United States District Court, D. Oregon
STATE FARM FIRE AND CASUALTY COMPANY, an Illinois Company, Plaintiff,
EVANS CONSTRUCTION & SIDING CORP., an Oregon corporation, Defendant.
P. ROSSMILLER ELISS M. BOYD Betts, Patterson & Mines,
P.S. Attorneys for Plaintiff
S. MILLER RACHEL C. NIES Miller Nies, LLC Attorneys for
OPINION AND ORDER
J. BROWN UNITED STATES SENIOR DISTRICT JUDGE.
matter comes before the Court on Defendant Evans Construction
& Siding Corp.'s Motion (#8) to Dismiss for Failure
to State a Claim (Rule 12(b)(6)). The Court concludes the
record is sufficiently developed and, therefore, oral
argument would not be helfpul to resolve this Motion.
reasons that follow, the Court DENIES
Defendant's Motion to Dismiss.
21, 2019, Plaintiff State Farm Fire and Casualty Company
filed an action in this Court against Evans for declaratory
judgment in which it seeks an order from this Court that it
does not have a duty to defend or to indemnify Evans in an
underlying lawsuit (Underlying Lawsuit) filed in Oregon state
court. Plaintiff also alleges claims for breach of contract
and misrepresentation based on Evans's tender of defense.
The Underlying Lawsuit in State Court
15, 2018, Irvington Garden Apartments, LLC, filed a second
amended complaint in Multnomah County Circuit Court against
Creston Homes, LLC, and others, in which it alleged claims
for negligence based on defects in the construction of the
Irvington Garden Apartments (the Construction Project) in
Portland, Oregon. Creston was the general contractor on the
Construction Project. Irvington alleges on September 26,
2017, it notified Creston of defects in the Construction
August 22, 2018, Creston filed a third-party action against
Evans, a subcontractor on the Construction Project, in which
it alleged Evans was at least responsible in part for the
construction defects Irvington claimed. Irvington's
second amended complaint was attached as an exhibit to
Creston's third-party complaint.
The Declaratory-Judgment Action
noted, State Farm filed in this Court a declaratory-judgment
action against Evans on June 21, 2019. State Farm alleges it
issued two Contractors Liability Policies (the Policies) that
named Evans as the insured and that were effective from
December 26, 2006, through December 26, 2008. State Farm also
alleges the Construction Project identified in the Underlying
Lawsuit was commenced in 2011, and the subcontract between
Evans and Creston was signed in 2011. State Farm alleges the
Policies issued to Evans had expired before the Underlying
Lawsuit was commenced, and any damages alleged in the
Underlying Lawsuit "could not have occurred during the
time periods the Policies were in effect." Accordingly,
State Farm alleges it does not have a duty to defend or to
indemnify Evans in the Underlying Lawsuit.
addition, State Farm asserts two separate claims against
Evans for breach of contract and misrepresentation. State
Farm alleges the Cooperation Clauses of the Policies require
the insured to "cooperate with [State Farm] in the
investigation, settlement[, ] or defense of the claim or
suit" and that Evans knew when it tendered defense of
the Underlying Lawsuit that the damages could not have
occurred during the effective period of the Policies.
Accordingly, State Farm alleges Evans breached its duty to
cooperate in the investigation of the claims in the
Underlying Lawsuit by making a knowingly false tender of
Farm also alleges a claim for misrepresentation that Evans
made a knowingly false representation that it was entitled to
coverage when it made the tender of defense. State Farms
asserts it relied on the false representation by Evans and
was damaged as a result of such reliance. State Farm states
it is, therefore, relieved of any performance required by the
Policies as a result of the false representation by Evans.
August 2, 2019, Evans filed a Motion to Dismiss State
Farm's Complaint pursuant to Federal Rule of Civil
Procedure 12(b)(6) for failure to state a claim.
August 30, 2019, the Court took Evans's Motion under
survive a motion to dismiss a complaint must contain
sufficient factual matter, accepted as true, to “state
a claim for relief that is plausible on its face.”
Bell Atlantic v. Twombly, 550 U.S. 544, 545 (2007).
A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged. Id. at 556. “The plausibility
standard is not akin to a ‘probability requirement,
’ but it asks for more than a sheer possibility that a
defendant has acted unlawfully.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009)(quoting
Twombly, 550 U.S. at 546). When a complaint is based
on facts that are “merely consistent with” a
defendant's liability, it “stops short of the line
between possibility and plausibility of entitlement to
relief.” Iqbal, 556 U.S. at 678 ...