Oregon Claims Founded in 1935 Adjusters Aoregoncasualtyadjusters.org/news/OCAA News SEPTEMBER 2020.pdf · David Schuman, Oregon’s Remedy Guarantee: Article I, Section 10 of the

www.oregoncasualtyadjusters.orgPO Box 87 • Dexter, OR 97431

Founded in 1935OCAA provides

Insurance Claim Professionalswith information,

educational resources,and an arena for networking

Claims

Adjusters

Association

OregonSEPTEMBER 2020

Many of us are going through some veryunsettled times. With the Covid Pandemic,fires and smoke we can only hope and prayfor the safety of our friends, family and col-leagues. Our hearts go out to all those im-pacted in one way or another.

Most meetings continue to be via Zoom and other relatedapplications, and by cell phone and through email. Please stayconnected and reach out to one another — including OCAA.

We are still unable to resume our monthly meetings andluncheons at the Spaghetti Factory due to gathering restric-tions, and we have not implemented any Zoom meetings atthis time. It is our best guess that we will not resume with aluncheon but possibly come back in November 2020 with anannual belated Happy Hour Kick-Off. Stay tuned!

We are still planning for our annual OCAA Symposiumwhich has been confirmed and rescheduled to Thursday, April8, 2021 at the Holiday Inn in Wilsonville, Oregon. If you area vendor and interested in participating at some level, pleasecontact our Executive Assistant Barb Tyler for details andhow to sign up.

You are a vital part in making OCAA a success. Even thoughwe are not currently holding meetings/events due to the pan-demic, we still encourage adjusters to get their dues paid forthis year and vendors to renew their partnerships if they havereceived a renewal invoice. Payments can be made onlinewith a credit card at

www.oregoncasualtyadjusters.org/paypalpage.html

As always, let us continue to encourage one another, staypositive, mentor and share our knowledge. Together we canmake a difference!

Message from OCAA President

Nancy Greenidge, Norcross

The remedy clause of Oregon’s Constitution states:“No court shall be secret, but justice shall beadministered, openly and without purchase, com-pletely and without delay, and every man shallhave remedy by due course of law for injurydone him in his person, property, or reputation.”Or. Const., Art. I, § 10.

Oregon’s remedy clause, like the nearly forty other states withremedy clauses, has no federal model – there is no equivalentin the U.S. Constitution. Its principles come from the MagnaCarta, and is further bred of colonial distrust for the sover-eignty of legislative as well as executive power. The Constitu-tional Right to a Remedy, Speech by Thomas R. Phillips, ChiefJustice of the Texas Supreme Court, published in NYU L.Rev., Vol. 78:1309 (Oct. 2003).

Oregon is one of many states whose remedy clause wasadopted without a single word of debate or dissent among theframers and ratifiers, calling into question what the effect orparameters of the clause were intended to be, and leaving theclause wide open for interpretation. See NYU L. Rev., Vol.78:1309, 1315 (Oct. 2003), citing The Oregon Constitution andProceedings and Debates of the Constitutional Convention of1857, at 120, 310, 343, 468 (Charles Henry Carey ed., 1926).

As a result, it has been argued, “the remedy clause has not oc-casioned a coherent body of case law leading to anything thatcould be called an ‘interpretation.’” David Schuman, Oregon’sRemedy Guarantee: Article I, Section 10 of the Oregon Consti-tution, 65 Or. L. Rev. 35, 36 (1986).

(See Case Study… continued on page 3)

Case Study

Busch v. McInnis Waste Systems,Inc., 366 Or. 628, 468 P.3d 419(2020): The Coup de Grâce forthe Noneconomic Damages CapBy Hilary A. BoydDavis Rothwell Earle & Xóchihua, PC

OCAA — September 2020OCAA — September 2020 - 2 -

This newsletter is a publication of the Oregon Claims Adjusters AssociationIt is produced and distributed monthly by

Alquemie Publishing Ink(541) 937-2611

Mail correspondence to:PO Box 87, Dexter, Oregon 97431

Email to: [email protected] or [email protected]

OCAA Vital Statistics 2020-21PO Box 87, Dexter, OR 97431Website: www.oregoncasualtyadjusters.orgEmail: [email protected]

BOWLINGCAROL WATKINS503/314-7982BUDGET & FINANCE COMMITTEETRESSA GOBET, 503/208-1958CONSTITUTION & BYLAWSPAST PRES. SPUNKY GRAY, 800/788-3933PAST PRES. RON GRAY, 855/426-8898GOLFTRESSA GOBET, 503/208-1958JAMISON MCCUNE, 503/595-7820HOLIDAY PARTYNANCY GREENIDGE, 503/724-8213

LEGISLATIVE LIAISONPAST PRES. SPUNKY GRAY, 800/788-3933MEETING PROGRAM & SPEAKERSMELODY EWERS, 971/245-1066NEWSLETTER, SYMPOSIUM & WEBSITECOORDINATOR, EMPLOYMENT, FACEBOOKBARB TYLER, ALQUEMIE PUBLISHING541/937-2611, [email protected]

PARLIMENTARIANPAST PRES. RON GRAY, 855/426-8898SCHOLARSHIPCAROL WATKINS, 503/314-7982SYMPOSIUMNANCY GREENIDGE, 503/724-8213ROGER HOWSON, 206/676-3851JOHN BACHOFNER, 360/567-3906

FAIR USE NOTICE: This publication contains copyrighted material the use of which has not alwaysbeen specifically authorized by the copyright owner. News and informational articles posted here are for

the non-profit purposes of education and news reporting. We believe this constitutes a 'fair use' of anysuch copyrighted material as provided for in 17 U.S.C § 107.

PRESIDENTNANCY GREENIDGENORCROSS503/[email protected]

PRESIDENT-ELECTPOSITION OPEN

TREASURERTRESSA GOBETNORCROSS503/[email protected]

SECRETARYCAROL WATKINSINDEPENDENT503/[email protected]

ASSOCIATE BOARD MEMBERMELODY EWERSBAKER TILLY971/[email protected]

IMMEDIATE PAST PRESIDENTNANCY GREENIDGENORCROSS503/[email protected]

ASSOCIATE BOARD MEMBERPOSITION OPENANYONE WHO QUALIFIES FOR ASSOCIATEMEMBERSHIP IS ELIGIBLE TO FILL THISPOSITION. NON-VOTING.

