S057155, Opinion — ZRZ Realty v. Beneficial Fire and Casualty Ins.

255
On petitioners on review’s petition for attorney fees, filed January 5, considered
and under advisement September 8, petition for attorney fees allowed; petitioners
on review awarded $40,858.50 for attorney fees before Court of Appeals and
Supreme Court November 10, 2011
ZRZ REALTY COMPANY,
an Oregon corporation,
for itself and as trustee of
the Zidell Remediation Funding Trust,
an Oregon Trust;
Zidell Marine Corporation,
a Washington corporation;
Tube Forgings of America, Inc.,
an Oregon corporation;
and Pon Exploration, Inc.,
a Delaware corporation,
fka Zidell Explorations, Inc.,
an Oregon corporation,
Petitioners on Review,
v.
BENEFICIAL FIRE AND CASUALTY
INSURANCE COMPANY,
succeeded in interest by
J.C. Penney Life Insurance Company, et. al.,
Defendant,
and
CERTAIN UNDERWRITERS AT
LLOYD’S OF LONDON,
and Certain London Market Insurance Companies,
aka ‘‘Lloyds,’’
including the following defendant companies:
Assicurazioni Generali S.P.A.,
Insurance Company Of North America (UK) Ltd.,
Commercial Union Assurance Company, PLC,
Edinburgh Assurance Company, Ltd.,
Ocean Marine Insurance Company, Ltd.,
World Auxiliary Insurance Corporation, Ltd.,
Cornhill Insurance Company, Ltd.,
Dominion Insurance Company, Ltd.,
Eagle Star Insurance Company Ltd.,
The Threadneedle Insurance Company Ltd.,
Excess Insurance Company Ltd.,
London & Edinburgh General Insurance Company Ltd.,

256 	ZRZ Realty v. Beneficial Fire and Casualty Ins.
New Zealand Insurance Company, Ltd.,
Road Transport & General Insurance Company, Ltd.,
South British Insurance Company, Ltd.,
Ulster Marine Insurance Company, Ltd.,
The United Scottish Insurance Company, Ltd.,
Yorkshire Insurance Company, Ltd.,
Hansa Re & Marine Insurance Company (UK) Ltd.,
La Reunion Francaise (UK) Ltd.,
Economic Insurance Company Ltd.,
Norwich Union Fire Insurance Society, Ltd.,
Firemen’s Insurance Company Of Newark New Jersey,
Swiss Union General Insurance Company, Ltd.,
Leadenhall Insurance Company, Ltd.,
Bishopgate Insurance Company, Ltd.,
Home Insurance Company,
Nippon Fire & Marine Insurance Company (UK), Ltd.,
Switzerland General Insurance Company, Ltd.,
River Thames Insurance Company, Ltd.,
Royal Insurance Company, Ltd.,
British Fire Insurance Company, Ltd.,
British & Foreign Insurance Company, Ltd.,
National Provincial Insurance Company, Ltd.,
The Scottish Lion Insurance Company, Ltd.,
Skandia Marine Insurance Company (UK), Ltd.,
Drake Insurance Company, Ltd.,
Sphere Insurance Company, Ltd.,
Sphere Drake Insurance Company PLC,
Alliance Assurance Company, Ltd.,
British Law Insurance Company, Ltd.,
and Continental Assurance Company Of London, Ltd.,
Liverpool Marine & General Insurance Company, Ltd.,
Phoenix Assurance Company, Ltd.,
Fine Art & General Insurance Company, Ltd.,
Anglo-French Insurance Company, Ltd.,
Baloise Marine Insurance Company, Ltd.,
Baltica Insurance Company (UK), Ltd.,
Fuji Fire & Marine Insurance Company, (UK), Ltd.,
R.W. Gibbon Group,
La Preservatrice Group,
Switzerland General Insurance Company (London), Ltd.,
Yasuda Fire & Marine Insurance Company, Ltd.,
Iron Trades Mutual Insurance Company, Ltd.,

