S057573, Opinion — Bresee Homes, Inc. v. Farmers Ins. Exchange

112
Argued and submitted May 13, 2010, decision of Court of Appeals reversed,
judgment of circuit court reversed, and case remanded to that court for further
proceedings December 31, 2012.
BRESEE HOMES, INC.,
an Oregon corporation,
Petitioner on Review,
v.
FARMERS INSURANCE EXCHANGE,
a California corporation,
Respondent on Review.
(CC 06C12550; CA A136397; SC S057573)
293 P3d 1036
Bresee Homes, Inc. (Bresee), a general contractor, had an insurance policy
with Farmers Insurance Exchange (Farmers). After homeowners filed a complaint
against Bresee seeking a remedy for property damage, Bresee sought coverage
under its policy with Farmers. Farmers declined coverage, and Bresee then filed
this suit against Farmers for breach of contract and for a declaratory judgment,
asserting that Farmers had contractual obligations to provide Bresee a defense
against the homeowners’ complaint and to indemnify Bresee for any liability to
the homeowners. Farmers filed a motion for summary judgment, and Bresee filed
a motion for partial summary judgment. The trial court issued an order granting
Farmers’s motion and denying Bresee’s motion, concluding that the “products -
completed operations hazard” policy provision defeated any claim for coverage.
The Court of Appeals affirmed. Held: (1) Under the insurance policy and the facts
alleged in the homeowners’ complaint, Farmers owed a duty to defend Bresee; and
(2) on the record before the court, neither party was entitled to summary judgment
on the issue of indemnification. The decision of the Court of Appeals is reversed.
The judgment of the circuit court is reversed and the case is remanded to that
court for further proceedings.
On review from the Court of Appeals.*
J. 	Michael 	Alexander, 	Swanson, 	Lathen, 	Alexander,
McCann & Prestwich, PC, Salem, argued the cause and filed
the brief for petitioner on review.
Misty Edmundson, Soha & Lang P.S., Seattle, argued the
cause and filed the brief for respondent on review.
Cody Hoesly, Larkins Vacura LLP, Portland, filed the
brief for amicus curiae Oregon Trial Lawyers Association.
______________
* Gillette and Landau, JJ., did not participate in the decision of this case.

Cite as 353 Or 112 (2012) 	113
Rick Pope, Kirklin Thompson & Pope LLP, Portland, filed
the brief for amicus curiae Oregon Home Builders Association,
Home Builders Association of Marion & Polk Counties,
Central Oregon Home Builders Association, Associated
General 	Contractors 	Oregon-Columbia 	Chaper, 	Walsh
Construction Co., and Adair Homes, Inc.
Diane L. Polscer, Gordon & Polscer, LLC, Portland, filed
the brief for amicus curiae State Farm Fire and Casualty
Company. With her on the brief was Brian C. Hickman.
Gregory L. Baird, Gordon & Polscer, LLC, Portland,
filed the brief for amicus curiae Complex Insurance Claims
Litigation Association. With him on the brief were Laura A.
Foggan, Amanda Schwoerke, and Wiley Rein LLP.
Before Balmer, Chief Justice, and Durham, De Muniz,
Kistler, Walters, and Linder.**
DURHAM, J.
The decision of the Court of Appeals is reversed. The
judgment of the circuit court is reversed, and the case is
remanded to that court for further proceedings.
______________
** Appeal from an order of the Marion County Circuit Court, Joseph Ochoa,
Judge. 227 Or App 587, 206 P3d 1091 (2009).

