Court Opinion

ID: 4182158
Source: CourtListenerOpinion
Date Created: 2017-06-29 15:14:26.070384+00
Date Added: 2024-06-11T14:39:05.408869
License: Public Domain

584	                            June 22, 2017	                             No. 34

               IN THE SUPREME COURT OF THE
                     STATE OF OREGON

                      Alex SPEARMAN,
                     Petitioner on Review,
                               v.
                  PROGRESSIVE CLASSIC
                  INSURANCE COMPANY,
                   a Wisconsin corporation,
                    Respondent on Review.
           (CC 1302-01718; CA A155674; SC S063995)

    On review from the Court of Appeals.*
    Argued and submitted November 14, 2016.
   Willard E. Merkel, Merkel & Associates, Portland, argued
the cause and filed the brief for petitioner on review.
   James B. Rich, Harris, Wyatt & Amala, LLC, Salem,
argued the cause and filed the brief for respondent on review.
  Lisa T. Hunt, Law Office of Lisa T. Hunt, LLC, Lake
Oswego, filed the brief for amicus curiae Oregon Trial Lawyers
Association.
  Before Balmer, Chief Justice, and Kistler, Walters, Landau,
and Brewer, Justices, and DeHoog, Judge of the Court of
Appeals, Justice pro tempore.**
    LANDAU, J.
   The decision of the Court of Appeals and the judgment of
the circuit court are affirmed.

____________
	**  Appeal from Multnomah County Circuit Court, Nan G. Waller, Judge. 276
Or App 114, 366 P3d 821 (2016).
	    **  Baldwin, J., retired March 31, 2017, and did not participate in the decision
of this case. Nakamoto and Flynn, JJ., did not participate in the consideration or
decision of this case.
Cite as 361 Or 584 (2017)	585

     Case Summary: After plaintiff successfully recovered damages from his
insurer under the uninsured motorist coverage of his automobile insurance pol-
icy, he sought attorney fees from the insurer. The insurer asserted that a fee
award was not proper because it had met the “safe harbor” against a fee award of
ORS 742.061(3). That safe harbor applies if (among other things) an insurer does
not raise issues beyond the liability of the uninsured motorist and “the damages
due the insured.” Plaintiff asserted that “damages due the insured” requires an
insurer to agree that it owes some amount above zero in benefits, and that the
insurer here had raised issues beyond “the damages due the insured” by chal-
lenging the nature and extent of plaintiff’s injuries and the reasonableness and
necessity of his medical expenses. The trial court declined to award fees, and the
Court of Appeals affirmed. Held: (1) The phrase “damages due the insured” refers
to the type of damages that would be payable in uninsured and underinsured
motorist cases: namely, the damages that the insured would be legally entitled to
recover from the uninsured or underinsured motorist; and (2) the insurer did not
raise issues beyond the “damages due the insured.”
    The decision of the Court of Appeals and the judgment of the circuit court
are affirmed
586	                Spearman v. Progressive Classic Ins. Co.

	      LANDAU, J.
	         ORS 742.061(1) generally provides for an award of
attorney fees when an insured brings an action against his
or her insurer and recovers more than the amount tendered
by the insurer. ORS 742.061(3) provides a “safe harbor” for
the insurer in uninsured motorist (UM) cases: An insured
is not entitled to attorney fees if, within six months of the
filing of a proof of loss, the insurer states in writing that it
has accepted coverage, that it agrees to binding arbitration,
and that the only remaining issues are the liability of the
uninsured motorist and the “damages due the insured.”
	         At issue in this case is what the safe-harbor statute
means when it refers to the “damages due the insured.” The
insurer, Progressive Classic Insurance Company, responded
to plaintiff’s claim by agreeing that the accident was covered
by the policy, but challenging the nature and extent of plain-
tiff’s injuries, as well as the reasonableness and necessity
of his medical expenses. Plaintiff argues that, by reserving
the right to challenge the nature and extent of his injuries,
Progressive raised issues that went beyond the “damages
due the insured.” According to plaintiff, to qualify for the
safe harbor in ORS 742.061(3), an insurer must agree that
it owes some amount above zero in benefits, so that the only
remaining issues must concern the particular amount above
zero that the insurer owes.
	        The trial court and the Court of Appeals, Spearman
v. Progressive Classic Ins. Co., 276 Or App 114, 366 P3d 821
(2016), both rejected plaintiff’s construction of the safe-harbor
statute. For the reasons that follow, we do as well and affirm
the decision of the Court of Appeals and the judgment of the
circuit court.
                          I. FACTS
	        Plaintiff purchased an automobile insurance policy
from Progressive. The policy included UM coverage with a
limit of $25,000.
	        Plaintiff was injured in an automobile accident with
an uninsured motorist. Plaintiff filed a proof of loss for UM
benefits with Progressive. Within six months, Progressive
sent a letter to plaintiff that stated:
Cite as 361 Or 584 (2017)	587