Cite as 351 Or 255 (2011) 	257
Minster Insurance Company, Ltd.,
Reliance Insurance Company,
Sirius (UK) Insurance PLC,
Indemnity Marine Assurance Company, Ltd.,
London & Hull Maritime Insurance Company, Ltd.,
and Associated Companies,C.A.
Parr Agencies, Ltd.,
Sun Insurance Office,
Marine Insurance Company, Limited,
and Sumitomo Marine & Fire Insurance Company, Limited,
Respondents on Review.
(CC 9708-06226; CA A121145; SC S057155)
266 P3d 61
Plaintiffs prevailed, in part, in litigation to establish insurance coverage in a
dispute regarding environmental contamination that resulted from plaintiffs’ dis-
mantling of navy and merchant marine vessels at a site along the Willamette
River. Plaintiffs petitioned to recover attorney fees based upon ORS 742.061, which
provides that a plaintiff who brings an action on any insurance policy may recover
its attorney fees if the insurer does not settle within six months of the plaintiff’s fil-
ing a proof of loss and the plaintiff recovers more than the insurer tendered.
Held: Even if a 2005 amendment to ORS 742.001 excepting ‘‘surplus lines insur-
ance policies’’ from ORS chapter 742 modifies the scope of ORS 742.061, the
amendment does not apply to actions, such as this one, filed before the amend-
ment’s effective date. At this stage of the litigation, plaintiffs may recover attorney
fees that they incurred to establish certain defendants’ duty to defend plaintiffs
under various insurance policies that defendants issued and plaintiffs may recover
attorney fees to prepare the fee petition.
The petition for attorney fees is allowed in part and plaintiffs are awarded
$40,858.50 for their attorney fees for work performed before the Court of Appeals
and the Supreme Court.
En Banc
Bruce L. Campbell, Miller Nash LLP, Portland, filed the
petition for attorney fees and the reply for petitioners on
review. With him on the petition and reply was Heather K.
Cavanaugh.
Thomas W. Sondag, Lane Powell PC, Portland, filed the
objection to petitioners’ fee petition for respondents on
review. With him on the objection was John Folawn, Folawn
Alterman & Richardson LLP, Portland.

258 	ZRZ Realty v. Beneficial Fire and Casualty Ins.
KISTLER, J.
The petition for attorney fees is allowed. Petitioners on
review are awarded $40,858.50 for their attorney fees before
the Court of Appeals and the Supreme Court.

Cite as 351 Or 255 (2011) 	259
1 As amended in 2005, ORS 742.001 provides that ‘‘[t]his chapter * * * appl[ies]
to all insurance policies delivered or issued for delivery in this state except * * *
[s]urplus lines insurance policies.’’
2 Generally, if insurers admitted to do business in this state do not offer cov-
erage for in-state risks, some brokers (surplus lines licensees) can place the cover-
age for those risks (surplus lines insurance) with insurers who are not authorized
to do business in Oregon and who are eligible to accept such insurance. See ORS
KISTLER, J.
Pursuant to ORS 742.061, plaintiffs (Zidell) have
petitioned to recover attorney fees that they incurred before
this court and the Court of Appeals. Defendants (London)
have objected to Zidell’s fee request on three grounds. London
contends that, as a result of a 2005 amendment to ORS
742.001, Zidell may not recover any fees that it incurred after
the effective date of that amendment. Alternatively, London
argues that Zidell is entitled to fees only for work that it did
to establish London’s duty to defend. Finally, London argues
that the billing records that Zidell submitted do not support
its fee request. We hold that, to the extent the 2005 amend-
ment applies to ORS 742.061, that amendment does not
apply to actions filed before its effective date. We also hold
that, at this stage of the litigation, Zidell may recover the
attorney fees that it incurred to establish London’s duty to
defend and to prepare the fee petition.
Zidell bases its fee request on ORS 742.061, which
provides, in part:
‘‘[I]f 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 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.’’
By its terms, ORS 742.061 applies to ‘‘any policy of insurance
of any kind or nature.’’ London notes, however, that in 2005
the legislature amended ORS 742.001 to except surplus lines
insurance policies from the requirements of ORS chapter
742.1 London argues that the policies in this case are ‘‘surplus
lines insurance policies”2 and that, as a result of the 2005

