Masood v. Safeco Insurance Co. of Oregon
360 Or. 638
| Or. | 2016Background
- Masood's house was destroyed by fire; he had an Oregon homeowners policy including extended dwelling coverage (50% extra for unexpected rebuild costs).
- Masood alleged an oral agreement with Safeco’s large-loss adjuster promising payment of full replacement cost up to the policy limits, including extended coverage.
- Masood sued Safeco for breach of contract seeking the extended dwelling coverage; Safeco counterclaimed that Masood had misrepresented facts and the policy was void for fraud.
- A jury found for Masood on his breach claim and awarded the extended dwelling coverage limits, and found for Safeco on its counterclaim; the trial court voided the policy and entered judgment for Safeco instead of Masood.
- The Court of Appeals reversed the voiding of the policy, instructed entry of judgment for Masood for the jury award, and Safeco’s petition for review to the Oregon Supreme Court was denied.
- Masood petitioned the Supreme Court for attorney fees under ORS 742.061(1) for fees incurred responding to Safeco’s petition for review; Safeco argued Masood’s action was not “upon any policy of insurance” because it was based on a separate oral agreement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Masood brought an action "upon any policy of insurance" under ORS 742.061(1) | Masood argued the claim’s source was the insurance policy: the oral agreement expressly incorporated and was premised on policy terms, so the action sought policy benefits. | Safeco argued the action was based on a separate oral agreement with its adjuster, not the policy, so ORS 742.061(1) does not apply. | The court held the dispositive inquiry is the source of the claim; Masood’s claim was based on the policy (the oral agreement incorporated the policy), so ORS 742.061(1) applies. |
Key Cases Cited
- Travelers Insurance Co. v. Plummer, 278 Or 387 (explains that the decisive question under the fee statute is the source of the insured’s claim)
- Williams v. Stockman’s Life Ins., 250 Or 160 (action’s essential nature can make it one to recover under an insurance policy for fee purposes)
- American Federal Savings v. Rice, 76 Or App 635 (finding of coverage must precede a finding that coverage is voided for fraud)