Federal Judge Rejects Insurer’s Motion to Bifurcate Moody Claims

This office represents Brook Gebremedhin, whose home suffered a burst pipe during the historic winter freeze in January 2024. Plaintiff filed suit against American Family Insurance Company in July 2024, alleging claims for breach of contract and violation of O.R.S. 746.230.  American Family assigned Chock Barhoum to defend, and exercised its right to remove the case to federal court.

Mischaracterizing plaintiffs’ O.R.S. 746.230 negligence claim as a “bad faith” claim, American Family filed a motion to bifurcate plaintiff’s claims. On August 29, 2025, Judge Stacie Beckerman issued a minute order rejecting American Family’s motion as follows:

"Having considered the relevant factors (see Clark v. I.R.S., 772 F. Supp. 2d 1265, 1269 (9th Cir. 2009); see also FED. R. CIV. P. 42(b)), the Court finds that Defendant has failed to meet its burden of demonstrating that bifurcating Plaintiff's claims for discovery or trial would 'promote judicial economy [or] avoid inconvenience or prejudice to the parties." Clark, 772 F. Supp. 2d at 1269 ("Bifurcation... is the exception rather than the rule of normal trial procedure[.]') (citations omitted)."

In a Fee Proceeding Following a Historic Jury Verdict Exceeding $150 Million, Magistrate Judge Clarke Awarded Attorney Fees with a 30% Enhancement to Reflect the Prevailing Party’s Exceptional Success

In his opinion dated July 15, 2025, (view opinion here), Judge Mark Clarke granted the prevailing defendant/counter claimant’s Federal Civil Procedure Rule 54 motion for attorney fees. Bob Bonaparte served as defendant/counter claimant’s attorney fee expert.

Over the plaintiff’s strenuous objections and counterarguments, Judge Clarke awarded fees to defendant/counter claimant’s attorneys at their requested hourly rates and for all of the requested expenditures of time, without any reduction in either. In addition, based on the defendant/counter claimant’s “exceptional success” in the litigation, Judge Clarke awarded a 30% increase in the fee award to reflect the attorneys’ “extraordinary” success in achieving “what is likely one of the highest damage awards in the history of the state of Oregon.”

Magistrate Judge Beckerman Allows Plaintiff’s Motion to Amend to Include a Prayer for Punitive Damages

In her opinion dated July 9, 2025, (view opinion here), Judge Stacie Beckerman granted plaintiffs’ motion for leave to amend to include a prayer for punitive damages. Judge Beckerman’s opinion acknowledges that punitive damages can be available to remedy a homeowners insurance provider’s violations of the duty of care it owes to all of its Oregon policyholders pursuant to Or. Rev. Stat. § 746.230(1).

Plaintiffs Ari and Micah Hoffman own a home in Portland that suffered significant damage during the historic winter storm of January 2024. Four months after the loss, plaintiffs filed an action against their property insurer USAA in Multnomah County Circuit Court. Plaintiffs’ state-court complaint included an express allegation that the plaintiffs planned to amend their complaint to include a prayer for punitive damages. USAA removed the action to federal court.

Approximately ten months later, plaintiffs timely filed a Federal Civil Procedure Rule 15 motion to amend their pleading to include a prayer for punitive damages. Defendant opposed the motion, arguing: (1) futility; (2) prejudice; (3) undue delay; and (4) bad faith. See Foman v. Davis, 371 U.S. 178, 182 (1962). Judge Beckerman found that “the Foman factors were in plaintiffs’ favor,” and granted plaintiffs’ motion to amend. See Jensen v. Brown, 131 F.4th 677, 701 (9th Cir. 2025) (Rule 15(a)’s policy should be applied with “extreme liberality”).

Court Rejects Safeco’s Attempt to Avoid Coverage Based on Definition of “Residence Premises”

Our clients, John and Karen Durkheimer, own homes in Portland, on the coast, and in Carmel, California. All three homes are insured by Safeco.

During the January 2024 freeze, the Durkheimers’ home in SW Portland suffered hundreds of thousands of dollars of water damage due to burst pipes. Their insurer, Safeco, failed to indemnify their loss in full.

