fb pixel

Log In


Reset Password

Judge sides with OSF in suit

A federal judge has sided mostly with the Oregon Shakespeare Festival in its lawsuit against its insurance company, deciding that canceled performances and facility damage from wildfire smoke should have been covered by the festival's policy.

U.S. Magistrate Judge Mark Clarke ruled that Great American Insurance Co. breached its contract when it denied coverage for lost revenue and damage caused by the smoke from multiple wildfires, which caused air quality to reach hazardous levels, damaged indoor theater filters and affected outdoor lighting and equipment at the Allen Elizabethan Theatre, according to documents filed June 7 in U.S. District Court in Medford. 

"We have the right to pursue a trial or a settlement," OSF spokesman Eddie Wallace said, putting the ruling in layman's terms.

The court ruling wasn't fully in OSF's favor. Clarke dismissed OSF's claim of negligence against GAIC. The festival had sought punitive damages for the time 14 staff members spent providing examinations under oath and filling numerous document requests from the insurance company, which OSF had described as "extensive demands" that weren't relevant to the insurance company's basis for denying the claim.

"At the moment, we're in internal discussions as to what the next step will be," Wallace said. "But we're very pleased with the judge's decision."

The ruling followed GAIC's requests to dismiss the case on grounds that OSF's "BusinessPro" insurance policy only covered damage to the buildings' physical structures, not the quality of the air inside. OSF canceled performances at the outdoor Allen Elizabethan Theatre between July 30 and Aug. 7, 2013. Throughout Southern Oregon, multiple outdoor events, including concerts and sporting events, were canceled because of smoke from five lightning-caused wildfires. Clarke disagreed with the insurance company's arguments that the canceled performances were voluntary.

"It is undisputed that the air contained an unhealthy level of particulates and that (OSF) canceled the performances out of concern for the health of patrons and OSF actors and staff," Clarke ruled.

Clarke cited precedents from similar cases against insurance companies in which air quality made buildings and businesses uninhabitable despite being structurally unchanged, finding particular similarity in a New Jersey packaging facility's case for losses caused by an ammonia spill, which caused a weeklong shutdown.

"Even though the loss or damage was not structural or permanent, the property experienced a loss of 'essential functionality,' " Clarke wrote.

The festival has switched insurance companies since 2013, Wallace said. Wallace couldn't say who insures OSF or whether there's language in the current policy protecting OSF from wildfire smoke.

Surveys showed that reversing cancellations at the last minute was a hardship on patrons in 2013, Wallace said. Even as forecasts change, Wallace said the festival has learned the importance of clear communication for 1,200 theatergoers trying to make alternate plans.

"It's so hard to communicate, even in this electronic age," Wallace said. "We've learned that we need to have a plan and stick with it."

Although Wallace said he's grateful for the wet spring, wildfires have become part of the festival's business plans.

"After three years in a row, we'd be foolish to think we're not going to have to implement something," Wallace said.

Reach reporter Nick Morgan at 541-776-4471 or nmorgan@mailtribune.com. Follow him on Twitter at @MTCrimeBeat.