ORS 742.061
Recovery of attorney fees in action on policy or contractor’s bond


Except as otherwise provided in subsections (2) and (3) of this section, 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. If the action is brought upon the bond of a contractor or subcontractor executed and delivered as provided in ORS 279B.055 (Competitive sealed bidding), 279B.060 (Competitive sealed proposals), 279C.380 (Performance bond) or 701.430 (Performance bond) and the plaintiff’s recovery does not exceed 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 and allowed to the defendant as part of the costs of the action and any appeal thereon. If in an action brought upon such a bond the surety is allowed attorney fees and costs and the contractor or subcontractor has incurred expenses for attorney fees and costs in defending the action, the attorney fees and costs allowed the surety shall be applied first to reimbursing the contractor or subcontractor for such expenses.


Subsection (1) of this section does not apply to actions to recover personal injury protection benefits if, in writing, not later than six months from the date proof of loss is filed with the insurer:


The insurer has accepted coverage and the only issue is the amount of benefits due the insured; and


The insurer has consented to submit the case to binding arbitration.


Subsection (1) of this section does not apply to actions to recover uninsured or underinsured motorist benefits if, in writing, not later than six months from the date proof of loss is filed with the insurer:


The insurer has accepted coverage and the only issues are the liability of the uninsured or underinsured motorist and the damages due the insured; and


The insurer has consented to submit the case to binding arbitration. [Formerly 736.325 and then 743.114; 1999 c.790 §1; 2003 c.794 §328]

Source: Section 742.061 — Recovery of attorney fees in action on policy or contractor’s bond, https://www.­oregonlegislature.­gov/bills_laws/ors/ors742.­html.

See also annotations under ORS 743.114 in permanent edition.

Notes of Decisions

Lack of specificity regarding amount of damages does not forestall commencement of six-month settlement period. State Hwy. Comm. v. DeLong Corp., 9 Or App 550, 495 P2d 1215 (1972), Sup Ct review denied

If contingent fee agreement makes no specific reference to any possible attorney fees which may be awarded by court and makes no specific provision for manner in which any such fee is to be considered in computing the amount, source and manner of distribution of contingent fee, any attorney fees awarded by court shall be offset as a credit or deduction from the amount of the agreed contingent fee, as computed upon the basis of amount of the judgment. Chalmers v. Ore. Auto. Ins. Co., 263 Or 449, 502 P2d 1378 (1972)

The fact that plaintiff’s attorneys in the case are engaged on a contingent fee basis does not bar an allowance of attorney fees. Chalmers v. Ore. Auto. Ins. Co., 263 Or 449, 502 P2d 1378 (1972)

Where the insured seeks both declaratory relief and a money judgment under an insurance policy, attorney fees may be allowed. Cornell, Howland, Hayes, & M., Inc. v. Continental Cas. Co., 465 F2d 22 (1972)

This section was not intended to apply to any situation where an insurer, as an innocent stakeholder, is willing to pay policy proceeds to whomever they might belong. Gore v. Prudential Ins. Co. of Am., 265 Or 12, 507 P2d 20 (1973)

Since this section equates attorney fees with costs, 20-day deadline specified by ORS 20.320 for filing verified statement of costs and disbursements applies. State ex rel. Town Concrete Pipe, Inc. v. Andersen, 265 Or 593, 510 P2d 564 (1973)

In action on surety performance bond prevailing party bears the burden of proving amount and reasonableness of attorney fees. City of Hillsboro ex rel Lenchitsky Heating and Air Conditioning, Inc. v. Maintenance and Constr. Serv., Inc., 269 Or 169, 523 P2d 1036 (1974)

Where insurer is estopped from making assertions denying coverage, recovery on estoppel is recovery on policy and therefore qualifies for attorney fees. Farley v. United Pacific Ins. Co., 269 Or 549, 525 P2d 1003 (1974)

Liability for attorney fees cannot be avoided merely because the litigation was cast in the form of a declaratory judgment proceeding. Hartford v. Aetna/Mt. Hood Radio, 270 Or 226, 527 P2d 406 (1974)

Where there was no bad faith refusal of liability insurer to settle, in that insurer satisfied entire judgment which was in excess of policy limits, this section provided no authority to award attorney fees. Kricar, Inc. v. Gen. Acc., Fire and Life Assur. Corp., 542 F2d 1135 (1976)

The claimant under an insurance policy is entitled to the attorney fees if he establishes a claim for more than the tendered amount on his initiative, either as a plaintiff or defendant who emerges with a money “recovery” in his favor. Travelers Ins. Co. v. Plummer, 278 Or 387, 563 P2d 1218 (1977)

