Yesterday, the Oregon Court of Appeals dealt a hefty blow to insurance companies seeking to exclude coverage for property damage to multi-family dwellings and for awards of attorney fees. In Hunters Ridge Condominium Ass’n v. Sherwood Crossing, LLC, the Oregon Court of Appeals held that an insurance company’s “Multi-Unit New Residential Construction” exclusion was unclear as to whether it excluded coverage for property damage to both residential-only and mixed-use condominiums. Given there were two plausible ways to read the exclusion, the Oregon Court of Appeals held the exclusion must be construed against the insurance company. Continue Reading Not so fast insurance company, that judgment against your insured may in fact be covered
You’re sued. You tender the defense of the lawsuit to your insurer, but it refuses to defend you. You settle the case and then file a lawsuit against your insurer for what it should have paid to defend you while sitting out of the fight. You win in the trial court, in the Court of Appeals, and the Oregon Supreme Court. Under Oregon law, you get your attorney fees for this fight with the insurer about attorney fees, right?
Not if, despite all appearances, you were not the insured, but really a “self insurer” all this time, fighting with your insurer about paying for a fair share of your own defense costs. That’s what one Oregon insurer recently argued, and what the Oregon Court of Appeals soundly rejected in a decision issued today. Continue Reading Oregon Court of Appeals rejects insurer’s attempt to cast its own insured as just another insurer
Last week, the Oregon Supreme Court made it just a little easier for an insured to recover the attorney fees that it has been forced to spend in compelling an insurer to pay up. In Long v. Farmers Ins. Co. of Oregon, the Supreme Court resolved an old ambiguity about what “recovery” means under the fee-shifting rule in Oregon’s insurance statutes. This decision should put to rest at least one opportunity for gamesmanship by insurers in Oregon. Continue Reading A “recovery” against insurers in Oregon does not require a money judgment
One of the most misunderstood provisions in a Commercial General Liability policy is the first sentence, which provides that the insurance company promises to provide coverage for damages “because of” bodily injury or property damage. Many people, including seasoned insurance professionals, believe CGL policies merely provide coverage “for” bodily injury or property damage. We see this every day, including in motions filed by insurance companies. Continue Reading Court finds plaintiff’s attorney fees covered by liability policy
The Washington Court of Appeals recently issued an unpublished opinion that should serve as a warning to policyholders pursuing coverage in Washington. On its surface, The Port of Longview v. Arrowood Indemnity Co. (Aug. 2, 2016) was a significant win for the insured. The appellate court upheld the trial court’s ruling that the insured’s primary insurers had a duty to defend and indemnify, and its excess carriers had a duty to indemnify, the Port against all claims arising from two contaminated sites. In affirming the trial court’s declaratory judgment rulings, the Court of Appeals rejected the insurers’ arguments that they had been prejudiced by the insured’s late notice, that the contamination at issue was “expected or intended” by the insured, and that the policies’ “qualified pollution exclusions” precluded coverage. Continue Reading In Washington, late notice may not preclude coverage, but it could cost you your fee claim
Last week, I posted this article about the Ninth Circuit’s recent opinion affirming a $3.5 million attorney-fee award in favor of Schnitzer Steel against its insurer, Continental Casualty Co. Continental is unsatisfied with how it lost this battle, arguing in this petition for rehearing that the Ninth Circuit failed to adequately address Continental’s argument that Oregon’s fee-shifting statute in coverage cases doesn’t apply to losing insurers merely because the coverage lawsuit was filed in federal court.
It is Continental’s right to give this argument a shot. But what Oregon insureds should find troubling is Continental’s risibly misleading attempt to minimize what’s at stake here for insureds forced to spend many thousands (or even millions) of dollars forcing their insurers to pay what they promised. Continue Reading Update: Insurer asks for reconsideration of opinion affirming insured’s attorney-fee award
As my colleague, Kevin Mapes, wrote in an article last year, an insurer had raised the hackles of policyholder-side lawyers in Oregon in arguing that insureds successfully suing their insurers for coverage could not recover their attorneys’ fees if the insurer had lost its fight in federal court in Oregon, rather than one of Oregon’s state courts. This argument was especially troubling in light of the tactical choice of many insurers to “jump” an insured by rushing into federal court for a declaration about coverage rather than waiting for the insured to sue the insurer for coverage in state court.
