Automobile Insurance SubrogationAutomobile Total Loss ThresholdsDeductible ReimbursementDiminution of ValueFirst Come, First Served: Subrogating Multiple Claims in Excess of Policy LimitsFuneral Procession Traffic LawsImputing Contributory Negligence of Driver to Vehicle OwnerKeep Right Traffic LawsLaws Regarding Using Cell Phones/Headphones/Texting While DrivingLoss Of UseMed Pay/PIP SubrogationNo Pay, No Play LawsOwner Liability For Stolen VehiclesPayment of Sales Tax After Vehicle Total LossPedestrian and Crosswalk LawsRental Car Company Physical Damage and Loss of Use ClaimsRental Car Company’s Liability Insurance Primary or ExcessSudden Medical Emergencies While DrivingSuspension of Drivers’ LicensesUse of Non-Original Equipment Manufacturer (OEM) Aftermarket Crash Parts in Repair of Damaged Vehicles
Federal , State, and Local Governmental EntitiesMunicipal/County/Local Governmental Immunity and Tort LiabilityState Sovereign Immunity And Tort Liability
General Tort Laws/StatutesAnti-Indemnity StatutesContribution ActionsContributory Negligence/Comparative FaultDog Bite LawsEconomic Loss DoctrineParental ResponsibilitySpoliationStatute of LimitationsStatute of Limitations Exceptions
Health Insurance SubrogationHealth and Disability Insurance
InvestigationAdmissibility of Expert TestimonyPre-Suit Disclosure of Liability Policy Limits in Third-Party ClaimsRecording Conversations
Product Liability SubrogationProduct Liability Law
Property Subrogation“Matching Regulations” And Laws Affecting Homeowners Property ClaimsCondominium/Co-Op Waiver of Subrogation LawsDamage to Property Without Market ValueGeneral Contractor Overhead And Profit Payments In First-Party ACV Property Damage ClaimsLandlord/Tenant Subrogation
Subrogation GenerallyAnti-Subrogation RuleCriminal RestitutionMade Whole DoctrineMedical Expenses, Insurance Write-Offs, and The Collateral Source Rule
Workers’ CompensationEmployee Leasing LawsHospital Lien LawsOCIP/CCIP Subrogation In Workers’ Compensation Construction CasesRecovery Of Increased Workers’ Compensation Premiums By EmployerWhich Workers’ Compensation “Benefits” Can Be Subrogated?Workers’ Compensation Subrogation Waiver EndorsementsWorkers’ CompensationWorkers’ Compensation Claims by Undocumented Employees
Automobile Insurance Subrogation
Automobile Total Loss Thresholds
Total Loss Threshold (80%).
Damage to vehicle is equal to or more than 80% of retail market value. O.R.S. § 801.527(3).
Automobile: Pro-Rata. Or. Admin. Code § 836-080-0240 provides: “An insurer shall, upon first-party claimant’s request, include claimant’s deductible in insurer’s demands under its subrogation rights. Subrogation recoveries shall be shared at least on proportionate basis with first-party claimant, unless deductible amount has been otherwise recovered by claimant. No deduction for expenses may be made from deductible recovery unless outside attorney is retained to collect such recovery, in which case deduction may be made only for pro-rata share of the cost of retaining attorney.”
Deductible must be included in any collision subrogation demand upon claimant’s request.
Diminution of Value
First Party: The Oregon Supreme Court has stated that the insured was entitled to the difference between the pre-loss and post-loss value of the vehicle and the proper repair of the auto may not accomplish this result, and that a complete restoration of the property has not occurred unless there has been no diminution in value after repair of the auto. Dunmire Motor Co. v. Oregon Mut. Fire Ins. Co., 114 P.2d 1005 (Or. 1941).
In a more modern case, the clash was over the meaning of “repair” in an insurance contract. Insured argued that to “repair” a vehicle, the insurer must restore the truck to a pre-accident condition, and if that’s not possible, then insurer must pay for the associated diminution in the vehicle’s value. The insurer argued that “repair” means a restoration of the function and appearance of the insured property. The Oregon Supreme Court found that “repair” in an auto insurance policy requires the insurer to restore the insured to a pre-loss condition via payment of money, repair of vehicle, or replacement of vehicle. If insurer is unable to repair the vehicle to a pre-loss condition, the resulting diminution of value is a loss to the insured which was caused by a collision, for which the insurer was payable under the insurance policy. Gonzales v. Farmers Ins. Co. of Oregon, 196 P.3d 1 (Or. 2008).
Third Party: Court of Appeals of Oregon acknowledged potential acceptance of evidence of diminished value, but found that such evidence was not presented. EAM Advertising Agency v. Helies, 954 P.2d 812 (Or. App. 1998).
First Come, First Served: Subrogating Multiple Claims in Excess of Policy Limits
An insurer is negligent in failing to settle, where an opportunity to settle exists, if in choosing not to settle it would be taking an unreasonable risk, that is, a risk that would involve chances of unfavorable results out of reasonable proportion to chances of favorable results. Maine Bonding & Cas. Co. v. Centennial Ins. Co., 693 P.2d 1296 (Or. 1985). An insurer owes to its insured the duty of due diligence and good faith. In determining whether to settle claims against the insured, the insurer must act as if it were liable for the entire judgment that might eventually be entered against the insured. In addition, only a decision made by an insurer who exercises due diligence in apprising itself of the material facts is entitled to be considered as made in good faith. Kuzmanich v. United Fire and Casualty, 410 P.2d 812 (Or. 1966).
Funeral Procession Traffic Laws
Oregon law requires other vehicles to yield the right-of-way to funeral processions, to stop at intersections to allow the funeral procession to pass, and obey any directions given by the driver of a funeral escort vehicle. If the funeral escort lead vehicle enters the intersection lawfully, the other vehicles may follow without stopping. Processions must yield the right-of-way to emergency vehicles or if directed by a police officer. The escort vehicle may exceed the speed limit by 10 miles per hour and cross the center line of a road. Other vehicles may not drive between or join a funeral procession. Funeral processions are allowed to pass toll-free through all tollgates. Or. Rev. Stat. § 811.802 – 812.