Standing Committees

This summer, the Oregon Supreme Court found the $500,000statutory cap on noneconomic damages under ORS 31.710(1) unconstitutional on the basis of the remedy clause. Buschv. McInnis Waste Systems, Inc., 366 Or. 628, 468 P.3d 419(2020).

In Busch, Plaintiff lost his leg when he, a pedestrian, wasstruck by a garbage truck. He brought a personal injuryclaim for damages against defendant, a private entity. Pursu-ant to ORS 31.710(1), the trial court reduced the none-conomic damages that the jury awarded—$10,500,000—tothe maximum amount permitted by statute—$500,000. TheCourt of Appeals held that, as applied to plaintiff, the capviolated the remedy clause of Article I, section 10, of theOregon Constitution and reversed. The Oregon SupremeCourt upheld the Court of Appeals’ decision, overturnedprior case law in finding that the difference between damagesawarded by a jury and the damages permitted by statute isnot determinative of constitutional sufficiency of an awardwhere the cap is applied, and found that the cap violated theremedy clause regardless of that difference.

As pointed out by Justice Landau in his special concurrenceand dissent, the Oregon Supreme Court has never consis-

Case Study… (Continued from front page)

DUES RENEWAL TIME!We extend membership to anyone involved in theresolution of an insurance claim: Claims Adjusters,Casualty Claims Support Staff, Defense Attorneys,Private Investigators, Fire Origin & Cause Experts,Forensic Engineers and Forensic Accountants.

Trade Vendors can support the organization by becoming a VendorPartner-Advertiser — a form of membership.

To apply for membership or to RENEW DUES for 2020-21*, pleasevisit our website where you’ll find the membership application in PDFand the opportunity to pay dues online with a credit card.

Or use the application found on page 14 of this publication.

*Dues year runs August 1st thru July 31st.

www.oregoncasualtyadjusters.org

- 3 -

lquemie ublishing

nk

Barb Tyler(541) 937∙2611

[email protected] Box 87, Dexter, Oregon 97431

Newsletter Publishing • Executive Assistance • Event PlanningAnything your volunteers need help with ~ I can assist!

1994 ~ 2020Over 25 years providing

tailored services tononprofit organizations

“The next best thingto a volunteer!”

Find us conveniently at:

www.oregoncasualtyadjusters.orgwww.facebook.com/OregonClaimsAdjusters

tently decided whether or not the legislature is constrained bythe remedy clause:

“In Templeton v. Linn County, 22 Or. 313, 316,29 P. 795 (1892), the court concluded that theremedy clause doesn’t constrain the legislature atall. In Mattson v. Astoria, 39 Or. 577, 580, 65 P.1066 (1901), the court said yes, it does. Then inPerozzi v. Ganiere, 149 Or. 330, 345, 40 P.2d1009 (1935), the court said no, it doesn’t. Thecourt in Smothers v. Gresham Transfer, Inc., 332Or. 83, 123-24, 23 P.3d 333 (2001), said yes, itdoes, but only for claims that existed at commonlaw in 1857. Horton then said that Smothers waswrong in temporally limiting the effect of theremedy guarantee but otherwise was correct.Horton, 359 Or. at 218, 376 P.3d 998. What amess.”366 Or. at 653 (Landau, J. dissenting).

The prior basis for upholding the noneconomic damages capin cases involving non-state actor defendants was that “[…]Article I, section 10, is not violated when the legislature alters(or even abolishes) a cause of action, so long as the party in-jured is not left entirely without a remedy. Under those cases,the remedy need not be precisely of the same type or extent; itis enough that the remedy is a substantial one.” Hale v. Port

(Continued on page 5)

*** Notice ***All monthly luncheon meetingscanceled until further notice.

~ Welcome New Vendor Partner ~


This newsletter is a publication of the Oregon Claims Adjusters AssociationIt is produced and distributed monthly by

Alquemie Publishing Ink(541) 937-2611

Mail correspondence to:PO Box 87, Dexter, Oregon 97431

Email to: [email protected] or [email protected]

OCAA Vital Statistics 2020-21PO Box 87, Dexter, OR 97431Website: www.oregoncasualtyadjusters.orgEmail: [email protected]

BOWLINGCAROL WATKINS503/314-7982BUDGET & FINANCE COMMITTEETRESSA GOBET, 503/208-1958CONSTITUTION & BYLAWSPAST PRES. SPUNKY GRAY, 800/788-3933PAST PRES. RON GRAY, 855/426-8898GOLFTRESSA GOBET, 503/208-1958JAMISON MCCUNE, 503/595-7820HOLIDAY PARTYNANCY GREENIDGE, 503/724-8213

LEGISLATIVE LIAISONPAST PRES. SPUNKY GRAY, 800/788-3933MEETING PROGRAM & SPEAKERSMELODY EWERS, 971/245-1066NEWSLETTER, SYMPOSIUM & WEBSITECOORDINATOR, EMPLOYMENT, FACEBOOKBARB TYLER, ALQUEMIE PUBLISHING541/937-2611, [email protected]

PARLIMENTARIANPAST PRES. RON GRAY, 855/426-8898SCHOLARSHIPCAROL WATKINS, 503/314-7982SYMPOSIUMNANCY GREENIDGE, 503/724-8213ROGER HOWSON, 206/676-3851JOHN BACHOFNER, 360/567-3906

FAIR USE NOTICE: This publication contains copyrighted material the use of which has not alwaysbeen specifically authorized by the copyright owner. News and informational articles posted here are for

the non-profit purposes of education and news reporting. We believe this constitutes a 'fair use' of anysuch copyrighted material as provided for in 17 U.S.C § 107.

