A familiar pattern played itself out on July 25 when the Oregon Supreme Court reversed an Oregon Court of Appeals decision that had favored an insurance carrier, finding that the Court of Appeals had too glibly taken the insurance carrier’s argument at face value. In PGE v. Lexington the policyholder, PGE, sued a number of insurance companies and served them all. Through some sort of hiccup in its corporate department Lexington failed to respond to the complaint and PGE took a default for a significant amount. Problem was, PGE failed to allege a specific amount of damages against Lexington in its complaint, which is a violation of Oregon’s civil procedure rules. Lexington tried to set aside the judgment in the trial on several grounds and failed, but the Court of Appeals held that that PGE’s failure was jurisdictional and the judgment was void. The Supreme Court reversed, holding that the judgment was merely voidable, and that Lexington had failed to show a due process violation. The court remanded to the Court of Appeals to consider Lexington’s other arguments. (The pattern that I’m referring to is that the Court of Appeals frequently appears to side with the insurance industry, which the Oregon Supreme Court often appears more policy-holder friendly. Vast generalizations, of course.)
