T R I A L Spring 2023 OREGON TRIAL LAWYERS ASSOCIATION In the Service of Justice First Party Insurance
1 Trial Lawyer • Spring 2023 Board of Governors Spring 2023 The views expressed in Trial Lawyer are solely those of the authors and do not necessarily reflect the policies or opinions of the Oregon Trial Lawyers Association, its members, Board of Governors or staff. Trial Lawyer is a quarterly publication of the Oregon Trial Lawyers Association and is distributed as a membership benefit. For permission to reprint articles, contact Michael Kesten at 503-804-0668, michael@kestenmedia.com. For advertising rates, contact law@llmpubs.com or 503-445-2240. Publications Committee Co-Chairs — Barb Long, barb@vogtlong.com. 503-228-9858; Faith Morse, faith@morselawllc.com, 541-362-4725 Editor — Michael Kesten, KestenMedia, michael@kestenmedia.com, 503-804-0668 Oregon Trial Lawyers Association, 812 SW Washington Ste. 900, Portland OR 97205, 503-223-5587, otla@oregontriallawyers.org, www.oregontriallawyers.org Dedicated to protecting people, holding wrongdoers accountable, and promoting a fair and equitable justice system through advocacy and education. Articles Financially Viable: Employee benefit claims Megan Glor.....................................................................................................6 Wildfire: Fire insurance denial claims Clinton Tapper..............................................................................................12 Emotions Run High: Settling first party claims Richard Spier................................................................................................16 Arbitration vs. Trial Gretchen Mandekor......................................................................................20 Insurance Got You Down? Exploring a plantiff’s rights Kyle Sturm, Nick Thede................................................................................24 Lessons Learned along my attorney fee journey Bob Bonaparte..............................................................................................30 Get Outta My Dreams, Get Into My Car: Insurance update Ben Cox........................................................................................................35 Brenna Collacchi and the fight against State Farm Aaron Reichenberger.....................................................................................40 Coverage of Homeowner Policies Fred Millard .................................................................................................43 Washington vs. Oregon: Insurance bad faith Mona Moghimian ........................................................................................46 Fighting Corporate Greed Travis Eiva.....................................................................................................50 Departments President’s Message: Protecting our clients Blair Townsend...............................................................................................2 View from the Bench: A new courthouse for Clackamas County Judge Kathie Steele.........................................................................................4 Annual Partners . .................................................................................................................... 11 OTLA Guardians of Civil Justice . .................................................................................................................... 28 Comp Corner: Attorney fee factors Julene Quinn................................................................................................55 Between the Sheets Cody Hoesly, Lisa T. Hunt, Nadia Dahab....................................................... 56 Officers President Blair Townsend President-elect Rob Kline Secretary-Treasurer Melissa Bobadilla Parliamentarian Brent Barton Immediate Past President Lara Johnson District Governors Talia Guerriero — District 1 Nathan Sosa — District 1 Kelly Andersen — District 2 Brian Dretke — District 2 Rob Beatty-Walters — District 3 Rhett Fraser — District 3 Erin Christison — District 4 Diego Conde — District 4 Derek Johnson — District 5 Tim Williams — District 5 Governors-at-Large Steve Berman Ronn Elzinga Sonya Fischer Neil Jackson Ryan Jennings Quinn Kuranz Paul Loving Jeremiah Ross Thanh Tran Greg Zeuthen New Lawyer Governors Ron Cheng Emily Johnson AAJ Governors Kathryn Clarke Tom D’Amore Nadia Dahab AAJ State Delegates Apolinar Montero-Sánchez Shenoa Payne Michael Wise OTLA Staff Email, (firstname)@oregontriallawyers.org Main phone, 503-223-5587 Kathleen Bergin, 503-223-5587 x108 Membership and Partnership Director Beth Bernard, 503-223-2558 Chief Executive Officer Caroline Greenlaw, 503-223-5587 x100 Education and Development Director Arthur Towers, 503-345-0045 Political Director/Lobbyist
2 Trial Lawyer • Spring 2023 By Blair Townsend OTLA Guardian If you had asked me (or anyone, frankly) when I was younger if I thought I was going to be a politician someday, the answer would have been yes. Absolutely. Years, okay, decades later, I was still contemplating running for political office. In 2017, I applied and was selected for that year’s Emerge class along with twenty-four other like-minded women, including OTLA member and now Oregon Labor Commissioner Christina Stephenson. Emerge’s mission was clear — over seven months, instructors and elected officials trained us on how to run an effective political campaign and more importantly, WIN IT. The course was instructional and also aspirational. We were challenged to question our motivations, what set us apart, what we perceived as personality failures, Protecting our clients what we hoped to change. Early on, we scribbled on a sheet of paper what political office we wanted to hold. For me, it was HD 45, House Majority Leader Barbara Smith Warner’s seat (planning for when she retired). The rest of the course focused on boots on the ground