   	 “Pursuant to ORS 742.061(3)(a) and (b), please be
   advised that Progressive Classic Insurance Company has
   accepted coverage for the above matter and the only issues
   are the liability of the [u]ninsured motorist and damages
   due to [plaintiff]. Progressive Classic consents to submit
   this case to binding arbitration if we cannot resolve this
   matter.”
	        Progressive paid plaintiff some benefits, but the
parties were unable to resolve their dispute about the extent
of the insurer’s UM liability. So plaintiff filed an action
against Progressive in circuit court. Plaintiff’s complaint
alleged:
   	 “4.  That on or about August 5, 2012, Plaintiff, an
   insured person under the terms of Defendant’s aforesaid
   insurance policy, was operating the insured vehicle south-
   bound on NE 82nd Avenue near its intersection with NE
   Brazee Street, public roadways in Portland, Multnomah
   County, Oregon, when he stopped his automobile [for] traf-
   fic stopped ahead and was struck by an automobile oper-
   ated by [a named driver].
   	 “5.  That the aforesaid accident was caused by an unin-
   sured vehicle and motorist as defined in the policy and at
   ORS 742.502(2)(a).”
It further alleged that, as a result of the accident, plain-
tiff was required to incur medical expenses that should
have been reimbursed as part of his uninsured motorist
coverage. And it alleged that plaintiff had “performed all
preconditions to the recovery of benefits under the policy of
insurance” that Progressive had issued. Plaintiff prayed for
an award of his unpaid UM damages in an amount not to
exceed the $25,000 UM policy limit.
	         In its answer, Progressive alleged that it “[a]dmits
the allegations contained in paragraph 4, except that [it]
lacks information and knowledge as to whether or not plain-
tiff was stopped at impact.” Progressive further stated that
it “admits that plaintiff sustained ‘some’ injury as a result
of the alleged accident; but disputes the nature and extent
of plaintiff’s alleged injuries.” It also admitted that plain-
tiff had submitted a claim for some medical expenses, but
denied “the reasonableness and necessity of some of plain-
tiff’s accident-related medical expenses.”
588	               Spearman v. Progressive Classic Ins. Co.

	        Plaintiff served Progressive with a request for admis-
sions. In response, Progressive admitted that plaintiff had
done everything required of him to be eligible for unin-
sured motorist benefits; admitted that plaintiff had suffered
“some” injury, although Progressive disputed the nature and
extent of the injury; and admitted that plaintiff had suffered
“some” economic damages, although Progressive denied “the
reasonableness, necessity, relatedness, and extent” of the
economic damages that plaintiff had claimed.
	        The matter was transferred to the court’s arbitra-
tion program, and the arbitrator awarded plaintiff $6,022.80
under the UM provisions of the policy. Plaintiff requested
attorney fees under ORS 742.061(1). Progressive asserted
that it was entitled to the safe harbor of ORS 742.061(3).
The arbitrator agreed with Progressive and denied the fee
request.
	        Plaintiff challenged in circuit court the arbitrator’s
failure to award attorney fees. The parties did not dispute
that the conditions generally necessary for a fee award under
ORS 742.061(1) had been met. The sole dispute was over
whether Progressive had met the requirements for the safe
harbor set out in ORS 742.061(3). Relying on this court’s
decision in Grisby v. Progressive Preferred Ins. Co., 343 Or
175, 182-83, 166 P3d 519, adh’d to as modified on recons, 343
Or 394, 171 P3d 352 (2007), plaintiff argued that, because
Progressive had raised issues that could have resulted in
an award of zero damages, the insurer had raised issues
beyond “the damages due the insured.” Plaintiff argued
that, although Grisby concerned a statutory provision that
applied only to personal injury protection (PIP) benefits, its
holding should be extended to this case. That means, he con-
tended, that Progressive “was required to frame its plead-
ings to concede that the trier of fact was required to award
some damages.” (Emphasis in original.)
	        The trial court rejected plaintiff’s argument and
denied the fee request. Plaintiff appealed. Before the Court of
Appeals, he advanced the same argument that he had in the
circuit court: that Grisby’s reasoning as to the PIP safe har-
bor should apply to ORS 742.061(3), and that Progressive’s
dispute as to the reasonableness of plaintiff’s medical bills
Cite as 361 Or 584 (2017)	589

