Hard Hat Case Notes

• Pages: 49-51
• Date: 01 July 2025
• Published date: 01 July 2025
• Author: Brandon R. Clark
• Subject Matter: Derecho Público y Administrativo

Published in The Construction Lawyer Volume 44, Number 3, ©2025 by the American Bar Association. Reproduced with

permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any

means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.

Forum on Construction Law The Construction Lawyer Summer 2025

49

By Brandon R. Clark

Brandon R. Clark is counsel at Saul Ewing LLP. He is a member of the firm’s Construction Practice

Group and is based in the firm’s Chicago office. He is also licensed and practices in Washington, DC.

Supreme Court of Oregon Is the Latest to Rule That Faulty Workmanship May

Constitute an Occurrence Under a Commercial General Liability Insurance Policy

With the recent decision of its supreme court, in Twigg v. Admiral Ins. Co., 373 Or. 475 (2025), Oregon

has become the latest state to join the modern trend of interpreting commercial general liability (CGL)

insurance policies to provide coverage for faulty workmanship. In the Twigg decision, the court went to

great lengths to reconcile its ruling with its earlier decision in Oak Crest Constr. Co. v. Austin Mutual Ins.

Co., 329 Or. 620 (2000), which has long been interpreted to bar CGL coverage for faulty workmanship.

Whether Oak Crest had just been misunderstood, or whether the court wanted to avoid admitting it

was overruling Oak Crest, there is little doubt now that the door has been opened for contractors and

subcontractors to obtain CGL coverage for claims of faulty workmanship.

Plaintiffs Weston and Carrie Twigg hired Rainier Pacific Development LLC (Rainier Pacific), a general

contractor, to build their home in 2011. After taking possession of their new home, the Twiggs identified

and reported a number of construction defects; the defect with most significance to the ultimate litigation

concerned the concrete slab poured to create the garage floor. The slab was “sloped and cracked in the

middle” and sloped “toward the house, raising the risk of water damage.” After the Twiggs reported this

and other issues to the contractor, Rainier Pacific agreed to make repairs but failed to do so to the Twiggs’

satisfaction; the Twiggs initiated arbitration proceedings. Eventually the Twiggs and Rainier Pacific settled

their dispute via the “Repair Agreement,” under which Rainier Pacific was to make certain repairs by a

certain time. Rainier Pacific again failed to perform to the Twiggs’ satisfaction. The Twiggs again initiated

arbitration proceedings, obtained an award, and attempted to enforce that award; when they were

unable to successfully enforce, the Twiggs sued Rainier Pacific’s CGL insurance carrier, Admiral Insurance

Company (Admiral), for satisfaction of their award.

In their suit against Admiral, the Twiggs claimed that Admiral had a duty arising from the CGL policy

to satisfy the judgment the Twiggs had obtained for the “property damage” that Rainier Pacific’s faulty

workmanship had caused to their home. Admiral answered that because the arbitration award was based

on Rainier Pacific’s breach of the Repair Agreement—i.e., was a breach of contract claim, rather than

a tort claim—it had no indemnity obligation under the Oregon Supreme Court’s ruling in Oak Crest.

Admiral argued that Oak Crest held that a breach of contract claim, as a categorical matter, cannot

trigger a CGL policy. Admiral’s argument flowed from Oak Crest’s interpretation of the triggering

language within CGL policies. Specifically, such policies grant coverage for “‘property damage’ caused by

an ‘occurrence,’” which is further defined as an “accident.” Admiral’s position, supported by Oak Crest,

was that Rainier Pacific’s breach of the Repair Agreement could not be considered an accident, could not

be an occurrence, and, therefore, could not trigger coverage. Admiral succeeded at the trial court and the

intermediate appellate court and the case was appealed to the Oregon Supreme Court.

The Oregon Supreme Court interpreted its Oak Crest decision as more nuanced than Admiral argued—

and more nuanced than the decision had previously been interpreted. In doing so, the court went to

great lengths to situate Oak Crest as subordinate to another case in its jurisprudence—Hoffman Constr.

HARD HAT CASE NOTES