Deardorff v. Farnsworth

Estoppel cannot be used to negate an express exclusion in an insurance policy, unless it is through interpretation of an ambiguous provision.

Deardorff was insured by Oregon Mutual Insurance Co. (OMI), which, while Deardorff was applying for the policy, said the policy included custody and control liability coverage for the horses Deardorff transported. While Deardorff was transporting horses, the trailer caught fire, killing the horses. The owners of the horses sued Deardorff, who brought the defense that the damages were covered by the OMI policy. OMI refused to defend Deardorff, stating they were not required to because the insurance policy had an "other insurance" clause that expressly excluded such coverage. The trial court granted summary judgment in Deardorff’s favor, finding OMI’s statements estopped them from denying liability coverage for the loss of the horses. OMI appealed, arguing that court erred by estopping denial of liability. The Court held that an estoppel theory cannot negate an express exclusion in an insurance policy, unless it is through interpretation of an ambiguous provision. Reversed and remanded.