meant that Progressive had raised issues beyond the quan-
tum of “damages due the insured.”
	        Progressive responded it had satisfied the safe-
harbor requirements of ORS 742.061(3) in that it had
accepted coverage, agreed to arbitration, and challenged
only the damages due plaintiff. Grisby, it argued, was distin-
guishable because that case had interpreted a different stat-
ute with different text concerning PIP—not UM—benefits.
	         Sitting en banc, the Court of Appeals affirmed.
Key to understanding the safe-harbor statute, the court
explained, is the nature of the particular category of insur-
ance to which it applies, namely, UM coverage. At the core
of every action to recover UM benefits is the idea that the
uninsured motorist “would be liable to the insured in a civil
action for some amount of damages for bodily injury.” 276 Or
App at 121. Thus, the court reasoned, the phrase “damages
due the insured” in ORS 742.061(3) refers to “the amount
of damages (if any) that the insured would be entitled to
recover from the uninsured motorist.” Id. at 127. A dispute
over the “damages due the insured” in the context of a claim
for UM benefits might well result in an award of zero bene-
fits, the court said. But that does not foreclose the applica-
tion of the safe-harbor statute. Id. at 127-28.
	         The court concluded that Grisby was distinguish-
able in that it construed the safe-harbor provision that
applies only to PIP benefits, and not UM. In particular, the
court noted that the statutory safe-harbor provision relating
to claims for UM benefits permits an insurer to contest the
liability of the uninsured motorist. Id. at 123. There is no
parallel provision in the PIP provision, the court observed,
and plaintiff’s proposed interpretation fails to take into
account that key textual distinction. Id.
                      II. ANALYSIS
	        On review, plaintiff argues that the Court of
Appeals erred in drawing on the nature of UM coverage in
interpreting the safe-harbor statute. In his view, although it
is true that the purpose of UM coverage is to put the injured
person in the same position as he or she would have been if
injured by an insured motorist, “the legislative history of
590	                      Spearman v. Progressive Classic Ins. Co.

ORS 742.061(3) does not suggest that the safe harbor stat-
ute was intended to have that scope.” Rather, he argues, the
legislature intended the safe-harbor statute that applies to
UM claims to have the same effect as the parallel provision
that applies to PIP claims. Because Grisby already has held
that the safe-harbor statute for PIP claims applies only if
the insurer agrees that it owes something more than zero
benefits, plaintiff concludes that the same must apply to
ORS 742.061(3).1 In this case, he asserts, Progressive lost
the protection of the safe harbor because it failed to agree
that it owed him something more than zero in UM benefits.
	        The issue is one of statutory construction, which we
resolve by applying familiar rules requiring us to determine
the meaning of the words of the statute most likely intended
by the legislature that enacted it, taking into account its
text in context and the relevant legislative history. State v.
Gaines, 346 Or 160, 171-73, 206 P3d 1042 (2009).
	         We begin with the text of the statute at issue. ORS
742.061(1) sets out the general rule concerning the availabil-
ity of attorney fees in insurance claims:
    	 “(1)  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
	1
       In his brief, plaintiff advances an additional argument in favor of his
contention that defendant is not entitled to the safe harbor of ORS 742.061(3).
According to plaintiff, Progressive failed to “accept[ ] coverage,” as the statute
requires. As plaintiff sees it, “[w]hen Progressive denied that plaintiff’s accident
had occurred, it violated the ‘coverage accepted’ prong of the statute and lost safe
harbor.”
	    We readily reject the argument for either of two reasons. First, the argument
was not preserved. We have examined the record of arguments that plaintiff
raised before the trial court and the Court of Appeals, and nowhere do we find
an assertion that defendant is not entitled to the safe harbor because it failed
to state that it had “accepted coverage” within the meaning of the safe-harbor
statute. Having failed to raise the issue below, plaintiff may not raise it now. See,
e.g., ORAP 9.20(2) (generally, issues on review before Supreme Court are “all
questions properly before the Court of Appeals that the petition * * * claims were
erroneously decided by that court” (emphasis added)); State v. Ghim, 360 Or 425,
442, 381 P3d 789 (2016) (“When a party has lost in the Court of Appeals, that
party cannot ask us to reverse the Court of Appeals decision on a ground that
the party did not raise in that court.”). Second, and in any event, plaintiff’s argu-
ment rests on a factually erroneous premise—namely, that Progressive “denied
that plaintiff’s accident had occurred.” That assertion is flatly contradicted by
the allegations of Progressive’s answer, in which—as we have noted above—it
specifically and expressly admitted that the accident had occurred.
Cite as 361 Or 584 (2017)	591

