*1 Argued April 11, 1984, judgment and submitted In resubmitted Banc December appeal; cross-appeal, affirmed on remanded with instructions and affirmed November Bollam’s reconsideration and Fireman’s Fund Ins. Co.’s January 10, 11,1986 petitions February reconsideration denied both for review allowed (300 545) Or Oregon Reports See later issue al, BOLLAM et - Respondents Cross-Appellants, FIREMAN’S COMPANY, FUND INSURANCE - Appellant Cross-Respondent. A27608)
(A8004-02314; *2 In Banc - appellant for Portland, the cause argued Abbott, Gary V. Hallmark, were briefs on the him With
cross-respondent. Portland. Keating, & Griffith for cause Portland, argued Frank, R. Stephen - was the briefs him on With cross-appellants.
respondents Shenker, & Kerr, Tooze, Marshall CobbW. Montgomery Portland.
GILLETTE, J.
Warren, J., concurring. dissenting. J.,
Buttler,
GILLETTE, J. brought This by plaintiffs is a action by recover company’s caused alleged their insurance properly failure thereby exposing claim, handle a them to liability. appeals judgment plain- from cross-appeal. tiffs. Plaintiffs We affirm. pertinent facts driving are northbound Washington on Interstate January 5 in raining heavily. 1975. It passing splashed A plain- truck obscuring tiffs water, car with Mr. Bollam’s result, view. As a he crossed the center median and hit a southbound car driven Ruhle, Russel injuries who suffered required back and later spinal fusion. Plaintiffs’ for the accident rea- sonably clear. January On 31, 1975, defendant, as insur- company, began ance payments to Ruhle in the amount of payments $400 week in addition to his expenses. medical payments July, continued until approximately when $48,000 of the Bollaras’ expended. limit had been July, plaintiffs, In on defendant’s advice, *3 retained own to evaluate the Ruhle claim. Subsequently, defendant offered Ruhle the balance of the policy limits in reponse settlement of his claim. Ruhle’s towas bring against plaintiffs. an action The case was settled before trial for $135,000, paying with Ruhle the balance of policy paying limits and him $35,000 of their own funds 29,1979. on June Plaintiffs then alleging commenced this that negligent defendant Ruhle, making payments in advance to payments kept settling those him from within the $100,000 limits. Plaintiffs claimed of consisting $38,271, they pay $35,000 of the that had to in liability expenses, $3,271 and for defense in the of form attorney fees, incurred in connection with the Ruhle claim. jury plaintiffs.1
The a appeal returned verdict for This fol- lowed. parties stipulated that only would determine whether respect entitled to recover with they paid liability to the amount in excess and that, verdict, following the court would decide whether were entitled to any part
recover of the expenses. as incurred defense error, contends of assignment
Defendant, its first in directed for a its motion denying erred court plain of more one alternative, strike to or, in verdict assign this argument Its negligence.2 of specifications tiffs’ of scream a points, some at error&emdash;resembling, ment to appears frustration&emdash;is Defendant clarity. a model to (f) it 746.230(1) requires ORS that, because only argue claims settle to equitably and promptly faith in attempt good clear, reasonably become liability has in which statutory its discharge to attempt in an payments advance negli law, actionable constitute cannot, matter as a duty gence. 746.230(1)(f) imposes obligation ORS on insurers an settle equitably faith, promptly good “in attempt, * * *.” reasonably clear become liability has in which claims a under that, because to contend seems anoma be it would payments, duty to make
statutory it could duty, statutory that fulfilling that, in say lous think, We its insured. tortious incur nonetheless se, cannot, serve per duty such existence however, that has company insurance that an allegation to an as a defense an insurance that fact a claim. handled negligently to settle equitably promptly duty may have company preclude necessarily does party third injured an with its toward negligently acted it has so doing possibility consider only need illustration, one way of By own insured. in which accident an days after which, two situation company insurance clear, reasonably liability is its a check tenders this case of defendant position a release. obtaining without limits suggest good We do not that a defendant's faith isit assume enough. We is not 746.230 ORS compliance case, this out point merely We enough. defendant’s experts&emdash;put two evidence&emdash;including *4 the that suggestion no is There in issue. faith good indeed, and, might Although we inadequate. instructions summary for motion of its denial court’s trial assigns the as error also Defendant appeal, when on reviewable summary judgment is of a motion judgment. Denial trial. to went thereafter the case defen- way, other the this case decided would, probably erred court the that demonstrate failed to dant has jury. the it to sending problem. looking at way of alternative is an
There affirmative any record, to find in this put, hard is One accepted ever have Ruhle would that evidence negli- therefore, no that argue, fairly could One settlement. plain- to damage any caused company of the insurance gence directed motion in defendant’s raised issue was tiff. That repeated case, it but was close of at the verdict is It appeal. on argued nor the evidence close all at the ato submitted Instead, case was us. not before therefore this instruction: jury with in the negligent is alleged the defendant that “The particular, in one claim this it handled in which manner is that in this claim case. you’reto consider is all
