2015 ORS 742.061¹
Recovery of attorney fees in action on policy or contractor’s bond

(1) Except as otherwise provided in subsections (2) and (3) of this section, if settlement is not made within six months from the date proof of loss is filed with an insurer and an action is brought in any court of this state upon any policy of insurance of any kind or nature, and the plaintiff’s recovery exceeds the amount of any tender made by the defendant in such action, a reasonable amount to be fixed by the court as attorney fees shall be taxed as part of the costs of the action and any appeal thereon. If the action is brought upon the bond of a contractor or subcontractor executed and delivered as provided in ORS 279B.055 (Competitive sealed bidding), 279B.060 (Competitive sealed proposals), 279C.380 (Performance bond) or 701.430 (Performance bond) and the plaintiff’s recovery does not exceed the amount of any tender made by the defendant in such action, a reasonable amount to be fixed by the court as attorney fees shall be taxed and allowed to the defendant as part of the costs of the action and any appeal thereon. If in an action brought upon such a bond the surety is allowed attorney fees and costs and the contractor or subcontractor has incurred expenses for attorney fees and costs in defending the action, the attorney fees and costs allowed the surety shall be applied first to reimbursing the contractor or subcontractor for such expenses.

(2) Subsection (1) of this section does not apply to actions to recover personal injury protection benefits if, in writing, not later than six months from the date proof of loss is filed with the insurer:

(a) The insurer has accepted coverage and the only issue is the amount of benefits due the insured; and

(b) The insurer has consented to submit the case to binding arbitration.

(3) Subsection (1) of this section does not apply to actions to recover uninsured or underinsured motorist benefits if, in writing, not later than six months from the date proof of loss is filed with the insurer:

(a) The insurer has accepted coverage and the only issues are the liability of the uninsured or underinsured motorist and the damages due the insured; and

(b) The insurer has consented to submit the case to binding arbitration. [Formerly 736.325 and then 743.114; 1999 c.790 §1; 2003 c.794 §328]

(formerly 743.114)

See also annota­tions under ORS 743.114 in permanent edi­tion.

Notes of Decisions

Lack of specificity re­gard­ing amount of damages does not forestall commence­ment of six-month settle­ment period. State Hwy. Comm. v. DeLong Corp., 9 Or App 550, 495 P2d 1215 (1972), Sup Ct review denied

If contingent fee agree­ment makes no specific reference to any possible attorney fees which may be awarded by court and makes no specific pro­vi­sion for manner in which any such fee is to be considered in computing the amount, source and manner of distribu­tion of contingent fee, any attorney fees awarded by court shall be offset as a credit or deduc­tion from the amount of the agreed contingent fee, as computed upon the basis of amount of the judg­ment. Chalmers v. Ore. Auto. Ins. Co., 263 Or 449, 502 P2d 1378 (1972)

The fact that plaintiff's attorneys in the case are engaged on a contingent fee basis does not bar an allowance of attorney fees. Chalmers v. Ore. Auto. Ins. Co., 263 Or 449, 502 P2d 1378 (1972)

Where the insured seeks both declaratory relief and a money judg­ment under an insurance policy, attorney fees may be allowed. Cornell, Howland, Hayes, & M., Inc. v. Continental Cas. Co., 465 F2d 22 (1972)

This sec­tion was not intended to apply to any situa­tion where an insurer, as an innocent stakeholder, is willing to pay policy proceeds to whomever they might belong. Gore v. Prudential Ins. Co. of Am., 265 Or 12, 507 P2d 20 (1973)

Since this sec­tion equates attorney fees with costs, 20-day dead­line specified by ORS 20.320 (Statement of costs and disbursements) for filing verified state­ment of costs and disburse­ments applies. State ex rel. Town Concrete Pipe, Inc. v. Andersen, 265 Or 593, 510 P2d 564 (1973)

