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Powell v. System Transport Inc.

United States District Court, D. Oregon, Portland Division

January 26, 2015

ANGELA POWELL, Plaintiff,
v.
SYSTEM TRANSPORT INC., and DANNY CANADY, Defendants

For Angela Powell, Plaintiff: Gregory W. Byrne, LEAD ATTORNEY, Buckley Law P.C., Lake Oswego, OR; John Edwards Powers, LEAD ATTORNEY, Portland, OR.

For System Transport, Inc., a Washington corporation, Danny Anderson Canady, Defendants: Kimberlee M. Petrie Volm, Paul A.C. Berg, LEAD ATTORNEYS, Robert E Barton, Cosgrave Vergeer Kester, LLP, Portland, OR.

For PacificSource Health Plans, Interested Party: Joshua K. Smith, Gleaves Swearingen Potter & Scott, LLP, Eugene, OR.

OPINION AND ORDER

JOHN V. ACOSTA, United States Magistrate Judge.

Introduction

This post-judgment matter involves two parties and the interests of their respective insurers: plaintiff, Angela Powell (" Powell" ); Powell's Personal Injury Protection (" PIP" ) coverage provider, Allstate, Inc. (" Allstate" ); defendant, System Transport, Inc. (" System Transport" ); and System Transport's motor vehicle insurance provider, American Trucking and Transportation Insurance Company (" ATTIC" ). System Transport filed a motion for entry of partial satisfaction of judgment (the " Motion" ) in the amount of $24,421.25, which represents the amount ATTIC paid to Allstate to reimburse Allstate for the wage-loss benefits it paid to Powell. ATTIC made to the payment to Allstate on May 29, 2014, following a May 15, 2014, verdict of $41,131 against System Transport and in Powell's favor.

The Motion raises two issues for the court to resolve. First, whether System Transport is entitled to partial satisfaction of judgment; and second, if so, whether Powell's attorney fees and costs are to be deducted from System Transport's $24,421.25 payment before partial satisfaction of judgment is entered. The court concludes that System Transport is entitled to partial satisfaction of judgment in the amount of $16,310.70.

Background

On August 9, 2011, Allstate Fire and Casualty Insurance Company (" Allstate" ) issued Powell an automobile insurance policy (the " Policy" ), which included among other coverages personal injury protection (" PIP" ) benefits. (July 3, 2014 Berg Decl. (" July Berg Decl." ) Ex. 1, at 7. Relevant to the pending motion, the Policy provides:

Subrogation Rights
When we pay, an injured person's rights of recovery from anyone else for damages we have paid become ours up to the amount we have paid. However, our rights of recovery only apply if the injured person has been fully compensated for the loss. The injured person must protect these rights and help us enforce them.

Reimbursement Trust Agreement

When we pay any person under this coverage:

1. we are entitled to repayment of the amounts paid by us out of the proceeds of any settlement that person recovers from any legally responsible party of insurer. We are not entitled to repayment until after the person we have paid under this coverage has been compensated for all damages which that person is legally entitled to recover.
2. All rights of recovery against any legally responsible patty of insurer must be maintained and preserved for our benefit.
Our rights under this provision are subject to any applicable limitations provided in the Utah Insurance Code.

(July Berg Decl. Ex. 1, at 7-8.)

On February 1, 2012, Powell suffered injuries when a semi-tractor and trailer driven by Canady, a System Transport employee, struck Powell's passenger car. On February 28, 2012, Allstate wrote to Powell's lawyer, Greg Byrne, to inform him that " pursuant to the provisions of ORS 742.534 and the terms of our policy, we will negotiate directly with the responsible party and/or their insurance carrier for the recovery of any benefit payments we make on behalf of your client[.]" (December 4, 2014 Berg Email (" First Berg Email" ) at 3.) Between March 1, 2012, and January 22, 2013, Allstate paid Powell a total of $24,421.25 in wage-loss benefits under the Policy's PIP provision. (June 2, 2014 Berg Decl.(" June Berg Decl." ) Ex. 2; June 27, 2014 Byrne Decl. (" June Byrne Decl." ) Ex. 1, at 4.)

On June 28, 2013, Powell filed a lawsuit against Canady and System Transport in Multnomah County Circuit Court. (Notice of Removal of Action (" Removal Notice" ) at 2.) Powell's complaint asserted negligence in various particulars against Canady and included a prayer of approximately $700,000 for wage loss, medical expenses, and pain and suffering.. (Pl.'s Am. Compl. at 3.) Defendants removed the case to this court on the basis of diversity jurisdiction on July 19, 2013. (Removal Notice at 2.)