this defendant when payment making advance negligent in have known care should reasonable in the exercise knew that to do claim the Ruhles’ preclude settlement so would limits.” policy within that were all payment advance
If the no there was that with defendant involved, agree might we appeal. on asserts all defendant claim —that cognizable preclude to tend would payment any advance Obviously, be would limits, there policy within settlement A the claim. to settle money” available less “new company between whipsaw insurance not be able should hand, claim and, hand, on the other 746.230, the one ORS itself, be can, negligence. in and any payment that evi- There was however, more. case, involves This defendant handling process, in the claims early dence that limits and exceeded value the claim’s knew that attorney had concluded (The own insurer’s was clear. less liability was successfully on defending chance of theory case on ten.) tried this Plaintiffs one in than once claim whole attempt settle duty had liability was limits and to exceed were known failing theory was under clear. out claim stringing and in the limits to tender promptly for the insured. buy peace left little was until too and, that kind to evidence of object did not *5 272 fact, evidence from its own supported witnesses theory. is, theory think,
That we viable and consistent with the 746.230(1) (f), of ORS imposing on the insurer an affirmative obligation to initiate settlement. It is also a theory that is not clearly outside pleadings. the The trial court did not err in submitting the case to the jury, at least as against any theory of error advanced here.
Defendant next contends that the trial court erred in
striking its Statute of Limitations defense. In
action,
period
the
of limitation begins to run when three
requirements
(1)
(2)
are met:
occurred,
the harm has
appears reasonably probable that
the harm
was caused
(3)
defendant’s negligence and
the negligence was or should
have been discovered. U.S.
Davies,
Nat’l Bank u.
274 Or
(1976);
As a practical matter, plaintiffs were entitled —even obliged retain counsel with respect potential liability to —to Ruhle because the might satisfy limits damages. his Because this is a suing defendant, different concern from doing act of carry so does not with it Statute of Limitations implications. analysis
We also find this to be the correct one in light of the precedents. In U.S. Nat’l Bank v. supra, 274 Or at the Supreme quoted, Court approval, following from passage “Developments in the Law: Statutes of Limitations,” 1177, 1200 (1950): 63 Harv L Rev
“Although prima just compute facie it seems the time plaintiffs remedy limitation on the from the time when a suit maintained, could have been the considerations which deter- components pleaded proved by mine the factual to be plaintiff necessarily appropriate do not fix themselves time surprising, limitations for the initiation of an action. It is not literally out always carried therefore, have not that the courts action period begin when cause the directive period has statutory commencement accrues. a the- despite existence of delayed, occasionally been later of some recovery, the occurrence until right to oretical improba- impossible suit of which made the absence event wrong or learned of example, until the ble: for omitted.) (Footnotes damage occurred.” until substantial incurrence theoretically, Although, years before than two damage more them attorney fees caused Limita the Statute we hold filing of this when Ruhle’s until the date run at begin least tions did Ruhle the paid was settled case *6 in which view, case this a liability. In our $35,000 excess attorney fees incurrence of meet: the legality practicality does not of future harm possibility the guard running the start the sufficient damage constitute for settled claim was the Ruhle statutory Until period. liability excess exposure to limits, plaintiffs’ over within the been settled Had claim possibility. a merely was We, there limits, have vanished. their concern would facts, of the the commencement fore, that, these hold under substan delayed plaintiffs until suffered statutory period was hold otherwise i.e., liability. To tial, palpable damage, anomolous situation which result would an action in an to have initated required would been have materialized. never loss that might of a anticipation in U.S. disapproved expressly actions were provisional Such Or at 670.3 supra, 274 Bank v. Nat’l error for the next contends Defendant attorney by fees incurred as court to award does Ruhle claim. Defendant with the in connection by situations, fees incurred defense in some dispute See, e.g., from its insurer. may be recovered party insured an App 639 Company, Insurance v. Safeco O’Keeffe Westlund, 43 Or (1982); Hoage v. Or 863 1312, rev 292 P2d den 3 contrary holding; supra, require Jaquith it does The dissent reads trigger by deemed in that case kind of harm suffered not. The property hundreds to sell the statute of limitations —incurrence parallel case until in this no it was worth —has dollars than less thousands settlement.
