Target Data Breach Lawsuits Increase Focus on Insurance Coverage for Cyber-Risk

I just finished a very fine (and, unusual for a lawyer blog, concise!) piece on the deluge of lawsuits already filed against Target entitled The Target Data Breach Lawsuits: Why Every Company Should Care.  I recommend it.  The author does not touch on the insurance coverage issues raised by data breach litigation, and who can blame him.  The author probably realized that his subject matter - causes of action, standing, multi-district litigation - was dry enough.  No need to put absolutely everyone to sleep by bringing up insurance.  But that's my stock in trade.  So are suits like these covered by traditional GL policies?  Are you sitting down, 'cause this will be a shocker... it depends.  It depends on what the plaintiffs allege, it depends on what the hackers got, it depends on what jurisdiction you are in.  As it happens, right before the Target news came out I had begun working on some CE (continuing education) materials for insurance professionals on data breach and cyber-risk coverage at the suggestion of a good friend in the industry.  I'll share some of the highlights here as I develop those materials, so please subscribe via RSS or email for further updates!  And Happy New Year, readers!

"Pay and Chase" Jeopardized by Court of Appeals

Policyholders representing general contractors and developers frequently urge defending carriers to "pay and chase" - in other words, settle with the owner ("pay") and then subrogate against the subcontractors or design professionals whose work caused the alleged damage ("chase") to get reimbursed for the settlement with the owners.  Many carriers are increasingly leery of this approach, and unfortunately a new decision from the Court of Appeals is likely to further dampen their enthusiasm.  In Montara Owners Ass'n v. LaNoue Development, the developer's carrier (Zurich) agreed to pay and chase, paying $4 million to resolve the developer's liability.  Zurich settled with almost all subcontractors, but proceeded to trial against one, Advanced Construction ("Advanced") (referred to in the decision as Sharabarin, the name of the "dba" owner).

At trial Advanced succeeded on a directed verdict motion to reduce the total amount that LaNoue could seek in damages by knocking out two chunks from Zurich's subrogation right: 1) amounts that Zurich had been reimbursed by settling subcontractors; 2) an amount that Zurich had paid in settlement out of a policy that pre-dated Advanced's construction work on the project.  Advanced's argument as to #1 was essentially that Zurich could not get a double recovery; its argument on #2 was that because it could not have caused property damage during that early Zurich policy period, there was no subrogation right for that period.  LaNoue (Zurich) argued that subrogation merely puts the carrier in the insured's shoes, and does not impose any additional burdens of proof on a subrogating carrier.

The Court of Appeals reversed the directed verdict on #1, holding that property damage caused by other subcontractors, for which those subcontractors paid to settle, had nothing to do with the claims against Advanced, and since there was no overlap, the trial court should not have pretended that there was a concern about "double recovery."  But the Court of Appeals upheld the #2 reduction, for the policy period prior to Advanced's work, "because Sharabarin could not have been responsible for covered losses during that timeframe."

As all insurance professionals know, carrier allocations of indemnity payments that are made from multiple policies are idiosyncratic and usually have nothing to do with the amount of property damage that actually occurred in any particular policy period.  That issue often comes up in litigation over prior exhaustion of policies: a carrier will claim that a policy was exhausted in prior litigation and that therefore no defense was owed, but policyholder counsel can often establish that the allocation of losses to the policy in question was arbitrary, that the insured was not consulted, and that the policy was in fact no exhausted at all.  Indeed it appears that in this case Zurich put in evidence that the amount that it allocated to the earliest, pre-Advanced policy was arbitrary.  It is unclear why the Court of Appeals ignored this evidence.  If Zurich appeals, policyholders may want to weigh in on the impact of the decision on them.

Former Insurance Defense Counsel's Firm Permitted to Represent Insured Against Carrier

The Portland Harbor Superfund Site continues to generate new coverage-related law on issues beyond environmental contamination.  In a recent ruling from Oregon's federal court, Judge Acosta permitted Stoel Rives to substitute in as coverage counsel for steel company Evraz, Inc. in litigation between Evraz and many of its former carriers over coverage at the Superfund site.  The carriers, led by first named defendant Continental Insurance, contended that Stoel Rives had a conflict because at one point Continental was paying the firm to do the substantive environmental defense work for Evraz.  Continental claimed that under Oregon State Bar ethics opinions, that created a default "tripartite" relationship in which both Evraz and the insurance companies had been Stoel Rives' clients, meaning that there was a "prior client conflict" disqualifying Stoel Rives from prosecuting the coverage claim against Continental.  Judge Acosta held that no default status could be created by the ethics opinions because they have been held to be only "advisory."  The court went on to analyze the conflict issue under Oregon case law, and found that because Stoel Rives' environmental lawyers had not been retained initially by Continental, were not paid directly (but only indirectly) by Continental, and had gone to pains to advise Continental that they did not represent Continental during the prior work, there was no prior client conflict.

Washington Federal Court Permits Deposition of Carrier's Former Coverage Attorney

On October 30, 2013 Judge Martinez of the Western District of Washington permitted the policyholder in a long-running bad faith case to take the deposition of the carrier's former coverage counsel, Joanne Henry, about the coverage analysis that she performed for the carrier leading to the carrier denying the tender of defense.  This decision relied heavily on the landmark 2011 Cedell decision from the Washington Supreme Court which, broadly speaking, abrogated in part the attorney-client privilege where the attorney was acting as an adjuster, taking on one of the "quasi-fiduciary" roles of a potentially defending insurer.  Judge Martinez held that because the policyholder had reason to believe that Ms. Henry did the entire coverage investigation herself, in addition to performing legal analysis of the policy, the policyholder could take her deposition, although the carrier could object if a question that genuinely intruded into the privilege was asked.

Implementation of Environmental Coverage Claims Mediation Program Underway

The recent amendments to Oregon's Environmental Cleanup Assistance Act (OECAA) included a potentially useful tool in the policyholder toolbox - one that could benefit all sides and the environment as well.  The amendments provided that an insured could demand that an insurer participate in a mediation over a broad range of environmental coverage disputes, and if the insurer refuses, that is a per se bad faith claims handling practice subjecting the carrier to increased damages.  The Oregon Department of Justice was given the responsibility for creating an environmental coverage mediation program including hiring a mediation service provider (MSP) to administer the program and writing regulations governing issues like qualifications and rates.  DOJ convened a public meeting of stakeholders this past Monday, December 2, in Salem, which was attended by insurers, policyholder advocates, and many representatives of the mediation community.  DOJ has also set up a website for the program which will track its progress.  There are a number of issues under discussion.  Let me know if you have thoughts that you'd like conveyed through the Advisory Committee that is being set up, and stay tuned.

