NOT FOR PUB LIC ATION UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C U IT
FIR ST M ER C UR

Y INSUR ANC E ) No. 16-35888 C OM PANY, a

n Illinois c om

p a ny , ) ) D.C . No. 3:15-c v-00192-M O Pla intiff-Appe lle e , ) ) M EM OR

A NDUM * ) AIG SPEC IALTY INSUR ANC E ) C OM PANY, ) ) Inte rve nor-Pla intiff-Appe lle e , ) ) v. ) ) W ESTC HESTER

SURPLUS ) LINES INSUR

ANC E C OM PANY, ) a Ge orgia c om pa ny , )

) De fe nda nt-Appe lle e , )

) M ULTNOM AH C OUNTY, a n ) Ore gon m unic ipa lity , ) ) De fe nda nt-Appe lla

nt. ) )

Appe a l from

the Unite d

Stat e s Distric t C ourt for the Distric t of Ore gon M i c ha e l W . M osm an, C hie f Distric t Judge , Pre siding 

# FIL ED
JUL 20 2018 M OLLY C. DW Y ER, CLERK U

. S. CO URT O F APPEALS

* This disposition is not a

ppropria te for public ation a

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

by 9th C ir. R . 36-3.Subm itte d July 10, 2018 ** Se attle , W a s hington B e fore : FER

NANDEZ a

nd NGUYEN, C i rc uit Judge s, a nd R AKOFF, *** Distric t Judge
. M ultnom ah C ounty (“ the C ounty ” ), whic h is thea ssigne e of the c l a im s of Ze llC o m p, Inc ., a ga inst First M e rc ury Insura nc e C om pa ny , W e s tc he ste r Surplus Line s Insura

nc e C om pa ny , a nd AIG Spe c i a lty

Insura nc e C om pa ny (c olle c tive ly

“ the Insure rs” ), a

ppe a ls the distric t c ourt’ s gra nt of judgm e nt in fa

vor of the Insure rs. W e a ffirm
. The C ounty

e nte re d into a

c ontra c t with C onwa

y C onstruc tion C om

pa ny (“ C onwa y ” ) unde r whic h C onwa

y wa s to furnish goods a

n d se rvic e s 1 for the
re ha bilita tion of theM o rrison B ridge (“ the B ridge ” ), a struc ture owne d a

nd ope rat e d by

the C ounty . C onwa

y e nte re d into a

subc ontra c t with Ze llC om p unde r whic h the latte r wa s to furnish mate ria ls, inc l uding re inforc e d poly m e r bridge de c king (“ t

he de c k ing” ). Ze llC om

p, in turn, e nte re d into a sub-subc ontra c t (“ the

** T he pa ne l una nim ously finds this c a se suita

ble for de c ision without ora l argum e nt. Fe d. R . App. P. 34(a)(2).

*** The Honora

ble Je d S. R akoff, Se n ior Unite d State s Distric t Judge for the Southe rn Distric t of Ne w York, sitting by de signa tion.
1 Those inc lude d “ de sign, c onstruc tion, c onstruc tion a dm i nistra tion, a nd re late d se rvic e s.” 2Agre e m e nt” ) with Strongwe ll C orporation unde r whic h the latte r wa s to c u stom

m ake and se ll the de c king to the form e r, for use in the B ridge re ha bilita tion proje c t. The Agre e m e nt provide d tha t Strongwe l l wa s re quire d to m a inta i n insura nc e tha t would inde m

nify Ze llC om p for the latte r’ s own ne g lige nc e tha t c a use d da m a ge s to the C ounty . Strongwe ll did so, a nd the Insure rs a

re the one s it c ontra c te d

with for that purpose . Afte r the B ridge re ha b ilita t ion proje c t

wa s c om ple te d, num e rous proble m s de ve lope d, inc l u ding c ra c ks in a n d othe r de te riora