PRESIDENTNANCY GREENIDGENORCROSS503/[email protected]

PRESIDENT-ELECTPOSITION OPEN

TREASURERTRESSA GOBETNORCROSS503/[email protected]

SECRETARYCAROL WATKINSINDEPENDENT503/[email protected]

ASSOCIATE BOARD MEMBERMELODY EWERSBAKER TILLY971/[email protected]

IMMEDIATE PAST PRESIDENTNANCY GREENIDGENORCROSS503/[email protected]

ASSOCIATE BOARD MEMBERPOSITION OPENANYONE WHO QUALIFIES FOR ASSOCIATEMEMBERSHIP IS ELIGIBLE TO FILL THISPOSITION. NON-VOTING.

Standing Committees

This summer, the Oregon Supreme Court found the $500,000statutory cap on noneconomic damages under ORS 31.710(1) unconstitutional on the basis of the remedy clause. Buschv. McInnis Waste Systems, Inc., 366 Or. 628, 468 P.3d 419(2020).

In Busch, Plaintiff lost his leg when he, a pedestrian, wasstruck by a garbage truck. He brought a personal injuryclaim for damages against defendant, a private entity. Pursu-ant to ORS 31.710(1), the trial court reduced the none-conomic damages that the jury awarded—$10,500,000—tothe maximum amount permitted by statute—$500,000. TheCourt of Appeals held that, as applied to plaintiff, the capviolated the remedy clause of Article I, section 10, of theOregon Constitution and reversed. The Oregon SupremeCourt upheld the Court of Appeals’ decision, overturnedprior case law in finding that the difference between damagesawarded by a jury and the damages permitted by statute isnot determinative of constitutional sufficiency of an awardwhere the cap is applied, and found that the cap violated theremedy clause regardless of that difference.

As pointed out by Justice Landau in his special concurrenceand dissent, the Oregon Supreme Court has never consis-

Case Study… (Continued from front page)

DUES RENEWAL TIME!We extend membership to anyone involved in theresolution of an insurance claim: Claims Adjusters,Casualty Claims Support Staff, Defense Attorneys,Private Investigators, Fire Origin & Cause Experts,Forensic Engineers and Forensic Accountants.


To apply for membership or to RENEW DUES for 2020-21*, pleasevisit our website where you’ll find the membership application in PDFand the opportunity to pay dues online with a credit card.

Or use the application found on page 14 of this publication.

*Dues year runs August 1st thru July 31st.


- 3 -

lquemie ublishing

nk

Barb Tyler(541) 937∙2611

[email protected] Box 87, Dexter, Oregon 97431

Newsletter Publishing • Executive Assistance • Event PlanningAnything your volunteers need help with ~ I can assist!

1994 ~ 2020Over 25 years providing

tailored services tononprofit organizations

“The next best thingto a volunteer!”

Find us conveniently at:

www.oregoncasualtyadjusters.orgwww.facebook.com/OregonClaimsAdjusters

tently decided whether or not the legislature is constrained bythe remedy clause:

“In Templeton v. Linn County, 22 Or. 313, 316,29 P. 795 (1892), the court concluded that theremedy clause doesn’t constrain the legislature atall. In Mattson v. Astoria, 39 Or. 577, 580, 65 P.1066 (1901), the court said yes, it does. Then inPerozzi v. Ganiere, 149 Or. 330, 345, 40 P.2d1009 (1935), the court said no, it doesn’t. Thecourt in Smothers v. Gresham Transfer, Inc., 332Or. 83, 123-24, 23 P.3d 333 (2001), said yes, itdoes, but only for claims that existed at commonlaw in 1857. Horton then said that Smothers waswrong in temporally limiting the effect of theremedy guarantee but otherwise was correct.Horton, 359 Or. at 218, 376 P.3d 998. What amess.”366 Or. at 653 (Landau, J. dissenting).

The prior basis for upholding the noneconomic damages capin cases involving non-state actor defendants was that “[…]Article I, section 10, is not violated when the legislature alters(or even abolishes) a cause of action, so long as the party in-jured is not left entirely without a remedy. Under those cases,the remedy need not be precisely of the same type or extent; itis enough that the remedy is a substantial one.” Hale v. Port

(Continued on page 5)

*** Notice ***All monthly luncheon meetingscanceled until further notice.

~ Welcome New Vendor Partner ~

- 5 -

of Portland, 308 Or. 508, 523, 783 P.2d 506 (1989), reason-ing adopted in Greist v. Phillips, 322 Or. 281, 291, 906 P.2d789 (1995) (finding in the context of statutory wrongful deathcap that the capped remedy is a “substantial remedy” becausean award of 100% of economic damages plus $500,000 innoneconomic damages is a substantial amount and because ofthe historical limitation on wrongful death recovery).

With “substantiality” as the measure of constitutionality, indi-vidualized scrutiny of every application of the cap, or“comparison of immeasurables” was required in order to de-termine that the imposition of the cap did not result in a rem-edy that was so paltry so as to be no remedy at all. See Greist,322 Or. at 311-314. The “substantial remedy” test was fore-warned as being unworkable. Greist, 322 Or. at 311 (“the“substantial” test adopted by the court in this case is an un-clear, imprecise, and flawed basis for applying the Oregonconstitutional remedy guarantee clause” and “it is vague andgives no guidance to legislators, litigants, or ordinary citizensas to how courts will apply the standard.”) (Unis, J., concur-ring).

“Substantiality” as a requirement for a constitutionally suffi-cient remedy comes not from the Oregon Constitution butfrom the Oregon Supreme Court’s own dicta in Hale. Brief ofAmici Curiae Oregon Medical Association, America MedicalAssociation, and American College of Obstetricians and Gy-necologists in Support of McInnis Waste Systems, Inc., p. 13,Taylor, Hilary A., Keating Jones Hughes, PC (October 24,2019). The Busch majority officially demoted the substantial-ity test from being the test of constitutionality, and rejected,without discussion, the argument that any statute that limits aplaintiff’s recovery of noneconomic damages while permit-ting the plaintiff to fully recover economic damages satisfiesthe remedy clause in and of itself. Busch, 366 Or. at 647.They found that it would be error for them to rule that thelegislature is entitled to modify common-law remedies suchas noneconomic damages for any reason it [the legislature]deems sufficient. 366 Or. at 650.