In the ensuing litigation, Safeco raised an affirmative defense asserting that plaintiffs were required to reside at the home in order to maintain coverage. In support, Safeco pointed, not to a coverage exclusion requiring residency as an express condition of coverage, but to policy definitions defining the “insured location” as the policyholders’ “residence premises” and defining “residence premises” in turn as the “family dwelling, used principally as a private residence. . . where [the policyholders] reside.” The Durkheimers readily conceded that the SW Portland home was not their sole or primary residence, but argued that the policy definitions were intended only to identify the home that was the subject of the insurance provided under the policy, and not to act as a condition of coverage.

Plaintiffs filed a Rule 12(f) motion to strike Safeco’s affirmative defense. On February 12, 2025, Judge Stacie Beckerman issued her Findings and Recommendation recommending that the defense be stricken (view opinion here). On April 1, 2025, Judge Michael Simon adopted the Findings and Recommendation and struck the defense as insufficient as a matter of Oregon law (view opinion here).

Fix Insurance by Allowing Lawsuits

Robert E.L. Bonaparte and Stephen D. Leggatt’s Letter to the Editor of The Oregonian:

We are lawyers who represent homeowners shortchanged by property insurers after disasters like fires, treefalls, or burst pipes. If our cases don’t settle, they proceed to jury trial to hold insurers accountable. Lawyers often take such cases on contingency, because under Oregon law a recovery in any amount obliges insurers to pay policyholders’ attorney fees.

Much ink has been spilled about Luigi Mangione, whose manifesto savages health insurers and their unfair coverage denials. But the debate omits a key issue.

The problem is: you can’t sue [the bastards]. Most Americans get health insurance through their job, meaning their health insurance plans are subject to the federal ERISA statute. Under ERISA, health insurers cannot be sued in state court. And before they can sue an ERISA health insurer in federal court, consumers must first “exhaust” all “administrative remedies” available from the same health insurer that denied their claims. This process is a minefield of arcane rules calculated to extinguish the insured’s right to sue.

Even if consumers clear that hurdle, their claims will be decided, not by a jury, but by a federal judge whose only function is to determine whether the insurer’s denial was “rationally based” – a very low threshold. If there was any rational basis for the insurer’s decision, the consumer’s claims will be dismissed.

The remedy: scrap ERISA and allow consumers to take lawsuits against health insurers to a jury. Consumers’ lawyers will function as a legion of private attorneys general, and bring recalcitrant health insurers to heel.

Presentation on Attorney Fees to OSB Business Litigation Section

On October 24, 2024, Bob Bonaparte made a presentation on recovery of attorney fees to the Oregon State Bar’s Business Litigation Section. The materials can be accessed here.

"Moody v. Oregon Community Credit Union: The Oregon Supreme Court Heralds a Significant New Development in First-Party Insurance Litigation"

In the February 2024 issue of Multnomah Lawyer (published by the Multnomah Bar Association), Stephen Leggatt analyzes the Oregon Supreme Court’s recent landmark decision affirming that policyholders harmed by insurance companies’ unfair claims settlement practices may sue their insurers for negligence and may seek award of emotional distress damages. Read the article here; view the opinion here.

Oregon Supreme Court Affirms that Policyholders May Sue Insurance Companies for Emotional Distress

Oregon Supreme Court Affirms that Policyholders May Sue Insurance Companies for Emotional Distress (and Likely Other Extra-Contractual Consequential Damages) Where the Insurer Engages in Unfair Practices Such as Unreasonable Delay, Inadequate Investigation, and Underpayment of Claims

On December 29, 2023, the Oregon Supreme Court issued its long-awaited opinion in Moody v. Oregon Community Credit Union, SC Case No. S069409. View opinion here. The new opinion affirms the Oregon Court of Appeals’ groundbreaking January 26, 2022 opinion, which for the first time recognized a private cause of action to remedy an insurer’s violation of the standard of care every insurer owes to every Oregon policyholder under ORS 746.230.

In his January 26, 2022 Moody opinion, Judge Landau of the Oregon Court of Appeals found that, because ORS 746.230 creates a duty of care that insurers owe to their Oregon policyholders, an insurer’s negligent breach of that duty gives rise to a cause of action for money damages independent and distinct from any cause of action arising out of the insurer’s breach of the insurance policy itself. Moreover, Judge Landau specifically found that where the insurer’s violation of the statutory standard of care deprives the policyholder of the “peace of mind” that is the principal reason insurance consumers purchase insurance policies, the aggrieved policyholder may seek emotional distress damages from the insurer.

