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Pickell v. Oregon Mutual Insurance Co.10/30/1991
COURT OF APPEALS OF OREGON
CA No. A67095
1991.OR.40393 ; 109 Or. App. 439; 819 P.2d 764
Decided: October 30, 1991.
DOUGLAS L. PICKELL, APPELLANT,
v.
OREGON MUTUAL INSURANCE COMPANY, RESPONDENT
Appeal from Circuit Court, Jackson County. L. A. Merryman, Judge. No. 89-2805-L-1.
Richard A. Stark, Medford, argued the cause for appellant. With him on the brief was Stark and Hammack, Medford.
G. Marts Acker, Portland, argued the cause for respondent. With him on the brief were Cathy E. Smith and Acker, Underwood, Norwood & Hiefield, Portland.
Richardson, Presiding Judge, and Rossman and Deits, Judges.
Rossman
Plaintiff appeals from a summary judgment for defendant Oregon Mutual Insurance Company (OMIC). The trial court held that defendant correctly refused tender of an action against plaintiff, its insured. We affirm.
Plaintiff had retired from the construction business. He owned and managed some rental properties. He also served on the board of directors of Jefferson State Communications (JSC), an Oregon corporation that operated as a long-distance resale company. He served on the board primarily to protect his investment. Between 1982 and 1984, he persuaded various investors to put money into JSC, promising that a $25,000 investment would yield $80,000 in just a year.
Three of those investors later sued plaintiff for fraud, misrepresentation, violation of Oregon security laws and breach of fiduciary duty. Their complaints alleged that plaintiff was greatly involved in JSC's promotion and management. Plaintiff tendered the actions to OMIC on December 20, 1985, and January 29, 1987. OMIC initially worked to settle the first action, but, on March 12, 1987, it rejected tender of all the claims. Plaintiff settled the actions in 1989 for $24,500 plus $14,762.70 in attorney fees and costs. He brought this action to compel OMIC to cover the false representation claims under his homeowner's, business owner's protector and comprehensive general liability policies. OMIC moved for summary judgment, which the trial court granted. Plaintiff's argument on appeal relates only to his claim under the homeowner's policy.
The policy is a standard homeowner's insurance policy. Plaintiff argues that these provisions compel OMIC to defend:
"Coverage L -- Personal Liability
"We pay, up to our limit of liability, all sums for which any insured is legally liable because of bodily injury or property damage caused by an occurrence to which this coverage applies.
"We also pay, up to our limit of liability, all sums for which any insured is legally liable because of personal injury to which this coverage applies.
"We will defend any suit seeking damages, provided the suit
arises out of bodily injury, property damage, or personal injury not excluded under this coverage. We may make any investigation and settle any claim or suit that we decide is appropriate. We are not obligated to provide a defense after we have paid an amount equal to our limit of liability."
OMIC contends that two other sections of the policy shield it. The clauses provide:
"This coverage does not apply to liability for personal injury * * * arising out of the business activities of any insured."
and:
"[Personal liability] coverage does not apply to liability * * * arising out of the rendering of o
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