fieldwork, strategy, media, campaign fundraising and the rest of the exhausting work it takes to win. So many from my class, and those before and after it, have gone on to attain those dreams. Emerge was eye-opening for me because I realized, and this was definitely not Emerge’s objective, I did not want to run for political office. I was more inspired by the behind-the-scenes work, the campaign managers over the politicians. Ultimately, Emerge taught me the language of campaigning, being on a team, helping to raise issues, voices and people to the positions they deserved and we need. That work feels more satisfying to me than running for office. The full circle moment for me was when House Majority Leader Smith Warner announced her retirement before the end of her term. A democratic candidate would have the opportunity to be appointed to her seat and then run as an incumbent, about as welcoming as running for office gets. Albeit briefly, it was quiet — no one had put their name in. I revisited that scrap of paper and thought, if you are going to do this, this is your sign to go for it, regardless of what happens. As quickly as I considered it, I felt in my gut that I no longer wanted it, at least not in the way you have to want it to do it well. Political and legislative strength When I became president of OTLA, I knew I wanted to talk to you about an important benefit of our OTLA membership — OTLA’s political and legislative strength and advocacy work through our Legislative Committee and our Political Action Committee. These committees are working committees. For the Legislative Committee, our legislative concepts are discussed and prioritized months before session begins. The committee is busiest during the first few months of session. The Legislative Committee leadership meets every Tuesday at 7 a.m. via Zoom to discuss strategy, problematic bills and bills that need amendments, as well as our game plan throughout the everchanging session. Tuesday evenings, the Legislative Committee members meet and sign up to review bills with some impact on our work and our clients’ rights. More than 80 OTLA members served on the committee reviewing more than 600 bills, a herculean feat. Unfortunately, as this edition hits your inbox, session is over and our two priority bills, adding insurance to the Unlawful Trade Practices Act and enhancing the Unfair Claims Settlement President’s Message Blair Townsend
3 Trial Lawyer • Spring 2023 Practices Act died at the end of session getting caught up in all sorts of political gamesmanship. Without writing a playbook, suffice it to say that OTLA is a powerhouse. The machinations necessary to get, for instance, a legislative priority born from OTLA committee meetings (like stacking) involve years of work and strategy. Building consensus, reading the political landscape, recruiting candidates, having a PAC Board educating our legislators on why issues like immunity and caps on damages are harmful to Oregonians (and then getting those legislators to back us) takes long-range perspective and strategy. Selfishly, a primary reason I wanted to be president this year was to be a part of this behind the scenes work and learn everything I could about the process. The right case As I mentioned, a first-party insurance case made its way into the Oregon Legislature. On January 26, 2022, the Oregon Court of Appeals released its opinion in OTLA member Travis Eiva’s case, Moody v. Federal Insurance Company, 317 Or App 233 (2022), a case with incredible implications for our clients. Oregonians have long been hamstrung, without a hammer by which to force an insurance company to simply do what they were contracted to do. We all see it in our cases. An insurance company will insult our clients with exceedingly low offers, move at a snail’s pace in an effort to exhaust our client or just simply deny the claim altogether without any real investigation. I’ve long told my clients that I shouldn’t have a job most of the time, that I exist, in part, because as certain as death and taxes, insurance companies will work to bilk their insureds if lawyers don’t step in. Essentially, the Moody court held a policyholder may recover emotional distress (one variety of “bad faith” damages) on a claim for “negligence per se” based on the insurer’s violation of ORS 746.230, the Oregon Unfair Claim Settlement Practices Act. Standing ovation for our colleague, Eiva. This decision could be monumental in holding insurance companies accountable for their bad behavior — if the Supreme Court affirms the COA decision or the decision is codified into law. Fuel for the engine The work we are doing at the Legislature would not happen without your contributions to our Guardians program. Guardians directly funds OTLA-PAC, which then supports political candidates who believe in access to justice and protecting your clients’ rights. Guardian contributions are the only way OTLA PAC is funded. Your dollars allow OTLA to remain a strong advocate (often the ONLY advocate) for injured Oregonians’ access to the civil justice system. Whether you realize it or not, your practice has already benefited greatly from the legislative and political work of OTLA, as you will read in this edition. Yet, only 49% of our members are currently Guardians. Whether you look at it as an investment in your future or a cost of doing business, I urge you to give and give now. Contact me or OTLA Development Director Caroline Greenlaw at caroline@oregontriallawyers.org. One of us will get you signed up. Blair Townsend specializes in personal injury, wrongful death, medical malpractice and business litigation. She contributes to the OTLA Guardians at the Guardians Club level. She practices at The Townsend Law Firm LLC, 50 Pine St. Ste. 400, Portland, OR 97204. She can be reached at blair@btownsendlaw.com or 503-7151896. Without writing a playbook, suffice it to say that OTLA is a powerhouse.