The Busch majority acknowledged the reasons for the cap:“(1) the legislature sought to address the availability and af-fordability of insurance; and (2) the legislature adopted thecap as a tradeoff to the “broadening” of tort liability that hadoccurred in the 1960s and 1970s[,]” e.g., adoption of strictliability, abolishment of doctrines such as charitable immu-nity, contributory negligence as complete defense, and guest-passenger laws. Busch, 366 Or. at 648.

The Busch majority essentially held that an individual’s rightto pain and suffering damages in whatever amount a jurydeems appropriate outweighs the public policy interests thelegislature sought to advance when it enacted the cap in 1987.366 Or. at 651-52.

However, it is not explained why the state’s interest in sover-eign immunity, or a so-called Good Samaritan’s ability toreport abuse without facing liability, or any of the other in-stances of the legislature’s limitation of remedies which theCourt has not deemed violative of the remedy clause, aremore important interests than those of private citizens or pri-vate entities’ interest in being subject only to noneconomic


of Portland, 308 Or. 508, 523, 783 P.2d 506 (1989), reason-ing adopted in Greist v. Phillips, 322 Or. 281, 291, 906 P.2d789 (1995) (finding in the context of statutory wrongful deathcap that the capped remedy is a “substantial remedy” becausean award of 100% of economic damages plus $500,000 innoneconomic damages is a substantial amount and because ofthe historical limitation on wrongful death recovery).

With “substantiality” as the measure of constitutionality, indi-vidualized scrutiny of every application of the cap, or“comparison of immeasurables” was required in order to de-termine that the imposition of the cap did not result in a rem-edy that was so paltry so as to be no remedy at all. See Greist,322 Or. at 311-314. The “substantial remedy” test was fore-warned as being unworkable. Greist, 322 Or. at 311 (“the“substantial” test adopted by the court in this case is an un-clear, imprecise, and flawed basis for applying the Oregonconstitutional remedy guarantee clause” and “it is vague andgives no guidance to legislators, litigants, or ordinary citizensas to how courts will apply the standard.”) (Unis, J., concur-ring).

“Substantiality” as a requirement for a constitutionally suffi-cient remedy comes not from the Oregon Constitution butfrom the Oregon Supreme Court’s own dicta in Hale. Brief ofAmici Curiae Oregon Medical Association, America MedicalAssociation, and American College of Obstetricians and Gy-necologists in Support of McInnis Waste Systems, Inc., p. 13,Taylor, Hilary A., Keating Jones Hughes, PC (October 24,2019). The Busch majority officially demoted the substantial-ity test from being the test of constitutionality, and rejected,without discussion, the argument that any statute that limits aplaintiff’s recovery of noneconomic damages while permit-ting the plaintiff to fully recover economic damages satisfiesthe remedy clause in and of itself. Busch, 366 Or. at 647.They found that it would be error for them to rule that thelegislature is entitled to modify common-law remedies suchas noneconomic damages for any reason it [the legislature]deems sufficient. 366 Or. at 650.

The Busch majority acknowledged the reasons for the cap:“(1) the legislature sought to address the availability and af-fordability of insurance; and (2) the legislature adopted thecap as a tradeoff to the “broadening” of tort liability that hadoccurred in the 1960s and 1970s[,]” e.g., adoption of strictliability, abolishment of doctrines such as charitable immu-nity, contributory negligence as complete defense, and guest-passenger laws. Busch, 366 Or. at 648.

The Busch majority essentially held that an individual’s rightto pain and suffering damages in whatever amount a jurydeems appropriate outweighs the public policy interests thelegislature sought to advance when it enacted the cap in 1987.366 Or. at 651-52.

However, it is not explained why the state’s interest in sover-eign immunity, or a so-called Good Samaritan’s ability toreport abuse without facing liability, or any of the other in-stances of the legislature’s limitation of remedies which theCourt has not deemed violative of the remedy clause, aremore important interests than those of private citizens or pri-vate entities’ interest in being subject only to noneconomic

OCAA — September 2020OCAA — September 2020

when enacting the cap might be fatal to its constitutionality, eventhough they acknowledge that a quid pro quo has not alwaysbeen required in validating a legislature’s limitation of a consti-tutional right. 366 Or. at 652. They suggest that a quid pro quowould be some sort of alteration to the duty of care, without clar-ity about what that means. Id. Perhaps raising private citizens’or entities’ duty of care to others to something above a reason-ableness standard? We can expect a response from the legisla-ture at the prompting of the medical, insurance, and businesscommunities, given the blended private and public interests thathave been batted aside with the Busch decision.

— Contact the author at [email protected].

- 7 -- 6 -

damages awards that are “coherent,” (i.e., that treat similarlysituated cases similarly) or more important than the public in-terest in having affordable insurance premiums. See 366 Or. at663-64 (Balmer, J. dissenting). Attracting and keeping medicalprofessionals in Oregon, better access to health care, encourag-ing citizen compliance with compulsory automobile insurance,attracting businesses and economic opportunities for Orego-nians – all can be tied to affordability of insurance and regula-tion of noneconomic damages, and all are public interests thelegislature seeks to advance by way of imposing the cap.

Chief Justice Balmer, in his dissent, questioned the majority’sconclusory dismissal of the legislature’s exercise of its plenarypowers to limit recovery of noneconomic damages:

“But precisely because noneconomic damages inindividual cases are explicitly and inherently“subjective” and receive only the most limitedjudicial review and, viewed more generally, maybe incoherent and arbitrary, it seems to me thatthe legislature might well choose to exercise itsplenary authority over the civil justice system toregulate those damages in some way.Busch, 366 Or. at 670.

