SALEM, Ore. (Legal Newsline) - The Oregon Supreme Court, in a ruling earlier this month, reaffirmed its opinion upholding a nearly $9 million verdict against a group of insurance companies.
The defendants in the case -- Farmers Insurance Co. of Oregon, Mid-Century Insurance Co. and Truck Insurance Exchange -- petitioned the state's high court to reconsider its opinion affirming a trial court judgment against it for about $900,000 in compensatory damages and $8 million in punitive damages.
In their petition, the insurance companies contend that the Court's resolution of certain state law issues violated their federal due process rights.
The Court granted reconsideration to consider their arguments. It also addressed their request that it vacate its decision and rehear the case.
The Court, in its July 8 opinion, stuck with its prior ruling without modification. Justice Virginia Linder wrote the majority opinion.
The insurers, in their new petition, argued that the Court altered what is required, under state law, to prove a fraud claim in a class action.
However, Linder wrote for the Court, their arguments stem from an incorrect understanding of the Court's prior decision.
"We held only that, from the evidence that plaintiffs presented, the jury was permitted to infer reliance on the part of individual class members. We disagreed with Farmers that direct evidence of reliance by each individual class member is always required in a class action for fraud. Whether in any particular case such reliance can be inferred depends on the nature and circumstances of the misrepresentation involved," she wrote.
"In this particular case, for the reasons we explained in our prior opinion, the evidence gave rise to a question of fact for the jury to resolve. Our analysis did not invoke a presumption at all, let alone one that Farmers was not entitled to rebut."
Neither did the Court, in so holding, "unexpectedly and radically" alter state law, it said.
The insurers also argued that the Court's conclusion that the appeals court erred in deciding their constitutional challenges to the punitive damages award is a "novel state-law procedural bar that is neither firmly established nor regularly followed."
But their argument "misses the mark," the Court said.
"First, it characterizes our conclusion as 'novel' by assuming the answer to one of the legal questions that this court had to resolve. That question was whether the 55-day time period for hearing and determining a motion for new trial under ORCP 64 F precludes a trial court from memorializing its reasons in writing after timely determining the motion and after announcing those reasons orally on the record. We concluded that the answer was no," it wrote.
"That conclusion was not novel in the sense that it marked a change of state procedural practice or ran counter to some settled understanding. It simply was an answer to a procedural question that had not been raised or resolved before."
The Court also said its consideration of the trial court's written explanation for its timely denial of the insurers' motion for a new trial did not bar their challenge to the amount of the punitive damages award.
"Farmers' challenge to the amount was barred because Farmers failed to assign error to one of two independent and alternative grounds on which the trial court ruled," it wrote.
In short, the insurers' legal arguments fail, the Court said.
From Legal Newsline: Reach Jessica Karmasek by e-mail at firstname.lastname@example.org.