4 Trial Lawyer • Spring 2023 By Judge Kathie Steele Clackamas County Circuit Court When I started practicing law in Clackamas County in 1981, I often heard rumors about plans to build a new courthouse. It was deemed “pending.” Turns out, attorneys in our county had been promised that new courthouse since the 1960s. The current Clackamas County Courthouse was constructed in 1936, when our county had approximately 50,000 residents. It housed county officials and one solitary courtroom. Today, Clackamas County has approximately 445,000 residents and we have carved eleven courtrooms out of our original 1936 building. Expansion Best practices would dictate that we have 14 judges for our population, but we currently have nowhere to put them! Not having enough judges means delayed justice for civil and criminal cases. Delay means bulging caseloads, heartbreaking delays in trials, incarcerations and hearings. In addition, the current courthouse is obsolete and unable to technologically be updated. Lots of overtime hours are spent keeping the system running to a moderately acceptable degree. Wires run across courtroom floors. Our courthouse traffic patterns put folks both in and out of custody, victims, View From The Bench Hon. Kathie Steele A new courthouse for Clackamas County witnesses and opposing litigants right next to each other in hallways and courtrooms, creating both security and safety challenges. Jurors have no sequestration room on site, leaving them exposed to potentially improper communications (and the weather). Perhaps most importantly, the building is less than three feet away from a 100 foot dropoff into the Willamette River. It is sitting on soil that will liquify in the event of an earthquake. It is not attached to bedrock. A serious earthquake is predicted to inflict serious damage and present a risk of death for occupants. The building is very vulnerable. Over 140 people per day who work here are put at risk by working in this building, let alone the litigants, attorneys, witnesses and jurors. Everybody agrees it needs to be replaced. The problem has always been: How are we going to pay for it? Funding the future I became presiding judge for the Clackamas County Circuit Court in January 2019 and served for four years. During the 2017 Oregon legislative session, the state provided $1.2 million for courthouse planning. The county had prioritized working with the Legislature around funding for a new courthouse. Despite the fact that all the prior presiding judges were pessimistic that it could be done, we went to work. A coalition of elected county officers, judges, state lawmakers, city officials, local bar members, the sheriff’s office and the district attorney joined the effort. The county worked with the state to secure matching dollars to cover the project costs, so that residents would have an efficient, safe and financially responsible courthouse. The county invested millions to prepare for this significant project and the state provided additional millions. We visited city council and community meetings, and the Legislature (individuals and committees). I carried a picture of our location relative to the drop-off into the river and a yardstick to demonstrate how close we were to the cliff edge. We plastered the Legislature with yardsticks identified with the Clackamas County Courthouse. Note, the yardsticks were much lighter than the bricks Judge Nan Waller carted around to demonstrate why the Multnomah County Courthouse needed to be replaced. We provided tours for the legislators and county officials. Bottom line was the traditional method of getting in the state system “line” for financial assistance for a new courthouse was difficult. We did not expect our county voters to vote for a bond measure to replace it. Several counties were ahead of us in the line. Even though a newer statute allowed for the state to contribute to new and remodeled
5 Trial Lawyer • Spring 2023 courthouses, a “fool’s mission” was the terms most often bandied around. Enter our Clackamas County project coordinator, Gary Barth. Barth had been hired by the county to spearhead our efforts with the planning of the new courthouse. He had been involved in said planning for several years before I got involved. Knowing our problems with financing issues, he searched for other options and found one: the P3 model for developing public works. Based on his research and presentation to those of us involved, he presented the option to the Clackamas County Board of Commissioners. The board requested further study and ultimately adopted this method of replacement in 2021. The state’s participation in this process was a little longer. The Legislature has also embraced (or acquiesced to) this process to build the new Clackamas County Courthouse. A P3 is a “Public, Private Partnership.” Specifically, in a P3 approach, the county contracts with a consortium or project company to provide the design, construction, and partial (private) financing to replace our courthouse and provide for its maintenance and operation for 30 years. The “project company” includes architects, construction, finance, technology and maintenance companies joined together to deliver the new building. Several courthouses across the country have been constructed using this process. We sought them out to confirm the benefits and risks of the process. The county sent out requests for proposals (RFPs) to companies and received eight potential applicants in 2021. Those interested companies were winnowed down to three applicants in 2022. One subsequently dropped out. Of the two finalists, the board chose one to build, operate and maintain the new courthouse. This procurement process was competitive. The project company’s application was very detailed and had to meet requirements of the county and state for the needs of our courthouse. Full speed ahead We now have several counties watching us to see how this process works to determine if they want to adopt a similar P3 process. One of the advantages of a P3 process is the county knows exactly what it is getting, and how it will pay for it. There are no “change orders” during construction. The plan is already largely completed. Tweaking may occur, but only if we can do so without changing the final price. After we move in, the monthly payments are the same for the next 30 years. Construction is faster with a P3 compared to conventional construction. We should be moving in by May 2025. Financing, operation and lifecycle maintenance risks are shifted to the private partners. This saves us money. The county and state don’t pay anything until the building is completed. At the end of 30 years, we should have a building that is as good as the one we get when we move in. By building “smart” or with quality construction, we are ultimately saving money as things will not have to be fixed or replaced over time (at our cost). Sanctions occur if, for example, an elevator or bathroom goes out of commission. The final price includes not only the technology required for the courthouse, but furniture and maintenance of the building and its contents. The most state of the art construction methods and content are considered and applied to save us money now and in the future. The new Clackamas County Courthouse will have 14 completed courtrooms now and two more as “warm shells” to complete as needed in the future. We intend this to last 50-100 years. It’s been an interesting process. I’m really looking forward to completion! Judge Kathie Steele serves at ClackamasCounty Circuit Court, 807 Main St., Rm 101, Oregon City, OR 97045. She can be reached at 503-655-8678 or kathie.f.steele@ojd.state.or.us. Planning is completed for a new Clackamas County Courthouse, which is expected to be open for business by May 2025.
