Paid leave to care for yourself and
those you love
Who’s covered?
Types of leave covered
Family Leave: to care for a family member with a serious illness or injury, or to bond with a new child after birth, adoption or foster care placement.
Medical Leave: during your own serious health condition.
Safe Leave: for survivors of sexual assault, domestic violence, harassment, or stalking.
When will the Paid Leave Oregon program start?
Contributions start in January 2023. Employees can start applying for benefits in September 2023.
Any employee, no matter how many hours you work, who earned at least $1,000 in the year before claiming paid leave may be eligible. This includes agricultural employees and those who may use an Individual Taxpayer Identification Number to file their taxes. Tribal governments, those who are self-employed, and independent contractors may choose to participate, but are not required.
What benefits are included for Oregon employees?
• You can take up to 12 weeks of paid leave per year (up to 14 weeks for pregnancy-related medical leave).
• You can take your leave when you need—a day, week or month at a time.
• If you’ve worked for your employer more than 90 days, then your job is protected. Your employer cannot penalize you for taking time off.
• The benefit amount you get paid will depend on your wages and income. Visit our website for more details.
• Many employees will have 100% of their wages covered.
Lightning Round
Dealing with the Difficult Opponent: Tips for Approaching Settlement when the other Side Refuses
PRESENTED BY:
John R . Bachofner, Bachofner Arbitration & Mediation
2023 OADC ANNUAL CONVENTION CONTINUING LEGAL EDUCATION GUIDEBOOK OADC Oregon Association of Defense Counsel
2023
June 16,
11:15am – 12:15pm
John Bachofner
John R. Bachofner has practiced law in Oregon since 1988 and Washington since 1989, with a focus on insurance coverage and litigation. He retired from the private practice of law as a Shareholder and Director at Jordan Ramis, PC, where he served as the firm’s Ethics and Loss Prevention Shareholder, and Chair of the firm’s Insurance Coverage and Defense Group. Effective 1/1/23, he is working solely as an arbitrator, mediator, and consultant with Bachofner Arbitration & Mediation.
An experienced trial lawyer, John has represented businesses, insurers, creditors, and individuals in a wide variety of civil matters, including coverage, commercial litigation, personal injury defense, business disputes, and bankruptcy. He has assisted both claimants and insurers in a wide variety of civil lawsuits, arbitrations, and mediations. His fair and balanced approach to litigation has resulted in him frequently serving as an arbitrator, mediator, or expert in UM/UIM, PIP, and other civil matters.
A former elected member of the OSB Board of Governors, John’s reputation and experience over the last 34 years has resulted in him receiving a Martindale-Hubbell® AV Preeminent® rating, the organization’s highest rating; listing in The Best Lawyers in America®, Litigation - Insurance; and listing in Washington Super Lawyers, Creditor-Debtor Rights. He is a past chair of the Oregon State Bar’s Litigation Section, and past chair of Jordan Ramis PC’s Litigation and Insurance Coverage and Defense Groups. He has represented individuals and organizations in a variety of state and federal courts, arbitration forums, and agency hearings, as well as in a variety of transactions.
John enjoys an eclectic variety of hobbies, from singing and acting, to camping, Ham radio, swimming, teaching, and scuba diving. An avid scuba diver since 1982, John is a licensed scuba instructor for PADI and NAUI.
John has been recognized as an expert on insurance coverage, frequently speaking and presenting on those and other areas, with a focus on FirstParty PIP, and UM/UIM issues. He is the author of the Oregon State Bar’s practice manual on UM/UIM coverage, and has served as an expert in various First-Party attorney fee disputes. In January 2023, John received his certification from the Nation al Association of Certified Mediators. He is also a member of the Oregon Mediator’s Association, Oregon Association of Defense Counsel, and Oregon Trial Lawyer’s Association.
MEMBERSHIP AND ACTIVITIES
Oregon Association of Defense Counsel (1992–Present); Board of Directors (2012–2014); Chair Practice Management Group (2021–2022)
Oregon Trial Lawyer’s Association (2023 – Present)
Oregon State Bar: Board of Governors, Out-of-State Region Member (2016–2019)
OSB House of Delegates, Delegate (2000–2015) Out-of-State Delegate (2020–Present)
EDUCATION
B.A., Pacific Lutheran University, 1985
J.D., cum laude, University of Puget Sound School of Law, 1988
ADMISSIONS
State of Oregon
State of Washington
U.S. Court of Appeals, Ninth Circuit
U.S. District Court, District of Oregon
U.S. District Court, Western District of Washington
U.S. District Court, Eastern District of Washington
AWARDS AND HONORS
The Best Lawyers in America®, Litigation – Insurance, 2018-2022
Superb AVVO Rating, 2022
Oregon State Bar, President’s Public Service Award, 1994
Martindale-Hubbell® AV Preeminent® Attorney
Martindale-Hubbell® Top-Rated Lawyer in “Insurance Law,” 2013
Washington State Bar Association, Taskforce on Mandatory Malpractice Insurance (2018–2020)
Oregon Council on Court Procedures (2009–2017), ChairElect (2015–2016), Chair (2016–2017)
OSB Procedure and Practice Committee (2013–2015)
OSB Task Force on International Trade in Legal Services (2013)
OSB Litigation Section Executive Committee (2010–2019), Chair (2016)
OSB Law-Related Education Committee, Past Chair
OSB New Lawyer’s Division Law-Related Education Committee (1993–1995)
OSB Public Service and Information Committee (1993–1996)
Washington Scuba Alliance, Board of Directors (2010–Present)
Camas-Washougal Chamber of Commerce (2004–2023); Board of Directors (2012–2014)
Oregon Law Commission, Auto Insurance Legislation Workgroup, Appointee (2003–2007)
Defense Research Institute
Oregon Casualty Adjusters Association
Multnomah Bar Association
Clark County Bar Association
Washington Defense Trial Lawyers
Oregon Mediation Association
National Association of Certified Mediators
PRESENTATIONS AND PUBLICATIONS
OSB Torts CLE Update, 2023
UM/UIM Coverage 101, Oregon Trial Lawyer’s Association, October 2022
“The Paradigm Shift in Oregon Law? The Moody Decision and its Potential Ramifications,” Oregon Association of Defense Counsel, February 2022
Chapter 22, Uninsured and Underinsured Motorist Coverage, OSB Insurance Law in Oregon CLE, 2020
“UM/UIM Arbitration – Maximizing the Benefits and Minimizing the Pitfalls,” Oregon Association of Defense Counsel Fall Seminar, November 2019
Speaker, “Obtaining and Collecting Your Client’s Judgment–Show Me the Money,” Oregon State Bar, 2013, 2015, 2017, 2019
“It’s a Whole New World! What’s New in Stacking and UM/UIM Set-offs,” National Business Institute Seminar, December 2017
“From PIP to UIM to Every Lien in Between,” Oregon Law Institute, April 2016
“How to Effectively Present and Defend PIP and UM/UIM Claims,” Multnomah Bar Association, December 2015
“Legislative Update and the New World for UM/UIM/ PIP Claims,” Oregon Association of Defense Counsel, November 2015
“Get What You Paid For: Stacking of UIM and PIP under SB 411,” Oregon Trial Lawyers Association, October 2015
“Negotiation Ethics: Winning Without Selling Your Soul,” Oregon State Bar, October 2015
“Collecting Judgments in Oregon,” Oregon Civil Trial Procedure, Oregon State Bar, September 2015
“Legislative Changes to Uninsured/Underinsured Motorist and PIP Coverage,” Oregon Casualty Adjusters Association, July 2015
“Impacts of Measure 91,” Oregon Casualty Adjusters Association, April 2015
“Advanced Uninsured and Underinsured Motorist Issues,” Oregon Law Institute, Oregon Association of Defense Counsel, May 2014
“Obtaining and Collecting Your Client’s Judgment — Show Me the Money,” Oregon State Bar 2013
“Litigating the Uninsured & Underinsured Motorist Claim,” National Business Institute 2013
“Collections: Seeking and Collecting a Judgment,” National Business Institute 2012
“Presenting and Defending Uninsured, Underinsured, and PIP Claims in Oregon,” Oregon State Bar 2011
“Collections: Seeking and Collecting a Judgment,” National Business Institute 2011
“Uninsured/Underinsured Motorist Law 101,” National Business Institute 2011
“Common Questions Asked by Adjusters and Attorneys Handling UM/UIM Claims,” Oregon Association of Defense Counsel 2011
“Recent Developments in UM, UIM and PIP Coverage,” Multnomah Bar Association CLE, 2003, 2004, 2010, 2011
“Collection Law from Start to Finish,” National Business Institute, 2007, 2008, 2010
“Advanced Uninsured/Underinsured Motorist Coverage,” National Business Institute, 2008, 2009
“Pleadings and Parties,” Oregon State Bar Civil Procedure, 2007
“Debt Collection From Start to Finish in Oregon,” National Business Institute, 2004, 2006
“How to Successfully Collect on Judgments in Oregon,” National Business Institute, 2005
“Persuasion within the State,” OADC Annual Convention, 2005
“Auto Insurance Repair,” OADC Fall Seminar, 2004
“Personal Injury Protection and Uninsured/Underinsured Motorist Coverage,” IISOI, 2003
“Auto Insurance Law and Accident Litigation in Oregon,” CLE, 2003
“What Every Oregon Lawyer Should Know About Washington PIP & UIM,” OADC Annual Convention, 2002
“Fundamentals of Oregon Civil Trial Procedure,” OSB CLE, 2001
“UM/UIM Issues,” OADC Annual Convention, 2001
“Five Strategies to Reduce Your Bottom Line in UM/UIM Cases,” Oregon Casualty Adjusters, 2000
“Tips for Defense Counsel and Adjusters in Dealing with UM/UIM Claims,” OADC Fall Seminar, 2000
“UM, UIM Strategies & Developments,” OSB Insurance Law CLE, 1999
DEALING WITH THE DIFFICULT OPPONENT: TIPS FOR APPROACHING SETTLEMENT WHEN THE OTHER SIDE REFUSES
1. THE NO-WIN SCENARIO:
Yourcaseisdefensible,buttheothersidehasunrealisticexpectationsonliability,value, orboth. Yourinsurerwantsitsettledanddoesnotwanttokeepspendingmoney,but theothersideremainsinthestratosphere. Whatdoyoudo?
2.
WHAT CAN BE DONE?
Usingarecentcaseasanexample,thissessionwillfocusonstrategiestoeducateyour opponentontheblemishesintheircase,while“keeping your powder dry”fortrial. Join usforadiscussionofORCP54EOfferstoAllowJudgment,Mediation,andMotionsfor SummaryJudgment.
West's Oregon Revised Statutes Annotated
Title 1. Courts of Record; Court Officers; Juries
Oregon Rules of Civil Procedure (Refs & Annos)
OR Rules Civ. Proc., ORCP 54
ORCP 54. Dismissal of actions; offer to allow judgment
Effective: May 1, 2020 Currentness
A Voluntary dismissal; effect thereof.
A(1) By plaintiff; by stipulation. Subject to the provisions of Rule 32 D and of any statute of this state, a plaintiff may dismiss an action in its entirety or as to one or more defendants without order of court by filing a notice of dismissal with the court and serving the notice on all other parties not in default not less than 5 days prior to the day of trial if no counterclaim has been pleaded, or by filing a stipulation of dismissal signed by all adverse parties who have appeared in the action. Unless otherwise stated in the notice of dismissal or stipulation, the dismissal is without prejudice, except that a notice of dismissal operates as an adjudication upon the merits when filed by a plaintiff who has once dismissed in any court of the United States or of any state an action against the same parties on or including the same claim unless the court directs that the dismissal shall be without prejudice. Upon notice of dismissal or stipulation under this subsection, a party shall submit a form of judgment and the court shall enter a judgment of dismissal.
A(2) By order of court. Except as provided in subsection A(1) of this rule, an action shall not be dismissed at the plaintiff's instance save upon judgment of dismissal ordered by the court and upon any terms and conditions that the court deems proper. If a counterclaim has been pleaded by a defendant prior to the service upon the defendant of the plaintiff's motion to dismiss, the defendant may proceed with the counterclaim. Unless otherwise specified in the judgment of dismissal, a dismissal under this subsection is without prejudice.
A(3) Costs and disbursements. When an action is dismissed under this section, the judgment may include any costs and disbursements, including attorney fees, provided by contract, statute, or rule. Unless the circumstances indicate otherwise, the dismissed party shall be considered the prevailing party.
B Involuntary dismissal.
B(1) Failure to comply with rule or order. For failure of the plaintiff to prosecute or to comply with these rules or any order of court, a defendant may move for a judgment of dismissal of an action or of any claim against that defendant.
B(2) Insufficiency of evidence. After the plaintiff in an action tried by the court without a jury has completed the presentation of plaintiff's evidence, the defendant, without waiving the right to offer evidence in the event the motion is not granted, may move for a judgment of dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. The court as trier of the facts may then determine them and render judgment of dismissal against the plaintiff or may decline to render any judgment until the close of all the evidence. If the court renders judgment of dismissal with prejudice against the plaintiff, the court shall make findings as provided in Rule 62
B(3) Dismissal for want of prosecution; notice. Not less than 60 days prior to the first regular motion day in each calendar year, unless the court has sent an earlier notice on its own initiative, the clerk of the court shall mail notice to the attorneys of
ORCP 54. Dismissal of actions; offer to allow judgment, OR R RCP ORCP 54 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 1
record in each pending case in which no action has been taken for one year immediately prior to the mailing of such notice that a judgment of dismissal will be entered in each such case by the court for want of prosecution unless, on or before such first regular motion day, a motion, either oral or written, is made to the court and good cause shown why it should be continued as a pending case. If a motion is not made or good cause is not shown, the court shall enter a judgment of dismissal in each such case. Nothing contained in this subsection shall prevent the dismissal by the court at any time for want of prosecution of any action upon motion of any party thereto.
B(4) Effect of judgment of dismissal. Unless the court in its judgment of dismissal otherwise specifies, a dismissal under this section operates as an adjudication without prejudice.
C Dismissal of counterclaim, cross-claim, or third party claim. The provisions of this rule apply to the dismissal of any counterclaim, cross-claim, or third party claim.
D Costs of previously dismissed action.
D(1) Previous action dismissed by plaintiffs. If a plaintiff who has once dismissed an action in any court commences an action based upon or including the same claim against the same defendant, the court may make any order for the payment of any unpaid judgment for costs and disbursements against plaintiff in the action previously dismissed that it may deem proper and may stay the proceedings in the action until the plaintiff has complied with the order.
D(2) Previous claim dismissed with prejudice. If a party who previously asserted a claim, counterclaim, cross-claim, or third party claim that was dismissed with prejudice subsequently files the same claim, counterclaim, cross-claim, or third party claim against the same party, the court shall enter a judgment dismissing the claim, counterclaim, cross-claim, or third party claim and may enter a judgment requiring the payment of reasonable attorney fees incurred by the party in obtaining the dismissal.
E Offer to allow judgment; effect of acceptance or rejection.
E(1) Offer. Except as provided in ORS 17.065 to 17.085, any party against whom a claim is asserted may, at any time up to 14 days prior to trial, serve upon any other party asserting the claim an offer to allow judgment to be entered against the party making the offer for the sum, or the property, or to the effect therein specified. The offer shall not be filed with the court clerk or provided to any assigned judge, except as set forth in subsections E(2) and E(3) of this rule.
E(2) Acceptance of offer. If the party asserting the claim accepts the offer, the party asserting the claim or the party's attorney shall endorse the acceptance thereon and file the accepted offer with the clerk before trial, and within 7 days from the time the offerwasserveduponthepartyassertingtheclaim;andthereuponjudgmentshallbegivenaccordinglyasastipulatedjudgment. If the offer does not state that it includes costs and disbursements or attorney fees, the party asserting the claim shall submit any claim for costs and disbursements or attorney fees to the court as provided in Rule 68.
E(3) Failure to accept offer. If the offer is not accepted and filed within the time prescribed, it shall be deemed withdrawn, and shall not be given in evidence at trial and may be filed with the court only after the case has been adjudicated on the merits and only if the party asserting the claim fails to obtain a judgment more favorable than the offer to allow judgment. In such a case, the party asserting the claim shall not recover costs, prevailing party fees, disbursements, or attorney fees incurred after the date of the offer, but the party against whom the claim was asserted shall recover from the party asserting the claim costs and disbursements, not including prevailing party fees, from the time of the service of the offer.
F Settlement conferences. A settlement conference may be ordered by the court at any time at the request of any party or upon the court's own motion. Unless otherwise stipulated to by the parties, a judge other than the judge who will preside at trial shall conduct the settlement conference.
ORCP 54. Dismissal of actions; offer to allow judgment, OR R RCP ORCP 54 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 2
Credits
[CCP Dec. 2, 1978; amended by Laws 1979, c. 284, § 32; § E amended by CCP Dec. 13, 1980; § A amended by Laws 1981, c. 912, § 2; § E amended by Laws 1983, c. 531, § 1; § A amended by CCP Dec. 8, 1984; amended by Laws 1995, c. 618, § 1; § E amended by CCP Dec. 11, 2004, eff. Jan. 1, 2006; § E amended by CCP Dec. 13, 2008, eff. Jan. 1, 2010; §§ A, B, D and E amended by CCP Dec. 11, 2010, eff. Jan. 1, 2012; §§ A, B, D, E amended by CCP Dec. 6, 2014, eff. Jan. 1, 2016.]
Rules Civ. Proc., ORCP 54, OR R RCP ORCP 54
Current through Chapters 3, 13, and 14 enacted in the 2021 Regular Session of the 81st Legislative Assembly, which convened January 22, 2021, pending classification of undesignated material and text revision by the Oregon Reviser. See ORS 173.160.
End of Document
© 2023 Thomson Reuters. No claim to original U.S. Government Works.
ORCP 54. Dismissal of actions; offer to allow judgment, OR R RCP ORCP 54 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 3
PRESENTED
2023 OADC ANNUAL CONVENTION CONTINUING LEGAL EDUCATION GUIDEBOOK OADC Oregon Association of Defense Counsel
Round My Recent Experience as a Juror in Washington County Melanie Rose, Smith Freed Eberhard June 16, 2023 11:15am – 12:15pm
Lightning
BY:
Melanie Rose
EXPERTISE OVERVIEW
Melanie is a litigator with a diverse civil litigation practice focusing on catastrophic injury, premises liability, automobile liability, dram shop, and commercial litigation. Melanie’s practice takes her all over the state of Oregon and Washington regularly, and occasionally into Idaho as well. She has given a number of presentations on changes in Oregon and Washington law highlighting the Pacific Northwest’s unique legal landscape.
PROFESSIONAL BACKGROUND
Before joining Smith Freed Eberhard, Melanie handled first-party insurance claims including claims related to PIP, UM/UIM, bad faith, and consumer protection act claims on behalf of insurance carriers. Melanie also has experience handling insurance subrogation matters. This highvolume practice placed a premium on efficiency, diligence, and energy that has carried over into her current practice.
In law school, Melanie won awards for both client advocacy and legal writing. Some of Melanie’s first experiences in the legal community were volunteering for the Washington County Family Law Assistance Program and working at the Low Income Taxpayer Clinic.
PERSONAL LIFE
Melanie is an Oregon native and grew up in a handful of smaller, Southern Oregon towns. She moved to the big city for law school, fell in love with Portland, and can’t imagine being anywhere else. Away from work, Melanie can usually be found teaching knitting lessons at a local yarn shop, checking out a local brewery, or getting her yearly supply of Vitamin D during the 4 months of the year that it’s dry enough to be outside.
EDUCATION
Lewis and Clark Law School, J.D., cum laude, 2012
Lawrence University, B.A., summa cum laude, 2009
PRACTICE AREAS
Commercial Liability Defense
BAR ADMISSIONS
Oregon Washington Idaho
CERTIFICATION & ACCOLADES
Member, Oregon State Bar Association
Member, Washington State Bar Association
Member, Idaho State Bar Association
Admitted, U.S. District Court – District of Oregon
Admitted, U.S. District Court – Western District of Washington
Admitted, U.S. District Court – Eastern District of Washington
Admitted, U.S. District Court – District of Idaho
Admitted, U.S. District Court – US 9th Circuit Court of Appeals
Super Lawyers Rising Star 2021-2022
Topic: My Recent Experience as a Juror in Washington County
Presented by: Melanie Rose, Smith Freed Eberhard
Melanie Rose was recently empaneled on a jury that resulted in a mistrial. As it is rare that attorneys are afforded the opportunity to peak behind the veil into the minds of jurors, she plans to share her personal experience from the voir dire process through the end of the trial. While the experience ended in a mistrial, the process was still very illuminating, and Melanie is excited to share her experiences behind the closed door. Listeners should expect to walk away with concrete tips on how to better present evidence with the average juror in mind.
• Key Takeaways:
o Become a civics teacher.
o Have a strong opening statement
o Anticipate speculation.
o Beware of experts in your panel
2023 OADC Annual Convention – Lightning Round
PRECAUTIONARYINSTRUCTIONS
[Tobegivenafterthejuryisselected]
Membersofthejury,Iwillnowexplainsomeoftherulesthatapplyduringatrial. Thereareeightstagestomosttrials,andIwillbrieflyexplaineachstage:
(1) Juryselection.Wejustcompletedthatpart.
(2) Explanationofthegeneralrules.ThatiswhatIamdoingnow.
(3) Openingstatements.Thisiswhentheattorneyssummarizewhattheyexpectthe evidencetobe.
(4) Presentationoftheevidence.Thisiswhenwitnessesandexhibitsarepresented.
(5) *Closingarguments.Thisiswhentheattorneyshavetheopportunitytopersuadeyou howtodecidethecase.
(6) Juryinstructions.Thisiswhenthejudgeexplainsthelawthatappliestothe particularchargesinthecase.Thisincludesexplainingwhatthestatemustprovebeyonda reasonabledoubtforaguiltyverdict.Youwillreceiveaprintedcopyoftheinstructions.
(7) Deliberations.Thisiswhenyougobackintothejuryroomanddecidewhetherthe defendantisguiltyornotguilty[ofanyparticularcharge].
(8) Returnofverdict.Thisiswhenyoutellusyourverdict[s].
Iwillexplaininamomentwhatisandwhatisnotevidence.Itisextremelyimportantthat youconsideronlytheevidenceindecidingthefacts. Donotallowanypersonalfeelings,sympathy,prejudice,orbias—whetherconsciousor unconscious—toinfluenceyourdecisionmaking.Youmustnotbebiasedinfavoroforagainstany party,witness,orlawyerbecauseoftheperson’sdisability,gender,genderidentity,race,religion, ethnicity,sexualorientation,age,nationalorigin,[or]socioeconomicstatus[,or insert any other impermissible form of bias against a group or status that is not a protected class, e.g., a person’s profession].
[Aspartofyourorientation,youwereshownavideoonunconsciousbias.] Unconscious bias isatermusedbysocialscientiststodescribetherealitythateveryone[,includingme,]has feelings,assumptions,perceptions,fears,andstereotypes,thatis,“unconsciousbiases,”thatwemay notbeawareof.Thesehiddenthoughtscanaffectwhatweseeandhear,howwerememberwhatwe seeandhear,howweinteractwithothers,andhowwemakeimportantdecisions.Ourbiasescan affecthowweact,favorablyorunfavorably,towardsomeone.Youshouldmakeeveryefforttobe awareofyourunconsciousbiasesandwhateffectthosemayhaveonyourdecisionmaking.
Asajudge,Iamagatekeeperregardingevidence.Ideterminewhatthelawallowstobe evidence.Ineffect,thelawconsidersanythingthatisnotevidencetobeunreliable;thatiswhyyou maynotconsidernonevidenceindecidingthefacts.However,thelawdoesnotconcludethat anythingthatisevidenceisnecessarilyreliable.Determiningthereliabilityorbelievabilityof evidenceisultimatelyyourresponsibility.Youmustdecidewhatevidenceisbelievableandhow believableorpersuasiveanyparticularpieceofevidenceis.So,whileyouarenotallowedto consideranythingthatisnotevidenceindecidingthefacts,youarefreetodecidehowbelievableor unbelievable,importantorunimportant,anyparticularpieceofevidenceisindecidingthefacts.
Evidenceconsistsoftestimonyofwitnessesandexhibitsthatareadmittedintoevidence. Testimonyiswhatawitness,whohasswornoraffirmedtoanswerquestionstruthfully,sayswhile beingexaminedasawitness.Exhibitsarephysicalobjects,suchasphotographs,charts,andletters.
UCrJI1004
Youwillbeabletoexamineadmittedexhibitsduringyourdeliberations.Youmaydrawreasonable inferencesfromtheevidence,butdonotguessorspeculate.
Inunderstandingwhatisevidence,itishelpfultohavesomeexamplesofwhatisnot evidence.
Thefactthatacriminalchargehasbeenfiledagainstthedefendantisnotevidence.Any defendantisinnocentofanycrimeunlessanduntilthestateprovesthedefendant’sguiltbeyonda reasonabledoubt.
Questionsfromlawyers—andothernonwitnesses,forthatmatter—arenotevidence.So, wheneverIsustainanobjectiontoaquestion,donotspeculateaboutwhythequestionwasaskedor whattheanswerwouldhavebeen.
Thisisasubtlebutimportantpoint.Inoureverydaylives,ifafriendasksusifwehaveseen ourmutualfriend’snewcar[the court should feel free to choose its own example],weinferfrom thequestionthatthemutualfriendhasanewcar.However,itisnotthesameinatrial.Theperson askingthequestionisnotawitnessandisnotsubjecttothesafeguardsthatthelawrequiresbefore youmayconsidertheperson’swordsasevidence.So,incourt,youarenotallowedtoconsider questionsaskedbyattorneysornonwitnessesindeterminingwhatthefactsare.Thosequestionsare notevidence.
Ofcourse,whenawitnessanswersaquestion,youmayconsidertheanswerinthecontextof thequestion.Forexample,ifalawyerasks,“Wasthetrafficlightredorgreen?”andthewitness answers,“Green,”youmaytaketheanswerasstatingthatthetrafficlightwasgreen.However,if thewitnessanswers,“Therewasnotrafficlight,”youmaynottakethequestionasevidencethat therewasatrafficlight.
Fromtimetotime,alawyermayobjecttosomethingthatisofferedintoevidence.Iwill decidewhethertheobjected-tomaterialwillbeadmittedintoevidence.IfIoverruletheobjection, thematerial—forexample,anexhibitorawitness’sanswertoaquestion—becomesevidence.IfI sustaintheobjection,theexhibitisnotadmittedandisnotevidence,orthewitnessisnotallowedto answerthequestion.IfthewitnessstartstoansweraquestionbeforeIsustainanobjectiontothe question,youmustdisregardthewitness’sresponsebecausetheresponseisnotevidence.
Occasionally,Imaydecidethatsomethingthathadbeenadmittedintoevidenceshouldnot havebeen.Ifthathappens,Iwillinstructyoutodisregardtheexhibitortestimonythatshouldnot havebeenadmitted.Thismeansthatthematerialisnolongerevidence.Youmustnotconsideritin anyway.Youmusttreatitasifthequestionhadnotbeenansweredortheexhibithadnotbeen receivedinthefirstplace.
Youmustnotinterpretanystatement,ruling,orremarkImakeduringthistrialasany indicationthatIhaveformedanyopinionaboutthefactsoroutcomeofthiscase.You,andyou alone,aretodecidethefacts.Youmustdecidehowbelievabletheevidenceisandwhatweightor valueyouwillgivethatevidence.
[Duringthistrial,youmaybeallowedtoaskquestionsofwitnesses.Ifyouhaveany questionsofthewitnesses,youwillsubmittheminwriting.Theprocedureforsubmittingquestions isasfollows: A/B (Procedures are to be established by the judge; sample procedures are set forth below.)
Yourquestionsaresubjecttotherulesofevidence,justasthelawyers’questionsare.Iwill reviewthequestionwiththelawyersandwillruleonwhetherthequestionmaybeasked.Iwillbe thepersontoaskthequestionofthewitnessifIdecideitisproper.Wedonotexpectjurorstoknow thefinepointsofaskingquestionspursuanttotherulesofevidence.Accordingly,Imaysometimes modifyaquestionsothatitconformstotherulesofevidence.Ifthequestionisnotasked,jurors shouldnotdrawanyinferencesaboutmyrulingorspeculateastowhattheanswertothequestion
mighthavebeen.Donotweighanswerstoajurorquestionanydifferentlythananyotheranswer simplybecausetheanswerwasgiveninresponsetoajurorquestion.Afteranyjurorquestions,the lawyersareallowedtoaskfollow-upquestions.]
Youmaytakenotes,ifyouwish,duringthetrial.However,pleasekeepinmindthateach partyisentitledtotheconsidereddecisionofeachjuror.Therefore,duringdeliberation,youshould notgiveundueweighttoanotherjuror’snotesifthosenotesconflictwithyournotesoryour recollectionoftheevidence.Donotallowyournote-takingtointerferewithyourabilitytoobserve andevaluatetestimony.Yournotesmaybeinonlytwoplaces:thecourtroomandthejuryroom. Youmaynottakethenoteswithyouonlunchorovernightbreaks,forexample.Mystaffwillmake surethatyournotesaresafeandthatnoonehasaccesstotheminyourabsence.
Donotdiscussthiscaseduringthetrialwithanyone,includinganyofthelawyers,parties, witnesses,yourfriends,ormembersofyourfamily.Thisincludesnotcommunicatingwithanyone byanyothermeans,suchastelephone,textmessages,email,Internetchat,blogs,orsocial networkingwebsites.Donotdiscussthiscasewithotherjurorsorlookatotherjurors’notesuntil youbeginyourdeliberationsattheendofthecase,afteryouhaveheardalltheevidenceandthe argumentsofthelawyersandbeeninstructedonthelawthatappliestothecase.Eachofyoumust keepanopenmindthroughoutthetrialandmustnotattempttodecidethecaseuntilyoubeginyour deliberations.
Donotmakeanyindependentpersonalinvestigationsintoanyfactsorlocationsconnected withthiscase.Donotlookupanyinformationfromanysource.Donotcommunicateanyprivateor specialknowledgeaboutanyofthefactsofthisparticularcasetoyourfellowjurors.Decidethecase onlyontheevidencereceivedhereincourt.Donotreadanynewsstories,listentoanyradioor televisionreports,orreadorlistentoanythingontheInternetaboutthiscaseoraboutanyone involvedinthiscase.
Inadditiontoconventionalresearch,youalsomustnotuseanyInternetsearchengine—such asGoogle—tolookforanyinformationaboutthecase,thelawthatappliestothecase,orthepeople involvedinthecase,includingthedefendant,thewitnesses,thelawyers,orthejudge.Donotuse anymapprogramormappingsystemtoattempttovieworlocateanyofthelocationsthatmaybe discussedinthiscase.
Inshort,donotcommunicatewithanyonebyanymeansconcerningwhatyouseeorhearin thecourtroom,anddonottrytofindoutmoreaboutthiscase,byanymeans,otherthanwhatyou learninthecourtroom.Decidethecaseonlyonwhathappenshereinopencourt,whereboththe stateandthedefenseareawareofandhavetheopportunitytoquestionthesourcesoftheevidence andtoaddressanylegalissuesthatmayarise.Thatistheonlyfairwaytodecideacase.
Ifyoubaseyourverdictonanythingotherthanwhatyoulearninthiscourtroom,thatcould begroundsforamistrial—whichmeansthatalloftheworkthatyou,yourfellowjurors,theparties, thelawyers,andthejudgehavedonewillhavetobedonealloveragain.Thatiswhythisisso important.[Ifyoudisobeyanyofmyorders,youcouldbeheldincontemptofcourt.]
Ignoreanyattemptedimpropercommunication.Ifanypersontriestocommunicatewithyou aboutthiscase,tellthatpersonthatyoucannotdiscussthecasebecauseyouareajuror.Ifthat personpersists,simplywalkawayandreporttheincidenttothecourt.Youmaynottalktoanyone aboutthiscase—eventhepeopleclosesttoyou—excepttosaythatyouareajuroronacriminal caseandJudge____saysyoucannottalkaboutit.
Afteryouhaverenderedyourverdict,orhavebeenotherwisedischargedbyme,youwillbe freetodoanyresearchyouchoose,ortoshareyourexperienceswithanyoneyouchooseeither directlyorthroughyourfavoriteelectronicmeans.
Rememberthatallphones,laptops,andotherelectronicdevicesmustbeturnedoffwhileyou areincourtandwhileyouareindeliberations.[Thebailiffwilltakeallsuchdevicesfromyou duringdeliberations.Wedothis,inpart,topreventanyonefromquestioningwhetherjurorsare engaginginimpropercommunicationsduringdeliberations.]
Wewillnowheartheopeningstatementsinwhichthelawyerswilloutlinetheevidenceas theyexpectittobe.Aftertheopeningstatements,theevidencewillbepresented.*Attheconclusion oftheevidence,thelawyerswillmaketheirclosingargumentstoyou.Iwilltheninstructyouabout thelawthatappliestothiscase,andyouwillbeginyourdeliberations.
Attheendofthetrial,youwillhavetomakeyourdecisionbasedonwhatyourecallofthe evidence.Youwillnothaveawrittentranscripttoconsult[,anditisdifficulttoplaybackrecorded testimony,sothatisnottypicallydone].Iurgeyoutopaycloseattentiontothetestimonyasitis given.Ifatanytime,youcannothearaquestionoranswer,letmeknowimmediatelybyraising yourhand.Inperformingyourrole,youmust,ofcourse,befairandimpartial.Youmustfollowthe lawwhetheryouagreewithitcompletelyornot,andyoumustnotallowyourselftobeinfluencedat allbypersonalfeelings,sympathyfor,orprejudiceagainstanyoneinvolvedinthiscase.
A Pleasewaituntiltheendofthewitnesstestimony,becausethequestionmaybeansweredby thetimethelawyersarethrough.Youmaywriteyourquestiondown,foldit,andholdthe paperuptogetmyattention,oryoumayraiseyourhandandwewillwaitforyoutowrite outyourquestionifyouhavenotalreadydoneso.Theclerkwillgetthequestionfromyou.
B Whenthelawyersarefinishedquestioningthewitness,youwillretiretothejuryroomwhere youmaywritedownyourquestionorquestions.Donotsignyournametothequestion.The clerkwillretrievethequestion,andwewillreviewitbeforeyouarebroughtbacktothe courtroom.
COMMENT:ORCP58B;ORS136.330(1).Thisinstructionshouldbegivenafterthejuryis impaneledandbeforeopeningstatements.Thisisapreliminaryinstructionandisnotintendedto replaceanyinstructionsthatwouldordinarilybegivenafterargument. Thedecisiontoallowjurorquestionsisatthediscretionofthecourt.See§1.19oftheUsers’ Guidefordiscussionontheuseofjurorquestions.Ifthecourtdoesallowquestions,thecourtmust affordthepartiesanopportunitytoobjecttothequestionsoutsidethepresenceofthejury.ORCP58 B(9).
Theparagraphsconcerningelectroniccommunicationandresearchwereaddedfollowing severalincidentsacrossthecountryinwhichjurorswerebloggingordoingInternetresearchduring trialsanddeliberations.
TheCommitteeremovedthephrase“anditwillnotbepossibleforthecourtreportertoread backtestimony”fromthefinalparagraphoftheinstructionbecauseitimpliedanincorrectstatement ofthelaw.Althoughmostcourtsnolongerusereporters,itiswithinthetrialcourt’sdiscretionto refreshthejury’srecollectionregardingtestimony.Physicalorelectroniclimitationsofindividual courtroomsmayaffectthatability,butthereisnolegalprohibition. State v. Vaughn,200Or275, 278,265P2d249(1954)(“Thebetterrule,however,seemstobethatwhetherinaparticularcase certainportionsofthetestimonyshouldbereadtoajuryrestsinthediscretionofthetrialcourt,and thisstateconformstothisrule.”)(citationomitted); State v. Jennings,131Or455,475,282P560 (1929); State v. Miller,2OrApp353,355,467P2d683(1970)(“Whilesuchrequestsshouldnot
____________________
____________________
beencouraged,whenajuryrequeststhattestimonyberepeatedthedecisiononthatrequestlies withinthediscretionofthetrialcourt.”).
Thebracketedparagraphaddressingmistrialsandcontemptmaynotbeneededinmost trials.Incertaincircumstances,though,suchaninstructionmaybewarranted.
*Judgeswhogivejuryinstructionsbeforeclosingargumentsshouldmodifythisinstruction accordingly.
4/20
Lightning Round
Effectively Asserting the Economic Waste Defense to Avoid Cost of Repair Damages
PRESENTED BY:
Molly Honoré, Markowitz Herbold
June 16, 2023 11:15am – 12:15pm
2023 OADC ANNUAL CONVENTION CONTINUING LEGAL EDUCATION GUIDEBOOK OADC Oregon Association of Defense Counsel
Molly Honoré
Molly Honoré is a pragmatic litigator who works with her clients to solve complex business problems. Molly wants to get to know you and your organization, find out what matters to you, and learn your goals and concerns. She knows that a case is never just about the bottom line and that details matter.
To her, law is best practiced in a dynamic, hands-on manner. Molly’s clients appreciate her direct involvement and straightforward communication at every stage of their representation whether developing case themes, deciding how to structure an argument, or strategizing during negotiations. Her style is well matched to litigation involving closely-held businesses, the focus of Molly’s practice.
Molly is adept at managing litigation in state and federal court. She routinely advises and represents clients in commercial disputes, including shareholder and contract matters, business tort claims, products liability, professional negligence, and real estate litigation. Her recent successes include:
• Achieving dismissal with prejudice of action for breach of contract and trade secret misappropriation
• Negotiating favorable settlement of multiple related lawsuits involving shareholder disputes among owners of a closely-held company
• Defeating a motion to dismiss a $30 million negligent misrepresentation claim, arguing an issue of first impression for Oregon courts
• Arbitrating accounting irregularities on behalf of minority owners of a closely-held company
• Litigating and resolving real estate, shareholder, misappropriation of trade secrets, and breach of contract actions up to and through trial
Molly’s legal practice draws from her diverse and unique life experiences. Her decision to pursue a legal career was largely motivated by a volunteer position assisting with the legal representation of a Guantanamo Bay detainee. The detainee was a French-speaking Moroccan national. Molly, who understands and speaks some French, was granted special clearance to travel to the naval station at Guantanamo Bay and conduct on-site interviews of the detainee. She was able to speak with him directly without an intermediary interpreter and was asked to translate and interpret documents as part of his defense.
Before law school, Molly also spent two years as an Outreach Coordinator for AmeriCorps in Massachusetts where she managed a team of AmeriCorps members and directed planning and volunteer recruitment for environmental restoration and clean-up events.
As a law student, Molly clerked for the Oregon Department of Justice’s Special Litigation Unit where she assisted with specialized cases, including high-profile Constitutional challenges, complex regulatory cases, and environmental litigation.
Molly earned her J.D. with a certificate in business law from Lewis & Clark Law School, summa cum laude, where she was an articles editor for the Lewis and Clark Law Review. She was awarded the John and Susan Bates Scholarship for Business Law and was selected as a Keller Law and Entrepreneurship Scholar. Molly also was inducted into the Cornelius Honor Society by the law school faculty based on her distinguished scholarship, leadership, and contribution to the lawschool community.
Topic: Effectively Asserting the Economic Waste Defense to Avoid Cost of Repair Damages
Presented by: Molly Honoré, Markowitz Herbold
In this brief presentation, Molly Honoré will explore the concept of the economic waste defense in Oregon and its potential application to avoid cost of repair damages in construction and landlord-tenant disputes. The economic waste defense allows parties to argue against the traditional measure of damages for breach of contract claims by asserting that the cost of repair exceeds the diminution in value of the damaged property. Molly will discuss the factors that courts typically consider when evaluating a claim based on economic waste, including the property’s economic value, the extent of the damage, and the feasibility of repairs. Additionally, we will examine relevant case law to highlight the successful implementation of this defense strategy.
2023 OADC Annual Convention – Lightning Round
KeyCite Yellow Flag - Negative Treatment
Declined to Extend by Graydog Internet, Inc. v. Giller, Or., November 30, 2017
357 Or. 333 Supreme Court of Oregon.
MONTARA OWNERS ASSOCIATION, an Oregon non-profit corporation, Plaintiff, v.
LA NOUE DEVELOPMENT, LLC, an Oregon limited liability company; et al., Defendants.
La Noue Development, LLC, an Oregon limited liability company, Third–Party Plaintiff–Appellant, Respondent on Review, and
Mark La Noue, an individual, Third–Party Plaintiff, v.
Suttles Construction, Inc., an Oregon corporation; Gordon Harding, an individual, dba Gordon Harding Construction; MCM Architects, PC, an Oregon professional corporation; et al., Third–Party Defendants, and
Vasily A. Sharabarin, an individual, dba Advanced Construction, Third–Party Defendant–Respondent, Petitioner on Review. Evans Construction Siding Corporation, an Oregon corporation, Fourth–Party Plaintiff, v.
Dave Burgess Construction, Inc., an Oregon corporation; et al, Fourth–Party Defendants.
Dave Burgess Construction, Inc., an Oregon corporation, Fifth–Party Plaintiff, v.
Raul Hernandez and Carlos Hernandez, individuals, dba Hernandez Brothers, a partnership; et al, Fifth–Party Defendants.
La Noue Development, LLC, an Oregon limited liability company; and Mark La Noue, an individual, Plaintiffs, v.
MCM Architects, PC, an Oregon professional corporation, Defendant.
(CC051213487, CC061213628; CA A140771; SC S062120)
Argued and Submitted Nov. 6, 2014.
Decided June 18, 2015.
Synopsis
Background: Homeowners association filed a complaint against general contractor for damages caused by design and construction defects. General contractor filed third party complaints against subcontractors, then settled claims with homeowners' association. Following trial on general contractor's contract claims against nonsettling subcontractors, the Circuit Court, Multnomah County, Jean Kerr Maurer, J., entered judgment on jury verdict that was in favor of general contractor but awarded limited damages, and later denied general contractor's recovery of attorney fees as consequential damages and denied its motion for new trial.
General contractor appealed. The Court of Appeals, 259 Or.App. 657, 317 P.3d 257, affirmed in part, reversed in part, and remanded. Subcontractor petitioned for review.
Holdings: After granting review the Supreme Court, Balmer, C.J., held that:
[1] indemnity clause in subcontract could be enforced by the trial court after the illegal portion of the provision, which required subcontractor to indemnify general contractor for its own negligence, was severed;
[2] trial court erred when it instructed the jury on economic wasteaspartofitsinstructionforthebreachofcontractclaim;
[3] error did not substantially affect general contractor's substantial rights; and
[4] as an apparent matter of first impression, homeowner association's claims against general contractor, and general contractor's third party claims against subcontractor, both generated attorney fees that arose within the same action, for the purpose of determining whether general contractor's attorney fees incurred in defending against association's claims arose prior to the pending third party action, and thus were not subject to the civil procedure rule governing the post-trial recovery of attorney fees.
Affirmed in part, reversed in part, and remanded.
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Procedural Posture(s): On Appeal.
West Headnotes (16)
[1] Indemnity Contractors, subcontractors, and owners
Indemnity Contractors, subcontractors, and owners
Indemnity clause in subcontract, which provided for indemnification of general contractor for any damages caused in whole or in part by the negligence of general contractor, could be enforcedbythetrialcourtaftertheillegalportion of the provision, which required subcontractor to indemnify general contractor for its own negligence, was severed; indemnification of general contractor for actions that are the fault of subcontractor was allowed by statute that voided overbroad indemnity provisions in contracts. West's Or.Rev. Stat. Ann. §§ 30.140, 30.140(2)
7 Cases that cite this headnote
[2] Statutes Language and intent, will, purpose, or policy Statutes Context Statutes Legislative History
When interpreting a statute the Supreme Court beginsbyexaminingthestatute'stextandcontext and then look to legislative history if helpful to determine the legislature's intent.
4 Cases that cite this headnote
[3] Statutes Conflict
Where parts of a statute conflict, the Supreme Court attempts to harmonize them in a way that gives effect to both.
[4] Contracts Partial Illegality
When an agreement is partly legal and partly illegal, if the legal may be separated from the illegal, the legal part will be enforced.
[5]
2 Cases that cite this headnote
Damages Measure of damages for breach of contract
The record failed to contain some evidence of both cost of repair damages and diminution in value damages, as necessary for a comparison to determine if an award of cost of repair damages would constitute economic waste, in breach of contract action filed by general contractor against subcontractor, and thus the trial court erred when it instructed the jury on economic waste as part of its instruction for the breach of contract claim.
4 Cases that cite this headnote
[6] Damages Mode of estimating damages in general
When a contractor fails to keep an agreement, the measure of damages is always the sum which will put the injured party in as good a position as if the contract had been performed.
1 Case that cites this headnote
[7] Damages Defects in performance
Oregon courts use an alternative measure of damages for breach of contract involving construction defects, the diminution in the market value of the property, when the cost of repair is not the prudent remedy to apply because that remedy would create economic waste.
4 Cases that cite this headnote
[8] Damages Defects in performance
In the case of economic waste, damages will be measurednotbythecostofremedyingthedefect, but by the difference between the value of the building as it is and what it would have been worth if it had been built in conformity with the contract, in other words, the diminution in value.
3 Cases that cite this headnote
Montara Owners Ass'n v. La Noue Development, LLC, 357 Or. 333 (2015) 353 P.3d 563 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 2
[9] Damages Defects in performance
“Economic waste” occurs where the defect in material or construction is one that cannot be remedied without an expenditure for reconstruction disproportionate to the end to be attained, or without endangering unduly other parts of the building.
1 Case that cites this headnote
[10] Trial Construction and Effect of Charge as a Whole
In determining whether it was error to give a particular jury instruction, the Court of Appeals reviews the instructions as a whole to determine whether they accurately state the law.
4 Cases that cite this headnote
[11] Trial Matters of law
A trial court errs if it gives a jury instruction that is at odds with a general rule of Oregon law or inconsistent with a specific application of that rule in prior Oregon case law.
2 Cases that cite this headnote
[12] Trial Facts and Evidence
An instruction can be erroneous because there is no evidence in the record to support giving the instruction.
3 Cases that cite this headnote
as to cost of repair damages, and no evidence was presented as to diminution of value. West's Or.Rev. Stat. Ann. § 19.415(2)
1 Case that cites this headnote
[14]
Costs, Fees, and Sanctions Contracts
Homeowner association's claims against general contractor, and general contractor's third party claims against subcontractor, both generated attorney fees that arose within the same action, for the purpose of determining whether general contractor's attorney fees incurred in defending against association's claims arose prior to the pending third party action, and thus were not subject to the civil procedure rule governing the post-trial recovery of attorney fees. Rules Civ.Proc., Rules 22(C)(1), 67, 68.
3 Cases that cite this headnote
[15] Damages Litigation with third persons
General contractor could seek from subcontractor, as consequential damages of subcontractor's breach of contract, attorney fees that general contractor incurred in defending against homeowner association's claim in firstparty construction defects case; a party may seek attorney fees under the third-party litigation exception to the American rule as to attorney fees, even if the party incurred those fees in the same action.
13 Cases that cite this headnote
[16]
[13]
Appeal and Error Damages and amount of recovery
The trial court's error in instructing the jury on economic waste as part of the instructions for the breach of contract claim did not substantially affect general contractor's substantial rights, in breach of contract action filedbygeneralcontractoragainstsubcontractor; the jury awarded damages in the amount of $43,711 to general contractor, the award was close to the $50,000 cost of repair damages estimate given by subcontractor's expert, general contractor's expert provided a higher estimate
Costs, Fees, and Sanctions Statutory or contractual authorization
Generally, a party cannot recover attorney fees unless there is a statute or a contract that authorizes recovery of those fees.
5 Cases that cite this headnote
**565 On review from the Court of Appeals. *
Montara Owners Ass'n v. La Noue Development, LLC, 357 Or. 333 (2015) 353 P.3d 563 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 3
Attorneys and Law Firms
Thomas M. Christ, Cosgrave Vergeer Kester LLP, Portland, argued the cause and filed the briefs for petitioner Vasily A. Sharabarin. With him on the brief was Julie A. Smith
Leta E. Gorman, Jordan Ramis PC, Lake Oswego, argued the cause and filed the brief for respondent La Noue Development, LLC.
Opinion
BALMER, C.J.
*336 This construction defect case presents three issues on review, following certain rulings by the trial court and an award of damages by the jury. First, we consider the proper application of ORS 30.140, a statute that voids overbroad indemnity provisions in construction contracts. The Court of Appeals held that the trial court had erred by invalidating an indemnity provision in its entirety when the provision was only partially void under ORS 30.140.
Montara Owners Assn. v. La Noue Development, LLC, 259 Or.App. 657, 682–83, 317 P.3d 257 (2013). On that issue, we affirm the Court of Appeals and remand to the trial court. Second, we consider whether it was error for the trial court to give an instruction on the economic waste doctrine in the absence of any evidence on the alternative measure of damages, diminution in value. The Court of Appeals found that it was error to give the instruction and that the error was not harmless. Id. at 669–70, 317 P.3d 257. As to that issue, we reverse the Court of Appeals, because we conclude that the instructional error was harmless. Third, we consider whether a third-party plaintiff can recover attorney fees as consequential damages for a third-party defendant's breach of contractwhentheattorneyfeeswereincurredinthefirst-party **566 litigation in the same action. The Court of Appeals affirmed the trial court's ruling that the general contractor in this case could not recover such attorney fees. Id. at 683, 317 P.3d 257. On the issue of the proper procedure to recover those fees, we agree with the Court of Appeals and the trial court. However, we reverse and remand to the trial court to consider the general contractor's substantive right to those fees.
The Montara Owners Association (homeowners) sued the developer and general contractor, La Noue Development, LLC (La Noue), for damages caused by design and
construction defects in the building of the Montara townhomes, a complex of 35 separately owned units in multiple buildings. The defects included problems with the framing, siding, decking, and windows, resulting in water intrusion and water damage. La Noue, in turn, filed a third-party complaint against multiple subcontractors, including Vasily A.Sharabarin,dbaAdvancedConstruction(Sharabarin),who *337 provided siding work on four buildings. Before trial, however, La Noue settled with the homeowners for $5 million—eliminating the first-party litigation from the case —and also reached settlements with most of the third-party subcontractors. La Noue did not settle with Sharabarin.
Because of various pretrial rulings, the only claims submitted to the jury were La Noue's breach of contract claims against Sharabarin and two other subcontractors. 1 Before trial, the trial court granted summary judgment in favor of Sharabarin on La Noue's claim for contractual indemnity, on the ground that the indemnification provision on which La Noue had relied was void under ORS 30.140. The trial court also held that the court—not the jury—would decide whether La Noue could recover the attorney fees that it had incurred in defending against the homeowners' claims as consequential damages for Sharabarin's breach of contract and that the court would resolve that issue after trial. In its post-trial ruling on the attorney fee issue, the court ultimately held that La Noue could not recover attorney fees as consequential damages in thecase,evenaftertrial,anddeniedLaNoue'sclaimforthose attorney fees.
La Noue tried its breach of contract claim to the jury. La Noue generally contended that Sharabarin's work in siding the townhouses had deviated from the plans and specifications in the contract and had damaged the buildings that Sharabarin had worked on. Through an expert witness, La Noue presented evidence that it would cost just under $2 million to repair the damage caused by Sharabarin's breach. In contrast, Sharabarin's expert witness testified that the cost to repair all of the damage caused by various subcontractors to the four buildings Sharabarin worked on would be only around $1 million. He further stated that only five percent of that $1 million repair cost involved areas where Sharabarin had performed work, and concluded that the resulting amount (about$50,000)representedthecostofrepairinganydamages caused by Sharabarin's breach.
*338 The jury found that Sharabarin had breached his contractwithLaNoueandawarded$43,711intotaldamages, significantly less than La Noue had sought. La Noue
Montara Owners Ass'n v. La Noue Development, LLC, 357 Or. 333 (2015) 353 P.3d 563 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 4
appealed. The Court of Appeals reversed the summary judgment in favor of Sharabarin on the contractual indemnity claim, held that the trial court erred in giving one of Sharabarin's requested jury instructions and that the error was prejudicial, and affirmed the trial court's denial of La Noue's claim for attorney fees. Montara, 259 Or.App. at 670, 317 P.3d 257. Sharabarin petitioned this court for review of the Court of Appeals' rulings on the jury instruction and contractual indemnity issues. La Noue opposed review but requested contingent review of the Court of Appeals' ruling on attorney fees and another aspect of the Court of Appeals' ruling on the jury instruction issue.
to indemnify another against liability for damage arising out of death or bodily injury to persons or damage to property caused in whole or in part by the negligence of the indemnitee is void.
“(2) This section does not affect any provision in a construction agreement that requires a person or that person's surety or insurer to indemnify another against liability for damage arising out of death or bodily injury to personsordamagetopropertytotheextentthatthedeathor bodily injury to persons or damage to property arises out of the fault of the indemnitor, or the fault of the indemnitor's agents, representatives or subcontractors.”
I. INDEMNITY UNDER ORS 30.140
[1] We first address whether the trial court erred in granting summary judgment **567 on the issue of contractual indemnification. “In reviewing a trial court's disposition of a motion for summary judgment, this court determines whether the moving party is entitled to judgment as a matter of law.”
PIH Beaverton, LLC v. Super One, Inc., 355Or.267,275,323 P.3d961(2014)(citingORCP47C).Theindemnityprovision in the contract between La Noue and Sharabarin provided:
“[Sharabarin] specifically and expressly agrees to indemnifyandsaveharmless[LaNoue],itsofficers,agents and employees, from and against any and all suits, claims, actions,losses,costs,penaltiesanddamages,ofwhatsoever kind or nature, including attorneys' fees, arising out of, in connection with, or incident to [Sharabarin's] performance of th[e] subcontract, whether or not caused in part by [La Noue], [its] employees or agents, but excepting that caused by the sole negligence of [La Noue], [its] employees or agents.”
(Capitalization omitted.) In a pretrial ruling, the trial court granted Sharabarin's motion for summary judgment on the issue of contractual indemnity because “this case falls squarely within ORS 30.140 and its interpretation in *339 Walsh [Construction Co. v. Mutual of Enumclaw, 338 Or. 1, 104 P.3d 1146 (2005),]” and therefore, the court concluded, the indemnity clause was void.
ORS 30.140 provides:
“(1) Except to the extent provided under subsection (2) of this section, any provision in a construction agreement that requires a person or that person's surety or insurer
Because the contract at issue here provided for indemnification “whether or not caused in part by [La Noue] [andonly]exceptingthatcausedbythe sole negligenceof[La Noue],” the parties agree that it violates the prohibition on requiring indemnification “for damage * * * caused in whole or in part by the negligence of the indemnitee.” ORS 30.140(1) (emphases added). The issue here is the effect of the exception in ORS 30.140(2) on that prohibition. As noted,theCourtofAppealsagreedwithLaNouethat ORS 30.140(2) sets out an exception to ORS 30.140(1) and that the indemnification provision here comes within that exception. Montara, 259Or.App.at682–83,317P.3d257. For that reason, it reversed the trial court.
On review, Sharabarin argues that ORS 30.140 sets forth two mutually exclusive categories of construction agreement indemnification provisions, one of which is enforceable and the other of which is void. Under his view, if an indemnification provision requires one person (the indemnitor, usually a subcontractor) to indemnify another (the indemnitee, usually a general contractor)2 for damages *340 that arise in whole or in part out of the negligence of the general contractor, the provision is void in its entirety under subsection (1); in contrast, if an indemnification provision requires the subcontractor to indemnify the general contractor for only damages that arise out of the fault of the subcontractor, the provision is enforceable under subsection (2). Sharabarin argues that because the contract provision at issue here requires indemnity to a greater extent than allowed under subsection (2), it falls under subsection (1) and is void in its entirety. La Noue concedes that the provision in the subcontract with Sharabarin partially does what subsection (1) prohibits, but argues that the provision
Montara Owners Ass'n v. La Noue Development, LLC, 357 Or. 333 (2015) 353 P.3d 563 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 5
remains enforceable to the extent allowed by subsection (2), because the legislature intended subsection (2) as an exception to subsection (1) and intended such provisions **568 to be partially enforceable. For the reasons set out below, we agree with La Noue that the provision is partially enforceable.
[2] [3] This issue presents a question of statutory interpretation to be analyzed using the framework described in State v. Gaines, 346 Or. 160, 206 P.3d 1042 (2009) We begin by examining the statute's text and context and then look to legislative history if helpful to determine the legislature's intent. State v. Klein, 352 Or. 302, 309, 283 P.3d 350 (2012). Where parts of a statute conflict, we attempt to harmonize them in a way that gives effect to both. Weldon v. Bd. of Lic. Pro. Counselors & Therapists, 353 Or. 85, 91–92, 293 P.3d 1023 (2012) (citing State v. Guzek, 322 Or. 245, 266–68, 906 P.2d 272 (1995)).
ORS30.140(1)declaresthatanindemnityprovisionofthe kind that it describes is void “[e]xcept to the extent provided under subsection (2).” (Emphasis added.) That phrase lends support to La Noue's interpretation—that subsection (2) was intended to carve out an area of indemnification from the general rule voiding indemnification clauses in subsection (1). By including the phrase “[e]xcept to the extent provided under subsection (2)” in subsection (1), the legislature intended that the subsections would overlap rather than be mutually exclusive, as Sharabarin contends. Sharabarin's interpretation, on the other hand, would make that phrase superfluous. “Except” in that context means *341 “with the exclusion or exception of” or “other than: BUT.” Webster's Third New Int'l Dictionary 791 (unabridged ed. 2002). “Extent” means “the range (as of inclusiveness or application) over which something extends: SCOPE * * * <the ~ of his authority> <the ~ of the law>” and “the limit to which something extends <exerting the full of his power>.” Webster's at 805. Thus, ORS 30.140(1)makescertainconstructioncontractprovisionsvoid —provisionsthatrequireindemnificationfordamage“caused in whole or in part by the negligence of the indemnitee” general contractors—but excludes from being voided the part of the indemnification agreement that comes within subsection (2)—that is, where the liability “arises out of the fault of the indemnitor” subcontractor. Subsection (2) confirms the legislative intent that the statute “not affect” indemnification for damage which is “the fault of the indemnitor” subcontractor.
In arguing for a contrary understanding of the statute, Sharabarin urges this court to give weight to the legislature's choice of the words “any provision” in subsection (1). Sharabarin argues that the legislature intended the part of the provision that is unenforceable under subsection (1) to void the entire indemnification provision—including the part that otherwise would be enforceable under subsection (2)—and that that legislative intent is evidenced by the language in subsection (1) making void “any provision” requiring what it forbids. We disagree, however, that the statutory phrase “any provision” can be read so broadly. It is true that the contract language at issue in this case is a “provision” requiring, in part, what subsection (1) forbids. However, it does not follow that the entire provision—including the part permitted by subsection (2)—is void.
[4] The context for interpreting a statute's text includes the preexisting common law, and we presume that the legislature was aware of that existing law. Blachana, LLC v. Bureau of Labor and Industries, 354 Or. 676, 691, 318 P.3d 735 (2014). Under Oregon law, both today and at the time the legislature enacted ORS 30.140, when an “agreement is partly legal and partly illegal, if the legal may be separated from the illegal, the legal part will be enforced.” Eldridge v. Johnston, 195 Or. 379, 405, 245 P.2d 239 (1952); see also
*342 State v. McDonnell, 310 Or. 98, 116, 794 P.2d 780 (1990) (Fadeley, J., concurring in part and dissenting in part) (collecting cases supporting the proposition that “Oregon disregards the illegality and enforces the contract”).
In Eldridge, the defendant agreed as part of the sale of his interest in the plaintiff's meat business to not engage in the meat business in “the entire states of Oregon and Washington” for 10 years. 195 Or. at 400, 245 P.2d 239. This court—after assuming that the two-state exclusion was so broad as to be void because of the public policy against restraints on trade—held that a “reasonable **569 territorial area” in Oregon where the plaintiff actually conducted business could be severed from the two-state area and enforced against the defendant. Id. at 409–10, 245 P.2d 239. In this case, as in Eldridge, the legal and illegal parts of the provision are intermingled. However, the illegal indemnification in this contract can be severed, and would be under Eldridge, allowing indemnification to the extent permitted by ORS 30.140(2) See Hays v. Centennial Floors, Inc., 133 Or.App. 689, 695, 893 P.2d
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564 (1995) (holding that “[former ] ORS 30.140(2) voids the clause to the extent that its application would require [the subcontractor] to indemnify [the general contractor] for its own sole negligence” (emphasis added)); accord Richardson v. Howard S. Wright Const. Co., No CV–05–1419–ST, 2007 WL 1467411 at *5 (D.Or., May 18, 2007) (unpublished) (citing Hays for proposition that, if contract is broad enough to violate ORS 30.140(1), “it is only unenforceable in part”). We do not believe that, in adopting ORS 30.140, the legislature intended to create a different system where any imperfection in a contract provision would void the entire provision. Rather, we interpret ORS 30.140 to be consistent with Eldridge and Oregon case law providing for severance of the illegal part of a contract provision and enforcement of the remainder.
The legislative hearings on Senate Bill (SB) 788—the 1995 revision to ORS 30.140 in which the first and second subsections took their present form—further reveal that the legislature intended to address an issue of perceived unfairness in the construction business. See Walsh Construction Co., 338Or.at7–9,104P.3d1146(examiningin detail the “evolution of ORS 30.140”); Gaines, 346 Or. at 172, 206 P.3d 1042 (court may consult legislative *343 history to confirm interpretation even where there does not appear to be an ambiguity in the statute's text). The prior version of the statute “spoke very clearly to [the situation of] sole negligence [of the general contractor], but it le[ft] quietthequestionofconcurrentnegligence.”TapeRecording, Senate Judiciary Committee, SB 788, Apr. 3, 1995, Tape 83, Side A (statement of Steve Frey). Because of that ambiguity in the law, general contractors had developed a practice of requiring subcontractors to indemnify them on a take-it-orleave-it basis for everything except the sole negligence of the general contractor, essentially “shov[ing] the insurance liability down the line to the guy on the bottom, and if he wants the contract he must” accept the provision. Tape Recording, House Commerce Committee, SB 788, May 4, 1995, Tape 33, Side A (statement of Rep Larry Wells).
LittlewassaidinthepublichearingsandworksessionsonSB 788 about particular contract wording or provisions. Rather, the legislature appears to have been more concerned about the practical outcome of the contract provisions: essentially, that the “[sub]contractor [should] be responsible for the [sub]contractor's actions, and the [general contractor should]
be responsible for the [general contractor's actions].” Tape Recording, House Commerce Subcommittee on Business, SB 788, May 2, 1995, Tape 75, Side A (statement of Ruth Spetter). One subcontractor characterized the bill as “essentially * * * propos[ing] to” “edit out” language in subcontracts requiring that a subcontractor indemnify a general contractor for the general contractor's own negligence. Tape Recording, Senate Judiciary Committee, SB 788, Apr. 3, 1995, Tape 83, Side A (statement of Frank Morse). From that legislative history, we understand that, whenthelegislatureusedthephrase“totheextent”in ORS 30.140(1), it intended to refer to the extent of fault described by subsection (2). That is, the legislature intended that a subcontractorremainliableforthesubcontractor'snegligence even as subsection (1) protects the subcontractor from having to indemnity a general contractor for the general contractor's negligence.
Given the analysis above, we conclude that the trial court should have severed the unenforceable parts of the indemnity clause—the parts that violate *344 ORS 30.140(1)—but still allowed La Noue's claim to go forward to determine if, and to what extent, the “damage to property ar[ose] out of the fault of [Sharabarin], or the fault of [Sharabarin's] agents, representatives, or subcontractors” under ORS 30.140(2) We agree with the Court of Appeals that the trial court erred in granting Sharabarin's motion for summary judgment on La Noue's indemnity claim under **570 ORS 30.140, and we remand that claim to the trial court for further proceedings on that claim.3
II. JURY INSTRUCTIONS
[5] We turn to La Noue's argument that it was reversible error for the trial court to instruct the jury on the economic waste doctrine as part of the instruction on damages for the breach of contract claim. The trial court described the economic waste doctrine for the jury in Instruction No. 26No. 26, which dealt with the appropriate measures of damages:
“If one party breached the contract, then you must decide if the breach caused a loss and, if so, how much money should be paid.
“The mere fact that I am talking about money does not mean that you should or should not award any money.
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“The cost of replacement or repair so as to make the building conform to the plan is the correct measure of damages for defects in construction work unless that remedy generates undue economic waste. If you find that, except for technical, nonsubstantial, or immaterial departures by the defendants from the plans and specifications, the framing or siding work is satisfactory, and that an award to La Noue Development, L.L.C. for claimed repair costs would result in gross economic waste, the proper measure of damages is not the cost of repair but rather the difference in the value of Montara as built and what its value would be if it had been built according to the subcontracts.”
*345 That instruction identified the “cost of replacement or repair” as the “correct” measure of damages, but it also told the jury that there was an alternative measure of damages— the difference between the value of the project as built and its value if it were built according to the contract—that the jurycouldawardiftherepaircostresultedin“grosseconomic waste.”
The verdict form asked the jury to determine whether Sharabarin had breached his contract with La Noue, and, if so, what damages the breach had caused La Noue. As noted, the jury found that Sharabarin had breached his contract and awarded $43,711 in total damages, significantly less than the $2 million that La Noue had sought. On appeal, La Noue argued that, in giving Instruction No. 26No. 26, the trial court had erred by instructing the jury that—if it found economic waste—it could award damages based on the diminution in value of the project, rather than the cost of repair. La Noue asserts that the $43,711 represented the amount that the jury believed was the diminution in value caused by Sharabarin's breach, but that there was no evidence in the record of diminution in value. Sharabarin, on the other hand, claims that the $43,711 represented the cost of repair, and that evidence in the record supported that amount. As noted previously, Sharabarin's expert testified that Sharabarin's breach of contract, if proved, caused approximately five
percent of the $1 million in total cost to repair the buildings that Sharabarin had worked on.
Where, as in this case, a party alleges error in the jury instructions given by the trial court, this court asks three questions: whether the objection was preserved; whether the instruction was erroneous; and, if it was erroneous, whether the instruction substantially affected the party's rights under ORS 19.415(2). Wallach v. Allstate Ins. Co., 344 Or. 314, 319–22, 180 P.3d 19 (2008). The Court of Appeals concluded that La Noue adequately preserved its objection to the jury instruction, Montara, 259 Or.App. at 664–65 n. 2, 317 P.3d 257, and we agree. We therefore examine the doctrine of economic waste to determine if Instruction No. 26No. 26 included an erroneous statement of that doctrine, either because the instruction misstated Oregon law or because the evidence was insufficient to support giving the instruction.
**571 *346 A. The Economic Waste Doctrine in Oregon [6] When a “contractor fails to keep [an] agreement,” the measure of damages “is always the sum which will put [the injured party] in as good a position as if the contract had been performed.” Samuel Williston, 24 Williston on Contracts § 66.17, 461 (Richard A. Lord ed., 4th ed. 2002). In Oregon constructiondefectcases,that“sum”isthe“amountofmoney equal to the cost of curing the defects, provided repair is the prudent remedy to apply.” Turner v. Jackson, 139 Or. 539, 560, 11 P.2d 1048 (1932). That is the injured plaintiff usually “recoverssuchamountashehasreasonablyexpended,orwill reasonably have to spend, to remedy the defect.” Schmauch v. Johnston, 274 Or. 441, 446–47, 547 P.2d 119 (1976) (quoting Charles T. McCormick, Damages § 168, 648 (1935)). That “cost of repair” calculation is ordinarily the measure of damages in a construction defect case, as the instruction at issue here stated.
[7] [8] However, Oregon courts use an alternative measure of damages—the diminution in the market value of the property—when the cost of repair is not “the prudent remedy to apply” because that remedy would create “economic waste.” See Turner, 139 Or. at 560, 11 P.2d 1048. In the case of economic waste, “damages will be measured not by the cost of remedying the defect, but by the difference between the value of the building as it is and what it would have been worth if it had been built in conformity with the contract”—in other words, the diminution in value. 4 Schmauch, 274 Or. at 447, 547 P.2d 119
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[9] Economic waste occurs where “the defect in material or construction is one that cannot be remedied without an expenditure for reconstruction disproportionate to the end to be attained, or without endangering unduly other parts of the building.” Id.; see also Restatement (Second) of Contracts § 348(2)(b) (1979) (courts award “the reasonable cost of completing performance or of remedying the defects if that cost is not clearly disproportionate to the probable loss in value to” the injured party). Stated differently, “[d]iminution in value is the proper measure of damages *347 only when the cost of repair is disproportionate to the diminution in value.” Hanset v. General Construction Company, 285 Or. 101, 106, 589 P.2d 1117 (1979) (emphasis in original). 5 In Jacob & Youngs v. Kent, 230 N.Y. 239, 129 N.E. 889 (1921), a classic case on economic waste, the defendant contracted to build a home for the plaintiff according to a contract requiring the use of “Reading” brand pipe. After the house was complete, the plaintiff discovered that the defendant had instead used “Cohoes” pipe, an equally good brand. Id. at 241, 129 N.E. at 890. To replace the Cohoes pipe with Reading pipe would have required tearing down walls at great expense. Id. The substitution of Cohoes pipe for Reading pipe did not affect the market price of the house, and therefore the proposed repair would not have increased the market price of the house. Judge Cardozo declared that the cost of repair was “grossly and unfairly out of proportion to the good to be attained,” namely “the difference in value, which [in that case] would be either nominal or nothing.”
Id. at 244, 129 N.E. at 891. Where the diminution in value wasnearzero,andthecostofrepairwasa“greatexpense,”the **572 court awarded only nominal damages. Id. The Jacob & Youngs decision accords with Oregon law.
B. The Trial Court Erred in Giving Instruction No. 26No. 26 [10] [11] [12] “Indeterminingwhetheritwaserrortogive aparticularjuryinstruction,thiscourtreviewstheinstructions as a whole to determine whether they accurately state the law.” State v. Serrano, 355 Or. 172, 187, 324 P.3d 1274 (2014). A trial court errs if it gives a jury instruction that is “at odds with [a] general rule” of Oregon law or “inconsistent with [a] specific application of that rule” in prior Oregon case *348 law. Wallach, 344 Or. at 319–20, 180 P.3d 19; see also Hernandez v. Barbo Machinery Co., 327 Or. 99,
107, 957 P.2d 147 (1998) ( “[W]e first inquire whether the requested jury instruction is a correct statement of the law.”). An instruction can also be erroneous because there is no evidence in the record to support giving the instruction. That is because giving instructions not supported by the evidence permits the jury to speculate in rendering its verdict, rather than to base the verdict on the evidence and the applicable law. Dormaier v. Jesse et al., 230 Or. 194, 198, 369 P.2d 131 (1962); see also Purdy v. Deere & Co., 355 Or. 204, 227, 324 P.3d 455 (2014) (“[T]he parties in a civil action are entitled to jury instructions on their theory of the case if their requested instructions correctly state the law, are based on the current pleadings in the case, and are supported by evidence.” (Emphasis added.)); Sherrard v. Werline, 162 Or. 135, 157, 91 P.2d 344 (1939) (“The purpose of instructions is to state to the jury the principles of law governing the facts revealed to the jury by the evidence.”).
Neither party argues that Instruction No. 26No. 26 was erroneously given because it was incorrect as an abstract statement of law. 6 As discussed above, the instruction described the default measure of damages—cost of replacement or repair—and the circumstances in which an alternative measure of damages, diminution in value, would beappropriate, viz., whenanawardofthecostofrepairwould constitute “economic waste.”
La Noue, however, argues that it was error for the trial court to give the instruction because the economic waste doctrine does not apply to this type of case, where La Noue is not a homeowner suing a building contractor but rather a general contractor suing a subcontractor.
Contrary to La Noue's assertion, there is no requirement that the party injured by defective work be a homeowner. See Turner, 139 Or. at 560, 11 P.2d 1048 (referring to “the injured *349 party”); Williston, Williston on Contracts § 66:17 at 476 (“[T]he principles [of the economic waste doctrine] are generally applicable to all kinds of contracts for a particular piece of work, such as, for example, where a charter party is broken by the failure of the charterer to load the vessel.” (Footnotes omitted.)). One of the leading cases on economic waste arose from the breach of a lease contract requiring a lessee to regrade a family farm at the conclusion of a mining lease term. Peevyhouse v. Garland Coal & Min. Co., 1962 OK 267, ¶ 14, 382 P.2d 109, 114 (1962) (where the cost of regrading was $29,000 and the market value was diminished only $300, court measured property
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owners' lost expectancy by the lesser amount). La Noue cites no authority that limits the application of Oregon's economic waste doctrine to cases where one party is a homeowner or landowner, and we see no principled reason to adopt that limitation.
La Noue argues in the alternative that, even if the economic waste doctrine applies to this type of case, Sharabarin failed to meet his “burden of proof” to show economic waste. Sharabarin presents two arguments in response: First, the burdentoshoweconomicwastewasnothisand,alternatively, totheextentthathedidhavetheburdenofproofoneconomic waste, he met that burden. **573 Second, Sharabarin argues that once he made some showing of economic waste, the subsequent burden to prove damages—the amount of the diminution in value—shifted back to the party seeking damages(inthiscase,LaNoue)becausethatpartyalwayshas the burden of proof on damages. See North Pacific Lbr. v. Moore, 275 Or. 359, 366, 551 P.2d 431 (1976) (plaintiff has burden to “establish the fact of damage and evidence from which a satisfactory conclusion as to the amount of damage can be reached”).
The parties' arguments over who bears the “burden of proof” on economic waste, however, do not address the relevant issue regarding the jury instruction in this case. Rather, the legal issue on review is whether there was “some evidence” in the record from which the jury could have reached a verdict that was consistent with the instruction. See State v. Brown, 306 Or. 599, 602, 761 P.2d 1300 (1988) (“In civil cases, the jury must be permitted to consider every claim on which the plaintiff has presented some evidence *350 tending to establish each element of that claim.” (Emphasis in original.)); Wootten v. Dillard, 286 Or. 129, 136, 592 P.2d 1021 (1979) (“We conclude that we are unconcerned with the quantum of evidence. Our concern is only with the existence of evidence which, if accepted as being true by the trier of fact, would establish [the fact in question].”); Plourd v. Southern Pac. Transp. Co., 266 Or. 666, 670–71, 513 P.2d 1140(1973)(becausetherewas“someevidence”intherecord relating to an issue, plaintiff was entitled to jury instruction on that issue). Regardless of which party ultimately bore the burden of production or proof on economic waste, if there was no evidence in the record to support that part of the instruction, the instruction was erroneous.
As discussed above, the proper determination of whether economic waste would result from an award of cost of repair
damages requires a comparison of the cost of repair and the diminution in value. Thus, it was error to give the part of the instruction that dealt with economic waste unless there was some evidence in the record of both measures of damage. Here, there was no evidence in the record regarding diminution in value. Sharabarin points only to evidence that some (but not all) of his breaches of contract were merely “technical” deviations from the plans and to evidence of the cost to build the townhouses. Neither party put on evidence of the value of the townhouses or of any reduction in value as a result of Sharabarin's breach of contract. And neither party sought to tie that breach to any particular reduction in value or in market price. At least some evidence of diminution in value was required to support an instruction that would have allowed the jury to base its verdict on that theory. Because there was no such evidence, the trial court erred in giving that part of the instruction.
C. The Erroneous Instruction Did Not Substantially Affect La Noue's Rights.
[13] When an appellate court concludes that a jury instruction was erroneously given, the next question is “whether the erroneous instruction substantially affected [the party's] rights” under ORS 19.415(2).7 *351 Wallach, 344 Or. at 322, 180 P.3d 19. In applying that standard, an appellate court must “assess[ ] the extent to which an error skewed the odds against a legally correct result” and determine “whether—in an important or essential manner— the error had a detrimental influence on a party's rights.” Purdy, 355 Or. at 226, 324 P.3d 455. Generally, “little likelihood is not enough, but more—that is ‘some’ or a ‘significant’ likelihood that the error influenced the result— will suffice for reversal.” Id.; see also id. at 235, 324 P.3d 455 (Balmer, C.J., concurring) (“[T]he bar for the appellant is somewhere above ‘possibly affected’ the result, but below ‘necessarily affected’ the result,” and how much likelihood is required “will depend on factual and legal issues in the case as determined from the trial court record.”).
As noted, it was error for the trial court to give Instruction No.26No.26becausethatinstruction **574 referredtoboth the usual measure of damages, as to which evidence had been introduced by both parties, and to an alternative measure of damages, as to which there was no evidence in the record. ORS 19.415(2) places the burden to demonstrate prejudicial effectonwhicheverpartylosesinthetrialcourtandthenseeks reversal or modification of the judgment on appeal. Purdy,
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355 Or. at 225, 324 P.3d 455; Shoup v. Wal–Mart Stores, Inc., 335 Or. 164, 173–74, 61 P.3d 928 (2003)
Here, La Noue has not met its burden of showing that the instructional error substantially affected its rights. Sharabarin's expert testified that the entire cost of repair for thebuildingsSharabarinworkedonwouldbe$1million,with onlyfivepercentofthatamountattributabletoSharabarin.La Noue's expert testified that the cost of repair of the work done improperly by Sharabarin was slightly less than $2 million. If the jury believed Sharabarin's expert over La Noue's expert, it would have attributed $50,000 in damages to Sharabarin— fivepercentofthe$1milliontotal.ThejuryawardedLaNoue $43,711 in damages for breach of contract.
We presume, as we ordinarily do, that the jury followed the instructions. Wallach, 344 Or. at 326, 180 P.3d 19. Here, *352 thoseincludedinstructionsthatthejurybaseanyaward of damages “on the evidence” and that the jury not decide the case based on “guesswork, conjecture, or speculation.” The instructions also told the jury that damages could be awarded in the amount of the cost of repair or, in certain circumstances, in the amount of diminution in value. Both parties introduced evidence on cost of repair, and the jury awardedanamountofdamages($43,711)thatwasclosetothe cost of repair as estimated by Sharabarin's expert ($50,000). On the other hand, there was no evidence as to diminution in value. In these circumstances, we presume that the jury based its award on the cost of repair evidence. Assuming the jury followed the instructions, that was the only theory on which it could have based the verdict, because no evidence supported a verdict based on the alternative theory of diminution in value. See Shoup, 335Or.at178–79,61P.3d928(harmless error because defendant had “not identified anything in the record to demonstrate that the jury based its verdict on” the error); Jensen v. Medley, 336 Or. 222, 240, 82 P.3d 149 (2003) (where alternative basis could support jury's verdict, court asks “whether the record contains sufficient evidence to support liability on that alternative basis”). La Noue points to nothing in the record to suggest that the reference in the damage instruction to diminution in value as an alternative measure was likely to have had any effect on the jury's deliberations.
The Court of Appeals concluded that the instructional error was not harmless because “the jury instruction permitted the jury to speculate as to the loss in value of the buildings as a consequence of Sharabarin's breach of the contract.”
Montara, 259 Or.App. at 670, 317 P.3d 257. We disagree. The assessment of harmless error under ORS 19.415(2) necessarily involves a contextual, record-based review that takes into account what evidence the jury had before it. An Oregon appellate court “must adhere to the limitation of ORS 19.415(2) and reverse or modify a judgment only if it can [determine] from the record that the error ‘substantially affect[ed] the rights of a party.’ ” Shoup, 335 Or. at 174, 61 P.3d 928 (emphasis added); see also Purdy, 355 Or. at 236, 324 P.3d 455 (Balmer, C.J., concurring) (“[W]e do not look at trial court errors in the abstract—rather, we examine those errors in the context *353 of the trial record as a whole, including * * * the evidence admitted and excluded[.]”).
The Court of Appeals concluded that the jury “speculate[d] as to the loss in value.” Montara, 259 Or.App. at 670, 317 P.3d 257. La Noue's arguments do not persuade us, and we reach a different conclusion. As discussed, not only was there no evidence of “loss in value,” there was evidence—from both parties—of cost of repair. The jurors were cautioned not to speculate, and nothing in the record suggests that they did. On this issue, the jury apparently credited Sharabarin's expert and not La Noue's. The record points to the conclusion that the jury followed a permissible path from evidence in the record of cost of repair, through the instructions given, to its award of damages. **575 Cf. Jensen, 336 Or. at 240, 82 P.3d 149 (Where “the jury instructions gave the jury two possible grounds for imposing liability,” one based on an erroneous instruction and the other not, defendant “c[ould] not demonstrate that the verdict was based on the erroneous instruction***,ratherthanonthecorrect***instruction.”). We cannot say that the error in this case “skewed the odds against a legally correct result” to such an extent that the trial courtjudgmentshouldbedisturbed. See Purdy, 355Or.at226, 324 P.3d 455; Shoup, 335 Or. at 173, 61 P.3d 928 (under ORS 19.415(2), an “error must cause something more than the ‘possibility’ of a different result” and is “not merely one that ‘might’ have changed the outcome of the case”). Because La Noue has not met its burden under ORS 19.415(2), we conclude that the instructional error was harmless.
III. ATTORNEY FEES
In La Noue's third-party complaint against Sharabarin, La Noue sought the attorney fees that it had incurred defending the first-party claim by the homeowners against La Noue.
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La Noue argued that those attorney fees were recoverable as consequential damages of Sharabarin's breach of contract. The trial court made two rulings on that issue, one before trial and one after trial. We address those rulings separately.
Before the trial began on La Noue's breach of contract claim against Sharabarin, there was a dispute over whether *354 La Noue could seek, as consequential damages, attorney fees that it had incurred defending against the homeowners' claims. Sharabarin argued that those fees could be recovered only under the procedure set out in ORCP 68, while La Noue asserted that the fee issue should be presented to the jury as partofitsclaimfordamagescausedbySharabarin'sbreachof contract. Although we briefly discuss below the substantive basisforLaNoue'sclaim,thenarrowissuefordecisionhereis the proper procedure for La Noue to assert that fee claim. We notethattheusualORCP68attorneyfeeclaimisoneinwhich a party that has prevailed in a proceeding against another party—and that has a contractual or statutory right to attorney fees as the prevailing party—files a claim for those fees. This case presents the unusual variant of a defendant that incurs attorney fees in an action brought by a plaintiff, files a thirdparty claim in the same action, and, as part of its damages claim against the third-party defendant, seeks recovery of those first-party fees. We are unaware of reported Oregon cases in this posture, although, as we discuss below, courts in other states have considered whether a third-party plaintiff can seek attorney fees against third-party defendants that the third-party plaintiff incurred in defending against first-party claims in the same action.
[14] With that background, we turn to the dispute over the application of ORCP 68 8 The ORCP 68 procedure for *355 recovering attorney fees, with limited exceptions set out in the rule, “governs the pleading, proof, and award of attorney fees in all cases, regardless of the source of the right to recover such fees.” ORCP 68 C(1) (emphasis added). The rule provides an exception when the fees “are claimed as damages arising prior to the action.” ORCP 68 C(1)(a) (emphasis added). **576 When ORCP 68 applies, the party seeking the fees must first allege the right to attorney fees in a pleading, motion, or response, and then file a detailed statement of the amount of attorney fees within 14 days after entry of judgment. ORCP 68 C. Thus, proof of attorney fees is ordinarily not part of the trial itself, but rather is presented in a post-trial proceeding, which may involve a court hearing without a jury. ORCP 68 C(3), (4)(e)(i).
La Noue argues that its claim for the fees that it incurred in defending against the homeowners' complaint is not subject to ORCP 68 procedure because it comes within the ORCP 68 C(1)(a) exception for fees “arising prior to the action.” In the trial court, La Noue argued that those fees arose prior to the trialonLaNoue'sclaimsagainstSharabarinbecauseLaNoue had already settled the homeowners' claims before the trial of La Noue's third-party claims against Sharabarin and they were thus part of a “separate and distinct action.” La Noue soughttopresentevidenceofthoseattorneyfeestothejuryas consequential damages from Sharabarin's breach of contract. Sharabarin objected, arguing that ORCP 68 covers all claims for attorney fees in an action “regardless of the source of the right to recover those fees,” ORCP 68 C(1), and that La Noue's fee request was subject to the post-trial procedure of ORCP 68 C(4). Sharabarin asserted to that “this is all part of one action, * * * one caption, one case number” and “a separate action [is] required for attorney fees to be counted as damages in a case such as this.” At oral argument on that dispute, the trial court observed that Sharabarin's position would allow a party to claim the attorney fees in a subsequent action, but “another party who [seeks the fees in the same action] is precluded from those very same damages.” *356 Emphasis added.) Sharabarin responded that La Noue was “not precluded” and agreed that it “would be entitled to argue [those damages] at a later time,” presumably using the posttrial procedures of ORCP 68
At that pretrial stage, the trial court was concerned that if it didnotallowLaNouetopresentevidenceoftheattorneyfees as consequential damages for Sharabarin's alleged breach of contract to the jury, then La Noue would be “precluded” from pursuing that component of its damages at all. But the trial courtapparentlyacceptedSharabarin'sacknowledgementthat the ORCP 68 procedure would allow La Noue to seek those damages after trial and thus not “preclude” La Noue from recovering any damages to which it would otherwise be entitled. On that basis, the trial court held that La Noue could not present evidence to the jury of the attorney fees that it incurred defending against the homeowners' claims, but that La Noue could seek those attorney fees post-trial using the ORCP 68 procedure.9 The Court of Appeals agreed with the trialcourtthatwhateverdamagesarosefromthehomeowners' claims against La Noue did not “aris[e] prior to the action,” ORCP 68 C(1)(a), because those claims and La Noue's thirdparty claims against Sharabarin were part of the same action.
Montara, 259Or.App.at683,317P.3d257.Onreview,La Noue reprises its arguments below.
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La Noue's argument turns on whether its claim comes within the exception for fees and other expenses that “are claimed as damages arising prior to the action.” ORCP 68 C(1)(a). Although the word “action” is not defined in the rules, rules other than ORCP 68 make it clear that first-party claims, such as the homeowners' claims against La Noue, and thirdparty claims, such as La Noue's against Sharabarin and other subcontractors, are part of the same “action.” ORCP 22 C(1), in discussing third-party practice, refers to both first- and third-partyclaimsaspartof“the *357 action.”Additionally, ORCP 67 B provides that, “[w]hen more than one claim for relief is presented in an action, whether as a claim, counterclaim,cross-claim, or third party claim, ***thecourt **577 may render a limited judgment as to one or more but fewer than all of the claims or parties.” (Emphasis added.)
The conclusion that fees incurred in the same action are not fees“arisingpriortotheaction”isconsistentwiththeCouncil on Court Procedure's comment on ORCP 68. The comment notes that the rule was “designed to provide a procedure for claiming and proving attorney fees which are an incident of the action.” For that reason, the Council stated, “preexisting attorney fees which are actually claimed as damages are excluded.” Council on Court Procedures, Oregon Rules of Civil Procedure and Amendments, Rule 68 comment, at 22 (Dec. 13, 1980) (emphasis added). The comment thus emphasizes the distinction between fees that are “an incident of the action,” which are subject to ORCP 68, and “preexisting” fees—those that “existed” prior to the action—that are not.
We conclude that the first- and third-party claims in this case were part of the same “action” and, consequently, that ORCP 68 provided the procedure for seeking an award of those attorney fees. We acknowledge that the ORCP 68 procedure seems to have been adopted with an eye toward resolving a claim by a prevailing party against a nonprevailing party for attorney fees incurred in the litigation between those two parties. However, the text of the rule is sufficiently expansive to encompass claims for fees incurred in the same action, because they did not “arise prior to the action.”10 We therefore affirm the trial court's pretrial decision not to send La Noue's claim for attorney *358 fees to the jury and to defer ruling on that claim until after trial.11
[15] The trial court's post-trial ruling denying La Noue's claim for those attorney fees presents different issues.12 After the jury trial, as part of a series of post-trial hearings, La Noue again requested as damages the attorney fees that
it had incurred in defending the first-party claims by the homeowners. The court's written ruling stated that the court denied La Noue's claim “because its attorney fees were incurred in the same action in which La Noue made thirdparty claims against the Subcontractors[, and t]he recovery of attorneys' fees as consequential damages in a breach of contract claim is predicated on those fees having been incurredinapriorseparateaction.”Initsoralruling,thecourt further stated:
“As to whether or not there are consequential damages that will be allowed in terms of the attorney fees that were accrued or incurred, I find that this is a different situation from the situation in many prior cases which can hold attorney fees can be consequential damages.
“Unlike the situation in those cases, this is not a situation in which there was earlier or separate litigation with a third party.Thatisinvariablythecontextinwhichthisdiscussion occurs, rather than the context which has presented itself here in this case, which is the presence of a single case in which there was a settlement that was made with a number of the parties and in which litigation then continued against remaining parties. There was, therefore, no **578 prior litigation which resulted in attorney fees that might be recoverable as consequential damages, and I couldn't find any cases that would suggest that this is so.”
In those oral and written post-trial rulings, it appears that the trial court was referring to arguments made by the parties based on both ORCP 68 and *359 Huffstutter v. Lind, 250 Or. 295, 301, 442 P.2d 227 (1968), and we address both of those sources of law below. The Court of Appeals acknowledged that La Noue “might have” some “substantive entitlement”totheattorneyfeesincurredindefendingagainst the homeowners' claims, but nonetheless affirmed the trial court because, in contrast to the situation in Huffstutter, there was “no prior litigation with a third party.” Montara, 259 Or.App. at 683, 317 P.3d 257; see Huffstutter, 250 Or. at 301, 442 P.2d 227 (“[A]ttorney fees are generally allowable as damages in an action against a defendant where the defendant's tortious or wrongful conduct involved the plaintiff in prior litigation with a third party.” (Emphasis added.)).
The legal basis on which the trial court rejected La Noue's post-trial request for attorney fees was not clear. If the posttrial ruling was based on the trial court's conclusion that it could not consider the substance of La Noue's request under
Montara Owners Ass'n v. La Noue Development, LLC, 357 Or. 333 (2015) 353 P.3d 563 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 13
ORCP 68, that ruling was erroneous. ORCP 68 was not intended to affect any substantive right of a party to attorney fees as consequential damages for a breach of contract. See ORCP 68 C(1) (distinguishing procedure for “the pleading, proof, and award of attorney fees” from “the source of the right to recover such fees”); Council on Court Procedures, Oregon Rules of Civil Procedure and Amendments, Rule 68 comment, at 21 (Dec. 13, 1980) (“[T]he rule simply provides a procedure for assessing such fees no matter what source is relied upon as providing the right to such fees.” (Emphasis added.)).Moreover,thetrialcourt's pretrial rulingdenyingLa Noue'srequesttoputonevidenceofattorneyfeesaspartofits damagescaseagainstSharabarinapparentlywaspredicatedin part on its view that La Noue would be able to seek those fees in a post-trial proceeding. As we have held, that ruling was correct. Insofar as the trial court's post-trial ruling denying the attorney fee claim relied upon the conclusion that the fees were not “claimed as damages arising prior to the action” under ORCP 68 C(1)(a), it was error.13
*361 Although the court in Huffstutter referred to attorney fees incurred in “prior litigation” with a third party, it did so because of the procedural posture of that case. The gravamen of the case was not that the fees must have been incurred in a prior case, but rather that the American rule does not apply when a plaintiff seeks attorney fees as consequential damages on the theory that “the defendant's tortious or wrongful conduct” involved the plaintiff in litigation with a third party.
[16]
*360 We also conclude that the trial court and Court of Appeals read Huffstutter too narrowly when they concluded that it did not apply unless the attorney fees claimed were incurred in separate, earlier litigation. Under the so-called American rule regarding the award of attorney fees, “Generally, a party cannot recover attorney fees unless there is a statute or a contract that authorizes recovery of those fees.” Peace River Seed Co–Op, Ltd. v. Proseeds Marketing, Inc., 355 Or. 44, 65, 322 P.3d 531 (2014) La Noue lacked any statutory or contractual basis for the recovery of any attorney fees. 14 Huffstutter, however, recognized a third-party litigation exception to the American rule in the circumstances when attorney fees are claimed as consequential damages.15 **579 Huffstutter held that, although “[i]n the absence of contract, attorney fees are allowable only where there is statutory authority,” there is an exception to that rule, whereby “attorney fees are generally allowable as damages in an action against a defendant where the defendant's tortious or wrongful conduct involved the plaintiff in prior litigation with a third party.” 250 Or. at 301, 442 P.2d 227; see also OnePoint Solutions, LLC v. Borchert, 486 F.3d 342, 352 (8th Cir.2007) (“[U]nder the third-party litigation exception to the American Rule * * * a court may award attorney fees as damages if the defendant's tortious act thrusts or projects the plaintiff into litigation with a third party.” (Internal quotation omitted.)).
250 Or. at 301, 442 P.2d 227. That holding is consistent with other authorities cited inHuffstutter recognizing that such attorney fees can be claimed as damages, and we followed Huffstutter in Osborne v. Hay, 284 Or. 133, 585 P.2d 674 (1978). Both Huffstutter and Osborne discussed claims for attorney fees as consequential damages in tort cases, but the rule has also been applied in appropriate contractcases.When“abreachofcontractresultsinclaimsby third persons against the injured party,” the breaching party is liable for the injured party's “reasonable expenditures in the litigation, if the party in breach had reason to foresee such expendituresastheprobableresultofhisbreachatthetimehe made the contract.” Restatement (Second) of Contracts § 351 comment c; see also Raymond v. Feldmann, 124 Or.App. 543, 546, 863 P.2d 1269 (1993) (collecting cases and treatises describing the third-party litigation exception).
Whether those damages arose in a separate, earlier case or in the same action in which a party seeks them will determine only the procedure for asserting a claim for those fees— either by presenting evidence at trial on the merits or by using the post-trial procedure established by ORCP 68—but it will not determine whether a party has any substantive right to those fees. Cases from other jurisdictions have acknowledged that, although ordinarily a plaintiff that asserts a claim for attorney fees as a component of damages for a defendant's wrongdoingwilldosoinaseparatelawsuitfromthatinwhich the fees were incurred, nothing prevents those attorney fees from being claimed in the same action. See Prentice v. North Am. Title Guar. Corp., Alameda Div., 59 Cal.2d 618, 621,30Cal.Rptr.821,381P.2d645(1963)(“Intheusualcase, the attorney's fees will have been incurred in connection with a prior action; but there is no reason why recovery of such fees should be denied simply because the two causes *362 the one against the third person and the one against the party whose breach of duty made it necessary for the plaintiff to sue the third person) are tried in the same court at the same time.”); M.F. Roach Co. v. Town of Provincetown, 355 Mass. 731, 733, 247 N.E.2d 377, 378 (1969) (same).
Montara Owners Ass'n v. La Noue Development, LLC, 357 Or. 333 (2015) 353 P.3d 563 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 14
Nothing in our rules or case law suggests that a different result would obtain here. Indeed, one of the cases cited by Huffstutter involved a claim for fees that were incurred in the same action rather than a separate and earlier action. 250 Or. at 301, 442 P.2d 227 (citing Prentice, 59 Cal.2d at 621, 30 Cal.Rptr. 821, 381 P.2d 645). In the usual case, previously incurred attorney fees are sought in a separate action against the wrongdoer. In those cases, the ORCP 68 procedure for seeking attorney fees post-trial does not apply because of the exception in ORCP 68 C(1)(a) for fees and other expenses “arising prior to the action.” But if a party chooses **580 to seek those fees in the same action in which it incurred them— as La Noue has done here—it may do so, although the party will need to follow the ORCP 68 procedure.
The Court of Appeals affirmed the trial court and rejected La Noue's attorney fee claim because the fees did “not originate from prior litigation with a third party.” Montara, 259 Or.App. at 683, 317 P.3d 257. For the reasons set out above, we disagree. Like the courts in Prentice and M.F. Roach, we conclude that a party may seek attorney fees under the thirdparty litigation exception, even if the party incurs those fees in the same action. Our holding is limited to reversing the lower court rulings that La Noue was precluded from seeking attorneyfeesaspartofitsdamages,andweexpressnoopinion as to the substantive merits of La Noue's claim. Because the trial court concluded that La Noue could not pursue its claim forattorneyfees,thepartiesdidnotdevelopandthetrialcourt did not rule on the legal and factual grounds for establishing, or the potential limitations on, such a claim.16
*363 We conclude that La Noue may use the ORCP 68 procedure to seek from Sharabarin, as consequential damages of Sharabarin's breach of contract, attorney fees that La
Noue incurred in defending against the homeowners' claims in the first-party action. We remand to the trial court for further proceedings to determine whether La Noue meets the requirementstorecoverthosefeesand,ifitdoes,todetermine the appropriate amount of the fee award.
IV. CONCLUSION
In summary, we hold that ORS 30.140 allows for partial invalidation of overbroad indemnity clauses in construction contracts. As to La Noue's claim for contractual indemnity, we therefore affirm the decision of the Court of Appeals, reverse the judgment of the circuit court, and remand the case to the circuit court for further proceedings. With respect to the instruction on damages, we reverse the decision of the Court of Appeals and affirm the trial court because, although we conclude that it was error for the trial court to instruct on diminution in value as a measure of damages when there was no evidence on diminution in value, that error was harmless. Finally, we reverse the Court of Appeals decision on attorney fees. We affirm the trial court's pretrial ruling that the ORCP 68 procedure applies to La Noue's claim for attorney fees that it alleges as consequential damages for Sharabarin's breach of contract, but reverse the post-trial denial of that claim and remand for further proceedings.
The decision of the Court of Appeals is affirmed in part and reversed in part. The judgment of the circuit court *364 is affirmedinpartandreversedinpart,andthecaseisremanded to the circuit court for further proceedings.
All Citations
357 Or. 333, 353 P.3d 563
Footnotes
* Appeal from Multnomah County Circuit Court, Hon. Jean K. Maurer, Judge. 259 Or.App. 657, 317 P.3d 257 (2013)
1 The other subcontractors settled with La Noue while the case was pending before the Court of Appeals, leaving Sharabarin as the only subcontractor remaining on appeal. Because of those settlements, we limit our discussion of the facts to Sharabarin's participation at trial.
Montara Owners Ass'n v. La Noue Development, LLC, 357 Or. 333 (2015) 353 P.3d 563 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 15
2 Although ORS 30.140 uses the terms “indemnitee” and “indemnitor,” we refer to the general contractor and the subcontractor, respectively, in this opinion where doing so lends clarity to our reasoning.
3 We do not address any potential overlap between La Noue's different claims or the damages that it may recover under those claims. It may be that the indemnification provision, as constrained by ORS 30.140, does not provide for La Noue to recover anything more than they have already been awarded by the jury for Sharabarin's breach of contract plus any attorney fees potentially recoverable for the reasons set out later in this opinion.
4 For clarity, we refer to that measure throughout this opinion as the “diminution in value,” although we note that it is the same amount that the market value of the building would be expected to increase if the repair were completed.
5 In Beik v. American Plaza Co., 280 Or. 547, 555–56, 572 P.2d 305 (1977), this court suggested that the disproportionality test for economic waste in Oregon is not necessarily limited to a comparison of cost of repair and diminution in value, and may involve consideration of other factors, such as purchase price, need for structural change, loss of habitability, and savings to the breaching party. See also Hanset, 285 Or. at 106–07, 589 P.2d 1117 (considering plaintiffs' intentions to live in, rather than sell, their home in determining appropriate measure of damages). Although this court has referred to those other factors, the parties have not asked us to resolve, and it is not necessary to resolve here, any uncertainty as to the proper formulation of the economic waste doctrine, because all of the variations involve some consideration of diminution in value. It is sufficient for the purposes of this case to consider the test for economic waste that compares cost of repair to diminution in value.
