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Page 1 of 1Seth H. RowFrom:    info@ord.uscourts.govSent:    Thursday, October 13, 2011 1:11 PMTo:      nobody@ord.uscourt...
Case 3:11-cv-00137-MO         Document 7          Filed 05/12/11   Page 1 of 2    Page ID#: 44Seth H. Row, OSB #021845srow...
Case 3:11-cv-00137-MO          Document 7         Filed 05/12/11    Page 2 of 2     Page ID#: 45           1. On Plaintiff...
Case 3:11-cv-00137-MO        Document 8         Filed 05/12/11   Page 1 of 23   Page ID#: 46Seth H. Row, OSB # 021845Email...
Case 3:11-cv-00137-MO       Document 8      Filed 05/12/11      Page 2 of 23   Page ID#: 47                               ...
Case 3:11-cv-00137-MO         Document 8       Filed 05/12/11    Page 3 of 23     Page ID#: 48                            ...
Case 3:11-cv-00137-MO        Document 8       Filed 05/12/11    Page 4 of 23   Page ID#: 49                             T ...
Case 3:11-cv-00137-MO          Document 8        Filed 05/12/11      Page 5 of 23      Page ID#: 50        Plaintiff Ander...
Case 3:11-cv-00137-MO             Document 8    Filed 05/12/11     Page 6 of 23      Page ID#: 51II.      STATEMENT OF BAS...
Case 3:11-cv-00137-MO              Document 8           Filed 05/12/11        Page 7 of 23         Page ID#: 52and storage...
Case 3:11-cv-00137-MO         Document 8        Filed 05/12/11     Page 8 of 23      Page ID#: 53responses to 82 separate ...
Case 3:11-cv-00137-MO             Document 8          Filed 05/12/11         Page 9 of 23        Page ID#: 54answers shall...
Case 3:11-cv-00137-MO           Document 8       Filed 05/12/11      Page 10 of 23       Page ID#: 55        The G N L Let...
Case 3:11-cv-00137-MO               Document 8           Filed 05/12/11         Page 11 of 23          Page ID#: 56 St. Pa...
Case 3:11-cv-00137-MO         Document 8        Filed 05/12/11      Page 12 of 23      Page ID#: 57        The O E C A A p...
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Case 3:11-cv-00137-MO              Document 8           Filed 05/12/11         Page 17 of 23          Page ID#: 62 alleged...
Case 3:11-cv-00137-MO               Document 8           Filed 05/12/11         Page 18 of 23          Page ID#: 63 facili...
Case 3:11-cv-00137-MO          Document 8        Filed 05/12/11      Page 19 of 23       Page ID#: 64 Pintlar, getting inv...
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Case 3:11-cv-00137-MO         Document 8        Filed 05/12/11     Page 22 of 23       Page ID#: 67 all ofthe same reasons...
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Anderson Bros. MSJ 104(e) Request Granted

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Transcript of "Anderson Bros. MSJ 104(e) Request Granted"

  1. 1. Page 1 of 1Seth H. RowFrom: info@ord.uscourts.govSent: Thursday, October 13, 2011 1:11 PMTo: nobody@ord.uscourts.govSubject: Activity in Case 3:11-cv-00137-MO Anderson Brothers, Inc. v. St. Paul Fire and Marine Insurance Company Order on motion for partial summary judgmentThis is an automatic e-mail message generated by the CM/ECF system. Please DO NOTRESPOND to this e-mail because the mail box is unattended.***NOTE TO PUBLIC ACCESS USERS*** Judicial Conference of the United Statespolicy permits attorneys of record and parties in a case (including pro se litigants) toreceive one free electronic copy of all documents filed electronically, if receipt is requiredby law or directed by the filer. PACER access fees apply to all other users. To avoid latercharges, download a copy of each document during this first viewing. However, if thereferenced document is a transcript, the free copy and 30 page limit do not apply. U.S. District Court District of OregonNotice of Electronic FilingThe following transaction was entered on 10/13/2011 at 1:10 PM PDT and filed on 10/11/2011Case Name: Anderson Brothers, Inc. v. St. Paul Fire and Marine Insurance CompanyCase Number: 3:11-cv-00137-MOFiler:Document Number: 49(No document attached)Docket Text:MINUTES of Proceedings: Oral Argument regarding Motion for Partial SummaryJudgment (Plaintiffs) [7] and defendants Cross Motion for Partial SummaryJudgment Against Plaintiff [22]. Order DENYING defendants cross motion forpartial summary judgment [22] and GRANTING plaintiffs motion for partialsummary judgment [7], as stated on the record. Seth H. Row present as counselfor plaintiff(s). Thomas A. Gordon and Stephanie M. Parent present as counsel fordefendant(s).(Court Reporter Bonita Shumway.) (dls)3:11-cv-00137-MO Notice has been electronically mailed to:Thomas A. Gordon tgordon@gordon-polscer.com, docketing@gordon-polscer.comStephanie M. Parent stephanie.m.parent@doj.state.or.us, amanda.c.skaggs@doj.state.or.usSeth H. Row srow@pfglaw.com, dgoodwin@pfglaw.comAndrew S. Moses amoses@gordon-polscer.com, docketing@gordon-polscer.comKristopher L. Kolta kkolta@pfglaw.com, shunter@pfglaw.com3:11-cv-00137-MO Notice will not be electronically mailed to:10/14/2011
  2. 2. Case 3:11-cv-00137-MO Document 7 Filed 05/12/11 Page 1 of 2 Page ID#: 44Seth H. Row, OSB #021845srow@pfglaw.comPARSONS F A R N E L L & GREIN, L L P1030 SW Morrison StreetPortland, Oregon 97205Telephone: (503)222-1812Facsimile: (503) 274-7979Attorneys for Plaintiff Anderson Brothers, Inc. UNITED STATES DISTRICT COURT DISTRICT OF OREGON P O R T L A N D DIVISION ANDERSON BROTHERS, INC., an Case No: 11-CV-00137-MO Oregon corporation. Plaintiff, PLAINTIFFS MOTION FOR V. PARTIAL SUMMARY JUDGMENT ST. PAUL FIRE AND MARINE Pursuant to Fed. R. Civ. P. 56 INSURANCE COMPANY, a Minnesota insurance company, REQUEST FOR O R A L A R G U M E N T Defendant.I. CONFERRAL STATEMENT The undersigned counsel certifies that counsel for Plaintiff Anderson Brothers, Inc.("Anderson" or "Plaintiff) has conferred with counsel for St. Paul Fire and Marine InsuranceCompany ("St. Paul") and the parties were unable to resolve the issues presented by this Motion.II. MOTION Pursuant to Fed. R. Civ. P. 56, Plaintiff moves the Court for an Order granting partialsummary judgment in its favor as follows:Page 1 ~ PLAINTIFFS MOTION FOR PARTIAL S U M M A R Y J U D G M E N T