274 App (1979) 602 P2d Rather, defendant takes position, it, as we understand that there is no evidence in this record from which a trier of fact could conclude that all (or any) of the question defense fees in were incurred because any negligent act of proposition, defendant. As abstract (or not) point may may defendant’s However, be well taken. defendant has brief, not shown in its by either a verbatim quotation provided by by transcript citation, rule —or —as where it precise made this argument to the trial court. We 7.19; Mendenhall, decline to consider it. See ORAP State v. App Or
We turn to the by plaintiffs issues raised on cross- First, appeal. they contend that the trial court erred in denying request attorney fees incurred the trial of present In support contention, rely case.- of this 743.114, provides, ORS which in part:
“If settlement is not made within six months from the date proof of loss is filed with an brought insurer and an action is any upon any policy any court of this state of insurance of nature, plaintiffs recovery kind or and the exceeds the any by action, amount of tender made such reasonable amount to be fixed the court as fees part shall be taxed as any appeal of the costs of the action thereon.” responds tort, that this was a not a contract is, therefore, issue,
and ORS 743.114 inapplicable. On this this equally is, court is therefore, divided. The trial court affirmed *7 on the issue.
As their
assignment
error,
final
plaintiffs contend
that
the trial
erroneously
request
court
denied their
prejudgment
They
interest.
damages
contend that
are
“liquidated” and, therefore,
that
are entitled to interest
from the time the amounts
became due under ORS
82.010(2)(a). Defendant,
hand,
on the other
maintains that
plaintiffs’ damages
“unliquidated”
are
prejudgment
inter-
is, therefore,
est
inappropriate.
argues
Defendant further
that
in a
prejudgment
interest should not be awarded
tort action.
Traditionally,
liquidated
claim has been defined as
sum,
obligation
one in which “defendant’s
is
fixed
such as
principal
an insurance
or the
due on
the face amount of
Dobbs,
Because
a note.”
Remedies 166
in excess of an insur
paid
are based on an amount
damages
“liquidated”
damages
we do not find that the
policy,
ance
However,
do not
agree
traditional
sense.
we
that,
damages
because the
are not
defendant’s conclusion
necessarily precluded.
interest
is
liquidated, prejudgment
may
unliquidated,
they may
be
be
though
damages
Even
In
easily
ascertained or
ascertainable.
Public Market Co. v.
Portland,
(1943),
P2d
171 Or
“Inasmuch as there was a
as to whether defendant
damaged
plaintiffs potatoes prior
some of
to March
properly
jury.
the court
submitted that matter to the
Such
damages,
any,
unliquidated
if
would be
and would be due to
the tortious act of the defendant. For that reason
any
prior
judg-
would not be entitled to
interest
thereon
ment. The rule laid down in Public Market Co. v. Portland
* * *
apply
unliqui-
was never intended to
tort
actions for
(Citations omitted.)
damages.”
