The opinion
SCHUMAN, J.,
dissenting.
Plaintiff was injured in an automobile accident and prevailed in an action against Progressive Preferred Insurance Company (Progressive), his insurer, after Progressive refused to pay the full amount of plaintiffs claim under the policy’s personal injury protection (PIP) provision. In a supplemental judgment, however, the trial court denied plaintiffs petition for attorney fees. Plaintiff appeals that denial. The majority affirms. For the reasons explained below, I would reverse.
The facts at this stage of the litigation are undisputed. Plaintiff was in a motor vehicle accident on November 4, 2001. At the time, he held an insurance policy issued by Progressive. The policy included a PIP provision. Four days after the accident, Progressive’s representative sent plaintiff a letter informing him, “Progressive has accepted coverage for Personal Injury Protection benefits and is willing to submit your case to binding PIP arbitration,” but also informing *602 him that it “may deny, limit or terminate benefits” that did not meet certain “criteria.” Several months later, plaintiff underwent chiropractic treatment. Progressive refused to pay for the treatment on the ground that it was not directly related to the collision, one of the “criteria” that was a precondition for receipt of benefits. The letter informing plaintiff of that refusal stated:
“However, in the end, should you disagree with our decision concerning coverage, you have the right to request arbitration as set out in your Progressive policy and ORS 742.520 to 742.512.” 1
Arbitration occurred, and the arbitrator ruled in favor of Progressive. Plaintiff appealed to the trial court, where a jury ruled in his favor. As described above, however, the court rejected plaintiffs petition for attorney fees. This appeal ensued.
The issues in this case involve the interpretation and application of ORS 742.061. That statute provides, in part:
“(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 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. * * *
“(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.”
It is undisputed that plaintiff meets the criteria for attorney fees set out in subsection (1): the case did not settle, and *603 plaintiffs recovery exceeded the amount of Progressive’s tender. Our task is to decide whether this case is within the exception in subsection (2), that is, whether Progressive “accepted coverage,” the “only issue [was] the amount of benefits due the insured,” and Progressive “consented to submit the case to binding arbitration.”
Resolving that question requires us to determine what Progressive actually did with respect to plaintiffs claim, disregarding the label that either party attached to those actions. Thus, it is of no import that, four days after the accident, Progressive wrote to plaintiff that it had “accepted coverage for Personal Injury Protection benefits and is willing to submit your case to binding PIP arbitration.” An insurer cannot avoid liability for attorney fees by the painless expedient of a written statement that it “accept [s] coverage” and “consents to binding arbitration” if it subsequently demonstrates by word or deed that its definition of those terms is more expansive than the legislature’s. Our task, in other words, is to determine whether Progressive actually “accepted coverage” so as to leave “only * * * the amount of benefits” at issue, and “consented to submit the case to binding arbitration” as the legislature used those terms in ORS 742.061(2).
In its letter to plaintiff shortly after the accident, Progressive’s representative wrote:
“I am sorry to hear about your recent injury sustained in the above stated loss. To assist you during this unpleasant time, I will be handling the medical portion of your claim. Personal Injury Protection coverage provides you with coverage for reasonable and necessary medical expenses directly related to the accident. These expenses must be incurred within one year from the accident date or up to the coverage limit under your policy, whichever comes first. Please be advised that we may deny, limit or terminate benefits if it is determined such expenses do not meet this criteria. If a dispute arises regarding the amount of benefits due, please be advised that pursuant to ORS 742.061 Progressive has accepted coverage for Personal Injury Protection benefits and is willing to submit your case to binding PIP arbitration.”
*604 Ultimately, and in accordance with its letter, Progressive accepted the fact that, at the time of the accident, plaintiff held a Progressive auto insurance policy that included PIP protection, but it did not accept the fact that plaintiffs chiropractic expenses fell within the terms of that PIP protection, arguing that the expenses were not related to injuries he sustained in the accident. 2 That issue was litigated.
