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State by State Bd. of Higher Education v. Northwestern Pacific Indem. Co.

State by State Bd. of Higher Education v. Northwestern Pacific Indem. Co.

Court of Appeals of Oregon

May 11, 1984, Argued and submitted ; August 8, 1984, Filed; Argued and submitted May 11, 1984

CA No. A29101

Opinion

 [*458]   [**1027]  Defendant appeals from a final judgment awarding plaintiff damages entered after the court had granted plaintiff's motion for a partial summary judgment on liability and denied defendant's motion for summary judgment. The parties stipulated to plaintiff's damages.

Plaintiff sued defendant, its insurer, for indemnity under a liability policy. The policy was in effect between October 1, 1973, and October 1, 1975. During that time plaintiff sold "foundation" wheat seed to the Washington State Crop Improvement Association (WSCIA), the official seed certification agency [***2]  for the state of Washington. Oregon State University (OSU) had developed the "foundation" seed that WSCIA purchased. 1 The seed, however, was not pure, because OSU had negligently produced, cleaned, treated and packaged it.

 On September 17, 1975, WSCIA sold the contaminated seed to Washington wheat seed farmers. After the policy period, the farmers planted the seed, harvested the crop and applied to WSCIA to certify the crop as "registered" seed. WSCIA refused, because the seed did not meet purity standards. The farmers sued plaintiff in Washington and obtained a judgment for  [**1028]  $ 163,749.87. Plaintiff satisfied the judgment and brought this action.

The policy provides:

"The Company will pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as 'damages' because [***3]  of:

"* * *

"* * * Property Damage; to which this policy applies, caused by an occurrence * * *."

The policy defines "occurrence":

"[A]n event, or continuous or repeated exposure to conditions, which causes * * * property damage during the policy period that is neither knowingly nor intentionally caused by or at the direction of the insured."

 [*459]  The policy defines "property damage" as "injury to or destruction of tangible property" and recites that:

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69 Ore. App. 456 *; 685 P.2d 1026 **; 1984 Ore. App. LEXIS 3856 ***

THE STATE OF OREGON, acting by and through the STATE BOARD OF HIGHER EDUCATION, Respondent, v. NORTHWESTERN PACIFIC INDEMNITY COMPANY, an Oregon corporation, Appellant

Prior History:  [***1]  Appeal from Circuit Court, Lane County. Edwin E. Allen, Judge. No. 16-81-09284.

Disposition: Reversed and remanded for entry of judgment for defendant.

CORE TERMS

seed, property damage, insurer, policy period, occurrence, farmers, crop, partial summary judgment, summary judgment, tangible property, enter a judgment, defense motion, wheat seed, destruction, registered, harvested, instruct, packaged, certify, cleaned, damages