Wa. Court of Appeals: Exhaustion of Primary Layer Means Actual Payment

In a new decision that has generated some interest nationally, the Washington Court of Appeals held November 12, 2013 that if an excess policy's attachment language is sufficiently restrictive, the excess policy will not be triggered unless the primary carrier actually pays the full amount of its limits.  In this case, Quellos Group LLC v. Federal Insurance and others, the insured financial advisory firm was called on the carpet by federal regulators for shady tax shelter schemes.  As often happens in such regulatory-type cases, involving disgorgement, fines, damages, and injunctive relief, there were many question about what the primary layer policy would actually cover.  Quellos and its primary-layer carriers settled those coverage disputes with the primary carriers paying Quellos less than full policy limits.  So far, so good.  Quellos then paid the difference between what the primary carriers paid and the primary limits, therefore reaching the "attachment point" for the excess layer policies.

Not so fast, said the Court of Appeals.  The Federal excess policy stated that coverage "shall attach only after the insurers of the Underlying Insurance shall have paid in legal currency the full amount of the Underlying Limit." The Indian Harbor policy stated that coverage "will attach only after all of the Underlying Insurance has been exhausted by the actual payment of loss by the applicable insurers thereunder."  The court read these provisions as literally requiring, as a pre-condition to any coverage, that the primary carrier itself pay the the full limits.  The court rejected Quellos' argument that these provisions should function like many of the other "conditions of coverage" that aren't really conditions at all, but are treated more like exclusions, where the carrier has the burden of showing that it was prejudiced in some way by the insured's failure to comply with the condition.  The court also rejected Quellos' public-policy argument, noting that there are policy forms available that allow the insured to do just what Quellos tried to do in triggering excess coverage.

From the policyholder's perspective this decision is bad news, and it is not in keeping with the general trend (with many exceptions) in Washington law to tackle coverage questions from a practical, policyholder-oriented perspective.  These excess carriers contracted to provide coverage only if a certain amount of liability was assessed and paid out.  What in the world does it matter to them who pays the underlying limit?  Unfortunately this decision is joining a trend in the case law nationally on this issue that is against policyholders.  Hopefully the Washington Supreme Court will accept review and overturn the decision.

Benefits of Involving Counsel In Choosing Your Insurance Program

All companies routinely review their insurance coverage programs, usually through risk management talking to a trusted insurance broker.  Today I came across this excellent "Sound Advice" podcast from Tonya Newman, a colleague at Neal Gerber & Eisenberg in Chicago, about the reasons that companies should involve counsel in discussions at renewal time.  It is of course fairly self-serving to say so, but insurance coverage counsel can provide a perspective on what insurance to buy that brokers often cannot.  If coverage counsel have recently represented the company in coverage disputes they may be more intimately familiar with how standard-form exclusions intersect with the company's products or business practices.  And because insurance procurement decisions should involve a good deal of candid self-assessment, and review of prior claims, it may be worth while to consider doing that kind of assessment inside the attorney-client privilege rather than having the conversations strictly with an insurance broker who may be subject to subpoena in a later claim.  The presentation is very well done and I commend it to other policyholder counsel, brokers, and risk managers.

Trial Court Rejects Constitutional Challenge to New Provisions of OECAA

Today the trial court judge in the long-running environmental coverage contribution battle between Lloyd's and several other carriers for Zidell Marine rejected a constitutional challenge mounted by Lloyd's to one of the newest provisions of the Oregon Environmental Cleanup Assistance Act (OECAA).  This case has had many zigs and zags but to briefly sum up, Zidell sued its carriers for failing to defend it in a cleanup action brought by the state, both for defense costs and for the cost of the cleanup.  Several of the carriers including Beneficial settled with Zidell.  Lloyd's did not.  Lloyd's later was tagged in the coverage action (which itself has gone on for years with multiple trips up the appellate chain) for millions of dollars; Lloyd's then sued Beneficial and others arguing that those carriers did not contribute to the overall "pie" in proportion to their coverage.  In June of this year new amendments to the OECAA went into effect.  One provision of the amendments provides that a carrier that has settled with a policyholder in "good faith" is protected from a contribution suit by other, non-settling carriers.  Beneficial and the other defendants in the Lloyd's contribution case filed a motion to dismiss arguing that under that new provision, Lloyd's has no cause of action.  Lloyd's in turn argued, among other things, that a) the statute does not apply if there has been a "final judgment" in the underlying coverage case; b) the statute is unconstitutional; c) there are questions of fact about whether the Beneficial et al. settlements were in "good faith."  In today's decision the trial court held that there has been no "final judgment" in the coverage case between Zidell and Lloyd's, meaning that the statute applies, and rejected the constitutional argument.  She held, however, that there are some questions of fact and allowed discovery into whether the settlements were in good faith.  More appeals appear inevitable, so stay tuned.  However, this appears to be the first enforcement by a trial court of the new provisions of the OECAA, and the first rejection of a constitutional challenge to one of the new provisions, and it's certainly notable for that alone.

Presentation on Anderson Brothers Decision

For those of you who missed the OSB Environment and Natural Resources Committee's CLE on the Anderson Brothers decision yesterday, click here for the presentation visuals (via Prezi) and here for a short article that I wrote for ENR on the decision.  Thanks to everyone who came and for the great questions.

Oregon Supreme Court Sets Limits on What Constitutes "Proof of Loss" For Attorney Fee Purposes

Today the Oregon Supreme Court held that a policyholder is not entitled to attorney fees under Oregon's fee-recovery statute for insurance coverage disputes (ORS 742.061) until the insured has given the insurance company information that at least suggests that coverage is requested under the policy  The case is Zimmerman v. Allstate.  The facts, briefly: Zimmerman was injured in an accident with a motorist who it turns out was underinsured (UIM), but she didn't seek UIM coverage from Allstate from the outset of her claim, because she didn't know the extend of her injuries and didn't know what the policy limits of the other motorist were.  So at the outset she only made a claim for personal injury (PIP) benefits under her Allstate policy.  Later, after retaining a lawyer, discovering that her injuries exceeded her PIP benefit, and discovery that the other motorist only had the minimum in coverage, she made a demand for UIM benefits.  Allstate paid, and she then sought her attorney fees all the way back to the time that she submitted her first claim.