Imputing Contributory Negligence of Driver to Vehicle Owner
Imputed Contributory Negligence Law: Contributory negligence of owner-husband driver is not imputed to wife-passenger in wife’s action against third party. Joint control must be shown. Ditty v. Farley, 347 P.2d 47 (Or. 1959); Johnson v. Los Angeles-Seattle Motor Express, 352 P.2d 1091 (Or. 1960).
Vicarious Liability/Family Purpose Doctrine: No Vicarious Liability Statute.
Oregon recognizes the Family Purpose Doctrine. Liability may be imposed on an owner who maintains a vehicle for the pleasure or convenience of the owner’s family if a member of the family negligently uses the car for pleasure or convenience with the knowledge and consent of the owner. Maquiel v. Adkins, 27 P.3d 1050 (Or. App. 2001).
Sponsor Liability for Minor’s Driving: No Sponsorship Liability Statute.
Keep Right Traffic Laws
Statute: O.R.S. § 811.295, O.R.S. § 811.315, O.R.S. § 811.410 and O.R.S. § 811.325.
Summary: Drivers must drive in the right lane. Drivers are not required to drive in the right lane when passing another vehicle; preparing to turn left; when an obstruction exists in the right lane; upon a roadway with three marked lanes for traffic; or on a roadway restricted to one-way traffic. Slower traffic must keep right. Any camper, vehicle with a trailer, vehicle with registration weight of 10,000 lbs. or more must drive in right lane of all roadways with two or more lanes, except to pass (without interfering with passage of other vehicles), turn left, respond to emergency conditions, avoid merging traffic, or to obey traffic control devices.
Flow of Traffic: Vehicles proceeding slower than the normal speed of traffic must drive in the right lane. Except when overtaking and passing on the right is permitted under O.R.S. § 811.415, the driver of an overtaken vehicle shall give way to the right in favor of an overtaking vehicle.
Laws Regarding Using Cell Phones/Headphones/Texting While Driving
Cell Phone/Texting: All cell phone use while driving must be hands-free. No driver may send, receive, or read a text message while driving. Drivers under the age of 18 may not operate a vehicle and use a cell phone in any capacity. O.R.S. § 801.507.
Other Prohibitions: No Applicable Laws*
Comments: City, county, or local government may not enact laws regulating use of cell phones in motor vehicles. O.R.S. § 801.038.
*Cities and counties may pass ordinances against headphones while driving.
Loss Of Use
Loss of Use: Yes. A vehicle owner is entitled to recover for loss of use of a vehicle for the time reasonable to make repairs. Graf v. Don Rasmussen Co., 592 P.2d 250 (Or. App. 1979). The measure of damages is the reasonable rental value of a similar vehicle for a reasonable repair period. Scott v. Elliott, 451 P.2d 474 (Or. 1969). No case law or statutory authority directly on point regarding recovery of loss of use when vehicle is a total loss.
Lost Profits: Yes. Loss of profits, if properly proven, is an acceptable measure of the loss of use of a commercial vehicle. Bullock v. Hass, 571 P.2d 902 (Or. 1977). Loss of profits are properly proven to the extent that the evidence affords a sufficient basis for estimating the amount of such profits with reasonable certainty. Hardwick v. Dravo Equip. Co., 569 P.2d 588 (Or. 1977).
Comments: A rental vehicle doesn’t have to be obtained in order to receive loss of use damages. Graf v. Don Rasmussen Co., supra.
Med Pay/PIP Subrogation
Med Pay: Coverage not applicable.
PIP: Subrogation/ reimbursement available under § 742.534 (inter-insurer reimbursement through binding arbitration), § 742.536 (injured party must give notice to insurer of claim or legal action, and insurer can give notice of election to seek reimbursement within 30 days, and this constitutes a lien), or § 742.538 (if inter-insurer reimbursement not available and no lien election made by insurer, the insured must hold any recovery in trust and insurer will be reimbursed, less share of costs and attorneys’ fees). (Eff. 1/1/08). See § 742.520(6) and Gaucin v. Farmers Ins. Co., 146 P.3d 370 (Or. App. 2006).
- “Add-On” PIP State. $15,000 limits of PIP coverage required.
Made Whole: Senate Bill 421 signed on 6/20/19 introduces a hybrid version of the Made Whole Doctrine to PIP subrogation under either § 742.536 (PIP Lien) or § 742.538 (direct PIP subrogation). The implications of our ability to pursue Inter-Company Arbitration directly via § 742.534 remains unclear, but will make what has been a smooth PIP reimbursement process significantly more difficult. Amended § 742.544 allows PIP reimbursement only when the insured is (1) fully compensated for his injuries, and (2) the reimbursement is paid from the “total amount of the recovery” in excess of the amount necessary to fully compensate the insured. The phrase “total amount of the recovery” includes: (1) UIM benefits; (2) Liability insurance payments; (3) PIP and/or health insurance benefits received; and (4) any other payment by or on behalf of the tortfeasor. Amendment creates rebuttable presumptions that (1) the amount of any judgment is the amount necessary to make the insured whole; (2) the insured is made whole if the settlement is for less than the liability limits; and (3) the insured is not made whole if the insured recovers the amount of liability limits, UIM limits, or PIP limits. The tortfeasor/liability carrier may not include the PIP carrier’s name on a settlement check. Any reimbursement or subrogation clause which provides any rights other than those set forth in § 742.544 is void and unenforceable.
Statute of Limitations: The two (2) year personal injury statute of limitations runs from the date of the insured’s accident. O.R.S. § 12.110(1).
No Pay, No Play Laws
Rule: An uninsured plaintiff may not recover non-economic damages from insured tortfeasor unless the tortfeasor was acting intentionally or recklessly or, the tortfeasor was engaged in a felony act at the time of the accident.
Authority: O.R.S. § 31.715.
Owner Liability For Stolen Vehicles
Key In The Ignition Statutes: O.R.S. § 811.585.
Common Law Rule: Whether the circumstances are such that a vehicle owner should have reasonably foreseen that their vehicle would be stolen is a question for the jury. Itami v. Burch, 650 P.2d 1092 (1982).
Payment of Sales Tax After Vehicle Total Loss
First-Party Claims: No state sales tax in Oregon. If the policy provides for the settlement of first-party auto total loss, insurer may (1) offer a replacement comparable vehicle including all applicable taxes, license fees, or other fees, or (2) offer a cash settlement based on the ACV of a comparable vehicle including all applicable taxes, license fees, or other fees. Or. Admin. R. § 836-080-0240.
