Coos County Airport Dist. v. Special Districts Ins.

If contract term interpretations are ambiguous and without plain meaning when examined in context of the policy as a whole, the Court will construe the remaining plausible interpretations against the drafter and in favor of the insured. Hoffman Construction Co. v. Fred S. James & Co., 313 Or 464, 469, 836 P2d 703 (1992).

Coos County Airport Dist. (CCAD) appealed a jury instruction given in an earlier trial over the replacement price of a concrete slab.  CCAD assigned error to the court's instruction defining the term "functionally equivalent" as "equally performing the functions that the damaged property could have performed, had it not been damaged," rather than defining the term as "to have corresponding or virtually identical purpose or activity for which the original slab existed or was used.  CCAD argued that their definition was a valid understanding of the undefined term "functionally equivalent."  If contract term interpretations are ambiguous and without plain meaning when examined in context of the policy as a whole, the Court will construe the remaining plausible interpretations against the drafter and in favor of the insured. Hoffman Construction Co. v. Fred S. James & Co., 313 Or 464, 469, 836 P2d 703 (1992).  The Court held that CCAD presented enough evidence that their interpretation of the contract would have allowed a jury to find in CCAD's favor if properly instructed, and as a result the trial court erred in its jury instruction on the definition of "functionally equivalent."  Reversed and remanded.