Oregon's attorney fee statute allows recovery of attorney fees if the carrier does not settle the claim within six months of "proof of loss."  (For UIM claims, a carrier may avoid fee exposure by doing other things as well, but that is specific to UIM claims).  The Oregon courts have interpreted the phrase "proof of loss" very broadly, to encompass virtually any kind of notice provided by the insured about the loss.  However, in this case the Court did not award fees all the way back to the initial notice, because auto coverage comes in two parts (reduced to its essence): PIP coverage, and UIM coverage.  The Court reasoned that because the trigger of coverage between the two forms of benefit are so different, and the initial notice provided by Zimmerman did not contain information directed at the UIM trigger of coverage, attorney fees would only apply based on the timing of the notice from Zimmerman that UIM coverage was being sought.

The Court went to great lengths to emphasize that the general law applicable to "proof of loss" was not changed by the decision, which was driven by the type of coverage involved.  It is, however, a reminder that policyholder counsel should inform carriers as soon as possible of every type of coverage claim that may potentially be implicated by a loss.

Washington Supreme Court Confirms that Washington Insurance Defense Counsel Has One Client: Insured

The Washington Supreme Court has confirmed the long-standing rule in Washington that a lawyer hired by an insurance company to defend an insured has only one client -- the insured -- and that the insurance company is not a client in any respect. This case arose out of a mechanic's lien dispute and evolved into a title insurer malpractice claim against a law firm - an interesting enough situation on its own.  The basic facts are these: a lender for purchase of a piece of land, Sterling, hired a title company -- Stewart -- to make sure that it would have a first priority lien.   Stewart messed up:  a general contractor, Mountain West, had already started work, giving it first priority.  Sterling got sued when Mountain West tried to foreclose on its lien.  Stewart was the title company and also, as is usual, issued a title insurance policy providing liability coverage to Sterling.  Stewart agreed to hire Sterling a lawyer, the well-known and well-respected Witherspoon Kelley firm.  A dispute arose between Witherspoon Kelley and the insurer, Stewart, over strategy.  The case ended badly, and the insurer, Stewart, sued the law firm for malpractice.

The problem for the insurer, Stewart, was that under long-settled Washington law, an insurance company is not a client of the lawyer that it hires to defend its insured.  (That is a different rule than in Oregon, where the insurance company and the insured are both clients of the attorney, with the attorney's primary duty and loyalty to the insured.)  Stewart argued that although it was a "nonclient," because its interests were aligned with those of its insured, it was an "intended beneficiary" of the representation of the insured, and could sue.  The Washington Supreme Court said no, that the "intent" is to be viewed from the perspective not of the insurer, but of the insured and its attorney, and that neither the insured nor the attorney intended to benefit the insurer.  The court also rejected the argument that because the lawyer had a duty to keep the insurance company informed about the case, the lawyer owed the carrier a duty; that contractual obligation, the court found, did not create a duty of care running to the carrier.

The court's holding is consistent with Washington's generally protective attitude toward the attorney-client relationship in the insurance-defense context, and the protections that it has extended in the Tank case and after to policyholders being provided a defense by their carriers.  The court acknowledged that its holding is in conflict with the law in other states.  (No published case law on the subject exists in Oregon, but one would expect Oregon to come out differently than Washington - see above.)  But that, of course, is what makes practicing in the Northwest enjoyable - cross a river, and the law is different!

Wonder Why You Never Hear About Crop Insurance Coverage Disputes? Here's Why

Short decision today from the Washington Supreme Court reversing the Court of Appeals on enforcement of an arbitration clause in an insurance policy.  Here the farmer wanted to sue both the insurance broker and the insurer at the same time to avoid the risk of inconsistent decisions, and having to litigate in two fora.  That's a common issue.  What is notable about the case is the kind of insurance policy involved: crop insurance, which is one of those features of the ag business that most people don't know about.  Crop insurance is issued by ostensibly private companies but underwritten by the federal government, and claims under those policies are tightly governed by federal law.  Part of the law requires that claims be dealt with in a federal arbitration program with very limited rights of review.  The law is so tight that very few folks challenge the arbitrability of these claims, resulting in a whole body of insurance coverage law being created outside of public view (except for the very intrepid) in an industry where losses are frequent and sometimes enormous.  Whether that's good public policy is for others to debate, but at least you know why you don't see courts issuing decisions on crop losses.

Rely On "Certificates of Insurance" At Your Great Peril

I came across this new decision from the Ninth Circuit, on a Washington case (full disclosure: I learned of it courtesy of a national firm's "Lexology" article), and it reminded me of a point that I continually try to hammer home with clients and transactional lawyers, who deal in these things daily: a "certificate of insurance" is barely worth the paper that it is printed on, and is never a substitute for a thorough review of the insurance policy itself.

In this case a hospital contracted with a nursing staffing service to provide skilled nurses.  As part of the deal the hospital required that the nursing staffing service demonstrate that it had adequate liability insurance.  The staffing service provided a certificate of insurance, which the underwriter prepared, showing that it had $5m of insurance.  Great.  What the certificate didn't show was that there was a $1m self-insured retention (SIR), meaning that the staffing service was responsible for the first $1m of any loss.  A patient was injured and sued both the hospital and the staffing service; damages were slightly less than $1 million.  The hospital convinced the plaintiff to drop the claim against the hospital by showing plaintiff's lawyer the certificate indicating plenty of coverage.  Plaintiff dropped the hospital, but when it got a judgment against the staffing service within the SIR, the service could not pay, and declared bankruptcy.  The plaintiff succeeded in getting its claim against the hospital revived.  Hospital sued the insurance company and the underwriter claiming that the certificate was deceptive.  Problem: the certificate (a standard form) has no blank for SIR or deductible, despite the fact that that is absolutely critical information.  The Ninth Circuit agreed with the trial judge that the hospital had no claim.

Lesson: if you do not have a long-standing business relationship, don't just ask for the certificate of insurance when entering into any kind of contract where insurance matters (and there are few such contracts) - ask for the policy itself, with all declarations and endorsements, and have it reviewed by someone familiar with insurance policies and finding "holes" in coverage, like a large SIR.

