IN THE UNITED STATES DISTRICT COtJRT 

FOR THE DISTRICT OF OREGON 

STATE FARM FIRE AND CASUALTY 

COMPANY, an Illinois 

corporation, 

Plaintiff, 

v. 

BRANDON SAUER, an individual, 

and CARSON STAHL, by and 

through Guardian Ad Litem, 

CRAIG STAHL, 

Defendants. 

BRIAN C. HICKMAN 

Gordon· & Polscer, LLC 

9755 S.W. Barnes Road 

Suite 650 

Portland, OR 97225 

(503) 242-2922 

Attorneys for Plaintiff 

RANDALL J. WOLFE 

15573 S.W. Bangy Road 

Suite 250 

Lake Oswego, OR 97035 

(503) 598-3500 

3:14-CV-01274-BR 

OPINION AND ORDER 

Attorney for Defendant Carson Stahl 

1 - OPINION AND ORDER 

Case 3:14-cv-01274-BR Document 31 Filed 02/06/15 Page 1 of 12
BRANDON SAUER 

15546 S.E. River Forest Drive 

Milwaukie, OR 97267 

(503) 481-8862 

Defendant, Pro Se 

BROWN, Judge. 

This matter comes before the Court on Plaintiff's Motion 

(#11) for Partial Summary Judgment. The Court heard oral 

argument on Plaintiff's Motion on February 5, 2015. For the 

reasons that follow, the Court GRANTS Plaintiffs' Motion. 

BACKGROUND 

At some point Defendant Brandon Sauer entered into a Renters 

Policy with Plaintiff State Farm Fire and Casualty Company 

effective February 23, 2013, through August 15, 2014. 

On January 22, 2014, Defendant Carson Stahl filed an action 

against Sauer and others in Multnomah County Circuit Court (the 

underlying action) for negligence related to injuries Stahl 

sustained on May 9, 2013. The underlying action was transferred 

to Clackamas County Circuit Court. At some point after the 

underlying action was transferred, Stahl filed a Second Amended 

Complaint seeking an award of damages in excess of $500,000. 

On August 7, 2014, State Farm filed a Complaint for 

Declaratory Relief in this Court in which State Farm seeks a 

declaration that it does not have a duty to defend or to 

2 - OPINION AND ORDER 

Case 3:14-cv-01274-BR Document 31 Filed 02/06/15 Page 2 of 12
indemnify Sauer in the underlying action. 

On October 3, 2014, Plaintiff filed a Motion for Partial 

Summary Judgment on the issue of the duty to defend. Stahl filed 

a Response on November 19, 2014. On December 12, 2014, Sauer 

filed a Response in which he joined in the arguments made by 

Stahl in his Response. On January 2, 2015, Plaintiff filed a 

Reply. As noted, the Court heard oral argument on Plaintiff's 

Motion on February 5, 2015. 

DISCUSSION 

Plaintiff State Farm asserts the business-pursuits exclusion 

in Sauer's insurance policy establishes Plaintiff does not have a 

duty to defend Sauer in the underlying action. Plaintiff seeks a 

declaration that it is not obligated to defend Sauer and, 

accordingly, requests the Court to issue an order permitting 

Plaintiff to withdraw from the defense of Sauer in the underlying 

action. 

Defendants, in turn, assert the business-pursuits exclusion 

does not relieve Plaintiff from the obligation to defend Sauer in 

the underlying action. 

I. Insurance Contract Interpretation. 

Under Oregon law the construction of a contract is a 

question of law for the court. Holloway v. Republic Indem. Co. 

of Am., 341 Or. 642, 649 (2006) (citing Hoffman Const. Co. of 

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Case 3:14-cv-01274-BR Document 31 Filed 02/06/15 Page 3 of 12
Alaska v. Fred S. James & Co. of Ore., 313 Or. 464, 470 (1992)). 

The Court's task is to "ascertain the intention of the parties to 

the insurance policy." Id. at 649-50 (citing Or. Rev. Stat. 

