Oregon Court AWOPs MLR’s Trial Victory on Water Loss Claim

Last week, the Oregon Court of Appeals upheld the decision in favor of Maloney Lauersdorf Reiner’s client in Long v. Farmers Ins. Co. of Oregon, Marion County Circuit Court, Case No. 12C23950.  MLR attorney F.J. Maloney successfully tried the case to a defense verdict, which included claims for breach of the insurance contract, breach of the implied covenant of good faith and fair dealing, and declaratory judgment under Oregon law. The insured appealed the trial court’s decision to deny its motion notwithstanding the verdict and motion for new trial, and the Court of Appeals affirmed the trial court’s ruling without opinion.

The case concerned a water loss that caused damage to the insured’s residence.  Following the loss, the insured retained a remediation company to repair the damage.  The parties were not able to reach an agreement concerning coverage and scope of the loss.  Due to concerns about potential fraud on the part of the remediation company, Farmers exercised its right to an examination under oath (“EUO”).  In response, and seemingly in retaliation, the insured demanded the dispute be submitted to appraisal. Farmers argued that appraisal was not appropriate until it concluded its investigation, which included completion of the EUO. While the parties were trying to schedule the EUO (it took about 8 months), the insured filed suit, but did not serve the lawsuit on Farmers.  Within days after the EUO, Plaintiff served her lawsuit on Farmers before Farmers was able to make any coverage determinations.

In the Answer, Farmers admitted that appraisal was appropriate, and the parties moved forward with the appraisal hearing. Following the appraisal hearing, the insurance company paid all undisputed amounts awarded by the panel.  The only remaining issue following appraisal was replacement cost holdback, code upgrade coverage and additional living expenses.  Construction was estimated at 6 weeks.  Trial was set for mid-March, and Plaintiff commenced construction about 6 weeks prior to trial.  Two days prior to trial, Plaintiff presented her proof of loss for replacement cost holdback. On the first day of trial, Farmers tendered all remaining replacement cost holdback to Plaintiff.  At the conclusion of the 4-day trial, the jury agreed that MLR’s client Farmers did not breach the insurance contract and was not liable to the insured for any damages.  The trial court denied the insured’s motion notwithstanding the verdict and motion for new trial.

Maloney Lauersdorf Reiner has represented numerous clients throughout Oregon in cases concerning insurance coverage for water loss damage, including the claims brought in the Long v. Farmers Ins. Co. of Oregon matter.  Please contact us with any questions regarding this matter, or anything else you read on the Insurance Coverage Blog.

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