114 	Bresee Homes, Inc. v. Farmers Ins. Exchange
DURHAM, J.
Plaintiff, Bresee Homes, Inc. (Bresee), seeks review
of a Court of Appeals decision that affirmed a trial court judg-
ment in favor of defendant, Farmers Insurance Exchange
(Farmers). Bresee Homes, Inc. v. Farmers Ins. Exchange, 227
Or App 587, 206 P3d 1091 (2009). The dispute concerns the
correct interpretation of the commercial general liability
(CGL) policy that Farmers sold to Bresee. For the reasons
explained below, we reverse.
The trial court granted a motion for summary judg-
ment in favor of Farmers and denied the cross-motion for
partial summary judgment filed by Bresee. On review, this
court examines the summary judgment record, in accordance
with ORCP 47 C, to determine whether the pleadings and
any supporting documents on file show that there is no gen-
uine issue as to any material fact and that the moving party
is entitled to prevail as a matter of law. Jones v. General
Motors Corp., 325 Or 404, 420, 939 P2d 608 (1997). Bresee’s
claims allege that Farmers breached its obligations under
the policy (a) to defend Bresee against a claim against
Bresee, and (b) to indemnify Bresee against any liability for
damages arising out of the claim. Those are separate obliga-
tions requiring a separate analysis. Paxton-Mitchell Co. v.
Royal Indemnity Co., 279 Or 607, 610-11, 569 P2d 581 (1977).
On July 15, 2005, the Joneses filed an action against
Bresee for breach of contract and negligence regarding the
construction of their home. The Joneses alleged that, on
April 2, 1999, they had contracted with Bresee, a contrac-
tor, for the construction of a custom home in Salem. They
alleged that Bresee had failed to install flashing prop-
erly and that the exterior synthetic stucco, known as the
Exterior Insulated Finish System (EIFS), leaked water into
the interior and failed. They sought $52,580 in damages
from Bresee, consisting of both the cost to repair the siding
work and damages arising from the failure of the siding.
According to Bresee, Farmers had sold a CGL policy
to Bresee that was in effect over various successive periods
from the late 1980s to June 17, 2003. When Bresee received
the Joneses’ complaint, Bresee tendered the Joneses’ claims
to Farmers and requested a defense and indemnification

Cite as 353 Or 112 (2012) 	115
under the CGL policy. When Bresee tendered the Joneses’
claims, Farmers, acting through its lawyer, denied the tender,
citing the “products - completed operations hazard” exclu-
sion in the policy. We discuss the pertinent provisions of the
CGL policy and the exclusion below.
Bresee filed this action against Farmers for breach
of contract and for a declaratory judgment, asserting, as
noted above, that Farmers had contractual obligations to pro-
vide a defense against the Joneses’ action and to indemnify
Bresee for any liability to the Joneses. Farmers filed a motion
for summary judgment and argued that the “products -
completed operations hazard” endorsement to the CGL pol-
icy precluded any liability to Bresee. Bresee filed a cross-
motion for partial summary judgment and argued that the
endorsement did not apply and that, even if it did, the court
should conclude that the Joneses’ complaint, reasonably
construed, could be read to include a covered loss, i.e., prop-
erty damage occurring before completion of construction
and damages arising from the failure of a product installed
by a subcontractor.
Bresee also contended that extrinsic evidence of
Farmers’s adjustment and settlement of multiple nearly
identical EIFS damage claims by other homeowners against
Bresee was relevant for two reasons. First, it constituted
some evidence of how the parties intended the CGL policy to
apply to similar claims by homeowners against Bresee. Sec-
ond, it amounted to some proof that Farmers had waived its
position that the “products - completed operations hazard”
endorsement precluded any coverage of the Joneses’ claim
against Bresee.
The trial court, as noted, granted Farmers’s motion
for summary judgment and denied Bresee’s cross-motion
for partial summary judgment. The trial court determined,
as an initial matter, that the property damage claimed by
the Joneses was included within the coverage portion of
the Farmers CGL policy. However, the court ultimately con-
cluded that the “products - completed operations hazard”
policy provision defeated any claim for coverage. The trial
court also determined that Bresee’s claim for a defense was
not well taken because Bresee, in submitting evidence on

116 	Bresee Homes, Inc. v. Farmers Ins. Exchange
summary judgment, had not established when Bresee’s sub-
contractor had completed the work and when the alleged
damage had occurred.
The Court of Appeals did not separately analyze
Bresee’s claims for a defense against the Joneses’ claim and
for coverage under Farmers’s CGL policy. That court con-
cluded, however, that the trial court was correct in deciding
that the policy was unambiguous and afforded no coverage
to Bresee. The Court of Appeals affirmed the trial court’s
decision to grant summary judgment against Bresee. This
court granted Bresee’s petition for review.
Bresee’s claims for a defense and for coverage under
the CGL invoke separate contractual obligations governed
by different legal standards. We begin with Bresee’s claim
for a defense against the Joneses’ action.
This court examines two documents to determine
whether an insurer has a duty to defend an action against its
insured: the insurance policy and the complaint in the action
against the insured. Marleau v. Truck Insurance Exchange,
333 Or 82, 89, 37 P3d 148 (2001). As this court has explained:
“An insurer has a duty to defend an action against its
insured if the claim against the insured stated in the com-
plaint could, without amendment, impose liability for con-
duct covered by the policy.
“In evaluating whether an insurer has a duty to defend,
the court looks only at the facts alleged in the complaint to
determine whether they provide a basis for recovery that
could be covered by the policy[.] * * * An insurer should be
able to determine from the face of the complaint whether to
accept or reject the tender of the defense of the action.
“The insurer has a duty to defend if the complaint pro-
vides any basis for which the insurer provides coverage.
Even if the complaint alleges some conduct outside the
coverage of the policy, the insurer may still have a duty
to defend if certain allegations of the complaint, without
amendment, could impose liability for conduct covered by
the policy. Any ambiguity in the complaint with respect
to whether the allegations could be covered is resolved in
favor of the insured.”