The Moody defendant appealed Judge Landau’s decision, and the insurance industry spilled considerable ink on amicus briefs roundly condemning Judge Landau’s legal reasoning. The Oregon Supreme Court heard oral argument on the appeal in November 2022.

More than 14 months later, the Oregon Supreme Court rejected the insurer’s appeal and affirmed Judge Landau’s decision. Although the Oregon Supreme Court agreed entirely with the result reached by the Court of Appeals in recognizing the availability of emotional distress damages in connection with a cause of action arising out of an insurer’s violation of the ORS 746.230 standard of care, its reasoning differed in one significant respect from Judge Landau’s.

Specifically, whereas Judge Landau characterized the newly recognized cause of action as a claim of “negligence per se” distinct from garden variety negligence, expressly rejecting the argument that such a cause may only lie in connection with a separate and independent common-law negligence claim against the insurer, the Oregon Supreme Court found that the newly recognized cause is simply a special case of an ordinary negligence claim and does, in fact, require that a common-law negligence claim “otherwise exist.” However, the Oregon Supreme Court determined that, in light of the nature of the relationship between policyholder and insurer, it is reasonably foreseeable that an insurer’s violation of the statutory standard of care will create a risk of harm to a legally protected interest of the policyholder of sufficient importance to give rise to a claim of negligence. The Oregon Supreme Court further found the policyholder’s legally protected interest in freedom from the unfair practices proscribed by ORS 746.230 to be both of a kind and of sufficient importance to warrant subjecting insurance companies to liability for the policyholder’s consequential emotional distress damages.

As the Oregon Supreme Court observed, its decision brings Oregon in line with the majority of jurisdictions which have recognized for years that where an insurer engages in unfair claims settlement practices, its conduct can cause policyholders significant harm beyond or apart from deprivation of the benefits of the insurance contract itself. To seek damages for such harm, policyholders need not prove that their insurers acted in bad faith in unreasonably delaying payments, failing to perform adequate investigation of claims, or deliberately underpaying valid claims, but rather need only show that the insurer’s conduct was in violation of the statutory standard of care.

In Moody, the only extra-contractual damages at issue were emotional distress damages. However, it is well worth noting that the court expressly left open the question whether other extra-contractual consequential damages could be available in connection with the newly-recognized cause of action. Indeed, given the court’s clear instruction that the claim sounds in negligence and is co-extensive with a common-law negligence claim, the new opinion provides no reason to doubt that the entire range of damages ordinarily available in connection with a negligence claim is likewise available in connection with a so-called Moody claim premised on violation of ORS 746.230.

As a result, the newly issued Moody opinion represents a significant victory for Oregon’s insurance consumers. Prior to Moody, policyholders who suffered financial catastrophe caused by their insurers’ unreasonably delayed payment (or significant underpayment) of insurance benefits had no recourse beyond recovery of the amounts owed under the policy, and no way to repair the damage caused by the delay in paying the full amount owed. Now, under Moody, the Oregon courts have a mechanism for holding insurers accountable for the harms caused by their unfair claims settlement practices.

"Spotlight on Attorney Fees: Recent Trends in Attorney Fee Case Law"

In the November 2023 issue of Multnomah Lawyer (published by the Multnomah Bar Association), Stephen Leggatt discusses the lessons to be learned from three recent significant attorney fee decisions by Oregon courts. Read the article here.

July 19, 2023 "The Oregon State Bar’s 2022 Economic Survey Has Been Released"

In the July/August 2023 issue of Multnomah Lawyer (published by the Multnomah Bar Association), Stephen Leggatt addresses noteworthy aspects of the just-released Oregon State Bar 2022 Economic Survey. Read the article here.

"Lessons Learned Along my Attorney Fee Journey"

In the Spring 2023 issue of Trial Lawyer (published by the Oregon Trial Lawyers Association), Robert (“Bob”) Bonaparte discusses some of his more memorable career cases involving attorney fees. Read the article here.

Multnomah County Circuit Court Rejects Proportionality Theory and Other Arguments for Capping Attorney Fee Awards

Judge Melvin Oden-Orr recently issued an attorney fee ruling (Findings of Fact and Conclusions of Law) in Ciferri v. State Farm Fire & Casualty Co. Multnomah County Circuit Court Case No. 21CV14243.