Third-Party Claims: Insurer is only required to offer a cash settlement to third-parties including all applicable taxes, license fees, or other fees. Or. Admin. R. § 836-080-0240 (14).
Pedestrian and Crosswalk Laws
O.R.S. § 810.080: Gives road authorities right to regulate crosswalks and crossing.
O.R.S. § 810.080: Gives road authorities right to regulate crosswalks and crossing.
O.R.S. § 810.040: A pedestrian must yield to a vehicle if he suddenly leaves the curb into the path of a vehicle so close as to constitute an immediate hazard.
O.R.S. § 801.220: Even where there is no marked crosswalk, an unmarked crosswalk exists where one would expect to find one between intersecting shoulders or sidewalks. In irregularly shaped intersections, such as where sidewalks are of different widths, crosswalks have needed to be defined as trapezoidal in shape, but the statute still requires that the crosswalk be no less than six or more than 20 feet in width
Summary: Although the Oregon Vehicle Code imposes a number of requirements on pedestrians, it does not prohibit crossing a street at other than right angles. State v. Tyler, 7 P.3d 624 (Or. App. 2000).
Rental Car Company Physical Damage and Loss of Use Claims
Recovery From Renter: Recovery of physical damage and loss of use are not prohibited or otherwise regulated. Terms of rental agreement control. Collision Damage Waivers regulated by statute. Or. Stat. § 646.859.
Recovery From Third-Party: Case law allows for owner of commercial vehicle (tractor-trailer). Nothing specifically for rental cars. Loss of profits, if properly proven, is an acceptable measure of loss of use of a commercial vehicle (Peterbilt truck tractor). Bullock v. Hass, 571 P.2d 902 (Or. 1977). A vehicle owner is entitled to recovery for loss of use damages. This is true even when a rental vehicle is not obtained. Graf v. Don Rasmussen Co., 592 P.2d 250 (Or. App. 1979). However, the plaintiff will not be compensated for any unnecessary delays in repairs. The measure of damages is the reasonable rental value of a similar vehicle for a reasonable repair period.
Rental Car Company’s Liability Insurance Primary or Excess
Summary: The personal policy of the renter is primary, and the policy of the car rental company is secondary. Or. Stat. § 30.135. A self-insured car rental company is also excess. Or. Stat. § 806.130; 30.135 (test drivers and car rental companies).
Sudden Medical Emergencies While Driving
Sudden Emergency Defense. When the operator of a motor vehicle who, while driving, becomes suddenly stricken by a fainting spell or losses consciousness from an unforeseen cause, and is unable to control the vehicle, is not chargeable with negligence. van der Hout v. Johnson, 446 P.2d 99 (Or. 1968).
Sudden unconsciousness was unforeseeable even when defendant had been suffering from the flu and had not eaten for two days. La Vigne v. La Vigne, 158 P.2d 557 (Or. 1945).
Suspension of Drivers’ Licenses
Administrative Suspension: A driver found driving without insurance will have their license suspended. O.R.S. § 806.010. If convicted, individual must file proof of financial responsibility for three years. O.R.S. § 806.010.
Judgment: If a person has a judgment against them for an accident, and has not satisfied the judgment within 60 days, the Department will suspend the license of the judgment debtor. O.R.S. § 809.415; O.R.S. § 809.416. The Department will suspend the license of the judgment debtor until he settles the judgment. O.R.S. § 809.415.
Contact Information: State of Oregon, Department of Transportation, Driver and Motor Vehicle Services, 1905 Lana Ave., N.E., Salem, OR 97314, (503) 945-5000, http://www.oregon.gov/ODOT/DMV/Pages/index.aspx.
Use of Non-Original Equipment Manufacturer (OEM) Aftermarket Crash Parts in Repair of Damaged Vehicles
Authority: O.R.S. § 746.287; O.R.S. § 746.288; O.R.S. § 746.289; O.R.S. § 746.291.
Summary: An insurer can only mandate the use of a non-OEM part if they receive either the insured’s consent to use the part, OR an independent test facility has certified that the non-OEM part is of equal quality to its OEM equivalent. In the written estimate, the insurer must disclose the use of non-OEM parts, that the parts of the original warranty might be invalidated, and that the repair shop will include a copy of the warranty for the non-OEM parts to the insured. Lastly, the insurer must be able to provide the insured with a copy of the warranty for the non-OEM parts used if asked for one by the insured.
Federal , State, and Local Governmental Entities
Municipal/County/Local Governmental Immunity and Tort Liability
Legal Authority: Tort Actions Against Public Bodies (a/k/a Oregon Tort Claims Act): O.R.S. §§ 30.260 – 30.300 (1967). “Public body” includes cities, municipalities, and other local public bodies.
Notice Deadlines: Action must be commenced within two (2) years. O.R.S. § 30.275(9). Notice of claim to any member of the governing body of the public body within 180 days (one (1) year for death). No particular form for notice. Actual notice may suffice. O.R.S. § 30.275.
Claims/Actions Allowed: Oregon Tort Claims Act is limited (partial) waiver of sovereign immunity. Every public body subject to liability for its employees’ and agents’ torts committed within the scope of their employment, including operation of motor vehicles. O.R.S. § 30.275.
Comments/Exceptions: Exceptions to liability: (1) injury covered by workers’ compensation; (2) exercise of discretionary function* or duty; and (3) act under apparent authority of law. (6) no liability to any person injured or killed who was covered by workers’ compensation insurance. O.R.S. § 30.265(6). *Discretionary function is policy-making decision (policy judgment). Negligent implementation of policy is not immune. No immunity if duty to act.
Damage Caps: Personal Injury: $691,200 per person. $1,382,300 per occurrence. Property damage: $113,400 per person. $566,900 per occurrence. O.R.S. §§ 30.271(4), 30.272(4), 30.273(3) (through 7/1/17). Claims which are subject to the OTCA are not subject to O.R.S. § 30.710, setting limit of $500,000 for non-economic damages in civil actions. O.R.S. § 30.269(2).
