Trapp v. Hodges

“For potentially ambiguous terms, the court considers the context in which the term appears and then the context of the policy as a whole. If ambiguity remains, the term is construed against the drafter.” Allianz Global Risks v. ACE Property & Casualty Ins. Co, 367 OR 229, 734 (2021).

Plaintiff appeals a general judgment awarding $2,500 in damages. Plaintiff challenges the trial court’s denial of his petition for attorney fees under OR 20.080. The trial court denied the petition concluding defendant’s pretrial offer exceeded the amount awarded at trial. Plaintiff was in an automobile accident and sued to recover for personal injuries and property damage and extended defendant a written demand. Defendant’s insurance carrier tendered an offer. The grammatical ambiguity of the defendant’s offer is in question. Plaintiff declined defendant’s offer and proceeded to trial, where the jury awarded him $2,000 for personal injury and $500 for economic loss. Plaintiff argues that defendant’s offer should be read as $3,900 minus all liens and PIP repayment, making the jury award exceed defendant’s pretrial offer. Defendant argued the pre-trial offer was unambiguous and plaintiff is not entitled to attorney fees under ORS 20.080. “For potentially ambiguous terms, the court considers the context in which the term appears and then the context of the policy as a whole. If ambiguity remains, the term is construed against the drafter.” Allianz Global Risks v. ACE Property & Casualty Ins. Co, 367 OR 229, 734 (2021). The majority reasoned the offer was made by the defendant in response to the Plaintiff’s demand and because the plaintiff’s demand explicitly excluded the PIP subrogation claim, it is reasonable to read the defendant’s tender as inclusive of the claim. The Court cautioned against applying strict rules of grammar to those outside the legislature and courts. The Majority held the defendant’s offer of $3,900 was a net offer of $1,215.64 after the deduction of the PIP lien and therefore ORS 20.080 entitled plaintiff to reasonable attorney fees for his noneconomic damage. The Concurrence agreed with the outcome the Court reached, but wrote separately to address the grammatical question of the comma.The concurrence reasoned that the focus when determining what a writing means is on what the author intended the writing to mean. The concurrence reasoned that because the comma created the ambiguity, and because the letter must be construed against the drafters, then plaintiff could be entitled to attorney fees. The Dissent believed the offer was unambiguous and disagrees with how the Majority analyzed the grammatical framework of the offer. The Dissent held the drafter of the defendant’s offer used the comma to distinctly delineate that the PIP amount was separate.

Reversed and Remanded.