Foraker v. USAA Casualty Insurance Company
Opinion and Order. The Court GRANTS Defendant's Motion 274 for Summary Judgment as to Plaintiff's First Cause of Action for Breach of Contract; DENIES Plaintiff's Motion 283 for Partial Summary Judgment on Breach of Contr act, Attorney Fees, Expert Costs, and Prejudgment Interest; and DENIES Plaintiff's request for a partial final judgment on Claim One pursuant to Federal Rule of Civil Procedure 54(b). Signed on 10/14/2016 by Judge Anna J. Brown. See attached 16 page Opinion and Order for full text. (bb)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
USAA CASUALTY INSURANCE
HEATHER A. BRANN
P.O. Box 11588
Portland, OR 97211
STEPHEN C. HENDRICKS
Hendricks Law Firm, PC
1425 S.W. 20th Avenue, Suite 201
Portland, OR 97201
Attorneys for Plaintiff
1 - OPINION AND ORDER
OPINION AND ORDER
JOSHUA N. KASTAN
ROBERT S. MCLAY
Hayes Scott Bonino Ellingson & McLay, LLP
203 Redwood Shores Parkway, Suite 480
Redwood City, CA 94065
MATTHEW C. CASEY
Bullivant Houser Bailey, PC
300 Pioneer Tower
888 S.W. Fifth Avenue
Portland, OR 97204
Attorneys for Defendant
This matter comes before the Court on Defendant USAA
Casualty Insurance Company's Motion (#274)
for Summary Judgment
as to Plaintiff's First Cause of Action for Breach of Contract
and Plaintiff Peggy Foraker's Motion (#283)
for Partial Summary
Judgment on Breach of Contract, Attorney Fees, Expert Costs, and
Prejudgment Interest, including for partial final judgment on
Claim One pursuant to Federal Rule of Civil Procedure 54(b).
For the reasons that follow,
the Court GRANTS Defendant's
for Summary Judgment as to Plaintiff's First Cause
of Action for Breach of Contract and DENIES Plaintiff's Motion
(#283) for Partial Summary Judgment on Breach of Contract,
Attorney Fees, Expert Costs, and Prejudgment Interest.
2 - OPINION AND ORDER
The following facts are undisputed and taken from the record
on summary judgment: 1
Plaintiff was injured in a two-car automobile collision on
January 4, 2012, when Plaintiff's car was struck by the car that
Adrian Neira, an uninsured motorist, was driving.
At the time of
the collision Neira was fleeing police and driving the wrong way
down a one-way street.
Defendant insured Plaintiff and her automobile under an
insurance policy that provided $50,000 in "Additional Personal
Injury Protection" (PIP), $100,000 on Medical Payments (MedPay),
and $1,000,000 in Uninsured Motorist (UM) benefits.
Neira was uninsured.
On January 5, 2012, Plaintiff reported the accident to
Defendant and made PIP and MedPay claims.
Plaintiff later made a
UM claim. Defendant accepted coverage under PIP and MedPay and
between February 6, 2012, and February 20, 2013, Defendant paid
In her Opposition (#289) to Defendant's Motion for Summary
Judgment Plaintiff moves to strike various exhibits and factual
materials filed by Defendant on summary judgment on the basis
that those materials are not relevant to the legal analysis as to
The mere fact that portions of the summary-judgment
record may not be material to the ultimate legal analysis,
however, is not a basis to strike those materials from the
Instead the Court disregards or gives little weight to
such material as described herein. Accordingly, the Court denies
Plaintiff's Motion to Strike presented in her Opposition to
Defendant's Motion for Summary Judgment.
3 - OPINION AND ORDER
$159,329.76 to Plaintiff for covered medical expenses under the
PIP and MedPay portions of the policy.
On February 20, 2013,
Defendant advised Plaintiff and her medical providers that
Defendant's payments exhausted the limits of Plaintiff's MedPay
and PIP coverages.