State Sovereign Immunity And Tort Liability
Tort Claims Act: Tort Actions Against Public Bodies (a/k/a Oregon Tort Claims Act). Oregon Tort Claims Act (OTCA). O.R.S. §§ 30.260 – 30.300 (1967).
Notice Deadlines: Action must be commenced within two years. O.R.S. § 30.275(9). Notice of claim to the office of the Director of the Oregon Department of Administrative Services within 180 days. No particular form for notice. Provide time, place, circumstances, damages, contact information. O.R.S. § 30.275.
Claims/Actions Allowed: Oregon Tort Claims Act is limited waiver of sovereign immunity. Every public body subject to liability for its employees’ and agents’ torts committed within the scope of their employment, including operation of motor vehicles. O.R.S. § 30.275.
Comments/Exceptions: Exceptions to liability:
(1) injury covered by workers’ compensation;
(2) exercise of discretionary function or duty; and
(3) act under apparent authority of law.
(6) no liability to any person injured or killed who was covered by workers’ compensation insurance. O.R.S. § 30.265(6).
*Discretionary function is policy-making decision (policy judgment). Negligent implementation of policy is not immune. No immunity if duty to act.
Damage Caps: Personal Injury: $2,073,600 per person. $4,147,100 per occurrence. Property damage: $113,400 per person. $566,900 per occurrence. O.R.S. §§ 30.271(4), 30.272(4), 30.273(3).
Claims which are subject to the OTCA are not subject to O.R.S. § 30.710, setting limit of $500,000 for non-economic damages in civil actions. O.R.S. § 30.269(2).
General Tort Laws/Statutes
Prohibits Intermediate Indemnity. Applies to Construction Agreements. Or. Rev. Stat. § 30.140.
Not applicable to railroads. The anti-indemnity statute limits statutory indemnity to contractually required additional insured coverage as well as to indemnity. Or. Rev. Stat. § 30.140(1) & (2).
Modified Joint and Several Liability. Several Liability, except for environmental torts, but if part of judgment is uncollectable, it may be reallocated. O.A.R. § 31-610.
Contribution plaintiff entitled to recover from joint tortfeasor the amount of a reasonable settlement which is in excess of his pro-rata share of liability in a third-party action or as a separate action. O.A.R. §§ 31.800 and 31.805; Lasley v. Combined Transp., 261 P.3d 1215 (Or. 2011). Section 31.800 governs. The four elements of a claim for contribution by a tortfeasor settling with the tort victim are: (1) joint liability in tort for the same injury; (2) contribution plaintiff paid more than a proportional share of the common liability; (3) settlement extinguished the contribution defendant’s liability; and (4) settlement was reasonable. Jensen v. Alley, 877 P.2d 108 (Or. App. 1994). Two-year statute of limitations after final judgment or settlement. O.A.R. § 18.450.
Contributory Negligence/Comparative Fault
Modified Comparative Fault: 51% Bar. Damaged party cannot recover if it is 51% or more at fault. If 50% or less at fault, it can recover, although its recovery is reduced by its degree of fault. With his own negligence, plaintiff’s recovery will not be barred, but it may diminish his right to damages. Or. Rev. Stat. Ann. § 31.600.
Dog Bite Laws
Dog owner will be liable for victim’s bite injuries if they knew (or had reason to know) of their dog’s dangerous propensities. Westberry v. Blackwell, 282 Or. 129, 577 P.2d 75 (Or. 1978).
Economic Loss Doctrine
Intermediate Rule. Russell v. Ford Motor Co., 575 P.2d 1383 (Or. 1978) (The loss must be a consequence of the kind of danger and occur under the kind of circumstances, “accidental” or not, that made the condition of the product a basis for strict liability. This distinguishes such a loss from economic losses due only to the poor performance or the reduced resale value of a defective, even a dangerously defective, product. It is a difference between the endangered consumer and the disappointed consumer). A plaintiff may recovery in tort for property damage because it is not “economic loss.” Harris v. Suniga, 149 P.3d 224 (Or. App. 2006). The recovery of economic loss such as lost profits or lost sales is not recoverable in Oregon in product liability actions where strict liability is alleged. In Brown v. Western Farmers Assoc., 268 Or 470, 480 (1974), the Oregon Supreme Court held that strict product liability was not designed or intended to offer a remedy for such commercial aspirations as sales and profits. Oregon is a physical injury state and Oregon appellate courts have uniformly held that strict liability is not a remedy for purely economic loss in the absence of a physical injury to persons or property. Russell v. Deere & Co., 61 P.3d 955 (Or. App. 2003).
Under the ELR, if a plaintiff seeks to recover for “purely economic losses” without injury to a person or property, the plaintiff must provide some other “limiter” or “source of duty beyond the common law.” JH Kelley, LLC v. Quality Plus Servs., 472 P.3d 280 (Or. App. 2020). The concept of duty as a limiting principle takes on a greater importance than it does with regard to the recovery of damages for personal injury or property damage. Onita Pac. Corp. v. Trs. of Bronson, 843 P.2d 890 (Or. 1992); Hale v. Groce, 744 P.2d 1289 (Or. 1987). Such “injuries to persons or property” are defined as “personal injuries, i.e., bodily injuries including their psychic consequences, and physical damage to existing tangible property, but not financial losses such as a reduced value of the completed project due to the unsatisfactory performance of the work or the added cost of satisfactory completion or replacement.” Securities-Intermountain, Inc. v. Sunset Fuel Co., 611 P.2d 1158 (Or. 1980).
Willful Misconduct. Liability imposed on parents when child commits intentional or reckless tort. O.R.S. § 30.765.
The limit of liability is $7,500.00. Child must be under 18-years-old.
Tort of Spoliation: Although the Oregon Supreme Court has not addressed whether either intentional or negligent spoliation of evidence is recognized as an independent cause of action under state law, the Court of Appeals has suggested that such claims may exist. Marcum v. Adventist Health System/West, 168 P.3d 1214 (Or. App. 2007) (discussing negligent spoliation), rev’d on other grounds, 193 P.3d 1 (Or. 2008); Classen v. Arete NW, LLC, 294 P.3d 520 (Or. App. 2012) (discussing negligent and intentional spoliation and declining to “address the precise contours of a cognizable claim for spoliation under Oregon law”); Blincoe v. Western States Chiropractic College, 2007 WL 2071916 (D. Or. 2007) (concluding that Oregon law does not and would not recognize a tort of intentional spoliation of evidence). Although the Oregon appellate courts have not directly addressed the issue, they are likely to agree with the result reached by this court in the Blincoe case. As noted in Classen, even those “jurisdictions that recognize an independent claim for spoliation of evidence require the plaintiff to have first brought the underlying claim and lost or suffered diminution in its value” and “none has permitted a plaintiff to bring such claim after the statute of limitations on her underlying claims has expired….” Nat’l Interstate Ins. v. Beall Corp., 2015 WL 1137440 (D. Or. 2015).
