and Submitted April 20, 2017
County Circuit Court 110405348; Cheryl A. Albrecht, Judge.
Willard E. Merkel argued the cause for appellant. With him on
the briefs was Merkel & Associates.
Chock argued the cause for respondent. With him on the brief
were Jeffrey W. Hansen and Chock Barhoum LLP.
Ortega, Presiding Judge, and Egan, Chief Judge, and Lagesen,
Summary: Plaintiff appeals, assigning error to the trial
court's denial of his request for attorney fees and its
decision to offset PIP benefits against the damages awarded
by the jury in the tort action he brought against defendant,
his insurer, for under insured motorist benefits.
Held: The trial court erred with respect to the
denial of plaintiff's request for attorney fees. An
insurer's commitment merely to concentrate on the issues
of liability and damages is not enough to invoke the
statutory safe harbor from attorney fees afforded to
insurers, ORS 742.061(3), because the insurer must commit
that those are the only issues, to the exclusion of all other
issues. As to the offset of PIP benefits, the trial court did
not err under Cooksley v. Lofand, 289 Or.App. 103,
107-08, P.3d (2017).
Or.App. 699] LAGESEN, J.
was injured in a car accident. After settling his tort claim
against the motorist who caused the accident, he brought this
action for underinsured motorist (UIM) benefits against his
insurer, defendant Allstate Fire and Casualty Company. The
case went to trial and the jury returned a verdict of $162,
484.35 in plaintiffs favor. Pursuant to ORS 31.555, the trial
court offset personal injury protection (PIP) benefits that
defendant previously paid to plaintiff against the verdict
and entered judgment for plaintiff in the amount of $57,
521.78. Later, the court denied plaintiff's request for
attorney fees, concluding that defendant was entitled to the
statutory "safe harbor" protection of ORS
742.061(3). Plaintiff appeals, assigning error to (1) the
trial court's denial of his attorney fees request and (2)
the trial court's decision to offset PIP benefits against
the damages awarded by the jury. We agree with plaintiff as
to the attorney fees but not as to the offset. We therefore
reverse and remand for reconsideration of plaintiffs request
for attorney fees but otherwise affirm.
start with the issue of attorney fees. The trial court denied
plaintiff's request for fees based on its conclusion that
defendant had sent a letter to plaintiff that was adequate to
invoke the statutory safe harbor from attorney fees afforded
to insurers by ORS 742.06K3). Under ORS 742.061(1), a plaintiff
in an action on an insurance policy generally is entitled to
recover attorney fees if "the plaintiff's recovery
exceeds the amount of any tender made by the defendant in
such action." ORS 742.061(3), however, creates an
exception-or safe harbor-to that entitlement in an action for
"if, in writing, not later than six months from the date
proof of loss is filed with the insurer:
"(a) The insurer has accepted coverage and the only
issues are the liability of the * * * underinsured motorist
and the damages due the insured; and
[289 Or.App. 700] "(b) The insurer has consented to
submit the case to binding arbitration."
See generally Kiryuta v. Country Preferred Ins. Co.,
360 Or. 1, 376 P.3d 284 (2016) (discussing operation of
statutory safe harbor provision). Whether an insurer's
letter is sufficient to invoke the safe harbor provision is a
question of law, and we review the trial court's ruling
for legal error. See Zimmerman v. Allstate Property and
Casualty Ins., 354 Or. 271, 292-94, 311 P.3d 497 (2013)
(so doing); see also Robinson v. Tri-Met. 277
Or.App. 60, 61, 370 P.3d 864 (2016) (reviewing a ruling on an
entitlement to attorney fees for legal error).
the trial court erred. ORS 742.061(3) is unequivocal. To
invoke the safe harbor, an insurer must have, in writing,
"accepted coverage and the only issues are the
liability of the * * * underinsured motorist and the damages
due the insured." ORS 742.061(3) (emphasis added).
Although an insurer's written communication need not
necessarily recite the statutory wording, it must demonstrate
that the statutory prerequisites for the safe harbor
protection are met. See, e.g., Grisby v. Progressive
Preferred Ins. Co..343 Or. 175, 180, 166 P.3d 519,
adh'd to as modified on recons.343 Or. 394, 171
P.3d 352 (2007); Zimmerman, 354 Or at 293
(concluding that insurer's statement that it was
'"willing to ...