Insurance Coverage Disputes

We represented the owners of a commercial building in which tenants’ inventories were ruined due to a sewage back-up that occurred after a heavy rainfall. Drain pipes had been clogged by another tenant’s dumping of restaurant waste into the plumbing system. Our client’s insurance carrier refused to cover our client’s significant losses on the basis of a pollution exclusion in the insurance policy. We took the insurer to court and defeated its motion for summary judgment, which was based on that pollution exclusion. Shortly after the court’s ruling, the insurance company settled by paying our client’s claim.

We represent a client being sued by the State of Oregon for fraud and unjust enrichment in his capacity as an officer of his company. After we tendered defense of the claims to the insurer for his company he obtained insurance defense counsel to represent him. The company’s insurer is now claiming that it is not obligated to provide him coverage. In what has become an increasingly common strategy for insurers, it has filed a declaratory judgment action in federal court while simultaneously providing our client defense counsel in the state court litigation. We are moving to stay the federal court case on several legal theories.