In a unanimous ruling issued April 10, 2025, the Oregon Supreme Court confirmed that Continental Casualty Company can pursue contribution from another insurer, even after that insurer has settled with the insured. The decision in Continental Casualty Co. v. Argonaut Insurance Co., 373 Or 389 (2025), resolves an important legal question under Oregon’s Environmental Cleanup Assistance Act (OECAA) regarding insurers’ contribution rights in environmental liability cases.
The dispute stems from the ongoing cleanup of the Portland Harbor Superfund Site, where Schnitzer Steel Industries, Inc. and its affiliate were among the entities named as potentially responsible. Schnitzer had insurance coverage from multiple providers, including Continental Casualty Company, Transportation Insurance Company, Employers Insurance Company of Wausau, and Century Indemnity Company. These insurers agreed to split defense costs, with Continental covering 70 percent and assuming the lead.
Following a 2010 lawsuit by Schnitzer over billing disputes, the insurer was ordered by a federal court to pay over $15 million in defense-related expenses. The court also ruled Continental was responsible for all future defense costs, subject to policy limits. Continental fulfilled this obligation by 2018 and then filed a contribution claim against Wausau and Century in 2016 under OECAA.
In 2019, Wausau entered into a separate settlement with Schnitzer, aiming to bar Continental’s contribution claim. Wausau cited a provision of OECAA that prohibits contribution claims against an insurer that has entered into a good-faith settlement with the insured regarding the environmental claim.
The trial court rejected Wausau’s argument, stating that since Schnitzer had no remaining claim for the defense costs already paid by Continental, the settlement did not extinguish Continental’s right to contribution. The court awarded Continental approximately $3.6 million.
However, the Oregon Court of Appeals reversed the decision, interpreting the statute to apply broadly to all aspects of Schnitzer’s environmental claim. The Oregon Supreme Court disagreed and reinstated the trial court’s ruling. Writing for the court, Justice Garrett emphasized that the statute’s reference to “the environmental claim” applied narrowly to the specific claim already resolved—namely, the paid defense costs.
The court held that a post-judgment settlement between an insured and another insurer cannot retroactively eliminate an insurer’s statutory right to contribution for costs already paid. The ruling did not address whether a settlement reached before a contribution claim is filed would bar recovery.
This decision clarifies that under OECAA, targeted insurers retain the ability to seek equitable cost-sharing, even after a co-insurer has entered into a separate agreement with the insured, as long as the contribution relates to claims already resolved through payment and judgment.
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