45 Trial Lawyer • Spring 2023 wife whose homeowner’s claim was initially rejected by the insurer alleging that my clients had misrepresented material facts and failed to cooperate with the insurer’s investigation of the loss. After three years of litigation resulting in the insurer’s every defense to coverage being defeated, the insurer argued that my clients’ loss was overvalued. At that point, rather than the cost of a trial, we decided to put the value dispute into appraisal. We knew that this created a risk that the appraisal could result in a value less than what our clients were seeking. However, our consultants were confident on their valuation. We also knew that by doing so, the insurer could still force the dispute into a jury trial by rejecting the appraisal award. We felt that since the appraisal process is not confidential that if the insurer elected to do so, we would have the additional ammunition at trial of the appraisal award. After much back and forth the insurer ultimately threw in the towel by paying my clients the appraisal award, together with an exorbitant fee and cost reimbursement, ORS 742.061, plus 9% statutory interest commencing 60 days after the insured was notified of the loss amount. After having a covered loss, with a named insured and agreeing to valuation with the insurance company, and getting that ACV payment (to the named insured), what’s next? Going back for the RCV. Not all policies have it, and some have endorsements for additional replacement cost benefits beyond the original policy limits, but that means replacing. Keep in mind the time to replace is not the same as the suit limitation provision. If the replacement isn’t completed before the suit limitation deadline, or if it is but the check hasn’t arrived yet, you may still need to file a lawsuit. Avoiding payment I had a case years ago that resulted from a marina fire. Most of the boats docked at the marina were destroyed by fire. My client was residing onboard one of the boats that was destroyed, and so were her belongings. The insurer promptly paid the ACV of her loss. However, the holdback was a different story. The RCV holdback payment had yet to be made and was taking longer than anticipated. The two-year anniversary of the loss was soon upon us, and the RCV holdback was not yet paid. Although the insurer kept promising to pay it, it refused to enter into a tolling agreement. Accordingly, I had no choice but to file a lawsuit. Had we not filed within 24 months, my client would have been unable to bring an action to recover the remaining proceeds due her. The moral of the story is no matter what the insurer promises, without a tolling agreement, you must file suit prior to the two-year fire policy statute of limitations. In my experience from handling insurance claims for more than 20-plus years, insurance companies will always look for ways to pay far less than they should. They’ll look for creative ways to avoid coverage, or push misrepresentation, or just undervalue a loss because the adjuster lacks the experience or has a “pro-company” approach. Or, they simply delay cutting those checks. When any, or all, of those things happen you may need to litigate. Just remember to file before the expiration of 24 months after the date of loss. A nice feature in such scenarios is the ability to recover attorney fees and costs to the extent provided for by ORS 742.061(1). Three things must occur. First, settlement must not occur within six months of the insured furnishing the insurer with proof of his or her loss. Second, the insured brings an action against the insurer. And third, the insured must recover more than the insurer tendered in the past. Should all three events occur, then the court shall award attorney fees to the insured. Concerning the water pipe referenced earlier, the insurer ultimately paid my client approximately $70,000 in claim damages, plus another circa $370,000 in fees, plus interest (on a related note, get yourself a good expert for the fees — OTLA member Steve Piucci helped with that one). Fred Millard is the managing partner of Millard & Bragg, Attorneys at Law, 419 5th St., Oregon City, OR 97045. Millard and his law partner, Doug Bragg, focus primarily on first-party insurance disputes and construction litigation.They also counsel clients through the insurance claims process. Millard contributes to OTLA Guardians at the Guardian Club level. He can be reached at 503-305-7806 or fmillard@millardlaw.com. 1 Although the Moody decision is beyond the scope of this article, it is important to note that it is an early 2022 appellate court decision that exposes an insurer to emotional distress liability should the latter violate any provision of the Unfair Claims Settlement Act (ORS 746.230). In late 2022, the Oregon Supreme Court reviewed the appellate court decisions, for which we are waiting for a decision.
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