Spada

MEMORANDUM *

George and Marietta Spada (the “Spadas”) appeal the district court’s grant of summary judgment in favor of Unigard Insurance Company (“Unigard”). Three issues are presented: (1) whether Unigard had a duty to defend the Spadas against directives issued by the City of Portland (the “City”); (2) whether Unigard’s duty to defend related to the underlying action extended to the Spadas’ affirmative claims; and (3) whether Unigard had the duty to indemnify the Spadas for the costs of remediating their property. Because we conclude that the district court erred, we reverse and remand for further proceedings.

*29 The parties are familiar with the facts, which will be discussed only to the extent they are relevant to the discussion below.

I.

In determining Unigard’s duty to defend, we look only to the City’s directives and the Spadas’ insurance policy to determine whether the claim could impose liability for occurrences covered by the policy. Ledford v. Gutoski, 319 Or. 397 , 877 P.2d 80, 82 (1994). Ambiguities in claims are resolved against the insurer. Id. at 83. Because damage to the Spada’s own property is excluded from coverage under the policy, the City must have…