HNRK Coverage Corner

Last month an Oregon federal court held that the phrase “and/or” in a communicable disease exclusion was ambiguous and denied an insurer’s bid for summary judgment. For coverage counsel, the opinion in Scottsdale Insurance Co. v. Bruce Packing Co., Inc. provides an interesting analysis of whether a listeria outbreak is both “infectious” and “contagious”—and for lawyers in nearly every practice area, it’s a reminder that precision in contract language is important. 

Background

Bruce Packing Co. operated meat processing facilities. In 2024, the U.S. Department of Agriculture detected listeria during an inspection of one of Bruce’s plants. This led to a recall of meat that had passed through that facility, and number of consumers sued Bruce after they were exposed to Bruce’s allegedly tainted products. 

Scottsdale was Bruce’s insurer. Citing a “Communicable Disease Exclusion,” Scottsdale sued Bruce in 2025 seeking a declaration that it had no duty to indemnify or defend Bruce in the underlying consumer lawsuits. 

The Communicable Disease Exclusion provided:

Communicable Disease

(1) “Injury or damage” arising out of the actual or alleged transmission of or exposure to a “communicable disease,” illness or condition related to any “communicable disease.”

* * *

For purposes of this exclusion, the following definition applies: “Communicable disease” means any infectious and/or contagious disease, including but not limited to, diseases caused by bacteria, fungi, protozoa, viruses, or any combination of the foregoing.

Scottsdale moved for summary judgment, arguing that this language precluded any coverage for listeria-related claims. 

Infectious or Contagious (or Both)?

The court denied the motion. Applying Oregon law, the court explained that insurance policies (like all contracts) are construed in accordance with the contracting parties’ intent, which in the first instance may be determined by the plain language of the policy terms. But if the language is ambiguous, the court examines the context of the ambiguous phrase and the policy as a whole. If this analysis does not resolve the ambiguity, any reasonable doubt as to the policy’s meaning is resolved against the insurer.

Guided by this framework, the court first observed that the terms “infectious,” “contagious” and “and/or” were not defined in the policy. Turning to dictionaries, the court determined that “infectious disease” means a disease caused by “bacteria, protozoans, fungi, or analogous organisms.” Listeria—a bacteria that can cause several types of harmful diseases—falls easily within the plain meaning of “infectious.”

But “contagious” means something different: a “contagious disease,” the court found, is “a disease communicable by contact with one suffering from it, with a bodily discharge of such a patient, or with an object touched by such a patient or his bodily discharges.” And because listeria is transmitted by food rather than human contact, it is not a contagious disease.

“And/Or” Can Be Ambiguous

Next, the court grappled with the “and/or” phrasing of the exclusion. Scottsdale argued that the term unambiguously means “one or the other or both” but the court disagreed. It held that the term was ambiguous because the outcome of the case would be different depending on whether the policy excluded claims arising from, on the one hand, “infectious or contagious” diseases or, on the other hand, diseases that were both “infectious and contagious.”

The court also held that the ambiguity could not be resolved by looking at the context of the policy as a whole. The court found that Scottsdale’s proffered interpretation would render certain policy language meaningless: Scottsdale admitted that all contagious diseases are infectious, but that not all infectious diseases are contagious. And if that’s true, the court reasoned, then Scottsdale’s interpretation (one or the other or both) would make the policy’s use of the term “contagious” meaningless because the policy could have simply said “infectious.”  

Finally, because the court could not say the Communicable Disease Exclusion unambiguously barred coverage for listeria claims, it construed the exclusion against the insurer. 

A Useful Reminder

Interesting as this case is for coverage lawyers, the opinion is a useful reminder for counsel in nearly every practice area that precision in contracting is critical and that drafters should avoid using “and/or” as a shortcut when more thoughtful phrase would better capture the parties’ intent.