There is uncertainty after this decision as to whether any capon noneconomic damages would survive a remedy clause chal-lenge. The majority indicated, but did not decide, that the leg-islature’s failure to provide a quid pro quo, or a benefit con-ferred on plaintiffs counterbalancing the trial court’s mandateto reduce a jury’s noneconomic damages award to $500,000,

Five insurance tips for wildfire recovery

Salem – The Oregon Division of Financial Regulation hasfive tips for homeowners and renters who have evacuated orbeen affected by fire, smoke, and ash damage:

Call your insurance company to check your policy.Let your company know if you have evacuated. Cov-erage is typically available for fire, smoke, and ashdamage to your home and personal property.

Ask about your auto coverage, too. You need com-prehensive coverage on your auto policy to coverfire, smoke, and ash damage, no matter where yourvehicle is located at time of the loss.

If you had to evacuate, save your receipts and, whenit is safe, let your insurance company know youevacuated. Your homeowners policy may pay forexpenses such as lodging, food, and even pet board-ing due to a mandatory evacuation. Be sure to checkwith your insurance company to confirm your spe-cific coverage.

If you have not evacuated and it is safe to do so,make a quick home inventory by taking photos orvideo of each room in your home. Pay close atten-tion to what is on the walls and in drawers and clos-ets. Don’t forget storage areas such as the attic andgarage. Check your insurance company’s website foran app or checklist that will help. Or use the InsureU Home Inventory Checklist.

If your personal belongings are damaged, the insur-ance company will request a list of items that aredamaged or destroyed. Take some time to work onyour home inventory list now. Look through yourphotos and videos to help recall personal items. Besure to look for smaller items, such as jewelry. Tothe best of your ability, write down the age, originalcost, and replacement cost of each item.

Following these tips will help save you money, time, andstress during a wildfire. For more information on preparingfor a wildfire, visit the division’s wildfire page.

Oregonians that have been forced to evacuate their homesbecause of area wildfires should contact their insurancecompanies as soon as possible to let them know they haveevacuated and discuss next steps. If you still have questionsor concerns, the division’s Advocacy Team is here to help.Call the team at 888-877-4894 (toll-free) or visitdfr.oregon.gov.

Department issues wildfire emergency order

The Oregon Department of Consumer and Business Ser-vices’ Division of Financial Regulation has issued a wild-fire emergency order.

Insurance companies must immediately take steps to do the

News from theDivision of Financial Regulation

OCAA — September 2020OCAA — September 2020

when enacting the cap might be fatal to its constitutionality, eventhough they acknowledge that a quid pro quo has not alwaysbeen required in validating a legislature’s limitation of a consti-tutional right. 366 Or. at 652. They suggest that a quid pro quowould be some sort of alteration to the duty of care, without clar-ity about what that means. Id. Perhaps raising private citizens’or entities’ duty of care to others to something above a reason-ableness standard? We can expect a response from the legisla-ture at the prompting of the medical, insurance, and businesscommunities, given the blended private and public interests thathave been batted aside with the Busch decision.

— Contact the author at [email protected].

- 7 -- 6 -

damages awards that are “coherent,” (i.e., that treat similarlysituated cases similarly) or more important than the public in-terest in having affordable insurance premiums. See 366 Or. at663-64 (Balmer, J. dissenting). Attracting and keeping medicalprofessionals in Oregon, better access to health care, encourag-ing citizen compliance with compulsory automobile insurance,attracting businesses and economic opportunities for Orego-nians – all can be tied to affordability of insurance and regula-tion of noneconomic damages, and all are public interests thelegislature seeks to advance by way of imposing the cap.

Chief Justice Balmer, in his dissent, questioned the majority’sconclusory dismissal of the legislature’s exercise of its plenarypowers to limit recovery of noneconomic damages:

“But precisely because noneconomic damages inindividual cases are explicitly and inherently“subjective” and receive only the most limitedjudicial review and, viewed more generally, maybe incoherent and arbitrary, it seems to me thatthe legislature might well choose to exercise itsplenary authority over the civil justice system toregulate those damages in some way.Busch, 366 Or. at 670.

There is uncertainty after this decision as to whether any capon noneconomic damages would survive a remedy clause chal-lenge. The majority indicated, but did not decide, that the leg-islature’s failure to provide a quid pro quo, or a benefit con-ferred on plaintiffs counterbalancing the trial court’s mandateto reduce a jury’s noneconomic damages award to $500,000,

Five insurance tips for wildfire recovery

Salem – The Oregon Division of Financial Regulation hasfive tips for homeowners and renters who have evacuated orbeen affected by fire, smoke, and ash damage:

Call your insurance company to check your policy.Let your company know if you have evacuated. Cov-erage is typically available for fire, smoke, and ashdamage to your home and personal property.

Ask about your auto coverage, too. You need com-prehensive coverage on your auto policy to coverfire, smoke, and ash damage, no matter where yourvehicle is located at time of the loss.

If you had to evacuate, save your receipts and, whenit is safe, let your insurance company know youevacuated. Your homeowners policy may pay forexpenses such as lodging, food, and even pet board-ing due to a mandatory evacuation. Be sure to checkwith your insurance company to confirm your spe-cific coverage.

If you have not evacuated and it is safe to do so,make a quick home inventory by taking photos orvideo of each room in your home. Pay close atten-tion to what is on the walls and in drawers and clos-ets. Don’t forget storage areas such as the attic andgarage. Check your insurance company’s website foran app or checklist that will help. Or use the InsureU Home Inventory Checklist.

If your personal belongings are damaged, the insur-ance company will request a list of items that aredamaged or destroyed. Take some time to work onyour home inventory list now. Look through yourphotos and videos to help recall personal items. Besure to look for smaller items, such as jewelry. Tothe best of your ability, write down the age, originalcost, and replacement cost of each item.

Following these tips will help save you money, time, andstress during a wildfire. For more information on preparingfor a wildfire, visit the division’s wildfire page.

Oregonians that have been forced to evacuate their homesbecause of area wildfires should contact their insurancecompanies as soon as possible to let them know they haveevacuated and discuss next steps. If you still have questionsor concerns, the division’s Advocacy Team is here to help.Call the team at 888-877-4894 (toll-free) or visitdfr.oregon.gov.

