Birdnest Mobile Estates, LLC v. MCH Prop. Mgmt., LLC

“Where the bargained for but not obtained insurance would have covered the damages at issue in the case, the party who agreed but failed to obtain such insurance waived its claim against the contractual counterparty.” Koch v. Spann, 193 Or App 608 (2004).

Birdnest appealed a judgment dismissing its claim in favor of MCH Property Management (MCH) in a breach of contract suit. Birdnest assigned error to the trial court (1) for denying its motion for summary judgment in response to MCH’s counterclaim for breach of contract for failing to obtain liability insurance; and (2) for granting summary judgment based on the affirmative defense of waiver. MCH argued that the first issue was ruled moot by their voluntary dismissal of its counterclaim; however, Birdnest contended that they would have been entitled to attorney fees if the court had rules on the counterclaim. “Our cases have rejected the notion that a court retains jurisdiction to resolve moot merits issues simply for the purpose of determining attorney fee entitlement.” Chinese Consolidated Benevolent Ass'n. v. Chin, 316 Or App 523 (2021). The Court ruled in favor of MCH and dismissed the first issue as moot. Regarding the issue of waiver, Birdnest argued that a defense of waiver does not apply unless the claim would have been covered by the bargained for insurance. MCH responded that the issue of waiver is an allocation of risk of loss. “Where the bargained for but not obtained insurance would have covered the damages at issue in the case, the party who agreed but failed to obtain such insurance waived its claim against the contractual counterparty.” Koch v. Spann, 193 Or App 608 (2004). The Court determined that there was no basis on the evidence submitted by MCH that the action must be barred by the doctrine of waiver. As such, the trial court erred in granted MCH's summary judgment on the breach of contract claim. Reversed and Remanded.