Cite as 353 Or 112 (2012) 	117
Ledford v. Gutoski, 319 Or 397, 399-400, 877 P2d 80 (1994)
(emphasis in original; citations omitted).
Regardless of the presence of ambiguity or unclar-
ity in the complaint, the key question is whether the court
can reasonably interpret the allegations to include an inci-
dent or injury that falls within the coverage of the policy.
Blohm et al v. Glens Falls Ins. Co., 231 Or 410, 416, 373 P2d
412 (1962). As this court observed in Marleau, “[N]either
the failure to identify correctly the claims nor the failure to
state them separately defeats the duty to defend.” 333 Or
at 91. As long as the complaint contains allegations that,
without amendment, state a basis for a claim covered by
the policy, the duty to defend arises. Id. The inclusion in
the complaint of other allegations describing claims that fall
outside the policy’s coverage is immaterial. See Abrams v.
General Star Indemnity Co., 335 Or 392, 400, 67 P3d 931
(2003) (if the complaint contains allegations of covered con-
duct, the insurer has a duty to defend even if the complaint
also contains allegations of excluded conduct). Any ambigu-
ity concerning potential coverage is resolved in favor of the
insured. Ledford, 319 Or at 400.
We turn now to the provisions of the CGL policy
that Farmers issued to Bresee. The parties agree that the
following policy terms were in effect between June 17, 1998,
and June 17, 2003; that the parties renewed the policy
annually; and that the policy pertains to the claim that the
Joneses filed against Bresee.
The policy, as pertinent to this dispute, consists of
a broad insuring agreement stating the insurer’s promise
to pay specified damages and to defend the insured against
claims brought against the insured to recover those dam-
ages. A list of exclusions from coverage follows the insuring
agreement. Finally, the policy sets out a list of definitions
of terms and phrases in the policy. We set out below those
relevant parts of the policy:
“Throughout this policy the words ‘you’ and ‘your’ refer to
the Named Insured shown in the Declarations, and any
other person or organization qualifying as a Named Insured
under this policy.

118 	Bresee Homes, Inc. v. Farmers Ins. Exchange
“* * * * *
“SECTION I - COVERAGES
“COVERAGE A. 	BODILY INJURY AND PROPERTY
DAMAGE LIABILITY
“1. 	Insuring Agreement
“a. 	We will pay those sums that the insured becomes
legally obligated to pay as damages because of
‘bodily injury’ or ‘property damage’ to which this
insurance applies. We will have the right and
duty to defend the insured against any ‘suit’ seek-
ing those damages. However, we will have no
duty to defend the insured against any ‘suit’ seek-
ing damages for ‘bodily injury’ or ‘property dam-
age’ to which this insurance does not apply. * * *
“* * * * *
“2. 	Exclusions
“This insurance does not apply to:
“* * * * *
“j. 	Damage to Property
“ ‘Property damage’ to:
“(1) 	Property you own, rent, or occupy;
“* * * * *
“(5) 	That particular part of real property on
which you or any contractors or subcontrac-
tors working directly or indirectly on your
behalf are performing operations, if the ‘prop-
erty damage’ arises out of those operations;
or
“(6) 	That particular part of any property that
must 	be 	restored, 	repaired 	or 	replaced
because ‘your work’ was incorrectly per-
formed on it.
“* * * * *
“Paragraph (6) of this exclusion does not
apply to ‘property damage’ included in the
‘products - completed operations hazard.’

