December 16, 2019

Can an insurer end its duty to defend and indemnify its insured by depositing the policy limits into the court registry? A federal district court in Oregon, and several other courts across the country, say no. The case is United States Fire Ins. Co. v. Mother Earth School, No. 3:18-cv-01762-HZ (D. Ore. Oct. 31, 2019).

Outdoor pre-school and elementary school, Mother Earth School (Mother Earth), was sued on allegations that several students were the victims of sexual and nonsexual misconduct at the school. Mother Earth's insurer, United States Fire Insurance Company (U.S. Fire), filed an interpleader action in the U.S. District Court for the District of Oregon, and also deposited $100,000 into the court's registry, and then moved for summary judgment claiming that the underlying state court lawsuits were limited by a provision capping liability at $100,000 for all claims arising from "abuse" and "molestation".