Adverse Presumption: Oregon has a statutory provision allowing that willful suppression of evidence raises an unfavorable presumption against the party who suppressed it. O.R.S. § 40.135, Rule 311(1)(c); Stephens v. Bohlman, 909 P.2d 208, 211 (Or. Ct. App. 1996).
Statute of Limitations
Personal Property6 YearsO.R.S. § 12.080(3)*
Personal Injury/Death2 YearsO.R.S. § 12.110(1)
Personal Injury/Wrongful Death3 YearsO.R.S. § 30.020(1)
Breach of Contract/Written6 YearsO.R.S. § 12.080(1)
Breach of Contract/Oral6 YearsO.R.S. § 12.080(1)
Breach of Contract/Sale of Goods4 YearsO.R.S. § 72.7250**
Statue of Repose/Products10 YearsO.R.S. § 30.905(2), (3)***
Statute of Repose/Real Products10 YearsO.R.S. § 12.135****
Breach of Contract4 YearsO.R.S. § 72.7250(1)
Workers’ Comp Third Party Case2 YearsO.R.S. § 656.593
Strict Product Liability2 YearsO.R.S. § 30.905(1-3)*****
Statute of Limitations Exceptions
*Except certain actions arising from the construction and repair of improvements to real property, which can be ten or six years after the substantial completion of the construction or repair. O.R.S. § 12.135(1).
**O.R.S. § 72.7250(1) (If claim arises from contractual obligations of the parties and not from a defect in goods.) Weston v. Camp’s Lumber & Bldg. Supply, 135 P.3d 331 (Or. App. 2006); Smith v. Ethicon, Inc., 2021 WL 3578681 (D. Or. 2021).
***Suits claiming personal injuries or property damage must be filed before the later of (A) 10 years from the date the product was first purchased for use or consumption, or (B) expiration of any statute of repose for an equivalent civil action in the state in which the product was manufactured, or, if the product was manufactured in a foreign country, expiration of any statute of repose for an equivalent civil action in the state into which the product was imported. O.R.S. § 30.905(2). Death cases must be brought within 3 years after death or 10 years after the product was purchased, whichever comes first. O.R.S. § 30.905(3).
****10 Years from substantial completion of improvement to real property. O.R.S. § 12.135.
*****A breach of warranty claim has a 2-year SOL under §30.905 “if the claim arose directly out of defendant’s failure to provide the very thing that it had promised to sell to the plaintiffs.” Gladhart v. Oregon Vineyard Supply Co., 26 P3d 817 (Or. 2001).
Health Insurance Subrogation
Health and Disability Insurance
Statute of Limitations: 2 Years. O.R.S. § 12.110(1). Wrongful Death – 3 Years. O.R.S. § 30.020(1).
Subrogation of Medical and Disability* Benefits are allowed. O.R.S. § 742.538; Provident Health Plan v. Charriere, 666 F.Supp.2d 1169 (D. Or. 2009) (*assuming coverage is deemed similar to PIP-type benefits). Made Whole Doctrine applies. O.R.S. § 742.544(1)(b) precludes an insurer from obtaining reimbursement unless the injured person receives full compensation for their injuries. Common Fund Doctrine applies. O.R.S. § 742.538; State Farm Mut. Auto Ins. Co. v. Clinton, 518 P.2d 645 (Or. 1974).
Admissibility of Expert Testimony
Admissibility Standards: Daubert
Case/Statutory Law: State v. O’Key, 899 P.2d 663 (Or. 1995).
Pre-Suit Disclosure of Liability Policy Limits in Third-Party Claims
Duty To Disclose: No.
Failure To Disclose A Basis For Bad Faith: A liability carrier has an obligation to negotiate with a view to settle the case within the policy limits. Maine Bonding & Cas. Co. v. Centennial Ins. Co., 693 P.2d 1296 (Or. 1985).
Mixed: It is not unlawful for an individual who is a party to or has consent from a party of an electronic communication to record or disclose the contents of said communication. It is unlawful to record an in-person communication without the consent of all parties involved. Or. Rev. Stat. Ann. § 165.540; Or. Rev. Stat. Ann. § 165.535.
Product Liability Subrogation
Product Liability Law
Statute of Limitations/Repose: 2 years for personal injury. O.R.S. § 30.905(1). Wrongful death is 3 years. O.R.S. § 30.905(3). Discovery Rule Applies. Statute of Repose is 10 years. O.R.S. § 30.905(2)(a).
Liability Standards: Negligence, Strict Liability, Warranty.
Fault Allocations: Modified Comparative. O.R.S. § 31.600.
Non-Economic Caps/Limits On Actual Damages: Yes (With Exceptions).
Punitive Y/N and Limits: Yes.
Heeding Presumption?: No. McPike v. Enciso’s Cocina Mejicana, Inc., 762 P.2d 315, 319 (Or. App. 1988).
Innocent Seller Statute: No (Upstream Immunity).
Joint and Several Liability: Several Only (With Exceptions). O.A.R. § 31-610.
Available Defenses: Misuse; Alteration; Learned Intermediary; Inherently Unsafe Products; State of the Art; Presumption; Compliance With Government Standards; Seatbelts.
Restatement 2nd or 3rd?: Both.
“Matching Regulations” And Laws Affecting Homeowners Property Claims
Condominium/Co-Op Waiver of Subrogation Laws
If association by-laws require unit owners to obtain insurance for their units, the by-laws also must contain a provision requiring the association to maintain property insurance and liability insurance. The association’s insurance shall also waive subrogation as to any claims against the association. O.R.S. § 100.435.