260 	ZRZ Realty v. Beneficial Fire and Casualty Ins.
731.144 (defining ‘‘surplus lines insurance’’); ORS 735.405(3), (6), and (9) (defining
respectively ‘‘eligible surplus lines insurer,’’ ‘‘nonadmitted insurer,’’ and ‘‘surplus
lines licensee’’).
3 We note that the 2005 amendment to ORS 742.001, which excepts surplus
lines insurance generally from several chapters of the revised statutes, is at odds
with the more specific terms of ORS 742.061, which applies to ‘‘any policy of insur-
ance of any kind or nature.’’ Zidell does not argue, however, that the specific con-
trols over the general. Rather, it assumes that the later-amended statute controls
over the earlier-enacted one but argues that the later amendment does not apply to
this action. For the reasons explained below, we conclude that, even assuming the
2005 amendment controls, it does not apply to actions, such as this one, filed before
its effective date.
4 House Bill 2160 made technical changes to the insurance code. As initially
proposed, the bill did not address surplus lines insurance. It was amended late in
the session to ‘‘[c]larify when the Insurance Code applies and does not apply to sur-
plus lines.’’ See Statement of Joel Ario, HB 2160, Senate Business and Economic
Development Committee, May 10, 2005, Exhibit K (stating the purpose of the sur-
plus insurance lines amendments to the bill). Nothing in the legislative history
addresses whether or how the amendments to HB 2160 regarding surplus lines
policies would apply to claims for attorney fees under ORS 742.061.
amendment to ORS 742.001, ORS 742.061 does not authorize
Zidell to recover any attorney fees that it incurred after the
effective date of the amendment. Zidell responds that the
2005 amendment does not apply to actions filed before its
effective date.3
In this case, both parties argue that the 2005 act
applies prospectively. They differ over the event to which the
2005 act prospectively applies. London argues that the act
applies prospectively to fees incurred after its effective date,
while Zidell argues that it applies prospectively only to
actions filed after its effective date. In resolving the parties’
dispute, we look initially to the text, context, and legislative
history of the 2005 act. See Whipple v. Howser, 291 Or 475,
480, 632 P2d 782 (1981); cf. Spicer v. Benefit Ass’n of Ry.
Emp., 142 Or 574, 593, 17 P2d 1107, 21 P2d 187 (1933) (fol-
lowing an express legislative direction that an amendment
authorizing attorney fees on appeal for the predecessor to
ORS 742.061 did not apply to actions filed before the amend-
ment’s effective date). Those usual sources of legislative
intent provide no help here, however. Nothing in the text,
context, or legislative history of the 2005 act addresses
whether that act applies prospectively or retroactively. See
Or Laws 2005, ch 185; Minutes, Senate Business and
Economic Development Committee, HB 2160, May 10, 2005.4

Cite as 351 Or 255 (2011) 	261
5 In Murray, approximately two months after filing a proof of loss, the insured
filed a complaint alleging a right to recover on the policy and also a claim for attor-
ney fees under the predecessor to ORS 742.061. See 121 Or at 169-70. At that time,
the statute provided for fees only if the insurer had not settled within eight months
of filing the proof of loss and if the insured recovered more than the insurer had
tendered. Oregon Laws, title XXXVI, ch I, § 6355 (1920). Regarding attorney fees,
this court observed that the insured’s fee claim was premature because the insured
filed his complaint within eight months of filing the proof of loss. Id. at 171. The
insurer, however, had not objected on that ground, and the court held that, in those
circumstances, ‘‘plaintiff ought not to be made to wait the full period of eight
months after filing proof’’ to bring a fee claim. Id. at 172.
In the absence of guidance from those sources, this
court ‘‘ordinarily [has] decline[d] to construe a legislative
amendment to have a retrospective effect if to do so would
‘impair existing rights, create new obligations or impose
additional duties with respect to past transactions.’ ’’ Black v.
Arizala, 337 Or 250, 271, 95 P3d 1109 (2004) (quoting
Derenco v. Benj. Franklin Fed. Sav. and Loan, 281 Or 533,
539 n 7, 577 P2d 477, cert den, 439 US 1051 (1978)); accord
Joseph v. Lowery, 261 Or 545, 551-52, 495 P2d 273 (1972). In
considering that issue, we note that this court explained
more than 80 years ago that the predecessor to ORS 742.061
was intended ‘‘to protect an insured who has suffered a loss
from annoying and expensive litigation.’’ Murray v. Firemen’s
Ins. Co., 121 Or 165, 172, 254 P 817 (1927). Accordingly, this
court recognized that an insured could allege a claim for
attorney fees under the predecessor to ORS 742.061 if the
insured had filed a proof of loss and if the insurer had not set-
tled within the statutory time period, forcing the insured to
bring an action on the policy and incur attorney fees. Id. at
170-71.5 To be sure, then as now, an insured’s fee claim was
not perfected until he or she recovered more than the insurer
had tendered. Compare Oregon Laws, title XXXVI, ch I,
§ 	6355 	(1920) 	(imposing 	that 	requirement), with ORS
742.061 (same). However, this court reasoned that the
insured’s rights under the attorney fee statute attached once
the insurer’s failure to settle within the requisite time period
caused the insured to bring an action to enforce his or her
rights under the policy. Murray, 121 Or at 170-71.
It follows, we think, that Zidell’s right to seek fees at
trial and on appeal under ORS 742.061 attached when
London failed to settle within six months of Zidell’s proof of

