16 Trial Lawyer • Winter 2024 No Safe Harbor Continued from p 15 290). We explained to the court that, under the current UM/UIM statutes, Zimmerman actually supports finding that knowledge of the underlying liability limits is irrelevant to the safe harbor inquiry. We argued, and the court agreed, that insurers’ reliance on Zimmerman is misplaced because the case addressed an earlier version of the relevant UIM statute, ORS 742.502(2)(a), which had a dispositively different definition of underinsured motorist coverage. See Zimmerman, 354 Or at 285-86 (“the sufficiency of a submission to constitute a ‘proof of loss’ within the meaning of ORS 742.061 depends on the nature of the insurance coverage at issue”). Under the pre-2016 version of the UIM statute at issue in Zimmerman, the underlying liability limits were part of an insurer’s coverage determination and were therefore part of an insured’s proof of loss under ORS 742.061(3). Under the amended statute, however, the underlying limits are merely an element of “the damages due the insured” which UIM insurers can reserve for later determination after they enter the safe harbor. See McNeil v. Geico Cas. Co., Inc., 319 Or App 458, 462, 510 P3d 224, rev. denied, 370 Or 303 (2022) (“the issue of the application of a PIP offset [to a UIM recovery] is necessarily an issue of ‘the damages due the insured’ and not an issue of claim coverage”) (emphasis omitted); Zimmerman, 354 Or at 291 (“determining what constitutes a ‘proof of loss’ is a pragmatic and functional inquiry”). After losing on the Zimmerman issue, USAA also initially contested the amount of fees claimed on Jaime’s UIM claim, but its own expert ultimately agreed to almost the amount we had requested and the court awarded another $131,738.88 in attorney fees on the UIM claim. Conclusion We were honored to tell Jaime and John’s story to the jury and grateful that USAA got to hear the voice of our community through them. After offsets and expenses, though, their total recovery in this case was greatly improved when we took a closer look at USAA’s safe harbor status. Given insurers’ propensity to send untimely and invalid safe harbor letters, it is essential to carefully examine the timing and content of such letters to determine whether or not they strictly conform to ORS 742.061(2) and (3). And, given the ease with which insurers may sail out of a safe harbor even if they start out in one, we must determine whether any of the insurers’ subsequent conduct was inconsistent with the safe harbor requirements. As this case showed, an attorney fee settlement or award can substantially increase the client’s total recovery. Robert Le is the legal director of Oregon Consumer Justice Law. Le formerly operated his own law firm, Robert Le Attorney at Law. He contributes to the OTLA Guardians of Civil Justice at the Sustaining Member level. You can reach him at 1235 SE Morrison St., 2nd Fl., Portland, OR 97214. He can also be reached at rle@ocj. org or 503-734-2099. 1 Note that much less egregious errors can remove an insurer from a safe harbor. For example, GEICO letter EC0311 (6/2009) accepts UM/ UIM coverage and states, “If a dispute were to arise between us with regard to [UM/UIM] liability and / or the amount of damages, we agree to submit the dispute to binding arbitration restricted to those issues only.” This form letter does not satisfy ORS 742.061(3) because it only meets two of the three UIM safe harbor requirements. It accepts coverage and agrees to arbitration but does not commit that “the only issues are the liability of the uninsured or underinsured motorist and the damages due the insured.” See Lizama v. Allstate Fire & Cas. Ins. Co., 292 Or App 611, 619, 425 P3d 464 (2018) (“The statute states the several requirements of subsection (3) in the conjunctive. Thus, each requirement must be satisfied to trigger its safe harbor protection.”) (emphasis in original).
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