Tidewater Associated Oil Company, a Corporation v. Northwest Casualty Company, a Corporation

Northwest Casualty Company refused to defend its public liability policyholder, Tidewater Associated Oil Company, against a particular damage claim. It also refused to reimburse Tidewater for the sum paid in compromise settlement of that claim. Tidewater brought this action against the insurance company to recover the sums expended in defending against and settling the claim.

The trial court rendered judgment for defendant. It was held that under an “exclusion of product liability” endorsement attached to the policy the claim in question was excepted from policy coverage. Plaintiff appeals, contending that the damage claim asserted against it was not excluded under the product liability endorsement.

The comprehensive public liability policy was issued to William V. Sherer, a Tidewater gasoline and oil distributor at Bandon, Oregon. By endorsement on the policy appellant was named an insured so far as its interest was concerned. Attached to the policy was an endorsement entitled “Exclusion of Product Liability,” which we quote in the margin.

While this policy was in effect, Mrs. Ruth Buffington, who resided near Ban-don, ordered stove oil from Sherer. For the purpose of filling…