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IN THE CIRCUIT COURT OF THE STATE OF OREGON

FOR THE COUNTY OF MULTNOMAH

NW DEMOCRACY RESOURCES, INC., AN

Oregon limited liability company,

Plaintiff,

Case No.

COMPLAINT ((Breach of

Contract; Declaratory Judgment)

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HOUSTON CASUALTY COMPANY, an

Oregon limited liability company,

Amount Prayed for: $15,000

Fee Authority: ORS 21.160(1Xb)

JURY TRIAL DEMANDED

Defendant.

CLAIMS NOT SUBJECT TO

MANDATORY ARBITRATION

Plaintiff NW Democracy Resoutces, Inc. ("NV/DR") alleges as follows:

NWDR is an Oregon corporation with its principal place of business in Portland, Oregon.

2.

Defendant Houston Casualty Company (" the Insurer") is a Texas insurance company

authorized to issue surplus lines policies in the state of Oregon. Its principal place of business is

in Houston, Texas.

3.

The Insurer issued an errors and omissions insurance policy to NV/DR bearing no. H713-

102591 and effective December 31,2013, to December 3 l, 2014 ("Policy").

Page I - COMPLAINT

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PARSONS FARNELL & GREIN, LLP

Attornevs at Law

1 030 SW Morison Streêt

Portland. Oreoon 97205

Telephone (503) 222-1812 Fþ'y.: (5031274-7979

7/22/2014 4:26:17 PM Case 3:14-cv-01351-KI Document 1-1 Filed 08/22/14 Page 1 of 5 14CV09524
t4.

2 On or about June 14, 2014, NWDR received a demand for money damages from a third3 part1 claimant, together with a draft arbitration petition ("Claim"), which NWDR promptly

4 tendered to the Insurer. The Insurer assigned claim no. MPL-13-03664 to NWDR's tender.

55.

6 On or about June 30, 2014, the Insurer denied coverage for the Claim and threatened to

7 file a declaratory judgment action against NWDR if NV/DR did not withdraw its tender within

g seven daYS.

g6.

l0 NV/DR now files this action seeking defense coverage for the Claim. Under N. Pacffic

1 1 Ins. Co. v. llilson Distributing Serv., Inc., I38 Or App 766, 175,908 P2d 827 (1995), any

12 litigation over indemnity coverage for the Claim is presently premature, would put NWDR in an

13 untenable conflicted position, and would require abatement. NWDR reserves the right to amend

14 this Complaint to add claims for indemnity coverage as timely and appropriate.

15 FIRST CLAIM FOR RELIEF

16 Breach of Contract

t7 (DufY to Defend)

18 7'

19 Paragraphs 1 through 6 are incorporated herein as ifexpressly alleged.

20 8'

2l Under the terms of the Policy, the Claim triggered the Insurer's duty to defend NV/DR

22 and pay Claim Expenses, as dehned in the Policy,

23 9.

24 The Insurer's denial of defense coverage constituted a breach of the Policy.

25 10.

26 All conditions under the Policy have been satisfied or otherwise excused.

Page 2 - COMPLAINT

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PARSONS FARNELL & GREIN, LLP

Attorn€vs at Law

'1030 SW Morr¡son Slreet

Portland. Oreoon 97205

Telephone (5O3\ 222-1812 Flù<: (5o3) 274-7979

Case 3:14-cv-01351-KI Document 1-1 Filed 08/22/14 Page 2 of 5
11.

As a direct result of the Insurer's breach of the Policy, NV/DR is being forced to defend

itself against the Claim. NWDR is entitled to recover all defense expenses, the amount of which

does not exceed $15,000 to date. NV/DR reserves the right to amend its alleged damages.

NWDR is entitled to prejudgment interest at the statutory rate of 9o/o per annum on all defense

expenses from the date payment is due on each invoice until judgment is entered.

12.

NWDR is entitled to attorney fees pursuant to ORS 742.061, which are less than $15,000

as of the date of this filing.

SECOND CLAIM FOR RELIEF

Declaratory Judgment

(Dufy to Defend)

13.

Paragraphs 1 through 12 are incorporated herein as ifexpressly alleged.

t4.

An actual controversy now exists between NWDR and the Insurer. The Insurer has

refused to provide NWDR with an insured defense; meanwhile, NWDR is being forced to defend

itself against the Claim, which remains ongoing. NWDR requests a declaration that the Insurer is

obligated to provide an insured defense to NWDR, including prospective defense expenses

through final resolution of the Claim.

15.

NV/DR is entitled to attomey fees pursuant to ORS 742.06I, which are less than $15,000

as of the date of this filing.

Page 3 - COMPLAINT

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PARSONS FARNELL & GREIN, LLP

Attorn€vs at Law

1 030 sW Morr¡son Street

Portland. Oreoon 97205

T€l€phonê (503) 222-'1812 FAx: (5031274-7979

Case 3:14-cv-01351-KI Document 1-1 Filed 08/22/14 Page 3 of 5
1 JURY TRIAL DEMANDED

2 16.

3 Plaintiff demands a jury trial on its claims to the extent any questions of disputed material

4 fact exist.

5 WHEREFORE, NWDR prays for judgment in its favor and against the Insurer as follows:

6 A. On its First Claim for Relief for Breach of Contract:

7 L For principal damages in an amount of defense expenses to be proven at trial but

g not exceeding $15,000 as of the date of this filing;

9 2. For prejudgment interest pursuant to ORS 82.010 at the statutory rate of 9Yo per

10 annum from the date payment is due on each invoice for defense expenses until

l l judgment is entered;

12 3. For attorney fees pursuant to ORS 742.06I, which as of the date of this filing are

13 not more than $15,000; and

14 4. For such further relief as the court deems just and equitable.

15 B. On its Second Claim for Relief for Declaratory Judgment:

16 1. For a declaration that the Insurer owes NWDR prospective defense coverage for

17 the Claim through final resolution;

1g 2. For attorney fees pursuant to ORS 742.061, which as of the date of this filing are

lg not more than $15,000; and

20 lll

2r ill

22 lll

23 lll

24 ilt

2s ilt

26 lll

Page 4 - COMPLAINT

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PARSONS FARNELL & GREIN, LLP

Attornêvs at Law

1030 SW Morison Streot

Portland. Oreoon 97205

Telephone (503) 22211A12 FAx: (5O3\ 274-7979

Case 3:14-cv-01351-KI Document 1-1 Filed 08/22/14 Page 4 of 5
Page

3. For such further relief as the court deems just and equitable.

DATED this22"d day of July,2014.

PARSONS FARNELL & GREIN, LLP

By: /s/ Michael tr Farnell

Michael E. Farnell, OSB #922996

E-Mail : mfarnell@pfglaw.com

Emily S. Miller, OSB #034348

E-Mail : emiller@.pfglaw.com

Telephone: (503) 222-1812

Fax: (503) 274-7979

Of Attorneys þr P I aintiff

5 . COMPLAINT

Ot9870001\0004 esm complâint.wpd

PARSONS FARNELL & GREIN, LLP

Attornevs at Law

I 030 SW Mor¡son Stre6t

Portland. Oreoon 97205

Tel€phone (503) 222:181I F ÞJ<: (503') 27 4-797 9

Case 3:14-cv-01351-KI Document 1-1 Filed 08/22/14 Page 5 of 5