  3. 3. Case 3:11-cv-00137-MO Document 7 Filed 05/12/11 Page 2 of 2 Page ID#: 45 1. On Plaintiffs First Claim for Relief, partial summary judgment on St. Paulsliability for breach of contract as to Policy Numbers 587JD7640 and 587JE180 as to theAnderson 104(e) Request, as that is defmed in the Complaint; 2. On Plaintiffs First Claim for Relief, partial summary judgment on St. Paulsliability for breach of contract as to Policy Numbers 587JD7640 and 587JE180 as to the GeneralNotice Letter ("GNL"), as that is defmed in the Complaint; 3. On Plaintiffs Second Claim for Relief, partial summary judgment and adeclaration that St. Paul has an obligation to defend Plaintiff under Policy Numbers 587JD7640and 587JE 180 against the Anderson 104(e) Request and the GNL, as both are defmed in theComplaint in this matter, and specifically that the duty to defend includes the alternative disputeresolution process underway in connection with the Site; This Motion is supported by Plaintiffs Memorandum In Support of Motion for PartialSummary Judgment, the Declaration of Seth H. Row In Support of Plaintiff s Motion for PartialSummary Judgment; the Declaration of Martha Sharp In Support of Plaintiff s Motion for PartialSummary Judgment; and the Declaration of John W. Anderson In Support of Plaintiff s Motionfor Partial Summary Judgment, all filed contemporaneously herewith. D A T E D this 12* day of May, 2011. PARSONS F A R N E L L & GREIN, L L P By: /s/Seth H. Row Seth H.Row, OSB #021845 Telephone: (503)222-1812 Attorneys for Plaintiff Anderson Brothers, Inc.Page 2 - PLAINTIFFS MOTION FOR PARTIAL S U M M A R Y J U D G M E N T
  4. 4. Case 3:11-cv-00137-MO Document 8 Filed 05/12/11 Page 1 of 23 Page ID#: 46Seth H. Row, OSB # 021845Email: srow@pfglaw.comPARSONS F A R N E L L & GREIN, L L P1030 SW Morrison StreetPortland, Oregon 97205Telephone: (503)222-1812Facsimile: (503) 274-7979Attorneys for Plaintiff Anderson Brothers, Inc. UNITED STATES DISTRICT C O U R T DISTRICT OF O R E G O N P O R T L A N D DIVISION ANDERSON BROTHERS, INC., an Case No: 11-CV-00137-MO Oregon corporation. Plaintiff, MEMORANDUM IN SUPPORT OF V. PLAINTIFFS MOTION FOR PARTIAL SUMMARY JUDGMENT ST. PAUL FIRE AND MARINE INSURANCE COMPANY, a Minnesota insurance company, Defendant. Page 1 - M E M O R A N D U M IN SUPPORT OF PLAINTIFFS M O T I O N FOR PARTIAL SUMMARY JUDGMENT
  5. 5. Case 3:11-cv-00137-MO Document 8 Filed 05/12/11 Page 2 of 23 Page ID#: 47 TABLE OF CONTENTS Page No.L INTRODUCTION 2II. STATEMENT OF BASIC M A T E R I A L FACTS 3 A. The Policies 3 B. Andersons Property Identified Within Superfund Site 3 C. The 104(e) Request 4 D. The General Notice Letter 6 E. Tender & Denial By St. Paul 7in. ARGUMENT 8 A. St. Paul Breached the Policies By Refusing to Defend the 104(e) Request 8 1. The O E C A A Governs the Scope of an Insurers Duty to Defend Environmental Claims 8 2. The 104(e) Request Was a "Suit" Under the O E C A A 11 3. The 104(e) Request Triggered the Defense Obligation 13 4. Because the 104(e) Request Was a "Suit," St. Paul Had a Duty to Defend, Which It Breached 16 5. St. Pauls Duty to Defend the 104(e) Request Is Continuing 16 B. St. Paul Breached the Policies By Refusing to Defend the G N L 16 1. The G N L Is a "Suit" Under the O E C A A & Controlling Ninth Circuh Case Law 17 2. The G N L Triggered the Defense Obligation 18 3. Because the G N L Was a "Suit," St. Paul Had an Obhgation to Defend, Which It Breached 19 C. Anderson Is Entitled to Declaratory Judgment that St. Paul Has an Obligation to Defend Anderson 19 1. Legal Standard for Declaratory Judgment 19 2. The Defense Obligation for the G N L Includes the Ongoing A D R Process.... 19IV. CONCLUSION 20Page i - T A B L E OF CONTENTS
  6. 6. Case 3:11-cv-00137-MO Document 8 Filed 05/12/11 Page 3 of 23 Page ID#: 48 T A B L E OF AUTHORITIESCases Page No.Aetna Casualty and Surety Company v. Pintlar Corporation, 948 F.2d 1507, 1516 (9* Cir. 1991) 11, 18Ash Grove Cement Co. v. Liberty Mutual Ins. Co. et al., No. 09-239-KI, 2010 W L 3894119 (D. Or. Sept. 30, 2010) 11Carson Harbor Vill, Ltd v. Unocal Corp., 270 F.3d 863, 870 (9th Cir. 2001) 15Firemans Fund Ins. Co. v. Ed Niemi Oil Co., Inc., 2005 W L 3050460 (D. Or. 2005) 10GE Prop. & Cas. Ins. Co. v. Portland Community Coll., 2005 W L 2044315 (D. Or. 2005) 10, 14GerlingAm. Ins. Co. v. Wagner Constr. Co., No. CV-98-1156-K1, 1999 W L 962468 (D. Or. 1999) 10Grabhorn, Inc. v. Metropolitan Service Dist. 624 F.Supp.2d 1280, 1284 (D. Or. 2009) 14Hiebert V. Farmers Ins. Co. ofOregon, 172 Or. App. 13, 17, 18, 18 P.3d 397 (2001) 12Ledford v. Gutoski, 319 Or. 397, 399-400, 877 P.2d 80 (1994) 10, 13North Pacific Ins. Co. v. Wilson Distributing Serv., Inc., 138 Or. App. 166, 169, 908 P.2d 827 (1995) 10Northwest Environmental Advocates V. U.S. E.P.A., 537 F.3d 1006, 1026 -1027 (9* Cir. 2008) 14Sch. Dist No. 1 V. Mission Ins. Co., 58 Or. App. 692, 703-04, 650 P.2d 929 (1982) 10Schnitzer Investment Corp. v. Certain Underwriters at Lloyds of London, 197 Or. App. 147, 156-57, 104 P.3d 1162 (2005), a f f d in part, 341 Or. 128, 137 P.3d 1281 (2006) 10Spring Vegetable Co. v. Hartford Cas. Ins. Co., 801 F.Supp. 385, 391 (D. Or. 1992) 11 United States v. Cannons Engineering Corp etal, 899 F.2d 79, 93 (1^ C h . 1990) 15 W. Equities, Inc. v. St Paul Fire & Marine Ins. Co., 184 Or. App. 368, 371, 56 P.3d 431 (2002) 10XDP, Inc. v. Watumull Properties Corp., 2004 W L 1103023 (D.Or. May 14, 2004) 15Page ii - T A B L E OF AUTHORITIES
  7. 7. Case 3:11-cv-00137-MO Document 8 Filed 05/12/11 Page 4 of 23 Page ID#: 49 T A B L E OF AUTHORITIES contdStatutes Page No.28 U.S.C. § 2201(a) 1928 U.S.C. § 2461 531 U.S.C. § 3701 542 U.S .C. §§ 9607(a) (cost recovery) and 9613(f)(1) (contribution) 1542 U.S.C. § 9601(9) 1542 U.S.C. § 9607(a)(l-2) 15ORS 465.478 18Page iii - T A B L E OF AUTHORITIES
  8. 8. Case 3:11-cv-00137-MO Document 8 Filed 05/12/11 Page 5 of 23 Page ID#: 50 Plaintiff Anderson Brothers, Inc. ("Anderson" or "Plaintiff) submits the followingMemorandum In Support of Plaintiff s Motion for Partial Summary Judgment. ThisMemorandum is supported by the Declaration of Seth H. Row In Support of Plaintiff s Motionfor Partial Summary Judgment ("Row Dec."); the Declaration of Martha Sharp In Support ofPlaintiffs Motion for Partial Summary Judgment ("Sharp Dec."); and the Declaration ofJohn W. Anderson In Support of Plaintiff s Motion for Partial Summary Judgment ("AndersonDec"), all filed contemporaneously herewith.I. INTRODUCTION This is an environmental insurance coverage dispute involving policies sold by defendantSt. Paul Fire and Marine Insurance Company ("St. Paul") to Anderson and to its predecessor-in-interest. Specialty Truck Parts, Inc., over a period of years in the 1970s and early 1980s.Plaintiff brought this action against St. Paul to enforce its statutory and contractual rights to a fulland complete defense for environmental claims against Plaintiff related to the Portland HarborSuperfund Site ("Site"). Plaintiff owns or leases property within the boundaries ofthe Site.Plaintiff received several demands and claims against it relating to the Site, including two lettersfrom the Environmental Protection Agency, the first called the "104(e) Request," and the seconda "General Notice Letter" (aka a "PRP letter" or "GNL"). Plaintiff tendered both to St. Paul, butSt. Paul has refused to defend, in breach of its contracts of insurance. Plaintiff brings thisMotion now, before discovery has been completed, because its rights are being jeopardized bythe lack of a full and complete defense in connection with the Site, and because the material factsrelating to this Motion are uncontested.//////////Page 2 - M E M O R A N D U M IN SUPPORT OF PLAINTIFFS MOTION FOR P A R T I A L S U M M A R Y JUDGMENT
