Defendant's Attorney: Ralph C. Spooner and David E. Smith

Description: Eugene, Oregon insurance law lawyers represented the Plaintiff who sued the Defendant on a bad faith breach of insurance contract theory.


Sosa was injured by an uninsured motorist while driving a vehicle he owned that was covered by a State Farm policy. State Farm paid out to Sosa the maximum damages available under that policy. Sosa, however, also holds State Farm policies insuring three other vehicles. He argues that those policies also covered his injuries, and that State Farm therefore should have paid him under those policies as well.


Specifically, they exclude coverage "for an insured who sustains bodily injury . . . while occupying a motor vehicle owned by . . . you if it is not your car" (capitalization and emphasis removed). The policies define "your car" as the "vehicle shown under 'YOUR CAR' on the Declarations Page ....'" And the car in which Sosa was injured is not shown on the Declarations Page attached to his other policies. Accordingly, because Sosa was injured while driving a car he owned, and because that car was not covered by his three other policies, those policies excluded coverage for his injuries.

"Oregon bad faith breach of insurance contract law is a complex area of law that is still evolving. However, there are a few general principles that can be gleaned from case law and statutory law.

First, in order to establish a claim for bad faith breach of insurance contract, the plaintiff must show that the insurer breached its duty of good faith and fair dealing. This duty requires the insurer to act in the best interests of its policyholders, even when it is in the insurer's own financial interest to do otherwise.

Second, the plaintiff must show that the insurer's breach of duty caused the plaintiff damages. Damages can include economic losses, such as the amount of the policy benefits that the insurer should have paid, as well as emotional distress damages.

Third, the plaintiff must show that the insurer's breach of duty was intentional or reckless. This means that the insurer must have known or should have known that its conduct was improper.

In Oregon, the Unfair Claims Settlement Practices Act (ORS 746.230) sets out a number of specific practices that insurers are prohibited from engaging in. These practices include:

Denying a claim without conducting a reasonable investigation.
Failing to attempt to settle a claim promptly and fairly.
Misrepresenting pertinent facts or policy provisions to a claimant.
Engaging in fraudulent or deceptive acts or practices.

If an insurer engages in any of these practices, it may be liable for bad faith breach of contract.

Here are some examples of conduct that may be considered bad faith breach of insurance contract in Oregon:

An insurer denies a valid claim without conducting a reasonable investigation.
An insurer delays paying a valid claim in order to pressure the policyholder to settle for a lower amount.
An insurer offers a policyholder a settlement that is clearly inadequate.
An insurer misrepresents the terms of the policy to the policyholder.
An insurer engages in fraudulent or deceptive practices in order to avoid paying a claim.

If you believe that your insurance company has breached its duty of good faith and fair dealing, you should contact an attorney to discuss your legal options. An attorney can help you assess your claim and determine whether you have a viable case for bad faith breach of contract."

Google Bard

Outcome: Defendant's motion for summary judgement granted. Affirmed on appeal by the 9th Circuit.

Plaintiff's Experts:

Defendant's Experts:

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