Foraker v. USAA Casualty Insurance Company
Opinion and Order - Defendant's partial motion to dismiss (ECF 345 ) is GRANTED. Plaintiff's Second and Fourth Claims for Relief are dismissed. Plaintiff's motion to amend (ECF 347 ) is DENIED. Signed on 7/26/2017 by Judge Michael H. Simon. (mja)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
Case No. 3:14-cv-87-SI
OPINION AND ORDER
USAA CASUALTY INSURANCE
Stephen Hendricks, HENDRICKS LAW FIRM, 1425 SW 20th Avenue, Suite 201, Portland, OR
97201; Heather A. Brann, HEATHER A. BRANN, ATTORNEY AT LAW, P.O. Box 11588, Portland,
OR 97211; James R. Jennings, JAMES R. JENNINGS, P.C., 1550 NW Eastman Parkway, Suite 275,
Gresham, OR 97030. Of Attorneys for Plaintiff Peggy Foraker.
Robert S. McLay and Joshua N. Kastan, 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 SW Fifth Avenue, Portland, OR 97204. Of
Attorneys for Defendant USAA Casualty Insurance Comapny.
Michael H. Simon, District Judge.
In this lawsuit, Plaintiff Peggy Foraker asserted three claims against her automobile
insurance carrier, Defendant USAA Casualty Insurance Company, arising out of a January 2012
car accident with an uninsured driver. Under Oregon common law, Plaintiff alleged breach of
express contract and breach of the implied covenant of good faith and fair dealing. Plaintiff also
PAGE 1 – OPINION AND ORDER
alleged financial abuse of a vulnerable person, in violation of Oregon Revised Statutes (“ORS”)
§§ 124.005, et seq. Earlier in this action, the Court dismissed Plaintiff’s claims of breach of
express contract and financial abuse of a vulnerable person. On March 23, 2017, the Court held
that Plaintiff may seek noneconomic damages from her claim of breach of the implied covenant
of good faith and fair dealing if she properly alleges and proves physical injury resulting from
Defendant’s alleged breach. The Court also denied Plaintiff’s motion to reinstate her claim for
financial abuse of a vulnerable person and granted Plaintiff leave to file a Second Amended
Plaintiff filed her Second Amended Complaint (“Complaint”) on April 21, 2017. In her
Complaint, Plaintiff asserts her original three claims, plus two new claims: a claim for
declaratory relief and money judgment for uninsured motorist benefits and a common law
negligence per se claim for negligent performance of an insurance contract. Defendant moves to
dismiss Plaintiff’s two new claims and Plaintiff moves for leave to amend. For the reasons
discussed below, Defendant’s motion is granted and Plaintiff’s motion is denied.
On January 4, 2012, Plaintiff was injured in an automobile collision caused by an
intoxicated, uninsured motorist. The next day, Plaintiff reported the accident to Defendant, her
insurer. By February 2013, more than a year later, Defendant had paid Plaintiff $159,329.76 for
covered medical expenses. On April 8, 2013, Plaintiff made a policy-limits demand against
Defendant for $1 million, which was the limit of Plaintiff’s uninsured motorist (“UM”) coverage
with Defendant. On May 30, 2013, Plaintiff and Defendant agreed to an “open extension” of
time for Defendant to respond to Plaintiff’s demand.
On November 14, 2013, Defendant offered to pay Plaintiff $250,000 to resolve Plaintiff’s
UM claim. Plaintiff rejected Defendant’s offer. On December 16, 2013, Plaintiff sued Defendant
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in Oregon state court, and Defendant removed the action to federal court, asserting diversity
jurisdiction. The case was assigned to U.S. District Judge Anna Brown.
