ZRZ Realty Co. v. Beneficial Fire & Casualty Insurance, 266 P.3d 61

Zidell petitioned for attorney fees under ORS 742.061 after London failed to settle within six months of Zidell's proof of loss, leading to litigation on defense and indemnity duties.
Trial court awarded fees for London’s duty to defend but not for the duty to indemnify; appellate stages addressed related fee issues.
2005 amendment to ORS 742.001 excepts surplus lines policies, raising whether ORS 742.061 applies to post-amendment fees and whether the amendment applies to actions filed before its effective date.
Court acknowledged historic aim of ORS 742.061 to assist insureds in costly disputes and noted the limitation that fees attach only if recovery exceeds tender.
Court held the 2005 amendment does not retroactively bar fees in actions filed before the amendment's effective date, and Zidell may recover fees incurred to establish London's duty to defend at this stage.
Court ruled that Zidell cannot recover fees related to establishing London's duty to indemnify at this stage, as indemnity is independent of defense and no indemnification recovery had occurred yet.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does the 2005 amendment apply retroactively to ORS 742.061 claims?	Zidell: amendment does not apply to pre-existing actions.	London: amendment applies prospectively to post-enactment fees.	Amendment does not apply retroactively to actions filed before its effective date.
May Zidell recover fees to establish London's duty to defend under ORS 742.061 at this stage?	Zidell seeks fees incurred to enforce defense obligation.	London disputes entitlement for these appellate/defense-related fees.	Yes; Zidell may recover those fees at this stage.
May Zidell recover fees to establish London's duty to indemnify at this stage?	Zidell argues fees related to indemnity are recoverable if related to winning defense.	London contends such indemnity-related fees are not recoverable at this stage.	No; indemnity-related fees are not recoverable at this stage.

Murray v. Firemen's Ins. Co., 121 Or. 165, 254 P. 817 (1927) (Or. 1927) (attorney fees available when insurer fails to settle after proof of loss)
Ledford v. Gutoski, 319 Or. 397, 877 P.2d 80 (1994) (Or. 1994) (duty to indemnify is independent of duty to defend)
Black v. Arizala, 337 Or. 250, 95 P.3d 1109 (2004) (Or. 2004) (principles against retroactive application of amendments that impair rights)
Spicer v. Benefit Ass'n of Ry. Emp., 142 Or. 574, 17 P.2d 1107 (1933) (Or. 1933) (legislative amendments and timing considerations for attorney-fee provisions)
Whipple v. Howser, 291 Or. 475, 632 P.2d 782 (1981) (Or. 1981) (legislative intent and retroactivity in amendments)
McGraw v. Gwinner, 282 Or. 393, 578 P.2d 1250 (1978) (Or. 1978) (fees under ORS 742.061 require recovery exceeding tender)
Hartford v. Aetna/Mt. Hood Radio, 270 Or. 226, 527 P.2d 406 (1974) (Or. 1974) (attorney fees may be awarded when insured prevails on related claims)
ZRZ Realty Co. v. Beneficial Fire & Casualty Ins. Co., 349 Or. 117, 241 P.3d 710 (2010) (Or. 2010) (duty to indemnify independent of duty to defend; remand implications for fees)