  9. 9. Case 3:11-cv-00137-MO Document 8 Filed 05/12/11 Page 6 of 23 Page ID#: 51II. STATEMENT OF BASIC MATERIAL FACTS A. The Policies St. Paul sold to Anderson several insurance policies, including the followingComprehensive General Liability ("CGL") contracts of insurance (collectively referred tohereinafter as "the Policies"):Policy Number Effective Dates Insured587JD7640 1/21/79-1/21/80 Anderson587JE3180 1/21/80-1/21/81 AndersonRow Dec, Exs. A & B . Each of the Policies provides for coverage, and defense, as follows: The Company will pay on behalf of the insured all sums which the Insured shall become legally obligated to pay as damages because of: Coverage A. bodily injury or Coverage B. property damage to which this insurance applies, caused by an occurrence, and the Company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage, even i f any of the allegations of the suit are groundless, false or fraudulent, and may take such investigation and settlement of any claim or suit as it deems expedient, but the Company shall not be obligated to pay any claim or judgment or to defend any suit after the applicable limit of the Companys liability has been exhausted by payment of judgments or settlements.Id. The Policies do not contain a defmition of the term "suit." Id. B. Andersons Property Identified Within Superfund Site Anderson is an Oregon corporation with its principal place of business in Portland,Oregon. Anderson Dec.,T| 2. Anderson operates and has operated as a truck wrecking, servicing.Page 3 - M E M O R A N D U M IN SUPPORT OF PLAINTIFFS M O T I O N FOR P A R T I A L SUMMARY JUDGMENT
  10. 10. Case 3:11-cv-00137-MO Document 8 Filed 05/12/11 Page 7 of 23 Page ID#: 52and storage company. Anderson Dec.,^ 3. During the period 1975 to 1985 Anderson leasedproperty known as Tax Lots 400, 1000, and 1100, which are part of property loiown as 4621 N WSt. Helens Road, Portland, Oregon. Anderson Dec.,Tf 5. Anderson also purchased, itself, anadjacent parcel, known as Tax Lot 200, in 1976. Anderson Dec.,T| 6. C. The 104(e) Request The United States Environniental Protection Agency ("EPA") has identified an 11-milestretch of the lower Willamette River, and properties along that stretch, as the "Portland HarborSuperfund Site" (hereinafter "Site").^ Tax Lots 400, 1000, 1100 and 200 are all within the landarea that is part of the Site. Sharp Dec, Tf2. On or shortly after November 6, 2006, Anderson received a letter from an attorney forChevron U.S.A., Inc., which the author stated was a participant in the Lower Willamette Group("LWG"). Anderson Dec, Ex. C. The L W G letter indicated that Anderson had been identifiedas a potentially responsible party ("PRP") in connection with the Site. Id. The letter threatenedto bring a lawsuit against Anderson for contribution to costs that had been incurred by the L W G ,if Anderson did not sign a tolling agreement. Id. Anderson did not sign the tolling agreement.Anderson Dec, ^9. On or shortly after January 18, 2008, Anderson received a letter from the E P A thatdemanded information from Anderson pursuant to the authority of Section 104(e) of theComprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42U.S.C. § 9604(e) ("104(e) Requesf). Anderson Dec, Ex. A . The 104(e) Request sought Anderson acquired a company known as Specialty Trucli Parts, Inc. ("Specialty") in 1973. Anderson Dec, 4.On or about September 16, 1992, Specialty dissolved. Id. Specialty purchased several policies from St. Paul asalleged in the Complaint. However, those policies are not at issue in this Motion as to St. Pauls breach of contractor declaratory relief, because St. Paul has indicated that it believes that there are issues of fact regardingsuccessorship, and successor liability, that would preclude summary judgment as to those policies.^ See the EPAs map of the Portland Harbor Superfund Site, athttp://yosemite.epa.gov/rl0/CLEANUP.NSF/0/6312f7efl7518912882573990068d67d/$FILE/Portlandharbormaplg.jpg (last visited May 2, 2011).Page 4 - M E M O R A N D U M IN SUPPORT OF PLAINTIFFS M O T I O N FOR P A R T I A L SUMMARY JUDGMENT
  11. 11. Case 3:11-cv-00137-MO Document 8 Filed 05/12/11 Page 8 of 23 Page ID#: 53responses to 82 separate questions (not including numerous sub-parts and compound elements ofthose questions). Id. The Instructions accompanying the 104(e) Request provided that Andersonwas obligated to "[p]rovide responses to the best of Respondents ability, even i f the informationsought was never put down in writing or if the written documents are no longer available." Id.They further provided that Anderson was obligated to "[sjeek out responsive information fromcurrent and former employees/agents." Id. In the 104(e) Request, E P A noted that it was seekinginformation "from current and past landowners, tenants, and other entities believed to haveinformation about activities that may have resulted in releases or potential threats of releases ofhazardous substances to the Site." Id. The 104(e) Request went on to note that "[tjhisinformation will be used for the purposes of determining the need for response, or choosing ortaking any response action at the Portland Harbor Superfund Site, and to identify additionalpotentially responsible parties for performing the cleanup." Id. It also made clear thatcompliance with the 104(e) Request was "required by law." Id. The 104(e) Request warnedthat: [f]ailure to respond fully and truthfully to the Information Request by the due date provided below may result in an enforcement action by EPA. Under Section 104(e)(5)(B) of C E R C L A , 42 U.S.C. § 9604(e)(5)(B), pursuant to the Federal Civil Penalties Inflation Adjustment Act of 1990, 28 U.S.C. § 2461, as amended by the Debt Collection Improvement Act of 1996, 31 U.S.C. § 3701, E P A is authorized to commence an action to assess civil penalties of not more than $32,500 per day for each day of noncompliance against any person who unreasonably fails to comply with an Information Request.Id. The Instructions accompanying the 104(e) Request required Anderson to provide responsiveinformation notwithstanding objections, and warned that objecting without providing responsiveinformation could subject Anderson to the penalties listed above. Id. The Instructions alsowarned Anderson that submission of cursory responses when other responsive information wasavailable would be considered noncompliance, and that "[ijncomplete, evasive, or ambiguousPage 5 - M E M O R A N D U M IN SUPPORT OF PLAINTIFFS M O T I O N FOR P A R T I A L S U M M A R Y JUDGMENT