Appellant obtaining remand is not entitled to attorney fees and costs incurred on appeal unless also prevailing at trial following remand. Stanford v. American Guaranty Life Insurance Company, 281 Or 325, 574 P2d 646 (1978)

In action against insurance agency to recover losses for agency’s negligent failure to procure insurance for claimant, defendant was not an insurer and thus claimant was not entitled to award of attorney fees. Monsantofils v. Gacek Insurance Agency, 282 Or 3, 576 P2d 789 (1978)

In order to secure attorney fees under this section, insured must recover money judgment against insurer; it is not sufficient that insured establish coverage which may in turn lead to subsequent recovery of money. McGraw v. Gwinner, 282 Or 393, 578 P2d 1250 (1978); distinguished in Long v. Farmers, 360 Or 791, 388 P3d 312 (2017)

Plaintiff’s excess insurer was entitled to attorney fees under this section when primary insurer refused, in bad faith, to pay claim. Portland Gen. Electric Co. v. Pacific Idem. Co., 579 F2d 514 (1978)

Insurer acting as assignee of contractual right rather than subrogee may recover attorney fees. Fisk v. Dairyland Ins. Co., 42 Or App 777, 601 P2d 868 (1979)

Judgment creditors may recover attorney fees. Rowley v. Dairyland Ins. Co., 44 Or App 333, 605 P2d 1356 (1980); NW Marine Iron v. Western Casualty, 45 Or App 269, 608 P2d 199 (1980), Sup Ct review denied

Excess carrier who defended claim after primary carrier declined defense was subrogated to rights of insured and could recover attorney fees pursuant to this section. Sch. Dist. No. 1 v. Mission Ins. Co., 58 Or App 692, 650 P2d 929 (1982), Sup Ct review denied

Where policy for dredge owner covering liability for pollution under Federal Water Pollution Control Act was more nearly analogous to “general marine” type than to “wet marine” type, attorney fees may be awarded. Port of Portland v. Water Quality Insurance Syndicate, 549 F Supp 233 (1982)

Where plaintiff settled claim against defendant for full amount of policy limits, then litigated with insurer whether advance payments should be included in those limits, plaintiff is entitled to recover from insurer attorney fees incurred in litigation. Kessler v. Weigandt, 73 Or App 48, 697 P2d 574 (1985), Sup Ct review denied

Although Washington law governed substantive insurance issues, attorney fees were awardable as procedural matter subject to Oregon law. Vancouver Furniture v. Industrial Indemnity, 74 Or App 642, 704 P2d 518 (1985), Sup Ct review denied

Where insurer settled within six weeks from date of proof of loss, but then filed adversary proceedings, sought injunction and asked for constructive trust throughout remainder of six-month statutory period, prerequisite for award of attorney fees was not met. American Universal Ins. Co., v. Pugh, 821 F2d 1352 (1987)

Court’s striking of allegation for attorney fees, incurred by plaintiff in arbitration proceeding, was not reviewable by appellate court after action on policy, in which plaintiff sought fees, was dismissed without prejudice. Rossi v. State Farm Mutual Auto Ins. Co., 90 Or App 589, 752 P2d 1298 (1988), Sup Ct review denied

Where general contractor for installation of fire sprinkling system brought action for declaratory relief that its insurer was required to defend property owner’s action against general contractor and subcontractors to recover for damage to tank and reservoir site, general contractor not entitled to attorney’s fees because it had not recovered money judgment against insurer. Fireguard Sprinkler Systems v. Scottsdale Ins., 864 F 2d 648 (9th Cir. 1988)

Where defendant made timely settlement tender and this section did not require that settlement offer be made before commencement of litigation nor allow for award of fees incurred before offer, trial court erred in awarding plaintiff attorney fees. Durflinger v. Statesman Life Ins. Co., 100 Or App 581, 787 P2d 892 (1990)

Although action against insurance company was abated and arbitrators established gross amount of damages suffered by plaintiffs in automobile accident, court subsequently decided in favor of plaintiffs on legal issues raised by defendant insurance company in affirmative defenses and counterclaim so plaintiffs were entitled to attorney fees. Wick v. Viking Ins. Co., 105 Or App 33, 803 P2d 1199 (1990)

Tender must be absolute and unconditional, except that tender may be accompanied by condition on which tendering party has right to insist. Gardner v. Cox, 117 Or App 57, 843 P2d 469 (1992)

Attorney fees incurred before action on insurance policy is filed are recoverable if reasonably related to action. Farmers Ins. Co. v. Trutanich, 123 Or App 6, 858 P2d 1332 (1993)