Defendant moved to dismiss Plaintiff’s financial abuse claim as premature, and the Court
granted the motion. The Court then bifurcated Plaintiff’s implied covenant claim from her claim
for breach of express contract. The parties stipulated to a bench trial and waived their rights to a
jury. Plaintiff also moved for partial summary judgment, which the Court granted in part and
denied in part, determining, among other things, that the other driver was 100 percent at fault for
the accident. ECF 139. The issues of causation and damages, however, still needed to be
The Court held an eight-day bench trial from January 25 to February 3, 2016. The Court
found that the other driver’s negligence was a substantial contributing factor that caused
Plaintiff’s injuries and “awarded” Plaintiff $1,172,338.04 in economic damages and $750,000.00
in non-economic damages as a result of the uninsured motorist’s conduct. ECF 237. On
February 19, 2016, Defendant paid Plaintiff $1 million, which was the policy limit of her UM
The parties then cross-moved for summary judgment on Plaintiff’s claim of breach of
express contract. The Court granted Defendant’s motion and denied Plaintiff’s motion. The
Court explained that because Defendant never actually denied Plaintiff’s UM claim and because
Defendant paid Plaintiff $1 million promptly after the Court rendered its decision regarding
causation and the amount of Plaintiff’s damages, Defendant did not breach any express term of
its contract with Plaintiff. ECF 315. The Court also determined that because Plaintiff initiated
litigation during the claims negotiation process, Plaintiff “effectively short-circuited the claims
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process before the expiration of the open-ended time extension for Defendant to state a final
position on Plaintiff’s policy-limits demand.” Id. at 11.
On November 4, 2016, Judge Brown sua sponte recused herself from the remainder of
this case. ECF 325. On November 8, 2016, the lawsuit was reassigned to the undersigned judicial
officer. At that time, certain motions were pending, which the Court denied without prejudice.
On January 20, 2017, Plaintiff moved to reinstate her statutory claim for financial abuse of a
vulnerable person. ECF 333.
At the request of the Court, the parties briefed the following legal questions:
Under the circumstances of this case, are non-economic
damages available under Oregon law for Plaintiff’s claim of breach
of the implied covenant of good faith and fair dealing?
Under the circumstances of this case, what is the proper
measure of economic damages for Plaintiff’s claim of breach of the
implied covenant of good faith and fair dealing?
Should Plaintiff be permitted to reinstate her statutory
claim for financial abuse of a vulnerable person, or would such a
claim be futile under the circumstances of this case?
The Court issued its opinion answering the three questions on March 29, 2017. The Court
determined that non-economic damages could be available for Plaintiff’s claim of breach of the
implied covenant if she could plead and prove physical injury as a result of Defendant’s alleged
breach. The Court also determined that the measure of damages for such breach is traditional
expectation damages and are not subject to the $1 million bodily injury policy limit contained in
the insurance policy issued by Defendant. Finally, the Court concluded that Plaintiff could not
assert her claim for financial abuse of a vulnerable person under Oregon law, but granted
Plaintiff leave to seek reconsideration if Oregon law were to change, because the Ninth Circuit
recently had certified a question to the Oregon Supreme Court that could have implications on
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A. Plaintiff’s Claim for Declaratory Judgment
Plaintiff argues that she “needs” to add a claim for declaratory relief because she
prevailed in the Phase I bench trial in proving that the other driver was at fault, causing Plaintiff
significant economic and non-economic damages, and Defendant owed Plaintiff at least the full
amount of the $1 million insurance policy issued by Defendant. Plaintiff notes that a verdict1 was
entered in her favor, and argues that under the Federal Rules of Civil Procedure every verdict
must at some point be reduced to a judgment.2 Because Judge Brown granted summary judgment
in favor of Defendant on Plaintiff’s breach of contract claim, Plaintiff argues that she must add
some claim to her Complaint on which she prevailed at trial and on which judgment can be
entered in her favor. Plaintiff contends that she is not seeking to add any new cause of action to
litigate moving forward, but is merely conforming her pleadings to the results of the bench trial
and its “verdict.” She argues this is necessary in order for a “clean record,” so any appellate court
can see what claim was alleged and tried, for a judgment to be entered, and for this to be a “trial”
and not an “arbitration.”
Defendant responds that Plaintiff’s declaratory judgment cause of action is more than an
exercise of pleading-cleaning, because Plaintiff is seeking the entry of a judgment against
Defendant in this claim and will then request prejudgment interest. Defendant further argues that
any pleading-cleaning exercise is unnecessary because after the Court issued its verdict on the
Although this was a bench trial and not a jury trial, the Court announced its findings in a
document titled “Verdict.” ECF 237.