6 Trial Lawyer • Spring 2023 Megan Glor By Megan Glor OTLA Guardian Liz called me at the recommendation of her estate lawyer. She explained she had left her 15-year career as a software engineer nine months earlier because of unbearable neck and back pain. She said her pain had exhausted her and she had struggled to perform her work duties. She had started bringing work home with her in the hope of catching up at night, unsuccessfully. She had, for the first time in her career, received negative performance reviews and got a sense her manager might be eying her for termination in an upcoming round of layoffs. Based upon her declining performance, Liz knew she was seen as a weak link in her department. She was stunned how far she felt she had fallen. Not only was she struggling at work, but increasingly, she was so exhausted from pain and the stress of her workplace struggles that she was not able to care for her young children as she always had or fully participate in family life. After a weekend of despair over an exacerbation of pain and her difficulties at work, Liz’s manager’s stinging comment about a missed deadline was the final blow. Liz had made an urgent appointment with her primary care physician, who agreed it was appropriate for Liz to leave work and submit a benefit claim through her employer’s group disability plan. The disability plan, Liz explained, was managed by an administrator and the assigned claim manager initially told Liz cheerfully that her claim should be “no problem.” Liz, however, quickly had a feeling things might not go well. The claim manager seemed disorganized. She claimed that medical records Liz knew had been submitted were missing. She also told Liz that historical medical records that documented Liz’s long history of chronic back pain, many rounds of physical therapy, orthopedic evaluations, chiropractic treatment referrals and a car accident that had made everything worse were unnecessary, because “the issue is whether you are disabled now, not back then.” Increasingly, things had felt “not right” and, Liz explained, she had begun to wonder whether she should hire a lawyer. During a particularly frustrating call, Liz told the claim manager she realized she might need a lawyer. The manager dissuaded her, explaining that the claims process is “simple” and “almost done.” When Liz’s claim was denied, the manager explained she could appeal, explaining, “all we need is a letter from you saying you appeal and explaining why you think the decision was wrong,” and added, “the process is designed to be simple for the insured.” Liz’s appeal was quickly denied. Liz’s condition had not improved and she now had the additional burden of having no income or benefit stream. Liz told me that she wanted to fight the claim denial. She explained that her doctors were on board and that she realized we might need an expert witness. She said she thought her complete medical history would also be helpful and that she had many supportive colleagues who would attest to her devotion to her career and obvious struggles that led to her departure from work. I had to break it to Liz that it was too late for any of that, and that there would be no consideration of additional information or testimony, no expert witnesses and no jury trial. Limited rights and remedies This is because Liz’s claim — through her group disability plan provided through private employment — was Financially Viable Employee Benefit Claims
7 Trial Lawyer • Spring 2023 See Employee Benefit Claims p 8 governed by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. ERISA governs most private employer-sponsored definedbenefit plans, defined-contribution plans, such as 401(k) plans, 403(b) plans, employee stock ownership plans (ESOPs) and profit-sharing plans, and privatesector health plans, including health maintenance organization (HMO) plans, flexible spending accounts (FSAs), disability plans, and life insurance plans. While a claimant who had purchased an individual disability insurance policy would have the rights Liz thought she had, Liz’s rights and potential remedies were extremely limited under ERISA: • Her case would be decided based upon the parties’ motions, which would argue the “cold record,” consisting of all documents obtained, produced and generated during the claim review process. There would be no testimony, by Liz or her doctors, family members or colleagues, supporting her claim. Nor would the important earlier medical records be reviewed by the court. • There would be no jury trial. See, Thomas v. Or. Fruit Prods. Co., 228 F.3d 991, 996 (9th Cir. 2000) (“[P]lan participants and beneficiaries are not entitled to jury trials for claims brought under, or preempted by, section 502 of ERISA.”). • If her case were to be successful, Liz probably would recover no more than the monthly benefits through the date of judgment, minimal interest and attorney fees and costs incurred in litigation. ERISA preemption would bar any threat of a bad faith claim, extracontractual damages and other claims. If the denial decision were overturned, she would be back to “dealing with the devil,” having to provide proof of her continuing disability for the life of her claim. Adequately established disability Even worse, because Liz’s disability coverage was through a self-funded plan that included a provision delegating to the claims administrator the “discretionary authority to make all benefit decisions and interpret the terms of the plan,” the denial decision would be reviewed under the abuse of discretion standard of review. “Under this deferential standard, [the] plan administrator's decision ‘[would] not be disturbed if reasonable.’” Stephan v. Unum Life Ins. Co. of Am., 697 F.3d 917 (9th Cir. 2012) (quoting Conkright v. Frommert, 130 S. Ct. 1640, 1651 (2010) (internal quotation marks omitted in Stephan). Had Liz’s disability coverage been provided through an insurance policy issued in Oregon, judicial review would have been under the de novo standard, where “the court does not give deference to the claim administrator’s decision, but rather determines in the first instance if the claimant has adequately established that he or she is disabled under the terms of the plan.” Muniz v. Amec Constr. Mgmt., Inc., 623 F.3d 1290, 1295-96 (9th Cir. 2010). While Oregon, like about half the states, has since 2015 banned so-called discretionary clauses, see OAR 836-010-0026, because Liz’s disability coverage was not provided through an insurance policy, it was not subject to the insurance code. Therefore, the discretionary clause was not barred. Liz was facing a serious uphill battle. I recognized based upon our discussion that her claim might not be viable for litigation. I offered to obtain and review the claim file, which she authorized. The claim file, provided by the plan administrator (see, 29 CFR § 2560.5031(h)(2)(iii), (m)(8)), was a bit of a mixed bag and was weak overall. The recent medical records, going back a year before her disability, documented Liz’s symptoms and summarized her long history of treatment for chronic back pain and the car collision. Her employer had noted on the administrator’s disability claim form that Liz had been a “valuable expert and employee” and that “disability/pain was very obvious.” Among the most helpful documents were notes by the claim manager documenting Liz’s suggestions that the manager request prior medical records that “document a long history of back pain, treatment and prior MVA,” coupled with two form letters issued by the administrator, assuring Liz, “we will use your medical authorization to request all needed medical records.” The claim file showed the administrator had pushed back against Liz’s efforts Thank You to members of the OTLA Publications Committee Blaine Clooten Shannon Conley Kyle Dukelow Marilyn Heiken Barb Long Shangar Meman Faith Morse Matt Rizzo Tim Walsh Rob Wilkinson For your hard work throughout the year to bring us the fine content of this and every issue of Trial Lawyer magazine.