Plaintiff Seth Ciferri is a tattoo artist who suffered a theft loss of an estimated $55,000 in vintage tattoo machines from the trunk of his car. State Farm applied a $1,500 business property limitation to the loss. State Farm initially prevailed on its business property theory at court-annexed arbitration. However, following its assessment of plaintiff’s draft motion for partial summary judgment, State Farm agreed to pay the full alleged contract damages of $55,000, and to refer the parties’ attorney fee dispute to the court.

State Farm argued that plaintiff’s fee award should be capped at 33% of plaintiff’s recovery (e.g., $18,000) pursuant to a provision of the original fee agreement between plaintiff and counsel. State Farm also argued that the requested award was disproportionate to the plaintiff’s recovery. The court rejected State Farm’s arguments, and awarded all attorney fees requested in the amount of $234,835, including a 1.25 multiplier.

An Insider’s Guide for the Reluctant Federal Practitioner

On September 20, 2023, Stephen Leggatt gave an MBA-sponsored CLE presentation discussing the differences between federal and Oregon procedural rules, the ways the rules shape federal and state-court litigation practice, and the pros and cons of litigation in federal vs. state court.  The presentation is available for viewing here.

The Rights of Oregon Wildfire Victims Will Expire in September 2022

A Bonaparte & Bonaparte client is featured prominently in this Oregonian article regarding the devastation wrought by the 2020 wildfires in the Santiam Canyon area. Many Oregonians lost their homes in those fires, and many have faced serious challenges in connection with rebuilding their homes.  As the article relates, thousands of Oregonians lost their homes in the 2020 fires, and only a fraction of the destroyed homes have been rebuilt to date. In many instances, affected homeowners have been unable to rebuild their homes due to the failure of their insurance companies to comply with coverage obligations under their homeowners insurance policies.

Homeowners in that situation should know that a two-year statute of limitations governs their right to bring suit against their insurers. For many victims of the 2020 fires, that time is nearly past.

The Moody Blues

On May 13, 2022, Bob Bonaparte and co-presenter Rob May (Kilmer Voorhees & Laurick) gave an MBA-sponsored CLE presentation analyzing the ways in which the Oregon Court of Appeals’ recent decision in Moody v. Oregon Community Credit Union, 317 Or. App. 233 (January 26, 2022; view opinion here) is changing the ways insurance litigation is practiced in Oregon – and the ways in which it is not.  The presentation is available for viewing here. 

First Federal Court Decision to Interpret Moody

In a fire loss case against State Farm in Baker City, plaintiffs Cassie and Johnny Owens requested leave of court to file a motion to amend their complaint in Owens v. State Farm Fire and Casualty Company, U.S.D.C. Dist. Of Oregon Case No.: 2:22-cv-00119-HL to include a claim for negligence per se under the Oregon Court of Appeals’ recent decision in Moody v. Oregon Community Credit Union, 317 Or. App. 233 (January 26, 2022). Plaintiffs’ proposed amended pleading also included a claim for punitive damages arising out of the same conduct giving rise to plaintiffs’ proposed Moody claim.

State Farm declined to offer its consent, arguing that the proposed amendments were futile. Specifically, State Farm argued that (1) Moody was wrongly decided and did not constitute binding precedent that the District of Oregon was obliged to follow, (2) under Moody only “extreme” insurer misconduct can give rise to a claim for negligence per se against the insurer, and (3) conduct giving rise to a Moody claim against an insurer is insufficient as a matter of law to support a prayer for punitive damages. Plaintiffs filed their motion to amend, State Farm objected to the motion, and plaintiffs replied.  On April 4, 2022, Judge Andrew Hallman issued a minute order over State Farm’s objections, granting plaintiffs leave of court to state a Moody claim against the insurer for negligence per se and a prayer for punitive damages.