Major Victory for Policyholders in Oregon Environmental Coverage Dispute

Today the Ninth Circuit affirmed the trial court's decision in Anderson Brothers v. St. Paul Fire & Marine in favor of the policyholder in the first case to reach the Ninth Circuit on the issue of whether an EPA "104(e)" information demand triggers an insurance carrier's duty to defend.  I am very proud to represent Anderson Brothers, a family-owned and operated business with deep roots in Portland, in this litigation.  The decision, written by Judge Rheinhardt, confirms what not only the trial judge (Judge Mosman) had held, but what two other judges in Oregon have held, which is that a 104(e) letter from the EPA (in this case, issued as part of the Portland Harbor Superfund Site process) is one potential starting point for CERCLA's adversarial process involving (potentially) strict liability. As such, a 104(e) letter qualifies as a "suit" not only under Oregon common law but under the Oregon Environmental Cleanup Assistance Act (OECAA), Oregon's unique statute governing some environmental insurance claims.  This is a significant victory for a small business caught up in some very dramatic machinations here in Portland as insurance companies try to control their overall exposure to the costs of defending hundreds of businesses and government entities in the line of fire at the Harbor Site, and is proof positive that the Oregon legislature did right by small business when it passed the OECAA in 1999.

*Disclaimer:  Success in this (or any other) case does not guarantee success in any other case.

Oregon Federal Court: Participation in Superfund Site ADR Part of Defense Obligation

Judge Marco Hernandez recently issued his rulings after a bench trial in the long-running Ash Grove Cement Co v. Liberty Mutual et al. environmental coverage litigation.  In 2008 Ash Grove became embroiled in the Portland Harbor Superfund Site when it received a “104(e)” information demand from the EPA.  When Ash Grove’s insurers (including Liberty and Travelers) refused to pay for Ash Grove’s defense, it sued.  In 2010, Ash Grove prevailed on the issue of whether the “104(e)” letter triggered the duty to defend – an issue of first impression under Oregon law – meaning that Ash Grove’s insurers were held liable for defense costs.  Of course since 2008 a lot has happened at the Harbor, including the commencement of an ADR process involving all the major players at the site.  At the March, 2013 trial on Ash Grove’s damages, the insurers argued that even if (as the Court had already found) they are required to pay for the response to the “104(e)” letter, Ash Grove’s costs to participate in the ADR process are not a reasonable and necessary part of the defense to the "104(e)" letter.   In effect, the insurers were trying to pick apart the defense obligation into discrete parts.  Ash Grove argued that in a complicated, fluid, non-traditional situation like a Superfund dispute such an approach makes no sense.  Judge Hernandez’s Findings and Conclusions, available here, adopted Ash Grove’s argument.  In so doing he established an important precedent (on that issue, and others) for all of the other policyholders who are currently suing their insurers to cover costs of defense associated with the Harbor.  The insurers have pledged to appeal.

Insurer Gets Creative Seeking to Defeat SB 814 Independent Counsel Provision

Insurer CNA has filed its brief in the long running Schnitzer coverage litigation concerning defense coverage at the Portland Harbor Superfund Site and it's interesting reading.  The issue here is not the duty to defend per se, because Schnitzer's insurers are defending. The issue rather is whether the "independent counsel" provision of SB 814, the amendment to Oregon's Environmental Cleanup Assistance Act (OECAA) passed this last legislative session, mean that Schnitzer's insurers have to pay the full rates being charged by Schnitzer's Los Angeles-based environmental defense counsel.  So far CNA has been paying only what it claims is its ordinary "panel" rate for Oregon defense lawyers, which is a small portion of the hourly rate charged by Schnitzer's LA lawyers.

SB 814 contains a clause requiring an insurer to pay for experienced environmental counsel, which Schnitzer argues means whatever rates are charged by available experienced Superfund defense lawyers; since all of the lawyers with that kind of experience in Portland are already representing other entities at the Site, CNA must pay Los Angeles rates.

CNA makes the following arguments that I found interesting (and I'm paraphrasing heavily here): 1) the insurance policies (which are standard older GL forms) give it the absolute right to control the defense, and therefore the "savings clause" in the OECAA applies, negating the independent counsel provision; 2) SB 814 cannot apply to existing counsel that are already being paid by the insurance company because that would interfere with the Oregon State Bar's rules on conflicts of interest and attorney ethics, and the Legislature cannot overrule the Bar's rules.  The second point is the most creative, but seems a little thin at first glance.  The problem with the first argument is that Oregon courts have not directly confronted the scope of an insurer's right to control the defense - which CNA acknowledges by citing only out-of-Oregon cases in its brief.  But if CNA wins the day, that could spell trouble for anyone trying to take advantage of the independent counsel provision, not just those in Schnitzer's highly unusual situation.

Stay tuned, as they say.

Magistrate Judge Sullivan Endorses Conventional Wisdom on Oregon Bad Faith Claims

It is conventional wisdom in the insurance coverage bar that there is no bad faith claim available when a liability insurer breaches the duty to defend.  This is based on several rather old cases.  In more modern times the Oregon Court of Appeals has suggested that the issue may be ripe for re-examination.  But in this decision (link below) federal Magistrate Judge Sullivan adopted the conventional wisdom and granted a motion to dismiss the policyholder's bad faith claim.  What is somewhat remarkable here is that this is an environmental contamination coverage claim governed (it appears) under the Oregon Environmental Cleanup Assistance Act.  That Act was amended effective June 10, 2013 (a few weeks before this decision came down) to provide for bad faith claims in these kinds of situations (whether the amendments would apply here may be an open question).  No objections were filed, so Judge Hernandez adopted Judge Sullivan's findings without review.  This case may be a good illustration of exactly why the amendments (SB 814) adopted this legislative session were so necessary.

Russell v. Liberty Mutual Insurance Company, Dist. Court, D. Oregon 2013 - Google Scholar:

'via Blog this'

Oregon Supreme Court Will Review Landmark Case on Stipulated Judgments

The Oregon Supreme Court has accepted review in the landmark Brownstone Homes Condo Ass'n v. Brownstone Forest Heights LLC case, on the issue of stipulated judgments.  To simplify greatly, the case involves a developer (the LLC) that was sued along with one of its subcontractors, A&T Siding, by the condo association.  A&T was denied coverage by its carrier, and so entered into a stipulated covenant judgment with the association in which it assigned its coverage claim against its carrier, Capitol.  The condo association then attempted to enforce the judgment as a garnishee on Capitol.  The trial court denied recourse, holding that: 1) under the "Stubblefield" rule Capitol had no liability because the covenant did not leave any potential unsatisfied liability; and 2) ORS 31.825 (which permits assignments) did not control because that statute requires that the assignment take place after judgment was entered, and here the assignment and judgment happened at the same time.  The Court of Appeals affirmed, holding that a garnishment proceeding by an injured claimant is subject to Stubblefield because of the Reuter decision, which limited the rights of a garnishee to those held by the primary defendant.  The court also agreed that ORS 31.825 requires a specific sequence in a stipulated judgment with assignment and that unless the proper sequence is followed, the statute has no application.  Finally, the court held that a good-faith-cooperation requirement in the agreement did not make the agreement Stubblefield-compliant with regard to the insured's continued exposure to liability.