6 Because neither party raised the issue, we do not consider whether Instruction No. 26No. 26 was erroneous for failing to define the term “economic waste” or for failing to refer in any respect to the cost of repair as being “disproportionate.” See Schmauch, 274 Or. at 446, 547 P.2d 119; see also State v. McDonnell, 313 Or. 478, 497, 837 P.2d 941 (1992) (although “words of common usage need not be defined for the jury,” terms that are not of common usage and are not “understandable without elaboration” should be defined).
7 ORS 19.415(2) provides that “[n]o judgment shall be reversed or modified except for error substantially affecting the rights of a party.” See also Or. Const., Art. VII (Amended), § 3 (This court should affirm when “the judgment of the court appealed from was such as should have been rendered in the case * * * notwithstanding any error committed during the trial[.]”).
8 In relevant part, ORCP 68 provides:
“C(1) Application of this section to award of attorney fees. * * * [T]his section governs the pleading, proof, and award of attorney fees in all cases, regardless of the source of the right to recover such fees, except when:
“C(1)(a) Such items are claimed as damages arising prior to the action; “ * * * * *
“C(3) Proof. The items of attorney fees and costs and disbursements shall be submitted in the manner provided by subsection (4) of this section, without proof being offered during the trial.
“C(4) Procedure for seeking attorney fees or costs and disbursements. The procedure for seeking attorney fees or costs and disbursements shall be as follows:
Montara Owners Ass'n v. La Noue Development, LLC, 357 Or. 333 (2015) 353 P.3d 563 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 16
“C(4)(a) * * * A party seeking attorney fees or costs and disbursements shall, not later than 14 days after entry of judgment * * * [f]ile with the court a signed and detailed statement of the amount of attorney fees or costs and disbursements[.]
“ * * * * *
“C(4)(e)(i) If a hearing is requested the court, without a jury, shall hear and determine all issues of law and fact raised by the objection.”
(Emphases omitted.)
9 While the trial court's ruling was not entirely clear, that appears to be the intent of its pretrial ruling. The court ultimately declared that it was ruling “with the defense on this” and characterized the defense's position as being that this was “something that would be argued at the time of, perhaps, the attorney fee decision made by the court at the end of the case as opposed to an element of damage that goes to the jury.”
10 There is a potential dispute about the meaning of the word “arising” in ORCP 68 C(1)(a). “[A]rising prior to the action” could have at least two different meanings: that the fees had been partially incurred prior to the action, or that they had been fully incurred prior to the action. On the one hand, that phrase could include those attorney fees that are being incurred on an ongoing basis at the time the action begins, regardless of whether more attorney fees are yet to be incurred. Alternatively, “arising prior to the action” could mean that the prior proceeding that gave rise to the attorney fees had been concluded before the action in which the fees are sought is filed, so that the amount of the fees can be determined. Because the fee issue in this case comes up in the context of a single action, we do not address the issue of the potential meanings of “arising.”
11 The parties have not raised any argument that the trial court violated the Oregon Constitution when it concluded that La Noue could not submit that aspect of its damages case to the jury. See Or. Const., Art. I, § 17 (“In all civil cases the right of Trial by Jury shall remain inviolate.”); Or. Const., Art. VII (Amended), § 3 (“In actions at law, where the value in controversy shall exceed $750, the right of trial by jury shall be preserved[.]”).
12 As discussed further below, La Noue did not use the procedure set out in ORCP 68 to seek those fees.
13 We recognize that La Noue did not use the ORCP 68 procedure in its post-trial attorney fee request for the attorney fees incurred in defending the homeowners' claims. However, we agree with La Noue's assertion at oral argument before this court that seeking those attorney fees again in their ORCP 68 filing would have been futile, given the trial court's post-trial ruling denying La Noue's claim for those fees as consequential damages because they had been incurred in the same action.
14 The only reference to attorney fees in La Noue's contract with Sharabarin was in the contractual indemnification clause, which provided that “[i]n the event of litigation between [Sharabarin] and [La Noue] to enforce the rights under this subparagraph (o) [relating to indemnification], reasonable attorneys' fees shall be allowed to the prevailing party.” Because Sharabarin was the “prevailing party” on the issue of contractual indemnification,theonlycontractualbasisavailableforrecoveringattorneyfees,LaNouecouldnotarguethat the contract authorized recovery of these attorney fees. See ORS 20.077 (establishing process to determine prevailing party for purpose of attorney fee award). As discussed above, however, the trial court erred in deciding the contractual indemnification claim, and that claim will be the subject of further proceedings on remand.
Montara Owners Ass'n v. La Noue Development, LLC, 357 Or. 333 (2015) 353 P.3d 563 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 17
15 The third-party litigation exception to the American rule has been adopted by almost every jurisdiction in the United States. Robert Rossi, 1 Attorneys' Fees § 8:3, 9 (3d ed 2014) (identifying Arkansas and North Carolina as only states that have declined to adopt the doctrine). It might be more accurate to say that a claim for attorney fees as consequential damages for another party's wrongful conduct is simply a situation in which the American rule does not apply, rather than an “exception” to the rule.
16 Oregon has relatively little case law on the requirements that must be met for a party in La Noue's position to prevail on its attorney fee claim. One treatise summarizes the requirements as follows:
“[The party seeking to recover attorneys' fees under this doctrine must establish:]
“(1) that the plaintiff had become involved in a legal dispute either because of a breach of contract by the defendant, or because of defendant's tortious conduct; that is, that the party sought to be charged with the fees was guilty of a wrongful or negligent act or breach of agreement; (2) that the litigation was with a third party, not with the defendant from whom the fees are sought to be recovered; (3) that the attorneys' fees were incurred in that third-party litigation; and (4) that the fees and expenses which were incurred were thenaturalandnecessaryconsequencesofthedefendant'sact,sinceremote,uncertain, and contingent consequences do not afford a basis for recovery; in other words, the attorneys' fees sought to be recovered must have been proximately and necessarily caused by the act complained of.”
Montara Owners Ass'n v. La Noue Development, LLC, 357 Or. 333 (2015) 353 P.3d 563 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 18
Rossi, 1 Attorneys' Fees § 8:3 at 10–13
End of Document
© 2023 Thomson Reuters. No claim to original U.S. Government Works.
Lightning Round
Is A Motion to Strike the Motion that’s Right? Why Judges Prefer Facts that will Get you to Admissible Evidence versus Supplying Admissible Evidence
PRESENTED BY:
Michael Godfrey, SBH Legal June
2023 OADC ANNUAL CONVENTION CONTINUING LEGAL EDUCATION GUIDEBOOK OADC Oregon Association of Defense Counsel
16, 2023
12:15pm
11:15am –
Michael Godfrey
Michael joined SBH Legal in 2017 and became a partner in 2023. He advises clients on mitigating risk and managing pre-litigation situations, but also represents his clients in all levels of litigation including administrative hearings, jury trials, and appellate litigation. His practice includes state and federal employment defense matters including workers’ compensation, wrongful termination, ADA, wage & hour, OSHA/WISHA claims, and all other employment-related discrimination claims.
Born and raised in Eastern Oregon, he is native to the Pacific Northwest. He and his wife, Taylor, live in Portland with their son, Jackson, and golden retriever, Watson.
PROFESSIONAL ACTIVITIES
Oregon State Bar Association
Washington State Bar Association
U.S. District Court for the District of Oregon
United States Court of Appeals for the Ninth Circuit
Washington Self-Insurers Association
Oregon Association of Defense Counsel
SOMETHING YOU MAY NOT KNOW ABOUT MICHAEL
Favorite restaurant? Ringside Steakhouse.
Where did you honeymoon? South Africa (it was the best). Hobbies? Golfing, Snowboarding, and spending time with his family.
PRACTICE
University
Eastern Oregon University, B.S. (2010)
EDUCATION Willamette
College of Law, J.D. (2014)
GROUPS Employment Law Litigation
OSHA
Compensation
Compensation
Longshore
Workers’
- Oregon Workers’
- Washington
Topic: Is A Motion to Strike the Motion that’s Right? Why Judges Prefer Facts that will Get you to Admissible Evidence versus Supplying Admissible Evidence
Presented by: Michael Godfrey, SBH Legal
When writing motions to amend, motions for summary judgment, or any other motion requiring facts supported by admissible evidence, is it proper to file a motion to strike when opposing counsel’s facts appear to rely on hearsay or are not yet established business records (and other admissibility issues)? Should courts spend time during the oral argument debating the admissibility of those facts, or should the admissibility be determined at trial and the facts at the motion just generally be admissible? Michael Godfrey explores the nuance between the two and proposes that a motion to strike may not be worth your time when defending a motion as the hearing is not the time that the Judge will determine admissibility but determine if sufficient facts exist that would be supported by admissible evidence.
This discussion will address the following:
• What is an affidavit?
o ORS 45.020 states an affidavit is “a written declaration under oath, made without notice to the adverse party.”
• What is the standard for a Motion for Summary Judgment?
o ORCP 47(D) states “…supporting and opposing affidavits and declarations must be made on personal knowledge, must set forth facts as would be admissible evidence, and must show affirmatively that the affiant or declarant is competent to testify to the matters stated therein.”
• What about a Motion to Amend?
o Pleading punitive damages is ORS 31.725(3)(a): “The court shall deny a motion to amend a pleading made under the provisions of this section if: (a) the court determines that the affidavits and supporting documentation submitted by the party seeking punitive damages fail to set forth specific facts supported by admissible evidence adequate to avoid the granting of a motion for a directed verdict to the party opposing the motion on the issue of punitive damages in a trial of the matter…”
2023 OADC Annual Convention – Lightning Round
• Important takeaway:
o This does not allow for parties to use inadmissible evidence to support a motion, but simply means that the court may not weigh the admissibility of the evidence at the time of the hearing on the motion.
• Opposing viewpoints:
o Some practitioners swear by the Motion to Strike and will still push for a hearing on admissibility of a particular piece of evidence. Perman v. CH. Murphy/Clark-Ullman, Inc., 220 Or App 132, 138 (2008).
PRESENTED
2023 OADC ANNUAL CONVENTION CONTINUING LEGAL EDUCATION GUIDEBOOK OADC Oregon Association of Defense Counsel
Client’s Expert has Been Subpoenaed to Testify Against Them. Now What? Jason P . Evans, Sussman Shank June 16, 2023 11:15am – 12:15pm
Lightning Round Your
BY:
Jason Evans is an associate attorney who works closely with Sussman Shank’s litigation team on matters ranging from the defense of Class I railroads from actions arising under the FELA to the defense of individuals in all arrays of lawsuits brought against them. Whether his client is a multinational corporation or an individual who needs help navigating their defense, Jason’s goal is the same—to achieve the fair and equitable result.
Since Jason graduated from Lewis & Clark Law School in 2019, he has successfully defended matters ranging from those involving less than $10,000 in damages all the way up to multi-million-dollar injury actions that were resolved at trial in Federal Court. Jason has trained with some of the best defense-side attorneys in the State of Oregon, and it shows.
Jason’s approach to litigation combines his eye for what’s right with his understanding of how stressful the process can be, meaning that when a discussion of dollars and cents is on the table, so is the overall wellbeing of his client—big or small. He has been taught that there is more to the legal process than just a bottom line, something reflected in his case management strategy—and something his clients can appreciate even after their action has been resolved.
THE ADVANTAGE OF WORKING WITH JASON
Clients know that I will give things to them straight. When money, reputation, and often much more are on the line, there is no room to beat around the bush. If a matter needs to go to trial, I will tell you exactly why. If a settlement is what’s right, I will make sure you know that too. Every case comes with different facts, but one thing is consistent among all: clients should know why the things that are happening are happening the way they are. I take care to keep my clients updated and informed.
ORGANIZATIONS
• Professional Organizations
• Member, Oregon Association of Defense Counsel
• Member, Multnomah Bar Association
• Member, American Inns of Court, Owen M. Panner Chapter
PERSONAL INTERESTS
Before law school and during seasonal breaks from college, I spent a good deal of time working in kitchens, where I learned I am actually quite fond of cooking—an interest I had plenty of time to develop during the time Portland (and most of its restaurants) was closed down in the early years of the pandemic—and which has persisted to this day. In the wintertime, I can also be found snowboarding, an interest that with family in both the Pacific Northwest and Colorado has proven to be an exciting, travel inducing pursuit.
EDUCATION
BA, The College of Wooster Communication Studies
• German Studies minor JD, Lewis & Clark Law School
INDUSTRIES
Railroad
PRACTICES
Litigation
ADMISSIONS
Oregon State Bar
United States District Court for the District of Oregon
PUBLICATIONS
Diversity and Inclusion: Practical Strategies for Productive Conversations and Meaningful Progress
The Inevitable Approaches: Preparing for and Preventing Cyberattacks
SPEAKING ENGAGEMENTS
Your Client’s Expert has Been Subpoenaed to Testify Against Them. Now What? , Oregon Association of Defense Counsel Annual Convention (2023)
Evans
Jason P .
Topic: Your Client’s Expert has Been Subpoenaed to Testify Against Them. Now What?
Presented by: Jason Evans, Sussman Shank
Though it is certainly not common, Oregon practitioners in U.S. District Court may, in certain circumstances, find themselves faced with a trial subpoena from the opposing party for one of their own defense experts. If a defendant wishes to quash that subpoena, they will find that there are three approaches taken by federal courts. See House v. Combined Ins. Co. of America, 168 F.R.D. 236 (N.D. Iowa 1996) (outlining generally each of the three approaches: “exceptional circumstances,” “balancing” / “discretionary,” and “entitlement”). They will also find that there is no controlling Ninth Circuit precedent on the question. This short presentation will outline those three tests and will highlight the District Courts’ current lean towards the “exceptional circumstances” test, which often will favor the quashing party’s position.
*Briefing provided with client consent, redactions applied pursuant to client request.
2023 OADC Annual Convention – Lightning
Round
KeyCite Yellow Flag - Negative Treatment
168 F.R.D. 236 United States District Court, N.D. Iowa, Western Division.
Jody Renae HOUSE, Plaintiff, v.
COMBINED INSURANCE COMPANY OF AMERICA and Bola Olorundami, Defendants.
No. C 95–4032–MWB | July 31, 1996.
[2] Evidence Disqualification of Expert
Ability of opposing party to call expert witness, consulted but never designated as expected to testify at trial, depends upon showing of extraordinary circumstances. Fed.Rules Civ.Proc.Rule 26(b)(4)(A, B), 28 U.S.C.A.
39 Cases that cite this headnote
[3] Federal Civil Procedure Identity and location of witnesses and others
Federal Civil Procedure Persons Whose Depositions May Be Taken
Synopsis
In employee's sexual harassment lawsuit against employer, employer filed motion in limine seeking to prevent employee from calling expert witness, designated by employer as expected to be called at trial, but whom employer announced it would not call at trial. The District Court, Bennett, J., held that: (1) designation of expert as likely to testify at trial, even if that designation is subsequently withdrawn, invokes court's discretionarybalancingofprobativevalueversusprejudiceto determine whether to allow opposing party access to expert once designation has been withdrawn, and (2) employer was entitled to depose expert witness and call him at trial.
Employer's motion in limine denied in part and granted in part.
West Headnotes (5)
[1] Evidence Disqualification of Expert
Federal Civil Procedure Identity and location of witnesses and others
Parties should be encouraged to consult experts to formulate their own cases, to discard those experts for any reason, and to place them beyond reach of opposing party, if they have never indicated an intention to use expert at trial.
3 Cases that cite this headnote
Practical effect of designating expert as trial witnessistomakeexpertavailablefordeposition by opposing party. Fed.Rules Civ.Proc.Rule 26, 28 U.S.C.A
44 Cases that cite this headnote
[4] Federal Civil Procedure Identity and location of witnesses and others
Designation of expert as likely to testify at trial, even if that designation is subsequently withdrawn, removes question of whether opposing party should be able to dispose and call expert at trial from exceptional circumstances requirement of procedural rule providing party may discover facts known or opinions held by expert retained or specially employed by party in anticipation of litigation or preparation for trial andwhoisnotexpectedtobecalledaswitnessat trial and, instead, designation of expert as likely to testify at trial invokes court's discretionary balancing of probative value versus prejudice to determine whether to allow opposing party access to expert once designation has been withdrawn.Fed.RulesCiv.Proc.Rule26(b)(4)(A, B), 28 U.S.C.A.; Fed.Rules Evid.Rule 403, 28 U.S.C.A.
81 Cases that cite this headnote
[5] Evidence Former employment or associations
Federal Civil Procedure Identity and location of witnesses and others
House v. Combined Ins. Co. of America, 168 F.R.D. 236 (1996) 71 Fair Empl.Prac.Cas. (BNA) 764 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 1
Declined to Follow by Miller ex rel. Monticello Banking Co. v. Marymount Medical Center, Ky., January 22, 2004
Federal Civil Procedure Persons Whose Depositions May Be Taken
Employee, who brought sexual harassment action against employer, was entitled to depose and call at trial expert witness designated by employer as expected to be called at trial, but whom employer announced it would not call at trial; employee had interest in presenting expert witness because expert had relevant information probative of employee's alleged emotional distress, expert's evidence was not cumulative of that of employee's own expert and toavoidpotentialprejudicetoemployer,noparty or witness would be able to refer to manner in which expert became involved in litigation beyond fact of his examination of employee.
27 Cases that cite this headnote
Attorneys and Law Firms
*237 MargaretPrahlandSabraCraigofEidsmoe,Heidman, Redmond, Fredregill, Patterson, Schatz & Plaza, L.L.P., Sioux City, Iowa, for Plaintiff Jody House.
Christopher Harristhal and John Steffenhagen of Larkin, Hoffman, Daly & Lindgren, Ltd., Bloomington, Minnesota, for Defendant Combined Insurance.
Douglas Phillips of Klass, Hanks, Stoos, Stoik, Villone & Phillips, L.L.P., Sioux City, Iowa, for Defendant Bola Olorundami.
ORDER REGARDING TESTIMONY
TABLE OF CONTENTS
*238 One of several motions in limine filed by the parties in this sexual harassment lawsuit presents the vexing and surprisingly little explored question of whether one party should be able to depose or call at trial an expert designated by an opposing party as expected to be called at trial, but
whom the designating party has announced it will not call at trial. Despite the infrequency with which courts have apparently confronted this question, they have nonetheless postulatednolessthanthreedifferentstandardsforanswering it. The defendant contends that the plaintiff should not be
House v. Combined Ins. Co. of America, 168 F.R.D. 236 (1996) 71 Fair Empl.Prac.Cas. (BNA) 764 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 2
OF DR. TAYLOR
District Judge.
BENNETT,
I. INTRODUCTION AND BACKGROUND 238 II. LEGAL ANALYSIS.................................................................................................. 240 A. Applicable Standards And Pertinent Circumstances...................................... 240 1. The “exceptional circumstances” standard 240 2. “Balancing” or “discretionary” standards 242 3. The “entitlement” standard 244 B.
Proper Standard
245 1. “Entitlement,” “balancing,” or “exceptional circumstances”? 245 2. The balance here 247 III. CONCLUSION........................................................................................................ 249
The
Here
allowed to call a non-testifying defense expert, because no “exceptional circumstances” are presented. Plaintiff contends that defense counsel is attempting to suppress an expert witness previously designated to testify at trial, but whose testimony defendant has now learned will be favorable to plaintiff. Plaintiff therefore contends that she is entitled to present defendant's erstwhile expert, at a minimum, to lay a foundation for his report. Trial of this matter is scheduled to beginAugust5,1996.Thecourtheardoralargumentsonallof the motions in limine on July 25, 1996, but the present ruling concerns only the expert witness issue.1
I. INTRODUCTION AND BACKGROUND
The court's statement of the background for this ruling must perforce be brief. Plaintiff Jody House brought this lawsuit on April 18, 1995, asserting claims of quid pro quo sexual harassment, creation of a sexually hostile work environment, and retaliation for opposing unlawful employment practices
pursuant to 42 U.S.C. § 2000e et seq. Defendants are her formeremployer,CombinedInsuranceCompanyofAmerica, and her supervisor, and alleged harasser, Bola Olorundami. The nature of House's factual allegations is not critical to the present ruling, although her assertion of a claim for damages foremotionaldistressispertinent,becausethepresentdispute involves whether House may depose prior to trial and may call as a witness at trial an expert originally designated by defendant Combined, Dr. Michael J. Taylor, who is a psychiatrist.
On March 15, 1996, House designated her expert witnesses pursuant to court order and Fed.R.Civ.P. 26(b)(4)(A). Her expert witness on House's emotional distress allegedly suffered as a result of defendants' conduct is a social worker, Jennifer Burrows. Combined contends that the initial designation of Ms. Burrows was so vague that Combined was unable to tell the nature of Ms. Burrows's testimony.2 Therefore, Combined contends, in order to rebut whatever testimony Ms. Burrows might present, Combined designated Dr. Taylor as its expert on May 2, 1996.
Dr. Taylor first examined House on June 5, 1996, more than a month after he had been designated as an expert expected to testify at trial. House subsequently noticed Dr. Taylor's deposition and moved to compel production of Dr. Taylor's report on his examination of House. In response, Combined moved to quash the deposition of Dr. Taylor and
for a protective order precluding any discovery from Dr. Taylor on the ground that Combined had decided not to call Dr. Taylor as a witness at trial. Combined has never formally withdrawn its designation of Dr. Taylor as an expert expected to be called at trial. However, Dr. Taylor has been dropped from defendant's witness list in the final pretrial order filed July 19, 1996, and Combined has represented to the court, both in proceedings before Chief Magistrate Judge John A. Jarvey and the undersigned, that it has no intention of calling Dr. Taylor at trial. On July 2, 1996, Judge Jarvey ruled that, pursuant to Fed.R.Civ.P. 35(b), House was entitled to Dr. Taylor's report. However, the magistrate *239 judge concluded that, pursuant to Fed.R.Civ.P. 26(b)(4)(B), an expert employed in anticipation of litigation who is not expected to be called as a witness at trial can be deposed only upon a showing of exceptional circumstances under which it isimpracticableforthepartyseekingdiscoverytoobtainfacts or opinions on the same subject matter by other means, and that no such exceptional circumstances had been shown. In reaching this conclusion, Judge Jarvey cited, inter alia, the undersigned's opinion in Brown v. Ringstad, 142 F.R.D. 461 (S.D.Iowa 1992)
In its motion in limine, filed on June 27, 1996, Combined again moved to bar House from calling Dr. Taylor at trial. House resisted the exclusion of Dr. Taylor's testimony. The court held oral arguments on this and the other issues raised in the parties' motions in limine on July 25, 1996. The court found both the written and oral arguments on this difficult issue to be particularly well presented. At the oral arguments, plaintiff House was represented by counsel Margaret Prahl and Sabra Craig of Eidsmoe, Heidman, Redmond, Fredregill, Patterson, Schatz & Plaza, L.L.P., in Sioux City, Iowa. DefendantCombinedwasrepresentedbycounselChristopher HarristhalandJohnSteffenhagenofLarkin,Hoffman,Daly& Lindgren, Ltd., in Bloomington, Minnesota. Defendant Bola Olorundami was represented by counsel Douglas Phillips of Klass, Hanks, Stoos, Stoik, Villone & Phillips, L.L.P., in Sioux City, Iowa.
InthesamemotioninwhichitmovedtoprecludeHousefrom calling Dr. Taylor, Combined also moved to strike House's expertsonthegroundsoflateandinadequateidentificationof the substance of their testimony. As to Dr. Taylor, Combined stated that, since House still has not provided adequate expert disclosures and Combined seeks exclusion of expert testimony as a sanction, Combined has indicated that it will not call Dr. Taylor as a witness. 3 Combined argues that allowing House to use Dr. Taylor as a witness would be
House v. Combined Ins. Co. of America, 168 F.R.D. 236 (1996) 71 Fair Empl.Prac.Cas. (BNA) 764 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 3
anomalous if House's own experts are stricken. Combined also argued that the situation here is analogous to that addressed in Brown v. Ringstad, and that the rationale for precluding a party from calling an opposing party's nontestifying expert at trial is even stronger than the rationale for barring a party from deposing such a non-testifying expert. At the oral arguments on the motions in limine, Combined further argued that other state cases supported its position, but that the federal cases cited by House in her brief in resistance to the motions in limine did not permit the full scope of trial testimony by one party's expert when called by the opposing party Combined fears House contemplates here.
Furthermore, Combined argued that Durflinger v. Artiles, 727 F.2d 888 (10th Cir.1984), stood for the proposition that only exceptional circumstances would permit a party to call an opposing party's expert witness at trial, and that no such exceptional circumstances had been shown here.
In House's written resistance to that part of the motion in limine seeking to prevent her from calling Dr. Taylor, House contended that she should be allowed to call Dr. Taylor to lay a foundation for his report. House argued that she was absolutely entitled to this report pursuant to Fed.R.Civ.P.
35(b) and Salvatore v. American Cyanamid Co., 94 F.R.D. 156 (D.R.I.1982), and that the decisions in Fitzpatrick v. Holiday Inns, Inc., 507 F.Supp. 979 (E.D.Penn.1981), and Crowe v. Nivison, 145 F.R.D. 657 (D.Md.1993), established her right to call Dr. Taylor to lay a foundation for introduction of his report. At oral arguments, having now received a copy of Dr. Taylor's report pursuant to Judge Jarvey's order, House expanded her argument, asserting that Fitzpatrick and Crowe stand for the broader proposition that a party is entitled to call at trial an opposing party's expert who has conducted a medical examination of the party. House's counsel specifically alleged that Combined's purpose *240 in seeking to exclude testimony by Dr. Taylor was to suppress evidence favorable to House.
During the oral arguments, the court issued an oral ruling that House would be permitted to depose Dr. Taylor prior to trial, if she desired to take that step. However, the court reserved for a subsequent written ruling the question of whether House would be able to present Dr. Taylor's testimony, either live or bydeposition,atthetrial.Thecourtnowprovidesthatwritten ruling.
II. LEGAL ANALYSIS
Examination of the pertinent case law, of which there is surprisingly little, suggests that courts have applied three different standards to the question of whether a party should have access to and be able to use at trial an expert hired by the opposing party. Moving from least to most permissive, the first of those standards is an “exceptional circumstances” standard founded on Fed.R.Civ.P. 26(b)(4)(B). The second standard is articulated in the most recent of the decisions to discussthequestion, Peterson v. Willie, 81F.3d1033(11th Cir.1996), which despite their capable briefing and argument the parties did not discover, although, in some respects, it is more directly on point than any of the decisions cited by the parties. Peterson suggests a “discretionary” or “balancing” standard, involving a balancing of the interests of the party and the court against the potential for prejudice to the party who hired the expert, but who does not wish to use that expert at trial. The third, and most permissive standard, is based upon a few cases finding an “entitlement” to call an opposing party's expert under certain circumstances, despite the opposing party's desire not to have the expert testify. The court finds that these differing standards arise in three different procedural postures and sets of circumstances. This court's somewhat daunting task is to identify the situations in which these standards have each been applied, whether thesituationsactuallyrequiredifferentstandards,and,finally, to determine what circumstances are present here and which standard should apply in these circumstances.
A. Applicable Standards And Pertinent Circumstances
1. The “exceptional circumstances” standard
The “exceptional circumstances” standard, asserted here by Combined, finds its authority in Fed.R.Civ.P. 26(b)(4)(B), which provides as follows:
A party may, through interrogatories or by deposition, discover facts known or opinions held by an expert who has been retained or specially employed by another party in anticipation of litigation or preparation for trial and who is not expected to be called as a witness at trial, only as provided
House v. Combined Ins. Co. of America, 168 F.R.D. 236 (1996) 71 Fair Empl.Prac.Cas. (BNA) 764 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 4
in Rule 35(b) or upon a showing of exceptional circumstances under which it is impracticable for the party seeking discovery to obtain facts or opinions on the same subject by other means.
Fed.R.Civ.P. 26(b)(4)(B) (emphasis added). The circumstances under which discovery is obtainable from an expert consulted, but not expected to be called at trial, must be contrasted with the provisions of Rule 26(b)(4)(A), which provides for discovery from an expert who is expected to be presented at trial:
(3) fear of restraint on the willingness of experts to serve as consultants if their testimony could be compelled; and (4) the substantial risk of “explosive” prejudice stemming from the fact of the prior retention of an expert by the opposing party.
A party may depose any person who has been identified as an expert whose opinions may be presented at trial.
Fed.R.Civ.P. 26(b)(4)(A) (emphasis added). Although commentators and courts have generally recognized four classes of experts created by Rule 26, and the limits on discovery or trial testimony that may be elicited from experts in each of these classes,4 this case *241 involves a fifth class of experts: Experts once designated as likely to testify at trial, but whose designation is subsequently withdrawn.
Combined asserts that this fifth class of experts should be treated like consulted-but-not-testifying experts. Discovery from such experts is generally precluded, except upon a showing of “exceptional circumstances.” Fed.R.Civ.P. 26(b) (4)(B). The rule on access to a consulted-but-not-testifying expert serves a number of interests, as identified by the United States District Court for the Southern District of New York in Rubel v. Eli Lilly & Co., 160 F.R.D. 458, 460 (S.D.N.Y.1995). The district court recognized four interests weighingagainstallowinganopposingpartytodeposeorcall at trial a consultative, non-testifying expert witness: (1) an “important interest in allowing counsel to obtain the expert advice they need in order properly to evaluate and present theirclients'positionwithoutfearthateveryconsultationwith an expert may yield grist for the adversary's mill,” which the courtfoundunderlies Fed.R.Civ.P. 26(b)(4)(B)'slimitationon discovery of consultative, as opposed to testifying, experts;
(2) unfairness of allowing an opposing party to benefit from a party's effort and expense incurred in preparing its case;
Rubel, 160 F.R.D. at 460; see also Rocky Mountain Natural Gas Co. v. Cooper Indus., Inc., 166 F.R.D. 481, 482 (D.Colo.1996) (“ ‘[Rule 26(b)(4)(B) ] is designed to promote fairness by precluding unreasonable access to an opposing party's diligent trial preparation,’ ” quoting Durflinger v. Artiles, 727 F.2d 888, 891 (10th Cir.1984)); In re Shell Oil Refinery, 132 F.R.D. 437, 440 (E.D.La.1990) (quoting the Advisory Committee Notes to Rule 26, which state that “[t]he procedure established in subsection (b)(4)(A) holds the risk [that one side will benefit unduly from the other side's better preparation] to a minimum. Discovery is limited to trial witnesses, and may be obtained only at a time when the parties know who their expert will be. A party must as a practical matter prepare his own case in advance of that time, for he can hardly hope to build his case out of his opponent's expertise,” with emphasis added by that court, which further noted that “Rule [26(b)(4)(B) ] is also designed to prevent a party from building his case on the diligent preparation of his adversary”).
In Durflinger v. Artiles, 727 F.2d 888 (10th Cir.1984), the Tenth Circuit Court of Appeals found these and similar interestsprotectedbyRule26(b)(4)(B)tobedispositiveofthe question of whether one party could call an expert originally designatedbyanopposingparty,butastowhomtheopposing partyhadsubsequentlywithdrawnitsdesignationofintention to use at trial. Durflinger, 727 F.2d at 891. In Durflinger, the Tenth Circuit Court of Appeals held that the party who sought to present the expert's testimony at trial had “violated” Fed.R.Civ.P. 26(b)(4)(B), because it had hired the opposing party's expert, knowing he had been previously retained then dropped by that opposing party, but had not shown the court any“exceptionalcircumstances”foremployingtheexpert. Id. The court found defendants' conduct objectionable, because the expert had formed *242 his opinion on the basis of information furnished to him by the plaintiffs, the expert had been paid for his services by the plaintiffs, and the defendants had an expert testifying on the same psychological principles and procedures and could probably have obtained others. Id.
Another decision, that of the United States District Court for the Eastern District of Louisiana, In re Shell Oil Refinery, 132 F.R.D. 437 (E.D.La.1990), suggests that prior to the
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deadline for designation as an expert witness expected to be calledattrialpursuanttoRule26(b)(4)(A),apartymaynotify the opposing party that an expert will not be testifying, even if the party has previously disclosed expert witness reports of thatexpert. In re Shell Oil Refinery, 132F.R.D.at440.The court therefore barred an opposing party from attempting to obtain discovery from certain experts until and unless those experts were designated as expected to be called at trial. Id.
Implicit in the decision in Durflinger, 727 F.2d at 891, is the assumption that whenever a party decides not to use at trial an expert it has consulted, the “not expected to be called as a witness” provisions of Rule 26(b)(4)(B) come into play. The decision in In re Shell Oil suggests that a party may change anticipated witnesses to non-witnesses up untilthecourt-imposeddeadlineforexchangeofwitnesslists, although the court in that case did not actually have before it a case in which a previous designation of an expert witness had been withdrawn at the time of the exchange of witness lists. In re Shell Oil Refinery, 132 F.R.D. at 437. Instead, the decision in that case was rendered prior to the deadline for any party to designate any expert witnesses as expected to be called at trial. Id. at 440. Other courts do not adhere to these assumptions, finding that there are situations in which the“exceptionalcircumstances”standardofRule26(b)(4)(B) is not applicable to a never-designated expert or one whose designation as likely to testify at trial has been withdrawn. The decisions of these courts are discussed in the following sections.
2. “Balancing” or “discretionary” standards
Other courts have identified circumstances in which they find that the “exceptional circumstances” standard of Rule 26(b)(4)(B) does not apply, even though a party now has a present intention not to use at trial an expert it had consulted, or even designated as likely to be used at trial under Rule 26(b)(4)(A). The most recent of such cases is Peterson v. Willie, 81 F.3d 1033 (11th Cir.1996). In Peterson, the Eleventh Circuit Court of Appeals considered a situation in which the plaintiff, through former counsel, had designated a psychiatrist as an expert witness expected to testify at trial pursuant to Fed.R.Civ.P. 26(b)(4)(A)(i) Peterson, 81 F.3d at 1036. Defendants then noticed the deposition of the expert, to which the plaintiff offered no objection. Id. Shortly before the scheduled deposition, without the knowledge of plaintiff's counsel, the expert re-examined the plaintiff. Id.
At depositions, the expert testified that, as a result of his second examination, his opinion concerning the matters at issue had changed. Id. After the deposition, plaintiff's new counselwithdrewthedesignationoftheexpertasatrialexpert and filed a motion in limine seeking to preclude the expert from testifying on behalf of the opposing parties. Id. The district court permitted the expert to testify concerning his opinion on the case and to testify that he had previously been retained by the plaintiff's former attorney. Id. at 1036–37. The Eleventh Circuit Court of Appeals therefore was required to address whether it was permissible for the expert, designated by one party, but not called by that party, to be called as an expert witness by the opposing party, as well as whether it waspermissibleforthejurytobeinformedthattheexperthad previously been retained by the other party. Id. at 1037.
In Peterson, the plaintiff argued that one of the opposing parties' reasons for calling the expert was to inform the jury thattheexperthadoriginallybeenhiredbyplaintiff'scounsel, but had been withdrawn when counsel disagreed with his opinion, i.e., to suggest that “something was being hidden” fromthe *243 jurybythecounselwhohiredtheexpert.5 Id. House has asserted as an argument for permitting her to offer Dr. Taylor's testimony the assertion that Combined is trying to hide Dr. Taylor's opinion from House and the jury.
However, the court in Peterson recognized the prejudice that results from informing the jury that an expert had originally been consulted by the opposing party. Id. (citing Healy v. Counts, 100 F.R.D. 493 (D.Colo.1984), and Granger v. Wisner, 134 Ariz. 377, 656 P.2d 1238, 1242 (1982)). The Eleventh Circuit Court of Appeals quoted the following observation with approval:
Jurors unfamiliar with the role of counsel in adversary proceedings might well assume that plaintiff's counsel had suppressed evidence which he had an obligation to offer. Suchareactioncoulddestroycounsel's credibility in the eyes of the jury.
Id. (quoting Granger, 134 Ariz. 377, 656 P.2d at 1242). Thecourtcitedotherauthoritiesdescribingas“explosive”the potential prejudicial effect of disclosing that the expert called
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by one party had originally been hired by an opposing party. Id. (citing Rubel, 160 F.R.D. at 460, and 8 CHARLES A. WRIGHT, ARTHUR R. MILLER, AND RICHARD L. MARCUS, FEDERAL PRACTICE AND PROCEDURE: CIVIL § 2032, at 447 (1994)). The appellate court therefore concluded that the district court had erred in allowing disclosure of the fact that the expert testifying at trial had originally been hired by the opposing party. Id. at 1038. This court also recognizes the significant potential prejudice of informing the jury that the expert presently testifying for one party was originally designated, retained, or consulted by the opposing party.
However, the court in Peterson also recognized that courts had split on the more fundamental question of whether one party should be allowed to call an expert originally consulted bytheopposingparty. Id. at1037(citing Granger, 656P.2d 1238, and Sun Charm Ranch, Inc. v. City of Orlando, 407 So.2d 938 (Fla. 5th DCA 1981), as holding that a party may call an expert originally consulted by the opposing party, but must be prohibited from offering evidence that the witness had previously been consulted by the opposing party, and citing Rubel, 160 F.R.D. at 458, as refusing to permit the expert to testify at all absent a showing of need). The court also cited Broward County v. Cento, 611 So.2d 1339 (Fla. 4thDCA,1993),asholdingthatawitnessdesignatedpursuant to Fed.R.Civ.P. 26(b)(4)(A)(i) as expected to be called at trial shouldbetreateddifferentlyfromonemerelyconsultedbythe opposing party. Peterson, 81 F.3d at 1037. The Eleventh Circuit Court of Appeals found whether or not the expert had been designated as expected to be called at trial was not controlling in all respects. Id. However, the court found that “once a witness has been designated as expected to testify at trial, there may be situations when the witness should be permitted to testify for the opposing party.” Id. The court concluded that deciding whether such a situation exists “is committed to the sound discretion of the district court.” Id. at 1037–38 & n. 4. The Eleventh Circuit Court of Appeals recognizedaserroronlythedistrictcourt'sconclusionthatthe jury could be told that the expert had originally been hired by the opposing party, not the conclusion that the expert could testify at trial for the plaintiff. Id. at 1038.
In a recent decision, the United States District Court for the Southern District of New York found that the “exceptional circumstances” standard of Fed.R.Civ.P. 26(b)(4)(B) was not controlling on the question of whether the testimony
of an expert who had been consulted by one party, never designated as an expert by that party, but *244 deposed by the opposing party without objection, should be excluded at trial. See Rubel v. Eli Lilly & Co., 160 F.R.D. 458, 460 (S.D.N.Y.1995). The court found that the interests in “free consultation” of a non-testify expert that Rule 26(b)(4)(B) was intended to protect were not in jeopardy, because of the original consulting party's failure to object to the opposing party's deposition of the expert. Id. In such circumstances, the court found that the fundamental consideration was not “exceptional circumstances,” but the interests of the party seeking access to the expert and the interests of the court in an informed resolution of the claims in the case, balanced against the possibility of prejudice arising from prior retention of the expert by the opposing party. Id. The court found that the party seeking to use the expert had little interest in presenting the testimony of the opposing party's erstwhile consultative expert, because that testimony would be cumulative of testimony from its own experts. Id. However, the court found the possible prejudice to the opposingparty,whohadoriginallyhiredtheexpert,wasgreat. Id. First, it seemed likely that, even if not told, the jury would be able to determine from the lack of an explanation of how the expert came into the case that the expert had been hired bytheopposingparty,and,second,thattherewaslittlereason to require efforts to prevent the jury from knowing how the expert became involved when the party had available to it other experts never consulted by the opposing party. Id. at 461. Expressly treating the question as governed by the balancing of interests required by Fed.R.Evid. 403, the court excluded the expert's testimony, not least because the party seeking to use the expert at trial had had ample time to obtain other expert testimony. Id. at 462
3. The “entitlement” standard
Yet another group of courts apply yet another standard, at least in certain circumstances, to the question of whether a party should be allowed to call at trial an opposing party's expert. In Crowe v. Nivison, 145 F.R.D. 657 (D.Md.1993), the United States District Court for the District of Maryland heldthatsubmissiontoanexaminationbyanexpert“entitled” the examined party not just to a report of the examination pursuant to Fed.R.Civ.P. 35, but to a deposition of the expert for use at trial. Crowe, 145 F.R.D. at 657. The court concluded that neither the provisions of Fed.R.Civ.P. 26(b) (4)(B) nor the work product doctrine barred such discovery
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of the expert's opinions and use of the expert's deposition at trial. Id. at 657. The court specifically found unpersuasive the arguments of the party that had originally consulted the expert that the opposing party should only have access to the expert upon a showing of “exceptional circumstances.” Id. The court found the case was not a typical Rule 26(b)(4) (B) or work product doctrine case, because of the opposing party's submission to an examination and entitlement to a report of that examination pursuant to Rule 35(b). Id. The court found that Rule 35 balances the privacy interests of the party examined with the interest of the party seeking the examination, the judicial system, and society as a whole in arriving at the truth of the matter, and “[i]n return for suffering an invasion of his person, the examined party is entitled to make use of such information as results from the examination.” Id. at 658 (emphasis added).
Similarly, the United States District Court for the Eastern District of Pennsylvania concluded in Fitzpatrick v. Holiday Inns, Inc., 507 F.Supp. 979 (E.D.Pa.1981), that the plaintiff should be able to call the defendant's expert who had examined the plaintiff pursuant to Fed.R.Civ.P. 35, even though the defendant subsequently decided not to use the expertandsoughttopreventtheplaintifffromusingtheexpert or his report at trial. Fitzpatrick, 507 F.Supp. at 979. The court found that fairness required allowing the plaintiff to call the expert as the only person who could establish the foundation for introducing the expert's report, but that further examination of the witness must be limited to the preparation of his report and the facts and opinions contained therein. Id. Fairness also required that the plaintiff pay the physician's expertwitnessfeeiftheplaintiffusedthephysicianattrial. Id. The court therefore allowed a subpoena to issue on behalf of the plaintiff to compel the defendant's *245 erstwhile expert to appear at trial as plaintiff's witness. Id.
experts to formulate their own cases, to discard those experts for any reason, and to place them beyond the reach of an opposing party, if they have never indicated an intention to use the expert at trial. See, e.g., Rubel, 160 F.R.D. at 460–61 (identifying interests served by Rule 26(b)(4) (A) and (B)). Such a consulted-but-never-designated expert might properly be considered to fall under the work product doctrine that protects matters prepared in anticipation of litigation. Durflinger, 727 F.2d at 891 (party should not have access to opposing party's diligent trial preparation, including experts consulted but not expected to be called at trial); Rocky Mountain Natural Gas Co., 166 F.R.D. 481, 482 (purpose of Rule 26(b)(4)(B) is to prevent a litigant from unfairly benefitting from an opposing party's work and preparation). For this reason also, the ability of an opposing party to call a never-designated expert at trial should depend upon a showing of “extraordinary circumstances.”
[3] [4] However, once an expert is designated, the expert is recognized as presenting part of the common body of discoverable, and generally admissible, information and testimony available to all parties. The practical effect of a Rule 26 designation of an expert is to make an expert available for deposition by the opposing party, see Ringstad, 142 F.R.D. at 465 (“If the expert is designated as a trial witness, the expert may be deposed by the opposing party.”);
B. The Proper Standard Here
[1] [2] This court is persuaded that whether the witness has been designated as an expert expected to testify at trial pursuant to Fed.R.Civ.P. 26(b)(4)(A) is a very significant difference from the situation in which an expert has merely been consulted by a party, but never designated as likely to testify at trial. Parties should be encouraged to consult
In re Shell Oil Refinery, 132 F.R.D. at 440 (designation pursuant to Rule 26(a)(4)(A), as contrasted with subsection (B), authorizes discovery only from designated experts and that discovery may not occur until designation of an expert as expected to be called at trial), and such a deposition preserves the testimony of the expert, should the expert later become unavailable, or provides a basis for impeachment, should the expert's opinion offered at trial differ. Thus, Rule 26 designation waives the “free consultation” privilege a party enjoys as to its non-testifying experts. Cf. Rubel, 160 F.R.D. at 460 (“free consultation” privilege waived by permitting deposition of non-testifying expert). The court therefore concludes that designation of an expert as expected to be called at trial, pursuant to Fed.R.Civ.P. 26(b)(4)(A), even if that designation is subsequently withdrawn, takes the opposing party's demand to depose and use the expert at trial out of the “exceptional circumstances” category of Rule 26(b)(4)(B) Contra Durflinger, 727F.2dat891(assuming expert as to whom designation is withdrawn should be treated as stated in Rule 26(b)(4)(B)).6
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1. “Entitlement,” “balancing,” or “exceptional circumstances”?
*246 Furthermore,designation,andsubmissiontoamedical examination by the designated expert, create the kind of relianceontheavailabilityoftheexpertthatthecourtin Rubel found lacking where an expert had been consulted, but never designated. See Rubel, 160 F.R.D. at 462 (plaintiff could not be heard to argue that she relied upon the availability of defendant's undesignated expert, where neither plaintiff nor defendant ever designated the expert); see also Crowe, 145 F.R.D. at 658 (Rule 35 balances the privacy interests of the party examined with the interest of the party seeking the examination, the judicial system, and society as a whole in arriving at the truth of the matter, and “[i]n return for suffering an invasion of his person, the examined party is entitled to make use of such information as results from the examination”). However, the court does not find that either designation under Rule 26(b)(4)(A) or the examination of the opposing party by the expert under Rule 35 creates an “entitlement” of the opposing party to depose or use another party's expert at trial. Contra Crowe, 145 F.R.D. at 657–58; Fitzpatrick, 507 F.Supp. at 979. Rule 35 undeniably provides for invasion of the privacy of the examined party, and in subsection (b)(2), specifically provides for waiver of the examined party's privilege if that party requests a report from the examining expert. Fed.R.Civ.P. 35(b)(2). However, Rule 35 just as undeniably does not provide for deposition or use at trial of the examining expert by either party. Instead, Rule35providesonlyfortheexaminedparty'srighttoreceive the expert's report. Fed.R.Civ.P. 35(b)(1) (“If requested by the party against whom an order is made under Rule 35(a) or the person examined, the party causing the examination to be made shall deliver to the requesting party a copy of the detailed written report of the examiner....”; emphasis added); Ringstad, 142 F.R.D. at 464 (Rule 35(b)(1) provides that an examined party is entitled to a copy of the examiner's report);
Salvatore, 94 F.R.D. at 158 (examined party is entitled, upon request, to a report of an examining expert under Rule 35(b)(1)).
What, then, is the proper standard for House's access to and use at trial of Dr. Taylor, where both a Rule 26(b)(4)(A) designation has occurred, albeit a designation subsequently withdrawn, and a Rule 35 medical examination has occurred? The court concludes that the proper standard in these circumstances is a “discretionary” standard, where the trial court's discretion is guided by a balancing of probative value againstprejudiceunder Fed.R.Evid. 403 Accord Peterson,
81 F.3d at 1036–38; Rubel, 160 F.R.D. at 460–61 7 Such a standard takes into account the interests Rule 26 was designedtoprotectandthoseofthepartywhooriginallyhired the expert, to the extent that party has not waived such an interest, Rubel, 160 F.R.D. at 460 (party who hired expert waived “free consultation” privilege by allowing deposition of the expert), as well as taking into account the peculiar prejudice that could arise if the jury is informed that an expert presented by one party was hired, then dropped, by the other party. See, e.g., Peterson, 81 F.3d at 1037 (discussing this prejudice). It also recognizes the court's interest in the proper resolution of issues, Rubel, 160 F.R.D. at 460 (identifying the court's interest as “an informed resolution of plaintiff's claim”); Crowe, 145 F.R.D. at 658 (identifying the court's interest and that of society as a whole as “arriving at the truth of the matter”), which is more objective than the plaintiff's interest in proving the truth of his or her claims, and the interests of the party seeking the testimony in presenting to the jury the results of an intrusive examination where those results are favorable to the party who suffered the invasion of privacy. Crowe, 145 F.R.D. at 658 (examined party's interest after Rule 35 examination is presentation of results of the examination “[i]n return for suffering an invasion of his person”).
*247 This conclusion is not contrary to the undersigned's prior opinion in Ringstad. Ringstad, 142 F.R.D. at 464–65. In Ringstad, the undersigned concluded that, despite a Rule 35 examination of the plaintiff, Rule 26(b)(4)(B) barred the deposition of the opposing party's expert who was not expected to be called at trial. Id. Ringstad is therefore consistent with what the court recognizes here to be the general rule with regard to never-designated experts and the court's present determination that a Rule 35 examination does not create an “entitlement” to depose or use at trial an expert who has examined the plaintiff. Ringstad, however, did not involve the situation where an expert was designated, then withdrawn after a Rule 35 examination when his opinion was actually ascertained. However, in Ringstad, the undersigned observed that “[i]f the expert is designated as a trial witness, the expert may be deposed by the opposing party.” Id. at 465 (citing Fed.R.Civ.P. 26(b)(4)(A)). The undersigned also observed that the policy behind Rule 26's requirements for access to experts was “fairness,” id., which the court believes is best protected by the standard enunciated here as applicable in the unique circumstances of withdrawal of a prior designation. Thus, the court considers the situation
House v. Combined Ins. Co. of America, 168 F.R.D. 236 (1996) 71 Fair Empl.Prac.Cas. (BNA) 764 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 9
here to be governed by balancing, in the court's discretion, probativevalueversusprejudice,asarticulatedin Fed.R.Evid. 403
2. The balance here
[5] Performing the required balancing of interests here, the court finds that House has a very significant interest in presenting to the jury the results of Dr. Taylor's examination. However, the court is less convinced than was the court in Crowe, 145 F.R.D. at 658, that the plaintiff has an interest in presentation of evidence resulting from an “invasion of privacy” Dr. Taylor's examination may have occasioned. The court is instead convinced that the plaintiff has an interest in presenting Dr. Taylor as a witness, because he now has relevantinformationprobativeofplaintiff'sallegedemotional distress, and that there is a difference between the nature of Dr. Taylor's psychiatric evaluation and House's own expert's methods, where House's own expert is a social worker, not a physician, such that Dr. Taylor's testimony is not merely cumulative of House's own expert's opinion. Cf. Rubel, 160 F.R.D. at 462 (court precluded use of the expert by an opposing party, because the evidence was cumulative of the opposing party's own experts, such that the prejudice to the other party was not outweighed). The interests weighing in favor of presentation of Dr. Taylor's evidence also include the court's interest in proper resolution of the issues before the court, Rubel, 160 F.R.D. at 460, and the fact that the designation of Dr. Taylor as an expert expected to be called at trial established the “reliance” missing in Rubel, because House was only asked to consent to an examination after Dr. Taylor had been designated, and that consent may have been based,atleastinpart,ontheexpectationthatDr.Taylorwould testify at trial. The much more complicated side of the scales is the weight to be given the potential prejudice to Combined and any other interests Combined may have in precluding Dr. Taylor's testimony.
All too often, parties designate expert witnesses as likely to testify at trial to meet a court-imposed deadline, even though they have not actually hired the expert, but are only planningto,andeventhoughtheexperthasnotconductedany examination of the opposing party, if necessary to the expert's opinion, or even been provided with pertinent information from which the expert's opinion will be derived. The court's holding here will serve the salutary policy of requiring parties to give some thought and care to their expert witness designations, because once those designations are made, the
party will have to live with the consequence that the opposing party will likely be given the opportunity to depose the expert or even to call the expert at trial on their own behalf. Furthermore, one purpose of Rule 26 is to prevent a party from piggybacking on another party's trial preparation. See, e.g., Rubel, 160 F.R.D. at 460. Thus, a party who waits to make a designation of an expert, or waits to discover the expert's opinion on the merits, because the opposing party hasn't yet designated its expert or experts, is attempting to piggyback its own discovery and trial preparation on *248 that of the opposing party, contrary to the purpose of Rule 26. Such a party has not properly utilized an as yet undesignated expert to ascertain the merits of the case, nor taken advantage of the protection from discovery such expert advice on the meritsofthecaseenjoys. See Rubel, 160F.R.D.at460(use of an undesignated expert and the protection from discovery afforded an undesignated expert is to allow a party to make an evaluation of the merits of the case without fear of the opposingpartylookingovertheparty'sshoulder).Inthiscase, Combinedhasalwaysknownthatemotionaldistressdamages would be at issue in this case, from the complaint and Ms. Burrows's records concerning House supplied to Combined in 1995, but seemingly did not take the steps necessary to prepare to meet that claim. The court finds little interest in relieving a party of the consequences of an expert designation made simply to meet a court-ordered deadline, when Rule 26 provides every protection for finding and using an expert to prepare for trial prior to designation of the expert as expected to testify at trial.
However, the court sees a tremendous potential for prejudice to Combined simply in the revelation to the jury that Combined originally hired, designated, then dropped Dr. Taylor as an expert after his examination of the plaintiff once Dr. Taylor's opinions were actually known. Accord Peterson, 81 F.3d at 1036–37. Combined should not suffer the obvious prejudice disclosure of its prior contact with Dr. Taylorwouldlikelyhavewherethatprejudicecanbeavoided. The proper evidentiary issue remains Dr. Taylor's opinion, not how he became involved in the case, as only his opinion serves the plaintiff's proper interests in discovering the truth of the plaintiff's claims. Thus, House's argument to the court for access to Dr. Taylor based on assertions that Combined is improperly “hiding” information is an attempt to trade on the very prejudice this court concludes it must prevent.
The court concludes that it can indeed avoid or largely eliminate the potential prejudice of disclosure to the jury
House v. Combined Ins. Co. of America, 168 F.R.D. 236 (1996) 71 Fair Empl.Prac.Cas. (BNA) 764 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 10
of Combined's prior contact with Dr. Taylor. Neither party nor Dr. Taylor himself will be allowed to refer to how Dr. Taylor became involved in the case. See Peterson, 81 F.3d at 1038; Fitzpatrick, 507 F.Supp. at 979. Contrary to the concernsofthecourtin Rubel, 160F.R.D.at461&n.3,the courtconsidersitunlikelythatthejurywillbeconcernedwith how Dr. Taylor became involved in the litigation. House's own emotional distress expert, Ms. Burrows, is a “treating” professional, and the jury is likely to assume unless told otherwise, on the basis of Dr. Taylor's examination of House, that he too became involved in this case to treat or evaluate House. The court will allow House to call Dr. Taylor, so long as evidence of how he became involved in the case is excluded. The court's conclusion is in accord with the conclusions of the Eleventh Circuit Court of Appeals in Peterson, in which the appellate court concluded that the district court should not have allowed the expert to testify as to how he became involved in the case, but did not find error in the district court's decision to allow the expert to testify.
Peterson, 81 F.3d at 1038; see also Fitzpatrick, 507 F.Supp. at 979 (reaching a similar conclusion, by allowing testimonyoftheexpert,butlimitedtothefactsandopinionsin his report). If House decides to call Dr. Taylor at trial, fairness dictates that House pay his expert witness fee. Fitzpatrick, 507 F.Supp. at 979
Because the court concludes that House is entitled to call Dr. Taylor as a witness at trial, under the circumstances presented here, and in light of a balance of the parties' interests against prejudice to Combined, the court will allow the pretrial deposition of Dr. Taylor by House in order to preserve his testimony for trial,8 should he be unavailable at that time for any reason. 9
*249 III. CONCLUSION
The court concludes that designation of an expert as likely to testify at trial, pursuant to Fed.R.Civ.P. 26(b)(4)(A), even if that designation is subsequently withdrawn, removes the question of whether an opposing party should be able to depose and call the expert at trial from the “exceptional circumstances” requirements of Fed.R.Civ.P. 26(b)(4)(B). Instead, designation of the expert as likely to testify at trial invokes the court's discretionary balancing of probative value versus prejudice articulated in Fed.R.Evid. 403 to determine whetherornottoallowtheopposingpartyaccesstotheexpert once the designation has been withdrawn. After conducting suchabalanceofinterestsinthiscase,thecourtconcludesthat House may depose Dr. Taylor and call him at trial. However, inordertoavoidthepotentialforprejudicetoCombinedifthe jury is advised that Combined originally hired, then dropped, Dr. Taylor as an expert, no party or witness may refer to the manner in which Dr. Taylor became involved in this litigation beyond the fact of his examination of the plaintiff. Also, in the interests of fairness, if House calls Dr. Taylor, House will be required to pay his expert witness fee.
Combined's motion in limine concerning Dr. Taylor is denied to the extent that it seeks to preclude deposition and trial testimonyofDr.Taylor,butgrantedtotheextentthatnoparty may refer to the manner in which Dr. Taylor became involved in this litigation beyond the fact of his examination of the plaintiff. In order to preserve Dr. Taylor's testimony should he be unavailable at the time of trial, House may depose Dr. Taylor prior to trial, any prior order notwithstanding.
Footnotes
1 Other issues, though no less complicated than the present one, will not require as much last-minute pretrial preparation by the parties, whichever way they are resolved. Therefore, they will be addressed in a separate ruling, if necessary, after the parties complete a settlement conference scheduled for July 30, 1996.
House v. Combined Ins. Co. of America, 168 F.R.D. 236 (1996) 71 Fair Empl.Prac.Cas. (BNA) 764 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 11
IS SO ORDERED. All Citations
F.R.D. 236, 71 Fair Empl.Prac.Cas. (BNA) 764
IT
168
2 However, House's counsel contended that defendants had available to them from late in 1995 all of Ms. Burrows's records concerning House, so that her opinions and testimony were unlikely to surprise anyone.
3 The court finds this explanation of why Combined no longer wishes to call Dr. Taylor to be disingenuous at best. The court believes the more plausible explanation for why Combined no longer wishes to call Dr. Taylor is that suggested by Judge Jarvey: “Apparently, Dr. Taylor's opinions must not be favorable to the defendants' position because they do not want to produce a copy of Dr. Taylor's report and have stated that they will not call him as a witness at trial.” Order of July 2, 1996, p. 2.
4 For example, the Tenth Circuit Court of Appeals in Ager v. Jane C. Stormont Hosp. & Training Sch. for Nurses, 622 F.2d 496 (1980), adopted the four classifications of commentators Wright and Miller:
(1) Experts a party expects to use at trial. The opponent may learn by interrogatories the names of these trial witnesses and the substance of their testimony but further discovery concerning them can be had only on motion and court order.
(2) Experts retained or specially employed in anticipation of litigation or preparation for trial but not expected to be used at trial. Except as provided in rule 35 for an examining physician, the facts and opinions of experts in this category can be discovered only on a showing of exceptional circumstances.
(3) Experts informally consulted in preparation for trial but not retained. No discovery may be had of the names or views of experts in this category.
(4) Experts whose information was not acquired in preparation for trial. This class, which includes both regular employees of a party not specially employed on the case and also experts who were actors or viewers of the occurrences that gave rise to the suit, is not included within Rule 26(b)(4) at all and facts and opinions they have are freely discoverable as with any ordinary witness. [Footnotes omitted].
Wright & Miller, Federal Practice and Procedure: Civil § 2029[.]
Ager, 622 F.2d at 500–01; see also Healy v. Counts, 100 F.R.D. 493, 495–96 (D.Colo.1984) (noting Wright and Miller's four categories of experts as articulated in Ager, but finding that its case involved only two of the categories, the second and third).
5 The other reason the plaintiff in Peterson asserted was that defendants had called plaintiff's formerly designated expert merely to buttress the testimony of their own expert, and therefore the evidence was cumulative. Peterson, 81 F.3d at 1037. That issue has not been asserted directly here. However, the court notes that “cumulativeness” is less of a possible issue here, since House's own expert is a social worker, not a psychiatrist. Thus, House's own expert will not testify to the same psychological principles and procedures as Dr. Taylor. Cf. Durflinger, 727 F.2d at 891 (party's own experts would testify to the same psychological principles and procedures as the opposing party's expert, and therefore the party did not have a need to call the opposing expert, as his testimony would have been cumulative).
6 The present case is also distinguishable from Durflinger however, to the extent that the information upon which Dr. Taylor formed his opinion was not provided by Combined, but by House herself in the course of an examination. Cf. Rocky Mountain Natural Gas Co., 166 F.R.D. 481, –––– (the opposing party was not responsible for the information and opinions its consultative experts acquired regarding the case before being retained by that opposing party, and therefore the interests identified in Durflinger were not implicated). Pursuant to Fed.R.Civ.P. 35(b)(1), House was entitled, at a minimum, to Dr. Taylor's report. The state court decisions cited by Combined are also, therefore, inapplicable, because none of those decisions considers
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whether different standards apply in a situation in which a party had originally designated a witness as likely to testify at trial, then withdrawn that designation, and only one of them also involves a medical examination of the party demanding access to the expert. See Young v. Strong, 118 A.D.2d 974, 499 N.Y.S.2d 988 (1986) (concluding a party may not call an opposing party's expert, but not considering the question of whether designation of an expert as likely to testify at trial would require application of a different standard, and further not involving an expert who had examined the plaintiff); Gugliano v. Levi, 24 A.D.2d 591, 262 N.Y.S.2d 372 (1965) (not considering the effect of designation of an expert as likely to be called at trial, although the case did involve a medical examination of the opposing party); Brink v. Multnomah County, 224 Or. 507, 356 P.2d 536 (1960) (expert was hired as an “adviser,” not as a testifying expert).
7 Indeed, the court believes that this standard should be applicable whenever a Rule 26(b)(4)(A) designation has occurred, but that the factor of a Rule 35 examination of the opposing party weighs particularly heavily in favor of the examined party's interests in all facts relevant to the examined party's claims coming to light. See Crowe, 145 F.R.D. at 658 (identifying these as the examined party's interests).
8 This conclusion is contrary to Judge Jarvey's ruling of July 2, 1996, but the court concludes that Judge Jarvey assumed that the “exceptional circumstances” standard was applicable here, and this court's conclusion is to the contrary.
9 Although it was not the only reason Dr. Taylor might be unavailable, the parties expressed some concern that Dr. Taylor might fall outside of the subpoena power of this court at the time of trial, because he resides in Des Moines, which is outside of this district and more than one hundred miles away. The court has not as yet been directly presented with the question of whether Dr. Taylor is subject to the court's subpoena power, nor with the question of whether Dr. Taylor is otherwise unavailable, and will, of course, await such a question, should it arise, before ruling on it. However, the court observes that Fed.R.Civ.P. 45 provides, inter alia, that a federal court may “borrow” the subpoena powers of state courts in the state in which it sits. Fed.R.Civ.P. 45(b)(2) (providing in part that “a subpoena may be served at any place within the district of the court by which it is issued, or at any place without the district that is within 100 miles of the place of the ... trial specified in the subpoena or at any place within the state where a state statute or rule of court permits service of a subpoena issued by a state court....”; emphasis added). The court also observes that Iowa Rule of Civil Procedure 147 provides that “oral depositions may be taken only in this state, or outside it at a place within one hundred miles from the nearest Iowa point ...,” Iowa R.Civ.P. 147(a), but that Rule 155 provides that if subpoenaed, “[n]o resident of Iowa shall be thus subpoenaed to attend out of the county where he resides, or is employed, or transacts his business in person.” Iowa R.Civ.P. 155(b)
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(BNA)
End of Document © 2023 Thomson Reuters. No claim to original U.S. Government Works.
Derek J. Ashton, OSB 871552 dashton@sussmanshank.com
Jason P. Evans, OSB 193573 jevans@sussmanshank.com
SUSSMAN SHANK LLP
1000 SW Broadway, Suite 1400
Portland, OR 97205-3089
Telephone: (503) 227-1111
Facsimile: (503) 248-0130
Attorneys for Defendants
Defendants.
UNITED STATES DISTRICT COURT
DISTRICT OF OREGON
PORTLAND DIVISION
DEFENDANTS’ MOTION TO QUASH
PLAINTIFFS’ TRIAL SUBPOENA TO R. LEE FOSTER
ORAL ARGUMENT REQUESTED
CERTIFICATION
Pursuant to LR 7-1(a), counsel for Defendants certify that the parties made a good faith effort via telephone conference on November 11, 2022, to resolve the following dispute and have been unable to do so.
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DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’ TRIAL SUBPOENA TO R. LEE FOSTER
SUSSMAN SHANK LLP, ATTORNEYS AT LAW 1000 SW BROADWAY, SUITE 1400, PORTLAND, OREGON 97205-3089 TELEPHONE (503) 227-1111 | FACSIMILE (503) 248-0130
, Plaintiffs, v.
MOTION
Pursuant to FRCP 45, Defendants (collectively, “Defendants”) respectfully request that this Court issue an order quashing Plaintiffs’ trial subpoena to Defendants’ potential witness, economics expert, R. Lee Foster. This motion is supported by the Court’s own record, the Declaration of Derek Ashton, and the Points and Authorities below.
POINTS AND AUTHORITIES
A. Background
Defendants bring this Motion to Quash because Plaintiffs have served a trial subpoena on Defendants retained economist, R. Lee Foster, and intend to present testimony from Mr. Foster in Plaintiffs’ case-in-chief. Plaintiffs are doing this in an attempt to cure their failure to disclose an economist pursuant to this Court’s Order.
On June 17, 2022, the date set for Simultaneous Exchange of Expert Disclosures, however, Plaintiffs did not disclose an economist while Defendants did. Declaration of Derek Ashton in Support of Defendants’ Motion to Quash Plaintiffs’ Trial Subpoena to Lee Foster (“Decl. Ashton”), ¶ 2 and ¶ 3; Exhibit 1, Plaintiffs’ Expert Witness Disclosure and Exhibit 2, Defendants’ Expert Disclosures. Thereafter, on June 27, 2022, the date set for Supplemental Expert Disclosures, Plaintiffs disclosed an economic loss expert, Eric Knowles, and subsequently produced his report See id., ¶ 4; Exhibit 3, Plaintiffs’ Supplemental Expert Witness Disclosure, at 6 (supplemented expert information provided in bold type). Mr. Knowles’ report, on its face, makes clear that he is a rebuttal witness:
Dear Mr. Mallove:
You have requested a rebuttal report regarding the opinions of earnings capacity loss for alleged by defense expert Lee Foster, CPA, in his report authored on June 17, 2022.
SUSSMAN SHANK LLP, ATTORNEYS AT LAW 1000 SW BROADWAY, SUITE 1400, PORTLAND, OREGON 97205-3089 TELEPHONE (503) 227-1111 | FACSIMILE (503) 248-0130 Page 2 - DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’
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LEE FOSTER
Id., ¶ 5; Exhibit 4, Knowles Report, dated June 27, 2022 (“Knowles Report”), at 1 (emphasis added).
Then, on October 24, 2022, pursuant to this Court’s Jury Trial Management Order (ECF No. 42), the parties submitted their Witness Lists and Witness Statements. Plaintiffs did not list Mr. Foster among their potential witnesses nor did they provide any witness statement for him. See generally, Plaintiffs’ Witness List (ECF No. 48); Plaintiffs’ Witness Statements, at 1-6 (ECF No. 49). They did, however, list their new-found economics expert, Mr. Knowles, without indicating that he was, as noted, a rebuttal witness. And in their Witness Statement they said that Mr. Knowles would “testify consistent with his attached written report dated June 27, 2022, regarding the past and future income loss sustained by plaintiff as a result of the subject collision,” and that he was “also expected to testify in rebuttal to testimony offered by defendant’s economic expert, Lee Foster, CPA.” Plaintiffs’ Witness Statements, at 6 (ECF No. 49).
In their Motions in Limine, filed on October 31, 2022, Defendants seek to limit Mr. Knowles to rebuttal testimony only, because he was not disclosed by the date set for Simultaneous Exchange of Expert Disclosures and, in any event, because his report says he was retained by Plaintiffs to rebut “the opinions of earnings capacity loss for alleged by defense expert Lee Foster[.]” Decl. Ashton, ¶ 5; Exhibit 4, Knowles Report, at 1; see also Defendants’ Motions in Limine, at 9-12 (ECF No. 62). In response, Plaintiffs acknowledged their failure to disclose Mr. Knowles and his proposed testimony in their initial expert disclosure, but ask the court to blink that problem away and let Mr. Knowles testify anyway. Plaintiffs’ Memorandum RE Defendants’ Motions in Limine, at 7 (ECF No. 66). The response also informed Defendants that Plaintiffs’ counsel had issued (or was preparing to issue) a trial subpoena to Defendants’ expert, Lee Foster, in order to secure his attendance at trial for purposes
LEE FOSTER
SUSSMAN SHANK LLP, ATTORNEYS AT LAW 1000 SW BROADWAY, SUITE 1400, PORTLAND, OREGON 97205-3089 TELEPHONE (503) 227-1111 | FACSIMILE (503) 248-0130 Page 3
DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’ TRIAL SUBPOENA TO
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R.
of testifying for them in in their case-in-chief. For the reasons that follow, Plaintiffs’ trial subpoena to Mr. Foster must be quashed.
B. Plaintiffs’ subpoena must be quashed because it is merely an attempt to circumvent requirements of the federal discovery process
“‘[T]rial subpoenas are not intended as a backdoor for discovery that could have been obtained before trial.’” Prewitt v. Mississippi State University, 2012 WL 13005949, *1 (E.D. Miss. Aug. 10, 2012) (quoting IQ Prods. Co. v. Onyx Corp., 48 Fed.Appx. 107, *4 (5th Cir. Aug. 23, 2002)) (additional citation omitted). If a trial subpoena has “circumvented the discovery process,” the Court operates well within its discretion in quashing it. See Progressive Emu Inc. v. Nutrition & Fitness Inc., 785 Fed.Appx. 622, 629-30 (11th Cir. 2019) (affirming district court’s quashal of trial subpoena and award of attorney fees to defending party where the subpoena at issue subjected its target to undue burden and expense, thereby “violat[ing] Rule 45 and circumvent[ing] the discovery process”).
Here, Plaintiffs’ trial subpoena is a clear attempt to circumvent the discovery process and obtain expert testimony (discovery) in their case-in-chief that could easily have been obtained before trial. Indeed, the expert testimony Plaintiffs seek to present in their case-in-chief by way of Defendants’ economic expert is the same sort of evidence (economics, wage loss, etc.) that Plaintiffs’ economics expert, Eric Knowles, could have presented had he been timely retained to do so and properly disclosed as ordered.
1. Plaintiffs’ attempt to circumvent the discovery process and privileges
Plaintiffs’ trial subpoena to Mr. Foster is an attempt to circumvent the limitations on expert discovery in federal court and should therefore be quashed. Rule 26(b)(4) “remains a limitation on the right of access by an opposing party to the evidence of experts who have been retained to testify in the case, and that the discovery of the facts and opinions of those experts cannot [be] obtain[ed] solely under Rule 45 where, as here, a bare subpoena duces tecum has
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issued for the experts’ files.” Marsh v. Jackson, 141 F.R.D. 431, 432 (W.D. Va. Feb. 27, 1992)
(emphasis added). Advisory committee notes to Rule 45 explain that FRCP 45(c)(3)(B)(ii)
“provides appropriate protection for the intellectual property of the non-party witness [and] does not apply to the expert retained by a party, whose information is subject to the provisions of Rule 26(b)(4).” Rule 45, 1991 Amendment, Subsection (c) advisory committee notes (emphasis added).
As indicated, Rule 26(b)(4) and, concurrently, Rule 30, traditionally have been seen as limitations on the methods by which information may be discovered from experts retained by a party. None of the methods of discovery allowed under Rules 26(b)(4) and 30 permit the use of bare Rule 45 subpoenas duces tecum Instead, they operate as a control, or brake if you will, on the potential runaway use of the subpoena duces tecum to compel the production of the evidence of experts retained by a party to testify at trial. Marsh, 141 F.R.D. at 433.
The “brake” effect Rule 26 has upon the use of Rule 45 subpoenas finds ample support in prior case law. See, e.g., Spencer v. Greenwald, 2022 WL 2180052, *3 (D. Idaho Jun. 15, 2022)
(reiterating that “‘Rule 26(b)(4) remains a limitation on the right of access by an opposing party to the evidence of experts who have been retained to testify in the case ... the discovery of the facts and opinions of those experts cannot obtain solely under Rule 45.’” (quoting Marsh, 141 F.R.D. at 431)); see also, Winchester Surplus Lines Insurance Company v. Interstate Underground Warehouse & Storage, Inc., 2017 WL 2313288, at *2 (W.D. Mo. May 18, 2017)
(“Rules 26 and 30 operate as a control, or brake if you will, on the potential runaway use of the subpoena duces tecum to compel the production of the evidence of experts retained by a party to testify at trial.” (citing Marsh, 141 F.R.D. at 433));
Though Plaintiffs’ subpoena at issue here is for trial testimony as opposed to the pretrial production of documents, the same principles apply because ultimately, it is information and evidence (testimony) that Plaintiffs could have obtained well prior to today’s date, and indeed should have obtained as evidenced by their late retention of an economics (rebuttal) expert of
FOSTER
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DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’
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R. LEE
their own. Thus, Plaintiffs’ subpoena, if permitted to stand, would not only circumvent the federal discovery process, it would obviate it.
Finally, to permit Plaintiffs to call a defense expert for direct examination in their casein-chief would substantially undermine if not completely dissolve principles of privilege and doctrinal protections afforded even to retained, testifying experts. For example, under FRCP 26(b)(4)(C), an expert’s trial-preparation communications with the retaining party’s attorney are strictly protected “regardless of the form of the communications” unless the communications fall into three narrow categories, all of which relate to the expert’s opinions and compensation. Placing Mr. Foster on the stand for direct examination by Plaintiffs, not cross-examination by them, will surely risk disclosure of privileged information.
2. Plaintiffs’ misuse of trial subpoena
Plaintiffs’ trial subpoena is not aimed at ensuring the attendance of their economic expert (Mr. Knowles) at trial, or even ensuring that Defendants’ expert (Mr. Foster) will remain at trial for cross-examination in the event he is called by Defendants. Rather, it is aimed at presenting expert testimony in their case-in-chief in the event they are prevented from presenting any because of the failure to disclose their own expert on time
In this case, the parties could and indeed did retain an economic expert of their choosing and in whatever manner they felt was best-suited to the needs of their case and ultimately, their trial strategy. Plaintiffs were free to depose Mr. Foster. They did not. Instead, they hired an economic expert of their own, but only to rebut Mr. Foster’s opinions and conclusions. The only difference between the two economic experts is that one Lee Foster was timely and properly retained and disclosed to testify in Defendants’ case-in-chief, while the other Eric Knowles was retained specifically to rebut Mr. Foster’s conclusions and was not timely or properly retained and disclosed to testify in Plaintiffs’ case-in-chief.
Where a party has failed to timely designate an expert witness in accordance with a
SUSSMAN SHANK LLP, ATTORNEYS AT LAW 1000 SW BROADWAY, SUITE 1400, PORTLAND, OREGON 97205-3089 TELEPHONE (503) 227-1111 | FACSIMILE (503) 248-0130 Page 6 - DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’ TRIAL SUBPOENA TO R.
LEE FOSTER
Court’s pretrial order, it is proper to exclude those experts in line with the relief Defendants seek in their fourth and fifth motions in limine See Geiserman v. MacDonald, 893 F.2d 787, 790-92 (5th Cir. 1990) (upholding decision to exclude expert witnesses based on party’s failure to designate experts until two weeks after the expiration of the discovery deadline because explanations for delay were “weak, at best”). Plaintiffs, apparently now aware of their error, and in an attempt to remedy their mistake, seek to call a defense expert in their case-in-chief.
Put simply, Plaintiffs are attempting to leverage a trial subpoena not to gain testimony and information that they could not otherwise have obtained since this action was commenced over eighteen months ago in April 2021, but rather, to remedy their chosen trial strategy That is not the purpose of a trial subpoena, and this Court should not allow it. Defendants’ motion to quash must be granted.
C. Plaintiffs’ trial subpoena should be quashed because it is merely an avenue to obtain relief from a situation caused by carelessness
Here, Plaintiffs had ample opportunity to hire an economic expert ahead of the June 17, 2022 simultaneous disclosure deadline. The instant matter was commenced in Multnomah County State Court in April 2021 and was removed shortly thereafter, on or around April 28, 2021. So, as of May 2021 almost one full year before expert disclosures and reports were exchanged, Plaintiffs knew they would be required to disclose their retained, testifying experts on a date certain. They failed to do so, and even their own expert’s reporting makes his role perfectly clear:
You have requested a rebuttal report regarding the opinions of earnings capacity loss for alleged by defense expert Lee Foster, CPA, in his report authored on June 17, 2022.
Decl. Ashton, ¶ 5; Exhibit 4, Knowles Report, at 1 (emphasis added). The remainder of Mr. Knowles’ report is comprised of two bullet pointed sections, each of which directly addresses and rebuts conclusions and opinions reached by Mr. Foster. See generally, id.
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We must assume Plaintiffs failure to disclose an economist was their chosen trial strategy. However, whether it was or not, there is no question that due diligence and simple planning could easily have avoided the present scenario by timely retaining and properly disclosing Mr. Knowles so that he could testify in their case-in-chief, as opposed to attempting to compel by subpoena the testimony of Defendants’ retained expert. In the context of failure to comply with the dates provided in a Court’s pretrial order, “[i]f a party was not diligent, the inquiry should end.” See Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992); Geiserman, 893 F.2d at 790-92 (5th Cir. 1990) (upholding decision to exclude expert witnesses based on party’s failure to designate experts until two weeks after the expiration of the discovery deadline). This Court should not now allow Plaintiffs reverse their chosen trial strategy or to correct an inexcusable error an error which they have had more than four months to seek leave to correct by permitting them to simply circumvent this Court’s pretrial disclosure deadlines by way of a trial subpoena served on a timely retained and properly disclosed defense expert.
CONCLUSION
For the reasons briefed above, Defendants respectfully request that this Court grant the present motion and issue an order quashing Plaintiffs’ trial subpoena to R. Lee Foster.
DATED this 15th day of November, 2022.
SUSSMAN SHANK LLP
By /s/ Derek J. Ashton Derek J. Ashton, OSB 871552 dashton@sussmanshank.com
Jason P. Evans, OSB No. 193573 jevans@sussmanshank.com Attorneys for Defendants
SUSSMAN SHANK LLP, ATTORNEYS AT LAW 1000 SW BROADWAY, SUITE 1400, PORTLAND, OREGON 97205-3089 TELEPHONE (503) 227-1111 | FACSIMILE (503) 248-0130 Page 8 - DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’
SUBPOENA TO
TRIAL
R. LEE FOSTER
Joseph A. Grube, OSB # 962976
GRUBE OREHOSKI, PLLC
1200 Fifth Avenue, Suite 1711
Seattle, WA 98101
(206) 624-5975
joe@go-trial.com
Local Counsel for Plaintiffs
Daniel P. Mallove, WSBA # 13158
LAW OFFICE OF DANIEL P. MALLOVE, PLLC
2003 Western Avenue, Suite 400 Seattle, WA 98121
(206) 239-9933
dmallove@dpmlaw.com
Lead Counsel for Plaintiffs
UNITED STATES DISTRICT COURT
DISTRICT OF OREGON PORTLAND DIVISION
Case No.
Plaintiffs,
PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION TO QUASH TRIAL SUBPOENA TO R. LEE FOSTER
Defendants.
Plaintiffs , by and through their counsel of record, Daniel P.
Mallove and Joseph A. Grube, hereby submit the following Memorandum in Opposition to Defendants’ Motion to Quash Plaintiffs’ Trial Subpoena to R. Lee Foster.
PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION TO QUASH TRIAL SUBPOENA TO R. LEE FOSTER
Page 1 –
v.
ADDITIONAL RELEVANT FACTUAL BACKGROUND
Because defendants present only limited and incomplete factual background, plaintiffs provide the Court with the following additional factual background.
This issue of plaintiff ’s income loss has been in this case since its outset. Plaintiffs’ Complaint alleges in paragraph 3.7 that “As a result of his injuries, plaintiff has been unable to work since June 2019 and has sustained past income loss in the amount of $150,000.00. Plaintiff remains unable to work due to his injuries and will incur additional income loss in the future as a result of the injuries he sustained in the subject collision in the amount of $1,850,000.” A copy of the Complaint is attached as Exhibit 1 to the Declaration of Daniel P. Mallove in Opposition to Defendants’ Motion to Quash Plaintiffs’ Trial Subpoena to R. Lee Foster.
In discovery, in response to requests for production from defendants, plaintiffs produced to defendants all of ’s corporate and personal tax returns detailing his historical income and invoices and other documents detailing all of the revenue and income earned by prior to the subject collision. Defendants did not propound interrogatories to plaintiffs. However, defense counsel deposed on November 18, 2021, at which time he questioned extensively about his employment history and his income loss.
Defendants are correct that plaintiffs did not identify an economist in Plaintiffs’ Expert Witness Disclosure. The reason for this was two-fold – first, in a telephone conversation approximately one month before the expert disclosures were due, defense counsel Derek Ashton represented to plaintiffs’ counsel Daniel Mallove that defendants would not be identifying an expert economist except potentially in rebuttal; and second, plaintiffs identified in Plaintiffs’ Expert Witness Disclosure life care planning expert Robert Malaer and produced to defendants a copy of his written report which details ’s income loss. However, in Plaintiffs’ Expert Witness Disclosure, plaintiffs included a section entitled EXPERTS DISCLOSED BY DEFENDANTS and specifically stated as follows:
PLAINTIFFS’ MEMORANDUM IN OPPOSITION TO DEFENDANTS’ MOTION TO QUASH TRIAL SUBPOENA TO R. LEE FOSTER
Page 2 –
Plaintiffs reserve the right to elicit expert opinions at trial from the experts disclosed in defendant’s Expert Witness Disclosure, and from witnesses whose deposition or trial testimony has not yet been taken, and from defendant’s experts, whose deposition or trial testimony has not yet been taken, either those already disclosed or yet to be disclosed, regarding their observations, opinions, qualifications, expertise, reports, and/or prior testimony. Plaintiffs further reserve the right to elicit expert opinions from other witnesses identified by defendant, and other witnesses whose deposition or trial testimony has not yet been taken regarding their observations, opinions, qualifications, expertise, reports, and/or prior testimony.
Plaintiffs also included in their Expert Witness Disclosure a section entitled REBUTTAL EXPERTS in which they stated as follows:
Plaintiffs further reserve the right to add additional experts, who may be characterized as rebuttal expert witnesses, in response to defendant’s expert witness disclosures consistent with the Federal Rules of Civil Procedure and the Court’s orders in this litigation. Plaintiffs reserve the right to identify other individuals within the scope of FRCP 26(a)(2) as discovery and investigation continue.
A copy of Plaintiffs’ Expert Witness Disclosure is attached as Exhibit 2 to the Declaration of Daniel P. Mallove in Opposition to Defendants’ Motion to Quash Plaintiffs’ Trial Subpoena to R. Lee Foster.
On June 27, 2022, plaintiffs timely and properly served Plaintiffs’ Supplemental Disclosure of Expert Witnesses in which they formally identified economist Eric Knowles as a rebuttal witness. Plaintiffs included in that document a section entitled EXPERTS DISCLOSED BY DEFENDANT and a section entitled REBUTTAL EXPERTS containing the same language as was contained in Plaintiffs’ Expert Witness Disclosure quoted above. A copy of Plaintiffs’ Supplemental Expert Witness Disclosure is attached as Exhibit 3 to the Declaration of Daniel P. Mallove in Opposition to Defendants’ Motion to Quash Plaintiffs’ Trial Subpoena to R. Lee Foster.
OADC PRESENTATION--SUPREME COURT CASE SUMMARIES
Justice Stephen K. Bushong
Oregon Supreme Court
June 17, 2023
I. Defamation/Unlawful Trade Practices
Rosenblum v. Living Essentials, LLC, 371 Or 23 (2023)
Defendants manufacture, market and sell 5-hour ENERGY products, which contain caffeine and a blend of noncaffeine ingredients. In advertising these products, defendants stated that the noncaffeine ingredients "provide extra energy, alertness, and focus." 371 Or at 27. The Attorney General filed suit, alleging that the advertisements violated the Unlawful Trade Practices Act (UTPA), ORS 646.605 to 646.656, because the noncaffeine ingredients do not have the effects advertised. Following a bench trial, the trial court ruled in favor of defendants on all claims, concluding that the state failed to prove that the misrepresentations were material to consumer purchasing decisions. The Court of Appeals affirmed. The Supreme Court reversed, holding that "the text, context, and legislative history demonstrate that the statute unambiguously does not require proof that a defendant's conduct was 'material to consumer purchasing decisions.'" Id. at 44. The court also rejected defendants' argument that, without such a requirement, the provisions of the UTPA violate the free speech provisions of the state and federal constitutions. Id. at 59.
Lowell v. Medford School Dist. 549C, 370 Or 79 (2022)
Plaintiff provided piano tuning and concert production services to defendant school district. A school theater technician (Malone), reported to her supervisor (Bales) that plaintiff appeared to be intoxicated at a concert, that he “smelled of alcohol,” and that “this was not the first time.” Bales repeated the statements to another district employee (Armstrong), who sent emails summarizing the statements to other district employees. Plaintiff sued, alleging that the statements by Malone, Bales and Armstrong were defamatory. The trial court granted the school district’s motion for summary judgment, concluding that the claim is barred by absolute immunity because the statements were made by public officials in the course of their official duties. The Court of Appeals affirmed. The Supreme Court reversed. The court explained that the absolute privilege applies “when the public’s interest in functioning government is so great that it outweighs an individual’s interest in redress for reputational harm.” 370 Or at 93. The court “conceives of the absolute privilege as narrow in scope.” Id. at 94.
1
The court rejected the school district’s argument that the court has already extended “or should extend the absolute privilege to all public employees acting within the course and scope of their duties.” Id. at 95. The privilege did not apply here, the court concluded, because Malone, Bales, and Armstrong were not “officers” of the district “equivalent to the university department head in Shearer [v. Lambert, 274 Or 449 (1976)].” Id. at 96.
Lowell v. Wright, 369 Or 806 (2022)
Plaintiff owns and operates a piano store. Defendant Wright, the general manager of a competing piano store (defendant Artistic Pianos), posted a negative review of plaintiff’s store on Google. After talking to Artistic’s owner, Wright removed the negative review without saving a copy; it was never recovered. The trial court granted defendants’ motion for summary judgment on plaintiff’s defamation claim, concluding that some of the statements were not actionable, and that, without a copy of the Google posting, it was not possible to determine whether the other allegedly false statements were constitutionally protected expressions of opinion. The Court of Appeals reversed; the Supreme Court affirmed the Court of Appeals in part on different grounds and remanded the case to the trial court. The court first concluded that “the lack of a copy of the review is not fatal to plaintiff’s libel claim and that two of the three allegedly defamatory statements in the review are actionable.” 369 Or at 808. The court further concluded that, under Neumann v. Liles, 358 Or 706 (2016), the on-line review about plaintiff’s store “contained speech on a matter of public concern protected by the First Amendment’s public comment defense.” Id. Finally, the court declined to overrule its precedent recognizing a distinction between media and nonmedia defendants, concluding that plaintiff was not required to prove actual malice because these defendants “are not ‘media’ under any definition.” Id. at 809.
II. Negligence
Scott v. Kesselring, 370 Or 1 (2022)
Plaintiff was injured in a rear-end collision. She alleged that her emotional injuries were so severe that she attempted to take her own life and was hospitalized. Defendant admitted liability for the collision but argued at trial that evidence of defendant’s cellphone use at the time of the collision should be excluded. The trial court admitted the evidence and the jury returned a verdict in plaintiff’s favor. The Court of Appeals reversed; the Supreme Court reversed the Court of Appeals and affirmed the trial court’s judgment. The court concluded that the trial court did not err in admitting the evidence because it was “admissible on the issue of foreseeability.”
2
370 Or at 13. The court explained that defendant’s factual admission “that her conduct caused a rear-end collision” did not “take the pertinent question of the range of foreseeable consequences from the jury.” Id. at 23. Rather, “the fact that defendant challenged the foreseeability of the kind of harm that befell the plaintiff a suicide attempt meant that the jury was still required to determine whether defendant’s conduct unreasonably created a foreseeable risk of that harm.” Id. at 24. The court also concluded that the trial court did not abuse its discretion in concluding that the cellphone evidence was admissible under OEC 403 because its probative value was not substantially outweighed by the risk of unfair prejudice. The court explained that, when a defendant’s conduct is at issue, “there is nothing particularly unfair about painting that conduct in all its details, and it could be unfair not to do so.” Id. at 26.
Haas v. Estate of Mark Steven Carter, 370 Or 742 (2023)
Plaintiff alleged that she suffered injuries to her neck and back when her stopped car was rear-ended by a car driven by defendant Carter. Before the collision, plaintiff had what her orthopedic surgeon described as "an extensive cervical and lumbar physical history," including prior neck surgery. 370 Or at 744. At trial, plaintiff requested two jury instructions on causation: Uniform Civil Jury Instruction (UCJI) 23.01 on "but for" causation, and UCJI 23.02 on "substantial factor" causation. The trial court gave the "but for" instruction, concluding that the "substantial factor" instruction only applied when multiple causes operating at the same time. The trial court also gave requested UCJI 70.06 on "previously infirm condition." The jury returned a verdict for defendants. The Court of Appeals affirmed, concluding that the "substantial factor" instruction was not required in this case. The Supreme Court affirmed. The court explained that there is a "subtle difference between a defendant's argument that the defendant is not liable for any injury to a plaintiff because the plaintiff's preexisting condition was the only cause of the plaintiff's injury and an argument that, even if the defendant's negligent conduct was a cause of the plaintiff's injuries, the defendant should not be held liable for the full extent of the injuries that the plaintiff incurred." Id. at 762. That difference "is not, however, a reason to require a substantial factor causation in every multiple causation case. Together, a but-for instruction on causation and a previous infirm condition instruction on damages may suffice." Id.
III. Elder Abuse
Adelsperger v. Elkside Development LLC, 371 Or 61 (2023)
Plaintiffs purchased membership contracts from Elkside Development LLC (Elkside) that allowed them to use the campground free of charge. Elkside later sold the
3
campground to Barnett Resorts LLC, which was owned and operated by defendants Stefani and Chris Barnett (the Barnetts). Shortly after purchasing the campground, the Barnetts sent a letter to plaintiffs informing them that they would no longer honor the membership contracts entered into by Elkside, the prior owner. Plaintiffs sued, alleging claims for (1) breach of contract; (2) intentional interference with contract; and (3) elder abuse, based on the fact the many of the membership contracts had been held by plaintiffs over the age of 65. The trial court granted the Barnetts' motion for summary judgment, concluding that they could not be individually liable for the actions of Barnett Resorts LLC under ORS 63.165(1). The Court of Appeals affirmed without opinion. The Supreme Court reversed in part and affirmed in part. On the elder abuse claim, the court reversed the trial court, holding that "ORS 63.165(1) is not a bar to asserting a claim for a statutory violation of ORS 124.100(2) against a member-manager of an LLC, when the LLC is alleged to be the entity that directly perpetrated the elder abuse." 371 Or at 71. On the breach of contract claim, the court affirmed the trial court, holding that, because "there is no evidence that the Barnetts, acting in their individual capacity, breached the contract[,]" the trial court "was correct to preclude this claim according to ORS 63.165). Id. Finally, the court "affirm[ed] the [trial court's ruling on] the intentional interference claim by an equally divided court." Id. at 65
IV. Procedure
Dahlton v. Kyser, 370 Or 34 (2022)
Decedent in this wrongful death case died from cardiac arrest when he was five months old. The representative of his estate filed this action, seeking, among other things, damages on behalf of the statutory beneficiaries for their loss of decedent’s society and companionship. The trial court entered an order under ORCP 44 C requiring the beneficiaries to produce records of their medical and psychological care. The Supreme Court granted the beneficiaries’ petition for alternative writ of mandamus, concluding as a matter of law that “the statutory beneficiaries of a wrongful death claim are not, by virtue of that status, ‘parties’ who can be compelled under ORCP 44 C to provide privileged records.” 370 Or at 36.
Gist v. ZoAn Management, Inc., 370 Or 27 (2022)
The parties in this case signed a “Driver Services Agreem ent” (DSA) for plaintiff to provide delivery services for defendants as an independent contractor. Plaintiff filed this class action wage and hour suit, alleging that he and other drivers were employees, not independent contractors. The trial court granted defendants’ motion to compel arbitration under the DSA’s arbitration clause. The Court of Appeals and Supreme Court
4
affirmed, rejecting plaintiff’s argument that the DSA is unconscionable “because it requires him to arbitrate his wage and hour claims but prohibits the arbitrators from granting him relief on those claims.” 370 Or at 31. The court explained that (1) “the DSA does not prevent the arbitrators from concluding that the DSA’s provisions classifying drivers as independent contractors are invalid or unenforceable and that plaintiff was an employee”; and (2) if the arbitrators agree that plaintiff was an employee, “they can resolve plaintiff’s claims under Oregon’s wage and hour statutes.” Id. at 32.
State/Klamath County v. Hershey, 370 Or 200 (2022)
Klamath County Animal Control impounded 22 dogs, three horses, and seven chickens from Hershey’s property, and the state charged Hershey with animal neglect. The county then filed a petition under ORS 167.347 seeking forfeiture of the animals unless Hershey paid a deposit or bond to cover the costs of caring for them. Defendant requested a jury trial. The Supreme Court held that a proceeding under ORS 167.347 “does not involve a claim for relief that would have been tried to a jury at the ti me of the adoption of the constitution, and, therefore, is not one to which the Article I, section 17, jury trial right applies.” 370 Or at 209.
E.J.T. v. Jefferson County, 370 Or 215 (2022)
Claim under Oregon's Vulnerable Person Act, ORS 124.100 to 124.140, is available against a public body. The legislature did not intend to create a statutory private right of action to address violations of child abuse reporting requirements.
Chaimov v. State of Oregon, 370 Or 382 (2022)
Documents subject to attorney-client privilege are exempt from disclosure under Oregon Public Records Act. Legal services provided by Office of Legislative Counsel in connection with bill drafting are provided to the Governor, not the Legislative Assembly. Bill drafting request forms are protected by the attorney-client privilege.
5
324 Or.App. 526
Court of Appeals of Oregon.
Scott COCKEY, Plaintiff-Appellant, v.
George MEAD, an individual and The Mead Law Firm, P.C., an Oregon professional corporation, Defendants-Respondents.
A177424 |
Argued and Submitted December 9, 2022. | March 8, 2023
Opinion JOYCE, J.
Synopsis
Background: Former client brought legal-malpractice action againstattorneyandattorney'semployer,basedonallegations that in earlier guardianship settlement, attorney committed malpractice by failing to ensure independent guardianship of client's adult daughter was temporary and by binding client to fund special needs trust. The Circuit Court, Multnomah County, Melvin Oden-Orr, J., entered judgment granting attorney and employer's motion for summary judgment. Client appealed.
*528 In this legal malpractice case, plaintiff appeals from a judgment granting summary judgment in favor of defendant on the ground that plaintiff's claim is time-barred.1 The question we must resolve is whether there is a genuine issue of material fact as to whether plaintiff knew or should have known of any harms caused by defendant's alleged tortious conduct more than two years before plaintiff filed his legal malpractice claim in July 2019. See ORS 12.110(1); U.S. Nat'l Bank v. Davies, 274 Or. 663, 665, 548 P.2d 966 (1976) (applying two-year statute of limitations to legal malpractice claim pursuant to ORS 12.110(1)). We review a trial court's grant of summary judgment to determine whether there are any issues of material fact and whether the moving party is entitled to judgment as a matter of law. ORCP 47 C; see generally Jones v. General Motors Corp., 325 Or. 404, 939 P.2d608(1997).Afterreviewingtherecordandallreasonable inferences in the light most favorable to plaintiff, Marshall v. PricewaterhouseCoopers, LLP, 316 Or. App. 610, 626, 504 P.3d 1236 (2021), we affirm.
The Court of Appeals, Joyce, J., held that client's cause of action accrued more than two years before he filed claim.
Affirmed.
Procedural Posture(s): On Appeal; Motion for Summary Judgment.
**1202 Multnomah County Circuit Court, 19CV25628; Melvin Oden-Orr, Judge.
Attorneys and Law Firms
Matthew Whitman argued the cause and filed the briefs for appellant.
Julie A. Smith, Portland, argued the cause for respondents. Also on the brief was Cosgrave Vergeer Kester LLP.
Before Aoyagi, Presiding Judge, and Joyce, Judge, and Jacquot, Judge. *
The statute of limitations begins to run at the time a cause of action accrues. ORS 12.010. To determine when a legal malpractice claim accrues, the discovery rule applies. Kaseberg v. Davis Wright Tremaine, LLP, 351 Or. 270, 277, 265 P.3d 777 (2011) (construing discovery rule in legal malpractice case). Under that rule, the limitation period begins to run on a plaintiff's claim only when “the client knows or, in the exercise of reasonable care, should know every fact which it would be necessary for the client to prove *** in order to support his right to judgment.” Id. (internal quotation marks and brackets omitted). To establish a legal malpracticeclaim,aplaintiffmustprovethatthey(1)incurred harm (2) that was caused by (3) their attorney's tortious conduct. Id.; Marshall, 316 Or. App. at 629, 504 P.3d 1236
The parties agree that the single question on appeal concerns when plaintiff knew or should have known that he had incurred the appropriate kind of harm. As to that question, the relevant events are as follows:
*529 • In 2016, concerned about his adult disabled daughter's safety while in the guardianship of her mother, plaintiff hired defendant to petition in probate court for the mother's removal as guardian, his own
Cockey v. Mead, 324 Or.App. 526 (2023) 526 P.3d 1201 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 1
**1203 appointment as guardian, and his daughter's placement in his home.
• In April 2016, while defendant was representing plaintiff, the parties to the guardianship proceeding entered into a settlement whereby an independent guardian was appointed.
•InMay2016,plaintiffestablishedaspecialneedstrustfor his daughter.
• In September 2016, the independent guardian informed plaintiff that his daughter would be placed in a group home rather than plaintiff's home.
• In October 2016, plaintiff, after hiring a new attorney, petitioned to have the independent guardian removed and have himself appointed.
• The independent guardian then moved for an order compelling plaintiff to fund the special needs trust to cover the guardian's professional and legal fees.
• In January 2017, the probate court issued an “order on [plaintiff's] objection to funding a special needs trust,” which required plaintiff to fund the special needs trust by “depositing a meaningful sum sufficient to satisfy reasonable debts incurred in the care of the Protected Person, including necessary attorney fees” based on its finding that, in the settlement agreement, plaintiff had stipulated to funding the trust.
• In March 2017, plaintiff filed a separate action in circuit courtaskingthecourttodeclarethat(1)thespecialneeds trust could not be used to pay the guardian's legal fees or professional fiduciary compensation and (2) the probate court could not require plaintiff to make any particular distributions as trustee of the trust.
*530 • In April 2017, plaintiff withdrew his October 2016 petition to remove the guardian and have himself appointed.
• In March 2018, the circuit court concluded that plaintiff had to fund the special needs trust to reimburse the independent guardian's costs, including any attorney fees.
Plaintiff filed his malpractice complaint in June 2019. In his complaint, plaintiff alleged that defendant committed malpractice in April 2016, in the guardianship proceeding settlement, by failing to ensure that the independent
guardianship was temporary and by binding him to fund the special needs trust. Plaintiff alleged that defendant's conduct caused legally cognizable damage by resulting in plaintiff being “forced to pay *** guardianship fees, attorney's fees, and other professional fees in attempts to undo the consequences of [defendant's] negligence.”