§ 742.016). The Court accomplishes this "based on the terms and 

conditions of the insurance policy." Id. 

''If an insurance policy explicitly defines the phrase in 

question, [the Court] appl[ies] that definition." Id. at 650. 

See also Joseph Educ. Ass'n v. Joseph Sch. Dist. No. 6, 180 Or. 

App. 461, 467 (2002). 

Id. 

If the policy does not define the phrase in 

question, [the Court] resort [s] to various aids of 

interpretation to discern the parties' intended 

meaning. Under that interpretive framework, we 

first consider whether the phrase in question has 

a plain meaning,· i.e. , whether it is susceptible 

to only one plausible interpretation. If the 

phrase in question has a plain meaning, we will 

apply that meaning and conduct no further 

analysis. If the phrase in question has more than 

one plausible interpretation, we will proceed to 

the second interpretive aid. That is, we examine 

the phrase in light of 'the particular context in 

which that [phrase] is used in the policy and the 

broader context of the policy as a whole. If the 

ambiguity remains after the court has engaged in 

those analytical exercises, then any reasonable 

doubt as to the intended meaning of such [a] 

term[] will be resolved against the insurance 

company. However, . a term is ambiguous 

. only if two or more plausible interpretations of that term withstand scrutiny, i.e., 

continue[] to be reasonable despite our resort to 

the interpretive aids outlined above. 

When "evaluating whether an insurer has a duty to defend[,] 

the court looks only at the facts alleged in the complaint" and 

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Case 3:14-cv-01274-BR Document 31 Filed 02/06/15 Page 4 of 12
the terms of the policy. Ledford v. Gutoski, 319 Or. 397, 400 

(1994). See also Nat' 1 Union Fire Ins. Co. of Pittsburgh v. 

Starplex Corp., 220 Or. App. 560, 573 (2008) (" [w]hether an 

insurer has a duty to defend an action against its insured 

depends on two documents: the complaint and the insurance 

policy.") . 

II. Insurance Policy Language. 

Sauer's insurance policy with Plaintiff provides in 

pertinent part: 

COVERAGE L - PERSONAL LIABILITY (INCLUDING 

PROVISIONS POTENTIALLY RESTRICTING OR ABRIDGING 

THE RIGHTS OF THE INSURED) 

If a claim is made or a suit is brought against an 

insured for damages because of bodily injury 

to which this coverage applies, caused by an 

occurrence, we will: 

* * * 

2. provide a defense at our expense by 

counsel of our choice. 

Compl., Ex. 1 at 30 (emphasis in original). The policy also 

provides the following limitation of coverage: 

1. Coverage L and Coverage M do not apply to: 

* * * 

b. bodily injury arising out of 

business pursuits of any insured or the 

rental or holding for rental of any part 

of any premises by any insured. 

Id. The policy defines business as ~a trade, profession or 

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Case 3:14-cv-01274-BR Document 31 Filed 02/06/15 Page 5 of 12
occupation. This includes farming." Compl., Ex. 1 at 18. 

III. Analysis. 

Stahl alleges two claims for relief in his second amended 

complaint in the underlying action: negligence and negligence 

per se, both arising from injuries Stahl sustained. 

Specifically, Stahl alleges "[o)n ... May 9, 2013, [Stahl) was 

at the Milwaukie Investment Property with his family, at 

[Sauer's) invitation, and for [Sauer's] business purpose, in that 

[Stahl's) family was a potential purchaser of the Milwaukie 

Investment Property" when Stahl was injured. Compl., Ex. 2 at 

~ 7 (emphasis added). Stahl also alleges in his second amended 

complaint that "[a)t all material times [he) had the legal status 

of an invitee." Compl., Ex. 2 at~ 7. 