Damage to Property Without Market Value
Service Value: “That measure [depreciation method], although imperfect, comes closer to promoting just compensation in power pole damage cases as a whole than does the ‘full replacement cost’ method.” Portland General Elec. Co. v. Taber, 934 P.2d 538 (Or. Ct. App. 1997).
Intrinsic Value: “…if it has no market value, he may prove its special value to him by showing its qualities, characteristics, and pedigree, and may offer the opinions of witnesses who are familiar with such qualities.” McCallister v. Sappingfield, 144 P. 432 (Or. 1914).
Sentimental Value: “In the case of household goods and furniture…the owner is entitled to recover the actual value of the property to him, excluding, of course, any fanciful or sentimental value which he might place upon it.” Barber v. Motor Inv. Co., 298 P. 216 (Or. 1931).
General Contractor Overhead And Profit Payments In First-Party ACV Property Damage Claims
Payment And Depreciation Of GCOP/Sales Tax: No applicable case law, statutes, administrative rules, or other guidance with regard to the calculation and/or depreciation of GCOP.
Oregon rejects blanket following of the “Sutton Rule” (see Oklahoma) which holds the tenant is an implied co-insured. Whether the landlord’s insurer can subrogate against the tenant depends on the facts of the case and the language of the lease. Koch v. Spann, 92 P.3d 146 (Or. App. 2004). Where the lease provides that the landlord will provide “full fire insurance coverage on all of the leased property for all of the parties and that the premiums therefore were included in the monthly lease payments” or “OWNER TO FURNISH FREE OF CHARGE … [f]ire insurance in the amount equal to the value of the equipment…”, the Court recognized as a complete defense to either a direct action or a subrogation claim, the landlord’s contractual obligation to maintain fire insurance. Permitting the owner or lessor to proceed against the tenant or lessee would deprive the latter of the benefit of what it bargained for – insurance against liability for its own negligence.
An insurer cannot subrogate against its own insured. Koch v. Spann, 92. P.3d 146 (Or. App. 2004). An insurer cannot subrogate against a co-insured on a policy. California Cas. Ins. Co. v. David Douglas School Dist., 693 P.2d 54 (Or. App. 1984). A negligent sub-subcontractor tortfeasor cannot seek indemnification from a subcontractor if the subcontractor is an insured on the policy that is suing the sub-subcontractor for damages. Factory Mut. Ins. Co. v. Peri Formworks Systems, Inc., 223 F.Supp.3d 1133 (D. Or. 2016). In David Douglas School Dist., Salvo, a district administrator for the David Douglas School District (“School District”), hit and injured a pedestrian while performing a task that was authorized by the School District. Salvo’s personal auto insurer, California Casualty Insurance Company (“California”), paid $50,000 to the pedestrian, and the School District’s business auto liability insurer paid $34,000 to the pedestrian. California sought indemnification from the School District and its insurer under ORS ֻ§ 30.285, a statute which requires public employers to indemnify employees while in the course of their duties. California, as subrogee of Salvo’s rights, argued that they should be indemnified by the School District and its insurer. However, the court ruled against California finding that the School District was an insured under Salvo’s policy due to a clause which extended coverage to an “other person or organization but only with respect to his or its liability because of acts or omissions of an insured [Salvo].” Because the School District was also an insured under Salvo’s policy, the ASR blocked California’s subrogation attempt. In Peri Formworks Systems, Inc., Factory Mutual Insurance (“Factory”) sued Peri Formworks Systems, Inc. (“Peri”), a subcontractor of McClone, for payments that Factory was forced to pay on a builders’ risk policy after Peri was negligent in laying concrete. Peri in turn sued McClone, citing a contractual indemnification provision, seeking indemnification for any payments they would have to make to Factory for the damages. McClone argued that they were not required to pay for any damages because McClone was an insured on the policy Factory was now suing Peri over. The court reasoned that McClone is indeed an insured on Factory’s policy and, therefore, the ASR is triggered which bars Peri from forcing McClone to indemnify Peri in the lawsuit.
Oregon statute allows for a “victim” to recover restitution payments from a liable criminal defendant. O.R.S. § 137.106(1). Applicable case law has stated that, as an insurer could recover any benefits paid through a right of subrogation, it can, therefore, be included as a “victim” for purposes of restitution. Oregon v. Divers, 625 P.2d 681 (Or. Ct. App. 1981). Evidence that medical bills were paid by an institutional insurer at a contracted rate was sufficient to prove the reasonableness of medical expenses. State v. Campbell, 296 Or. App. 22 (2019).
Made Whole Doctrine
Oregon was slow to adopt the Made Whole Doctrine. On June 9, 2004, an Oregon Court of Appeals held that subrogation is an equitable doctrine which is based on a theory of restitution and unjust enrichment, and enables a secondarily liable party who has been compelled to pay a debt to be made whole by collecting that debt from the primarily liable party, who, in good conscience, should be required to pay it. Koch v. Spann, 92 P.3d 146 (Or. App. 2004). This case, however, doesn’t go quite as far as establishing the Made Whole Doctrine in Oregon or requiring that the insured be made whole before subrogation can be effected. Although not specifically identifying the Made Whole Doctrine by name, one might argue that Oregon implies that an insured must be made whole before an insurer may proceed with subrogation. Id. Until they specifically adopt the Made Whole Doctrine, however, you should maintain that such a doctrine does not exist under Oregon law.
The Made Whole Doctrine as applicable to PIP subrogation has changed recently. It used to be subject to the “Make-Half Rule” or the “Made Whole Doctrine”, depending on the date the policy was issued or renewed. That all ended with the passage of Senate Bill 421 in 2019.
Oregon Senate Bill 421 was signed into law on June 20, 2019, and drastically affects PIP subrogation under either § 742.536 (PIP Lien) or § 742.538 (direct PIP subrogation). It amended both of these statutes along with § 742.544 (Oregon’s “Make-Half” or “Make Whole” statute). The bill introduced added more details and even some presumptions to the application of the Made Whole Doctrine to PIP subrogation. Section 742.544 was amended to read as follows:
742.544. Reimbursement for payment of personal injury protection benefits.
(1)(a) As used in this subsection, “total amount of the recovery” means the amount that a person injured in a motor vehicle accident recovers from:
(A) Underinsured motorist benefits described in ORS 742.502 (2);
(B) Liability insurance coverage the injured person receives from other parties involved in the motor vehicle accident;
(C) Personal injury protection benefits or health insurance benefits; and
(D) Any other payment by or on behalf of the party that caused the motor vehicle accident.
