Hofsheier v. Farmers Insurance Exchange6/24/1998
read to negate a specific coverage. In essence, plaintiff argues that the contract is ambiguous and should be interpreted against the insurer in favor of coverage. However, the policy is not ambiguous and the trial court correctly held that Farmers had no duty to defend.
In determining whether an insurer has a duty to defend, we look only at the facts alleged in the complaint to determine whether they provide a basis for recovery that could be covered by the policy. Holman Erection Co., Inc., v. Employers Insurance of Wausau, 142 Or App 224, 229, 920 P2d 1125, rev den 324 Or 394 (1996). A duty to defend an action against the insured arises when the claim stated in the complaint against the insured could, without amendment, impose liability for conduct covered by the policy. Id. Thus, our review is limited to two documents: the complaint and the insurance policy. Id.
The lawsuit filed by Aho against plaintiff alleges two claims for relief. The first claim was brought pursuant to the Federal Fair Housing Act, 42 USC Sections 3604(a), (b) and 3617. The second was brought pursuant to Oregon's Fair Housing Laws, specifically ORS 659.033. Both allegations fall within the insurance policy's exclusion denying coverage for damages "due to discrimination in anyway connected with a violation of any State or Federal Civil Rights law."
That exclusion, by itself, is not ambiguous. Plaintiff's argument, however, is that the exclusion becomes ambiguous when read in combination with the entire policy which provides coverage for "discrimination because of race, color, religion or national origin. Discrimination prohibited by law is excluded." Plaintiff argues that denial of coverage in this case would essentially "withdraw with the policy's left hand what is given with its right." He argues that there is no common law claim for discrimination and, if the exclusion applies, there can be no coverage whatsoever for discrimination. He is incorrect.
It is true that most discrimination lawsuits are based on either federal or state civil rights laws. However, there are areas of the common law that encompass aspects of discrimination actions. For instance, under common law, innkeepers, smiths, and others who offered to serve the public at large are prohibited from refusing, without good cause, to serve a customer. See Romer v. Evans, 517 US 620, 627, 116 S Ct 1620, 134 L Ed 2d 855 (1996). The Supreme Court has acknowledged that the fair housing provisions of the Civil Rights Act of 1968 are analogous to, and possibly an extension of, the common law rule against discrimination by innkeepers. Curtis v. Loether, 415 US 189, 196, 94 S Ct 1005, 39 L Ed 2d 260 (1974). That Court also noted that an "action to redress racial discrimination may also be likened to an action for defamation or intentional infliction of mental distress." Id. at 195 n 10. Additionally, in Oregon, discrimination may form the basis for common law claims for intentional infliction of emotional distress, Carr v. US West Direct Co., 98 Or App 30, 35-36, 779 P2d 154, rev den 308 Or 608 (1989), or wrongful discharge, Goodlette v. LTM, Inc., 128 Or App 62, 65-66, 874 P2d 1354 (1994). The insurance contract here is not ambiguous. It specifically excludes damages in any way arising out of a violation of any state or federal civil rights law. The claims made by Aho against plaintiff were both based entirely on state or federal civil right statutes. The insurer had no duty to defend against those claims.
Affirmed.
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