MLR Obtains Jury Verdict in Water Loss Coverage Lawsuit

Maloney Lauersdorf Reiner recently obtained a verdict in favor of its client following a three day trial in Marion County Circuit Court in Benninger v. Farmers Ins. Co. of Oregon, Marion County Circuit Court, Case No. 13C10643.  MLR attorneys F.J. Maloney and Kyle Sturm successfully tried the case to a jury, which found in the client’s favor on March 13, 2014.  The trial court entered a general judgment on April 25, 2014, after they were able to defeat a post-trial motion for judgment notwithstanding the verdict and for a new trial.  The case included claims for breach of the insurance contract and breach of the implied covenant of good faith and fair dealing.  The insured alleged damages for the unpaid cost of repairs, additional living expenses caused by the loss of use of the residence, and her attorney fees and costs.

The underlying insurance claim related to a water loss caused by clogged drain.  The clog occurred in the sewer line of the residence, which caused it to back up and overflow from the sink, bathtub, washing machine, and toilet.  Following the water loss, the insured retained a remediation company and public adjuster to assist her with the claim.  Throughout the subsequent claims process, the insured gave up control of her claim—including presentation of information and making decisions regarding repairs—to the remediation contractor and public adjuster.

Prior to trial, the insurance company moved for summary judgment on the ground that the loss was not covered under the policy.  The court denied the insurer’s motion, finding there was an issue of fact for trial.  At the commencement of the trial, over the objection of the insurer, the judge found as a matter of law that the loss was covered under the applicable insurance policy.

The sole remaining issue for trial was whether the insurance company paid all amounts due and owing under the insurance policy, including replacement cost holdback.  The insurer’s position at trial was that the remediation contractor’s work was grossly excessive and that the insured never incurred any replacement costs because she was never billed by the remediation contractor.  On the stand, the insured admitted under cross-examination that her remediation contractor never billed her for any of the services it performed, and therefore, she did not owe her remediation contractor any money, and in turn, that insurance company did not owe her any money.  At the close of the evidence, the jury returned a verdict in favor of MLR’s client.

The attorneys at Maloney Lauersdorf Reiner have litigated numerous disputes in Oregon regarding insurance coverage for water loss, including the type of claims brought in the Benninger v. Farmers Ins. Co. of Oregon matter.  Feel free to contact us with any questions concerning this case, or any other matter you find on the Insurance Coverage Blog.

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