8 Trial Lawyer • Spring 2023 Employee Benefit Claims Continued from p 7 to make a complete record by assuring her it would obtain the necessary evidence and failing to do so. Claim notes documented incomplete and misleading responses by the claim manager to Liz’s questions about her legal rights and suggested she had been dissuaded from retaining a lawyer, as she had stated. The appeal had clearly documented the manager’s assurances to Liz that she would merely need to submit a simple letter to appeal. Abuse of discretion In reviewing for an abuse of discretion under ERISA, the court will not overturn an administrator’s denial decision that is “reasonable.” Black v. Hartford Life Ins. Co., No. 3:17-CV-1785-HZ, 2019 U.S. Dist. LEXIS 96711, at *5-6 (D Or June 10, 2019); See, Salomaa v. Honda Long Term Disability Plan, 642 F.3d 666, 676 (9th Cir. 2011). However, this rule is tempered by the court’s recognition that the administrator has a conflict of interest and this “must be weighed as a factor in determining whether there is an abuse of discretion.” Id. at 674 (internal quotation marks omitted). The reviewing court considers “case-specific factors” and “reaches a decision as to whether discretion has been abused by weighing and balancing those factors together.” Montour v. Hartford Life & Accident Ins. Co., 588 F.3d 623, 630 (9th Cir. 2009) (citation omitted). Factors that frequently arise include the quality and quantity of medical evidence; whether the administrator obtained an in-person medical evaluation or merely relied on a paper file review of existing records; whether the administrator provided its consultants all relevant evidence; evidence of malice; and procedural violations of ERISA regulations. See Black, 2019 U.S. Dist. LEXIS 96711, at *8 (citations omitted). We had some good arguments that the denial decision in Liz’s case was tainted by the administrator’s conflict of interest based upon the claim notes and the fact the insurer willingly ignored and failed to obtain evidence that it knew or should have known could be material to its decision. See Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 966-67 (9th Cir. 2006) (en banc) (“we may ‘weigh’ the conflict ‘more heavily’ if there’s evidence that the administrator…has failed ‘adequately to investigate a claim or ask the plaintiff for necessary evidence’...” (quoting Atwood v. Newmont Gold Co., 45 F.3d 1317, 1323 (9th Cir. 1995)). Conflict discovery I concluded that the claim file provided enough helpful “conflict” evidence for me to offer to pursue the case in litigation. Liz’s claim was nevertheless a very difficult one. We pursued so-called “conflict” discovery, seeking further evidence that the administrator’s conflict of interest had tainted its denial decision. See Black v. Hartford Life Ins. Co., No. 3:17-cv-01785-HZ, 2018 U.S. Dist. LEXIS 137138 (D. Or. Aug. 14, 2018) (addressing discovery standards under ERISA in “conflict” discovery motion). Eventually, Liz settled her case through a “buy-out.” She was paid a lump sum in exchange for her waiver of rights under the plan. She received a very small portion of the present value of the benefit stream she would have received had she remained disabled through the plan’s maximum benefit period, another 20 years. Her risk was too high to continue. Had Liz known she had fallen into the unfair realm of ERISA and obtained See Employee Benefit Claims p 10 In reviewing for an abuse of discretion under ERISA, the court will not overturn an administrator’s denial decision that is “reasonable.”
9 Trial Lawyer • Spring 2023
10 Trial Lawyer • Spring 2023 representation, a strong appeal might have included: • All pertinent medical records, including those documenting Liz’s long history of back pain and treatment and supportive letters by Liz’s medical providers. See, e.g., Dykman v. Life Ins. Co. of N. Am., No. 3:20-cv-01547-IM, 2021 U.S. Dist. LEXIS 216616, at *22-23 (D. Or. Nov. 8, 2021) (“The health care professionals who have personally examined and treated Dykman support disability…This evidence alone is persuasive evidence that Dykman is totally disabled.” (citing Salomaa, 642 F.3d at 676-79)). • A functional capacity evaluation (“FCE”). See, e.g., Sterio v. HM Life, 369 F. App'x 801, 804 (9th Cir. 2010)(citing limitations found on FCE that were consistent with the treating physicians’ conclusions that Sterio was “permanently disabled,” and noting that the insurer “failed to credit this reliable medical evidence.”) • Statements by work colleagues, family members and friends attesting to Liz’s presentation and increasing functional problems at work and home. See.e.g., Dykman, 2021 U.S. Dist. LEXIS 216616, at *29-30 (“... at no point did LINA address Dykman’s…mother’s statement documenting how MS affected Dykman over the years.”); Coleman-Fire v. Standard Ins. Co., No. 3:18-cv00180-SB, 2019 U.S. Dist. LEXIS 76726, at *35 (D. Or. May 7, 2019) (“the statements provided by plaintiff's legal secretary supports a finding that plaintiff is unable to work as an associate attorney…”); Rabbat v. Standard Ins. Co., 894 F. Supp. 2d 1311, 1323 (D. Or. 2012) (finding a supervisor’s statements to be persuasive evidence of disability). • Symptom logs supporting the claim and/or rebutting the administrator’s assertions. See, Abrams v. Unum Life Ins. Co. of Am., No. C21-0980 TSZ, 2022 U.S. Dist. LEXIS 231950, at *7 (W.D. Wash. Dec. 27, 2022) (citing “logs/photos/videos of elevated temperature readings in the fall and winter of 2020-21…” submitted on appeal and “three supplemental letters…with additional…temperature recording…” as supporting disability and rebutting insurer’s assertions that temperatures were normal at office visits); Olis v. Unum Life Ins. Co. of Am., No. 8:19-cv-01347-JVSDFM, 2020 U.S. Dist. LEXIS 137728, at *40-41 (C.D. Cal. July 27, 2020)(citing documentation