  12. 12. Case 3:11-cv-00137-MO Document 8 Filed 05/12/11 Page 9 of 23 Page ID#: 54answers shall constitute failure to respond" and could subject Anderson to the penalties listedabove. Id. Anderson retained attorney Martha Sharp to assist it in responding to the 104(e) Request.Sharp Dec, | 3 . Sharp and Anderson retained an environmental consultant to assist Sharp, andAnderson, in performing the investigation required by the 104(e) Request. Sharp Dec, f4.Sharp prepared a detailed response to the 104(e) Request, as required by the terms of the request.Sharp Dec, ^5. Sharp, and the environmental consultant, spent hundreds of hours retrieving,assembling, and analyzing historical and current documents and information about the propertiesand activities on those properties. Sharp Dec, ^[6. Anderson submitted its initial response to the104(e) Request on June 16, 2008.^ Sharp Dec, 1. D. The General Notice Letter Shortly after November 13, 2009, Anderson received a letter from the E P A entitled"General Notice Letter for the Portland Harbor Superfund Site in Portland, Oregon." AndersonDec, Ex. B ("GNL Letter"). This letter stated that "EPA has determined that AndersonBrothers, Inc. and Specialty Truck Parts may be responsible under C E R C L A for cleanup of theSite or costs E P A and others have incurred in cleaning up the Site." Id. The letter goes on tostate that "EPA has reason to believe that hazardous substances have been or are being releasedfrom the facilities located at 5275 N W St. Helens Road, 5315 N W St. Helens Road, and 4621N W St. Helens Road & adjacent Tax Lots 200 & 300 in Portland Oregon, into the study areafor the Portland Harbor Superfund Site, which is River Mile 2 to River Mile 12." Id. The letterinformed Anderson that " E P A is encouraging PRPs [potentially responsible parties] to convene amediated allocation process," described an ongoing ahernative dispute resolution ("ADR")process known as the "Convening Group," and provided a contact for the Convening Group. Id.^ Anderson is under a continuing duty to supplement its 104(e) Response if it comes across additional responsiveinformation. Anderson Dec, Ex. A .Page 6 - M E M O R A N D U M IN SUPPORT OF PLAINTIFFS M O T I O N FOR PARTIAL SUMMARY JUDGMENT
  13. 13. Case 3:11-cv-00137-MO Document 8 Filed 05/12/11 Page 10 of 23 Page ID#: 55 The G N L Letter received by Anderson is based on a standard-form G N L letter used by EPA. Sharp Dec, ^19, Ex. A . In response to the G N L Letter, Anderson investigated participating in the Convening Group as E P A directed. Sharp D e c , |10. However, Anderson learned that the costs of participating in the Convening Group, including paying an attorney to participate in the group on its behalf and the "buy in" costs required of participants (to fund the operations of the group, including costs for neutrals) were beyond its means. Sharp D e c , ^11; Anderson Dec, ^9. Anderson has, through its attorney Ms. Sharp, continued to monitor the process underway involving other "PRPs" at the Site and to do what it can to limit its liability at the Site, including attending meetings hosted by the EPA. Sharp Dec, f 12. E. Tender & Denial By St. Paul Anderson, through its attorney, tendered the 104(e) Request to St. Paul on March 10, 2008. Sharp Dec, Ex. B. On March 27, 2008, St. Paul acknowledged receipt ofthe tender. Sharp Dec, Ex. C. On September 10, 2008, St. Paul denied the tender. Sharp Dec, Ex. E. On September 22, 2008 Anderson requested that St. Paul reconsider its denial. Sharp Dec, Ex. F. On October 14, 2008, St. Paul again denied the tender. Sharp D e c , Ex. G. On June 17, 2009, Anderson again demanded that St. Paul accept the tender. Sharp D e c , Ex. H. On June 24, 2009, St. Paul again denied the tender. Sharp Dec, Ex. I. On November 20, 2009, Anderson tendered the G N L letter to St. Paul. Sharp Dec, Ex. J. On March 26, 2010, St. Paul denied the tender. Sharp Dec, Ex. K. On March 31, 2010, Anderson again wrote to St. Paul encouraging it to reconsider its denial. Sharp Dec, Ex. L. Anderson wrote to St. Paul on May 27, 2010 and July 6, 2010, again requesting that St. Paul reconsider its denial of the tender. Sharp Dec, Exs. M and N . On July 14, 2010, St. Paul repeated its denial of the tender. Sharp Dec, Ex. O. On July 29, 2010, Anderson wrote to Page 7 - M E M O R A N D U M IN SUPPORT OF PLAINTIFFS M O T I O N FOR PARTIAL SUMMARY JUDGMENT
  14. 14. Case 3:11-cv-00137-MO Document 8 Filed 05/12/11 Page 11 of 23 Page ID#: 56 St. Paul informing it of statements made by the EPA at a meeting on July 27, 2010, the importance of St. Paul agreeing to defend Anderson in light of EPAs statements, and the prejudice that Anderson was suffering as the result of not being defended by St. Paul. Sharp Dec, Ex. P. On October 6, 2010, Anderson again requested that St. Paul reconsider its denial. Sharp Dec, Ex. Q. III. ARGUMENT The 104(e) Request from the E P A was sufficient to trigger the duty to defend under the Liberty Mutual policies because the 104(e) Request is a "suif under the Oregon Environmental Cleanup Assistance Act ("OECAA"), which governs this dispute."^ The G N L also unquestionably triggered the duty to defend under the O E C A A . A. St. Paul Breached the Policies By Refusing to Defend the 104(e) Request. 1. The O E C A A Governs the Scope of an Insurers Duty to Defend Environmental Claims. The Oregon Environmental Cleanup Assistance Act (OECAA) was passed to assist in the "fair and efficient resolution of environmental [insurance] claims while encouraging voluntary compliance and regulatory cooperation." ORS 465.478. The O E C A A governs the scope of an insurers duty to defend an environmental claim because it requires that courts use a specific rule of construction when attempting to define the terms "lawsuit" or "smt" (which in older insurance policies - including the St. Paul policies - are not defined) ^ for purposes of interpreting an insurance contract. ORS 465.480(2). The O E C A A specifies that the term "suif in an insurance policy shall be given a specific, and broad, interpretation as to environmental claims. ORS 465.480(2)(b). * There is no question that Oregon coverage law applies to this dispute. ^ The statute contains a "savings clause" that provides that "The rules of construction set forth in this section do not apply if the application of the rule results in an interpretation contrary to the intent of the parties to the general liability insurance policy." ORS 465.480(7). Where, as here, a term is undefined in the policy (as is the term "suit" in the St. Paul policies), the statutory rule of construction will control. Page 8 - M E M O R A N D U M IN SUPPORT OF PLAINTIFFS M O T I O N FOR P A R T I A L S U M M A R Y JUDGMENT