On April 8, 2013,
Plaintiff made a policy-limits demand for
$1,000,000.00, the full amount of the UM coverage, and the
parties engaged in extensive negotiations regarding the UM claim.
On May 30, 2013, the parties agreed to an open extension of the
time limit by which Defendant was required to respond to
Plaintiff's policy-limits demand for UM coverage.
On November 14, 2013,
Defendant offered to resolve
Plaintiff's UM claim by paying $250,000.00, but Plaintiff did not
accept this offer.
As noted below,
Plaintiff initiated this
litigation approximately four weeks later.
Plaintiff filed this action in Multnomah County Circuit
Court on December 16, 2013, and Defendant removed it to this
Court on January 16, 2014.
In her original Complaint,
Plaintiff asserted three claims
Plaintiff alleges Defendant breached the
insurance contract by refusing to make payments under the UM
coverage (Claim One); Plaintiff alleges Defendant's refusal to
pay UM benefits violated the Elderly Persons and Person with
4 - OPINION AND ORDER
Disabilities Abuse Prevention Act, Oregon Revised Statutes
124.005, et seq.
(Claim Two); and Plaintiff alleges Defendant's
actions in denying benefits under the UM coverage breached
Defendant's contractual implied covenant of good faith and fair·
dealing (Claim Three).
On April 23, 2014, the Court dismissed without prejudice
Claim Two as premature and with leave to amend if and when the
amount of money that Defendant owes to Plaintiff is actually
On August 28, 2014, the Court bifurcated the
proceedings to allow the parties to litigate Plaintiff's Claim
One to conclusion before litigating Claim Three.
After an eight-day bench trial the Court found the
negligence of Neira, the uninsured driver of the other vehicle,
caused Plaintiff personal injuries.
In particular, the Court
found Plaintiff incurred economic damages in the amount of
$1,172,338.04 and noneconomic damages in the amount of
$750,000.00 as a result of Neira's negligence.
On February 19,
2016, Defendant paid to Plaintiff the $1,000,000.00 UM policy
Summary judgment is appropriate when there is not a "genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law."
5 - OPINION AND ORDER
Fed. R. Civ. P. 56(a).
party must show the absence of a genuine dispute of a material
Rivera v. Philip Morris, Inc.,
395 F.3d 1142, 1146 (9th
See also Emeldi v. Univ. of Or., 673 F.3d 1218, 1223
(9th Cir. 2012).
In response to a properly-supported motion for
summary judgment, the nonmoving party must go beyond the
pleadings and point to "specific facts demonstrating the
existence of general issues for trial."
627 F.3d 376, 387
light one .
In re Oracle Corp. Sec.
"This burden is not a
(9th Cir. 2010).
The non-moving party must do more than show
there is some 'metaphysical doubt' as to the material facts at
A dispute as to a material fact is genuine "if the evidence
is such that a reasonable jury could return a verdict for the
Nigro v. Sears, Roebuck & Co., 784 F.3d 495,
(9th Cir. 2015) (quoting Anderson v. Liberty Lobby, Inc.,
U.S. 242, 248
The court must draw all reasonable
inferences in favor of the nonmoving party.
606 F.3d 584, 587
(9th Cir. 2010).
inferences may be drawn from the facts,
Sluimer v. Verity,
the case must go to the
jury" and summary judgment cannot be granted.
Torres v. City of
Los Angeles, 548 F.3d 1197, 1206 (9th Cir. 2008) (quoting LaLonde
v. County of Riverside, 204 F.3d 947, 959 (9th Cir.2000)).
A "mere disagreement or bald assertion" that a genuine
dispute as to a material fact exists "will not preclude the grant
6 - OPINION AND ORDER
of summary judgment."
Deering v. Lassen Cmty. Coll. Dist., No.