of plaintiff’s “symptoms (some of which were recorded in a log of symptoms)” that “consistently indicated requiring eye breaks lasting two to three hours.”). • Relevant medical literature. See, Dykman, 2021 U.S. Dist. LEXIS 216616, at *29 (insurer’s consultant “does not address the medical literature that ‘the progression of physical and cognitive disability in MS may occur in the absence of clinical exacerbations,’ which resembles Dykman’s progressing visual issues, fatigue, and cognitive issues without an MS relapse.”); Coleman-Fire, 2019 U.S. Dist. LEXIS 76726, at *34 (Medical literature submitted with ERISA appeal were consistent with treating “concussion specialist’s” conclusion that plaintiff is among the PCS patients whose symptoms persist and render them disabled.”); Abrams, 2022 U.S. Dist. LEXIS 231950, at *7. The late Hon. William M. Acker, Jr., United States district judge for the Northern District of Alabama, addressed the problems with ERISA in several judicial decisions and became an activist for reform from the bench. In one article he lamented: In Florence Nightingale Nursing Service, Inc. v. Blue Cross and Blue Shield[, 832 F. Supp. 1456, (N.D. Ala. 1993), aff'd, 41 F.2d 1476 (11th Cir. 1995)], I started my opinion with these three sentences: A hyperbolic wag is reputed to have said that E.R.I.S.A. stands for “Everything Ridiculous Imagined Since Adam.” This court does not take so dim a view of the Employee Retirement Income Security Act of 1974. Instead, this court is willing to believe that ERISA has lurking somewhere in it a redeeming feature. Since writing Florence Nightingale, I have changed my mind. ERISA is beyond redemption. No matter how hard the courts have tried, and they have not tried hard enough, they have not been able to elucidate ERISA in ways that will accomplish the purposes Congress claimed to have in mind. William M. Acker, Jr., “Can the Courts Rescue ERISA?,” 29 Cumb.L.Rev. 285 (1998-1999). Unfortunately, ERISA claim administrators and insurers are not required to advise ERISA claimants what they are up against by explaining the judicial process. Nor are they expressly forbidden from downplaying the importance of the ERISA appeal process. Unfortunately, unless Congress addresses the serious defects in the highly privatized ERISA claim and review process — through which most employee benefit claims are decided in the United States — the odds for claimants like Liz are unlikely to improve significantly. Megan Glor specializes in representing individuals in disability, health and other benefit claims through both ERISA-governed benefit plans and individual policies. She is the owner of the firm Megan E. Glor Attorneys at Law, 707 NE Knott St., Ste. 101, Portland, OR 97212. She can be reached at megan@meganglor.com and 503-751-2064. Employee Benefit Claims Continued from p 8
11 Trial Lawyer • Spring 2023 8 SIDEBAR May/June 2023 DIAMOND PARTNERS PLATINUM PARTNERS GOLD PARTNERS Barrister Support Service CC Reporting & Videoconferencing Columbia Bank Expert Institute Fat Pencil Studio Heritage Bank Integrity Legal Nurse Consulting LEX Reception LexisNexis Medical Vocational Planning Paulson Coletti Physician Life Care Planning Sage Settlements Stoll Berne Trial Guides Vision Office Solutions
12 Trial Lawyer • Spring 2023 Clinton Tapper By Clinton Tapper OTLA Guardian On Labor Day weekend, 2020, a combination of high temperatures, low rainfall, strong winds, human activity and thunderstorms caused 21 named fires throughout the state. Together these fires destroyed 1.1 million acres of Oregon forests, put 500,000 Oregonians on warning for evacuation, forced the actual evacuation of 40,000 Oregonians, burned over 4,000 structures and killed 11 people. The cities of Phoenix, Talent, Detroit and Gates were effectively destroyed by the Almeda and Santiam Fires. While 2020 was a historic year for wildfire, all indications are it was the new normal for our region. Due to climate change, predictive models anticipate Oregon will continue to experience warmer temperatures, lower snowfall and hotter summers. These conditions combined make it a matter of when, not if, Oregon will suffer another similar fire season. Our response In the aftermath of the fires, OTLA sprang into action with an immediate call for volunteers from our membership. And the OTLA family answered the call. Leading the charge was OTLA member and Volunteer of the Year 2021 Marc Johnston, whose family was evacuated due to fires in Clackamas County. He had a vision of how our organization could help those in need by tapping into our best resource — you — lawyers and their staffs who know the ins and outs of dealing with insurance companies. With Johnston at the helm and with help from President Lara Johnson, OTLA organized a CLE dealing specifically with fire issues for those volunteers willing to go out into the affected communities and provide free advice. I joined other members who specialize in property damage cases asked to lead the CLE on how to help victims navigate their claims. Thanks to Bob Bonaparte, Doug Bragg, Tonna Faxon, Michael Knapp, Fred Millard, Nick Thede and Kyle Sturm for sharing their knowledge and expertise. Regional leaders were assigned: Chris Cauble, Lara Johnson, Marc Johnston, Faith Morse, Travis Prestwich, David Rosen and Adam Springer. These leaders organized panels of volunteers throughout the state to go to the affected areas and run free legal clinics for the wildfire victims. OTLA volunteers also took shifts answering calls on an 800 line set up by OTLA to assist folks affected by the wildfires. Thanks to all OTLA members who stepped up and helped in this effort. Now, all these months later, it seems like a good time to check on a few of the claims coming from the OTLA program. Sara — CAT adjusters In 2020, Sara was evacuated almost immediately