dated
Although generally “unliquidated” tort claims are obligated a defendant is precise the sense that the amount entered, that is not the case pay judgment is not known until assertion, this case went to Contrary here. to defendant’s liable, its were found theory on the if defendant *8 276 $35,000 amount were
liability would be —the $100,000 theory limit. pay over the That required in a instruction to which defendant clearly expressed jury exception concerning damages.4 made no the extent of “Now, you if find from the evidence and the instructions prevail, plaintiff then the is is entitled to amount the settlement entitled to recover the excess which was of policy. you If the limits the insurance find that the of negligent management in the of the claim of defendant was Mr. Ruhle amount of your plaintiff, then verdict willbe sup- damages by plaintiffs.” (Emphasis suffered plied.) instruction,
Considering that
defendant’s contention
“unliquidated,”
are
because the
could
damages
$35,000,
simply wrong.
for less than
is
have returned a verdict
liability, had no alternative under the
jury, having
found
$35,000. Thus, although
return a verdict for
instruction but to
them,
not,
sought
in the
were
form
sense,
very
at
in the traditional
“liquidated”
way
or ascertainable in view of the
the case
least ascertained
tried.
routinely
prejudg
allowed
Oregon
courts
liquidated damages in breach
contract
ment
interest on
Gravel,
See,
Inc. v. Westwood
e.g., Dale’s Sand &
actions.
1378,
259
Construction,
570, 661 P2d
rev den 295 Or
App
Educ.,
App
Or
(1983);
Higher
v. Bd.
48
Papadopoulos
(1980).
727, cert den
incurred as defense time, prejudgment interest. plaintiffs were entitled to definite cross-appeal, appeal; affirmed on
Judgment interest prejudgment instructions to award remanded with respects. in all other opinion; this affirmed accordance with sufficiently ground except did not that it did to this instruction on appeal. raised on causation. That issue was not address
WARREN, J., concurring. appeal only
I concur in the affirmance of agree way what the majority I calls the “alternative *9 problem.” disagree looking specifically at the I with what the majority says about the submis- correctness court’s primary ground sion of the case to the discussed. 746.230(1) (f) imposes obligation ORS on insurers the faith, to attempt, good promptly equitably to “in and settle claims in has become liability reasonably which clear.” majority liability
The notes that for the reasonably accident 76 atApp Being clear. Or 269. under a duty and promptly equitably claim, to settle the payments made advance to compensate injury. for Ruhle’s argument position plaintiffs inherent in the take is paid advance, had the insurer not in injured parties would $100,000. have argument necessarily settled for That assumes by that the insurer was negligent, paying advance, because in it acted unreasonably injured to cause the parties third demand more than otherwise would have That accepted. kind of at claim is least novel. To imposed allow to be under these facts will encourage insurers not to make advance payments in prompt furtherance of a settlement. This is clearly the legislative policy inconsistent with in expressed seq ORS strange 18.500 et and ORS 746.230. It seems to me that an who payments, presumably insurer makes advance try to keep court, the case and the insured be out can said to respect be at fault argument to the insured. The could as easily be made that the insurer be in negligent would payments, forcing the litiga- thus case into paid tion. Had this insurer in nothing advance but offered its $100,000 settlement, presumably the case turn out would differently. advance, paid Because the insurer comes out it it worse than had taken the kind of hard-nosed attitude premise which insurers are often I criticized. believe that the i.e., claim, of this negligently greed, caused is not one the law any and from recognize myself should wish disassociate implication opinion theory in the that such a is majority viable. Newman, JJ., this concurrence. join
Rossman 278
BUTTLER, J., dissenting. judgment
I must be reversed its believe the Statute of Limitations had run entirety, plaintiffs. correctly points period out that majority (1) requirements run are met: begins
limitation
when three
(2)
occurred,
appears reasonably probable
harm has
(3)
negligence,
harm was caused
defendant’s
or
have
discovered. U.S. Nat’l
should
been
(1976);
663,
Jacquith
Bank
274 Or
Plaintiffs admit Ruhle, making payments to knew defendant had been that June, 1977, they were part the latter during and that They also paid. had been the exact amount that advised of accept 1, 1977, that Ruhle would April knew before $100,000 his claim. to settle policy limits of plaintiffs’ April no later than plaintiffs, It is clear that rely now in their they on which the information had all of their defendant, except the amount of for against claim 29,1979, on when finally June which was determined damage, The $35,000 limits. in excess of they paid Ruhle Davies, ruled supra, v. court, on Nat’l Bank relying U.S. Ruhle; paid had until not harmed that were defendant, which was filed against action therefore of Limitations. by the Statute was not barred April I disagree. majority agrees; The through discussion the same This court went contrary question supra,