262 	ZRZ Realty v. Beneficial Fire and Casualty Ins.
loss, forcing Zidell to bring this action and incur fees to estab-
lish its rights under the policies that London had issued. It
also follows that applying the 2005 act retroactively to
actions filed before the act’s effective date would impair that
right. Following Black, we hold that, even assuming the 2005
act excepts actions brought on surplus lines insurance poli-
cies from the scope of ORS 742.061, that act does not apply to
actions, such as this one, filed before the act’s effective date—
a holding that is consistent with the legislature’s direction
when it addressed a virtually identical issue 80 years ago. See
Spicer, 142 Or at 593 (noting the legislature’s statement that
an amendment authorizing attorney fees on appeal for the
predecessor to ORS 742.061 would not apply to actions filed
before the amendment’s effective date).
Our holding is limited to the relationship between
the 2005 amendment to ORS 742.001 and ORS 742.061. We
express no opinion on how the 2005 amendment to ORS
742.001 applies to the various other provisions found in ORS
chapter 	742. 	As 	Justice 	Linde 	observed 	in 	Whipple,
‘‘[r]esponsible attention to the significance to be attached to
past events cannot be compressed into some simple formula
to serve legislation of all kinds. Too many different past
events and too many potential legal consequences are rele-
vant for different kinds of laws’’ to announce a single formula
that would determine how the 2005 amendment to ORS
742.001 applies to all the various provisions of chapter 742.
See id. at 489 (Linde, J., concurring) (stating general
proposition).
Having concluded that the 2005 amendment does
not bar Zidell from recovering fees that it incurred on appeal,
we turn to the second issue that London raises: whether
Zidell may recover fees that it incurred to establish London’s
duty to indemnify, as well as the fees that it incurred to
establish London’s duty to defend. To put that issue in per-
spective, it is helpful to recount briefly the posture in which
the issue arises. The Oregon Department of Environmental
Quality (DEQ) issued a notice to Zidell that it was potentially
responsible for cleaning up environmental damages resulting
from its business. See ZRZ Realty v. Beneficial Fire and
Casualty Ins., 349 Or 117, 125, 241 P3d 710 (2010). When
London refused to defend Zidell in response to DEQ’s notice