Thus, the precise question before us is whether the legislature, in using the phrase “the insurer has accepted coverage and the only issue is the amount of benefits,” intended to include a situation in which the insurer accepts the fact that the insured holds a policy and that the general type of expense incurred (here, personal injury protection) is within the terms of that policy, but nonetheless maintains that a particular expense claimed does not entitle the insured to benefits because it does not meet certain criteria imposed by the insurer. Progressive argues, and the trial court and the majority agree, that the legislature intended just that. Plaintiff, on the other hand, argues that an insurer has “accepted coverage and the only issue is the amount of benefits” only when the insurer has agreed to reimburse the insured for each item he or she claims as an expense and disputes only the amount claimed for one or more of the items.
I begin and end my analysis with a portion of the text of ORS 742.061(2) itself:
“Subsection (1) of this section [entitling an insured to attorney fees] 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 [.]”
*605 Although much of the parties’ dispute focuses directly on the meaning of “coverage,” paragraph (2)(a) establishes two complementary criteria that must exist in order for the insurer to avoid liability for attorney fees: the insurer must have accepted coverage and there must remain only one issue, namely, the “amount of benefits.” If the insurer’s “acceptance” leaves other issues unresolved, then the insurer has not accepted coverage, and it is still exposed to attorney fees.
The majority concludes that, in acknowledging that plaintiff has PIP insurance but disputing whether, under that insurance, he is entitled to benefits for the chiropractic treatment he received, Progressive is disputing “the amount of benefits”; if plaintiffs chiropractic expenses qualify as insured costs, plaintiff will receive a greater “amount of ben efits” — i.e., more money — than he would receive if the expenses do not qualify. That sense of the statute, however, does not survive scrutiny for at least two reasons. First, it eliminates any distinction between “coverage” and “amount of benefits,” thereby rendering part of the statute meaningless; an insurer could reject a claim for any reason, or for no reason, and maintain that the only issue was “amount of benefits” because, had the insurer accepted the claim, the insured would receive more money. Second, the word “amount” refers to quantity and not to any other nonquantifiable characteristic. Thus, when an insurer rejects a claim because it fails to meet a precondition established in the policy, then, even if “amount” refers to the ultimate size of the insured’s benefit, the ensuing dispute is not “only” about amount; it is also about whether the claim possesses some particular characteristic such as being directly related to a covered accident.
In the present case, even if I could accept Progressive’s argument that its rejection of plaintiffs claim for chiropractic treatment involved the “amount of benefits due” to him, I cannot accept the argument that the rejection involved only that issue. It also involved the separate issue of whether those treatments were related to the accident.
This interpretation conforms to common sense and to common usage, even in the context of insurance claims. Imagine the following hypothetical situation. A homeowner *606 has a valid fire insurance policy that will pay replacement or repair costs and reimburse the homeowner for one month’s rent while she looks for a replacement or is displaced because of ongoing repair work. Her house bums. She is told that replacement will cost $500,000 and repairs will cost $100,000 and take up to six months to complete. She decides to rebuild and rent an apartment for the duration. She telephones her insurance provider, describes the damage and the options, and asks, “If I have to find alternative housing, am I covered?” Under Progressive’s and the majority’s definition of “coverage,” the insurer can reply, “Yes, you have coverage,” because by doing so the insurer merely acknowledges that the homeowner is a person who owns a policy, the house is a covered item in the policy, and fire is an event insured against. Hearing that answer, the homeowner would surely be shocked when the insurer subsequently denies her request for reimbursement for five of the six months’ rent she has paid under the impression that she was covered. The insurer’s answer cannot be reconciled with how real policyholders and real insurance adjusters talk to each other.
Because I conclude that Progressive’s statements to plaintiff and its posture in litigation left unresolved issues beyond the amount of benefits, I would hold that Progressive cannot avail itself of the immunity from attorney fees in ORS 742.061(2). I would therefore reverse and remand in order for the trial court to determine “a reasonable amount to be fixed by the court as attorney fees * * ORS 742.061(1).
The letter is not in the record, but the quoted paragraph appears in the trial court’s letter opinion and the parties do not dispute its contents.
In its “Response to Plaintiffs Request for Admissions,” Progressive admitted that plaintiffs “chiropractic care was necessary as a result of plaintiff’s injuries from the motor vehicle collision of November 4, 2001.” As developed at trial, however, Progressive’s ultimate position was that the care was not related to the accident; the parties agreed that the only issue for the jury was “whether the medical billings [for chiropractic treatment] between August 2, 2002 and October 31,2002 are related to the accident of November 4, 2001.”