The Oregon Supreme Court identified the following issues for appeal (I'm paraphrasing): 1) does Reuter really mean that Stubblefield applies to garnishment proceedings?; 2) does ORS 31.825 require that judgment-covenant proceed in a specific order; and 3) most tantalizingly, if the Court of Appeals were right on #1 and #2, should Stubblefield be abrogated?  The alignment of the parties and interests of the counsel pursuing the appeal are somewhat odd, so amicus participation seems likely.  This will be one to watch in the fall as briefing comes in.

Duty to Cooperate Alive and Well in Oregon

Insurers are celebrating the new decision from Oregon's federal district court in the long-running Charter Oak et al. v. Interstate Mechanical et al. case finding that the policyholder lost all coverage by breaching the duty to cooperate.  In my view, this is a bad-facts-make-bad-law situation involving a fact pattern not likely to be repeated, that will unduly encourage out-of-state insurer lawyers to take an aggressive position in coverage disputes.  In this case the developer and the general contractor on a project in Montana were owned by the same person, and were therefore aligned as opponents in the defect litigation in that state.  The carrier agreed to defend the contractor (as an additional insured) in the underlying case.  The problem was that (according to the decision, at least) they failed to maintain even the appearance of an arms-length relationship in concocting the damages being sought from the contractor, including having the insurance defense lawyer for the contractor submit a declaration from the developer's damages expert using the defense lawyer's letterhead.  Those kind of bad facts make it difficult to survive the "smell test" that all judges employ, no matter what the legal standard is.

The notable points in the decision are these: a prediction that Oregon courts would find that a court can find an insurer to have been prejudiced by a lack of cooperation even before the underlying case is over; and a finding that an insured's giving notice of an intent to stipulate to a judgment needs to be roughly contemporary with the settlement itself - it is not enough to have warned the carrier earlier in the litigation that the insured was contemplating such a move.  While one can take issue with both propositions (and I do), it is somewhat easy to understand how those calls came down when you go back to the "smell test" problem.  And like it or not, these holdings demonstrate why competent policyholder counsel need to keep up to date on developments from every jurisdiction considering new points of Oregon coverage law.

Oregon In What Is Now Majority Across the County on Coverage for Construction Defect Claims

Really nice post the other day by our friends at DC-based Dickstein Shapiro on the recent change in tide on something that we in Oregon tend to take for granted: that construction defects that have resulted in property damage may be covered under the standard CGL policy.  Oregon courts have long employed a slightly different interpretation of the term "occurrence" in the standard coverage grant, which is one reason that Oregon has been in what is now the majority on this issue from the beginning of the construction defect boom.

Familiar Pattern Plays Out in Reversal of PGE v. Lexington Appeal

A familiar pattern played itself out on July 25 when the Oregon Supreme Court reversed an Oregon Court of Appeals decision that had favored an insurance carrier, finding that the Court of Appeals had too glibly taken the insurance carrier's argument at face value.  In PGE v. Lexington the policyholder, PGE, sued a number of insurance companies and served them all.  Through some sort of hiccup in its corporate department Lexington failed to respond to the complaint and PGE took a default for a significant amount.   Problem was, PGE failed to allege a specific amount of damages against Lexington in its complaint, which is a violation of Oregon's civil procedure rules.  Lexington tried to set aside the judgment in the trial on several grounds and failed, but the Court of Appeals held that that PGE's failure was jurisdictional and the judgment was void.  The Supreme Court reversed, holding that the judgment was merely voidable, and that Lexington had failed to show a due process violation.  The court remanded to the Court of Appeals to consider Lexington's other arguments.  (The pattern that I'm referring to is that the Court of Appeals frequently appears to side with the insurance industry, which the Oregon Supreme Court often appears more policy-holder friendly.  Vast generalizations, of course.)

"Bresee" Decision Applied by Oregon Federal Courts

We recently obtained a victory for one of our clients, a developer on the Oregon Coast, in a duty to defend fight with a very aggressive and creative opponent, Catlin Specialty Insurance Company.  Magistrate Judge Coffin's findings and recommendations, adopted by Judge Aiken, relied on the Oregon Supreme Court's Bresee decision to find a duty to defend where the allegations in the underlying case were unclear about whether the property damage fell into a policy exclusion.  This is a difficult case because according to the insurance company the policy has both an "owned property" exclusion and a "products-completed operations" exclusion, meaning (according to the insurance company) that the policy excluded all damage to the condo units before they were sold to customers, and after they were sold to customers - meaning that nothing would be covered!  The case is ongoing, but it was gratifying to have a federal judge (again) recognize the Bresee decision's impact on this area of coverage law.

*Disclaimer: success in this case, or any other case, does not guarantee success in any other case.

Insurers Start Duking It Out Over Impact of SB 814 on Oregon Environmental Coverage Law

Ironically enough, the first attempt that I've heard of to take advantage of the new pro-policyholder provisions of the Oregon Environmental Cleanup Assistance Act (OECAA) was by an insurance company.  That effort, in the form of a motion to dismiss recently filed in the Multnomah County Circuit Court Lloyd's of London v. Beneficial Insurance case, is here.  As I've reported in earlier posts, one provision of SB 814 (which went into effect in early June) added "contribution protection" to the OECAA.  To put it very simply, the provision has this effect: if insurance company A settles a coverage claim with the policyholder in good faith, and the policyholder also sues insurance company B over the same loss and wins, insurance company B can't then sue insurance company A for contribution, arguing that insurance company A didn't pay its righteous share of the loss, and insurance company B overpaid, so company A owes company B.  The idea behind the provision was to encourage insurance companies to settle these claims early, by removing the fear that they will then have to pay again if sued for contribution.

The Lloyd's of London v. Beneficial Insurance contribution case arises out of the Zidell "Moody Avenue" contaminated site (not the Portland Harbor Superfund Site).  Zidell settled early on with Beneficial, then went after Lloyd's, and tagged Lloyd's for a considerable amount (that litigation is still going, after having gone up the appellate court ladder several times, like the contribution case).  Lloyd's sued Beneficial for contribution.  Judge You, who has had this case at the trial level for some time, earlier ruled that because of the date of the DEQ enforcement action against Zidell, the OECAA does not apply to the case.  Beneficial is now trying to both undo that ruling, and assert that the Lloyd's claim is barred by the contribution protection provision of SB 814.  This motion is just the opening salvo.