   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.”
That general rule is subject to either of two enumerated
exceptions, or “safe harbors.” The first exception, specified
in subsection (2), applies to claims for PIP benefits:
   	 “(2)  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:
   	 “(a)  The insurer has accepted coverage and the only
   issue is the amount of benefits due the insured; and
   	 “(b)  The insurer has consented to submit the case to
   binding arbitration.”
ORS 742.061(2). The second exception is stated in subsec-
tion (3) and applies to claims for UM benefits or underin-
sured motorist (UIM) benefits:
   	 “(3)  Subsection (1) of this section does not apply to
   actions to recover uninsured or underinsured motorist ben-
   efits if, in writing, not later than six months from the date
   proof of loss is filed with the insurer:
   	 “(a)  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
   	 “(b)  The insurer has consented to submit the case to
   binding arbitration.”
	        To claim the benefit of either safe harbor, the insurer
must accept coverage and be willing to engage in binding
arbitration on a limited set of issues. In the case of claims
for PIP benefits, the only issue is “the amount of benefits
due the insured.” In contrast, in the case of claims for UM or
UIM benefits, the issues are the liability of the uninsured or
underinsured motorist and the “damages due the insured.”
	       The fact that the two safe-harbor provisions are set
out separately and with different conditions that apply to
592	               Spearman v. Progressive Classic Ins. Co.

claims for PIP and UM/UIM claims, respectively, suggests
that the legislature, in enacting those provisions, saw some
significant differences between the two categories of claims.
So we digress briefly to address the relevant differences
between the two.

	        Both PIP and UM/UIM refer to types of insurance
that the law requires all motor vehicle liability policies to
include. See generally Dowell v. Oregon Mutual Ins. Co.,
361 Or 62, 67-68, 388 P3d 1050 (2017) (PIP); Vogelin v.
American Family Mutual Ins. Co., 346 Or 490, 501-06, 213
P3d 1216 (2009) (UM/UIM). The former refers to a form
of no-fault insurance coverage that requires “payments for
expenses, loss of income and loss of essential services” as
provided elsewhere by statute. ORS 742.520(3). In gen-
eral, that amounts to payments for “medical expenses and
loss of income.” Kessler v. Weigant, 299 Or 38, 40 n 3, 699
P2d 183 (1985). An insurer is required to pay PIP bene-
fits “promptly after proof of loss has been submitted to the
insurer.” ORS 742.520(4). As this court explained in Perez
v. State Farm Mutual Ins. Co., 289 Or 295, 300, 613 P2d 32
(1980), “the obvious purpose of [the PIP statutes] is to pro-
vide, promptly and without regard to fault, reimbursement
for some out-of-pocket losses resulting from motor vehicle
accidents.”

	        The latter type of insurance refers to coverage for
the risk of injury or death arising from an accident involving
a vehicle that is either not insured at all in accordance with
the state financial responsibility law (UM) or is insured at a
level that is insufficient to pay the injured driver’s damages
in full (UIM). See generally Vogelin, 346 Or at 501-06 (sum-
marizing nature of UM/UIM coverage). The law requires
that such insurance pay all sums that the insured “is legally
entitled to recover as damages from the owner or operator” of
the uninsured or underinsured vehicle. ORS 742.504(1)(a).
The focus of that particular type of insurance is thus “ ‘to
place the injured policyholder in the same position he would
have been in if the tortfeasor had had liability insurance.’ ”
Vega v. Farmers Ins. Co., 323 Or 291, 305-06, 918 P2d 95
(1996) (quoting Peterson v. State Farm Ins. Co., 238 Or 106,
112, 393 P2d 651 (1964)).
Cite as 361 Or 584 (2017)	593

