Justia Oregon Supreme Court Opinion Summaries

Plaintiff was injured in an automobile accident and filed a claim for underinsured motorist (UIM) benefits with defendant Country Preferred Insurance. The insurer submitted a letter that satisfied the attorney fee safe harbor requirements of ORS 742.061(3). The case was arbitrated, and plaintiff prevailed and was awarded attorney fees. Defendant filed exceptions to the fee award in the circuit court, and the court concluded that defendant’s safe harbor letter precluded the award of fees. Plaintiff appealed, and the Court of Appeals reversed, holding that defendant was ineligible for the protection of the attorney fee safe harbor because, in arbitration, in its answer to plaintiff’s complaint, defendant had raised issues in addition to the liability of the underinsured motorist and the damages due to plaintiff. On review, the Oregon Supreme Court agreed with the Court of Appeals that defendant was not entitled to the protection of ORS 742.061(3), and affirmed the award of reasonable attorney fees. View "Kiryuta v. Country Preferred Ins. Co." on Justia Law

A condominium homeowners association sued a contractor for negligence. The contractor’s insurer refused to defend the contractor against the action, and the contractor and the homeowners association thereafter entered into a settlement that included a stipulated judgment against the contractor, a covenant by the homeowners association not to execute that judgment, and an assignment to the homeowners association of the contractor’s claims against its insurer. When the homeowners association then initiated a garnishment action against the insurer, however, the trial court dismissed the action on the ground that, under “Stubblefield v. St. Paul Fire & Marine,” (517 P2d 262 (1973)), the covenant not to execute had released the contractor from any obligation to pay the homeowners association and, in the process, necessarily released the insurer too. The homeowners association appealed, arguing that “Stubblefield” either was distinguishable on its facts or had been superseded by statute. In the alternative, it argued that Stubblefield should have been overruled. The Court of Appeals affirmed. After its review, the Supreme Court concluded that, although Stubblefield was not distinguishable and had not been superseded by statute, it was wrongly decided. The Court reversed and remanded for further proceedings. View "Brownstone Homes Condo. Assn. v. Brownstone Forest Hts." on Justia Law

A certified question of Oregon law was certified to the Oregon Supreme Court from the United States Court of Appeals for the Ninth Circuit. The question arose out of a construction contract dispute in which a homeowner's association sued a builder in state court for construction defects. The homeowner's association and the builder settled, and the settlement included an unconditional release and covenant not to execute against the builder. When the homeowner's association attempted to garnish the builder's liability insurance policy, however, the insurer claimed that it had no liability because the settlement unconditionally released its insured from any liability. The state trial court agreed, and the builder appealed. Meanwhile, in response to the state trial court's conclusion that the settlement agreement eliminated the insurer's liability, the homeowner's association and the builder amended their settlement agreement to eliminate the unconditional release and covenant not to execute. Pursuant to the new agreement, the builder initiated this action in federal court against its insurer. In the federal court action, the insurer argued that the state court already had determined that, given the terms of the original settlement, the builder could not recover under its insurance policy and that the parties lacked authority to create any new insurance coverage obligation by amending their settlement agreement. The federal district court agreed. On appeal, the Ninth Circuit certified a question on whether the homeowner's association and the builder could amend their settlement agreement in such a way as to revive the liability of the builder's insurer. After review, the Oregon Court concluded that, although the parties possessed authority to amend the terms of their settlement agreement, they could not do so in a way that retroactively revived the liability that was eliminated in their original agreement (at least not on the basis of the legal theories that they proposed). View "A&T Siding, Inc. v. Capitol Specialty Ins. Corp." on Justia Law

In 2009, claimant sought workers' compensation benefits for a work-related injury. Claimant had preexisting multilevel degenerative disc disease and a history of intermittent low back pain with some bilateral radiation to his legs. SAIF, the employer's workers' compensation insurer, accepted a claim for a lumbar strain. Claimant subsequently sought acceptance of a combined condition, which SAIF ultimately denied on the ground that the accepted injury was no longer the major contributing cause of the combined condition. The Workers' Compensation Board upheld SAIF's denial, and claimant sought judicial review in the Court of Appeals. On appeal to that court, claimant contended that, in determining the compensability of his claim, the board erroneously had framed the inquiry in terms of whether the accepted condition continued to be the major contributing cause of his disability or need for treatment. In claimant's view, the proper inquiry was whether his accidental injury continued to be the major contributing cause of his combined condition. Claimant contended that there was no evidence that that injury was no longer the major contributing cause of his disability or need for treatment. While judicial review was pending before the Court of Appeals, claimant died of causes unrelated to his workplace injury, without a surviving spouse or other beneficiary entitled to a death benefit. The Court of Appeals held that claimant's estate, through his personal representative, was not authorized to pursue the claim to final determination under ORS 656.218(3) on the grounds that: (1) the estate was not one of the "persons" described in 656.218(5); and (2) the phrase "unpaid balance of the award" in the second sentence of subsection (5) restricted an estate's entitlement to permanent partial disability benefits that were awarded before a worker's death. The Supreme Court reversed the appellate court: in the absence of persons who would have been entitled to receive death benefits if the injury causing a deceased worker's disability had been fatal, an award of permanent partial disability benefits that is finally determined after the worker's death pursuant to ORS 656.218(3) is payable to the worker's estate under ORS 656.218(5). The case was remanded for further proceedings. View "Sather v. SAIF" on Justia Law

