OR Case Update: Will an Insurer’s Reference to a Nonissue Disqualify it from the Attorney Fee Exemption?

From the desk of Cliff J. Wilson: What operates to disqualify a motor vehicle insurer from the “safe harbor” of Oregon’s first party attorney fee statute? Find out in this week’s case update.

Claims Pointer: The Oregon Court of Appeals held that Tri-County Metropolitan Transportation (Tri-Met) was entitled to the ORS 742.061 attorney fee exemption because its safe harbor letter was effective and Tri-Met did not raise impermissible issues through its affirmative defenses, including its offset defense, which was not actually developed, disputed or decided. Addressing an issue of first impression, the Court established an important precedent regarding the fee exemption statute for motor vehicle insurers, namely that affirmative defenses raised in litigation, if not actually developed, will likely not preclude the exemption.

Robinson v. Tri-Met, 277 Or App 60 (March 16, 2016).

Oregon statute 742.061(1) provides a mechanism for an insured to recover attorney fees if the insured makes a proof of loss, settlement is not achieved within six months of the proof of loss, and the insured recovers more in court than what was offered by the insurer in settlement. Section (3) of the statute also provides a “safe harbor” from the insurer’s obligation to pay attorney fees. This “safe harbor” applies in actions to recover UM/UIM benefits if the insurer provides timely written notice of its acceptance of coverage and the only issues in dispute are the liability of the uninsured/underinsured motorist and the damages due to the insured. The writing must consent to submit the case to binding arbitration.

In this case, Plaintiff was a passenger on a bus operated by Defendant, Tri-County Metropolitan Transportation (Tri-Met). She was thrown within the bus and injured after the bus stopped suddenly or made an evasive maneuver to avoid a collision with a negligent driver. Because her injuries occurred without a collision and the negligent driver was unknown, she was...

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