Axis Surplus Insurance Co. v. Lebanon Hardboard, LLC

* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
** The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
AXIS SURPLUS INSURANCE CO.,
Plaintiff - Appellee,
v.
LEBANON HARDBOARD, LLC,
Defendant - Appellant.
No. 08-36055
D.C. No. 3:07-cv-00292-MO
MEMORANDUM *
Appeal from the United States District Court
for the District of Oregon
Michael W. Mosman, District Judge, Presiding
Submitted February 4, 2010 **
Seattle, Washington
Before: RYMER, GOULD and BYBEE, Circuit Judges.
Defendant-appellant Lebanon Hardboard, LLC (“Lebanon”) appeals
from the district court’s grant of partial summary judgment holding that a partially-
deconstructed Former Production Building (“FPB”) did not qualify as “Business
FILED
FEB 16 2010
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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Personal Property” under Lebanon’s insurance policy with plaintiff-appellant Axis
Surplus Insurance Co. (“AXIS”). Lebanon also challenges the amount of the
attorney fees it was awarded by the district court. We affirm in all respects.
We review de novo the district court’s ruling granting summary judgment.
Wedges/Ledges of Cal. v. City of Phoenix, 24 F.3d 56, 62 (9th Cir. 1994). Under
Oregon law, the terms of the insurance contract between AXIS and Lebanon
control whether there was coverage for the FPB at the time of the fire. See OR.
REV. S TAT . § 742.016(1). This is a question of law in which our goal is to
ascertain the parties’ intent based on the terms of the policy. Hoffman Constr. Co.
v. Fred S. James & Co., 836 P.2d 703, 706 (Or. 1992). An insurance policy is to
be construed as a whole and, insofar as possible, is to be interpreted so as to give
meaning to all its terms. See id. at 707.
The policy here describes two types of “Covered Property”: (1)
“Building[s],” as described in the declarations, and (2) “Business Personal
Property,” of specified types, located in or near the covered “Buildings.” Absent
evidence to the contrary, “[t]he terms of a writing are presumed to have been used
in their primary and general acceptation.” OR. REV. S TAT . § 42.250; see Purcell v.
Wash. Fidelity Nat’l Ins. Co., 30 P.2d 742, 746 (Or. 1934). The FPB, which was
formerly insured as a building and had not been fully deconstructed at the time of

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1 Lebanon also argues that even if the FPB were a “building,” it would still
constitute “business personal property” because a constructive severance occurred.
We reject this argument, as Lebanon simply gave AXIS notice of its own intention
to treat the FPB as business personal property; the two parties had no agreement to
this effect. See Pepin v. City of North Bend,198 F. Supp. 644 (D. Or. 1961).
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the fire, still qualified as a “building” as that term is generally used. Even though
the FPB had no running water, holes in the walls, and a largely-deconstructed roof,
the FPB still had a frame, four walls, part of a roof, and other features that would
lead a lay observer to deem it a “Building” and not “Business Personal Property.”
Moreover, the insurance contract explicitly includes “[a]dditions under
construction, alterations and repairs to the building or structure[,]” and
“[m]aterials, equipment, supplies, and temporary structures . . . used for making
additions, alterations or repairs to the building or structure” within “Building,”
rather than “Business Personal Property,” coverage. If Lebanon wished to insure
the FPB during its deconstruction, it should not have removed the FPB from its
declarations as a “Building.” 1
Oregon law required the district court to award Lebanon “a reasonable
amount . . . as attorney fees,” O R. REV. S TAT . § 742.061(1). In determining what
constituted “a reasonable amount,” the district court was required to consider
sixteen statutory factors. O R. REV. S TAT . § 20.075(2); see id. § 20.075(1)(a)-(h)
and (2)(a)-(h) (listing the sixteen factors). These factors included “[t]he objective

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reasonableness of the claims and defenses asserted by the parties,” id.
§ 20.075(1)(b), “[t]he time and labor required in the proceeding, the novelty and
difficulty of the questions involved in the proceeding and the skill needed to
properly perform the legal services,” id. § 20.075(2)(a), and “[t]he amount
involved in the controversy and the results obtained,” id. § 20.075(2)(d).
The district court carefully weighed each statutory factor before ultimately
awarding $97,645.00 in fees and $982.57 in related nontaxable expenses to
Lebanon. As the district court correctly recognized, Lebanon’s claims were
somewhat weak, see id. § 20.075(1)(b), the legal issue in this proceeding—a rather
straightforward insurance dispute—was not particularly novel or difficult, see id.
§ 20.075(2)(a), and Lebanon’s attorneys secured only an $8,500 judgment, despite
seeking between $100,000 and $200,000, see id. § 20.075(2)(d). There is simply
no merit to Lebanon’s contention that the district court abused its discretion in
awarding Lebanon “only” $97,645.00 in attorney fees.
AFFIRMED.

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