The Twiggs hired Rainier Pacific Development, LLC to build a home. But, after the home was complete, the Twiggs complained the concrete garage slab was sloped toward the house and cracked.[1] The Twiggs and Rainier agreed to a “Repair Agreement” (in other words, a contract) that obligated Rainier to repair the slab by applying a thin concrete overlay.[2]
The Twiggs alleged the repairs were defective and proceeded to arbitration. In arbitration, the Twiggs made a claim for breach of contract by alleging Rainier had breached the Repair Agreement.[3] The arbitrator ruled in favor of the Twiggs, and a trial court entered judgment against Rainier. When the Twiggs’ efforts to collect on the judgment were unsuccessful, the Twiggs sued Rainier’s commercial general liability insurer, Admiral Insurance Group.[4]
Admiral Insurance denied coverage and argued at trial that the CGL policy did not provide coverage because the arbitrator awarded damages for Rainier’s breach of the Repair Agreement. The insurer’s position was breach of contract damages cannot quality as “property damage” caused by an “occurrence” because the award in arbitration was only made because Rainier had breached the contract.[5]
The trial court and appeals court agreed[6] with Admiral Insurance and concluded breach of contract damages do not qualify as an “accident” and do not meet the “occurrence” requirement of a CGL policy.[7] The Trial and Appeals court relied on the Oregon Supreme Court’s decision in Oak Crest Construction Co. v. Austin Mutual Insurance Co. which held the term “accident” “has a tortious connotation and exists only when damage results, in some sense, from a tort, i.e. breach of some duty imposed by law.”[8]Therefore, Admiral Insurance had no obligation to indemnify Rainier – or pay the Twiggs – for the damages awarded by the arbitrator for breach of contract.[9]
The Oregon Supreme Court came to a different conclusion. In addition to an extensive analysis of the definition of the term “accident,” the Oregon Supreme Court held the Twiggs did not foreclose their claim for recovery under the CGL policy even though the Twiggs only pursued a breach of contract claim in the arbitration.[10]
Instead of looking at how the Twiggs classified their claim, the Court looked at the factual record of events that had occurred and held there was sufficient evidence that Rainier and its subcontractors negligently installed the garage floor repairs and damaged the property.[11] This case illustrates Oregon Court’s will look beyond the labels given to a claim and analyze the facts to determine if insurance coverage exists.[12]
Although the Court did not invalidate the principle that claims arising solely from a breach of contract are generally not covered by a CGL policy,[13] the description in a claim, complaint, judgment, or arbitrator’s ruling is not what determines coverage – the facts and the policy do.
[1] Twigg v. Admiral Ins. Co., 373 Or. 445, 447, 568 P.3d 156 (2025).
[2] 373 Or. 445 at 448-49.
[3] 373 Or. 445 at 448.
[4] 373 Or. 445 at 451.
[5] 373 Or. 445 at 451-52.
[6] The trial court granted summary judgment in favor of Admiral Insurance. The Court of Appeals upheld this decision.
[7] 373 Or. 445 at 453.
[8] Oak Crest Construction Co. v. Austin Mutual Ins. Co., 329 Or. 620, 627, 998 P.2d 1254 (2000).
[9] 373 Or. 445 at 454.
[10] 373 Or. 445 at 473.
[11] 373 Or. 445 at 474.
[12] 373 Or. 445 at 447 (“Whether an insurance claim seeks recovery for an ‘accident’ does not depend on a plaintiff’s pleading decisions…but depends instead on whether there is a basis in fact for imposing tort liability.”)
[13] 329 Or. 620 at 629.