N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
AM E R IC AN HALLM ARK INSUR ANC E C OM PANY OF TEXAS, a fore ign c orporation, Pla i ntiff-c ounte rde fe nda nt-Appe lle e , v. OREGON INTERIOR S, INC ., a n Ore gon c orporation; e t a l.,

De fe nda n ts-c o unte rc la im ants-Appe lla

nts. No. 19-35025

D.C . No. 3:17-c v-00344-SB
M EM O R ANDUM *

Appe a l from

the Unite d

Stat e s Distric t C ourt for the Distric t of Ore gon Sta c ie F. B e c ke rm an, M a gistra te Judge , Pre siding Subm itte d M arc h 3, 2020 ** Portla nd, Ore gon 

# FIL ED
MAR 18 2020 M OLLY C. DW Y E R, CLERK U. S. CO URT O F APPEALS

* This disposition is not a ppropria te for public at ion a

nd is not pre c e de nt e xc e pt a s provide d

by Ninth C irc uit R

ule 36-3.

* * The pa

ne l una nim ously c onc lude s this c a se is suita ble for de c ision without ora l a

rgum e nt. Se e Fe d. R . App. P. 34(a )(2).B e fore : W OLLM AN, *** FER NANDEZ, a

nd PAEZ, C irc uit Judge s. Ore gon Inte riors, Inc
. a

ppe a ls from

the distric t c ourt’ s orde r on c rossm otions for sum

m ary judgm e nt gra

nting Am e ric an Ha llm ark Insura n c e C o.’ s
m otion a n d de ny ing Ore gon Inte riors’ . Ore gon Inte riors a rgue s tha t the distric t
c ourt e rre d whe n

it a pplie d two e xc lusions (“ Exc lusion 2.a ” and “ Exc lusion 2.r” ) in the E xte nde d Lia

b ility pa rt of the um

bre lla insura n c e polic y

to a c la i m arising from
an a utom obile a c c ide nt involving a n Ore gon Inte riors e m

ploy e e . 1 The distric t
c ourt he ld tha

t Am e ric an Ha llm ark ha d no duty to de fe nd the unde rly ing la wsuit
a ga inst Ore gon Inte riors. W e re ve rse an d re m an d. Exc lusion 2.a

in the um bre l la insura nc e polic y

de nie s c ove ra ge for any injury tha t is “ the subje c t

of” the prim a

ry insura nc e polic y . It wa s not
unre a s ona

ble for Ore g on Inte riors to think tha t “ the subje c t

of” the prim ary insura nc e polic y , m e aning theba sis of it or the m atte r for whic h it wa s c re ate d, is

* * * The Honora

ble R oge r L. W o llm a

n , Unite d State s C irc uit Judgefor the U.S. C ourt of Appe a l s for the Eighth C irc uit, sitting by de signa t ion. 1 Insura nc e c o ntra c ts a

re inte rpre te d by

“ de te rm in[ing] the inte ntion of the pa rtie s ba se d on the te rm s a nd c onditions of the

insura nc e polic y . ” Hoffman C

onst. C o. of Alask

a v . Fre d S. J

ame s & C o. of Or. , 836 P.2d 703, 706 (Or. 1992). Unde r Ore gon la w, we are to look only

to the te xt of the polic y

itse lf a nd the unde rly ing c om pla i nt; we do not c onside r any othe r e x trinsic e vide nc e . Se e Marle au v . Truc k Ins. Ex c h

. , 37 P.3d 148, 152 (Or. 2001); Andre s v . Am. Standard Ins. C

o. of W is. , 134 P.3d 1061, 1063 (Or. C t . App. 2006). 2to se t forth the injurie s tha t it c ove rs, whic h would lim it Exc lusion 2.a

to only those injurie s the prim ary

polic y a c tua lly c ove rs. 2 C

f. Groshong v . Mut. of Enumc law Ins. C o. , 985 P.2d 1284, 1289 (Or. 1999). Nor is Ore gon Inte riors’ inte rpre tation
unre a s ona

ble in the c onte xt of the polic y . B e c a use this interpre tation is pla usible , we are obliga

te d to c onstrue Exc lusion 2.a in fa vor of the insure d , a

nd c onc lude that it doe s not e xc lude Am e ric an Ha llm ark from its duty to de fe nd the unde rly ing la wsuit. Se e De w

snup v . Farme rs Ins. C

o. of Or., 239 P.3d 493, 497 (Or. 2010). Exc lusion 2.r a lso doe s not e xc use Am e ric an Ha l lm ark’ s duty to de fe nd. This e xc l usion re stric ts c ove ra ge for injurie s tha t a re e xc lude d unde r the prim ary insura nc e polic y . The distric t c ourt c onc l ude d tha t be c a use the nam e d drive r
e xc lusion de nie s c ove ra ge for the unde rly ing la wsuit unde r the prim ary

polic y , Exc lusion 2.r a

pplie d he re . B ut the nam e d drive r e xc lusion in the prim ary polic y doe s not e xc l ude injurie s; it e x c lude s c la im s for a c tions of thespe c i fic e m p loy e e

2 Se e Subje c t , W e bste r’ s Third Ne w Inte rnationa l Dic tiona ry (una bridge d e d
. 1986); S ubje c t , B l a c k’ s La

w Dic tiona

ry (11th e d. 2019). B oth pa rtie s a gre e tha

t the p rim ary

polic y doe s not provide

c ove ra ge be c a

use of a nam e d drive r e xc lusion, whic h e lim inat e s c o ve ra ge for c la im s c a use d by the e m ploy e e who c a

use d the a c c ide nt in theunde rly ing la w suit. 3involve d he re . 3 B a se d on the te xt of the polic y , we c annot sa y that Ore gon Inte riors’ inte rpre tat ion of e xc lude d “ injurie s” in Exc lusion 2.r a s not a pply ing to the e xc lude d “ c la im s” in the nam e d drive r e xc lusion is unre a sona ble
. In short, Am e ric an Ha llm ark ha s a duty to de fe n d the unde rly ing a c tion
a ga inst Ore gon Inte riors. The distric t c ourt the re fore e rre d whe n it gra nte d Am e ric an Ha llm ark’ s m o tion for sum m ary judgm e nt a

nd de n i e d Ore gon Inte riors’
m otion for sum

m a ry judgm e nt. RE V E RSE D and RE M ANDE D
.

3 The nam e d drive r e xc l usion in the prim ary polic y lim its c ove ra ge by e xc luding a

spe c ific individual from

be ing a n insure d, not by

e xc luding ty

pe s of injurie s. 4