Plaintiff admitted that he knew that defendant's negligence had caused him harm when, in October 2016, he decided to hireanewattorneytofileapetitiontoremovetheindependent guardian.Hehiredanewattorneyatthatpointbecausehehad “learned that [defendant] had never secured the agreement of [theindependentguardian]toanylimitationoftimeorscope.” He also admitted that he knew that “[d]efendants’ advice had begun to cost him money by April 2017.”
The trial court granted defendant's motion for summary judgment on the ground that plaintiff's claim was barred by the two-year statute of limitations.
As noted, the question before us is narrow: Did a genuine issue of material fact exist as to when plaintiff knew or should have known that he had been harmed by defendant's negligence? As to that question, both parties find support, at leastfacially,intwolinesofcasesthatinvolveaprofessional's negligent act that results in additional litigation for the plaintiff. Plaintiff relies on Davies, 274 Or. 663, 548 P.2d 966, and its progeny to argue that his claim did not accrue until March 2018, when the circuit court construed the trust to require plaintiff to cover the independent guardian's legal *531 fees and compensation through the date of that circuit court judgment. He asserts that he could have “prevailed outright in [that later circuit court case], and the Court could have determined that he had no financial obligation, either to fund the Supplemental [sic] Needs Trust nor to pay the guardian's attorney fees. Had Plaintiff prevailed, he would never have suffered legally cognizable harm at all.” (Emphasis in plaintiff's brief.)
**1204 Defendant relies on a different Supreme Court case, Jaquith v. Ferris, 297 Or. 783, 687 P.2d 1083 (1984), and its progeny to argue that plaintiff suffered actionable harm no later than April 2017, when he incurred legal expenses to try to undo the alleged malpractice.
As we explain, the distinction between the cases on which plaintiff and defendant rely ultimately turns on whether the plaintiff knew the defendant's negligence was the cause of their harm versus whether the plaintiff knew that they had
Cockey v. Mead, 324 Or.App. 526 (2023) 526 P.3d 1201 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 2
been harmed. Where the outcome in litigation subsequent to the negligent act could establish that the defendant was not negligent in the first instance, the statute of limitations does not begin to run until the conclusion of that litigation. But where the plaintiff knows or should know that the defendant was negligent, and the litigation subsequent to the negligent act serves only to determine to what extent the plaintiff has been harmed, the statute of limitations begins to run from the time that the plaintiff learns or should have learned that the defendant's act was negligent and that it caused some harm.
We begin with Davies. Davies was an attorney malpractice action where the defendant had advised the plaintiff that the plaintiff could take a certain action with respect to stock funds. 274 Or. at 665, 548 P.2d 966. Four years after that advice, the plaintiff was sued for return of the funds. The plaintiff ultimately settled the action. A year after entering into the settlement agreement, the plaintiff sued the defendant for malpractice, seeking both attorney fees and recovery of the amount that he had paid in settlement. The Supreme Court reversed dismissal of the case on statute of limitationsgrounds.Itfirstconcludedthatdefendinganaction —including the incurrence of attorney fees—that arose out *532 of an attorney's negligent advice constituted harm. Id. at 667-78, 548 P.2d 966. But it went on to hold that whether that harm was caused by the defendant could not be known until the lawsuit against the plaintiff had been resolved, becauseitwasonlythenthattheplaintiffwouldknowthatthe defendant's advice was negligent, thereby causing her harm.
Id. at 668-69, 548 P.2d 966
In Jaquith, by contrast, the question was not whether the plaintiff was aware of the cause of her harm but rather when she had incurred the harm, a difference that the court ultimately concluded required a result different from that in Davies Jaquith involved litigation brought by a plaintiff against her realtor for undervaluing property that the plaintiff then entered into a contract to sell. 297 Or. at 785, 687 P.2d 1083. When the plaintiff discovered the undervaluation, she refused to proceed with the sale; the prospective buyer then sued her for specific performance. At the conclusion of that action, the plaintiff was forced to convey the property. The plaintiff then commenced a negligence action against the realtor, more than two years after she discovered the undervaluation of her property, but within two years of the specific-performance lawsuit being fully resolved.
On appeal from a dismissal on statute-of-limitations grounds, the plaintiff argued that “she sustained no harm until the
extent of her damage was ascertained” at the conclusion of the specific-performance action. Id. at 788, 687 P.2d 1083
The Supreme Court rejected that argument, concluding that the plaintiff's contractual obligation to sell at the undervalued price, which arose from the defendant's negligence and which existed when she signed the agreement to sell the property, had itself caused harm. Additionally, “[t]he legal costsplaintiffassumedtoresisthercontractualdutytoconvey likewise constituted harm.” Id. In short, more than two years before filing the negligence action, the plaintiff knew of the defendant'snegligence(undervaluingtheproperty),knewthat she had incurred harm (the expenses of resisting the specific performance action and the contractual obligation itself), and knew that defendant's negligence had caused that harm (the underpriced sales contract resulted from defendant's undervaluation); it was only the extent of *533 her damages that she did not ascertain until the conclusion of the specific performance action. Id.
The Supreme Court further synthesized Davies and Jaquith in Bollam v. Fireman's Fund Ins. Co., 302 Or. 343, 730 P.2d 542 (1986). There, the plaintiffs brought a negligence **1205 action against their car insurance company, alleging that the company had improperly handled a claim in a way that exposed the plaintiffs to excess liability. After a car crash in which the plaintiffs were at fault, their insurance company began making payments to the party injured in the crash. The plaintiffs hired an attorney to evaluate the claim. The party injured in the crash ultimately sued the plaintiffs, resulting in the insurance company paying the balance of the policy limits and the plaintiffs having to pay an additional sum. Id. at 345-46, 730 P.2d 542. The plaintiffs then brought an action against their insurance company for negligence, more than two years after they hired an attorney to evaluate the claim, but less than two years after they had to pay the crash victim in the lawsuit. The question the court was faced with was whether the plaintiffs’ claim accrued when they incurred the attorney fees or when they had to pay the crash victim.
In concluding that the claim accrued when the plaintiffs had to hire an attorney, the court contrasted Davies and Jaquith
On the one hand, in Davies, when the plaintiff incurred attorney fees defending the stock-fund action, she could not have known whether the cost of defending the action was caused by negligent advice, whereas, on the other hand, in Jaquith, “no issue related to defendant's alleged negligence wouldberesolvedinthelitigationthatfollowedtherespective defendant's negligent conduct”; that is, the fact that the propertyhadbeenundervaluedwasnotatissueinthespecific
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performance action. Bollam, 302 Or. at 352-53, 730 P.2d 542. The court in Bollam distinguished the plaintiff's case from Davies by noting that, in Davies, “the very question whether the attorneys’ advice was correct would be resolved in the ligation” brought against the plaintiff. Id. at 352, 730 P.2d 542. “Only if the litigation precipitated by the stock sale transaction was resolved against the [plaintiff] would it becomeapparentthatthecostofdefendingthesuitwas *534 caused by the attorneys’ advice and not a misapprehension of rights” by the party that sued the plaintiff. Id. (emphasis in original).
The court then concluded that the plaintiffs’ claim in Bollam was more like Jaquith because the “result of the litigation between the present plaintiffs and [the crash victim] would determine only the amount of plaintiffs’ liability to [him],” and not whether the insurance company had been negligent at all. Id. “Onlythefullextentofharmwaslefttobedetermined” after the insurance company's alleged negligence, which occurred—and about which the plaintiffs knew—more than two years prior to the filing of the lawsuit. Id. at 353, 730 P.2d 542.
In short, both Jaquith and Bollam involved facts that left no doubt that the respective plaintiffs knew, more than two years priortofilingnegligenceactions,thatthedefendantshadbeen negligent, that the plaintiffs had incurred harm, and that the harmwastheresultofthedefendants’negligence.Subsequent litigation may have informed the plaintiffs’ knowledge of the extent of the harm they incurred, but for statute of limitations purposes, the proverbial clock began to run from when the harm accrued, not when its full extent was discovered.
The same is true in the present matter. Like the plaintiff in Jaquith (andunlikein Davies),plaintiffknewthatdefendant's negligent conduct had caused him harm more than two years
before filing his legal malpractice claim. Plaintiff hired a new attorney both to petition to remove the independent guardian andtoobjecttopayingonthetrust,thelatterofwhichresulted in the probate court ordering him to fund the trust in January 2017. And by his own admissions, plaintiff knew that he had incurredharmasaconsequenceofdefendant'sconductbythat point. See Jaquith, 297 Or. at 788, 687 P.2d 1083 (legal costs incurred because of the attorney's negligence can constitute a cognizable harm). What is more, the subsequent trust case could not have obviated defendant's alleged negligence; at most, it would have “determine[d] only the amount of plaintiff[’s] liability to” the special needs trust. Bollam, 302 Or. at 352, 730 P.2d 542. Framed slightly differently, unlike in Davies, in this case, the trust *535 case litigation did not determine the culpability of defendant's conduct; **1206 at most, prevailing in it would have mitigated the extent of plaintiff's damages.
In sum, on this record, no genuine issue of material fact exists that plaintiff knew that defendant's alleged negligence had caused him harm more than two years before he filed the malpractice claim. Plaintiff's concessions together with the underlying procedural facts establishes that, by at least April 2017, plaintiff knew that he had incurred compensable harm that was caused by defendant's purported negligence. Accordingly, the trial court properly concluded that the limitation period was triggered no later than April 2017, more than two years before plaintiff filed his legal malpractice claim.
Affirmed.
All Citations
324 Or.App. 526, 526 P.3d 1201
Footnotes
* Jacquot, J., vice James, J. pro tempore.
1 Though plaintiff filed his claim against both his former attorney and that attorney's employer, we refer to “defendant” in the singular.
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End of Document © 2023 Thomson Reuters. No claim to original U.S. Government Works.
325 Or.App. 648 Court of Appeals of Oregon.
Loren HATHAWAY, on behalf of himself and all others similarly situated within the state of Oregon; Gennise Hathaway, on behalf of herself and all others similarly situated within the state of Oregon; and Heather Noble, on behalf of herself and all others similarly situated within the state of Oregon, Plaintiffs-Respondents, v. B & J PROPERTY INVESTMENTS, INC., an Oregon corporation; Better Business Management, Inc., an Oregon corporation doing business as Salem RV Park; and William J. Berman, an individual, Defendants-Appellants.
A169427 |
Argued and Submitted February 15, 2022. | May 3, 2023
Marion County Circuit Court, 13C14321; Dennis J. Graves, Judge. (General Judgment dated October 31, 2018); Donald D. Abar, Judge. (Supplemental Judgment dated January 2, 2020)
Attorneys and Law Firms
Matthew J. Kalmanson, Portland, argued the cause for appellants. Also on the briefs were Hart Wagner LLP, and Janet M. Schroer.
Rick Klingbeil, Portland, argued the cause for respondents. Also on the briefs were Rick Klingbeil, PC, Brady Mertz, PC, and Brady Mertz
Before Shorr, Presiding Judge, and Mooney, Judge, and Pagán, Judge.
Opinion
SHORR, P. J.
**1 *650 This appeal reaches us following nearly seven years of class-action litigation in the trial court. In 2013, plaintiffs Loren and Gennise Hathaway (the Hathaways) first filed suit on behalf of themselves and all similarly situated persons against the owners and managers of Salem RV Park, where the Hathaways lived, alleging that certain park
utility billing practices violated ORS 90.315(4) (2011) of the Oregon Landlord Tenant Act (ORLTA).1 Originally, the defendants to the action were Better Business Management, Inc. (BBM), which managed the park, and B & J Property Investments, Inc. (B & J), which owned the land. As the litigation progressed, more named plaintiffs joined; plaintiffs added William Berman, an owner and president of BBM and B & J, as a defendant; plaintiffs brought an additional claimforunlawfulretaliationunderORS90.385afterthepark raised monthly rents by $20 in the first months of litigation; and, eventually, plaintiffs sought to pierce BBM's corporate veil to recover damages for BBM's violations from both B & J and Berman individually.2
By late 2017, the court had resolved nearly all the issues in the litigation, largely through a series of partial summary judgment rulings that, in total, held BBM liable to plaintiffs for violations of the ORLTA pursuant to ORS 90.315(4) (2011) and ORS 90.385 and awarded plaintiffs nearly $5 million in damages. The case then proceeded to a bench trial solely on the issue of whether to pierce BBM's corporate veil to permit plaintiffs to recover those damages from B & J and Berman. The court again ruled in plaintiffs’ favor and entered a general judgment against all three defendants, “and each of them,”onplaintiffs’claims.Overthenextyear,litigationover attorney fees and costs *651 ultimately resulted in entry of a supplemental judgment awarding plaintiffs nearly $1 million in fees.
Defendants appeal from the court's general and supplemental judgments. BBM asserts nine assignments of error arising from class certification, summary judgment rulings for plaintiffsontheORLTAclaims,anorderdirectingdefendants to bear the costs of class notice, the court's order striking defendant's “good faith” affirmative defense, and the attorney feeaward.Inseparatebriefing,B&JandBermanassertseven assignments of error arising from the piercing trial.
**2 Because we conclude that the trial court erred as to several of its legal rulings that occurred early in the litigation, we reverse and remand the general judgment for further proceedings. Specifically, we conclude that the trial court erred (1) in certifying a 10-year class for plaintiffs’ claims under ORS 90.315(4) (2011), a ruling which was based on the court's conclusion that a discovery rule applied to the statute of limitations for plaintiffs’ ORLTA claims, ORS 12.125, as described in BBM's second assignment of error; (2) in granting partial summary judgment to plaintiffs on the issue of BBM's liability under ORS 90.315(4) (2011) for its
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rate billing practices, a ruling that was due to the court's conclusion that BBM violated ORS 90.315(4) (2011) as a matter of law when it charged tenants a higher kilowattper-hour (kWh) rate for electricity than the electricity utility had charged BBM, as described in BBM's first assignment of error; and (3) in granting partial summary judgment to plaintiffs on the issue of damages under ORS 90.315(4) (2011) based on its erroneous interpretation of the damages provision in ORS 90.315(4)(e) (2011), as described in BBM's seventh assignment of error.
We also write to address several rulings that we conclude were not erroneous—specifically, the court's grant of partial summary judgment to plaintiffs on the issue of BBM's liability under ORS 90.315(4) (2011) for its “meter reading fee,” a ruling which was based on its conclusion that BBM's $10 meter reading fee violated ORS 90.315(4) (2011) as a matter of law, as described in BBM's second assignment of error, and the court's grant of partial summary *652 judgmenttoplaintiffsontheirretaliationclaim,arulingwhich was based on the court's conclusion that BBM's rent increase constituted retaliation under ORS 90.385 as a matter of law, as described in BBM's fifth assignment of error. We also conclude that, to the extent that the court erred as alleged in BBM's sixth assignment of error in striking BBM's good faith defense, any error was harmless for the reasons explained below. BBM's eighth assignment of error, which asserts that the trial court erred in granting partial summary judgment to plaintiffs on the issue of calculating retaliation damages under ORS 90.375, is undeveloped in part and unpreserved in part, as explained in greater detail below, and we thus reject it. BBM's third assignment of error depends on the argument that the court erred in granting partial summary judgment to plaintiffs on any theory of BBM's liability under ORS 90.315(4) (2011), and we reject that assignment of error because we reject the argument it depends on. BBM's fourth assignment of error is mooted by our conclusion that the trial court erred in certifying a 10-year class. Thus, we do not further discuss BBM's third and fourth assignments of error.
We also do not address the assignments of error raised by defendants B & J and Berman that pertain to the piercing trial that followed the court's legal rulings addressed above, because we are not persuaded that those issues would necessarily arise in the same way and with the same factual evidence on remand. We reverse the general judgment in this case due to other legal errors, returning this case to a posture that existed well before the piercing trial occurred. On remand, BBM's ultimate liability to plaintiffs will be
significantly reduced, and assuming that plaintiffs still pursue a piercing claim under those circumstances, the issues presented to the court may be markedly different as well.
Finally, we do not address BBM's ninth assignment of error regardingplaintiffs’attorneyfeeaward.Wereversethecourt's supplemental judgment as a matter of law because we are reversing the general judgment to which that supplemental judgment applies. See ORS 20.220(3)(a) (“[w]hen an appeal is taken from a judgment under ORS 19.205 to which an award of attorney fees or costs and disbursements *653 relates[, i]f the appellate court reverses the judgment, the award of attorney fees or costs and disbursements shall be deemed reversed”).
**3 Because BBM's assignments of error implicate varying standards of review as to the facts, we do not provide facts relevant to the litigation as a whole, but instead detail any facts relevant to a given assignment of error within our discussion of that issue. BBM's assignments of error do not track the chronological development of the litigation in the trial court, and we do not attempt to address each assignment inprecisechronologicalordereither.Instead,weorganizeour discussion into the three main overarching topics at issue in BBM's appeal. We begin with the court's class certification ruling, in which the court applied a discovery rule to the oneyearstatuteoflimitationsinORS12.125.Wethenaddressthe court's summary judgment rulings on liability and damages for plaintiffs’ utility billing claims under ORS 90.315(4) (2011). Lastly, we address the court's summary judgment and ORCP 21 E(2) rulings relevant to plaintiffs’ retaliation claim under ORS 90.385 and BBM's affirmative defense thereto.
I. ORS 12.125 STATUTE OF LIMITATIONS AND BBM'S SECOND ASSIGNMENT OF ERROR
We begin by addressing BBM's contention that the trial court erred when it certified a 10-year class for plaintiffs’ utility billing claims, a ruling which depended on the court's conclusion that the one-year statute of limitations for ORLTA claims, ORS 12.125, includes a discovery rule that tolls the limitation period until a tenant knew or reasonably should have known that they had a cause of action under the ORLTA. That argument constitutes the bulk of BBM's second assignment of error.3 We review the trial court's ruling for errors of law. Waxman v. Waxman & Associates, Inc., 224 Or App 499, 503, 198 P3d 445 (2008)
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*654 The only relevant facts are procedural. In the trial court, the parties agreed that ORS 12.125 set a one-year limitations period applicable to plaintiffs’ ORLTA claims but disagreed on whether ORS 12.125 incorporated a discovery rule. While plaintiffs contended that their ORLTA claims were subject to a discovery rule, BBM contended that they were not and asserted that plaintiffs “should be barred from bringing their [O]RLTA claims and defining any alleged class for the [O]RLTA claims for any period of time greater than [one] year prior to the filing of the complaint.”
Afterbriefingandargumentontheissue,thetrialcourtissued a letter opinion in which it stated that the requirements for class certification had been met and that a discovery rule applied to toll the applicable statute of limitations. However, the court relied on ORS 12.110(1), a provision applicable to tort claims that neither party had cited as controlling. In its later order certifying a 10-year class for the electricity billing claims, the court restated that “[t]he statute of limitations applicable to the ORLTA claims is one year pursuant to ORS 12.125” and “[t]he discovery rule shall apply to toll the applicable statute of limitations relating to the ORLTA.”
On appeal, the parties reprise their arguments made to the trial court below. BBM contends that the text, context, and legislative history of ORS 12.125 “support the argument that the legislature did not intend for ORS 12.125 to embody a discovery rule.” Plaintiffs contend the opposite.
“The existence of a discovery rule cannot be assumed, but rather must be embodied in the applicable statute of limitations.” Rice v. Rabb, 354 Or 721, 726, 320 P3d 554 (2014). Thus, the parties’ arguments present a question of statutory interpretation to which we apply our familiar methodology, considering the text, context, and any relevant legislative history we deem helpful. State v. Gaines, 346 Or 160, 171-72, 206 P3d 1042 (2009). We apply that methodology to determine whether the legislature intended to incorporate a discovery rule in ORS 12.125, and thus begin by examining the text and context of that statute as well as any case law previously interpreting it. Rice, 354 Or at 726, 320 P.3d 554
**4 *655 We begin with the statute at issue. ORS 12.125 states that “[a]n action arising under a rental agreement or ORS chapter 90 shall be commenced within one year.” On its face, then, nothing in the plain text of ORS 12.125 states explicitly that the legislature intended for that limitations period to begin when the plaintiff discovers or should have
discovered the harm, rather than when the facts necessary for the plaintiff to prove their claim have occurred. We have generallystatedthat,“whenthelegislatureintendstosubjecta statuteoflimitationstoadiscoveryrule,itknowshowtomake its intent to do so clear.” Waxman, 224 Or App at 511, 198 P.3d 445; see also, e.g., ORS 12.135(3)(a)(A) (providing that specified actions must be commenced before the earliest of two years “after injury or damage is first discovered or in the exercise of reasonable care should have been discovered”).
However, “the absence of an express discovery provision * * * is not dispositive.” Rice, 354 Or at 730, 320 P.3d 554 (listing cases where the Supreme Court applied a discovery rule absent explicit language). Notably, the Supreme Court has interpreted the word “accrue” to incorporate a discovery rule in many circumstances. Id. at 728, 320 P.3d 554. As a result, case law establishes that tort claims generally “accrue” whenthe“plaintiffobtain[s]knowledge,orreasonablyshould have obtained knowledge of the tort committed upon her personbydefendant.” Berry v. Branner,245Or307,316,421 P2d 996 (1966).
Plaintiffs first defend the trial court's ruling by contending that the plain language of ORS 12.125 includes a discovery rule via “accrual” language. As we understand it, plaintiffs assert that, in specifying that ORS 12.125 applies to “[a]n action arising under a rental agreement or ORS chapter 90,” the legislature intended for the term “arising” to function as “accrual” language that communicated a discovery rule. (Emphasisadded.)Thatargumentappearstorelyonthe Berry opinion's definition of the word “accrue” as “to arise, to happen to come into force or existence.” 245 Or at 311-12, 421 P.2d 996 (emphasis added). Plaintiffs further claim that our opinion in Abraham v. Kendall, 69 Or App 341, 686 P2d 428 (1984), already established that ORS 12.125 includes “accrual” language that incorporates a discovery rule.
*656 Werejectthatargument.Inspecifyingthat“[a]naction arising under a rental agreement or ORS chapter 90 shall be commenced within one year,” ORS 12.125 uses the word “arising” as part of the phrase “arising under.” (Emphasis added.) That phrase designates the variety of claims to which the statute is applicable—those arising from a breach of a rental agreement or a violation of ORS chapter 90. As used here, the word “arise” means “to originate from a specified source.” Webster's Third New Int'l Dictionary 117 (unabridged ed. 2002); see also Waldner v. Stephens, 345 Or 526, 540, 200 P3d 556 (2008) (“Combining the ordinary meaning of ‘arise’ (‘to originate from a specified source,’
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‘to come into being’) and ‘under’ (‘in accordance with’), we think that the phrase ‘action arising under a rental agreement or [the ORLTA]’ is most naturally read as applying when the action itself is authorized by, or brought in accordance with, one of those two sources.” (Footnotes and emphasis omitted.)).
Further, our opinion in Abraham does not support plaintiffs’ argument. That case involved an alleged oral contract in which the plaintiff agreed to lease a space in defendant's mobile home park on a month-to-month basis and the defendant agreed to obtain certain county permits for the plaintiff. 69 Or App at 343, 686 P.2d 428. The discussion in Abraham that plaintiffs cite does not address whether a discovery rule applies to ORS 12.125—although we framed the issue as when the plaintiff's cause of action “accrued,” our discussion was clearly focused on determining when the defendant breached the alleged oral contract to obtain the permits, and we did not discuss or consider whether a discovery rule applied to the claim. Id. at 346, 686 P.2d 428 That approach was consistent with the well-settled principle that “a contract claim accrues on breach.” Waxman, 224 Or App at 512, 198 P.3d 445; see also Romero v. Amburn, 323 Or App 410, 415, 523 P3d 1135 (2022) (summarize the case law supporting that principle going back “more than 50 years”).4 In other words, Abraham *657 does not support plaintiffs’ contention that ORS 12.125 contains “accrual” language that implicates a discovery rule.
**5 Plaintiffs next contend that ORS 12.125 is subject to a discovery rule by operation of ORS 12.010, and that contention presents a closer issue. Our precedent establishes that, even when a statute of limitations does not contain a discovery rule on its face, the statute may incorporate a discovery rule by operation of ORS 12.010, the introductory statute to ORS chapter 12. See Rice, 354 Or at 728, 730, 320 P.3d 554. ORS 12.010 states that “[a]ctions shall only be commenced within the periods prescribed” in ORS chapter 12,“afterthecauseofactionshallhave accrued,exceptwhere a different limitation is prescribed by statute.” (Emphasis added.) A claim “accrue[s]” under ORS 12.010 when the “plaintiff obtained knowledge, or reasonably should have obtained knowledge” of the claim. Rice, 354 Or at 728, 320 P.3d 554
In Rice, the Supreme Court determined that ORS 12.010 may attach a discovery rule to other ORS chapter 12 statutes of limitations that lack language specifying when the limitations period begins to run. Rice, 354 Or at 728, 320 P.3d 554
There, the court considered ORS 12.080(4), the statute of limitation for conversion and replevin claims, which declares onlythatsuchactions“shallbecommencedwithinsixyears.” The court concluded that ORS 12.080(4) did “not specify when the limitation begins to run” and therefore “f[ell] under the purview of ORS 12.010.” Rice, 354 Or at 728, 320 P.3d 554. As a result, the court read ORS 12.080(4) and ORS 12.010 together to require that relevant actions be commenced within six years from the point in time when the action “accrued” pursuant to ORS 12.010, or when “plaintiff obtained knowledge, or reasonably should have obtained knowledge of the tort committed upon her person by a defendant.” Id. In the years since Rice, we have attached the discovery rule in ORS 12.010 to a number of other statutes of limitations in ORS chapter 12 by following the same analysis. See Hayes Oyster Co. v. DEQ, 316 Or App 186, 200, 504 P3d 15 (2021), rev. den, 369 Or 507, 507 P.3d 271 (2022) (attaching discovery rule in ORS 12.010 to limitation period in ORS 12.140); Hammond v. Hammond, 296 Or App 321, 334, 438 P3d 408 (2019) (attaching discovery rule in ORS 12.010 to 12.050); *658 Tavtigian-Coburn v. All Star Custom Homes, LLC, 266 Or App 220, 222, 337 P.3d 925 (2014) (attaching discovery rule in ORS 12.010 to ORS 12.080(3)).
Discerning whether ORS 12.010 attaches a discovery rule to ORS 12.125 seems like a simple question on first blush. ORS 12.125 is a statute of limitations in ORS chapter 12, and it does not contain language specifying when the limitations period begins to run, directing only that “[a]n action arising under a rental agreement or ORS chapter 90 shall be commenced within one year.” By its plain language, ORS 12.125 is similar to other statutes of limitations that include a discovery rule by operation of ORS 12.010. See ORS 12.050; ORS 12.080(3) - (4); ORS 12.140
However, defendant correctly observes that ORS 12.125 was placed in ORS chapter 12 by the Office of Legislative Counsel. See Vollertsen v. Lamb, 302 Or 489, 495-96, 732 P2d 486 (1987) (explaining that ORS 12.125 was originally passed as Senate Bill (SB) 159, section 39 (1973)—part of the same bill that codified the original ORLTA in ORS chapter 90—but that “[d]uring the process of compilation for inclusionintheOregonRevisedStatutes,LegislativeCounsel moved this section to chapter 12”). Proceeding from that fact, defendant argues that there is no evidence that the legislature intended for ORS 12.125 to be codified in ORS chapter 12, and therefore no evidence that the legislature intended for ORS 12.010 to apply a discovery rule to ORS 12.125. In
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response, plaintiffs contend that, “[i]f the legislature did not intend ORS 12.125 to be treated as a ‘period prescribed in’ ORS chapter 12 per ORS 12.010, it could have indicated so or moved it back to ORS chapter 90.” Because the legislature never amended ORS 12.125 in such a way despite opportunities to do so, plaintiffs contend that “ORS 12.125 is onequalfootingwiththeotherstatutesoflimitationcontained in ORS chapter 12.”
**6 We note first that the lack of legislative action moving ORS 12.125, or otherwise amending its language, is not particularly compelling evidence that the legislature intended for ORS 12.010 to attach a discovery rule to ORS 12.125 See Berry, 245 Or at 311, 421 P.2d 996 (“Legislative inaction is a weak reed upon which to lean in determining legislative *659 intent.”).However,weunderstandplaintiffs to essentially contend that the legislative history of ORS 12.125 is insufficient to overcome our case law that ORS 12.010 applies a discovery rule to ORS chapter 12 statutes of limitations that look like ORS 12.125. Indeed, recent cases applying ORS 12.010 to other statutes of limitations have not analyzed how those statutes came to be codified in ORS chapter 12; it was enough that they simply were statutes of limitations in ORS chapter 12 that lacked “triggering event” language. See, e.g., Hayes Oyster Co., 316 Or App at 200, 504 P.3d 15 (“Because the catch-all statute, ORS 12.140, falls within the scope of ORS 12.010, we regard the discovery rule applicable.” (Footnote omitted.)).
Despite those factors, however, a review of the legislative historyofORS12.125leadsustoconcludethatthelegislature did not intend for ORS 12.010 to apply a discovery rule to ORS 12.125. To explain why, we summarize the legislative history of both statutes. We start by considering ORS 12.010, which predated the enactment of the ORLTA and ORS 12.125
ORS 12.010 has roots as one of Oregon's oldest statutes. The statute that would become ORS 12.010 was first passed during the Second Legislative Assembly in 1862 and was part of the first Code of Civil Procedure. An Act to Provide a Code of Civil Procedure, Or. Laws 1862, ch. I, title II, § 3, compiled in General Laws of Oregon, Civ Code, ch 1, title II, § 3, p. 140 (Deady 1845-1864) (“Actions at law shall only be commenced within the periods prescribed in this title, after the cause of action shall have accrued; except where, in special cases a different limitation is prescribed by statute.”).5 Ithasremainedlargelyunchangedeversince. See Rice, 354 Or at 726 n 7, 320 P.3d 554 (although ORS 12.010
has “undergone slight modification and renumbering” since 1862,“therelevantoperativetextremainsthesame”).Chapter I,titleIIoftheoriginalCodeofCivilProcedurewasorganized in much the same way as today's ORS chapter 12—section 3 *660 introduced the title, then various provisions defined the limitation periods for certain categories of actions. Like ORS12.010,manyofthosefirststatutesoflimitationsremain largelythesametoday. See, e.g.,GeneralLawsofOregon,Civ Code,ch1,titleII,§6(2),p.141(Deady1845-1864)(defining a six-year limitation period for actions “upon a liability created by statute, other than a penalty or forfeiture,” today codified as ORS 12.080(2)); General Laws of Oregon, Civ Code,ch1,titleII,§6(4),p.141(Deady1845-1864)(defining a six-year limitation period for actions “for taking, detaining or injuring personal property, including an action for the specific recovery thereof,” today codified as ORS 12.080(4)). Thus, when the legislature originally created the predecessor to ORS 12.010 stating that actions “shall be commenced within the periods prescribed in this title,” it intended for that provision to apply to the statutes of limitations in chapter I, title II of the same act. Although the legislature surely contemplated that new statutes of limitations could become part of title II due to future lawmaking, section 3 originally applied to a set collection of statutes of limitations.
**7 With that in mind, we turn to ORS 12.125. ORS 12.125 was first passed in 1973 as part of SB 159, which created the ORLTA. When the bill was first introduced, however, it did not contain a statute of limitations provision applicable to the causes of action the bill created. The Senate Committee on Local Government and Urban Affairs amended the bill to add what became section 39, providing that “[a]n action arising under sections 1 to 35 of this Act shall be commenced within one year.” See Exhibit 1, Senate Local Government & Urban Affairs Committee, SB 159, March 26, 1973 (memorandum and adopted amendments to SB 159). The House Committee on Local Government and Urban Affairs later adopted an amendment to extend the statute to also cover actions under a rental agreement. See Minutes, House Local Government & UrbanAffairsCommittee,SB159,Jun.1,1973,4-5(adopting proposed amendments dated May 18, 1973). In its final form, section 39 stated: “An action arising under a rental agreement or sections 1 to 33 of this Act shall be commenced within one year.” Or. Laws 1973, ch. 559, § 39.
*661 The legislative history to SB 159 contains little background on the provision, presumably because it was part of a much larger bill. The record notes only that section 39 institutes a “short” one-year limitations period and “was
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added at the suggestion of Senator John Burns [to] prevent landlords and tenants from dragging out ancient history in a dispute between them.” Explanation of Engrossed SB 159, House Local Government & Urban Affairs Committee, SB 159,May18,1973,8.Weseenoindicationthatthelegislature ever discussed whether a discovery rule would or should apply.
Most of the ORLTA created new provisions of law, and although there is some evidence that legislators may have expected that the act would “replace” the existing landlordtenant provisions in ORS chapter 91, the final act did not specify that any of the provisions were “added to and made a part of” any preexisting chapter. See Exhibit 2, Senate Local Government & Urban Affairs Committee, SB 159, Mar. 20, 1973 (memorandum on proposed amendments to SB 159) (explaining that the act “would replace ORS [chapter] 91”); Or. Laws 1973, ch. 559 (specifying only that act “creat[es] new provisions”). This is important, because the legislature knew how to specify that a provision should be added to and made a part of a certain chapter or series, yet did not take that action here. See, e.g., Or. Laws 1973, ch. 694, § 21 (in legislation from same year, specifying that “[s]ections 22 to 25” of act relating to parole procedures “are added to and made a part of ORS 144.310 to 144.400”); Or. Laws 1971, ch. 285, § 1 (specifying that “[s]ection 2” of act relating to ad valorem taxation “is added to and made a part of ORS chapter 307”).
It then fell upon the Office of Legislative Counsel to codify the new law into the Oregon Revised Statutes. See ORS 173.160 (explaining that Legislative Counsel “prepar[es] editions of the statutes for publication and distribution”). As part of its statute preparation duties, Legislative Counsel may renumber or rearrange sections so long as those changes do “not alter the sense, meaning, effect or substance of any Act.” ORS 173.160. Absent direction from the legislature that the provisions were “added to and made a part of” any *662 specificchapterorseries,LegislativeCounselcodified most of the new Act in ORS chapter 91 (which was later renumbered to ORS chapter 90) but codified the statute of limitationsprovisionintoORSchapter12. See Vollertsen,302 Or at 495-96, 732 P.2d 486 (explaining that history).
Thus, there is no evidence that the legislature intended for the ORLTAstatuteoflimitationstobecodifiedinORSchapter12 or subject to the discovery rule in ORS 12.010. Not only did the legislature know how to make such an intent clear, but it had also used the required language to explicitly add another
statuteoflimitationstoORSchapter12inthepriorlegislative session. See Or. Laws 1971, ch. 664 (specifying that sections that later became the original version of ORS 12.135 “are added to and made a part of ORS 12.070 to 12.260”). In the case of ORS 12.135, including the “added to and made a part of” language means that ORS 12.135 is part of ORS chapter 12 for purposes of other provisions that broadly apply to ORS chapter12.Here,thelegislaturecouldhavemadeORS12.125 subject to ORS 12.010 by using the “added to and made a part of” convention but took no such action.
**8 Because the placement of the ORLTA statute of limitations in ORS chapter 12 was the result of an organizational decision by Legislative Counsel, and not legislative action adding the statute to and making it a part of ORS chapter 12, we cannot draw any legislative intention from the placement of ORS 12.125 within ORS chapter 12. Legislative Counsel cannot “alter the sense, meaning, effect orsubstanceofanyAct.”ORS173.160.LegislativeCounsel's editorial actions in assigning an enacted law an ORS number withinacertainchapterdoesnotmeanthatthelawistherefore subject to other general provisions that apply to that chapter; that sort of effect, when it occurs, must be the result of legislative action. See State v. Burris, 370 Or 339, 354 n 10, 518P3d891(2022)(“Astatutehastheeffectoffallingwithin a series only if the legislature says that it falls within the series.”). Thus, we conclude that ORS 12.125 is not affected by the language in ORS 12.010 applicable to limitations “periods prescribed in this chapter.”
*663 Finally, we conclude that Rice and its progeny do not mandate that any statute of limitations in ORS chapter 12 that lacks triggering language is subject to a discovery rule by operation of ORS 12.010, regardless of other factors. Rice, Tavtigian-Coburn, Hammond, and Hayes Oyster Co. all involved statutes of limitations that were part of the 1862 Code of Civil Procedure that first enacted the predecessor to ORS 12.010 See Rice, 354 Or at 723, 320 P.3d 554 (applying discovery rule in ORS 12.010 to 12.080(4), formerly chapter I, title II, section 6(4) of 1862 Code); Hayes Oyster Co., 316 Or App at 200, 504 P.3d 15 (applying discovery rule in ORS 12.010 to 12.140, formerly chapter I, title II, section 11 of 1862 Code); Hammond, 296 Or App at 334, 438 P.3d 408 (applying discovery rule in ORS 12.010 to 12.050, formerly chapter I, title II, section 4(1) of 1862 Code); TavtigianCoburn,266OrAppat222,337P.3d925(applyingdiscovery rule in ORS 12.010 to 12.080(3), formerly chapter I, title II, section 6(3) of 1862 Code). The legislature's intent for those statutes of limitations to be subject to and interact with ORS
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12.010 was clear. In other words, Rice and its progeny do not imply that the question whether ORS 12.010 attaches a discovery rule to a certain statute of limitation is determined only by where the statute was codified and whether it lacks relevant triggering language. As to a statute like ORS 12.125, the lack of any legislative intent for the statute to be added to and made a part of ORS chapter 12 controls over those other considerations.
For those reasons, we conclude that a discovery rule does not apply to ORS 12.125. In the absence of a discovery rule, a limitations period begins to run when every fact necessary for the plaintiff to prove the elements of their claim has occurredandtheplaintiffhasarighttosue. See Stupek v. Wyle Laboratories Corp., 327 Or 433, 438, 963 P2d 678 (1998) (so stating). As to plaintiffs’ ORS 90.315(4) (2011) claims that fall under the one-year statute of limitations in ORS 12.125, the limitations period began to run when the relevant billing violations occurred. Thus, the trial court erred in certifying a 10-year class for plaintiffs’ claims under ORS 90.315(4) (2011) 6
not err in granting plaintiffs’ summary judgment motion on the meter reading claim.
**9 We take the relevant facts from the summary judgment record.7 BBM operated a 158-site recreational vehicle (RV) park in Salem. The park's rental agreements with its residents varied, but stated either that residents were responsible for “electric” or “Electric As Used,” depending on the specific tenant and when they signed their agreement, as an extra charge paid to BBM each month in addition to rent. Prior to the filing of plaintiffs’ complaint, those agreements did not explain how electricity charges would be calculated or disclose fees for meter reading.
*665 Each of the park's 158 sites were separately metered for electrical service by individual meters that were owned by BBM. Approximately six to 12 individual site meters fed into one PGE-owned submeter, and a total of 16 PGE-owned submeters serviced all 158 sites at the park. PGE billed BBM monthly for the electricity delivered to each PGE-owned submeteratakWhratethat“varie[d]eachmonth,andvarie[d] monthlybetweenthesubmeters.”BBMcontendedthatPGE's rates ranged from $0.09 to $0.12 per kWh during the relevant time period.
*664 II. PLAINTIFFS’ ORS 90.315(4) (2011) CLAIMS AND BBM'S FIRST AND SEVENTH ASSIGNMENTS OF ERROR
A. BBM's Liability under ORS 90.315(4) (2011) and First Assignment of Error
We next address BBM's first assignment of error, in which it contends that the trial court erred “when it granted summary judgment to plaintiffs on their ORS 90.315(4) [(2011)] claims.” That ruling was based on the trial court's legal conclusions that (1) to the extent that BBM charged residents a higher kWh rate for electricity than BBM was billed by the utility provider, Portland General Electric (PGE), that practice violated ORS 90.315(4) (2011); and (2) BBM's practice of charging residents a meter reading fee violated ORS 90.315(4) (2011). On review, we view the evidence, and all reasonable inferences that may support it, in the light most favorable to BBM as the nonmoving party to determine whether there are any genuine issues of material fact and whether plaintiffs were entitled to judgment as a matter of law. Day v. Day, 299 Or App 460, 461, 450 P3d 1 (2019) In so doing, we first conclude that the trial court erred in granting summary judgment to plaintiffs on their rate claim, as plaintiffs were not entitled to judgment as a matter of law on that claim. However, we conclude that the trial court did
BBM, in turn, billed residents on a monthly basis for the electricity used at individual tenant sites. BBM's process for determining tenant electricity bills involved the park's maintenance worker reading each individual site meter monthlyandcomputingtheelectricityusedbysubtractingthe prior month's meter reading from the current month's reading. Once the kWh usage for the month was computed, that number was multiplied by “the current kWh rate.” Finally, a $10 “meter fee” was added to reach the total tenant electricity charge amount. The meter fee was intended to cover BBM's costs“associatedwithreadingthemeters,thecostsassociated with installing the individual tenant site meters, lines and pedestals as well as the repairs and upkeep for the individual tenant meters.”8
The “current kWh rate” that BBM charged its residents was not the current rate PGE charged BBM for electricity for the relevant month or submeter, but instead a $0.12 “flat kWh rate”setbythepark.BBMcontendedthatthedifferentbilling periods used by PGE and the park, the different kWh rates assessed by PGE for different submeters, and the different kWh rates assessed by PGE from month to month combined to make computing each resident's electrical fee based on the actual kWh rate PGE charged for the resident's usage “an
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administrative and accounting burden [that] would result in a high likelihood of error in the calculations.”
*666 BBM's flat kWh rate was reviewed annually by analyzing the total amount billed to BBM by PGE for the 16 submeters in the previous year and the total amount paid by residents for electricity in that year. Despite the higher rate, the park did not make a profit on electricity, apparentlybecauseeachPGEmeterrecordedmoreelectricity use in kilowatt hours than the total of all the individual submeters that fed into it. Although the parties disputed the reason for that discrepancy, they agreed that it existed. BBM “attempt[ed] to lose a slight amount of money each year” and had a “longstanding policy to charge its tenants slightly less for their electricity expenses” than what BBM was charged by PGE.
**10 In the trial court, plaintiffs moved for partial summary judgment on two legal issues central to its ORS 90.315(4) (2011) claims: that charging tenants a higher kWh rate than BBM was billed by the utility and charging a meter reading fee both violated ORS 90.315(4) (2011) as a matter of law. BBM contended that neither did. Specifically, BBM contended that ORS 90.315(4) (2011) did not require it to bill tenants the same kWh rate as PGE had billed BBM and instead only required that “the landlord does not make a profit” on electricity. As to the meter reading fee, BBM contended that ORS 90.315(4) (2011) was not relevant to the chargeatallbecauseitwasforBBM'sservices“inaccounting fortheelectricityusedbythetenant.”Afterreceivingbriefing and argument, the trial court granted plaintiffs’ motions. The parties essentially repeat their summary judgment arguments on appeal.9
Whether the inflated kWh rate and “meter fee” billing practices at issue in this case violated ORS 90.315(4) (2011) as a matter of law are questions of statutory interpretation for which we again turn to the familiar framework laid out in Gaines, 346 Or at 171-72, 206 P.3d 1042, beginning with the relevant statute. ORS 90.315 (2011) defines a “[u]tility or *667 service,” as used in the statute, specifying that it “includes but is not limited to electricity, natural or liquid propanegas,oil,water,hotwater,heat,airconditioning,cable television,directsatelliteorothervideosubscriptionservices, Internetaccessorusage,sewerserviceandgarbagecollection and disposal.” ORS 90.315(1)(b) (2011) ORS 90.315(4) (2011) then addresses certain landlord obligations regarding utility billing. It states, in part:
“(a) Except for tenancies covered by ORS 90.505 to 90.840,ifawrittenrentalagreementsoprovides,alandlord may require a tenant to pay to the landlord a utility or service charge that has been billed by a utility or service provider to the landlord for utility or service provided directly to the tenant's dwelling unit or to a common area available to the tenant as part of the tenancy. A utility or service charge that shall be assessed to a tenant for a common area must be described in the written rental agreement separately and distinctly from such a charge for the tenant's dwelling unit. Unless the method of allocating the charges to the tenant is described in the tenant's written rental agreement, the tenant may require that the landlord give the tenant a copy of the provider's bill as a condition of paying the charges.
“(b) Except as provided in this paragraph, a utility or service charge may only include the cost of the utility or service as billed to the landlord by the provider. A landlord may add an additionalamounttoautilityorservice charge billed to the tenant if [the charge is for certain cable, satellite, video, or internet services not relevant here.]”
ORS 90.315(4) (2011) (emphases added).
We first consider the inflated kWh rate billing issue. Pursuant to ORS 90.315(4)(a) (2011), because BBM's rental agreements provided that residents were responsible for “electric” or “Electric As Used” (depending on the rental agreement at issue), BBM could require a resident to pay a “utility or service charge” that had been billed by PGE to BBM for electricity (a “utility”) “provided directly to the tenant's [RV site or] dwelling unit.” See ORS 90.100(12) (“ ‘Dwelling unit’ regarding a person who rents a space for a * * * recreational vehicle * * * means the space rented * * *.”). And, pursuant to ORS 90.315(4)(b) (2011), that “utility or *668 service charge” could “only include the cost” of the electricity“asbilled”byPGEtoBBM.ORS90.315(4)(2011) does not mandate that a landlord charge the exact same rate it is billed by a utility—instead, the landlord is only required to charge the exact same “cost.” The “cost” of something is generally “the amount or equivalent paid or given or charged
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or engaged to be paid or given for anything bought or taken in barter or for service rendered : CHARGE, PRICE.” Webster's at 515. Here, the kWh rate PGE charged to BBM for resident site electricity was but one component of the overall cost charged.
**11 The legislative history of ORS 90.315(4) (2011) supports that reading. The provision was first passed in 1997 as part of legislation that created new statutes and amended large swaths of the ORLTA. See Or. Laws 1997, ch. 577, § 16. According to the bill's principal drafter, John Van Landingham, the utility provisions at issue here were intended to ensure that “the landlord cannot add on to the charge” or “include any capital costs incurred by a landlord, such as installing a water system.” Exhibit O, House Commerce Committee, SB 675, May 29, 1997, 8 (accompanying comments by Van Landingham) (emphasis added). In subsequent years, the provision was subject to minor changes, but the focus remained on ensuring that landlords did not pass on more than the overall “cost” billed by the utility provider.10
Further, we reject plaintiffs’ arguments that we consider the utility billing provisions in ORS 90.531 to 90.543 (2011) in interpreting ORS 90.315(4) (2011). Those statutes specifically address permissible utility billing methods for manufactured dwellings and floating home space tenancies and do not apply to BBM's RV park. See ORS 90.100(25) (2011) (“ ‘Manufactured dwelling’ does not include a recreational vehicle.”); ORS 90.120(5) (2011) (“Residential tenancies for *669 recreational vehicles * * * shall be subjecttoORS90.100to90.465.”);ORS90.315(4)(a)(2011) (excepting “tenancies covered by ORS 90.505 to 90.840”). Plaintiffs did not bring their claims under those statutes or raise them below, and the parties in fact agreed in the trial court that ORS 90.505 to 90.840 (2011) did not apply to BBM's RV park.
We are also not persuaded that those statutes provide relevant context for interpreting ORS 90.315(4) (2011). Indeed, those statutes provide specific guidelines for landlord utility billing for those tenancies, limiting landlords who seek reimbursement for utility service costs to three options: (1) including the costs in the rent, (2) separately billing tenants via pro rata apportionment based on a “master meter,” or (3) separately billing tenants based on the tenant's actual use as measured by their submeter “at a rate no greater than the average rate billed to the landlord by the utility or service provider, not including any base or service charge.” ORS
90.536(1), (2) (2011); ORS 90.532(1) (2011). However, we see no evidence that the legislature intended for those statutes to have any application outside of the manufactured dwelling and floating home tenancies they regulate. See also ORS 90.315(4)(a) (2011) (excepting “tenancies covered by ORS 90.505 to 90.840”).
In short, ORS 90.315(4)(a) and (b) (2011) ensure that a landlord does not upcharge a tenant for utilities beyond the “cost” that the landlord is billed by the provider. Those provisions do not require that a landlord must charge a tenant the exact same kWh rate for electricity that the landlord is itself billed by the utility. Of course, a landlord's use of an inflated kWh rate may lead to tenant bills that exceed the landlord'scosttotheprovider—infact,thatmightbethemost likely result of such a practice. But determining whether that is the case would depend on the facts.
**12 In this case, plaintiffs did not allege, or later present facts in the summary judgment record, that BBM's inflated rate billing resulted in electricity charges to tenants that exceeded BBM's cost to PGE for that electricity, in violation of ORS 90.315(4) (2011). Instead, in the operative complaint at the time of their partial summary judgment motion, plaintiffs only alleged that BBM violated *670 ORS 90.315(4) (2011) when it “charged plaintiffs and class members a rate per kilowatt hour for electricity that was in excess of the rate defendants paid to PGE.” Because, as we concluded above, an inflated rate billing practice is not alone sufficient to violate ORS 90.315(4) (2011) as a matter of law, the trial court erred in granting partial summary judgment to plaintiffs on their rate claim.
We reach a different conclusion as to BBM's practice of adding a $10 “meter fee” or “meter reading fee” into tenant electricity charges, however. Again, under ORS 90.315(4) (2011), “a landlord may require a tenant to pay to the landlord a utility or service charge that has been billed by a utility or service provider to the landlord for utility or service provided directly to the tenant's dwelling unit,” and a utility charge for electricity “may only include the cost of the utility or service as billed to the landlord by the provider.” ORS 90.315(4)(a), (b) (2011). As we understand it, BBM's argument is that ORS 90.315(4) (2011) “does not prohibit or even address the meter fee” to recoup BBM's capital and administrative electrical costs, because, in BBM's view, the fee was not for PGE's electricity “provided directly to the tenant's dwelling unit,” but instead, for a service BBM provided.
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However, BBM misconstrues the relevant language. ORS 90.315(4) (2011) applies to the meter fee because it was a surcharge that BBM added into residents’ monthly electricity charges and not a cost passed on from PGE. BBM required tenants “to pay to the landlord a utility or service charge,” or electricity charge, “that ha[d] been billed by a utility or service provider to the landlord.” ORS 90.315(4)(a) (2011). That charge was “for utility or service provided directly to the tenant's dwelling unit” rather than “a common area available to the tenant as part of the tenancy.” Id. Thus, BBM'selectricitychargestotenantsfellunderORS90.315(4) (b) (2011) and could “only include the cost of the utility or service as billed to the landlord by the provider.” However, the charges were not limited as required. BBM added a meter reading fee into the tenant electricity charges to recoup its owncapitalandlaborexpenses,expenseswhichwerenotpart of the “cost” of electricity “as billed” by PGE. That type of surcharge is the precise type of billing practice *671 that the legislature intended to prevent with ORS 90.315(4) (2011) See Exhibit O, House Commerce Committee, SB 675, May 29, 1997, 8 (accompanying comments by Van Landingham) (explaining that “the landlord cannot add on to the charge” or “include any capital costs incurred by a landlord”). Thus, BBM'smeterfeeviolatedORS90.315(4)(2011),andthetrial court did not err in granting summary judgment to plaintiffs on that issue.
B. Damages under ORS 90.315(4) (2011) and BBM's Seventh Assignment of Error
We next turn to the arguments in BBM's seventh assignment of error, in which it contends that the trial court erred in granting plaintiffs’ motion for summary judgment on the issue of damages under ORS 90.315(4)(e) (2011). Under that provision, “[i]f a landlord fails to comply with paragraph (a), (b) or (c) of this subsection, the tenant may recover from the landlord an amount equal to one month's periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater.” ORS 90.315(4)(e) (2011). Specifically, the court adopted plaintiffs’ view that ORS 90.315(4)(e) (2011) provided one month's rent as a remedy for each specific and repeated violation of ORS 90.315(4)(a) to (c) (2011), such that each tenant could receive as much as two month'srentforeverymonthinwhichtheywerechargedboth an inflated kWh rate and meter fee.
**13 We recently rejected that interpretation in Shepard Investment Group LLC v. Ormandy,320OrApp521,514P3d 1125, rev. allowed, 370 Or. 404, 518 P.3d 942 (2022). In that case, a landlord had violated two recently created provisions
of ORS 90.315(4): ORS 90.315(4)(b)(A), requiring that utility charges are billed to a tenant in writing, and ORS 90.315 (4)(b)(B), requiring that a landlord provide a tenant with a written explanation of the manner in which the utility provider assessed its charges and the manner in which the landlord allocated those charges among the tenants. Id. at 524-25, 514 P.3d 1125. The trial court in Shepard Investment Group LLC also concluded that the violations had been repeated every month over the course of a year every time the landlord billed the tenant for utilities absent the required writings. Id. Citing the remedy provision now numbered as *672 ORS 90.315(4)(f), the tenant argued that, because the landlord had “fail[ed] to comply with paragraph * * * (b)” 12 separate times, the tenant was entitled to recover “an amountequaltoonemonth'speriodicrentortwicetheamount wrongfully charged to the tenant, whichever is greater” as a separateremedyforeachofthose12individualviolations. Id. at 524, 514 P.3d 1125. The trial court agreed and awarded the tenant an amount equal to 12 months’ rent or nearly $10,000.
Id. at 525, 514 P.3d 1125
On the landlord's appeal, we construed the remedy provision and concluded that the legislature had not intended for it to provide “one month's periodic rent or twice the amount wrongfully charged” as a remedy each time a landlord “fail[ed] to comply” with the listed requirements. Id. at 530-31, 514 P.3d 1125. We noted that the plain language of the provision does not specify that it applies on a “per violation” or “per noncompliant billing” basis as the tenant had argued. Id. at 531, 514 P.3d 1125. Instead, the provision provides for the greater of two possible remedies if a tenant establishes that a landlord “fails to comply” with any of the listed requirements, language which plainly does not distinguish between the number of times a landlord violates the requirements. Id. at 530-31, 514 P.3d 1125. However, the provisionstillprovidesforanincreasedremedywhenatenant is “wrongfully charged” on a repeated basis if “twice the amountwrongfullychargedtothetenant”isgreaterthan“one month's periodic rent.” Id. at 530, 514 P.3d 1125. Applying that interpretation to the facts, we concluded that the tenant had been “wrongfully charged” $40 each month over 12 months, because each of those monthly utility charges had failed to comply with ORS 90.315(4)(b). Id. at 532, 514 P.3d 1125.Becausetwicethetotalamountwrongfullychargedwas greater than one month of the tenant's periodic rent, the tenant was entitled to “twice the amount wrongfully charged” or $960. Id.
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Inaccordancewithourdecisionin Shepard Investment Group LLC, we agree with BBM that the trial court erred in granting partial summary judgment to plaintiffs on the issue ofdamagesunderORS90.315(4)(e)(2011)andconcludethat plaintiffswerenotentitledtotwomonths’rentforeachmonth in which BBM violated ORS 90.315(4)(b) (2011). A tenant is not entitled to “an amount equal to one month's periodic rent or twice the amount wrongfully *673 charged to the tenant, whicheverisgreater”asaseparateremedyforeachindividual billing over time that fails to comply with ORS 90.315(4) (b) (2011). Regardless of the total number of billings that “fail[ed] to comply” with ORS 90.315(4)(b) (2011), the court should only consider whether BBM “fail[ed] to comply with paragraph * * * (b),” and, if the answer is yes, award a tenant “an amount equal to one month's periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater.” ORS 90.315(4)(e) (2011). In short, the trial court here erred in granting summary judgment to plaintiffs on the issue of calculating damages under ORS 90.315(4)(e) (2011)
power used than the PG&E smart meters,” that BBM had “been losing money on electricity” for that reason, and that the billing changes were intended “to simplify billings, break evenonelectricity,andkeeptotalrentsdown.”(Underscoring in original.) The notice ended by stating that “[i]t is our hope that these changes will only affect your monthly billings slightly, if at all.” Berman held three different meetings to announce the new billings policies to tenants. At the meetings, Berman explained to the tenants that the changes were “revenue neutral.”
III. PLAINTIFFS’ RETALIATION CLAIM AND BBM'S FIFTH AND SIXTH ASSIGNMENTS OF ERROR
A. Plaintiffs’ Retaliation Claim and BBM's Fifth Assignment of Error
Next, we consider BBM's fifth assignment of error, in which BBM assigns error to the trial court's ruling granting partial summary judgment to plaintiffs on their retaliation claim. As relevant here, ORS 90.385 prohibits a landlord from retaliating “by increasing rent” after “[t]he tenant has performed or expressed intent to perform any * * * act for the purpose of asserting, protecting or invoking the protection of any right secured to tenants under any federal, state or local law.” ORS 90.385(1)(f)
**14 The facts relevant to the court's summary judgment ruling, viewed in the light most favorable to BBM, are as follows. In June 2013, approximately two months after plaintiffs filed this action, BBM issued a “30-day Written Notice of Change of Policies and Practices” to all current park residents, explaining that on July 29, 2013, BBM would stop charging tenants a “monthly $10.00 electricity service charge,” begin charging tenants a kWh electricity rate that was based on the average kWh rate charged by the utility for each billing cycle, and increase rent for all tenants by $20 per month. The notice stated that “[i]t has recently been brought to our attention that our RV sites are metered with electro-mechanical meters that consistently *674 read less
Explaining the changes in a later deposition, Berman stated that “attorneys had impact” on his decision to produce the noticeandholdthetenantmeetingsregardingtherestructured billing practices and rent increase “specifically right then,” but that “the fact that [he] had been sued for charging a meter reading fee” had not been “a factor that went into that decision.” Acknowledging that the billing changes made some residents’ overall bills increase by “two, three bucks” a month, Berman stated that “I don't know any other way to do it * * * [to] be so far above board and compliant that I'm never having this discussion with [plaintiffs’ attorney] again.” In a later affidavit, Berman added that the park made the billing changes “because it was attempting to be more legally compliant in its practices, because it was engaging in protected settlement discussions, because the park had legitimate business reasons for the restructuring (as reflected in the notice to the tenants about the same) and it was attempting to meet Plaintiffs’ ORCP 32 H demands.”11
Plaintiffs amended their complaint to add an additional claim for retaliation and moved for partial summary judgment on the claim, contending that “conduct admitted to by Defendants—raisingrentasaresultofthefilingof *675 this lawsuit—constitutesunlawfulretaliationunderORS90.385.” Citing Elk Creek Management Co. v. Gilbert,353Or565,303 P3d 929 (2013), plaintiffs contended that they had met the requirements of ORS 90.385 and proved that “the landlord made the decision to act because of the tenant's protected activity.” Specifically, plaintiffs pointed to a June 10, 2013 letter from BBM's attorney to plaintiffs’ counsel during settlement negotiations and Berman's deposition testimony as proof that BBM had admitted that the lawsuit motivated the rent increase.
In response, BBM argued that plaintiffs had not established retaliation as a matter of law. First, BBM contended that the statute did not apply at all, because the rent increase had accompanied decreases in other fees that made the overall
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changes “revenue neutral,” and because none of the current tenantsatthetimeoftherentincreasewereyetinvolvedinthe litigation—only the Hathaways were named plaintiffs, they no longer resided at the park, and the court had yet to certify a class. BBM also argued that plaintiffs’ complaint was not the “but for” cause of the rent increase and that other factors had motivated the changes.
**15 Additionally, BBM pointed to different settlement communication letters, this time those dated May 31 and July 11, 2013, from plaintiffs’ attorneys to BBM's counsel, as evidence that plaintiffs had brought their retaliation claim in bath faith. See ORS 90.130 (“[e]very duty under this chapterandeveryactwhichmustbeperformedasacondition precedent to the exercise of a right or remedy under this chapterimposesanobligationofgoodfaithinitsperformance or enforcement”). Specifically, BBM argued that plaintiffs
“should not be entitled to the right to enforce ORS 90.385 or be entitled to damages under [ORS] 90.375 as a result of alleged retaliation. Defendants were negotiating with Plaintiffs in good faith pursuant to ORCP 32 H and 32 I at or around the time the Park changed its practices. Additionally, counsel for Plaintiffs assured counsel for DefendantsthatDefendantwas‘freetoincreaserent’inthe present proceeding. In a letter from Counsel to Plaintiffs dated May 31, 2013, which counsel for Plaintiffs filed in support of their Motion for Leave to File its Second *676 AmendedComplainttoadddamagestotheproceeding,and in discussing the meter reading fee being dropped, counsel stated: ‘My understanding from our discussion is that this fee will be dropped altogether. Obviously, defendant is free to increase rent, or, as I read the statute, disclose and include this charge as an explicit term in any new leases.’ Additionally, in June 11, 2013, correspondence from counsel for Plaintiffs, counsel for Plaintiffs stated that they ‘welcome[d] implementation of the curative steps outlined in your letter.’ (Plaintiffs’ June 11, 2013 correspondence was also previously filed in support of its Motion for Leave to File its Second Amended Complaint). In this respect, Plaintiffs through their counsel, acted in bad faith by encouraging the changes proposed by counsel for Defendant through settlement negotiations, and even expressly stated that rent could be raised to address their legal concerns related to the meter reading fee, and then proceeded to file a retaliation claim after the park made its proposed changes.”
(Internal citations omitted.) That argument did not fashion ORS 90.130 as an affirmative defense, and BBM had not
pleaded ORS 90.130 as an affirmative defenses to the retaliation claim at that time.
Lastly, at the same time that BBM invoked settlement letters from plaintiffs’ counsel in its arguments, BBM moved to strike the settlement letter from BBM’s counsel that plaintiffs had included and referenced in their motion, arguing that it wasevidenceofstatementsmadeincompromisenegotiations that was protected and inadmissible under OEC 408 to prove BBM's liability.
After receiving briefing and oral argument, the trial court made its rulings. First, the court granted defendant's motion to strike the letter from BBM's attorneys, concluding that it was inadmissible under OEC 408. The court then granted plaintiffs’ motion “to establish liability under ORS 90.385.” The court explained:
“Once the Defendants were no longer able to illegally overcharge tenants for electricity and meter reading fees, they chose to instead increase the rent. It is clear that this action was done in response and because of tenants’ filing this lawsuit. As a result, this court finds that Defendants *677 did in fact violate ORS 90.385 by retaliating when they raised rent by $20.”
In granting the motion, the trial court implicitly concluded thattherewasnogenuineissueastoanymaterialfactandthat plaintiffs were entitled to prevail on the claim as a matter of law. See ORCP 47 C.
**16 With that background in mind, we summarize the controlling law on this issue. As relevant here, ORS 90.385 prohibits a landlord from retaliating “by increasing rent” after the tenant has “made any complaint to the landlord that is in good faith and related to the tenancy”; “testified against the landlord in any judicial, administrative, or legislative proceeding”; or “performed or expressed intent to perform any other act for the purpose of asserting, protecting or invoking the protection of any right secured to tenants under any federal, state or local law.” ORS 90.385(1). There must be a causal connection between the landlord's action and the tenant's protected activity—specifically, the tenant must provethatthelandlordmadethedecisiontoraiserent because of the tenant's complaint. Elk Creek Management Co., 353 Or at574,582,303P.3d929.Thereasonforalandlord'sdecision is a question of fact. Id. at 584, 303 P.3d 929. Typically, the tenant must establish that, “but for” the protected activity, the landlord would not have made the decision to raise rent. Id. In the event that multiple factors motivated the decision but
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either operating alone would have been sufficient to cause it, a tenant may also prevail by proving that the tenant's protected activity was a “material and substantial factor” in the landlord's decision. Id. at 584-85, 303 P.3d 929. In neitherinstanceisthetenantrequiredtoprovethatthetenant's protected activity was the “sole” or “dominant” reason for the landlord's decision. Id. at 585, 303 P.3d 929. In other words, thetenant'sprotectedactivityneedonlybe“afactorthatmade a difference in the landlord's decision.” Id. at 583, 303 P.3d 929.
We first address BBM's renewed argument that its rent increase was not retaliatory because no current tenant had asserted protected rights when the rent increase occurred. We reject that argument. The complaint asserted claims on behalf of “a Class consisting of * * * [a]ny person who, at any time during the ten[-]year period preceding the *678 date this lawsuit was filed,” had paid electricity bills from BBM that hadbeencomputedusingthekWhrateandmeterfeepractices at issue in plaintiffs’ ORS 90.315(4) (2011) claims. The complaintmadeclearthataclassthatincludedcurrenttenants intended to pursue class action litigation to assert its rights under the ORLTA, and by the time of the rent increase, at leasttwocurrenttenantshadactuallyparticipatedintheaction by declaring that BBM's ORLTA violations were ongoing. Further, ORS 90.385(5) makes clear that “a complaint made by another on behalf of a tenant is considered a complaint by the tenant” for purposes of ORS 90.385. In that context, current tenants had “expressed intent” to assert their rights.
We are also not persuaded by BBM's contention that the rent increase did not violate ORS 90.385 because it was “revenue neutral.”ORS90.385statesthat“alandlordmaynotretaliate” by taking certain delineated actions, including “increasing rent,” after a tenant asserts its ORLTA rights. In short, the legislature chose to prohibit a landlord from responding to tenant complaints by raising rent, without any exception for rentincreasesaspartofotherfeerestructuringthatpotentially also lowers other tenant costs.12
We also reject BBM's contention that the trial court erred because“[t]herewasanissueoffactongoodfaith.”Although plaintiffs did not address this particular argument, both in the trialcourtandonappeal,weneverthelessconcludethatitdoes not provide BBM with a basis for reversal because it relies on a fundamental misunderstanding of the requirements of ORS 90.130
As we have said before, the duty of good faith in ORS 90.130 appliesto“everyactthatisaconditionprecedenttoexercising a right or a remedy under the ORLTA.” Lopez v. Kilbourne, 307 Or App 301, 309, 477 P3d 14 (2020). As relevant here, because a tenant must bring a claim as a condition precedent to recovering a remedy for retaliation *679 pursuant to ORS 90.385, the tenant is obligated to bring that claim in good faith. See id.
Although the ORLTA defines “good faith” as “honesty in fact in the conduct of the transaction concerned,” ORS 90.100(19), ORS 90.130 is not so broad as to prohibit plaintiffs’ alleged conduct at issue here. The Supreme Court hasexplainedthatgoodfaithundertheORLTAhasanarrower meaning than the “broader concept of good faith that is frequently found in both statute and common law.” Eddy v. Anderson, 366 Or 176, 188, 458 P3d 678 (2020). A tenant violates the ORLTA's obligation of good faith with respect to a claim “only if they acted dishonestly with respect to the allegation” in the claim, meaning that they alleged a claim “that they knew to lack merit.” Id. at 189, 458 P.3d 678 (“So long as they subjectively believed that the [claim] had merit, and so long as they did not knowingly fail to comply with any prerequisite for asserting their claim, they were entitled to bring it.”). For example, ORS 90.130 prevented tenants in an eviction proceeding who “deliberately” avoided personal service of a termination notice, and who in fact received a notice that was slipped under their door, from enforcing the statutory requirement for personal delivery of the notice. See Stonebrook Hillsboro, L.L.C. v. Flavel, 187 Or App 641, 69 P3d 807, rev. den, 335 Or 656, 75 P.3d 899 (2003). The duty of good faith does not function to deny a remedy to a tenant who subjectively believes that their claim has merit, but who otherwiseengagedinunfairdealingorhad“uncleanhands”or a“maliciouspurpose.” Id.; see also Lopez,307OrAppat311, 477 P.3d 14 (explaining that ORS 90.130 did not bar tenant who lied on rental application from prevailing on defense to a later, unrelated eviction proceeding for nonpayment of rent).
**17 Applyingthatlawtothefactsofthiscase,ORS90.130 required that plaintiffs bring their retaliation claim in good faith, or with the subjective belief that the claim has merit. For sure, several factual scenarios could have supported an argument that plaintiffs’ retaliation claim lacked good faith in itsenforcement.Asin Stonebrook Hillsboro, L.L.C.,plaintiffs couldnotprevailiftheyhadknowinglypreventedorthwarted BBM's attempts to comply with ORS 90.385 ORS 90.130 also barred plaintiffs’ recovery if they subjectively believed their claim lacked merit, such as if *680 they knew that they
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had never made a protected complaint or if they knew that BBM had raised rent for a reason unrelated to the lawsuit.
None of those circumstances, or any other circumstances that would violate ORS 90.130, are present on these facts. The extent of the record on the issue, viewed in the light most favorable to BBM, was limited to the following: In the first letter dated May 31, 2013, plaintiffs’ attorney welcomed BBM's cessation of the meter fee and added that
“[o]bviously, defendant is free to increase rent, or, as I read the statute, disclose and include [the meter reading fee] as an explicit term in any new leases.
Lastly, BBM contends that an issue of fact as to the cause of or motivation behind the rent increase precluded summary judgment. As we explained earlier, a tenant must prove that the tenant's protected activity was a factor that made a difference in the landlord's decision. A tenant is not required to prove that the tenant's protected activity was the “sole” or “dominant” reason for the landlord's decision.
“Regardless, as long as defendant proposes a solution that complies with the statute and is fair to the class, we will likely agree to it.”
In the second letter, plaintiffs’ attorney “agree[d] with defendants’ proposal” to eliminate the meter fee and welcomed “cessation of the $10 per month charge,” if approved by the court, as a part of “implementation of the curative steps outlined in your [June 10, 2013] letter.” 13 At most, that evidence could support a finding that plaintiffs encouragedBBM'sviolationofORS90.385withanimproper motive to add more claims, and thus more damages, to their recovery. It does not, however, create an issue of fact as to whether plaintiffs had a good faith belief in the legitimacy of their claim. Again, ORS 90.130 is not so broad as to prohibit recovery by a tenant with unclean hands or malicious purpose,andasin Lopez,BBMhasnotpresentedanargument as to what “precise duty or condition precedent” plaintiffs were either “performing or enforcing” when they encouraged BBM's retaliatory rent increase in violation of ORS 90.385 307 Or App at 311, 477 P.3d 14. “Without the identification of a duty or an act that is a condition precedent, the statutory duty of good faith does not apply.” Id. The ORLTA does not condition a tenant's right to bring a claim under ORS 90.385 on a requirement that the tenant not encourage the landlord's violation. Nowhere in the ORLTA are those rights and *681 duties tied together. As a result, we reject BBM's contention that a question of fact as to whether plaintiffs had acted in good faith precluded the trial court's grant of summary judgment to plaintiffs on their retaliation claim.
Although the reason for a landlord's decision to raise rent is generally a question of fact, we agree with the trial court that, even viewing the summary judgment record in the light most favorable to BBM and making all reasonable references in its favor, no objectively reasonable jury could conclude that plaintiffs’ class-action complaint was not a factor that made a difference in BBM's decision to raise rent. BBM raised rent as part of billing changes that also eliminated the meter fee and inflated kWh rate that were the subjectofplaintiffs’claims,changeswhichoccurredonlytwo months after plaintiffs filed their lawsuit. Berman stated that “attorneys had impact” on his decision to make the changes “specifically right then” and opined during deposition that “I don't know any other way to do it * * * [to] be so far above board and compliant that I'm never having this discussion with [plaintiffs’ attorney] again.” Perhaps most importantly, Berman also submitted an affidavit in which he asserted that the park made the billing changes “because it was attempting to be more legally compliant in its practices, because it was engaging in protected settlement discussions,* * * [and because] it was attempting to meet Plaintiffs’ ORCP 32 H demands.” Even viewed in the light most favorable to BBM, those statements constitute admissions by BBM and Berman that the class-action complaint was a factor that made a difference in the park's decision to institute the billing changes, one component of which was a $20 rent increase.
**18 Further, Berman's singular statement that “the fact that [he] had been sued for charging a meter reading fee” *682 was not “a factor that went into [his] decision” to raise rent does not establish a material dispute of fact on causation sufficient to preclude summary judgment, even viewing the record in BBM's favor as we must. In response to plaintiffs’ summary judgment motion, BBM insisted that a number of purposes motivated the rent increase, including its efforts to meet plaintiffs’ demands, made pursuant to ORCP 32 H, that BBM remedy the alleged ORLTA violations raised in plaintiffs’ complaint. In other words, BBM took the legal position that it could be motivated by “Plaintiffs’ ORCP 32 H demands” while also simultaneously not being motivated by the tenants’ legal action to assert their rights more generally.
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But we do not agree that BBM's motivations can be parsed in such a way. BBM would not have been motivated to meet plaintiffs’ ORCP 32 H demands but for plaintiffs’ act of pursuing legal action against BBM in the first place.
Lastly, a plaintiff need not establish that their protected activity was the sole or dominant cause of the landlord's action. For that reason, BBM could not avoid summary judgment in plaintiffs’ favor by noting other causes that may also have motivated the change, such as its asserted “legitimate business reasons for the restructuring” and desire to “to simplify billings, break even on electricity, and keep total rents down.” Even if those asserted interests could plausibly constitute reasons for a landlord to raise rent as part of changes to its billing practices, the existence of those other motivations does not negate BBM's admission that plaintiffs’ ORCP 32 H demands, and therefore plaintiffs’ complaintgenerally,wasacauseoftherentincreasedecision. In short, we see no material factual dispute on this record that plaintiffs’ complaint was a cause of BBM decision to raise rents,andthusrejectBBM'sargumentthatthetrialcourterred ingrantingsummaryjudgmenttoplaintiffsontheirretaliation claim for that reason.
B. BBM's Good Faith Defense and Sixth Assignment of Error
We next address BBM's sixth assignment of error, in which it contends that the trial court legally erred in striking BBM's good faith affirmative defense as “insufficient in substance and therefore frivolous.”
*683 Although the record on this issue is somewhat convoluted, the relevant procedural facts are that in May 2016, over a year after BBM first raised its good faith arguments in opposition to plaintiffs’ motion for summary judgment on the retaliation claim, and also nearly a year after the trial court granted that motion and concluded that BBM “violate[d] ORS 90.385 by retaliating when [it] raised rent by $20,” BBM, for the first time, pleaded as an affirmative defense that plaintiff Seaman “failed to act in good faith in that before she commenced a claim for retaliation, her lawyers stated that BBM could raise rents to offset for the additional losses resulting from eliminating a park meter reading fee and/or developing a different allocation system to reimburse tenants’ electrical usage.”14 Nearly a year later in May2017,plaintiffsmovedtostrikethatdefense,arguingthat the defense depended on settlement correspondence that was inadmissible under OEC 408 and that, as a result, there was
“no admissible evidence to support defendant's allegation.” Plaintiffs also noted that the court had already ruled for plaintiffs on the issue of BBM's liability for retaliation and argued that that ruling rendered the defense moot. In plaintiffs’view,BBM's“timetopresentitsgoodfaithdefense was during the pendency of those motions.”
**19 BBM responded that the settlement correspondence at issue was admissible and had already been admitted without objection, waiving plaintiffs’ OEC 408 arguments. BBM also argued that the motion to strike was untimely, because it was not filed within 10 days of service of BBM's first assertion of the defense. As to plaintiffs’ mootness argument, BBM contended that its good faith defense had never been adjudicated or waived and that issues of fact regarding the assertions underlying the defense still remained.
After briefing and argument on the issue, the trial court concluded first that plaintiffs’ motion to strike was *684 untimely. However, the court concluded that defendant's good faith defense relied on settlement correspondence that was inadmissible under OEC 408 and struck the defense as insufficient and frivolous pursuant to its own authority under ORCP 21 E(2).
On appeal, BBM assigns error to that ruling, contending that the trial court erred in its applications of ORCP 21 E and OEC 408. In turn, plaintiffs defend the trial court's ruling on its merits while also offering that the ruling may be affirmed on the alternative basis that the defense was not timely raised because BBM pleaded ORS 90.130 as an affirmativedefenselongafterthetrialcourtgrantedplaintiffs’ motion for summary judgment on retaliation liability. In reply, BBM presses that we disregard plaintiffs’ timeliness argument, which it contends was never raised below. Further, BBM contends, “[e]ven assuming there is a legal source for plaintiffs’ argument, at best it would give the court discretion to strike the defense and would not require it to be stricken as a matter of law.” (Emphasis in original.) Discretionary questions, BBM asserts, cannot be affirmed under the “right for the wrong reason” doctrine.
Several points of clarification resolve the parties’ arguments. First, plaintiffs did preserve their argument that BBM's good faith affirmative defense was untimely or moot when they raised that argument as part of their original motion to strike the defense. As explained earlier, plaintiffs moved to strike BBM's defense on two rationales—both that there was no admissible evidence to support the defense and that the time
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forlitigatingBBM'sretaliationliabilityhadpassed—eitherof which would, if legally correct, support striking the defense as legally insufficient or frivolous. Whether a pleading or defense is, in fact, sham, frivolous, or irrelevant is a question of law, not an issue left to the discretion of the court. Ross and Ross, 240 Or App 435, 439, 246 P3d 1179 (2011) (distinguishing the legal question of whether a pleading is sham, frivolous, or irrelevant from the discretionary decision to strike a matter and preclude further pleading).
As we recently clarified in Sherertz v. Brownstein Rask, 314 OrApp331,341,498P3d850(2021), rev. den, *685 369Or. 338, 504 P.3d 1181 (2022), the “right for the wrong reason” doctrine is not implicated when an alternative argument was indeed raised in the trial court rather than for the first time on appeal. If “the argument is properly presented again on appeal and raises a question of law, we may simply resolve it, typically remanding only if it is necessary for the trial court to make factual findings from conflicting evidence, exercise discretion, or the like.” Id. Thus, we may consider such an alternative argument without first determining whether it satisfiestherequirementsof Outdoor Media Dimensions, Inc. v. State of Oregon, 331 Or 634, 659-60, 20 P3d 180 (2001) (notingadditionalrequirementsanddiscretionarycharacterof “right for the wrong reason” review).
**20 With those considerations in mind, we conclude that BBM has not established that a reversible error occurred here. Even if it constituted legal error for the trial court to strike the defense as frivolous due to its conclusion that no admissible evidence could support the defense under OEC 408, any purported error was harmless, because the defense was also untimely—and therefore insufficient or frivolous —for the reason that it attempted to relitigate a claim that had already been resolved by the court. When a party moves for summary judgment on an issue, “[t]he adverse party has the burden of producing evidence on any issue raised in the motionastowhichtheadversepartywouldhavetheburdenof persuasion at trial.” ORCP 47 C. Thus, BBM's time to litigate plaintiffs’allegedlackofgoodfaithinbringingtheretaliation claim, and in particular, their time to raise ORS 90.130 as an affirmative defense to which they would have had the burden of persuasion at trial, was when plaintiffs moved for summaryjudgmentonthatclaim.15 Indeed,BBMdidlitigate plaintiffs’ good faith at that time and the trial court rejected the argument. For those reasons, BBM's sixth assignment of error does not provide a sufficient basis for reversal, even in the event that any legal error occurred, and we reject it.
*686 C. Retaliation Damages and BBM's Eighth Assignment of Error
Finally, we acknowledge BBM's eighth assignment of error, in which it contends that the trial court erred in granting summary judgment to plaintiffs on the issue of calculating retaliation damages. Specifically, the trial court concluded that ORS 90.375, which permits a tenant who establishes retaliation to recover “an amount up to two months’ periodic rent or twice the actual damages sustained by the tenant, whichever is greater,” entitled plaintiffs to “damages of double rent for each month the retaliatory rates have been charged.”
BBM first contends that “[t]he trial court erred in the same manner that is described supra relating to damages” under ORS 90.315(4)(e) (2011), but provides no further explanation as to how we should interpret that solitary statement. Presumably, BBM contends that its arguments as to ORS 90.315(4)(e) (2011)—that plaintiffs are only entitled to a “one-time” award rather than a separate award for each individual violation over time—apply equally to ORS 90.375. However, BBM's arguments as to ORS 90.315(4)(e) (2011) actually engage with the specific text of that statute. Its single sentence argument as to ORS 90.375 does not —it does not account for the varied language defining the violations at issue, the varied measures of penalties, or the differing legislative history or case law relevant to those provisions. Thus, because a construction of ORS 90.375 would differ significantly in its approach and analysis from the construction of ORS 90.315(4)(e) (2011), we conclude that BBM's undifferentiated argument is not sufficiently developed for our consideration.
BBM also raises the additional argument that the trial court erred in granting partial summary judgment to plaintiffs because ORS 90.375 is a discretionary statute that permits a factfinder to award ‘up to’ or less than two months’ rent. Specifically, BBM contends that the trial court “usurped the jury's role” when it ruled on summary judgment that each retaliation class member was entitled to two months’ rent as a matter of law. However, the record establishes that BBM argued for the trial court to “make findings *687 in the present proceeding as a matter of law” and “assess the actual damages suffered by the tenant,” at which time it was then “within [the court's] discretion to award ‘up to two month's periodic rent or twice the actual damages sustained by the tenant, whichever is greater.’ ” (Emphases in original.) Due to that record, we conclude that BBM's additional argument regarding ORS 90.375 is unpreserved.
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IV. CONCLUSION
**21 In summary, the trial court erred (1) in certifying a 10year class for plaintiffs’ claims under ORS 90.315(4) (2011), based on its determination that a discovery rule applied to ORS 12.125; (2) in granting summary judgment to plaintiffs on the ground that BBM violated ORS 90.315(4) (2011) as a matter of law when it charged tenants a higher kWh rate for electricity than the electricity utility had charged BBM; and (3) in granting summary judgment to plaintiffs on the issue of computing damages under ORS 90.315(4)(e) (2011) The trial court did not err in granting summary judgment to plaintiffs on the basis that BBM's $10 “meter reading fee” violated ORS 90.315(4) (2011), or in granting summary judgment to plaintiffs on their retaliation claim. Even if the trial court erred in striking BBM's good faith defense, any legal error in that regard was harmless. Because we reject BBM's third assignment of error, the court's order shifting the
costs of class notice to BBM stands. Likewise, because we do not address BBM's eighth assignment of error, the trial court's ruling granting partial summary judgment to plaintiffs on the issue of calculating retaliation damages stands. We do not address the assignments of error raised by B & J and Berman regarding the piercing trial, as those issues may arise differently,ornotatall,onremand.Finally,wedonotaddress the assignments of error stemming from the supplemental judgment in this case, although that judgment is reversed by this ruling as a matter of law due to our conclusion that severallegalerrorsunderliethegeneraljudgmenttowhichthe supplemental judgment applies. We reverse and remand the trial court judgments for further proceedings consistent with this opinion.
Reversed and remanded.
Footnotes
1 ORS 90.315(4) (2011) was subsequently amended after plaintiffs filed their class action complaint. See Or. Laws 2015, ch. 388, § 8. As a result, we refer to the 2011 version of the statute throughout this opinion. Where other ORLTA statutes mentioned in this opinion have substantively changed since plaintiffs filed their action, we cite to the 2011 versions of those statutes as well.
2 Plaintiffs also alleged other claims during the litigation pursuant to ORS 646.608 of the Unlawful Trade Practices Act and ORS 124.100 for financial abuse of elderly persons. Those claims were ultimately unsuccessful and are not at issue on appeal.
3 BBM also raises the argument that, if we conclude that the trial court erred in ruling that BBM violated ORS 90.315(4) (2011), we must also reverse the class certification decision, because the court's “incorrect view” of ORS 90.315(4) (2011) “necessarily drove its conclusion that class treatment was appropriate.” We reject that argument because we conclude, as discussed later in our opinion, that the trial court did not err in granting partial summary judgment to plaintiffs based on its conclusion that BBM's meter fee violated ORS 90.315(4) (2011)
4 In Romero, we recently reaffirmed the rule that a breach of contract action accrues at the time of breach, even while acknowledging that the rule might appear inconsistent with some of the reasoning in the Supreme Court's opinion in Rice. See 323 Or App at 421, 523 P.3d 1135 (“contract actions ‘accrue’ at the time of breach, * * * even if most other types of actions ‘accrue’ when the plaintiff knew or reasonably should have known of the wrong, under the reasoning of Rice”).
5 It appears that the 1862 law was largely derived from an earlier territorial version. See Statutes of Oregon 1854, Act for the Limitation of Actions, ch 1, § 1, p. 170 (“actions shall only be commenced within the periods
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Citations --- P.3d ----, 325 Or.App. 648, 2023 WL 3215683
All
prescribed in this chapter, after the cause of action shall have accrued, except when in special cases a different limitation is prescribed by statute”).
6 We do not address plaintiffs’ contention that defendant should be “estopped” from asserting a statute of limitations defense, because we conclude that plaintiffs did not present that argument in the trial court or request our consideration of the argument under our “right for the wrong reason” doctrine.
7 We note that plaintiffs have directed our attention to materials that were not in the record at the time the trial court considered plaintiffs’ motion for summary judgment. We consider only the evidence that was in the record at the pertinent time, viewed in the light most favorable to BBM.
8 Plaintiffs contend on appeal that this fee was instead intended to recoup a PGE “basic charge.” Plaintiffs’ contention is not supported by the relevant summary judgment record or consistent with our standard of review to view the evidence in the light most favorable to BBM.
9 We do not address plaintiffs’ arguments that rely on evidence that was not part of the summary judgment record. As we discuss further below, we also do not consider arguments plaintiffs make for the first time on appeal that rely on a section of the ORLTA relevant to manufactured dwellings and floating homes, both because plaintiffs did not bring their claims under those statutes and because the parties agreed below that those statutes did not apply to BBM's RV park.
10 House Bill (HB) 3098 (1999) amended the original 1997 language that “[a] landlord shall not increase the utility or service charge to the tenant by adding any costs of the landlord, such as a handling or administrative charge, other than those costs billed to the landlord by the provider for utilities or services” to require that “[a] utility or service charge shall include only the value or cost of the utility or service as billed to the landlord by the provider.” Or. Laws 1999, ch. 603, § 18. SB 772 (2009) subsequently changed “should only include the value or cost” to “may only include the cost.” Or. Laws 2009, ch. 816, § 4a.
11 Under ORCP 32 H, potential class action plaintiffs must “[n]otify the potential defendant of the particular alleged cause of action” and “[d]emand that such person correct or rectify the alleged wrong” in writing at least 30 days “prior to the commencement of an action for damages.” In turn, a defendant who shows that all potential class members have been reasonably identified and notified that “the defendant will make the appropriate compensation, correction, or remedy of the alleged wrong,” makes “[s]uch compensation, correction, or remedy” within a reasonable time, and has or will cease “from engaging in * * * such methods, acts, or practices alleged to be violative of the rights of potential class members” may avoid an action for damages. ORCP 32 I.
12 We also reject BBM's contention that the trial court erroneously relied on its earlier conclusions that BBM's inflated kWh rate billing and meter fees violated ORS 90.315(4) (2011) in granting summary judgment to plaintiffs on their retaliation claim. Having reviewed the trial court's ruling, we conclude that the court did not apply an incorrect legal standard or improperly rely on its earlier rulings in ruling on the retaliation claim.
13 The reader may recall that BBM successfully blocked admission of the June 10, 2013 letter from BBM's attorney. No other evidence from the settlement negotiations entered the summary judgment record.
14 BBM also asserted good faith as a defense to plaintiffs’ claims under ORS 90.315(4) (2011), specifically alleging that plaintiffs “failed to act in good faith in that they did not notify BBM that they believed that they were being allegedly overcharged for electricity or that the park meter reading fees were allegedly a violation of the [ORLTA].” BBM does not raise arguments on appeal that are specific to that aspect of their defense, however, and only raises arguments regarding its good faith defense to the retaliation claim. As a result, we only consider that defense as it relates to plaintiffs’ retaliation claim.
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15 Just as we need not decide whether the trial court erred in striking the defense based on its understanding that no admissible evidence could support the claim, we also need not evaluate whether ORS 90.130 is more appropriately characterized as a regular or affirmative defense. Regardless, BBM's time to litigate its liability for plaintiffs’ retaliation claim was when plaintiffs moved for summary judgment on that issue.
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End of Document © 2023 Thomson Reuters. No claim to original U.S. Government Works.
320 Or.App. 521 Court of Appeals of Oregon.
SHEPARD INVESTMENT GROUP LLC, an Oregon limited liability company, dba Umbrella Properties Management, Plaintiff-Appellant, v.
Bret Lee ORMANDY, an individual and all other occupants, Defendant-Respondent.
A173257
Argued and submitted February 11, 2021.
June 29, 2022
Matthew G. Shepard, Salem, argued the cause and filed the brief for respondent.
Before Ortega, Presiding Judge, and Shorr, Judge, and Powers, Judge.
Opinion
SHORR, J.
Synopsis
Background: Landlord brought eviction action, and tenant asserted counterclaim that landlord, in each month for preceding year, violated provision of Oregon Residential Landlord and Tenant Act (ORLTA) imposing several requirementsonlandlordswishingtopassonutilitychargesto tenants. The Circuit Court, Lane County, Kamala H. Shugar, J., dismissed landlord's claim for possession, awarded tenant damagesequaltoonemonth'srentforeachseparateviolation, and awarded attorney fees and costs to tenant. Landlord appealed.
*523 In this case, we construe ORS 90.315(4)(f), one of many remedy provisions in the Oregon Residential Landlord and Tenant Act (ORLTA). ORS 90.315(4) permits a landlord to pass on utility charges to tenants, but only if it does so in a certain manner and meets certain requirements. ORS 90.315(4)(f) in turn states that, “[i]f a landlord fails to comply with”thoselistedrequirements,“thetenantmayrecoverfrom the landlord an amount equal to one month's periodic rent or twicetheamountwrongfullychargedtothetenant,whichever is greater.” What does it mean to “fail[ ] to comply” with the listed utility billing requirements? Further, what damages may a tenant recover when a landlord charges for utilities in a manner that does not comply with the billing practices requiredbyORS90.315(4)(b)everymonthforanentireyear?
As a matter of first impression, the Court of Appeals, Shorr, J.,heldthattenantcouldnotrecoveronemonth'srentforeach separate violation, and instead could only recover twice of total amount that he was wrongfully charged.
Reversed and remanded.
Procedural Posture(s): On Appeal; Motion for Attorney's Fees; Motion for Costs.
**1126 Lane County Circuit Court, 19LT16199; Kamala H. Shugar, Judge.
Attorneys and Law Firms
John R. Roberts, Eugene, argued the cause and filed the brief for appellant.
As we explain below, and upon careful consideration of the statutory text and context, we conclude that ORS 90.315(4) does not permit a tenant to recover “one month's periodic rent or twice the amount wrongfully charged” for each individual or separate periodic billing that fails to comply with ORS 90.315(4)(a) to (d). Here, tenant could simply recover “an amountequaltoonemonth'speriodicrentortwicetheamount wrongfully charged to the tenant,” whichever was greater. More specifically, tenant is entitled to recover twice the amount that he was wrongfully charged by landlord—$960 —for the one-year period alleged in tenant's counterclaim, because that amount is greater than one month of tenant's periodicrent.Thus,withrespecttolandlord'sfirstassignment of error on appeal, the trial court erred in awarding one month's rent for each month during which tenant was charged for utilities in a manner that violated ORS 90.315(4)(b). As we explain further below, we need not consider the merits of landlord's second assignment of error, because any error in that regard—if any indeed occurred—was harmless. Finally, we reject landlord's third and final assignment of error. Accordingly, we reverse and remand.
The relevant facts are largely procedural and undisputed. Tenant had rented a residential unit in landlord's *524 Fairfield Apartments since 2008. In 2013, landlord notified
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tenant by letter that it would begin charging a monthly flat fee for several utilities, namely water, sewer, and garbage services. Tenant's subsequent rental agreements included a provision to that effect. At all times relevant to this appeal, landlord charged tenant a $40 per month utility fee.
In November 2019, tenant failed to pay that month's rent charges, and on November 8, landlord issued a “72-hour notice” communicating its intent to terminate tenant's rental agreementfornonpaymentofrent.OnNovember13,landlord initiatedanevictionaction.Inresponse,tenantfiledananswer asserting affirmative defenses and a counterclaim alleging that landlord had violated the utility billing requirements of ORS 90.315(4)(b). Tenant alleged in his counterclaim that landlord had failed to timely bill him in writing for utility charges assessed each month over the preceding year, as required by ORS 90.315(4)(b)(A).1 Tenant further alleged that landlord had failed to provide him, in the written rental agreement or in bills, with an explanation of the manner in which the utility providers assessed their charges and the manner in which the landlord allocated those charges among the Fairfield **1127 tenants, as required by ORS 90.315(4)(b)(B). Tenant asserted that, pursuant to the damages provision in ORS 90.315(4)(f), he was entitled to recover “an amount equal to one month's periodic rent or twicetheamountwrongfullychargedtothetenant,whichever is greater.” More specifically, he claimed that he was entitled to one month's periodic rent for each month he was charged for utilities in a manner that failed to comply with ORS 90.315(4)(b).Tenantarguedthatthatamounttotaled$11,010.
The case was tried to the court. The court found that, over the relevant time period, landlord had charged tenant $40 each month for utility services without sending any written or electronic bills for those charges; that landlord had never offered or provided tenant with the underlying utility providers’ bills; that landlord had failed to provide any explanation, in either the rental agreement or in bills, of the manner in which the utility providers assessed *525 their charges; and that landlord had failed to describe, in either the rental agreement or in bills, the manner in which it allocated the utility charges among the Fairfield tenants. The court concluded that landlord had failed to comply with ORS 90.315(4)(b) 12 times—once every month over the preceding year—and awarded tenant statutory damages pursuant to ORS90.315(4)(f)inanamountequaltoonemonthoftenant's rent for each of those violations, totaling $9,050. After deducting the amount of tenant's unpaid November rent and otheroutstandingchargespertheagreementoftheparties,the
court dismissed landlord's claim for possession and awarded tenant $7,195 in damages. Tenant subsequently obtained a supplemental judgment for $5,068 in costs and attorney fees.
Landlord appeals, contending in part that the trial court erred in determining the damages award. We do not understand landlord to contest the trial court's conclusion that landlord charged tenant for utilities in a manner that did not comply with ORS 90.315(4)(b), or that those charges were levied 12 times. Instead, landlord contends that ORS 90.315(4) (f) is not a “per violation” damages provision, that the legislature knows how to include “per violation” language when it so intends, and that ORS 90.315(4)(f) punishes “a course of conduct which may consist of one or many related acts occurring over an undefined period of time.” Landlord argues that, regardless of whether a landlord levies one or 12 individual utility charges that fail to comply with ORS 90.315(4)(b), in all circumstances the landlord “fail[ed] to comply” with the requirements and is liable to the tenant in “an amount equal to one month's periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater.”Tenant,ontheotherhand,arguesthateachindividual noncompliant charge is a separate “fail[ure] to comply” that must be assessed its own damages; in other words, tenant argues that a landlord is liable for “one month's periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater” for each noncompliant charge.
We review for legal error. Lopez v. Kilbourne, 307 Or. App. 301, 307, 477 P.3d 14 (2020). Landlord's assignment of error presents a question of statutory interpretation to which we employ our familiar methodology, considering the text, *526 context, and any helpful legislative history. State v. Gaines, 346 Or. 160, 171-72, 206 P.3d 1042 (2009). It is our duty to identify the statute's correct interpretation, regardless of whether that interpretation is asserted by either party. Elk Creek Management Co. v. Gilbert, 353 Or. 565, 570, 303 P.3d 929 (2013). In doing so, we may not “insert what has been omitted” or “omit what has been inserted.” ORS 174.010
We begin with a brief overview of the statute at issue. ORS 90.315 is one of many statutes in the ORLTA, an act that was originally modelled after the Uniform Residential Landlord and Tenant Act and enacted in 1973. See, e.g., Eddy v. Anderson, 366 Or. 176, 186, 458 P.3d 678 (2020) (noting uniform act origins). In recent decades, the vast majority of the many amendments to the act have been the product of a coalition of landlord and tenant advocate groups that has sought to draft legislation by consensus. Testimony,
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House Committee on Human Services and Housing, SB 390, May 11, 2015, Ex. 1 (summary by John VanLandingham) (noting coalition history); Jodie Leith Chusid, **1128 The Oregon Residential Landlord and Tenant Act: The Time for Reform, 77 Or. L. Rev. 337, 338-39, 360-61 (1998) (noting history of act and later coalition amendments). The monthly billing transparency requirements that are today found in ORS 90.315(4)(b) are relatively new, having been enacted in 2015. Or. Laws 2015, ch. 388, § 8. Those requirements were also drafted and proposed by the landlord-tenant coalition. Testimony, House Committee on Human Services andHousing,SB390,May11,2015,Ex.1(summarybyJohn VanLandingham).
ORS 90.315 specifically addresses utility and service charges in residential tenancies, and, as relevant here, ORS 90.315(4) (a)and(b)imposeavarietyofrequirementsonlandlordswho wish to pass those charges on to tenants:
“(4)(a) Except for tenancies covered by ORS 90.505 to 90.850,ifawrittenrentalagreementsoprovides,alandlord may require a tenant to pay to the landlord a utility or service charge or a public service charge that has been billed by a utility or service provider to the landlord for utility or service provided directly, or for a public service provided indirectly, to the tenant's dwelling unit or to a common area available to the tenant as part of the tenancy.
*527 A utility or service charge that shall be assessed to a tenant for a common area must be described in the written rental agreement separately and distinctly from such a charge for the tenant's dwelling unit.
“(b)(A) If a rental agreement provides that a landlord may require a tenant to pay a utility or service charge, the landlord must bill the tenant in writing for the utility or service charge within 30 days after receipt of the provider's bill. If the landlord includes in the bill to the tenant a statement of the rent due, the landlord must separately and distinctly state the amount of the rent and the amount of the utility or service charge.
“(B) The landlord must provide to the tenant, in the written rentalagreementorinabilltothetenant,anexplanationof:
“(i) The manner in which the provider assesses a utility or service charge; and
“(ii)Themannerinwhichthechargeisallocatedamongthe tenants if the provider's bill to the landlord covers multiple tenants.
“(C) The landlord must:
“(i) Include in the bill to the tenant a copy of the provider's bill; or
“(ii) If the provider's bill is not included, state that the tenant may inspect the provider's bill at a reasonable time and place and that the tenant may obtain a copy of the provider's bill by making a request to the landlord during the inspection and upon payment to the landlord for the reasonable cost of making copies.
“(D) A landlord may require that a bill to the tenant for a utility or service charge is due upon delivery of the bill. A landlord shall treat the tenant's payment as timely for purposes of ORS 90.302(3)(b)(A) if the payment is made by a date that is specified in the bill and that is not less than 30 days after delivery of the bill.
“(E) If a written rental agreement so provides, the landlord may deliver a bill to the tenant as provided in ORS 90.155 or by electronic means.”
ORS90.315(4)(c)and(d)presentadditionalrequirementsnot at issue here, limiting the conditions under which a landlord may add an additional amount to a utility charge *528 and placing requirements on how a landlord may amend a rental agreement to pass on service charges. Finally, and most significantly for this opinion, paragraph (4)(f) provides a tenant remedy for violations of the above requirements: “If a landlord fails to comply with paragraph (a), (b), (c) or (d) of this subsection, the tenant may recover from the landlord an amountequaltoonemonth'speriodicrentortwicetheamount wrongfully charged to the tenant, whichever is greater.” ORS 90.315(4)(f).
Generally stated, then, a landlord may require a tenant to pay a monthly utility charge, if the written rental agreement so provides,butmustbillthetenantforthatchargeinwritingand must include in that bill either the utility provider's bill itself or an offer that the tenant may inspect the provider's bill upon request.ORS90.315(4)(b)(A),(C).Additionally,thelandlord **1129 must also provide the tenant with an explanation of how the utility provider assesses its charges and how those charges are allocated among the tenants. ORS 90.315(4)(b) (B).Thatinformationmaybeprovidedintherentalagreement
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or as part of the utility bill to the tenant. Id. If a landlord “failstocomply”withparagraphs(a)to(d),ORS90.315(4)(f) provides the tenant with the greater of two possible remedies —either “an amount equal to one month's periodic rent” or “twice the amount wrongfully charged to the tenant.” And, again,alandlord“failstocomply”withparagraph(b)ifitfails tobillthetenantinwritingfortheutilitychargewithin30days afterreceiptoftheprovider'sbill(ORS90.315(4)(b)(A));fails to provide the tenant, in the written rental agreement or in the bill, with an explanation of the manner in which the provider assesses the utility charge and the manner in which the charge isallocatedamongthetenants(ORS90.315(4)(b)(B));orfails to include in the bill a copy of the provider's bill or an offer that the tenant may inspect the provider's bill (ORS 90.315(4) (b)(C)).