2:07-CV-1521-JAM-DAD, 2011 WL 202797, at *2
2011) (citing Harper v. Wallingford,
(E.D. Cal., Jan. 20,
877 F.2d 728, 731 (9th Cir.
See also Moore v. Potter, 701 F. Supp. 2d 1171 (D. Or.
When the nonmoving party's claims are factually
implausible, that party must "come forward with more persuasive
evidence than otherwise would be necessary."
v. Brekka, 581 F.3d 1127, 1137
LVRC Holdings LLC
(9th Cir. 2009) (citing Blue Ridge
Ins. Co. v. Stanewich, 142 F.3d 1145, 1149 (9th Cir. 1998)).
The substantive law governing a claim or a defense
determines whether a fact is material.
454 F.3d 975, 987
Miller v. Glenn Miller
(9th Cir. 2006).
resolution of a factual dispute would not affect the outcome of
the claim, the court may grant summary judgment.
As noted, the parties have filed Cross-Motions for Summary
Judgment on Claim One in which they each contend the Court must
issue summary judgment in their favor as a result of the Court's
Verdict ( #237) .
Defendant asserts the undisputed factual record requires the
Court to find Defendant did not breach the insurance contract
because Defendant did not deny Plaintiff's UM claim and because
it paid the $1,000,000.00 policy limit shortly after the Court
7 - OPINION AND ORDER
determined Plaintiff suffered damages in excess of that limit.
In addition, Defendant contends because the insurance contract
specifically contemplated the adjudication of any disagreement
between the insurer and the insured regarding the amount of
damages and because the parties' disagreement about the nature
and extent of Plaintiff's damages was not resolved until the
Court returned its Verdict, Defendant did not breach the contract
when it waited until after the Court's Verdict to pay the full
amount of the policy limit.
Defendant, therefore, contends it
did not breach the insurance contract and, therefore, it is
entitled to summary judgment on Claim One.
Plaintiff, on the other hand, contends Defendant's failure
to accept Plaintiff's UM claim and to pay the $1,000,000.00
policy limit before Plaintiff filed this action constitutes a
breach of the insurance contract.
As a result, Plaintiff
contends she is entitled to summary judgment on Claim One; a
declaration that Defendant breached the insurance contract;
prejudgment interest in the amount of $258,169.26, plus $63.65
per day from February 19, 2016; attorneys'
Oregon Revised Statute
fees pursuant to
742.061; and an award of expert costs.
Plaintiff also seeks a partial, "final" judgment on Claim One
pursuant to Federal Rule of Civil Procedure 54(b).
The UM policy provides Defendant:
8 - OPINION AND ORDER
will pay compensatory damages which [Plaintiff] is
legally entitled to recover from the owner or operator
of an uninsured motor vehicle because of:
Bodily injury sustained by [Plaintiff] and
caused by an auto accident; and
[Property damage] caused by an accident if
the Declarations indicates that [property
damage] UM Coverage applies.
Statement of Agreed Material Facts (#272), Ex. A at 24.
portion of the UM policy that relates to resolving disagreements
among the parties as to UM coverage or the amount of damages
If [Defendant] and [Plaintiff] disagree as to:
Whether the covered person is legally
entitled to recover damages from the owner or
operator of an uninsured motor vehicle; or
The amount of damages that the covered person
is legally entitled to collect from that
then, that disagreement may be arbitrated, provided
both parties so agree to the arbitration and agree to
be bound by the results of the arbitration.
disagreements concerning coverage under this Part may
not be arbitrated.
Statement of Agreed Material Facts (#272), Ex. A at 26.
"[U]nder well-established principles of contract law, a
contract action cannot be maintained .
. until the contract has
Vega v. Farmers Ins. Co. of Oregon, 323 Or. 291,
An insurer breaches the insurance contract "when the
insurer denies a claim for UM/UIM benefits, thereby refusing to
honor a promise to pay such benefits."
