Oregon Court of Appeals Decision Bears on Insurance Coverage for Repair of Construction Defects (JD Supra)

Oregon Court of Appeals Decision Bears on Insurance Coverage for Repair of Construction Defects

  Friday, May 26th, 2023 Source: JD Supra

In a February 15, 2023 decision in Twigg v. Admiral Insurance Company, the Oregon Court of Appeals held that an insurance company was not required to indemnify its insured based on a claim for breach of a repair agreement that settled underlying construction defect claims.

As background, the Twiggs hired a contractor, Rainier Pacific, to construct a new home. The Twiggs then filed their first arbitration against Rainier Pacific alleging, among other things, that a portion of the work was defective.

The first arbitration was resolved through a settlement agreement which the parties referred to as the ‘Repair Agreement.’ Under the Repair Agreement, Rainier Pacific was required to repair certain alleged construction defects.

The Twiggs then filed a second arbitration alleging that Rainier Pacific had breached the Repair Agreement by failing to perform the repairs required under the Repair Agreement.

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