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September 2012

Morgan v. Amex Assurance Company - Oregon's Attorney Fees Statute Applies to Policies Purchased Outside Of Oregon

The Oregon Supreme Court Concludes That ORS 742.061 Authorizes An Award of Attorney Fees To Any Insured Prevailing In Action Upon A Policy Of Insurance ? Even If The Policy Was Issued And Delivered Outside Of Oregon

(September 14, 2012) __Wn.App.__

While Carla Morgan (“Morgan”) was living in Vancouver, Washington, she applied for an automobile insurance policy from Amex Assurance Company (“Amex”).  Amex accepted the application and delivered the policy to Morgan in Washington.  Subsequently, Morgan was involved in an accident with an uninsured motorist and she filed a claim under her uninsured motorist coverage.  Amex denied coverage based on a policy exclusion.

 Morgan then filed an action against Amex in Multnomah County Circuit Court, Oregon.  After the trial court denied Amex’s motion for summary judgment, Amex offered Morgan $85,0000 “exclusive of any costs, disbursements, and attorney fees, if any, that may be recoverable” to settle the action.  Morgan accepted the offer and petitioned for attorney fees pursuant to ORS 742.061 which provides:

[I]f 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.

Amex objected to Morgan’s attorney fees request.  The preamble to Chapter 742  provides that that ORS Chapter 742 “appl[ies] to all insurance policies delivered or issued in this state… .”  ORS 742.001.  Accordingly, Amex argued that ORS 742.061 only applies to policies delivered and issued in Oregon.  The trial court agreed with Amex and denied Morgan’s request for attorney fees.

On appeal, the Oregon Court of Appeals noted that the Oregon legislature had enacted ORS 742.001 after it had enacted ORS 742.061.  Therefore, the Court of Appeals concluded that, in enacting ORS 742.001, the legislature had intended to limit the scope of ORS 742.061 only to policies issued and delivered in Oregon.

Morgan appealed this decision to the Oregon Supreme Court. The Supreme Court found that the fundamental issue in interpreting the statues was whether the Oregon legislature intended to limit the scope of ORS 742.061 when it enacted ORS 742.001.  To determine that intent, the Court reviewed the legislative history of the statute.  The opinion contains a solid overview of that history and, based upon the legislative history, text and context of the statute, the Oregon Supreme Court ruled that ORS 742.001 did not limit the scope of 742.061 and that Morgan was entitled to attorney fees.  The decision of the Court of Appeal was reversed. 

Click here for the opinion.

This and other case bulletins, as well as other publications of Gordon & Rees LLP, may be found at www.gordonrees.com.

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