Hall v. Speer

• Decision Date: 24 December 2014
• Docket Number: A145014.,080506976
• Citation: 343 P.3d 640,267 Or.App. 639
• Parties: Joann HALL, Plaintiff–Appellant, v. Taysia SPEER; Aimbridge Hospitality, LP; and Ray Welsh, Defendants, and Allstate Insurance Company, Defendant–Respondent.
• Court: Oregon Court of Appeals

267 Or.App. 639

343 P.3d 640

Joann HALL, Plaintiff–Appellant

v. Taysia SPEER; Aimbridge Hospitality, LP; and Ray Welsh, DefendantsandAllstate Insurance Company, Defendant–Respondent.

080506976

A145014.

Court of Appeals of Oregon.

Submitted on Remand March 13, 2014.

Decided Dec. 24, 2014.

Michael J. Clancy filed the briefs for appellant.

Joel S. Devore and Luvaas Cobb filed the brief for respondent.

Opinion

HASELTON, C. J.

This case is on remand from the Oregon Supreme Court, which vacated our prior decision, Hall v. Speer, 244 Or.App. 392, 261 P.3d 1259 (2011) (Hall I ), and remanded for reconsideration in light of its decision in Zimmerman v. Allstate Property and Casualty Ins., 354 Or. 271, 311 P.3d 497 (2013). Hall v. Speer, 354 Or. 699, 319 P.3d 696 (2014) (Hall II ). On remand, the dispositive issue is whether plaintiff—who prevailed in an action against her insurer, defendant Allstate Insurance Company (Allstate), for underinsured motorist (UIM) benefits—provided Allstate with a “proof of loss” more than six months before Allstate accepted coverage and consented to binding arbitration such that she is entitled to attorney fees under ORS 742.061. Although, in Hall I, we concluded that the trial court had erred in determining that plaintiff had not provided a timely proof of loss, the Supreme Court in Zimmerman clarified the principles governing that inquiry in the context of a UIM claim. For the reasons explained below, we now conclude that, under Zimmerman, the information that plaintiff provided to Allstate was insufficient to trigger an obligation to investigate a UIM claim. Thus, plaintiff failed to provide Allstate with timely proof of loss, and she was not entitled to attorney fees under ORS 742.061. Accordingly, we affirm.

With three amplifications noted below, we take the facts and a description of the procedural history of this case from Hall I.

“The relevant facts are undisputed. Plaintiff was injured in an automobile accident on September 16, 2006. She carried Allstate insurance that provided liability, personal injury protection (PIP), and UIM coverage. Two days after the accident, she informed Allstate that the accident had occurred and that she had been injured. On January 28, 2009, more than two years after learning of plaintiff's accident and after a number of events described below, Allstate sent plaintiff a letter acknowledging that it had ‘accepted coverage’ of her UIM claim, that the remaining issues were ‘liability and damages,’ and that, if Allstate and plaintiff could not reach a settlement, Allstate was ‘also willing to submit to binding arbitration.’ Plaintiff declined arbitration and ultimately won a jury verdict that exceeded Allstate's settlement offer. She then petitioned for attorney fees pursuant to ORS 742.061.

“The date of Allstate's letter acknowledging coverage and offering arbitration is important because ORS 742.061 provides, in part:

“ ‘(1) Except as otherwise provided in subsections (2) and (3) of this section, if settlement is not made within six months from the date proof of loss is filed with an insurer and an action is brought in any court of this state upon any policy of insurance of any kind or nature, and the plaintiff's recovery exceeds the amount of any tender made by the defendant in such action, a reasonable amount to be fixed by the court as attorney fees shall be taxed as part of the costs of the action and any appeal thereon. * * *

“ ‘ * * * * *

“ ‘(3) Subsection (1) of this section does not apply to actions to recover uninsured or underinsured motorist benefits if, in writing, not later than six months from the date proof of loss is filed with the insurer:

“ ‘(a) The insurer has accepted coverage and the only issues are the liability of the uninsured or underinsured motorist and the damages due the insured; and

“ ‘(b) The insurer has consented to submit the case to binding arbitration.’

“In this case, no settlement occurred, and plaintiff's recovery exceeded Allstate's tender. Thus, Allstate could avail itself of the ‘safe harbor’ afforded by ORS 742.061(3) and avoid paying reasonable attorney fees only if its January 28, 2009, letter accepting coverage and offering to arbitrate occurred within six months of plaintiff's proof of loss—that is, only if plaintiff's proof of loss occurred after July 28, 2008.

“Before that date, the following relevant events occurred:

“• September 18, 2006: Plaintiff informed Allstate that she had been injured in an accident.

“• September 27, 2006: Plaintiff filled in and submitted to Allstate an application for PIP benefits that Allstate had sent her, in which she described the accident as well as her injuries. Except for its caption, the application for PIP benefits is in all relevant respects identical to the application for UIM benefits.