For purposes of this Motion, the parties do not dispute 

Stahl suffered "bodily injury" as that term is defined in the 

insurance policy. Based on the allegation in~ 7 of Stahl's 

second amended complaint, however, Plaintiff contends the 

business-pursuits exclusion applies and establishes Plaintiff 

does not have a duty to defend Sauer in the underlying action.· 

Defendants do not contest Plaintiff's assertion as to the 

content of~ 7 of Stahl's second amended complaint. In their 

Response, however, Defendants assert ~ 4 of the second amended 

complaint has effectively been amended by interlineation as 

follows: 

6 - OPINION AND ORDER 

Case 3:14-cv-01274-BR Document 31 Filed 02/06/15 Page 6 of 12
At all material times, Defendant Brandon Sauer, 

was: acting in his individual capacity 

unaffiliated with any other person or entity; was 

acting in his individual capacity doing a favor 

for his father who is a member of Defendant 

FAIRWAY PROPERTIES, LLC; and/or was acting in his 

employment capacity, representative capacity 

and/or agency capacity or H & H PREFERRED REAL 

ESTATE, STONECREEK DEVELOPMENT LLC and/or FAIRWAY 

PROPERTIES, LLC. 

Resp. at 2. In ~ 4 of the second amended complaint, Stahl stated 

"[a]t all material times [Sauer] was acting in his individual 

capacity and/or acting in his employment capacity, representative 

capacity and/or agency capacity for H&H PREFERRED REAL ESTATE 

and/or STONECREEK DEVELOPMENT, LLC." Defendants assert the 

referenced amendment by interlineation "creates a genuine dispute 

of material fact" as to whether Sauer "was acting in a business 

activity, or merely was running a 'personal errand.'" Resp. at 

3. 

In its Reply Plaintiff asserts the second amended complaint 

has not been amended by interlineation and, even if it has been 

amended, the amendment does not create a genuine dispute of 

material fact. 

A. The second amended complaint in the underlying action 

has not been amended. 

To support their assertion that the second amended 

complaint has been amended, Defendants rely on an email from 

Stahl's attorney, Randall J. Wolfe, addressed to the three 

defense counsel in the underlying action in which Wolfe states: 

7 - OPINION AND ORDER 

Case 3:14-cv-01274-BR Document 31 Filed 02/06/15 Page 7 of 12
I would like to amend our Second Amended Complaint 

by INTERLINEATION regarding an allegation related 

to Mr. Sauer. Specifically, I would like to amend 

paragraph 4 to read as indicated below. Please 

advise if you have any objections to the same. If 

no one has an objection, the Second Amended 

Complaint will be considered amended. 

Resp., Ex. 1 at 1. 

The record reflects only two of the three defense 

counsel responded to Wolfe's email. Oregon Rule of Civil 

Procedure 23 provides a complaint ~may be amended by a party once 

as a matter of course at any time before a responsive pleading is 

served. Otherwise a party may amend the pleading only by 

leave of court or by written consent of the adverse party." 

Because the record does not reflect Stahl obtained written 

consent to amend the second amended complaint from all of the 

adverse parties in the underlying action, Stahl could only amend 

the second amended complaint by leave of Clackamas County Circuit 

Court. The docket in the underlying action, however, does not 

reflect any motion to amend the second amended complaint was 

filed or any order issued by the court permitting such an 

amendment. Deel. of Brian Hickman, Ex. A at 1-2. Instead the 

docket reflects the second amended complaint was filed on 

February 24, 2014; no further amended complaints were filed; and 

the underlying action was stayed on September 29, 2014. Hickman 

Deel., Ex. A. at 1-2. In addition, at oral argument defense 

counsel confirmed there had not been any formal, filed amendment 

8 - OPINION AND ORDER 

Case 3:14-cv-01274-BR Document 31 Filed 02/06/15 Page 8 of 12
to the second amended complaint in the underlying action. 

The Court notes Defendants did not offer any authority 

at oral argument for the proposition that the Court can look to a 

proposed amendment to a complaint in the underlying matter when 

evaluating a liability insurer's duty to defend in such an 

action. 