Claimant injured his low back while at work in April 2008, and his employer accepted his subsequent claim for a lumbar strain. Claimant was taken off work after his injury and, during the next several months, received an extensive course of chiropractic care. In An examining physician declared claimant medically stationary and released him to regular work without restriction. Based on the physician's findings, the employer issued a notice of closure that did not award benefits to claimant. Claimant was unsuccessful in his request for reconsideration. The Supreme Court, after its review of this case, concluded that the Department of Consumer and Business Services (DCBS) erred in its interpretation of the rules with regard to claimant's injury and determination for benefits. Accordingly, the case was remanded to the board for further proceedings. View "Schleiss v. SAIF Corporation" on Justia Law

At issue in this case was what constituted a "proof of loss" in a claim for UIM benefits and what sufficed to trigger the safe harbor provision. The insured provided notice of an injury automobile accident to her insurer, but did not submit a UIM benefits claim at that time. Nearly two years later, the insurer learned of the possible UIM claim. The insurer agreed in writing that it accepted coverage, that the only remaining issues were liability and damages, and that it was willing to submit to binding arbitration. After recovering on her UIM claim, the insured asked for attorney fees. The insurer claimed the benefit of the safe harbor provision of ORS 19 742.061(3). The Court of Appeals concluded that the insurer did not send its safe harbor letter within six months of the insured's "proof of loss." According to the Court of Appeals, the "proof of loss" was the initial report of injury two years earlier. Upon review, the Supreme Court concluded that the initial report of injury did not provide sufficient information to constitute a proof of loss for a UIM claim and that the insurer's safe harbor letter was sufficient to trigger the statutory exception to an attorney fee award. View "Zimmerman v. Allstate Property and Casualty Ins." on Justia Law

Portland General Electric Company (PGE) appealed a Court of Appeals decision that reversed and remanded a trial court order that denied Lexington Insurance Company's motion to set aside a default judgment entered in PGE's favor. Specifically, the issues were: (1) whether a default judgment awarding monetary relief violated ORCP 67C if the complaint did not specify amount of damages sought; and (2) if so, whether that omission rendered the judgment voidable or void. The Supreme Court held the judgment in question here did not violate ORCP 67C and that the judgment was not void. The case was remanded to the Court of Appeals for further proceedings. View "PGE v. Ebasco Services, Inc." on Justia Law

The issue before the Supreme Court in this case concerned the scope of Clackamas County's contractual obligation to provide health insurance benefits to command officer retirees of the County Sheriff's Office. A contract between the county and command officers, including Plaintiff Neil James, required the county to use a particular fund to pay for a certain level of benefits to command officers after they retired. The contract added that the obligation to pay benefits was "contingent upon the availability of sufficient funding in said fund to pay for the same." After plaintiff retired, the cost of insurance premiums increased to the point where the fund was and would for the foreseeable future continue to be insufficient to pay for the benefits required. The county entered into a new contract with certain union employees to provide lesser benefits from a more stable fund, and plaintiff (a retired officer, not a union employee) also was provided those lesser benefits. Plaintiff brought an action against the county, asserting breach of contract. He maintained that the first contract required the county to pay him full health insurance benefits and argued that the contingency provision did not apply because of the creation of the new fund, which had sufficient money to pay for those benefits. The trial court entered judgment in favor of plaintiff, but the Court of Appeals reversed. Upon review, the Supreme Court concluded that the new fund was the product of a contract that was separate and independent from the earlier contract. Because the prior fund was insufficient to provide the agreed level of benefits, the county did not breach its contractual obligation to provide that level of benefits. Accordingly, the Court affirmed the appellate court's decision. View "James v. Clackamas County" on Justia Law

ORS 742.061 authorizes an award of attorney fees to an insured who prevails in "an action * * * in any court of this state upon any policy of insurance of any kind or nature * * *." A later enacted statute, ORS 742.001, provides that ORS chapter 742 "appl[ies] to all insurance policies delivered or issued for delivery in this state * * *." The question in this case was whether ORS 742.001 precluded awarding attorney fees to an insured who prevailed in an action in an Oregon court on an insurance policy that was issued for delivery and delivered in the State of Washington. The trial court concluded that it did and entered a supplemental judgment to that effect. The Court of Appeals affirmed. Considering the text, context, and legislative history of Chapter 742, the Supreme Court concluded that the legislature did not intend that ORS 742.001 would limit the scope of ORS 742.061. "For us to hold otherwise, we would have to turn an expansion of the state's authority to impose substantive regulations on insurers transacting business in Oregon into a limitation on the remedial and procedural rules that affect insurers appearing in its courts. * * * we would have to read a limitation into the text of that section that the legislature did not include. We may not do that." The Court reversed the appellate court and remanded the case for further proceedings. View "Morgan v. Amex Assurance Company" on Justia Law

Claimant Crystal DeLeon sought workers' compensation benefits for a work-related injury to her back, neck and one shoulder. SAIF Corporation, her insurer, accepted the claim but awarded only temporary partial disability; the insurer did not award Claimant permanent partial disability. Claimant sought reconsideration, and the Department of Consumer and Business Services awarded her an eleven percent permanent partial disability for her shoulder. The insurer appealed the Department's award; the ALJ agreed with the insurer and reduced the permanent partial disability award to zero. Claimant appealed the ALJ's decision to the Workers' Compensation Board. The board reversed the ALJ and reinstated the eleven percent disability determination, and awarded attorney's fees. The issue on appeal concerned the authority of the Workers' Compensation Board to award attorney fees. Upon review, the Supreme Court found that the Board indeed has statutory authority to award attorneys' fees. View "SAIF Corp. v. DeLeon" on Justia Law