I can't say I'm unhappy about insurance companies having to spend money on very good lawyers on both sides of a dispute that may help clarify how this new provision of the OECAA, and perhaps related retroactivity and constitutionality problems, will work out in practice.  Stay tuned, as always.

Insurers Chalk Up a Victory for Form Over Substance in D&O Coverage

Kevin LaCroix over at the D&O Diary has a nice piece on a new decision out of the Carolinas that has us insurance geeks talking, GS2 Engineering v. Zurich.  The case puts front-and-center one of the most notorious and difficult "form over substance" claim denial practices in the liability insurance industry, where professional liability or Directors and Officers coverage is involved: that a claim was not reported during the right policy year.  These kinds of policies are what is known as "claims made" policies, meaning that the policy will only provide coverage if the liability claim (demand letter, lawsuit, whatever) was made against the insured during the policy year.  Pretty straightforward so far.  But where it gets tricky is when the claim has to be reported.  The policies break down into multiple camps on that front: they may be "claims-made-and-reported" (meaning the claim must be "reported" to the insurer during the policy year) or purely "claims made" in which case it doesn't matter when the claim is "reported" so long as its reasonable - or it may be some kind of hybrid.  It matters because generally if the policy is just "claims made" then if the reporting is "late" the insurance company has to show "prejudice" in order to deny the claim.

In the GS2 case the policy was (in my view) in that hybrid realm meaning that there needed to be a showing of prejudice.  The claim was made during the policy year but reported during the next policy year.  Tough toenails for the insured, said the court, which decided that the policy was "claims-made-and-reported."  The insurance company didn't have to show that it was prejudiced in some way by the "late" reporting.  The real kicker here is that as often happens the "next" policy year was a renewal with the same insurance company!  How's that for "the customer is always right!"

As Kevin observes (much more eloquently than I ever could) the rhetoric from the carriers and often the courts in these situations frequently takes on a moralizing, parental kind of tone: "You should have been more careful about when you reported this - maybe next time you'll have learned your lesson!"  That is absolutely the wrong way to look at this issue, IMHO.  These are contracts of adhesion with tremendously confusing language that nevertheless play an important part in advancing sound public policy about allocation of risk.  Permitting carriers to evade their contractual responsibilities without having to show prejudice, particularly when the policy is renewed, erodes public confidence in insurance generally, in these large financial institutions, and in the rule of law.

Professional Liability Insurance: Problems with Pure Claims Made and Reported Policies : The D & O Diary:

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Something That Insurers and Policyholders Can Agree On...

Is that the building where a lot of Oregon's insurance disputes are decided, the Multnomah County Courthouse, needs to be replaced.  Hopefully the Legislature's allocation of some new funds for planning will push the project into reality-land, although we have all had our hopes raised before.  Our state-court judges are under enough stress with low pay, staffing cuts, and having to juggle administrative tasks with serving the needs of justice - they deserve (and the taxpaying public deserves) safe and functional accommodations to do the people's work.

$15M revives plans for a new Multnomah County Courthouse - Portland Business Journal:

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Washington Court Smacks Down Lloyd's Effort to "Cook the Books"

Subcontractors on construction projects are commonly required to provide "additional insured" liability coverage to the general contractor.  The coverage is available to the extent that the general is liable because of the subcontractor's negligence - which is the case most of the time.  In Oregon it is rare for a subcontractor's carrier to actually agree to defend a general contractor because of a lack of bad faith exposure.  However, in Washington it is much more common, thanks to Washington's pro-policyholder coverage law.  That makes it much more expensive for the subcontractor's carrier, who has to defend two entities.  In this case the carrier for the subcontractor, Lloyd's, tried to terminate its obligation to defend the general contractor by paying for the subcontractor to settle with the underlying claimant, and including language in the settlement agreement "stipulating" that the subcontractor actually had no liability (obviously a subterfuge, because if that were true Lloyd's would not have settled the case).  Then Lloyd's stopped paying to defend the general contractor.  In a coverage action between the general's carrier (Zurich) and Lloyd's, Judge Bryan saw clear through Lloyd's breach of its duties to its additional insured, the general, denying summary judgment to Lloyd's for breaching a contractual duty to defend, and suggested that there may be a claim for bad faith in there as well.

We see these kinds of aggressive carrier tactics every day.  It is nice to see a judge calling a carrier out on it.


ZURICH AMERICAN INSURANCE COMPANY v. CERTAIN UNDERWRITERS AT LLOYD'S LONDON, Dist. Court, WD Washington 2013 - Google Scholar:

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Alabama Federal Trial Court Dismisses Bad Faith Claim Over Defense of PRP Letter

One of the issues that we cover closely is environmental coverage litigation, and particularly coverage issues similar to the coverage fights that are taking place about the massive Portland Harbor Superfund Site.  Our firm has been at the forefront of making good law on those coverage issues including the first decision establishing that carriers have a duty to defend against the EPA's coercive "104(e)" information request demands, and also establishing that under Oregon law carriers have a duty to defend a "Potentially Responsible Party" (PRP) letter.  Both of those cases were decided under Oregon's somewhat unique state law, but in arguing about the PRP letter issue we noted that almost all other states have decided that a PRP letter triggers the duty to defend, including just recently (December 2012), Alabama.  Unfortunately, for a variety of reasons, the policyholder who won that dispute about the existence of the duty to defend has now lost out on its bad faith claim, because the trial court determined that when the insurance company denied the claim the issue was fairly debatable, and therefore the decision was not made in bad faith.  This is an excellent illustration of how, even if Oregon caught up to most of the rest of the nation by enacting a bad faith cause of action (like HB 3160), insurance companies can often still avoid paying for taking aggressive coverage positions, rather than stepping up to the plate and giving the benefit of the doubt to their policyholders.

ALABAMA GAS CORPORATION v. TRAVELERS CASUALTY AND SURETY COMPANY, Dist. Court, ND Alabama 2013 - Google Scholar:

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Associated Oregon Industries Fails to Mention Opposition to HB 3160 In Legislative Recap

Perhaps there's an entirely innocuous explanation as I'm sure that AOI opposes many bills each session, but I found it notable that AOI's blog posting on the legislative session does not mention its opposition to HB 3160.  That bill would have provided businesses (and individuals) with a private right of action against insurance companies for unfair claims handling practices, creating a dramatic disincentive for the current practice (by liability insurers, in particular) of denying a claim first, then seeing if the insured has the wherewithal to hire an attorney to press the claim, and then if necessary "reconsidering" and accepting the claim- risk free, because there is no penalty in the current law for taking this "free breach" approach.  AOI came out against the bill reportedly at the instance of some big players in the group including Liberty Mutual and The Standard.  However, I'd wager a pint of your favorite local microbrew that the average AOI member had more to gain from HB 3160 than to lose.  Putting on my conspiracy theory hat (an occupational hazard of someone who litigates against big insurance companies for a living), perhaps that has something to do with the omission of HB 3160 from this update.


