Use this button to switch between dark and light mode.

Experience a New Era in Legal Research with Free Access to Lexis+

Fred Shearer & Sons, Inc. v. Gemini Ins. Co.

Fred Shearer & Sons, Inc. v. Gemini Ins. Co.

Court of Appeals of Oregon

February 3, 2010, Argued and Submitted; September 29, 2010, Filed

A136818 (Control), A140007

Opinion

 [**69]   [*470]  SCHUMAN, J.

Defendant Gemini Insurance Company insured TransMineral USA, a distributor of a stucco product. Plaintiff Fred Shearer & Sons, Inc. (Shearer) installed that product on the exterior of a residence. The product allegedly failed, and the property owners sued their general contractor who, in turn, sued Shearer and TransMineral. Shearer then tendered the defense of that underlying action to Gemini, on the theory that the policy issued by Gemini to TransMineral contained an endorsement that also required Gemini to cover "vendors" of TransMineral products, and that Shearer was such an entity. Gemini rejected the tender, and Shearer brought this action seeking, among other relief, a declaration that Gemini owed Shearer a duty of defense. The trial  [***2] court granted Shearer's motion for partial summary judgment to that effect, and, after a trial on stipulated facts, entered a limited judgment  [**70]  against Gemini, which it now appeals. We affirm. 1

Although the facts themselves are undisputed, there is a question in this case as to which of those facts properly may be considered when determining the duty to defend. We discuss that issue below and resolve it in favor of the more inclusive position.     Or App at     (slip op at 6-10). The following recitation reflects that determination.

In  [***3] May 2000, Walsh Construction Co. entered into a contract with the Evenstads to perform various repairs to their residence. Walsh then subcontracted with Shearer to apply stucco to the exterior of the residence, which Shearer did. Sometime after the repairs were completed, the Evenstads discovered cracking in the stucco, and they eventually filed an action against various defendants, including their general contractor, Walsh. The factual allegations in that complaint included the following:

"After the repairs were completed, the [Evenstads] began to notice cracking of the stucco and were told by * * * Walsh and Shearer that such cracking was normal and  [*471]  to be expected. Plaintiffs became more concerned as the cracking continued and they began to notice leaking and mold[.] * * *.

Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.

237 Ore. App. 468 *; 240 P.3d 67 **; 2010 Ore. App. LEXIS 1137 ***

FRED SHEARER & SONS, INC., an Oregon corporation, Plaintiff-Respondent, v. GEMINI INSURANCE COMPANY, a Delaware corporation, Defendant-Appellant. GEMINI INSURANCE COMPANY, a Delaware corporation, Counterclaim Plaintiff, v. FRED SHEARER & SONS, INC., an Oregon corporation, Counterclaim Defendant.

Subsequent History: Review denied by Fred Shearer & Sons, Inc. v. Gemini Ins. Co., 349 Ore. 602, 2011 Ore. LEXIS 68 (Or., Feb. 3, 2011)

Prior History:  [***1] Multnomah County Circuit Court. 0507-07126. Steven K. Bushong, Judge. (General Judgment). Ronald E. Cinniger, Senior Judge. (Limited Judgment).

Disposition: Affirmed.

CORE TERMS

insured, vendor, stucco, coverage, duty to defend, products, allegations, endorsement, property damage, trial court, mix, bodily injury, distributed, cladding, repairs, insurance company, defense costs, container, pleadings, relabeled, cracking, labeled, third-party, ingredient, ambiguous, damages, parties, argues, insurance afforded, insurance policy

Civil Procedure, Appeals, Standards of Review, Questions of Fact & Law, Pleadings, Complaints, General Overview, Insurance Law, Claim, Contract & Practice Issues, Claims Made Policies, Coverage, Liability & Performance Standards, Good Faith & Fair Dealing, Duty to Defend, Pleading & Practice, Rule Application & Interpretation, Exclusions, Policy Interpretation, Question of Law, Ambiguous Terms, Construction Against Insurers, Plain Language