  15. 15. Case 3:11-cv-00137-MO Document 8 Filed 05/12/11 Page 12 of 23 Page ID#: 57 The O E C A A provides specific rules of construction for insurance policies in coverage actions such as this one: (2) Except as provided in subsection (7) of this section, in any action between an insured and an insurer to determine the existence of coverage for the costs of investigating and remediating environmental contamination, whether in response to governmental demand or pursuant to a written voluntary agreement, consent decree or consent order, including the existence of coverage for the costs of defending a suit against the insured for such costs, the following rules of construction shall apply in the interpretation of general liability insurance policies involving environmental claims: * * * * (b) Any action or agreement by the Department of Environmental Quality or the United States Environmental Protection Agency against or with an insured in which the Department of Environmental Quality or the United States Environmental Protection Agency in writing directs, requests or agrees that an insured take action with respect to contamination within the State of Oregon is equivalent to a suit or lawsuit as those terms are used in any general liability insurance policy. ORS 465.480(2) & (2)(b) (emphasis added). " S u i f is defined for purposes ofthe O E C A A as follows: (1) As used in this section: (a) "Suh" or "lawsuit" includes but is not limited to formal judicial proceedings, administrative proceedings and actions taken under Oregon or federal law, including actions taken under administrative oversight of the Department of Environmental Quality or the United States Environmental Protection Agency pursuant to written voluntary agreements, consent decrees and consent orders. ORS 465.480(l)(a). Taken together, these O E C A A sections provide that i f an insured and an insurer are in litigation over coverage of "the costs of investigating and remediating environmental contamination," ORS 465.480(2), the court shall interpret the term "suif in the policy to mean "any action... against... an insured in which... the Department of Environmental Quality or the United States Environmental Protection Agency in writing directs, requests or agrees that an insured take action with respect to contamination within the State of Oregon..." ORS 465.480(2)(b). Page 9 - M E M O R A N D U M IN SUPPORT OF PLAINTIFFS MOTION FOR P A R T I A L S U M M A R Y JUDGMENT
  16. 16. Case 3:11-cv-00137-MO Document 8 Filed 05/12/11 Page 13 of 23 Page ID#: 58 The O E C A A acts to further broaden Oregons aheady-broad law on the duty to defend. GEProp. & Cas. Ins. Co. v. Portland Community Coll, 2005 W L 2044315, at *3 (D. Or. 2005) (unpublished) (duty to defend under Oregon law is separate from and broader than its duty to indemnify); North Pacific Ins. Co. v. Wilson Distributing Serv., Inc., 138 Or. App. 166, 169, 908 P.2d 827 (1995); Ledford v. Gutoski, 319 Or. 397, 403, 877 P.2d 80 (Or. 1994) ; Firemans Fund Ins. Co. V. Ed Niemi Oil Co., Inc., 2005 W L 3050460, at *1 (D. Or. 2005) (unpublished) ("[T]he duty to defend is based on a possibility of coverage. Specifically, this involves the possibility that the insurer might be liable to indemnify the insured based on the factual allegations asserted in the complaint against the insured."). A n insurer is required to defend a "suit" if the complaint "contains some allegations of conduct or damage ... that fall within policy coverage or can reasonably be interpreted to fall within coverage..." Ledford, 319 Or. at 400. The O E C A A is consistent with Oregons generally expansive approach to defense. Oregon courts have in several situations found a duty to defend to have been triggered before a formal complaint was filed against the insured. See Schnitzer Investment Corp. v. Certain Underwriters at Lloyds of London, 197 Or. App. 147, 156-57, 104 P.3d 1162 (2005), a f f dinpart, 341 Or. 128, 137 P.3d 1281 (2006) (finding, under pre-OECAA law, that the tendering of correspondence and demands from the Department of Environmental Quality ("DEQ") and a consent order with DEQ was the "functional equivalent of a judicial complaint" and therefore triggered the insurers duty to defend, and citing Sch. Dist. No. I v. Mission Ins. Co., 58 Or. App. 692, 703-04, 650 P.2d 929 (1982) for proposition that administrative proceeding may be a "suit" under insurance policy); GerlingAm. Ins. Co. v. Wagner Constr. Co., No. CV-98-1156-Kl, 1999 W L 962468 (D. Or. 1999) (permitting recovery of pre-lawsuh defense fees); Spring Vegetable ^ A l l doubts or ambiguities in the allegations of a complaint are resolved in favor of defense coverage. W. Equities, Inc. V. St Paul Fire & Marine Ins. Co., 184 Or. App. 368, 371, 56 P.3d 431 (2002). Page 10 - M E M O R A N D U M IN SUPPORT OF PLAINTIFFS M O T I O N FOR PARTIAL S U M M A R Y JUDGMENT
  17. 17. Case 3:11-cv-00137-MO Document 8 Filed 05/12/11 Page 14 of 23 Page ID#: 59 Co. V. Hartford Cas. Ins. Co., 801 F.Supp. 385, 391 (D. Or. 1992) (finding that notice to the insurer of a courts oral ruling that opened the door for potential indemnity coverage was sufficient to trigger defense coverage). 2. The 104(e) Request Was a " S u i f Under the O E C A A . (a) The Ash Grove Decision In September, 2010, Judge King held that a 104(e) request was a "smt" under the OECAA. Ash Grove Cement Co. v. Liberty Mutual Ins. Co. et a/.. No. 09-239-KI, 2010 W L 3894119 (D. Or. Sept. 30, 2010). In Ash Grove the plaintiff received a 104(e) request nearly identical to the letter received by Anderson. Ld. at 2010 W L 3894119 at *2. Judge King heldthat a 104(e) request fits within the O E C A A s provision directing that the term "suit" in aninsurance policy be interpreted to include letters from the E P A that can be considered an"action" "against" the insured in which the E P A requests that the insured "take action withrespect to contamination." Ld. at *4. Judge King noted that compliance with a 104(e) request isrequired by law (CERCLA), as stated in the 104(e) letter itself, and that i f an entity fails torespond fully in a timely manner, the EPA "can commence an action for civil penalties of up to$32,500 per day..." Id Judge King also noted that the Ninth Circuits decision in Aetna Casualty and SuretyCompany v. Pintlar Corporation, 948 F.2d 1507, 1516 (9* Ch. 1991), supports the finding that a 104(e) request triggers a duty to defend. In Pintlar the Ninth Circuh held that a "PRP notice"triggered the duty to defend, despite the fact that the PRP letter is merely part of an E P Aadministrative process. at 1516. Judge King noted that the 104(e) request is part of the C E R C L A administrative processjust like the PRP notice discussed in Pintlar.Page 11 - M E M O R A N D U M I N SUPPORT OF PLAINTIFFS M O T I O N FOR PARTIAL S U M M A R Y JUDGMENT
