ELR Citation: ELR 20960
No(s). s. 80-780-RE, 81-94-RE (D. Or. Oct 7, 1982)

The court rules that the port of Portland can recover from its two its two insurers the costs of cleaning up an oil slick caused when a port-owned dredge sank at its moorings. First, the court holds that damage to water resources is "property damage" as defined in St. Paul's policy and that the exclusion for "sudden and accidental" discharges is inapplicable on the facts. The court also rejects St. Paul's request to introduce parol evidence to show the contract did not intend to cover such pollution losses. The court then holds that the Water Quality Insurance Syndicate's (WQIS') policy, which covers all "discharges" under the Federal Water Pollution Control Act (FWPCA) applies to the oil slick cleanup costs. The court rules that the dredge is not exempt from FWPCA coverage as a "public vessel" not "engaged in commerce." The court rules that the vessel was engaged in the nongovernmental function of dredging the river under contract with the Corps of Engineers, and as such was engaged in commerce and subject to Commerce Clause regulation. In addition, the court holds that the insurance brokers hired by the port were not agents of the insurer for the purposes of receipt of notice of loss and consent to expenditures. Finally, the court holds that the port may be able to recover attorney fees from the insurer WQIS because the policy is a "general marine" rather than "wet marine" type policy and therefore qualifies for attorney fees under state statute.

Counsel for Plaintiff
Paul N. Wonacott, Donald J. Morgan, Craig C. Murphy
Wood, Tatum, Mosser, Brooke & Holden
Suite 1300, 1001 SW 5th Ave., Portland OR 97204
(503) 224-5430

Counsel the Defendants
Alex L. Parks, C. Kent Roberts
Parks, Montague, Allen & Greif
1200 Jackson Twr., 806 SW Broadway, Portland OR 97205
(503) 224-4840

Sheldon D. Vogel
Thacher, Proffitt & Wood
40 Wall St., New York NY 10005
(212) 483-5800

James M. Callahan
Landis, Aebi & Bailey
Room 1516, Georgia-Pacific Bldg., Portland OR 97204
(503) 224-6532