Federal District of Oregon Restricts an Insurer’s Assertion of a “Vacancy” Coverage Exclusion as a Matter of Oregon Law

On June 1, 2021, Judge Acosta of the District of Oregon issued a Findings and Recommendation in Davison v. Foremost Insurance Company, 20-cv-1387.  In Davison, the plaintiffs purchased an all-risk home-insurance policy to cover damage to a residential property they had inherited.  The policy contained a coverage exclusion for damage to the property caused while “the dwelling has been vacant for more than 30 consecutive days immediately before the loss.”  The policy defined “vacant” to mean “[t]he absence of most of. . . [t]he furniture. . . [and] [o]ther items needed for human occupancy as a dwelling.”  The property was subsequently damaged by fire while the plaintiffs were not using the property as a residence but rather were conducting renovations there, exclusively on weekends.  The defendant insurer denied coverage on grounds of the vacancy exclusion.

The plaintiffs moved for partial summary judgment as to the issue of the insured’s liability, only.  Judge Acosta found that, although the plaintiffs were concededly not using the property as a dwelling during the thirty days preceding the fire, the vacancy exclusion was inapplicable as a matter of Oregon law due to the continuous presence at the property of at least some furniture and household items, including chairs, tables, appliances, and food.  On that basis, Judge Acosta recommended that the court grant partial summary judgment in the plaintiffs’ favor as to the insured’s liability for breach of its indemnification obligations under the policy.

On June 23, 2021, Judge Mosman adopted Judge Acosta’s Findings and Recommendation as his own opinion, without modification.

Oregon Court of Appeals Allows Insurance Consumers to Sue for Emotional Distress

On January 26, 2022, the Oregon Court of Appeals issued its opinion in Moody v. Oregon Community Credit Union, CA Case No. A178244. View opinion here. The new opinion is groundbreaking, and allows first party plaintiffs in Oregon to claim emotional distress damages based on negligence per se under ORS 746.230. Section 746.230(1) prohibits insurers from engaging in a number of specified unfair claim settlement practices, including in particular: 

(d) Refusing to pay claims without conducting a reasonable investigation based on all available information;

(e) Failing to affirm or deny coverage of claims within a reasonable time after completed proof of loss statements have been submitted;

(f) Not attempting, in good faith, to promptly and equitably settle claims in which liability has become reasonably clear;

(g) Compelling claimants to initiate litigation to recover amounts due by offering substantially less than amounts ultimately recovered in actions brought by such claimants;

(h) Attempting to settle claims for less than the amount to which a reasonable person would believe a reasonable person was entitled after referring to written or printed advertising material accompanying or made part of an application;

ORS 746.230(1)(d)-(h). 

Prior to Moody, an insured’s primary remedy against an insurer was an action for breach of contract.  The Moody court changed Oregon law, establishing for the first time that Section 746.230(1) creates an independent standard of care owed by an insurer to its insureds, such that an insurer’s violation of the statute can give rise to a cause of action in tort.  Moreover, observing that “an elementary principle of insurance law is that insurance policies do not merely provide for the payment of funds in case of loss; they also provide the policyholder peace of mind,” the Moody court found that an insurer’s violation of any of the provisions of Section 746.230(1) can give rise specifically to a claim for negligence per se, in connection with which a wronged plaintiff may seek damages for emotional distress caused by the insurer’s unfair claim settlement practices.

The Moody court’s ruling provides an important new tool to lawyers seeking to vindicate the rights of insureds and can be expected to make it more expensive for insurers to deny or delay payment of valid claims.  That said, we can expect the Moody decision to be vigorously appealed.  As of now, however, the Moody decision is the law of the land.

Medford Wildfire Case Ruling Allows Attorney Fees Against Insurer for its Delay in Paying ALE (Additional Living Expense)

A renter in Talent, Oregon lost everything when her rental home burned up in the September 8, 2020, Almeda fire. She engaged Bonaparte & Bonaparte to file suit against her insurer (Lemonade Insurance Company) to recover compensation for her contents and unpaid ALE. In July 2021—11 months after the fire—Lemonade made a supplemental ALE payment, but disputed the insured’s entitlement to attorney fees. On September 30, 2021, Judge Charles Kochlacs of the Jackson County Circuit Court ruled that the insured was entitled to attorney fees based on the insurer’s delayed ALE payment. [See Opinion here.]

Insurance Law Handbook - Chapter 45

The Oregon State Bar invited Robert Bonaparte to author the chapter on attorney fees in the 2020 Insurance Law Handbook. Click here to read the chapter (which is co-authored by Dean Heiling).