Court Opinion

ID: 179852
Source: CourtListenerOpinion
Date Created: 2010-11-24 18:00:55+00
Date Added: 2024-06-11T17:25:49.917423
License: Public Domain

FILED
                           NOT FOR PUBLICATION                               NOV 23 2010

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                         U.S. COURT OF APPEALS

                           FOR THE NINTH CIRCUIT

SHILO INN, SEASIDE OCEANFRONT,                  No. 09-35839
LLC, (Judgment Creditor/Garnishor),
                                                D.C. No. 3:08-cv-00618-BR
             Plaintiff - Appellant,

       v.                                       MEMORANDUM*

MARYLAND CASUALTY COMPANY,
a foreign insurance company,

             Garnishee - Appellee,

JAMES GRANT, (Judgment Debtor),
DBA J. Grant & Associates, DBA
TouchStone Granite & Marble,

             Defendant - Appellee.

                   Appeal from the United States District Court
                            for the District of Oregon
                    Anna J. Brown, District Judge, Presiding

                     Argued and Submitted November 1, 2010
                                Portland, Oregon

        *
        This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Before: W. FLETCHER and FISHER, Circuit Judges, and BURY, District
        Judge.**

      Shilo Inn, Seaside Oceanfront, LLC, appeals from the judgment entered in

favor of Maryland Casualty Company. After James Grant negligently installed

granite tub surrounds on Shilo’s property, Shilo obtained an arbitration award and

civil judgment against Grant. Shilo then filed this garnishment action against

Maryland Casualty, which had issued Grant a commercial general liability

insurance policy in effect at the time of Grant’s faulty work. The district court

granted Maryland Casualty’s motion for summary judgment. We affirm.

      Under the insurance policy, Maryland Casualty agreed to “pay those sums

that the insured becomes legally obligated to pay as damages because of . . .

‘property damage’ to which this insurance applies.” The insurance applies only if

the “‘property damage’ occurs during the policy period.” “Property damage” is

defined as “[p]hysical injury to tangible property.” Thus, to trigger coverage, Shilo

was required to show physical injury to tangible property occurring during the

policy period. See St. Paul Fire & Marine Ins. Co. v. McCormick & Baxter

Creosoting Co., 923 P.2d 1200, 1210 (Or. 1996) (“If property is injured during the

       **
        The Honorable David C. Bury, United States District Judge for the District
of Arizona, sitting by designation.

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policy period, there has been an ‘occurrence,’ and coverage under the policy is

triggered.”).

      Here, Shilo contends that it suffered physical injury to tangible property

because water intruded from the tub surrounds, damaging the sheet rock and

framing studs behind the granite. Shilo, however, has not presented any evidence

that this damage occurred during the policy period, which ended on June 1, 2003.

At Shilo’s Rule 30(b)(6) deposition, David Steiner testified that customers did not

begin to use the rooms until June 2003, after Grant walked off the job on June 5

and another contractor performed mitigation work on the rooms. This evidence is

uncontroverted by Shilo.

      Shilo’s reliance on St. Paul is misplaced. In St. Paul, the Oregon Supreme

Court held that coverage is triggered by the occurrence of property damage,

defined here as physical injury to tangible property, even if the damage is not

discovered until later. See id. at 1211. St. Paul did not hold that mere installation

of a defective product, without resulting physical injury to property during the

policy period, triggers coverage.

      Summary judgment was therefore properly granted.

      AFFIRMED.

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