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Oregon House Passes SB 414 Giving Insurance Commissioner Greater Authority

A significant win for individual consumers in the often frustrating and never fair battle for coverage, it remains to be seen whether these new powers granted
to the Commissioner will assist commercial lines consumers.    "6.28.13: House" http://feedly.com/k/127kunW

Oregon Court of Appeals Confirms Holding on Attorney Block Billing

The Oregon Court of Appeals has issued a clarification of its prior decision in the long running ZRZ Realty ("Moody Avenue") environmental coverage litigation concerning attorney fees.  See link below.  The procedural aspects are of little concern other than to the litigants but it is worth noting that the court confirmed the prior decisions holding that block billing of attorney time did not necessarily render the fees unreasonable or unrecoverable. This holding has been helpful to policyholders trying to recover past defense costs from carriers that deny a defense and force the insured to litigate, something that is all too common because Oregon lacks bad faith legislation, a situation that the pending HB 3160 would help to rectify.   And as the Zidell folks pointed out in supporting that bill, if a bad faith claim had been available to them in the first place this whole multi year litigation might never have been necessary!

http://www.publications.ojd.state.or.us/docs/A121145c.pdf

Senate Passes SB 414, Giving Oregon Insurance Commissioner Power to Order Restitution

Congratulations to Sen. Shields and his allies for getting this through.  Somewhat bittersweet, as I've reported before.  The need for a bad faith cause of action or direct right action under the Claims Handling statute was brought home yet again for me today when I heard this story: a single-family homebuilder in Dallas was sued by a disgruntled customer, tendered to his insurance company which initially accepted the defense but then yanked the defense (and even tried to prevent the builder from continuing on with the same lawyer) after it hired coverage counsel who advised the insurer not to defend based on a grossly unfair contortion of the allegations against the builder as being excluded, in violation of every precept of Oregon law culminating with the Bresee decision that I blogged about earlier.  Builder had to settle the claim with his own money and then find a lawyer to sue the insurance company, which is (amazingly) still contending that it did nothing wrong.  Fortunately a good friend was willing to take it on contingency.  A perfect example of the "free breach" thinking that carriers in Oregon employ to try to keep as much of their customers' premiums as they can without having to provide coverage.

Senate votes to hold insurance companies accountable through increased agency authority:

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Oregon Supreme Court's Bresee Decision Makes the "Headlines"

The good folks at the large national firm Farella Braun posted this excellent summary of the Oregon Supreme Court's late-2012 decision in Bresee v. Farmers Insurance Exchange.  In Bresee the court made it clear that an insurer's decision to provide a defense under a liability policy must be based on only the words of the underlying complaint or other charging document itself, and that any ambiguity -- any ambiguity, including one created by the lack of specific allegations -- is construed in favor of providing the defense.  In that specific case the insurance company denied a defense based on a "completed operations" exclusion based on the insurance company's interpretation of the underlying complaint, which is said indicated that the property damage had occurred after "operations" were "complete."  As Farella's blog post points out, the court's admonition to insurance carriers that they cannot use such "reading between the lines" to deny a defense is a straightforward proposition - so straightforward, in fact, that most states permit a policyholder who is denied a defense to seek punitive or exemplary damages, via a bad faith claim, to deter insurance companies from the practice.  Unfortunately, unless HB 3160 or something like it passes, insurance companies will continue to ignore Bresee and its forebears (which they do, every day) because even though it is a clear-cut breach of their obligations to policyholders, in Oregon insurers get a "free breach," as I explained in my recent letter to Senator Betsy Johnson in support of HB 3160/the SB 414-A amendment.

Vote on SB 414, Permitting Insurance Commission to Order Restitution, Set for Today

Whether this bill will be useful to small business remains to be seen, but it is certainly a step in the right direction. However, as the "preferred alternative" by the insurance industry to real insurance claims handling reform, one has to assume that the industry will exert its pressure to keep the benefits of this change in the law restricted to consumers, who may remain unaware of the availability of recourse to the state's complaint process.

K-12 budget meltdown, wine and beer: Oregon Legislature today | OregonLive.com:

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A Nice Summary of How Insurance Reform In Oregon Has Fared This Legislative Session

The Lund Report has a great piece today recapping how it came to be that SB 414 and SB 814 moved through the Legislature while HB 3160 has stalled, again.  It continues to be painful to see how successfully the insurance industry has distorted the issues and the relationship between a private right of action and the regulatory oversight exercised by the Insurance Commission.  As my former colleague Jim Guse of Ball Janik points out in this piece, Washington's bad faith law has had the entirely salutary effect of shortening the time in which claims are paid, and removing the incentive that carriers now have in Oregon to "roll the dice" on coverage litigation, exposing their small business insureds (in liability cases) to potentially disastrous consequences - including unpaid judgments, which for a contractor can mean the loss of a license.

Shields Pushes to Empower DCBS as Effort to Put Insurance Under UTPA Flounders | The Lund Report:

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Insurance Industry Invests Heavily in Defeating Bad Faith Legislation

HB 3160, which among other things would give small business owners a private right of action against insurance companies for violating the state Unfair Claims Settlement Practices Statute, is still alive as the legislative session draws nearer its close, and the insurance industry and those that might be held to account under the bill continue to invest heavily in lobbying efforts to make sure that it again does not make it to the floor.  Among the canards that the industry continues to throw out there is that this is 'radical' reform, but failing to note that most states have some version of this kind of private right of action, or some other bad faith right of action, under state law.  I recently worked on a survey of bad faith law in the Pacific Northwest as my firm continues to expand its practice base, and was dismayed to note that Oregon lags behind even conservative states like Montana and Idaho in giving small business owners the leverage that they need, through a potential bad faith claim, to get insurance companies to step up when the going gets rough.  My Father's Day wish?  That the legislators currently on the fence, including Sen. Betsy Johnson, realize that this bill is not about enriching "tort lawyers" but is about bringing the insurance code into the modern era to protect ordinary Oregonians, including Oregon's small business owners.


