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L & D of Oregon11/15/2000
Argued and submitted April 10, 2000.
Affirmed.
This is an action for defense costs and indemnity brought by L & D of Oregon, Inc. (L & D) against its insurer, American States Insurance Company (American States). L & D was the defendant in a civil action brought in federal court by a former employee, Crespi. The complaint in the underlying action alleged, among other things, that management and other employees at the L & D workplace made racially derogatory and otherwise disparaging comments to him. Crespi alleged the same basic facts in support of four claims labeled, "employment discrimination" (three counts), "intentional infliction of emotional distress," "negligent retention and supervision," and "wrongful discharge." L & D tendered the Crespi complaint to American States, which refused to defend on the ground that the complaint did not allege the occurrence of a covered event as defined in its policy. L & D settled the lawsuit with Crespi and brought this breach of contract action against American States to recover the costs of its defense and the amount of the settlement. Both parties moved for summary judgment, ORCP 47, and the trial court entered judgment in favor of American States.
L & D argues that American States had a contractual obligation to defend under the policy because Crespi's complaint contained factual allegations that would satisfy all the elements of claims for slander and invasion of privacy, both of which are covered claims under paragraphs 1(d) and 1(e) of the policy. According to L & D, the facts alleged in the underlying complaint determine whether American States has a duty to defend, not the labels placed on the claims by the underlying plaintiff. American States counters that although the label placed on a claim may not be determinative, Crespi's complaint does not allege conduct covered by the policy. We affirm.
An insurer has a duty to defend its insured if the complaint against the insured provides any basis for which the insurer's policy provides coverage. Ledford v. Gutoski, 319 Or 397, 400, 877 P2d 80 (1994); Nielsen v. St. Paul Companies, 283 Or 277, 280, 583 P2d 545 (1978). That determination is made by a comparison of two documents: the complaint and the insurance policy. American Hardware Ins. Group v. West One Auto., 167 Or App 244, 247, 2 P3d 413 (2000). An insurer should be able to determine from the face of the complaint whether its policy requires it to accept tender of the defense. Ledford, 319 Or at 400. If the claims against the insured as set forth in the complaint could, without amendment, serve as the basis for liability for conduct covered by the policy, the insurer must defend. American Hardware Ins. Group, 167 Or App at 247. " ny 'doubt as to whether or not the allegations of a complaint against the insured state a cause of action within the coverage of a liability policy sufficient to compel the insurer to defend the action * * * will be resolved in the insured's favor.'" Minnis v. Oregon Mut. Ins. Co., 162 Or App 198, 209, 986 P2d 77 (1999), rev allowed 330 Or 120, 6 P3d 1097 (2000) (quoting Blohm et al v. Glens Falls Ins. Co., 231 Or 410, 416, 373 P2d 412 (1962)).
We agree with plaintiff that reliance on the labels placed on counts in a complaint alone is not sufficient to determine the duty to defend. Minnis, 162 Or App at 201 n 1 ("The basis for coverage is not necessarily limited to the legal theory with which the underlying plaintiff labeled the claim."). Rather, it is the "conduct" alleged that is critical to the determination. The policy provides that "[American States] will pay those sums that the insured becomes legally obligated to pay as damages because
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