On October 28, 2013, Allstate filed a complaint in Multnomah County Circuit Court against System Transport and Canady " as subrogee for ANGELA POWELL[.]" (December 4, 2014 Byrne Email (" Byrne Email" ) at 3.) In the complaint, Allstate entitled its primary allegations as " subrogation rights," which allegations it based on its payments " on behalf of their insured for losses due to the negligence of SYSTEM TRANSPORT and CANADY." (Byrne Email at 4.) Allstate asserted that it had " subrogation rights to collect the losses paid to their insured from the liable parties, SYSTEM TRANSPORT INC. and CANADY." ( Id.) The prayer included a request for " reasonable attorney's fees[.]" ( Id. at 6.)

On April 21, 2014, System Transport filed a motions in limine, one of which, Motion No. 16, asked the court to preclude Powell from double recovery of wage-loss benefits. (Def.'s Mot. in Limine (" Mot. in Limine " ) at 21). In that motion, System Transport contended:

ORS 742.538 entitles an insurance company to the proceeds of any judgment of an insured to the extent it provided benefits. But only if the insurance company does not exercise its rights under ORS 742.534 to seek reimbursement of PIP funds paid directly from the defendants' insurer. And that is what happened in this case. Plaintiffs insurer, Allstate, filed a separate action to recover the amount of PIP benefits that it paid to plaintiff. That case is currently in abatement in Multnomah County Circuit Court: Allstate Insurance Company, a/s/o Angela Powell v. System Transport Inc.; Danny Anderson Canady, Case No. 1310-15073. Thus, Allstate has expressly elected not to attach itself to plaintiff's claims in this case.

(Mot. in Limine at 22.) This court granted the Motion in Limine on May 7, 2014, without opposition from Powell. (Order on Mot. in Limine (" Limine Order" ) at 14.)

On May 15, 2014, after a trial, the jury returned a verdict for Powell in the amount of $41,131.00 for wage loss (the " Judgment" ). (Verdict.) On May 29, 2014, System Transport's counsel tendered a check from ATTIC in the amount of $24,241.25, to Allstate's counsel in the Multnomah County Circuit Court case, in reimbursement to Allstate for the full amount of wage-loss benefits Allstate had previously paid to Powell. (June Berg Decl. Ex. 3.) Also on May 29, 2014, Powell's counsel refused System Transport's attempt to tender $17,031.74 to Powell, the amount System Transport maintained remained unsatisfied after offset for the $24,421.25 paid to Allstate. (June Berg Decl. Ex. 4).

On June 2, 2014, System Transport filed the Motion seeking partial satisfaction of the Judgment in the full amount of the reimbursed wage-loss benefits.

Preliminary Procedural Matters

At the outset, the court must resolve two procedural issues. First, the court must decide whether Powell waived her right to contest System Transport's eligibility for reimbursement. Second, the court must decide whether to apply the state law of Oregon or Utah to this dispute.

I. Waiver.

System Transport argues that prior to trial Powell waived her right to contest post-trial System Transport's request for partial satisfaction of judgment in the full amount of the $24,421.25 System Transport paid to Allstate, Powell's insurer, after the trial, in reimbursement to Allstate for its wage-loss payment to Powell under Powell's Allstate automobile insurance policy. As suppo1i, System Transport cites Powell's failure to oppose defendants' Motion in Limine No. 16, entitled " Motion for an Order Precluding Plaintiff from Double-Recovery for Wage-Loss Damages Already Paid by Plaintiffs PIP Insurer." (Mot. In Limine at 21-22.) Defendants asked that the court " issue an order that any award granted to plaintiff for her lost wages shall be reduced post-verdict by the amount of Personal Injury Protection (PIP) benefits plaintiff already received," and " post-verdict, ... reduce the damages by the amount of PIP benefits already received." ( Id.) Powell responded that she " does not object to the court's dealing with this issue post-verdict." (Plaintiff's Mot. In Limine Response (" Limine Response" ), at 16.) She addressed none of the legal arguments defendants advanced regarding the specific statutory mechanism by which the court make the wage-loss reduction from Powell's verdict.

