In a March 2024 decision by the United States District Court for the District of Oregon, Judge Karin Immergut ruled that liability insurer Amica Mutual Insurance Company must defend its policyholder David Pollock against claims alleged by the City of Portland regarding a landslide that originated on Mr. Pollock’s property.[1]
The Background Facts
In 2017 a landslide occurred on Mr. Pollock’s property that resulted in damage to adjacent properties owned by the city and neighboring property owners. The city sent Mr. Pollock notices requiring him to perform a variety of remedial and mitigative actions, such as stabilizing his property and curing damage caused to the city’s property. Cost estimates to perform the work required by the city totaled several hundred thousand dollars. Mr. Pollock was unable to fund the cost of the work himself, and the city began assessing fines against him that attached to his property as liens.
Mr. Pollock held homeowner and umbrella insurance policies that he bought from Amica and thought should cover his legal liabilities to the city. Mr. Pollock asked Amica to defend and indemnify him against the city’s claims. Amica, however, denied Mr. Pollock’s request, asserting that damages to his own property were excluded under their policies. This denial led to Mr. Pollock suing Amica for breach of contract and seeking a declaratory judgment.
The Court’s Ruling
Mr. Pollock filed a motion for partial summary judgment that Amica had a duty to defend Mr. Pollock against the city’s claims. Amica primarily argued coverage was precluded by the owned property exclusion, which generally bars coverage for damages to the insured’s own property. The court granted Mr. Pollock’s motion and ruled that Amica had to defend him against the city’s claims because they were ambiguous about whether they concerned damages only to Mr. Pollock’s property or also to third-party property. The court held the city’s claims were ambiguous in the following ways:
- Public Drainage Systems: The city’s claims mentioned damages to a public drainage system. Although it wasn’t clear whether Mr. Pollock was responsible, this ambiguity worked in his favor under Oregon law.
- Groundwater: The city’s claims required Mr. Pollock to obtain geotechnical reports that included investigations into soil and groundwater conditions. Since groundwater is public property, any remediation could potentially affect third-party property.
- Neighboring Structures: The city’s claims required Mr. Pollock to procure stabilization plans that required information about structures near Mr. Pollock’s property, indicating possible liability for third-party damages.
Given these ambiguities, the court concluded that Oregon law required Amica to defend Mr. Pollock under both policies.
The Takeaway for Policyholders
Insurance disputes can be complex, but they often hinge on interpreting technical policy language and legal authorities. If you’re a policyholder whose claim has been denied by your insurer, you should consult an attorney with substantial experience resolving coverage disputes. By doing so, you can better navigate the legal challenges of securing the coverage you need in times of crisis and misfortune.
[1] Pollock v. Amica Mutual Insurance Co., Case No. 3:23-cv-00191-IM, 2024 WL 942093 (D. Or. Mar. 5, 2024).