Plaintiff cites to Rule 49 as requiring that a “court must approve, for entry under
Rule 58” a judgment. Rule 49 only applies to jury trials. The rule that applies to bench trials is
Rule 52, which similarly requires that “[j]udgment must be entered under Rule 58.” Fed. R. Civ.
P. 52(a)(1). Rule 52 also permits a court the discretion to enter a judgment after partial findings
have been made, or to wait until the close of evidence. Fed. R. Civ. P. 52(c).
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damages suffered by Plaintiff caused by the uninsured motorist, Defendant paid to Plaintiff the
UM policy limits benefits, Judge Brown already denied Plaintiff’s request for prejudgment
interest, and the parties have already agreed that Plaintiff is entitled to recover reasonable
attorney’s fees in prosecuting Phase I of this action.
The procedural history of this case has been somewhat complicated with bifurcations and
split resolution of the issues. The case was originally bifurcated to address in Phase I Plaintiff’s
breach of contract claim. It was then bifurcated again and the trial part of Phase I only addressed
the issues of whether the uninsured motorist was a substantial factor in causing Plaintiff’s
injuries and the total economic and noneconomic damages suffered by Plaintiff as a result of
those injuries. The 100 percent fault of the uninsured motorist had been resolved through partial
summary judgment before the bench trial. Plaintiff “succeeded” in the Phase I bench trial and
obtained a “verdict” in her favor. In that verdict, the Court found that the uninsured motorist was,
in fact, a substantial factor in causing Plaintiff’s injuries and determined the total amount of
damages suffered by Plaintiff from those injuries.
Plaintiff did not, however, prevail in Phase I at summary judgment on her breach of
contract claim. Shortly after the Court concluded that the uninsured motorist caused Plaintiff’s
injuries and that those injuries resulted in damages that exceeded the policy limits, Defendant
paid Plaintiff the full policy limits. Because Plaintiff had given Defendant an open-ended
extension of time to consider her policy limits demand, the Court found that Defendant had not
breached the insurance contract by waiting until after the Court’s decision on causation and
damages before Defendant paid Plaintiff the policy limits.
As Plaintiff points out, it is unclear on what “claim” she prevailed at trial, because she did
not prevail in her breach of contract claim. The Court is not unwilling to allow Plaintiff to add a
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new claim for declaratory relief to confirm that which the Court has already adjudicated in
Plaintiff’s favor. Plaintiff’s new declaratory judgment claim, however, is not what the Court
declared after the bench trial.
Plaintiff’s claim seeks a declaration that the Defendant owes Plaintiff $1 million dollars
under the uninsured policy limit, that Plaintiff is entitled to a money judgment for $1 million, and
that Plaintiff is entitled to prejudgment interest and attorney’s fees. But after the bench trial, the
Court simply declared that the uninsured motorist was a substantial contributing factor in causing
Plaintiff’s injuries and those injuries resulted in $1,922,338.04 in economic and noneconomic
harm to Plaintiff. See ECF 237. The Court’s verdict only related to the liability of the uninsured
motorist and Plaintiff’s total damages. It did not specifically address whether Defendant was
liable for anything. Although the liability of the uninsured motorist may well be a straight line to
Defendant’s liability under Plaintiff’s UM policy, Defendant’s liability is not something the
Court actually decided at trial. Nor was it necessary for the Court to resolve Defendant’s liability
under its UM policy because of Defendant’s prompt payment after the trial.3 Thus, adding a
claim declaring Defendant’s liability is not, strictly speaking, amending the pleadings to conform
to what was tried in this case.
Additionally, regarding prejudgment interest, Judge Brown has already determined that
Plaintiff may not recover prejudgment interest on her breach of contract claim, because the UM
policy did not provide for prejudgment interest and because Judge Brown found that Defendant
did not breach the insurance policy and granted summary judgment against Plaintiff on her
breach of contract claim. Plaintiff’s claim for prejudgment interest, therefore, has already been
adjudicated against her and she may not attempt to revive that claim now. Moreover, because the
Whether Defendant’s payment was sufficiently “prompt” after the accident is the
subject of Plaintiff’s remaining claim for breach of the implied covenant of good faith.