(b) An insurer may not receive a reimbursement or subrogation for personal injury protection benefits or health benefits the insurer provided to a person injured in a motor vehicle accident from any recovery the injured person obtains in an action for damages except to the extent that:
(A) The injured person first receives full compensation for the injured person’s injuries; and
(B) The reimbursement or subrogation is paid only from the total amount of the recovery in excess of the amount that fully compensates for the injured person’s injuries.
(2) For purposes of this section, the following rebuttable presumptions apply:
(a) The amount of any judgment that an injured person obtains is the amount necessary to fully compensate for the injured person’s injuries.
(b) An injured person has received full compensation for the injured person’s injuries if the amount of the recovery is less than the coverage available to the injured person from the sum of benefits paid under another person’s motor vehicle liability policy, under an underinsured motorist policy described in ORS 742.502 (2), as personal injury protection payments and from any other source of payment from or on behalf of the party whose fault caused the injuries.
(c) An injured person has not received full compensation for the injured person’s injuries if the injured person recovers an amount that is equal to the coverage available to the injured person from the sum of benefits paid under another person’s motor vehicle liability policy, under an underinsured motorist policy described in ORS 742.502 (2), as personal injury protection payments and from any other source of payment from or on behalf of the party whose fault caused the injuries.
(3) An insurer may not deny or refuse to provide benefits that are otherwise available to an injured person because of the potential the injured person has to make a claim or bring an action against another person or enter into a settlement with another person.
(4) A person with whom an injured person enters into a settlement or from whom the injured person obtains a judgment in connection with a claim or action may not name an insurer that seeks a reimbursement or subrogation under ORS 742.536 or 742.538 as a payee on a check, draft or other form of payment in satisfaction of the claim or judgment.
(5) An insurer may not delay, withhold or reduce benefits to an injured person because of an act or omission for which a third party is or may be liable or as a means of enforcing or attempting to enforce a claim for reimbursement or subrogation.
(6) An insurer that receives a reimbursement for benefits the insurer provided to an injured person shall apply the amount of the reimbursement as a credit against any lifetime maximum benefit set forth for the injured person in the policy, benefit plan or contract under which the insurer paid the benefits.
(7) A provision in a policy, benefit plan or contract that permits reimbursement or subrogation other than as provided in this section is void and unenforceable.
(8) This section does not:
(a) Prohibit insurers from coordinating benefits;
(b) Limit an insurer’s right to seek reimbursement or subrogation to recover, without reduction, amounts the insurer paid for property damage;
(c) Limit an insurer that provided coverage against underinsured motorists from pursuing a claim against a party at fault; or
(d) Require a person to repay more than the amount of personal injury protection benefits that the person actually received. O.R.S. § 742.544.
The new statute continues to apply the Made Whole Doctrine to PIP subrogation, allowing PIP reimbursement only when the insured is (1) fully compensated for his injuries, and (2) the reimbursement is paid from the “total amount of the recovery” in excess of the amount necessary to fully compensate the insured. The phrase “total amount of the recovery” includes:
- UIM benefits;
- Liability insurance payments;
- PIP and/or health insurance benefits received; and
- Any other payment by or on behalf of the tortfeasor.
The statute also creates rebuttable presumptions that (1) the amount of any judgment is the amount necessary to make the insured whole; (2) the insured is made whole if the settlement is for less than the liability limits; and (3) the insured is not made whole if the insured recovers the amount of liability limits, UIM limits, or PIP limits.
It should be noted that the underlined portion of the amended statute above appears to limit the application of the Made Whole Doctrine into Oregon’s PIP reimbursement scheme only with respect to any recovery that “the injured person obtains in an action for damage.” This raises the question of whether this applies only when a lawsuit is filed and does not apply to settlements.
The new statute also introduces some other novel issues that affect PIP subrogation. The tortfeasor/liability carrier may not include the PIP carrier’s name on a settlement check. The amount of any reimbursement is applied as a credit against any lifetime maximum benefits in the plan, policy, or contract owed to the insured. In addition, any reimbursement or subrogation clause which provides any rights other than those set forth in § 742.544 is void and unenforceable.
The implications of Senate Bill 421 on a PIP carrier’s ability to pursue “inter-insurer reimbursement” pursuant to § 742.534 remain unclear in the wake of its passage. The chances are that it is going to make what has been generally a very smooth PIP reimbursement process under this statute significantly more difficult.
Medical Expenses, Insurance Write-Offs, and The Collateral Source Rule
Collateral Source Rule: Oregon’s CSR modified by statute. Section 31.580 allows for the introduction of evidence of collateral source payments by affidavit after trial, but prior to final judgment. Exceptions: (1) if subrogation owed; (2) life insurance or death benefits; (3) insurance that plaintiff paid premiums for; and (4) retirement, disability, pension, and Social Security. O.R.S. § 31.580.
Recovery Of Medical Expenses Rule:
Private Insurance: Amounts paid by insurance is admissible. White v. Jubitz Corp., 182 P.3d 215 (Or. App. 2008) aff’d 219 P.3d 566 (Or. 2009). No decisions regarding whether court must deduct write-off amounts from jury verdict.
Medicare/Medicaid/Oregon Health Plan: Can recover amount of Medicare billed, and they are not admissible at trial. White v. Jubitz Corp., 219 P.3d 566 (Or. 2009). Medicaid, like Medicare, is a federal Social Security program, and, pursuant to § 31.580(1)(d), a court may not reduce a plaintiff’s award of damages by the amount of Medicaid write-offs. Cohens v. McGee, 180 P.3d 1240 (Or. App. 2008).
Related Law/Comments: Plaintiff entitled to recover the full amount of all medical bills incurred regardless of any write-offs taken by the medical provider due to Medicare, Medicaid, or Oregon Health Plan.
Employee Leasing Laws
The employee leasing company and the client company are both immune from third-party actions under the Exclusive Remedy Rule, provided they comply with all of the provisions required under the Act. O.R.S. § 656.020 and O.R.S. § 656.850.