Considering those provisions together, several takeaways are immediately apparent. First, a landlord may not charge a tenant for utilities at all if the written rental agreement does not account for such charges, and a landlord “fails to comply” if it charges a tenant a single utility charge under those circumstances. Second, ORS 90.315(4)(b) describes *529 requirements that a landlord must meet when a landlord chargesatenant a utilitycharge.Itfollowsthatalandlordalso “fails to comply” with ORS 90.315(4)(b) if it sends a single utility charge to a tenant absent the required disclosures, even if such charges were contemplated by the rental agreement. Thus, ORS 90.315(4)(f) makes clear that a landlord is liable for damages if it levies even a single noncompliant utility charge; it is the provision's applicability when multiple utility billings violate the requirements that is less clear. As explained earlier, in tenant's view, “courts must make an ORS 90.315(4)(f) calculation and award for each separate utility chargeforwhichaviolationhasoccurred.”Inlandlord'sview, tenant is “entitled only to the greater of twice the amount wrongfully charged or one month's rent” regardless of the number of noncompliant utility charges.
Before we address those competing arguments, however, we must interpret an aspect of the statute that neither party confronts in their arguments to us: What does it mean under ORS 90.315(4) for a landlord to “wrongfully charge[ ]” a tenant? As noted, we have a duty to interpret ORS 90.315(4) (f) correctly, and our understanding of that term necessarily informs our understanding of the remedy provision as a whole,which,again,providesatenanttherightto“anamount equal to one month's periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater.” ORS 90.315(4)(f). “Wrongful” and “wrongful charge” are
not defined by the ORLTA. However, “wrongful” is a word of common usage that ordinarily means “full of wrong: injurious, unjust, unfair” or “not rightful especially in law: having no legal sanction: unlawful, illegitimate.” Webster's Third New Int'l Dictionary 2642 (unabridged ed. 2002). That latter definition makes sense in the context of this statute— in other words, a landlord wrongfully charges a utility charge to a tenant when it charges the tenant without complying with the law, or, more particularly here, the requirements in ORS 90.315(4)(a) to (d) 2
*530 We turn to our construction of the remedy provision. As discussed above, ORS 90.315(4)(f) applies when a landlord “fails to comply” with paragraphs “(a), (b), (c) or (d).”“[F]ailstocomply”plainlydoesnotdistinguishbetween individual utility bills or provide for increasing penalties whenatenantestablishesthatthelandlordchargedforutilities in a manner that violated ORS 90.315(4)(b) several different times. A landlord can “fail[ ] to comply” once or many times, and that phrase, standing alone, does **1130 not tell us what the legislature intended as a remedy. Instead, it merely establishes the necessary conditions for a tenant to recover one of two possible remedies: “an amount equal to one month's periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater.” ORS 90.315(4) (f).
However, the provision does account for the possibility that, when a landlord fails to comply with the law on multiple occasions, it may be liable for multiple “wrongful[ ] charge[s].” The first possible measure of damages limits a tenant to just “one month's periodic rent” if the landlord fails to comply. ORS 90.315(4)(f) (emphasis added). Thus, a landlord may fail to comply with the law any number of times yet still be subject to just one month's periodic rent in damages. However, the second of the two possible damages measured under ORS 90.315(4)(f) is “twice the amount wrongfully charged to the tenant.” By its plain language, that measuremaybecalculatedfromonesinglechargeoravariety of different wrongful charges—the statute does not specify or limit the measure to one or the other. Instead, the focus is on the amount wrongfully charged. By including that alternative measure of damages, the legislature provided an avenue by which repeated noncompliant utility billings could result in a damagesawardthatisgreaterthanthatresultingfromasingle noncompliantbilling.Inthatway,thelegislaturebuiltintothe damages provision a penalty with some, but not too many, teeth. When a landlord fails to comply with ORS 90.315(4) (a),(b),(c),or(d),atenantmayrecoverformultipleviolations
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when there are multiple wrongful charges, but the legislature limited those damages to either one month's periodic rent or twice the total amount wrongfully charged, whichever is greater.
*531 Although no Oregon appellate case has yet construed ORS 90.315(4)(f), the surrounding context of ORS 90.315 provides additional support for our interpretation. Specifically, ORS 90.315 begins by addressing requirements that effect the tenancy as a whole. The statute's first landlord requirement is expressed in subsection (2), which requires the landlord to disclose, “in writing at or before the commencement of the tenancy,” if “any utility or service that the tenant pays directly *** benefits, directly, the landlord or other tenants.” As previously noted, subsection (3) provides a tenant the remedy of “twice the actual damages sustained or one month's rent, whichever is greater” if the landlord “knowingly fails to disclose those matters required under subsection (2).” ORS 90.315(4), in turn, lists a variety of different utility billing requirements, beginning, as we explained earlier, with the foundational requirement in paragraph (a) that the landlord may not bill the tenant for utilities at all unless those charges are stated in the rental agreement.Thelegislaturewouldhavebeenawareindrafting ORS 90.315(4)(b) that the provision would appear after and interact with provisions that concerned tenancy-wide requirements. In light of that context, we conclude that the legislature would have included “per noncompliant billing” or similar language in ORS 90.315(4)(f) had it intended for courts to calculate damages in that fashion.
In sum, we conclude that the proper application of ORS 90.315(4)(f) is clear from its plain text: “If a landlord fails to comply with paragraph (a), (b), (c) or (d) of this subsection, the tenant may recover from the landlord an amountequaltoonemonth'speriodicrentortwicetheamount wrongfully charged to the tenant, whichever is greater.” The legislature chose language that does not direct a deciding courttoaward“onemonth'speriodicrentortwicetheamount wrongfully charged the tenant, whichever is greater” for each and every separate noncompliant bill sent by a landlord, and the legislature would have included language to that effect had that interpretation been intended. 3 Instead, **1131 the legislature *532 created a remedy that addresses multiple failures to comply with the law via a potential remedy of “twice the amount wrongfully charged,” a remedy that is only available to tenants when that amount is greater than one month's rent.
In the instant case, tenant established that landlord had failed to comply with ORS 90.315(4)(b) during 12 separate months, and, as a result, tenant was entitled to recover from landlord “an amount equal to one month's periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater.” Tenant established that he had been “wrongfully charged” a $40 utility fee during each of those 12 months, totaling $480. Tenant also established that, at the time of trial, he paid $825 in periodic rent each month. Tenant was therefore entitled to “twice the amount wrongfully charged” or $960 in damages on his counterclaim, the greater of those two possible measures of damages.
Finally, we briefly address landlord's two remaining assignmentsoferror.Inlandlord'ssecondassignmentoferror, landlord contends that the trial court erred in concluding that tenant's rental agreement did not permit “nail and mail” service, and in concluding that landlord's termination notice was invalid. Even if the trial court indeed erred as to those rulings, however, any error was harmless. In the trial court, the parties originally scheduled trial for November 2019 but stipulated to reset the trial date to December. In doing so, they agreed that only claims and counterclaims that had accrued as of November 2019 would be litigated. In light of that time frame, landlord sought possession for nonpayment of $825 for November's rent. Because, as we just determined, tenant is entitled to $960 in damages on his counterclaim, landlord would not have been entitled to possession in any event,evenifthecourthadfoundits“nailandmail”serviceof the termination notice to be valid. See *533 ORS 90.370(1) (b) (“If no rent remains due after application of this section * * * a judgment shall be entered for the tenant in the action for possession.”); Timmermann v. Herman, 291 Or. App. 547, 549, 565, 422 P.3d 347 (2018) (tenant entitled to possession and judgment in her favor where she prevailed on her counterclaims “to the extent that no rent remains due”). As a result, we do not consider landlord's second assignment of error on its merits. In landlord's third assignment of error, landlord contends that the trial court erred in designating tenant as the prevailing party and awarding tenant costs and attorney fees. We reject that argument without discussion.
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Reversed and remanded. All Citations 320 Or.App. 521, 514 P.3d 1125
Footnotes
1 Pursuant to ORS 12.125, “[a]n action arising under a rental agreement or ORS chapter 90 shall be commenced within one year.”
2 We note that a different subsection of ORS 90.315 provides that, when a landlord knowingly fails to disclose certain matters, “the tenant may recover twice the actual damages sustained or one month's rent, whichever is greater.” ORS 90.315(3). Actual damages therefore appear to be distinct from “the amount wrongfully charged.” However, we need not decide the precise distinction between those terms here.
3 We note, briefly, that we find no guidance in the legislative history. The tenant remedy today found at ORS 90.315(4)(f) was first enacted in 1999 and originally applied to landlord violations such as failing to disclose utility charges in rental agreements or adding prohibited surcharges into utility fees. See Or. Laws 1999, ch. 603, § 18. The monthly billing transparency requirements today found in ORS 90.315(4)(b) were not enacted until 2015. Or. Laws 2015, ch. 388, § 8. Both provisions were drafted and proposed by the landlordtenant coalition described earlier. Testimony, House Committee on Human Services and Housing, SB 390, May 11, 2015, Ex. 1 (summary by John VanLandingham); Testimony, Senate Committee on Business and Consumer Affairs, HB 3098, May 10, 1999, Ex. O (comments by John VanLandingham). However, neither the coalition nor the legislators commented on how ORS 90.315(4)(f) damages should be awarded when a landlord repeatedly charges a tenant for utilities in violation of ORS 90.315(4)(b)
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End of Document
© 2023 Thomson Reuters. No claim to original U.S. Government Works.
370 Or. 1
Supreme Court of Oregon.
Michelle SCOTT, Petitioner on Review, v.
Leslie KESSELRING and Kesselring Communications, LLC, Respondents on Review. (CC CV15110065)(SC S068503) |
Argued and submitted January 13, 2022. | July 8, 2022
Decision of the Court of Appeals reversed; judgment of the Circuit Court affirmed.
Procedural Posture(s): On Appeal.
**585 On review from the Court of Appeals. * (CA A163709)
Attorneys and Law Firms
Travis Eiva, Eugene, argued the cause and filed the briefs for petitioner on review.
Synopsis
Background: Motorist filed personal injury action against rear-endingdriveranddriver'semployeraftershewasinjured in a car accident on the freeway when driver rear-ended her. The Circuit Court, Clackamas County, Douglas V. Van Dyk, J., awarded motorist $41,000 in economic damages and $200,000 in noneconomic damages. Rear-ending driver and his employer appealed. The Court of Appeals, Ortega, J., 308 Or.App. 12, 479 P.3d 1063, reversed and remanded, and motorist filed petition for review.
Julie A. Smith, Cosgrave Vergeer Kester LLP, Portland, arguedthecauseandfiledthebriefforrespondentsonreview.
James S. Coon, Thomas, Coon, Newton & Frost, Portland, and Kathryn H. Clarke, Portland, filed the amicus curiae brief for Oregon Trial Lawyers Association.
Before Walters, Chief Justice, and Balmer, Flynn, Duncan, Nelson, and Garrett, Justices, and Nakamoto, Senior Judge, Justice pro tempore. **
Opinion
WALTERS, C. J.
Holdings: The Supreme Court, Walters, C.J., held that:
rear-ending driver's denial of responsibility for causing full nature and extent of motorist's alleged injuries was not an admission that she was legally liable for some or any of motorist's injuries;
despite rear-ending driver's admission that she caused accident, fact that rear-ending driver challenged foreseeability of kind of harm that befell motorist meant that jury was still required to determine whether rear-ending driver's conduct unreasonably created foreseeable risk of that kind of harm;
evidence as to the conduct in which rear-ending driver engaged, including her speed and the fact that she looked down to place a cellphone call to a client, was relevant; and
trial court did not abuse its discretion in determining that probative value of relevant evidence, that rear-ending driver looked down to place phone call, was not substantially outweighed by danger of unfair prejudice.
*3 In this personal injury case, defendant rear-ended plaintiff's vehicle, and plaintiff suffered physical and emotional injuries as a result. Plaintiff claimed that her emotional injuries were so severe that she attempted to take her own life and was hospitalized. Defendant disputed responsibilityforthatharmonthegroundthatherconductdid not unreasonably create a foreseeable risk of such harm but argued that the court should exclude certain evidence of her conduct—that,immediatelybeforethecollision,shehadbeen using her cellphone—as irrelevant and unfairly prejudicial. Reasoning that evidence of defendant's conduct could affect the jury's determination of the foreseeability question and was not unfairly prejudicial, the trial court denied defendant's motion. After a jury verdict in plaintiff's favor, the trial court entered judgment, and defendant appealed. The Court of Appeals reversed. Scott v. Kesselring, 308 Or.App. 12, 479 P.3d 1063 (2020). For the reasons that follow, we agree with the trial court, affirm the judgment that it entered, and reverse the contrary decision of the Court of Appeals.
Scott v. Kesselring, 370 Or. 1 (2022) 513 P.3d 581 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 1
I. FACTUAL AND PROCEDURAL BACKGROUND
This case arises from an automobile collision between defendant1 and plaintiff. We recite the facts as alleged, denied, and admitted in the parties’ pleadings and as adduced at trial. In her amended complaint, plaintiff alleged the following. On the day of the collision, it was raining heavily, and the roads were slick. Defendant knew of those conditions and that other motor vehicle accidents had occurred that day. Defendant used her cellphone to place a non-emergency call to a client and, while doing so, she crashed into the rear of plaintiff's vehicle. Plaintiff alleged that defendant was negligent in one or more of the following particulars:
*4 “a. In failing to keep and maintain a lookout for traffic in front of her;
“b.Indrivingtoofastforcircumstancesthenthereexisting; and
Before trial, defendant filed proposed jury instructions and a motion in limine asking the court to exclude all mention of her cellphone use, because “[a]ny evidence regarding [defendant's] alleged cell phone ‘use’ is irrelevant to any issue in this case, as [defendant has] admitted fault. Any probative value of this evidence is substantially outweighed bytheriskofunfairprejudiceto[d]efendant[].OEC401,402 and 403.” Defendant's requested jury instructions included one stating that she had “admitted liability,” and another on foreseeability, Uniform Jury Instruction 20.03:
“A person is liable only for the reasonably foreseeable consequences of his or her actions. There are two things that must be foreseeable. First, the plaintiff must be within the general class of persons that one reasonably would *5 anticipate might be threatened by the defendant's conduct. Second, the harm suffered must be within the general class of harms that one reasonably would anticipate might result from the defendant's conduct.”
“c. In following traffic at a distance that was too close in violation of ORS 811.485.”
As a result of her negligence, defendant caused plaintiff physical injuries as well as **586 severe emotional distress, including pain, anxiety, and post-traumatic stress. Plaintiff sought $97,505 in past medical expenses, $50,000 in future medical expenses, and $350,000 in noneconomic damages.
In her amended answer, defendant responded as follows. Defendant admitted that she knew that it was raining heavily, that the roads were slick, and that other motor vehicle accidents had occurred that day. Defendant denied plaintiff's allegations that defendant was using her cellphone to place a call and that defendant was negligent in the alleged particulars, but she also reframed the issues and “admitted” that “immediately before the accident, [p]laintiff was slowing intrafficas[defendant]waslookingdown.When[defendant] lookedbackup,shewasunabletostopintimeandrear-ended plaintiff's 2012 Dodge SUV.” Defendant also “admitted” that “sheisresponsibleforcausingtheaccident,”but“denied”that “she is responsible for causing the full nature and extent of plaintiff's alleged injuries and damages.”
At the hearing on defendant's motion in limine, the court questioned the parties about the issues for trial, and, in that context, the parties discussed defendant's requested foreseeability instruction. Plaintiff did not object to the instruction but noted that including a foreseeability instructionwouldnotmakesenseinthecontextofanadmitted negligence case:
“I can't tell what the defendant is admitting and what the defendant is not admitting. All—there's an air of confusion and avoidance about what the defendant is or is not admitting. Is the defendant admitting that ‘I caused the crash, I caused injury, I caused damage, and it was all foreseeable,’ and the only question is how to compensate the plaintiff.
“Or is the defendant saying, ‘I admit I caused the crash, don't ask me how,’ and then, ‘I get to contest every single other issue of common law negligence beyond that.’ And if that's what the defendant is asking for then plaintiff is asking for the opportunity to demonstrate—to put on proof of all of the elements of common law negligence.”
Defendant argued in response that she had admitted “negligence” and that she had “caused injury to plaintiff.” Defendant stated that she was contesting “the extent of plaintiff's injuries” and the foreseeability of plaintiff's suicide attempt:
“I am arguing foreseeability. * * *
Scott v. Kesselring, 370 Or. 1 (2022) 513 P.3d 581 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 2
“Yes. UCJI 20.03, on the suicide attempt, we have admitted the defendant was negligent. We have admitted the defendant caused injury to plaintiff.
“What we are contesting is the extent of the injuries, and that it was not foreseeable that she would attempt suicide following this accident.”
Defendant argued that her use of a cellphone did not affect whether it was “foreseeable” that plaintiff would attempt suicide, making the cellphone use irrelevant and therefore *6 inadmissible. In addition, defendant argued that the cellphone evidence was unfairly prejudicial under OEC 403
Thetrialcourtdenieddefendant'smotion in limine, explaining as follows: “I do consider that the degree of risk * * * bears on the **587 scope of harms that might reasonably be anticipated. I've alluded to that with several of my remarks. And I think [that the cellphone use] is a circumstance here that is germane to that consideration.” Among the “remarks” to which the court referred were the following:
“Cellphone use could result in a really bad accident on the freeway so the scope of foreseeability, you know, might even extend to post-traumatic stress, might even extend that far. If you hit somebody hard enough going that fast and you know what, you drive around distracted, there's a degree of foreseeability about the scope of the harm. “* * * * *
“[I]t becomes a question of foreseeability of harm and scope of harm that a person might anticipate in a context like this. “* * * * *
“[T]he type of risk that * * * you undertake correlates with the foreseeability of the loss. The greater the disregard, the greater the foreseeability of the loss. *** The more limited in scope the disregard or the negligence, the less foreseeability attaches to the loss.
“Now, if we're 40 miles over the speed limit, it's different than if we're 20 miles over the speed limit. Both might be negligent, but the one might invoke ascopeoflossorharmgreaterthanthe otherandsoforeseeabilitywouldseem to attach to such a consideration.”
The trial court also concluded that the probative value of the cellphone evidence was not substantially outweighed by unfair prejudice. It allowed voir dire questions regarding cellphone use and allowed evidence about cellphone use at trial “as the backdrop of the circumstances of the accident[, n]ot to dwell on it.”
*7 At trial, plaintiff adduced evidence of defendant's conduct without objection. There was testimony that defendant was driving at least 45 miles per hour at the time of the collision, that she was aware that a different collision had occurred in front of her, and that she was driving a loaner car that did not have a hands-free phone set up. Defendant testified that, just before the collision, she had looked down at her cellphone to search for a client contact and place a call.
During trial, plaintiff testified that six months after the accident, she was still experiencing physical pain from the accident, having trouble sleeping, and having difficulty keeping up with normal household activities. As plaintiff testified:
“I wasn't getting better and I wasn't getting better, and I just kept—I just felt like—I was trying to keep up, trying to keep a happy smile on my face, trying to keep up with like, you know, appearances like everything's fine, everything's fine. But inside I wasn't fine. I wasn't fine at all. And it really—I just felt like I was in a downward spiral of pain of hopelessness and despair was how I felt.”
On cross-examination, defendant suggested that plaintiff's physical pain had abated by the time of her suicide attempt and that she had acted for an unrelated reason—that she felt unappreciated by her husband—a circumstance that defendant did not cause. In closing, defendant made the following argument:
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“* * * * *
“* * * * *
“[Plaintiff's husband's] lack of understanding is [defendant's]fault?[Plaintiff's]maritalproblemscausedby [defendant]? A suicide attempt caused by [defendant]?
We allowed plaintiff's petition for review.3
“[Plaintiffis]tryingtomanageeverythingwhileessentially operatingasasingleparentbecauseherhusband'snotthere. And not only is he not there, he's not real supportive or understanding. Is that [defendant's] fault? [Defendant] is only responsible for what she caused.
“[Plaintiff's counsel] asked you, ‘How could you conclude the suicide attempt was not a result of this accident?’ Well, I am going to tell you how. And it's right here on this board. It is the law. And is the jury instruction you will *8 have with you in writing back in the jury room, right here, the last sentence, ‘The harm suffered must be within the general class of harm that one reasonably would anticipate mightresultfromthedefendant'sconduct.’‘Foreseeability’ isthenameoftheinstruction. **588 Whatisforeseeable? A person who's liable only for the reasonably foreseeable consequences of his or her actions, reasonably foreseeable.
“Could it be predicted? Could it be anticipated? If you rear end someone on the highway, is it reasonably foreseeable that they're going to attempt suicide? * * * Was it reasonably foreseeable that she would attempt suicide as a result of this car accident?”
The jury awarded plaintiff $41,000 in economic damages, rather than the $97,505 that she had sought, and $200,000 in noneconomic damages, rather than the $350,000 that she had sought.2 The trial court entered judgment in those amounts and defendant appealed, assigning error to the trial court'sdecisiontoadmitevidencethatdefendanthadusedher cellphone immediately before the collision.
The Court of Appeals viewed the question before it as “whether the precise reason that defendant was negligent— that she was using her cellphone moments before colliding with plaintiff's car—is relevant to the question of whether the particular harm that befell plaintiff—physical and emotional trauma—wasforeseeable.” Scott,308Or.App.at19,479P.3d 1063 (internal quotation omitted). The court answered that question in the negative, concluding that the trial court had erred and that a new trial was necessary. Id. at 20, 23, 479 P.3d 1063
*9 II. LEGAL BACKGROUND
Before we begin our analysis of the evidentiary question presented, it is helpful to describe the nature of a negligence claim. Over time, as we explained in Sloan v. Providence Health System-Oregon, 364 Or. 635, 643-44, 437 P.3d 1097 (2019), this court has changed the way it has described what a plaintiff must prove to make out such a claim:
“Traditionally, to prevail on a negligence claim, a plaintiff had to prove that (1) the defendant had a duty to the plaintiff,(2)thedefendantbreachedtheduty,(3)thebreach was a factual cause and (4) a legal cause (or proximate cause) of (5) harm to the plaintiff measurable in damages. Aiken v. Shell Oil Co. et al and Huey, 219 Or. 523, 535-36, 348 P.2d 51 (1959) (‘One of the old and simple definitions of negligence is: “There must be a duty on the defendant; a failure to perform that duty; and the failure to performthatdutymustbetheproximatecauseofinjuryand damage to the plaintiff.” ’). But, in [Fazzolari v. Portland School Dist. No. 1J, 303 Or. 1, 734 P.2d 1326 (1987)], this court reformulated the elements for an ordinary negligence claim, stating:
“ ‘[U]nless the parties invoke a status, a relationship, or a particular standard of conduct that creates, defines, or limits the defendant's duty, the issue of liability for harm actually resulting from defendant's conduct properly depends on whether that conduct unreasonably created a foreseeable risk to a protected interest of the kind of harm that befell the plaintiff.’
“Fazzolari, 303 Or. at 17 [734 P.2d 1326]. Thus, when asserting an ordinary negligence claim, a plaintiff must establish that the defendant's conduct created a foreseeable and unreasonable risk of legally cognizable harm to the plaintiff and that the conduct in fact caused that kind of harm to the plaintiff.”
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“* * * * *
Sloan, 364 Or. at 643, 437 P.3d 1097.
In Fazzolari, the court examined how courts and scholars had confronted the age-old **589 problem of how to state the “bounds of liability” and conducted an extensive review of the evolution of the problem and the “vast amount of legal literature.” 303 Or. at 4-6, 734 P.2d 1326. The court discussed the concepts of duty, proximate cause, and scope of duty and found them bound up in and used as “shorthand statement[s] of [ ] *10 conclusion[s], “verbal crutch[es],” or “convenient label[s],” to express “the sum total of those considerations of policy which lead the law to say that the plaintiff is entitled to protection.” Id. at 7-9, 734 P.2d 1326 (internal quotation marks omitted). The court paid particular attention to a thenrecent Oregon case that had turned away from the use of those concepts—Stewart v. Jefferson Plywood Co., 255 Or. 603, 469 P.2d 783 (1970)—a case that the Fazzolari court characterized as making “foreseeable risk the test both of negligentconductandofliabilityforitsconsequenceswithout phrasing the test in terms either of causation or of duty.” 303 Or. at 14, 734 P.2d 1326. In Fazzolari, the court completed the turn that Stewart had begun, deliberately stepping away from what it characterized as the “neat division of issues” and the “duty, breach, cause” formula. Id. at 4, 15, 734 P.2d 1326. The court recognized that those discrete issues could have continued significance when the parties invoke a status, relationship, or particular standard of conduct that defines or limits the defendant's duty. But, without such a status, relationship,orparticularstandard,thecourtreformulatedthe question of the bounds of a defendant's liability as a question of whether the defendant's “conduct unreasonably created a foreseeablerisktoaprotectedinterestofthekindofharmthat befell the plaintiff.” Id. at 17, 734 P.2d 1326
In that formulation:
“[The] role of the court is what it ordinarily is in cases involving the evaluation of particular situations under broad and imprecise standards: to determine whether upon the facts alleged or the evidence presented no reasonable factfinder could decide one or more elements of liability for one or the other party.”
Id. In Fazzolari the court quoted Stewart, to emphasize the importance of the jury's role:
“ ‘The jury is given a wide leeway in deciding whether the conduct in question falls above or below the standard of reasonable conduct deemed to have been set by the community. The court intervenes only when it can say that the actor's conduct clearly meets the standard or clearly falls below it.’ ”
Id. at 17-18, 734 P.2d 1326 (quoting Stewart, 255 Or. at 607, 469 P.2d 783). The jury's assessment of foreseeability, that is, whether a particular *11 defendant's conduct unreasonably created a foreseeable risk to a protected interest of the kind of harmthatbefelltheplaintiff,isanaspectofadeterminationof liability (together with factual causation, as explained further below):
“[A]n actor should not be liable unless he is at fault in the legal sense. Although legal fault is not the exact equivalent of moral fault, the predicate is blameworthiness in some sense; the actor being regarded as blameworthy if his conduct is, according to community standards, generally considered as creating a danger to persons in the situation in which the plaintiff finds himself.”
Stewart, 255 Or. at 608, 469 P.2d 783 (footnotes omitted).
Since Fazzolari this court has, on occasion, discussed how its reformulation in that case lines up with the traditional elements of a negligence claim. In Piazza v. Kellim, 360 Or. 58, 70, 377 P.3d 492 (2016), this court said the following:
“Foreseeability plays a role in at least two overlapping common-law negligence determinations: (1) whether the defendant's conduct unreasonably created a foreseeable risk of harm to a protected interest of the plaintiff such that the defendant may be held liable for that conduct —formerly described in terms of ‘duty’ and ‘breach’ as measures of negligent conduct; and (2) whether, because the risk of harm was reasonably foreseeable, the defendant may be held liable to the plaintiff for the particular harm that befell the plaintiff—a concept that traditionally was referred to as ‘proximate’ cause and which, in our current analytical framework, operates as a legal **590 limit on the scope of a defendant's liability for negligent conduct.”
And, in Sloan, this court included that quotation from Piazza and took another stab at explaining the relationship between the traditional elements of a negligence claim and the Fazzolari reformulation:
“In ordinary negligence claims, foreseeability plays a role in determining whether a defendant's conduct is negligent (in other words, in setting a defendant's standard of care) and whether a defendant should be liable for particular consequences of their negligent conduct (in other words, establishing the scope of a defendant's liability).”
Sloan, 364 Or. at 643, 437 P.3d 1097.
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*12 But Fazzolari’s formulation stands on its own and bears repeating:
“[U]nless the parties invoke a status, relationship or a particular standard of conduct that creates, defines, or limits the defendant's duty, the issue of liability for harm actually resulting from defendant's conduct properly depends on whether that conduct unreasonably created a foreseeable risk to a protected interest of the kind of harm that befell the plaintiff.”
303 Or. at 17, 734 P.2d 1326. In this case, the parties do not invokeaparticularstatus,relationship,orstandardofconduct, and we therefore consider plaintiff's claim to be “an ordinary negligenceclaim,”inwhichplaintiffwasrequiredtoestablish that defendant's conduct “unreasonably created a foreseeable risk to a protected interest of the kind of harm that befell the plaintiff.” Id.
To prove liability in an ordinary negligence claim, a plaintiff also must prove factual causation. See Oregon Steel Mills, Inc. v. Coopers & Lybrand, LLP, 336 Or. 329, 340, 83 P.3d 322 (2004) (explaining that “[a] plaintiff, of course, still must prove ‘factual’ or ‘but-for’ causation—that there is a causal link between the defendant's conduct and the plaintiff's harm”). “Foreseeability (what prospectively might happen) is considered separately from causation (what retrospectively did happen).” Chapman v. Mayfield, 358 Or. 196, 206, 361 P.3d 566 (2015). Thus, weaving together the requirements of an ordinary negligence claim, plaintiff in this case was required to prove that (1) defendant's conduct (2) unreasonably (3) created a foreseeable risk (4) to a protected interest (5) of the kind of harm that befell the plaintiff, and (6) that defendant's conduct in fact caused the harm that plaintiff incurred.
Before we embark on an analysis of the evidence relevant to that claim, an additional note is necessary. In this case, neither party takes the position that, on this record, any of those aspects of plaintiff's claim present matters of law for the court. In particular, defendant does not take the position that the emotional distress that plaintiff suffered as a result of her suicide attempt was not a harm to a legally protected interest or that, as a matter of law, emotional *13 distress severe enough to lead to a suicide attempt is not a foreseeable consequence of the alleged conduct. Rather, defendant takes the position, as she did below, that the foreseeability of that risk of harm was a question for the jury, and that the evidence of her cellphone use was irrelevant to that factual
determination. Similarly, plaintiff does not raise an objection to having the jury consider the question of foreseeability, as she understands that question.
III. ANALYSIS
With that background in mind, we turn to the specifics of this case and the question we must answer—whether the trial court erred in ruling that evidence that defendant was using her cellphone at the time of the collision was admissible on the issue of foreseeability. Defendant contends that that ruling was in error because she had admitted “liability,” “fault,” and “negligence,” rendering evidence of “the elements of” plaintiff's claim, including “most aspects of foreseeability,” irrelevant. Defendant contends that, because she admitted responsibility for causing a rear-end collision, the only “aspect” of foreseeability at issue was whether it wasforeseeablethatsuchacollisionwouldcausethe“extent” of the harm that plaintiff suffered, particularly her suicide attempt. Defendant submits that her cellphone use was not relevant to that question, and, even if it was, its probative value was substantially outweighed by the risk of unfair prejudice.
**591 Plaintiff argues that this is not an admitted liability case. Plaintiff takes the position that, by contesting foreseeability, defendant put her conduct at issue, that determining whether that conduct unreasonably created a foreseeableriskofthekindofharmthatbefellherisablended factual and normative inquiry, and that defendant's cellphone use was relevant to that inquiry.
A. The Nature of the Foreseeability Inquiry and its Implications.
Because defendant's argument starts with the premise that she admitted “liability,” “fault,” and “negligence,” it is helpful to begin our analysis with the facts that plaintiff alleged and was required to prove to establish her *14 negligence claim. Plaintiff alleged that, on the day of the collision, it was raining heavily and the roads were slick, that defendant knew of those conditions and that other motor vehicle accidents had happened that day, that defendant “used her cellphone to place a non-emergen[cy] call to a client,” and that defendant rear-ended plaintiff's vehicle. Defendant admitted all those allegations, except her cellphone use. Plaintiff did not allege, in Fazzolari terms, that defendant's conduct “unreasonably created a foreseeable risk” of the kind of harm that befell
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her. Instead, plaintiff alleged that defendant was “negligent” in failing to keep and maintain a lookout, in driving too fast, and in following too closely and that defendant's use of her cellphone was a fact supporting plaintiff's claim that defendant was negligent in those particulars. Defendant denied those allegations. Plaintiff alleged that, as a result of the collision and impact, she suffered physical injury, posttraumatic stress, and anxiety. Defendant also denied those allegations. However, defendant also made “admissions” and “denials” that varied from plaintiff's allegations. Defendant “admitted” that, immediately before the accident, she was looking down and was unable to stop and that she was “responsible” for causing the “accident.” Defendant “denied” thatshewas“responsibleforcausingthefullnatureandextent of plaintiff's alleged injuries and damages.”
Defendant's answer does not constitute an admission of “liability,” “fault,” or “negligence.” Defendant did not admit that she was “negligent” in the alleged particulars or that plaintiffwasentitledtoajudgmentonher“negligence”claim. Defendant admitted “responsibility,” but only for “causing the accident,” not for causing plaintiff's injuries. A person can cause “an accident” without being “at fault” or legally responsible for the consequences, and a person can be legally responsible for a collision, without being legally responsible for a plaintiff's injuries. Defendant did not admit that she engaged in the conduct or drove in the manner that plaintiff alleged, that her conduct unreasonably created a foreseeable risk of harm to plaintiff, or that her conduct in fact caused the harm that plaintiff alleged she had incurred. Defendant's denial of responsibility for causing the “full nature and extent of plaintiff's alleged injuries” *15 was not an admission that she was legally liable for some or any of plaintiff's injuries.
In her memorandum in support of her pretrial motion in limine, defendant argued that she had “admitted fault,” and she submitted a proposed jury instruction admitting “liability.” At the hearing on defendant's motion, the trial court inquired about the matters that remained for trial, and defendant responded, not that she had admitted “fault” or “liability,” but that she had admitted “negligence.” In her filings and argument, defendant was entitled to admit matters that she had not admitted in her answer, but it is not clear that she intended to do so; if she did, she did not do so with precision. By stating that defendant admitted that she was “negligent,” defendant may have intended to admit that her conductwasunreasonable,butitisnotclearsheusedthatterm of art to take a new position and to admit more than she had admitted in her answer—that she accepted responsibility for
rear-ending plaintiff's vehicle and causing the collision. Be thatasitmay,whatismostsignificantforourpurposesisthat, on questioning by the court, defendant acknowledged that, despiteheradmissions,shewascontesting“foreseeability”— and the trial court understood her argument on that issue in the context of the foreseeability instruction she requested. To reiterate, defendant requested, and the trial court gave, the following jury instruction:
**592 “A person is liable only for the reasonably foreseeable consequences of his or her actions. There are twothingsthatmustbeforeseeable.First,theplaintiffmust be within the general class of persons that one reasonably would anticipate might be threatened by the defendant's conduct. Second, the harm suffered must be within the generalclassofharmsthatonereasonablywouldanticipate might result from the defendant's conduct.”
In sum, although defendant has taken the position on review that she admitted “liability,” the pleadings and argument to thetrialcourtmakeitclearthatdefendantadmittedsomething less than that. “Foreseeability” is an aspect of liability, and, although defendant admitted some level of responsibility for the events that led to plaintiff's injuries, defendant continued to dispute foreseeability all the way through trial.
*16 We move, then, to defendant's argument that she admittedmost“aspects”offoreseeability,makingevidenceof her conduct irrelevant. In her briefing in this court, defendant contends that foreseeability plays a number of roles and that, in this case, her admissions changed the nature of the foreseeability question. According to defendant:
“The first role that foreseeability plays is in determining whether the defendant's conduct unreasonably created a foreseeable risk of harm to a protected interest of the plaintiff such that the defendant may be held liable for that conduct—formerly described in terms of ‘duty’ and ‘breach’ as measures of negligent conduct.”
(Internal quotation omitted.) That role, defendant contends, is the “blameworthiness” aspect of foreseeability. For defendant, the second role that foreseeability plays is in determining whether “ ‘the defendant may be held liable to the plaintiff for the particular harm that befell the plaintiff —a concept that traditionally was referred to as “proximate” cause and which * * * operates as a legal limit on the scope of a defendant's liability for negligent conduct.’ ” (Quoting Piazza, 360 Or. at 70, 377 P.3d 492; emphasis and ellipses defendant's.) In defendant's view, that second role often
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“focuses on the foreseeability of the harm that initially befell a particular plaintiff,” but also permits an inquiry about “whether the extent of the plaintiff ’s harm was reasonably foreseeable.” (Emphases defendant's.) According to defendant, her “judicial admissions conclusively established the ‘blameworthiness’ aspect of foreseeability as well as the threshold liability limiting aspect, i.e., the foreseeability of the harm that initially befell the plaintiff.” Defendant contends that because she admitted responsibility for causing a rear-end collision, the only “aspect” of foreseeability at issue was whether it was foreseeable that such a collision would cause the “extent” of the harm plaintiff suffered, particularly her suicide attempt.
We agree with defendant that this court has described foreseeabilityas“playingarole”inoverlappingcommon-law negligence determinations. We have not described the role of foreseeability in the same way that defendant does, but even if defendant were correct in her description, a question that we do not address, she is incorrect in the conclusion that she draws from it. To start, defendant is incorrect in *17 arguing that there is an “aspect” of foreseeability that considersonlytheforeseeabilityofthe“extent”ofaplaintiff's injuries. The general rule—and the rule in Oregon—is that when a defendant is liable for the type of harm that a plaintiff suffers, the defendant is liable for the entirety of that harm, even when the extent of that harm is not foreseeable. As the Restatement (Third) of Torts puts it:
“If the type of harm that occurs is within the scope of the risk, the defendant is liable for all such harm caused, regardless of its extent. Even when a foreseeability standard is employed for scope of liability, the fact that the actor neither foresaw nor should have foreseen the extent of harm caused by the tortious conduct does not affect the actor's liability for the harm.”
Restatement (Third) of Torts: Physical and Emotional Harm, §29commentp(2010). See Fazzolari, 303Or.at17,734P.2d 1326 (requiring consideration of whether conduct created foreseeableriskof“thekindofharmthatbefelltheplaintiff”); Winn v. Fry, 77 Or.App. 690, 693, 714 P.2d 269 (1986) (explaining that “[t]he basic premise regarding damages is that a defendant takes the plaintiff **593 as he finds him”) (internal quotation marks omitted); Crismon v. Parks, 238 Or.App. 312, 314, 317, 241 P.3d 1200 (2010) (explaining that a plaintiff with a genetic condition exacerbated by a car accident was entitled to a “ ‘previous infirm condition’ instruction [because it] is designed to prevent the jury from discounting damages because a ‘normal’ person would not
have suffered the same extent of damages as the plaintiff”).
Accord, Fuller v. Merten, 173 Or.App. 592, 22 P.3d 1221 (2001) (trial court erred in not giving “previous infirm condition” instruction in circumstance in which the plaintiff alleged that the collision caused break in plaintiff's neck that ordinarily would not be caused by that kind of collision).
In Oregon, all persons have a legally protected interest to be “free from physical harm at the hands of another.”
Philibert v. Kluser, 360 Or. 698, 703, 385 P.3d 1038 (2016) (internal quotation omitted). And, when negligent conduct causes physical injury, Oregon law also allows the plaintiff to recover damages for emotional distress. Id.; see also Tomlinson v. Metropolitan Pediatrics, LLC, 362 Or. 431, 452, 412 P.3d 133 (2018) (“[I]f the plaintiff establishes a negligence *18 claim based on physical injury * * *, then, generally speaking, the pain for which recovery is allowed includes virtually any form of conscious suffering, both emotionalandphysical.”(Internalquotationomitted.)).Thus, in this case, defendant was liable for the physical injuries that she caused plaintiff to suffer even if those injuries were more extensive than she reasonably could have anticipated. Defendant accepted that proposition; she did not object or except to an instruction that so informed the jury.4
Defendant also was liable for the emotional distress that she caused plaintiff to suffer, even if plaintiff was more prone to suffer distress, anxiety, or depression than another person might be. The rule that a defendant is responsible for the “full extent” of a plaintiff's injuries, even though those injuries would not be foreseeable, extends not only to preexisting physical injuries, but also to unanticipated harm and emotional injuries. See Restatement § 31 comment b (“a plaintiff need not have a preexisting condition to recover for physical or emotional harm that is of unforeseeable magnitude”).5
**594 *19 That rule applies, however, only when a defendant is liable for the type or kind of harm that the plaintiff suffers. Restatement § 31 comment b (stating rule as applicable if the type of harm that occurs is within the scope of the risk). As articulated by Dobbs, “Courts assume a radical distinction between the nature of a harm and its extent.” Dan Dobbs, Paul T. Hayden & Ellen M. Bublick, 1 The Law of Torts § 206 (2d ed. 2011) (emphases in original). Harper, James and Gray on Torts discusses the basis for the distinction:
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“There are cases where the defendant has been negligent toward the plaintiff or his property (even under the restrictive view of the scope of duty) and where injury has come through the very hazard that made the conduct negligent, but where because the state is set for it the extent oftheinjurypassesallboundsofreasonableanticipation.A milkdeliverer,forinstance,negligentlyleavesabottlewith a chipped lip, and this scratches a [person's] hand as she takes it in. All this is easily within the range of foresight. This particular [person] however, has a blood condition so that what to most [people] would be a trivial scratch leads to blood poisoning and death. * * * In these and like cases of what well may be called direct consequences, the courts generally hold the defendant liable for the full extent of the injury without regard to foreseeability.
17, 734 P.2d 1326 (requiring foreseeability of “kind of harm” that befell the plaintiff).
One context in which the issue of foreseeability arises in Oregon is in cases in which a plaintiff's initial injury is followed by subsequent conduct and subsequent injury. In such cases, the defendants may argue that the subsequent third-party conduct was not foreseeable and that they should not be held liable for the subsequent harm. Sloan is an example of a case in which the defendants made such an argument. There, the plaintiff alleged that the defendant doctors were negligent in failing to treat her when she was a patient at the facility where they worked and that, as a result, she died at a second facility to which she had been released. The defendants argued that the plaintiff's death could have been caused by negligence at that second facility, and the plaintiff requested the following jury instruction:
“This result has been attacked as one quite inconsistent with the prevailing limitation on the scope of duty to interests and hazards that are foreseeable. * * * But the criticism stems from too much insistence on mechanical consistency. There is no reason to apply the restrictive foreseeability test to all problems just because it is applied to some. There are strong reasons, both within the framework of fault and to secure more effective compensation, for holding a wrongdoer liable for all injuries [the wrongdoer] *20 causes innocent people, and for rejecting theforeseeabilitylimitationaltogether. Counter considerations have prevailed to limit the risks of negligent conduct to persons and types of hazard.”
Fowler V. Harper, Fleming James, Jr. & Oscar S. Gray, 4 Harper, James and Gray on Torts §20.5,175-77(3ded.2007)
(footnoteomitted;firstemphasisinoriginal;secondemphasis added). Accordingly, courts, including Oregon courts, have made a distinction between the extent of a plaintiff's harm, which need not be foreseeable, and the type of harm that befelltheplaintiff,whichmayraisethatissue. Compare Winn, 77 Or.App. at 693, 714 P.2d 269 (explaining premise that a defendant takes the plaintiff as is) with Fazzolari, 303 Or. at
“If you find the defendant was negligent and that such negligence caused injury to the plaintiff, the defendant would also be liable for any additional injury caused by the subsequent conduct of another person or entity, even if such conduct was negligent or wrongful, as long as the subsequent conduct and risk of additional injury were reasonably foreseeable.”
Sloan, 364 Or. at 646, 437 P.3d 1097. This court held that that instruction correctly stated the law. Id. at 647, 437 P.3d 1097.
*21 In this case, a court could understand defendant's argument that she should not be held liable for plaintiff's attempted suicide as an argument that defendant should not be held liable for subsequent conduct—here, the subsequent conduct of plaintiff herself. Viewed as an argument about the foreseeability of the extent of plaintiff's harm, defendant's foreseeability argument is not legally viable for the reasons discussed above. However, **595 viewed as an argument about the foreseeability of the general kind of harm that plaintiffsuffered,defendant'sforeseeabilityargumentwasnot legally foreclosed, at least here, where plaintiff did not so argue or object to having the jury consider the issue.6
Giving defendant the benefit of an argument that she could have made, we rephrase her contention as a contention that, having admitted responsibility for causing the rear-end collision, the foreseeability question for the jury was whether itwasforeseeablethatsuchacollisionwouldcausethe“kind” of harm she suffered, particularly her suicide attempt. With that understanding of defendant's argument, we now consider
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defendant's contention that her conduct—the cause of the collision—is not relevant to that inquiry. She is wrong.
In subsequent conduct cases in which foreseeability is an issue, the jury is tasked with deciding the same *22 general question as that presented in other foreseeability cases—whetherthedefendant'sconductunreasonablycreated a foreseeable risk of the type of harm that resulted. In subsequent conduct cases, the specific application of that question asks whether the defendant's conduct unreasonably created a foreseeable risk of the subsequent conduct, and the type of harm that resulted from it. See Chapman, 358 Or. at 209-15, 361 P.3d 566 (discussing subsequent conduct cases and the evidence necessary to present jury question on foreseeability). In subsequent conduct cases, “ ‘The community's judgment, usually given voice by a jury, determines whether the defendant's conduct met that threshold in the factual circumstances of any particular case.’
” Piazza, 360 Or. at 74, 377 P.3d 492 (quoting Chapman, 358 Or. at 206, 361 P.3d 566). That, as plaintiff suggests, is “a blended factual and normative inquiry.” Piazza, 360 Or. at 94, 377 P.3d 492. When a defendant admits responsibility for initial harm, but contests liability for subsequent conduct and harm, the foreseeability inquiry is still an inquiry about defendant's conduct and whether it unreasonably created a foreseeable risk. That inquiry simply cannot be conducted without considering the nature of the defendant's conduct.
Thus, in this case, even if we construe defendant's argument as a challenge to the foreseeability of the type (rather than the extent) of harm plaintiff suffered—a later suicide attempt—defendant's conduct is an indispensable part of the foreseeability analysis. And, as we will explain, defendant's admission that she caused the rear-end collision does not make it otherwise.
Defendant contends that this case is different than other foreseeability cases in that she admitted responsibility for a rear-end accident and, therefore, all the jury needed to know was that there was “a rear-end car accident on the freeway.” Defendant posits that “[t]he foreseeable consequences of rear-ending another car are, logically speaking, the same regardless of whether the person **596 doing the rearending is distracted, asleep, intoxicated, or simply failed to react in time.”
the impact, and differing conduct may present differing risks of forceful impact. But defendant's argument suffers from a more fundamental problem.
The immediate physical consequence of a defendant's conduct—here, the fact of a rear-end collision—is not the starting point in the foreseeability inquiry as correctly understood. We start, as Fazzolari instructs, with the defendant's “conduct” and the reasonableness of the foreseeable risks that it created. See Fazzolari, 303 Or. at 17, 734 P.2d 1326 (“liability for harm actually resulting from defendant's conduct properly depends on whether that conduct unreasonablycreatedaforeseeablerisktoaprotected interestofthekindofharmthatbefelltheplaintiff”(emphases added)). Accordingly, as the subsequent conduct cases discussed above illustrate, a foreseeability inquiry does not ask a jury to begin with the consequences of a defendant's conduct—what actually happened. Rather, foreseeability is a prospective inquiry that asks a jury to consider what could have happened. Chapman, 358 Or. at 206, 361 P.3d 566. The uniform jury instruction that defendant requested and that the trial court gave correctly told the jury as much. It told the jury that “the harm suffered must be within the general class of harms that one reasonably would anticipate might result from the defendant's conduct.” (Emphasis added.) Different conduct may create different risks of harm, and a jury may well reach different conclusions about whether the defendant unreasonably created a foreseeable risk depending onwhetherthedefendantwas“distracted,asleep,intoxicated, or simply failed to react in time.” In this case, defendant's admission that her conduct caused a rear-end collision was an admission that, as it happened, her conduct had a particular consequence, a rear-end collision. That factual admission did not, however, take the pertinent question of the range of foreseeable consequences from the jury.
We disagree. First, defendant may be factually incorrect on that point. The foreseeable consequences of rear-ending another car may be different depending on the *23 force of
In concluding that, in this case, defendant's admission did not preclude the jury's consideration of foreseeability, we do not mean to imply that, in other ordinary negligence cases, a defendant cannot make factual admissions that may narrow the issues and the facts relevant to those issues. For instance, in Lasley v. Combined Transport, Inc., 351 Or. 1, 4, 261 P.3d 1215 (2011), an ordinary negligence *24 case, a corporate defendant had spilled glass on the freeway, creating dangerous conditions; the driver defendant had driven negligently and collided with the plaintiff's decedent, who was stopped in traffic behind the spilled glass. The corporate defendant contended that the trial court had erred in excluding evidence that the driver had
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been intoxicated at the time of the collision. The corporate defendant contended that that evidence was relevant to the issue of whether the corporation's negligence was a substantial factor in causing the plaintiff's injuries and to the issue of comparative fault. The driver admitted that she had driven at an unreasonable speed and that her negligence was a cause in fact of the plaintiff's injuries. The driver had not contested foreseeability, and this court held that, as a result of the driver's admissions, evidence of the driver's intoxication was not relevant to causation; it was, however, relevant on the issue of comparative fault. Id. at 27, 261 P.3d 1215. The legal and evidentiary effect of factual admissions will depend on the circumstances of each case. Our point is not that such admissions are inconsequential; rather, it is that, in this case, defendant's factual admissions and the legal positions did not have the effect for which she argues. Defendant's admissions may have taken the questions of whether a collision occurred, or even whether defendant drove unreasonably, off the table. However,thefactthatdefendantchallengedtheforeseeability of the kind of harm that befell the plaintiff—a suicide attempt —meant that the jury was still required to determine whether defendant's conduct unreasonably created a foreseeable risk of that kind of harm.
**597 B. The Admissibility of the Cellphone Evidence on the Question of Foreseeability.
Understanding the nature of the foreseeability question that defendant raised and that the jury was required to consider, we arrive at the question of whether the trial court erred in ruling that evidence of defendant's cellphone use was relevant to that question. Relevant evidence is evidence that has “any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” OEC 401. We review that OEC 401 ruling for legal error. State v. Titus, 328 Or. 475, 481, 982 P.2d 1133 (1999).
*25 Having already concluded that, by contesting foreseeability, defendant put her conduct at issue, the relevancy question in this case is a straightforward one. A driver's decision to look away from the road to make a cellphone call to a client could affect a jury's determination of whether the driver unreasonably created a foreseeable risk of a horrific collision and significant physical injury, even loss of life. That evidence also could affect a jury's determination of whether that conduct unreasonably created a foreseeable risk of significant emotional distress, even distress so severe thatitwouldcauseapersontoattemptsuicide.Andadecision to use a cellphone could be considered less reasonable and
the risk more foreseeable than would a driver's glancing away for a reason that did not require the same mental attention. Here, the jury was entitled to hear, and without objection did hear, evidence beyond the fact of the rear-end collision. The jury heard evidence of the conditions that existed at the time and the conduct in which defendant engaged, including her speed, the fact that she looked down, and the fact that she looked down to place a cellphone call to a client. That conduct evidence was relevant because it could have had a tendency to affect the jury's determination of whether the conduct unreasonably created a foreseeable risk of the kind of harm that plaintiff suffered.
Defendant, understandably, may have been concerned that a jury might consider her cellphone use more blameworthy than other aspects of her conduct and misuse that evidence to increase the damages awarded. Had defendants not contested foreseeability, then evidence of defendant's conduct, including her cellphone use, may not have been relevant. For instance, defendant could have admitted the foreseeability of a suicide attempt, but argued, as she argued in closing, that her conduct was not a cause-in-fact of plaintiff's attempt. Defendant could have argued that the only cause of plaintiff's attempt was her insecure relationship with her husband. Had defendant taken that tack, the trial court may have viewed the relevancy of defendant's conduct, including her cellphone use, differently. See Lasley, 351 Or. at 11, 261 P.3d 1215 (evidence of intoxication not relevant on issueoffactualcausation).Buthere,defendantdidcontestthe foreseeabilityofplaintiff'ssuicideattemptand *26 evidence of the defendant's conduct was relevant to that issue.
That brings us to the final question of whether the cellphone evidence should have been excluded because “its probative value is substantially outweighed by the danger of unfair prejudice.” OEC 403. We review the trial court's determination under OEC 403 for abuse of discretion. Titus, 328 Or. at 481, 982 P.2d 1133
We understand that evidence of defendant's cellphone use could have caused a jury to consider her behavior riskier than the jury might have in the absence of that evidence, but the fact that evidence may make it more likely that a jury will decide for or against a party does not determine whether evidence is “unfairly” prejudicial. See McCathern v. Toyota Motor Corp., 332 Or. 59, 71, 23 P.3d 320 (2001) (explaining that “relevant evidence often has the effect of proving one party's position while harming the other's”). When a defendant's conduct is at issue, there is nothing
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particularlyunfairaboutpaintingthatconductinallitsdetails, and it could be unfair not to do so. Cf. State v. Davis, 336 Or. 19, 34, 77 P.3d 1111 (2003) (concluding that evidence was improperly excluded as prejudicial when it “potentially was influential because it tended to complete the picture of defendant's version of the events[, **598 and d]efendant was entitled to prove his theory of the case by presenting relevant, admissible evidence to the jury”). In this case, we conclude that the trial court did not abuse its discretion in admitting evidence of defendant's cellphone use. See State v.
Shaw, 338 Or. 586, 615, 113 P.3d 898 (2005) (noting that a trial court has “broad discretion” when findings on the record support discretionary ruling under OEC 403).
The decision of the Court of Appeals is reversed. The judgment of the circuit court is affirmed.
All Citations
370 Or. 1, 513 P.3d 581
Footnotes
* On appeal from Clackamas County Circuit Court, Douglas Van Dyk, Judge. 308 Or.App. 12, 479 P.3d 1063 (2020).
** DeHoog, J., did not participate in the consideration or decision of this case.
1 Defendant Kesselring (Kesselring) is the agent and owner of Kesselring Communications, LLC, (Communications) which is also a party to this appeal. Communications admitted that it is vicariously liable for Kesselring's acts and makes no arguments independent of Kesselring's. For readability, we refer to defendant in the singular. However, all references to defendant in the singular are attributable to both defendants.
2 The $97,505 figure that plaintiff alleged in economic damages included the cost of psychiatric treatment arising from plaintiff's suicide attempt. The difference between that sum and the sum that the jury awarded almost exactly reflects the cost of that psychiatric treatment. As defendant argues, the jury may well have chosen not to award plaintiff economic damages related to her suicide attempt.
3 In addition to the evidentiary issue that we discuss, plaintiff also asks that we address another issue, but only if we affirm the decision of the Court of Appeals and order a new trial. In that event, plaintiff asks that we conclude that the Court of Appeals erred in its failure to address her cross-assignment of error on an intermediate ruling. Because we reverse the decision of the Court of Appeals, we do not reach the contingent issue that plaintiff raises.
4 The trial court instructed the jury:
“IfyoufindthatthePlaintiffhadabodilyconditionthatpredisposedhertobemoresubject to injury than a person in normal health, nevertheless the defendant would be liable for any and all injuries and damage that may have been suffered by the Plaintiff as the result of the negligence of the defendant even though those injuries due to the prior condition may have been greater than those that would have been suffered by another person under the same circumstances.”
5 Defendant cites Wallach v. Allstate Ins. Co., 344 Or. 314, 180 P.3d 19 (2008) for the proposition that foreseeability can limit a defendant's liability for the extent of the harm that a plaintiff suffers. That is an
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incorrect understanding of the case. There, the plaintiff was injured by a phantom driver and sued her insurer for coverage. Before trial, the plaintiff was again injured in two subsequent accidents. Id. at 316, 180 P.3d 19
At trial on coverage for the first accident, the court instructed the jury that the insurer was liable for all of the plaintiff's harm, including harm incurred in the other two accidents, as long as the subsequent harm would not have occurred but for the first accident. Id. at 317-18, 180 P.3d 19. This court held that the instruction was erroneous in two separate but related respects. Id. at 319, 180 P.3d 19. First, the instruction was “at odds with the general rule that a defendant is liable only for the foreseeable consequences of his or her negligence,” because it required only that the subsequent injuries be causally connected to the first accident and not that they be foreseeable:
“Under the trial court's instruction, the jury could hold Allstate liable for all aggravation damages that were causally connected to the first driver's negligence no matter how unforeseeable those damages were. Such unlimited liability is contrary to Oregon negligence law.”
Id. at 320, 180 P.3d 19. Second, we noted that “[u]nder Oregon law, a tortfeasor is responsible to the extent that his or her negligence aggravates a preexisting condition.” Id. at 321, 180 P.3d 19. We explained that if, in the case at hand, “the second accident was not a foreseeable consequence of the first, then the law allocates responsibility for any aggravation of plaintiff's preexisting condition to the second tortfeasor, not the first.” Id. Thus, Wallach coheres with the principal that a defendant is liable for the full extent of harms that she causes. The foreseeability issue in Wallach was not an issue of severity, it was an issue about whether an initial tortfeasor could be held liable for injuries that were aggravated by the negligence of a subsequent tortfeasor.
6 This court has not decided whether a plaintiff's suicide or attempted suicide would present a matter of the “extent” of a plaintiff's injuries (precluding consideration of foreseeability), a matter of “subsequent conduct” (permitting a consideration of foreseeability), or a matter of comparable fault. In other jurisdictions, juries have been permitted to consider the foreseeability of a plaintiff's suicide, not only when the foreseeable danger of suicide was the principal risk that made the defendant's conduct negligent, such as, for example, when a hospital leaves a suicidal patient unsupervised, but also where suicide or attempted suicide was arguably within the scope of a more obvious risk that made the defendant's conduct negligent. For instance, juries have been permitted to consider the foreseeability of a plaintiff's suicide after a medical center negligently misdiagnosed plaintiff's HIV status, Cramer v. Slater, 146 Idaho 868, 876, 204 P.3d 508, 516 (2009) (whether misdiagnosis was cause of suicide was question of fact for the jury), the foreseeability of a plaintiff's suicide after suffering a serious brain injury in an automobile accident caused by the defendant, Fuller v. Preis, 35 N.Y.2d 425, 427, 363 N.Y.S.2d 568, 322 N.E.2d 263, 264 (1974) (whether defendant's negligence caused plaintiff's death by suicide was an issue for the jury), and the foreseeability of a plaintiff being shot at his own request after being seriously injured in a motorcycle accident caused by a manufacturer's defect, Zygmaniak v. Kawasaki Motors Corp. U.S.A., 131 N.J.Sup. 403, 405, 330 A.2d 56, 58 (1974) (whether defendant motorcycle manufacturer caused motorcyclist's death was an issue for the jury).
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End of Document © 2023 Thomson Reuters. No claim to original U.S. Government Works.
370 Or. 742
Supreme Court of Oregon.
Roberta HAAS and Kevin Haas, Petitioners on Review, v.
The ESTATE OF Mark Steven CARTER and State Farm Mutual Automobile Insurance Company, Respondents on Review, and Gerald Campbell, Defendant.
(CC 16CV24579) (SC S069255) |
Argued and Submitted on September 30, 2022. | February 24, 2023
Synopsis
Background: Occupants of stopped vehicle brought negligenceactionagainstrear-endingdriverandhisinsurance company, alleging that they suffered injuries when driver's vehicle struck the back of their stopped vehicle. The Circuit Court, Multnomah County, Jerry B. Hodson, J., 2018 WL 6171992, entered judgment for rear-ending driver, and occupants appealed. The Court of Appeals, Hadlock, J. pro tempore, 316 Or.App. 75, 502 P.3d 1144, affirmed, and occupants filed petition for review.
Mutual Automobile Insurance Company. Also on the briefs was David E. Smith, Salem.
Leslie A. Kocher-Moar, MacMillan Scholz & Marks PC, Portland, argued the cause and filed the brief for respondent on review Estate of Mark Steven Carter.
Travis Eiva, Eiva Law, Eugene, filed the brief for amicus curiae Oregon Trial Lawyers Association.
Lindsey H. Hughes, Keating Jones Hughes PC, Portland, and Janet M. Schroer, Hart Wagner LLP, Portland, filed the brief for amici curiae Oregon Association of Defense Counsel, American Property Casualty Insurance Association, American Tort Reform Association, and Chamber of Commerce of the United States of America.
Before Flynn, Chief Justice, and Duncan, Garrett, and DeHoog, Justices, and Balmer and Walters, Senior Judges, Justices pro tempore. **
Opinion
WALTERS, S. J.
*744 In this negligence action, we conclude that the trial court did not err in instructing the jury on the causation element of plaintiffs' claims. Although our reasoning varies fromthatoftheCourtofAppeals,weaffirmitsdecision, Haas v. Estate of Mark Steven Carter, 316 Or App 75, 87-88, 502 P.3d 1144 (2021), and the judgment of the circuit court.
The Supreme Court, Walters, Senior Judge, held that trial court did not commit legal error by declining to give substantial factor instruction.
Affirmed.
Procedural Posture(s): On Appeal.
**453 On review from the Court of Appeals. * (CA A169932)
Attorneys and Law Firms
Kathryn H. Clarke, Portland, argued the cause and filed the briefs for petitioners on review.
Ralph C. Spooner, Spooner & Much PC, Salem, argued the cause and filed the brief for respondent on review State Farm
FACTUAL BACKGROUND
In 2014, plaintiffs' stopped car was struck by a car driven by defendant Carter. 1 Plaintiffs brought this negligence action against defendants, seeking to recover economic and noneconomic damages.2 At trial, one of the primary issues was whether Carter's driving was a cause-in-fact of the injuries that plaintiffs alleged.
Plaintiff Roberta Haas alleged that, as a result of Carter's negligence, she suffered injuries to her neck and back and required medical treatment, including surgery. Shortly after the collision, Roberta Haas began to experience neck and back pain. Several months later, she was still experiencing significant pain, and she consulted an orthopedic surgeon. In 2015, Haas underwent a lumbar fusion. At trial, the orthopedic surgeon testified that, prior to the collision, Haas
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had had an “extensive cervical and lumbar physical history,” including a bout of osteomyelitis in her neck in 2010 that had led to extensive neck surgery. She also had had a cervical fusion which had left her with what her surgeon considered “an infirm condition.” The orthopedic surgeon testified that the surgery performed in 2015 was attributable to the 2014 collision, but he also stated that, prior to the collision, Haas's spine was already “a mess” and that anything, even a sneeze, could have made Haas symptomatic.
*745 PlaintiffKevinHaasalsoallegedinjurytohisneckand the need for medical treatment, including surgery. After the 2014 collision, Kevin Haas noticed soreness in his neck, and, a couple of months later, he received physical and massage therapy, which appeared to improve his condition. However, in 2017, Haas was still suffering pain and **454 underwent neurosurgery, which disclosed a partially healed tear in the casing of a spinal cord disc that was consistent with the date and mechanism of the injury that he had sustained in the 2014 collision. At trial, the neurosurgeon attributed Haas's neck problems and the need for surgery to the collision but also testified that annular tears are not uncommon, and that they frequently occur due to age and degeneration.
At trial, plaintiffs submitted a written request for two uniform jury instructions on the issue of causation:
“§ 23.01—Causation—‘But For’
“The defendants' conduct is a cause of the plaintiffs' injury if the injury would not have occurred but for that conduct; conversely, the defendants' conduct is not a cause of the plaintiffs' injury if that injury would have occurred without that conduct.
“§ 23.02—Causation—‘Substantial Factor’
“Many factors may operate either independently or togethertocauseinjury.Insuchacase,eachmaybeacause of the injury even though the others by themselves would have been sufficient to cause the same injury.
is an important factor and not one that is insignificant.”
The trial court delivered the but-for instruction but rejected plaintiffs' request for the substantial factor instruction— stating, in part, that that instruction applies only “when you have multiple actors potentially at the same time.”
In addition to the but-for causation instruction, the court delivered the following instruction on damages for a previous infirm condition:
*746 “§ 70.06—Damages—‘Previous Infirm Condition’
“Ifyoufindthataplaintiffhadabodily condition that pre-disposed him or her to be more subject to injury than a person in normal health, nevertheless the defendant would be liable for any and all injuries and damage that may have been suffered by the plaintiff as the result of the negligence of the defendant, even though those injuries, due to the prior condition, may have been greater than those that would have been suffered by another person under the same circumstances.”
The jury returned a verdict for defendants.
“If you find that the defendants' act or omission was a substantial factor in causing the injury to the plaintiff, you may find that the defendants' conduct caused the injury even though it was not the only cause. A substantial factor
Plaintiffs appealed, arguing that they were entitled to the substantialfactorinstructionandthatthetrialcourtcommitted prejudicial error when it delivered only the but-for instruction to the jury. Plaintiffs contended that, because the jury was “confronted with multiple possible causes of plaintiffs' back and neck problems,” it should have been given the substantial factor instruction to determine whether defendant Carter's collision was a “substantial or important factor in causing the injuries plaintiffs suffered[.]” In response, defendants disputed that there was evidence that multiple causes had acted concurrently to bring about plaintiffs' injuries and argued that preexisting conditions are not concurrent causes of injury; rather, they “are the predicate for susceptibility to injury or for aggravation of prior injury.”3
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The Court of Appeals began its analysis by agreeing with plaintiffs that the use of the substantial factor instruction need not be limited to cases in which there are multiple tortfeasors. Haas, 316 Or App at 83-84, 502 P.3d 1144. Citing this court's decision in Joshi v. Providence Health System, 342 Or. 152, 149 P.3d 1164 (2006), the court reasoned that “any cause of a plaintiff's injury should be considered as part of the *747 causal analysis[,] whether or not that cause was the result of a negligent act.” Haas, 316 Or App at 84, 502 P.3d 1144. Nevertheless, the Court of Appeals concluded that the substantial **455 factor instruction was not required in this case, because plaintiffs had not adduced evidence that there were multiple potential causes of their injuries. Id. The court cited cases in the workers' compensation context where it had differentiated between conditions that make a person more susceptible to injury—“susceptibilities” that increase the likelihood of injury but that do not actively contribute to damaging the body—and those conditions, “causes,” that actively contribute to a disability or need for treatment. Id. at 85-86, 502 P.3d 1144 (citing Corkum v. Bi-Mart Corp., 271 Or App 411, 422-23, 350 P.3d 585 (2015); SAIF v. Dunn, 297 Or App 206, 217-18, 439 P.3d 1011, rev. den., 365 Or. 557, 451 P.3d 1006 (2019)).
The Court of Appeals applied that workers' compensation paradigm to conclude that, in a negligence case, a plaintiff's underlying condition can be the cause of the plaintiff's injury only when the condition actively contributes to causing the injury. Haas,316OrAppat86,502P.3d1144.Inthiscase,the courtexplained,plaintiffs“ha[d]notidentifiedanythingother than defendant Carter's negligent driving that caused their injuries” and had not provided specific evidence showing a “causal link” between their underlying conditions and the injuries for which they sought treatment. Id. at 87, 502 P.3d 1144. The court said that “[e]vidence that plaintiffs' underlying conditions made them more susceptible to injury” was not enough to show that the trial court erred in declining to deliver the substantial factor instruction. Id.
This court allowed plaintiffs' petition for review.
injuries. Plaintiffs argue that, whenever multiple factors may have contributed to a plaintiff's injuries, the trial court should deliver a substantial factor instruction. *748 Defendants counter that, in most circumstances, a but-for instruction correctlydescribesthatnecessarycausallinkandthatthiscase does not encompass one of the exceptional instances in which a substantial factor instruction would be required.4
In considering the parties' arguments, we begin with the principles that govern the causation element of plaintiffs' negligence claims. As we explained in Lasley v. Combined Transport, Inc., 351 Or. 1, 6-7, 261 P.3d 1215 (2011), that elementisapurelyfactualmatterdistinguishedfromconcepts of “proximate cause,” “legal cause,” and “foreseeability”:
“This court has abolished not only the terms but also the concepts of ‘proximate’ and ‘legal’ cause. Oregon Steel Mills, Inc. v. Coopers & Lybrand, LLP, 336 Or. 329, 340, 83 P.3d 322 (2004); Simpson v. Sisters of Charity of Providence, 284 Or. 547, 555, 588 P.2d 4 (1978); McEwen v. Ortho Pharmaceutical, 270 Or. 375, 385 n 7, 528 P.2d 522 (1974). When a defendant's negligence is a factual cause of harm to the plaintiff, the defendant is subject to liability to the plaintiff as long as the harm that the plaintiff suffered was a reasonably foreseeable result of the defendant's negligence. Fazzolari v. Portland School District No. 1J, 303 Or. 1, 17, 734 P.2d 1326 (1987) Thus, the concept of causation (determined as a purely factual matter) is a separate concept from that of liability (determined by foreseeability and not by ‘proximate’ or ‘legal’ cause).”
ANALYSIS
In this court, plaintiffs agree with the Court of Appeals that delivery of a substantial factor instruction is not limited to circumstances in which there are multiple tortfeasors but disagree that, to be entitled to that instruction, they must establish that some other factor “actively” contributed to their
“[C]ausation in fact” is established when “someone examining the event without regard to legal consequences would conclude that the allegedly faulty conduct or condition in fact played a role in its occurrence.” Sandford v. Chev. Div. Gen. Motors, 292 Or. 590, 606, 642 P.2d 624 (1982). As one treatise puts it, and we agree, factual causation “is not a quest for a sole cause. Probably it cannot be said of any event that it has a single causal **456 antecedent; usually there are many.” Fowler V. Harper, Fleming James, Jr., & Oscar S. Gray, 4 Harper, James and Gray on Torts § 20.2, 100 (3d *749 ed.2007)(emphasisinoriginal).Todeterminewhether a defendant's negligence is one of many potential causes of a plaintiff's harm, courts commonly use what is referred to as a “but-for”test. Id. Thattestasks,asdidtheinstructiongivenin this case, whether the plaintiff's injury would have occurred but for the defendant's negligence. If the plaintiff's injury
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would not have occurred but for the defendant's negligence, then the defendant's negligence is a cause of the injury.5
As discussed in Harper, James and Gray on Torts, a but-for instruction is not intended to tell a jury—and, by its terms, does not tell a jury—that a defendant's conduct must be the only or even the predominate cause of the plaintiff's injury. Other authorities agree:
“It is by no means true that the but-for test reduces everything to a single cause. In fact, there are always manycausesthatmeetthebut-fortest,somerepresentedby negligent conduct, some not. A negligently fells a tree; to get around it, B walks into the street; C, driving a car, hits his brake to avoid running into B; D, a passenger is thrown into the windshield. As a pure matter of factual cause, the conduct of A, B, and C are all causes of D's harm. Without A'sconduct,noneofthiswouldhaveoccurredandthesame can be said of the conduct of the others.”
Dan B. Dobbs et al., 1 The Law of Torts § 186, 625-26 (2d ed. 2011) (footnotes omitted); accord W. Page Keeton et al., Prosser and Keeton on The Law of Torts § 41, 266 (5th ed. 1984).
There is, however, at least one situation in which a butfor instruction will not work. That situation occurs “[i]f two causes concur to bring about an event, and either one of them, operating alone, would have been sufficient to cause the identical result[.]” Keeton, Prosser and Keeton on The Law of Torts § 41 at 266 (emphases added). If, for example, two defendants negligently set fires that combined to burn the plaintiff's barn, but each fire alone would have *750 been sufficient to burn the barn, then, applying the but-for instruction, either defendant could claim that that defendant's conduct was not a cause of the barn's destruction; even if that defendant had not set the fire, the other defendant's action would have destroyed the barn. Because the plaintiff could not prove that the barn would not have burned but for the act of either defendant, the plaintiff would not be able to prove causation. The but-for instruction would effectively shield both defendants from liability for the plaintiff's loss, eventhough,asalegalmatter,thecausalrelationshipbetween each defendant and the plaintiff would have been otherwise sufficient to impose liability. See Dobbs et al., 1 The Law of Torts § 189 at 631-32. The substantial factor test was developed primarily for that circumstance—the situation in which the concurrent conduct of two or more causes combine to create an injury, and either one of those causes, operating alone, would have been sufficient to produce the same result.
Keeton, Prosser and Keeton on The Law of Torts § 41 at 268; Harper, 4 Harper, James and Gray on Torts § 20.2 at 100-01.6 In the scenario described above, the substantial factor test would better instruct the jury on the **457 causal relationship necessary to establish the defendants' liability.
This court discussed that very scenario in Joshi. In that case, the propriety of a particular jury instruction was not at issue; the question before the court was whether the plaintiff had adduced sufficient evidence to prove that the defendants' failure to diagnose and treat the decedent's stroke had caused the decedent's death within the meaning of the wrongful death statute, ORS 30.020 342 Or. at 155, 163-64, 149 P.3d 1164. The plaintiff's expert had testified that the defendants' *751 failure had deprived the decedent of a 30 percent chance of surviving a stroke, but not that the defendants' failure had caused the decedent's death. Therefore, this court concluded, the plaintiff had not made out the causation element of a wrongful death claim. Id. at 164, 149 P.3d 1164 Although that holding does not control our analysis here, the court's discussion of the reason for both the but-for and the substantial factor instructions of causation is helpful.
In Joshi, the court recognized the situation in which two causes concur to cause an event, and either, operating alone, would have been sufficient to cause the identical result and quoted Keeton for the proposition that “ ‘[[t] he substantial factor formula] is an improvement over the ‘but for’ rule for this special class of cases.’ ” 342 Or. at 161, 149 P.3d 1164 (quoting Keeton, Prosser and Keeton on The Law of Torts § 41at267).Thus,weexplained,thesubstantialfactorstandard “has not supplanted” the but-for standard of causation; rather, “the two standards apply to different types of negligence cases.” Id. at 162, 149 P.3d 1164.
Plaintiffs read Joshi as placing all multiple tortfeasor cases in the substantial factor bucket and contend that all multiple causation cases should be placed there as well. Plaintiffs argue that there is a “need” for a substantial factor instruction whenever evidence of multiple causal factors is adduced. In that circumstance, plaintiffs argue, a but-for instruction should not be used, because it incorrectly indicates that a defendantcannotbeheldliableunlessthedefendant'sconduct was the sole or predominate cause of the plaintiffs' injuries.
In delving into those arguments, a few preliminary notes are important. First, in this case, plaintiffs proffered both a but-for instruction and a substantial factor instruction. They did not argue, however, that both were required or that the
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substantial factor instruction was required to supplement the but-for instruction, and they now seem to take the position that the court was required to choose between them. Second, the parties understand the difference between the two instructions to hinge on whether the jury is informed that, to find causation, the jury must find that the alleged harm would not have occurred absent the *752 defendant's conduct; they make their arguments accordingly. That is the distinction on which we too will focus, but we note that when a party requests an instruction, its particular wording may be important in any legal analysis, depending, of course, on any objection a party makes.
Starting, then, with plaintiffs' argument from Joshi, we think it important to emphasize that its holding was specific to the interpretation of the wrongful death statute and does not control our analysis here. Nevertheless, Joshi includes two statements with which we agree and that also bear emphasis: The substantial factor standard “has not supplanted” the butfor standard of causation and “the two standards apply to differenttypesofnegligencecases.” Id. at162,149P.3d1164. We understand plaintiffs' contention to be that Joshi also stands for the proposition that the substantial factor standard applies, and consequently that a substantial factor instruction should be given, in all multiple tortfeasor cases. That is not how we read Joshi.
In Joshi, this court discussed earlier cases that referred to the causation “standard” as a substantial factor standard, but, in all but one of those cases, the issue was the sufficiency of evidence, and, in holding that the plaintiffs had established the causation element, the court did not distinguish between but-for and substantial factor causation. 342 Or. at 159, 149 P.3d 1164 (citing, e.g., Stewart v. Jefferson Plywood Co., 255 Or. 603, 606, 469 P.2d 783 (1970) (where this court determined that there was “sufficient evidence” to **458 establish causation-in-fact between the defendant's conduct and the plaintiff's injury)). As the court pointed out in Joshi, those two standards “produce the same result in most cases,” id. at 162, 149 P.3d 1164, and a general statement describing the factual inquiry as one about whether an actor's conduct was a substantial factor in producing a plaintiff's harm does not negate the use of a but-for analysis to make that determination.
We also part ways with plaintiffs in their understanding that, in citing McEwen v. Ortho Pharmaceutical, 270 Or. 375, 528 P.2d 522 (1974), Joshi stands for the proposition that the substantial factor standard rather than the but-for standard
applies in all instances in which there are multiple tortfeasors. Joshi, 342 Or. at 160, 149 P.3d 1164 (citing *753 McEwen, 270 Or. at 407-21, 528 P.2d 522). In McEwen, the plaintiff allegedthathercombineduseoforalcontraceptivesthatwere manufactured by two pharmaceutical companies had resulted in her injuries. 270 Or. at 381, 528 P.2d 522. This court held that the trial court had correctly permitted the jury to decide whether each company was negligent and whether the negligence of each was a cause-in-fact of the plaintiff's injuries. The court said:
“The respective liability of multiple defendants depends upon whether the negligence of each was a substantial factor in producing the complained of harm. If both Syntex and Ortho [(defendants)] were negligent and their negligence combined to produce plaintiff's injuries, then the negligence of Ortho was concurrent with that of Syntex and does not insulate Syntex from liability. Hills v. McGillvrey, 240 Or. 476, 402 P.2d 722 (1965). This is true although the negligent omissions of each defendant occurred at different times and without concerted action. Kuhns v. Standard Oil Co., 257 Or. 482, 478 P.2d 396 (1971). See also Murray v. Helfrich, 146 Or. 602, 30 P.2d 1053 (1934). Nor is it essential to Syntex's liability that its negligence be sufficient to bring about plaintiff's harm by itself; it is enough that Syntex substantially contributed to the injuries eventually suffered by Mrs. McEwen. See Escobedo v. Ward, 255 Or. 85, 464 P.2d 698 (1970).”
270 Or. at 418, 528 P.2d 522. In so stating, we did not reject the use of a but-for instruction or hold that a substantial factor instruction is preferable. We restated the concept that there may be many causes of a plaintiff's harm and that, when multiple tortfeasors contribute to that harm, all may be held liable for it: When an injury would not have occurred without the combined negligence of many, the negligence of each is a but-for cause of the resulting injury. That was the circumstance alleged in McEwen and the cases on which the court relied in McEwen 7 In Joshi, we did not hold that a substantial factor analysis or instruction is required or preferable to a but-for analysis or instruction in all cases in which two or more tortfeasors act concurrently to bring about a plaintiff's *754 injury, and it is incorrect to read that case or its citation to and discussion of McEwen for that proposition.8
**459 In Joshi,thiscourtdid,however,discussanothercase that has a more direct bearing on the one before us—Simpson v. Sisters of Charity of Providence, 284 Or. 547, 549, 588 P.2d
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4 (1978). There, the plaintiff fell while working, landing on his neck and shoulders. He was taken to a hospital, where, he claimed, x-ray technicians were negligent in failing to take adequate x-rays of his cervical thoracic junction. The plaintiff alleged that adequate x-rays would have disclosed a fracture and that the failure to identify that fracture caused him to suffer further injury when a physician who was unaware of it asked the plaintiff to sit on his hospital bed with his legs dangled over the side. Id. at 549-51, 588 P.2d 4. At trial, the defendant argued that the same result would have occurred evenifthex-raytechnicianshadnotbeennegligentandthatit was entitled to a but-for instruction. The plaintiff requested a substantial factor instruction, which the trial court delivered. Id. at 560-61, 588 P.2d 4. The defendant appealed the jury's verdictfortheplaintiff,and,onreview,thiscourtheldthatthe trial court had not erred in instructing the jury:
*755 “Although the term ‘substantial factor’ is concededly not perfect, it and the instructions as a whole were sufficient to alert the jury that to find actual cause in this case they must find that the injury would not have occurred had the technicians taken proper x-rays. The instructions as given adequately presented the issue to the jury, and the trial court did not err in refusing to give the [defendant's] requested [but-for] instruction[.]”
Id. at 561, 588 P.2d 4.
Simpson was not a case in which a but-for instruction would fail: It was not a case in which two causes concurred to bring about an injury, and either one of them, operating alone,wouldhavebeen sufficient tocausetheidenticalresult. Nevertheless,thiscourtuphelddeliveryofasubstantialfactor instruction, reasoning that “it and the instructions as a whole were sufficient to alert the jury that to find actual cause in this case they must find” that the defendant's conduct was a but-forcauseoftheinjury. Id. Thus,although Simpson upheld delivery of a substantial factor instruction in an instance in which a but-for instruction would not have failed, it does not stand for the proposition that a substantial factor instruction is preferable to a but-for instruction and should be used in its stead. In fact, a but-for instruction may be clearer and thereforepreferabletoasubstantialfactorinstructioninthatit explicitly, rather than implicitly, informs a jury that negligent conduct is a cause of a plaintiff's injury when that injury would not have occurred absent the negligent conduct.
In addition, a substantial factor instruction that informs a jury that, to find factual causation, it must find that a defendant's negligence was a “substantial” or “important”
factor in causing the plaintiff's injury may be misleading. As the Restatement (Third) of Torts section 26 comment j (2010) points out, a substantial factor instruction may cause confusion because it can lead a jury erroneously to believe that it must search for a most significant causal factor, when that is not required. This court has made it plain that, in considering the factual cause element of a negligence claim, the jury is not to examine whether one defendant's causal role was relatively more important than that of another defendant. In State v. Gerhardt, 360 Or. 629, 635, 385 P.3d 1049 (2016), we explained that arguments about *756 the relative roles of multiple tortfeasors are more properly considered arguments about foreseeability than about factual causation:
“When we use the term ‘substantial factor’ in the causation context, it refers to cases in which ‘the negligence of multiple tortfeasors combines to produce harm,’ and each tortfeasor may be liable as a factual cause of the injury. Lasley[, 351 Or. at 6, 261 P.3d 1215]. Defendant uses the term in a different sense, one that involves weighing **460 the relative role of different causes in a chain of events and evaluating the extent to which the existence of the other causes attenuates the connection between an initial crime and resulting economic damages. As shown by our discussion of the issue in [State v. Ramos, 358 Or. 581, 597-99, 368 P.3d 446 (2016)], that is not a problem of causation; rather, it is addressed in the consideration of the foreseeability of the damages.”
And in Wright v. Turner, 368 Or. 207, 218-19, 489 P.3d 102 (2021), this court explained that, when multiple defendants each play a role in causing a plaintiff's injuries, a court apportions the plaintiff's damages based on comparative fault rather comparative causation:
“Under Oregon's comparative fault statutes, ‘[w]hen a trier of fact determines that multiple defendants were negligent and that the conduct of each was a causein-fact of the plaintiff's harm, the trier of fact is then required to determine the relative fault of the defendants and to apportion the plaintiff's damages between them on that basis.’ Lasley[, 351 Or. at 13, 261 P.3d 1215] (citing ORS 31.605). Under those statutes, ‘the liability of each defendant for damages awarded to plaintiff shall be several only and shall not be joint,’ and the damages recoverablefromeachdefendantisbasedonthepercentage of fault as found by the trier of fact. ORS 31.610(1) - (2)
Comparative
fault is different than comparative
causation With comparative fault, the ‘trier of fact is required to compare the degree to which each defendant deviated from
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the standard of care and is therefore “blame-worthy” ’ and to express that departure as a percentage, which is then applied to apportion damages. Lasley, 351 Or. at 13 [261 P.3d 1215]. Oregon's comparative fault statutes do not ‘call for apportioning damages by quantifying the contribution ofseveralcausesthathadtocoincidetoproducetheinjury.’ Sandford, 292 Or. at 606 [642 P.2d 624][.]”
(Footnote omitted; emphases in original.)
*757 This court has been careful to distinguish factual or “actual” cause and legal or “proximate” cause. Simpson, 284 Or. at 560, 588 P.2d 4; Stewart, 255 Or. at 606, 469 P.2d 783. At least since Fazzolari, 303 Or. at 13-14, 734 P.2d 1326, this court has used the concept of foreseeability—not a consideration of the causal significance of a defendant's conduct—as a factor in evaluating the unreasonableness of the defendant's conduct and deciding whether that conduct is negligent and whether the defendant should be held liable for the injury that the defendant had a role in causing. See Scott v. Kesselring, 370 Or. 1, 12, 513 P.3d 581 (2022) (“[P]laintiffwasrequiredtoestablishthatdefendant'sconduct ‘unreasonablycreateda foreseeable risktoaprotectedinterest of the kind of harm that befell the plaintiff.’ ” (Emphasis added.)). A substantial factor instruction should not be worded, understood, or used to shield a defendant from liability because that defendant's causal role is less significant than the role played by another tortfeasor or causative factor.9
In this case, of course, plaintiffs do not take issue with that aspect of a substantial factor instruction;10 rather, they argue that a substantial factor instruction is required in all multiple causation negligence cases and that a but-for instruction does not suffice. Plaintiffs argue that a but-for instruction necessarily indicates that a defendant cannot be held liable unless the defendant's conduct was the sole or predominate cause of the plaintiffs' injuries.
**461 As discussed above, we disagree. Most negligence cases include evidence of multiple causal factors, and in most cases, a but-for instruction correctly describes the necessary cause-in-fact relationship. A but-for instruction does *758 not fail in every multiple causation case, nor does it implicitly tell a jury that it must find that the defendant's conduct was the sole or predominate cause of the alleged harm. We reject plaintiffs' argument that, in every multiple causation case, a trial court is required to give a substantial factor as opposed to a but-for instruction.
Turning then to the facts before us in this case, we find it significant that plaintiffs do not contend that this is one of the exceptional instances in which the but-for instruction fails; they do not contend, for instance, that this is a case in which two causes concurred to bring about an injury, and either one of them, operating alone, would have been sufficient to cause the identical result.11 The most that plaintiffs seem to do to distinguish this case from the typical multiple cause case is to argue that causation is a particularly difficult concept when applied to preexisting conditions, noting that, in this case, defendants argued that plaintiffs' preexisting conditions, and not Carter's conduct, caused their injuries.
Plaintiffs correctly describe defendants' arguments. Defendants indeed argued that Roberta's spine was already a “mess,” and that a sneeze could have caused her neck injury; they argued that Kevin's annular tear could have been caused by age or degeneration. It also is true that many people have preexistingconditionsandthatallareaging.Butthemerefact that such conditions abound and often may contribute to a plaintiff's injuries does not mean that a trial court must use a substantial factor instruction to inform the jury about how to address that issue of multiple causation.
In many cases the defendants contend that their conduct did notplayanyroleincausingaplaintiff'sinjury—thattherewas some other more likely cause. So, for instance, in a collision between A and B, resulting in injuries to B, A could argue that her failure to keep a look out did not *759 play a role in the collision—that the more likely cause was B's negligence in speeding and running a stop sign. A could argue that, even if she had kept a careful lookout, she could not have avoided the collision. And A could make the same argument if one of many potential causes of harm were nontortious. So, for example, if A had encountered black ice, she could argue that, even if she had kept a careful lookout, she could not have avoided the collision. In a typical multiple causation case, a defendant may seek to avoid liability by pointing to other potential causes of the plaintiff's injuries and claiming that the defendant's negligent conduct was not a cause of those injuries. But such an argument does not render a but-for instruction erroneous. As discussed, in most multiple cause cases, it is appropriate to instruct the jury that a defendant's conduct is a cause of injury if the injury would not have occurred but for the conduct.12
Preexisting conditions are nontortious factors that are subject to the same analysis. 13 A defendant is not precluded from
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arguing that a preexisting condition was the **462 sole causeoftheplaintiff'sinjury,andajuryispermittedtosofind. Itwillbeuptothejurytodecidewhetherthe *760 defendant iscorrect,or,instead,thattheplaintiffprovedthatitwasmore likely than not that the defendant's conduct also played a role.
See 370 Or at 759 n 12.
In so reasoning, we consider, but are not persuaded by the concern expressed by amicus Oregon Trial Lawyers Association (OTLA) that a but-for instruction can wrongly be understood to undermine what is commonly referred to as the “eggshell skull” rule. That rule pertains to damages. It provides that, “when a defendant is liable for the type of harm that a plaintiff suffers, the defendant is liable for the entirety of that harm, even when the extent of that harm is not foreseeable.” Kesselring, 370 Or. at 17, 513 P.3d 581 (emphases in original).
OTLA's concern is that a jury could understand a but-for instruction as requiring a plaintiff to prove not only that the defendant's conduct contributed to the injury that the plaintiff sustained, but also that, “in a universe of possibility, the [preexisting condition] would not have otherwise caused the plaintiff to suffer the same or similar injury in another event.” In so stating the problem, OTLA wrongly focuses on an issue that a plaintiff is not required to prove—that the same or a similar result would not have occurred in another event. The question for a jury is whether the injury that in fact occurred would have occurred when and as it did without the defendant's tortious conduct. The question is not whether the plaintiff would have suffered the same or similar injury in a different event.14
For example, if A drives negligently, killing B, the plaintiff in a wrongful death action does not have to prove that B would not have died anyway, in another event or at some other time—even if B was terminally ill and death was imminent. What the plaintiff does have to prove is that, but for A's negligent driving, B would not have died when B did. See, e.g., Kwasny v. U.S., 823 F.2d 194, 196 (7th Cir 1987) (“However skeptical we might be as an original matter, we cannot gainsay the presence in the record *** *761 that the perforation caused [decedent's] death in the sense that, but for the windpipe's being perforated, he would not have died when he did. Nothing more is required to place the district court's finding of causation beyond our legitimate powertorevise.Thatayoungerandmorerobustpersonwould not have been fatally injured by the botched intubation is irrelevant[.]”); Smith v. State Through Dept. HHR, 523 So 2d
815, 820 (La 1988) (“In a situation where the patient dies, * * * the plaintiff does not have to shoulder the ‘unreasonable burden’ of proving that the patient would have lived had proper treatment been given.”); Budd v. Erie Lackawanna R.R.,93NJSuper166,172,225A.2d171(NJSuperCt1966) (“Defendant would require that there be affirmative evidence on plaintiff's part that decedent would have lived if he had been given medical attention, and that he would not have died ‘anyway.’ To require such expert prescience in the context of a heart case goes beyond the standard required * * *. We must recognize that there can be no such medical certainty, for there are too many imponderables[.]” (Emphasis added.)).
That said, OTLA is correct to point out that the question of causation, no matter how phrased, requires consideration of hypothetical alternative conduct. See **463 Tomlinson v. Metropolitan Pediatrics, LLC, 362 Or. 431, 457, 412 P.3d 133 (2018) (“Central to determining causation of harm is a comparison between what actually happened and what would have happened if the defendant had not engaged in the allegedly negligent conduct.”). Suppose that a plaintiff is injured when a tree on the defendant's land falls during a windstorm. If the alleged negligence is the defendant's failure to brace the tree, the question at trial would be whether that conduct played a role in the plaintiff's injury. Evidence about how hard the wind was blowing and what happened to trees that were braced could be adduced, and the jury would be asked to consider whether the tree would have fallen on the plaintiff as it did, even if it had been braced. 15 See Dobbs et al., 1 The Law of Torts § 189 at 636-37. Depending on the evidence adduced, a jury could find that the negligent *762 failure to brace did or did not play a role in the tree falling and determine causation accordingly. The jury will not, of course, ever know with certainty what would have happened in the absence of a defendant's negligence, and, consequently, evidence sufficient to establish causation may be difficult to adduce. But that problem does not mean that a trial court would err in instructing the jury using a but-for instruction. And, importantly, that problem of hypothetical alternatives is not unique to cases involving preexisting conditions. It is a problem inherent in determining causation, and, in our view, it is not a reason for this court to require a substantial factor instruction in all multiple causation cases.
Although we do not accept OTLA's argument on that point, we do want to acknowledge that its concern highlights the subtle difference between a defendant's argument that the defendant is not liable for any injury to a plaintiff because the plaintiff's preexisting condition was the only cause of the
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plaintiff's injury and an argument that, even if the defendant's negligent conduct was a cause of the plaintiff's injuries, the defendant should not be held liable for the full extent of the injuries that the plaintiff incurred. Under the “eggshell skull” rule, a defendant whose conduct is a cause of a plaintiff's injuries will be responsible for the full extent of the injuries caused by that conduct, even though those injuries are greater than those that another person without a preexisting condition mayhavesuffered.Thatthoseargumentsaredistinctandmay be difficult in application is not, however, a reason to require a substantial factor causation instruction in every multiple causation case. Together, a but-for instruction on causation and a previous infirm condition instruction on damages may suffice.16 For clarity, an instruction expressly telling the jury that “many factors may operate either independently or togethertocauseinjury,”andthatit“mayfindthatdefendant's conduct caused the injury even though it was not the only cause” also could be helpful. And it also could be helpful to expressly tell the jury how to understand the relationship between causation and damages. For instance, in this case, it could have been helpful to instruct the jury that (1) even if
it found *763 that plaintiffs' preexisting conditions were a causeoftheirinjuries,itcouldalsofindthatdefendantCarter's conduct was a cause of those injuries and hold defendants liableforthoseinjuries;butthat(2)indeterminingtheamount of damages to award, the jury should award the damages permitted by the damages instructions.
Here, however, plaintiffs did not ask the trial court for such clarifying instructions, and their only argument in this court is that the trial court erred in declining to give the particular substantial factor instruction that they proffered. For the reasons given, we conclude that the trial court did not commit legal error.
The decision of the Court of Appeals and the judgment of the circuit court are affirmed.
** Nelson, J., did not participate in the decision of this case. Bushong and James, JJ., did not participate in the consideration or decision of this case.
1 Carter died after plaintiffs filed suit, and his estate was substituted as defendant. We use the name Carter throughout this opinion to refer to the deceased individual and his estate.
2 Plaintiff Roberta Haas also named as a defendant her insurer, State Farm Mutual Automobile Insurance Company, whom she sued for breach of contract, alleging that State Farm had failed to pay all the personal injury protection (PIP) benefits that were due. No issues from that claim are before the court.
3 Defendants also set out alternative preservation arguments. With respect to plaintiff Kevin Haas, they argued that he did not preserve his argument because plaintiffs' counsel's arguments at trial in support of the substantial factor instruction “related solely to the evidence presented on [Roberta] Haas'[s] claims.” With respect to plaintiff Roberta Haas, defendant State Farm argued that she had failed to preserve any error relating to her breach of contract claim against State Farm. The Court of Appeals did not address those alternative arguments.
4 Defendant State Farm also reprises the alternative preservation argument that it made in the Court of Appeals regarding the breach of contract claim brought by plaintiff Roberta Haas. Like the Court of Appeals, we do not address that argument.
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All Citations 370 Or. 742, 525 P.3d 451
* Appeal from Multnomah County Circuit Court, Jerry B. Hodson, Judge. 316 Or App 75, 502 P.3d 1144 (2021)
Footnotes
5 Of course, a defendant whose conduct is a but-for cause of the plaintiff's injury is not necessarily liable for those injuries. The plaintiff also must prove the other elements of a negligence claim—that the defendant was negligent and that the injuries caused by the defendant were foreseeable.
6 Keeton provides additional examples of circumstances in which the substantial factor test should be applied instead of the but-for rule, including the following:
“Two motorcycles simultaneously pass the plaintiff's horse, which is frightened and runs away; either one alone would have caused the fright. A stabs C with a knife, and B fractures C's skull with a rock; either wound would be fatal, and C dies from the effects of both. *** In such cases it is quite clear that each cause has in fact played so important a part in producing the result that responsibility should be imposed upon it; and it is equally clear that neither can be absolved from that responsibility upon the ground that the identical harm would have occurred without it, or there would be no liability at all.”
7 In Hills, for example, the decedent's death involved the negligence of multiple parties, including an “Auto Parts”storeandamechanic.240Or.at479-80,402P.2d722.Thiscourtdeterminedthat,ifboththemechanic and the Auto Parts store were negligent, and their combined negligence produced the result, then both could be held liable for the decedent's death. Id. at 483, 402 P.2d 722
8 As indicated in Joshi, that does not mean that a but-for instruction will always be appropriate in cases that involve multiple tortfeasors. In addition to the circumstance in which the concurrent acts of multiple tortfeasors are each sufficient to cause the injury, there may be other instances in which a but-for instruction will fail. Consider,forexample,the“multiple-sufficient-causal-set”situation,wherebyatortfeasor'sconductisafactual cause of the plaintiff's harm even if that conduct requires other conduct to be sufficient to cause the harm. Restatement (Third) of Torts § 27 comment f (2010). The following is illustrative:
“When a person contracts a disease such as cancer, and sues multiple actors claiming that each provided some dose of a toxic substance that caused the disease, the question of the causal role of each defendant's toxic substance arises. Assuming that there is some threshold dose sufficient to cause the disease, the person may have been exposed to doses in excess of the threshold before contracting the disease. Thus, some or all of the person's exposures may not have been but-for causes of the disease. Nevertheless, each of the exposures prior to the person's contracting the disease (or the time at which the disease was determined ***) is a factual cause of the person's disease[.]”
Restatement (Third) of Torts § 27 comment g (2010) (emphases added). In such a multiple-sufficient-causalset situation, it may be appropriate to use an instruction that is specific to that situation rather than a typical but-for or substantial factor instruction. One alternative could be to inform jurors that to find causation, they must find the tortfeasors' acts to be “so related to an event that their combined conduct, viewed as a whole, is a but-for cause of the event.” Keeton, Prosser and Keeton on The Law of Torts § 41 at 268.
9 Even in instances where a but-for instruction fails, a substantial factor instruction may not be the best way to instruct a jury on factual causation because of the ambiguity that it can create. See, e.g., Keeton, Prosser
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Keeton, Prosser and Keeton on The Law of Torts § 41 at 266-67 (footnotes omitted).
and Keeton on The Law of Torts § 41 at 268 (recommending directly instructing the jury on multiple sufficient causes rather than using substantial factor instruction); Restatement (Third) of Torts § 27 comment b (2010)
10 Plaintiffs also do not note that the substantial factor instruction that they submitted in this case could be understood as informing the jury that the instruction applies only in the instance in which a but-for instruction fails; that is, when two causes concurred to bring about an injury, and either one of them, operating alone, would have been sufficient to cause the identical result. So understood, that instruction would be inconsistent with the but-for instruction that plaintiffs also requested and therefore not applicable in this case.
11 Plaintiffs also do not challenge the clarity of the but-for instruction that they themselves proffered. They do not contend that, to be clear, the but-for instruction should have explicitly informed the jury that “many factors may operate either independently or together to cause injury,” that “each may be a cause of the injury,” and that it “may find that the defendant's conduct caused the injury even though it was not the only cause.”
12 The instances in which a but-for instruction fails may include instances in which nontortious conduct is a cause of harm. So, for example, if one fire is set by a tortfeasor and the other by lightening, and either, alone, would have been sufficient to burn the barn, then it would be incorrect to use the but-for instruction; a substantial factor instruction would be necessary to inform the jury that each may be a cause of the injury even though the others by themselves would have been sufficient to cause the same injury. See Dobbs et al., 1 The Law of Torts § 189 at 632-33.