Department issues wildfire emergency order

The Oregon Department of Consumer and Business Ser-vices’ Division of Financial Regulation has issued a wild-fire emergency order.

Insurance companies must immediately take steps to do the

News from theDivision of Financial Regulation

- 9 -

VETERAN CLAIMS EXECUTIVES know that sometimeslawsuits go off the rails. Juries can “run away,” key witnessescan crater on cross-examination, and judges can, occasionally,be injudicious.

However, there are warning signs:

1. It’s quiet, too quiet. Most insurers have reporting intervalsstated in their litigation guidelines, but these represent mini-mum standards, not the ideal. Ignoring reporting deadlines isbad enough, but it’s a danger sign when an attorney who hasbeen a more frequent correspondent than the guidelines rec-ommend goes radio silent.

It could be an illness or “nothing much doing.” Is it a high-endstakes case? Are there trial or pre-trial deadlines coming up?Those usually aren’t good times for the silent treatment;rather, times to over-communicate. Maybe counsel doesn’twant to broadcast what’s happening, hoping things will turnout fine, but forgetting Murphy’s Law. Clients hate surprises,especially ones that begin, “We regret to advise …”

2. The sudden, unexplained substitution of an expert wit-ness. There must be 100 good reasons why counsel might

Seven Signs a Claim is Aboutto Go WrongBy Louie CastoriaReprinted from DMA Claims Services Newsletter, September 2020

following until the order is no longer in effect: Extend all deadlines for policyholders to report claims

or submit other communications related to claims Take all practicable steps to provide opportunities for

policyholders to report claims Immediately institute a grace period for premium pay-

ment for all insurance policies issued, delivered, orcovering a risk in the affected areas

Suspend cancellations and nonrenewals

The division also issued bulletin No. DFR 2020-16. It pro-vides a list of ZIP codes that are subject to the order.

— To view the order and the bulletin, visit the divi-sion's wildfire insurance resource page at:

https://dfr.oregon.gov/insure/home/storm/Pages/wildfires.aspx


VETERAN CLAIMS EXECUTIVES know that sometimeslawsuits go off the rails. Juries can “run away,” key witnessescan crater on cross-examination, and judges can, occasionally,be injudicious.

However, there are warning signs:

1. It’s quiet, too quiet. Most insurers have reporting intervalsstated in their litigation guidelines, but these represent mini-mum standards, not the ideal. Ignoring reporting deadlines isbad enough, but it’s a danger sign when an attorney who hasbeen a more frequent correspondent than the guidelines rec-ommend goes radio silent.

It could be an illness or “nothing much doing.” Is it a high-endstakes case? Are there trial or pre-trial deadlines coming up?Those usually aren’t good times for the silent treatment;rather, times to over-communicate. Maybe counsel doesn’twant to broadcast what’s happening, hoping things will turnout fine, but forgetting Murphy’s Law. Clients hate surprises,especially ones that begin, “We regret to advise …”

2. The sudden, unexplained substitution of an expert wit-ness. There must be 100 good reasons why counsel might

Seven Signs a Claim is Aboutto Go WrongBy Louie CastoriaReprinted from DMA Claims Services Newsletter, September 2020

following until the order is no longer in effect: Extend all deadlines for policyholders to report claims

or submit other communications related to claims Take all practicable steps to provide opportunities for

policyholders to report claims Immediately institute a grace period for premium pay-

ment for all insurance policies issued, delivered, orcovering a risk in the affected areas

Suspend cancellations and nonrenewals

The division also issued bulletin No. DFR 2020-16. It pro-vides a list of ZIP codes that are subject to the order.

— To view the order and the bulletin, visit the divi-sion's wildfire insurance resource page at:

https://dfr.oregon.gov/insure/home/storm/Pages/wildfires.aspx

- 11 -

need to drop an expert witness from the trial list. Even expertsget sick, but substituting a new expert for the one who hasworked the case up, has been disclosed as a trial witness, andhas already billed a substantial amount of money can be adanger sign. The departing expert’s work, if used at all, mayseem less forceful, and if the new expert relies solely on thatwork, his or her credibility may be questioned.

The keyword in this danger sign is often “unexplained.” Beskeptical if the explanation is so brief that it sounds more likean excuse: “She has a calendar conflict.” Really? When did itarise? Why is that case deemed more important than this one?Has the expert already written a report or expressed opinionsin our case? Has the expert issued contrary opinions in othercases? If it is an illness, when will the expert again be avail-able?

3. Unexpected motions seeking re-consideration. Some-times a law firm’s invoice tells more than its reports. If youfirst learn about a motion for reconsideration on an invoice,that’s a danger sign. The outcome of the motion being recon-sidered must be important to the case, and unfavorable.

Judges, like the rest of the species, can make mistakes, someof which need to be corrected. When that happens, that is thetime to notify the client of the adverse ruling, provide a copyof the order, if there is one, and advise the client that motionsfor reconsideration have a low-percentage shot. In most juris-dictions, it must be based on a change in the law occurringafter the motion was briefed and argued, newly discoveredfacts that could not have been known earlier, or counsel’sexcusable neglect, will not support reconsideration.

4. A string of unfavorable outcomes on pretrial motionsby the trial judge. Most judges decide pretrial motions onthe merits, and not for settlement leverage. When the trialjudge issues a string of unfavorable decisions, seemingly one-sidedly, it’s time to reassess. Are we right on the law andfacts? Is our method of presentation turning the judge off —too wordy, too many issues in a single motion? This might bea time to consult with someone who has tried many before thejudge and can provide a reality check.

5. Overly-optimistic reports from defense counsel. A veryseasoned trial lawyer had a case before a jury and phoned indaily reports to the client and managing partner. They weretoo good to be true: “They didn’t lay a glove on us!” Dayafter day. At the end of the case, Ka-POW! It was more likean anvil than a glove. In some large-exposure trials, it may beworth the effort to bring in a neutral observer who has seenother trials, acting as the canary in the coal mine by sensingwhen things start to go wrong.