Cite as 353 Or 112 (2012) 	119
“* * * * *
“l. 	Damage to Your Work
“ ‘Property damage’ to ‘your work’ arising out of it
or any part of it and included in the ‘products -
completed operations hazard.’
“This exclusion does not apply if the damaged
work or the work out of which the damage arises
was performed on your behalf by a subcontractor.
“* * * * *
“SECTION V - DEFINITIONS
“* * * * *
“14. ‘Products - completed operations hazard’:
“a. 	Includes all ‘bodily injury’ and ‘property damage’
occurring away from premises you own or rent and
arising out of ‘your product’ or ‘your work’ except:
“(1) 	Products that are still in your physical pos-
session; or
“(2) 	Work that has not yet been completed or aban-
doned. However, ‘your work’ will be deemed
completed at the earliest of the following
times:
“(a) 	When all of the work called for in your
contract has been completed.
“(b) 	When all of the work to be done at the
job site has been completed if your con-
tract calls for work at more than one
job site.
“(c) 	When that part of the work done at a job
site has been put to its intended use by
any person or organization other than
another contractor or subcontractor
working on the same project.
“Work that may need service, maintenance,
correction, repair or replacement but which
is otherwise complete, will be treated as com-
pleted.

120 	Bresee Homes, Inc. v. Farmers Ins. Exchange
“* * * * *
“15. ‘Property damage’ means:
“a. 	Physical injury to tangible property, including all
resulting loss of use of that property. All such loss
of use shall be deemed to occur at the time of the
physical injury that caused it; or
“b. 	Loss of use of tangible property that is not physi-
cally injured. All such loss of use shall be deemed
to occur at the time of the ‘occurrence’ that caused
it.
“* * * * *
“18. ‘Your product’ means:
“a. 	Any goods or products, other than real property,
manufactured, sold, handled, distributed or dis-
posed of by:
“(1) 	You;
“(2) 	Others trading under your name; or
“(3) 	A person or organization whose business or
assets you have acquired; and
“b. 	Containers (other than vehicles), materials, parts
or equipment furnished in connection with such
good or products.
“ ‘Your product’ includes:
“a. 	Warranties or representations made at any time
with respect to the fitness, quality, durability, per-
formance or use of ‘your product’; and
“b. 	The providing of or failure to provide warnings or
instructions.
“ ‘Your product’ does not include vending machines or
other property rented to or located for the use of others
but not sold.
“19. ‘Your work’ means:
“a. 	Work or operations performed by you or on your
behalf; and
“b. 	Materials, parts or equipment furnished in con-
nection with such work or operations.

Cite as 353 Or 112 (2012) 	121
“ ‘Your work’ includes:
“a. 	Warranties or representations made at any time
with respect to the fitness, quality, durability, per-
formance or use of ‘your work’; and
“b. 	The providing of or failure to provide warnings or
instructions.”
The policy was accompanied by a separate form
labeled as the “EXCLUSION - PRODUCTS - COMPLETED
OPERATIONS HAZARD” endorsement, which states:
“This endorsement modifies insurance provided under the
following: COMMERCIAL GENERAL LIABILITY COV-
ERAGE Part.
“This insurance does not apply to ‘bodily injury’ or ‘property
damage’ included within the ‘products - completed opera-
tions hazard.’”
Several aspects of the insurance policy are note-
worthy. First, the coverage agreement, and specifically the
duty to defend Bresee, would apply to the Joneses’ claims if
the property damages that their complaint sought consti-
tutes “property damage” to which the policy applied.
Second, the policy incorporates qualifying word-
ing for some property damage exclusions that has the
effect of limiting or cancelling the particular exclusion. For
example, in the coverage portion of the policy, paragraph
2.j.(6) excludes property damage to property “that must be
restored, repaired or replaced because ‘your work’ was incor-
rectly performed on it.” However, the policy declares that
that exclusion is inapplicable “to ‘property damage’ in the
‘products - completed operations hazard.’ ” Similarly, para-
graph 2.l. excludes “ ‘[p]roperty damage’ to ‘your work’ aris-
ing out of it or any part of it and included in the ‘products -
completed operations hazard[,]’ ” but then declares that
that exclusion is inapplicable “if the damaged work or the
work out of which the damage arises was performed on your
behalf by a subcontractor.”
Finally, the policy definition of the “products -
completed operations hazard,” which the property damage
exclusions just cited incorporates, is itself subject to an excep-
tion under section V, paragraph 14.a.(2) for “[w]ork that has