	        Accordingly, in contrast with PIP coverage, UM/
UIM coverage is predicated on the fault of the uninsured
or underinsured motorist. As this court explained in Vega,
“the insurer’s obligation to pay [is] coextensive with the
responsible party’s liability,” so that the “insured is placed
in the same position—no better and no worse—than he or
she would have occupied had the responsible party been
insured.” 323 Or at 306. The insured, in other words, is
“legally entitled to recover” only to the extent that he or she
could recover directly from the tortfeasor. Id.
	        Given the differences between PIP and UM/UIM
coverage and benefits, it made sense for the legislature
to phrase differently the issues that may be submitted to
arbitration under the two different safe-harbor statutes.
Because PIP is a no-fault type of insurance coverage, ORS
742.061(2) provides that the only issue will be the particular
amount of benefits owed the insured. But because UM/UIM
coverage entails the fault of the uninsured or underinsured
motorist, ORS 742.061(3) provides that the issues that may
include the liability of that motorist.
	       With that in mind, we return to the text of ORS
742.061(3), which specifies that the issues that the insurer
may dispute without losing the benefit of the safe harbor
include the “damages due the insured.” The fact that the
phrase “damages due the insured” appears in the safe-
harbor provision concerning UM/UIM benefits strongly
suggests that it refers to the type of damages that would be
payable in that type of case, namely, the damages that the
insured would be “legally entitled to recover” from the unin-
sured or underinsured motorist.
	         Nothing in the text of ORS 742.061(3) suggests that
the “damages due the insured” must be some amount above
zero. As we have explained, the nature of UM/UIM damages
is that they constitute the amount that an insured would be
“legally entitled to recover” from the uninsured or underin-
sured motorist. At least in some cases, that amount will be
zero, because the uninsured or underinsured motorist was
not liable in the first place. Confirming that very point is
the fact that ORS 742.061(3) expressly includes “the liabil-
ity of the uninsured or underinsured motorist” as one of the
594	               Spearman v. Progressive Classic Ins. Co.

issues that may be submitted to arbitration without losing
the benefit of the safe-harbor statute.
	        Plaintiff insists that this court’s decision in Grisby
forecloses that reading of ORS 742.061(3). He reasons that,
because the court in that case concluded that the safe har-
bor that applies to PIP claims under ORS 742.061(2) is not
available unless the insurer agrees that it owes some quan-
tum of benefits above zero, the same rule should apply to
the safe harbor for UM/UIM claims under ORS 742.061(3).
According to plaintiff, Grisby’s interpretation of ORS
742.061(2) applies to ORS 742.061(3) because the statutory
phrase at issue in that case—the “amount of benefits due
the insured”—is functionally the same as the “damages due
the insured” under ORS 742.061(3).
	        Plaintiff acknowledges the difference in wording
between the two statutes, as well as the fact that the term
“damages” in the statutes governing UM/UIM coverage is
used to refer to those damages that an insured is “legally
entitled to recover” from the uninsured or underinsured
motorist. He nevertheless urges the court to ignore refer-
ences to any statutory provisions governing the nature of
UM/UIM coverage because “the legislative history of ORS
742.061(3) does not suggest that the safe harbor statute was
intended to have that scope.” To the contrary, he contends,
the legislative history “demonstrates an intent that both
ORS 742.061(2) and (3) have the same meaning.” (Emphasis
omitted.)
	         Plaintiff’s arguments are unavailing. In Grisby, the
plaintiff was injured in an automobile accident and filed a
claim for PIP benefits. The parties disputed the insurer’s
liability to pay PIP benefits. Plaintiff sued the insurer, pre-
vailed, and asked for attorney fees under ORS 742.061(1). In
response to the claim for attorney fees, the insurer claimed
the benefit of the safe harbor that applied to PIP claims
under ORS 742.061(2). This court rejected the insurer’s
argument, concluding that, because the insurer had disputed
more than the “amount of benefits due the insured,” the safe
harbor did not apply. 343 Or at 182-83. The court’s decision
turned on the particular phrasing of ORS 742.061(2) and
its reference to disputes over the “amount” of benefits. Id.
Cite as 361 Or 584 (2017)	595

