Continental Casualty Co. v. Argonaut Ins. Co.

The “insurer’s duty to defend is determined by comparing the complaint to the insurance policy”, West Hills Development Co. v. Chartis Claims, 360 Or 650, 653 (2016), and the “construction of the insurance policy requires ascertaining the parties’ intent”, which is revealed by “the terms and conditions”. Groshong v. Mutual of Enumclaw Ins. Co., 329 Or 303 (1999).

Insurance Company of the State of Pennsylvania (“ICSOP”) appealed an order for summary judgement, which claimed that ICSOP’s defense endorsement was triggered by underlying insurance not being available to pay damages and made them subject to Continental’s claim for contribution to defense costs. ICSOP assigned error to the trial court in holding that they were subject to this contribution claim. On appeal, ICSOP argued that there should be no allocation of any portion of defense costs because their policies were to provide excess coverage, not primary, and that before their coverage could be triggered, there must be an exhaustion of all policies held by the insured. Continental responded that ICSOP’s defense endorsement was triggered if the underlying insurance was not available to pay damages on the claim. The “insurer’s duty to defend is determined by comparing the complaint to the insurance policy”, West Hills Development Co. v. Chartis Claims, 360 Or 650, 653 (2016), and the “construction of the insurance policy requires ascertaining the parties’ intent”, revealed by “the terms and conditions”. Groshong v. Mutual of Enumclaw Ins. Co., 329 Or 303 (1999). The court found that ICSOP’s construction of the defense endorsement was correct. They reasoned that the endorsement was only triggered when the underlying insurance and other policy limits were exhausted because it gave the defense endorsement a meaning that did not conflict and was consistent with other provisions of the policy. Therefore, the trial court did err in concluding that Continental was entitled to seek contribution from ICSOP. REVERSED and REMANDED.