6. Unexplained changes in lead counsel. “Unexplained” isagain the keyword. Many clients say, “We hire lawyers, nothire law firms.” Of course, they expect that lawyer to be sup-ported by the resources of the law firm, but it is him or herthey want at the helm of the case. Attorneys are vulnerable todisease, irreconcilable conflicts, or simply running out of gas.When a change in lead counsel must be made, it must be donegracefully, giving the client options of others to take the reins,and an opportunity to speak with each of them.


need to drop an expert witness from the trial list. Even expertsget sick, but substituting a new expert for the one who hasworked the case up, has been disclosed as a trial witness, andhas already billed a substantial amount of money can be adanger sign. The departing expert’s work, if used at all, mayseem less forceful, and if the new expert relies solely on thatwork, his or her credibility may be questioned.

The keyword in this danger sign is often “unexplained.” Beskeptical if the explanation is so brief that it sounds more likean excuse: “She has a calendar conflict.” Really? When did itarise? Why is that case deemed more important than this one?Has the expert already written a report or expressed opinionsin our case? Has the expert issued contrary opinions in othercases? If it is an illness, when will the expert again be avail-able?

3. Unexpected motions seeking re-consideration. Some-times a law firm’s invoice tells more than its reports. If youfirst learn about a motion for reconsideration on an invoice,that’s a danger sign. The outcome of the motion being recon-sidered must be important to the case, and unfavorable.

Judges, like the rest of the species, can make mistakes, someof which need to be corrected. When that happens, that is thetime to notify the client of the adverse ruling, provide a copyof the order, if there is one, and advise the client that motionsfor reconsideration have a low-percentage shot. In most juris-dictions, it must be based on a change in the law occurringafter the motion was briefed and argued, newly discoveredfacts that could not have been known earlier, or counsel’sexcusable neglect, will not support reconsideration.

4. A string of unfavorable outcomes on pretrial motionsby the trial judge. Most judges decide pretrial motions onthe merits, and not for settlement leverage. When the trialjudge issues a string of unfavorable decisions, seemingly one-sidedly, it’s time to reassess. Are we right on the law andfacts? Is our method of presentation turning the judge off —too wordy, too many issues in a single motion? This might bea time to consult with someone who has tried many before thejudge and can provide a reality check.

5. Overly-optimistic reports from defense counsel. A veryseasoned trial lawyer had a case before a jury and phoned indaily reports to the client and managing partner. They weretoo good to be true: “They didn’t lay a glove on us!” Dayafter day. At the end of the case, Ka-POW! It was more likean anvil than a glove. In some large-exposure trials, it may beworth the effort to bring in a neutral observer who has seenother trials, acting as the canary in the coal mine by sensingwhen things start to go wrong.

6. Unexplained changes in lead counsel. “Unexplained” isagain the keyword. Many clients say, “We hire lawyers, nothire law firms.” Of course, they expect that lawyer to be sup-ported by the resources of the law firm, but it is him or herthey want at the helm of the case. Attorneys are vulnerable todisease, irreconcilable conflicts, or simply running out of gas.When a change in lead counsel must be made, it must be donegracefully, giving the client options of others to take the reins,and an opportunity to speak with each of them.

- 13 -

To submit an article to this publication contact Barb Tylerat [email protected]. Length of the article is not asimportant as its content, which should be pertinent to

today’s claim professionals.

7. A ringer is brought in to try the case for the plaintiff. Awell-known, high-stakes attorney — a “ringer”— suddenlyjoins as counsel for the other side. This can sometimes be aploy, especially if the ringer does not formally associate in thecase but lends his or her name to a mediation or settlementconference statement.

You could bring in your own “ringer,” though that could tele-graph lack of confidence in current counsel. Another down-side: some “ringers“ thrive on the battle, and may not be at-tuned to settlement opportunities that arise during trial. Hav-ing a ringer consult behind the scenes may provide the advan-tage of his or her expertise, thus empowering current counsel.

Watching for the telltale signs that a case may be taking awrong turn can be the proverbial “stitch in time that savesnine” or $9,000,000.

— Louie Castoria ([email protected]) is the chair emeri-tus of the Professional Liability Practice Group in Kaufman Dolowich &Voluck LLP, a national law firm, a mediator, and an adjunct professor atGolden Gate University School of Law. He is a member of the board of direc-tors of the Professional Liability Defense Federation. This article does notprovide legal advice. The views expressed are the author’s and not necessar-ily the firm’s or its clients’.

Consider these disturbing facts: 1) Fraud costs an averageof $82 billion per year, 2) Twenty-five percent of the publicbelieves it is acceptable to commit fraud, 3) There were 17billion connected devices in 2018 and 50 billion devices to-day. These facts should raise a flag that fraud and technologyshould be on the strategic radar as immense losses result fromsuspicious claims.

Technology is all around us, from self-driving cars and per-sonable wearables, smart appliances and connected cities. Allof these platforms push data into circulation — data thatcauses a shift in our psyche. This shift in psychology is alsoevident in the fraudster, and companies will need to adjusttheir strategies to face this new type of criminal effectively.

Technology has incredible advantages in the insurance world,but it also increases the disconnect a customer has with theirinsurance company. Studies in criminology reveal that whenan individual does not identify or “feel” their victim, then acrime is more likely to ensue. With claims automation andadvancements occurring in the insurance space, this also cre-ates more detachment with customers, which translates intomaking it easier for them to commit fraud on a psychologicallevel as there is no identifiable victim.

From a purely psychological perspective, technology willbreed more fraud as this detachment will make fraudsters feel“ok” about committing these suspicious acts. Carriers are alsoat a disadvantage when we consider how technology itselfwill result in increased fraud. Fraudsters can leverage technol-ogy and take advantage of the immense data in circulation byaltering their tactics; they often choose to engage in low-dollar claims but in higher frequency to remain off the radarof most companies’ claims handling thresholds for fast trackand no-touch handling. Another example rests in video verifi-cation; many companies use remote video to verify damage,such as allowing an insured to FaceTime property or vehicledamage and then fast-track the payment. This format has in-credible potential for fraud as there are few or no touch pointswith the company.

