Oregon Reinstates $20 Million Subrogation Case

Oregon's Supreme Court has reversed lower court rulings that concluded a $32,000 equipment purchase contract contained a tort liability waiver that invalidated a $20 million subrogation claim. In Certain Underwriters v. TNA NA Manufacturing , Lloyd's insured purchased food processing equipment that was later involved in a recall that cost Lloyd's the $20 million policy limit. Lloyd's subrogated against the manufacturer, but the manufacturer won summary judgment because the $32,000 purchase agreement contained a waiver of all tort liability.

Oregon's Supreme Court reversed. The Court explained it has long enforced a strong presumption against contractual waiver of tort liability. Such waivers can be created and enforced if clear and unequivocal language is used, but meeting that burden is intentionally difficult. Applied here, the Supreme Court noted the district court and Court of Appeals had concluded a waiver existed "through inference or implication, and through