In Richardson v. Safeco Insurance Company of Oregon, Lane County Circuit Court Case No. 25CV00019, a jury found an insurer breached the terms of an insurance policy. Still, it declined to award the plaintiffs any emotional distress damages for their negligence per se claim. This was the first test of this new cause of action in Oregon pursuant to Moody v. Oregon Community Credit Union and its progeny. The verdict signals that while Moody expanded potential exposure for insurers, juries may require substantial proof of emotional distress damages, as well as clearly delineated causation distinguishable from other personal or financial stressors, before awarding noneconomic damages. 

The Moody Decision
In 2019, in Lane County Circuit Court, Eugene, Oregon, a widow brought a claim for emotional distress damages against her husband’s life insurance company. The claim appeared to conflict with the then-held maxim in Oregon insurance law that policyholders may only recover contractual damages in first-party insurance disputes. Accordingly, Judge Cascagnette dismissed the widow’s claim. That dismissal resulted in the Oregon Supreme Court’s ruling in Moody, which allowed policyholders to recover emotional distress damages against their insurers for violations of Oregon’s claim-handling statute. Moody transformed the environment of first-party insurance litigation in Oregon, though the exact contours of the ruling remain undefined.

The Richardson Trial
In November 2025, Moody was once again the subject of debate in Lane County Circuit Court, with partner Kirsten Curtis and associate Sean Downing of Wilson Elser’s Portland office defending an insurer in a jury trial against a Moody claim for the first time in Oregon since the high court’s ruling. 

After a tree fell on their rental property, the insured plaintiffs submitted several revised estimates from their contractor. Each revised estimate increased the scope and projected cost of the repairs. As the insurer was about to issue payment on a revised estimate, the contractor called the insurer and advised that he had authored only the original estimate and that he was not the author of the revised estimates. Following the contractor’s allegation of fraud, the insurer’s Special Investigations Unit (SIU) investigated and concluded that the plaintiffs had prepared the revised estimates themselves. The insurer denied the claim based on the misrepresentations in the estimates. The plaintiffs then sued the insurer.

In addition to the claimed $300,000 in contractual damages, the plaintiffs sought $200,000 for emotional distress arising from the insurer’s allegedly negligent investigation and failure to settle the claim in good faith. See ORS 746.230(1)(d), (f). At the trial, the plaintiffs did not present a claim-handling expert or a mental health care provider. Instead, the plaintiffs relied on their own testimony regarding their suffering from panic attacks, anxiety, and depression. Aside from the claim-handling and SIU investigation, the plaintiffs admitted there were other sources of stress in their lives at the time, including a tenant claiming wrongful eviction, the need for repairs at a property located three states away, and a contractor who did not complete the repairs as they requested. The defense presented the documentary evidence that showed the estimates had been prepared by different people, called the SIU investigator to testify as to the thoroughness of her investigation, and presented the contractor in person to tell the jury that he was not the author of the revised estimates.

Ultimately, nine jurors accepted the plaintiffs’ story over that of the contractor and found no misrepresentations in the revised estimates. The jurors also determined that the insurer had breached its contract and, therefore, owed the plaintiffs new money to repair their rental property. As for the Moody claim, the jury found that the insurer breached its standard of care by failing to settle the claim when liability became reasonably clear. However, the jury also found that the insurer’s investigation was reasonable and that the plaintiffs had not suffered a serious emotional injury that allowed them to recover any extracontractual damages.

This case appears to be the first Moody case that has gone to trial and resulted in an award of zero emotional distress damages. Based on this one instance, it seems that an Oregon jury needs more evidence than the plaintiff’s own testimony about their anxiety to award noneconomic damages. In this trial, the plaintiffs’ lack of medical or claims-handling experts likely impaired their ability to satisfy their burden of proving a serious emotional injury.

Additionally, the case was almost dismissed on directed verdict because the plaintiffs could not delineate whether their distress arose from the insurer’s actions or from other stresses in their lives. Both parties agreed that the plaintiffs had to prove their damages using the “but for” standard. Future cases may pose similar challenges to plaintiffs who cannot segregate their alleged damages stemming from the insurer’s actions from their emotional distress that naturally follows a covered loss to life or property. Therefore, coverage attorneys may want to include in their deposition and cross-examination outlines questions regarding what non-insurance stresses the plaintiff was experiencing during the claim-handling timeframe.

Practical Effects of Richardson 
Even under Moody, Oregon juries will not automatically award emotional distress damages in first-party insurance cases. The Richardson case suggests that meaningful evidentiary hurdles remain for plaintiffs seeking noneconomic damages, including the need for plaintiffs to provide persuasive evidence – beyond their own testimony – to prove a serious emotional injury and to clearly separate that distress from other life stressors using the “but for” causation standard.  Finally, this case shows that a jury may find that the insurer breached the policy but was not negligent in its handling of the claim or coverage determination. As the judge noted during the hearing on the defendant’s directed verdict, a bad outcome does not necessarily mean a bad process. The jury here seemed to agree and found that the insurer breached its contract with the policyholder, but that it did not act unreasonably in doing so. In short, even in the post-Moody setting, the insurer still has the right to be wrong.