United States District Court, D. Oregon
Stephen Hendricks, Hendricks Law Firm, Heather A. Brann,
Heather A. Brann, Attorney at Law, James R. Jennings, James
R. Jennings, P.C., Of Attorneys for Plaintiff Peggy Foraker.
S. McLay and Joshua N. Kastan, Hayes Scott Bonino Ellingson
& McLay, LLP, Matthew C. Casey, Bullivant Houser Bailey,
PC, Of Attorneys for Defendant USAA Casualty Insurance
OPINION AND ORDER
Michael H. Simon United States District Judge
lawsuit, Plaintiff Peggy Foraker asserted three claims
against her automobile insurance carrier, Defendant USAA
Casualty Insurance Company, arising out of a January 2012 car
accident with an uninsured driver. Under Oregon common law,
Plaintiff alleged breach of express contract and breach of
the implied covenant of good faith and fair dealing.
Plaintiff also alleged financial abuse of a vulnerable
person, in violation of Oregon Revised Statutes
(“ORS”) §§ 124.005, et seq.
Earlier in this action, the Court dismissed Plaintiff's
claims of breach of express contract and financial abuse of a
vulnerable person. On March 23, 2017, the Court held that
Plaintiff may seek noneconomic damages from her claim of
breach of the implied covenant of good faith and fair dealing
if she properly alleges and proves physical injury resulting
from Defendant's alleged breach. The Court also denied
Plaintiff's motion to reinstate her claim for financial
abuse of a vulnerable person and granted Plaintiff leave to
file a Second Amended Complaint.
filed her Second Amended Complaint (“Complaint”)
on April 21, 2017. In her Complaint, Plaintiff asserts her
original three claims, plus two new claims: a claim for
declaratory relief and money judgment for uninsured motorist
benefits and a common law negligence per se claim
for negligent performance of an insurance contract. Defendant
moves to dismiss Plaintiff's two new claims and Plaintiff
moves for leave to amend. For the reasons discussed below,
Defendant's motion is granted and Plaintiff's motion
January 4, 2012, Plaintiff was injured in an automobile
collision caused by an intoxicated, uninsured motorist. The
next day, Plaintiff reported the accident to Defendant, her
insurer. By February 2013, more than a year later, Defendant
had paid Plaintiff $159, 329.76 for covered medical expenses.
On April 8, 2013, Plaintiff made a policy-limits demand
against Defendant for $1 million, which was the limit of
Plaintiff's uninsured motorist (“UM”)
coverage with Defendant. On May 30, 2013, Plaintiff and
Defendant agreed to an “open extension” of time
for Defendant to respond to Plaintiff's demand.
November 14, 2013, Defendant offered to pay Plaintiff $250,
000 to resolve Plaintiff's UM claim. Plaintiff rejected
Defendant's offer. On December 16, 2013, Plaintiff sued
Defendant in Oregon state court, and Defendant removed the
action to federal court, asserting diversity jurisdiction.
The case was assigned to U.S. District Judge Anna Brown.
moved to dismiss Plaintiff's financial abuse claim as
premature, and the Court granted the motion. The Court then
bifurcated Plaintiff's implied covenant claim from her
claim for breach of express contract. The parties stipulated
to a bench trial and waived their rights to a jury. Plaintiff
also moved for partial summary judgment, which the Court
granted in part and denied in part, determining, among other
things, that the other driver was 100 percent at fault for
the accident. ECF 139. The issues of causation and damages,
however, still needed to be determined.
Court held an eight-day bench trial from January 25 to
February 3, 2016. The Court found that the other driver's
negligence was a substantial contributing factor that caused
Plaintiff's injuries and “awarded” Plaintiff
$1, 172, 338.04 in economic damages and $750, 000.00 in
non-economic damages as a result of the uninsured
motorist's conduct. ECF 237. On February 19, 2016,
Defendant paid Plaintiff $1 million, which was the policy
limit of her UM coverage.
parties then cross-moved for summary judgment on
Plaintiff's claim of breach of express contract. The
Court granted Defendant's motion and denied
Plaintiff's motion. The Court explained that because
Defendant never actually denied Plaintiff's UM claim and
because Defendant paid Plaintiff $1 million promptly after
the Court rendered its decision regarding causation and the
amount of Plaintiff's damages, Defendant did not breach
any express term of its contract with Plaintiff. ECF 315. The
Court also determined that because Plaintiff initiated
litigation during the claims negotiation process, Plaintiff
“effectively short-circuited the claims process before
the expiration of the open-ended time extension for Defendant
to state a final position on Plaintiff's policy-limits
demand.” Id. at 11.
November 4, 2016, Judge Brown sua sponte recused
herself from the remainder of this case. ECF 325. On November
8, 2016, the lawsuit was reassigned to the undersigned
judicial officer. At that time, certain motions were pending,
which the Court denied without prejudice. On January 20,
2017, Plaintiff moved to reinstate her statutory claim for
financial abuse of a vulnerable person. ECF 333.
request of the Court, the parties briefed the following legal
1. Under the circumstances of this case, are non-economic
damages available under Oregon law for Plaintiff's claim
of breach of the implied covenant of good faith and fair
2. Under the circumstances of this case, what is the proper
measure of economic damages for Plaintiff's claim of
breach of the implied covenant of good faith and fair
3. Should Plaintiff be permitted to reinstate her statutory
claim for financial abuse of a vulnerable person, or would
such a claim be futile under the circumstances of this case?
Court issued its opinion answering the three questions on
March 29, 2017. The Court determined that non-economic
damages could be available for Plaintiff's claim of
breach of the implied covenant if she could plead and prove
physical injury as a result of Defendant's alleged
breach. The Court also determined that the measure of damages
for such breach is traditional expectation damages and are
not subject to the $1 million bodily injury policy limit
contained in the insurance policy issued by Defendant.
Finally, the Court concluded that Plaintiff could not assert
her claim for financial abuse of a vulnerable person under
Oregon law, but granted Plaintiff leave to seek
reconsideration if Oregon law were to change, because the
Ninth Circuit recently had certified a question to the Oregon
Supreme Court that could have implications on this claim.
Plaintiff's Claim for ...