Ironically enough, the first attempt that I’ve heard of to take advantage of the new pro-policyholder provisions of the Oregon Environmental Cleanup Assistance Act (OECAA) was by an insurance company. That effort, in the form of a motion to dismiss recently filed in the Multnomah County Circuit Court Lloyd’s of London v. Beneficial Insurance case, is here. As I’ve reported in earlier posts, one provision of SB 814 (which went into effect in early June) added “contribution protection” to the OECAA. To put it very simply, the provision has this effect: if insurance company A settles a coverage claim with the policyholder in good faith, and the policyholder also sues insurance company B over the same loss and wins, insurance company B can’t then sue insurance company A for contribution, arguing that insurance company A didn’t pay its righteous share of the loss, and insurance company B overpaid, so company A owes company B. The idea behind the provision was to encourage insurance companies to settle these claims early, by removing the fear that they will then have to pay again if sued for contribution.
The Lloyd’s of London v. Beneficial Insurance contribution case arises out of the Zidell “Moody Avenue” contaminated site (not the Portland Harbor Superfund Site). Zidell settled early on with Beneficial, then went after Lloyd’s, and tagged Lloyd’s for a considerable amount (that litigation is still going, after having gone up the appellate court ladder several times, like the contribution case). Lloyd’s sued Beneficial for contribution. Judge You, who has had this case at the trial level for some time, earlier ruled that because of the date of the DEQ enforcement action against Zidell, the OECAA does not apply to the case. Beneficial is now trying to both undo that ruling, and assert that the Lloyd’s claim is barred by the contribution protection provision of SB 814. This motion is just the opening salvo.
I can’t say I’m unhappy about insurance companies having to spend money on very good lawyers on both sides of a dispute that may help clarify how this new provision of the OECAA, and perhaps related retroactivity and constitutionality problems, will work out in practice. Stay tuned, as always.