The Court, therefore, concludes on this record that the 

second amended complaint in the underlying action has not been 

amended and the evaluation of Plaintiff's duty to defend depends 

upon the "four corners" of Stahl's last-filed complaint. 

B. Even if the second amended complaint had been amended, 

it would not establish a genuine issue as to 

Plaintiff's duty to defend. 

Plaintiff asserts even if the second amended complaint 

had been amended as asserted by Defendants, the amendment does 

not establish a genuine issue as to Plaintiff's duty to defend 

because the alleged amendment "touches [only] upon the capacity 

in which Defendant Sauer was allegedly acting; it does not 

address the purpose of Mr. Sauer'~ conduct." Reply at 3 

(emphasis in original). The Court agrees. 

As noted, the business-pursuits exclusion relieves 

Plaintiff from its otherwise-existing duty to defend for "bodily 

injury or property damage arising out of business pursuits of any 

insured." Sauer alleges in 'l[ 7 of the second amended complaint 

that Stahl was at the Milwaukie Investment Property "at [Sauer's] 

9 - OPINION AND ORDER 

Case 3:14-cv-01274-BR Document 31 Filed 02/06/15 Page 9 of 12
invitation, and for [Sauer's] business purpose" in that Stahl's 

family was a potential purchaser of the Milwaukie Investment 

Property. The alleged amendment does not modify ~ 7 of the 

second amended complaint and, therefore, does not alter Sauer's 

allegations that Stahl and Sauer were on the property for Sauer's 

business purpose. The alleged amendment addresses only the 

capacity in which Sauer was acting rather than his purpose in 

being at the property. The business-pursuits exclusion by its 

plain language excludes coverage if the conduct was undertaken as 

part of a business pursuit or purpose. As noted, Sauer alleges 

in the second amended complaint that he was on the property for 

business purposes. Thus, at best the alleged amendment might 

establish a dispute exists as to whether Sauer was acting in an 

individual capacity or on behalf of a company or another entity 

but that potential issue is not relevant to the duty-to-defend 

analysis. 

On this record the Court concludes even if the second 

amended complaint was amended as alleged by Defendants, the 

alleged amendment does not establish a genuine issue as to 

whether the business-pursuits exclusion establishes Plaintiff 

does not have a duty to defend in the underlying action. 

Accordingly, the Court grants Plaintiff's Motion for 

Partial Summary Judgment, declares Plaintiff is not obligated to 

defend Sauer in the underlying action, and declares Plaintiff may 

10 - OPINION AND ORDER 

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withdraw from the defense of Sauer in the underlying action. 

IV. Case Management Schedule 

At oral argument the parties advised the Court that 

proceedings in the underlying matter may lead to resolution of 

this.matter. The parties requested the Court suspend the current 

case management deadlines for 90 days to avoid potentially 

unnecessary further litigation of this matter. The Court agrees 

with the parties' proposal and, therefore, STRIKES all current 

case management deadlines in this matter. The Court DIRECTS the 

parties to file a joint status report no later than May 6, 2015, 

advising the Court of the status of the underlying matter and, if 

the claims in this action have not been resolved by that date, to 

include in their report a jointly proposed case management 

schedule to resolve this matter. 

CONCLUSION 

For these reasons, the Court GRANTS Plaintiff's Motion (#11) 

for Partial Summary Judgment, DECLARES Plaintiff is not obligated 

to defend Brandon Sauer in the underlying action, and DECLARES 

Plaintiff may withdraw from the defense of Sauer in the 

underlying action. 

The Court STRIKES the current case management deadlines in 

this matter and DIRECTS the parties to file a joint status report 

no later than May 6, 2015, advising the Court of the status of 

11 - OPINION AND ORDER 

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the underlying matter and, if the claims in this action have not 

been resolved by that date, to include in their report a jointly 

proposed case management schedule to resolve this matter. 

IT IS SO ORDERED. 

DATED this 6th day of February, 2015. 

ANN~-u./ United States District Judge 

12 - OPINION AND ORDER 

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