Moody v. Oregon Community Credit Union
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In the State of Oregon, a woman whose husband was accidentally shot and killed during a camping trip filed a lawsuit against her husband's life insurance company. The woman claimed that the insurance company negligently failed to investigate and pay her claim for policy benefits, causing her economic harm and emotional distress. The trial court granted the insurance company's motions to dismiss the woman's negligence claim and to strike her claim for emotional distress damages. The Court of Appeals reversed the trial court's decision, and the insurance company appealed the case to the Supreme Court of Oregon.
The Supreme Court of Oregon affirmed the decision of the Court of Appeals. The court held that the woman had pleaded facts sufficient to give rise to a legally cognizable common-law negligence claim for emotional distress damages. The court reasoned that the woman, as the surviving spouse of a deceased breadwinner, had a legally protected interest sufficient to support a common-law negligence claim for emotional distress damages against her husband's life insurance company for failure to reasonably investigate and promptly pay her claim for insurance benefits. The court concluded that the insurance claim practices that Oregon law requires and the emotional harm that foreseeably may occur if that law is violated are sufficiently weighty to merit imposition of liability for common-law negligence and recovery of emotional distress damages. Therefore, the Supreme Court of Oregon reversed the judgment of the trial court and remanded the case back to the trial court for further proceedings.
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