- Court: Oregon Court of Appeals
- Area(s) of Law: Insurance Law
- Date Filed: 02-20-2014
- Case #: A151680
- Judge(s)/Court Below: Lagesen, J. for the Court; Duncan, P.J.; and Schuman, S.J.
- Full Text Opinion
Leach appealed the trial court's final judgment dismissing his claims against Scottsdale Indemnity Company (Scottsdale). Leach leased and operated a motocross course insured by Scottsdale. The policy provided for liability coverage with an "Athletic Sports Participants" exclusion. The exclusion provided that liability coverage would not apply to injury occurring while practicing for or participating in any sports or athletic contest or exhibition that Leach sponsors. A rider was seriously injured during a practice session. The injured rider sued Leach. Leach provided the claim to Scottsdale. Scottsdale denied coverage based on application of the exclusion. Leach sued Scottsdale arguing that Scottsdale failed to defend and indemnify. The trial court granted summary judgment in favor of Scottsdale on the ground that the policy did not provide coverage to motorcycle riders on Leach's track and Scottsdale had no present duty to indemnify because a covenant not to execute by the injured rider in favor of Leach, given in exchange for an assignment of rights, extinguished any liability of the insurer under Stubblefield. On appeal, Leach argued that there was a genuine issue of material fact as to whether the rider's injuries were excluded from the policy and that Stubblefield did not apply to the facts of this case. The Court held that the trial court erred in granting summary judgment to Scottsdale on the duty to defend and the duty to indemnify because there was a factual issue as to whether the "Athletic Sports Participants" exclusion applied. The Court also found that Stubblefield did not apply because of a partial invalidation of the assignment of rights in an earlier proceeding created a factual issue as to whether Leach's liability to the injured rider had been extinguished. Scottsdale was not entitled to summary judgment on the duty to indemnify based on the covenant not to execute. Reversed and remanded.