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only appropriate declaratory judgment claim would be one declaring the liability of the
uninsured motorist and the amount of Plaintiff’s economic and noneconomic damages suffered,
it would not involve any damages owed by Defendant and would not be a claim on which
prejudgment interest against Defendant could be based.
Regarding attorney’s fees, the parties agree that Plaintiff is entitled to reasonable
attorney’s fees for prosecuting her claim at the Phase I bench trial. No new claim is required for
Plaintiff to pursue attorney’s fees. In fact, on March 10, 2017, the Court granted Plaintiff leave to
file a motion for her Phase I attorney’s fees before the final resolution of this case. ECF 336.
Plaintiff has yet to file that motion.
The fact that Plaintiff obtained a verdict in her favor after the bench trial does not require
amending the pleadings to add a new cause of action. The verdict can be part of the judgment
that will ultimately be entered in this case without identifying a specific cause of action on which
Plaintiff prevailed. Although Federal Rule of Civil Procedure 15 permits such an amendment, it
does mandate one. See Fed. R. Civ. P. 15(b)(2) (noting that a party may move to amend the
pleadings to conform to issues tried by express or implied consent, but that “failure to amend
does not affect the result of the trial of that issue”). That said, the Court is not unwilling to allow
a properly asserted claim for declaratory relief that accurately describes what the Court actually
declared after the trial—that the uninsured motorist caused Plaintiff’s injuries and the amount of
Plaintiff’s economic and noneconomic damages suffered as a result of the accident. Because
Plaintiff’s Second Claim for Relief does not do so, Defendant’s motion to dismiss is granted with
respect to this claim and Plaintiff’s motion amend is denied.
B. Plaintiff’s Claim for Negligence per se
Under Oregon law, to state a claim for negligence per se, a plaintiff must
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allege that (1) defendants violated a statute [or rule]; (2) that
plaintiff was injured as a result of that violation; (3) that plaintiff
was a member of the class of persons meant to be protected by the
statute [or rule]; and (4) that the injury plaintiff suffered is of a
type that the statute [or rule] was enacted to prevent.
Abraham v. T. Henry Constr., Inc., 230 Or. App. 564, 573 (2009) (alterations in original)
(quoting McAlpine v. Multnomah Cty, 131 Or. App. 136, 144 (1994)).
Defendant moves to dismiss Plaintiff’s negligence per se claim, arguing that in a firstparty insurance coverage dispute, unless there is a special relationship, Oregon law does not
permit a plaintiff to bring a tort claim against his or her insurer. Plaintiff responds that under
Oregon law a negligence per se claim may be brought when an insurer violates ORS § 746.230,
the Unfair Settlement Claims Practices Act, under two theories. First, ORS § 746.230 provides a
duty of care that is independent of the terms of the insurance contract, which gives rise to a tort
claim against an insurer. Second, because the statute articulates a statutory duty of care, the
violation of that law is actionable as negligence per se. Although there is not an Oregon case
directly on point regarding either of Plaintiff’s arguments, Oregon courts have developed a body
of case law regarding an insurer’s liability in tort that informs the Court’s analysis.
In Farris v. United States Fid. & Guar. Co., the Oregon Supreme Court held that an
insured cannot recover emotional distress damages resulting from the insurer’s refusal to defend,
finding that the insurance code was intended to prohibit insurance companies from breaching
insurance contracts and not to allow recovery of emotional distress damages. 284 Or. 453, 458
(1978). The court explained that there was nothing in the legislative history of ORS § 746.230 to
indicate that actions for breach of contract would be converted into tort actions, the statute
expresses no public policy promoting damages for emotional distress, and “[c]oncern about the
insured’s peace of mind does not appear to be the gravaman of the statutory policy.” Id. Three
years later, the Oregon Supreme Court confirmed that “violation of the provisions of the
PAGE 9 – OPINION AND ORDER
Insurance Code prohibiting certain conduct [do] not give rise to a tort action.” Bob Godfrey
Pontiac, Inc. v. Roloff, 291 Or. 318, 328 (1981). In Employers’ Fire Ins. v. Love It Ice Cream
Co., the Oregon Court of Appeals similarly held that “the violation of ORS 746.230(1)(f), which
requires insurers to settle claims promptly and in good faith where their liability is reasonably
clear, does not give rise to a tort action.” 64 Or. App. 784, 790 (1983).