  18. 18. Case 3:11-cv-00137-MO Document 8 Filed 05/12/11 Page 15 of 23 Page ID#: 60 Unlike the garden variety demand letter, which only exposes one to a potential threat of future litigation, a PRP notice carries with it immediate and severe implications. Generally, a party asserting a claim can do nothing between the occurrence of the tort and the filing of the complaint that can adversely affect the insureds rights. However, in a C E R C L A case, the PRPs substantive rights and ultimate liability are affected from the start of the administrative process... In many instances, it is more prudent for the PRP to undertake the environmental studies and cleanup measures [resulting from the PRP letter] itself than to await the EPAs subsequent suit in a cost recovery action. Ash Grove, 2010 W L 3894119 at *5 (quoting Pintlar, 948 F. 2d at 1517); see also Ash Grove, 2010 W L 3894119 at *5 ("The Pintlar courts rationale for construing a PRP notice applies to a [§ 104(e)] letter as well..."). Therefore, it is clear that Judge King found that a 104(e) request - and the named targets response to h - was part of a compulsory administrative process that permitted the targeted entity to have some influence on hs liability for the Superfund site. The 104(e) request is simply one starting point for the administrative process. Judge King also found that treating a 104(e) request as a "suh" was consistent with Oregon law on the duty to defend and interpretation of insurance contracts generally: A reasonable insured could interpret the § 104(e) letter as an "effort to impose on policyholders a liability ultimately enforceable by a court," triggering the need for a defense, see Pintlar, 948 F.2d at 1516, and the insured is entitled to the advantage of the courts interpreting the policy provision against the drafting party.Ash Grove, 2010 W L 3894119 at *5, a/^o citing Hiebert v. Farmers Ins. Co. ofOregon, 172 Or. App. 13, 17, 18, 18 P.3d 397 (2001). (b) Andersons 104(e) Request Falls Within the Ash Grove Analysis. The 104(e) Request received by Anderson is nearly identical to the 104(e) request in theAsh Grove matter as discussed by Judge King. The Anderson 104(e) Request contained the same language quoted by Judge King relating to compliance being required by law and penalties for non-compliance. Anderson Dec, Ex. A. The Anderson 104(e) Request contained "82 questions, Page 12 - M E M O R A N D U M IN SUPPORT OF PLAINTIFFS M O T I O N FOR PARTIAL S U M M A R Y JUDGMENT
  19. 19. Case 3:11-cv-00137-MO Document 8 Filed 05/12/11 Page 16 of 23 Page ID#: 61 with subparts," and as in Ash Grove "required [Anderson] to seek information from former employees and agents, as well as documents." Ash Grove, 2010 W L 3894119 at *2; Anderson Dec, Ex. A . Therefore, analytically the Anderson 104(e) Request falls within the Ash Grove analysis, and Anderson submits that the same analysis should be applied. The Anderson 104(e) Request was an "action" "against" the insured in which the EPA "directed" that Anderson "take action" in connection with contamination. ORS 465.480(2)(b). 3. The 104(e) Request Triggered the Defense Obligation. Not only was the 104(e) Request a "suit" under the Policies, due to the interpretative mandate of the O E C A A , but it also satisfied the other factors in the Policies to trigger the duty to defend. As set out above, under the Policies St. Paul must defend any "suit" "against the insured seeking damages on account of... property damage [to which this insurance applies]." Row Dec, Exs. A & B . Two aspects of Oregon law on the duty to defend are critical in evaluating whether the 104(e) Request triggered the duty to defend: first, Oregon law is clear that if the "complaint provides any basis for which the insurer provides coverage" the duty to defend exists; second, "[a]ny ambiguity in the complaint with respect to whether the allegations could be covered is resolved in favor ofthe insured." Ledford v. Gutoski, 319 Or. 397, 399-400, 877 P.2d 80 (1994). Here, the facts alleged in the 104(e) Request provide a basis for coverage. First, the 104(e) Request alleged that there had been property damage, in the form of contamination at the Portland Harbor Superfund Site ("Site").^ Anderson Dec, Ex. A . The 104(e) Request also ^ The 104(e) Request, although it did not contain extensive detail about the property damage at the Site, incorporated by reference the materials at the E P A s Portland Harbor Superfund Site website: http://yosemite.epa.gov/R10/cleanup.nsf7dl9cd587dffleee8825685f007d56b7/75e7f27bdl08f3eb88256f4a007ba01 8!OpenDocument. The Court may take judicial notice ofthe fact that within that website are documents dated prior to January, 2008 that refer to various types of contamination, including contamination in river sediment for which Page 13 - M E M O R A N D U M IN SUPPORT OF PLAINTIFFS M O T I O N FOR P A R T I A L SUMMARY JUDGMENT
  20. 20. Case 3:11-cv-00137-MO Document 8 Filed 05/12/11 Page 17 of 23 Page ID#: 62 alleged that response costs had already been incurred, and were continuing to be incurred, in the form of a Remedial Investigation and Feasibility Study ("RI/FS"), in cormection with that property damage, and that additional response costs were going to be incurred in the future. Id. Second, the 104(e) Request alleged that Anderson was among the group of persons potentially liable for that contamination. The 104(e) Request stated that the E P A was sending information requests to, among others, "landowners" and "tenants" at the Site. Id. It is undisputed that Anderson is a landowner and tenant at the Site. Any ambiguity in the 104(e) Request, of course, must be resolved in favor of coverage. Ledford, 319 Or. at 399-400. Oregon courts have held that where a complaint is ambiguous as to a coverage-related fact, a duty to defend exists whenever the factual allegations in the complaint would permit the presentation of evidence at trial that would establish the missing coverage fact. GEProp. & Cas. Ins. Co. v. Portland Community College, No. C V 04-727-HU, 2005 W L 2044315, *6 (D. Or., August 25, 2005) ("G£ v. PCC") (allegations in DEQ voluntary agreement would have permitted DEQ to put on evidence of groundwater contamination). The 104(e) Request clearly was broad enough to permh EPA to "introduce evidence" that Anderson was a landowner of facilities within the Site subject to potential liability under state and federal environmental laws and regulations. C E R C L A is essentially a strict liability statute for landowners and tenants. Under the law implicated by the 104(e) Request ( C E R C L A and the Superfund statute), any landowner orAnderson, as a riparian landowner, is potentially liable. See Northwest Environmental Advocates v. U.S. E.P.A., 537F.3d 1006, 1026 -1027 (9* Cir. 2008) (taking judicial notice of statements in E P A administrative documents);Grabhorn, Inc. v. Metropolitan Service Dist. 624 F.Supp.2d 1280, 1284 (D. Or. 2009) ("The court may take judicialnotice of matters of public record which are not subject to reasonable dispute over authenticity," without takingnotice of the truth of facts asserted in those documents where it would be inappropriate to do so.); see also Schnitzer,197 Or. App. at 157 (reading DEQ letter together with attached documentation to assess duty to defend). One suchdocument is the March, 2007 "Comprehensive Round 2 Site Characterization Summary and Data Gaps AnalysisReport" which at page 3-7 of the Main Text discusses river sediment (main text available at:http://yosemite.epa.gov/R10/CLEANUP.NSF/6d62f9al6e249d7888256db4005fa293/0fal09d2ec455988882572950079ff2f$FILE/2007-02-21_CompR2Rep__MainText.pdf). Page 14 - M E M O R A N D U M IN SUPPORT OF PLAINTIFFS M O T I O N FOR PARTIAL SUMMARY JUDGMENT
