Oak Crest Const. Co. v. Austin Mut. Ins. Co.

Citation905 P.2d 848,137 Or.App. 475
PartiesOAK CREST CONSTRUCTION COMPANY, Appellant, v. AUSTIN MUTUAL INSURANCE COMPANY, a Minnesota corporation, Respondent. 93C13423; CA A84861.
Decision Date08 November 1995
CourtCourt of Appeals of Oregon

J. Michael Alexander, Salem, argued the cause for appellant. With him on the briefs was Burt, Swanson, Lathen, Alexander, McCann & Smith.

Carl Amala, Salem, argued the cause for respondent. With him on the brief was J.P. Harris II, P.C., Salem.

Before RIGGS, P.J., and LANDAU * and LEESON, JJ.

LANDAU, Judge.

Plaintiff appeals from a summary judgment entered in favor of defendant in this action for breach of a contract to provide insurance coverage. We affirm.

The facts are undisputed. Plaintiff is a general contractor engaged in the construction of residential homes. Defendant insures plaintiff under a commercial liability policy. Plaintiff was hired to build a custom house, and it retained a subcontractor to paint the cabinets and other woodwork in the home. The subcontractor completed that painting work. Approximately two to three weeks later, the paint failed to cure properly in some unspecified way. Plaintiff hired another subcontractor to repair the painting and expended $10,240 in the process. Plaintiff then submitted a claim to defendant, who denied coverage.

Plaintiff brought this action for breach of the insurance policy. Defendant denied liability and alleged the applicability of various exclusions from coverage as affirmative defenses. Defendant moved for summary judgment on the basis of the exclusions. Plaintiff also moved for summary judgment. In support of its motion, plaintiff offered the affidavit of its principal, who averred to the foregoing facts. Plaintiff argued that its liability for the repair of the painting performed by its subcontractor arose out of property damage caused by an "occurrence" within the meaning of the policy and that no exclusions from coverage applied. Defendant did not contest the facts, but argued that it, and not plaintiff, was entitled to judgment as a matter of law. In particular, defendant argued that plaintiff's claim was not covered, because the undisputed facts show that the property damage to the house was not caused by an "occurrence." 1

The trial court denied plaintiff's motion and granted defendant's. In a letter opinion, the court concluded that the property damage was caused by an "occurrence," within the meaning of the policy, but that several exclusions applied. The court entered judgment for defendant.

On appeal, plaintiff argues that the trial court erred in granting defendant's motion and in denying plaintiff's. Defendant argues that the trial court correctly entered judgment in its favor because the property damage in this case was not caused by an "occurrence," as defined in the policy, and because the exclusions on which it relied in its motion apply. We address only whether the property damage was caused by an "occurrence," because we find that issue dispositive. 2 In addressing that question, we draw all reasonable inferences from the undisputed facts in favor of the nonmoving party to determine whether the movant is entitled to judgment as a matter of law. Seeborg v. General Motors Corporation, 284 Or. 695, 699, 588 P.2d 1100 (1978).

Plaintiff argues that two provisions, for property damage and for "products/completed work," apply to this case. The first provides coverage for

"all sums which an insured becomes legally obligated to pay as damages due to bodily injury or property damage to which this insurance applies. The bodily injury or property damage must be caused by an occurrence."

(Boldface in original.) The second provision extends coverage for

"all sums which an insured becomes legally obligated to pay as damages due to bodily injury or property damage arising out of the Products/Completed Work Hazard to which this insurance applies. The bodily injury or property damage must be caused by an occurrence."

(Boldface in original.) In both cases, property damage must be caused by an "occurrence" for coverage to be required. The policy defines "occurrence" as "an accident and includes repeated exposure to similar conditions." The policy does not define "accident."

Defendant argues that neither coverage provision applies, because the undisputed facts show that the property damage was not caused by an accident. According to defendant, the evidence demonstrates that the subcontractor intentionally applied paint to the cabinets and woodwork, and that property damage--in this case, improper curing--resulted. Thus, defendant concludes, the property damage was caused by the intentional act of the subcontractor, not by an accident.

Plaintiff does not dispute that the subcontractor intended to apply the paint. Nevertheless, plaintiff argues that the term "accident" should be broadly construed to include the unintended consequences of intended acts. Relying on Ramco, Inc. v. Pacific Ins., 249 Or. 666, 439 P.2d 1002 (1968), plaintiff argues that, because the property damage was unanticipated, it was accidental.

Even assuming that plaintiff is correct that the policy term "accident" refers to the unintended consequences of intended acts, plaintiff's argument fails. The policy requires that the property damage be caused by an accident, not that the property damage itself be an accident. The Ramco decision, on which plaintiff relies, illustrates the distinction. In that case, the plaintiff, a manufacturer of electric baseboard heaters, obtained from the defendant a products liability policy covering "injury...

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8 cases
  • Simonsen v. Ford Motor Co.
    • United States
    • Court of Appeals of Oregon
    • 8 d3 Dezembro d3 2004
    ...components of the tribunal's reasoning or analysis that underlie that ruling. See ORAP 5.45(3); Oak Crest Const. Co. v. Austin Mutual Ins. Co., 137 Or.App. 475, 478 n. 2, 905 P.2d 848 (1995), aff'd, 329 Or. 620, 998 P.2d 1254 (2000) ("`Rulings' must be assigned or cross-assigned as error, n......
  • Brown v. Chas. H. Lilly Co.
    • United States
    • Court of Appeals of Oregon
    • 7 d3 Julho d3 1999
    ...is a mechanism for challenging a ruling of the trial court, not a reason for its ruling. See Oak Crest Const. Co. v. Austin Mutual Ins. Co., 137 Or.App. 475, 478 n. 2, 905 P.2d 848 (1995) ("The trial court's various reasons for its ruling on the motions for summary judgment are not independ......
  • Groshong v. Mutual of Enumclaw Ins. Co.
    • United States
    • Court of Appeals of Oregon
    • 11 d3 Setembro d3 1996
    ...court; rather, defendant urges us to affirm the trial court based on reasoning the court rejected. In Oak Crest Const. Co. v. Austin Mutual Ins. Co., 137 Or.App. 475, 905 P.2d 848 (1995), which also involved construction and enforcement of an insurance policy, we rejected an argument virtua......
  • State v. Aman
    • United States
    • Court of Appeals of Oregon
    • 15 d3 Dezembro d3 1999
    ...wrong reason" argument is not properly the subject of a cross-assignment of error. Id.; see also Oak Crest Const. Co. v. Austin Mutual Ins. Co., 137 Or.App. 475, 478 n. 2, 905 P.2d 848 (1995), rev. allowed 327 Or. 620, 971 P.2d 412 (1998). To the extent that a footnoted observation in State......
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