Stanford v. American Guaranty Life Insurance

574 P.2d 646, 281 Or. 325, 1978 Ore. LEXIS 751

• Court: Oregon Supreme Court
• Decided: February 14, 1978
• Docket: No. 416-735, SC 25081
• Status: Published

Opinion

DENECKE, C. J.

Plaintiff brought this action to recover proceeds of a credit-disability insurance policy. The defendant insurer prevailed in the trial court. The plaintiff appealed and we reversed, but remanded the cause to the trial court with instructions to redetermine whether plaintiff was entitled to recover. Stanford v. American Guaranty Life Ins. Co., 280 Or 525, 571 P2d 909 (1977). Plaintiff petitions this court for an allowance of attorney fees for services in this court pursuant to ORS 743.114. The defendant insurer contends plaintiff is not entitled to attorney fees until and unless plaintiff ultimately recovers on the policy. The petition is denied.

ORS 743.114 provides:

"If settlement is not made within six months from the date proof of loss is filed with an insurer and an action is brought in any court of this state upon any policy of insurance of any kind or nature, and the plaintiff’s recovery exceeds the amount of any tender made by the defendant in such action, a reasonable amount to be fixed by the court as attorney fees shall be taxed as part of the costs of the action and any appeal thereon.”

We stated the purpose of this statute (formerly ORS 736.325) in Heis v. Allstate Insurance Co., 248 Or 636, 643-644, 436 P2d 550 (1968):

"* * * The policy behind the statute is to encourage the settlement of claims and to discourage the unreasonable rejection of claims of insurers. * * * ”

The wording of the statute appears to condition the right to attorney fees upon "plaintiffs recovery.” The purpose of the statute is also served by such an interpretation. We, therefore, deny plaintiffs petition with leave to plaintiff to petition this court for attorney fees for services in this court if the plaintiff recovers on the policy in the proceedings now before the circuit court.