GILLETTE, Judge.
The issue in this case is whether Northwestern Pacific Indemnity Company (Northwestern) had a duty to defend its insured, the state of Oregon. The trial court sustained Northwestern's demurrer to the state's second amended complaint, holding that the complaint did not state a cause of action and that Northwestern had no duty to defend. ORS 16.260(6), infra. Judgment was entered on the demurrer,
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