Jacquith Ferris, the and resolved v. plaintiff majority opinion case, had the this case. In that listing agreement signed real estate the defendant Acting property. parcel the defen- on of real to sell broker obligat- money agreement signed advice, an earnest she dants’ party property convey $164,325. ing a third her to closed, discovered she that transaction was Before property the transac- refused to close was worth money agreement. by the earnest tion covered money agreement buyer filed under the earnest performance; plaintiff specific coun- an action for plaintiff ruled for The trial court terclaimed for rescission. ultimately reversed; the and this court her counterclaim conveyed plaintiff Supreme then denied review.The Court year Supreme property purchaser and, within one after to the against denied, filed suit the defendant Court review was damages appraised property. having negligently for his Jacquith supra, held that The trial court by barred the Statute of Limitations. We the action was majority in this banc, affirmed in a six to four vote. Like the Jacquith, Nat’l Bank v. case, the dissenters in relied on U.S. concluding plaintiff supra, had not been that finally damage damaged had been until the extent of her required by determined, is, this court to when she was money agree- convey property pursuant to the earnest majority, hand, held that the Statute on the other ment. to run when she discovered of Limitations had commenced defendant’s defending expense and incurred the performance. pointed specific We out that the action for at filed an action the defendants could have her time, all of the relevant elements of because she knew of her if the full extent action and stay requested in order to await the unknown, could have she *11 specific performance reason, we suit. For that outcome of the materially Davies, from where said, case was different causation had to await ascertainment of the element of plaintiff. against the outcome of the action affirming opinion, Supreme stated: Court, in our «* * * argument no harm that she sustained Plaintiffs damage or, ascertained, in this her was until the extent of
case, appellate finally until an convey decision forced her to property, concepts, mixes two discrete the occurrence of damages. harm and the extent of We have stated that ‘[i]t immaterial that the extent of could not be deter- mined at the purposes time of the determining of run. [tort]’ when the statute of limitation commenced to Industrial Plating North, Co. v. * * *” Or at 788. Accordingly, it held that the Statute of Limitations com- menced to run when she legal assumed the costs to resist her duty contractual to convey property, because she knew of the defendant’s negligence and incurred some harm at that time.
This squarely case falls within Jacquith v. supra. distinguishable It is Davies, from U.S. Nat’l Bank v. supra, for the same reason Jacquith was. In controlling issue aware, was when did the become aware, should have become damage, of the cause of his when the harm damage, occurred. Because the cause of his if any, could not have prior been determined until the action was terminated, the court held that the Statute of Limitations did not commence to run until that determination had been made. Here, inas the resolution Jacquith, prior of the action was determinative of the extent of the damages, the cause.
If defendant’s having regular, periodic made advance payments to Ruhle was negligent, plaintiffs were aware of the full June, extent of that no later than late 1977. They accept plaintiffs also knew that Ruhle would not claim, limits of they settle his and that exposed probable liability. Actually, they knew of the possibility July, 1976, exposure of that at which time employed attorney, an as incurring expenses a result. majority states hiring defendant, for “a suing doing different concern than the act of so does not carry implications.” Statute Limitation 76 Or App However, at 272. that was the situation in precise Jacquith. accept
If the cause of Ruhle’s refusal to a settlement plaintiffs’ policy within limits defendant’s him, payments just April, that was as true in April, as it was when this action was filed in 1980. *12 by the same attor- represented
Plaintiffs have been evidence that between ney throughout this matter. There is no that Ruhle 1980, plaintiffs learned April, April, $100,000 if defendant had not advanced accepted would negli- money Accordingly, to him. if defendant’s conduct the cause of and if that gent, more all that and were damage, plaintiffs knew filed, could years they before this action was than three why reason have filed an action defendant. There no claim in the Ruhle third-party could not have asserted a Therefore, action. the Statute of Limitations had run before they filed this action. and, therefore, I would reverse dissent.
Accordingly, J., in this dissent. Joseph, joins C.