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State Farm Mutual Automobile Insurance Co. v. Sieger

Court of Appeals of Oregon

May 24, 2017

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, an Illinois corporation, Plaintiff-Respondent,
v.
Eunice SIEGER, an individual, Defendant-Appellant.

          Argued and submitted May 3, 2017

         Umatilla County Circuit Court CV141567; Lynn W. Hampton, Judge.

          Mona J. Geidl argued the cause and fled the briefs for appellant.

          John R. Bachofner argued the cause for respondent. With him on the brief was Jordan Ramis PC.

          Before Egan, Presiding Judge, and Lagesen, Judge, and Schuman, Senior Judge.

         Case Summary:

         State Farm Mutual Automobile Insurance Company (insurer) sought a declaration regarding its obligations to provide Uninsured/ Underinsured Motorist (UM/UIM) benefits to Sieger (insured) in connection with an automobile accident. Relying on Bonds v. Farmers Ins. Co. of Oregon, 349 Or. 152, 240 P.3d 1086 (2010), the trial court granted summary judgment to insurer, concluding that the undisputed facts establish as a matter of law that insured has no cause of action against insurer for UM/UIM benefits in view of the requirements of ORS 742.504(12). On appeal, insured argues that insurer "formally instituted" arbitration for purposes of ORS 742.504(12) by sending a letter conditionally consenting to arbitration in the event that the parties did not reach agreement about amounts due under the policy, and by virtue of the fact that the parties did not, in fact, reach agreement within the two-year period.

         Held:

         The trial court did not err in granting summary judgment to insurer because insurer did not "formally institute" arbitration for purposes of ORS 742.504(12), as the Supreme Court construed that provision in Bonds. The only communication that insurer made to insured about arbitration was the letter conditionally consenting to arbitration in the event that the parties did not reach agreement [285 Or.App. 728] about amounts due under the policy, and insurer never expressly communicated to insured that a disagreement existed, or took any other steps to suggest that it was "formally" instituting arbitration. As a result, under Bonds, insurer did not "formally institute" arbitration proceedings for purposes of ORS 742.504(12).

         Affirmed.

         [285 Or.App. 729] LAGESEN, J.

         This is a declaratory judgment action in which State Farm Mutual Automobile Insurance Company (insurer) sought a declaration regarding its obligations to provide Uninsured/Underinsured Motorist (UM/UIM) benefits to Sieger (insured) in connection with an automobile accident that occurred on September 29, 2011. The issue is whether insured has a cause of action for UM/UIM benefits against insurer under ORS 742.504(12) and the policy issued to insured, which echoes the statute. Relying on Bonds v. Farmers Ins. Co.. 349 Or. 152, 240 P.3d 1086 (2010), the trial court granted summary judgment to insurer, concluding that the undisputed facts establish as a matter of law that insured has no cause of action against insurer for UM/UIM benefits in view of the requirements of ORS 742.504(12). It then entered a declaration to that effect. Because we agree with the trial court that Bonds controls the outcome of this case, we affirm.

         ORS 742.504(12)(a) states:

"The parties to this coverage agree that no cause of action shall accrue to the insured under this coverage unless within two years ...

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