In ac­tion on surety performance bond prevailing party bears the burden of proving amount and reasonableness of attorney fees. City of Hillsboro ex rel Lenchitsky Heating and Air Condi­tioning, Inc. v. Maintenance and Constr. Serv., Inc., 269 Or 169, 523 P2d 1036 (1974)

Where insurer is estopped from making asser­tions denying coverage, recovery on estoppel is recovery on policy and therefore qualifies for attorney fees. Farley v. United Pacific Ins. Co., 269 Or 549, 525 P2d 1003 (1974)

Liability for attorney fees cannot be avoided merely because the litiga­tion was cast in the form of a declaratory judg­ment pro­ceed­ing. Hartford v. Aetna/Mt. Hood Radio, 270 Or 226, 527 P2d 406 (1974)

Where there was no bad faith refusal of liability insurer to settle, in that insurer satisfied entire judg­ment which was in excess of policy limits, this sec­tion provided no authority to award attorney fees. Kricar, Inc. v. Gen. Acc., Fire and Life Assur. Corp., 542 F2d 1135 (1976)

The claimant under an insurance policy is entitled to the attorney fees if he es­tab­lishes a claim for more than the tendered amount on his initiative, either as a plaintiff or defendant who emerges with a money "recovery" in his favor. Travelers Ins. Co. v. Plummer, 278 Or 387, 563 P2d 1218 (1977)

Appellant obtaining remand is not entitled to attorney fees and costs incurred on ap­peal unless also prevailing at trial following remand. Stanford v. American Guaranty Life Insurance Company, 281 Or 325, 574 P2d 646 (1978)

In ac­tion against insurance agency to recover losses for agency's neg­li­gent failure to procure insurance for claimant, defendant was not an insurer and thus claimant was not entitled to award of attorney fees. Monsantofils v. Gacek Insurance Agency, 282 Or 3, 576 P2d 789 (1978)

In order to secure attorney fees under this sec­tion, insured must recover money judg­ment against insurer; it is not sufficient that insured es­tab­lish coverage which may in turn lead to sub­se­quent recovery of money. McGraw v. Gwinner, 282 Or 393, 578 P2d 1250 (1978)

Plaintiff's excess insurer was entitled to attorney fees under this sec­tion when primary insurer refused, in bad faith, to pay claim. Portland Gen. Electric Co. v. Pacific Idem. Co., 579 F2d 514 (1978)

Insurer acting as assignee of contractual right rather than subrogee may recover attorney fees. Fisk v. Dairyland Ins. Co., 42 Or App 777, 601 P2d 868 (1979)

Judg­ment creditors may recover attorney fees. Rowley v. Dairyland Ins. Co., 44 Or App 333, 605 P2d 1356 (1980); NW Marine Iron v. Western Casualty, 45 Or App 269, 608 P2d 199 (1980), Sup Ct review denied

Excess carrier who defended claim after primary carrier dec­lined de­fense was subrogated to rights of insured and could recover attorney fees pursuant to this sec­tion. Sch. Dist. No. 1 v. Mission Ins. Co., 58 Or App 692, 650 P2d 929 (1982), Sup Ct review denied

Where policy for dredge owner covering liability for pollu­tion under Federal Water Pollu­tion Control Act was more nearly analogous to "general marine" type than to "wet marine" type, attorney fees may be awarded. Port of Portland v. Water Quality Insurance Syndicate, 549 F Supp 233 (1982)

Where plaintiff settled claim against defendant for full amount of policy limits, then litigated with insurer whether advance pay­ments should be included in those limits, plaintiff is entitled to recover from insurer attorney fees incurred in litiga­tion. Kessler v. Weigandt, 73 Or App 48, 697 P2d 574 (1985), Sup Ct review denied

Although Washington law governed substantive insurance issues, attorney fees were awardable as procedural matter subject to Oregon law. Vancouver Furniture v. Industrial Indemnity, 74 Or App 642, 704 P2d 518 (1985), Sup Ct review denied

