39 Trial Lawyer • Spring 2023 litigated claim counted as a “recovery.” Farmers argued that only the amounts in a judgment constituted a recovery, while the plaintiff argued that all types of payment made outside the initial six-month window (e.g. judgment, settlement, voluntary payment) should count. The Supreme Court substantially sided with the plaintiff because accepting Farmers’ position would mean a carrier could continually move the goalposts for attorney’s fees further away up until the time of judgment. This would frustrate the compensatory purpose and reasonable settlement incentives behind ORS 742.061 — “The statute ensures that, when insureds file suit to obtain what is due to them under their policies, they do not win the battle but lose the war by expending much or all of what they obtained in the litigation on attorney fees.” Long, at 804. Accordingly, the court held that any monetary recovery occurring in litigation (not necessarily a judgment) counts toward considering whether the plaintiff beat the carrier’s best offer made within the first six months following proof of loss. Id. at 805. Moody kicks open the door In early 2022, the Court of Appeals rocked the foundations of Oregon firstparty insurance law when it issued Moody v. Or. Cmty. Credit Union, 317 Or App 233 (2022) rev granted 2022 Or App LEXIS 156. In Moody, the insurer refused to pay a $3,000 life insurance benefit to the decedent’s widow. For the first time, the Court of Appeals recognized a tort claim against a policyholders’ insurance company for conduct outside of any “special relationship” status (such as a liability carrier’s duty to competently defend its insured). Instead, the plaintiff was allowed to pursue a negligence per se claim for her emotional distress arising from the company’s alleged violations of the Unfair Claims Settlement Practices Act (UCSPA), codified at ORS 746.230. The plaintiff argued that previous appellate opinions in analogous areas of law permitted plaintiffs to advance tort claims against contract partners by alleging per se violations of official standards of care that existed outside of the contract, and that the UCSPA provided exactly such a standard for insurers. Judge Landau’s opinion agreed that the cause of action satisfied all requirements for stating a claim of negligence per se, including that the purpose of the statute at issue was in part to prevent just this sort of harm to policyholders. Moody, at 240. Moody was argued to the Supreme Court in November 2022, and a final opinion will presumably be issued in 2023. While Moody’s logic is convincing, at oral argument the justices seemed concerned that affirmation could lead to a flood of tort claims (including claims for punitive damages) in actions between contract partners. Until the Supreme Court decides, practitioners should compare UM/UIM carriers’ conduct to the list of prohibited practices in ORS 746.230(1). While some map awkwardly onto the claims process, many provisions are straightforward. Carriers may not mispresent facts or policy provisions, fail to act promptly, fail to implement reasonable standards or conduct a reasonable investigation, or fail to attempt, “in good faith, to promptly and equitably settle claims in which liability has become reasonably clear.” Finally, practitioners should remember that the statute forbids not only insurers from taking these actions, but also any “other person,” which could include claims adjusters or their managers. Adding Oregon-based adjusters as parties in a Moody-type action would defeat diversity jurisdiction in a case otherwise against out-of-state insurance companies (though remember to serve the in-state party first to avoid “snap” removal). Conclusion Despite some headwinds (e.g. the “actual dispute” cases), the trend lines in recent Oregon UM/UIM law remain extremely positive overall for claimants. Every time I have a reason to dig into the history of insurance law’s development here, I almost always come away heartened by the scrutiny our courts apply to insurance companies, giving real teeth to ORS 731.008’s declaration that “the Insurance Code is for the protection of the insurance-buying public.” Appointments made to the Supreme Court and Court of Appeals in recent years have only reinforced my optimism. Accordingly, I would encourage anyone pursuing UM/UIM cases on behalf of claimants to feel emboldened. We have many powerful weapons available to keep unfair and overreaching insurers from mistreating our clients — we need only pick them up and use them. Ben Cox specializes in personal injury and insurance law. He contributes to the OTLA Guardians of Civil Justice at the Guardians Club level. His solo practice is located at 3723 N. Williams Ave., Portland, OR 97227. Cox can be reached at 503-2241787 or ben@coxlawpdx.com. We have many powerful weapons available to keep unfair and overreaching insurers from mistreating our clients — we need only pick them up and use them.
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