You’ve been litigating against your insurer for over a year when, finally, it agrees to pay every penny of what you have long demanded — plus interest. What’s not to like? Plenty, if you still have to pay your coverage counsel for getting you this far.

In an opinion filed today by the Oregon Court of Appeals, Triangle Holdings, II v. Stewart Title Guaranty Co., the insured, Triangle Holdings, sued its title-insurance company, Stewart Title, after Triangle Holdings had paid several construction liens that had not been found in Stewart’s title search. After nearly a year of litigation — and a year of incurring attorneys’ fees — the insurer sent a check for the full amount for two of the five liens at issue (the other three were dismissed and not at issue in the appeal), plus interest. Triangle Holdings accepted the payment, after which Stewart successfully moved for summary judgment as to the paid liens, arguing that they were now “moot.” The trial court granted the motion.

This apparent success, at least as to the motion for summary judgment, carried with it an unwelcome surprise for Triangle Holdings. The trial court refused to award any attorneys’ fees to Triangle Holdings in choking this payment from Stewart because ORS 742.061, the statute governing attorneys’ fees in coverage disputes, permits an insured to seek its attorneys’ fees only for a “recovery” by the insured that is greater than the insured had offered within six months of receiving the insured’s proof of loss. The trial court ruled, and the Court of Appeals agreed, that a “recovery” means a money judgment, not a mere payment by the insurer, even one handed over on the eve of certain defeat.

The Court of Appeals explained how to avoid being the prevailing party that, nevertheless, loses the right to attorneys’ fees that usually goes to prevailing insureds in coverage disputes, explaining that Triangle Holdings “had an opportunity to reject defendant’s offer and negotiate further. For example, plaintiff could have agreed to dismiss its claim only in exchange for an amount that included attorney fees, or it could have insisted on entry of a stipulated judgment.”

That sounds good on paper, but Triangle Holdings gives an insurer the opportunity to deny valid claims, even in bad faith, and then pay what it owes at the eleventh hour — after the insured has already shouldered the burden of paying its attorneys and faces the uncertainty of choosing the two birds in the bush for the one in the hand. This pressure, especially for insureds that desperately need money to rebuild a business or a home and move on with their lives, can be irresistibly and unfairly coercive.