This malicious trap, however, will not be available for insurers under the Ninth Circuit’s recent holding in Schnitzer Steel Indus., Inc. v. Continental Casualty Co. Continue Reading Ninth Circuit rejects insurer’s attempt to avoid paying its insured’s attorneys’ fees
Under Oregon law, insurers typically have only limited incentives to treat their policyholders fairly and to handle claims with the utmost good faith. As of now, Oregon has no statutory “bad faith” remedy. The insurance industry is the only industry to get an exemption from Oregon’s Unfair Trade Practices Act. And, despite the general evolution of tort law in the state, Oregon courts have been slow to recognize common-law bad-faith remedies outside of certain limited circumstances. In Oregon, an insurer can, in many instances, wrongfully deny a claim, lose in coverage litigation with its policyholder, and ultimately be forced to pay exactly what it should have paid in the first place, after years of unreasonable delay and expense.
ORS 742.061 has long provided policyholders with a valuable weapon in a state that otherwise does little to incentivize prompt and fair claims handling by insurers. Under ORS 742.061, a policyholder is entitled to an award of reasonable attorneys’ fees where 1) the insurer does not resolve a claim within six months of the filing of a proof of loss; 2) “an action is brought in any court of this state upon any policy of insurance of any kind or nature;” and 3) the policyholder ultimately recovers more than the insurer has offered. In our experience, insurers who lose in court will typically try to dull the sting of this statutory fee provision by arguing that the rates charged were too high or the hours worked were excessive. Whether the coverage claims were litigated in state court or in Oregon’s federal courts, however, insurers have ultimately paid fee awards after the policyholder prevailed.
Faced with a policyholder’s attorney-fee claim that approached $3.5 million, however, Continental Casualty Corp. and Transportation Insurance Co. (collectively “Continental”) decided to get creative in federal district court in Oregon. In Schnitzer Steel Indus., Inc. v. Continental Casualty Corp., Schnitzer Steel sued Continental, its liability insurers, over unpaid defense costs arising from the Portland Harbor Superfund site. The parties litigated for more than three years. Ultimately a jury found for the insured, Schnitzer, on every claim presented, awarding more than $8.6 million in damages. Pursuant to ORS 742.061, Schnitzer then moved for an award of attorneys’ fees incurred in the coverage litigation totaling nearly $3.5 million. Continue Reading Insurer attempts to avoid multi-million dollar attorney-fee award in Oregon
Last week, a Florida circuit court found an insurer jointly and severally liable not only for post-tender attorney’s fees but, because the insurer had refused to defend its insured, the insurer was liable for pre-tender attorney’s fees as well.
In Centex Homes v. Builders FirstSource-Florida, LLC, Centex Homes developed a residential condominium community. Centex Real Estate Corporation, the general contractor, hired Builders FirstSource-Florida, LLC (“BFS”) to supply and install the windows for the project. BFS was insured by Liberty Mutual Fire Insurance Company (“Liberty”), and the two Centex entities were named as additional insureds under the Liberty policies. Continue Reading Florida Court: Insurers, if you deny defense, you must pay your insured’s pre-tender attorney’s fees.
You’ve been litigating against your insurer for over a year when, finally, it agrees to pay every penny of what you have long demanded — plus interest. What’s not to like? Plenty, if you still have to pay your coverage counsel for getting you this far.
In an opinion filed today by the Oregon Court of Appeals, Triangle Holdings, II v. Stewart Title Guaranty Co., the insured, Triangle Holdings, sued its title-insurance company, Stewart Title, after Triangle Holdings had paid several construction liens that had not been found in Stewart’s title search. After nearly a year of litigation — and a year of incurring attorneys’ fees — the insurer sent a check for the full amount for two of the five liens at issue (the other three were dismissed and not at issue in the appeal), plus interest. Triangle Holdings accepted the payment, after which Stewart successfully moved for summary judgment as to the paid liens, arguing that they were now “moot.” The trial court granted the motion. Continue Reading Oregon Court of Appeals warns insureds to look a gift horse in the mouth.