Thoens v. Safeco Ins. Co.

An insurer can be liable for the insured’s attorney’s fees if it leaves the safe harbor provisions of ORS 742.061(3) by injecting other issues that become a matter of live controversy that are not covered in ORS 742.061(3).

Defendant appealed the court’s award of attorney’s fees to the plaintiff. Defendant’s primary assignment of error was that it was covered by the safe harbor provision under ORS 742.061(3). Defendant argued that it never abandoned the safe harbor provision because it was in fact the plaintiff who forced Defendant to argue an issue not covered by ORS 742.061(3). Plaintiff’s response was that Defendant refused to stipulate to the underinsured issue, which resulted in Defendant removing itself from the safe harbor. An insurer can be liable for the insured’s attorney’s fees if it leaves the safe harbor provisions of ORS 742.061(3) by injecting other issues that become a matter of live controversy that are not covered in ORS 742.061(3). The Court held that Defendant left the safe harbor and thus was required to pay the award of attorney’s fees. The court reasoned that Defendant had the ability to keep the case within the bounds of ORS 742.061(3). It could have properly objected during the trial court’s instructions, or it could have stipulated to the underlying underinsured fact. Instead, Defendant refused to stipulate which raised a new issue of controversy that was not provided for under ORS 742.061(3). Affirmed.