122 	Bresee Homes, Inc. v. Farmers Ins. Exchange
not been completed.” The definition then sets out several
factual circumstances under which the policyholder’s “work”
is deemed completed.
In construing the policy to determine whether it
gives rise to a duty to defend, we construe the text of the pol-
icy as a whole, rather than view particular parts of the policy
in isolation. Hoffman Construction Co. v. Fred S. James &
Co., 313 Or 464, 836 P2d 703 (1992). That principle applies
with equal force to the construction of policy endorsements,
exclusions, and exceptions. We may conclude, after construc-
tion of the policy as a whole, that a particular provision nul-
lifies or limits coverage or that one policy provision controls
over another. That conclusion, however, must result from the
application of familiar principles of interpretation to the pol-
icy as a whole, not from an attempt to give particular weight
or effect to one provision because it is an exclusion or excep-
tion to the policy’s coverage.
Some aspects of the Joneses’ complaint are note-
worthy. The allegations do not state whether the claimed
damages from the alleged breach of contract and negligence
occurred before or after the completion of Bresee’s work.
From all that appears from a reading of the complaint, the
described property damage occurred, or could have occurred,
when Bresee’s work was neither completed nor “deemed
complete” under the “products - completed operations haz-
ard,” as defined in the policy.
Farmers argues that this court should conclude
that the property damage alleged in the Joneses’ complaint
occurred after Bresee completed its work, in part because
that complaint was filed in 2005 and used verbs in their
past tense (e.g., “flashing was not properly installed,” “the
exterior synthetic stucco system failed”) to describe the
alleged deficient performance. We are not persuaded. The
allegations describe events and damage that occurred in
the past, but which could have occurred at any time after
contract execution. The allegations describing past deficient
performance and damage do not necessarily say anything
about the date Bresee completed its work.
The Joneses’ allegations also do not permit this court
to conclude that the alleged damage arose from Bresee’s work
that “may [have] need[ed] service, maintenance, correction,

Cite as 353 Or 112 (2012) 	123
repair or replacement but which is otherwise complete”
within the meaning of the “products - completed opera-
tions hazard” definition. The allegations say nothing about
whether Bresee’s work was “otherwise complete,” or whether
Bresee’s work might need service, maintenance, etc., to be
regarded as completed.
Farmers also argues that Bresee bore the burden
of demonstrating that the work was not completed when
the alleged property damage occurred, in order to avoid the
effect of the “products - completed operations hazard” exclu-
sion. That is not correct. With regard to the duty to defend,
Bresee has no burden to come forth with facts beyond those
alleged in the Joneses’ complaint. Those allegations stated
the pertinent facts when Bresee tendered the Joneses’
claims to Farmers and requested a defense. Our analysis of
the duty to defend focuses on those allegations whether or
not different or additional facts might be adduced at trial.
The Court of Appeals applied a different analysis
of Farmers’s motion for summary judgment, and we take
this opportunity to correct it. As noted, the Court of Appeals
observed that Farmers had presented some evidence in sup-
port of its motion for summary judgment indicating that
Bresee had completed work on the Joneses’ home in 1999,
and that Bresee had presented no contradictory evidence
that the claimed damage had occurred before Bresee had
completed its work. The Court of Appeals concluded, as a
result, that the record contained no issue of fact on that
question and that Farmers was entitled to summary judg-
ment. The court reasoned that Bresee had a specific burden
to produce evidence that an exception (i.e., damage arising
out of uncompleted work) to the exclusion—the “products -
completed operations hazard”—applied. See Bresee, 227 Or
App at 593.
The Court of Appeals was mistaken in that anal-
ysis. Farmers relied on facts concerning the completion of
Bresee’s work that were not alleged in the Joneses’ complaint.
Farmers could discern from facts alleged by the Joneses and
from its policy that the Joneses potentially could prove that
the claimed damage arose before Bresee completed its work.
When Bresee tendered the Joneses’ complaint for defense,