Cite as 351 Or 255 (2011) 	263
6 Much of the trial focused on determining whether Zidell had expected or
intended the damages caused by contaminants that were released into the environ-
ment as a result of operating Zidell’s business. See ZRZ Realty, 349 Or at 125-26.
The trial court developed a series of rules for allocating the costs that Zidell and
London would have to bear in remediating those contaminants. Id. at 126 and n 8.
or to indemnify it for the costs of remediating any environ-
mental damages, Zidell brought this action claiming that
London had breached its contractual obligations under vari-
ous insurance policies that it had issued to Zidell over the
years. Id. Zidell also sought a declaratory judgment that
London had a duty to defend and indemnify it. Id.
The trial court ruled on summary judgment that
London had a duty to defend Zidell, id., and it found that
London owed Zidell certain defense costs that Zidell had
incurred. Id. at 149. The remainder of the trial was devoted
to Zidell’s declaratory judgment claim that London had a
duty to indemnify it for the cost of remediating environmen-
tal damages caused by its business.6 Id. at 125. Because
Zidell had not incurred any remediation costs by the time of
trial, the trial court’s rulings regarding the duty to indemnify
were prospective only. Id. at 126 n 10.
After the trial ended, Zidell sought attorney fees
under ORS 742.061 for establishing both London’s duty to
defend and its duty to indemnify. As noted, ORS 742.061
authorizes an award of fees if (1) the parties to an insurance
agreement do not settle within six months from the date that
the insured files a proof of loss and (2) the insured’s monetary
recovery exceeds the amount tendered by the insurer. The
trial court awarded Zidell fees for the work that its attorneys
had done to establish London’s duty to defend and to recover
the defense costs that Zidell had incurred. Id. at 148-49. The
trial court, however, did not award Zidell fees for the work
that its attorneys had done to establish London’s duty to
indemnify. Because Zidell had not yet recovered any remedi-
ation costs, id. at 126 n 10, the trial court could not say that
Zidell had recovered more remediation costs than London
had tendered, as ORS 742.061 requires.
London appealed, and Zidell cross-appealed from the
resulting judgment. On the merits, London argued, among
other things, that the trial court had erred in allocating the

264 	ZRZ Realty v. Beneficial Fire and Casualty Ins.
burden of proof on the express and implied fortuity policies.
Id. at 127. Regarding attorney fees, London argued that the
trial court had erred in ruling that a letter that Zidell had
sent London constituted a proof of loss within the meaning of
ORS 742.061. Id. at 149. Alternatively, London argued that,
if the Court of Appeals reversed the trial court’s judgment on
any ground, ORS 20.220 required it to reverse the award of
attorney fees as well. See id. Zidell cross-appealed on, among
other things, the trial court’s ruling that Zidell did not have
a right to recover fees for the work done on the duty to
indemnify.
The Court of Appeals reversed the trial court’s ruling
allocating the burden of proof on the express fortuity policies
and remanded for a new trial on both the express and implied
fortuity policies. See id. at 126-27, 146. In considering the
trial court’s fee award, the Court of Appeals agreed with the
trial court that Zidell’s letter was a proof of loss. See id. at
149. However, it reversed the fee award, which was based on
the duty to defend, because it had remanded for a new trial.
See id. Having reversed the fee award, the Court of Appeals
did not reach Zidell’s cross-appeal arguing that it had a right
to fees for work done to establish London’s duty to indemnify,
as well as London’s duty to defend.
On review, we upheld the Court of Appeals decision
that the trial court had erred in allocating the burden of proof
on the express fortuity policies but held that the case should
be remanded for a new trial on only that issue. Id. at 132,
146-48. We reversed the Court of Appeals decision vacating
the attorney fees that the trial court had awarded Zidell for
the work its attorneys had done on the duty to defend. Id. at
149-50. On that point, we reasoned:
‘‘According to the trial court, it awarded Zidell only
those fees and costs that were attributable to London’s
breach of its duty to defend. By contrast, the issue that the
trial court must retry on remand—whether Zidell expected
or intended the damage resulting from its business activ-
ity—is relevant only to the question whether London has a
duty to indemnify Zidell under the various express fortuity
policies that London issued.