13 In so concluding, we disagree with two related aspects of the reasoning of the Court of Appeals. First, we do not agree that a party is entitled to an instruction only if that party adduces evidence or makes an argument material to the requested instruction. A party may be entitled to an instruction that addresses an opposing party's evidence or argument. See Hernandez v. Barbo Machinery Co., 327 Or. 99, 106, 957 P.2d 147 (1998) (“[T]he parties in a civil action are entitled to jury instructions on their theory of the case if their requested instructions correctly state the law, are based on the current pleadings in the case, and are supported by evidence.”). Second, we do not agree that a plaintiff with preexisting conditions is not entitled to an instruction that informs the jury that many factors may operate either independently or together to cause an injury and that a defendant's conduct may be a cause of a plaintiff's injury even though it was not the only cause, unless the plaintiff shows that the plaintiff's preexisting conditions were “active” causes of injury. As discussed, nontortious conditions and circumstances may be one of many causes of a plaintiff's injuries without being “active” causes of those injuries, and a plaintiff may be entitled to an instruction so informing a jury.
14 In this case, plaintiffs did not argue to the trial court that the but-for instruction was misleading in that respect, or that the substantial factor instruction more clearly informed the jury that it was not to consider whether the plaintiffs' injuries were inevitable. Nor did plaintiffs propose an instruction explicitly providing that clarity. Accordingly, we do not address those issues.
15 The jury would not be asked to consider whether the plaintiff would have been similarly injured in another event, given the storm's violence and the other windblown objects that could have caused injury.
16 As noted above, 370 Or at 745-46, in this case, the court gave the previous infirm condition instruction on damages.
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End of Document © 2023 Thomson Reuters. No claim to original U.S. Government Works.
Synopsis
325 Or.App. 511 Court of Appeals of Oregon.
Ignatius SODARO, Plaintiff-Appellant, v.
Carnetta BOYD, Defendant-Respondent.
A174005
Argued and Submitted May 20, 2022.
April 26, 2023
Background: Passenger of sport-utility vehicle (SUV) brought negligence action against motorist, alleging motorist rear-endedtheSUVwhileitwasturningleftatanintersection because it had to stop suddenly for another car that ran the red light. The Circuit Court, Multnomah County, Christopher A. Ramras, J., 2020 WL 13441670, after a jury verdict, entered judgment in favor of passenger, but only awarded $4,339.98 for past medical expenses and $2,400.00 for noneconomic damages. Passenger appealed
Before Shorr, Presiding Judge, and Mooney, Judge, and Pagán, Judge.
Opinion
MOONEY, J.
**1 *512 Plaintiff appeals from a judgment entered in his favor after a jury awarded him money damages for injuries he sustained in an automobile accident.1 In his sole assignment of error, he asserts that the trial court erred when it failed to instruct the jury that conduct is a cause of injury when it is a “substantial factor” in producing it, even though it is not the onlycause.Forthereasonsexplainedbelow,weconcludethat the trial court did not err and, therefore, affirm.
I. STANDARD OF REVIEW
“We review a trial court's failure to give a requested jury instruction for errors of law, and evaluate the evidence in the light most favorable to the establishment of the facts necessary to require the instruction.” Ossanna v. Nike, Inc., 365 Or. 196, 199, 445 P.3d 281 (2019) (citations omitted).
Holdings: The Court of Appeals, Mooney, J., held that: passenger and motorist were entitled to jury instruction as to causation, and trial court was not required to give substantial factor instruction.
Affirmed.
Procedural Posture(s): On Appeal; Judgment.
Multnomah County Circuit Court 18CV51752; Christopher A. Ramras, Judge.
Attorneys and Law Firms
Kathryn H. Clarke argued the cause and filed the briefs for appellant.
Andrew D. Glascock, Portland, argued the cause for respondent. Also on the brief was Glascock Street Waxler LLP.
II. FACTUAL AND PROCEDURAL BACKGROUND
A. The Sudden Stop and The Rear-End Collision
The basic facts about how this motor vehicle accident occurred are not in dispute. Plaintiff, then 76 years old, and visiting family in Oregon, was the front seat passenger in an Acura MDX (the SUV) being driven by his adult son. The collision occurred late one fall evening at the intersection of the northbound I-5 offramp and Southwest Wilsonville Road. TheSUVhadbeentravelingnorthonI-5whenittooktheexit and then came to a full stop at the red light at the intersection, waiting to turn left. Defendant was driving her car, a Ford Focus, and came to a stop behind the SUV. After the light turned green, the SUV started forward and then had to stop suddenly for another car that ran the red light on Wilsonville Road and crossed through the intersection. Defendant's car immediately collided into the rear of the SUV.2
*513 B. The pleadings
Plaintiff's amended complaint described the key events as follows:
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“*** [T]he driver of [plaintiff's] SUV had to stop for anothercarthatwascrossingwithintheintersection.While he was still stopped, [d]efendant collided into the rear of [plaintiff's] Acura MDX. Said collision caused [plaintiff's] injuries and damages as alleged herein, all of which were reasonably foreseeable.”
Plaintiff alleged that defendant had been negligent in a number of ways that led to the collision, and he also alleged that:
“At all times material, [plaintiff] had a bodily condition of his spine that made him more susceptible to injury than a person in normal health, and he suffered injury as a result of that condition.”
Plaintiff sought to hold defendant liable for the damages he sustained as a result of the injuries caused by defendant's alleged negligence. There were no other named defendants.
Defendant filed an answer in which she admitted that “she was involved in an automobile incident with a vehicle occupied by the [p]laintiff.” She denied all other allegations and asserted this affirmative defense:
**2 “Some or all of [p]laintiff's damages were caused by the negligence of the unidentified driver over which [d]efendant had no control. Specifically the unidentified driver traveling on Wilsonville Road who ran a red light causing [p]laintiff to make a sudden emergency stop directly in front of [d]efendant. This sudden emergency stop caused [p]laintiff's injuries, if any, and caused the collision to occur between [p]laintiff and [d]efendant.”
C. The trial
Thecasewenttotrialthreeyearslater.Inhisopeningremarks to the jury, plaintiff's counsel described the force of impact when the Ford Focus collided with the SUV as more than “an insignificant parking lot type of impact” and less than “a freeway speed event.” He explained that even though the impact “wasn't huge,” plaintiff was injured. He told the jury that plaintiff had some preexisting *514 medical conditions that left him more susceptible to injury than a person without those conditions, and that plaintiff did, in fact, sustain significant injuries in the collision that required medical treatment.
not recall feeling any pain at that point. He did, however, experience pain in his neck, middle back, and shoulder, as well as shortness of breath after the SUV was struck from behind by defendant's car. Plaintiff sought medical treatment at an urgent care clinic the next day. He received chiropractic treatment while in Oregon and again upon returning home to Florida. He later sought treatment from Dr. Smith, a neurosurgeon, and from Dr. Bistline, a boardcertified anesthesia and pain management physician. Plaintiff testifiedthathehashadneckandbackpaincontinuouslysince the day of the collision.
Plaintiff called several witnesses, including Smith, who offered his professional opinion, based on a reasonable degree of medical probability, that the rear-end collision caused injuries to plaintiff's neck and back that worsened his underlying conditions, causing plaintiff's current and ongoing neck and back pain that, without any additional treatment, would likely be permanent. Smith testified to the detailsofhisdiagnosticprocess,whichincluded,amongother things,reviewingaseriesofpre-accidentimagingstudiesthat showed degenerative changes in plaintiff's spine and that led Smith to conclude that, at the time of the collision, plaintiff was more likely to have developed a painful condition from being involved in a collision than someone who did not have similar preexisting conditions. Smith testified about his treatment recommendations for plaintiff, which included steroidinjectionsintothefacetjointsofthethoracicspineand, eventually, a different kind of injection for longer-term relief, which helped for a while. Ultimately, Smith offered plaintiff surgical intervention with an “anterior cervical discectomy and fusion,” because he did not think that nonsurgical treatmentalonewouldbeenoughtorelieveplaintiff'songoing pain. Plaintiff declined that surgery for various reasons, including his advanced age. Smith testified that, in any event, plaintiff *515 would likely require chronic pain management and functional rehabilitation to improve his range of motion and pain level.
On cross examination, Smith admitted that he did not know the speed of the vehicles at the moment of impact and that his chart notes do not reflect that there had been a hard stop prior to the rear-end collision. He agreed that the mechanics of a hard stop could cause a neck injury. When asked if he could “definitively *** differentiate any injuries that [plaintiff] sustained in the hard stop versus the rear-end accident[,]” Smith replied, “No, I don't think I can.” On redirectexamination,Smithexplainedthatitwas“probableand
Plaintiff testified that he heard a pop in his shoulder when the SUV came to a quick and sudden stop, but that he did
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most likely” that plaintiff's injuries stemmed from the rearend collision, although it was “a little less definitive.”
**3 Defendant took the position at trial that the rear-end collision was caused by the driver who ran the red light, and not by her. She characterized the collision as a “very minor rear-end impact” event and she argued that if there was any injury, it was minor. Any medical expenses beyond those incurred for limited soft tissue injuries, according to defendant, were unrelated to the rear-end collision and were, instead, related to either the sudden stop or plaintiff's degenerative neck and back conditions that predated the event, neither of which were caused by her.
Defendant called Dr. Polin, a neurosurgeon, who testified that he had examined plaintiff in person, reviewed pre- and post-collision medical records and imaging studies, as well as some deposition transcripts. Polin's opinion was that plaintiff had suffered sprain and strain injuries, or soft tissue injuries, to the cervical, thoracic, and lumbar spine. Polin testified that, absent speculation, he could not give an opinion about whether the sudden stop, the rear-end collision, or both had played a role in causing plaintiff's injuries, although he did testify that plaintiff's injuries could have been caused by the sudden stop, the rear-end collision, or a combination of both. He added that he would defer to the “biomechanical people” about what the respective forces of the two events were. Polin testified that the changes to plaintiff's facet joints were related to his arthritis and *516 degenerative condition rather than to the collision. It was Polin's opinion that the treatment plaintiff had received through April 4, 2017, which was mostly chiropractic care, was reasonable and necessary as a result of the events on the day of the collision.
Defendant also called a biomechanical engineer, Probst, to testify. Probst conducted a biomechanical evaluation of the rear-end collision, which included consideration of speed, forces, and movement, and the individual involved. He testified that there was insufficient force to cause plaintiff's cervical, mid-back, low back, shoulder, disc, or facet joint injuries. Probst did not evaluate the biomechanics of the sudden stop, and he did not offer an opinion about the probability of that stop causing plaintiff's injuries. However, when pressed, Probst testified that there would have been “more motion” with the sudden stop than with the rear-end collision.
The parties disagreed on the causation instruction to be given to the jury. Plaintiff requested that the trial court give the “substantial factor” instruction, UCJI 23.02:
“Many factors or things may operate either independently or together to cause injury. In such a case each may be a cause of the injury even though the others by themselves would have been sufficient to cause the same injury.
“If you find that the defendant's act or omission was a substantial factor in causing the injury to the plaintiff, you may find that the defendant's conduct caused the injury even though it was not the only cause. A substantial factor is an important factor and not one that is insignificant.”
Defendant requested that the trial court provide a “but for” causation instruction:
“[Defendant's] conduct is a cause of plaintiff's injury if the collision between her car and the *** SUV would not have occurred but for that conduct and plaintiff's injuries would not have occurred but for that conduct. Conversely, [defendant's] conduct is not a cause of plaintiff's injuries if those injuries would have occurred without that conduct.”
*517 In support of his request for the substantial-factor instruction, plaintiff argued that although Smith testified that plaintiff's injuries were probably caused by the rear-end collision, Polin testified that plaintiff's injuries could have been caused by the sudden stop, the rear-end collision, or a combination of both.3 Plaintiff also argued that if the jury found that plaintiff's injuries were caused by a combination of the sudden stop and the rear-end collision, and it only had the but-for instruction on causation, it might try to apportion the damages between each segment of the event and award only those apportioned to the rear-end collision, even though the law would permit them to find that defendant caused all of plaintiff's damages so long as the rear-end impact was a substantial factor in causing those injuries. Plaintiff argued that the substantial-factor instruction would correctly explain that to the jury.
The jury instructions – at trial
**4 Defendant argued that under Joshi v. Providence Health System, 342 Or. 152, 149 P.3d 1164 (2006), use of
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D.
the substantial-factor instruction is proper “only in limited situations involving multiple tortfeasors,” and that the but-for instruction is the legally correct choice here, because “there are not multiple alleged tortfeasors involved.” Defendant's argument in favor of the but-for instruction and against the substantial-factor instruction reduced to this: Plaintiff did not allegethatmultipletortfeasorscombinedtocausehisinjuries, and even if he had, defendant would not be liable for those injuriesunlessplaintiffprovedthathisinjurieswouldnothave occurred in the absence of defendant's negligent conduct.
The trial court, relying primarily on Joshi, noted that plaintiff had not alleged that two tortfeasors acted in concert to cause his injuries, and determined that the “but for” causation instruction was “better suited” for the facts of this case. Thus, along with other instructions, the court instructed the jury:
“The Defendant's conduct is a cause of the Plaintiff's injury if the injury would not have occurred but for that conduct.
*518 Conversely, the Defendant's conduct is not a cause of the Plaintiff's injury if that injury would have occurred without that conduct.”4
Ultimately, plaintiff asked the jury to award damages for past and future medical expenses in an amount up to $131,630.57 andnoneconomicdamagesof$250,000.Defendantsuggested to the jury that plaintiff's damages would, at most, be for the cost of chiropractic care for a particular period of time, which cost just under $7,100.00. The jury found that defendant was negligent, and that her negligence was “a cause of damages to the plaintiff.” The jury awarded $4,339.98 for past medical expenses and $2,400.00 for noneconomic damages.
E. The jury instructions – on appeal
On appeal, plaintiff asserts that the trial court erred by failing to instruct the jury that conduct is a cause of injury when it is a substantial factor in producing it, even though it is not the only cause. Plaintiff contends that in a case such as this one, where the evidence would support a finding that multiple factors contributed to the injuries for which plaintiff sought compensation, the proper test for the causal link between defendant's negligence and plaintiff's injuries is reflected in the substantial-factor instruction. Plaintiff argues that his requested instruction was a correct *519 statement of the law and that, given how the case was presented and how defendant argued her defense, the but-for instruction was legally insufficient. He argues further that the but-for instruction improperly instructs the jury that conduct causes injury only if the injury could not otherwise have occurred,
suggestingthatdefendant'sconductmusthavebeenthemajor —or predominant—causative factor.
**5 In response, defendant contends that the court properly instructed the jury on causation. She asserts that, based on plaintiff's theory of causation and the evidence he presented in support of that theory, neither the sudden stop nor the pre-existing condition would have caused plaintiff's injuries absent defendant's negligent conduct. Therefore, according to defendant, the trial court correctly determined that plaintiff was required to prove that but for the rear-end collision, he would not have been injured.
III. ANALYSIS
“[J]ury instructions matter.” Ossanna, 365 Or. at 221, 445 P.3d 281. They matter because they tell the jury “what laws [to apply] in the case.” Id.
Jury instructions must be understandable. The parties are entitled to jury instructions that are “plain, clear, [and] simple.” Williams et al. v. Portland Gen. Elec., 195 Or. 597, 610, 247 P.2d 494 (1952). “Where the law is complex, it is even more important to instruct in clear and simple terms.” Holbrook v. Amsberry, 289 Or App 226, 248, 410 P.3d 289 (2017). Given that each juror brings their own unique set of lifeexperiencestocourt,theneedforclarityineachparticular case cannot be overstated. For a jury to effectively use the court's instructions on the law, its members must be able to understand those instructions so that they can then correctly and meaningfully apply the law to the evidence and reach a legally valid verdict.
Jury instructions must be connected to the case theories and evidence.
“[A] party is entitled to a jury instruction on its theory of the case if the requested instruction correctly states the law, is based on the operative pleadings, and is supported by the evidence. A trial court, however, is not required to *520 give a requested instruction if another instruction adequately addresses the issue.”
Ossanna, 365 Or. at 212-13, 445 P.3d 281 (internal quotation marks and citations omitted).
A. Causation as an Element of a Claim for Negligence in the Post-Haas Era
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We begin with the Supreme Court's recent decision in Haas v. Estate of Mark Steven Carter, 370 Or. 742, 525 P.3d 451 (2023), which issued after the parties briefed and argued this appeal.5 Althoughdistinguishableonsomeoftheunderlying facts, Haas concerns the same jury instructions that are at issue here and is controlling authority as we review those instructions in the context of this case. Our analysis necessarilyappliesthelawthatisnowineffectbecause“[t]he ‘benchmark’ for error is the law existing as of the time the appeal is decided.” State v. Jury, 185 Or App 132, 137, 57 P.3d 970 (2002), rev. den., 335 Or. 504, 72 P.3d 636 (2003)
Causation “is a purely factual matter” that is distinct from proximate cause and legal cause, both of which have been abolished in Oregon. Haas, 370 Or. at 748, 525 P.3d 451 (quoting Lasley v. Combined Transport, Inc., 351 Or. 1, 6-7, 261 P.3d 1215 (2011)). “Causation in fact is established when someone examining the event without regard to legal consequences would conclude that the allegedly faulty conduct or condition in fact played a role in its occurrence.”
Id. (internal brackets and quotation marks omitted). In the court's discussion of causation, it expressly agreed that:
**6 “[F]actual causation ‘is not a quest for a sole cause. Probably it cannot be said of any event that it has a single causal antecedent; usually there are many.’ ”
Id. at 748, 525 P.3d 451 (quoting Fowler V. Harper, Fleming James, Jr., & Oscar S. Gray, 4 Harper, James and Gray on Torts § 20.2, 100 (3d ed. 2007) (emphasis in original)). The question, then, of whether a defendant's specific act or failure to act was a *521 cause-in-fact of a plaintiff's harm requires an answer to this question: would the harm have occurred but for the defendant's conduct? Id. at 749, 525 P.3d 451. Stated another way—would the harm have occurred in the absence of the defendant's conduct? If the answer to the question —stated either way—is no, then the defendant's negligent conduct is a cause of the injuries. Stated yet another way, if the plaintiff's injuries would have occurred in the absence of the defendant's conduct, then the defendant's conduct was not a cause of those injuries in the context of a negligence claim.
The fact that more than one event, act, or circumstance might play a role in bringing about the injuries is simply part of the landscape that the jury is tasked with considering as it evaluates whether, in fact, the defendant was a cause of the injuries. It is helpful to remember that cause-in-fact is not the samethingasliability;rather,itisoneelementofanegligence claim that, if proven, could lead to liability. Id. at 749 n 5, 525 P.3d 451
The Supreme Court concluded that the but-for test for causation applies in most negligence cases, and that the butfor jury instruction is likewise the appropriate instruction to be given in most cases. Id. at 755, 757-58, 525 P.3d 451 The substantial-factor test, on the other hand, “was developed primarily for *** the situation in which the concurrent conduct of two or more causes combine to create an injury, and either one of those causes, operating alone, would have been sufficient to produce the same result.” Id. at 750, 525 P.3d 451 (citing Keeton, Prosser and Keeton on The Law of Torts § 41, 268 (5th ed. 1984); Harper, 4 Harper, James and Gray on Torts § 20.2, 100-01 (3d ed 2007)). The court explained that the but-for test does not reduce causation to a single cause:
“[T]here may be many causes of a plaintiff's harm and *** when multiple tortfeasors contribute to that harm, all may be held liable for it: When an injury would not have occurred without the combined negligence of many, the negligence of each is a but-for cause of the resulting injury.”
Id. at 753, 525 P.3d 451
The plaintiffs in Haas, like the plaintiff here, argued broadly “that a substantial factor instruction is required in all multiple causation negligence cases and that a but-for instruction does not suffice.” Id. at 757, 525 P.3d 451. They also argued, as does plaintiff here, “that a but-for *522 instruction necessarily indicates that a defendant cannot be held liable unless the defendant's conduct was the sole or predominate cause of the plaintiffs’ injuries.” Id. The court, in Haas, rejected those broad assertions, stating that
“[m]ost negligence cases include evidence of multiple causal factors, and in most cases, a but-for instruction correctly describes the necessary cause-in-fact relationship. A but-for instruction does not fail in every multiple causation case, nor does it implicitly tell a jury that it must find that the defendant's conduct was the sole or predominate cause of the alleged harm.”
**7 Id. at 757-58, 525 P.3d 451
In concluding that the trial court did not err in declining to give the substantial-factor instruction in Haas, the Supreme Courtfoundit“significantthatplaintiffs[did]notcontendthat this [was] one of the exceptional instances in which the butfor instruction fails[.]” Id. at 758, 525 P.3d 451. The plaintiffs
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had not argued that the circumstances in that case were in any way exceptional or that the facts of that case were such that the but-for instruction would not correctly describe the required causal relationship between the defendant's conduct and the plaintiffs’ injuries. They instead argued that causation is a “particularly difficult concept” in cases where there are preexisting medical conditions. Id. The court acknowledged that a defendant may point their finger at other parties or causes—the so-called empty chair defense—in an effort to escapeliabilitybutconcludedthat“suchanargumentdoesnot render a but-for instruction erroneous.” Id. at 759, 525 P.3d 451. The court held that a substantial-factor instruction is not required in all multiple causation negligence cases and that, under the circumstances of Haas, it was not error to decline to give that instruction. Id. at 762-63, 525 P.3d 451.
B. Parties are entitled to instructions that properly address their theory of the case as well as that put forward by their adversary.
We reject the contention that plaintiff was restricted to a jury instruction on causation only if it was supported by *523 his complaint or the evidence that he produced during the trial. As the Supreme Court explained:
“[W]e do not agree that a party is entitled to an instruction only if that party adduces evidence or makes an argument material to the requested instruction. A party may be entitled to an instruction that addresses an opposing party's evidence or argument.”
Id. at 759 n 13, 525 P.3d 451. Although plaintiff named only one defendant here, his pleadings describe the rearend collision, the sudden stop, and his preexisting medical conditions. Plaintiff's counsel described both segments of the accident as well as the preexisting conditions in his opening statement and closing argument. Defendant raised an affirmative defense in which she alleged that the sudden stop—not the rear-end collision—was the cause of plaintiff's injuries,andshearguedthathispreexistinginjuriesaccounted for much of his pain and related medical care. The sudden stop, the rear-end collision, and the preexisting injuries were the subject of much testimony and debate throughout the trial. Plaintiff was entitled to request jury instructions that addressed both his theory of the case as well as that put forward by defendant.
To the extent that plaintiff argues that all multiplecause negligence cases merit giving the substantial-factor instruction, Haas has squarely rejected that argument and we, in turn, must do the same. Id. at 758, 525 P.3d 451. Such a broad rule would also be inconsistent with Joshi, where the court stated that the but-for and substantial-factor standards “produce the same result in most cases.” 342 Or. at 162, 149 P.3d 1164. But the court did, in Joshi, describe certain situations in which the but-for test would fail, requiring that the substantial factor instruction be given: (1) “where ‘two causes concur to bring about an event, and either one of them, operating alone, would have been sufficient to cause the identical result’ ”; (2) “ ‘where a similar, but not identical resultwouldhavefollowedwithoutthedefendant'sact’”;and (3) “ ‘where one defendant has made a clearly proved but quite insignificant contribution to the result.’ ” Id. at 161, 149 P.3d 1164 (quoting Prosser and Keeton on The *524 Law of Torts § 41 at 267-68). See also Haas, 370 Or. at 750-52, 525 P.3d 451 (explaining that while Joshi is distinguishable from Haas because Joshi wasawrongfuldeathcaseaboutthe sufficiency of the evidence on causation, it relied on the same treatise provisions from Prosser and Keeton and agreed that the substantial-factor standard had not been replaced by the but-for standard, but rather, those standards apply to different types of negligence cases).
D. Plaintiff has not argued that exceptional circumstances warranted the use of the substantial-factor instruction.
**8 Plaintiff did not, and does not, argue that this case fits into any of the three scenarios, described in Joshi, that would render the but-for instruction an inadequate or unclear statement of the law on causation. Plaintiff did argue that there was a risk that the but-for instruction would confuse the jury on how to evaluate defendant's conduct on the question of causation. Plaintiff focused on the evidence, which included, among other things, the testimony of three expert witnesses, and argued that a jury could conclude that multiple factors or events concurred or combined to cause his injuries. In response, defendant argued that this was the type of negligence case where the but-for instruction would provide a clear statement about causation.6 We agree with defendant.
E. It was not error to not give the substantial-factor instruction.
The remaining arguments made by plaintiff on appeal do not persuade us that the trial court erred by not giving the substantial-factor instruction.
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C. The but-for instruction on causation is proper in most multiple-cause negligence cases.
*525 The jury deliberated and returned a verdict on which it answered the specific question, “Was the defendant's negligence a cause of damages to the plaintiff?” with a yes. We reject plaintiff's contention that because the jury was instructed only on but-for causation, it would not have understood that defendant's conduct would be a cause of plaintiff'sinjuriesifthecollisionhadbeenasubstantialfactor, although not necessarily the only factor, in causing those injuries. Plainly put, the jury found that defendant's conduct caused plaintiff's injuries.
We also reject plaintiff's argument that because the jury concluded that the injuries would not have occurred in the absenceoftherear-endcollision,itwouldsomehowconclude that it was to affirmatively apportion damages between defendant and any other causes, including the sudden stop. The record does not contain evidence that the sudden stop was, more probably than not, a cause of plaintiff's injuries. Certainly, no expert offered that opinion to a reasonable degree of probability. The jury was properly instructed by the trial court not to decide the case on “guess-work, conjecture, or speculation.” They were also instructed on damages, and plaintiff has not, and does not, challenge those instructions in any way. Given that we presume juries will follow the court's
instructions, State v. Shinnick, 288 Or App 847, 848-49, 407 P.3d 877 (2017), rev. den., 362 Or. 794, 416 P.3d 1103 (2018), and given the evidentiary record viewed in light of Haas, it is difficult to see how the trial court would have been required to give the substantial-factor instruction.
Finally, we are not persuaded that the amount of the jury's damage award alone reflects that it misunderstood the instruction on causation. The jury found that defendant caused plaintiff's injuries. Given that it found the necessary causal link, the more likely explanation for the low monetary award is that the jury found that the injuries were not as significant as claimed. Jurors were given a number of tools to evaluate witness testimony through instructions that both parties agreed to that might reasonably have led to the final award. We cannot say, on this record, that the amount of the award was driven by, or connected to, a *526 misunderstanding of the causation instruction. The trial court did not err.
**9 Affirmed. All
Footnotes
1 The jury awarded plaintiff total damages in an amount that was less than two percent of his prayer.
2 We refer to those sequential events as the sudden stop and the rear-end collision.
3 Plaintiff had included both the but-for and substantial-factor instructions in his proposed jury instructions; however, based on the evidence at trial, plaintiff ultimately asked the trial court to instruct the jury with only the substantial-factor instruction.
4 The court instructed the jury about plaintiff's preexisting condition as follows:
“Damages previous infirm condition. If you find that the Plaintiff has a bodily condition that predisposed him to be more subject to injury than a person in normal health, nevertheless, the Defendant would be liable for any and all injuries and damage that may have been suffered by the Plaintiff as a result of the negligence of the Defendant. Even though those injuries, due to the prior condition, have been greater than those that would have been suffered [by] another person under that same circumstance[ ].
“Damages, aggravation or pre-existing injury or disability. In the present case, the Plaintiff has alleged that the injury which he sustained as a result of the negligence of the Defendant, aggravated a pre-existing injury of his.
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P.3d ----, 325 Or.App. 511,
Citations ---
2023 WL 3085811
“In determining the amount of damages, if any, to be awarded [to] the Plaintiff in this case, you will allow him reasonable compensation for the consequences of any such aggravation that you find to have taken place as a result of the Defendant's negligence. The recovery should not include damages for the earlier injury, only those that are due to its enhancement or aggravation.”
Plaintiff did not assign error to the giving of those instructions.
5 In Haas, the plaintiffs’ stopped car was hit by a car driven by the defendant; the plaintiffs brought a negligence action. The plaintiffs had preexisting conditions, and therefore, according to the plaintiffs, the jury was confronted with multiple possible causes of the plaintiffs’ neck and back problems—the preexisting conditions and the auto collision. 370 Or. at 744-46, 525 P.3d 451.
6 We note that defense counsel also made this argument:
“So giving [the substantial-factor] instruction, Your Honor, invites the risk that the jury will render a verdict against my client even if it finds that the phantom driver's conduct alone would have been sufficient to cause the harm, which does not satisfy Plaintiff's burden.”
But that argument describes one of the Joshi scenarios where the but-for test would fail, making the substantial-factor instruction a more appropriate choice. While that would have been an argument more aligned with plaintiff's position, it is clear that plaintiff did not make that argument. Nor did he argue that this case fits within any of the Joshi scenarios that would support use of the substantial-factor instruction. And although there are times when inartful arguments are given context and clarity by the arguments they draw in opposition, that is not the case here.
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End of Document
© 2023 Thomson Reuters. No claim to original U.S. Government Works.
320 Or.App. 534 Court of Appeals of Oregon.
Jamie MARTINEAU, Personal Representative of the Decedent, Aaron Martineau, Plaintiff-Appellant, v.
MCKENZIE-WILLAMETTE MEDICAL CENTER, an assumed business name of McKenzie-Willamette Regional Medical Center Associates, a limited liability company, Defendant, and
Radiology Associates, P.C., a corporation; Dariusz Zawierucha, M.D., an individual; Cascade Medical Associates, the assumed business name of Doctor's Emergency Room Corporation, P.C., a corporation; and Gary Josephsen, M.D., an individual, Defendants-Respondents.
A172846 |
Argued and submitted January 27, 2022. | June 29, 2022
Court of Appeals would address issue on appeal of whether trial court erred in dismissing claim for loss of chance of recovery;
personalrepresentative'sfilingofamendedcomplaintwithout claim for loss of chance of recovery did not result in abandonment or withdrawal of claim; and
whereadecedent'sinjuryisalossofchanceofrecoveryrather than death itself, the wrongful death statute does not preclude a claim for loss of chance of recovery.
Reversed and remanded.
Procedural Posture(s): On Appeal; Judgment.
**523 Lane County Circuit Court, 17CV36517, Charles D. Carlson, Judge.
Attorneys and Law Firms
TravisEiva,Portland,arguedthecauseandfiledthebriefsfor appellant.
Synopsis
Background: Patient's personal representative brought medical malpractice claims against medical providers arising from patient's death after presenting to emergency room with chest pains. The Circuit Court, Lane County, Charles D. Carlson, J., dismissed personal representative's claim for loss of chance of recovery, and entered judgment on jury verdict in favor of defendants on wrongful death claim. Personal representative appealed.
Lindsey H. Hughes, Portland, argued the cause for respondents Gary Josephsen, M.D., and Cascade Medical Associates. Also on the brief were Hillary A. Taylor and Keating Jones Hughes, P.C.
Alice S. Newlin, Portland, argued the cause for respondents RadiologyAssociatesandDariuszZawierucha,M.D.Alsoon the brief were Jay W. Beattie, Nikola L. Jones, and Lindsay Hart, LLP.
BeforeJames,PresidingJudge,andEgan,Judge,andKamins, Judge.
Opinion
Holdings: The Court of Appeals, James, P.J., held that:
to avoid medical malpractice liability, physician must exercise the degree of care, skill, and diligence required by law;
pattern jury instruction that included statement that physician did not guarantee good result was incorrect statement of law and was likely to mislead the jury;
trialcourt'serrorinitsjuryinstructionwasnotharmlesserror;
JAMES, P. J.
*536 Aaron Martineau visited the emergency room after experiencing chest pain and other symptoms. There, defendant Josephson examined him and arranged for a chest x-ray, which defendant Zawierucha read. Based on the results and on review of an electrocardiogram of a different patient, Josephson concluded that Martineau did not have an urgent cardiovascular problem or need further testing immediately. In fact, Martineau had an urgent cardiovascular problem, and he died approximately 24 hours later.
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Plaintiff, in her capacity as personal representative of Martineau, brought medical malpractice claims against defendant Josephson and the Doctor's Emergency Room Corporation, P.C. (the ER defendants) and Zawierucha and Radiology Associates, P.C. (the radiology **524 defendants). She appeals a general judgment entered after the trial court dismissed her claim for loss of chance of recovery and after a jury returned a verdict in defendants’ favor on her wrongful death claim. Plaintiff raises five assignments of error. We write only to address two. As explained below, we conclude that the trial court erred in instructing the jury using Uniform Civil Jury Instruction (UCJI) 44.03, which is likely to mislead the jury and incorrectly states the law, and that the error was not harmless. Accordingly, plaintiff is entitled to a new trial on her wrongful death claim. We also conclude that the court erred in dismissing plaintiff's claim for loss of chance of recovery, which was pleaded as an alternative to her wrongful death claim. Our conclusion that a new trial is necessary obviates the need to address plaintiff's second through fourth assignments of error, as the evidentiary issues that they concern may not arise in the same way on remand. We reverse and remand.
case in plain, clear, simple language. Jury instructions should seektoassistandenlightenthejury,andtoacquainttheminan approachable manner with the applicable law. “ ‘Everything which is reasonably capable of confusing or misleading the juryshouldbeavoided.Instructionswhichmisleadorconfuse are ground for a reversal or a new trial.’ ” Estate of Michelle Schwarz v. Philip Morris Inc.,348Or.442,454,235P.3d668, adh'd to on recons,349Or.521,246P.3d479(2010)(quoting Williams et al. v. Portland Gen. Elec., Co., 195 Or. 597, 610, 247 P.2d 494 (1952)).
Medical malpractice cases are “nothing more that negligence actions against medical professionals. The fundamental issue in these cases, as in all negligence cases, is whether the defendant breached the standard of care and caused injury to the plaintiff.” Rogers v. Meridian Park Hospital, 307 Or. 612, 619-20,772P.2d929(1989).Since1975,aphysician'sdutyof care has been codified in ORS 677.095, which now provides as follows:
“A physician licensed to practice medicine or podiatry by the Oregon Medical Board has the duty to use that degree of care, skill and diligence that is used by ordinarily careful physicians in the same or similar circumstances in the community of the physician or a similar community.”
I. UCJI 44.03
We begin by considering plaintiff's fifth assignment of error, in which she contends that the court erred in instructing the jury in the language of UCJI 44.03, which provides, “Physicians are not negligent merely because their efforts were unsuccessful. A physician does not guarantee a good result by undertaking to perform a service.”
*537 Inobjectingtotheinstruction,plaintiffpointedoutthat Oregon appellate courts have never approved giving it, and that, recently, in Sherertz v. Brownstein Rask, 288 Or. App. 719, 407 P.3d 914 (2017), we cast doubt on its correctness in general and held that, in a legal malpractice case that turned on the attorney's promise to accomplish a particular result, it wasreversibleerrorforthecourttogiveamodifiedversionof it. In this case, the court rejected plaintiff's objection without explanation and gave the instruction.
We review a trial court's decision to give a particular instruction primarily to determine “whether the instruction, when read together with the other instructions given, completely and accurately stated the law applicable to the case.” Id. at 722, 407 P.3d 914. In any jury trial, parties are entitled to have the jury instructed in the law that governs the
To understand the instruction at issue here, it is necessary to place it in its historical context. As the Oregon *538 Supreme Court began to articulate the standard of care for physicians that was eventually codified in 1975, the court adopted two rules, commonly stated together, that it often applied in the course of evaluating the sufficiency of the evidence of negligence in medical malpractice cases. One of the rules was the “error-of-judgment rule,” which distinguishes choices, or judgments, that later turn out to be incorrect, from medical negligence. Rogers, 307 Or. at 615, 772 P.2d 929 See, e.g., Lehman v. Knott, 100 Or. 59, 71, 196 P. 476 (1921) (“Improper treatment by a surgeon might be **525 due to an error in judgment of a skillful surgeon honestly and carefully exercised, and not constitute negligent treatment.”); see also Hills v. Shaw, 69 Or. 460, 468, 137 P. 229 (1913) (“The distinction between an error of judgment and negligence is not easily determined.”).
In Rogers, the Supreme Court held that, in light of the statutory standard of care, it is error to instruct the jury in a medical malpractice case regarding a physician's judgment. 307 Or. at 620, 772 P.2d 929. The court noted that the error-of-judgment rule derived both from the principle that a physicianisnotawarrantorofacureandfromtherecognition
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that there may be more than one acceptable treatment for a given condition and that a choice between those treatments is not necessarily negligent. Id. at 615-16, 772 P.2d 929 Both of those concepts have been subsumed by the standard of care for physicians: “The fundamental issue in [medical malpractice] cases, as in all negligence cases, is whether the defendant breached the standard of care and caused injury to the plaintiff.” Id. at 619, 772 P.2d 929
The court concluded that the error-of-judgment instruction given in Rogers “obscures the fact that, to avoid liability, the defendant must exercise the degree of care, skill, and diligence required by law.” Id. That is, by directing the jury's attention to whether there are reasonable differences of opinion in the medical community and whether a physician exercised reasonable judgment, the instruction directed attention away from what is actually the critical issue in a medical malpractice case—whether the physician exercised reasonable care. Id. For that reason, and because the phrase “error of judgment” was also confusing, the court *539 held that it was error to instruct the jury in terms of a physician's judgment: “[S]uch instructions not only confuse, but they are also incorrect because they suggest that substandard conduct is permissible if it is garbed as an ‘exercise of judgment.’ ” Id. at 620, 772 P.2d 929
ThesecondrulethattheSupremeCourtadoptedinearlycases —and that, as the court noted in Rogers, formed one of the grounds on which the error-of-judgment rule was based: “[A] physicianisnotawarrantorofacure.” Crewse v. Munroe,224 Or. 174, 177, 355 P.2d 637 (1960); see also, e.g., Hotelling v. Walther, 169 Or. 559, 562, 130 P.2d 944 (1942) (“Dentists, like physicians and surgeons, are not guarantors of good results.”).
The idea that a physician is not a warrantor of a cure is intertwined in Oregon appellate case law with a concept that the court did not discuss in Rogers—namely, res ipsa loquitur, a doctrine of negligence in which an accident or injury “speaks for itself.” Watzig v. Tobin, 292 Or. 645, 648, 642 P.2d 651 (1982). “In essence, [res ipsa loquitur] is a rule of circumstantial evidence that allows an inference of negligence to be drawn if the accident is of a kind which ordinarily would not have occurred in the absence of the defendant's negligence, even though it is impossible to determine the specific way in which the defendant was negligent.” Id. Before presenting any argument of that kind to thejury,thepartyinvokingthedoctrinemustpresentevidence sufficient to “establish that the harm more probably than
not would not have occurred in the absence of negligence on the part of the defendant. That determination cannot be based on speculation and conjecture and cannot be drawn from probabilities evenly balanced.” Hagler v. Coastal Farm Holdings, Inc., 354 Or. 132, 146, 309 P.3d 1073 (2013) (internal citation and quotation marks omitted).
In early medical malpractice cases, plaintiffs sometimes implicitlyorexplicitlysoughttoapplythedoctrineof res ipsa loquitur to support an argument that, because a physician's treatments did not succeed, the physician must have been negligent. For example, in Hills, a plaintiff contended that the defendantphysicianhadbeennegligentinsettingabrokenleg in a way that caused the broken bones *540 not to join while they healed. 69 Or. at 461-62, 137 P. 229. The court observed, “To all appearances, so far as the testimony discloses, the leg was treated by the usual methods known and approved by reputable surgeons.” Id. at 464, 137 P. 229. After quoting two cases discussing the applicability of res ipsa loquitur to medical malpractice claims and citing other cases, the court explained:
**526 “The substance of the doctrine taught by these cases is that if a regularly licensed physician with reasonable diligence employs the skill of which he is possessed in treating a surgical case, he is not liable for an error of judgment, and that the mere fact that an untoward result ensues is not in any sense evidence of negligence. There are so many elements combating the surgeon in his efforts to restore a patient to bodily soundness that he can do no more than exercise his best skill and judgment to accomplish the desired result.”
Id. at467-68,137P.229(emphasisadded).Applyingthatrule to the facts, the court explained that the plaintiff's evidence was insufficient to prove negligence:
“No lack of application of the ordinary remedies is shown. Reduced to its lowest terms, the case is one where the surgeon has treated a case in which the result was a failure. There is nothing to show that he did not do his best with what skill he possessed. The error of plaintiff's contention consists in relying upon the abortive result of the treatment as an evidence of negligence on the part of the defendant, without showing further that some careless act or omission of his produced that undesirable consequence. To hold defendant liable under such circumstances would be to make him an absolute insurer of success in every operation which he undertook.”
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Id. at 469, 137 P. 229 (emphasis added); see also Emerson v. Lumbermen's Hospital Assn., 100 Or. 472, 480, 481, 198 P. 231 (1921) (the death of the plaintiffs’ decedent after his leg was crushed by a railroad car and he was treated by the defendant doctor was “no evidence of want of care, or of unskillfulness or failure to administer proper treatment”; nonsuit was proper where there was “an entire lack of testimony as to whether or not [the defendant doctor] adopted and applied the proper method of treating” the decedent). In those cases, among others, the Supreme Court relied on the principle that a *541 physician does not guarantee a cure to reject the plaintiffs’ express or implicit res ipsa loquitur arguments.
That principle—that, because a physician does not guarantee a cure, an inference of negligence does not arise under the concept of res ipsa loquitur simply from a poor outcome in a medical malpractice case—is now well established in the Supreme Court's and our own case law. See, e.g., Ritter v. Sivils, 206 Or. 410, 413-14, 293 P.2d 211 (1956) (finding it unnecessary to cite authority for the proposition that “[a] chiropractor is not a warrantor of cure, and if a good result does not ensue from his efforts the doctrine of res ipsa loquitur is not available to his erstwhile patient,” among others, because the propositions “have been many times enunciated by this court”); Trees v. Ordonez, 250 Or. App. 229,241,279P.3d337(2012), rev'd on other grounds,354Or. 197,311P.3d848(2013)(notingOregoncourts’reluctanceto apply res ipsa loquitur inmedicalmalpracticecases“basedon the concern that the doctrine will impinge on the established principle that a physician is not a warrantor of a cure, and if a good result does not ensue from his efforts the doctrine of res ipsa loquitur isnotavailabletohiserstwhilepatient”(internal quotation marks and ellipsis omitted)).
Thus, the principle that a physician is not a warrantor of a cure is potentially significant in two ways in a medical malpractice action. First, as the Supreme Court suggested in Rogers, it, and the error-of-judgment rule that rests, in part, on it, are early attempts at articulating the standard of care for physicians, albeit ones that approach the problem somewhat differently than the formulation that the Supreme Court, and the legislature, ultimately settled on. Second, the principle that a physician is not a guarantor of a cure is also a specific application of what courts now recognize as the general requirement that a party invoking the doctrine of res ipsa loquitur “must establish that the harm more probably thannotwouldnothaveoccurredintheabsenceofnegligence
on the part of the defendant.” 1 **527 Hagler, 354 Or. at 146, 309 P.3d 1073 (internal quotation marks omitted).
*542 With that historical context in mind, we now turn to the jury instruction at issue. Again, the instruction provides, “Physicians are not negligent merely because their efforts were unsuccessful. A physician does not guarantee a good result by undertaking to perform a service.” UCJI 44.03.
We begin by noting that Oregon courts have repeatedly admonished that not every principle of law stated in an appellate decision makes a good jury instruction:
“An instruction that accurately quotes or faithfully paraphrasesanappellatedecisionisnotnecessarilybeyond reproach. Indeed, ‘it is not advisable in charging the jury to use the exact words of an appellate court opinion * * *.’ Ireland v. Mitchell, 226 Or[.] 286, 294, 359 P[.]2d 894 (1961). In Amfac Foods[, Inc.] v. Int'l Systems [& Co.], 294 Or[.] 94, 99 n[.] 3, 654 P[.]2d 1092 (1982), we warned that because many appellate opinions are written with no view that they will be turned into instructions, care must be exercised in using the language of these opinions for instructions to juries. See also Thornburg v. Port of Portland, 244 Or[.] 69, 73, 415 P[.]2d 750 (1966).”
Rogers, 307 Or. at 616, 772 P.2d 929. See also, e.g., State v. Avila, 318 Or. App. 284, 290-91, 507 P.3d 704 (2022) (noting that “the Miles instruction has been a case study in the risks attendant to drawing jury instructions from short snippets of opinions”); Sherertz, 288 Or. App. at 725 n. 2, 407 P.3d 914 (“Jury instructions drawn from short snippets of opinions pose challenges.”). UCJI 44.03 provides good example of the hazards of that practice.
*543 Although, as we have explained, the principle that a physician is not a warrantor of a cure has often been stated in appellate cases, the instruction nevertheless is not useful in the jury's assessment of a physician's negligence because it both obscures the correct legal inquiry and is incorrect as a categorical statement of the law. First, to the extent that the principle that a physician does not guarantee a good result is an articulation of the standard of care, it suffers from the same problem that the error-of-judgment instruction rejected in Rogers did: Its inclusion in the instructions “obscures the fact that, to avoid liability, the defendant must exercise the degree of care, skill, and diligence required by law.” 307 Or. at 619, 772 P.2d 929. By directing the jury's attention to the success or lack thereof of a physician's efforts and what “result” a physician promises by undertaking to provide
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medical services, it directs attention away from what the legislaturehasestablishedasthecriticalquestion:whetherthe physician used “that degree of care, skill and diligence that is used by ordinarily careful physicians in the same or similar circumstances in the community of the physician or a similar community.” ORS 677.095
The latter sentence of the instruction—“[a] physician does not guarantee a good result by undertaking to perform a service”—is incorrect when stated as a categorical proposition. Critically, the instruction uses the word “result” not “cure.” Although a physician usually does not guarantee a cure by undertaking to perform medical services—that is, medical treatment is inherently uncertain in many ways, and the likelihood that a medical problem will be conclusively resolved through any particular course of **528 treatment varies depending on a vast array of circumstances—there are situations in which a physician guarantees some particular good result—a “consequence or effect”—by undertaking to perform medical services. Webster's Third New Int'l Dictionary 555 (unabridged ed. 2002) (defining “cure” as “recovery from a disease”); id. at 1937 (defining “result” as anything “that results as a consequence, effect, issue, or conclusion”). A physician does guarantee avoidance of injuries of a kind that do not occur in the absence of medical negligence—for example, an injury caused by leaving a clamp inside a patient after surgery. *544 Fieux, 159 Or. App. at 644-45, 978 P.2d 429. Further, there are factual scenarios outside of res ipsa loquitur in which a physician guarantees some particular result, in the sense of a consequence or effect—even if that result is not a cure. See, e.g., Emerson, 100 Or. at 481, 198 P. 231 (noting that the principle that a physician does not guarantee a cure applies only “in the absence of a contract to that effect”); Sherertz, 288 Or. App. at 725, 407 P.3d 914 (Previous cases “do not support the proposition that a physician, as a matter of law, can never guarantee some result. For example, if a patient sees a physician to have her appendix removed, one expected ‘result’ is the removal of an appendix, not an amputation of a foot.” (Emphasis added.)).2
Thus, there are two problems with the instruction: it obscures the fact that the correct focus is on application of the standard of care, and, because the meaning of “result” is broader than the meaning of “cure,” its statement that “[a] physician does not guarantee a good result by undertaking to perform a service” is incorrect when stated—as it is in the instruction —as a universal principle. To the extent that the instruction could add any clarity to the jury's understanding of the law,
any potential benefit is fatally outweighed by its potential to confuse the jury and its incorrectness as a statement of the law.3 In short, UCJI 44.03 is an incorrect statement of the law, and likely to mislead the jury. It was error for the court to give it.
Having determined that giving the instruction was error, we must next consider whether the error was harmless. In the context of instructional error, whether an error is harmless turns on whether “the error had a detrimental influence on a party's rights.” *545 Purdy v. Deere & Co., 355 Or. 204, 226, 324 P.3d 455 (2014) (internal quotation marks omitted); see also ORS 19.415(2) (“No judgment shall be reversed or modifiedexceptforerrorsubstantiallyaffectingtherightsofa party.”). We must assess “the extent to which an error skewed the odds against a legally correct result.” Purdy, 355 Or. at 226,324P.3d455.“[L]ittlelikelihoodisnotenough,butmore —that is, ‘some’ or a ‘significant’ likelihood that the error influenced the result—will suffice for reversal.” Id.
As we set forth at the beginning, the evidence showed that Martineau's trip to the emergency room was prompted by chest pain and other symptoms. The ER defendants examined him and took a chest x-ray, which the radiology defendants read, and, based on the results and on review of an electrocardiogram of a different patient, defendants concluded that the decedent did not have an urgent cardiovascular problem or need further testing immediately. Martineau died within 24 hours of that conclusion.
Plaintiff's theory of the case was that defendants negligently failed to recognize the urgency of the decedent's condition when he came to the emergency room. She argued **529 that the decedent “did his part” when he went to the emergency room and informed the ER defendants of his symptoms; after the decedent did that, she contended, it was up to the defendants to correctly determine that he needed a CT scan to rule out the possibility that he was suffering from an urgent cardiovascular problem. If defendants had done that, plaintiff argued, the CT scan would have identified the problem and emergency surgery could have saved his life.
Plaintiff contended that the risk from giving the instruction in this case was that, in light of the instruction that no “good result” was promised, the jury might reason that defendants’ duty of care did not require defendants to order a CT scan because the CT scan—which was the main focus of plaintiff's theory of the case and argument to the jury—was the “good result” referred to in the instruction.
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We conclude that the error was not harmless. As described above, the instruction is misleading because it suggests that the results of a physician's efforts are relevant to the determination of negligence in some way that *546 is independent of the standard of care. It could have caused the jury to reason that conduct that failed to meet the standard of care nonetheless was not negligent because a physician does not promise a good result. See Rogers, 307 Or. at 620, 772 P.2d 929 (error-of-judgment instructions are “incorrect because they suggest that substandard conduct is permissible if it is garbed as an ‘exercise of judgment’ ”). The jury could have applied that principle to, for example, the radiology defendants’ reading of the x-ray or the fact that the ER defendants evaluated the electrocardiogram of a different patient, concluding that those acts were not done with the degree of care, skill, and diligence required by law but that they nevertheless were not negligent because no good result was promised.
That risk of misleading the jury was particularly pronounced here,whereplaintiff'stheoryofthecaseturnedondefendants’ failure to reach a particular result that, in plaintiff's view, was compelled under the circumstances by the standard of care. Plaintiff's case exemplifies the difference between guaranteeinga cure andguaranteeinga result. Sometimes,the minimum professional standard of care does, in fact, dictate a result—a follow up, a test, an action. Here, plaintiff argued that, given their roles as emergency room personnel, and in light of the decedent's cardiovascular symptoms, defendants were obliged to examine and test plaintiff sufficiently to discoverwhetherhehadaconditionthatneededcareurgently. That, plaintiff contended, is what emergency rooms are for. In plaintiff's view, having undertaken to perform the service of determining whether plaintiff had an urgent cardiovascular condition, defendants were obliged to conduct a thorough examination in accord with the standard of care, including testing and performance of a CT scan, which, accordingly to plaintiff, would have saved the decedent's life.
Given that theory of the case, the instruction that “[a] physician does not guarantee a good result by undertaking to perform a service” may well have led the jury to conclude that, even if a CT scan was required under the standard of care, defendants did not need to order it because they had not guaranteed that they would reach that “good result.” As litigated, we cannot conclude that there is not *547 “some” likelihood that the erroneous instruction influenced the jury's conceptualizationofthestandardofcare,andaccordingly,the
result. Purdy, 355 Or. at 226, 324 P.3d 455. Therefore, the instructional error was not harmless.
II. LOSS OF CHANCE CLAIM
Next, we consider plaintiff's first assignment of error, in which she argues that the court erred in dismissing, pursuant to ORCP 21 A(1)(h), her claim for loss of chance of survival of the decedent, which she alleged as an alternative to her wrongful death claim:
“Based on the aforementioned conduct, defendants hospital, ER corporation, ER physician, radiology corporation, and radiologist caused [decedent] to suffer a loss of a chance at a better medical outcome that he would have been able to pursue as a negligence claim had he survived. Those economic and noneconomic damages will **530 be determined by the jury, in accordance with the law, and are not to exceed $5,000,000.00.”
The radiology defendants, but not the ER defendants, moved to dismiss that claim for failure to state a claim or, alternatively, for an order requiring plaintiff to make the allegations more definite and certain. In support of the motions, they made two arguments: First, they argued that, as a matter of law, a plaintiff “is not permitted to plead both wrongful death and survivorship claims arising from the same negligence and injuries,” relying on the text of ORS 30.075 and Supreme Court case law. Second, they argued that plaintiff had not “adequately pleaded a loss of chance claim because Plaintiff has not alleged the percentage chance lost to a reasonable medical probability, and has not identified a significant or substantial opportunity for treatment missed as a result of Defendants’ care.”
In her response, plaintiff disagreed that the relevant case law required more specific pleading of the loss of chance. Alternatively, she proposed the following, with the proposed addition in boldface, to make the allegations more definite:
“Based on the aforementioned conduct, defendants hospital, ER corporation, ER physician, radiology corporation, and radiologist caused [decedent] to suffer a loss of a *548 [greater than 30%] chance at a better medical outcome that he would have been able to pursue as a negligence claim had he survived.”
The trial court did not signal how it was leaning, but plaintiff noted, at the end of the argument, “I just wanted to let
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you know in our briefing we just—we offer the Court an alternative more definite pleading, I just want to make sure the Court was aware of that.” The trial court responded, “I saw that,” and then said that it would issue a ruling later that day. The court did so, issuing an order that stated simply, “Motion No. 2—Motion to dismiss Claim Three is GRANTED,” followed by, “Plaintiff has 20 days to replead.” Plaintiff then filed an amended complaint, which omitted the loss-of-chance claim entirely.
A. Procedural Arguments
As a predicate matter, each group of defendants raises procedural reasons that we should not address the merits of the first assignment of error. The radiology defendants contend that, if we reject plaintiff's other assignments of error, regarding the legitimacy of the jury's verdict, any error was harmless as to them, because the jury found that they were not negligent and, accordingly, would not have found in plaintiff's favor on a loss-of-chance claim if it had been tried. The ER defendants contend that, because only the radiology defendants, not the ER defendants, moved against the lossof-chance claim, the court's grant of the motion to dismiss affected that claim only as to the radiology defendants, not as to the ER defendants. As a result, in their view, when plaintiff filedanamendedcomplaintomittingtheloss-of-chanceclaim altogether, she abandoned her loss-of-chance claim against the ER defendants. The ER defendants also appear to contend thatplaintiffabandonedorwithdrewherloss-of-chanceclaim against all defendants when she failed to replead it with more specificity after the trial court dismissed it.
Taking each of those arguments in turn, we first conclude that the radiology defendants’ harmlessness argument fails, as they seem to acknowledge it must, because we have concluded that the trial court erred in instructing the jury. As a result, on remand, the case will be back in a *549 pretrial posture, so any error committed pretrial must be remedied, regardless whether the error would be harmless in a different procedural posture.
The ER defendants’ contentions that plaintiff abandoned or withdrew her loss-of-chance claim are not supported by the record. As we view the record—a view with which the radiology defendants appear to agree—the trial court granted the radiology defendants’ ORCP 21 A(1)(h) motion, rather than their alternative motion for an order to make more definite and certain. If the court had done the latter, it would have ordered plaintiff to make the pleading more definite and certain, and it did not do that. Rather, it **531 dismissed the
claim, which was the appropriate course of action if it was granting the motion to dismiss.
Based on the arguments that had been presented to the court before it dismissed the claim, plaintiff could assume—as we do on appeal—that the court had dismissed the loss-ofchance claim because it agreed with the radiology defendants that, as a matter of law, plaintiff was not permitted to plead a survivorship claim based on loss of chance of recovery where,asdescribedfurtherbelow,deathwasanelementofthe claim. That reasoning was categorical, not dependent on the identity or circumstances of any particular defendant. Given that situation, it would have been unreasonable for plaintiff's new pleading to include a claim for loss of chance against the ER defendants. At best, given the court's ruling, to include that claim would have been futile; at worst, the court might have penalized plaintiff for wasting its and defendants’ time.
In omitting the loss-of-chance claim from her amended complaint, plaintiff did not abandon or withdraw that claim; rather, she recognized and gave effect to the court's ruling on the claim. On remand, plaintiff may move to amend the complaint to reallege the loss-of-chance claim against the ER defendants, who, under these circumstances, will not be prejudiced by the amendment.4 See Eklof v. Persson, 369 Or. 531,533,508P.3d468(2022) *550 (“[T]hegravamenofthe inquiry [on a motion to amend the pleadings] under ORCP 23 A is prejudice to the opposing party[.]”).
B. Loss of Chance of Recovery
1. Legal context
Turning now to the merits of plaintiff's first assignment of error, the parties’ arguments turn on the operation of ORS 30.020, ORS 30.075, and the Supreme Court's case law delineating the contours of common-law negligence claims. We touch on each briefly before applying them to the case before us.
ORS 30.020 establishes a statutory cause of action for wrongful death. As relevant here, ORS 30.020(1) provides:
“When the death of a person is caused by the wrongful act or omission of another, the personal representative of the decedent *** may maintain an action against the wrongdoer, if the decedent might have maintained an action, had the decedent lived, against the wrongdoer for an injury done by the same act or omission.”
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In general, and in Oregon, the existence of statutory wrongful death actions has prevented development of a common law of wrongful death claims. See Hughes v. PeaceHealth, 344 Or. 142, 151, 178 P.3d 225 (2008) (explaining that, with the enactment of statutory wrongful-death actions, “efforts to develop a common law of wrongful death came to a halt”; “[q]uite simply, courts were reluctant to recognize a common-law remedy that might compete with their states’ newly adopted wrongful death statutes”).
In Joshi v. Providence Health System Corp., 342 Or. 152, 157, 149 P.3d 1164 (2006), the Supreme Court interpreted the phrase “when the death of a person is caused by the wrongful act or omission of another,” ORS 30.020(1), and held that, in cases that do not fall within narrow exceptions, the word “caused” refers to a “but-for” test of causation: A plaintiff must show that, but for the negligence of the defendant, the decedent would not have died. Joshi, 342 Or. at 162, 149 P.3d 1164
The court also declined to adopt a theory of loss of chance of survival as an alternative theory of recovery—one *551 that would include a “substantial factor” or “substantial possibility”test,ratherthana“but-for”test,forcausation—in an action under the wrongful death statute. Id. at 163-64, 149 P.3d 1164. The court explained that the loss-of-chance theory was inconsistent with the text of ORS 30.020(1):
“That statute requires that a plaintiff prove that a defendant's negligent act or omission caused the decedent's death. *** [T]he plaintiff must demonstrate that defendant's negligent acts or omission was **532 sufficient to bring about decedent's death. Plaintiff cannot avoid this requirement by showing that defendant's negligent act or omission merely increased the risk of death.”
Id. at 163-64, 149 P.3d 1164 (emphasis in original).
The court explained that, in the case before it, the plaintiff's expert had testified that the defendants’ negligence had deprived the decedent of a 30 percent chance of survival, and, thus, that that testimony did not meet the plaintiff's burden to show but-for causation. Id. at 164, 149 P.3d 1164. The court held,“Althoughdeprivationofa30percentchanceofsurvival may constitute an injury, the injury that is compensable under ORS 30.020 is death. Therefore, plaintiff has failed to prove the elements of the wrongful death action as set forth in the statute.” Id.
Unlike wrongful death claims, negligence claims based on injuries other than death are governed by common law. Smith v. Providence Health & Services, 361 Or. 456, 463, 393 P.3d 1106 (2017). In Smith, the Supreme Court held that loss of chance of recovery is a cognizable injury in a common-law negligence claim: “Oregon law permits a plaintiff who has suffered an adverse medical outcome resulting in physical harm to state a common-law medical negligence claim by alleging that the defendant negligently caused a loss of his or her chance at recovery.” Id. at 458, 393 P.3d 1106.
The plaintiff in Smith had sought medical care from the defendants while experiencing symptoms of a stroke, and the defendants had not promptly ordered testing that would have identified the stroke. The plaintiff suffered significant permanent impairment from the stroke. The plaintiff alleged that, as a result of the defendants’ negligence, he had lost an opportunity for treatment that had *552 a 33 percent chance of resulting in greatly reduced or no permanent symptoms from the stroke Id. at 460, 393 P.3d 1106. The trial court dismissed the claim, concluding that loss of chance of a better outcome was not a viable theory of negligence, and we affirmed. Id. at 458, 393 P.3d 1106.
The Supreme Court disagreed. It held that the loss of chance of recovery, itself, was the injury, and that Oregon common law should recognize a claim for medical negligence that causes that injury. Id. First, the court concluded that the question before it was one of first impression. Id. at 463, 393 P.3d 1106. Among other things, it distinguished its holding in Joshi, explaining that, in Joshi, it had been tasked with construing the wrongful death statute rather than applying the common law of negligence:
“As we noted [in Joshi], ‘although deprivation of a 30 percent chance of survival may constitute an injury, the injury that is compensable under ORS 30.020 is death.’ In contrast, this case is not bound by a statute that requires that plaintiff prove that defendants caused a specific injury. Rather, the issue presented concerns a claim for medical negligence under Oregon's common law.”
Smith, 361 Or. at 464, 393 P.3d 1106 (internal citation and brackets omitted; emphasis in Smith).
Then the court considered whether to recognize loss of chance of recovery as an injury in common-law medical negligence. It explained that “failing to recognize a loss-ofchance theory of injury in the context of medical malpractice has the effect of insulating from malpractice claims the
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negligent services that medical providers have given to those who seek treatment for conditions when their odds of a favorable medical outcome are less than 51 percent before treatment but who can prove that they had an opportunity to realize that favorable outcome with appropriate treatment.”
Id. at 479-80, 393 P.3d 1106. The court pointed out that to prevent tort recovery under those circumstances offended two basic principles of the tort system: It prevented the tort system's function of “distribut[ing] the risk of injury to or among responsible parties” and it undercut the “ ‘prophylactic’ factor of preventing future harm.” Id. at 480, 393 P.3d 1106. Considering a hypothetical scenario of patients with a 45 percent chance of a favorable *553 outcome that was wiped out by a physician's negligence, the court explained that the “all-or-nothing rule” of a standard medical **533 malpracticecase“alwaysresultsinnegligent physicians avoiding liability and in uncompensated patients —even though in 45 out of 100 instances, the patients suffered their adverse medical outcomes because of the physician's negligence.” Id. Further, the court noted, the special relationship between physicians and their patients counsels in favor of allowing recovery for loss-of-chance injuries because “the physician's breach of the duty to the patient results in a situation in which no one can know whether the patient would have recovered with proper medical care.” Id.
The court also rejected the defendants’ contention that the legislature, rather than the court, was the appropriate body to recognize loss of chance as an injury in medical malpractice cases. The court explained that, “regardless of whether the legislature could have in the past or may in the future weigh in on this issue, this court is the forum for a case involving a common-law medical malpractice claim[, and] we are called on to decide common-law cases properly presented to us.” Id. at 482, 393 P.3d 1106
Becausetheloss-of-chanceclaimin Smith hadbeendismissed at the pleading stage, the case presented “only a limited opportunity to discuss the various aspects of such a claim and the considerations in litigating a medical malpractice claim in whichtheplaintiffallegesthelossofachanceatarecoveryor better medical outcome.” Id. However, the court nevertheless addressed some “practical concerns” that had been raised by the defendants and amici, to provide guidance on remand. Id.
First, the court noted that it did not need to decide precisely what kind or degree of chance was necessary, because the plaintiff's allegation that he had lost “a 33 percent chance of
total or close to total recovery from his stroke had defendants provided him with non-negligent care” was sufficient, as a matter of law. Id. at 483, 393 P.3d 1106. Second, it explained that “fairness to defendants requires that plaintiff plead with specificity the lost chance of a better medical outcome.” Id. “In practical terms, a plaintiff must plead the percentage and quality of his or her loss of chance, which in turn *554 must be based on the plaintiff's experts and relevant scientific evidence that meets the standard of reasonable medical probability.” Id.
In a footnote, the court distinguished a “loss of chance as injury” claim from a “standard medical malpractice claim.” Id. at 483 n. 5, 393 P.3d 1106. It explained that the case before it was a loss-of-chance claim “because plaintiff was unable to allege that he had at least a 51 percent chance of recovery but for defendants’ malpractice”; thus, the injury was the loss of chance itself. Id. By contrast, it noted, a standard medical malpractice claim “involves proof of the medical outcome as the injury and not the lost chance as the injury.” Id.
Third, the court explained that, although the injury is a loss of chance of recovery, an “adverse medical outcome resulting in physical harm,” id. at 458, 393 P.3d 1106, is still an element of the claim:
“[A]s his complaint reflects, plaintiff has suffered the physical harm that he might well have avoided had he received proper medical care. That present adverse medical outcome is an essential element of a common-law medical malpractice claim and provides the foundation for a calculation of plaintiff's damages.”
Id. at 483, 393 P.3d 1106
Thus, Smith establishes that (1) “loss of chance of recovery” is a cognizable injury in a common-law medical negligence claim in Oregon, id. at 458, 393 P.3d 1106; (2) to bring such a claim, “a plaintiff must plead the percentage and quality of his or her loss of chance,” id. at 483, 393 P.3d 1106; and (3) “[a] present adverse medical outcome is an essential element of a common-law medical malpractice claim,” and, in a claim for loss of chance of recovery (unlike in a standard medical malpractice claim, in which the adverse medical outcome is the injury, id. at 483 n. 5, 393 P.3d 1106) the present adverse medical outcome “provides the foundation for a calculation of plaintiff's damages,” id. at 483, 393 P.3d 1106; see also id. at 460, 393 P.3d 1106 (“In a professional negligence claim, a plaintiff must allege and prove the following: (1) a duty that runs from the defendant to the plaintiff; (2) a breach of
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that **534 duty; (3) a resulting harm to the plaintiff *555 measurable in damages; and (4) causation, i.e., a causal link between the breach of duty and the harm.” (Internal quotation marks omitted.)).
One more point of law is relevant to our analysis this case: After a person's death, the continuation of a personal injury action that sounds in negligence is governed by ORS 30.075, the survivorship statute. That statute provides as follows:
“(1) Causes of action arising out of injuries to a person, caused by the wrongful act or omission of another, shall not abate upon the death of the injured person, and the personal representatives of the decedent may maintain an action against the wrongdoer, if the decedent might have maintained an action, had the decedent lived, against the wrongdoer for an injury done by the same act or omission. ***
“(2) In any such action the court may award to the prevailingparty,attrialandonappeal,areasonableamount to be fixed by the court as attorney fees.
“(3) Subsection (2) of this section does not apply to an action for damages arising out of injuries that result in death. If an action for wrongful death under ORS 30.020 is brought, recovery of damages for disability, pain, suffering and loss of income during the period between injury to the decedent and the resulting death of the decedent may only be recovered in the wrongful death action, and the provisions of subsection (2) of this section are not applicable to the recovery.”
2. Parties’ arguments
With that legal context in mind, we consider the parties’ arguments about what they agree was the trial court's dismissal of the claim on the ground that plaintiff could not plead a common-law claim based on loss of chance of recovery as an alternative to her wrongful death claim. Plaintiff contends that the claim that the trial court dismissed was for common-law negligence, and that the injury that she alleged was the decedent's loss of chance of recovery. In her view, that claim was not affected by the wrongful death statute,becausetheinjuryforwhichshesoughtcompensation in the claim at issue was not death; it was *556 a loss of chance of recovery. See Smith, 361 Or. at 464, 393 P.3d 1106 (“As we noted [in Joshi], ‘although deprivation of a 30 percent chance of survival may constitute an injury,theinjury that is compensable under ORS 30.020 is death.’ In contrast,
this case is not bound by a statute that requires that plaintiff prove that defendants caused a specific injury. Rather, the issuepresentedconcernsaclaimformedicalnegligenceunder Oregon's common law.” (Quoting Joshi, 342 Or. at 164, 149 P.3d 1164 (emphasis in Smith; internal citation omitted).)).
Further, in plaintiff's view, the claim did not abate upon the decedent's death, because it is an action that “the decedent might have maintained * * *, had the decedent lived, against the wrongdoer for an injury done by the same act or omission.” ORS 30.075(1). In other words, she contends that, as demonstrated by the court's holding in Smith, a person who lives can bring a common-law negligence claim where the injury is loss of chance of recovery, so, if the decedent had lived, he would have been able to maintain that kind of action —an action “against the wrongdoer for an injury done by the same act or omission.” ORS 30.075(1)
Finally, plaintiff contends that none of the law set out above can reasonably be understood to prevent a plaintiff from alleging, as alternatives, a wrongful death claim—in which the plaintiff must prove that the defendants’ negligence was the but-for cause of the decedent's death—and a claim for loss of chance of recovery based on the decedent's death —in which the plaintiff must prove that, even though the defendants’ negligence was not the but-for cause of the decedent's death, the defendants’ negligence was the but-for cause of the loss of a less-than-51-percent chance of survival of the decedent. See ORCP 16 D (“Inconsistent claims or defenses are not objectionable and, when a party is in doubt as to which of two or more statements of fact is true, the party may allege them in the alternative. A party may also state as many separate claims or defenses as the party has, regardless of consistency ***.”); **535 Dotson v. Smith, 307 Or. 132, 136, 764 P.2d 540 (1988) (“ORCP 16 [D] allows inconsistent claims.”). Thus, plaintiff contends that there was no substantive reason for the trial court to dismiss her claim.
*557 Defendants advance a variety of reasons that, under their view of the law that we have set out above, a plaintiff cannot allege both a wrongful death claim and a claim for loss of chance of recovery based on the same facts and circumstances. The radiology defendants contend that any claim based on loss of chance of survival—that is, a loss of chance of recovery where the adverse medical outcome was death—did not survive the decedent's death under ORS 30.075(1) because the claim is not one that “the decedent might have maintained ***, had the decedent lived, against the wrongdoer for an injury done by the same
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act or omission.” They further contend that, to the extent that plaintiff's claim here is based on a loss of chance of recovery that does not involve death, plaintiff could not recover damages for the loss-of-chance claim, because “ORS 30.075(3) makes clear that damages for pre-death personal injury including ‘disability, pain, suffering and loss of income’ may only be recovered in an action for wrongful death if such an action is brought.”
The ER defendants contend that any claim in which death is an element must be brought under the wrongful death statute. Consequently, in their view, plaintiff's claim here is decisively distinguishable from the claim at issue in Smith because plaintiff's claim alleged the death of the decedent as an element, even though it was not the alleged injury.
3. Analysis
We consider each of those contentions in turn and, as explained below, conclude that none of them is correct. Thus, we agree with plaintiff that the trial court erred in concluding that, as a matter of law, she could not bring her claim for loss of chance of recovery as an alternative to her wrongful death claim.
The radiology defendants first argue that a claim for loss of chance of recovery where death is the “present adverse medical outcome” (which, as the court explained in Smith, is anelementoftheclaimandisnecessarytocalculatedamages) isnotanactionthat“thedecedentmighthavemaintained***, had the decedent lived, against the *558 wrongdoer for an injury done by the same act or omission.” ORS 30.075(1) Thatisso,theycontend,because,ifthedecedenthadlived,he would not have suffered death, so he could not have brought a claim for loss of chance of recovery in which the present adverse medical outcome was death.
We review questions of statutory interpretation for legal error, seeking to discern the intention of the legislature by considering the text and context of a statute and, to the extent that it is helpful, its legislative history. State v. Gaines, 346 Or. 160, 171-72, 206 P.3d 1042 (2009).
The radiology defendants’ view of ORS 30.075(1) is flawed. The text and context demonstrate that the legislature did not intend ORS 30.075(1) to require the claim brought by a personal representative after the injured person's death to be identical in every element to the claim that “the decedent might have maintained ***, had the decedent lived, against the wrongdoer for an injury done by the same act
or omission.” The text allows the personal representative to maintain “an action against the wrongdoer” any time “the decedent might have maintained an action, had the decedent lived, against the wrongdoer for an injury done by the same act or omission.” ORS 30.075(1) (emphasis added). It does not say that the elements of the claim, the injury, or the specific theory of culpability that would give rise to the claim brought by the personal representative must be the same as the ones that the decedent might have alleged; only the act or omission of the wrongdoer must be the same.
Further, context evidences that the legislature did not intend the text to limit the action brought by the personal representative to claims with exactly the same elements as those that the decedent could have brought. The legislature used the same phrasing that appears in ORS 30.075(1) to describe the circumstances under which the personal representativeofthedecedentorsomeotherpersonmaybring awrongfuldeathclaim: **536 ORS30.020(1)providesthat, “[w]hen the death of a person is caused by the wrongful act or omission of another,” specified people “may maintain an action against the wrongdoer, if the decedent might have maintained an action, had the decedent lived, *559 against the wrongdoer for an injury done by the same act or omission.” (Emphasis added.)
If we were to interpret the text of ORS 30.075(1) to prohibit the personal representative from bringing a claim whose elements included death—because, as defendants argue, if the decedent had lived, he would not have suffered death, so he could not have brought a claim whose elements include death—then the same logic would apply to the wrongful death statute. See, e.g., State v. Cloutier, 351 Or. 68, 99, 261 P.3d 1234 (2011) (“[I]n the absence of evidence to the contrary, we ordinarily assume that the legislature uses terms in related statutes consistently.”). The result would be that no one could ever bring a wrongful death claim, because its elements include death, and a decedent would never have been able to bring a wrongful death claim “had the decedent lived.” ORS 30.020(1).
In this case, “the decedent might have maintained an action, had the decedent lived, against the wrongdoer for an injury done by the same act or omission.” The decedent's claim would have been for loss of chance of recovery, as demonstrated by Smith. The fact that the adverse medical outcome in the claim brought by plaintiff is death, whereas, in a claim by the decedent, had he lived, the adverse medical
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outcome would have been something different, is immaterial to plaintiff's ability to bring the claim under ORS 30.075(1)
The radiology defendants’ second argument continues where their first argument leaves off. They concede that, under their view of ORS 30.075(1), “if the complaint is read as alleging that [d]efendants’ failure to diagnose decedent's allegedly damaged aorta resulted in a loss of chance to avoid pre-death personal injury [rather than death, which is the scenario they addressed in their first argument], then that claim would survive.” (Emphasis in radiology defendants’ brief.) However, they contend that plaintiff could not recover any damages for that narrowed loss-of-chance claim, because “ORS 30.075(3) makes clear that damages for pre-death personal injury including ‘disability, pain, suffering and loss of income’ may only be recovered in an action for wrongful death if such an action is brought.”
*560 That argument rests on their understanding of the last sentence of ORS 30.075(3), which provides as follows:
“If an action for wrongful death under ORS 30.020 is brought, recovery of damages for disability, pain, suffering and loss of income during the period between injury to the decedent and the resulting death of the decedent may only be recovered in the wrongful death action, and the provisions of subsection (2) of this section are not applicable to the recovery.”
Defendants misconstrue the term “resulting” in that sentence. The purpose of the sentence is to prevent personal representatives from seeking what are really wrongful death damages—damages that occur between the injury that is the but-for cause of the decedent's death and the death itself— in survivorship claims. As we have explained, the wrongful death statute requires that the defendant's negligence was the but-for cause of the decedent's death. Joshi, 342 Or. at 162, 149 P.3d 1164. Given that causation standard, “damages for disability,pain,sufferingandlossofincomeduringtheperiod between injury to the decedent and the resulting death of the decedent,”ORS30.075(3)(emphasisadded),existonlywhen the decedent's death “results from”—is caused, in a but-for sense—by the defendant's negligence. Joshi, 342 Or. at 162, 149 P.3d 1164
Thus, when the defendant's negligence injures the decedent and is the but-for cause of the decedent's death, damages that are suffered between the injury and the death may be recovered only in the wrongful death action. But if, as in a loss-of-chance-of-recovery case, the defendant's negligence
injures the decedent but is not the but-for cause of the decedent's death, there is no “resulting death” of the decedent within the meaning of ORS 30.075(3), and the damages are not allocated to the wrongful death action—for **537 the logical reason that, under those circumstances, a wrongful death action cannot succeed. Joshi, 342 Or. at 162, 149 P.3d 1164. Thus, we disagree with the radiology defendants’ contention that ORS 30.075(3) would prevent plaintiff from recovering any damages on her claim for loss of chance of recovery.
WenowturntotheERdefendants’argument.Asnotedabove, they contend that any claim in which death *561 is an element must be brought under the wrongful death statute and,consequently,thatplaintiff'sclaimhereisdistinguishable from the claim at issue in Smith because plaintiff's claim alleged the death of the decedent as an element, even though it was not the alleged injury. It is true, as they assert, that the Supreme Court has held, in cases interpreting the remedy clauseofArticleI,section10,oftheOregonConstitution,that no common-law wrongful death action existed at common law. See, e.g., Storm v. McClung, 334 Or. 210, 222 n 4, 47 P.3d 476 (2002) (“Since at least 1891, this court has adhered to the view that no right of action for wrongful death existed at common law.”).
But that does not answer the question here, which is whether, in Smith, the Supreme Court recognized, or, in this case, we should recognize, a claim for medical negligence where the injury is the loss of chance of recovery and the adverse medical outcome suffered by the injured person is death, under today's common law of negligence. See Smith, 361 Or. at 482, 393 P.3d 1106 (“The fact is that, regardless of whether the legislature could have in the past or may in the future weigh in on this issue, this court is the forum for a case involving a common-law medical malpractice claim and *** we are called on to decide common-law cases properly presented to us.”); see also id. at 485, 393 P.3d 1106 (“[L]oss of a substantial chance of a better medical outcome can be a cognizable injury in a common-law claim of medical malpractice in Oregon.”).
Ultimately, Smith applies. The fact that, in this case, death is anelementoftheclaim—butnottheallegedinjury—doesnot make this situation dispositively different from the situation in Smith. The wrongful death statute does not address claims like this one, where the injury is a loss of chance of recovery rather than death itself. Joshi, 342 Or. at 164, 149 P.3d 1164.
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Thus, the ER defendants’ contention that the wrongful death statute precludes this claim is misplaced.
Nothing in Smith suggests that the court intended to exclude claims in which the adverse medical outcome was death from its recognition that “Oregon law permits a plaintiff who has suffered an adverse medical outcome resulting in physical harm to state a common-law medical negligence claim by alleging that the defendant negligently caused a *562 loss of his or her chance at recovery.” 361 Or. at 458, 393 P.3d 1106. Some of the cases that the court discussed in Smith, including Matsuyama v. Birnbaum, 452 Mass. 1, 890 N.E. 2d 819 (2008), on which the Smith court relied most heavily, involved death, rather than some other kind of adverse medical outcome, and the court did not distinguish those cases. See, e.g., Smith, 361 Or. at 467, 393 P.3d 1106 (noting that, in Hicks v. United States, 368 F.2d 626 (4th Cir. 1966), “the court explained that a negligent doctor must answer for a patient's lost chance of survival”); id. at 471, 393 P.3d1106(explainingthat,in Matsuyama,“theMassachusetts Supreme Judicial Court engaged in a comprehensive analysis oftheloss-of-chancetheory”and“concludedthatsuchclaims shouldbecognizable”); Matsuyama,452Mass.at7,890N.E. 2dat825(notingthatthedecedenthaddiedofgastriccancer). Although,in Smith,thecourthadnooccasionto,and,thus,did not, specifically address a claim in which the adverse medical
outcome was death, we perceive no reason to conclude that its holding did not encompass such claims.
It would be untenable for Oregon law to recognize claims for loss of chance of full recovery for plaintiffs who survived, but cut off those claims for plaintiffs who were, arguably, more severely harmed by being deprived of a chance of survival. That situation would offend, at least, the two basic principles of the tort system that the court addressed in Smith by preventing the tort system from operating in a rational way to “distribute the risk of injury to or among **538 responsible parties” and by undercutting the “ ‘prophylactic’ factor of preventing future harm.” Smith, 361 Or. at 480, 393 P.3d 1106. We do not believe that the court in Smith intended its holding to have that effect, and, as explained above, we perceivenootherlegalprinciplethatwouldrequirethatresult.
For all of those reasons, we conclude that the trial court erred indismissingplaintiff'sclaimforlossofchanceofrecovery.5
Reversed and remanded.
All Citations
320 Or.App. 534, 514 P.3d 520
Footnotes
1 In a medical malpractice case, as other contexts, when the plaintiff does make a showing that the harm more probably than not would not have occurred in the absence of the defendant's negligence, res ipsa loquitur applies. Mayor v. Dowsett, 240 Or. 196, 220, 400 P.2d 234 (1965) (holding that res ipsa loquitur applied in a medical malpractice case where the plaintiff had presented expert testimony that “the injury suffered by the plaintiff is one that does not ordinarily occur in the absence of negligence”); Fieux v. Cardiovascular & Thoracic Clinic, P.C., 159 Or. App. 637, 642, 978 P.2d 429, rev den, 329 Or. 318, 994 P.2d 123 (1999) (the plaintiff met his burden to rely on res ipsa loquitur, even absent expert testimony regarding the standard of care, because “it is within the capability of a jury to ascertain that a clamp is not normally left inside a patient unless someone was negligent”).
In other words, although, as the jury instruction at issue in this case phrases it, a physician does not generally “guarantee a good result,” in the sense of an ultimate cure for the patient, “by undertaking to perform a service,” (at least in the absence of a contract, Emerson, 100 Or. at 481, 198 P. 231), a physician does guarantee some kinds of “results”: The physician implicitly guarantees not to cause injuries through medical negligence—for example, injury caused by leaving a clamp inside a patient after surgery. Fieux, 159 Or. App. at 644-45, 978 P.2d 429
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2 As defendants pointed out at oral argument, the physician likely does not guarantee that the appendix will be removed—it may be that, after surgery begins, some unexpected development makes that inadvisable. In that situation, the guaranteed result, or consequence, is that the patient's foot will not be amputated. In a case involving that fact scenario, it would clearly be wrong to instruct the jury that, by undertaking to treat the patient for appendicitis, the physician made no implicit promise that the patient's foot would remain intact.
3 We also note that, in this case, the court also instructed the jury that “the mere fact alone that a patient experienced an adverse outcome is not sufficient to prove negligence.” That instruction provided the jury with clarification—to the extent that any was necessary or desirable, a question on which we express no opinion —that the outcome of treatment, alone, did not allow any particular conclusion about whether defendants’ conduct met the standard of care.
4 As noted further below, 320 Or. App. at (so35), we leave questions about what is required to plead this type of claim to the parties and the court on remand.
5 We decline to address the radiology defendants’ proffered alternative basis for affirmance, regarding the sufficiency of plaintiff's pleading of the loss-of-chance claim. On remand, the parties and the court will have the opportunity to address pleading issues.
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End of Document © 2023 Thomson Reuters. No claim to original U.S. Government Works.
322 Or.App. 202 Court of Appeals of Oregon.
Donald E. MILLER and Linda S. Miller, Plaintiffs-Respondents, v.
AGRIPAC, INC. et al., Defendants, and Kaiser Gypsum Company, Inc., Defendant-Appellant.
A174355 |
Argued and Submitted March 30, 2022. | October 5, 2022
Procedural Posture(s): On Appeal; Judgment; Motion for Judgment as a Matter of Law (JMOL)/Directed Verdict; Request for Instructions.
**958 Multnomah County Circuit Court, 19CV08509; Leslie G. Bottomly, Judge.
Attorneys and Law Firms
J.AaronLandau,Eugene,arguedthecauseforappellant.Also on the briefs was Harrang Long Gary Rudnick P.C.
Nadia H. Dahab, Portland, argued the cause for respondents. Also on the brief were Sugerman Law Office; and Jennifer Green and Maune Raichle Hartley French & Mudd LLC.
BeforeJames,PresidingJudge,andAoyagi,Judge,andJoyce, Judge.
Synopsis
Background: Construction worker and his wife brought action against manufacturer of asbestos-containing construction product, asserting claims of negligence, strict products liability, and loss of consortium, based on worker's exposure to the asbestos-containing product. Following a jury trial, the Circuit Court, Multnomah County, Leslie G. Bottomly, J., entered judgment in favor of plaintiffs on all three claims and required manufacturer to pay $5,233,618 in damages. Manufacturer appealed.
Opinion AOYAGI, J.
Holdings: The Court of Appeals, Aoyagi, J., held that:
trial court's “recklessness” instruction correctly stated legal standard for category of tortious conduct pertaining to aggravated form of negligence that was “wanton” or “reckless” conduct;
whether manufacturer acted recklessly during time period in which worker was exposed to product was a question for the jury; and
manufacturer was jointly and severally liable for all of plaintiffs'damages,regardlessofwhenplaintiffs'actionarose, because jury found that manufacturer had acted recklessly.
Affirmed.
*204 In this personal injury action, plaintiffs Donald Miller (Miller) and his wife Linda Miller have asserted claims of negligence, strict product liability, and loss of consortiumagainstdefendantKaiserGypsumCompany,Inc., based on Miller's exposure to an asbestos-containing **959 constructionproductsoldbydefendantinthe1960s.Plaintiffs also alleged similar claims against other defendants, based on Miller's exposure to other asbestos-containing products over several decades of his life; however, by the time of trial, defendant was the only remaining defendant. The jury returned a verdict in plaintiffs’ favor on all three claims. Based on that verdict, the trial court entered a judgment requiring defendant to pay $5,233,618 in damages to plaintiffs.
Defendant appeals, raising three assignments of error. First, defendant challenges the trial court's ruling that defendant is jointly and severally liable for plaintiffs’ damages, based on the court's conclusion that plaintiffs’ action “arose” in the 1960s and therefore is not subject to the modern several-only liability statute. Second, defendant argues that the court's jury instruction on “recklessness,” as relevant to the defense of comparativefault,wasinconsistentwithplaintiffs’claimsand contrary to Oregon law. Third, defendant argues that, even if the “recklessness” instruction was not erroneous, the court should have granted a directed verdict for defendant on that issue, because the evidence was legally insufficient to prove that defendant acted recklessly.
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For the reasons explained below, we conclude that the “recklessness” instruction was properly given and legally correct. We further conclude that the evidence was legally sufficient to go to the jury on whether defendant was “recklessly” negligent. We therefore reject the second and third assignments of error. As for the first assignment of error, given our disposition of the other assignments, and the relationship between the comparative-fault defense and several-only liability under existing case law, we conclude that any error in applying joint and several liability based on when the action “arose” was harmless. Accordingly, we affirm.
scan showed something suspicious. In January 2019, at age 70, Miller was diagnosed with mesothelioma, a cancer closelyassociatedwithasbestosexposure.Millerandhiswife brought this action against more than 50 defendants, based on their alleged involvement in Miller's exposure to asbestos. Only the claims against defendant went to trial. All of the other defendants were dismissed before trial as a result of bankruptcy, settlement, or otherwise.
*205 I. FACTS
Miller, who was born in 1948, was exposed to asbestos on numerousoccasionsforthefirst36yearsofhislife.Hecomes from a family of asbestos workers. He grew up going to job sites with family members, played in asbestos boxes as a child,shookouthisfather'sworkclotheswhiledoinglaundry, and worked as a teen in asbestos product fabrication. He began his own career in insulation after high school.
Between October 1966 and April 1969, Miller worked as a mechanical insulator in various commercial and industrial buildings in the Portland area. He personally worked mainly with fiberglass materials, but drywall workers were also presentatthejobsites.Drywallworkersuse“jointcompound” to fill the seams between sheets of drywall (also called sheetrock or wallboard) after mounting. Joint compound usually comes as a powder. It is mixed with water, applied as a paste, and then sanded after it dries. Multiple coats of joint compound are applied to achieve a smooth finish before painting.Onadailybasis,asheworked,Millerwouldbreathe in drywall dust produced by drywall workers’ mixing and sanding of joint compound. Some of that joint compound was defendant's product, which contained asbestos.
Miller changed jobs in April 1969. His exposure to asbestoscontaining products continued until 1984. There is no evidence that Miller was exposed to defendant's asbestoscontaining products after 1969, however, so any exposures after1969wouldbeattributabletoothercompanies’products. Miller retired in 2003.
Because of his known exposure to asbestos, Miller's health was regularly checked by his doctor. In June 2018, a CT
*206 Before trial, plaintiffs moved for a ruling that defendant would be subject to joint and several liability for all of plaintiffs’ damages. Historically, defendants have been **960 jointly and severally liable in personal injury actions, either as a matter of common law, e.g., Hansen v. The Bedell Co. et al., 126 Or. 155, 157, 268 P. 1020 (1928), or, after 1975, as a matter of statute, Or. Laws 1975, ch. 599, § 3; former ORS 18.485 (1975), renumbered as ORS 31.610 (2003). In 1995, however, the legislature largely eliminated joint and several liability for personal injury actions “arising on or after” September 1, 1995. Or. Laws 1995, ch. 696, §§ 5, 7; see former ORS 18.485 (1995), renumbered as ORS 31.610 (2003). In their pretrial motion, plaintiffs argued that their claims against defendant “arose” in the 1960s when Millerwasexposedtodefendant'sproduct,suchthatjointand several liability should apply. Defendant countered that the action arose in 2018, when Miller developed mesothelioma symptoms, such that defendant's liability should be several only, i.e.,limitedtothedamagesthatdefendant'sownproduct caused. The court took the issue under advisement and, after trial began, ruled that the action arose in the 1960s and that joint and several liability therefore applied.
Meanwhile, plaintiffs sought leave to amend their complaint to allege that defendant's negligence was “wanton and reckless” in nature, such that defendant could not use the defense of comparative fault. Defendant opposed the amendment, arguing, among other things, that plaintiffs had not brought a claim for wanton or reckless conduct and were trying to “squeeze an intentional tort into a negligence or strict liability claim.” The court allowed the amendment. Plaintiffs then filed their Fourth Amended Complaint, which included an allegation that plaintiffs’ claims are not subject to ORS31.600,thecomparative-faultstatute,becausedefendant “engaged in the alleged conduct wantonly and recklessly in that [defendant's] actions and omissions presented an unreasonable and highly probable risk of substantial bodily harm and [defendant] consciously disregarded said risk or reasonably should have been aware of said risk.”
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At the close of plaintiffs’ evidence, defendant moved for directed verdict on plaintiffs’ “wanton and reckless *207 conduct” allegation. In response, plaintiffs noted “preliminarily” that they were “withdrawing their allegation of wanton conduct” and would “instead proceed as to reckless conduct only.” They then proceeded to argue that there was sufficient evidence to create a jury issue as to whether defendant engaged in “reckless conduct.” In making that argument, plaintiffs defined “reckless conduct” as “the intentionaldoingorfailingtodoanactwhenoneknowsorhas reasontoknowoffactswhichwouldleadareasonableperson to realize that their conduct not only creates an unreasonable risk of harm to others but also involves a high degree of probability that substantial harm will result”—which was the same definition that plaintiffs had previously used for “wanton and reckless” conduct. The court denied defendant's directed verdict motion. It also denied a renewed motion at the close of all evidence.
After the close of all evidence, the court instructed the jury. As relevant to the defense of comparative fault, plaintiffs proposed an instruction on “recklessness,” which used the same definition as plaintiffs’ previously proposed instruction on“wantonandreckless.”Thecourtgavethatinstructionover defendant's objection. The jury was therefore instructed:
“Plaintiffs charge that Kaiser Gypsum's conduct in this casewasreckless.Recklessnessmeansanintentionaldoing or failing to do an act when one knows or has reason to know of facts which would lead a reasonable person to realize that their conduct not only creates unreasonable risk of harm to others but also involves a high degree of probability that substantial harm will result.”
So instructed, the jury was asked on the verdict form whether defendant's conduct was “reckless in its negligence.”
The jury returned a verdict for plaintiffs on all three claims—negligence, strict product liability, and loss of consortium. The jury found that Miller was exposed to defendant's asbestos-containing product, that the product was unreasonably dangerous, that the product's unreasonably dangerous characteristic was a substantial contributing factor in causing Miller's mesothelioma, that defendant was negligent, that defendant was “reckless **961 in its negligence,” *208 that defendant's negligence was a substantial contributing factor in causing Miller's mesothelioma, and that Miller was not negligent. Given the trial court's ruling that defendant was subject to joint and
severalliabilityforplaintiffs’damages,thejurywasnotasked to apportion liability among the defendants.
The court entered a general judgment in plaintiffs’ favor, which included a money award requiring defendant to pay $5,233,618 in damages. To arrive at that amount, the court deducted pretrial settlements with other defendants from plaintiffs’ total damages. Those reductions were based on the actual settlement amounts, however, not any apportionment of damages between defendants. Defendant appeals.
II. ANALYSIS
A. Overview of the Relevant Statutory Scheme
As a foundation for our discussion of the issues raised in this appeal, it is helpful to have a basic understanding of the history of the current statutes regarding the affirmative defense of comparative fault, ORS 31.600; apportionment findings, ORS 31.605; and several-only liability, ORS 31.610—both individually and as they relate to one another.
Prior to 1971, when a plaintiff suffered bodily injury as the resultofthenegligenceofmultipledefendants,eachnegligent defendant was jointly and severally liable for the plaintiff's damages, as a matter of common law. See Hansen, 126 Or. at 157, 268 P. 1020. If the plaintiff's own negligence contributed at all to the injury, however, the plaintiff was barred from recovering any damages, based on the common-law doctrine of contributory negligence. State v. Gutierrez-Medina, 365 Or. 79, 84, 442 P.3d 183 (2019).
In 1971, the legislature replaced the common-law defense of “contributory negligence” with the statutory defense of “comparative fault,” which is less absolute. Or. Laws 1971, ch. 668, § 1; see Hampton Tree Farms Inc. v. Jewett, 158 Or App 376, 392, 974 P.2d 738, rev. den., 329 Or 61, 994 P.2d 120 (1999) (“[T]he legislature adopted comparative fault to replace contributory negligence, which was an absolute bar *209 to recovery.”). Under comparative fault, a plaintiff whose own negligence contributed to the injury can still recover, so long as the defendant's negligence was greater than the plaintiff's negligence; however, the plaintiff's recovery is diminished in proportion to his or her own negligence. The original comparative-fault statute stated:
“Contributory negligence, including assumption of the risk, shall not bar recovery in an action by any person or his legal representative to recover damages for negligence
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resulting in death or injury to person or property if such negligence contributing to the injury was not as great as the negligence of the person against whom recovery is sought,butanydamagesallowedshallbediminishedinthe proportion to the amount of such negligence attributable to the person recovering.”
Former ORS 18.470 (1971), renumbered as ORS 31.600 (2003).
In 1975, the legislature did several notable things. First, it made minor amendments to the comparative-fault statute, including, as relevant here, changing the word “negligence” to “fault” and recognizing the possibility of multiple defendants. Or. Laws 1975, ch. 599, § 1; see former ORS 18.470(1975), renumbered as ORS31.600(2003).Theeffect of the change to “fault” is discussed in Sandford v. Chev. Div. Gen. Motors, 292 Or. 590, 642 P.2d 624 (1982). As for multiple defendants, the amendment clarified that the plaintiff's fault was to be compared to “the combined fault of the person or persons against whom recovery is sought[.]”
Former ORS 18.470 (1975) (emphases added). Second, the legislature abolished the common-law doctrines of last clear chance and implied assumption of risk. Or. Laws 1975, ch. 599, § 4; see former ORS 18.475 (1975), renumbered as ORS 31.620 (2003) Third, the legislature enacted a new statutory provision to create a mechanism for apportioning fault.Upontherequestofanyparty,thetrieroffactmustmake findings as to both the plaintiff's total damages and “[t]he degree of each party's fault expressed as a percentage of the total fault attributable to all parties represented **962 in the action,” and, in a jury trial, the “jury shall be informed of the legal effect of” those findings. Or. Laws 1975, ch. 599, § 2; see former ORS 18.480 (1975), renumbered as ORS 31.605 (2003) *210 Fourth, the legislature enacted a “joint and several liability” statute, thus codifying the common-law doctrine of joint and several liability. Or. Laws 1975, ch. 599, § 3; see former ORS 18.485 (1975)
Twenty years passed without substantial changes to the aforementioned laws. Then, in 1995, two things happened. Mostsignificantly,thelegislatureeliminatedjointandseveral liability, with certain exceptions, for personal injury actions “arising on or after” September 9, 1995:
“(1) Except as otherwise provided in this section, in any civil action arising out of bodily injury, death or property damage, including claims for emotional injury or distress, loss of care, comfort, companionship and society, and loss of consortium, the liability of each defendant for damages
awarded to plaintiff shall be several only and shall not be joint.”
Or. Laws 1995, ch. 696, §§ 5, 7; see former ORS 18.485(1) (1995). Subsection (2) addressed how the court should calculate each person's liability, including using “the percentages of fault determined by the trier of fact under ORS 18.480” and setting out “the several liability of each defendant” in the judgment “based on the percentages of fault determined by the trier of fact under ORS 18.480.”
Former ORS 18.485(2) (1995). Subsections (3), (4), and (5) provided for reallocation of an “uncollectible share” in certain circumstances. Id. §§ (3)-(5). Subsection (6) excepted certain types of civil actions—involving hazardous waste, air pollution, and other specified environmental claims—from the statute altogether. Id. § (6).
The other thing that the legislature did in 1995 was amend the comparative-fault statute. Prior to 1995, the plaintiff's fault wascomparedto“thecombinedfaultofthepersonorpersons against whom recovery is sought[.]” Former ORS 18.470 (1993), renumbered as ORS 31.600 (2003). In 1995, the legislature expanded and refined the group whose combined fault should be compared to the plaintiff's—and moved that information to a new subsection. After the amendment, the plaintiff's fault was to be compared to “the combined fault of all persons specified in *211 subsection (2).” Former ORS 18.470(1) (1995), renumbered as ORS 31.600 (2003). Subsection (2), in turn, provided that the plaintiff's fault shouldbecompared“withthefaultofanypartyagainstwhom recovery is sought, the fault of third party defendants who are liable in tort to the claimant, and the fault of any person withwhomtheclaimanthassettled”—exceptforpersonswho were immune from liability to the claimant, not subject to the jurisdiction of the court, or not subject to action because the claimagainstthemisbarredbyastatuteoflimitationorstatute of ultimate repose, who are excluded, unless they have settled with the claimant, in which case they are included. Former ORS 18.470(2) (1995).
The legislature made a related amendment to the apportionment mechanism in former ORS 18.480. Instead of requiring a court to provide, upon request, special findings on “[t]he degree of each party's fault expressed as a percentage of the total fault attributable to all parties represented in the action,” former ORS 18.480 (1993), renumbered as ORS 31.605 (2003), the amended statute required the court to provide, upon request, special findings on “[t]he degree of fault of each person specified in ORS 18.470(2),” which was to be “expressed as a percentage of the total fault attributable
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to all persons considered by the trier of fact pursuant to ORS 18.470.” Former ORS 18.480 (1995), renumbered as ORS 31.605 (2003)
After the 1995 amendments, the statutes became materially the same as today's statutes, at least as relevant to this appeal. Thestatuteswerereorganized,however,in2003.Thedefense of comparative fault is now described in ORS 31.600(1):
“(1) Contributory negligence shall not bar recovery in an action by any person or the legal representative of the person to recover damages for death or injury to person or property if the fault attributable to the claimant was not greater than the combined fault of all persons specified in subsection (2) of this section, but any damages **963 allowedshallbediminishedintheproportiontothe percentageoffaultattributabletotheclaimant.Thissection is not intended to create or abolish any defense.”
*212 The group of persons whose collective fault is to be compared to the plaintiff's fault is now in ORS 31.600(2), which provides:
“(2) The trier of fact shall compare the fault of the claimant withthefaultofanypartyagainstwhomrecoveryissought, the fault of third party defendants who are liable in tort to the claimant, and the fault of any person with whom the claimant has settled. The failure of a claimant to make a direct claim against a third party defendant does not affect therequirementthatthefaultofthethirdpartydefendantbe considered by the trier of fact under this subsection. Except for persons who have settled with the claimant, there shall be no comparison of fault with any person:
“(a) Who is immune from liability to the claimant;
“(b) Who is not subject to the jurisdiction of the court; or
“(1) When requested by any party the trier of fact shall answer special questions indicating:
“(a) The amount of damages to which a party seeking recovery would be entitled, assuming that party not to be at fault.
