Justia Insurance Law Opinion SummariesArticles Posted in Oregon Supreme Court
Allianz Global Risks v. ACE Property & Casualty Ins. Co.
Daimler-Benz AG acquired Freightliner Corporation (Freightliner) from Consolidated Freightways (now Con-Way) in 1981. As part of the transaction, it liquidated Freightliner’s assets and liabilities into a subsidiary, Daimler Trucks North America LLC (Daimler). Between 1952 and 1982, Freightliner and then Daimler had engaged in business activities, primarily the manufacture of trucks, that subsequently led to several environmental remediation proceedings, including claims related to the Portland Harbor Superfund cleanup, and to some 1,500 asbestos personal injury claims. Plaintiffs Allianz Global Risk US Insurance and Allianz Underwriters Insurance Company (Allianz) insured Freightliner in 1981 and Daimler from 1981 to 1986 through a general commercial liability insurance policy. Daimler also purchased from Allianz another policy to provide coverage for future claims that might be made against Freightliner based on its past operations that were “incurred but not yet reported.” By the time it filed the operative complaint in this action in 2014, Allianz had spent more than $24 million defending and paying environmental and asbestos claims against Daimler and the now-dissolved Freightliner arising from Freightliner’s business operations between 1952 and 1982. In this litigation, Allianz sought contribution for the payments it has made and will make in the future based on those environmental and asbestos claims from insurance companies that insured Freightliner -- either directly or through its parent, Con-Way -- from 1976 to 1982. The Oregon Supreme Court reversed the Court of Appeals' holding that Daimler did not assume the contingent liabilities of Freightliner (including the liabilities at issue here) and affirmed the jury verdict on that issue. On Allianz's appeal, the Supreme Court agreed that the trial court erred in submitting to the jury the question of whether, because of side agreements between Con-Way/Freightliner and the insurers, those insurers had a "duty to defend or indemnify Freightliner" -- that question was to be decided by the trial court as a matter of law based on the relevant policies. As to the "London pollution exclusion", the Supreme Court agreed with Allianz that it was error for the trial court not to provide a legal interpretation of a key provision in the policy as part of the jury instructions. The Court also concluded that the jury instructions regarding the London pollution exclusion should be similar to those regarding the Domestic exclusion. The decision of the Court of Appeals was reversed. The limited judgments of the trial court were affirmed in part and reversed in part, and the case was remanded to the trial court for further proceedings. View "Allianz Global Risks v. ACE Property & Casualty Ins. Co." on Justia Law
Arvidson v. Liberty Northwest Ins. Corp.
After claimant Danny Arvidson received an award of permanent total disability, insurer Liberty Northwest Insurance Corporation requested a hearing before an administrative law judge (ALJ) to review the award. The ALJ dismissed insurer’s hearing request as time-barred. The question on review before the Oregon Supreme Court was whether that dismissal entitled claimant to attorney fees under ORS 656.382(2), which provided that, if an insurer initiates review of a compensation award and the reviewing body “finds that ... all or part of the compensation awarded ... should not be reduced or disallowed,” the insurer shall pay the claimant’s attorney a “reasonable attorney fee.” The ALJ determined that the statute applied to the dismissal of insurer’s claim and awarded fees to claimant. The Workers’ Compensation Board reached a different conclusion and reversed that decision. The Court of Appeals affirmed without opinion. The Oregon Supreme Court reversed, finding the ALJ correctly determined that his dismissal of insurer’s request for hearing entitled claimant to attorney fees. The board erred in concluding otherwise. View "Arvidson v. Liberty Northwest Ins. Corp." on Justia Law
Pilling v. Travelers Ins. Co.
Claimant Mark Pilling filed a claim for workers' compensation benefits which insurer Travelers Insurance denied. An administrative law judge (ALJ) reversed insurer’s denial, but the Workers’ Compensation Board reversed the ALJ’s order and reinstated insurer’s denial on the ground that claimant was a nonsubject worker because he was a partner in the business for which he worked and he had not applied for coverage as a nonsubject worker. The Court of Appeals affirmed the board’s order. On claimant’s petition, the Oregon Supreme Court granted certiorari review and concluded that, even assuming claimant was a nonsubject worker, he was entitled to coverage because the business for which he worked made a specific written application for workers’ compensation coverage for him, which insurer accepted. Therefore, the Court reversed the decisions of the Court of Appeals and the Workers’ Compensation Board and remanded to the board for further proceedings. View "Pilling v. Travelers Ins. Co." on Justia Law
Garcia-Solis v. Farmers Ins. Co.