Cite as 351 Or 255 (2011) 	265
‘‘This court has long recognized that ‘[t]he duty to
indemnify is independent of the duty to defend.’ Ledford,
319 Or at 403. An insurer may have a duty to defend its
insured, as the trial court found here, but no duty to indem-
nify. It follows that, even if the trial court finds on remand
that London had no duty to indemnify Zidell under the
express fortuity policies, that ruling would have no effect on
either the trial court’s ruling that London had a duty to
defend Zidell in DEQ’s enforcement action or the trial
court’s conclusion that ORS 742.061 authorized Zidell to
recover attorney fees it incurred in this action in establish-
ing and enforcing London’s duty to defend. The Court of
Appeals erred in reversing and vacating the fee awards.31
‘‘31 Because the part of the trial court’s judgment that the
Court of Appeals reversed does not relate to the awards of
attorney fees, ORS 20.220(3) did not require the Court of
Appeals to reverse and vacate the fee awards.’’
Id. (footnote 30 omitted).
In its fee petition, Zidell seeks to recover the fees
that it incurred on appeal to establish London’s duty to
defend and its duty to indemnify. London does not dispute, at
least before this court, that it owes Zidell the attorney fees it
incurred in establishing the duty to defend and in upholding
the trial court’s fee award. London argues, however, that
Zidell may not recover attorney fees that it incurred to estab-
lish London’s duty to indemnify. In resolving that issue, we
note that this court repeatedly has held that obtaining a dec-
laration that an insurance policy provides coverage for a loss
is, without more, insufficient to trigger an insurer’s obliga-
tion to pay the insured’s attorney fees under what is now cod-
ified as ORS 742.061. See McGraw v. Gwinner, 282 Or 393,
396-400, 578 P2d 1250 (1978) (reviewing cases). An insured
also must recover more than the insurer tendered in order to
receive fees under that statute. Id.
Because Zidell has not yet recovered any indemnifi-
cation costs from London, it cannot argue that, at this stage
of the litigation, it has an independent right to recover fees
for establishing London’s duty to indemnify it. Zidell, how-
ever, advances two reasons why it should nonetheless
recover fees related to the duty to indemnify. First, Zidell

266 	ZRZ Realty v. Beneficial Fire and Casualty Ins.
notes that London argued in the Court of Appeals that, if the
trial court had erred in determining that London had a duty
to indemnify Zidell, then the Court of Appeals should reverse
both the judgment establishing London’s duty to indemnify
and the trial court’s fee award. Zidell reasons that, in light of
London’s argument, the fees that it incurred on appeal and
review defending the trial court’s indemnification rulings
were reasonably related to preserving the trial court’s fee
award. It follows, Zidell concludes, that it can recover those
fees now.
As we explained in our decision upholding the trial
court’s fee award, the argument that London advanced (and
the Court of Appeals accepted) is at odds with the well-
established principle that ‘‘ ‘[t]he duty to indemnify is inde-
pendent of the duty to defend.’ ’’ ZRZ Realty, 349 Or at 150
(quoting Ledford v. Gutoski, 319 Or 397, 403, 877 P2d 80
(1994)). An insurer may have a duty to defend even though it
has no duty to indemnify. London was wrong in arguing that,
if the Court of Appeals reversed the trial court’s rulings
regarding the duty to indemnify, then it also had to reverse
the trial court’s fee award, which was based on the duty to
defend. Zidell cannot convert London’s mistaken argument
into a basis for recovering fees now that it otherwise would
have no right to recover at this stage of the litigation.
Zidell advances a second argument that it raised in
the trial court (and the trial court rejected) and that it cross-
assigned as error in the Court of Appeals (and the Court of
Appeals did not reach). Zidell reasons that, if it recovers more
than London tendered on one matter (the duty to defend),
then ORS 742.061 permits it to recover the fees that it
incurred both on that matter and also on other, separate mat-
ters. That is true, Zidell reasons, even though it has no inde-
pendent right to recover fees under ORS 742.061 for those
matters.
Zidell cites one case in support of its argument,
Hartford v. Aetna/Mt. Hood Radio, 270 Or 226, 527 P2d 406
(1974). In that case, the insurer brought a declaratory judg-
ment action to determine its responsibility for a loss (damage
to the insured’s property), and the insured counterclaimed
for monetary damages for failure to pay the full amount of