The court concluded that the legislature’s use of that word
suggested a dispute about a “quantity” of benefits in excess
of zero. Id.
	        Grisby does not control our decision in this case. The
court’s decision as to the requirements of the safe-harbor
provision for PIP claims in ORS 742.061(2) explicitly rested
on its interpretation of wording that does not appear in
the safe-harbor provision for UM/UIM claims. As we have
noted, the two provisions are worded differently, and for rea-
sons that have to do with significant differences between
PIP and UM/UIM claims. To hold that Grisby controls our
interpretation of ORS 742.061(3) would require us to ignore
those differences. Specifically, it would require us to ignore
the fact that the safe-harbor provision that applies to UM/
UIM claims does not refer to disputes over an “amount” of
benefits. Rather, it refers to disputes over the “damages due
the insured,” which, given the nature of UM/UIM claims,
may in some cases be zero.
	        Plaintiff’s reliance on the legislative history of the
safe-harbor provisions is likewise unavailing. He contends
that it “demonstrates” that the safe-harbor provisions for
PIP and UM/UIM claims “have the same meaning.” But he
cites no legislative history that actually says that. To the
contrary, the legislative history indicates that the legisla-
ture created two separate provisions precisely because of
the differences between PIP and UM/UIM claims.
	        Before 1999, ORS 742.061 (1997)—now ORS
742.061(1)—generally provided for attorney fees whenever
an insured prevailed in an action against his or her own
insurer and recovered more than what the insurer had pre-
viously tendered. In the case of UM/UIM claims, though, the
existing state of the law created an anomaly: If an injured
motorist prevailed against a tortfeasor who had insurance,
there was no provision in the law for the recovery of attorney
fees. But, if the tortfeasor had no insurance, then a plaintiff
otherwise in the same circumstances could seek recovery
from his or her own insurer plus (potentially) attorney fees
under ORS 742.061 (1997). It was precisely that anomaly
that prompted representatives of the insurance industry to
propose an amendment through Senate Bill 504 in 1999.
596	               Spearman v. Progressive Classic Ins. Co.

The amendment, as originally proposed, would have com-
pletely exempted UM and UIM claims (as well as PIP claims)
from ORS 742.061 (1997). See Exhibit A, Senate Judiciary
Committee, SB 504, April 29, 1999 (proposed amendments
to SB 504).
	        Tom Mortland, an insurance industry attorney,
explained in some detail how the existing law operated to
encourage injured insureds to avoid negotiating with his or
her insurer and instead proceed as quickly as possible to
litigation:
  “An example illustrates the dynamics which are now in
  place. Picture an auto collision. Driver A negligently hits
  Driver B and injures B. In one scenario Driver A has
  insurance, in another he doesn’t. Driver B has insurance
  which includes the required PIP and UM benefits. Driver
  B retains an attorney to represent her in recovering dam-
  ages, or benefits, for her injury. Consider the scenario in
  which Driver A has liability insurance. B and her attor-
  ney present a claim to the liability insurer and resolve it
  through negotiation, or possibly mediation, or arbitration,
  or even through a civil suit which ends in a jury trial. In
  any event Driver B’s attorney will very likely be paid on a
  contingency basis, the fee being a percentage, typically a
  third, of the recovery.
  	 “Now consider the scenario in which Driver A doesn’t
  have insurance. Driver B presents a UM claim to her own
  insurer, and her attorney is faced with a choice. On one
  hand, the attorney can resolve this claim through negoti-
  ation, mediation[,] or arbitration, just as in the first sce-
  nario, and be paid an attorney fee which is a percentage
  of the recovery. On the other hand, the attorney can file
  suit against B’s insurance company and possibly recover
  attorney fees in addition to the recovery. The advantage,
  and necessity, of filing suit is being recognized by attor-
  neys all over the state. I say necessity because to not take
  advantage of the opportunity for attorney fees on top of the
  recovery could well constitute legal malpractice.”
Testimony, Senate Judiciary Committee, SB 504, Apr 29,
1999, Ex B, at 2 (testimony of Tom Mortland) (emphases in
original).
	        The problem with the existing law was not just that
it created incentives to litigate UM/UIM claims against
Cite as 361 Or 584 (2017)	597

