Oregon Court Holds No Attorney Fees Without Judgment

Oregon Court Holds No Attorney Fees Without Judgment

On October 22, 2014, the Oregon Court of Appeals issued an opinion in Triangle Holdings, II, LLC v. Stewart Title Guaranty Co., 266 Or App —, — P3d —, 2014 WL 5365977 (2014), analyzing an insured’s right to attorney fees under ORS 742.061. In the opinion, the Court of Appeals addressed what constitutes a “recovery” for purposes of determining whether an insured is entitled to attorney fees. The court concluded that, under the facts of the case, the insured did not obtain a “recovery” and, thus, was not entitled to recover its attorney fees.

In the case, the insured sued its title insurance company seeking reimbursement for construction liens the insured had paid. During the litigation, the title insurer paid, and the insured accepted, the amount the insured sought for the liens, plus interest. The insurer then moved for summary judgment. The trial court granted summary judgment, finding that the insured’s claims were moot because the insurer paid the amount sought by the insured.

After summary judgment was entered, the insured sought to recover its attorney fees under ORS 742.061. The trial court denied the insured’s request for attorney fees on the ground that the insured had not obtained a “recovery” under ORS 742.061(1) because the insured had not obtained a money judgment against the insurance company. The insured appealed the trial court ruling, arguing that it did recover the amount it sought—even though it did not obtain a judgment against the insurance company—because the insurance company’s payment of the liens constituted a “recovery” within the meaning of the Oregon attorney fee statute. The Court of Appeals affirmed the trial court ruling, finding that the insured was not entitled to attorney fees.

The court began it opinion by articulating the three requirements for recovery of attorney fees under ORS 742.061: first, there must be no settlement within six months of the insured filing its proof of loss; second, a party must bring an action on the policy; and third, the insured’s “recovery” under the policy must exceed the amount tendered by the insurance company during the six-month period after the insured files its proof of loss. The term “recovery” is not defined in the statute. The insured argued it satisfied the recovery requirement because the insurance company did not pay the amount of the claim within six months and it recovered the full amount of its claim when the insurance company paid the claim during litigation. The insurance company, on the other hand, argued that the term “recovery” is a money judgment.

The Court of Appeals agreed with the insurance company. Citing its ruling in Becker v. DeLeone, 78 Or App 530, 717 P2d 1185 (1986), the court held that the term “recovery,” as used in ORS 742.061, requires a judgment. The court further explained that another type of entitlement to money, including a jury verdict, does not satisfy the requirements of the statute. The court found that insured in the Triangle Holdings case was not entitled to recovery of attorney fees because it did not satisfy the “recovery” requirement.

The attorneys of Maloney Lauersdorf Reiner regularly represent clients litigating issues relating to entitlement of attorney fees under ORS 742.061. Please contact us with any questions about this case, or any other matter addressed on the MLR Insurance Coverage Blog.

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