9 - OPINION AND ORDER
See also Pritchard
v. Regence Bluecross Blueshield of Oregon, 225 Or. App. 455, 460
As noted, the UM policy in this case imparts on
Defendant the duty to pay Plaintiff's UM claim in the event
Plaintiff would be entitled to recover from an uninsured motorist
compensatory damages caused by an automobile accident.
under Vega if Defendant breached its duty to pay Plaintiff's UM
claim as she asserts, that breach could only occur when Defendant
denied Plaintiff's UM claim in whole or in part.
As noted, it is undisputed that on May 30, 2013, the parties
agreed to an open extension of time in which Defendant was
required to respond to Plaintiff's policy-limits demand for UM
It is also undisputed that on November 14, 2013,
Defendant offered to resolve Plaintiff's UM claim by paying
$250,000.00, but Plaintiff did not accept that offer and instead
filed this action on December 16, 2013.
Moreover, the parties
did not invoke the arbitration provision in the UM policy.
Plaintiff, however, does not point to any portion of the
record that establishes either as a matter of undisputed fact or
creates a genuine issue of material fact as to whether Defendant
actually denied Plaintiff's UM claim in whole or in part in
violation of the policy terms.
Instead the record indicates
Plaintiff and Defendant were actively engaged in negotiating
Plaintiff's UM claim from April 8, 2013, until December 16, 2013,
when Plaintiff filed this action.
10 - OPINION AND ORDER
In particular, because
Plaintiff and Defendant agreed to an open-ended extension of time
for Defendant to respond to Plaintiff's policy-limits UM demand,
Plaintiff fails to establish as a matter of fact or law that
Defendant denied her UM policy-limits claim when it failed to pay
the policy limit before Plaintiff filed this action.
filing this action in December 2013, the Court concludes
Plaintiff effectively short-circuited the claims process before
the expiration of the open-ended time extension for Defendant to
state a final position on Plaintiff's policy-limits demand for UM
In its February 3, 2016, Verdict, the Court resolved the
disputed issues arising from the unresolved claims in that
process by finding the damages caused by Neira exceeded the
That Verdict, however, did not establish any
breach of the insurance contract.
Accordingly, although the
parties now agree Defendant was required to pay the full limit of
the UM claim upon receiving the Court's Verdict, Defendant did
not breach the contract because it did not deny Plaintiff's UM
claim in whole or part and because Defendant has now paid the
$1,000,000.00 UM policy limit.
On this record, therefore, the Court grants Defendant's
Motion for Summary Judgment as to liability on Claim One and
denies Plaintiff's Motion for Summary Judgment as to liability on
For the same reasons, the Court denies Plaintiff's
11 - OPINION AND ORDER
request for a partial final judgment as to Claim One under Rule
54 (b) .
Plaintiff moves for an order granting prejudgment interest
in the amount of $258,169.26, plus $63.65 per day from
February 19, 2016.
Defendant, on the other hand, contends
Plaintiff is not entitled to prejudgment interest because
Defendant did not breach the contract; the insurance policy does
not provide for the payment of any prejudgment interest; and,
any event, prejudgment interest is inappropriate under Oregon law
because the exact amount and the time from which interest would
accrue are not "ascertained or easily ascertainable."
Precision Seed Cleaners v. Country Mut.
976 F. Supp. 2d
(D. Or. 2013) (citing Farhang v. Kariminaser, 230 Or.
App. 554, 556 (2009)).
Plaintiff is not entitled to prejudgment interest under the
breach-of-contract theory underlying Plaintiff's Claim One
because, as noted, the Court has determined Defendant is entitled
to summary judgment as to Claim One.
In any event, there is not
any authority in the UM policy that authorizes an award of
prejudgment interest when the Court has granted summary judgment
as to Claim One in favor of Defendant.
Accordingly, on this record the Court concludes Plaintiff is
not entitled t.o prejudgment interest as to Claim One.
