Sunset Presbyterian Church v. Anderson Construction Co.

ORS 30.140 only requires a subcontractor to defend a general contractor to the extent that plaintiff's allegations implicate the subcontractor's work; and similarly plaintiff's petition for attorney’s fees must divide attorney’s fees between allegations or claims.

Sunset Presbyterian Church (Sunset) appealed the trial court's decision not to award damages on the duty-to-defend claim, and not to award attorney's fees incurred in prosecuting the duty to defend claim. Sunset contracted with Anderson Construction Company (Anderson) for a two-phase construction of a church building, and Anderson sub-contracted with B&B Tile and Masonry (B&B). After the work was complete, Sunset brought a construction defect action against Anderson, and Anderson filed a third-party complaint against B&B. Sunset and Anderson settled, and Anderson assigned their action against B&B to Sunset. The trial court granted Sunset';s motion for partial summary judgement (MPSJ) that B&B had a contractual duty to defend Anderson against negligence claims implicating B&B, but did not award damages because ORS 30.140 only requires B&B to defend Anderson to the extent that Sunset's allegations implicate B&B's work. Similarly, because Sunset's petition for attorney's fees did not divide attorney's fees between allegations or claims, the trial court did not award attorney's fees. Sunset appealed the failure to award damages or attorney's fees, and B&B cross-appealed granting Sunset's MPSJ, and for attorney's fees. The Court of Appeals held that ORS 30.140 limits a subcontractor's duty to defend a general contractor, and that Sunset failed to segregate their claims. On appeal, affirmed; on cross-appeal, reversed and remanded.