The Oregon Supreme Court later clarified in Georgetown Realty Inc. v. Home Ins. Co.,
that an insurer may be liable to its insured in tort when the insurer is subject to a standard of care
that exists independent of the contract and without reference to the specific terms of the contract,
such as when the insurer undertakes the duty to defend, thereby creating a special relationship
with concomitant duties. 313 Or. 97, 110-11 (1992). Under analogous circumstances, Oregon
courts have occasionally allowed a plaintiff to rely on statutory provisions to create such an
independent standard of care. See, e.g., Abraham v. T. Henry Constr. Inc., 230 Or. App. 564, 573
(2009) (finding state building code provided standard of care independent of terms of the
contract); Simpkins v. Connor, 210 Or. App. 224, 232 (2006) (finding statute requiring the
production of medical records upon receipt of an authorized request provided statutory duty
owed to patients and those authorized to obtain records). The Oregon appellate courts have not,
however, specifically held that ORS 746.230 provides a standard of care sufficient to permit a
tort action against a first party insurance provider.4
Although Oregon appellate courts have not specifically addressed Plaintiff’s argument
that ORS § 746.230 provides a statutory standard of care that is independent of the contract and
Plaintiff submitted a 2013 Oregon trial court Order denying a motion to dismiss a
plaintiff’s negligence claim, and to strike certain paragraphs of the complaint relating to the
negligence claim, which stated that “ORS 746.230 provides a standard of care, independent of
the contract, that may give rise to a claim for negligence.” ECF 349-1 at 3, 4. There does not,
however, appear to be any relevant appellate decision in that case.
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therefore gives rise to a tort claim against the insurer under Georgetown Realty, several federal
decisions in this district, and a recent unpublished decision in the Ninth Circuit affirming one
such decision, have relied on the Oregon cases discussed above, among others, to hold that a tort
action may not be brought against a first party insurer. See, e.g., Braun-Salinas v. Am. Family
Ins. Grp., 665 F. App’x 576 (2016); Vail v. Country Mut. Ins. Co., 2015 WL 2207952, at *8 (D.
Or. May 11, 2015); Braun-Salinas v. Am. Family Ins. Grp., 2014 WL 1333731, at *7-8 (D. Or.
Apr. 1, 2014); HTI Holdings, Inc. v. Hartford Cas. Ins. Co., 2011 WL 6205903, at *5 (D. Or.
Dec. 8, 2011). These cases primarily rely on Oregon’s case law that declines to allow an insured
to bring a tort claim against its insurer except when the insurer has chosen to defend the insured.
These cases also particularly rely on the fact that Love It expressly found that ORS
§ 746.230(1)(f) did not give rise to a tort claim.
Plaintiff also argues that Georgetown Realty and its progeny do not need to be analyzed
because the Oregon Supreme Court, in Shahtout v. Emco Garbage Co., 298 Or. 598 (1985),
provides the necessary authority for allowing a negligence per se claim based on ORS § 746.230.
Plaintiff primarily relies on Clinicient, Inc. v. Sentinel Ins. Co., Ltd., 2016 WL 8470106 (D. Or.
Nov. 28, 2016), adopted by 2017 WL 991295 (D. Or., Mar. 14, 2017). In Clinicient, the
undersigned adopted the Findings and Recommendation (“F&R”) of Magistrate Judge Paul
Papak. The F&R acknowledged that Oregon law does not provide for any private cause of action
in tort for the violation of ORS § 746.230(1). Id. at *5. The F&R further acknowledged that
some opinions in this district have interpreted the fact that Oregon law does not allow “statutory
torts arising out of the violation of statutes lacking any provision for private causes of action as
PAGE 11 – OPINION AND ORDER
necessitating the conclusion that such statutes do not give rise to a standard of care the violation
of which could be actionable as negligence per se.”5 Id. The F&R explained, however, that:
Oregon law does not support that construction. In Shahtout v.