tion of thede c king. The re fore , the C ounty

brought a

n a c tion a ga inst C onwa

y and othe rs, whic h ultim ate ly re sulte d in a

jury ve rdic t de te rm ining tha

t the C ounty

wa s da m a ge d due to the ne glige nc e of a

num be r of pa rtie s a nd tha t forty pe rc e nt of tha

t da m a ge wa s
c a use d by the ne glige nc e of Ze llC om p. Ze l lC o m

p c la im e d the right to indem nity from the Insure rs a

nd, in duec ourse , a ssigne d its c la im s to theC ounty . In the
a c tion a t ha nd, the distric t

c ourt de c la

re d tha t the Agre e m e nt wa s void insofa r a s it provide d tha

t the Insure rs we re re quire d to inde m nify Ze llC om p for its ne glige nc e . Thus, thec ourt e nte re d judgm e nt a ga inst theC ounty . The C ounty a sse rts tha t the distric t c o urt e rre d. W e disa gre e with tha t a sse rtion. W e a pply Ore gon la

w to this a c tion, 2 whic h inc lude s Ore gon sta t ute s

2 Se e Zamani v

. C

arne s , 491 F.3d 990, 995 (9th C i r. 2007).

3c onstrue d a s the Ore gon Supre m e C ourt ha s , or would, c onstrue the m . 3 He re , the

pla i n la ngua ge of the Ore gon a

nti-inde m nity sta tute provide s tha

t “ any provision in
a c onstruc tion a g re e m e nt tha t re quire s a

pe rson or tha

t pe rson’ s sure ty

or insure r to inde m nify anothe r a ga i nst lia

bility for dam a ge arising out of . . . da m a ge to prope rty c a use d in wholeor in pa

rt by the ne glige n c e of the inde m nite e is void.” Or. R e v. Stat. § 30.140(1); se ealso id. at (3) (de fining c onstruc tion a gre e m e nt). And the history

of the le g isla

t ion m ake s it c le a

r that the ve ry

purpose of the le gisla ture wa s to pre c lude c ontra c tors or owne rs from “ forc ing subc ontra c tors to
a c c e pt” lia

bility for the c ontra c tor’ s own ne glige nc e “ a s pa rt of the [subc o ntra c tor’ s] c ost of doing busine ss.” Sunse t Pre s by te rian C

hurc h v

. Ande rse n C onstr. C o. , 341 P.3d 192, 200 (Or. C t. App. 2014); se ealso Montara Owne rs Ass’n v

. La N

oueDe v ., LLC , 353 P.3d 563, 569 (Or. 2015). B ut tha t is pre c ise ly what the Agre e m e nt re quire d. Thus, thete xt of the sta tute 4 and its le g isla

tive history 5 indic ate tha

t the inde m

nity portion of theAgre e m e nt is void. The C ounty ’ s sugge stion tha t the Agre e m e nt wa s for the sa l e of goods points

3 Se e Goldman v . Salisbury (In reGoldman) , 70 F.3d 1028, 1029 (9th C ir. 1995) (pe r c uriam ).

4 Se e State v . Gaine s , 206 P.3d 1042, 1050 (Or. 2009) (e n ba nc ).
5 Se eid. at 1050–51; se ealso State v . Thompson , 306 P.3d 731, 734 (Or. C t. App. 2013). 4to a

n irre le va nc y a s fa r a s this c ustom -m a de produc t for inc orporation in the B ridge is c onc e rne d. The sta

tute m ake s no suc h

distinc tion be t

we e n goods a

nd se rvic e s. Nor doe s the sta

tute provide diffe re nt provisions for a subc ontra c tor who ha

ppe ns to be m ore fina

nc ia lly sta ble or suc c e ssful tha

n the c ontra c tor itse l f. The sta tute spe a ks to whic h e nt ity

ha s the a uthority ove r awarding thec onstruc tion work in que stion. He re , Ze l lC om p, not Strongwe ll, wa s tha t e ntity
. Thus, thedistric t c ourt did not e rr. 6 AFFIRM ED.

6 As a re sult of this det e rm ination, wene e d not a nd do not c onside r whe the r the t e rm s of the Insure rs’ polic ie s would a lso pre c l ude re c ove ry by the C ounty

in whole or in pa

rt. 5