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The H.D.D. Company, Inc. v. Navigators Specialty Insurance Co.

United States District Court, D. Oregon

July 9, 2019

THE H.D.D. COMPANY, INC., A CORPORATION OF OREGON, Plaintiff,
v.
NAVIGATORS SPECIALTY INSURANCE COMPANY, Defendant.

          CHRISTOPHER T. CARSON Kilmer, Voorhhees & Laurick, P.C. Attorneys for Plaintiff

          THOMAS LETHER ERIC J. NEAL Lether & Associates, PLLC Attorneys for Defendant

          OPINION AND ORDER

          BROWN, SENIOR JUDGE.

         This matter comes before the Court on the Motion (#9) for Summary Judgment filed by Plaintiff The H.D.D. Company, Inc., A Corporation of Oregon, and the Cross-Motion (#14) for Summary Judgment filed by Defendant Navigators Specialty Insurance Company, both seeking a declaratory judgment regarding Defendant's duty to defend. The Court concludes the record is sufficiently developed, and, therefore, oral argument is not required to resolve this matter.

         For the reasons that follow, the Court DENIES Plaintiff's Motion (#9) for Summary Judgment and GRANTS Defendant's Cross-Motion (#14) for Summary Judgment.

         BACKGROUND

         The following facts are taken from the pleadings filed by the parties and are undisputed unless otherwise indicated.

         I. The Underlying Dispute

         In 2016 SNC-Lavalin Constructors, Inc. (SNC) was awarded a contract from Northwest Natural Gas Company for the expansion of an underground natural-gas reservoir near Mist, Oregon. As the general contractor, SNC hired Plaintiff to construct a portion of the natural-gas transmission pipeline for the project.

         The original contract value for Plaintiff's work was $4, 806, 257.00. SNC later issued a work change order that increased the contract value for Plaintiff's work to $5, 049, 949.33. At some point SNC paid Plaintiff $913, 188.83 for work completed pursuant to the contract. SNC, however, refused to pay the full contract price demanded by Plaintiff. SNC contends the remaining balance owed to Plaintiff pursuant to the contract is $226, 309.78.

         This dispute regarding payment between SNC and Plaintiff is subject to arbitration pursuant to the terms of their contract.

         On April 3, 2017, SNC served Plaintiff with a Demand for Arbitration (Demand) in order to resolve the payment dispute. A copy of the Demand is attached as Exhibit 1 to the Declaration (#10) of Christopher T. Carson in Support of Plaintiff's Motion for Summary Judgment and as Exhibit 1 to the Declaration (#15) of Merrill Tyler in Support of Navigator's [Cross-]Motion for Summary Judgment. Plaintiff tendered the defense of SNC's Demand to Defendant pursuant to the Contractor Controlled Insurance Program Policy (Policy) issued by Defendant for the project. A copy of the Policy is attached as Exhibit 2 to the Declaration (#10) of Christopher T. Carson in Support of Plaintiff's Motion for Summary Judgment and as Exhibit 2 to the Declaration (#15) of Merrill Tyler in Support of Navigator's [Cross-]Motion for Summary Judgment. Defendant rejected Plaintiff's tender of defense on the ground that there was not any coverage under the Policy for the claim asserted by SNC.

         II. Procedural Background

         On December 21, 2018, Plaintiff filed a complaint in Oregon state court against Defendant for declaratory judgment and requested damages for Defendant's alleged breach of contract based on Defendant's refusal to defend Plaintiff in the arbitration pursuant to the terms of the Policy.

         On January 24, 2019, Defendant filed a Notice of Removal (#1) of the state-court case to this Court.

         On April 26, 2019, Plaintiff filed a Motion (#9) for Summary Judgment.

         On May 17, 2019, Defendant filed a Cross-Motion (#14) for Summary Judgment.

         On June 20, 2019, the Court took the Motions under advisement.

         STANDARDS

         I. Summary Judgment

         Summary judgment is appropriate when “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Washington Mut. Ins. v. United States, 636 F.3d 1207, 1216 (9th Cir. 2011). See also Fed. R. Civ. P. 56(a). The moving party must show the absence of a dispute as to a material fact. Rivera v. Philip Morris, Inc., 395 F.3d 1142, 1146 (9th Cir. 2005). In response to a properly supported motion for summary judgment, the nonmoving party must go beyond the pleadings and show there is a genuine dispute as to a material fact for trial. Id. "This burden is not a light one. . . . The non-moving party must do more than show there is some 'metaphysical doubt' as to the material facts at issue." In re Oracle Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010)(citation omitted).

         A dispute as to a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th Cir. 2002)(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The court must draw all reasonable inferences in favor of the nonmoving party. Sluimer v. Verity, Inc., 606 F.3d 584, 587 (9th Cir. 2010). "Summary judgment cannot be granted where contrary inferences may be drawn from the evidence as to material issues." Easter v. Am. W. Fin., 381 F.3d 948, 957 (9th Cir. 2004)(citation omitted). A “mere disagreement or bald assertion” that a genuine dispute as to a material fact exists “will not preclude the grant of summary judgment.” Deering v. Lassen Cmty. Coll. Dist., No. 2:07-CV-1521-JAM-DAD, 2011 WL 202797, at *2 (E.D. Cal., Jan. 20, 2011)(citing Harper v. Wallingford, 877 F.2d 728, 731 (9th Cir. 1989)). When the nonmoving party's claims are factually implausible, that party must "come forward with more persuasive evidence than otherwise would be necessary." LVRC Holdings LLC v. Brekka, 581 F.3d 1127, 1137 (9th Cir. 2009) (citation omitted).

         The substantive law governing a claim or a defense determines whether a fact is material. Miller v. Glenn Miller Prod., Inc., 454 F.3d 975, 987 (9th Cir. 2006). If the resolution of a factual dispute would not affect the outcome of the claim, the court may grant summary judgment. Id.

         II. Insurance ...


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