insurers. It also was that, in so doing, the law compromised
the very purpose of UM and UIM coverage, which, as we
have noted, is “to place the injured policyholder in the same
position he would have been in if the tortfeasor had had
liability insurance.” Vega, 323 Or at 305-06 (internal quo-
tation marks and citation omitted). As Mortland’s example
made clear, an insured who had been injured by an unin-
sured motorist actually was put in a better position than
he or she would have been had the tortfeasor been insured:
With an insured tortfeasor, the net recovery would be dam-
ages minus attorney fees, while with an uninsured motor-
ist, the net recovery might be damages plus attorney fees.
Susan Youngstrom, a claims adjuster, made that point in
her testimony:
   	 “Since an attorney can file suit and claim attorney fees
   under this statute, a person with an uninsured claim is
   suddenly in a better position than a person with a claim
   against a known, insured party. The [insured’s] attorney
   can go to court and if he gets one dollar more than what
   was offered by the claims adjuster, he will get his attorney
   fees from the date he sent the [proof of loss] letter. * * * That
   means his client gets to keep all of the award and the judge
   will grant his attorney fees in addition to that amount.”
Testimony, Senate Judiciary Committee, SB 504, Apr 29,
1999, Ex C, at 1 (testimony of Susan Youngstrom).
	         Representatives of the private plaintiffs’ bar opposed
the bill. But, in the end, they and insurance industry rep-
resentatives negotiated a compromise bill that would have
limited the exemption from ORS 742.061 (1997) to UM,
UIM, and PIP claims in which the insurer accepted cov-
erage and consented to binding arbitration, so long as the
only contested issues were “the liability of the uninsured or
underinsured motorist and the damages due the insured.”
Exhibit L, Senate Judiciary Committee, SB 504, May 20,
1999 (proposed amendments to SB 504) (reflecting consen-
sus proposal and including changes announced orally by
witnesses at work session on May 13, 1999).
	        Robert Neuberger, an attorney appearing on behalf
of the plaintiffs’ bar, explained the compromise proposal in
the following terms:
598	                 Spearman v. Progressive Classic Ins. Co.

  “The concept that we have before you * * * is this, and here’s
  how it would work for PIP, UM, and UIM claims: It’ll still
  be just like always. The insured suffers a loss, files a proof
  of claim, er, notice of claim, and (if it is in one of those cases
  that isn’t resolved short of litigation) the case goes into
  litigation. Generally now [under this bill] there would be
  an exception for PIP, UM, and UIM claims if the insurer
  did the following—within that six-month period in which
  a proof of claim was made, it did the following in writing:
  agree that there was no dispute as to coverage, and that
  for UM and UIM claims that the only issue was going to
  be the liability of the uninsured or underinsured motor-
  ist and the amount of the damages to the injured party,
  and consented * * * that it would use binding arbitration as
  alternative dispute resolution.”
Audio Recording, Senate Judiciary Committee, SB 504,
May 13, 1999, at 4:20 (testimony of Robert Neuberger),
http://records.sos.state.or.us/webdrawer/webdrawer.dll/
webdrawer/rec/4234645/ (accessed June 12, 2017). Neuberger
then explained how the compromise would work in the case
of an uninsured motorist claim. If the insurer wanted to
avoid attorney fees:
  “They can simply write a letter, no legal form required,
  and say, ‘There’s no dispute about coverage—the premiums
  were paid, it wasn’t a stolen car, you weren’t using * * * your
  car for business purposes and got hurt on the job—and so
  the only issues that are left are liability for the UM and
  UIM claim and damages, and we also’—insurance com-
  pany say[s]—’and we also consent to be bound by arbitra-
  tion, to use binding arbitration.’ Now it kicks back over to
  the insured, the person who paid the premiums, and they
  can elect to stay in court, in circuit court, and have their
  case tried to a judge or a jury, but not get attorney’s fees,
  or they can go to binding arbitration. * * * It’s no stick, it’s
  all carrot.”
Id. at 6:15. On the other hand, Neuberger explained, the
insurer could raise other issues, but at the risk of facing
attorney fees:
  “If the insurance company * * * disputes coverage, says
  we’re not only going to dispute liability or damages, we
  don’t even think you’re covered, or says we won’t be bound
  by arbitration, we won’t use binding arbitration, then the
Cite as 361 Or 584 (2017)	599