Where insurer settled within six weeks from date of proof of loss, but then filed adversary pro­ceed­ings, sought injunc­tion and asked for constructive trust throughout remainder of six-month statutory period, prerequisite for award of attorney fees was not met. American Universal Ins. Co., v. Pugh, 821 F2d 1352 (1987)

Court's striking of allega­tion for attorney fees, incurred by plaintiff in arbitra­tion pro­ceed­ing, was not reviewable by appellate court after ac­tion on policy, in which plaintiff sought fees, was dismissed without prejudice. Rossi v. State Farm Mutual Auto Ins. Co., 90 Or App 589, 752 P2d 1298 (1988), Sup Ct review denied

Where general contractor for installa­tion of fire sprinkling system brought ac­tion for declaratory relief that its insurer was re­quired to defend prop­erty owner's ac­tion against general contractor and subcontractors to recover for damage to tank and reservoir site, general contractor not entitled to attorney's fees because it had not recovered money judg­ment against insurer. Fireguard Sprinkler Systems v. Scottsdale Ins., 864 F 2d 648 (9th Cir. 1988)

Where defendant made timely settle­ment tender and this sec­tion did not require that settle­ment offer be made before commence­ment of litiga­tion nor allow for award of fees incurred before offer, trial court erred in awarding plaintiff attorney fees. Durflinger v. Statesman Life Ins. Co., 100 Or App 581, 787 P2d 892 (1990)

Although ac­tion against insurance company was abated and arbitrators es­tab­lished gross amount of damages suffered by plaintiffs in automobile accident, court sub­se­quently decided in favor of plaintiffs on legal issues raised by defendant insurance company in af­firm­a­tive de­fenses and counterclaim so plaintiffs were entitled to attorney fees. Wick v. Viking Ins. Co., 105 Or App 33, 803 P2d 1199 (1990)

Tender must be absolute and uncondi­tional, except that tender may be accompanied by condi­tion on which tendering party has right to insist. Gardner v. Cox, 117 Or App 57, 843 P2d 469 (1992)

Attorney fees incurred before ac­tion on insurance policy is filed are recoverable if reasonably related to ac­tion. Farmers Ins. Co. v. Trutanich, 123 Or App 6, 858 P2d 1332 (1993)

Recovery of attorney fees is not limited to cases involving coverage disputes. Douglass v. Allstate Ins. Co., 152 Or App 216, 953 P2d 770 (1998), Sup Ct review denied

Tender in excess of plaintiff's recovery does not preclude award of attorney fees if not made within six months from date of proof of loss. Petersen v. Farmers Insurance Co., 162 Or App 462, 986 P2d 659 (1999)

"Proof of loss" means any event or submission that would permit insurer to estimate obliga­tions. Dockins v. State Farm Insurance Co., 329 Or 20, 985 P2d 796 (1999); Scott v. State Farm Mutual Automobile Insurance Co., 345 Or 146, 190 P3d 372 (2008)

Proof of loss submitted less than six months prior to litiga­tion is effective to commence running of six-month period for settle­ment without attorney fees. Dockins v. State Farm Insurance Co., 329 Or 20, 985 P2d 796 (1999); Wilson v. Tri-Met, 234 Or App 615, 228 P3d 1225 (2010), Sup Ct review denied

"Tender" means timely, uncondi­tional offer of pay­ment made before or after commence­ment of litiga­tion. Dockins v. State Farm Insurance Co., 329 Or 20, 985 P2d 796 (1999)

In suit brought to enforce insurer compliance with policy, attorney fees are available notwithstanding that plaintiff may be per­son other than insured. Webb v. Na­tional Union Fire Insurance Company of Pittsburgh, 207 F3d 579 (9th Cir. 2000)

Self-insurer providing uninsured motorist coverage is insurer for purposes of being subject to pay­ment of attorney fees for insurer's failure to make settle­ment within six months following proof of loss. Haynes v. Tri-County Metropolitan Transporta­tion District of Oregon, 337 Or 659, 103 P3d 101 (2004)