“• Fall 2006: Allstate's PIP adjuster opened a file on plaintiff's case and noted that the allegedly at-fault driver carried liability insurance. The PIP adjuster did not inform the UIM adjuster of plaintiff's claim.

“• February 5, 2007: At Allstate's request, plaintiff was examined by an orthopedic surgeon, who reported that the September 2006 accident had caused significant injuries. [That report indicated that an MRI of plaintiff's left shoulder showed ‘a very small partial thickness tear of the supraspinatus tendon along its articular surface.’ The surgeon noted that ‘[t]he typical necessary treatment * * * is physical therapy * * * directed toward her left shoulder joint’ and that he ‘believe[d] that she should be seen in therapy twice weekly for the next six to eight weeks.’ The surgeon also indicated that plaintiff ‘may require one or two other corticosteroid injections.’]

“• May 24, 2007: Plaintiff's counsel wrote letters informing Allstate's PIP adjuster and its general liability adjuster that he represented plaintiff.^[ [[^{1 ]} “Plaintiff argued to the trial court that the application for PIP benefits, together with the surgeon's report and counsel's letters to Allstate's adjusters, constituted proof of loss. Allstate took the position that, in a UIM case, the insurer does not have proof of loss until it knows the underinsured motorist's liability limit and the nature of the policyholder's injuries, knowledge that, in this case, plaintiff did not provide until just two months before Allstate's January 2009 acknowledgement of coverage and offer to arbitrate.^{[ 2 ]} The court agreed with Allstate:

“ ‘Until the insurer received a communication that the liability insurance carried by the driver at fault was less than the claimed damages suffered by the plaintiff, the insurer had not received information sufficient to estimate its own liability under the underinsured motorist coverage. The initial report of medical injuries did not reveal damages likely to exceed mandated liability coverage. Because the insurer of the driver at fault was not obligated to reveal its limits to Allstate, Allstate was not able to make [an] estimation of its obligations by reasonable investigation. Until the insurer did receive that information, it had not received a ‘proof of loss' covered by the underinsurance motorist provisions of the policy. As soon as it did, it acted appropriately.” ’

Hall I, 244 Or.App. at 394–96, 261 P.3d 1259 (sixth brackets and omissions in Hall I ). Plaintiff appealed.

Relying on the Supreme Court's decisions in Parks v. Farmers Ins. Co., 347 Or. 374, 227 P.3d 1127 (2009), Scott v. State Farm Mutual Auto. Ins., 345 Or. 146, 190 P.3d 372 (2008), and Dockins v. State Farm Ins. Co., 329 Or. 20, 985 P.2d 796 (1999), we held that

“the information that Allstate had by May 24, 2007—20 months before it acknowledged coverage and offered to arbitrate—triggered Allstate's duty to make a reasonable effort to investigate and clarify its possible UIM obligations, and that Allstate made no such efforts. That information included notice that plaintiff had been in an accident; that plaintiff had incurred serious injuries as a result; that the at-fault driver was insured; and that plaintiff carried UIM insurance.”

Hall I, 244 Or.App. at 399, 261 P.3d 1259 (emphasis in original). In doing so, we rejected Allstate's contention that “an insurer cannot have enough information to estimate its obligations in a UIM case until it knows that the at-fault driver's liability insurance is inadequate to cover the insured's compensable expenses.” Id. at 397, 261 P.3d 1259 (emphasis in original). We also rejected Allstate's argument that, in light of insurance carriers' policies not to disclose their insureds' policy limits, any duty to investigate was vitiated because “any attempt to investigate and clarify plaintiff's UIM claim would not have provided Allstate with the information that it needed in order to determine its obligation—in particular, the at-fault driver's liability limits.”Id. at 399, 261 P.3d 1259. Allstate sought review.

Thereafter, the Supreme Court decided Zimmerman, in which the court clarified the principles for determining what constitutes a “proof of loss” in the context of a claim for UIM benefits. For that reason, we describe Zimmerman in detail.

There, the plaintiff, Zimmerman, was injured in an automobile accident in December 2006. Zimmerman gave a recorded statement to Allstate, explaining that her car had been totaled, she had been injured, and the other driver (Alvis) had admitted liability and been cited by the police.³ Thereafter, Zimmerman submitted a PIP application and a medical authorization form to Allstate, and, “[i]n the following months, Allstate corresponded with Zimmerman or her attorney concerning medical records on a number of occasions.” Zimmerman, 354 Or. at 274, 311 P.3d 497. In December 2007, Zimmerman's treating physician informed Allstate that Zimmerman continued to suffer from neck and back pain and that x-rays showed a “reversed cervical spine”; however, no further bills for medical expenses were submitted to Allstate.

In July 2008, Zimmerman's attorney sent a demand letter to Alvis's...