Cite as 351 Or 255 (2011) 	267
7 Because the Court of Appeals reversed the trial court’s fee award, Zidell could
not have sought to recover attorney fees related to the duty to defend in that court.
the loss. Id. at 228, 235-37. This court held on the declaratory
judgment claim that the insurer was responsible for the loss
and on the counterclaim that the insurer owed more than it
had tendered. Id. at 235, 237. This court also awarded the
insured fees. Id. at 236. As the court later explained in
McGraw, because the insured in Hartford had recovered
more on its counterclaim than the insurer had tendered, the
insured could recover the attorney fees it incurred both in
responding to the insurer’s declaratory judgment action and
in pursuing the counterclaim. See McGraw, 282 Or at 399-
400 (explaining Hartford).
The decision in Hartford does not advance Zidell’s
argument in this case. In Hartford, both the insurer’s declar-
atory 	judgment 	claim 	and 	the 	insured’s 	counterclaim
involved the same issue—the insured’s obligation to pay the
insured for damage to its property. Unlike this case, that
decision did not involve a situation in which the insured had
established a right to recover fees on one matter (the duty to
defend) but had not established a right to recover fees on
another, separate matter (the duty to indemnify). There may
be cases in which the issues are sufficiently related that an
entitlement to fees on one issue will warrant awarding fees
for work on related issues. This is not one of those cases, how-
ever. As we explained in our previous decision, the matter on
which Zidell seeks fees (the duty to indemnify) is independ-
ent of the matter on which it is entitled to recover fees (the
duty to defend). In these circumstances, we agree with the
trial court that, at this stage of the litigation, Zidell may
recover only those fees that are related to the duty to defend.
London raises a final issue. It contends that, for the
most part, Zidell’s billing records are not sufficient for us to
determine which fees related to the duty to defend. Zidell’s
records, however, identify the time that its attorneys spent
on the assignments of error in the Court of Appeals related to
the trial court’s attorney fees award.7 Zidell also has submit-
ted affidavits from its lead counsel on appeal, which state
that, at this stage of the litigation, Zidell seeks only 20 per-
cent of the fees related to upholding the trial court’s fee

268 	ZRZ Realty v. Beneficial Fire and Casualty Ins.
8 Zidell briefed and argued issues related to the trial court’s fee award at other
stages of this appeal. However, its other billing entries do not identify what part of
its time was related to that issue, and counsels’ affidavits did not attempt to allo-
cate a portion of those general billing entries to work related to the duty to defend.
Our fee award for Zidell’s appellate work related to the duty to defend is limited to
the amount that Zidell specifically has identified and reflects the adjustment that
Zidell has proposed.
9 Zidell filed a reply to London’s objection but has not yet sought fees for the
work done on the reply.
10 Zidell also has sought to recover its costs, and London has objected to Zidell’s
cost bill. We resolve the cost bill in a separate order.
award, or $9,417. According to counsels’ affidavits, the
remainder of the time devoted to attorney fee issues was
spent briefing fee issues that the Court of Appeals did not
reach and that remain to be resolved on remand. London has
advanced no persuasive reason why we should not award
Zidell those fees now.8
Zidell also seeks $48,841.50 for the fees that it
incurred in preparing the fee petition.9 London does not dis-
pute that Zidell is entitled to fees for preparing the petition.
The only objection that London raises is that the time that
Zidell’s attorneys spent was excessive. In London’s view,
Zidell’s attorneys could have accomplished the task in six
hours. We agree in part with London’s objection. Having
examined Zidell’s billing records, we conclude that Zidell’s
attorneys reasonably devoted time to researching the legal
issues involved in recovering fees, reviewing the substantial
record in this case, coordinating with the expert witness who
submitted an affidavit in support of Zidell’s fee request,
and coordinating with the client, the trial attorneys, and
cocounsel in New York. We discount, however, the time spent
preparing the fee petition by 54.375 hours, in large part
because the theories that Zidell raised for recovering fees
related to the duty to indemnify did not result in the recovery
of those fees. When multiplied by the applicable hourly rate
of the attorney who did that work, that discount results in a
reduction of Zidell’s fee request by $17,400. We accordingly
award Zidell $31,441.50 for its attorneys’ work on the fee
petition and $9,417 for fees for their work on the duty to
defend.10
We note that our decision today does not preclude
Zidell from recovering attorney fees in the future for the work

Cite as 351 Or 255 (2011) 	269
11 Our decision also does not preclude the Court of Appeals from awarding
Zidell additional fees on remand if appropriate.
that its attorneys have done both at trial and on appeal to
establish London’s duty to indemnify if London did not settle
with Zidell within six months of Zidell’s filing a proof of loss
and if Zidell recovers on remand more indemnification costs
than London tendered. See ORS 742.061.11 If and when those
conditions are met, the trial court may award Zidell reason-
able fees for its attorneys’ work, both at trial and on appeal,
related to establishing London’s duty to indemnify it for the
cost of remediating the environmental damages caused by
the operation of its business.
The petition for attorney fees is allowed. Plaintiffs
are awarded $40,858.50 for their attorney fees before the
Court of Appeals and the Supreme Court.