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American Hardware Insurance Group v. West One Automotive Group5/10/2000
Argued and submitted April 11, 2000.
Affirmed.
In this action for a declaratory judgment, defendant West One Automotive Group appeals from summary judgment in favor of plaintiff American Hardware Insurance Group. Defendant argues that the trial court erred when it concluded that two insurance policies issued by plaintiff did not require plaintiff to defend and indemnify defendant against a wrongful termination claim under a provision that covered liability for personal injuries arising out of "eviction." We review for errors of law, Hoffman Construction Co. v. Fred S. James & Co., 313 Or 464, 469, 836 P2d 703 (1992), and affirm.
Defendant purchased four commercial insurance policies from plaintiff, two of which are at issue in this case. Those policies each provided personal injury liability coverage for claims based on defendant's "wrongful entry into, or eviction of a person from, a room, dwelling or premises that the person occupies." In 1996, John Ingolia filed an action alleging that defendant had wrongfully discharged him from employment. Defendant tendered the defense of the action to plaintiff, contending that Ingolia's claim was for "eviction," and was, thus, covered under the policies. Plaintiff rejected the tender. In 1998, defendant settled Ingolia's claim and requested indemnification from plaintiff, which plaintiff refused.
Plaintiff then commenced this action, seeking a declaration that none of the policies covered Ingolia's wrongful termination claim and that plaintiff, therefore, had no duty to defend or indemnify defendant. Defendant counterclaimed for a declaration that plaintiff breached its duties to defend and indemnify defendant under the policies and also alleged separate counterclaims based on several theories, including estoppel, misrepresentation, and bad faith. The parties filed cross-motions for summary judgment. The trial court granted summary judgment in favor of plaintiff on its declaratory judgment claim, and denied summary judgment on all other claims and counterclaims. The court concluded that " he wrongful termination claim against West One in the Ingolia litigation is not covered by the insurance American Hardware sold to West One."
Defendant assigns error to the trial court's grant of summary judgment in favor of plaintiff. The issue on appeal is whether Ingolia's wrongful termination claim is one for wrongful eviction under the personal injury coverages of the policies. Defendant asserts that the policies must be construed liberally to favor coverage, to "promote the polic[ies'] purpose," and so as not to render their provisions superfluous. Plaintiff responds that the term "wrongful eviction," as used in the policies, applies only in cases involving a possessory interest in particular premises, and does not include Ingolia's wrongful termination claim. Therefore, plaintiff argues, it had no duty to defend the Ingolia claim or to indemnify defendant from the cost of its settlement.
"Whether an insurer has a duty to defend an action against its insured depends on two documents: the complaint [against the insured] and the insurance policy." Ledford v. Gutoski, 319 Or 397, 399, 877 P2d 80 (1994). If the complaint alleges facts which, if proved, would impose liability covered by the policy, the insurer must defend. Id. at 399-400. Because defendant settled Ingolia's claims, the duty to indemnify is determined by the same principles. Northwest Pump v. American States Insurance Co., 144 Or App 222, 230, 925 P2d 1241 (1996). We begin our analysis by summarizing the claims Ingolia made against defendant. See Winther v. Valley Ins. Co., 140 Or App 459, 461, 915 P2d 1050 (1996) (following the same order of
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