Claimant Elvia Garcia-Solis was injured in a work-related accident. Farmers Insurance Company and Yeaun Corporation (collectively, “Insurer”) accepted a workers’ compensation claim and certain specified medical conditions associated with the accident. Because claimant also showed psychological symptoms, her doctor recommended a psychological referral to diagnose her for possible post-traumatic stress disorder (PTSD). Insurer argued, and the Court of Appeals agreed, that the cost of the psychological referral was not covered by workers’ compensation because claimant had failed to prove that it was related to any of the medical conditions that insurer had accepted. The Oregon Supreme Court reversed both the Court of Appeals and the Workers’ Compensation Board: “’injury’ means work accident is context-specific to exactly two uses in the first and second sentences of ORS 656.245(1)(a). It does not apply to the second use in the first sentence of ORS 656.245(1)(a). We do not decide or suggest that it applies to any other statute in the workers’ compensation system.” View "Garcia-Solis v. Farmers Ins. Co." on Justia Law
Bates v. Bankers Life and Casualty Co.
The United States Court of Appeals for the Ninth Circuit certified a certified question of Oregon law to the Oregon Supreme Court. The question related to claims under ORS 124.110 for financial abuse of “vulnerable persons” (here, elderly persons) who purchased long-term care insurance from defendant Bankers Life & Casualty Co. (Bankers) and sought to receive insurance benefits under their policies. Specifically, the Ninth Circuit asked whether a plaintiff states a claim under ORS 124.110(1)(b) for wrongful withholding of money or property where it is alleged that an insurance company has in bad faith delayed the processing of claims and refused to pay benefits owed under an insurance contract. Plaintiffs were elderly Oregonians or their successors who purchased long-term healthcare insurance policies sold by Bankers and its parent company. Plaintiffs alleged Bankers developed onerous procedures to delay and deny insurance claims: failing to answer phone calls, losing documents, denying claims without notifying policyholders, denying claims for reasons that did not comport with Oregon law, and paying policyholders less than what they were owed under their policies. Bankers allegedly collected premium payments and, without good cause, delayed and denied insurance benefits to which Plaintiffs were entitled. The Oregon Supreme Court answered in the negative: allegations that an insurance company, in bad faith, delayed the processing of claims and refused to pay benefits owed to vulnerable persons under an insurance contract do not state a claim under ORS 124.110(1)(b) for wrongful withholding of “money or property.” View "Bates v. Bankers Life and Casualty Co." on Justia Law
Spearman v. Progressive Classic Ins. Co.
Plaintiff purchased an automobile insurance policy from Progressive. The policy included UM coverage with a limit of $25,000. Plaintiff was injured in an automobile accident with an uninsured motorist. Plaintiff filed a proof of loss for UM benefits with Progressive. ORS 742.061(1) generally provides for an award of attorney fees when an insured brings an action against his or her insurer and recovers more than the amount tendered by the insurer. Subsection (3) provides a “safe harbor” for the insurer: an insured is not entitled to attorney fees if, within six months of the filing of a proof of loss, the insurer states in writing that it has accepted coverage, that it agrees to binding arbitration, and that the only remaining issues are the liability of the uninsured motorist and the “damages due the insured.” At issue in this case was what the safe-harbor statute meant when it referred to the “damages due the insured.” The insurer, Progressive Classic Insurance Company, responded to plaintiff’s claim by agreeing that the accident was covered by the policy, but challenged the nature and extent of plaintiff’s injuries, as well as the reasonableness and necessity of his medical expenses. Plaintiff argued that, by reserving the right to challenge the nature and extent of his injuries, Progressive raised issues that went beyond the “damages due the insured.” The trial court, Court of Appeals and Oregon Supreme Court all rejected plaintiff’s construction of the safe-harbor statute. View "Spearman v. Progressive Classic Ins. Co." on Justia Law
Brown v. SAIF Corp.
The issue in this workers’ compensation case was whether claimant was entitled to benefits for his “combined condition” claim. Claimant filed- and his employer’s insurer, SAIF Corporation, initially accepted-a claim for a lumbar strain combined with preexisting lumbar disc disease and related conditions. SAIF later denied the combined condition claim on the ground that the lumbar strain had ceased to be the major contributing cause of the combined condition. Claimant objected. He did not contest that his lumbar strain had ceased to be the major contributing cause of his combined condition. Instead, he argued that the otherwise compensable injury was not limited to the lumbar strain that SAIF had accepted as part of his combined condition claim. In claimant’s view, an “otherwise compensable injury” within the meaning of ORS 656.005(7)(a)(B) referred not just to the condition that SAIF accepted, but also includes any other conditions not accepted that might have resulted from the same work-related accident that caused the lumbar strain, and that larger group of work-related conditions continued to be the major contributing cause of his combined condition. As a result, claimant contended that an employer could not close a combined condition claim if any of those non accepted conditions remained the major cause of the combined condition claim. The Workers’ Compensation Board rejected claimant’s argument and upheld SAIF’s denial of claimant’s combined condition claim, concluding that existing precedent defined the “otherwise compensable injury” component of combined conditions to consist of the condition or conditions that the employer has accepted as compensable. The Court of Appeals reversed, acknowledging that its holding was “potentially at odds” with existing precedents from both that court and the Oregon Supreme Court. It nevertheless concluded that those precedents were either distinguishable or should be reconsidered. The Supreme Court concluded that the Court of Appeals erred and that the Workers’ Compensation Board was correct. View "Brown v. SAIF Corp." on Justia Law
Dowell v. Oregon Mutual Ins. Co.
