32 Trial Lawyer • Spring 2023 Lessons Learned Continued from p 31 until six months after notice of the loss. ORS 742.061 allows attorney fees if the insurer did not settle the claim within six months of submission of proof of loss. Most homeowner policies contain long lists of “proof of loss” requirements in connection with the insured’s submission of a claim, such as inventories, documents, receipts, reports, photographs, bank records, etc. Insurers continue (improperly) to insist on such submissions. However, over 20 years ago, the Oregon Supreme Court in Dockins v. State Farm Ins. Co., 329 Or 20, 985 P.2d 796 (1999) did away with the policy’s strict proof of loss requirement. I represented Troy and Donna Dockins, whose basement was damaged by a leaky underground storage tank (UST). The Oregon DEQ ordered them to clean it up and remove the tank. Following State Farm’s denial, we filed suit claiming both first party (property damage) and third party liability (defense of the DEQ administrative “action.”). State Farm sought to avoid attorney fees, claiming its payment was made within six months of the plaintiffs’ proof of loss submissions. However the Oregon Supreme Court held that “proof of loss” has a functional meaning and applies to any “event or submission” that accomplishes the purpose of a proof of loss. 329 Or at 28. In Dockins, the court held that the plaintiffs’ complaint satisfied the policy’s proof of loss requirement, and awarded attorney fees because of the passage of more than six months from the complaint filing prior to State Farm’s payment. The Oregon Supreme Court further liberalized the proof of loss requirement in 2009. I represented Eric and Yolanda Parks, whose rental home was damaged by a meth lab. Ms. Parks called her Farmers agent and asked if Farmers could help her with her loss. In attempting to avoid attorney fees, Farmers argued that a proof of loss must be in writing and must contain sufficient information to allow an insurer to ascertain its liability. The Oregon Supreme Court ruled that a telephone call to an insurance agent (not even the claim department) providing notice of the loss serves as a functional proof of loss (triggering the running of the six-month period). Parks v. Farmers Ins. Co. of Oregon, 347 Or 374, 227 P.3d 1127 (2009). Mid-litigation “recovery” It used to be unclear whether a claim had to be reduced to a judgment to give rise to entitlement to attorney fees. That has changed. Now, an insurer’s mid-litigation payment will entitle the insureds to an award of attorney fees under ORS 742.061. See Long v. Farmers Ins. Co., 360 Or 791, 388 P.3d 312 (2017) (“[T]he term ‘recovery’ must be read to include mid-litigation payments such as the ones that [the insurer] made in this case”). Beware the two-way statute Giddy with the success of Gerlicher, I took on the personal injury case of a tenant who had allegedly been exposed to meth residue by a landlord who had failed to clean up a meth lab after the prior tenant. I took the case to a jury trial and lost 9-3. The first lesson was not to expect sympathy from Washington County jurors for alleged neurological deficits arising from meth exposure. The second lesson was to beware of two-way attorney fee statutes. The landlord sought attorney fees under ORS 91.255 after prevailing, and the attorney fee judgment bankrupted my client. Ouch. Cause of action Evaluate the causes of action to include in the complaint because they will impact your attorney fee claim. Early in my career, I took the “kitchen sink” approach, and added a slew of tort claims to my primary claim for breach of insurance policy: tortious interference with business relationships; negligence; negligent misrepresentation; intentional misrepresentation; bad faith and unfair dealing; intentional infliction of emotional distress; and conversion. The tort claims naturally were attacked along the way by motions to dismiss and motions for summary judgment, and ultimately used by insurance defense attorneys to attack the plaintiff’s claim for attorney fees under ORS 742.061. The insurer would argue to the court that fee-shifting only applied to the fee-bearing claim for breach of the insurance policy, and that the insured was required to allocate time spent on nonfee-bearing claims. I would then fall back on the rule that attorney fees need not be apportioned when they are incurred for representation on issues common to a claim in which fees are proper and one in which they are not. See Estate of Smith v. Ware, 307 Or 478, 769 P.2d 773 (1989); Sunset Fuel & Eng’g Co. v. Compton, 97 Or App 244, 249, 775 P.2d 901, rev den, 308 Or 466 (1989); see also Malot v. Hadley, 102 Or App 336, 794 P.2d 833 (1990). The January 2022 decision by the Court of Appeals in Moody v. Oregon Community Credit Union, 317 Or App 233 (2022), rev allowed 369 Or 855 (2022), has dramatically changed the first-party landscape. The benefits of Moody (allowing an insured to recover emotional distress damages and punitive damages) outweigh the detriments (possible attorney fee repercussions). The lesson here is that a Moody claim should be included in most first party complaints. Record your time It is, of course, “best practice” to contemporaneously and meticulously record your time in six-minute increments with copious descriptions that fully inform the reader of the billing entry regarding tasks performed. Failure to record time is likely to lead to your time being reduced.
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