12 - OPINION AND ORDER
III. Attorneys' Fees
The parties agree Plaintiff is entitled to attorneys' fees
pursuant to Oregon Revised Statute
disagree, however, regarding the extent of attorney services for
which Plaintiff may recover attorneys' fees under
her Claim One.
The Court concludes the parties' dispute in this respect is
Although the parties are correct that attorneys' fees
742.061 apply only to the litigation of Claim One,
the Court concludes the issue of attorneys' fees as to Claim One
is likely to overlap with similar issues in the event that
Plaintiff prevails on the remaining claims.
therefore, concludes Plaintiff's current claim for attorneys'
fees should be resolved in the ordinary course after entry of a
final judgment that resolves all of the issues in this
In a Request for Admissions Plaintiff requested Defendant
admit the automobile accident that gave rise to this case caused
41 different medical conditions.
Plaintiff moves for expert-
witness fees under Federal Rule of Civil Procedure 37(c) (2) on
the basis that Defendant's failure to admit any medical
conditions were caused by the automobile accident required
Plaintiff to call expert witnesses at trial in order to establish
13 - OPINION AND ORDER
Rule 37 (c) (2) provides:
(2) Failure to Admit.
If a party fails to admit what
is requested under Rule 36 and if the requesting party
later proves a document to be genuine or the matter
true, the requesting party may move that the party who
failed to admit pay the reasonable expenses, including
attorney's fees, incurred in making that proof.
court must so order unless:
the request was held objectionable under Rule
the admission sought was of no substantial
the party failing to admit had a reasonable
ground to believe that it might prevail on
the matter; or
there was other good reason for the failure
At trial the Court heard a significant amount of contested
medical testimony from both sides regarding the many medical
conditions that Plaintiff alleged were caused by the automobile
accident, including significant disputed evidence as to a
hydrocephalus condition that caused the majority of Plaintiff's
damages and a cervical-spine injury that required significant
treatment, including surgery.
Indeed, of the $372,338.04 that
the Court found Plaintiff incurred in past medical expenses,
$307,600.20 were incurred to treat Plaintiff's hydrocephalus and
Although the Court ultimately concluded Plaintiff had proven
causati6n and damages in the amounts included in the Verdict,
14 - OPINION AND ORDER
that finding was made only by a preponderance of the evidence and
in the face of credible evidence to the contrary presented by
In fact, the Court noted at the end of trial:
Literally, this record is capable of variety of factual
conclusions; none of which could be overturned by an
appellate court because there is factual support for
the theories both sides are advancing.
I'm not saying
that as a threat or as an incentive but an observation.
Tr. of Proceedings (#262) at 12.
Thus, as to Plaintiff's
hydrocephalus and cervical-spine injury, the Court concludes
Defendant "had a reasonable ground to believe that it might
prevail on the matter."
R. Civ. P. 37(c) (2) (C).
To the extent that Plaintiff seeks expert-witness fees as a
result of Defendant's refusal to admit the accident caused the
other 39 conditions, the Court declines to issue such fees
because the vast majority (if not all) of the expert testimony at
trial related to Plaintiff's hydrocephalus and cervical-spine
injury and, therefore, "the admission[s] sought was of no
R. Civ. P. 37 (c) (2) (B).
Accordingly, on this record the Court denies Plaintiff's
request for expert-witness fees.
For these reasons, the Court GRANTS Defendant's Motion
(#274) for Summary Judgment as to Plaintiff's First Cause of
Action for Breach of Contract; DENIES Plaintiff's Motion (#283)
15 - OPINION AND ORDER
for Partial Summary Judgment on Breach of Contract, Attorney
Fees, Expert Costs, and Prejudgment Interest; and DENIES
Plaintiff's request for a partial final judgment on Claim One
pursuant to Federal Rule of Civil Procedure 54(b).
IT IS SO ORDERED.
DATED this 14th day of October, 2016.
United States District Judge
16 - OPINION AND ORDER
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