Dozens of lobbyists tie up bill to let consumers sue insurance companies | OregonLive.com:

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Letter to Sen. Johnson Supporting SB414 - Small Business Needs Protection Beyond Environmental Claims

Here is the letter that I just sent to Senator Betsy Johnson urging her to support SB414, which has a work session scheduled for today.  In it I describe the experience of my client Anderson Brothers, Inc. with its attempt to get its insurance company to help defend it against an environmental claim, and explain that although the SB814 amendment to the OECAA was great work, most coverage problems faced by small business are not covered by the OECAA, and that SB414 would therefore help level the tremendously un-level playing field in Oregon.

Oregon Insurance Reform Champions Continue to Press for Broader Change

Champions of changes to the insurance code that would benefit policyholders, both commercial and individual, are not giving up hope on the idea behind HB3160, which was to remove the exemption of insurance companies from the Oregon Unfair Trade Practices act.  One key component of that effort was to enact a private right of action for violations of Oregon's Unfair Claims Settlement  Practices Act (UCSPA).  At this point the consumer protections in that law are only enforceable by the Insurance Division, which does not have the resources to act on every instance of insurer misbehavior, and has limited ability to make consumers whole.  The insurance industry howled at the idea of being subject to the Unfair Trade Practices Act, so legislators are now proposing a more focused amendment to the UCSPA in SB 414, available here.  While not perfect, this legislation would be a broad-based improvement that would help level the incredibly uneven playing field that Oregon's small businesses now must play on to get their insurance companies to honor their contracts and step up when called upon.

Governor Signs SB814, amending Oregon's unique environmental insurance coverage law

The Governor of Oregon has now signed into law far-reaching changes to ORS 465.475 et seq, the Oregon Environmental Cleanup Assistance Act.  The changes include, most notably, addition of a specific cause of action against an insurer for bad faith denial of coverage, patterned on the Washington Insurance Fair Conduct Act (IFCA).  Although constitutional challenges to the statute are a near-certainty, many provisions of the law will be beyond challenge and may help change the power dynamic between carriers and policyholders on environmental coverage issues in Oregon.  And as I have mentioned before, in light of the staggering projected cost of the Portland Harbor Superfund Site ($2 billion and growing), if this law does what it was designed to do it may be the largest change in Oregon insurance law by total dollar value in recent memory.  Many, many businesses (large and small) have become ensnared in the Superfund action and this law will help skilled policy-holder side lawyers representing those businesses clear some of the significant hurdles to getting indemnity coverage to fund the cleanup.

SB 814 :: Oregon Legislature Bill Tracker - Your Government - The Oregonian:

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New York investigates insurance companies’ cyber security

I was very interested to read this morning that Governor Cuomo of New York will investigate insurance companies’ cyber security.  According to the article the focus of the investigation will be what safeguards insurers have in place to protect customers' sensitive personal and financial information.  Hopefully this inquiry will take into account commercial-lines policyholders' data as well.  Recent experience has made me skeptical about how well insurers do just about anything related to information management.  I recently had an insurer claim that it would have to review reams of paper files to find information on a group of claims that are currently being adjusted.  Investigation revealed that in fact the carrier has multiple electronic data repositories, but many them do not talk to each other, and that much coordination relies on information kept in the heads of certain supervisors!

Insurers demand a great deal of sensitive information about commercial policyholders in the underwriting process, from social security numbers and driving records of employees, to information on security systems.  I will be very interested to see what New York turns up about the cyber security measures, or lack thereof, at the nation's larger insurers.

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Utah Court Holds That "Fairly Debatable" Defense to Bad Faith Goes to the Jury

Here in Oregon with our relative paucity of reported bad faith cases we don't see too much of it, but in other states insurers can be sued for bad faith for a claim denial, unless the claim's validity was "fairly debatable" (or a similar standard).  Now that it looks like at least for environmental claims we'll have something like a bad faith claim, this defense will get more play.  A recent decision out of Utah came to what seems like a common sense decision about whether a "fairly debatable" defense can be the subject of a carrier-side summary judgment motion.  No, said the court in Jones v. Farmers Ins. Exchange - by its nature, there is a factual component to such a defense and it is for the jury.  Since carriers usually do not fare so well in jury trials, this kind of approach will hopefully have the result of prompting reasonable settlements, which is good public policy.

Washington and Now Idaho Limit Attorney-Client Privilege in Bad Faith Cases

My former colleagues at Bullivant Houser Bailey have done a nice job of summarizing two recent decisions, one from Washington and one from Idaho, limiting the application of the attorney-client privilege where outside coverage counsel participates in a fact investigation for coverage purposes.  Both decisions (Idaho's Stewart Title v. Credit Suisse in federal court, Washington's Cedell v. Farmers in state court) made it clear that an insurance company cannot seek to shield a coverage determination made in bad faith behind the privilege by using outside counsel, whether it's a first-party or a third-party coverage issue.  In both cases the insured sought discovery of counsel's work product to support a bad-faith claim.  It is hard enough to prove bad faith in either state; it's nice to see judges recognizing a common carrier tactic for what it is: an effort to make it nearly impossible.



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Understanding Coinsurance Problems In Builder's Risk Policies

Coinsurance is a difficult subject to understand, but it can have many implications for coverage in the context of ongoing-operations and first-party coverage, particularly in the Builder's Risk arena.  We have litigated under many of these policies and find coinsurance to be one of the knottier problems.  One of our excellent summer clerks helped me address these issues last year in an article for the OSB's Construction Law newsletter, available here.

Oregon Senate Committee Makes "Do Pass" Recommendation for Insurance UTPA Bill

Reports of the demise of HB 3160, which would remove the exemption of insurance from claims under Oregon's Unfair Trade Practices Act (UTPA), may have been wrong.  The Oregon Senate Consumer and Small Business Committee has made a "do pass" recommendation on the bill.  However, the measure has been referred to the Rules committee.  As the legislative session winds down, predictions had been that the opposition of small-town insurance brokers, in-state carriers like The Standard, and Associated Oregon Industries was going to again spell defeat for this common-sense measure.  Hopefully proponents will succeed in pulling out a victory in the coming days.

HB 3160 :: Oregon Legislature Bill Tracker - Your Government - The Oregonian:

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Speaker of Oregon House Signs SB 814, Amending Oregon Environmental Insurance Claims Law

SB 814 :: Oregon Legislature Bill Tracker - Your Government - The Oregonian:

Now all that remains is for the Governor to sign, and the largest change in Oregon insurance law (in potential dollar value) in recent memory will kick in.  Check back for a full analysis of the potential ramifications of this new law on policyholders, particularly those involved in the Portland Harbor Superfund Site.
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