after the Holiday Farm fire started. She and the other residents of her mobile home park located on the outskirts of Blue River, were among the first to receive the notice to evacuate. Sara gathered up her pets and a few treasured belongings and sought shelter in Eugene. When she returned home, she was overjoyed to find although the fire had come within a few hundred yards of her property, her home was spared from the fire. While not destroyed, her home did suffer damage. The fire caused acrid smoke to permeate her belongings and embers fell on her roof, causing significant damage. After calling her insurance company, Sara was put in touch with an adjuster who viewed her property and offered her a few hundred dollars to clean up her loss. When Sara tried to discuss the damage with the adjuster, the adjuster was difficult to reach. When she finally could talk to him, the adjuster told WILDFIRE Fire Insurance Denial Claims
13 Trial Lawyer • Spring 2023 See Wildfire p 14 Sara that was the amount the carrier was offering was final. Sara’s experience is not uncommon due to the insurance industry’s use of catastrophic loss or CAT adjusters. When a natural disaster such as a wildfire, blizzard or hurricane impacts a wide geographic area, insurance companies will mobilize adjusters from across the nation and send them to that area. The companies call this group of adjusters a catastrophic loss team or CAT team. After the wildfires in 2020, virtually all insurers mobilized such teams to Oregon. On the plus side, a CAT team provides a rapid response to a widespread problem. Local adjusters are not equipped with resources or personnel to handle hundreds or thousands of claims at once. A CAT team provides additional support to local resources, so insureds do not have to wait weeks or months to speak with an insurance representative. CAT adjusters also tend to have authority to write checks on the spot, and can authorize higher, pre-approved limits on claims. This allows CAT adjusters to pay for small or mid-sized losses immediately, allowing many claims to be dealt with without a prolonged insurance investigation. On the negative side, CAT adjusters are not local and have very little knowledge of what may be unique problems associated with losses in the region. In 2020, many of the areas hardest hit by the fires were rural areas and consisting of structures in existence for generations prior to the loss. Estimating the value and the possibility to rebuild these unique structures presented logistical and code issues not well suited to a one time cash payment. CAT adjusters are also not adjusters for the long haul. If an insured does have a large or complex loss, they may speak initially to a CAT adjuster who may provide information about their claim and then vanish when that adjuster is returned to his or her home jurisdiction. Finally, CAT teams are generally under direct orders to settle as many claims as possible as quickly as possible. This can lead to adjusters pushing to settle claims quickly and for less than their actual value. In the 2020 fires, there were reports of adjusters offering insureds quick cash settlements steeply discounted but available immediately. In some situations, there were reports of adjusters falsely telling insureds that if they did not take the settlement, they would have no other avenue to recover for the loss. Sara’s adjuster did not tell her she had to take the money or lose her claim, however, Sara’s adjuster was also not interested in working with her to understand the nuances of her loss. Luckily, Sara refused to take the adjuster’s word for the loss and eventually, with legal assistance, was able to get her claim paid in full. Brad — agent negligence In 2020, Brad was volunteering with the fire department fighting the Alameda fire outside Medford when he got the Thank You to the OTLA Volunteers who answered the call following the 2020 wild fires Dick Adams Megan Annand Randall Baker Robert Beatty-Walters Melissa Bobadilla Bob Bonaparte Douglas Bragg Heather Brann Mike Brian Chris Cauble Earl Christison Erin Christison Ben Cox Scott Cumming Shane Davis Joe Di Bartolomeo Alex Dunn Ronn Elzinga Brian Fann Tonna Faxon Sherria Fitzpatrick Bill Gibson Mark Ginsberg June Glisson Monica Goracke Beatrice Grace Adam Greenman Emily Guimont Roger Harris Samantha Hazel Katherine Heekin Marilyn Heiken Stephen Hendricks Dylan Hydes Lori Hymowitz Lara Johnson Robert Johnson Marc Johnston Tina Lackner Chris Larsen Andrew Lauersdorf Shanti Lewallen Andrew Lewinter Louis Marcanti Dan McKinney Miriam Medina Tom Melville Brady Mertz Fred Millard Brandon Moore Faith Morse Andrew Paris John Pinzelik Jo Posey Scott Pratt Julie Preciado Travis Prestwich Julene Quinn David Rosen Jeremiah Ross Thelma Sanchez Murphy Karen Schoenfeld Steven Schoenfeld Jason Skelton Dan Snyder Adam Springer Shayla Steyart Jennifer Stout Michael Stout Kyle Sturm Derek Swanson Clint Tapper Nick Thede Thanh Tran Natasha Voloshina Jud Wesnousky Tim Williams Nate Woodward Arnold Wuhrman Greg Zeuthen
