Recent federal court ruling holds insurer liable for damage to city property arising out of landslide on its insured’s property

On Behalf of | Jan 13, 2025 | Insurance Companies |

In an October 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 indemnify its policyholder David Pollock “against all legal liability for past and future costs resulting from” claims alleged by the City of Portland against Mr. Pollock 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 Mr. 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 indemnify Mr. Pollock against the city’s claims. The court granted his motion and ruled that Amica was contractually obligated to indemnify him against damages stemming from the city’s claims.

The court reviewed the parties’ expert opinions and stipulated facts that confirmed the landslide caused significant damage to third-party properties, including public infrastructure and private lands, and that Mr. Pollock was legally liable for that damage because the landslide originated on his property.

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 held that exclusion did not apply because the city’s claims included liabilities for third-party property damages.

The Takeaway for Policyholders

This case underscores the importance of understanding the scope of coverage provided by insurance policies and how Oregon law requires those policies to be interpreted and applied in resolving coverage disputes.  Policyholders should consider hiring legal counsel with substantial experience in resolving coverage disputes to ensure they have a clear understanding of what their policies cover.

[1] Pollock v. Amica Mutual Insurance Co., Case No. 3:23-cv-00191-IM, 2024 WL 4528985 (D. Or. Oct. 18, 2024).

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