The Ninth Circuit Court of Appeals issued a memorandum opinion in National Surety Corp. v. TIG Insurance Co., No. 23-35575, 2024 U.S. App. LEXIS 29612, 2024 WL 4850828 (Nov. 21, 2024), interpreting how Oregon’s Environmental Cleanup Assistance Act (OECAA) deals with insurers’ contributions where the insurers have overlapping coverage for an insured liable for environmental cleanup.
In National Surety, an insured dry cleaner facility contaminated soil and groundwater. The insured was then sued for cleanup by Oregon’s Department of Environmental Quality. Two insurers for the dry cleaner disputed allocation of defense and indemnity costs.
The court first noted that although the statute of limitations for contribution is 6 years, under Oregon law, the statute of limitations is triggered separately for each payment as it is made. As a result, the court held the statute of limitations has not tolled for any payment made on or after March 8, 2014.
The court reversed the district court on the allocation of defense costs. The district court had apportioned the defense costs according to the insurers’ time on risk, finding that policy limits are irrelevant in allocating defense costs. The Ninth Circuit remanded for the district court to apply in the first instance the ORS 465.480(5) factors to the apportionment of defense costs, noting that OECAA provides the district court considerable discretion in weighing the factors and that it was not directing that any specific weight must be applied to any one factor.
Finally, the court held that, because the total amount that was owed was already determined, even if the allocation had not been, the trial court did not abuse discretion in granting prejudgment interest.
Judge Hamilton, in a concurring opinion, addressed consideration of the respective policy limits in allocating defense costs under Lamb-Weston, Inc. v. Oregon Auto Ins. Co., 219 Or 129, 346 P2d 643 (1959) and its progeny.
Disclaimer: The opinions expressed in this blog are those of the author and do not necessarily reflect those of Soha and Lang, P.S. or its clients.