Recovery of attorney fees is not limited to cases involving coverage disputes. Douglass v. Allstate Ins. Co., 152 Or App 216, 953 P2d 770 (1998), Sup Ct review denied

Tender in excess of plaintiff’s recovery does not preclude award of attorney fees if not made within six months from date of proof of loss. Petersen v. Farmers Insurance Co., 162 Or App 462, 986 P2d 659 (1999)

“Proof of loss” means any event or submission that would permit insurer to estimate obligations. Dockins v. State Farm Insurance Co., 329 Or 20, 985 P2d 796 (1999); Scott v. State Farm Mutual Automobile Insurance Co., 345 Or 146, 190 P3d 372 (2008)

Proof of loss submitted less than six months prior to litigation is effective to commence running of six-month period for settlement without attorney fees. Dockins v. State Farm Insurance Co., 329 Or 20, 985 P2d 796 (1999); Wilson v. Tri-Met, 234 Or App 615, 228 P3d 1225 (2010), Sup Ct review denied

“Tender” means timely, unconditional offer of payment made before or after commencement of litigation. Dockins v. State Farm Insurance Co., 329 Or 20, 985 P2d 796 (1999)

In suit brought to enforce insurer compliance with policy, attorney fees are available notwithstanding that plaintiff may be person other than insured. Webb v. National Union Fire Insurance Company of Pittsburgh, 207 F3d 579 (9th Cir. 2000)

Self-insurer providing uninsured motorist coverage is insurer for purposes of being subject to payment of attorney fees for insurer’s failure to make settlement within six months following proof of loss. Haynes v. Tri-County Metropolitan Transportation District of Oregon, 337 Or 659, 103 P3d 101 (2004)

Successful defendant need not have made tender to settle action against contractor or subcontractor bond in order for defendant to be entitled to attorney fees. North Marion School District #15 v. Acstar Insurance Co., 206 Or App 593, 138 P3d 876 (2006)

Dispute over insurer’s denial of particular claim for benefits is not dispute over “amount of benefits.” Grisby v. Progressive Preferred Insurance Co., 343 Or 175, 166 P3d 519 (2007), modified 343 Or 394, 171 P3d 352 (2007)

Dispute over enforceability of insurer’s release from rights, claims, demands or damages that result from accident is not dispute over “amount of benefits.” Cardenas v. Farmers Insurance Co., 230 Or App 403, 215 P3d 919 (2009)

“Proof of loss” does not need to be in writing. Parks v. Farmers Insurance Co., 347 Or 374, 227 P3d 1127 (2009)

Multiplier or other fee enhancement may be used to calculate reasonable attorney fees for work done at trial or on appeal or work done before an appellate court sitting pursuant to its original jurisdiction. Strawn v. Farmers Insurance Co., 233 Or App 401, 226 P3d 86 (2010)

Process of recovering fees for appellate work may be considered part of appeal for purpose of fee petition. Strawn v. Farmers Insurance Co., 233 Or App 401, 226 P3d 86 (2010)

Requirement that attorney fees be imposed if settlement is not made within six months from date of proof of loss is exception to ORCP 54E. Wilson v. Tri-Met, 234 Or App 615, 228 P3d 1225 (2010), Sup Ct review denied

“Policy of insurance” includes enforceable oral binder of insurance. Stuart v. Pittman, 350 Or 410, 255 P3d 482 (2011)

Plaintiff was injured in motor vehicle accident and informed her insurer of her damages, but because plaintiff did not indicate potential uninsured motorist claim against other driver, plaintiff did not provide “proof of loss” sufficient to enable insurer to investigate and estimate uninsured motorist liabilities, and plaintiff was not entitled to attorney fees under subsection (1) of this section. Zimmerman v. Allstate Property and Casualty Ins., 354 Or 271, 311 P3d 497 (2013)

Where plaintiff brought action against defendant for reimbursement of liens plaintiff paid on defendant’s behalf, and defendant paid plaintiff full amount due after action commenced but neither party informed court of payment and court did not enter final judgment for payment, plaintiff did not have “recovery” as used in this section and is not entitled to attorney fees. Triangle Holdings, II v. Stewart Title Guaranty, 266 Or App 531, 337 P3d 1013 (2014)