Hospital Lien Laws
Statute: OR. Stat. §§ 87.555 – 87.585. Medical Services Lien. OR. Stat. §§ 87.607 – 87.633. Ambulance Services Lien.
(1) File notice of lien no later than 30 days after patient discharged, with recording officer of the county where the hospital is located.
(2) Must contain statement of amount claimed and be filed prior to date of third-party settlement.
(3) Serve certified copy of notice of lien on tortfeasor and its liability carrier before judgment or settlement.
(4) No later than 30 days after discharge of patient from hospital, must
(5) Notice of lien must be in form prescribed by § 87.750 and contain statement of amount claimed. §§ 87.555, 87.565.
Comments: Hospital, physician, nurse practitioner, and physician assistant have lien on any sum awarded to or recovered by the injured person for the reasonable value of the medical treatment rendered prior to the recovery. No lien if workers’ compensation involved. Lien extends to PIP policy. If not enough funds to satisfy all liens, the tortfeasor’s liability carrier must prorate the available funds without regard to the sequence of filing notice of liens, in proportion to the amount due each for services rendered. § 87.555. No lien once a settlement has been reached. Attorneys’ fees take priority. No lien on PIP payments made before the lien was filed. § 87.560. Form of Notice of Lien. § 87.570. Third-party carrier liable to hospital or physician for reasonable value of services if it receives notice of lien and still settles without paying provider. Action by hospital/physician must be commenced with 180 days after the settlement/payment. § 87.581. Lien can be foreclosed by filing suit in circuit court and both lien and reasonable attorneys’ fees “at trial” can be recovered. § 87.585.
OCIP/CCIP Subrogation In Workers’ Compensation Construction Cases
OCIP Law: Who is a “covered worker” is normally determined by the right to control the details of the employee’s work. This is true even when there is an OCIP. No automatic exclusive remedy protection. Schmidt v. Intel Corp., 112 P.3d 428 (Or. App. 2005).
Statutory Employer Law: In general, a general contractor is not the “employer” of a subcontractor’s injured employee and is not protected by the exclusivity provisions of workers’ compensation law. Martelli v. R.A. Chambers and Associates, 800 P.2d 766 (Or. 1990). However, where an owner/contractor which contracts for performance of labor where such labor is a normal and customary part or process of that entity’s trade or business is responsible for providing workers’ compensation coverage to all individuals who perform labor under the contract, unless the subcontractor provides such coverage before labor under the contract commences. O.R.S. § 656.029.
Comments: The court In Martelli distinguished between a contract requiring primarily the performance of labor and one requiring the services of a separate business engaged in the occupation covered by the contract at the time performance of the contract commenced; i.e., whether an independent contractor is involved. The result will be different if there is purely the supplying of labor. Lancaster v. E.S.S. Corp., 1992 WL 66652 (9th Cir. [Or.] 1992) (unpublished opinion).
Recovery Of Increased Workers’ Compensation Premiums By Employer
Recovery For Increased Premiums? Probably Not.
Statute/Case Law: Ore–Ida Foods, Inc. v. Indian Head Cattle Co., 627 P.2d 469 (Or. 1981).
Rule Summary: Oregon has not specifically denied the employer a cause of action against the negligent third-party tortfeasor for the increased premiums it experiences as a result of a work-related accident caused by the tortfeasor. However, it does prohibit a plaintiff from recovering for economic loss resulting from negligent infliction of bodily harm to a third person.
Which Workers’ Compensation “Benefits” Can Be Subrogated?
There is no precedent or discussion in case law regarding whether nurse case management fees or other allocated costs which may benefit the employer and/or employee can be recovered in subrogation. Section 656.593 describes a workers’ compensation carrier’s subrogation lien as follows:
… expenditures for compensation, first aid or other medical, surgical or hospital service, and for the present value of its reasonably to be expected future expenditures for compensation and other costs of the worker’s claim under this chapter. O.R.S. § 656.593.
Workers’ Compensation Subrogation Waiver Endorsements
Subrogation Statute: O.R.S. § 656.593
Waiver Allowed? Nothing in the Oregon Workers’ Compensation Act or applicable case law prohibits the use or efficacy of a waiver of subrogation.
Effect Of Waiver Endorsement on Carrier’s Right To Assert A Lien On Claimant’s Recovery: The effect of a waiver of subrogation on the carrier’s rights, including its right to enforce its statutory lien, has not yet been decided.
Other Applicable Law: O.R.S. § 30.145, enacted in 2011, acts as a partial ban on waivers of subrogation in construction contracts. The section voids any contractual requirement that a party waive its right to subrogate claims against another party, or its right to seek indemnity or contribution for claims paid by one party and caused by another.
Statute of Limitations: 2 Years. O.R.S. § 656.593.
Can Carrier Sue Third Party Directly: Yes, 90 days after election.
Right to Intervene: No.
Recovery from UM/UIM Benefits: No.
Subrogation Against Medical Malpractice: Yes?
Subrogation Against Legal Malpractice: Yes.
Recovery Allocation/Equitable Limitations: (1) Fees, Expenses; (2) Carrier Reimbursed Fully For Past and Future Benefits; (3) Carrier Reimbursed Fully; and (4) Balance to Plaintiff Credit. (Possible “Just and Reasonable” Allocation)
Employer Contribution/Negligence: No.
Attorney’s Fees/Costs: No, off the top.
Future Credit: No, must recover in third-party suit. Possible credit if recovery made before benefits paid.
Auto No-Fault: No.
Workers’ Compensation Claims by Undocumented Employees
Y/N/U: . Y
Statute: All workers are covered under workers’ compensation with a few exceptions. The statute is silent on “aliens” as well as “legal” or “illegal.” Or. Rev. Stat. § 656.027.
Case Law: Alanis v. Barrett Bus. Servs. (In re Alanis), 39 P.3d 880 (Or. Ct. App. 2002); Hernandez v. SAIF Corp., 35 P.3d 1099 (Or. Ct. App. 2001).
Comments/Explanation/Other: Alanis held that employees are not entitled to benefits for TTPD based on the full TTD rate just because they cannot work due to their undocumented status. TPD benefits are to be based on the difference between pre-injury wage and the wage of the physician-approved modified jobs. Hernandez held that undocumented workers who can perform modified work for an employer are to have their benefits reduced to reflect the income that they would have received but for their undocumented status.