   insured—the person who pays the premiums—gets to keep
   their case in court If * * * they prevail and they beat the
   offer, * * * then the court is to award reasonable attorneys
   fees.”
Id. at 7:15.
	        Tom Mortland, again appearing on behalf of the
insurance industry, confirmed that Neuberger had accu-
rately represented the substance of the compromise. Id. at
8:10 (testimony of Tom Mortland).
	        Staff counsel for the Senate Judiciary Committee,
however, noted that the proposed bill, as amended, treated
UM/UIM and PIP claims the same, which made no sense
in light of the differences between the types of insurance.
In particular, she noted, PIP involves no issues of fault.
Apparently, the issue had already been raised in the House,
and there was agreement in advance to address PIP and UM/
UIM claims in separate subsections. As counsel explained it
to the Senate Judiciary Committee, there was
   “concern that condition (a), the second half of it, those
   issues [‘the liability of the uninsured or underinsured
   motorist and the damages due the insured’] would never
   arise in a personal injury protection instance and so they
   have agreed in the House to better specify the fact that
   (a) and (b) actually will apply in uninsured and underin-
   sured motorist cases and (b) will apply in the PIP cases.”
Audio Recording, Senate Judiciary Committee, SB 504, May
20, 1999, at 49:30 (statement of staff counsel Anne Tweedt),
http://records.sos.state.or.us/webdrawer/webdrawer.dll/
webdrawer/rec/4234649/ (accessed June 14, 2017). With an
appropriate amendment to separate UM and UIM claims
from PIP claims, the bill passed both houses and was signed
into law.
	        The legislative history thus offers two insights that
are pertinent to the issues in this case. First, the impetus
for the legislation that ultimately resulted in the enactment
of the two safe-harbor provisions in 1999 was the fact that
existing law undercut the basic, underlying principle of UM
and UIM coverage, which is “to place the injured policy-
holder in the same position he would have been in if the
600	               Spearman v. Progressive Classic Ins. Co.

tortfeasor had had liability insurance.” Vega, 323 Or at 305-
06 (internal quotation marks and citation omitted). Second,
while the initial draft of the bill that ultimately was codified
at ORS 742.061(2) and (3) treated PIP and UM/UIM claims
the same, the legislature made a conscious choice to create
separate safe-harbor provisions for each, to reflect the differ-
ences between the two types of insurance. In both respects,
the legislative history lends support for the interpretation of
ORS 742.061(3) that we have concluded is evident from its
text in context. And, in both respects, it contradicts plain-
tiff’s proposal that we treat the two safe-harbor provisions
as having identical effect.
                    III. APPLICATION
	       We turn, then, to the facts of this case. As we noted
above, in response to plaintiff’s proof of loss for uninsured
motorist benefits, Progressive sent a letter that fully complied
with ORS 742.061(3). The letter stated that Progressive had
accepted coverage and agreed to binding arbitration, reserv-
ing only the issues of the liability of the uninsured motorist
and the damages due to plaintiff. That much is undisputed.
	        The question for us is whether, in response to plain-
tiff’s subsequent claim against Progressive, the insurer
raised issues beyond “the damages due the insured,” thus
placing it outside the safe harbor. Kiryuta v. Country
Preferred Ins. Co., 360 Or 1, 5, 376 P3d 284 (2016) (exam-
ining issues as framed by pleadings to determine whether
issues were limited to those listed in ORS 742.061(3)).
	         We conclude that Progressive’s pleadings did not
raise any issue that would remove it from the safe harbor
of ORS 742.061(3). When plaintiff filed his claim against
Progressive in the trial court, the insurer admitted that
plaintiff had insurance coverage and that plaintiff was
injured in an automobile accident with an uninsured motor-
ist, but disputed the “nature and extent of plaintiff’s alleged
injuries,” as well as the “reasonableness and necessity of
some of plaintiff’s accident-related medical expenses.” And,
in response to requests for admissions, Progressive admitted
that plaintiff had done everything required of him to be eli-
gible for UM benefits, though it denied “the reasonableness,
necessity, relatedness, and extent” of plaintiff’s damages.
Cite as 361 Or 584 (2017)	601

	        Plaintiff argues that, because it is conceivable that,
as framed by the foregoing pleadings, Progressive could
have established that it owed plaintiff nothing, those issues
go beyond those listed in ORS 742.061(3). We accept for the
sake of argument that it is at least possible that Progressive
could have established that it owed plaintiff nothing in UM
benefits because, although Progressive admitted that plain-
tiff was injured in an accident with an uninsured motorist,
plaintiff may not have incurred reasonable and necessary
medical expenses resulting from those injuries.2 As we have
concluded, that does not establish that the insurer raised
issues beyond the “damages due the insured,” as that term
is used in ORS 742.061(3). Because Progressive fell within
the safe harbor of ORS 742.061(3), it was not subject to the
attorney fee provision of ORS 742.061(1). The trial court cor-
rectly denied plaintiff attorney fees.
	       The decision of the Court of Appeals and the judg-
ment of the circuit court are affirmed.

	2
       This case does not require us to consider whether an insurer that contests
whether any of a plaintiff’s injuries were caused by an uninsured motorist, as
opposed to contesting the “reasonableness, necessity, relatedness and extent” of
that plaintiff’s injuries and medical expenses, is entitled to the benefit of the safe-
harbor provisions.