Title: CORVALLIS SAND & G. CO. INC. v. Oregon Auto. Ins.

State: oregon

Issuer: Oregon Supreme Court

Document:

521 P.2d 1044 (1974)
CORVALLIS SAND AND GRAVEL COMPANY, Inc., a Corporation, Appellant,
v.
OREGON AUTOMOBILE INSURANCE COMPANY, a Corporation, Respondent.

Supreme Court of Oregon.
Argued and Submitted January 7, 1974.
Decided May 2, 1974.
Robert Mix, Corvallis, argued the cause and filed briefs for appellant.
Thomas H. Tongue, Portland, argued the cause for respondent. With him on the brief were Morrison, Bailey, Dunn, Cohen & Miller, Portland.
Before O'CONNELL, C.J., and McALLISTER, DENECKE[*], HOLMAN, HOWELL, and BRYSON, JJ.
BRYSON, Justice.
Plaintiff, insured, brought this action against its liability insurance carrier to recover $36,224 expended in defending a statutory ejectment action (ORS 105.005 et seq.) entitled "State of Oregon, Acting by and through the State Land Board v. Corvallis Sand & Gravel Company, an Oregon corporation." Plaintiff tendered the defense of that action to defendant and the defendant refused to accept, stating, in part, in its letter of June 23, 1965, as follows:
The trial court in its memorandum opinion found:
Judgment was entered for defendant accordingly.
The plaintiff appeals, contending:
The question posed by the assignment of error is whether the defense of a statutory ejectment action, brought by a third party, the State of Oregon, against plaintiff is afforded plaintiff under the comprehensive liability policy issued by defendant. Oregon follows the rule that "[i]f the complaint, without amendment, may impose liability for conduct covered by the policy, the insurer is put on notice of the possibility of liability and it has a duty to defend. For example, in an action of trespass brought against the insured, if the complaint alleges a willful entry (in order to support a claim for punitive damages), the plaintiff could, without amending the complaint, recover ordinary damages for a nonwillful entry. The insurer, therefore, would have the duty to defend. * * *" Ferguson v. Birmingham Fire Ins., 254 Or. 496, 507, 460 P.2d 342, 347 (1969). See also, 50 A.L.R.2d 458.
In Casey v. N.W. Security Ins. Co., 260 Or. 485, 489, 491 P.2d 208, 210 (1971), we held:
The original complaint in State of Oregon v. Corvallis Sand & Gravel Company was filed June 7, 1965. The amended complaint filed December 23, 1969, alleged:
The State's complaint contained the above allegations in each of eleven causes of action covering eleven different described parcels of real property. The prayer of the complaint asks for possession of each of the eleven parcels of real property and "damages for each of the six years of the wrongful withholding of said property," totaling in excess of $192,000 and interest.
The four and one-half-year delay between the filing of the original complaint and the amended complaint was caused largely by the filing of a suit by Corvallis Sand & Gravel Company to enjoin the State of Oregon from prosecuting the above statutory action of ejectment which was eventually decided by this court in Corvallis Sand & Gravel v. Land Board, 250 Or. 319, 439 P.2d 575 (1968). The ejectment action having been tried on the amended complaint before the Circuit Court of Benton County is now on appeal to the Court of Appeals.
The defendant had issued liability insurance policies to plaintiff on an annual basis, October to October, for many years. The policy in effect at the time liability would attach pursuant to the complaint provided:
In deciding if there is coverage under the insurance policy it is necessary to determine the nature of the ejectment action (ORS 105.005 et seq.) filed by the State of Oregon against Corvallis Sand and Gravel Company. ORS 105.005 provides:
ORS 105.025 provides:
ORS 105.055 provides:
The above statutes were originally found in L. 1862, Deady § 326. One of the first cases interpreting these statutes, McCown v. Hannah, 3 Or. 302, 305 (1871), states:
In Barrell v. Title Guarantee Co., 27 Or. 77, 81, 39 P. 992, 993 (1895), it is stated:
In Hoover v. King, 43 Or. 281, 283, 72 P. 880 (1903), Mr. Justice Bean, speaking for the court, stated:
In Bessler v. Powder River G. Dredging Co., 90 Or. 663, 669, 176 P. 791, 793, 178 P. 237 (1919), the court in construing the ejectment statute held:
The evidence in this case and judicial knowledge of our opinion in Corvallis Sand & Gravel v. Land Board, supra, establishes that litigation between the Oregon State Land Board and Corvallis Sand and Gravel has been continuing for twenty years to establish title to the parcels of land described in the ejectment action. In Corvallis Sand & Gravel v. Land Board, supra, 250 Or. at 337, 439 P.2d  at 583, this court stated:
We conclude that the ejectment action against plaintiff herein is primarily an action to determine title to the property described therein. The State also demands damages for the loss of use of the land involved  actually for the sand and gravel removed  but this follows only on the basis of who is the rightful holder of title to the real property. The plaintiff had knowledge of the state's claim to the property long before the insurance policies herein were issued by the defendant. The trial court found that "[t]he Complaint filed against the Plaintiff by the State did not allege an `occurrence or accident' which was covered by the policy, therefore there was no duty by the Defendant to defend," and that "[t]he term `liability for property damage' cannot be construed to include an intentional withholding of possession and consequent damages which arise only from a wrongful taking or withholding." We agree. For these reasons the case is affirmed.
Affirmed.
[*]  DENECKE, J., did not participate in the decision of this case.