portion of Magistrate Judge
Russo's recommendation that Plaintiff has no duty to
defend defendants in the Underlying Lawsuit. Neither
Plaintiff nor Defendants object to Magistrate Judge
Russo's recommendation regarding indemnity coverage,
namely that because courts generally determine the duty to
indemnify after the underlying liability action has been
completed, both Plaintiff's and Defendants' motions
for summary judgment regarding indemnity should be denied as
premature. See Ohio Cas. Ins. Co. v. Ferrell Devs.,
LLC, No. 3:10-cv-162-AC, at *5 (D. Or. July 27, 2011).
is entitled to summary judgment if the “movant shows
that 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). The moving party has the burden of
establishing the absence of a genuine dispute of material
fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323
(1986). The court must view the evidence in the light most
favorable to the non-movant and draw all reasonable
inferences in the non-movant's favor. Clicks
Billiards Inc. v. Sixshooters Inc., 251 F.3d 1252, 1257
(9th Cir. 2001). Although “[c]redibility
determinations, the weighing of the evidence, and the drawing
of legitimate inferences from the facts are jury functions,
not those of a judge . . . ruling on a motion for summary
judgment, ” the “mere existence of a scintilla of
evidence in support of the plaintiff's position [is]
insufficient . . . .” Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 252, 255 (1986). “Where the
record taken as a whole could not lead a rational trier of
fact to find for the non-moving party, there is no genuine
issue for trial.” Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citation
and quotation marks omitted).
the complaint is unclear or ambiguous and may be reasonably
interpreted to include an incident within the coverage of the
policy, the insurer has a duty to defend.” U.S.
Fid. & Guar. Co. v. Star Techs., Inc., 935
F.Supp. 1110, 1113 (D. Or. 1996) (citing Oakridge Cmty.
Ambulance Serv., Inc. v. United States Fid. & Guar.
Co., 278 Or. 21, 24, 563 P.2d 164, 166 (1977)). The
Oregon Supreme Court established the steps for insurance
policy interpretation in Hoffman Constr. Co. v. Fred S.
James & Co., 313 Or. 464, 469-72 (1992). When the
parties offer competing interpretations of policy language,
the Court first determines whether the competing
interpretations are plausible when viewed in isolation.
Id. If they are, the Court next views the competing
interpretations in light of “the particular context in
which that term is used in the policy and the broader context
of the policy as a whole.” Id. If only one
interpretation continues to be reasonable after contextual
review, that interpretation controls. Id. If,
however, both interpretations continue to be reasonable, the
policy language is deemed legally ambiguous and construed in
favor of coverage for the insured. Id.
core of the dispute between the parties concerns the
Policy's “Special Event Participant
Exclusion” (the “Exclusion”). Plaintiff
contends that the Exclusion applies, and therefore Plaintiff
does not owe a duty to defend. Defendants contend that the
Exclusion is ambiguous and that as a matter of law ambiguous
policy language must be construed in favor of coverage for
the insured; therefore, argue Defendants, the Exclusion
should not be read to apply. Defendants further contend that
interpreting the Exclusion to apply in this context would
render the promise of insurance coverage by the policy
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT
SPECIAL EVENT PARTICIPANT EXCLUSION
This policy does not apply to “bodily injury, ”
“property damage” or “personal and
advertising injury” to any ...