  21. 21. Case 3:11-cv-00137-MO Document 8 Filed 05/12/11 Page 18 of 23 Page ID#: 63 facility operator within a contaminated site where hazardous substances have ever been released is prima facie liable for an allocated share of the response costs: To establish a claim for cost recovery under C E R C L A , a claimant must show that the defendant is a responsible party, a release or threatened release of hazardous material occurred at a facility, and the release or threatened release has caused the claimant to incur response costs that were necessary under C E R C L A . Carson Harbor Vill., Ltd. v. Unocal Corp., 270 F.3d 863, 870 (9th Ch. 2001). These are the prima facie elements for a claim under both 42 U.S .C. §§ 9607(a) (cost recovery) and 9613(f)(1) (contribution). Liability for the costs of response and remediation may be imposed upon current owners or operators of a facility, as well as upon previous owners or operators who owned or operated a facility at the time of disposal of any hazardous substance at the facility. 42 U.S.C. § 9607(a)(l- 2).XDP, Inc. V. Watumull Properties Corp., 2004 WL 1103023, *3 (D.Or. May 14, 2004).^ The C E R C L A statute was ched in the 104(e) Request, and the 104(e) Request referred to the Portland Harbor Superfund Site; it was no secret that potential liability under these statutes was implicated by the EPAs demand. As a landowner and tenant within a Superfund site - that is, a site that had already been identified as having property damage - Anderson was most assuredly potentially liable under C E R C L A based on the 104(e) Requests allegations.^ Further, the consequences of failing to comply with the 104(e) Request included the high likelihood that Anderson would face greater financial liability for response costs - liability arising out of covered property damage - than if it complied with the demand. A n entity that fails to cooperate with a 104(e) demand will be precluded from negotiating with the EPA regarding allocation for response costs. See United States v. Cannons Engineering Corp. et al., 899 F.2d 79, 93 (1 Cir. 1990), As noted by Judge King in Ash Grove and the Ninth Circuh in A "facility" includes a building, structure, or "any site or area where a hazardous substance has been deposited, stored, disposed of or placed, or otherwise come to be located." 42 U.S.C. § 9601(9). T O the extent that St. Paul would contend that the 104(e) Request did not trigger the duty to defend because it did not order Ash Grove to perfonn any "remedial action," that argument has been rejected by other courts. See GE v. PCC, 2005 W L 2044315, at *6 (order to conduct investigation triggered duty to defend). Page 15 - M E M O R A N D U M IN SUPPORT OF PLAINTIFFS M O T I O N FOR PARTIAL S U M M A R Y JUDGMENT
  22. 22. Case 3:11-cv-00137-MO Document 8 Filed 05/12/11 Page 19 of 23 Page ID#: 64 Pintlar, getting involved in the administrative process early is essential to controlling liability for property damage. Based on the undisputed facts, the 104(e) Request was a "suh" that triggered the defense obligation. 4. Because the 104(e) Request Was a "Suh," St. Paul Had a Duty to Defend, Which It Breached. Under the terms of the Policies St. Paul had an obligation to defend "suhs" against Anderson. Because, under the O E C A A , the 104(e) Request was a "suit," St. Pauls refusal to defend the 104(e) Request was a breach of the Policies. 5. St. Pauls Duty to Defend the 104(e) Request Is Continuing. Anderson has submitted its initial response to the 104(e) Request. Sharp D e c , ^ 7.However, the 104(e) Request states that the obligation to respond is continuing and thatAnderson has an obligation to supplement the response with "any additional information ordocuments that become available or known to [Anderson] after [Anderson] submit[s hs]response." Anderson D e c , Ex. A. Therefore, St. Pauls obhgation to defend the 104(e) Requestis ongoing. For the foregoing reasons, Anderson respectfully requests that this Court grant partialsummary judgment on Andersons First Claim for Relief as to breach of Pohcy Numbers587JD7640 and 587JE180 by St. Pauls refusal to defend the 104(e) Request. B. St. Paul Breached the Policies By Refusing to Defend the GNL. St. Paul also breached the Policies by refusing to defend the G N L that Anderson receivedfrom the EPA. Therefore, even if the 104(e) Request did not trigger a defense obligation, St.Paul is still liable for breach. Moreover, the duty to defend the G N L is ongoing and carries withit current, and urgent, obligations to assist Anderson in resisting the imposition of liability incormection with the Site.Page 16 - M E M O R A N D U M IN SUPPORT OF PLAINTIFFS M O T I O N FOR P A R T I A L S U M M A R Y JUDGMENT
  23. 23. Case 3:11-cv-00137-MO Document 8 Filed 05/12/11 Page 20 of 23 Page ID#: 65 1. The G N L Is a "Smt" Under the O E C A A & Controlhng Ninth Chcuit Case Law. As discussed above, the O E C A A mandates that for any insurance policy that does not hself define the term "suit" (as the St. Paul policies do not), that term shall be interpreted to include any "action" "against" an insured in which EPA (or the Oregon Department of Environmental Quality, DEQ) "in writing directs, requests or agrees that an insured take action with respect to contamination within the State of Oregon..." ORS 465.480(2)(b). Just as with a 104(e) request, a G N L clearly falls within the scope of the O E C A A s rules of construction. The Anderson G N L states: 1) that EPA has determined that contamination has occurred; 2) that funds have been or will be spent (by EPA and others) on investigation; 3) that Anderson "may be responsible under C E R C L A " for cleanup costs and that Anderson "may be a PRP [Potentially Responsible Party] with respect to this Site." Anderson Dec, Ex. B. The G N L specifically refers to Andersons property ~ ching, among other properties, 4621 N W St. Helens Road and "adjacent Tax Lots 200 and 300" - and states that "EPA has reason to believe thathazardous substances have been or are being released from those facilhies." Id. The GNL also directs that Anderson "take action." The G N L directs Anderson to "givethese matters your immediate attention" and to contact someone affiliated with the "Convening Group," coupled with the statement that the "mediated allocation process" undertaken by the Convening Group, which in description is a form of ahernative dispute resolution ("ADR") "will avoid litigation and significant transaction costs to you and your company." Anderson Dec, Ex.B. In Pintlar, the Ninth Circuh discussed the impact of a G N L (which h described using thecommonly-used sobriquet "PRP notice") on an entity like Anderson. The court noted that "aPRP notice carries with it immediate and severe implications... in a C E R C L A case, the PRPssubstantive rights and ultimate liability are affected from the start of the administrative process...Page 17 - M E M O R A N D U M IN SUPPORT OF PLAINTIFFS M O T I O N FOR PARTIAL SUMMARY JUDGMENT