For purposes of determining scope of permitted issues in claim for uninsured/underinsured motorist benefits, phrase “damages due the insured,” as used in subsection (3) of this section, refers to amount of damages, if any, that insured would be entitled to recover from uninsured motorist, which is different than scope of issues that may be raised under “the amount of benefits due” as used in subsection (2) of this section; thus, dispute about whether plaintiff sustained economic damages as result of collision was within scope of issues of “damages due the insured.” Spearman v. Progressive Classic Insurance Co., 276 Or App 114, 366 P3d 821 (2016), aff’d 361 Or 584, 396 P3d 885 (2017); Koenig v. State Farm Mutual Automobile Ins. Co., 315 Or App 28, 500 P3d 68 (2021), Sup Ct review denied

Insured was not disqualified from attorney fee exemption under this section when insurer referred to issues of fault and damages as only issues for determination for claim but also referenced potential offset for collateral source payments, which was not actual issue in dispute, because latter reference was reference to nonissue for determination of claim. Robinson v. Tri-Met, 277 Or App 60, 370 P3d 864 (2016), Sup Ct review denied

Plaintiff was entitled to award of attorney fees where plaintiff was prevailing party on subsequent appeal for defendant’s counterclaim action for breach of contract because plaintiff’s subsequent action was one “upon [a] policy of insurance” within meaning of this section where source of claim was underlying insurance policy that plaintiff purchased from defendant. Masood v. Safeco Ins. Co., 360 Or 638, 386 P3d 646 (2016)

As used in this section, “recovery” need not be limited to award in form of judgment as precondition to award of attorney fees; therefore, when insured files action against insurer to recover sums owing on insurance policy and insurer subsequently pays insured more than amount of any tender made within six months from insured’s proof of loss, insured obtains a “recovery” that entitles insured to award of reasonable attorney fees. Long v. Farmers, 360 Or 791, 388 P3d 312 (2017)

Insurer’s invitation to insured to request arbitration is not unconditional offer required to establish safe harbor exemption from liability for attorney fees with respect to claims for uninsured or underinsured motorist benefits. Lizama v. Allstate Fire and Casualty Ins. Co., 292 Or App 611, 425 P3d 464 (2018)

Defendant remained within statutory safe harbor even though defendant raised issue of plaintiff’s comparative fault in automobile accident with underinsured motorist, because determination of comparative fault is part of analysis of underinsured motorist’s legal obligations and therefore within scope of safe harbor. Berger v. Safeco Ins. Co., 305 Or App 380, 470 P3d 420 (2020), Sup Ct review denied

Insurer qualifies for safe harbor exemption from liability for attorney fees if only remaining disputed issues are liability of uninsured or underinsured motorist and damages due insured, regardless of whether insurer acts unreasonably or in bad faith in contesting liability or damages or not reaching settlement on those issues earlier. Rice v. State Farm Mutual Automobile Ins. Co., 307 Or App 238, 476 P3d 983 (2020), Sup Ct review denied

Where insurer initially agreed to binding arbitration but later refused to be bound by resulting award, plaintiff may collect attorney fees because insurer’s refusal removed insurer from this section’s safe harbor provision. Burns v. American Family Mutual Ins., 310 Or App 431, 487 P3d 50 (2021)

