Certain Underwriters v. Mass. Bonding and Ins. Co.

Under ORS 742.061 an insurer may receive contribution for contribution attorney fees if the insured prevails at trial and obtains a recovery that exceeds the insurer’s highest tender.

Certain Underwriters and Massachusetts Bonding and Insurance Co. (Mass. Bonding) were both insurers of Zidell, a scrapping business. Zidell filed a claim, which both insurers denied. Mass. Bonding settled with Zidell, but Certain Underwriters did not. The trial court judgment was in favor of Zidell. Pursuant to ORS 742.061 Certain Underwriters were liable for Zidell’s attorney fees. Certain Underwriters sued Mass. Bonding to obtain contribution of the attorney fees. However, the trial court granted Mass. Bonding’s motion for summary judgment. Certain Underwriters assigns error, arguing that while they are liable for attorney fees under ORS 742.061, Mass. Bonding was as well. Under the statute, “an insured is not entitled to attorney fees unless (1) settlement is not made within six month from the date proof of loss is filed; (2) an action is brought on the policy; and (3) the plaintiff’s recovery exceeds the amount of any tender made by the defendant in such action.” Since Zidell and Mass. Bonding settled, “defendants never shared plaintiffs’ liability for attorney fees, because defendants were never liable for attorney fees in the first place.” Former opinion modified and adhered to as modified.