124 	Bresee Homes, Inc. v. Farmers Ins. Exchange
the factual question of whether the claimed damages had
occurred before or after the completion of Bresee’s work
was an issue that the litigation between the Joneses and
Bresee might determine, and, once established, could affect
Farmers’s duty to indemnify Bresee. The potential factual
determinations in that litigation, however, are not the facts
that governed Farmers’s duty to defend Bresee. When Bresee
tendered the Joneses’ claims, only the facts alleged by the
Joneses and the terms of the Farmers policy governed
Farmers’s duty to provide a defense.
Farmers also posits that the court’s analytical focus
in this context is not confined strictly to the insurance pol-
icy and the underlying complaint, because this court’s cases
have left the door open for consideration of other “compel-
ling evidence of no coverage” outside the complaint that
would nullify a duty to defend. See Casey v. N.W. Security
Ins. Co., 260 Or 485, 489, 490 P2d 208 (1971) (applying that
criterion); Marleau, 333 Or at 91 (quoting that criterion in
Casey). However, the qualification that Casey recognized is
a narrow one and has no application here.
In Casey, the insured drove his automobile into
Shelton, causing injuries. Shelton sued the insured, alleg-
ing assault and battery. He then amended his complaint to
also allege negligence. Ordinarily, the alleged facts would
have been sufficient to state a claim covered by the insured’s
automobile liability policy, and thus, the facts would have
given rise to the insurer’s duty to defend the insured against
Shelton’s claim. This court, however, considered other evi-
dence in the record. That evidence demonstrated that, before
Shelton filed his complaint, the insured had been criminally
prosecuted for his conduct and had been convicted of inten-
tionally injuring Shelton with his automobile. The court
held that that evidence was available for consideration
because it established beyond dispute that the insured was
estopped to assert that he did not act intentionally in injur-
ing Shelton. 260 Or at 490-92. The court declined to permit
the insured to relitigate a key factual issue that the criminal
prosecution already had conclusively resolved against him.
The incontrovertible determination that the insured had
intentionally injured Shelton established that the insured

Cite as 353 Or 112 (2012) 	125
had no insurance coverage, and thus, the insurer had no
duty to defend. Id. at 492.
This case involves no court determination that pre-
cludes coverage like the criminal court adjudication consid-
ered in Casey. This court has consistently focused its analysis
on the policy and the underlying complaint,1 Marleau, 333
Or at 91, and we adhere to that approach in this case.
The foregoing discussion indicates that the “products -
completed operations hazard” exclusion does not eliminate
Farmers’s duty to defend Bresee against the Joneses’ claims.
We conclude that the Farmers policy provides a basis for
coverage of property damage claims that the “products -
completed operations hazard” exclusion does not eliminate.
Under the facts alleged in the Joneses’ complaint, Bresee
could have liability for conduct covered by the policy. Under
this court’s standard, as discussed in Marleau and Ledford,
Farmers owed a duty to defend Bresee. The trial court erred
in granting Farmers’s motion for partial summary judg-
ment and in denying Bresee’s cross-motion for summary
judgment on the issue of the duty to defend.
The parties have submitted additional arguments
regarding Farmers’s ultimate duty to pay the benefits of its
policy to Bresee. We cannot determine the answer to that
question at this point. Bresee informed the trial court that
1 Casey explained why the court, in the absence of a judicial determination
that precluded coverage, confines its analysis of a claim based on the duty to
defend to the insurance policy and the complaint against the insured:
“The insurer has a duty to defend only if the claim made against the
insured is one covered by the insurer. MacDonald v. United Pacific Ins. Co.,
210 Or 395, 399, 311 P2d 425 (1957).
“The difficulty arises when there is doubt as to coverage. This doubt
sometimes cannot be resolved until a judgment is entered in litigation between
the insured and the insurer. This is too late; the lawsuit by the injured party
has been filed and probably gone to judgment before this time. The insurer has
contracted with its insured to defend him. This benefit to the insured would
be curtailed if it could be withheld in the event of a dispute about coverage.
For this reason we have adopted the rule that in the absence of any compelling
evidence of no coverage, the insurer owes a duty to defend if the injured claimant
can recover under the allegations of the complaint upon any basis for which the
insurer affords coverage.”
260 Or at 489 (emphasis added).

126 	Bresee Homes, Inc. v. Farmers Ins. Exchange
the underlying case involving the Joneses had been settled.
However, neither party disclosed to the trial court the cost
of indemnifying Bresee as a consequence of that agreement.
Neither party advised the Court of Appeals or this court of
the terms of the settlement or how they may affect any issue
concerning indemnification. As Bresee correctly argued,
whether Farmers has a duty to pay must be determined on
the basis of the ultimate facts proven at trial or, as in this
case, the facts that formed the basis for the settlement. We
cannot determine, from the record made below, whether the
policy affords a basis for indemnification. We conclude that
neither party was entitled to summary judgment on the
issue of indemnification.
The decision of the Court of Appeals is reversed.
The judgment of the circuit court is reversed and the case is
remanded to that court for further proceedings.