“(b) The degree of fault of each person specified in ORS 31.600(2). The degree of each person's fault so determined shall be expressed as a percentage of the total fault attributable to all persons considered by the trier of fact pursuant to ORS 31.600.
“(2)Ajuryshallbeinformedofthelegaleffectofitsanswer to the questions listed in subsection (1) of this section.”
Asfortheseveral-liability-onlystatute,itisnowORS31.610, and it has been updated to reflect the renumbering of crossreferenced statutes, but it remains substantively the same as it was when originally enacted in 1995.
*213 B. The Issues on Appeal
“(c) Who is not subject to action because the claim is barred by a statute of limitation or statute of ultimate repose.”
Andthemechanismforapportioningfaultamongtheplaintiff andthatgroupofpeopleisnowinORS31.605,alongwiththe requirement that the court inform the jury of the legal effect of its apportionment findings:
We return to the specifics of this case. In its first assignment of error, defendant challenges the trial court's ruling that defendant is jointly and severally liable for plaintiffs’ damages, which was based on the court's conclusion that plaintiffs’ action “arose” in the 1960s, when Miller was exposed to defendant's product, rather than in 2018, when Miller developed mesothelioma symptoms. (The severalonly-liability statute, ORS 31.610, applies to actions “arising on or after” September 9, 1995.) In its second assignment of error, defendant challenges the jury instruction on “recklessness,”asrelevanttotheavailabilityofthedefenseof comparative fault. In its third assignment of error, defendant argues that, even if the jury instruction on “recklessness” was correct, the court erred by denying defendant's motion for a directed verdict on that issue, because the evidence was legallyinsufficienttoprovethatdefendantacted“recklessly.”
Although not immediately obvious, all three assignments of error are ultimately presented only for their relevance to the issue of joint and several liability. The jury found Miller to be 0% at fault for plaintiffs’ damages, so comparative fault is no longer relevant as an affirmative defense against plaintiffs. Thereasonthatthepartiescontinuetoargueaboutthedefense of comparative fault and the “recklessness” instruction is because, in plaintiffs’ view, a defendant who cannot use the comparative-fault defense is also excluded from the scope of the modern several-only liability statute. That is, in plaintiffs’
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view, even if this action “arose” in 2018, after the effective date of the several-only liability statute, defendant would still be jointly and severally liable for damages caused by other defendants so long as the “reckless” finding stands.
Because of the particular relationship between the three assignments of error, we begin with the second and third assignments of error.
**964 C. The Jury Instruction on “Recklessness”
As previously described, this case involves negligence and strict product liability claims, and the jury found *214 defendant to have been negligent. However, plaintiffs specifically alleged that defendant “engaged in the alleged conduct wantonly and recklessly”; the jury was instructed on “recklessness”; and the jury found defendant to have been “reckless in its negligence.” That begs the question why we are discussing recklessness in connection with a negligence claim. The answer lies in the case law regarding comparative fault and its historic predecessor, contributory negligence.
In the world of torts, there are four categories of “conduct” into which an “infinite” number of factual situations may be placed: (1) simple negligence; (2) gross negligence; (3) an aggravated form of negligence that is often described as “wanton” or “reckless” conduct; and (4) intentional misconduct. Gutierrez-Medina, 365 Or. at 86-87, 442 P.3d 183. Historically, only defendants who committed simple or gross negligence (the first two categories) could use the defense of contributory negligence against a plaintiff who had contributed to his or her own injury. Id. at 87, 442 P.3d 183. Defendants who acted in a “wanton” manner (the third category) could not use the defense of contributory negligence to prevent recovery by a negligent plaintiff. Id. Even if their conduct technically qualifies as “negligent,” defendants in the third category are treated differently from defendants who commit simple or gross negligence; they are treated more like intentional tortfeasors. Cook v. Kinzua Pines Mills Co. et al., 207 Or. 34, 42-43, 293 P.2d 717 (1956) (describing the third category as an “aggravated form of negligence, approaching intent,” which “differs from negligence not only in degree but in kind, and in the social condemnation attached to it”). That said, “wanton” conduct remains distinct from “intentional” conduct. See GutierrezMedina, 365 Or. at 92, 442 P.3d 183
In 1971, the legislature replaced the common-law defense of contributory negligence with the statutory defense of comparative fault. However, the distinction discussed in the
last paragraph remains in place. For a defendant to use the defense of comparative fault, the defendant's conduct must be “equivalent to conduct for which the defense of contributory negligence would have been available before 1971.” Id. at 85, 442 P.3d 183. That is, in a negligence action, a defendant who committed simple or gross negligence can use the defense of comparative fault against a negligent plaintiff—to reduce *215 the plaintiff's award or even, if the plaintiff was sufficiently negligent, prevent any recovery—but a defendant who acted in a “wanton” manner cannot. “[U]nder the common law, if a defendant's conduct could be characterized as ‘wanton,’ then the plaintiff's contributory negligence was nodefense.Thatisthelinethatthelegislaturecarriedforward when it created the defense of comparative fault: if the defendant's conduct was at least ‘wanton,’ comparative fault is no defense.” Id. at 87, 442 P.3d 183
In this case, plaintiffs alleged that defendant's negligent conduct was “wanton and reckless” and that the comparativefault statute therefore did not apply. Plaintiffs later “withdrew” the “wanton” allegation. The jury was then instructed on “recklessness”—but with the same definition that plaintiffs had previously proposed for “wanton and reckless.” Specifically, the jury was instructed:
“Recklessness means an intentional doing or failing to do anactwhenoneknowsorhasreasontoknowoffactswhich would lead a reasonable person to realize that their conduct not only creates unreasonable risk of harm to others but also involves a high degree of probability that substantial harm would result.”
So instructed, the jury found that defendant was “reckless in its negligence.”
Defendant first contends that giving that instruction was inconsistent with plaintiffs’ “assurances” to the court. We understand the thrust of that argument to be that plaintiffs misled the court and defendant by claiming to withdraw their “wanton” allegation, but then requesting an instruction that really described “wanton” conduct.
We are unpersuaded. As we will discuss shortly, there is not a settled label for the third category of tortious conduct, and there **965 is also a history of misuse and inconsistent use of terminology. There is no question that, in hindsight, plaintiffs could have been more precise about their intentions in “withdrawing” the “wanton” allegation. Their written and oral statements on the issue were not entirely clear in that regard. However, from the record as a whole, it is sufficiently
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apparent that, when plaintiffs “withdrew” the “wanton” allegation, they were not purporting to make *216 any change to the substance of their allegation against defendant, only its label. That is particularly evident from the fact that plaintiffs continued to use the same definition of the conduct that they were trying to prove as they always had. Plaintiffs could have been clearer about what they were doing, but, viewed as a whole, what they told the court was consistent with the instruction that they later requested.1
Turning to the instruction itself, defendant next argues that the instruction was legally incorrect. Defendant argues that the instruction does not describe reckless conduct but, instead, what defendant calls wanton, willful, and intentional conduct.2 In defendant's view, recklessness is best defined as “a deviation from the standard of care that presents a ‘substantial risk’ that a result will occur,” rather than a “conscious decision to act in a way that risks harm to another.” Defendant points to the Oregon criminal code's definitionof“recklessly”asanexample. See ORS161.085(9) (“ ‘Recklessly,’ when used with respect to a result or to a circumstance described by a statute defining an offense, means that a person is aware of and consciously disregards a substantial and unjustifiable risk that the result will occur or that the circumstance exists. The risk must be of such nature and degree that disregard thereof constitutes a gross deviation from the standard of care that a reasonable person would observe in the situation.”).
Plaintiffs respond that “reckless” and “wanton” are synonymous for comparative-fault purposes—both referring to the third category of tortious conduct—and that the instruction given was legally correct. Plaintiffs distinguish *217 the fourth category of tortious conduct, “intentional” conduct. They assert that, to prove that a defendant's negligence was “reckless” (or “wanton”), it is unnecessary to prove that the defendant intended to inflict harm or “actually knew” that its conduct would create an unreasonable risk of harm, as is necessary to prove intentional misconduct.
“Wereviewjuryinstructionsforerrorsoflawandwillreverse only if we can fairly say that, when considering all of the instructions as a whole, the instruction at issue probably created an erroneous impression of the law in the minds of the jurors that affected the outcome of the case.” Lenn v. Baldwin, 269 Or App 189, 193, 344 P.3d 475 (2015) (internal quotation marks omitted). Here, we agree with plaintiffs that the instruction was substantively correct and would not have
created an erroneous impression of the law in the jurors’ minds.
The Supreme Court first outlined the four categories of tortious conduct in Cook, a 1956 case involving a vehicle accident on a logging road, in which the defendant sought to use the defense of contributory negligence against the plaintiff.207Or.at38-39,293P.2d717.Describingthecourts as “constantly confused and frustrated by the over-generous employment of adjectives in describing wrongful conduct,” id. at 58, 293 P.2d 717, the court felt “compelled” to identify “four types of conduct into which the infinite variety of fact situations must fall:
**966 “(1) Simple negligence, subject to the defense of contributory negligence, (2) gross negligence which we have repeatedly held may be subject to the defense of contributory negligence, (3) injury to the person of another committed in a ‘wanton’ manner, meaning the doing of an intentional act of an unreasonable character in disregard of a risk known to the actor, or so obvious that he must be taken to have been aware of it and so great as to make it highly probable that harm would follow, usually accompanied by a conscious indifference to consequences. In the third category contributory negligence is no defense and for conduct of that kind a trespasser may recover. (4) Assault and battery where there is an actual intent not only to do an act but to cause personal injury.”
Id. at 58-59, 293 P.2d 717 (emphasis added; internal citation omitted).
*218 That same year, in Falls v. Mortensen, 207 Or. 130, 132, 295 P.2d 182 (1956), overruled in part on other grounds by Lindner v. Ahlgren, 257 Or. 127, 477 P.2d 219 (1970), the defendant was driving under the influence of alcohol when he strucktheplaintiff,apedestrian,whowascrossingthestreetat nightinaplaceotherthananintersection.Attrial,thejurywas instructed that “contributory negligence is no defense to an actionbaseduponadefendant'swantondisregardoftherights of others.” Id. at 134, 295 P.2d 182. The jury was then given an instruction on the meaning of “wanton”—an instruction substantively identical to the “recklessness” instruction given in the present case:
“Wanton misconduct is an intentional doing or failing to do of an act when one knows or has reason to know of facts which would lead a reasonable man to realize that the actor's conduct not only creates unreasonable risk of harm
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to others but also involves a high degree of probability that substantial harm will result to him.”
Id. at 135, 295 P.2d 182 (ellipses omitted).
On appeal, in addressing the defendant's challenge to that instruction, the Supreme Court recognized the importance of being clear about the four categories of tortious conduct. Id. at 141-42, 295 P.2d 182 (“The great obstacle to the development of a satisfactory system of tort law in this field arises from the fact that the courts have ascribed different meanings to the same words, with the result that it is difficult to draw the line between the various types of conduct as to which the law applies different legal consequences.”). The courtalsorecognizedthat“[t]hemostdifficultdistinction,but one which frequently must be made, is that between gross negligence and wanton misconduct.” Id. at 144, 295 P.2d 182. “In truth the distinction must be clearly explained to the jury because we have held that contributory negligence is a defense in an action for gross negligence but is not a defense in an action for wanton misconduct.” Id. at 146, 295 P.2d 182
After reviewing the Restatement, a leading treatise, and extensive out-of-court case law, the court concluded that the challenged instruction accurately described the third category of tortious conduct:
*219 “The definition of wanton misconduct, as given by the trial judge in the pending case, is supported by a great weight of authority. It makes clear the difference betweensuchconductandgrossnegligence.Italsoclarifies the difference between wanton misconduct and assault and battery. Both are the result of intentional action, but only the latter involves specific intent to injure the plaintiff.”
Id. at 147, 295 P.2d 182. In explaining its reasoning, the court itself tended to use the term “wanton” to refer to the third category of tortious conduct. See id. at 136-47, 295 P.2d 182. However, the court's discussion makes clear that “wanton” and “reckless” are alternative terms for the third category. See id. By contrast, the term “willful” should not be used for any of the categories, as it has been used so variously over time that“theworddoesnotconnoteadefinitequalityofconduct.”
Id. at 144, 295 P.2d 182 3
**967 Rollingforward70years,theSupremeCourtrecently addressed the nature of “wanton” conduct, as relevant to the civil defense of comparative fault, in Gutierrez-Medina. The underlying events in that case were similar to those in Falls: The defendant was driving under the influence of intoxicants
when he struck a pedestrian, who was crossing the street at night in a place other than a pedestrian crossing. GutierrezMedina, 365 Or. at 81, 442 P.3d 183. The procedural posture of Gutierrez-Medina was quite different, however, in that Gutierrez-Medina was a criminal appeal. The defendant was convicted of driving under the influence of intoxicants and third-degree assault and ordered to pay almost $155,000 in restitution to the crime victim. Id. The defendant argued on appeal that the sentencing court should have applied the civillaw defense of comparative fault—given the relationship between criminal restitution and civil economic damages— and that “the victim's own negligence was the primary cause of the collision.” Id. at 81 & n. 1, 83, 442 P.3d 183
*220 On review, the court assumed arguendo that the defense of comparative fault could be considered in awarding restitution. Id. at 84, 442 P.3d 183. However, it concluded that the defense would be unavailable to this defendant in a civil action for the same injury, because his third-degree assault conviction “establishes a degree of culpability for which the defense of comparative fault would be unavailable in a civil action.” Id. at 81, 442 P.3d 183. Given how thirddegree assault is defined, by pleading guilty to that crime, the defendant necessarily admitted “that he was aware that he was using a deadly or dangerous weapon in a way that created a substantial risk of serious physical injury and that he consciously disregarded that risk.” Id. at 82, 442 P.3d 183 That admission “would require a hypothetical civil jury to conclude that defendant's culpability fell with the range of ‘wanton’ conduct.” Id. at 84, 442 P.3d 183. Consequently, the defense of comparative fault would not be available. Id. at 87, 442 P.3d 183. In so concluding, the court rejected the defendant's argument that his conduct came within the category of “gross negligence,” so as to allow the defense. Id. at 87-88, 442 P.3d 183
In conducting its analysis in Gutierrez-Medina, the court relied on prior case law regarding the third category of tortious conduct, particularly Falls, which it described as a case in which the court “undertook to clarify the range of culpable conduct that will be considered ‘wanton.’ ” Id. at 89-90, 442 P.3d 183. The court then essentially reaffirmed its holding in Falls that the “wanton misconduct” instruction that was given in Falls was legally correct. Id. at 90, 442 P.3d 183. The court also spoke approvingly of “reckless” as an alternative term for “wanton,” id. at 91, 442 P.3d 183, while emphasizing that the word “wanton,” as used for comparative-fault purposes, “describe[s] not only a person whoactedwithactualknowledgeanddisregardoftheriskbut
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also one who acted without such knowledge if a reasonable person would have realized the risk,” id. at 92, 442 P.3d 183
Withthatcaselawinmind,weconsiderdefendant'schallenge to the jury instruction in this case, and we readily conclude that the instruction correctly described the third category of tortious conduct.
It is of no consequence that the instruction was framed as defining “recklessness”—or at least no one made *221 any arguments to the trial court that would have required it to consider using “wanton” or another term to label the category ofconductthatitwasdefiningforthejury.Therearepotential downsides to both terms, as far as the word itself suggesting too much or too little. See, e.g., Falls, 207 Or. at 143, 295 P.2d 182 (recognizing confusion regarding the meaning of “wanton,” due to “a failure on the part of litigants and some courts to distinguish between intent to act wantonly on the one hand, and intent to injure the particular plaintiff, on the other”); Cook, 207 Or. at 41-42, 293 P.2d 717 (“The word ‘reckless’ appears in conjunction with the word ‘negligent’ in most of the complaints coming to this court which are intendedtochargeandwhichhavebeenheldtochargesimple negligence.”). That is precisely why it is so important to instruct the jury accurately on the meaning of whatever term is used.
**968 As for the accuracy of the instruction that was given, the Supreme Court has already approved a substantively identical instruction as an accurate definition of “wanton” or “reckless”conduct, i.e.,thethirdcategoryoftortiousconduct. The instruction was approved in Falls and reaffirmed in Gutierrez-Medina. Defendant's argument that we should adopt a different definition of “reckless,” adapted from the criminal statutes, conflicts with that case law. The same is true of defendant's argument that “recklessness” is not an “element” of negligence and cannot be shoehorned into a negligence action. It is beyond dispute at this point that a plaintiff may assert that a defendant was negligent, while also asserting that the defendant acted recklessly, in the hopes of not only prevailing on the negligence claim but also cutting off the defense of comparative fault. Lastly, defendant's contention that the “recklessness” instruction given in this case actually described “intentional” misconduct is not welltaken, given existing case law. Although the historical case law contains inconsistencies, the Supreme Court recently reaffirmed that “wanton” (or “reckless”) conduct is an aggravated form of negligence that differs from “intentional” misconduct. “Intentional” misconduct involves not only a
conscious intent to act but also a conscious intent to cause harm. Gutierrez-Medina, 365 Or. at 87, 442 P.3d 183. As instructed, to find defendant reckless, the jury in this case had to find that defendant intended to act, but it did not have to find *222 thatdefendantactuallyintendedtoharmplaintiffs. That is an instruction on “wanton” or “reckless” conduct (the third category), not “intentional” misconduct (the fourth category).
In sum, the trial court's “recklessness” instruction correctly stated the legal standard for the third category of tortious conduct. It was not erroneous to give that instruction. We therefore reject defendant's second assignment of error.
D. The Denial of a Directed Verdict on “Recklessness”
In its third assignment of error, defendant challenges the trial court's denial of defendant's motion for directed verdict as to the “recklessness” allegation. “We review the denial of a motion for directed verdict for any evidence to support the verdict in favor of the nonmoving party.” Hoff v. Certainteed Corp., 316 Or App 129, 132, 503 P.3d 457 (2021), rev. den., 369 Or. 785, 511 P.3d 400 (2022) (internal quotation marks omitted). In doing so, we view the evidence, including all reasonable inferences therein, in the light most favorable to the nonmoving party. Lyons v. Beeman, 311 Or App 560, 564, 494 P.3d 358, rev. den., 368 Or. 513, 493 P.3d 507 (2021). We willnotdisturbthejury'sverdict“[u]nlessthereisnoevidence from which the jury could have found the facts necessary to support plaintiffs’ claim.” Hoff, 316 Or App at 132, 503 P.3d 457; Or. Const., Art. VII (Amended), § 3.
Defendant argues that the evidence was legally insufficient for a reasonable juror to find that, between October 1966 and April 1969, when Miller was exposed to defendant's joint compound, defendant knew or had reason to know that the use of its product would expose drywall installers and others working nearby to airborne asbestos at levels sufficient to make it highly probable that substantial harm would result. Plaintiffs disagree, contending that the evidence was sufficient for a reasonable jury to find that defendant's conduct was “reckless” as defined in the jury instruction.
We do not believe that it would be particularly helpful to the bench or bar to recount the specific evidence in this case. We have carefully reviewed that evidence, and we *223 agree with plaintiffs that it was sufficient to go to the jury. In particular, we agree that there was sufficient evidence to allowajurytofindthat,intherelevanttimeperiod,defendant acted or failed to act when, to quote the jury instruction,
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defendant had “reason to know of facts which would lead a reasonablepersontorealizethattheirconductnotonlycreates unreasonable risk of harm to others but also involves a high degree of probability that substantial harm would result.” In other words, viewing the evidence in the light most favorable to plaintiffs, we cannot say that there was no evidence to support a finding that defendant acted “recklessly” as that term was defined. **969 We therefore reject defendant's third assignment of error.
Together, our rejection of the second and third assignments of error means that the jury's finding that defendant was “reckless in its negligence” will stand. It follows, under wellestablished case law, that the defense of comparative fault is unavailable to defendant.
E. Joint and Several Liability
Our resolution of the second and third assignments of errors issues brings us back to defendant's first assignment of error, in which defendant challenges the trial court's ruling that it is jointly and severally liable for plaintiffs’ damages. Plaintiffs maintain that, given our disposition of the second and third assignmentsoferror,we“neednotreach”thefirstassignment of error.
As we understand it, plaintiffs’ position is that there are two legal consequences to a defendant being found to have committed negligence in a “reckless” manner: (1) the defendant cannot use the defense of comparative fault against the plaintiff, as a matter of well-established case law before and after 1971, and (2) the several-only-liability statute enacted in 1995 does not apply, as a matter of statutory construction, and the defendant therefore remains subject to common-law joint and several liability. Defendant did not respondonthisissueinitsbriefingand,atoralargument,took a somewhat equivocal position.
As a preliminary matter, we note that, if plaintiffs are correct about the relationship between the availability *224 of the comparative-fault defense and the applicability of the several-only-liability statute, we would still “reach” the first assignment of error. However, we would not need to resolve what the legislature meant by actions “arising on or after” September 9, 1995—see Or. Laws 1995, ch. 696, §§ 5, 7— because any error that the trial court made in applying joint and several liability based on the action having “arisen” in the 1960s would be harmless. See ORS 19.415(2) (“No judgment shall be reversed or modified except for error substantially affecting the rights of a party.”). That is, even if the trial
court was wrong, and the action “arose” in 2018, it would have no effect on defendant's liability, because the jury's “recklessness” finding would independently take defendant outside the scope of the several-only-liability statute, such thatdefendantwouldstillbesubjecttocommon-lawjointand several liability.
Turningtothesubstanceofplaintiffs’harmlessnessargument, we conclude that plaintiffs’ argument is supported by Shin v. Sunriver Preparatory School, Inc., 199 Or App 352, 111 P.3d 762, rev. den., 339 Or. 406, 122 P.3d 64 (2005). In that case, we held that an allegedly negligent tortfeasor (a private school) was not entitled to apportionment findings under ORS 31.605, where the negligent tortfeasor sought to avoid liability for the wrongdoing of an intentional tortfeasor (the plaintiff's father) who raped the plaintiff (a student). Id. at 354, 111 P.3d 762. The upshot of Shin is that the group of peopleidentifiedinORS31.605—thegroupwhosecollective negligence is to be compared to the plaintiff's negligence for purposes of the defense of comparative fault—does not include people who behaved wantonly or intentionally. See id. at 376, 111 P.3d 762. Because those people are simply not in the comparison group, they not only cannot rely on the defense of comparative fault themselves, but no one can look to them for apportionment under ORS 31.605 4 See id.
*225 We note that Shin itself involved intentional misconductbythethird-partydefendant(theplaintiff'sfather) whose liability the defendant wanted apportioned, and Shin mostly discusses intentional misconduct. However, Shin uses the phrase “willful or intentional conduct” in a way that could be intended to refer to wanton or intentional **970 conduct. See id. (“Before the adoption of comparative fault, contributory negligence was not a defense to willful or intentional misconduct.”). In any event, the logic of Shin necessarily applies to both the third and fourth categories of tortious conduct. There is no basis to distinguish between the third and fourth categories of conduct for comparative-fault purposes, and Shin’s reasoning is grounded almost entirely in the comparative-fault statute, ORS 31.600
Shin also addresses the several-only-liability statute, however, briefly but decisively. See Shin, 199 Or App at 378-79, 111 P.3d 762 Shin concludes that the reference in ORS31.610(theseveral-only-liabilitystatute)toORS31.605 (the apportionment mechanism) has the effect of limiting the scope of ORS 31.610 to the same people who can use the defense of comparative fault against a negligent plaintiff, i.e., thegroupofpeopleidentifiedinORS31.605whosecollective
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negligence is compared to the plaintiff's for purposes of the defense of comparative fault. See id. Anyone not included in that group is not covered by the several-only-liability statute. See id. The implication is that common-law joint and several liability continues to apply to those excluded tortfeasors, eliminating any benefit to their requesting apportionment findings under ORS 31.605 See id.
Shin appears to be the only published case making a connection between the availability of the comparative-fault defense, ORS 31.600, and the applicability of the severalonly-liability statute, ORS 31.610, and its discussion is extremely brief. However, defendant has not developed any argument to distinguish Shin, nor has it identified any error in Shin’s reasoning. Under Shin, plaintiffs are correct that, regardless of when plaintiffs’ action “arose,” defendant is
jointly and severally liable for all of plaintiffs’ damages, based on the jury's “reckless” finding. That being the case, any error that the trial court made in concluding that joint and several liability applies based on when the action “arose” *226 washarmless.Jointandseveralliabilitywould apply anyway, based on Shin’s construction of ORS 31.610 We therefore reject the third assignment without further discussion.
Affirmed.
All Citations
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Footnotes
1 Relatedly, in their opposition to directed verdict, when discussing an insurance policy that contained the phrase “willful and wanton,” plaintiffs stated that “reckless” conduct is obviously different from “willful and wanton” conduct. Defendant views that statement as plaintiffs expressly taking the position that “reckless” and “wanton” are different. However, it was the insurer that bundled together the terms “willful and wanton,” and we disagree that distinguishing “reckless” from “willful and wanton” equates to distinguishing “reckless” from “wanton.”
2 It is not immediately apparent how defendant could have been harmed by an instruction that, in defendant's view, required the jury to find too high a degree of culpability before defendant would be foreclosed from using the defense of comparative fault. We need not consider that issue, however, given our disposition.
3 We acknowledge that, notwithstanding the admonition in Falls, both we and the Supreme Court have occasionally continued to use “willful” to mean “wanton.” See, e.g., Taylor v. Lawrence, 229 Or. 259, 264, 366 P.2d 735 (1961) (describing “reckless disregard of safety” as “an equivalent for wilful or wanton misconduct”); Hampton Tree Farms, 158 Or App at 393-95, 974 P.2d 738 (repeatedly using “wilful” to mean “wanton”).
4 There are practical ramifications to excluding “wanton” defendants from the comparison group in a negligence action. If the plaintiff was negligent, the comparison group being smaller could result in the plaintiff having a higher percentage of fault relative to the smaller group. Also, the trier of fact (whether jury or judge) will have to account for its culpability findings in making apportionment findings, as accidentally including a wanton defendant in the comparison group would result in the percentages of the “real” comparison group not adding up to 100% as required by ORS 31.605
Miller v. Agripac, Inc., 322 Or.App. 202 (2022)
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371 Or. 61 Supreme Court of Oregon.
Ron ADELSPERGER; Sally Adelsperger; Walter Arnold; Sandy Arnold; Larry Brewer; Marilyn Brewer; James Brown; Lonna Brown; Bill Burgess; Jane Burgess; Shirley Calkins; Jerry Christensen, aka Gerald Christenson; Cindy Christensen, aka Cynthia EvansChristenson; Russell Cobb; Norma Cobb; Ron Ellis; Sallie Ellis; Amy Flickenger Pierpoint, aka Amy Flickenger-Pierpoint; Glen Pierpoint; Mike Fredrickson; Tresea Fredrickson; David Fulcer; Sarah Fulcer; Jack Gibson; Sharon Sue Gibson, aka Sue Gibson; Mary Gray; Rudolph Hanna; Brenda Hanna; Gerald Hastings, aka Jerry Hastings; Shirley House; Michael Huntley; Gloria Huntley; Rodney Hyde, aka Rod Hyde; Patricia Hyde; Johnnie Issacs, aka Johnnie Isaacs; Rowina Issacs, aka Rowena Isaacs; Don Johnson, aka Donald Johnson; Linda
Johnson; Robert Kasmar; Linda Kasmar; Kraig Knutson; Barbara Knutson; Tom Kuntz; Brenda Kuntz; Richard Mathis; Linda Mathis; Gary McCord; Marie McCord; David McReynolds; Joseph Moore; Geraldine Moore; Adam Morgan; Vicky Morgan, aka Victoria Morgan; Thomas Noel; William Oar; Donald Partridge, aka Don Partridge; Lucille Partridge, aka Lucy Partridge; Craig Pedersen; Cheryl Pedersen; David Smith; Carol Smith; William Thomas, aka Bill Thomas; Jackie Thomas; Fred Waidtlow; Linda Waidtlow; Gary Wayman; Charlotte Wayman; David Weberg; Jeanne Weberg; Forrest Wheeler; and Jane Wheeler, Petitioners on Review, v.
ELKSIDE DEVELOPMENT LLC, Successor in Interest to Osprey Point RV Park, LLC, and Barnett Resorts, LLC, an Oregon Limited Liability Company, dba Osprey Point RV Resort, Defendants, and Chris Barnett and Stefani Barnett, Respondents on Review.
(CC 19CV14756) (SC S069449)
Argued and Submitted January 18, 2023.
May 18, 2023
Synopsis
Background: Members of recreational vehicle (RV) resort brought action against limited liability company (LLC) that purchased resort and LLC member-managers alleging breach of contract, intentional interference with contract, and elder abuse arising from LLC's refusal to honor resort members' camping contracts with prior resort owner. The Circuit Court, Coos County, Andrew E. Combs, J., 2020 WL 13616284, granted summary judgment for LLC member-managers. Resort members appealed. The Court of Appeals affirmed. Resort members sought review, which was granted.
Holdings: The Supreme Court, James, J., held that:
LLC member-managers did not have statutory protection from claim of elder abuse for permitting LLC to not honor old contracts;
lack of privity precluded LLC member-managers from being held personally liable for breach of contract; and
for an equally divided court, grant of summary judgment on claim of interference with contract would be affirmed.
Affirmed in part, reversed in part, and remanded.
Bushong, J., filed opinion concurring in part and dissenting in part, in which Garrett and DeHoog, JJ., joined.
Procedural Posture(s): Petition for Discretionary Review; On Appeal; Motion for Summary Judgment.
On review from the Court of Appeals. * (CA A174502)
Attorneys and Law Firms
Ronald L. Sperry III, Johnson & McKinney DBA DC Law, Roseburg, argued the cause and filed the brief for petitioners on review. Also on the brief was Dan G. McKinney.
Elizabeth W. Armitage, Frohnmayer, Deatherage, Jamieson, Moore, Armosino & McGovern, P.C., Medford, argued the cause and filed the brief for respondents on review. Also on the briefs was Tracy M. McGovern.
Before Flynn, Chief Justice, and Duncan, Garrett, DeHoog, Bushong, and James, Justices. **
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Opinion
JAMES, J.
**1 *64 This case comes to us upon the grant of summary judgment. Elkside Development LLC (Elkside) owned and operated the Osprey Point RV Resort in Lakeside, Oregon. PartofElkside'sbusinessmodelinvolvedsellingmembership contracts that conferred free use of the campground, among other benefits. In April 2017, Barnett Resorts, LLC, an Oregon limited liability company operated by membermanagers Stefani Barnett and Chris Barnett, purchased Elkside. Shortly after the purchase, Stefani Barnett and Chris Barnett sent a letter to all campground members, identifying them as “owners” of the resort, and indicating that they would not honor Elkside's membership contracts. Plaintiffs —a group of 71 people who, collectively, were party to 39 membership contracts with Elkside—brought suit alleging a variety of claims against Stefani Barnett and Chris Barnett individually, and against the company, Barnett Resorts, LLC. Three of those claims have formed the basis of the parties’ arguments on appeal. For our purposes, they can be categorizedas(1)abreachofcontractclaim;(2)anintentional interference with contract claim; and (3) a statutory claim of elder abuse, based on the fact that the majority of the membershipcontractshadbeenheldbyplaintiffsovertheage of 65.1
As to the claims against Stefani Barnett and Chris Barnett individually, the trial court granted summary judgment for defendants, relying on ORS 63.165 and our opinion in Cortez v. Nacco Material Handling Group, 356 Or. 254, 280, 337 P.3d 111 (2014).2 ORS 63.165(1) provides:
“The debts, obligations and liabilities of a limited liability company, whether arising in contract, tort or otherwise, are solely the debts, obligations and liabilities of the limited liability company. A member or manager is not personally *65 liable for a debt, obligation or liability of the limited liability company solely by reason of being or acting as a member or manager.”
Plaintiffs appealed, arguing that the trial court erred in its understanding of ORS 63.165. Plaintiffs argued, in part, that whether ORS 63.165 shielded the Barnetts from liability required considering whether their actions were entirely in support of the LLC, or whether they were, instead, in furtherance of a non-LLC individual motive. The Court of Appeals heard oral argument, and then affirmed without
opinion. We allowed review and now reverse in part the decision of the Court of Appeals and the judgment of the trial court: Specifically, we reverse as to the elder abuse claim, affirm as to the breach of contract claim, and affirm the intentional interference claim by an equally divided court.
OVERVIEW
**2 The contours of summary judgment review are set by the operative complaint and the specific arguments for summary judgment advanced by a party. Under ORCP 47 C, the party opposing summary judgment has the burden of producing evidence on any issue “raised in the motion” as to which that party would have the burden of persuasion at trial.
Two Two v. Fujitec America, Inc., 355 Or. 319, 324, 325 P.3d 707(2014).Butapartydoesnothavetheburdenofproducing evidence on an issue that is not raised in the motion. Id. at 325, 325 P.3d 707
Once the parameters of what is, and is not, at issue in summary judgment are identified, we will affirm the trial court's judgment if we agree that “there is no genuine issue as to any material fact and * * * the moving party [was] entitled to a judgment as a matter of law.” ORCP 47 C; see also Robinson v. Lamb's Wilsonville Thriftway, 332 Or. 453, 455, 31 P.3d 421 (2001) (describing that standard on review). No issue of material fact exists if, viewing the evidence in the light most favorable to the nonmoving party—here, plaintiffs —“no objectively reasonable juror could return a verdict for theadversepartyonthematterthatisthesubjectofthemotion for summary judgment.” ORCP 47 C.
*66 In accord with that standard, we begin by setting forth, in greater detail, plaintiffs’ allegations in the first amended complaint, as well as defendants’ framing of the basis for summary judgment. Plaintiffs’ second claim for relief alleged a breach of contract claim against Elkside, Barnett Resorts, LLC, and the Barnetts individually, claiming that they had “breached the membership camping contract and guarantee with each Plaintiff by denying Plaintiffs the contractual right to the use of the Resort facilities set forth in themembershipcampingcontracts.”Theyfurtherallegedthat Elkside “breached the contracts by assigning its obligations to [Barnett Resorts, LLC] without permission or release from Plaintiffs. [Barnett Resorts, LLC] thereafter denied the Plaintiffs’ rights under the membership camping contracts.”
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Plaintiffs’ fourth claim for relief alleged a statutory elder abuse claim, asserting that both the Barnetts individually, as well as Barnett Resorts, LLC, had a “responsibility to honor the membership campground contracts of the Elderly Plaintiffs” and had “acquired a property right of the Elderly Plaintiffs (ORS 124.110[(1)](a)) or [held] in trust the annual dues and property rights of the Elderly Plaintiffs (ORS 124.110[(1)](b)).” The claim then alleged that both Barnett Resorts, LLC and the individual defendants had “acted in bad faith in refusing to honor the property rights and knew or should have known that the Elderly Plaintiffs had the rights in the membership camping contracts and the rights to use the Resort.”
Finally, plaintiffs’ sixth claim for relief alleged intentional interference with contractual relations against both Barnett Resorts, LLC and the Barnetts individually. That claim was specifically raised as an alternative claim to the breach of contract, “in the event Defendants Barnett are found not to be a contractual successor to [Elkside] and bound as a contracting party to the membership camping contracts.” In that alternative, plaintiffs alleged that the Barnetts intentionally interfered with the contractual relationship “between Plaintiffs and [Elkside] by acquiring the Resort with knowledge of the existence of the membership camping contractsandthereafterdenyingthePlaintiffsaccesstoResort facilities.”
**3 *67 Defendants’ arguments for summary judgment were undifferentiated by the individual claims in the complaint. Instead, defendants raised a unitary argument, against all claims and on behalf of all defendants equally, that primarily relied on the assertion that defendants had purchased property, not a business. Defendants challenged the recordation of the membership contracts, arguing that alleged failure to record prevented the contracts from encumbering the property. Without recordation, defendants argued, the membership camping contracts were retail installment contracts pursuant to ORS 94.989(2). Defendants argued that they had not purchased the contracts, only the landofthemobilehomepark.Thoseargumentsencompassed almosttheentiretyofthesummaryjudgmentmotionbutwere not the basis for the trial court's ruling and are not the subject of this appeal.
The argument that did form the basis of the trial court's partial grantofsummaryjudgmentoccursinthefinaltwoparagraphs of the summary judgment motion:
“Members of a limited liability company are personally liable only to the same extent and in the same manners as shareholdersofaprofessionalcorporation.ORS63.074(2) A member is not liable for the acts or debts of an LLC merely by reason of being a member. ORS 60.151(2).
“Plaintiffs have asserted claims against Barnett Resorts, LLC, but also against Chris and Stefani Barnett as the ownersandoperatorsofBarnettResorts.Itisaxiomaticthat an LLC owner or member is not liable for a claim against the LLC. Indeed, the purpose of organizing and carrying out business in an LLC, rather than some other form, is to avoid such liability. Barnett Resorts, LLC is the sole owner and operator of Osprey Point. Chris and Stefani Barnett are entitled to judgment as a matter of law.”
As to the claims against the Barnetts individually, the trial court granted summary judgment for defendants, relying on ORS 63.165 and our opinion in Cortez, 356 Or. at 280, 337 P.3d 111. As the trial court reasoned:
“The general rule regarding the liability of members and managers of limited liability companies in Oregon was explained in Cortez[, 356 Or. at 280, 337 P.3d 111,] as follows:
*68 “ ‘ORS 63.165 immunizes members and managers of an LLC from vicarious liability for the debts, obligations, and liabilities of that LLC. LLC members and managers, however, remain personally liable for their acts and omissions to the extent those acts or omissions would be actionable against the member or manager if that person were acting in an individual capacity.’
“The court finds in the instant matter that of the six claims alleged by plaintiffs’ in their first amended complaint, that none of those claims allege acts or omissions by defendants Chris Barnett or Stefani Barnett that would provide a basis for imposing personal liability on either. Chris Barnett and Stefani Barnett formed Barnett Resorts, LLConFebruary27,2017;BarnettResortsLLCpurchased the property on April 28, 2017; and Barnett Resorts LLC has been the owner of the property ever since. For these reasons, the court finds that defendants Chris Barnett and Stefani Barnett are entitled to summary judgment on all of plaintiffs’ claims.”
Onappeal,defendantsraiseanumberofargumentsindefense of the trial court's ruling; however, many of those arguments
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are unpreserved. Defendants argue that plaintiffs’ claims for elder abuse fail because defendants did not withhold money or property under ORS 124.110(1)(a) or (b). That argument was developed at trial, on the claims against Barnett Resorts, LLC that survived, but that was not an argument before the summary judgment court. Similarly, defendants argue that, as to the intentional interference claim, plaintiffs failed to provide evidence of an improper means or motive. That also was not an argument before the summary judgment court. As set forth above, the arguments on summary judgment were limited, and the sole basis of the court's grant of summary judgment was ORS 63.165. Accordingly, that is the singular issue we address.
**4 With that background now set, we turn to Cortez, where we noted that the Oregon legislature patterned ORS 63.165 off the Uniform Limited Liability Company Act (ULLCA) (1996) and adopted verbatim subsections 303(a) and (b) from that uniform act. We noted that a comment to that section included the following statement:
*69 “ ‘A member or manager is responsible for acts or omissions to the extent those acts or omissions would be actionable in contract or tort against the member or manager if that person were acting in an individual capacity. Where a member or manager delegates or assigns the authority or duty to exercise appropriate company functions, the member or manager is ordinarily not personally liable for the acts or omissions of the officer, employee, or agent [of the LLC] if the member or manager has complied with the duty of care set forth in Section 409(c).’ ”
Cortez, 356 Or. at 267-68, 337 P.3d 111 (citing ULLCA § 303 comment (1996) (brackets in Cortez)). Accordingly, we held that “members and managers remain personally liable for the actions that they take on behalf of an LLC to the same extent thattheywouldbeliable‘if[they]wereactinginanindividual capacity.’ ” Id. at 268, 337 P.3d 111 (brackets in Cortez). We therefore turn to applying that principle to each of the three claims at issue here. We begin with plaintiffs’ elder abuse claim, then proceed to consider the breach of contract claim, and conclude with the intentional interference with contract claim.
abuse or financial abuse may bring an action against any person who has caused the physical or financial abuse or who has permitted another person to engage in physical or financial abuse.” As used in the Oregon Revised Statutes, the term “person” is generally defined to include “individuals, corporations, associations, firms, partnerships, limited liability companies and joint stock companies.” ORS 174.100(7) (so providing unless context or specific statutory definition provides otherwise). By its terms, then, an action for elder abuse can lie against a corporate abuser, as well as those people who have “permitted” the corporation to abuse the elderly person.
To what extent, if at all, ORS 63.165 operates to preclude a claim for elder abuse, under ORS 124.100(2), is a question of statutory interpretation. We approach such questions with the “paramount goal” to discern the intention of the legislature.
*70 State v. Gaines,346Or.160,171,206P.3d1042(2009). In pursuing that goal, we give primary weight to the text and context of the disputed statutory terms. Id As we emphasized in Gaines, “there is no more persuasive evidence of the intent of the legislature than the words by which the legislature undertook to give expression to its wishes.” Id. (internal quotation marks omitted).
ORS 124.100(2), by its terms, contemplates direct liability in tort for an individual who permits another—including a corporation—to commit elder abuse. The parties have provided us no legislative history that would contradict the plain text, and our review of the history of ORS 124.100(2) shows no indication that the legislature sought to exclude from direct liability those who permitted abuse by a corporate actor.
ELDER ABUSE
ORS 124.100(2) provides that “[a] vulnerable person who suffers injury, damage or death by reason of physical
**5 As part of construing the text and context of a statute, we also look to case law construing the statute at issue. See Sherman v. Dept. of Human Services, 368 Or. 403, 411-12, 492 P.3d 31 (2021) (so demonstrating). In imposing direct liability for those who permit another to commit elder abuse, ORS 124.100(2) bears similarity to the statute at issue in Cortez. There, we considered a workplace safety statute that imposed obligations on a person who “retains the right to control the manner or method in which the risk-producing activity was performed.” 356 Or. at 273, 337 P.3d 111. The plaintiffin Cortez wasinjuredwhileworkingforalumbermill owned by an LLC and sued the member-manager of the LLC, arguing that the member-manager was a person subject to the statute. Id.at256,337P.3d111.Themember-managerargued that, under ORS 63.165(1), it could not be held personally
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liable for harm arising out of the LLC's business operations based on “merely having the authority to require the LLC to prevent a workplace accident.” Id. at 263, 337 P.3d 111
We held that ORS 63.165(1) did not shield the membermanager of an LLC from liability for failing to satisfy the statutory safe-workplace obligations. We reasoned that “ORS 63.165(1) immunizes [the LLC member] only from vicarious liability for the LLC's obligations,” and not from liability for itsownomissionsif,havingretainedcontrol,thepersonfailed toprovide,ortorequiretheLLCtoprovide,asafeworkplace. Id. at 264, 337 P.3d 111.
*71 Later, in Kinzua Resources v. DEQ, 366 Or. 674, 468 P.3d410(2020),weconsideredtwoadditionalstatutes—ORS 459.205 and ORS 459.268—which imposed obligations on the permit holder for the proper closure of a landfill. We construed the landfill permit statutes with ORS 63.165(1) and concludedthatindividualliabilityforLLCmember-managers was permissible:
“The commission contends that ORS 63.165(1) permits it to impose liability based on [the] petitioners’ own failure to perform obligations with which they were individually charged in their capacity as persons ‘controlling’ the landfill.
“We agree with the commission that ORS 459.205 and ORS 459.268 impose obligations directly on each person ‘controlling’ a landfill and that liability for the person's own failure to satisfy those obligations is direct liability, which ORS 63.165(1) does not prevent.”
Kinzua Resources, 366 Or. at 687, 468 P.3d 410
Like the statutes at issue in Cortez and Kinzua Resources, ORS 124.100(2) creates liability for those that perpetrate elder abuse, as well as those who permit others to perpetrate elder abuse.3 That liability is not vicarious; it is direct. In such an instance, ORS 63.165(1) is not a bar to asserting a claim for a statutory violation of ORS 124.100(2) against a member-manager of an LLC, when the LLC is alleged to be the entity that directly perpetrated the elder abuse. The trial court erred in granting summary judgment as to this claim.
BREACH OF CONTRACT
We turn now to plaintiffs’ second claim for relief—breach of contract. Here, we agree with the trial court that there is no evidence that the Barnetts, acting in their individual capacity, breached the contract. As we explain, the trial court was therefore correct to preclude this claim according to ORS 63.165
*72 It is well established, both in Oregon and elsewhere, that generally speaking, but with some exceptions, privity of contract is an essential prerequisite to a breach of contract claim. See, e.g., Davis v. Homasote Company, 281 Or. 383, 386,574P.2d1116(1978); DAFCO LLC v. Stewart Title Guar. Co., 156 Idaho 749, 754, 331 P.3d 491, 496 (2014) (“It is axiomatic in the law of contract that a person not in privity cannotsueonacontract.”(Quoting Wing v. Martin,107Idaho 267, 272, 688 P.2d 1172, 1177 (1984).)); Danielkiewicz v. Whirlpool Corp., 426 F Supp 3d 426, 432 (ED Mich 2019) (citing the same); Yucyco, Ltd. v. Republic of Slovenia, 984 F Supp 209, 215 (SD NY 1997) (stating that a plaintiff “may not assert a cause of action to recover damages for breach of contract against a party with whom it is not in privity” of contract); Cent. Con. Co. v. Paradise Valley Utility, 634 P2d 346, 348 (Wyo 1981) (“[P]rivity of contract is an essential element [for] a cause of action on a contract[.]” (Internal quotation marks omitted.)).
**6 Here, the parties do not dispute that the Barnetts, individually, are not signatories to the contracts at issue. The membership contracts existed between Elkside and plaintiffs. The purchase of Osprey Point was accomplished through a contract between Elkside and Barnett Resorts, LLC. To the extent that the Barnetts took any action in that contract formation, they did so solely as agents of the LLC. Accordingly, and as the parties effectively acknowledged at oral argument, the Barnetts, individually, are not in privity withanyoftheplaintiffsorElksideastothecontractsatissue.
Under ORS 63.165, member-managers remain personally liable for their acts or omission only to the extent that “those acts or omissions would be actionable against the member or manager if that person were acting in an individual capacity.” Cortez, 356 Or. at 280, 337 P.3d 111. That concept presumes that “those acts or omissions” could have been undertaken by a person in their individual capacity. In this case, the Barnetts lack privity with Elkside or plaintiffs. Absent certain
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circumstances not present here, such as issues of implied warranty, a nonparty to a contract cannot bring suit for breach of that contract, and in reverse, parties to a contract cannot bring suit against a third-party for breach of the contract. Thus, as alleged by plaintiffs, any “acts or *73 omissions” by the Barnetts with respect to the contract could not possibly have been undertaken in their individual capacities. As such, the trial court did not err in granting summary judgment as to the breach of contract claim against defendants Stefani Barnett and Chris Barnett individually.
INTENTIONAL INTERFERENCE
Finally, we turn to plaintiffs’ sixth claim, intentional interference with contractual relations. “A mere breach of contract cannot be sued on as a tort, but for tortious acts, independentofthecontract,amanmaybesuedintort,though one of the consequences is a breach of his contract.” Harper v. Interstate Brewery Co., 168 Or. 26, 37-38, 120 P.2d 757 (1942) (citing Stock v. City of Boston, 149 Mass. 410, 21 N.E. 871, 872, 14 Am St Rep 430 (1889)). Intentional interference with economic or contractual relations is the name we give to tortious conduct, independent of a contract, that brings about a breach of that contract.
To state a claim for intentional interference with economic or contractual relations, a party must allege each of the following elements: (1) the existence of a professional or business relationship, (2) intentional interference by the third party with the relationship, (3) that the interference was accomplished through improper means or for an improper purpose, (4) the interference caused damage to the economic relationship, and (5) damages. McGanty v. Staudenraus, 321 Or. 532, 535, 901 P.2d 841 (1995); Straube v. Larson, 287 Or. 357, 360-61, 600 P.2d 371 (1979); Wampler v. Palmerton, 250 Or. 65, 73-76, 439 P.2d 601 (1968); see Lewis v. Oregon Beauty Supply Co., 302 Or. 616, 621, 733 P.2d 430 (1987), overruled in part on other grounds by McGanty, 321 Or. 532, 901P.2d841(complaintmustallege“[e]itherthepursuitofan improperobjectiveofharmingplaintiffortheuseofwrongful means that in fact cause injury to plaintiff's contractual or business relationships”); see also Sheets v. Knight, 308 Or. 220, 237, 779 P.2d 1000 (1989), overruled in part on other grounds by McGanty, 321 Or. 532, 901 P.2d 841 (holding same); Top Service Body Shop v. Allstate Ins. Co., 283 Or. 201, 205, 582 P.2d 1365 (1978) (holding same).
In applying that rule here, it is important to call attention to how the claim was pleaded in this instance. *74 Plaintiffs asserted an intentional interference claim as an alternative to their breach of contract claim. As plaintiffs stated in the first amended complaint, the claim was triggered only “in the event Defendants Barnett are found not to be a contractual successor to [Elkside] and bound as a contracting party to the membership camping contracts.” As such, the claim would only exist if it was determined that Barnett Resorts, LLC was not a successor in interest to Elkside and did not assume the obligations of Elkside's contracts with the plaintiffs. Further, plaintiffs did not allege that the Barnetts, individually, had interfered with Barnett Resorts, LLC's contract. Rather, the claim asserted that Barnett Resorts, LLC, and the Barnetts individually, interfered as third parties to a contract between plaintiffs and Elkside. That interference was alleged to be accomplishedby“acquiringtheResortwithknowledgeofthe existenceofthemembershipcampingcontractsandthereafter denying the Plaintiffs access to Resort facilities.”
**7 So framed, ORS 63.165 is not an obvious bar. Both individuals and corporations can be liable for intentional interference in economic and contractual relations. In the situation presented here, when both the LLC and its membermanager are alleged to have acted tortiously vis-à-vis a contract between third parties, the individual liability of the member-manager under ORS 63.165 turns upon principles of agency—whether the member-manager acted uponindividualmotives,andforindividualbenefit,ormerely acted as an agent of the corporation, in furtherance of a corporate motive. “So long as the officer or employee acts within the general range of his authority intending to benefit the corporation, the law identifies his actions with the corporation.” Wampler, 250 Or. at 76-77, 439 P.2d 601
Before the trial court and the Court of Appeals, plaintiffs argued that the trial court erred in failing to consider whether a genuine issue of material fact existed as to whether the Barnetts interfered in furtherance of personal motives, or merely in their capacity as agents of the LLC. Plaintiffs were correct. The trial court's grant of summary judgment—based solely on ORS 63.165, without consideration of whether the Barnetts were acting within their authority for the benefit of the corporation, or for individual *75 motives—was misplaced, and the trial court erred. See, e.g., Bova v. City of Medford, 262 Or App 29, 43, 324 P.3d 492, rev. den, 356 Or 516, 340 P.3d 47 (2014) (reversing grant of summary judgment based on an incorrect statutory interpretation).
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Our holding here is narrow and confined to the particularities of the parties’ arguments and the trial court's reasoning. ORS 63.165 was the argument raised in defendants’ summary judgment motion as to the elder abuse and intentional interferenceclaim,andthesolebasisofthetrialcourt'sruling. No opinion is offered as to whether summary judgment might be appropriate on some alternative grounds. As discussed, the alternativeargumentspresentedonappealwerenotbeforethe trial court, and no party has invoked a “right for the wrong reasons” rationale. See Outdoor Media Dimensions Inc. v. State of Oregon, 331 Or. 634, 659-60, 20 P.3d 180 (2001) (setting out conditions for affirmance under a “right for the wrong reasons” basis); State v. Rogers, 330 Or. 282, 295, 4 P.3d 1261 (2000) (“The ‘right for the wrong reason’ principle establishesthatappellatecourtsmayexaminelegalarguments not relied on by a trial court to determine if those arguments provide a basis for affirmance.”). The foregoing analysis is simply that, on this record, ORS 63.165 did not bar plaintiffs’ claim such that summary judgment was required.
It is worth noting that the claims that survived summary judgment here, against Barnett Resorts, LLC, proceeded through verdict, and that verdict is now the subject of a different appellate proceeding—Adelsperger v. Elkside Development LLC, 322 Or App 809, 523 P.3d 142 (2022). It is certainly possible that the ultimate resolution of the issues presented in that case may ultimately affect the claims at issue here. As the dissent notes, whether this decision will have a meaningful affect upon the parties is a prudential concern. See, e.g., City of Damascus v. State of Oregon, 367 Or. 41, 68 n 13, 472 P.3d 741 (2020) (“We express no opinion here regarding the circumstances in which advisory opinions may or may not be unconstitutional * * *. The point isthatthereareprudentialandjurisprudentialreasonstoavoid unnecessarily deciding legal issues that may be presented in a case,ifthecasecanbeappropriatelyresolvedonmorelimited grounds.”). However, at this point in time, that *76 case has not reached finality, and we will not prognosticate its future. The dissent would hold the decision in this case, to avoid “piecemeal litigation of related claims.” However, it is not prudent to intentionally delay issuance of a decision in this mattertoawaitanunknownoutcomewhennolowercourthas consolidated the cases, and no party has moved for the cases to be consolidated, nor asked this court to hold a decision in abeyance. The ultimate applicability of that other case to the claims here is left to the sound wisdom of the trial court upon remand.
**8 The decision of the Court of Appeals is affirmed in part, affirmed in part by an equally divided court, and reversed in part. The judgment of the circuit court is affirmed in part, affirmed in part by an equally divided court, and reversed in part, and the case is remanded to the circuit court for further proceedings.
Bushong, J. concurred in part and dissented in part and filed an opinion, in which Garrett and DeHoog, JJ., joined.
BUSHONG, J., concurring in part, dissenting in part.
I agree with the majority's disposition of the elder abuse and breach of contract claims, and I join in the majority opinion on those claims.1 I write separately, however, to explain my preferred approach as a procedural matter as to the elder abuse and intentional interference claims, and relatedly, why I disagree with the majority's disposition of the intentional interference claim. I would await the final appellate disposition of Adelsperger v. Elkside Development LLC, 322 Or App 809, 523 P.3d 142 (2022) (Adelsperger II), recently decided by the Court of Appeals and involving similar claims from these same plaintiffs,2 before addressing theelderabuseandintentionalinterferenceclaimsinthiscase. In my view, we should not be addressing those claims at this stage of the proceeding, because they are intertwined with the issues decided in Adelsperger II. The final disposition of those issues may, in the end, transform the majority *77 opinion into an advisory opinion that has no practical effect on the parties. At the very least, deciding those issues now unnecessarily continues the piecemeal litigation of related claims.3
In reversing the trial court's summary judgment ruling on the two noted claims against defendants Stefani and Chris Barnett (the Barnetts), the majority opinion concludes that ORS 63.165 does not shield them individually from liability for elder abuse or intentional interference with contract. On the elder abuse claim, the majority opinion concludes that ORS 63.165 is not a bar to asserting the claim against the Barnetts individually simply because the entity alleged to have “directly perpetrated the elder abuse” is the LLC and not itsindividualmembers.371Orat72,–––P.3dat––––.But,in Adelsperger II—which involves the same claims as asserted by these same plaintiffs against Barnett Resorts, LLC—the CourtofAppealsdeterminedthatplaintiffshadfailedtoprove at trial that the LLC had perpetrated elder abuse. Adelsperger II, 322 Or App at 827, 523 P.3d 142
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Similarly, the majority opinion acknowledges that the intentional interference claim “would only exist if it was determined that Barnett Resorts LLC was not a successor in interest to Elkside [Resorts LLC] and did not assume the obligations of Elkside's contracts with the plaintiffs.” 371 Or at 74, ––– P.3d at ––––. But again, in Adelsperger II, the Court of Appeals concluded that sufficient evidence at trial had supported the jury's conclusion that Barnett Resorts LLC had been a successor in interest and thus had assumed the obligations of Elkside's contracts with the plaintiffs. 322 Or App at 819-20, 523 P.3d 142.
**9 If the Court of Appeals’ resolution in Adelsperger II of those claims as to the LLC becomes final, then the majority opinion's resolution of the issues in this case—whether the trialcourtproperlygrantedsummaryjudgmenttotheBarnetts underORS63.165onthosesametwoclaims—wouldamount to an advisory opinion that has no practical effect on the parties. And if the Court of Appeals’ resolution of those claims in Adelsperger II does not become final—that is, if we allow plaintiffs’ pending petition for review—then *78 decidingnowthattheBarnettsmightbeliableonthoseclaims and deciding later whether the Court of Appeals correctly resolved those claims against the LLC would continue the piecemeal litigation of these related claims.
We typically seek “to avoid piecemeal litigation of multiple claimslikelytoinvolverelatedfacts.” Thompson v. Coughlin, 329 Or. 630, 637, 997 P.2d 191 (2000). And there are prudential reasons to avoid unnecessarily deciding issues that may not have any practical effect on the parties. See City of Damascus v. State of Oregon, 367 Or. 41, 68 n 13, 472 P.3d 741 (2020) (“We express no opinion here regarding the circumstances in which advisory opinions may or may not be unconstitutional[.] *** Our point is that there are prudential and jurisprudential reasons to avoid unnecessarily deciding legal issues that may be presented in a case, if the case can be appropriately resolved on more limited grounds.”).
The majority opinion acknowledges that final resolution of the claims against the LLC may affect the ultimate disposition of the claims against the Barnetts. 371 Or at 75, ––– P.3d at ––––. The majority opinion also acknowledges that, depending upon how the claims against the LLC are ultimately resolved, today's decision may not have any meaningful effect on the parties. Id. at 75-76, ––– P.3d at –––– – ––––. Nevertheless, it concludes that it would not be
prudential to await the final resolution of the claims against the LLC. Id.
The majority justifies that conclusion by treating Adelsperger II as a different “case” that has not been consolidated with this case, concluding that the “ultimate applicability of that other case” to the claims here should be left to the trial court. Id. at 76, ––– P.3d at ––––. But there is no “other case”; there is one action commenced by filing a complaint that ultimately resulted in splintered appeals, each of which were assigned different case numbers See ORCP 3 (“[A]n action shallbecommencedbyfilingacomplaintwiththeclerkofthe court.”).Theclaimsaddressedbythemajorityopinionandby the Court of Appeals in Adelsperger II were asserted in the same complaint filed in the same action.
I suggest that, under the circumstances, the prudential decision would be to await final resolution of the *79 claims against the LLC, and then resolve all the remaining claims asserted in this action at once.
In addition, I disagree with the majority's disposition of the intentional interference claim for a reason that further highlights why we should not be deciding that alternative claim at all. The majority opinion called attention to how this claimwaspleaded—asanalternativetothebreachofcontract claim—and framed the issue as whether ORS 63.165 barred a claim asserting that the Barnetts individually (and the LLC) interfered with contracts between plaintiffs and Elkside. 371 Or at 74, ––– P.3d at ––––.
The majority then concludes that ORS 63.165 is not “an obvious bar” to the claim because, under Wampler v. Palmerton, 250 Or. 65, 74-77, 439 P.2d 601 (1968), the claim hinges on whether “the Barnetts were acting within their authority for the benefit of the corporation, or for individual motives[.]” 371 Or at 74-75, ––– P.3d at –––– – ––––; see also id. at 74, ––– P.3d at –––– (citing test under Wampler); id. (applying test).
**10 However, the circumstances presented here are different from those presented in Wampler, and the majority's application of the Wampler test for determining individual liability of corporate officials in this context is flawed. The plaintiff in Wampler alleged that the individual defendants—thepresidentandabusinessadvisorofDiamond Lake Lumber Company (Diamond Lake)—were liable for interfering with a logging contract between the plaintiff and Diamond Lake. A jury ruled in favor of the plaintiff, and the
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individual defendants appealed. 250 Or. at 67-68, 439 P.2d 601
This court first noted that, “[i]n the usual interference with a contract situation, the person interfering is a complete stranger to the contractual relationship.” Id. at 74, 439 P.2d 601. But Wampler added a “complicating ingredient *** where the party induced to breach its contract is a corporation and the third person who induces the breach is not a stranger, but is a person who, by reason of his position with the corporation, owes a duty of advice and action to the corporation.” Id. The interest protected by an interference with contract claim “is the interest of the plaintiff in not having his contract rights interfered with by intermeddling strangers.” *80 Id. at 77, 439 P.2d 601. Thus, “so long as the person inducing the breach of a corporate contract is an officer or employe[e] acting for the benefit of the corporation andwithinthescopeofhisauthority,theplaintiffcannotshow that this interest was invaded and therefore cannot maintain an interference with contract action.” Id.
“On the other hand,” the Wampler court explained, “there is no reason to protect corporate officers or employe[e]s who authorize, direct and participate in tortious conduct by their corporate principal.” Id. “If the corporation commits a tort as a result of such intentional action on the part of its officersoremploye[e]s,theseagentsarealsoresponsible.” Id. Thus, whether there was a jury question as to the liability of the individual defendants in Wampler depended on “whether there [was] evidence that defendants were guilty of engaging in tortious conduct upon behalf of the corporation.” Id. at 78, 439 P.2d 601. The Wampler court reviewed the evidence at trial, noting first that “there is no direct evidence of any bad motive or intent” in almost all cases “in which intent is in issue.” Id. at 80, 439 P.2d 601. As a result, it was necessary for the court “to ascertain whether there [was] sufficient circumstantial evidence” of bad motive or intent. Id. Finding none in the trial court record, the court concluded that “[t]he trial court erred in failing to grant the defendants’ motion for a directed verdict.” Id. at 82, 439 P.2d 601.
Cases decided after Wampler have made it clear that an intentional interference with contract claim requires proof of “the pursuit of an improper objective of harming plaintiff or the use of wrongful means that in fact cause injury to plaintiff's contractual or business relationships.” Lewis v. Oregon Beauty Supply Co., 302 Or. 616, 621, 733 P.2d 430 (1987); see also Sheets v. Knight, 308 Or. 220, 237, 779 P.2d 1000 (1989), abrogated in part on other grounds by
McGanty v. Staudenraus, 321 Or. 532, 901 P.2d 841 (1995) (plaintiff must plead and prove that defendant, “either with an improper objective or through improper means, purposefully interfered with the plaintiff's contractual relationship with some third party, thereby causing the plaintiff damage”). Thus, under Wampler and subsequent cases, for a corporate officer to be liable for intentionally interfering with a contract entered into by the corporation, the officer *81 must have authorized, directed, and participated in the corporation's tortious conduct, that is, conduct that not only amounted to a breach of contract but that was taken for improper motives or through improper means.
**11 Thiscaseisdifferentfrom Wampler becauseplaintiffs’ claim here is that the Barnetts may be individually liable for interfering with contracts between plaintiffs and Elkside. In other words, this case involves “the usual interference with contract situation” where the persons alleged to have interfered with the contract—here, the Barnetts—are strangers to the contractual relationship with which they allegedly interfered. Thus, it is not clear that Wampler even applies here. Moreover, even assuming that Wampler is on point, applying the Wampler test would seem to require the court to review the summary judgment record to determine whether it contains direct or circumstantial evidence that the Barnetts acted with “bad motive or intent” in causing Barnett Resorts, LLC to tortiously interfere with the contracts between plaintiffs and Elkside.
The majority opinion does not (1) explain why the Wampler test applies in this context; (2) explain why “individual motives”—not “bad motives or intent”—would be enough to meet the Wampler test in this context; or (3) review the summary judgment record to determine whether it contains evidence of both individual motives and “bad motive or intent” sufficient to avoid summary judgment. Instead, it just concludes that the trial court erred by granting summary judgment “without consideration of whether the Barnetts were acting within their authority for the benefit of the corporation,orforindividualmotives[.]”371Orat74-75,–––P.3d at –––– – ––––.
My disagreement with how the majority opinion disposes of the intentional interference claim highlights the reasons why we should not be reversing the trial court's decision to grant summary judgment on that claim—pled as an alternative to plaintiffs’ breach of contract claim—at this stage of the proceedings. Accordingly, I dissent from that part of the majority opinion.
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All Citations
--- P.3d ----, 371 Or. 61, 2023 WL 3521492
GarrettandDeHoog,JJ.,joininthisconcurringanddissenting opinion.
Footnotes
* Appeal from Coos County Circuit Court, Andrew E. Combs, Judge. 317 Or App 666, 504 P3d 1 (2022)
** Nelson, J., resigned February 25, 2023, and did not participate in the decision of this case.
1 The other claims are variations, or attendant to, the three main categories of claims. For example, the first claim for relief seeks a declaratory judgment as to the existence of a contract. The third claim seeks the appointment of a trustee.
2 The trial court allowed a breach of contract claim, and an elder abuse claim, against Barnett Resorts, LLC, to proceed, and the jury returned a verdict in favor of plaintiffs. Those claims form the basis of another pending appeal—Adelsperger v. Elkside Development LLC, 322 Or App 809, 523 P.3d 142 (2022)
3 We are not called upon here to delineate the boundaries of what constitutes permission under the statute.
1 For ease of reference, I use the term “majority opinion” throughout this opinion in referring to the opinion authored by Justice James. However, that opinion is not truly a “majority” opinion as to the intentional interference claim, which we are affirming by an equally divided court.
2 The Court of Appeals denied petitions for reconsideration in Adelsperger II on March 31, 2023. On May 5, plaintiffs petitioned this court for review of the Court of Appeals’ disposition of their elder abuse claim.
3 My views expressed in this opinion do not apply to the breach of contract claim addressed in the majority opinion.
End of Document © 2023 Thomson Reuters. No claim to original U.S. Government Works.
v. Elkside Development LLC, --- P.3d ---- (2023) 371 Or. 61 © 2023 Thomson Reuters. No claim to
U.S. Government Works. 10
Adelsperger
original
322 Or.App. 809 Court of Appeals of Oregon.
Ron ADELSPERGER; Sally Adelsperger; Walter Arnold; Sandy Arnold; Larry Brewer; Marilyn Brewer; James Brown; Lonna Brown; Bill Burgess; Jane Burgess; Shirley Calkins; Jerry Christensen, aka Gerald Christenson; Cindy Christensen, aka Cynthia EvansChristenson; Russell Cobb; Norma Cobb; Ron Ellis; Sallie Ellis; Amy Flickenger Pierpoint, aka Amy Flickenger-Pierpoint; Glen Pierpoint; Mike Fredrickson; Tresea Fredrickson; David Fulcer; Sarah Fulcer; Jack Gibson; Sharon Sue Gibson, aka Sue Gibson; Mary Gray; Rudolph Hanna; Brenda Hanna; Gerald Hastings, aka Jerry Hastings; Shirley House; Michael Huntley; Gloria Huntley; Rodney Hyde, aka Rod Hyde; Patricia Hyde; Johnnie Issacs, aka Johnnie Isaacs; Rowina Issacs, aka Rowena Isaacs; Don Johnson, aka Donald Johnson; Linda Johnson; Robert Kasmar; Linda Kasmar; Kraig Knutson; Barbara Knutson; Tom Kuntz; Brenda Kuntz; Richard Mathis; Linda Mathis; Gary McCord; Marie McCord; David McReynolds; Joseph Moore; Geraldine Moore; Adam Morgan; Vicky Morgan, aka Victoria Morgan; Thomas Noel; William Oar; Donald Partridge, aka Don Partridge; Lucille Partridge, aka Lucy Partridge; Craig Pedersen; Cheryl Pedersen; David Smith; Carol Smith; William Thomas, aka Bill Thomas; Jackie Thomas; Fred Waidtlow; Linda Waidtlow; Gary Wayman; Charlotte Wayman; David Weberg; Jeanne Weberg; Forrest Wheeler; and Jane Wheeler, Plaintiffs-Respondents, v.
ELKSIDE DEVELOPMENT LLC, Successor in Interest to Osprey Point RV Park, LLC et al., Defendants, and Barnett Resorts, LLC, an Oregon Limited Liability Company, dba Osprey Point RV Resort, Defendant-Appellant.
A174291
Argued and Submitted January 10, 2022.
November 30, 2022
Synopsis
Background: Resort members brought action against limited liabilitycompany(LLC)thatpurchasedresortallegingbreach of contract, elder financial abuse, and, in the alternative, intentionalinterferencewitheconomicrelationsafterLLCdid not honor memberships after it purchased resort. Following jury trial, the Circuit Court, Coos County, Andrew E. Combs, J., denied LLC's motion for direct verdict on all three claims, entered judgment on verdicts in favor of members on all claims, and awarded damages of $500,000 on the claim for breach of contract and $900,000 on the claim for elder financial abuse. LLC appealed.
Holdings: The Court of Appeals, Aoyagi, J., held that:
LLC's failure to make any substantive argument to trial court or Court of Appeals as to why evidence was insufficient precluded reversal of trial court's denial of directed verdict on breach of contract claim;
resort membership contracts were not “money or property,” and, thus, LLC's decision not to honor those contracts did not constitute elder financial abuse; and
there was insufficient evidence that LLC had “improper purpose” in deciding not to honor membership contracts, to support members' claim of elder financial abuse.
Affirmed in part, reversed in part, and remanded.
See also 317 Or App 666, 504 P.3d 1
Procedural Posture(s): On Appeal; Motion for Judgment as a Matter of Law (JMOL)/Directed Verdict; Judgment.
**145 Coos County Circuit Court, 19CV14756; Andrew E. Combs, Judge.
Attorneys and Law Firms
Alicia M. Wilson argued the cause for appellant. Also on the briefs was Frohnmayer, Deatherage, Jam Ieson, Moore, Armosino & McGovern, P.C.
Dan G. McKinney argued the cause for respondents. Also on the brief was DC Law.
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Opinion
AOYAGI, J.
*811 Thiscaseinvolvesadisputeovermembershipcamping contracts. For nearly 20 years, Elkside Development, LLC (Elkside) owned and operated the Osprey Point RV Resort in Lakeside. Elkside sold memberships as part of its business model. In exchange for payment of an initial fee and annual dues, members received free use of the campground for a significant portion of the year and other benefits. In April 2017, Elkside sold the property to defendant Barnett Resorts, LLC.Twomonthslater,defendantgavenoticetoallmembers —including plaintiffs—that it would not honor Elkside's membership contracts. That led to the filing of this action. Plaintiffs are 71 people who, collectively, were party to 39 membership contracts with Elkside. Fifty-six of the plaintiffs are aged 65 years or older. As relevant here, a jury found that, in failing to honor the contracts, defendant committed breach of contract, for which the jury awarded $500,000 in damages, and elder financial abuse under ORS 124.100, for which the jury awarded $900,000 in damages, which was automatically trebled to $2.7 million.
Defendant appeals the resulting judgment, raising four assignments of error. First, defendant challenges the denial of its motion for summary judgment on the breach of contract claim. We conclude that ruling is unreviewable. Second, defendant challenges the denial of its motion for a directed verdict on the breach of contract claim. We reject that claim oferrorand,accordingly,affirmthejudgmentastothebreach of contract claim. Third, defendant challenges the denial of its motion for a directed verdict on the elder financial abuse claim. We agree that the trial court erred in that regard and, accordingly, reverse and remand for dismissal of the elder financial abuse claim. Fourth, defendant challenges **146 the denial of its motion for a directed verdict on a claim for intentional interference with economic relations (IIER), which was pleaded in the alternative to the claim for breach of contract. Our resolution of the second assignment of error obviates the need to address the fourth assignment of error.
In reviewing the denial of a motion for a directed verdict, we consider the evidence and all reasonable inferences *812 from that evidence in the light most favorable to the nonmoving party, which in this case was plaintiffs. York v. Bailey, 159 Or App 341, 349, 976 P.2d 1181, rev. den, 329 Or. 287, 994 P.2d 122 (1999). We state the facts accordingly.
From 1999 until April 2017, Elkside operated the Osprey Point RV Resort on real property that it owned in Lakeside.1 As part of its business model, Elkside sold camping memberships, which were effectuated through membership contracts. People paid an initial fee to purchase a membership (such as $5,900) and annual dues to maintain the membership (suchas$325peryear).Asmembers,theywereentitledtouse the campground for free for a significant portion of the year (such as 265 days), including free utilities, and at a reduced rate for the rest of the year. They also received other on-site benefits at a reduced cost. The contracts generally provided for “lifetime” memberships and transfer rights.
Plaintiffs purchased their memberships between 1999 and 2016, entering into a total of 39 membership contracts with Elkside. Those 39 contracts vary in their details but are generally as described above. The contracts do not address what will happen in the event that the property is sold.2
Around 2005, Elkside began trying to sell the property, and it was on the market for most of the next 12 years. From the beginning, it was important to Mike Smalley—one of the members of Elkside—to try to sell the property to someone whowouldhonortheexistingcampgroundmemberships,and several possible buyers dropped out over the years because of the membership contracts. The property was initially listed at $5.9 million. Elkside later reduced the price to $3.3 million, then to $2.65 million in 2012, then to $1.995 million in 2013.
I. FACTS
*813 On April 28, 2017, defendant—an LLC whose members are Chris and Stefani Barnett—purchased the real property from Elkside, along with certain personal property and the business name, for $1.995 million. The closing documents did not list the membership contracts as an encumbranceorotherwisementionthem.Theexecutedbillof saleprovidedthatthepropertywas“freeandclearofandfrom all encumbrances, security interests, liens, mortgages and claims whatsoever.” Defendant was aware of the membership contracts, however, when it purchased the property. Before closing,defendanthadrequestedalistofactivememberships, reviewed copies of some or all of the membership contracts, and begun talking to people about whether the contracts
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Before Tookey, Presiding Judge, and Aoyagi, Judge, and Armstrong, Senior Judge.
would be binding on defendant if it purchased the property. Defendant also was aware that Smalley wanted the contracts to be honored after the sale; for example, in an email to Chris Barnett on February 26, 2017, attaching the “requested info onmembers,”Smalleyhadstated,“Ibelievethathonoringthe remaining contracts is worth the effort. It is an income and will not create negative reviews around the industry.”
There is conflicting evidence as to whether, at the time of closing, defendant intended to honor Elkside's membership contracts. In any event, there is no evidence that defendant **147 ever promised or otherwise represented to Elkside that it would honor the contracts.3
On May 14, 2017, defendant sent a letter to people who had “purchased a Membership prior to the new ownership.” The letter explained that defendant was not accepting any new memberships and announced “some immediate changes that will be in effect” relating to memberships. In describing those changes, the letter at least implied that defendant intended to honor the existing membership contracts, albeit perhaps on their narrowest terms, while *814 disavowing any “verbal or handshake agreements” with the previous owner. 4 Only 10 days later, however, on May 24, defendant sent an email to its staff that instructed them not to accept any new reservations from people who bought memberships from the previousowner,explainingthatanattorneywasreviewingthe contracts and that it would be “too confusing for the resort to conduct business as usual” while that happened. The email wentontostatethat,ifanyonewithamembershipaskedwhat to do, “please kindly tell them they cannot stay for Free and must pay regular resort prices.” The email then reiterated that all future reservations should be booked at the current season rates, that “[a]nyone can still stay at the resort but only under regular rates,” and that “there are no special fees or free stays until further notice.”
On June 20, 2017, defendant sent a letter to everyone with a membership contract. The upshot of the letter was that defendant would not be honoring the contracts. Defendant explained that it was the new owner, that it had purchased the resort but not the contracts, that defendant had “started fresh as a regular RV Park with nightly stays,” and that defendant did not consider it financially feasible to honor memberships that were purchased from the previous owner. Plaintiffs identify June 20, 2017, as the date on which the contracts were breached.
In April 2019, two years after defendant purchased the property, plaintiffs filed this action, asserting claims against Elkside, defendant, Chris Barnett, and Stefani Barnett. Plaintiffs obtained a default judgment against Elkside, which was not appealed and is not at issue. Plaintiffs’ claims against the Barnetts individually were dismissed on summary judgment and are the subject of a separate appeal. See Adelsperger v. Elkside Development LLC, 317 Or App 666, 504 P.3d 1, rev. allowed, 370 Or. 56, 512 P.3d 811 (2022). As for plaintiffs’ claims against defendant, three claims went to the jury and are the subject of this appeal: breach of contract, elder financial abuse under ORS 124.100, and IIER. *815 The parties stipulated to certain facts, including that none of the plaintiffs had entered into a contract with defendant, that defendant had not received membership dues from any of the plaintiffs, and that all of the plaintiffs were “monetarily damaged” by their contracts not being honored “to the extent that membership dues were less than the fair market value of the services received.”
At the close of plaintiffs’ case-in-chief, defendant moved for directedverdictsonallthreeclaims.Thetrialcourtdeniedthe motion.
Ultimately, the jury found for plaintiffs on all three claims submitted to it. On breach of contract, the jury found that plaintiffs’ membership contracts were binding on defendant, presumably as covenants running with the land given how the jury was instructed; that defendant had breached those contracts; and that such breach had resulted in $500,000 in damages. On elder financial abuse under **148 ORS 124.100, the jury found for the elderly plaintiffs and awarded $900,000 in damages, which the court trebled to $2.7 million as a matter of law. See ORS 124.100(2)(a) (requiring the court to award “three times all economic damages” to a prevailing plaintiff); ORS 124.100(2)(b) (requiring the court to award “three times all noneconomic damages” to a prevailing plaintiff). The court entered a general judgment and money award for plaintiffs on the breach of contract and elder financial abuse claims. The jury also found for plaintiffs on the IIER claim, but that claim was pleaded in the alternative to the breach of contract claim—applying only if it was determined that defendant was not bound by Elkside's contracts—so no judgment was entered on the IIER claim. Plaintiffs’ other claims against defendant—for declaratory relief, appointment of a trustee, and specific performance— also were not reduced to judgment, for various reasons, and are not at issue on appeal.
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II. BREACH OF CONTRACT CLAIM
Defendant's first two assignments of error pertain to the breach of contract claim. Defendant argues that the trial court erred, first, by denying defendant's motion for *816 summary judgment and, second, by denying defendant's motion for a directed verdict.
We do not address the first assignment of error. “[A]n order denying summary judgment is not reviewable following a full trial on the merits, unless the motion rests on ‘purely legal contentions’ that do not require the establishment of any predicate facts.” York, 159 Or App at 345, 976 P.2d 1181. “[T]he denial of a motion for summary judgment that is based on facts, even undisputed facts, is not reviewable.” Staten v. Steel, 222 Or App 17, 26, 191 P.3d 778 (2008), rev. den, 345 Or. 618, 201 P.3d 909 (2009); see also Farnsworth v. Meadowland Ranches, Inc., 321 Or App 814, 819-20, 519 P.3d 153 (2022) (emphasizing the difference between the summary judgment standard and reviewability). Because defendant's summary judgment motion “turned on the significance of adjudicative facts (albeit, facts that defendant asserted to be undisputed),” York, 159 Or App at 346,976P.2d1181,thetrialcourt'srulingdenyingthatmotion is unreviewable on appeal.
As for the second assignment of error, considering the particular arguments made to the trial court and on appeal, we conclude that the trial court did not err in denying defendant's motion for a directed verdict.
In their complaint, plaintiffs alleged that, when defendant purchased the campground from Elkside in April 2017, defendant, as “successor” to Elkside, “became obligated to honor the membership camping contracts,” while Elkside's ownobligationstohonorthecontractsalsoremainedinforce. With respect to the breach of contract claim, plaintiffs alleged that Elkside, as the original contracting party, had breached thecontractseither“byassigningitsobligations”todefendant without plaintiffs’ permission or “by divesting itself of the resort such that it can no longer perform” its contractual obligations. Plaintiffs alleged that defendant, “if found to be successor in interest to [Elkside], was also obligated to honor the membership camping contracts and by refusing to do so breached the membership camping contracts between Plaintiffs and [Elkside].”
It is fair to say that the complaint is unclear as to what legal theory or theories plaintiffs were relying on *817 to assert that defendant was liable on Elkside's contracts. “[M]erely to say that a party has succeeded to a predecessor's interest in land does not say enough to explain why the successor should somehow be bound by a predecessor's agreement.”
Sander v. Nicholson, 306 Or App 167, 185, 473 P.3d 1113, rev. den, 367 Or. 290, 476 P.3d 1255 (2020). The only theory that the complaint actually mentions is assignment—a theory that was abandoned, in that no evidence of assignment was offered at summary judgment or trial. Additional theories were raised, however, during the pretrial summary judgment proceedings. Without getting into unnecessary detail, the record suggests that, by the time trial began, there were two theories on the table as to how defendant could be liable on Elkside's contracts, despite not having assumed them voluntarily. In defendant's view, it would be **149 liable on the contracts only if plaintiffs proved that Elkside's mortgage holder had executed, delivered, and recorded a nondisturbance agreement in accordance with the statutory procedure for “membership camping contracts” provided in ORS 94.986(1). That, in defendant's view, “would prioritize plaintiffs’interestsaboveblanketencumbrancesthenexisting and provide for the mechanism to allow the contracts to run with the land and be enforceable on a subsequent purchaser.” In plaintiffs’ and the trial court's view, defendant also could be liable on the contracts if the common-law requirements for an equitable servitude or covenant running with the land were met.
When the trial court denied defendant's directed verdict motion, it made clear that it viewed the evidence as sufficient to allow a finding that the contracts ran with the land as a matter of common law. Specifically, when defendant argued thatElkside'snoncompliancewithORS94.986meantthatthe contracts did not bind defendant, the court asked why “this can'tbesomethingotherthanamembershipcampingcontract under ORS [chapter] 94” and why there was not a “common law issue here.” Defendant responded that “that's not what Plaintiffs pled,” that plaintiffs’ use of the term “membership camping contracts” in their complaint necessarily invoked ORS chapter 94, and that “any sort of equitable servitude” was “simply not what they pled.”
*818 The trial court was unpersuaded. It considered the evidence sufficient to go to the jury on a common law theory.5 As for defendant's pleading argument, the court explained that when there is evidence to support a theory not originally pleaded, “the pleadings can conform to the
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evidence.” Because of how the issue developed below, the exact amendments made to the complaint to conform to the evidence are unclear, so we necessarily can only assume that they were consistent with how the court ultimately submitted the case to the jury.6
On appeal, as in the trial court, defendant emphasizes that the complaint did not mention equitable servitudes (or covenants running with the land). That is certainly true. However, the trial court viewed the evidence as sufficient to support such a theory and treated the complaint as having been implicitly amended to conform to the evidence. See ORCP 23 B (providing for amendment of the pleadings to conform to the trial evidence, including implicit amendment). To the extent that defendant indirectly suggests on appeal that the court should not have allowed implicit amendment of the complaint to conform to the evidence, that issue is unpreserved for appeal, as defendant never argued to the trial court that implicit amendment was *819 improper in these circumstances. Defendant argued only that the existing pleadings did not raise the matter. The issue also is not properly before us on appeal, because defendant has assigned error only to the ruling on the motion for a directed verdict. It has not assigned error to the denial of any objection to allowing implicit amendment, to admitting the underlying evidence, **150 or the like. Indeed, as in the trial court, defendanthasnotevenacknowledgedtheprincipleofimplied amendment to conform to the evidence, let alone developed an argument as to how or why it was improper to recognize an implied amendment in these circumstances.
It therefore would be improper for us to consider, as a basis forpotentialreversalofthejudgment,theproprietyofthetrial court treating plaintiffs’ complaint as having been amended to conform to the evidence. Accordingly, we proceed with the understanding that the complaint was implicitly amended to assert an equitable servitude or a covenant running with the land, as the basis by which the membership contracts (or at least some parts of them) became binding on defendant when it purchased the land. With that understanding, we cannot concludethatthetrialcourterredindenyingadirectedverdict on the breach of contract claim. In moving for a directed verdict, defendant did not make any substantive argument to the trial court as to why the evidence was insufficient to prove an equitable servitude (or a covenant running with the land), asserting only that it was “not what [plaintiffs] pled.”
On appeal, defendant has similarly focused on the alleged pleadingdefect,ratherthantheevidence.Theonlytimethatit addresses the evidence is in its reply brief. For example, as to
whether the membership contracts directly touch and concern the land, in its reply brief, defendant points for the first time to a provision in the contracts that would have allowed Elkside to transfer the memberships to “a substitute property in the same general area” that was as or more desirable for camping and outdoor recreation. Those belated arguments raise interesting issues, but they were not raised in the trial court in arguing the directed verdict motion, or in the opening briefonappeal. See Clinical Research Institute v. Kemper Ins. Co.,191OrApp595,609,84P.3d147(2004)(regardingnew theories raised in a reply brief).
*820 In sum, on this record and given the arguments that were made, we reject the second assignment of error, challenging the court's denial of a directed verdict on the breach of contract claim. Our conclusion as to the common lawtheoryobviatestheneedtoaddressdefendant'sarguments under ORS 94.986, the statute regarding membership camping contracts. Our disposition of the second assignment of error also obviates the need to address the fourth assignment of error, as previously mentioned, because the IIER claim was pleaded in the alternative to the breach of contract claim.
III. ELDER FINANCIAL ABUSE CLAIM
Defendant's third assignment of error pertains to the claim for elderfinancialabuseassertedbythe56plaintiffswhoareaged 65 years or older. ORS 124.100(4) provides for an action “for financial abuse described in ORS 124.110.” ORS 124.110(1) in turn provides that “[a]n action may be brought under ORS 124.100 for financial abuse” in either of two circumstances:
“(a) When a person wrongfully takes or appropriates money or property of a vulnerable person, without regard to whether the person taking or appropriating the money or property has a fiduciary relationship with the vulnerable person.
“(b)Whenavulnerablepersonrequeststhatanotherperson transfer to the vulnerable person any money or property thattheotherpersonholdsorcontrolsandthatbelongstoor is held in express trust, constructive trust or resulting trust for the vulnerable person, and the other person, without good cause, either continues to hold the money or property or fails to take reasonable steps to make the money or property readily available to the vulnerable person when:
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“(A) The ownership or control of the money or property was acquired in whole or in part by the other person or someone acting in concert with the other person from the vulnerable person; and
“(B) The other person acts in bad faith, or knew or should have known of the right of the vulnerable person to have the money or property transferred as requested or otherwise made available to the vulnerable person.”
*821 A “vulnerable person” includes any person aged 65 years or older. ORS 124.100(1)(e) **151 (“vulnerable person” includes an “elderly person”); ORS 124.100(1)(a) (“elderly person” means a person 65 years of age or older).
In their complaint, the subset of plaintiffs aged 65 years or older alleged that defendant had acquired ownership of the resort and taken over the responsibility to honor the membership camping contracts and, thereby, “acquired a property right of the Elderly Plaintiffs (ORS 124.110(a)) or hold in trust the annual dues and property rights of the Elderly Plaintiffs (ORS 124.110(b)).” They further alleged that defendant had “acted in bad faith in refusing to honor the property rights”; that defendant “[knew] or should have known that the Elderly Plaintiffs had the rights in the membership camping contracts and the rights to use the Resort”; and that defendant had committed elder financial abuse “by denying the elderly Plaintiffs access to the Resort, by breaching the membership camping contracts and the additional benefits purchased by Elderly Plaintiffs, and by denying the property rights of the Elderly Plaintiffs.”
At the close of plaintiffs’ case-in-chief, defendant moved for a directed verdict on the elder financial abuse claim, citing Bates v. Bankers Life and Casualty Co., 362 Or. 337, 408 P.3d 1081 (2018), for the proposition that a contract dispute does not give rise to liability for elder financial abuse.
In ruling on the motion, the court described the legal standard and summarized plaintiffs’ evidence. The court stated that it “didn't really see” any evidence of wrongful conduct, noting that “it's not against Oregon law for a business person to decide that they want to cancel a contract with a vulnerable person.” The court also voiced concern that “[i]f you start
making that the law, no person would want to * * * have contracts with people who are over the age of 65, because every time they get into a squabble with them, they're going to get sued for treble damages.” Ultimately, however, the court concluded that there was enough to go to the jury, on the theory that defendant deprived plaintiffs of their property insofar as plaintiffs had common law rights *822 running with the land, arising from their membership contracts, and were being excluded from the campground.
Defendant assigns error to that ruling, arguing that the evidence was legally insufficient to support a verdict under either ORS 124.110(1)(a) or ORS 124.110(1)(b)
A. ORS 124.110(1)(b)
We begin with ORS 124.110(1)(b), which applies when a “vulnerable person entrusts his or her money or property to the other person and later requests its return, but the other person in bad faith refuses to return it.” Bates, 362 Or. at 344, 408 P.3d 1081. In Bates, the Supreme Court answered a question certified to it by the United States Court of Appeals fortheNinthCircuit,inconnectionwithaninsurancedispute: “ ‘Does a plaintiff state a claim under [ORS] 124.110 (1)(b) for wrongful withholding of money or property where it is allegedthataninsurancecompanyhasinbadfaithdelayedthe processing of claims and refused to pay benefits owed under an insurance contract?’ ” Id. at 339, 408 P.3d 1081 (quoting Bates v. Bankers Life & Cas. Co., 849 F.3d 846, 847 (9th Cir 2017)).
The elderly plaintiffs in Bates contended that their payment of insurance premiums to the defendant insurance company constituted a transfer of money or property and that, when the defendant failed to pay policy benefits in bad faith, it was not only a breach of the insurance contract but also a refusal to return their money or property and thus elder financial abuse under ORS 124.110(1)(b) Id. at 341-42, 408 P.3d 1081. The plaintiffs “essentially s[ought] to bring themselves within the words of the elder financial abuse statute by arguing that the insurance benefits that Bankers was contractually obligated to pay them constituted ‘money or property’ that ‘belong[ed] to’ them.” Id. at 341, 408 P.3d 1081 (quoting ORS 124.110(1) (b) (second brackets in original)).
TheSupremeCourtrejectedthatargumentandanswered“no” to the certified question. Id. at 340, 408 P.3d 1081. The court explained that a claim for elder financial abuse under ORS 124.110(1)(b) has four elements. **152 “The first element in time (although it appears in the middle of the provision)
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is that ‘[t]he ownership or control of the money or property *823 was acquired in whole or in part by the other person
* * * from the vulnerable person.’ ” Id. at 344, 408 P.3d 1081 (quoting ORS 124.110(1)(b)(A) (ellipses and brackets in Bates)).7 There need not be any wrongful conduct in the initial acquisition of the money or property. Id. The second elementis“thevulnerableperson'srequesttotheotherperson that the other person ‘transfer’ to the vulnerable person any money or property that ‘belongs to’ the vulnerable person.”
Id. (quoting ORS 124.110(1)(b)). The third element is “that the other person ‘without good cause’ continue to hold the money or property that ‘belongs to’ the vulnerable person.”
Id. (quoting ORS 124.110(1)(b)). The fourth element is “that the other person have acted ‘in bad faith, or knew or should have known of the right of the vulnerable person to have the money or property transferred as requested.’ ” Id. (quoting ORS 124.110(1)(b)(B)).
The elderly plaintiffs’ position in Bates that the defendant violated ORS 124.110(1)(b) by failing to honor the insurance contracts ran “into an initial, and fatal, textual barrier.” Id at 344, 408 P.3d 1081. It “essentially read[ ] out of the statute the first element of the claim—that [the defendant] have acquired ‘ownership or control of the money or property from [plaintiffs].’ ” Id. at 344-45, 408 P.3d 1081 (final brackets in original). The court disagreed with the plaintiffs that “their contractual right to receive insurance benefits under the policies” was money or property that the defendant acquired from them. Id. at 345, 408 P.3d 1081. Rather, the court explained, the “plaintiffs paid insurance premiums to Bankers in exchange for insurance policies.” vfId. The plaintiffs were “not seeking the return of the money they transferred to Bankers in the form of premium payments, but instead the contractual benefits they are entitled to under Bankers’ insurance policies, which are not the same thing.” Id.
Although a contractual right to receive benefits “might be considered ‘property’ in the broadest sense of the word,” the first element of ORS 124.110(1)(b) was not met, *824 because “the money or property” that the plaintiffs had given to the defendant—insurance premiums—was not the same “money or property” that they had requested from defendant—the benefits to which they were entitled under their contracts. Id. at 347, 408 P.3d 1081. Even if it was “wrongful” for the defendant to fail to pay benefits under the contract terms, it was not a violation of ORS 124.110(1) (b). Id. In reaching that conclusion, the court acknowledged that its construction of the statute limits liability under ORS
124.110(1)(b) to “trust-like situations—and not simply to any failure to pay a contractual or other debt owed to a vulnerable person as a result of an arms-length consumer transaction.”
Id. at 346-47, 408 P.3d 1081. That construction was dictated by the unambiguous text and context of the statute. Id. at 347, 408 P.3d 1081
Applying Bates, we reach the same conclusion here, i.e., that the first element for liability under ORS 124.110 (1) (b) was not proved. Plaintiffs argue that their rights under the camping contracts were “money or property” that they “requested” that defendant “transfer” to them. That is directly analogous to the plaintiffs’ position in Bates and fails for the same reasons. Plaintiffs did not seek return of the fees and dues that they paid to Elkside, so, even if defendant stands in Elkside's shoes, what plaintiffs requested from defendant —access to the resort and other benefits provided in their membership camping contracts—is “not the same thing” as what they transferred. Id. at 345, 408 P.3d 1081. In short, plaintiffs are not asking for the return of money or property that they transferred in a trust-like situation; rather, they are seeking the benefit of a contractual bargain that they made. Asin Bates,evenifdefendantbreachedthecontract,andeven if it was “wrongful” to do so, no claim exists under ORS 124.110(1)(b)
**153 B. ORS 124.110(1)(a)
We next consider ORS 124.110(1)(a), which applies “[w]hen a person wrongfully takes or appropriates money or property of a vulnerable person.” As used in ORS 124.110 (1)(a), “wrongful” refers to conduct that “is carried out in pursuit of animpropermotiveorbyimpropermeans.” Church v. Woods, 190OrApp112,118-19,77P.3d1150(2003)(concludingthat thelegislatureintended“wrongful”in *825 ORS124.110(1) (a) to have that term's “well-understood meaning in the law of torts with regard to interference with legal interests”).
To be considered improper, a party's means “must be independently wrongful by reason of statutory or common law, beyond the mere fact of the injury complained of.” Church, 190 Or App at 119, 77 P.3d 1150; see also Ride PDX v. Tee & B, LLC, 322 Or App 165, 168, 519 P.3d 870 (2022) (“If liability is based on the use of improper means, then the means must violate some objective, identifiable standard, such as a statute or other regulation, or a recognized rule of common law, or, perhaps, an established standard of a trade or profession.” (Internal quotation marks omitted.)).
“Improper means, for example, include violence, threats, intimidation, deceit, misrepresentation, bribery, unfounded
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litigation, defamation and disparaging falsehood.” Church, 190 Or App at 119, 77 P.3d 1150 (internal quotation marks omitted); see also Bates, 362 Or. at 344, 408 P.3d 1081 (referring to “fraud, conversion, or theft” as wrongful means of acquiring a vulnerable person's money or property); Allen v. Hall, 328 Or. 276, 286, 974 P.2d 199 (1999) (making fraudulent misrepresentations to an elderly person's attorney and care providers to prevent execution of a new will would qualify as using improper means to interfere with a prospective inheritance).
In the trial court, plaintiffs did not identify any “improper means” that they were claiming defendant used to take or appropriate plaintiffs’ property. On appeal, plaintiffs’ only argument as to improper means is “conversion”—that defendant converted plaintiffs’ “lifetime right to occupy specific portions of the resort property” to defendant's own use. That theory is untenable, because conversion relates only to chattels. See Hemstreet v. Spears, 282 Or. 439, 444, 579 P.2d 229, appeal dismissed, 439 U.S. 948, 99 S.Ct. 343, 58 L.Ed.2d 340 (1978) (“[C]onversion is an intentional exercise of dominion or control over a chattel which so seriously interferes with the right of another to control it that the actor may justly be required to pay the other the full value of the chattel.”); Black's Law Dictionary 268(9thed2009)(defining “chattel” as “[m]ovable or transferable property; personal property; esp. a physical object capable of manual delivery and not the subject matter *826 of real property”); see also Rapacki v. Chase Home Fin. LLC, 797 F Supp 2d 1085, 1092 (D Or 2011) (citing Hemstreet and Black's Law Dictionary and concluding that real property subject to a trust deed was not a chattel and, accordingly, plaintiff's claim could not be “construed as a claim for conversion”).
As for improper motive, we have never addressed improper motive in the specific context of ORS 124.110, but, under Church, we understand it to have its usual “well-understood meaning” in tort law. Church, 190 Or App at 118, 77 P.3d 1150. Therefore, to be liable for elder financial abuse based on acts committed with an improper motive, the defendant's “purpose must be to inflict injury on the plaintiff ‘as such.’
” Northwest Natural Gas Co. v. Chase Gardens, Inc., 328 Or. 487, 498, 982 P.2d 1117 (1999) (quoting Top Service Body Shop v. Allstate Ins. Co., 283 Or. 201, 211, 582 P.2d 1365 (1978)); see also Ride PDX, 322 Or App at 174 n 5, 519 P.3d 870 (“[T]o be actionable under the ‘improper purpose’ prong, the purpose must be to inflict injury on the plaintiff.” (Emphasis in original.)).
For example, a defendant acting “with the sole design of injuring [the plaintiff] and destroying his business” would have an improper motive. Top Service Body Shop, 283 Or. at 201-11, 582 P.2d 1365. Conversely, a defendant acting in “pursuit of its own business purposes as it saw them” would not have an improper motive. Id. at 212, 582 P.2d 1365; see also Eusterman v. Northwest Permanente, P.C., 204 Or App 224, 238, 129 P.3d 213, rev. den, 341 Or. 579, 146 P.3d 884 (2006) **154 (adefendant'sdesiretomaximizeprofitsisnot animpropermotive).In Ride PDX,322OrAppat174n5,519 P.3d870,forexample,weconcludedthat,eveniftheplaintiffs proved that the defendants’ motive for complaining to their mutual landlord about noise from the plaintiffs’ business was to obtain rent concessions for the defendants’ own benefit, that would not prove an improper purpose.
Here, defendant notified plaintiffs on June 20, 2017, that it would no longer honor the membership contracts. Even assuming arguendo that not honoring the contracts would qualify as a taking or appropriation of plaintiffs’ money or property—an issue that we need not decide—plaintiffs have not pointed to any evidence in support of their assertion that defendant had an “improper purpose” *827 in deciding not to honor the contracts, i.e., that defendant's intent was specificallytoinjureplaintiffs as such.Asthetrialcourtnoted in discussing the directed verdict motion, the evidence was that defendant decided not to honor the contracts based on Chris Barnett's conclusion that they were not valid or binding on defendant. Defendant acting in its own business interests, based on its own understanding of its legal obligations, is not an improper motive for refusing to honor contracts. It put defendant at risk of a breach of contract claim if plaintiffs took a different view, but it is not a viable basis for an elder financial abuse claim under ORS 124.110(1)(a)
Insum,onthisrecord,plaintiffsfailedtoproveelderfinancial abuse under ORS 124.110(1). It follows that the trial court erred when it denied defendant's motion for a directed verdict on that claim.
Judgment on elder financial abuse claim reversed and remanded; otherwise affirmed.
All Citations
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Footnotes
1 Elkside is the successor of Osprey Point RV Park, LLC. Each entity had as its members Mike Smalley and one or more of his family members. Like the parties, we do not distinguish between the two entities. We use “Elkside” to refer to both entities. References to “Smalley” are to Mike Smalley.
