Fireman's Fund Insurance v. Security National Insurance

MEMORANDUM *

Fireman’s Fund Insurance Company (“Fireman’s Fund”) appeals the district court’s grant of summary judgment in favor of Security National Insurance Company (“Security National”) regarding Security National’s duty to indemnify Fireman’s Fund. We reverse the district court and remand with instructions.

I. Duty to Indemnify

In the insurance context, the duty to indemnify exists if the facts of the case demonstrate a right to coverage under the insurance policy. 1 The district court erred when it held that, to demonstrate the right to coverage in this case, Fireman’s Fund had to prove that Chambers Construction Company (“Chambers”) was liable for its alleged negligent act. Not only does Northwest Pump & Equipment Co. v. American States Insurance Co. 2 not mandate that conclusion, but no other jurisdiction requires such proof, and Oregon public policy is contrary to such a conclusion.

In Northwest Pump, the court held that the insurance company had to indemnify the insured for settlement costs only if the underlying event that gave rise to the original claim was covered by the policy. 3 If the underlying event fell within a policy exclusion, the insurer was not…