14 Trial Lawyer • Spring 2023 Wildfire Continued from p 13 call. The fire had broken containment further south and was heading directly for his business located outside the city. With the fire line on the horizon and ash raining through the air, Brad raced to his store in time to save a few personal mementos and document the property on site. He quickly evacuated to escape the flames. When he returned, his tools, equipment and inventory were gone. Brad made a claim with his carrier and almost instantly began experiencing difficulty. Despite having purchased a fire policy believing he had coverage sufficient to pay for his entire loss, Brad’s policy was set with very low limits on property. These limits were based on his insurance agent’s representation they would be sufficient to cover any loss he might have. After accounting for his losses, his policy would cover less than half of the property destroyed by the fire. Brad was one of thousands of Oregonians without sufficient insurance coverage. Unfortunately, these policyholders are generally unaware of their situation until it is too late. Despite trying to make sure they are covered against a tragedy like these fires, they are misled by bad advice from an insurance agent. Brad’s case highlights a desperately needed legislative change in Oregon. In Oregon, there are two types of insurance agents. Insurance brokers work with multiple insurance companies and provide consumers with quotes from a variety of carriers, allowing the insured to purchase the insurance best suited to their needs. Captive agents are insurance agents who sell insurance exclusively for one company. Insurers like Farmers and State Farm almost exclusively use captive agents to sell their products. Thanks to the Oregon Court of Appeals in LewisWilliamson v. Grange Mut. Ins. Co. 39 P.3d 947 (Or. Ct. App. 2002) Oregonians who purchased insurance through a captive agent generally have no recourse against that agent for failing to properly advise them on their insurance needs. In Lewis-Williamson, the court determined while insurance brokers owe a duty to the insureds they sell to, captive agents owe their duty to the insurance carriers they sell for. This means even in cases of extreme professional negligence, a captive agent cannot be sued for giving bad advice because they had no duty to inform the insured properly in the first place. Insurers have taken full advantage of this and routinely advertise their agents are knowledgeable and proficient in writing policies. The insureds of Oregon generally are not aware their agents cannot be held accountable for errors and it is a situation the Oregon Legislature should fix immediately. Steve — rebuilding issues In 2020, Steve was not taking any chances regarding the fires. His wife was ill and needed frequent medical treatments. Not wanting to have to move her suddenly, he set the sprinklers running on his property, said a prayer and evacuated with her long before the notice came down. When he returned, he found his home undamaged but his custom built shop on his property with an extensive amount of woodworking equipment was totally destroyed. Once home, Steve started to rebuild his shop. His insurer was fully cooperative, identifying Steve’s loss has a large and complex one, and assigning him a non-CAT adjuster straight out of the gate. Steve’s issues began when he sought contractors to actually rebuild the shop. Steve, like so many others attempting to rebuild at this time, felt the pressure of economic forces in our region making it very difficult to find a contractor willing to take on the job. After finally finding a contractor, Steve then began to suffer delays associated with supply chain shortages. Steve’s construction project, like all construction projects, had to follow a linear order. In oversimplified terms, the Burned mobile home park from 2020 Almeda Wildfire in Medford area.
15 Trial Lawyer • Spring 2023 foundation must be set before the walls can be put up. The walls must be put up before the roof can be put on and the roof has to be on before finish work can take place. At every stage of the project, Steve experienced delays, and shortages of supplies and materials compounding the delays on the project. Eventually, Steve began to run into issues with the insurance carrier, because the carrier had limits on his time to replace his property. Steve’s carrier had a common clause in his policy stating that in order to recover the full replacement value for the loss, Steve had to complete repairs within one year of the date of the loss. Fortunately for Steve, OTLA’s response was not limited to offering direct advice to wildfire victims. In the aftermath of the fires, the OTLA legislative team assisted Sen. Pam Marsh in crafting and promoting House Bill 3272, which made important changes to Oregon Law regarding how and when Oregonians could rebuild their homes. In pertinent part, the bill extended the time allowed for replacement. Previously under state law, insures were allowed to set a one-year limit on replacement, meaning if the insured did not repair their property within a year of the loss, the insurer could deny further payment on the claim. Previously, claims like Steve’s would have forced him to either confirm an extension with the carrier or file a preemptive lawsuit against the carrier in order to argue why the timeframe should not apply. HB 3272 changed this time limit and allows that if property is lost during a declared state of emergency, the insured has a minimum of two years to replace the property from the date of the first payment by the insurer, with a one year extension upon a showing from the insured they have been unable to replace for reasons beyond their control. HB 3272 also codified a widespread industry practice wherein the insured can replace their property by purchasing property elsewhere and use the insurance funds to make that replacement purchase. Steve was able to complete the repairs on his property within the two year limit and he was fully compensated by his insurance carrier. Conclusion The fires of 2020 were a historic event, but one we are likely to see again in the near future. Thanks to the work of OTLA both directly and in the Legislature, Oregonians have better protection and access to support when these devastating fires hit again. Clinton Tapper focuses on insurance carrier disputes, as well as other complex litigation at The Tapper Law Firm, 474 Willamette St., Ste. 306, Eugene, OR 97401. Tapper is a contributor to OTLA Guardians at the Sustaining Member level. He can be reached at clinton@tapperlaw.com or 458-201-7828.
RkJQdWJsaXNoZXIy MTY1NDIzOQ==