Daniels v. Allstate Fire and Casualty Co.

To invoke the statutory safe harbor protection under ORS 742.061(3) 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.” Additionally, the insurer must have "consented to submit the case to binding arbitration." ORS 742.061(3)(a)-(b).

Plaintiff appealed a judgment that declined an award of attorney’s fees in an action against his insurer, defendant, for underinsured motorist benefits. On appeal, plaintiff assigns error to the trial court’s denial of his attorney’s fees request based on its determination that defendant was entitled to the “safe harbor” protections provided in ORS 742.061(3). Plaintiff argues that the letter sent by Defendant was inadequate under the statute to invoke the statutory safe harbor from attorney fees afforded to insurers. To invoke the statutory safe harbor protection under ORS 742.061(3) 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.” Additionally, the insurer must have "consented to submit the case to binding arbitration." ORS 742.061(3)(a)-(b). The Court of Appeals agreed with Plaintiff’s argument and found that the trial court had erred in finding that the letter sent by Defendant was sufficient to trigger the protections under ORS 742.061(3). The Court concluded that ORS 742.061(3) is unequivocal in its requirement that to invoke the protections, the insurer must have, in writing, accepted coverage and the only issues are the liability of the underinsured motorist, and damages owed to the insured. Thus, the Court held that Defendant’s letter was inadequate as it did not limit the issues as required by the statute. Reversed and remanded as to attorney fees; otherwise affirmed.