2 In 2001, Elkside gave a document to then-members to “certify” and “guarantee” resort privileges, including stating, “If Osprey Point RV Resort should be sold the above membership will continue in force under the direction of the new manager.” It is unclear how many of plaintiffs were members in 2001.
3 There is evidence that Elkside wanted the membership contracts honored, may have even believed that a new owner would find it legally difficult to avoid them, and had that in mind when pricing the property (initially at $5.9 million, then at $3.3 million, then at $1.995 million). However, plaintiffs do not contend that defendant made any actual promises to Elkside, and, on this record, it would require improper speculation and stacking of inferences to find that defendant actually promised or otherwise represented to Elkside that it would honor the contracts.
4 Chris Barnett felt that membership holders were “trying to take advantage of” him by constantly requesting “freebies”—such as free fishing lessons, free boat rides, free massages, free use of the event center, free pinball machines, etc.—based on alleged handshake deals and verbal agreements with Smalley.
5 The court referred to the “common law” generally, and it ultimately instructed the jury on covenants running with the land. Compare Johnson v. Highway Division, 27 Or App 581, 584, 556 P.2d 724 (1976), rev. den, 277 Or 99 (1977) (“Before a covenant may be said to run with the land and be binding upon a promisor's successors in interest, four requirements must be met: (1) there must be privity of the estate between the promisor and his successors; (2) the promisor and promisee must intend that the covenant run; (3) the covenant must touch and concern the land of the promisor; and (4) the promisee must benefit in the use of somelandpossessedbyhimasaresultoftheperformanceofthepromise.”) with Ebbe v. Senior Estates Golf, 61 Or App 398, 405, 657 P.2d 696 (1983) (A “promise is binding as an equitable servitude if (1) the parties intend the promise to be binding; (2) the promise concerns the land or its use in a direct and not a collateral way; and (3) the subsequent grantee has notice of the covenant, either actual or constructive.” (Internal quotation marks omitted.)).
6 By contrast, in Sander, 306 Or App at 185-86, 473 P.3d 1113, it was error to direct a verdict in the plaintiffs’ favor on a breach of contract claim, based on breach of an easement agreement, given how the claim was pleaded. And, in LDS Development, LLC v. City of Eugene, 280 Or App 611, 614, 618 n 8, 622, 382 P.3d 576 (2016), rev. den, 361 Or. 100, 391 P.3d 131 (2017), the trial court erred by granting summary judgment on an unpleaded theory. Here, the way the issue evolved makes it difficult to discern the court's exact thinking —and also precludes our saying that the court erred.
7 In the interests of completeness, we note that ORS 124.110(1)(b)(A) also applies when ownership or control of the money or property is acquired by “someone acting in concert with the other person.” That aspect of the statute was not at issue in Bates, but it is another way to satisfy the first element.
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End of Document © 2023 Thomson Reuters. No claim to original U.S. Government Works.
322 Or.App. 462 Court of Appeals of Oregon.
Jesse PETERS, an individual, and Kate Guptill, an individual, Plaintiffs-Appellants, v.
C21 INVESTMENTS, INC., a corporation incorporated under the laws of British Columbia; 320204 US Holdings Corp., a Delaware corporation; Phantom Brands LLC, an Oregon limited liability company, dba Phantom Farms; Swell Companies Limited, an Oregon corporation; Robert Cheney, an individual; Skyler Pinnick, an individual; Eric Shoemaker, an individual; Leonard Werden, an individual; and Eco Firma Farms, LLC, an Oregon limited liability company, Defendants-Respondents, and Clinton Harris, Defendant.
A174918
Argued and Submitted September 28, 2022
October 26, 2022
other operations, those operations' CEOs, and employee were not entitled to enforce forum-selection provision in agreements between former executives and Canadian corporation, and
claims of intentional interference with business relations and intentional interference with employment relations by former executives were not “in respect of the subject matter” of agreements between former executives and Canadian corporation.
Reversed and remanded.
Procedural Posture(s): On Appeal; Motion to Dismiss for Lack of Subject Matter Jurisdiction; Motion for Attorney's Fees.
**921 Clackamas County Circuit Court, 19CV19273; Douglas V. Van Dyk, Judge, (General Judgment), Susie L. Norby, Judge. (Supplemental Judgment)
Attorneys and Law Firms
Synopsis
Background: Former executives of licensed recreational marijuana growing operation, who sold their interests in operation to Canadian corporation and were to remain as executives of operation after sale, brought action against other licensed recreational marijuana growing operations, those operations' chief executive officers (CEOs), and employee of former executives' operation, asserting intentional interference with business relations and intentional interference with employment relations based on allegations that operations, their executives, and employee interfered with former executives' efforts to attract other operations to Canadian corporation. The Circuit Court, Clackamas County, Douglas V. Van Dyk, J., entered a general judgment granting motion to dismiss for lack of subject matter jurisdiction by other operations, their CEOs, and employee, and the Circuit Court, Susie L. Norby, J., entered a supplemental judgment awarding attorney fees. Former executives appealed both judgments.
Matthew A. Goldberg, Portland, argued the cause for appellants.AlsoontheopeningbriefwereAllisonC.Bizzano and Lotus Law Group, LLC. Also on the reply brief were Nicole C. Gossett-Roxbury and Lotus Law Group, LLC.
Julie A. Smith, Portland, argued the cause for respondents. Also on the brief was Cosgrave Vergeer Kester LLP.
Before Tookey, Presiding Judge, and Egan, Judge, and Kamins, Judge.
Opinion
TOOKEY, P. J.
*464 In this civil action, plaintiffs Jesse Peters and Kate Guptill appeal from general and supplemental judgments for defendants after the trial court dismissed for lack of subjectmatter jurisdiction their amended complaint alleging tort claims for intentional interference with business relations and intentional interference with employment relations.
Holdings: The Court of Appeals, Tookey, P.J., held that:
As explained in more detail below, plaintiffs’ claims arise out of a transaction in which plaintiffs agreed to sell their interests in Eco Firma Farms LLC (EFF), an Oregon-licensed recreational marijuana growing operation, to C21 Investments, Inc. (C21), a publicly traded Canadian corporation incorporated under the laws of the Province
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of British Columbia, through its United States subsidiary, 320204 US Holdings, Corp (USH), a Delaware corporation. The agreements **922 memorializing the sale were subject to a share-purchase agreement (SPA) that included a forumselection clause stating that the parties agreed that the courts of the Province of British Columbia were the “exclusive forum” for any litigation “in respect of the subject matter” of the agreement.
Plaintiffs’ original complaint, filed in the Clackamas County Circuit Court, named as defendants the above entities as well as the current defendants—Phantom Brands LLC, d/ b/a Phantom Farms, an Oregon limited liability company (Phantom), Phantom CEO Skyler Pinnick (Pinnick), Swell Companies Limited, an Oregon corporation (Swell), Swell CEO Eric Shoemaker (Shoemaker), Clinton Harris, an employee of EFF, and other individuals not pertinent to this appeal.
The trial court granted defendants’ motion to make the original complaint more definite and certain and allowed plaintiffs to replead. Plaintiffs then filed an amended complaint, on which this appeal is based, naming only the current defendants—Oregon entities Phantom and Swell, and Oregon residents Shoemaker, Pinnick, and Harris—none of whom were parties to the SPA that includes the forumselection clause.
Nonetheless,onthecurrentdefendants’motion,thetrialcourt dismissed the complaint for lack of subject-matter *465 jurisdiction, based on the forum-selection clause. Plaintiffs appeal from the general judgment dismissing their claims and a supplemental judgment awarding attorney fees. We conclude that the trial court erred in dismissing plaintiffs’ claims based on a lack of subject-matter jurisdiction and therefore reverse both judgments.
Whether a court has subject-matter jurisdiction over a particular proceeding is a question of law that we review for legal error. State v. Hill, 277 Or App 751, 763, 373 P.3d 162, rev. den., 360 Or. 568, 385 P.3d 82 (2016). In reviewing the trial court's ruling granting defendants’ motion to dismiss for lack of subject-matter jurisdiction under ORCP 21 A(1),1 we draw our summary of the relevant facts from the pleadings and affidavits and assume the truth of all well-pleaded facts alleged in plaintiffs’ amended complaint as supplemented by the record, construing the pleadings and affidavits liberally in favor of jurisdiction. See O'Neil v. Martin, 258 Or App 819, 828, 312 P.3d 538 (2013) (in reviewing a trial court's grant
of a motion to dismiss for lack of personal jurisdiction, we assume the truth of all well-pleaded allegations in the record andconstruethepleadingsliberallyinsupportofjurisdiction).
In 2018, plaintiffs sold their shares in EFF to C21 through C21's United States subsidiary USH. The terms and conditions of the sale were first set forth in a “term sheet” and then memorialized in the SPA between plaintiffs, C21, and USH.
Under a separate agreement incorporated into the SPA, plaintiffsweretocontinueworkingforEFFafterthesale,with Petersservingas“DirectorofOregonOperations”andGuptill serving as EFF's chief executive officer.
The SPA further included a forum-selection clause that provided:
“Each of the Parties hereto irrevocably attorns [(consents)] and submits to the exclusive jurisdiction of the courts of the Province of British Columbia in respect of the subject matter of this Agreement.”
*466 Plaintiffs alleged in their amended complaint that Peters's role with EFF was to include recruiting other Oregon cannabis businesses to join C21, and that a portion of his compensation would be based on that success. Plaintiffs alleged that Peters introduced C21 to other Oregon-licensed recreational marijuana growing operations, including defendants Phantom and Swell. Plaintiffs alleged that, shortly before and after C21's acquisition of EFF, defendants began to exclude plaintiffs from the Oregon operations as well as negotiations concerning C21's acquisition of Oregon entities, and to interfere with Peters's efforts to attract entities to C21. C21 removed Peters as manager of EFF, and replaced him with Shoemaker, who plaintiffs had initially introduced to C21.
**923 Peters resigned from his position with EFF over disputes concerning compensation and plaintiffs’ belief that they were being excluded from the business, and Guptill was fired from her position as CEO of EFF, allegedly as a result of defendants’ interference. Plaintiffs then made a demand on C21 to pay plaintiffs wages they believed were owed under the various agreements. C21 rejected the demand, and plaintiffs brought this action.
Aspreviouslynoted,plaintiffs’originalcomplainthadnamed as defendants C21, USH, and EFF, defendants Phantom and Swell, defendants Harris, Pinnick, and Shoemaker, and other
Peters v. C21 Investments, Inc., 322 Or.App. 462 (2022) 520 P.3d 920 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 2
individuals not involved in this appeal. Those defendants moved to dismiss the complaint for lack of subject-matter jurisdiction, based on the forum-selection clause, or to make the complaint more definite and certain. The trial court granted the motion to make the complaint more definite and certain and allowed plaintiffs to replead.
Also as noted, plaintiffs’ amended complaint names as defendants only Phantom, Swell, Pinnick, Shoemaker, and ClintonHarris.Thoseentitiesandindividualswerenotparties totheSPAandassociatedagreementsbetweenplaintiffs,C21, and EFF. For their first claim, plaintiffs allege that Phantom, Swell, Pinnick, and Shoemaker intentionally interfered with plaintiffs’ economic relations with C21 and EFF:
*467 “Phantom, Swell, Mr. Pinnick, and Mr. Shoemaker intentionally interfered with Plaintiffs’ contracts, professional relationships, and business expectancies for the improper purposes of, among others (i) ousting Plaintiffs from their senior management roles within C21 and (ii) conspiring to ensure that the acquisition of EFF by C21 would turn into a colossal tragedy and failure for Plaintiffs.
“Phantom, Swell, Mr. Pinnick, and Mr. Shoemaker intentionally interfered with Plaintiffs’ contracts, professional relationships, and business expectancies through improper means by: (i) repeatedly disparaging Peters behind his back within his professional network and within C21; (ii) working actively to exclude Peters from company and industry happenings to the greatest possible extent; (iii) misrepresenting to third-parties the true nature of C21's interest in Phantom and Swell; and (iv) knowingly violating OLCC regulations.”
Based on the same underlying facts, for their second claim, plaintiffs allege that defendants Phantom, Swell, Pinnick, and Shoemaker interfered with plaintiffs’ employment relationships with C21.
Defendants Phantom, Swell, Pinnick, and Shoemaker filed a new motion to dismiss under ORCP 21 A(1), for a lack of subject-matter jurisdiction, asserting that all of the claims depend on the existence of and arise “in respect of the subject matter” of plaintiffs’ agreements with C21 and EFF and, thus, that the forum-selection clause of the SPA requires that the claims be brought in a court of the Province of British Columbia.
The trial court granted the motion to dismiss and entered a general judgment dismissing all defendants except Harris, 2 and subsequently awarded defendants their attorney fees in a supplemental judgment. Plaintiffs appeal from *468 the general judgment and from the supplemental judgment awarding attorney fees.
Plaintiffs contend in their first and second assignments of error that the trial court erred in dismissing their claims againstPhantom,Swell,Pinnick,andShoemakerbasedonthe forum-selection clause of the SPA and associated agreements between plaintiffs and C21, USH, and EFF. Plaintiffs contend that their claims do not fall within the forum-selection clause, because they are not contract claims based on the agreements and because Phantom, Swell, Pinnick, and **924 Shoemaker were not parties to those agreements nor are they intended beneficiaries. Phantom, Swell, Pinnick, and Shoemaker respond that plaintiffs’ claims fall within the forum-selection provision, because the alleged interference depends on the existence of plaintiffs’ agreements with C21, USH, and EFF.3
The court's ruling relates to subject-matter jurisdiction. In Oregon, unless divested by statute or rule of law, “circuit courts have subject matter jurisdiction over all actions.” State v. Terry, 333 Or. 163, 186, 37 P.3d 157 (2001) (citing Or. Const, Art VII (Original), § 9 (stating that all jurisdiction not vested by law in another court shall be vested in circuit courts); Or. Const, Art VII (Amended), § 2 (not changing jurisdictional scheme set out in original Article VII)). To divest the circuit courts of subject-matter jurisdiction, the legislature must do so expressly. Speciality Risk Services v. Royal Indemnity Co., 213 Or App 620, 625, 164 P.3d 300 (2007)
There is no question that the Clackamas County Circuit Court had subject-matter jurisdiction of the parties’ litigation. The question is whether the court was nonetheless *469 required to relinquish its subject-matter jurisdiction because of the forum-selection clause of the SPA. The parties devote considerable briefing to the issue whether, as a matter of contract construction, the forum-selection clause of the SPA expresses the intention of the parties to the agreement that it can be enforced by a nonsignatory to the agreement. But we diverge from that issue preliminarily to consider a procedural issue not raised by the parties: whether an individual who is not a signatory to the agreement containing the forumselection clause may bring an ORCP 21 motion to dismiss based on the forum-selection clause.
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In Reeves v. Chem Industrial Co., 262 Or. 95, 101, 495 P.2d 729 (1972), the Supreme Court had before it the question whether a forum-selection clause requiring that the parties’ disputes be litigated in Ohio was valid and could provide a basis for dismissal of a claim brought in Oregon. The court reviewed the development of the case law around forum-selection clauses and concluded that, unless the court determined that a forum-selection clause establishing an exclusive forum for resolution of the parties’ disputes was unfair or its enforcement was unreasonable, the provision would be enforced by dismissing an action filed in a forum not agreed to by the parties. The court quoted with approval from the Restatement that enforcement of a forum-selection provision would be unreasonable if “the forum chosen by the parties would be a seriously inconvenient one for the trial of the particular action.” Reeves, 262 Or. at 98, 495 P.2d 729 (quoting comment to 1 Restatement, Conflict of Laws (Second), § 80). The court did not explicitly state in Reeves whether its ruling was based on subject-matter jurisdiction. Indeed, the court's concluding paragraph suggested that its ruling was not “jurisdictional.”4 Rather, the court explained, its decision *470 was a matter of not exercising its jurisdiction to give effect **925 to the parties’ enforceable agreement that their disputes would be litigated in Ohio. Id. at 101, 495 P.2d 729. Thus, the court's emphasis was on the enforceability of the parties’ agreement to litigate in Ohio.
In Black v. Arizala, 337 Or. 250, 266, 95 P.3d 1109 (2004), the court addressed the cognizability of a motion to dismiss under ORCP 21 A(1) for lack of subject-matter jurisdiction based on a venue agreement. The court found instructive to its interpretation of ORCP 21 A(1) the court's reasoning in Reeves that “the specific, private law estab-lished by the parties’ valid agreement superseded the general jurisdiction of the Oregon courts over claims for breach of contract.” Black, 337 Or. at 264, 95 P.3d 1109 (emphasis added). The court reasoned, based on Reeves, that “a conclusion of an Oregon court that the parties’ venue agreement is valid and enforceable is a legal determination that requires the court to dismiss the action in response to a timely motion to dismiss for lack of jurisdiction over the subject matter.” Id. (emphasis added). The court studied the legislative history of ORCP 21 A(1) and concluded that, although no statutory provision expressly provides for the dismissal of a complaint based on an agreement to litigate claims in a different venue,
“ORCP 21 A(1) authorizes Oregon courts to dismiss an action for lack of jurisdiction over the subject matter when
the motion is timely filed and the record demonstrates that the parties have an enforceable agreement to litigate the action in a different venue.”
Id. at 266, 95 P.3d 1109 (emphasis added).
Thus, both Reeves and Black seem to emphasize as a prerequisite to the enforceability of a forum-selection clause an agreement by the parties to the specific litigation that their disputes would be litigated in a selected forum. The forumselection clause of the SPA provides:
“Each of the Parties heretoirrevocablyattorns[(consents)] and submits to the exclusive jurisdiction of the courts of the Province of British Columbia in respect of the subject matter of this Agreement.”
*471 (Emphasisadded.)Textually,itisthepartiestotheSPA who consented and agreed to the exclusive jurisdiction of the Province of British Columbia. Defendants were not parties to the SPA or the associated agreements; nor do they have a separate forum-selection agreement with plaintiffs.
We note that courts of other jurisdictions have held that, in limited circumstances, forum-selection provisions may be enforced by or against nonsignatories. See, e.g., Tate & Lyle Ingredients Ams., Inc. v. Whitefox Tech. USA, Inc., 98 A.D.3d 401, 949 N.Y.S.2d 375 (2012) (citing cases holding that a nonsignatory can enforce a forum-selection clause when its enforcement is “foreseeable by virtue of the relationship betweenthem,”andthenonsignatoryhasa“sufficientlyclose relationship with the signatory and the dispute to which the forum selection clause applied”); Hugel v. Corporation of Lloyd's, 999 F.2d 206, 209 (7th Cir. 1993); Manetti-Farrow, Inc. v. Gucci Am. Inc., 858 F.2d 509, 514 n. 5 (9th Cir. 1988) (“We agree with the district court that the alleged conduct of the non-parties is so closely related to the contractual relationship that the forum selection clause applies to all defendants.”); but see Cape Flattery Ltd. v. Titan Maritime, LLC, 647 F.3d 914, 924 (9th Cir. 2011) (“The mere fact that the tortious interference claims would not have arisen ‘but for’ the existence of the Employment Agreements is insufficient to sweep those non-signatory claims into the ambit of the forum selection clause in a contract they did not sign.”). Assuming that we were to adopt the view that certain circumstancesmightjustifyenforcementofaforum-selection clause by a nonsignatory to the agreement containing the clause, the record here is not sufficiently developed to determine whether the limited circumstances described in those cases exist here. Thus, were we to resolve the case on
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that basis, we would conclude that, under both Black and Reeves, defendants are not entitled to enforce the forumselection provision, because they did not have an agreement with plaintiffs to pursue claims in the Province of British Columbia.
But we need not resolve that issue here, because we conclude that, even if the SPA forum-selection provision is enforceable by defendants as nonsignatories through a *472 **926 motion to dismiss for lack of subject-matter jurisdiction, it would not apply to these particular claims by plaintiffs under the terms of the provision itself. Thus, we turn to the contract construction arguments discussed by the parties. The forum-selection provision of the SPA states that the parties to the agreement “submit[ ] to the exclusive jurisdiction of the courts of the Province of British Columbia in respect of the subject matter of this Agreement.” (Emphasis added.) On appeal, in defense of the trial court's ruling, defendants contendthataclaimis“inrespectofthesubjectmatter”ofthe agreements if agreements provide the underlying facts for the claims. Plaintiffs assert that the forum-selection clause only applies when the claims originate from the agreements, not when they arise from separate tortious conduct.
In Black, the court said that, when parties have agreed to litigate their dispute in a different forum, whether, as a textual matter, the forum-selection provision requires dismissal of the particular litigation is to be determined through a construction of the agreement. 337 Or. at 267, 95 P.3d 1109 (“The remaining question is whether the trial court correctly determined that parties’ venue agreement required dismissal.”). The forum-selection provision in Black stated that “venue for any legal action arising from this Agreement, including enforcement of any arbitration award, shall be in San Juan, Puerto Rico.” The court explained in Black that the parties’ intentions, as expressed in the provision, would determine whether particular litigation was subject to the forum-selection provision. The court turned to dictionary definitions to help in its determination whether the instant action was “arising from this Agreement”:
“The dictionary defines the verb ‘arise’ to include ‘to originate from a specific source[,]’ ‘to come into being[,]’ and ‘to become operative[.]’ Webster's Third New Int'l Dictionary 117 (unabridged ed 1993). The dictionary also explains that ‘from’ is ‘used as a function word to indicate the source or original or moving force of something: as * * * (4) the place of origin, source, or derivation of a material or immaterial thing[.] Id. at 913, 95 P.3d 1109 Applying those definitions, we conclude *473 that the
parties’ agreement must be the specific place of origin or the source of the legal action to trigger application of the venue agreement.”
Black, 337 Or. at 267, 95 P.3d 1109 (emphasis added; ellipsis and brackets in Black).5
As in Black, our analysis requires that we determine whether thepartiestotheSPAintendedthattheforum-selectionclause would apply to plaintiffs’ tort claims. The ordinary rules of contract construction apply in determining the applicability of the forum-selection clause. Black, 337 Or. at 267, 95 P.3d 1109. We first determine whether the parties intended the forum-selection clause to include the present controversy by examining the text and context of the provision. Yogman v. Parrott, 325 Or. 358, 361, 937 P.2d 1019 (1997); see also Batzer Construction, Inc. v. Boyer, 204 Or App 309, 313, 129 P.3d 773, rev. den., 341 Or. 366, 143 P.3d 239 (2006) (noting that, to determine whether a provision is ambiguous, the trial court may **927 consider the text in light of the circumstances underlying the formation of the contract). If the provision is unambiguous, we construe the words of the contract as a matter of law. Eagle Industries, Inc. v. Thompson, 321 Or. 398, 405, 900 P.2d 475 (1995). If we concluded that the forum-selection clause applies, under Reeves, 262 Or. at 98, 495 P.2d 729, we must then determine whether application of the provision would be unfair or unreasonable.
*474 Our first task, then, is to determine whether plaintiffs’ claims are “in respect of the subject matter of” the SPA and associated agreements. The phrase “in respect of” is not defined in the SPA, so we give it its plain, natural, and ordinary meaning. See Copeland Sand & Gravel, Inc. v. Estate of Dillard, 267 Or App 791, 796, 341 P.3d 187 (2014), adh'd to on recons., 269 Or App 904, 346 P.3d 526 (2015) (“words in a contract should be given their plain and ordinary meaning[,] and * * * dictionary definitions are one source of that meaning”). Thus, as the court did in Black,werefertothedictionaryforguidance. Webster's Third New Int'l Dictionary 1934 (unabridged ed 2002), defines the phrase “in respect of” to include “as to : as regards : insofar as concerns : with respect to,” and defines “respect” to include “a relation or reference to a particular thing or situation.” See also Phillips Sisson Indus., Inc. v. Hysell, 317 Or App 440, 450, 506 P.3d 1139 (2022) (citing definition). Thus, the forum-selection provision applies to claims “as to” or “as regards” or “with respect to” the specific subject matter of the SPA and associated agreements. The “subject
Peters v. C21 Investments, Inc., 322 Or.App. 462 (2022) 520 P.3d 920 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 5
matter” of the SPA and the associated agreements was the contractual agreement between plaintiffs and C21 for the sale of plaintiffs’ shares in EFF and plaintiffs’ continued employment with EFF. Thus, as we construe the forumselection provision, it was unambiguously intended by the parties to those agreements to encompass disputes between them as to their specific contractual obligations for the sale of plaintiffs’ shares in EFF to C21 and plaintiffs’ agreement to work for EFF.
Although the SPA and associated agreements are tangential to and certainly provide background for plaintiffs’ current tort claims against defendants, the claims themselves do not have as their bases the contractual obligations of the parties to those agreements; nor are the claims as to the contractual subject matter of the agreements—the sale of EFF and plaintiffs’ employment. Rather, the claims concern defendants’ alleged tortious interference with those agreements. Thus, we conclude that the claims themselves are not “in respect of the subject matter” of the agreements.
Although the SPA and associated agreements could provide information to the court in its analysis of plaintiffs’ tort claims, we conclude that they do not require that the *475 claims be brought in the courts of the Province of British Columbia.6
*476 **928 For that reason, the trial court erred in concluding that plaintiffs’ claims must be dismissed because defendants are entitled to assert that they can only be sued in thecourtsoftheProvinceofBritishColumbia.7 Wetherefore reverse the general judgment. In light of our conclusion, we also reverse the supplemental judgment awarding attorney fees.
Generalandsupplementaljudgmentsreversedandremanded.
All Citations
322 Or.App. 462, 520 P.3d 920
Footnotes
1 ORCP 21 A has been renumbered, effective January 1, 2022. We cite to the version of the rule in existence at the time the trial court issued its decision in this case.
2 Harris was a former employee of EFF. In their amended complaint, plaintiffs alleged that Harris “coerced Plaintiffs through economic duress to give him a 10% interest in [EFF] or risk seeing their economic prospects disintegrate before their eyes,” and sought the recission of that agreement, the imposition of a constructive trust, and restitution. Harris made a motion to dismiss plaintiffs’ claims against him based on the forumselection provision, which the trial court denied. Harris and plaintiffs then entered into a stipulated judgment of dismissal without prejudice, and that judgment is not on appeal.
3 Defendants assert, as a preliminary matter, that the appeal should be dismissed because plaintiffs have failed to name C21, USH, and EFF as respondents on appeal, noting that, despite not naming them as defendants in the amended complaint, plaintiffs never sought to dismiss them from the case as permitted by ORCP 54 A(1) (providing that “a plaintiff may dismiss an action in its entirety or as to one or more defendants without order of court by filing a notice of dismissal with the court and serving the notice on all other parties not in defaultnotlessthan5dayspriortothedayoftrialifnocounterclaimhasbeenpleaded,orbyfilingastipulation of dismissal signed by all adverse parties who have appeared in the action”). We reject the assertion, as it appears that the general judgment did in fact dismiss all defendants without prejudice, including C21, USH, and EFF.
4 The opinion's concluding paragraph states:
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“It should be understood that we are not holding that such clause ‘ousted’ the Oregon court from jurisdiction. We are not deciding whether Oregon had jurisdiction under the long-arm statute. We are holding that if Oregon has jurisdiction the Oregon court nevertheless will dismiss the action because the contract clause agreeing upon the courts of Cleveland, Ohio, as the place for litigation over the contract is valid and should be enforced. This conclusion is reached because there is no evidence that the clause is unfair or enforcement would be unreasonable.”
Reeves, 262 Or. at 101, 495 P.2d 729
5 Because the particular contract at issue in Black was subject to Delaware law, the court then referred to Delaware case law in determining whether the parties’ contract was the “specific place of origin or the source” of the plaintiffs’ claims. The court referred for guidance to Parfi Holding AB v. Mirror Image Internet, Inc., 817 A.2d 149 (Del.2002), cert. den., 538 U.S. 1032, 123 S.Ct. 2076, 155 L.Ed.2d 1061 (2003), in which the Delaware Supreme Court had considered the meaning of an agreement requiring arbitration of disputes “ ‘arising out of or in connection with this Agreement.” The Delaware court held that the provision applied to actions seeking to enforce the rights and duties that the parties’ contract created, not rights and duties created by sources of law external to the parties’ contract. Black, 337 Or. at 268, 95 P.3d 1109. In Black, the court noted the noncontractual nature of the alleged improper acts that were the sources of the rights and duties that the plaintiffs’ action sought to enforce. Id. at 270, 95 P.3d 1109. The court explained its understanding of Delaware law that, although the plaintiffs’ claims may have arisen from some or all the same facts that related to the parties’ contractual transactions, because the sources of the claims were noncontractual, they did not arise out of the contract. Id. Thus, the court concluded, although the agreement could provide a source of information to the court in its analysis of the plaintiffs’ claims, the claims were not subject to the forumselection provision. Id.
6 Defendants contend that our opinion in Livingston v. Metro Pediatrics, LLC, 234 Or App 137, 227 P.3d 796 (2010), requires that we construe the SPA's forum-selection provision to be enforceable by defendants. In Livingston, the plaintiff brought claims of interference with economic relationships against the defendants, who were the plaintiff's coworkers and who then sought to enforce an arbitration clause contained in an employment contract between the plaintiff and the employer, to which they were not parties. The arbitration clause provided: “Any controversy, dispute or disagreement arising out of or relating to this Agreement, or the breach thereof, shall be resolved by arbitration.” The plaintiff contended that, as nonsignatories to the employment contract, the defendants had no right to enforce the arbitration provision. We disagreed. Id. at 149, 227 P.3d 796. We noted the special rule of construction relating to arbitration clauses that requires that an arbitration clause will apply if it can plausibly be so construed. Id. at 147, 227 P.3d 796. We reasoned that the broad text of the arbitration clause could plausibly be construed to apply to claims against nonsignatories. In light of that requirement and in view of the presumption in favor of arbitration, we held that the clause applied to the plaintiff's claims:
“[T]he plain text of the clause—in particular, the ‘arising out of or relating to’ language—does not limit its scope to controversies under the agreement or between plaintiff and [the employer]. Furthermore, the employmentagreementprovidesthebasisforandtermsofplaintiff'semployment.Thetextofthearbitration clause is reasonably susceptible to the interpretation that the parties intended it to apply to any claim that plaintiff might have arising out of or relating to his employment pursuant to the agreement.
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“We conclude that the wording of the clause is also broad enough to encompass claims against nonsignatories and to support the interpretation that the parties intended that [the employer's] employees and agents could avail themselves of its terms. Furthermore, the claims against the individual nonsignatory defendants (intentional interference with economic relations, intentional infliction of emotional distress, and blacklisting) depend on the same allegations made against [the employer] and have as their source the identical circumstances of plaintiff's claims against [the employer]—defendants’ concerted response to plaintiff's conduct relating to the vaccine storage problem. We conclude, especially in light of the public policy favoring arbitrability, see [Snow Mountain Pine, Ltd. v. Tecton Laminates Corp., 126 Or App 523, 869 P.2d 369, rev. den., 319 Or. 36, 876 P.2d 782 (1994)], that the arbitration clause plausibly encompasses not only claims between the parties to the agreement, but claims against the individual defendants that arise out of or relate to plaintiff's employment with [the employer].”
Id. at 150-51, 227 P.3d 796
Livingston is thus distinguishable and is not precedent for the issue presented here. First, Livingston involved an arbitration clause and not a forum-selection clause. It did not involve a motion to dismiss under ORCP 21 A(1) for lack of subject-matter jurisdiction; the enforcement of an arbitration provision does not implicate the court's general subject-matter jurisdiction. Second, our conclusion in Livingston was required because of a special rule of construction for arbitration clauses that is not applicable here—whether the clause can plausibly be interpreted to require arbitration. Id. at 147, 227 P.3d 796. Finally, had Livingston involved a forum-selection provision rather than an arbitration clause, under Reeves, we would have been required to also determine whether application of the provision to the plaintiff's claims against the defendants would be unfair or unreasonable.
7 In view of our conclusion that the forum-selection provision does not apply to plaintiffs’ claims, we do not need to address whether application of the forum-selection clause would be unfair or unreasonable. Reeves, 262 Or. at 100-101, 495 P.2d 729 (holding that a contractual clause agreeing on an exclusive forum will not be enforced if it is determined to be unfair or unreasonable).
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© 2023 Thomson Reuters. No claim to original U.S. Government Works.
322 Or.App. 746 Court of Appeals of Oregon.
Edward LEWIS, an individual, and Tamara Lewis, an individual, Plaintiffs-Respondents, v.
Valdene Marie Leimomi VARDE, dba Oregon Progressive Construction, and James Varde, Defendants-Appellants.
A176014 |
Submitted September 2, 2022. | November 23, 2022
Attorneys and Law Firms
Valdene Marie Leimomi Varde and James Varde filed the briefs pro se.
Sean J. Riddell, Portland, filed the brief for respondents.
Before Tookey, Presiding Judge, and Egan, Judge, and Kamins, Judge.
Opinion
TOOKEY, P. J.
Synopsis
Background: Customers brought action against construction contractors for breach of residential construction contract, unlawful trade practices, and unjust enrichment. The Circuit Court, Washington County, Theodore E. Sims, J., denied contractors' petition to compel arbitration. Contractors appealed.
*747 In this action by plaintiffs asserting, among other claims, breach of a residential construction contract, defendants Valdene Varde and James Varde, who are sister andbrother,appeal,contendinginasingleassignmentoferror that the trial court erred in denying their petition to compel arbitration of plaintiffs’ claims. ORS 36.730 (providing for appealofanorderdenyingpetitiontocompelarbitration).We conclude that the trial court erred in denying the petition and therefore reverse and remand.
Holdings: The Court of Appeals, Tookey, P.J., held that: parties' failure to designate arbitrator did not render construction contract's arbitration provision unenforceable; arbitration provision applied to claims against nonsignatory contractor because he was party to contract; and even if nonsignatory contractor were not party to contract, arbitration provision plausibly encompassed claims against him, and thus provision was enforceable against him.
Reversed and remanded.
Procedural Posture(s): On Appeal; Motion to Compel Arbitration.
**523 Washington County Circuit Court, 21CV03926; Theodore E. Sims, Judge.
For purposes of determining the arbitrability of the dispute, weassumethetruthoftheallegationsofplaintiffs’complaint. Livingston v. Metro. Pediatrics, LLC., 234 Or. App. 137, 140, 227 P.3d 796 (2010). Plaintiffs alleged that “Plaintiffs and Defendants entered into a written contract *** that provided Defendants would perform construction work for the benefit ofPlaintiffs”;thatthey“tenderedpaymentstoDefendants*** for the work under the Contract”; that “Defendants materially breached the Contract by abandoning the construction project on the Property prior to completion, and by failing to perform the construction work to the standard **524 of care previously agreed”; and that defendants misrepresented their skills and experience and ability to complete the project and “converted” plaintiffs’ payment to cover their personal debts. Based on those alleged facts, plaintiffs asserted against defendants claims of breach of contract, unlawful trade practices, conversion, fraud, and unjust enrichment.
Defendant Valdene Varde filed a petition to compel arbitration, noting that the parties’ contract included an arbitrationclauseproviding,“Bothpartiesagreetomandatory arbitration or mediation to resolve any and all disputes that may arise from this contract.” Plaintiffs objected to arbitration; thus, the matter was presented to the court for decision.
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ORS 36.360 provides, in part:
“(1) An agreement contained in a record to submit to arbitration any existing or subsequent controversy arising between the parties to the agreement is valid, enforceable *748 and irrevocable except upon a ground that exists at law or in equity for the revocation of a contract.
“(2) Subject to ORS 36.625(8), the court shall decide whether an agreement to arbitrate exists or a controversy is subject to an agreement to arbitrate.”
Oregon courts recognize a presumption in favor of the enforceability of an arbitration provision. Livingston, 234 Or. App. at 147, 227 P.3d 796; see Snow Mountain Pine, Ltd. v. Tecton Laminates Corp., 126 Or. App. 523, 529, 869 P.2d 369, rev. den., 319 Or. 36, 876 P.2d 782 (1994) (“Arbitration is required unless we can say with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute, and we resolve all doubts in favor of coverage[.]”) (citing Portland Assn. of Teachers v. School Dist. No. 1, 51 Or. App. 321, 325, 625 P.2d 1336 (1981)). Ambiguities as to the scope of an arbitration clause are resolved in favor of arbitration. Industra/Matrix Joint Venture v. Pope & Talbot, 341 Or. 321, 332-33, 142 P.3d 1044 (2006).
ORS 36.625(1) provides:
“On petition of a person showing an agreement to arbitrate and alleging another person's refusal to arbitrate pursuant to the agreement:
“*****
“(b) If the refusing party opposes the petition, the court shall proceed summarily to decide the issue *** and order the parties to arbitrate unless it finds that there is no enforceable agreement to arbitrate.”
The trial court summarily considered the petition to compel arbitration and denied it for two reasons that we reject:
First, the court reasoned that compelling arbitration was “problematic” because the parties had failed to designate an arbitrator, rendering the arbitration provision ambiguous and unenforceable. The court was mistaken. Under ORS 36.645(1), if the parties to an agreement to arbitrate have not agreed on a method for appointing an arbitrator, “the court, on petition of a party to the arbitration proceeding, shall appoint the arbitrator.” The parties’ failure to designate an arbitrator for their dispute did not render the arbitration provision unenforceable. The court therefore *749 erred in denying the petition to compel arbitration on that ground.
Second, the court reasoned that compelling arbitration was “problematic” because defendant James Varde was not a signatory to the contract, and plaintiffs’ claims against him therefore would proceed to trial, resulting in a splitting of the action. However, as plaintiffs have alleged in the complaint, James Varde, although not a signatory, was a party to the alleged contractual agreement. Thus, if, as we have concluded,thearbitrationprovisionisenforceable,theclaims against James Varde that arise from the contract are also subject to arbitration.
But even if James Varde is not a party to the contract, we would conclude that the arbitration clause itself—which covers claims that “arise from” the contract—plausibly encompassed the claims against James Varde and was therefore enforceable as to him. In Livingston, the plaintiff brought claims of interference with economic relationships against defendants who were not parties or signatories to the plaintiff's employment contract, and its included arbitration clause. The arbitration clause in Livingston **525 provided, “Any controversy, dispute or disagreement arising out of or relating to this Agreement, or the breach thereof, shall be resolved by arbitration.” 234 Or. App. at 146, 227 P.3d 796, The plaintiff contended that, as nonsignatories to the employment contract, those defendants had no right to enforce the arbitration provision. In rejecting that argument, we cited, among other authorities, the rule that an arbitration clause will apply if it can plausibly be so construed. 1 Id. at 147, 227 P.3d 796. We reasoned that the broad text of the arbitration clause could plausibly be interpreted such that the partiesintendedittoapplyto any claimthattheplaintiffmight have arising out of or relating to his employment pursuant to theagreement,andnotjustclaimsbetweenthesignatories. Id.
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We noted that, as here, the claims by the plaintiff signatory against the nonsignatory defendants “depend on the same allegations made against [the signatory defendant] and have as *750 theirsourcetheidenticalcircumstancesofplaintiff's claims against” the signatory defendant. Id. at 150, 227 P.3d 796. In light of those circumstances, and in view of the presumption in favor of arbitrability, we held that the clause applied to the signatory plaintiff's claims against the nonsignatory defendants. Id. at 151, 227 P.3d 796.
Similarly here, the claims against James Varde have as their source both defendants’ failure to perform under the contract. And similarly here, the broad language of the arbitration
agreement is plausibly susceptible to the construction that it also applies to claims against James Varde, in addition to claims against Valdene Varde, arising from the work that James performed under the construction contract. For those additional reasons, and because of the presumption in favor of arbitration, the trial court erred in denying the petition to compel arbitration.
Reversed and remanded.
All Citations
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Footnotes
1 We also explained that “[c]ourts have relied on a number of rationales for permitting nonsignatory defendants to invoke arbitration clauses in claims against them by signatories to a contract.” Livingston, 234 Or. App. at 149, 227 P.3d 796
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521
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Synopsis
369 Or. 806 Supreme Court of Oregon.
Tom LOWELL, dba Piano Studios and Showcase, Respondent on Review, v.
Matthew WRIGHT and Artistic Piano, an Oregon corporation, Petitioners on Review.
(CC 13CV04582)(SC S068129) |
Argued and submitted June 24, 2021. | June 23, 2022
Background: Owner of piano store brought defamation action against customer who posted negative online review of owner'sbusinessandagainststore'scompetitorforwhomthat customer worked. The Circuit Court, Jackson County, Dan Bunch, granted defendants' motion for summary judgment. Owner appealed. The Court of Appeals, Aoyagi, J., 306 Or.App. 325, 473 P.3d 1094, reversed and remanded, and defendants petitioned for review.
owner was not subject to a heightened proof-of-fault requirement based on the United States Supreme Court's First Amendment cases that applied to media defendants in defamation cases.
DecisionoftheCourtofAppealsaffirmedinpartandreversed in part; judgment of the Circuit Court reversed and case remanded.
Balmer, J., concurred and filed opinion in which Garrett, J., joined.
Flynn, J., filed concurring opinion.
Procedural Posture(s): On Appeal.
**407 On review from the Court of Appeals. * (CA A162785)
Attorneys and Law Firms
Tracy M. McGovern, Frohnmayer, Deatherage, Jamieson, Moore, Armosino & McGovern, P.C., Medford, argued the cause and filed the briefs for petitioners on review. Also on the briefs were Casey S. Murdock and Alicia M. Wilson.
Linda K. Williams, Portland, argued the cause and filed the brief for respondent on review.
Holdings: The Supreme Court, Nakamoto, J., held that:
absence of copy of negative online review was not fatal to piano store owner's defamation claims;
review was on a matter of public concern for First Amendment purposes;
with respect to First Amendment public comment defense, customer's remarks stating that store owner misrepresented whether his business could sell new pianos of a certain brand and that store owner misrepresented age of the piano on display were sufficiently factual to be actionable;
with respect to First Amendment public comment defense, customer's remark stating that store's salesman could not be trusted was not sufficiently factual to be actionable;
Supreme Court would not abolish the media/nonmedia distinction in context of this defamation action; and
Eugene Volokh, UCLA School of Law, First Amendment Clinic, Los Angeles, California, argued the cause and filed the brief for amici curiae Institute for Free Speech; Electronic Frontier Foundation; Professors William Funk, Ofer Raban, and Kyu Ho Youm; Howard Bashman; Scotusblog, Inc.; and Professors Glenn Harlan Reynolds and Eugene Volokh. Also on the brief was Owen Yeates, Institute for Free Speech, Washington, D.C.
JamesAbernathyandRebekahMillard,FreedomFoundation, Olympia, Washington, filed the brief on behalf of amicus curiae Freedom Foundation.
Before Walters, Chief Justice, and Balmer, Flynn, Duncan, Nelson, and Garrett, Justices, and Nakamoto, Senior Judge, Justice pro tempore. **
Opinion
NAKAMOTO, S. J.
Lowell v. Wright, 369 Or. 806 (2022) 512 P.3d 403 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 1
**408 *808 Plaintiff's libel per se claim is based on a Google review, written by the manager of plaintiff's business competitor, that subsequently was removed from the internet without a trace. The Court of Appeals reversed a grant of summary judgment to defendants. We resolve three disputed legal questions: (1) whether plaintiff may reach a jury on his libel claim when the text is no longer available; (2) whether the First Amendment's public comment defense is available in these circumstances and, relatedly, whether a defendant speaker's identity or motive is part of the court's inquiry on the defense's availability; and (3) whether Oregon should require a plaintiff claiming defamation to prove that the defendant acted with a heightened culpable mental state, “actual malice,” in all cases when the speech is on a “matter of public concern” protected under the First Amendment, abolishing the distinction that requires such proof only when the defendant is a member of the media.
The Court of Appeals concluded that the trial court had erred because plaintiff's evidence of the allegedly defamatory statements sufficed to create a question of fact for trial on his claim and the lack of the review's printed text did not affect the analysis of defendants’ First Amendment defense. Lowell v. Wright, 306 Or. App. 325, 334-35, 473 P.3d 1094 (2020) PuttingasidetheFirstAmendmentdefense,we,liketheCourt of Appeals, conclude that the lack of a copy of the review is not fatal to plaintiff's libel claim and that two of the three allegedly defamatory statements in the review are actionable.
To decide whether defendants were entitled to summary judgment based on their First Amendment defense, the threshold question is whether the review about plaintiff's store is subject to First Amendment protection as containing statements on a matter of public concern. As the Court of Appeals recognized, in Neumann v. Liles, 358 Or. 706, 369 P.3d 1117 (2016), this court held that a review of a wedding venue contained speech on a matter of public concern protected by the First Amendment's public comment defense, and the review of plaintiff's business in this case is similar to the review in Neumann. Although plaintiff *809 argues that a speaker's motive may affect the availability of the defense, an argument that we reject, neither party has asked this court to overrule Neumann’s holding. Accordingly, Neumann controls, and we are compelled to follow it in this case.
Finally, we decline to overrule our precedent recognizing the media/nonmedia distinction and to impose an across-theboard heightened proof-of-fault requirement on defamation
plaintiffsincasesinvolvingtheFirstAmendment.Defendants and amici argue that we ought to abolish the distinction, in part, they assert, because it is sometimes difficult to discern whether a given speaker, such as a blogger, is a media or a nonmedia defendant. This case does not offer an opportunity for careful examination of that issue, considering that defendants are not “media” under any definition and acknowledge that they are “nonmedia” defendants, and defendants have not persuaded us to abandon our precedent and to alter Oregon common law.
Ultimately, we conclude that the trial court erred in granting defendants’summaryjudgmentmotionandenteringageneral judgment of dismissal. We affirm the decision of the Court of Appeals in part and remand the case to the trial court.
I. BACKGROUND
We are reviewing the trial court's ruling granting defendants’ motion for summary judgment on plaintiff's claim for defamation. Accordingly, we recount the facts in the light most favorable to plaintiff as the nonmoving party, including reasonable inferences that may be drawn from the facts adduced. ORCP 47 C.
Plaintiff Lowell owns and operates Piano Studios and Showcase (Piano Studios), a piano store in Medford. On September 3, 2012, defendant Wright and his wife visited plaintiff's store. At that time, Wright was employed as a general manager by defendant Artistic Piano, another piano store in Medford.1 On the day of the visit, Wright was off **409 *810 work. Wright testified that he did not tell his boss, Werner, the owner and operator of Artistic Piano, about his plans to visit Piano Studios. Soon after the visit, Wright posted a Google review about Piano Studios.
InDecember2012,whilebrowsinginternetpagesmentioning his business, plaintiff found Wright's review and became upset. The review was not posted under Wright's name, but instead under “Amazing Impressions” (Wright's unrelated photography business). Plaintiff eventually found a phone number associated with Amazing Impressions and called it, instructing his employee, Norling, to listen to the phone call and take notes. Wright answered and eventually hung up on plaintiff.
After the phone call, Wright spoke with Werner and showed him the review. According to Wright, he had told Werner
Lowell v. Wright, 369 Or. 806 (2022) 512 P.3d 403 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 2
previously about his visit to Piano Studios but had not mentioned his review. Once Werner looked over the review, he suggested that Wright take it down. Wright removed it without saving a copy. Plaintiff also did not save a copy of the review before it was removed. Wright composed the review on a home laptop, which he disposed of, explaining that it had become old and inoperable. Despite a diligent search and a request to Google, the parties were unable to recover a copy of the review during litigation.
Although the actual text of the review is unavailable, four people read the review and testified in depositions regarding its contents: Lowell, Norling, Wright, and Werner. Although they could not remember the review verbatim, they largely agreedthatitcontainedthefollowingparaphrasedcontentand that the quoted language (or something extremely close to it) appeared in the review itself: Wright walked around the store for 45 minutes before a salesperson spoke to him, and the store “smelled like grandma's attic.” When he eventually spoke with Wright, the salesman told Wright that a Yamaha C-7 piano displayed on the showroom floor was about five years old. The salesman also told Wright that plaintiff can sell new Steinway pianos.2 However, *811 plaintiff cannot sell new Steinway pianos, and “[there] were no new Steinways in the showroom,” which is “like a Chevy dealer not having any Chevroletsonthelot.”Finally,Wrighthadbeenwarnedabout plaintiff's store and now knew that it was true that “this guy can't be trusted.”
According to plaintiff, Wright not only made false statements —he made up the entire conversation at Piano Studios. Plaintiff's theory is that defendants’ purpose in having Wright gotoPianoStudiosandwritethereviewwasto“cybersmear,” a practice whereby one business pseudonymously writes about a competitor on the internet to lower the competitor's reputation and thereby attract more business for itself. In support, plaintiff provided testimony from the salesman on duty the day Wright was in Piano Studios. Plaintiff's sales force kept time logs in which they recorded interactions with potential customers. The salesman's time log from that day does not reflect a conversation with Wright. And, the salesman testified, Wright never conversed with him about Steinways or the Yamaha piano on display. In further supportofhistheory,plaintiffemphasizesthatWrightwasthe manager of Artistic Piano when he wrote the review, that the review was written under the name “Amazing Impressions” rather than under Wright's own name, and that the review included no details that would suggest that its writer had specialized knowledge or a potential ulterior motive.
In 2013, plaintiff filed a defamation action **410 against Wright and Artistic Piano. 3 He alleged that Wright acted as Artistic Piano's agent in writing the Google review. Plaintiff asserted that the review “purported to describe the personal experience of an actual customer” but that “Wright was not a bona fide potential customer.” Plaintiff alleged that three *812 statements in the review were false and defamatory assertions of fact:
“a. That a Yamaha C-7 piano serial number F4910127 on the showroom floor was misrepresented to Wright as being about 5 years old, when in fact said piano was at least 15 years older and less valuable, and this misrepresentation of the age of the instrument was purposely made in an effort to cheat Wright;
“b. That [plaintiff] misrepresents that he sells new Steinway Pianos, when he actually doesn't; and
“c. That the above misrepresentations are proof that ‘this guy can't be trusted.’ ”
In their answer, among other defenses, defendants asserted that the First Amendment precluded liability for libel.
In 2016, defendants filed a motion for summary judgment on the libel claim. They argued that (1) plaintiff could not prevail because he could not prove that the statements were defamatory; (2) any statements made were protected by the First Amendment public comment defense (under which statements on a matter of public concern that are not susceptible to being proved true or false are not actionable); and (3) plaintiff could not prove that defendants acted with actual malice.
Plaintiff opposed the motion, providing the deposition testimony about the review's content. He also submitted evidence regarding the falsity of the Yamaha and Steinway statements. Plaintiff submitted a copy of the Yamaha piano's tag, which indicated that it was manufactured in 1990, to support the salesman's testimony that he never falsely told Wright that the piano was five years old. Plaintiff also introduced evidence that he can and does sell new Steinway pianos even though plaintiff was not a Steinway dealer,
Lowell v. Wright, 369 Or. 806 (2022) 512 P.3d 403 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 3
including documents that he contended related to the store's sales of Steinway pianos.
The trial court granted summary judgment to defendants. In a letter opinion, the court addressed the significance of the missingverbatimtextforplaintiff'sclaimthathewasdefamed by the can't-sell-new-Steinways remark in the review. The court indicated that, as to that statement, *813 plaintiff lacked sufficient evidence for a trial on what the review had said and whether it was false. The trial court did not fault the sufficiency of plaintiff's evidence that the review stated that the salesman had lied to Wright about the age of the Yamaha piano in the showroom. And the “this guy can't be trusted” statement, the court concluded, was so clearly one of subjective opinion that it was not actionable in a defamation claim.
The trial court went on to conclude that, because defendants had asserted a First Amendment defense, it was required to determine whether the allegedly false statements about the pianoswereconstitutionallyprotectedexpressionsofopinion. Without a copy of the review, the trial court concluded, it was not possible to determine whether the Yamaha and Steinway statements were constitutionally protected or instead actionable statements implying an assertion of objective fact and that, under those circumstances, judgment for defendants was appropriate.
The trial court did not address other issues that the parties had raised in connection with defendants’ First Amendment defense. The court then entered a general judgment dismissing the action. Plaintiff appealed, and the Court of Appeals reversed and remanded.
The Court of Appeals first held that the absence of the text of the review was not dispositive with respect to the defamatory remarks. Lowell, 306 Or. App. at 334, 473 P.3d 1094. Next, the court considered whether defendants were entitled to summary judgment based on their First Amendment defense. To be protected, the court stated, the speech must be on a matter of public concern that does not imply an assertion of objective fact about plaintiff. Id. at 335-36, 473 P.3d 1094. The court concluded that defendants’ **411 speech was on a matter of public concern, but only after concluding that, although “a speaker's motive or purpose in speaking is relevant to whether speech is protected by the First Amendment,” id. at 339, 473 P.3d 1094 (emphasis in original), plaintiff had failed to meet his burden to establish proof of defendants’ motive to denigrate his
business for private financial advantage. Id. at 342, 473 P.3d 1094. The court then addressed whether the review implied objective facts about plaintiff and held that the Yamaha and Steinway *814 statements could be sufficiently factual to be actionable, but that the statement “this guy can't be trusted” was not. Id. at 343, 473 P.3d 1094
Finally,theCourtofAppealsaddresseddefendants’argument that plaintiff was not entitled to a trial because he had not made a sufficient showing of their actual malice. Following this court's holding in Wheeler v. Green, 286 Or. 99, 593 P.2d 777 (1979), the court held that plaintiff need not establish thatdefendantsactedwithactualmalicetoovercometheFirst Amendment defense because that standard applied only to media defendants, a status defendants lacked, and that, in any case, plaintiff supplied sufficient evidence to establish actual malice for the purposes of summary judgment. Lowell, 306 Or. App. at 348, 473 P.3d 1094. We allowed defendants’ petition for review.
II. ANALYSIS
A. Libel Actions in Oregon and the First Amendment Defense, Generally
To put the issues we decide in perspective, we provide some basic law governing libel actions in Oregon. As this court explained in Neumann, 358 Or. at 711, 369 P.3d 1117, defamation has long been recognized as tortious in Oregon. Indeed,theremedyclause,ArticleI,section10,oftheOregon Constitution, has specified from its adoption that Oregonians shall have a remedy for injury to reputation, providing that “every man shall have remedy by due course of law for injury done him in his person, property, or reputation.” In Horton v. OHSU, 359 Or. 168, 180, 376 P.3d 998 (2016), the court explained that, textually, the “clause's focus on providing remedies for specified types of injuries implies that it was intended to guarantee some remedy for those injuries, and not merely be a guarantee of procedural regularity for whatever injuries may, at the moment, enjoy legal protection.”
A statement that “would subject the plaintiff to hatred, contempt or ridicule,” that tends to “diminish the esteem, respect, goodwill or confidence in which [the plaintiff] is held,” or that brings about “adverse, derogatory or unpleasant feelings or opinions against” the plaintiff can be the basis for a defamation claim. Neumann, 358 Or. at 711, 369 P.3d 1117 *815 (quotation and citation omitted, brackets in original). And, as relevant to this case, a statement also is defamatory
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if it falsely “ascribes to another conduct, characteristics or a condition incompatible with the proper conduct of his lawful business[.]” Id. at 711-12, 369 P.3d 1117. A court decides whether a statement is capable of a defamatory meaning, and, if so, the jury decides whether the statement did have a defamatory meaning. Brown v. Gatti, 341 Or. 452, 459, 145 P.3d 130 (2006).
Alleged defamatory statements that the plaintiff engaged in misconduct or dishonesty in conducting the plaintiff's business are actionable per se. Neumann, 358 Or. at 712, 369 P.3d 1117. Under Oregon law, to establish a prima facie claim of libel per se, subject to defenses, plaintiff must prove that defendants made a defamatory statement about him and published the statement to a third party. Id. at 711, 369 P.3d 1117. Because the claim is libel per se, plaintiff is not obliged toproveathirdelement:thatthedefamatorystatementcaused pecuniary loss or special harm. Brown, 341 Or. at 458, 145 P.3d 130
Butitisnowwellestablishedthatstatelawdefamationactions can be affected by the First Amendment rights of speakers. The Supreme Court first extended constitutional protections in a libel case over 50 years ago in New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964) Before that decision, the Court had recognized libel as one of the “well-defined and narrowly limited classes of speech, the preventionandpunishmentofwhichhavenever **412 been thought to raise any Constitutional problem.” Chaplinsky v. New Hampshire,315U.S.568,571-72,62S.Ct.766,86L.Ed. 1031 (1942).
Since New York Times was decided, the Supreme Court has repeatedly revisited the intersection between defamation claims and the First Amendment freedoms of speech and of the press and articulated additional constitutional principles that may apply in common-law defamation cases, sometimes focusing on the identity of the speaker, the identity of the plaintiff, or the nature of the speech involved. At the same time, the Court has noted that competing interests are involved. For example, the Court in Milkovich v. Lorain Journal Co., 497 U.S. 1, 110 S.Ct. 2695, 111 L.Ed.2d 1 (1990), as it had in earlier cases, recognized not only *816 the First Amendment's protection “of free and uninhibited discussion of public issues,” but also the “ ‘important social values’ ” undergirding common-law defamation and strong societal interests “ ‘in preventing and redressing attacks upon reputation.’ ” Id. at 22, 110 S.Ct. 2695 (quoting Rosenblatt v. Baer, 383 U.S. 75, 86, 86 S.Ct. 669, 15 L.Ed.2d 597 (1966)).
In Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S.Ct. 2997, 41 L Ed 2d 789 (1974), the Court also recognized the value of reputationinseveralways,notingthatstateshavealegitimate interest in compensating “individuals for the harm inflicted on them by defamatory falsehood” and that “the individual's right to the protection of his own good name ‘reflects no more than our basic concept of the essential dignity and worth of every human being—a concept at the root of any decent system of ordered liberty.’ ” Id. at 341, 94 S.Ct. 2997 (quoting Rosenblatt, 383 U.S. at 92, 86 S.Ct. 669 (Stewart, J., concurring)).4
As relevant here, the First Amendment interacts with plaintiff's claim in two distinct ways. First, defendants raise the First Amendment public comment defense, which places federal constitutional constraints on whether a state must require that a plaintiff in a defamation action show that the defamatorystatementsareprovablyfalse.Second,defendants argue that plaintiff must show that they acted with actual malice,astandardthatcomesfromFirstAmendmentdoctrine and that some state courts have chosen to apply broadly across defamation actions. We discuss each aspect of First Amendment doctrine in detail.
The Supreme Court explained the falsity requirement in Philadelphia Newspapers, Inc. v. Hepps, 475 U.S. 767, 106 S.Ct. 1558, 89 L.Ed.2d 783 (1986), and Milkovich. In Hepps, the Supreme Court considered a libel claim brought by a convenience store franchise stockholder against a newspaper over an article alleging that the stockholder had *817 mob ties. 475 U.S. at 769, 106 S.Ct. 1558. At issue was whether the plaintiff could recover without a showing that the statements were false. Id. The Court held “that, at least where a newspaper publishes speech of public concern, a privatefigure plaintiff cannot recover damages without also showing that the statements at issue are false.” Id. at 768-69, 106 S.Ct.1558.The Hepps Courtreservedthequestionofwhether a private-figure plaintiff could recover against a nonmedia defendant without making a showing of falsity. Id. at 779 n. 4, 106 S.Ct. 1558. In Milkovich, the Court reaffirmed its holding in Hepps, explaining, “Foremost, we think Hepps stands for the proposition that a statement on matters of public concern must be provable as false before there can be liability under state defamation law, at least in situations, like the present, where a media defendant is involved.” 497 U.S. at 19-20, 110 S.Ct. 2695 Milkovich held that a media defendant's speech was protected under the First Amendment aspubliccommentwhentwocriteriaweremet:(1)thespeech was on a matter of public concern and (2) the speech could
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not reasonably be interpreted as stating **413 facts or was not susceptible to being proved true or false. Id. The Court again reserved whether a nonmedia defendant could raise the public comment defense. Id. at 20 n. 6, 110 S.Ct. 2695.
Separately, the Supreme Court has held that states cannot allow a private-figure plaintiff to prevail in a defamation claimagainstamediadefendantwithoutmakingashowingof someleveloffault. Gertz,418U.S.at347,94S.Ct.2997.The statesarelefttodefineforthemselvestheappropriatestandard of fault. Id. Defendants in this case urge us to hold not only that plaintiff must prove defendants’ fault, even though they are not media defendants, but also that the standard of fault should be “actual malice,” or reckless disregard for the truth, which the Court has required only for defamation actions brought by public officials and public figures against media defendants. See New York Times, 376 U.S. at 279-80, 84 S.Ct. 710; Curtis Publishing Co. v. Butts, 388 U.S. 130, 87 S.Ct. 1975, 18 L.Ed.2d 1094 (1967)
In sum, without the overlay of any state law, federal constitutional law currently recognizes two different areas of defamation law in which a state may make rules that distinguish between media and nonmedia defendants within an acceptable range. With respect to falsity, *818 federal constitutional law announced by the Supreme Court demands that a state require a private-figure plaintiff to show falsity when a media defendant's speech is protected by the public comment defense. The Court's decisions do not speak to whether that requirement applies when the defendant is nonmedia. With respect to fault, a private-figure plaintiff may not collect damages from a media defendant without some showing of fault. But Gertz does not announce a federal rule for fault in a defamation case brought by a private-figure plaintiff against nonmedia defendants.
This court has also issued decisions involving proof of falsity and of fault in cases involving both the First Amendment and Oregon defamation law. In Neumann, the court established for the first time that a private-figure plaintiff bears the burden of proving falsity of statements in defamation cases involving the First Amendment public comment defense, evenwhentheactionisbroughtagainstnonmediadefendants. See 358 Or. at 716, 369 P.3d 1117 (announcing framework for applying Milkovich against factual backdrop with no media defendant).And,inaseriesofcasesdecidedinthe1970s,this court held that the Gertz fault requirement for private-figure plaintiffs applies only to media defendants. Harley-Davidson v. Markley, 279 Or. 361, 371, 568 P.2d 1359 (1977); Adams
v. State Farm Mutual Auto. Ins. Co., 283 Or. 45, 51-52, 581 P.2d 507 (1978); Wheeler, 286 Or. at 110, 593 P.2d 777
B. Sufficiency of Evidence in Absence of Text
On review, defendants rely primarily on Neumann to argue that the trial court correctly granted their motion for summary judgment.InchallengingthereversalbytheCourtofAppeals, defendants ask this court to address three issues, the first of which is whether a plaintiff may reach a jury in a libel claim based on a writing posted on a publicly available site when the writing itself is no longer available. Defendants urge that, without the actual text of the review, plaintiff cannot establish the content of the defamatory statements or, at least, cannot establish enough content to permit a court to competently analyze defendants’ First Amendment public comment defense. We conclude that the lack of the text is not fatal to plaintiff's libel claim.
*819 Since Wright removed his Google review, it is no longer available. In lieu of the unavailable writing, plaintiff relies on the testimony of four people who read the review to supply the content of the statements that he contends were defamatory. We reject defendants’ contention that plaintiff cannot proceed to trial on his libel claim without a copy of the review.
Defendants argue that the loss of the text means that a court cannot competently apply the constitutionally mandated test to discern whether the public comment defense is available. In Neumann,thiscourtheldthat,todeterminewhetherspeech was capable of defamatory meaning (and thus whether it satisfied one of the prongs of the public **414 comment defense), a court had to look to three factors: (1) the “general tenor of the entire work”; (2) the specific context and content of the statements including figurative and hyperbolic language; and (3) whether the statement itself is sufficiently factual to be proved true or false. 358 Or. at 718, 369 P.3d 1117. In defendants’ view, because the review is lost, a court lacks sufficient information to apply the test and properly perform its gatekeeping role. For instance, defendants doubt whether a court can discern the “general tenor” of the work without the text.
Havingacopyofthereviewwouldcertainlysimplifymatters, but factfinders have long been asked to weigh competing or incomplete evidence and to make credibility determinations. The task is no different here. It is an artifact of how libel cases are typically litigated that we might be tempted to think that a copy of the at-issue writing would be required. Because,
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definitionally, libel has been put into writing, the parties are typically able to supply the court with the writing. But we can easily find similar defamation cases in which no such exact record was available, and the case was nonetheless able to be tried to conclusion.
TheCourtofAppealsaptlycomparedthislibelcasetoslander cases. Lowell, 306 Or.App. at 334, 473 P.3d 1094. Slander cases can be litigated without the benefit of verbatim records of what words were spoken. See, e.g., Worley v. OPS, 69 Or.App. 241, 243, 686 P.2d 404, rev. den., 298 Or. 334, 691 P.2d 483 (1984) (relating the factual background, including that the allegedly *820 defamatory statements were spoken inastaffmeeting,withoutverbatimquotesofthestatements). In slander cases, a plaintiff need not prove that the defendant spoke exactly the words alleged in the complaint, but only that the words are in substance the same, i.e., “so many of the words alleged in the declaration as constitute the sting of the charge.” Swift & Co. v. Gray, 101 F.2d 976, 981-82 (9th Cir. 1939) (internal quotation marks omitted). There is no reason that such a standard should be categorically inapplicable to libel cases because the medium of the speech is different.
Here, four people—plaintiff, Norling, Wright, and Werner— read the review and testified as to its contents. Their accounts largely agree, and they all seem to agree that they have not collectively forgotten a substantial component of the review (e.g., an additional customer service complaint or remark about the store's instruments). The point of disagreement concerns the exact wording of the statement in the review about Steinway piano sales. Defendants’ witnesses recall its wording in one way, and plaintiff's witnesses recall it in another.
But, at summary judgment, the trial court must view the evidence in the light most favorable to plaintiff, leaving it to the eventual factfinder to make credibility determinations. ORCP 47 C. And the testimony of the four witnesses is sufficient for a factfinder to find the facts, including whether the review conveyed that plaintiff's salesman had misrepresented to Wright that plaintiff was a Steinway dealer or that plaintiff could sell Steinway pianos.
We turn to defendants’ additional argument that the text of the review is necessary to apply First Amendment protections properly.Althoughitcertainlyiseasiertodiscernthe“general tenor” of a piece or the use of hyperbolic or figurative languagewiththetextinhand,andthoseareimportantfactors to determine whether a statement implies an assertion of fact,
nothing in Neumann or the case law from which it derives suggests that the fact that exact wording is disputed means that a trial court must throw up its hands, declare defeat, and grant summary judgment to the defendants. 358 Or. at 718-19, 369 P.3d 1117. Competent evidence going to *821 the general tenor of the review, its use of language, and the nature of the allegedly actionable statements was available. Thus, a constitutional inquiry was certainly possible, albeit not as straightforward as it would be if the trial court could assure itself that it had all the information that ever existed about the allegedly defamatory writing.
Accordingly, we reject defendants’ argument that they were entitled to summary judgment because plaintiff could not produce the exact wording of the review.
**415 C. The First Amendment Defense
We turn to the second issue on review: whether defendants are entitled to assert their public comment First Amendment defense.Asexplainedabove,under Milkovich,forastatement to be protected under the First Amendment, it must (1) be on a matter of public concern and (2) not be susceptible to being proved true or false. 497 U.S. at 19, 110 S.Ct. 2695 The parties’ dispute here centers on the public concern prong and, in particular, whether the identity of the speaker or the speaker's motive can affect whether speech is on a matter of public concern.
We begin by describing the parties’ arguments in some detail, as they circumscribe our analysis here. First, plaintiff does not ask us to overrule Neumann. Plaintiff briefly discusses Neumann but argues that it is distinguish-able from the presentcase.Hearguesthat,becauseoftheproceduralposture in which the question about the nature of the statements in Neumann arose, the decision had little to do with whether the speech was on a matter of public concern in a constitutional sense. The defendant in Neumann had asserted protection under the Oregon Anti-Strategic Lawsuits Against Public Participation (anti-SLAPP) statute, ORS 31.150. In plaintiff's view,thecourt'scommentsaboutthestatementsatissuebeing on a matter of public interest concerned the statutory standard under the anti-SLAPP statute, which shifts a modest burden of production to the plaintiff when the allegedly actionable communications are made “in a place open to the public or a public forum in connection with an issue of public interest[.]” ORS 31.150(2)(c).
*822 Plaintiff also offers reasons to doubt the result of Neumann’s application to the present matter. Plaintiff would
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have us conclude that speaker identity and motive can affect the public concern analysis and that, under the circumstances of this case, Wright's identity as an employee for a competitor and his alleged motive of sinking plaintiff's business renders his review not on a matter of public concern. Plaintiff submits that the “attacks by a competing business are not issues of publicinterest”andarguesthattheCourtofAppealscorrectly concluded that the speaker's motivation is relevant to whether the speech is on a matter of public concern. Plaintiff also argues that the Court of Appeals incorrectly concluded that the record was insufficient to establish a factual issue for trial on motivation; he highlights the fact that Wright concealed who he was when he composed the review as a basis to find that defendants were not speaking on a matter of public concern. In response, defendants advance a simple argument: The identity or motive of the speaker is irrelevant to the determination of whether the speech is on a matter of public concern, and Neumann controls the outcome here.
To address whether the public concern prong of the public comment defense applies under the circumstances of this case, we address both interrelated aspects of the parties’ arguments: (1) the degree to which Neumann controls and (2) whether a speaker's identity and motive affect the public concern analysis. We conclude that Neumann controls in the absence of plaintiff's request that we overrule it, although we have doubts about its approach, and that a speaker's identity andmotivedonotaffectwhetheramatterisofpublicconcern.
for the motion under subsection (2), the burden shifts to the plaintiff to establish the probability that “the plaintiff will prevail on the claim by presenting substantial evidence to support a prima facie case”). This court allowed review “to determinehowanactionablestatementoffactisdistinguished from a constitutionally protected expression of opinion in a defamation claim and whether the context in which a statement is made affects that analysis.” Neumann, 358 Or. at 710, 369 P.3d 1117
This court began by reviewing the Supreme Court's decision in Milkovich. 358 Or. at 713-16, 369 P.3d 1117. Neumann described Milkovich as having two prongs for First Amendment protection to apply: first, whether the statements were on a matter of public concern and, second, whether the statements were susceptible to true-false analysis. Id. at 714, 369 P.3d 1117 (citing Milkovich, 497 U.S. at 19-20, 110 S.Ct. 2695).
Notably, Neumann did not mention that the Court had reserved judgment in Milkovich as to whether its First Amendment limitations applied to nonmedia defendants in defamation cases. See Milkovich, 497 U.S. at 20 n. 6, 110 S.Ct. 2695 (“In Hepps the Court reserved judgment on cases involving nonmedia defendants, and accordingly we do the same.” (Internal citation omitted.)). Additionally, Neumann’s discussion of whether the wedding review was on a matter of public concern was limited to the following:
Neumann was a libel action involving a wedding guest's negative online consumer review of a wedding venue posted on Google Reviews. 358 Or. at 708, 369 P.3d 1117. As discussed, the defendant filed a special motion to strike the plaintiffs’ claim under Oregon's anti-SLAPP statute, which applies to cases involving written statements presented “in a place open to the public or a public forum in connection with an issue of public interest,” among others. Id. at 709, 725, 369 P.3d 1117; see *823 also ORS 31.150(2)(c) The trial court granted the motion and dismissed the claim, and the Court of Appeals reversed. Neumann, 358 Or. at 709, 369 P.3d 1117. Rejecting the defendant's contention that his review was hyperbolic and mere opinion, the Court of Appeals concluded that some statements in the review were capable of a defamatory meaning and that the plaintiffs had adduced sufficient evidence, if credited, to **416 permit a factfinder to determine that the defendant's statements were defamatory. Id. at 710, 369 P.3d 1117; see also ORS 31.150(3) (providing that, if a defendant establishes grounds
“[Plaintiff] has not disputed that [the defendant's] statements involve matters of public concern, and we readilyconcludethattheydo.[Thedefendant's]reviewwas posted on a publicly accessible website, and the content of his review related to matters of general interest to the public, particularly those members of the public who are in the market for a wedding venue.”
*824 358 Or. at 720, 369 P.3d 1117 (citing Unelko Corp. v. Rooney, 912 F.2d 1049, 1056 (9th Cir. 1990), cert. den., 499 U.S. 961, 111 S.Ct. 1586, 113 L.Ed.2d 650 (1991)).
The court then turned to the legal question before it: How should a court determine whether an allegedly defamatory statement is susceptible to a true-false analysis, the second prongofthetestin Milkovich?Thecourtin Neumann adopted the approach the Ninth Circuit had crafted in Unelko Corp., 912 F.2d at 1053, soon after the Supreme Court decided Milkovich Neumann, 358 Or. at 716-19, 369 P.3d 1117. That approach involves a three-part inquiry, which we described as “(1) whether the general tenor of the entire publication
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1. Neumann v. Liles
negates the impression that the defendant was asserting an objective fact; (2) whether the defendant used figurative or hyperbolic language that negates that impression; and (3) whether the statement in question is susceptible of being proved true or false.” Id. at 719, 369 P.3d 1117. Through that framework,acourtconsiderstheworkasawhole,thecontext of the statements, and the statements themselves to determine whether a factfinder could conclude that the statements imply a false assertion of objective fact. Id.
The Neumann court explained in detail the choice to adopt the Unelko approach, but it did not address a factual difference between the two cases: The Neumann defendant wasnonmedia(aweddingguestwhowroteanonlinereview), 358 Or. at 708-09, 369 P.3d 1117, and the Unelko defendants were media (CBS and Andy Rooney, a broadcaster best known for his appearances on 60 Minutes), 912 F.2d at 1050 In Unelko, the Ninth Circuit mentioned but did not dwell on the Supreme Court's language in Milkovich reserving the question of whether the First Amendment defense applied to nonmedia defendants. See id. at 1056 (quoting Milkovich’s announcement of the rule as applying “at least in situations, like the present, where a media defendant is involved,” Milkovich, 497 U.S. at 19-20, 110 S.Ct. 2695, and applying the test without acknowledging CBS and Rooney as media defendants). In short, the Neumann court did not note that whether the defendant is media or not could affect the analysis, even to reject the idea.
The court went on to apply Unelko to the wedding guest's online review, agreeing with the Court of Appeals *825 that some of the **417 statements were capable of a defamatory meaning, but stating that the question remained “whether they are nevertheless protected under the First Amendment.” Neumann, 358 Or. at 719-20, 369 P.3d 1117. The court addressed each prong of the Milkovich test, and, concluding that the statements were protected expressions of opinion, it reversed the Court of Appeals. Id. at 722, 369 P.3d 1117
In short, while the main issue in, and the clear holding of, Neumann was that courts in Oregon would use the Unelko three-part inquiry to determine whether speech was capable of defamatory meaning under Milkovich, the Neumann court decided two other issues with comparatively little to no discussion: (1) that the First Amendment falsity requirement applied when a private-figure plaintiff made claims against nonmedia defendants and (2) that a scathing internet review was on a matter of “public concern.” Neumann allowed the defendant to raise the First Amendment public comment
defense because his speech was on a matter of public concern and his review could not reasonably be interpreted as asserting fact. 358 Or. at 722, 369 P.3d 1117. It appears that the parties did not dispute that the review of the wedding venuewasofpublicconcern,atermofartinFirstAmendment defamation doctrine.
In Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 472 U.S. 749, 105 S.Ct. 2939, 86 L.Ed.2d 593 (1985), the Court had the first occasion to consider how the First Amendment applies to a defamation suit between private-figure plaintiffs andnonmediadefendantsandused“publicconcern”asaterm of art in the defamation context. A building company sued a credit reporting service for defamation for misreporting to five subscribers that the company had filed for bankruptcy. Id. at 751, 105 S.Ct. 2939. The Court considered how best to balancethestate'sinterestsinprotectingitslawofdefamation and First Amendment values given the context. It noted that theFirstAmendmentinterestatissuewas“lessimportantthan theoneweighedin Gertz.Wehavelongrecognizedthatnotall speech is of equal First Amendment importance. It is speech on matters of public concern that is at the heart of the First Amendment's protection.” Id. at 758, 105 S.Ct. 2939 (internal quotations omitted). The Court explained that the *826 First Amendment was created to protect the interchange of ideas to effectuate the political and social will of the people and that speech concerning public affairs was the “essence of self-government.” Id. at 759, 105 S.Ct. 2939. Accordingly, that speech was worthy of the First Amendment's greatest protection. Id.
On the other hand, speech of only private concern deserved less protection. Id. The Court quoted this court's decision in Harley-Davidson, 279 Or. at 366, 568 P.2d 1359, extensively and favorably to support that point. See Dun & Bradstreet, 472 US at 760, 105 S.Ct. 2939 (“ ‘[There] is no threat to the free and robust debate of public issues; there is no potential interference with a meaningful dialogue of ideas concerning self-government; and there is no threat of liability causing a reaction of self-censorship by the press. The facts of the present case are wholly without the First Amendment concerns with which the Supreme Court of the United States has been struggling.’ ”). When balanced against a much weaker First Amendment interest, the state's interest in protectingitscitizensfromdefamationwasmuchstronger. Id.
The Court in Dun & Bradstreet readily concluded that the speech at issue was of private, not public, concern. Id. at 762, 764, 105 S.Ct. 2939 (Burger, J., concurring), 774 (White, J.,
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concurring).5 Itappliedthe“publicconcern”test(examining the content, form, and context of the speech) originally developed in public employment cases. Id. at 761, 105 S.Ct. 2939. The Court noted that the speech was wholly false, clearly injurious, **418 and made available to only five subscribers. Id. at 762, 105 S.Ct. 2939. Additionally, there was “simply no credible argument that this type of credit reporting require[d] special protection to ensure that ‘debate on public issues [remained] uninhibited, robust and wideopen.’ ” Id. (quoting and citing New York Times, 376 U.S. at 270, 84 S.Ct. 710). The Court also noted that the speech at issue was unlikely to be chilled based on the rule announced because *827 itsmotivationwasprofit,whichwouldbebest served with accurate information. Dun & Bradstreet, 472 US at 762-63, 105 S.Ct. 2939.
We draw two lessons from the Supreme Court's discussion of public concern. First and foremost, the legal rule is that a reviewing court discerns whether speech is on a matter of public concern by looking to its content, form, and context. Id. at 761, 105 S.Ct. 2939. Second, Dun & Bradstreet discusses matters of public concern as the “heart oftheFirstAmendment'sprotection”becausetheyprotectthe interchange of ideas required for effective self-government. Id. at 759, 105 S.Ct. 2939
Defendants essentially contend that a negative review of a business posted on the internet is categorically speech on a matter of public concern and that we should follow Neumann. Defendants seem to assume that the internet can breathe constitutional importance into speech posted in a way that makes it publicly available. We doubt that sweepingproposition.Theinternetisrevolutionary.Scholars, legal practitioners, and laypeople alike have urged that its revolutionary nature requires an entirely different set of rules, urging that speech on the internet enjoys unusual protection from influence or restraint. But many innovations were once revolutionary. The telegram allowed messages to travel in a matter of minutes or hours, instead of the days it took for letters to reach their destinations. But a statement communicated by telegram is no different from the same one communicated by letter. So too with the internet. In practice, there is no difference between a statement being posted on social media, Google reviews, on a sign carried around outside the plaintiff's home, or written in the sky: The statement is the same no matter how it reaches the public.
The touchstone principle in evaluating whether speech is on a matter of public concern is whether the speech must
be protected to ensure the continuance of vigorous debate on public issues and, by extension, self-governance. Dun & Bradstreet, 472 U.S. at 761-62, 105 S.Ct. 2939. The idea that negative remarks about a business's practices are always (or almost always) necessary to ensure vigorous debate on public issues or are part of self-governance is doubtful. Although such remarks may be made in public or be on a subject that a member of the public finds interesting, those circumstances *828 do not automatically render them of constitutional importance. None of this is to say that a customer's review of a business cannot be on a matter of public concern while hewing closely to Dun & Bradstreet. Rather, instead of assumingthatacustomerreviewofabusinessisonamatterof public concern, a careful and more nuanced approach would likely be to examine the “content, form, and context *** as revealed by the whole record.” Id. at 761, 105 S.Ct. 2939
2. Application of Neumann
We now turn to whether Neumann applies to the present case. Although the court's analysis on public concern consists of little more than a citation to Unelko, Neumann, 358 Or. at 720, 369 P.3d 1117 (citing Unelko, 912 F.2d at 1056), we cannot agree with plaintiff's characterization of Neumann as holding that, for purposes of the anti-SLAPP statute as opposed to the First Amendment, the wedding review was on a matter of public concern. The court's focus on the First Amendment belies that characterization. The court explained at the outset of its analysis that the “determination of the legal sufficiency of Neumann's defamation claim hinges on whether Liles's statements are protected under the First Amendment[.]” 358 Or. at 711, 369 P.3d 1117. After reviewingstatecommonlawandsomeoftheSupremeCourt's First Amendment decisions concerning defamation actions, especially Milkovich, the court stated that, “to determine whether a defamatory statement is protected under the First **419 Amendment, the first question is whether the statement involves a matter of public concern.” Id. at 718, 369 P.3d 1117. If so, “then the dispositive question is whether a reasonable factfinder could conclude that the statement implies an assertion of objective fact.” Id. at 718-19, 369 P.3d 1117.
Accordingly, considering that plaintiff has not asked us to overrule Neumann, the court's determination that the online wedding review in Neumann was on a matter of public concern that triggered the First Amendment is relevant. That negativeonlinereviewofaweddingvenueisinmanyrespects like the negative online review of plaintiff's piano store in thiscase,andbothcasesinvolvedprivate-figureplaintiffsand
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nonmedia defendants. In view of plaintiff's arguments, we apply Neumann and conclude that, under *829 that case, the online review in this case was on a matter of public concern.
3. The impact of speaker motive and identity on public concern
We now turn to the impact of the speaker's motive or identity onthepublicconcernanalysis.AlthoughtheCourtofAppeals did not treat it as dispositive in this case, it declared that “a speaker'smotiveorpurposeinspeaking is relevanttowhether speech is protected by the First Amendment.” Lowell, 306 Or.App. at 339, 473 P.3d 1094 (emphasis in original). To support its conclusion, it cited public employment cases from which Dun & Bradstreet derived its public concern test, including the following:
“[W]hen a public employee speaks not as a citizen upon matters of public concern, but instead as an employee upon matters only of personal interest, absent the most unusual circumstances, a federal court is not the appropriate forum in which to review the wisdom of a personnel decision taken by a public agency allegedly in reaction to the employee's behavior.”
Connick v. Myers, 461 U.S. 138, 147, 103 S.Ct. 1684, 75 L.Ed.2d 708 (1983). The Court of Appeals further reasoned that the motive of the speaker was properly part of the content, form, and context analysis, as part of the context of a statement, in public employment cases in Oregon. Lowell, 306 Or.App. at 340, 473 P.3d 1094 (citing one of its earlier cases). The Court of Appeals also cited Harley-Davidson, 279 Or. at 363, 366, 568 P.2d 1359, as support. In that case, this court held that a fake customer complaint written by a competitor and sent directly to a mutual distributor was not speech on a matter of public concern. The Court of Appeals acknowledged that this court “gave little explanation of its specific reasoning” but concluded that the court derived its result from the touchstone principle that to be speech on a matter of public concern, the speech must be in the interest of democratic dialogue and this court determined that “the interest in democratic dialogue [was] non-existent.” Lowell, 306 Or.App. at 340, 473 P.3d 1094.
The parties disagree on whether the Court of Appeals was correct. Plaintiff argues that the Court of Appeals was *830 correct, particularly in treating public employment cases as instructive, and defendants argue the opposite.
In the public employment cases, the relationship between whether the topic is one of public concern and the motive of the speaker is as follows: When the topic truly is one of public concern, it is likely that the employee is speaking in her capacity as a citizen, which is protected by the First Amendment irrespective of the fact that the government is also the speaker's employer. But, when the topic is narrow or one of private concern, it is likely that the employee is speaking in her capacity as an employee, which any employer, regardless of whether that employer happens to be the government, may have a legitimate interest in controlling. Plaintiff interprets Dun & Bradstreet as the Supreme Court's endorsement of a similar approach in the defamation context because it applied the content, form, and context approach crafted for public employment cases. Plaintiff argues that, when a writer makes negative comments about a business (the content), the writer's status—business competitor or disgruntled customer (the context)—and whether she masks her status in her delivery of those comments (the form) are instructive as to whether the comments truly are on matters of public concern. When the writer is a competitor, the logic goes, it is **420 likely, no matter how the comments are presented,thatthesubjectisoneofprivateconcern.Whenthe writer is a disgruntled customer, it is likely that the matter is one of public concern (albeit not one of overwhelming public concern).
That reasoning is mistaken because the logic is not parallel in public employment cases and defamation cases. The public employment cases reason from the topic of the speech to determine which relationship between the parties (the citizen-government relationship or the employee-employer relationship) ought to control the outcome. In other words, whether speech is on a matter of public concern is a tool of a larger inquiry in public employment cases. In the context of defamation, whether speech is on a matter of public concern is the object of the inquiry. Plaintiff asks us to reason from the status of the speaker to determine whether the topic is of public concern, going so far as to suggest that, whenever a competitor or its employee speaks about *831 another business, the speech is of purely private concern. That is mistaken. Defendants correctly note that the rules arising from the public employment context are intended to balance interests where the two players at issue each have two statuses, citizen-employee and government-employer. In deciding whether the topic of the speech was of public or private concern, the court decides which status controls (the citizen-government or employee-employer) and thereby which interests ought to control (a citizen's interest in her
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free speech rights or an employer's interest in appropriately regulating the workplace). Here, the object of the inquiry is to determinewhetherthespeechisonatopicofpublicorprivate concern.
The Supreme Court's decision in Garcetti v. Ceballos, 547 U.S. 410, 126 S.Ct. 1951, 164 L.Ed.2d 689 (2006), supports thatanalysis.Inthatcase,apublicemployeewroteamemoon what he believed to be serious internal misconduct pursuant tohisjobduties. Id. at414,126S.Ct.1951.Hewasreassigned and denied a promotion soon after. Id. at 415, 126 S.Ct. 1951.Hesued,citingFirstAmendmentprotectionsforspeech relating to matters of public concern because whether the department was corrupt was a matter of public concern. Id. The Supreme Court held that the memo was not protected by the First Amendment because it was written pursuant to his official duties, i.e., the topic of the speech was part of his duty asanemployee,sohewroteitasanemployee,notasacitizen. Id. at 421, 126 S.Ct. 1951. Thus, the government's interests as an employer regulating a workplace controlled. Whether the employee, in addition to having a job duty, was motivated to act because he believed that he was addressing an issue of public concern was not relevant in determining whether the speech was First Amendment-protected. Id.
Focusing on the motive of the speaker also distracts from the question central to the inquiry: Does the speech bear on public discourse, self-governance, or the ordering of society? There is no reason to suppose that the exact same words delivered in the exact same way have different ramifications forthoseareasofconstitutionalconcernbecausethespeaker's motive is different in the two cases. A useful example of that comes from a Connecticut case, Gleason v. Smolinski, 319 Conn. 394, 125 A.3d 920 (2015). In that case, *832 the defendants, family members to a missing person, posted missing person signs around the plaintiff's neighborhood. Id. at 396-97, 125 A.3d at 927. The defendants believed that the plaintiff, the missing person's girlfriend, was involved in his being missing or dead. Id. at 396, 125 A.3d at 927. Although there was substantial evidence that some of the defendants’ motive in posting the signs was to harass the plaintiff so that she would divulge information about the missing person, the Connecticut Supreme Court concluded that the matter was of public concern because it related to a police investigation and finding a missing person. Id. at 433 & n. 33, 125 A.3d at 949 & n. 33. The fact that the defendants were partially motivated byadesiretoharmtheplaintiffdidnotdetractfromthespeech being on a matter of public concern, a police investigation of a missing person.
Additionally, adoption of the Court of Appeals’ analysis would be inconsistent **421 with First Amendment values, which include “secur[ing] the widest possible dissemination of information from diverse and antagonistic sources.” New York Times, 376 U.S. at 266, 84 S.Ct. 710 (internal quotation omitted). Motives like competition, hatred, and ridicule may underlie speech vital to the public discourse, which the First Amendment is intended to protect. Allowing the governmenttoscrutinizethemotiveofaspeakertodetermine the scope of that speaker's protection from government enforcement against her under the First Amendment invites the government to define the contours of the public discourse according to the motives it finds the worthiest. Rather than giving expression the “breathing space” it needs to survive, id. at 271-72, 84 S.Ct. 710, we would suffocate it.
4. Whether the speech is susceptible to true-false analysis Having concluded that Neumann applies to this case such that the speech is on a matter of public concern and that motive and speaker identity do not alter that outcome, we turn to the last step in applying the First Amendment public comment defense, in view of defendants’ position that we are unable to make that determination on this record. That last step is whetherthespeechissusceptibletobeingprovedtrueorfalse under Milkovich.TheFirstAmendmentprecludesliabilityfor statements that a *833 reasonable factfinder could not find to imply an assertion of objective fact. The Court of Appeals applied the Unelko test adopted in Neumann to resolve that question, and we agree with its conclusions.
As discussed above, the three-part inquiry for discerning whether speech is susceptible to a true-false analysis is as follows: “(1) whether the general tenor of the entire publication negates the impression that the defendant was asserting an objective fact; (2) whether the defendant used figurative or hyperbolic language that negates that impression; and (3) whether the statement in question is susceptible of being proved true or false.” Neumann, 358 Or. at 719, 369 P.3d 1117. In the present matter, we examine how the three-part inquiry applies to three different statements: (1) the remark that plaintiff misrepresented whether his business could sell new Steinway pianos, (2) the statement that the salesman misrepresented the age of the Yamaha C-7 piano, and (3) “this guy can't be trusted.”
We agree with the Court of Appeals that the Steinway and Yamaha statements are sufficiently factual to be actionable but that “this guy can't be trusted” is not. Lowell, 306
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Or.App. at 343, 473 P.3d 1094. Starting with the last prong ofthe Unelko test,whetherplaintiff'sbusinessmisrepresented its ability to sell new Steinway pianos and whether the salesman misrepresented the age of the Yamaha piano are factual matters with truth values. Straightforward sets of facts would make Wright's statements in the review either true or false. Applying the two other prongs of the Neumann inquiry does not alter that result with respect to those two statements. Based on the record of the contents of the review, nothing in the review's “general tenor” would negate the impression that the writer really was asserting that the business and its employees were misrepresenting facts about pianos to customers. Although there is some evidence that the review used evocative language, such as the store “smelled like grandma's attic,” that language is not so figurative or hyperbolic as to undermine a reader's impression that the review is alleging that plaintiff's business lied to the writer about selling new Steinway pianos and the age of the Yamaha piano on display. See Milkovich, 497 U.S. at 21, 110 S.Ct. 2695 *834 (considering whether the writer's use of “loose, figurative, or hyperbolic language” or the “general tenor of the article” negated the impression that the writer “was seriously maintaining that petitioner committed the crime of perjury”).
The analysis differs with respect to the “this guy can't be trusted” remark. In isolation, the statement is subjective and not susceptible to being proved true or false. And, viewing the remark in the context of the whole review does not alter that result. As the Court of Appeals explained in its opinion, Lowell, 306 Or.App. at 345, 473 P.3d 1094, the remark can be best understood as a conclusion that the writer drew from the **422 “facts” presented in the review: The business misrepresentedwhetheritcouldsellnewSteinwaypianosand the age of a piano on display, and therefore its owner “can't be trusted.” The writer's conclusion implies no facts beyond those already offered in the review and is not actionable.
5. Whether to alter defamation law in Oregon by following Obsidian Finance
Because the public comment First Amendment defense is available to defendants and applies to two statements, we address what plaintiff's burden is to show defendants’ fault and the media/nonmedia distinction that applies when a private figure plaintiff sues a nonmedia defendant. Defendants ask that, if Neumann did not already abolish the distinction between media and nonmedia defendants in defamation claims brought by private figures, we now should do so and follow the Ninth Circuit's approach in Obsidian
Finance Group, LLC v. Cox, 740 F.3d 1284, 1291 (9th Cir. 2014). We decline to abolish the media/nonmedia distinction. The principles of stare decisis counsel that result for a few reasons. First, the facts of the case before us are far from an ideal vehicle for considering the nuances of the question with which we are confronted, and amici’s hypotheticals are no substitute. Second, we are not persuaded by the strength of Obsidian Finance’s logic and support to overrule our existing precedent.
At the outset, we note that “the party seeking to change a precedent must assume responsibility for affirmatively persuading us that we should abandon that precedent,” and we assume, grounded in the principle of stare decisis, *835 that “fully considered prior cases are correctly decided.” State v. Ciancanelli, 339 Or. 282, 290, 121 P.3d 613 (2005) Stare decisis is “a prudential doctrine that is defined by the competing needs for stability and flexibility in Oregon law.” Farmers Ins. Co. v. Mowry, 350 Or. 686, 697-98, 261 P.3d 1 (2011).Importantly,“[s]tare decisis doesnotpermitthiscourt to revisit a prior decision merely because the court's current members may hold a different view than its predecessors about a particular issue. At the same time, stare decisis is not absolute.” Couey v. Atkins, 357 Or. 460, 485, 355 P.3d 866 (2015)
This court held in Wheeler that plaintiffs must prove that a defendant acted with actual malice to obtain presumed damages only if the defendant is a media defendant. 286 Or. at 110, 593 P.2d 777. That has been an established rule of the law of defamation in Oregon for decades. Wheeler and its related cases do not suffer from some of the faults that have compelled us to overrule precedent in the past. The rule was not adopted in what amounted to dicta or without explanation. See Couey, 357 Or. at 485, 355 P.3d 866 (identifying the above as a reason to overcome the application of stare decisis). Wheeler discussed its decision in detail, relying on Gertz’s own emphasis on the fact that it dealt with media defendants. See 286 Or. at 108-10, 593 P.2d 777 (quoting Gertz extensively). Nor was Wheeler’s analysis clearly incorrect, see Couey, 357 Or. at 485, 355 P.3d866(identifyingthatasanadditionalreasontoovercome the application of stare decisis): Gertz did not itself resolve whether it applied to nonmedia defendants.
Defendants and amici urge that the time has come to overturn Wheeler and to abolish the media/nonmedia distinction because it has become incompatible with modern times and technology. First, they argue that the distinction creates a
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“double standard” at odds with the Supreme Court's current approach. They note that the Supreme Court has said that the press has no special speech privileges distinct from those of other speakers, see Citizens United v. Federal Election Comm'n, 558 U.S. 310, 352, 130 S.Ct. 876, 175 L.Ed.2d 753 (2010), and that all speakers, whether or not members of traditional media, should have the same standards of liability. Second, defendants and amici argue that Wheeler is at odds with the majority approach of most federal appellate *836 courts, including the Ninth Circuit. Given the split between Oregon state law and the law binding the Ninth Circuit, defendants and amici argue that Oregon defamation defendants will be less protected than their out-of-state counterparts facing similar suits in diversity cases in federal court. Amici further argue that Wheeler conflicts with the approachof **423 themajorityofstatesthathaveaddressed the question. Defendants urge, in summary, that “[t]here should be no different constitutional analysis for a news reporter[ ] (media defendant), a food-critic blogger (arguably media-defendant or non-media defendant), a private citizen review on Google or Yelp (non-media defendant), and any other person who posts a consumer review that is accessible to the public.”
Webeginwithdefendants’concernsaboutthechangingtimes and later address their arguments based on case law. Notably, defendants’ arguments have little to say about the facts of this case, with good reason: Wright is not a blogger or a food critic. He is an individual who wrote a review of a retailer and posted it to the internet, just as millions of other Americans do. Artistic Piano is just a store that sells musical instruments and accessories. At bottom, defendants argue that the media/ nonmedia distinction should be abandoned as clearly wrong because it presents a difficult line-drawing problem, but they makethatargumentinacaseinwhichthelineisentirelyclear: Defendants are not media under any workable definition. We also note that the resolution of the issue may make little practical difference under the circumstances of this case: Plaintiff is correct that he could make the required showing of actual malice to overcome summary judgment. Plaintiff's theory of the case is not that the review's statements are just false; it is that the conversation described in the review was entirely made up, and plaintiff adduced evidence in support of that theory. Because at summary judgment all reasonable inferences are drawn in the light most favorable to thenonmovingparty,afactfindermayverywellconcludethat theconversationreportedinthereviewnevertookplace.And, if defendants described an entirely made-up conversation, anything they claim was “said” in it would be made knowing
that it was false or with reckless disregard for the truth, i.e., *837 with actual malice, the very fault standard for which defendants advocate.
In short, we have before us a case in which the defendants are admittedly not media and may very well have acted with actual malice. Defendants do not engage with those facts in their efforts to persuade us to overrule the media/nonmedia distinction for purposes of determining what showing of defendants’ fault plaintiff must make. Stare decisis is not mechanistic, Mowry, 350 Or. at 697, 261 P.3d 1, but it is demanding. And it does not permit us to destabilize over 40 years of precedent on the strength of a few hypotheticals and some abstract concerns about modernity. We acknowledge the competing need for flexibility in a modern world and recognize that old rules can become outmoded with the passage of time, see id. at 697-98, 261 P.3d 1, but this case simply does not present an example of how the rule has become outmoded. It instead presents facts to which the rule can be straightforwardly applied.6
In the absence of an argument that the facts illustrate why the existing media/nonmedia distinction ought to be overruled, defendants attempt to meet their burden to show why precedent should be abandoned by appealing to case law from other jurisdictions, particularly Obsidian Finance. We are not persuaded that defendants’ argument meets that burden, nor do we find Obsidian Finance’s logic persuasive enough to convince us that our longstanding approach ought to be abandoned.
In Obsidian Finance, the Ninth Circuit acknowledged that the Supreme Court has not directly addressed whether its First Amendment defamation rules apply equally to the institutional press and to private, nonmedia defendants. 740 F.3dat1291.However,theNinthCircuitheldthatadefendant blogger's allegations that a *838 bankruptcy trustee was corrupt were protected by the First Amendment, though the defendant was not a trained journalist and “apparently ha[d] a history of making similar allegations and **424 seeking payoff in exchange for retraction.” Id. at 1287, 1291
The court's rationale, like defendants’ and amici’s argument before this court, was largely based on decisions by the Supreme Court—in contexts other than defamation claims— rejecting constitutional privileges for the institutional press greater than those available to individuals engaged in the sameactivities. See id. at1290(citingcases).Citingdecisions from other circuits, the Ninth Circuit concluded that the
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First Amendment defamation rules “apply equally to the institutional press and individual speakers.” Id. at 1291
We stand by our previous reasoning, that the legal context here, a defamation claim, matters for the purposes of whether and how the First Amendment must alter state common law. Defamation law in Oregon has developed over time mainly in the common-law tradition (the anti-SLAPP statute is a notable exception). The common-law libel cause of action exists to provide remedies in individual cases of harm caused by false speech, and liability is by no means a foregone conclusion, even in cases of libel per se, as a result of common-law privileges and defenses recognized in Oregon. We have already discussed in detail how the Supreme Court approaches defamation cases. In our view, the Supreme Court's approach in state common-law defamation cases is different from cases that involve a jurisdiction that enacts and seeks to enforce laws against speakers that are not content-neutral or suffer from similar constitutional defects. See Hepps, 475 U.S. at 777, 106 S.Ct. 1558 (acknowledging that “a suit by a private party is obviously quite different from the government's direct enforcement of its own laws”).