Waiver is the intentional relinquishment or abandonment of a known right or privilege. Gordon v. Deloitte & Touche, LLP Grp. Long Term Disability Plan, 749 F.3d 746, 752 (9th Cir. 2014) (citing Intel Corp. v. Hartford Accident & Indem. Co., 952 F.2d 1551, 1559 (9th Cir. 1991) (" Waiver is often described as the intentional relinquishment of a known right" )); see Moore v. Mut. of Enumclaw Ins. Co., 317 Or. 235, 855 P.2d 626 (1993) (citing State v. Hunter, 316 Or. 192, 201, 850 P.2d 366 (1993) (" Waiver is the intentional relinquishment or abandonment of a known right or privilege" ); Waterway Terminals v. P.S. Lord, 242 Or. 1, 26, 406 P.2d 556 (1965) (" Waiver ... is the intentional relinquishment of a known right" )). Here, the clear purpose of defendants' Motion in Limine 16 was to secure a pretrial ruling from the court establishing that the court would address the double-recovery issue after trial, so that defendants would not pay Powell's wage loss twice, once to Powell and a second time to Allstate. The court granted that motion: " Plaintiff does not oppose this motion and agrees this issue should be handled by the court after the verdict is rendered." ( Limine Order at 14.) To grant defendants' motion the court did not need to decide, and did not decide, the statutory arguments defendants advanced in their motion; at most, the court ruled that Powell would not receive a double recovery -- a proposition Powell did not then and does not now oppose. The legal arguments defendants raised in the motion in limine were not necessary to granting the motion; thus, Powell did not need to respond to those arguments and waived nothing by not doing so. Thus, by not opposing defendants' motion, Powell did not waive her right to assert the arguments she now makes in opposition to defendants' statutory interpretation regarding the payment of her wage loss as it relates to satisfying the judgment against them.

System Transport argues that, in opposing the Motion now, Powell is asking the court to revisit the reimbursement issue to reach a contrary result, but the record shows Powell's position on this issue has remained consistent throughout this litigation. Powell correctly points out that in her trial memorandum she acknowledged Allstate is entitled to reimbursement pursuant to Or. Rev. Stat. § 742.538 and that in her opposition to the Motion in Limine she expressed no objection to the court dealing with PIP reimbursement post-verdict. (Pl.'s Trial Mem. at 6; Limine Response at 16.) Powell does not contest System Transport's right to reimbursement; she contests System Transport's application of ORS 742.534 instead of ORS 742.538, to determine the appropriate amount by which to offset the Judgment, and she has consistently asserted this position..

Powell has not intentionally relinquished her right at any point in this litigation to make the arguments she now advances. She clearly differentiated between the statute System Transport relied upon and the statute she asserts controls the reimbursement issue currently at issue. Thus, there was no waiver and she may assert that position now.

II. Choice of Law.

System Transport argues that pursuant to the Policy, Utah law controls determination of the reimbursement dispute. (Def.'s Rep. to Pl.'s Suppl. Br. at 2-5.) Powell responds that Allstate already has conceded Oregon law applies, because it paid Powell's medical expenses up to the $15,000 minimum required under Oregon's PIP statute, not the lower $3,000 minimum required under Utah law. (Pl.'s Opp'n Br. at 2-3.) Powell also argues Oregon law applies because Allstate issued the Policy for use in Oregon, as the declaration page of the Policy evidences by listing Powell's Portland, Oregon address. ( Id.).

A. Standard.

Oregon law provides in relevant part:

Choice of law made by parties. (1) Except as specifically provided by ORS 15.320, 15.325, 15.330, 15.335 or 15.355, the contractual rights and duties of the patties are governed by the law or laws that the parties have chosen. The choice of law may extend to the entire contract or to part of a contract.
(2) The choice of law must be express or clearly demonstrated from the terms of the contract. In a standard-form contract drafted primarily by only one of the parties, any choice of law must be express and conspicuous.

Or. Rev. Stat. § 15.350 (2013).

" When sitting in diversity, [federal courts] apply the choice-of-law rules of the forum state." Coneff v. AT & T Corp., 673 F.3d 1155, 1161 (9th Cir. 2012). Under Oregon choice-of-law rules the Court must determine as a threshold issue whether there is a material difference between Oregon law and the law of the other forum. Waller v. Auto-Owners Ins. Co., 174 Or.App. 471, 475, 26 P.3d 845 (2001). See also Machado-Miller v. Mersereau & Shannon, LLP, 180 Or.App. 586, 591, 43 P.3d 1207 (2002) (" In analyzing a choice-of-law problem, the threshold question is whether the different states' laws actually conflict with each other." ) (citing Lilienthal v. Kaufman, 239 Or. 1, 395 P.2d 543 (1964)). Where no material difference exists between Oregon law and the law of the proposed alternative forum, Oregon courts will apply Oregon law without regard to the relative significance of the relationship between the dispute and the proposed alternative forum. Waller v. Auto-Owners Ins. Co., 174 Or.App. 471, 475, 26 P.3d 845 (2001) (citing Angelini v. Delaney, 156 Or.App. 293, 300, 966 P.2d 223 (1998)). If there is a material difference, the Court must determine whether both states have substantial interests in having their laws applied. Pulido v. United States Parcel Serv. Gen. Servs. Co., 31 F.Supp.2d 809, 813 (D. Or. 1998)(citing Dabbs v. Silver Eagle Mfg. Co., 98 Or.App. 581, 583-84, 779 P.2d 1104 (1989)). Finally, if " both states have substantial interests, the Oregon Supreme Co mt ...


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