Successful defendant need not have made tender to settle ac­tion against contractor or subcontractor bond in order for defendant to be entitled to attorney fees. North Marion School District #15 v. Acstar Insurance Co., 206 Or App 593, 138 P3d 876 (2006)

Dispute over insurer's denial of particular claim for benefits is not dispute over "amount of benefits." Grisby v. Progressive Preferred Insurance Co., 343 Or 175, 166 P3d 519 (2007), modified 343 Or 394, 171 P3d 352 (2007)

Dispute over enforceability of insurer's release from rights, claims, demands or damages that result from accident is not dispute over "amount of benefits." Cardenas v. Farmers Insurance Co., 230 Or App 403, 215 P3d 919 (2009)

"Proof of loss" does not need to be in writing. Parks v. Farmers Insurance Co., 347 Or 374, 227 P3d 1127 (2009)

Multiplier or other fee enhance­ment may be used to calculate reasonable attorney fees for work done at trial or on ap­peal or work done before an appellate court sitting pursuant to its original jurisdic­tion. Strawn v. Farmers Insurance Co., 233 Or App 401, 226 P3d 86 (2010)

Process of recovering fees for appellate work may be considered part of ap­peal for purpose of fee peti­tion. Strawn v. Farmers Insurance Co., 233 Or App 401, 226 P3d 86 (2010)

Require­ment that attorney fees be imposed if settle­ment is not made within six months from date of proof of loss is excep­tion to ORCP 54E. Wilson v. Tri-Met, 234 Or App 615, 228 P3d 1225 (2010), Sup Ct review denied

"Policy of insurance" includes enforceable oral binder of insurance. Stuart v. Pittman, 350 Or 410, 255 P3d 482 (2011)

Plaintiff was injured in motor vehicle accident and informed her insurer of her damages, but because plaintiff did not indicate potential uninsured motorist claim against other driver, plaintiff did not provide "proof of loss" sufficient to enable insurer to investigate and estimate uninsured motorist liabilities, and plaintiff was not entitled to attorney fees under subsec­tion (1) of this sec­tion. Zimmerman v. Allstate Property and Casualty Ins., 354 Or 271, 311 P3d 497 (2013)

Where plaintiff brought ac­tion against defendant for reimburse­ment of liens plaintiff paid on defendant's behalf, and defendant paid plaintiff full amount due after ac­tion commenced but neither party informed court of pay­ment and court did not enter final judg­ment for pay­ment, plaintiff did not have "recovery" as used in this sec­tion and is not entitled to attorney fees. Triangle Holdings, II v. Stewart Title Guaranty, 266 Or App 531, 337 P3d 1013 (2014)

For purposes of determining scope of permitted issues in claim for uninsured/underinsured motorist benefits, phrase "damages due the insured," as used in subsec­tion (3) of this sec­tion, refers to amount of damages, if any, that insured would be entitled to recover from uninsured motorist, which is different than scope of issues that may be raised under "the amount of benefits due" as used in subsec­tion (2) of this sec­tion; thus, dispute about whether plaintiff sustained economic damages as result of collision was within scope of issues of "damages due the insured." Spearman v. Progressive Classic Insurance Co., 276 Or App 114, 366 P3d 821 (2016)

Insured was not disqualified from attorney fee exemp­tion under this sec­tion when insurer referred to issues of fault and damages as only issues for determina­tion for claim but also referenced potential offset for collateral source pay­ments, which was not actual issue in dispute, because latter reference was reference to nonissue for determina­tion of claim. Robinson v. Tri-Met, 277 Or App 60, 370 P3d 864 (2016)

Law Review Cita­tions

44 WLR 253 (2007)


1 Legislative Counsel Committee, CHAPTER 742—Insurance Policies Generally; Property and Casualty Policies, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors742.­html (2015) (last ac­cessed Jul. 16, 2016).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2015, Chapter 742, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano742.­html (2015) (last ac­cessed Jul. 16, 2016).
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent.