Griffith v. Property and Casualty Insurance Company of Hartford (March 2025)

Oregon Court of Appeals Reverses Attorney Fee Award Based on Percentage Recovery in Insurance Dispute

In a significant decision for Oregon insurance and litigation attorneys, the Oregon Court of Appeals reversed a trial court’s attorney fee award that was based on a percentage of a homeowner’s insurance recovery, ruling instead that such an award must be grounded in a lodestar analysis. The case—Griffith v. Property and Casualty Insurance Company of Hartford, 339 Or App 40 (2025)—*clarifies how courts should assess “reasonable” attorney fees under ORS 742.061(1), Oregon’s insurance fee-shifting statute.

Background: Attorney Fees Under ORS 742.061

ORS 742.061(1) mandates that an insurer must pay the insured’s attorney fees if it fails to settle a claim within six months of receiving proof of loss, and the insured later recovers more than any pre-litigation tender. In Griffith, the plaintiffs filed suit against their insurer, Hartford, after delays in processing a fire loss claim. Although the underlying insurance dispute settled early, the trial court awarded plaintiffs’ counsel $221,179.27 in attorney fees—calculated as a contingency-based percentage of the insurance recovery.

Trial Court Award Reversed: Lodestar Method Required

The Court of Appeals reversed the fee award, holding that the trial court abused its discretion by calculating attorney fees based on a percentage of the client’s recovery rather than the hours worked. The court emphasized that:

• The lodestar method—reasonable hourly rate multiplied by reasonable hours worked—is the standard approach in statutory fee-shifting cases, even where counsel is retained on a contingency basis.
• The percentage-of-recovery method may be appropriate in common fund cases or when litigation is extensive and the result uncertain, but those conditions were not present here.
• In Griffith, there was no real dispute over coverage, minimal litigation activity, and the plaintiff’s attorney did not submit time records, making it impossible to assess the reasonableness of the award.

The Court concluded that the resulting fee award amounted to a windfall, not a reasonable fee under Oregon law. It remanded the case for recalculation of the fee based on the lodestar framework.

Key Takeaways for Oregon Attorneys

• Always track time: Even in contingency cases involving statutory fee-shifting, Oregon courts may require a lodestar analysis. Failure to provide time records may jeopardize a fee award.
• Understand ORS 742.061: Plaintiffs are entitled to reasonable attorney fees if an insurer fails to pay within six months—but that entitlement does not give carte blanche for percentage-based fee awards.
• Fee awards must be justified: Courts retain discretion in determining what is reasonable, and appellate courts will scrutinize awards that deviate from standard methodology.

Conclusion

The Griffith decision underscores the importance of aligning attorney fee petitions with established methods for calculating reasonableness. For insurance litigators and policyholder counsel in Oregon, the message is clear: absent exceptional circumstances, courts expect detailed time records and adherence to the lodestar standard—even in contingency fee arrangements.

This article covers the case at a high level for educational purposes only. It is not legal advice.