Law Review Citations

44 WLR 253 (2007)

Scope of ORS chapters 742, 743, 743A and 743B
Filing and approval of policy forms
Exemptions from requirement to file rates and policy forms
Grounds for disapproval of policy forms
Director’s withdrawal of approval
Health savings account exemption from prohibition on deductible
Regulation of sales material
Insurable interest in property
Representations in applications
Policy constitutes entire contract
Provision for construction according to foreign law prohibited
Standard provisions in general
Contents of policies in general
Underwriters’ and combination policies
Additional policy contents
Bankruptcy clause required in certain liability policies
Charter and bylaw provisions
Assessment policies, special contents
Validity and construction of noncomplying forms
Permissible classes of insurance in one policy
Delivery of policy
Effective date and time of coverage
Renewal by certificate
Forms for proof of loss
Certain conduct not deemed waiver
Return of premium on destruction of property
Recovery of attorney fees in action on policy or contractor’s bond
Filing and approval of liability form that includes cost of defense within limits of liability
Insurance against risk of loss assumed under less than fully insured employee health benefit plan
Approval by director
Limitations on applicability of ORS 742.150
Factors to be considered by director in determining whether to approve assumption reinsurance agreement
Notice of transfer under assumption reinsurance agreement
Rejection of transfer by policyholder
Effect of novation of policy under assumption reinsurance agreement
Transfer and novation of policy effected by director
Fire insurance not to exceed value of property insured
Standard fire insurance policy
Exceptions to standard fire insurance policy requirements
Insuring agreement
Uninsurable and excepted property
Perils not included
Other insurance
Conditions suspending insurance
Additional perils insured
Added provisions
Waiver provisions
Mortgagee interest and obligation of mortgagee
Pro rata liability of insurer
Requirements in case loss occurs
Insurer’s options
When loss payable
Suit on policy
Coverage for loss from nuclear reaction or radiation
Other fire insurance policy provisions permitted
Mutual fire insurers policyholders’ liability
Mutual fire insurer’s action to recover assessment
Mutual fire insurers
Mutual fire insurance policy cancellation
Cancellation of homeowner or fire policy
Repair, rebuilding or replacement of property under homeowner insurance policy
Property losses in locations subject to declarations of emergency
Estimates of cost to rebuild or replace covered property
Home protection insurance
Limitations on issuance of mortgage insurance
Insured obligations as legal investments and securities for deposit
Mortgage insurance
Bonds, undertakings and other obligations required by law may be executed by surety insurers
Reimbursement of private persons required to give bond, letter of credit or other obligation
Reimbursement of public officials required to give bond or letter of credit
Surety insurer may take measures to reduce risk of loss
Release of surety on official bonds by action of obligee
Release of surety on bond of public official by action of surety
Release of surety on depository bond
Fixing amount of new bond after release from original
Cancellation of bond by surety
Surety insurer may not deny power to execute bond
Bond construed as including omitted statutory provisions
Guaranteed arrest bond certificate
Surety may issue guaranteed arrest bond certificate not to exceed $1,000
Requirements to issue guaranteed arrest bond certificate
Reimbursement insurance policy
Termination of reimbursement insurance policy
Duty to report claim of professional negligence to licensing board
Conditions for issuance of medical malpractice insurance
Prohibition against refusing defense or indemnification of health practitioner or health care facility based on disclosure of adverse event or participation in discussion or mediation
Definitions for ORS 742.420 to 742.440
License requirement for conducting business as discount medical plan organization
Requirement for contract with provider
License application
Duties of licensee
License term
Duties of discount medical plan organization
Prohibited activities
Investigative powers of director
License suspension, revocation or failure to renew
Proof of insurance
Prohibition on assignment to high risk category on certain grounds
Contents of motor vehicle liability policy
Liabilities that need not be covered
When insurer’s liability accrues
General provisions governing liability policies
Insurer’s right to provide for reimbursement and proration
Insurer’s right to settle claims
Excess coverage permitted
Disputes over coverage for physical damage
Certain policies not considered motor vehicle liability policies
Appropriate premium charge reduction for certain motorcycle insurance policies
Effective period for premium reduction
Issuance and presentation of certificates for motorcycle rider education course
Premium reduction
Duration of reduction
Certification of completion of course
Limitation on qualification for discount
Definitions for ORS 742.500 to 742.506
Uninsured motorist coverage
Required provisions of uninsured motorist coverage
Arbitration procedures under ORS 742.504
Allocation of responsibility among insurers
Definitions for ORS 742.508 and 742.510
Property damage coverage for damage to vehicle caused by uninsured vehicle
Definitions for ORS 742.518 to 742.542
Personal injury protection benefits for motor vehicle liability policies
Conditions applicable to arbitration proceedings
Binding arbitration under ORS 742.520
Contents of personal injury protection benefits
Provider charges
Primary nature of benefits
Notice of denial of payment of benefits
Payment based on incorrect determination of responsibility
Exclusions from coverage
Benefits may be more favorable than those required by ORS 742.520, 742.524 and 742.530
Reimbursement of other insurers paying benefits
Notice of claim or legal action to insurer
Subrogation rights of insurers to certain amounts received by injured person
Effect of personal injury protection benefits paid
Reimbursement for benefits paid
Required disclosure in release for bodily injuries related to personal injury protection benefits
Required language in disclosure
Disclosures required by insurer to motor vehicle owner when insurer declares vehicle total loss
Dispute resolution process for total loss vehicles
Definitions for ORS 742.560 to 742.572
Grounds for cancellation of policies
Manner of giving cancellation notice
Renewal of policies
Proof of cancellation, replacement or nonrenewal notice
Notifying insured under canceled or unrenewed policy of eligibility for participation in insurance pool
Immunity from liability of persons furnishing information regarding cancellation or nonrenewal of policies
Report of cancellation, nonrenewal or issuance of motor vehicle liability policy
Definitions for ORS 742.585 to 742.600
Personal vehicle sharing program requirements
Assumption of liability
Limitation on insurance policy reclassification for personal vehicle sharing program vehicle
Limitations on cancellation
Definitions for ORS 742.700 to 742.710
Grounds for cancellation
Proof of receipt of notice
Exemptions from provisions of ORS 742.700 to 742.708
Green check means up to date. Up to date