38 Trial Lawyer • Spring 2023 tical force. In Berger v. Safeco Ins. Co., 305 Or App 380 (2020) rev den 2020 Or LEXIS 858, Safeco challenged a trial court decision awarding attorneys’ fees. In the underlying litigation, Safeco did not plead comparative fault in its answer, but included the issue in its trial memo and proposed verdict form. Because comparative fault was never actually pleaded, the defense was not allowed at trial. The trial court ruled after the verdict this failed action still took the carrier out of the safe harbor by raising the issue of comparative fault. On appeal, the plaintiff did not defend the trial court’s reasoning, but advanced two alternative arguments for affirming that the carrier left the safe harbor. First, that Safeco’s answer disputed whether the tortfeasor was underinsured, and second, that Safeco’s response to a request for admission denied that consent to settle the underlying claim had been granted. The Court of Appeals held, “[b]oth of plaintiff’s arguments fail for the same reason: neither of those references materialized into an issue in dispute. […] [A] defendant’s reference to an impermissible matter only removes the protections of the safe harbor if it develops into an actual dispute.” Berger, at 386. From a claimant’s perspective, the “actual dispute” cases are very frustrating. It seems as if a carrier may raise (and force claimants to be prepared to rebut) practically any issue it wants, safe in the knowledge that if it withdraws the dispute before trial, it may plausibly retain protection. The lesson for practitioners is — for any issue short of a dispute during trial, a sufficient documentary record must be created showing that the carrier’s stances on outside issues are not idle or lightly held, but are indeed matters of live controversy or actual dispute that the carrier intends to advance at trial or arbitration. A final safe harbor case bearing mention is 2021’s Burns v. American Family Mut. Ins. Co., 310 Or App 431, in which the Court of Appeals held that an insurer that refused to pay an arbitration award not only exited safe harbor by effectively withdrawing its consent to engage in binding arbitration, but was also liable for reasonable attorneys’ fees accrued during the entire arbitration process, i.e. the period when it was previously within the harbor. Burns illustrates an important principle. Practitioners should keep track of their time throughout all disputed claims and be on guard for insurer actions that effectively renege on any safe harbor promises over the same period. (Unfortunately, because of cases like Robinson and Berger, they must also keep in mind that a carrier may not be irrevocably forced out of safe harbor until they act at trial or arbitration.) Measuring recoveries ORS 742.061 allows attorney fees to insureds when they ultimately recover more than the insurer’s best “tender” in cases that are not settled within six months of proof of loss. What constitutes proof of loss has not changed — “Any event or submission that would permit an insurer to estimate its obligations (taking into account the insurer’s obligation to investigate and clarify uncertain claims).” Scott v. State Farm Mut. Auto. Ins., 345 Or 146, 155 (2008). This standard is tricky to apply, because carriers receive information in so many different ways and in such different quantities, so disagreements about when the six-month settlement clock starts are common. Beyond the uncertain date of proof of loss, offer or voluntary payments may be made at any time up until judgment is entered, so another perennial area of confusion concerns how much a claimant must “recover” before becoming entitled to their attorneys’ fees. In 2017, the Supreme Court decided Long v. Farmers Ins. Co., 360 Or 791. In Long, the parties disputed whether or not insurer payments made over the life of a Insurance Update Continued from p 37
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