Plaintiff had an Oregon auto insurance policy issued by defendant. In 2008, plaintiff was injured in a motor vehicle accident. Among other expenses, plaintiff incurred $430.67 in transportation costs to attend medical appointments and to obtain medication. She then applied for PIP medical benefits under her insurance policy. Defendant paid for plaintiff’s medical care, but it declined to pay for her transportation expenses to obtain her medical care. Plaintiff then filed a complaint for breach of contract, both for herself and on behalf of others similarly situated. She alleged that her claim for medical expenses under ORS 742.524(1)(a) included her transportation costs. Defendant moved for summary judgment, arguing ORS 742.524(1)(a) did not require it to pay for transportation costs. After a hearing, the trial court granted defendant’s motion and entered a judgment in defendant’s favor. The question on review was whether the PIP medical benefit in ORS 742.524(1)(a) included the insured plaintiff’s transportation costs to receive medical care. The Supreme Court held that PIP benefits for the “expenses of medical * * * services” do not include an insured’s transportation costs for traveling to receive medical care. Therefore, the Court affirmed the grant of summary judgment in favor of defendant. View "Dowell v. Oregon Mutual Ins. Co." on Justia Law
Long v. Farmers Ins. Co.
In 2011, plaintiff discovered a leak under her kitchen sink, which had caused extensive damage to her home, and filed a claim with her insurer, Farmers Insurance Company of Oregon (Farmers). In early 2012, Farmers voluntarily paid plaintiff a sum that it determined constituted the actual cash value of plaintiff’s losses less a deductible, $3,300.45. At around that time, it also paid plaintiff $2,169.22 in mitigation expenses. A few weeks later, plaintiff submitted to Farmers a proof of loss that included estimates of her mitigation costs and the actual cash value of her losses that far exceeded the sum that Farmers had paid her. Because plaintiff had not yet replaced any of the damaged items, she did not, at that time, submit a proof of loss that included the replacement cost of her losses. A year later, the parties had not resolved plaintiff’s claim, and in January 2013, plaintiff initiated this action. ORS 742.061 required an insurer to pay its insured’s attorney fees if, in the insured’s action against the insurer, the insured obtains a “recovery” that exceeds the amount of any tender made by the insurer within six months from the date that the insured first filed proof of a loss. In this case, the Supreme Court found that, when an insured files an action against an insurer to recover sums owing on an insurance policy and the insurer subsequently pays the insured more than the amount of any tender made within six months from the insured’s proof of loss, the insured obtains a “recovery” that entitles the insured to an award of reasonable attorney fees. View "Long v. Farmers Ins. Co." on Justia Law
Masood v. Safeco Ins. Co. of Oregon
Plaintiff purchased an insurance policy from defendant that provided coverage for his house, other structures on his property, personal property, and loss of use for up to 12 months. The policy also included “extended dwelling coverage,” which provided additional coverage of 50 percent to pay for unexpected repair or rebuilding costs that exceeded the base amount of coverage for the house. A fire completely destroyed plaintiff’s house and its contents and damaged other structures on the property. Plaintiff and defendant disagreed about what was owed under the policy. In particular, the parties disagreed about whether plaintiff was entitled to the extended dwelling coverage without having to first actually replace the house. After a lengthy and complicated trial, the jury returned a special verdict finding for plaintiff on his breach of contract claim and assessing damages in the amount of the limits of the extended dwelling coverage. The jury also found for defendant on the counterclaim, however. The trial court declined to enter a judgment awarding plaintiff any damages. The court concluded that, in light of the jury’s findings on the counterclaim, the insurance policy had been voided, and as a result, it was defendant who was entitled to a judgment for all payments that it had made under the policy up to that time. Plaintiff appealed. The Court of Appeals concluded that the trial court had erred in even sending the counterclaim to the jury because there was no evidence that defendant had reasonably relied on any misrepresentations by plaintiff. Defendant petitioned the Oregon Supreme Court, which ultimately denied defendant’s petition. Plaintiff sought an award of $30,771 in attorney fees incurred before the Supreme Court, contending that, given the Court of Appeals’ decision, he was the prevailing party on appeal and was entitled to fees. The Supreme Court concluded that plaintiff’s action was “upon [a] policy of insurance” within the meaning of ORS 742.061(1), and therefore did not address whether defendant was correct about the insufficiency of plaintiff’s “alternative” theory of recovery under the statute, based on his defeat of the counterclaim. Defendant advanced no other objection to the requested award of fees. The petition for attorney fees was allowed. View "Masood v. Safeco Ins. Co. of Oregon" on Justia Law