  24. 24. Case 3:11-cv-00137-MO Document 8 Filed 05/12/11 Page 21 of 23 Page ID#: 66 In order to influence the nature and costs of the environmental studies and cleanup measures, the PRP must get involved firom the outset." Pintlar, 948 F.2d at 1516-1517. After noting CERCLAs severe penalties for non-cooperation and "incentives" for a PRP to cooperate, the court held that "[a]s a resuh, an ordinary person would believe that the receipt of a PRP notice is the effective commencement of a suh necessitating a legal defense." Pintlar, 948 F.2d at 1517.^" In this context it is clear that the EPAs language in the Anderson G N L about the A D Rprocess is a "direction" to Anderson to get involved in that A D R process. Therefore, under the O E C A A (and Ninth Circuh case law), the G N L is clearly a "suit." 2. The G N L Triggered the Defense Obligation. The G N L also satisfied the language in the Policies stating that St. Paul must defend any"suit" "against the insured seeking damages on account of... property damage [to which thisinsurance applies.]" Row Dec, Exs. A & B . The GNL stated that a "release" "of hazardoussubstances, pollutants, or contaminants" "has occurred" at the Site, and specifically atAndersons property at 4621 N W St. Helens Road and adjacent Tax Lots 200 and 300.Anderson Dec, Ex. B. The G N L states that EPA "has spent or is considering spending publicfunds to investigate and control releases" at the Site, and that E P A "has determined that"Anderson "may be responsible under C E R C L A for cleanup of the Site." Anderson Dec, Ex. B. The G N L , similar to the 104(e) Request, clearly alleged that there has been propertydamage and that Anderson may be liable for damages resulting from that property damage. For The court rejected the carriers contention that nothing in insurance coverage law requires an interpretation ofinsurance policies to promote settlement rather than litigation: "Coverage should not depend on whether E P A maychoose to proceed with its administrative remedies or go directly to litigation. A fundamental goal of C E R C L A is toencourage and facilitate voluntary settlements." Pintlar, 948 F.2d at 1517. Moreover, the O E C A A contains anexpress statement that its purpose is to encourage potentially liable parties to cooperate with the governmentscleanup efforts. ORS 465.478.Page 18 - M E M O R A N D U M IN SUPPORT OF PLAINTIFFS M O T I O N FOR PARTIAL S U M M A R Y JUDGMENT
  25. 25. Case 3:11-cv-00137-MO Document 8 Filed 05/12/11 Page 22 of 23 Page ID#: 67 all ofthe same reasons set out above in cormection with the 104(e) Request, the G N L triggered St. Pauls defense obligation. 3. Because the G N L Was a "Suit," St. Paul Had an Obligation to Defend, Which h Breached. Under the terms of the Policies St. Paul had an obligation to defend "suhs" against Anderson. Because, under the O E C A A , the G N L was a "suh," St. Pauls refusal to defend the G N L was a breach of the Policies. Therefore, Anderson respectfully requests that the Court grant Andersons Motion forPartial Summary Judgment on St. Pauls liability for breach of contract as to Policies 587JD7640and 587JE180 as to the GNL. C. Anderson Is Entitled to Declaratory Judgment that St. Paul Has an Obligation to Defend Anderson. 1. Legal Standard for Declaratory Judgment A declaratory judgment is appropriate where there is a "case of actual controversy" inwhich the court may "declare the rights [or] other legal relations of any interested party." 28U.S.C. § 2201(a). 2. The Defense Obligation for the G N L Includes the Ongoing A D R Process. As discussed above, St. Paul has, repeatedly, stated that it owes no obligation to defendAnderson against either the 104(e) Request or the GNL. In particular, St. Paul has stated inwriting that hs denial is based on the two following two propositions: 1) the 104(e) Request andthe GNL do not constitute an "actual demand" "to take any action to perform clean-upactivities;" and 2) that the E P A "correspondence" "does not arise to the level of a suh as theredoes not appear to be any demand that Anderson take any action to perform clean up activities."Sharp Dec, Ex. O. If the Court holds that St. Paul breached the Policies by refusing to defendAnderson against the 104(e) Request and/or the GNL, those contentions (which seek to narrowlyPage 19 - M E M O R A N D U M IN SUPPORT OF PLAINTIFFS MOTION FOR P A R T I A L S U M M A R Y JUDGMENT
  26. 26. Case 3:11-cv-00137-MO Document 8 Filed 05/12/11 Page 23 of 23 Page ID#: 68 interpret the term "suit," contrary to the O E C A A ) will have been put to rest. However, an actual case or controversy will remain i f St. Paul takes the position, as its sister company United States Fidelity and Guaranty Company ("USF&G") has in the Ash Grove htigation, that the "defense" of an entity in connection with the Site does not include the A D R process identified in the GNL." St. Paul is expected to take the position that "defense" of the G N L does not include participation in the A D R process. Therefore, Anderson seeks summary judgment on hs Second Claim for Relief and specifically a declaration that the duty to defend includes participation in the A D R process described in the GNL. As described above, the A D R process was specifically identified by the EPA in the G N L as the mechanism by which an entity like Anderson may reduce hs liability. For all of the reasons described above, including the analysis provided by the Ninth Circuit in Pintlar, Anderson must get involved now in the administrative process. Anderson respectfully requests summary judgment in hs favor on its Second Claim for Relief IV. CONCLUSION For the foregoing reasons, Anderson respectfully requests that the Court grant its Motion for Partial Summary Judgment. D A T E D this 12* day of May, 2011. PARSONS F A R N E L L & GREIN, L L P By: /s/Seth H. Row SethH. Row, OSB #021845 Telephone: (503)222-1812 Attomeys for Plaintiff Anderson Brothers, Inc. " See the pleadings in the Ash Grove matter submitted by co-defendants Liberty Mutual Insurance Company andU S F & G making the assertion that the A D R process (including the "Convening Group") is not within the scope ofthe duty to defend, attached to the Row Declaration as Exhibits C and D.Page 20 - M E M O R A N D U M IN SUPPORT OF PLAINTIFFS M O T I O N FOR PARTIAL S U M M A R Y JUDGMENT

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