Court Opinion

ID: 5120168
Source: CourtListenerOpinion
Date Created: 2021-10-21 20:00:56.983558+00
Date Added: 2024-06-11T08:22:16.069879
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                            OCT 21 2021
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

JAMES W. FOWLER CO., an Oregon                   No.   20-35926
Company,
                                                 D.C. No. 3:18-cv-01705-SI
              Plaintiff-Appellee,

 v.                                              MEMORANDUM*

QBE INSURANCE CORPORATION, a
foreign insurance company,

              Defendant-Appellant.

                    Appeal from the United States District Court
                             for the District of Oregon
                    Michael H. Simon, District Judge, Presiding

                      Argued and Submitted October 8, 2021
                               Portland, Oregon

Before: W. FLETCHER, IKUTA, and BRESS, Circuit Judges.

      QBE Insurance Corporation (“QBE”) appeals from the district court’s order

granting summary judgment to James W. Fowler Co. (“Fowler”). We have

jurisdiction under 28 U.S.C. § 1291.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      The district court erred in granting summary judgment in favor of Fowler

because there is a genuine dispute of material fact as to whether Fowler suffered a

“direct physical loss,” for purposes of the insurance policy between Fowler and

QBE (the “Policy”), when Fowler’s Micro-Tunnel Boring Machine (“MTBM”)

was immobilized some hundred feet below the surface of the ground.

      Given that the Policy does not specifically define “direct physical loss,” and

that the plain meaning of the term does not resolve the question before us, under

Oregon law we must defer to Fowler’s interpretation of “direct physical loss”

because it is plausible and reasonable in context. See Hoffman Constr. Co. of

Alaska v. Fred S. James & Co. of Oregon, 313 Or. 464, 474–75 (1992). Thus, like

the district court, we adopt Fowler’s interpretation that it has suffered a “direct

physical loss” if the MTBM is either impossible or unreasonably expensive to

recover. To the extent the district court improperly interpreted “direct physical

loss” more broadly in reliance on the “Recoveries” section of the Policy, which

requires the insured to refund the insurer if lost property is subsequently recovered,

such reliance was error. The Recoveries section is implicated only after there is a

“direct physical loss,” and does not assist in interpreting that term.

      Adopting Fowler’s interpretation does not resolve the case, however,

because the parties and their experts dispute whether the MTBM is impossible to

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recover and (assuming it is recoverable) whether recovery costs would be

unreasonably expensive. That dispute is genuine and material and therefore

precluded summary judgment for Fowler.

      REVERSED AND REMANDED.

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