Emco Garbage Co., 298 Or. 598 (1985), decided seven years after
Burnette, specifically addressing negligence per se rather than
statutory torts, the Oregon Supreme Court clarified that:
The phrase “negligence per se” can apply only to cases
brought on a theory of liability for negligence rather than
liability grounded in obligations created by statute. Even
when a statute neither expressly nor impliedly gives a
person injured by its violation any claim for damages,
that person may have such a claim under existing
common-law theories, based on negligence or on
something else, to which the statutory violation may be
relevant. . . .
. . . . In a negligence case, the plaintiff must show that
defendant did not meet an applicable standard of due care
under the circumstances. When a plaintiff . . . invokes a
governmental rule in support of that theory, the question is
whether the rule, though it was not itself meant to
create a civil claim, nevertheless so fixes the legal
standard of conduct that there is no question of due
care left for a factfinder to determine; in other words,
that noncompliance with the rule is negligence as a matter
Shahtout v. Emco Garbage Co., 298 Or. 598, 601 (1985)
(emphasis added). Thus, Shahtout necessarily stands for the
proposition that a claim for negligence per se may rely for the
requisite statutory standard of care on a statute that, under
Burnette, does not and cannot give rise to a statutory tort. Because
the two district court opinions on which Sentinel relies conflate
statutory torts with negligence per se and presume that a cause of
action for the latter requires a statute giving rise to the former, their
holdings are untenable under Shahtout.
The F&R references Braun-Salinas and HTI Holdings, and their discussions of Burnette
v. Wahl and its progeny, which “stand for the proposition that, absent express provision for a
private cause of action, Oregon courts presume that a regulatory statute does not ‘create any civil
obligation or afford civil protection against the injuries which it was designed to prevent.’”
Clinicient, 2016 WL 8470106, at *5 (quoting Burnette, 284 Or. 705, 711 (1978)).
PAGE 12 – OPINION AND ORDER
Under Shahtout and Abraham, there is no requirement that the
violated statute (or rule) provide for a private cause of action to
remedy its breach.
Here, it is clear that Clinicient has alleged that Sentinel violated
Section 746.230(1) in a variety of ways, that Clinicient was injured
in consequence of those violations, that Clinicient was a member
of the class of persons intended to be protected by
Section 746.230(1), and that the damages Clinicient suffered were
of the kind Section 746.230(1) was enacted to prevent. Moreover,
Clinicient’s allegations that Section 746.230(1) was enacted to
prevent insureds in its position from suffering the kinds of
damages it allegedly did appear to be correct as a matter of law. In
consequence, Clinicient’s allegations are plainly sufficient to state
claim for negligence per se under applicable Oregon law. See
Abraham, 230 Or. App. at 573-74.
Clinicient, 2016 WL 8470106, at *5-6 (emphasis in original) (some citations omitted).
Plaintiff also cites to Ivanov v. Farmers, 344 Or. 421 (2008), as supporting the conclusion
that ORS § 746.230 supports tort claims under Oregon law. In Ivanov, the Oregon Supreme
Court listed tort and contract claims brought by the plaintiffs, but specifically noted that “neither
the parties nor the trial judge raised issues regarding the individual elements of the various legal
claims set out in plaintiffs’ complaint. The parties have similarly ignored those matters on
review.” Id. at 425 n.2. Instead, the sole issue on which the defendant had moved for summary
judgment was an issue of law under ORS § 742.524(1)(a), arguing that the plaintiffs were
required to prove the medical reasonableness and necessity of their individual claims. Id. at 42627. The Oregon Supreme Court disagreed, finding that the insurance company’s argument was
based on a faulty reading of ORS § 742.524(1)(a), that the plaintiffs’ did not have the initial
burden of demonstrating medical necessity but instead the insurance company had the initial
burden of establishing that the denials were reasonable, and that the gravaman of the plaintiffs’
complaint was that the insurance company employed unreasonable complaint review practices
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and thus the insurance company “needed to establish that the procedures it employed to deny
plaintiffs’ claims satisfied its statutory and common-law duties and did not violate the
prohibition set out in ORS 746.230(1)(d).” Id. at 429-31.