Leveraging technologyBut all is not gloom and doom as carriers can meet the chal-lenge and leverage the technology tools available to them.The most successful and effective carriers are utilizing tech-nology platforms to thwart efforts and are doing a very goodjob at it! What specifically can carriers do? Here are some ofmy top tips based on examining dozens of highly effectivecompanies.

Companies can become significantly more efficient byusing technology platforms for fraud detection, whetherthey utilize advanced machine learning (ML)/artificial in-telligence (AI) technology or other more simplistic ap-proaches. These tools can filter and screen an incredible

Inside the Mind of aFraudsterBy Michael SkibaReprinted from www.propertycasualty360.com


To submit an article to this publication contact Barb Tylerat [email protected]. Length of the article is not asimportant as its content, which should be pertinent to

today’s claim professionals.

7. A ringer is brought in to try the case for the plaintiff. Awell-known, high-stakes attorney — a “ringer”— suddenlyjoins as counsel for the other side. This can sometimes be aploy, especially if the ringer does not formally associate in thecase but lends his or her name to a mediation or settlementconference statement.

You could bring in your own “ringer,” though that could tele-graph lack of confidence in current counsel. Another down-side: some “ringers“ thrive on the battle, and may not be at-tuned to settlement opportunities that arise during trial. Hav-ing a ringer consult behind the scenes may provide the advan-tage of his or her expertise, thus empowering current counsel.

Watching for the telltale signs that a case may be taking awrong turn can be the proverbial “stitch in time that savesnine” or $9,000,000.

— Louie Castoria ([email protected]) is the chair emeri-tus of the Professional Liability Practice Group in Kaufman Dolowich &Voluck LLP, a national law firm, a mediator, and an adjunct professor atGolden Gate University School of Law. He is a member of the board of direc-tors of the Professional Liability Defense Federation. This article does notprovide legal advice. The views expressed are the author’s and not necessar-ily the firm’s or its clients’.

Consider these disturbing facts: 1) Fraud costs an averageof $82 billion per year, 2) Twenty-five percent of the publicbelieves it is acceptable to commit fraud, 3) There were 17billion connected devices in 2018 and 50 billion devices to-day. These facts should raise a flag that fraud and technologyshould be on the strategic radar as immense losses result fromsuspicious claims.

Technology is all around us, from self-driving cars and per-sonable wearables, smart appliances and connected cities. Allof these platforms push data into circulation — data thatcauses a shift in our psyche. This shift in psychology is alsoevident in the fraudster, and companies will need to adjusttheir strategies to face this new type of criminal effectively.

Technology has incredible advantages in the insurance world,but it also increases the disconnect a customer has with theirinsurance company. Studies in criminology reveal that whenan individual does not identify or “feel” their victim, then acrime is more likely to ensue. With claims automation andadvancements occurring in the insurance space, this also cre-ates more detachment with customers, which translates intomaking it easier for them to commit fraud on a psychologicallevel as there is no identifiable victim.

From a purely psychological perspective, technology willbreed more fraud as this detachment will make fraudsters feel“ok” about committing these suspicious acts. Carriers are alsoat a disadvantage when we consider how technology itselfwill result in increased fraud. Fraudsters can leverage technol-ogy and take advantage of the immense data in circulation byaltering their tactics; they often choose to engage in low-dollar claims but in higher frequency to remain off the radarof most companies’ claims handling thresholds for fast trackand no-touch handling. Another example rests in video verifi-cation; many companies use remote video to verify damage,such as allowing an insured to FaceTime property or vehicledamage and then fast-track the payment. This format has in-credible potential for fraud as there are few or no touch pointswith the company.

Leveraging technologyBut all is not gloom and doom as carriers can meet the chal-lenge and leverage the technology tools available to them.The most successful and effective carriers are utilizing tech-nology platforms to thwart efforts and are doing a very goodjob at it! What specifically can carriers do? Here are some ofmy top tips based on examining dozens of highly effectivecompanies.

Companies can become significantly more efficient byusing technology platforms for fraud detection, whetherthey utilize advanced machine learning (ML)/artificial in-telligence (AI) technology or other more simplistic ap-proaches. These tools can filter and screen an incredible

Inside the Mind of aFraudsterBy Michael SkibaReprinted from www.propertycasualty360.com


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To apply for membership or to RENEW DUES for 2020-21, visit ourwebsite where you’ll find the membership application in PDF and theopportunity to pay dues online with a credit card.


amount of data very quickly, a task that would be impossi-ble to accomplish manually.

Many platforms have multiple capabilities, such as opti-mizing processes in a low-touch environment and scanningfor fraudulent claims. This is a beautiful strategic pairingas carriers accomplish plugging the holes of the leakyfraud faucet and take care of honest customers (by fast-tracking) at the same time.

Get back to basics and perform training! Believe it or not,this approach helps to keep fraud fresh in the minds of theemployees and helps to create a strong front line defense.This is not a tech solution, but adding this to the counter-fraud arsenal will yield results.

Leverage technology platforms to predict future incidentsthat have not occurred using ML/AI functionality. In thismanner, carriers can avoid risk before it occurs, which isthe most desirable from a profitability standpoint.

Leverage technology to look for outliers in the data. In thecounter-fraud banking world, fraud detection is based ondeveloping a customer profile and then alerting the bank ofany activity outside of the norm. This same approach canbe used in the insurance industry; imagine if a certain salesagent wrote more policies on average than those in similarregions (actual case) and a technology platform helped toidentify this “outlier” behavior. This would be a strongindicator to investigate further.

Technology is changing every aspect of our lives on a dailybasis, and the fraudster’s mind is not insulated from this; theirapproaches and tactics will change to leverage technology totheir advantage. But carriers can also fight a fair fight by alsoutilizing technology to level the playing field.

Documents

Oregon Claims Founded in 1935 Adjusters Aoregoncasualtyadjusters.org/news/OCAA News SEPTEMBER 2020.pdf · David Schuman, Oregon’s Remedy Guarantee: Article I, Section 10 of the