The court in Ivanov did not discuss negligence per se, Shahtout, Georgetown Realty, or
any of the arguments raised in this case. Plaintiff argues, however, that if tort claims are not
viable against the insurer, then it would be superfluous for the Oregon Supreme Court to
reference both contractual and common-law duties in Ivanov. Plaintiff further argues that the fact
that the Supreme Court reinstated all of the plaintiffs’ claims in Ivanov, including the bad faith
tort claim, shows the viability of such claims under Oregon law.
The Court does not believe that the Oregon appellate courts have definitively spoken on
the issue of whether ORS § 746.230 can provide the statutory duty of care necessary under
Shahtout to support a negligence per se claim or under Georgetown Realty to provide the
independent standard of care separate from the insurance contract to support a tort claim. Federal
courts considering Oregon law have split on these issues.6 Accordingly, the Court asked the
parties whether the Court should certify these questions to the Oregon Supreme Court. Although
the parties have not agreed on much during the highly contested litigation of this matter, they
both strongly urged the Court not to certify any questions to the Oregon Supreme Court. Each
party argues that its position is the only reasonable interpretation of Oregon law. Because both
parties agree that the Court should not certify any questions to the Oregon Supreme Court, the
Court will respect that agreement and will not do so.
Indeed, this Court has adopted Findings and Recommendations from two different
Magistrate Judges, each concluding differently with respect to the viability of a negligence per se
claim under similar circumstances. See Clinicient, 2017 WL 991295; Vail, 2015 WL 2207952.
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The Court is thus required to decide what the Oregon Supreme Court would decide on the
questions at issue if presented before that court. Oregon courts have repeatedly held that an
insured may not bring a tort claim against its insurer except under narrow circumstances, which
are not present in this case. Although the Court does not agree with the parties that Oregon law is
clear on these issues, the Oregon Supreme Court has not been expansive in providing tort
remedies to first party insureds and has repeatedly focused on contract remedies as providing the
appropriate claim. Allowing a negligence per se claim for alleged violations of ORS § 746.230 is
not materially different from allowing a direct statutory tort claim, which is expressly precluded.
Thus, it would be an expansion of Oregon law. Without better guidance from the Oregon
appellate courts, the Court declines to expand tort remedies against insurers as Plaintiff requests
in this case. The comment in Ivanov regarding common-law and statutory duties is not sufficient,
particularly in a case that did not directly address the elements of a tort claim against an insurer,
negligence per se claims, or claims under ORS § 746.230, to overcome the decades of Oregon
case law limiting first party tort claims against insurers.
Moreover, as explained by the Ninth Circuit in an unpublished decision,
Oregon’s highest and intermediate courts, however, have allowed a
negligence per se claim only where a ‘negligence claim otherwise
exists.’ Deckard v. Bunch, 358 Or. 754, 370 P.3d 478, 483. n.6
(2016). Because the Insureds cannot bring a negligence claim
under a statutory or common law theory, they are also precluded
from bringing a hybrid negligence per se claim.
Braun-Salinas, 665 F. App’x at 577-78; see also Abraham v. T. Henry Const., Inc., 350 Or. 29,
36 n.5 (2011) (“As the Court of Appeals correctly noted, however, negligence per se is not a
separate claim for relief, but is simply shorthand for a negligence claim in which the standard of
care is expressed by a statute or rule.”). In this case, Plaintiff cannot bring a traditional
negligence claim against her insurer. Thus, Plaintiff may not bring a claim of negligence per se.
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Although the Court acknowledges that it adopted the F&R in Clinicient and recognizes
that there may be some common law merit to Plaintiff’s arguments, this federal court is tasked
with evaluating what it believes the Oregon Supreme Court would most likely decide. After
considering the body of Oregon case law, the Court does not believe Oregon would allow an
insured to bring a negligence per se claim against its insurer for an alleged violation of ORS
§ 746.230 under the facts of this case. Thus, Defendant’s motion to dismiss this claim is granted
and Plaintiff’s motion to amend is denied.
Defendant’s partial motion to dismiss (ECF 345) is GRANTED. Plaintiff’s Second and
Fourth Claims for Relief are dismissed. Plaintiff’s motion to amend (ECF 347) is DENIED.
IT IS SO ORDERED.
DATED this 26th day of July, 2017.
/s/ Michael H. Simon
Michael H. Simon
United States District Judge
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