And, the Court has recognized that the common-law speechbased torts are varied and call for an appreciation of the specific context at issue. See, e.g., Zacchini v. ScrippsHoward Broadcasting Co., 433 U.S. 562, 97 S.Ct. 2849, 53 L.Ed.2d 965 (1977). In Zacchini, the Ohio Supreme Court had held that a television news broadcast of the plaintiff's “humancannonball”actinitsentiretywithouttheperformer's permission was protected as reporting on a matter of *839 public interest, relying on the Court's decision in a false light case, Time, Inc. v. Hill, 385 U.S. 374, 87 S.Ct. 534, 17 L.Ed.2d 456 (1967). The Supreme Court reversed, noting that the tort in Time “involved an entirely different tort” from the plaintiff's cause of action for appropriation of his right of publicity under Ohio law, Zacchini, 433 U.S. at 571, 97 S.Ct. 2849, and explained that the “differences between these two torts are important,” id. at 573, 97 S.Ct. 2849 The Court also recognized that its line of cases involving the First Amendment and defamation, including Gertz, were inapplicable. Id. at 574, 97 S.Ct. 2849.
As a result, we are not persuaded that the Supreme Court's First Amendment cases involving other legal contexts are or should be determinative as to state law defamation cases. For example,in Bartnicki v. Vopper,532U.S.514,121S.Ct.1753, 149 L.Ed.2d 787 (2001), a case cited in Obsidian Finance, 740 F.3d at 1290, the plaintiffs’ mobile phone conversation
was unlawfully intercepted and recorded by an unknown third party during a labor dispute, and one defendant gave the recording to the media defendants. After the recording was broadcast over radio and published in newspapers, the plaintiffs brought claims for damages based on federal and Pennsylvania wiretap acts that prohibited disclosure of content of communications that a party has reason to knowwereobtainedunlawfully.Thedefendantsassertedthat, if they violated the wiretap laws, their disclosures of the conversationbetweentheplaintiffswereprotectedbytheFirst Amendment. Id. at 518-21, 121 S.Ct. 1753
The Third Circuit Court of Appeals evaluated the statutes and concluded that they deterred more speech than necessary to protect the privacy interests involved and therefore reversed the district court's denial of the defendants’ motion for summary judgment. Id. at 521-22, 121 S.Ct. 1753. Applying its framework for reviewing statutes challenged under the First Amendment, the Supreme Court agreed that the statutes werecontent-neutral. Id. at526-27,121S.Ct.1753.However, theCourtnotedthatitrepeatedlyhadheldthat,ifthepresshas lawfully obtained truthful information, state action punishing publicationofinformationofpublicconcernwillgenerallybe unconstitutional. **425 Id. at 527-28, 121 S.Ct. 1753. The Court concluded that the call between the union president and the union's chief negotiator, in which the president threatened use of physical *840 harm during ongoing negotiations over the terms of compensation for teachers at the public high school, was on a matter of public concern. Id. at 535, 121 S.Ct. 1753. Thus, the question in the case was whether the First Amendment protected the defendants when they had reason to know that the interception of the phone call was unlawful. The Court in Bartnicki acknowledged the communication privacy interest that the statutes protected but concluded that, based on the facts of the case—particularly the kind of speech that was publicized and the fact that none of the defendants had performed the interception—all the defendants were protected from liability for the publication.
Id 7 Similarly, Cohen v. Cowles Media Co., 501 U.S. 663, 111 S.Ct. 2513, 115 L.Ed.2d 586 (1991) (contract claim for breach of confidentiality), and First National Bank of Boston
v. Bellotti, 435 U.S. 765, 767, 98 S.Ct. 1407, 55 L.Ed.2d 707 (1978) (freedom of speech challenge to a Massachusetts criminal statute forbidding banks and corporations from making campaign contributions or expenditures to influence public votes on referenda other than those affecting their property, business, or assets), arise in contexts that are dissimilar to common-law defamation claims.
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Finally, we have reviewed the other circuit court decisions that the Ninth Circuit also treated as persuasive in concluding that the First Amendment defamation rules apply both to the institutional press and nonmedia defendants. Three of the cases are not on point, because they do not involve private figure plaintiffs and nonmedia defendants, thus obviating the need to decide the question of how the First Amendment applies in a defamation claim between two wholly private, nonmedia parties. See Garcia v. Bd. of Ed. of Socorro Consol. Sch. Dist., 777 F.2d 1403, 1408 (10th Cir. 1985) (the plaintiffs, school board members *841 in a defamation cross-claimagainstafiredschoolsuperintendent,werepublic officials); Avins v. White, 627 F.2d 637, 648 (3rd Cir. 1980) (theplaintiffwasapublicfigure); Davis v. Schuchat,510F.2d 731, 734 n. 3 (DC Cir. 1975) (the defendant was a reporter). Although another case stated that, whether the defendant is media or nonmedia is “irrelevant to the question of what level of constitutional protection that right is to receive,” In re IBP Confidential Business Documents Litigation, 797 F.2d 632, 642 (8th Cir. 1986), that case concerned the degree to which the First Amendment right to petition was implicated and should be protected. It is unsurprising that the Eighth Circuit concluded that the media/ nonmedia distinction should be irrelevant when the context is the defendant's exercise of the right to petition the government.
And we are not persuaded by the two remaining cases, which emphasize the difficulties in defining media. See Snyder v. Phelps, 580 F.3d 206, 219 n. 13 (4th Cir. 2009), rev'd on other grounds,562U.S.443,131S.Ct.1207,179L.Ed.2d172 (2011) (stating—as to an intentional infliction of emotional distress claim—that “[a]ny effort to justify a media/nonmedia distinction rests on unstable ground, given the difficulty of defining with precision who belongs to the ‘media’ ”); Flamm v. American Ass'n of University Women, 201 F.3d 144, 149 (2d Cir. 2000) (“We agree that a distinction drawn according to whether the defendant is a member of the media or not is untenable.”). Thus far, the Supreme Court itself has recognized that distinction in defamation cases.
The values underlying defamation claims have been recognized by this court for over 150 years, see Neumann, 358 Or. at 711, 369 P.3d 1117 (citing **426 Hurd v. Moore, 2 Or. 85 (1863)), and in the common law for much longer, see Milkovich, 497 U.S. at 11, 110 S.Ct. 2695 (noting that the common-law cause of action has existed since “the latter half of the 16th century”). As discussed earlier, the Supreme Court has repeatedly recognized the strong interests of the states in providing remedies for harms to reputation and the
individual and societal benefit in preventing and remedying invidious false speech. Considering the Court's precedents in defamation cases and its overall approach to assessing the interests of speakers in light of *842 the legal context (and concomitant competing interests), we are not persuaded that the Supreme Court requires states to alter their common law by applying First Amendment protections in defamation casesbroughtbyprivatefiguresagainstnonmediadefendants. We therefore decline to overrule existing precedent based on Obsidian Finance.
In sum, we affirm the decision of the Court of Appeals in part on different grounds. On remand to the trial court, plaintiff's libel claim is subject to the First Amendment defense, but plaintiff will not be subject to a heightened proof-of-fault requirement based on the Supreme Court's First Amendment cases that apply to media defendants in defamation cases.
The decision of the Court of Appeals is affirmed in part and reversed in part. The judgment of the circuit court is reversed, and the case is remanded to the circuit court for further proceedings.
Balmer, J., concurred and filed an opinion in which Garrett, J., joined.
Flynn, J., concurred and filed an opinion.
BALMER, J., concurring.
The majority holds that Oregonians who publish a review of a local business may be liable for defamation without any showing of fault on their part. In so doing, the opinion upholds an untenable distinction between “media” and “nonmedia” defendants without clearly articulating the differences between the two. In my view, any approach that retains that distinction must be supported by a workable test to delineate media from nonmedia, and the majority makes no attempt to provide that test. I would follow the federal and state courts that have rejected that distinction for purposes of defamation claims by a private figure and would hold that the First Amendment equally protects the media and private individuals.
The majority also casts doubt on this court's decision in Neumann v. Liles,358Or.706,369P.3d1117(2016),basedon argumentsthatarenotmadebythepartiesandareunrelatedto the case before us. I would not reach beyond the facts of this
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case to call into question a recent decision of this court that no party here has challenged and that was correctly decided.
*843 Thus, although I agree with much of what the majority opinion holds—including its discussion of the missing text of the review, its conclusion regarding the role of motive in identifying speech of public concern, and its ultimate disposition—I disagree with key parts of the majority's First Amendment analysis. I therefore respectfully concur in the judgment, but not in all of the analysis.
AtissueinthiscasearetwoFirstAmendmentprotectionsthat apply in defamation cases, which I address in turn. The first is that a plaintiff must show that a defendant acted with some level of fault, with the specific level of fault depending on the identities of the parties. The second is that a statement must be provably false to be actionable if the statement involves matters of public concern.
As to the first protection, the Supreme Court has indicated that the level of fault that a plaintiff must show varies with the circumstances. If the plaintiff is a public figure, for example, the plaintiff must show that the allegedly defamatory statement was made with “actual malice.” See New York Times Co. v. Sullivan, 376 U.S. 254, 283, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964); Curtis Publishing Co. v. Butts, 388 U.S. 130, 155, 87 S.Ct. 1975, 18 L.Ed.2d 1094 (1967) A plaintiff who is not a public figure must show that a defendant acted with negligence (or some higher level of fault) to recover, at least in cases involving media defendants. See Gertz v. Robert Welch, Inc., 418 U.S. 323, 347, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974). Gertz further **427 held that, to recover presumed or punitive damages, a plaintiff who is not a public figure must show that the defendant acted with actual malice. Id. at 349, 94 S.Ct. 2997
Following Gertz, state and federal courts have split on whether Gertz’s fault requirements apply in cases involving nonmedia defendants, as described below. For its part, this court held several decades ago that Gertz did not apply to nonmedia defendants, as the majority explains. 369 Or at 818 (citing Harley-Davidson v. Markley, 279 Or. 361, 371, 568 P.2d1359(1977); Adams v. State Farm Mutual Auto. Ins. Co., 283 Or. 45, 51-52, 581 P.2d 507 (1978); Wheeler v. Green, 286 Or. 99, 110, 593 P.2d 777 (1979)).
*844 That approach to Gertz, however, fails to engage with the increasingly difficult question of how to distinguish clearly between media and nonmedia defendants and, for that
reason, places this court at odds with recent decisions from other state and federal courts. Those cases, and the rapidly changing nature of media, communications, and public discourse, counsel that reevaluating the media/ nonmedia distinction may lead to a sounder approach to protecting our “profound national commitment to the principle that debate on public issues should be uninhibited, robust, and wideopen.” New York Times, 376 U.S. at 270, 84 S.Ct. 710 In short, I would reject the media/nonmedia distinction to which the majority adheres and would reconsider this court's limitation of Gertz to media defendants in Harley-Davidson, Wheeler, and Adams, in light of more recent case law and the changing media landscape.
As identified by the majority, one helpful recent federal case is Obsidian Finance Group, LLC v. Cox, 740 F.3d 1284, 1291 (9th Cir.), cert. den., 572 U.S. 1142, 134 S.Ct. 2680, 189 L.Ed.2d 223 (2014), where the Ninth Circuit held that the Gertz fault rules should apply equally to media and nonmedia defendants. 369 Or at 834. Obsidian Finance noted that, of the six federal circuit courts that had then reached the issue, all had extended the First Amendment protections of “[New York Times v.] Sullivan and its progeny,” including Gertz, to media and nonmedia defendants. 740 F.3d at 1291. The Ninth Circuit agreed with that approach, observing:
“The protections of the First Amendment do not turn on whether the defendant was a trained journalist, formally affiliated with traditional news entities, engaged in conflict-of-interest disclosure, went beyond just assembling others’ writings, or tried to get both sides of a story. As the Supreme Court has accurately warned, a First Amendment distinction between the institutional press and other speakers is unworkable * * *.”
Id. The Court therefore applied the Gertz negligence requirement for private defamation actions in that case involving a nonmedia defendant.
The majority rejects Obsidian Finance and the cases it cites as variously inapposite *845 or unpersuasive. 369 Or at 840-41. The majority is correct that some of those cases are not precisely on point here, because they considered only whether the New York Times fault rule for defamation actions by public figures extended to nonmedia defendants (as it already does in Oregon, see Wheeler, 286 Or. at 110-11, 593 P.2d 777 (“We conclude that all defendants, not only those associated with the media, continue to be protected by the New York Times rule in cases involving comment upon public officials and public figures.”)) rather than the Gertz fault rule
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for plaintiffs that are not public figures. E.g., Garcia v. Bd. of Ed. of Socorro Consol. Sch. Dist., 777 F.2d 1403, 1410 (10th Cir. 1985), cert. den., 479 U.S. 814, 107 S.Ct. 66, 93 L.Ed.2d 24 (1986); Avins v. White, 627 F.2d 637, 649 (3rd Cir.), cert. den., 449 U.S. 982, 101 S.Ct. 398, 66 L.Ed.2d 244 (1980)
At the same time, however, the majority disregards the significance of the cases cited by Obsidian Finance as a set as well as the persuasive reasoning of the Ninth Circuit. Togetherwith Obsidian Finance,thosecasesshowthatrecent federal court decisions have uniformly rejected the media/ nonmedia distinction in the First Amendment context and have done so for two primary reasons. First, in the context of the evolving communications and media landscape, with the boundary between traditional media and new or social mediadisappearing,thatdistinctionis“unworkable,” **428 Obsidian Finance, 740 F.3d at 1291, “rests on unstable ground,” Snyder v. Phelps, 580 F.3d 206, 219 n. 13 (4th Cir. 2009), aff'd, 562 U.S. 443, 131 S.Ct. 1207, 179 L.Ed.2d 172 (2011), or is “untenable,” Flamm v. American Ass'n of University Women, 201 F.3d 144, 149 (2d Cir. 2000) Second, that distinction is at odds with the fundamental First Amendment principle that the value of speech “ ‘does not depend upon the identity of its source, whether corporation, association, union, or individual.’ ” In re IBP Confidential Bus. Documents Litigation,797F.2d632,642(8thCir.1986), cert. den., 479 U.S. 1088, 107 S.Ct. 1293, 1294, 94 L.Ed.2d 150 (1987) (quoting First National Bank of Boston v. Bellotti, 435 U.S. 765, 777, 98 S.Ct. 1407, 55 L.Ed.2d 707 (1978)).
The federal courts are not alone. Several state courts have taken a similar tack, either by explicitly applying Gertz to nonmedia defendants or applying a functionally equivalent fault-based rule under state law. See, e.g., *846 Antwerp Diamond Exch., Inc. v. Better Bus. Bur., 130 Ariz. 523, 528, 637 P.2d 733, 738 (1981) (applying Gertz to nonmedia defendant); Bierman v. Weier, 826 N.W.2d 436, 470-71 (Iowa 2013) (Hecht, J., concurring in part and dissenting in part) (listing cases and noting that 22 state and federal jurisdictions apply Gertz to nonmedia defendants, while only eight states, including Oregon, have held that Gertz does not apply to nonmedia defendants); Lester v. Powers, 596 A.2d 65, 69 (Me. 1991) (holding that Maine common law requiresashowingof“faultamountingatleasttonegligence” in defamation suits against nonmedia defendants); Jacron Sales Co., Inc. v. Sindorf, 276 Md. 580, 592, 350 A.2d 688, 695 (1976) (“[W]e conclude as a matter of state law that the Gertz holding should apply to media and non-media defendants alike * * *.”); Maethner v. Someplace Safe, Inc.,
929 N.W.2d 868, 878-79 (Minn. 2019) (concluding that the limitation on presumed damages in Gertz applies equally to mediaandnonmediadefendantsinsuitsbyprivateplaintiffs); Bender v. City of Seattle, 99 Wash.2d 582, 599, 664 P.2d 492, 503 (1983) (citing Gertz and requiring a showing of fault in actions by private individuals against nonmedia defendants). At least one state has gone even farther and extended the New York Times actual malice requirement to cases involving private plaintiffs and nonmedia defendants based on statements involving matters of public concern. See Durando v. Nutley Sun, 209 N.J. 235, 250, 37 A.3d 449, 458 (2012) (“Today, in New Jersey the actual-malice standard protects both media and non-media defendants who make statements involving matters of public concern, regardless of whether the targets of the statements are public figures or private persons.”).
The Restatement (Second) of Torts takes the same approach as many of those cases, stating that, although the precise holding of Gertz was limited to media defendants, “the principle of the Gertz decision would appear to be broad enough to cover” situations involving only private, nonmedia individuals. Restatement (Second) of Torts § 580B comment e (1977). As the Restatement explains,
“It would seem strange to hold that the press, composed of professionals and causing much greater damage because of the wider distribution of the communication, can constitutionally be held liable only for negligence, but that a private person, engaged in a casual private conversation *847 with a single person, can be held liable at his peril if the statement turns out to be false, without any regard to his lack of fault.”
Id. The Restatement goes on to explain that, even if Gertz itself is limited to media defendants, “the common law of the states is almost certain to apply the same standard” of requiring a fault showing for private defamation actions. Id.
The majority responds by emphasizing that the defamation context is unique among First Amendment applications, and states, “Thus far, the Supreme Court itself has recognized that [media/nonmedia] distinction in defamation cases.” 369 Or at 841. But the Court itself has never taken up the question of whether Gertz applies to nonmedia defendants. To the contrary, when the Court has considered the media/nonmedia distinction, even in the context of defamation, the Court has consistently declined to embrace that **429 distinction and just as often has strongly cautioned against employing it.
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For example, in Dun & Bradstreet, Inc. v. Greenmoss Builders, 472 U.S. 749, 105 S.Ct. 2939, 86 L.Ed.2d 593 (1985), the Court considered a defamation action by a private figure (a construction contractor) against a nonmedia defendant (a credit reporting agency). In resolving that case, the Court did not rely on a media/nonmedia distinction, but instead concluded that the speech at issue was not of public concern. See id. at 772-73, 105 S.Ct. 2939 (White, J., concurring in the judgment).
The majority discusses Dun & Bradstreet, 369 Or at 825-27, but it does not mention that, although the plurality opinion did not decide the issue, a majority of the Court in that case nevertheless explicitly rejected the media/nonmedia distinction in the defamation context. At least five justices agreed that, “in the context of defamation law, the rights of the institutional media are no greater and no less than those enjoyed by other individuals or organizations engaged in the same activities.” Id. at 784, 105 S.Ct. 2939 (Brennan, J., dissenting, joined by Marshall, Blackmun, and Stevens, JJ.); see also id. at 773, 105 S.Ct. 2939 (White, J., concurring in the judgment) (“I agree with Justice BRENNAN that the First Amendment gives no more protection to the press in defamation suits than it does to others exercising their freedom *848 of speech. None of our cases affords such a distinction; to the contrary, the Court has rejected it at every turn.” (Uppercase in original; emphasis added.))
The Court reaffirmed that principle more recently in Citizens United v. Federal Election Comm'n, 558 U.S. 310, 340, 130 S.Ct. 876, 175 L.Ed.2d 753 (2010), where the Court noted that treating media differently from nonmedia in the First Amendment context is particularly fraught. “With the advent of the Internet and the decline of print and broadcast media,” the Court observed, “the line between the media and others who wish to comment on political and social issues becomes far more blurred.” Id. at 352, 130 S.Ct. 876. As a result, the Court has “consistently rejected the proposition that the institutional press has any constitutional privilege beyond that of other speakers.” Id. (emphasis added). Thus, although the Court has never specifically held that Gertz applies to a nonmedia defendant, the majority's brief assessment that “the Supreme Court has recognized that distinction in defamation cases,” 369 Or at 841, is belied by the Court's own statements emphasizing that it has drawn no such line.
Few would disagree that, as the Court observed in Citizens United in 2010, the line between the media and nonmedia is indeed “blurred” and that it has only become more so
in the last decade. Even if the Court had endorsed such a distinction in the abstract, we would be left with the difficult task of crafting a workable test to distinguish between types of defendants. It is no secret that, in today's world of internetbased communication and social media, private individuals andgroupswhoarenotpartofanykindof“traditionalmedia” can share similarly powerful platforms for the dissemination of speech on matters of public concern.
The difficulty in drawing the media/nonmedia distinction has also been highlighted by other courts and scholars. See, e.g., Snyder, 580 F.3d at 219 n. 13; Flamm, 201 F.3d at 149; Ryan M. Walters, When Can You Shoot the Messenger? Understanding the Legal Protections for Entities Providing Information on Business Products and Services in the Digital Age, 96 Or L Rev 185, 191 (2017) (“The barrier between a news organization and an individual has never been lower.”); Clay Calvert, Emma Morehart & Sarah *849 Papadelias, Plausible Pleading & Media Defendant Status: Fulfilled Promises, Unfinished Business in Libel Law on the Golden Anniversary of Sullivan, 49 Wake Forest L Rev 47, 73-83 (2014) (describing three reasons why the media/nonmedia distinction “should be obliterated”: difficulties in defining “media” in a digital world, the democratization of media empoweringprivateindividualstorespondtodefamation,and notions of speaker equality espoused in Citizens United, as discussed above).
Even if a workable distinction between media and nonmedia might be possible, the majority makes no attempt to explain how that distinction would be made. The majority asserts that defendants are “not ‘media’ under any definition.” 369 Or at 809. But in **430 making that assertion, the majority does not provide any definition of media. Although dictionary definitions are of limited use in discerning the meaning of Supreme Court opinions, a few examples nevertheless illustrate that defendants are “media” under at least some definitions of the term. For example, Black's Law Dictionary definesmediaascertainmeansofcommunication: “Collectively, the means of mass communication; specif., television, radio, newspapers, magazines, and the Internet regarded together.” Black's Law Dictionary 1175 (11th ed 2019). Here, the allegedly defamatory statements were made through the internet, which is one of those listed “media.” More importantly, the statements were posted as a review on Google. A central purpose of posting an online review is to make the writer's views regarding a product or service available to the broader public—including potentially any personintheworldwithaninternetconnectionandabrowser.
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The extent of that potential reach is exactly the “means of mass communication” we think of as “media.”
Under the above definition, defendants here could be deemed to have been acting as “media” insofar as they created content about a local business for broad online publication. Defendants, of course, might not fit the mold of traditional “media,” as the majority seems to understand that term, such as major newspapers or television broadcasters. But the very fact that defendants fit the terms of a definition of “media,” but do not seem to fit the unexpressed terms of *850 the majority's definition of “media,” highlights the difficulty and ambiguity in clearly distinguishing between media and nonmedia, particularly where user-generated internet content is involved.
Without an explanation of how to distinguish between media and nonmedia, the remainder of the opinion relying on that distinction is unpersuasive. Various federal and state courts have rejected that distinction, and I find Obsidian Finance’s explanationofwhytodosopersuasive.Asaresult,Iconclude that that distinction should not hold in defamation cases.
If the Gertz rule were applied here, plaintiff would have to allege and prove at least negligence on defendants’ part to be able to recover for defamation at all, and he would have to showactualmalicetorecoverforhisdefamation per se claim, which may proceed “without proof of specific harm.” Brown v. Gatti,341Or.452,458,145P.3d130(2006); see Gertz,418 U.S. at 350, 94 S.Ct. 2997 (“In short, the private defamation plaintiff who establishes liability under a less demanding standard than that stated by New York Times[, i.e., actual malice,] may recover only such damages as are sufficient to compensate him for actual injury.”). The majority asserts that applying that actual malice standard “may make little practical difference under the circumstances of this case,” because “Plaintiff is correct that he could make the required showing of actual malice to overcome summary judgment.” 369 Or at 836. I disagree that requiring that showing would be of “little practical difference” to defendants. A heightenedburdenofproofforplaintiffcouldchangewhether defendants are liable for their alleged defamation—which is why defendants raised the actual malice argument. I agree, however, that plaintiff has raised a triable issue of fact as to whether he may be able to make what would be the requiredshowingofactualmaliceinthiscase.Thus,although I disagree with the majority's analysis on this point, I concur in the judgment.
The second type of constitutional protection for speech that applies in defamation cases is the requirement that an allegedly defamatory statement be provably false *851 to be actionable. That requirement stems from Supreme Court decisions that were recently relied on by this court in Neumann. 358 Or. at 713-16, 369 P.3d 1117 (citing Philadelphia Newspapers, Inc. v. Hepps, 475 U.S. 767, 106 S.Ct. 1558, 89 L.Ed.2d 783 (1986); Milkovich v. Lorain Journal Co., 497 U.S. 1, 110 S.Ct. 2695, 111 L.Ed.2d 1 (1990)). In Neumann, we applied the requirement that statements be provably false to statements involving matters of public concern made by a nonmedia defendant. Id. at 722, 369 P.3d 1117 (holding that the defendant's online review was “an expression of opinion on matters of public concern that is protected under the First Amendment”). Neumann also adopted a test **431 for whether a statement is provably falsethatwasarticulatedbytheNinthCircuitin Unelko Corp. v. Rooney, 912 F.2d 1049, 1053 (9th Cir. 1990), cert. den., 499 U.S. 961, 111 S.Ct. 1586, 113 L.Ed.2d 650 (1991) 358 Or. at 718, 369 P.3d 1117. I agree with the majority's ultimate conclusion that Neumann controls this case in part and that some, but not all, of defendant's statements are actionable under the Unelko test. I disagree, however, with other aspects of the majority's discussion of Neumann
The majority upholds Neumann begrudgingly, and seemingly only because plaintiff failed to ask us to overrule it. See 369 Or at 822 (“We conclude that Neumann controls in the absence of plaintiff's request that we overrule it, although we have doubts about its approach ***.”). As part of that discussion, the majority explains at length some effects of the internet on modern communication and the extent to which the advent and development of the internet has changed, or not changed, defamation law in Oregon. 369 Or at 827-28. The majority also questions whether Neumann properly considered whether a media/nonmedia distinction might affect the analysis in that case, and it casts doubt on Neumann’s conclusion that the online review in that case was on a matter of public concern. 369 Or at 823-24, 824, 827-28.
But because the majority upholds Neumann and applies it to this case, the extended critique of that case's reasoning does not bear on the result here and is dicta. Whether online reviews should be automatically considered matters of public concern, or whether the internet can “breathe *852 constitutional importance” into a potentially defamatory statement,arequestionsthatareneitherpresentedbythiscase norrelevanttoitsoutcome.369Orat827.Iwouldnotexpress
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an opinion on matters so far removed from the situation at hand.
Nevertheless,inresponsetothemajority'sdiscussion,Iwould observethat Neumann isfarmoredefensiblethanthemajority suggests. In Neumann, this court “readily conclude[d]” that thestatementsinthatcaseinvolvedmattersofpublicconcern. 358 Or. at 720, 369 P.3d 1117. That ready conclusion was not due to a lack of consideration by this court, but rather due to the clarity with which the court understood that the character and reputation of a local business can be of great importance to members of the surrounding community, regardless of whether they are consumers of that business's services or products. Indeed, it appears that it did not even occur to the litigants in that case to argue otherwise. In Unelko, the Ninth Circuit similarly held that a statement made on 60 Minutes that the product Rain-X “didn't work” involved a matter of public concern, because the statement was “of general interest and was made available to the general public,” and because“protectionofstatementsaboutproducteffectiveness will ‘ensure that debate on public issues will be uninhibited, robust and wide-open.’ ” 912 F.2d at 1056 (quoting Dun & Bradstreet, 472 U.S. at 762, 105 S.Ct. 2939 (internal quotation marks and brackets omitted)). There should be no doubt that the “content, form, and context” of the statements here indicate that they too involve matters of public concern. Dun & Bradstreet,472U.S.at761,105S.Ct.2939(indicating that “ ‘whether speech addresses a matter of public concern must be determined by the expression's content, form, and context as revealed by the whole record’ ” (quoting Connick v. Myers, 461 U.S. 138, 148, 103 S.Ct. 1684, 75 L.Ed.2d 708 (1983) (alterations and brackets omitted))).
The majority also casts doubt on Neumann’s holding that the First Amendment's provably-false rule should apply to nonmedia defendants. See 369 Or at 824 (“In short, the Neumann court did not note that whether the defendant is media or not could affect the analysis, even to reject *853 the idea.”). As the majority recognizes, that question has not been decided by the Supreme Court, but, instead, has been expressly reserved. 369 Or at 817; id. (citing Hepps, 475 U.S. at 779 n. 4, 106 S.Ct. 1558; Milkovich, 497 U.S. at 20 n. 6, 110 S.Ct. 2695). But even if Neumann had not resolved the issue for purposes of Oregon law, which it did, this court should have come to the same conclusion in this case and applied the provably-false rule to defendants without regard to their media or nonmedia status. In the absence of such a rule, Oregonians who post online reviews of businesses **432 would have to be prepared to defend the truth of their
statements in court or face liability for defamation—even where their statements are not susceptible to being proven either truth or false.
The same arguments that weigh in favor of rejecting the media/nonmedia distinction in the Gertz context, articulated above, also support Neumann’s rejection of that distinction. The majority offers no example of another state that allows its citizens to be sued for defamation on matters of public concern where the statement at issue does not satisfy Milkovich’s provably-false standard, and several state courts have taken the opposite approach and agree with Neumann. See, e.g., Dodson v. Dicker, 306 Ark. 108, 111, 812 S.W.2d 97 (1991) (applying Milkovich in a case with a nonmedia defendant); Kahn v. Bower, 232 Cal.App.3d 1599, 1606-07, 284 Cal.Rptr. 244, 248-49 (1991) (same).
Because Neumann is settled law, no party challenges its underlying reasoning (whereas they do challenge the media/ nonmedia distinction in Harley-Davidson, Wheeler, and Adams), and its First Amendment conclusions remain sound, I would not cast doubt on Neumann’s reasoning and its application in this case.
In sum, the majority adheres to a distinction between media and nonmedia defendants, for purposes of defamation claims byprivatefigures,thathasnotbeenembracedbytheSupreme Court and that has been rejected by multiple federal and state courts, numerous scholars, and the Restatement. Although the majority is correct that the Court has not yet applied Gertz tononmediadefendants,theCourthasalsoconsistently rejected the media/nonmedia distinction, and, in its own words, refused to offer the media *854 “any constitutional privilege beyond that of other speakers.” Citizens United, 558 U.S. at 352, 130 S.Ct. 876. I would not continue to hold that Gertz applies only to media defendants in the absence of a workable method for distinguishing between media and nonmedia, and the majority makes no attempt to provide one.
As to Neumann, I would not cast doubt on a case that goes unchallenged by the parties, and I would not express an opinion on matters unrelated to the facts and legal arguments presented by this case.
For the foregoing reasons, I disagree with parts of the majority's First Amendment analysis and concur in the judgment.
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Garrett, J., joins in this concurring opinion.
FLYNN, J., concurring.
I agree with the concurrence that Neumann is not only controlling but correct, and that the critique of that case's reasoninginthemajorityopinionis dicta. AndIampersuaded by the argument in the concurrence that a media/nonmedia distinction is in tension with the Supreme Court's more recent First Amendment decisions. But we are not writing on a
clean slate. Rather, we are being asked to overrule our own controllingprecedentonthestrengthofpredictionsabouthow the Supreme Court ultimately will rule on the question of whether the First Amendment requires proof of fault in cases like this. In my opinion, it is both premature and potentially unnecessary to declare our precedent overruled.
All Citations
369 Or. 806, 512 P.3d 403
Footnotes
* On appeal from Jackson County Circuit Court, Dan Bunch, Judge. 306 Or. App. 325, 473 P.3d 1094 (2020)
** DeHoog, J., did not participate in the consideration or decision of this case.
1 Defendants Wright and Artistic Piano make no arguments independent of each other. This opinion will distinguish between them only when needed to clarify the facts.
2 The witnesses remember the exact wording of the Steinway comment differently. Plaintiff and Norling remembered the review stating that plaintiff's salesman said that the store “can sell new Steinway pianos”; Wright recalled the wording as “is a Steinway dealer.” The former comment would indicate that plaintiff is capable of selling while the latter would indicate that the plaintiff is allowed to sell because he had a dealership agreement with Steinway, authorizing him to sell new Steinway pianos. The significance of this difference, plaintiff explained, is that if the salesman said that the store “can sell new Steinway pianos,” that would be true, but if the salesman said that the store “is a Steinway dealer,” that would be false.
3 The action also included an unfair trade practices claim, which is not at issue on review.
4 Recently, Justice Thomas has called into question whether, in New York Times and the cases that followed, the “constitutional libel rules” adopted by the Court by virtue of the First and Fourteenth Amendments properly displaced the common law of libel developed by the states. McKee v. Cosby, ––– U.S. ––––, 139 S.Ct. 675, 678-82, 203 L.Ed.2d 247 (2019) (Thomas, J., concurring in denial of certiorari). In his view, the states “are perfectly capable of striking an acceptable balance between encouraging robust public discourse and providing a meaningful remedy for reputational harm.” Id. at 682
5 Dun & Bradstreet was a plurality decision, but five members of the Court (three signing on to the lead opinion and Justices Burger and White concurring separately) agreed that the speech at issue was on a matter of private rather than public concern and saw that as dispositive in distinguishing the case from Gertz. Justices Burger and White wrote separately to express disagreement with the trend in the case law of “constitutionalizing the entire law of libel and slander” but agreed that the lead opinion was correct given that case law. Id. at 764, 105 S.Ct. 2939 (Burger, J., concurring), 766, 774 (White, J., concurring).
6 Our colleagues criticize us for not announcing a test to distinguish media from nonmedia. 369 Or at 842 (Balmer, J., concurring). The rationale for not offering a test follows from the discussion above: The facts of this case do not lend themselves to the nuances that we would need to consider to craft one, and amici’s hypotheticals are no substitute. We have no difficulty applying the distinction to the facts of this case: Wright
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512 P.3d 403
and Artistic Piano are clearly not media defendants, and therefore the plaintiff need not show actual malice to obtain relief.
7 It is unclear why the Court relieved all defendants of liability. See id. at 525 n. 8, 121 S.Ct. 1753 (stating only that “we draw no distinction between the media respondents and Yocum[, the individual who gave the recording to the media]. See, e.g., New York Times Co. v. Sullivan, 376 U.S. 254, 265–266, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964); First Nat. Bank of Boston v. Bellotti, 435 U.S. 765, 777, 98 S.Ct. 1407, 55 L.Ed.2d 707 (1978)”). But, as in New York Times and the Court's other cases involving publication by the press of information it obtains on matters of public concern, it is apparent that the Court was concerned with freedom of the press. That concern, rather than an interest in treating all defendants alike in defamation and other cases with a First Amendment dimension, would be a likely basis for the Court's treatment of Yocum.
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Lowell v. Wright, 369 Or. 806 (2022)
P.3d
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512
403
Synopsis
370 Or. 79
Supreme Court of Oregon, En Banc.
Thomas LOWELL, Petitioner on Review, v. MEDFORD SCHOOL DISTRICT
549C, Respondent on Review, and Stephanie Malone et al., Defendants.
(CC 18CV19782) (SC S068891)
Argued and submitted March 8, 2022
July 28, 2022
Background: Piano tuner, who provided piano tuning services to school district and assisted in producing concerts performed in district facilities, brought defamation action against school theater technician, technician's supervisor, and district support services assistant based on their alleged statements that he had been intoxicated on school district premises. The Circuit Court, Jackson County, David G. Hoppe, J., allowed the substitution of school district for the individual defendants based on allegations that the individual defendants were acting in the course and scope of their employment when they made the statements at issue, and the Courtenteredsummaryjudgmentfordistrict.Tunerappealed. The Court of Appeals, 313 Or.App. 599, 497 P.3d 797, affirmed. Plaintiff's petition for review was allowed.
Attorneys and Law Firms
Linda K. Williams, Linda K. Williams PC, Portland, argued the cause and filed the briefs for petitioner on review.
Rebekah R. Jacobson, Garrett Hemann Robertson PC, Salem, argued the cause and filed the brief for respondent on review.
Opinion
WALTERS, C. J.
*81 In this defamation case, we hold that defendant public employer does not have an affirmative defense of absolute privilege that entitles it to summary judgment.
I. BACKGROUND
Because the trial court granted defendant's motion for summary judgment, we recount the facts in the light most favorable to plaintiff, the nonmoving party. ORCP 47 C.
The Supreme Court, Walters, C.J., held that district was not entitled affirmative defense of absolute privilege.
Reversed and remanded.
Procedural Posture(s): Petition for Discretionary Review; On Appeal; Motion for Summary Judgment.
**360 On review from the Court of Appeals. * (CA A173221)
PlaintiffprovidedpianotuningservicestodefendantMedford School District and assisted in producing concerts performed in defendant's facilities. While providing production assistance for a particular concert, plaintiff noticed an echo near the stage. He complained to the school theater technician, Malone, and, later, feeling that Malone had not adequately responded, he followed up with her. Malone reported to her supervisor, Bales, that plaintiff appeared to be intoxicated, that he “smelled of alcohol,” and that “this was not the first time.” Bales repeated Malone's statements to Armstrong, a district support services assistant. Armstrong sent emails summarizing Malone's statements to three other district employees, including the supervisor of purchasing. Armstrong expressed concerns that appearing on district propertyundertheinfluenceofalcoholviolateddistrictpolicy and the terms of plaintiff's piano tuning contract.
Plaintiff brought this defamation action against Malone, Bales, and Armstrong, alleging that the statements that they had made were defamatory. Those three individuals are employees of defendant, a public entity, and the court substituted defendant for the individual defendants. ORS 30.265(3)
Defendant answered, asserting multiple affirmative defenses, including the one at issue here, viz., that public employees areentitledtoanabsoluteprivilegefordefamatorystatements
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made in the course and scope of their employment. 1 Defendant alleged that, because its employees *82 were entitled to that absolute privilege, it too was immune from liability. See ORS 30.265(5) (public bodies are **361 immune from liability for any claim arising from actions of officers, employees, or agents who are immune).
Defendant moved for summary judgment on the absolute privilege defense, and plaintiff filed a corresponding motion for partial summary judgment, arguing that defendant was not entitled to immunity because the accused employees were “low level employees performing ministerial tasks,” who were not entitled to an absolute privilege. The trial court agreed with defendant that “[t]he alleged defamatory statementsweremadebypublicofficialsinthecourseoftheir official duties and they were entitled to absolute privilege.”
Plaintiff appealed, and the Court of Appeals affirmed, relying on its prior interpretation of this court's decision in Shearer v. Lambert, 274 Or. 449, 547 P.2d 98 (1976). Lowell v. Medford School Dist. 549C, 313 Or App 599, 602-05, 497
P.3d 797 (2021). In a series of cases, the latest of which was Christianson v. State of Oregon, 239 Or App 451, 459, 244 P.3d 904 (2010), the Court of Appeals had interpreted Shearer as holding that “an employee of an executive agency has an absolute privilege to make defamatory statements in the exercise of official duties, even if the statements were malicious and the person who made the statements is a lowerlevel employee.”
We allowed plaintiff's petition for review to take our own lookat Shearer andtoconsiderwhethertheabsoluteprivilege extends to all public employees, including defendant's employees, and, thereby, to defendant.
in this case are officers entitled to claim it. Plaintiff reads Shearer as extending the absolute privilege only to state “officers” and argues that defendant's employees do not fit that description. Plaintiff urges that we not further extend the absolute privilege to all public employees.2
Because the parties’ arguments focus on this court's decision in Shearer, we describe it and the common-law basis for our decision in that case in some detail. In Shearer, the plaintiff, an assistant professor at Oregon State University, brought a defamation action against plaintiff's department head for sending a letter to other faculty members describing alleged conversations between the department head and various students. 274 Or. at 451, 547 P.2d 98. The department head asserted absolute privilege as a defense. Id. at 452, 547 P.2d 98
This court began its analysis with the following description of the underpinnings of the defense:
“Underlyingtheruleofabsoluteprivilegeistheassumption that to permit suits against public officers would inhibit courageous and independent official action, and the further assumption that the public interest thus served outweighs the interest of persons damaged by the willful and malicious conduct of public officers.”
Id. The court remarked, without citation, that it had “frequently been called upon to choose between those competinginterestsincasesinvolvingtheconductofjudicial, legislativeandexecutiveofficersinvariouslevelsofauthority in *84 each of these branches of **362 government.” Id. at 452-53, 547 P.2d 98. The court then continued:
II. ANALYSIS
In this court, the parties reprise the arguments that they made below. Defendant contends that the Court of Appeals was correct in its interpretation of Shearer and that this court already has decided that the absolute privilege extends to all public employees acting within the *83 course and scope of their employment. Defendant argues that we must adhere to that interpretation of Shearer, or, alternatively, that we should endorse that development in the Court of Appeals’ case law as the correct understanding of the absolute privilege. Defendant does not argue that, if the absolute privilege extends only to “officers,” then the individual employees
“In rendering our decisions in these cases we have not overlooked the arguments advanced by the critics of the doctrine of absolute privilege. However, although there is no data which indicates one way or the other whether the recognition of an absolute privilege is necessary to assure fearless action on the part of public officers, we think that the privilege is necessary and therefore, if provision is to be made to compensate persons harmed by official action, it will have to be through some other kind of remedy which still preserves the privilege.”
Id. at 453 (footnote omitted).
The court then set out the issue as it saw it: “the applicability of the privilege to various types of governmental officers at various levels of authority or importance.” Id. at 454,
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547 P.2d 98. The court noted that it had “extended the absolute privilege to judicial and quasi-judicial officers at all levels” and recently held “that the privilege was applicable to subordinate legislative bodies[.]” Id. It then observed that the cases in other jurisdictions were in conflict and that some other jurisdictions had limited the executive absolute privilege to highly ranked government officials, e.g., the state's governor or attorney general, while others had extendedtheprivilegeto“inferiorstateofficersnomatterhow low their rank or standing.” Id. at 454, 547 P.2d 98. The court reasoned:
“Although we would prefer to confine the absolute privilege to its narrowest possible application, we feel compelledtoadoptthelatterviewbecause,startingwiththe premisethattheprivilegeisdesignedtofreepublicofficers from intimidation in the discharge of their duties, we are unable to explain why this policy would not apply equally to inferior as well as to high-ranking officers.”
Id.
Having set out its reasoning, the court then stated its holding as follows: “We hold, therefore, that an absolute privilege exists in an action brought against the head of a department of a state university.” Id. The court also included, just before its holding, a footnote that reads:
*85 “The privilege does not apply, however, where the tort arises out of the exercise of a ‘ministerial’ function. The difficulty of drawing the line between ‘ministerial’ and ‘discretionary’ functions again suggests the need for legislation which would provide relief under a principle which would render the distinction unnecessary.”
Id. at 454 n 9. Finally, the court disposed of the case, determining that, although the department head could claim absolute privilege, summary judgment was inappropriate because factual questions remained. The defendant was entitled to absolute privilege only if his defamatory statements were made in the performance of his duties, and, on that issue, the facts were contested. Id. at 455, 547 P.2d 98
Both parties take succor from the court's opinion. Defendant contends that the court adopted the broad application of the absolute privilege available in other states and made it applicable to all public employees, no matter the level of position they hold. Plaintiff concedes that the court extended the absolute privilege beyond the very highest officers in the
state but contends that its holding was limited to the facts presented in that case.
To better understand Shearer’s reach, we find it helpful to review the state of the law of defamation and the defense of absolute privilege in 1976 when the court issued its opinion in that case.
A. Common-Law Origins and Development in the State Courts
Defamation is a common-law claim that was recognized in England and, with its affirmative defenses, ported over to this country around the time of its founding. See generally, Van Vechten Veeder, Absolute Immunity in Defamation Judicial Proceedings, 9 Colum L Rev 463 (1909). The absolute privilegeinlegislativeproceedings, i.e.,therulethatmembers ofParliamentcouldnotbesuedforremarksthattheymadeon the Parliamentary floor, had existed in English common law sinceatleast1512.VanVechtenVeeder, Absolute Immunity in **363 Defamation Legislative and Executive Proceedings, 10 Colum L Rev 131, 132 (1910). In the United States, the Founders similarly protected members of *86 Congress from liability for statements made on the House or Senate floor. US Const Art. I, § 6, cl 1. The absolute privilege in judicial proceedings, i.e., the rule that witnesses, judges, parties, and parties’ counsel were protected from liability for statementsthattheymadeduringjudicialproceedings,existed in English common law since the sixteenth century. Veeder, 9 Colum L Rev at 474. In the United States, it appears that statecourtsimportedtheEnglishcommon-lawprivilegefrom a very early period and applied it mostly as English courts had. See id. at 475 (citing state cases from the mid-nineteenth century applying the absolute privilege to jurors).
An absolute privilege for high-ranking executive officers, such as the United States Postmaster General, seems to have come to prominence towards the end of the nine-teenth century in both England and the United States. Spalding v. Vilas, 161 U.S. 483, 16 S Ct 631, 40 L Ed 780 (1896); see also Chatterton v. Secretary of State for India [1895] 2 QB 189 (statement made by the Secretary of State for India to another executive official was absolutely privileged); Veeder, 10ColumLRevat140(citingcasesontheexecutiveabsolute privilege beginning in the 1870s). At that time, the absolute privilege extended only to very high-ranking government officials, i.e., cabinet-level government actors. A leading scholarin1910putthethen-currentrulethisway:“[Executive absolute privilege] is confined to official communications from the heads of departments in which the head of the
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department speaks for the government or as its mouthpiece. It has not been extended to inferior officers.” Id. at 141.
Thus, the basis for the application of the absolute privilege developed differently based on the branch of government in which the communication occurred. When applied to speakers in the legislative and judicial branches, communication was protected when made in particular proceedings, not when made by persons serving in particular positions. Thus, in judicial proceedings, communications by witnesses are protected, not because the witnesses are employees of the judicial branch, but because it is essential that they provide testimony in such proceedings. When speaking occurs *87 in proceedings or is necessary to proceedings, the thinking goes that all levels of speakers, from judges and legislators, to witnesses and complainants, should be entitled to an absolute privilege. It is the value and importance of the proceeding itself that the absolute privilege protects. See Dan B. Dobbs, Paul T. Hayden, & Ellen M. Bublick, 3 The Law of Torts § 540, 244 (2d ed 2011) (explaining that “the privilege also covers witnesses or citizen participants at legislative hearings, in order to secure citizen participation in the political process that will more fully inform legislators” and that that is “supported when the proceeding has a formal character and procedural safeguards and when the witness is subpoenaed or gives testimony under oath” (footnote omitted)); Veeder, 9 Colum L Rev at 469 (explaining that “[i]t is essential to the ends of justice that all persons participating in judicial proceedings (to take a typical class for illustration) should enjoy freedom of speech in the discharge of their public duties or in pursuing their rights without fear of consequences”).
Communication in the executive branch does not necessarily occur in the same types of structured proceedings, and thus, itsimportancetoeffectivegovernanceislessapparent.Asput in Dobbs, The Law of Torts § 541 at 244-45:
“The executive branch, including police, administrators at all levels, and most other governmental employees, is quite different from the judicial and legislative branch. Except in quasi-judicial proceedings where the absolute judicial privilege would apply, employees in the executive branch do not regularly operate in structured forums like the Congress or the judiciary; they are not often subject to institutional, professional, or even regular political constraints;andtheyseldomifeverhaveneedofprivileges not enjoyed by the citizens they are obliged to serve.
*** Apart from statute, executive branch employees were not traditionally afforded the same broad and absolute
**364 immunity granted to employees in the judicial and legislative branches.”
Accordingly, when applied to speech in the executive branch, the absolute privilege was confined to official communications from the heads of departments in which the head of the department spoke for the government or as its mouthpiece.
*88 Over time, most states retained that narrow conception of the executive branch privilege and applied it only to highranking government officers. However, a minority expanded the executive absolute privilege to apply to “lower-level” officials. In the year following Shearer, a leading treatise described the state of the law this way:
“Whilethereareafewstatecourtdecisionswhichappearto [apply the absolute privilege to] subordinate state officers, such courts in general have refused to accept the extension, and have recognized no absolute privilege on the part of such officers as superintendents of schools, mayors and aldermen, prosecuting attorneys and policemen, state investigators,andthelike.Unlesssuchanexecutiveofficer can claim immunity on the basis of a quasi-judicial or legislative function, he is held to be subject to qualified privilege only.”
W. Page Keeton, Dan B. Dobbs, Robert E. Keeton, & David G. Owen, Prosser and Keeton on the Law of Torts, § 114, 822 (5th ed 1984) (footnotes omitted); see also, Restatement (Second) of Torts, § 591 comment c (1977) (“A good number of the States have gone further, and have extended the absolute privilege to state officers of various ranks below that of cabinet level. The greater number of the state courts have notmadetheextension***andsomehaveexpresslyconfined the absolute privilege to superior officers of the States.”).
B. The Absolute Privilege in Oregon Before Shearer
In Oregon, the absolute privilege developed along a similar track. The absolute privilege for state legislators is enshrined in the state constitution. Article IV, section 9, of the Oregon Constitution provides, in relevant part, “Nor shall a member for words uttered in debate in either house, be questioned in any other place.”
The absolute privilege in judicial proceedings protects statements made by judges in such proceedings. See Irwin v. Ashurst, 158 Or. 61, 66, 74 P.2d 1127 (1938) (explaining that “[i]t is well settled in England and in this country, on the
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ground of public policy, that a judge has absolute immunity from liability in an action for defamatory words published in the course of judicial proceedings”). And *89 witnesses testifying in such proceedings also are entitled to an absolute privilege. See Cooper v. Phipps, 24 Or. 357, 358, 366, 33 P. 985 (1893) (holding that absolute privilege protected the testimony of a witness made during a divorce trial).
In 1955, this court considered whether to make the absolute privilege in judicial proceedings applicable outside the courtroom itself. In Grubb v. Johnson et al., 205 Or. 624, 626-27, 289 P.2d 1067 (1955), the plaintiff sued his former employerforstatementsthatthecompanyhadmadeinaletter that it had sent to a state agency instructing the agency to revoke the plaintiff's sales license because the plaintiff had embezzled money from the company. The company asserted the absolute privilege, arguing that the letter was part of a quasi-judicial proceeding. Id. at 640, 289 P.2d 1067. The courtdisagreed,reasoningthattherevocationprocesswasnot sufficiently like a judicial proceeding to make the application of the absolute privilege appropriate. The revocation process did not permit the agency to exercise discretion; revocation was automatic and mandatory upon receipt of the letter. Id. at 640-41, 289 P.2d 1067
The court reached a different conclusion four years later in Ramstead v. Morgan, 219 Or. 383, 401, 347 P.2d 594 (1959) There, the court determined that complaints about a lawyer in a letter sent to the Oregon State Bar were protected by a “quasi-judicial” absolute privilege. Id. at 396, 347 P.2d 594. The court reasoned that extension of the privilege was necessary to protect the public and explained that those who might lack the resources necessary to perfectly present their grievances should not have to face the threat of liability for making complaints about lawyer misconduct. Id. at 400-01, 347 P.2d 594 **365 Accord Moore v. West Lawn Mem'l Park, 266 Or. 244, 250-51, 512 P.2d 1344 (1973) (absolute privilegeappliedtoletterwrittentotheStateBoardofFuneral Directors and Embalmers with quasi-judicial function as a licensing body; Grubb did not control because the board had discretion about whether to revoke the license).
In 1975, this court extended the absolute privilege in legislative proceedings to proceedings in addition to those conducted on the floor of the House and Senate. In *90 Noble v. Ternyik, 273 Or. 39, 539 P.2d 658 (1975), the court held that the absolute privilege applied to a statement that a member of a port commission made in a commission meeting because:
“Uncompensated citizens, serving at least in part to fulfill their civic responsibility, comprise the vast bulk of numerous legislative bodies in Oregon. Port commissions, city councils, school boards, and special service districts are some of these bodies. Oregon prides itself on its citizen participation. These bodies make economic, social, educational, and other important decisions. This system will function only if capable people are willing to serve on these bodies.
“We are of the opinion that a substantial number of capable people would be reluctant to serve if their statements, made in the course of their legislative duties, were only conditionally privileged ***.
“We are also of the opinion that persons who would be willing to serve would be hesitant to bring information to the attention of their legislative bodies if the publication of this information were only conditionally privileged.”
Id. at 43-44, 539 P.2d 658.
Thus, when Shearer reached this court in 1976, the state of the law of absolute privilege in Oregon, with respect to governmentalproceedingsoractors,wasthattherewerethree types of absolute privilege: (1) legislative absolute privilege, (2) judicial absolute privilege, and (3) absolute privilege for “other acts of state,” i.e., executive absolute privilege. Grubb, 205 Or. at 631, 289 P.2d 1067. As the court said in Grubb:
“The class of absolutely privileged communications is narrow and is practically limited to legislative and judicial proceedings and other acts of the state, including, it is said, communications made in the discharge of a duty under express authority of law, by or to heads of executive departments of state, and matters involving military affairs.”
Id. (internal quotation marks and citation omitted). Legislative and judicial proceedings included local proceedings and quasi-judicial proceedings. The court had extended the absolute privilege to communications made in such *91 proceedings to protect the public and
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ensure essential participation and the provision of important information.
waiving sovereign immunity. At the time that Shearer was decided, the OTCA provided:
“Every public body is immune from liability for:
C. Shearer’s Reach
With that understanding of the law at the time of Shearer, we return to its holding and consider whether, as defendant argues, the court held that all public employees are entitled to claim the absolute privilege as long as they operate within the course and scope of their duties. As noted, the court started with the premise that the privilege is designed to free public officers from intimidation in the discharge of their duties and noted that it had “extended the absolute privilege to judicial and quasi-judicial officers at all levels.” Shearer, 274 Or. at 454, 547 P.2d 98. The court then stated that it was unable to explain why that policy would not apply equally to inferior as well as to high-ranking officers, and stated its holding—that the defendant, a university department head, was entitled to claim the absolute privilege. Id.
For the following reasons, we conclude that neither that reasoning nor that holding require us to agree with defendant that, under Shearer, all public employees have an absolute privilege to make defamatory statements in the course and scope of their duties, even when they do so with malice, ill will, or spite.
First, in Shearer, the court did not state its holding in those terms.Afterreasoningasdescribed,thecourtexpresslystated its holding as follows: “We hold, therefore, that an absolute privilege exists in an action brought **366 against the head of a department of a state university.” Id.
Second, the court did not expressly hold that the absolute privilege is available to “inferior officers” or define that term. Even if Shearer can be understood to extend the privilege to state executive “officers,” it cannot be understood to extend the privilege to all public employees.
Third, the court inserted a footnote, quoted above, that made clear that it did not intend to extend the absolute privilege to all public employees acting within the course of their duties.Thefootnotespecifiesthattheabsoluteprivilegeisnot intended to apply to actors who perform *92 “ministerial” tasks; it applies only to those who perform “discretionary” functions, and only when they are performing such functions.
Id. at 454 n 9, 547 P.2d 98.3 In using those terms, the court used wording found in the Oregon Tort Claims Act (OTCA),
“* * * * *
“(d) Any claim based upon the performance of or the failure to exercise or perform a discretionary function or duty, whether or not the discretion is abused.”
Former ORS 30.265(2)(d) (1975)4 (emphasis added). The court also had recently decided Smith v. Cooper, 256 Or. 485, 475 P.2d 78 (1970). In Smith, the court had considered whether the doctrine of sovereign immunity protected the State Highway Commission from an action brought by the plaintiff alleging negligence in highway planning. The court devoted a substantial part of the opinion to the question of whether designing the highway was a ministerial function (in which case sovereign immunity would not apply) or a discretionary one (in which case sovereign immunity would apply). Id. at 495-512, 475 P.2d 78. Thus, the “ministerial” and “discretionary” distinction would have been a familiar concept for the Shearer court to draw on. Significantly, however, we do not think that the court intended to import the law of sovereign immunity generally into the absolute privilege analysis. See Noble, 273 Or. at 41, 539 P.2d 658 (explaining that although “[c]ourts have intermingled the terminology of privilege, a part of the law of defamation, and immunity[,] * * * [t]here is at least a theoretical difference”).
A better understanding of the footnote is that the court was using a familiar construct to articulate its intent to adhere to the purpose that *93 underlies both the common-law defense of absolute privilege and the legislature's limited waiver of sovereign immunity: that those making important governmentaldecisionsrequiringtheexerciseofjudgmentbe assured that they can do so “fearlessly.” The court's footnote made clear that it did not intend to extend the absolute privilege to all public employees without bounds.
Finally, the court in Shearer plainly did not view its earlier extension of the absolute privilege to proceedings broader than those in the Capitol and the courts, as requiring it to extend that privilege to all who serve in legislative, judicial, and executive positions. In Shearer, the court noted that
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it had “frequently been called upon” to choose between competing interests “in cases involving the conduct of judicial, legislative and executive officers in various levels of authority in each of these branches of government.” 274 Or. at 452-53, 547 P.2d 98. The court did not cite cases for that proposition, however, and although we have looked, we have been unable to find cases before Shearer that meet that description, particularly for the executive branch of government. As discussed, the court's earlier cases extended theabsoluteprivilegetoabroaderrangeof proceedings;those cases did not extend the absolute privilege in defamation claims to communications by officers in a broader range of positions. **367 And, with respect to the executive branch, we are not aware of earlier cases in which the court discussed the application of the privilege in the executive branch in any detail.
Forthosereasons,weread Shearer tostandfortheproposition that the absolute privilege applies when the public's interest in functioning government is so great that it outweighs an individual's interest in redress for reputational harm, and to hold that, in the case of a university department head, the public interest is paramount. We reject defendant's argument that Shearer compels us to decide that the absolute privilege defense to a defamation claim extends to all public employees, including defendant's employees here, as long as they act within the course and scope of their employment.
Defendant also argues that, even if Shearer does not compel us to do so, we should accept an approach that *94 makes the absolute privilege available to all public employees, reminding us that, to claim that privilege, employees must establish that they are acting within the course and scope of their duties. Defendant submits that that require-ment makes the defense sufficiently narrow, providing both adequate redress to plaintiffs and protection from undue harassment to public employees. We reject that argument.
Defendant is correct that this court conceives of the absolute privilege as narrow in scope. Since Shearer, this court has maintained, as it stated in Grubb, that the absolute privilege is “narrow” and applies in “only a handful of situations.”
See Wallulis v. Dymowski, 323 Or. 337, 348, 918 P.2d 755 (1996) (“Oregon has recognized only a handful of situations in which defamatory statements are absolutely privileged.”); DeLong v. Yu Enterprises, Inc., 334 Or. 166, 171, 47 P.3d 8 (2002) (“Historically, this court has recognized the applicationofanabsoluteprivilegefordefamatorystatements in very limited circumstances.”). Defendant is incorrect,
however, in urging that that privilege can be extended to all public employees who make defamatory statements in the course of performing their duties, including those who do so with malice, without upsetting the balance of competing interests on which the absolute privilege rests. Protecting public employees from harassment is not the policy end for which the absolute privilege is designed. Protecting public employees, is, instead, a means to ensure good governance by fearless officials. As New York state's highest court put it when it refused to broaden the applicability of the privilege: “[T]he immunity is intended for the welfare of the public and not for governmental employees.” Stukuls v. State, 42 NY 272,278,366N.E.2d829,833,397N.Y.S.2d740,744(1977)
This court has recognized an absolute privilege as an affirmative defense to defamation claims, understanding that it might bar some meritorious claims; this court has done so, however, only when it deems the privilege essential to effective governance. We will not extend the absolute privilege when that purpose is not necessarily implicated. As the Kentucky Court of Appeals said in 1910, when it refused to extend the absolute privilege to a school superintendent:
*95 “It would be a dangerous and vicious thing to license people to write and speak without any restraint. There are many evil-minded and recklessly disposed who would shelter if they could under the protection afforded by absolute privilege and give free bridle to tongue and pen to injure or destroy an enemy. It would place in the power of revengeful and unscrupulous persons the right to malign at willthosewhohadincurredtheirdispleasure,andallowthe traducer to scatter without stint scandalous and defamatory matter about all who might come within the circle of his enmity.”
Tanner v. Stevenson, 138 Ky. 578, 585, 128 S.W. 878, 881 (1910). In reaching that conclusion, we, like other jurisdictions to consider the scope of the absolute privilege, emphasize that its remedy is potent: It protects a defendant not just from being held liable at the conclusion of a trial; it prevents a plaintiff from reaching a trial at all. Wallulis, 323 Or. at 347, 918 P.2d 755. Another common-law defense in defamation actions, a qualified privilege, is available for defendants who must defend the action, but who can defeat it if the plaintiff fails to establish that the defendant abused the privileged occasion. Id. at 348, 918 P.2d 755. Some state courts that **368 have been asked to extend an absolute privilege to lower-level executive branch speakers have decided that a qualified privilege is sufficiently protective. See Bradford v. Mahan, 219 Kan. 450, 455, 548 P.2d 1223,
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1228-29 (1976) (refusing to extend absolute privilege to police officers and stating that “[t]he police should never act with malice or ill will against the citizens of this state without being called to account for their actions,” and “[a] qualified privilege will sufficiently insulate police officers and insure the vigorous enforcement of the law”); Stukuls, 42 NY at 278, 366 N.E.2d at 833, 397 N.Y.S.2d at 744 (concluding that qualified privilege would adequately protect lower-level officials because “to cloak public officers who do not have suchaneedwiththeprivilegetowrongfullyvilifyotherswith impunity while their critics remain fully liable for their own tortious communications[ ] would tend to squelch criticism of government by its citizens while serving no sufficiently countervailing public purpose”).
In summary, we reject defendant's argument that we already have extended or should extend the absolute privilege to all
public employees acting within the course *96 and scope of their duties. As noted, defendant does not argue that it is entitled to the benefit of that defense because its employees are “officers” equivalent to the university department head in Shearer. Consequently, defendant was not entitled to claim the affirmative defense of absolute privilege, and the trial court erred in granting it summary judgment on that basis.
The decision of the Court of Appeals is reversed. The judgment of the circuit court is reversed, and the case is remanded to the circuit court for further proceedings.
All Citations
Footnotes
1 In its answer, defendant also asserted a “qualified privilege”—as well as an “absolute privilege”—as an affirmative defense to plaintiff's defamation claims.
However, defendant's motion for summary judgment was predicated only on its claim of absolute privilege, andthatistheonlyissuebeforeus.Webrieflydiscussthedifferencesbetweenabsoluteandqualifiedprivilege below.
2 The parties appear to assume that defendant is an executive agency and that its employees are employees of an executive agency. Plaintiff does not mount an argument that defendant school district is not a state agency or that its employees cannot be considered “executive branch officials.” Because we reject defendant's claim that all public employees are entitled to claim the absolute privilege, we need not consider whether officers of local entities are entitled to the privilege that executive branch officers, such as the department head in Shearer, can claim.
3 As noted above, the footnote reads:
“The privilege does not apply, however, where the tort arises out of the exercise of a ‘ministerial’ function. The difficulty of drawing the line between ‘ministerial’ and ‘discretionary’ functions again suggests the need for legislation which would provide relief under a principle which would render the distinction unnecessary.”
4 This statute has been amended several times since 1975, however, none of those amendments is material to our discussion here.
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370 Or. 79, 515 P.3d 359, 407 Ed. Law Rep. 291
* OnappealfromJacksonCountyCircuitCourt,DavidG.Hoppe,Judge.313Or.App.599,497P.3d797(2021)
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371 Or. 23
Supreme Court of Oregon.
STATE EX REL Ellen F. ROSENBLUM, in her official capacity as Attorney General for the State of Oregon, Petitioner on Review, v.
LIVING ESSENTIALS, LLC, a Michigan limited liability company; and Innovation Ventures, LLC, a Michigan limited liability company, Respondents on Review.
(CC 14CV09149) (SC S068857)
Argued and Submitted May 5, 2022.
May 4, 2023
determination of whether provisions violated Oregon Constitution as applied was premature; and
provisions did not violate First Amendment.
Reversed and remanded.
Procedural Posture(s): On Appeal.
On review from the Court of Appeals. * (CA A163980)
Attorneys and Law Firms
Carson L. Whitehead, Assistant Attorney General, Salem, argued the cause and filed the briefs for petitioner on review. Also on the briefs were Ellen F. Rosenblum, Attorney General, and Benjamin Gutman, Solicitor General.
Synopsis
Background: State brought action under Unlawful Trade PracticesAct(UTPA)againstdefendantproducersandsellers of energy drink, alleging that defendants made unlawful misrepresentations regarding effects of drink's non-caffeine ingredients and unlawfully misrepresented survey results to falsely imply that physicians recommended drink to patients. Following bench trial, the Circuit Court, Multnomah County, Kelly Skye, J., entered judgment in favor of defendants and ruled that defendants were not entitled to attorney fees. State appealed, and defendants cross-appealed. The Court of Appeals, 313 Or.App. 176, 497 P.3d 730, affirmed in part, reversed in part, and remanded. State petitioned for review.
MichaelJ.Sandmire,BuchalterAterWynne,Portland,argued the cause and filed the brief for respondents on review. Also on the brief was Rachel C. Lee, Stoel Rives LLP, Portland.
Chris Mertens, Mertens Law, LLC, Portland, filed the brief for amicus curiae Oregon Consumer Justice.
Nadia H. Dahab, Sugerman Dahab, Portland, and John W. Stephens, Esler Stephens & Buckley, Portland, filed the brief for amicus curiae Oregon Trial Lawyers Association.
Paloma Sparks, Oregon Business & Industry, Salem, filed the brief for amicus curiae Oregon Business & Industry Association.
Before Flynn, Chief Justice, Duncan, Garrett, and DeHoog, Justices, and Balmer and Walters, Senior Judges, Justices pro tempore.
Holdings: The Supreme Court, Garrett, J., held that:
to violate UTPA provision that prohibits causing likelihood of confusion or misunderstanding as to product's source or sponsorship, unlawful practice need not be material to consumer's purchasing decision;
to violate UTPA provision prohibiting misrepresentation of product's attributes, an unlawful practice need not be material to consumer's purchasing decision;
UTPA provision prohibiting misrepresentations about a product's attributes was not facially invalid under free speech provision of Oregon Constitution;
Opinion
GARRETT, J.
**1 *25 This case arises under the Unlawful Trade PracticesAct(UTPA),ORS646.605to646.656.1 TheUTPA sets out an extensive list of unlawful business practices that thelegislaturehasdeemedharmfultoOregonconsumers,and it provides for public and private enforcement actions.
The Attorney General brought this action against defendants, alleging that they had made representations about their products that violated two different provisions of the UTPA. The trial court ruled for defendants, explaining that the
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**
relevant provisions of the UTPA required the state to prove that the misrepresentations were “material to consumer purchasing decisions,” and that the state had not done so. The Court of Appeals affirmed that decision. State ex rel Rosenblum v. Living Essentials, LLC, 313 Or App 176, 497 P.3d 730 (2021). We allowed the state's petition for review to consider whether the lower courts correctly construed the statute. As explained below, we conclude, contrary to the trial court and the Court of Appeals, that the UTPA provisions at issue contain no “material to consumer purchasing decisions” requirement. We also reject defendants’ argument that, withoutsucharequirement,theprovisionsfaciallyviolatethe free speech provisions of the state and federal constitutions. Accordingly, we reverse the decision of the Court of Appeals and remand to that court for further proceedings.
attorneywithan“assuranceofvoluntarycompliance”(AVC). Id. The AVC must describe the actions, if any, that the person to be charged will take to ameliorate the alleged unlawful practice. Id. The AVC is not an admission of a violation. Id. The prosecuting attorney, if satisfied with the AVC, can submit it to the court for approval and filing with the clerk of the court, if approved. Id. An AVC constitutes a judgment in favor of the state. Id. Once approved by and filed with the court, a violation of the AVC constitutes contempt of court. ORS 646.632(4).
I. BACKGROUND
A. The UTPA Generally
We begin with a brief overview of the statute, including procedural requirements relevant to the issues on review. The UTPA is a comprehensive statute that protects consumers from unlawful trade practices. *26 State ex rel Redden v. Discount Fabrics, 289 Or. 375, 382, 615 P.2d 1034 (1980)
The UTPA includes an extensive list of trade practices that are unlawful. ORS 646.607, ORS 646.608(1)
The UTPA is enforceable by private parties and by public prosecuting attorneys, including the Attorney General and local district attorneys. ORS 646.632 (public enforcement); ORS 646.638 (private civil actions); Discount Fabrics, 289 Or. at 384-86, 615 P.2d 1034 (discussing the differences in the elements to be proved and the burden of proof between the two types of actions). Public officials may bring an action in the name of the state to enjoin violations, seek restitution for individuals deprived of money or property, and seek civil penalties for willful violations of an injunction, voluntary compliance agreement, or the UTPA's listed practices. ORS 646.642; Discount Fabrics,289Or.at382n6,615P.2d1034.
In a public action, the prosecuting attorney must have probable cause to believe that a person “is engaging in, has engaged in, or is about to engage in” an unlawful trade practice. ORS 646.632(1). Before filing suit, the prosecuting attorney must provide notice to the person to be charged. ORS 646.632(2). Notice must include the alleged unlawful practice and the relief sought. Id. After receiving notice, the persontobechargedhas10daystorespondtotheprosecuting
**2 The prosecuting attorney may reject an AVC as unsatisfactory if the AVC “does not contain a promise to make restitution in specific amounts or through arbitration,” or if the AVC “does not contain any provision * * * which the prosecuting attorney reasonably believes to be necessary to ensure the continued cessation of the alleged unlawful trade practice, if such provision was included in a proposed assurance attached to the notice.” ORS 646.632(3). If the AVC is *27 rejected as unsatisfactory, the prosecuting attorney may initiate a civil action. See ORS 646.632 (providing that a prosecuting attorney may bring suit in the name of the state after complying with the notice and AVC requirements).
B. Historical Facts
We take the following undisputed facts from the opinion of the Court of Appeals and from our own review of the record.
Defendants manufacture, market, and sell 5-hour ENERGY, a beverage sold at retail in two-ounce bottles throughout the United States. Defendants advertise 5-hour ENERGY to consumers, including in Oregon, through radio, television, internet, and print media. The drink is available in “Original,” “Extra-Strength,” and “Decaf” versions. The Original formula contains 200 milligrams of caffeine per bottle, Extra-Strength has 230 milligrams of caffeine, and Decafhas6milligramsofcaffeine.Eachversionalsocontains a proprietary blend of noncaffeine ingredients, including Bvitamins, amino acids, and other ingredients.
This action concerns certain representations that defendants madeinOregonaboutthecharacteristicsof5-hourENERGY. Advertisements stated that the noncaffeine ingredients in the Original and Extra-Strength formulas provide extra energy, alertness, and focus. Specifically, the advertisements stated that 5-hour ENERGY “contains a powerful blend of B-vitamins for energy, and amino acids for focus”; that it “is packed with B-vitamins for energy, and amino
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acids for a sharp, focused mind”; and that it “contains a healthy powerful blend of B-vitamins for energy, amino acids for focus and better mood, and enzymes to help you feel it fast.” Advertisements also stated that the Original and Extra-Strength formulas provide more energy than an equivalent amount of caffeine. Specifically, advertisements stated that 5-hour ENERGY products have “less caffeine than some Starbucks coffees, plus it has vitamins and nutrients.” Defendants advertised the Decaf formula as providing alertness and focus, attributing those benefits to the noncaffeine ingredients. Specifically, defendants’ website advertised the Decaf formula as “contain[ing] B-vitamins *28 for energy and amino acids for focus, plus Choline,” and stated that choline “is vital to the production of neurotransmittersinthebrainthataffectmemory,intelligence and mood.” Throughout this opinion, we will refer to the foregoing representations regarding the noncaffeine ingredients as the “NCI representations.”
Defendants also ran an “Ask Your Doctor” advertising campaign, with statements that 5-hour ENERGY had “asked over 3,000 doctors” to review the product. Those advertisements claimed that “over 73%” of the doctors who reviewed the product would recommend it to their “healthy patients who use energy supplements.” Throughout this opinion, we will refer to those representations as the “Ask Your Doctor campaign.”
The state initiated this action, alleging, as relevant to the issues on review, that the foregoing representations violated twoprovisionsoftheUTPA,ORS646.608(1)(b)and(1)(e).2 Those provisions state, respectively, that
“(1) A person engages in an unlawful practice if in the course of the person's business, vocation or occupation the person does any of the following:
**3 “* * * * *
“(b)Causeslikelihoodofconfusionorofmisunderstanding as to the source, sponsorship, approval, or certification of real estate, goods or services.
“* * * * *
that the real estate, goods or services do not have or that a person has a sponsorship, approval, status, qualification, affiliation or connection that the person does not have.”
ORS 646.608(1). The state alleged that defendants violated paragraph (1)(e) by representing that the noncaffeine ingredients in 5-hour ENERGY provide energy and alertness, when those ingredients do not have those effects. The state further alleged that defendants’ “Ask Your Doctor” campaign *29 violated both paragraphs (1)(b) and (1)(e) by falsely implyingthatdoctorsapprovedof5-hourENERGY.Thestate sought equitable relief and civil penalties.
Before filing suit, the state notified defendants of the alleged violations, as required by ORS 646.632(2), and defendants submitted an AVC in response. The AVC promised, generally, that defendants would comply with the UTPA, and, specifically, that defendants would refrain from making “material representations that are false or mislead consumers acting reasonably to their detriment.” The AVC also offered to pay $250,000 to the state to use “as allowed by law, including, but not limited to, restitution, consumer education, the Consumer Protection & Education Account established pursuant to ORS 180.095, or charitable purposes.” The state rejected the AVC and subsequently filed its complaint as allowed by ORS 646.632(1), alleging that the AVC was inadequate under ORS 646.632(3). The state took the position that the AVC was not satisfactory becauseitcontainedonlyapromisetorefrainfrom“material” misrepresentations that “misled consumers acting reasonably to their detriment,” while, in the state's view, the relevant statutory provisions do not contain that qualification.
“(e) Represents that real estate, goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, quantities or qualities
Following a bench trial, the trial court ruled in favor of defendants on all claims. In its written findings of fact and conclusions of law, the trial court listed the elements that the state needed to prove to succeed on its claim under ORS 646.608(1)(b) and (1)(e). One element, according to the trial court, of a paragraph (1)(b) claim for causing likelihood of confusionastosource,sponsorship,approval,orcertification, was that the defendants’ conduct “caused confusion or misunderstanding that was material to consumer purchasing decisions.” Under paragraph (1)(e), the misrepresentation provision, the trial court stated that one required element was that defendants “made representations that were material to consumer purchasing decisions.”
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With respect to the state's paragraph (1)(e) claims based on the NCI representations, the trial court found that some of the representations were not inherently false and that other representations were nonactionable “puffery.” *30 It found that the nonpuffery representations “may imply falsely the effect of the specific [noncaffeine ingredients] in a bottle of [5-hour ENERGY] and the expected effect of five hours of energy,” but it did not make particularized findings of falsity because of its ruling on materiality. The trial court also found that, for all formulas, none of the NCI representations was “willful,” as required for the imposition of civil penalties.3 The court then found that, for the Original and Extra-Strength formulas, none of the NCI representations “materially influence[d] consumer purchasing decisions.” Becausethetrialcourtfoundthatthestatehadfailedtosatisfy that materiality element for the Original and Extra Strength formulas, and the willfulness element for all three formulas, it ruled that the state had failed to establish that any NCI representation violated ORS 646.608(1)(e).
**4 With respect to the state's paragraph (1)(b) and (1) (e) claims based on the “Ask Your Doctor” campaign, the trial court explained that there was “some evidence that the ads could be misleading,” but it ultimately found that the representations at issue were not substantively misleading or confusing, nor were they material to consumer purchasing decisions. Thus, the court ruled for defendants on those counts.
Defendants requested approximately $2 million in attorney fees under ORS 646.632(8), which provides for mandatory attorney fees if a defendant prevails and if the court finds that the AVC was satisfactory and had been submitted in good faith to the prosecuting attorney. The trial court denied that requestinasupplementaljudgment,findingthattheAVCwas not satisfactory because the state's interpretation of the UTPA in rejecting the AVC had been reasonable at the time the AVC was submitted.
the wrong legal standard for a likelihood of confusion or misunderstanding under paragraph (1)(b). Defendants crossappealed the trial court's denial of attorney fees. The Court of Appeals affirmed the trial court's judgment on the merits and reversed the supplemental judgment denying attorney fees.
Living Essentials, LLC, 313 Or App at 218-19, 497 P.3d 730
The Court of Appeals agreed with the trial court that “material to consumer purchasing decisions” is a required element of both ORS 646.608(1)(b) and (1)(e). As to paragraph (1)(b), the Court of Appeals interpreted the phrase “cause[s] likelihood of confusion or of misunderstanding” by consulting dictionary definitions of those words, then reasoning that, to meet that standard, “the unlawful conduct necessarily mustbematerialtotheconsumer'sdecisiontobuy the product.” Id. at 187, 497 P.3d 730 (emphasis in original).
Turning to ORS 646.608(1)(e), the court interpreted the text to prohibit making misleading assertions “about various attributes that, by their nature, can have the potential to affect a purchasing decision,” but noted that the text “does not expressly say whether it is limited to attributes that actually do have that potential, or whether it reflects a legislative judgment that every misrepresented characteristic —regardless of how innocuous—has the potential to mislead and should constitute a violation of the UTPA.” Id. at 188, 497 P.3d 730 (emphases in original).
The Court of Appeals then consulted statutory context and legislative history, ultimately finding further support for the conclusion that paragraphs (1)(b) and (1)(e) both contain an implicit element of materiality. The court noted that the UTPA regulates “trade” and “commerce,” which are defined as “directly or indirectly affecting the people of this *32 state,” a qualifier that the court took to indicate that “the acts to be remedied as unlawful trade practices are ones that have affectedconsumers—inotherwords,onesthatmateriallybear onconsumerpurchasingchoices.” Id. at188-89,497P.3d730
*31 C. The Appeal
On appeal, the state raised seven assignments of error to the trial court's rulings on the merits. Among those assignments, the state argued that the trial court (1) erred by construing ORS 646.608(1)(b) and (1)(e) to include a materiality element; (2) applied the wrong legal standard for willfulness; (3) applied the wrong legal standard for a misrepresentation under paragraph (1)(e); and (4) applied
As to the legislative history, the Court of Appeals explained that the UTPA was “largely borrowed” from the Uniform Deceptive Trade Practices Act (UDTPA), which, in turn, was derived from the federal Lanham Trademark Act and the Restatement (Second) of Torts Id. at 191-92, 497 P.3d 730 The court found those sources instructive, explaining that the Lanham Act “contemplate[s] that the prohibited deception be materialtoaconsumer'spurchasingdecisions.” Id. at193,497 P.3d 730. On the whole, the court concluded, it was
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**5 “difficult to imagine how making actionable immaterial misrepresentations under ORS 646.608(1)(b) and(e)wouldservetoaccomplishthepurposeoftheUTPA to prevent consumers from harm. There is no need to provide a remedy for misrepresentations that are irrelevant to consumers’ purchasing decisions to accomplish the goal of protecting consumers.”
Id. at 194, 497 P.3d 730 (emphasis in original). Observing, finally, that construing ORS 646.608(1)(b) and (1)(e) not to require materiality would raise concerns under Article I, section 8, of the Oregon Constitution, the Court of Appeals concluded that materiality is required. Id. at 194-96, 497 P.3d 730. That conclusion made it unnecessary for the court to address the state's other assignments of error described above.4
The state petitioned for review, which we allowed.
II. STATUTORY CONSTRUCTION
The question before us involves the trial court's interpretation of ORS 646.608(1)(b) and ORS 646.608(1)(e). Specifically, the question is whether those provisions contain *33 an implicit requirement that defendants’ acts were “material to consumer purchasing decisions.” 5 Issues of statutory construction present questions of law that we review for legal error. State v. Ramoz, 367 Or. 670, 704, 483 P.3d 615 (2021) We resolve those questions by seeking to give effect to the intent of the legislature as demonstrated by the text, context, and any helpful legislative history. State v. Gaines, 346 Or. 160, 171-72, 206 P.3d 1042 (2009).
The statutory provisions at issue are ORS 646.608 (1)(b) and (1)(e). Again, those provisions state:
“(1) A person engages in an unlawful practice if in the course of the person's business, vocation or occupation, the person does any of the following:
“(e) Represents that real estate, goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, quantities or qualities that the real estate, goods or services do not have or that a person has a sponsorship, approval, status, qualification, affiliation or connection that the person does not have.”
ORS 646.608(1). The dispute in this case is whether those provisions contain an implicit additional requirement— that is, whether they require proof that the “likelihood of confusionorofmisunderstanding,”inparagraph(1)(b),orthe “represent[ation],” in paragraph (1)(e), would be “material to consumer purchasing decisions.” We will briefly summarize theparties’argumentsbeforeexaminingthetext,context,and legislative history.
**6 The state contends that the Court of Appeals erred in construing both provisions to include a “material to consumer purchasing decisions” requirement. The state *34 observes that no such requirement is expressly contained in the text, and it disagrees with the Court of Appeals’ conclusion that that requirement is implicit in the words that the legislature chose. The state contends that paragraphs (1)(b) and (1)(e) describe practices, among numerous others in the UTPA, that the legislature identified as hostile to consumers’ interests and therefore inherently objectionable, regardless of how they may contribute to a consumer's purchasing decision in a particular context. The state also points out that the UTPA allows for both public enforcement by prosecuting attorneys and private enforcement by injured consumers, and that public enforcement actions, unlike private actions, do not require proof of concrete injury.
“(b)Causeslikelihoodofconfusionorofmisunderstanding as to the source, sponsorship, approval, or certification of real estate, goods or services.
Defendants’ response tracks the reasoning of the Court of Appeals. Defendants argue that, as a textual matter, paragraphs (1)(b) and (1)(e) implicitly require a showing that the act was “material to consumer purchasing decisions,” and that such a requirement is supported by the context and purpose of the UTPA, as evidenced by the legislative history. Defendants argue that the UTPA regulates trade, which it defines in part as “directly or indirectly affecting” Oregonians, and that the legislature did not have an interest in prohibiting conduct that would not materially affect
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* * * *
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consumers by influencing their decisions about whether to purchase goods, real estate, or services.
A. Text
We begin with the text, as that is the best evidence of legislative intent. Gaines, 346 Or. at 171-72, 206 P.3d 1042
Starting with paragraph (1)(b), the text supports the state's view that materiality is not a requirement. That provision states that a person engages in an unlawful practice if the person “[c]auses likelihood of confusion or of misunderstanding as to the source, sponsorship, approval, or certification of real estate, goods or services.” ORS 646.608(1)(b). The text is addressed to a “likelihood of confusion or of misunderstanding” about the listed attributes; it says nothing expressly about whether the potential confusion or misunderstanding must be of the sort that wouldmateriallyaffectaconsumer'spurchasingdecision.We thus consider whether that additional element is necessarily implied by the words *35 that the legislature chose. As the legislature did not define those terms for purposes of the statute, we presume that the legislature intended for them to havetheirordinarymeanings. See Gaines,346Or.at171,206 P.3d 1042.
The key phrase in the statute is “[c]auses likelihood of confusion or of misunderstanding.” ORS 646.608(1)(b). When used as a verb, as here, “cause” means “1 : to serve as cause or occasion of : bring into existence : make” or, “2 : to effect by command, authority or force.” Webster's Third New Int'l Dictionary 356 (unabridged ed 2002). “Cause” is also a legal term of art, and it is defined as “[s]omething that produces an effect or result.” Black's Law Dictionary 273 (11th ed 2019). We understand the first Webster's definition and the Black's definition to refer to the same thing: the catalyst in a cause-and-effect sequence. The second part of the Webster's definition seems inapposite here, as nothing in the statute suggests that any command, authority, or force is required to effect the “likelihood of confusion or of misunderstanding.”Rather,theprovisionasawholeindicates that“causes”inparagraph(1)(b)simplyreferstoacause-andeffect relationship. Thus, “causes” in paragraph (1)(b) means “to produce an effect or result” or “bring into existence.”
“Likelihood”isdefinedas“probability<inall~itwillrain>.” Webster's at 1310. We thus understand the legislature to have used the phrase “causes likelihood of confusion or of misunderstanding”tomeanthatapersonproduces,creates,or
bringsaboutaprobabilitythatconfusionormisunderstanding will occur.
**7 The third relevant word is “confusion,” which has multiple definitions, some of which are clearly not applicable here.6 In context, the definitions that are potentially relevant are the following:
“2 a : a state of being discomfited, disconcerted, chagrined, or embarrassed esp. at some blunder or check <his sister [was] overcome with ~ and unable to lift up her eyes –Jane Austen> b : state of being confused mentally : lack of *36 certainty, orderly thought, or power to distinguish, choose, or act decisively : perplexity <slowly emerging fromthemental~whichfollowedthefall–HavelockEllis> <present intellectual ~ and moral chaos of the world –John Dewey>[.]”
Webster's at 477.7 Because the UTPA protects consumers by regulating commercial transactions in the marketplace, the references to a “lack of certainty” and the “power to distinguish, choose, or act decisively” seem more apt than the references to being “chagrined” or “embarrassed,” although those are potentially relevant.
The final word in the phrase is “misunderstanding,” which means:
“1 : a failure to understand : misinterpretation <the ~ which arose from reports of these golden palaces fired the imaginationofColumbus–G.F.Hudson>2:disagreement, quarrel <the ~s between the two territories have grown during the emergency –Vernon Bartlett>.”
Webster's at 1447. As between those definitions of “misunderstanding,” the entire text of ORS 646.608(1)(b) suggests that former definition is more apposite; given the reference to “confusion” earlier in the statute, it seems more likely that the legislature was concerned with business practices that could lead consumers to have a failure of understanding or a misinterpretation as opposed to those that might lead to a disagreement or quarrel.
Considered together, then, the dictionary definitions suggest that ORS 646.608(1)(b) refers to conduct whereby a person (1) produces or brings about (2) a probability (3) that another person will experience either (i) a lack of understanding or a misinterpretation, or (ii) a state of being that involves mental confusion, or being discomfited or disconcerted, or a diminished ability to distinguish or choose, *37 regarding
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(4) the “source, sponsorship, approval, or certification of real estate, goods or services.” Nothing in those requirements implies that the representation must have a material influence on consumer purchasing decisions.
**8 This is not the first case in which we have construed ORS 646.608(1)(b). In Daniel N. Gordon, PC v. Rosenblum, 361 Or. 352, 367, 393 P.3d 1122 (2017), ORS 646.608(1)(b) was applied to a law firm's debt collection practices. In that case, we explained that there are three elements to a claim under ORS 646.608(1)(b): (1) A “person” (2) “in the course oftheperson'sbusiness,vocationoroccupation”(3)“[c]auses likelihood of confusion or of misunderstanding as to the source, sponsorship, approval or certification of real estate, goods or services.” As to the third element, we examined the causal relationship required between the person's action and the resulting confusion. We explained that “the person must cause the likelihood of confusion or misunderstanding experienced by the other person.” Id. at 369, 393 P.3d 1122 (internal quotation marks omitted); see id. (interpreting the statute in the context of a company whose actions were likely tocauseconfusionaboutinterestratesondebtandliabilityfor attorney fees). We were not presented there with the question whether the statute includes a “materiality” requirement. We did say, however, that the elements of a violation of ORS 646.608 (1)(b) are “apparent on the face of the statute.” Id. at 367, 393 P.3d 1122
In this case, the Court of Appeals held that the concept of materiality, though not apparent on the face of the statute, is necessarily implied:
“[F]or a seller's unlawful trade practice to ‘bring into existence’ or ‘effect by authority’ a ‘state of being discomfited, disconcerted, chagrined, or embarrassed’ or a ‘lack of certainty’ or ‘power to distinguish, choose, or act decisively’ with respect to its product, the unlawful conduct necessarily must be material to the consumer's decision to buy the product. Said another way, if a seller's allegedlyunlawfulpracticeisimmaterialtotheconsumers’ purchasing decisions, it is unlikely to create a state of discomfort,chagrin,oruncertainty,oraffecttheconsumer's power to distinguish, choose, or act decisively with respect to that product.”
Living Essentials, LLC, 313 Or App at 187, 497 P.3d 730 (emphasis in original).
*38 We disagree with that conclusion. As a logical matter, the question whether a consumer is confused about some
attribute of a product is not necessarily connected to the question whether the consumer intends to purchase the product. For example, a consumer might be led by a false advertisement to form an incorrect understanding about the “certification” status of a product, a misunderstanding that will exist regardless of whether the consumer has any interest in purchasing the product. The proposition that the only statements capable of misleading are those that are material to the purchasing decision is not correct. In short, the plain text of ORS 646.608(1)(b) does not include a materiality requirement, and we are not persuaded that materiality is necessarily or logically implied by the words that the legislature used.
We take the same view of the second provision at issue, ORS 646.608(1)(e), which makes it an unlawful practice to “represent[ ]” that goods, services, [and] real estate have certain attributes that they “do not have” (or that a “person” has certain attributes that the person “does not have”). “Representation” is defined for purposes of the UTPA as “any manifestation of any assertion by words or conduct, including, but not limited to, a failure to disclose a fact.” ORS 646.608(2). Thus, paragraph (1)(e) prohibits making misrepresentations (including a failure to disclose), by speech or conduct, about certain attributes of goods, services, real estate, or persons. That text flatly prohibits such misrepresentations without regard to their possible effect. It is therefore even less supportive than paragraph (1)(b) of the interpretation that such conduct is actionable only if it is “material to consumer purchasing decisions.”
In sum, the text of ORS 646.608(1)(b) and (1)(e) supports the state's argument that the materiality element described by the Court of Appeals does not exist in either provision. We proceed to consider statutory context and, to the extent it is helpful, legislative history.
B. Statutory Context
**9 Context includes “other provisions of the same statute” and “the statutory framework within which the law *39 was enacted.” PGE v. Bureau of Labor and Industries, 317 Or. 606,611,859P.2d1143(1993); Klamath Irrigation District v. United States, 348 Or. 15, 23, 227 P.3d 1145 (2010) (internal quotation marks and citation omitted). Relevant context for ORS 646.608(1)(b) and (1)(e) thus includes the rest of ORS 646.608(1) as well as the rest of the UTPA.
The purpose of the UTPA is to protect consumers from unlawful trade practices. See, e.g., Denson v. Ron Tonkin
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Gran Turismo, Inc., 279 Or. 85, 90 n 4, 566 P.2d 1177 (1977) (“[T]he bill seeks to protect consumers rather than businesses.”). In fulfilling the purpose of protecting consumers, the legislature has prohibited an extensive list of trade and business practices in ORS 646.607 and ORS 646.608(1)
Defendants’ primary contextual argument is that the UTPA is aimed at restricting acts that “affect” Oregon consumers, as reflected in the statute's definitions of trade and commerce:
“ ‘Trade’ and ‘commerce’ mean advertising, offering or distributing, whether by sale, rental or otherwise, any real estate, goods or services, and include any trade or commerce directly or indirectly affecting the people of this state.”
ORS646.605(8).Defendantsarguethat“affect”means“toact upon” or “to produce a material influence upon or alteration in.” In support of inferring a materiality requirement in ORS 646.608(1)(b) and (1)(e), the Court of Appeals relied on that definition of “trade” and “commerce” as well as two of the UTPA's remedial provisions. ORS 646.632(1) allows a prosecuting attorney to bring suit to restrain “unlawful trade practices,”andORS646.636allowsacourttoorderequitable relief to “restore” to a person money or property “of which the person was deprived” by means of an unlawful practice or “as may be necessary to ensure cessation of unlawful trade practices.” The Court of Appeals reasoned that, in light of those provisions, “the UTPA ‘as a whole’ appears to envision that the acts to be remedied as unlawful trade practices are ones that have affected consumers—in other words, ones that materially bear on consumer purchasing choices.” Living Essentials, LLC, 313 Or App at 189, 497 P.3d 730
*40 We agree with the Court of Appeals that the UTPA as a whole reflects an intent to regulate trade practices that affect consumers. But it does not follow that the legislatureconsideredtheonlypracticesthataffectconsumers to be those that would materially influence their purchasing decisions as to a particular good or service. The legislature could have determined that practices that lead to confusion or inaccurate perceptions about goods and services have negative effects on a well-functioning marketplace, e.g., by undermining consumer confidence, and that those negative effects indirectly “affect” consumers regardless of whether consumers purchase a good or service. To put it another way, one can understand the UTPA as a legislative judgment that the specified unlawful practices are inherently “material” in the sense that they are all adverse to the societal interest in a
healthy marketplace where consumers can expect goods and services to be as they are represented to be. Consequently, the reference in the definition of “ ‘trade’ and ‘commerce’ ” to “directly or indirectly affecting the people of this state” does not suggest that we should construe specific prohibitions in the UTPA to include additional requirements of materiality that are not expressed in their text. The more obvious contextual reading is that the legislature stated its general intention to regulate practices that affect consumers and then provided a list of specific unlawful practices that, in the legislature's judgment, do that.
**10 That conclusion is also consistent with this court's decision in Searcy v. Bend Garage Company, 286 Or. 11, 592 P.2d 558 (1979), where we considered whether a different UTPAprovision,ORS646.608(1)(f),includesa“materiality” element. That provision makes it a violation to “[r]epresent[ ] that real estate or goods are original or new if the real estate or goods are deteriorated, altered, reconditioned, reclaimed, used or secondhand.” The plaintiff bought a used car from defendant, who had checked a box on a sales form indicating that the car was new. The defendant argued that the plaintiff had not relied on that misrepresentation. Searcy, 286 Or. at 15, 592 P.2d 558. Based on that argument, the defendant requested the following jury instruction:
“A representation is an actual definite statement or actual definite conduct that is material and that was relied upon by *41 the plaintiffs. It can also include concealment of a material fact that would normally have been relied upon by the plaintiffs and that defendant had a duty to disclose to plaintiffs.”
Id. at 16, 592 P.2d 558 (emphases in original). The defendant argued that the term “representation” in paragraph (1) (f) requires materiality because materiality is expressly required by another provision, ORS 646.608(1)(t), which prohibits the failure to disclose a “known material defect or material nonconformity” upon delivery of real estate, goods, or services. This court rejected that view. Searcy, 286 Or. at 16, 592 P.2d 558 (“Many of the enumerated unlawful trade practices involve representations. See ORS 646.608(1)(e), (f), (g), (j), (k), (l), and (s). But in the section defining ‘representation’ the legislature did not require that a concealed fact be material.”).
Defendants note that Searcy addressed a different UTPA provision,paragraph(1)(f);thatitdealtwithajuryinstruction rather than the substantive elements of a claim; and that Searcy has “no bearing” on whether materiality is required
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for paragraphs (1)(b) and (1)(e). But Searcy is not so easily ignored. Defendants are correct that that case, strictly speaking, involved the correctness of the trial court's jury instruction about the meaning of “representation.” But this court's conclusion that the instruction was correct, despite the omission of a reference to materiality, depended in part on its observation that ORS 646.608(1)(f), like several other provisions including paragraph (1)(e), prohibits certain representations without regard to materiality.
Searcy does not control our interpretation of paragraph (1)(e), butreadingamaterialityelementintothatparagraphwouldbe difficulttoreconcilewith Searcy’sinterpretationofparagraph (1)(f), which has a similar construction. Both provisions prohibit making inaccurate representations about a product or service. Neither provision expressly contains a materiality element. Ultimately, defendants offer no persuasive reason why this court should take a different view of one provision than we took of the other in Searcy
C. Legislative History
Thus far, we have concluded that the plain text and context of paragraphs (1)(b) and (1)(e) are inconsistent with *42 the inclusion of a materiality element. In that light, legislative history is likely to be unavailing. Gaines, 346 Or. at 172, 206 P.3d 1042 (“[W]e clarify that a party seeking to overcome seeminglyplainandunambiguoustextwithlegislativehistory has a difficult task before it.”).
Tracking the analysis of the Court of Appeals, defendants argue that the UTPA provisions at issue were taken from the UDTPA, and that it was understood at the relevant time (i.e., 1971) that the UDTPA requires materiality. For several reasons, that argument fails.
**11 It is true that, in enacting the UTPA in 1971, the legislature adopted language from numerous provisions of the UDTPA, promulgated by the Uniform Law Commission. See Or. Laws 1971, ch. 744, § 7; Tape Recording, House Committee on Judiciary, HB 1088, Feb. 10, 1971, Tape 5, Side 1 (statement of Attorney General Lee Johnson).8 The UTPA provisions at issue here, ORS 646.608(1)(b) and (1) (e), were drawn from the list of deceptive trade practices in the UDTPA.9 Those UDTPA provisions, however, do not contain a “materiality” requirement in their text, nor does the written commentary to those provisions refer to such a requirement. See Exhibit 5, House Committee on Judiciary, Subcommittee on Consumer Protection, HB 1088,
Apr. 5, *43 1971 (UDTPA draft with commentary). Thus, the UDTPA materials with which legislators were presented in 1971 would not have given them any indication that, in enacting UTPA provisions which make no reference to “materiality,” they were somehow implicitly incorporating that element from other sources of law.
Defendants contend that the UDTPA was nevertheless understood to require materiality. Defendants have not cited anycaselawtosupportthatproposition,but,eveniftheyhad, we have previously said that interpretations of the UDTPA “are of limited value in discerning the legislative intent behind the [UTPA]” because the “policy underpinnings of [the UTPA] (protection of consumers) differ somewhat from the Uniform Act (protection of businesses).” Denson, 279 Or. at 90 n 4, 566 P.2d 1177 10 Defendants also argue that the UDTPA provisions that correspond to paragraphs (1)(b) and (1)(e) have their origins in case law under the federal Lanham Trademark Act and the Restatement (Second) of Torts (Tent DraftNo.8,1963),bothofwhich,defendantscontend,require materiality for representations to be actionable. Defendants have produced no evidence from the legislative history, however, and we are aware of none, to suggest that legislators were made aware of the content of those sources of authority.
**12 At bottom, defendants’ contention is that, although a requirement of materiality is not found in the text of paragraphs (1)(b) and (1)(e), in the corresponding provisions of the UDTPA, or in the commentary to the UDTPA that the legislature considered, we should infer that the legislature implicitlyintendedtoincorporatethatrequirementfromother sources of law that legislators did not discuss. That argument falls far short of what would be necessary to overcome the seemingly unambiguous text of paragraphs (1)(b) and (1)(e).
*44 We briefly address defendants’ reliance on maxims of statutory construction. Defendants argue, as the Court of Appeals also concluded, that the canon of constitutional avoidance counsels in favor of construing the statute to include a materiality requirement. Defendants also raise an “absurd results” argument. However, when the text, context, and legislative history provide a single unambiguous interpretation of the statute, we do not reach such maxims. Coos Waterkeeper v. Port of Coos Bay, 363 Or. 354, 371-72, 423 P.3d 60 (2018). In this case, the text, context, and legislativehistorydemonstratethatthestatuteunambiguously does not require proof that a defendant's conduct was “material to consumer purchasing decisions.”
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III. CONSTITUTIONALITY
Having concluded that ORS 646.608(1)(b) and (1)(e) do not contain a specific materiality requirement, we next address defendants’ argument that, without such a requirement, those paragraphs violate the free speech provisions of the Oregon and federal constitutions, either facially or as applied to defendants’ conduct.
A. Article I, Section 8, of the Oregon Constitution
The Oregon Constitution provides, “No law shall be passed restraining the free expression of opinion, or restricting the right to speak, write, or print freely on any subject whatever; but every person shall be responsible for the abuse of this right.” Or. Const., Art. I, § 8.
1. The Robertson Framework
Our analytical framework for evaluating a law's constitutionality under Article I, section 8, was established in State v. Robertson,293Or.402,649P.2d569(1982).Wehave summarized that framework as follows:
“[U]nder the first category of the Robertson framework, a law that is ‘written in terms directed to the substance of any “opinion” or any “subject” of communication’ is unconstitutional unless the restriction is wholly confined within an historical exception. If the law passes that test but ‘is directed in terms against the pursuit of a forbidden effect’ and ‘the proscribed means [of causing that effect] include speech or writing,’ then the law falls into the second *45 category of Robertson and is examined for overbreadth. If a law is ‘directed only against causing the forbidden effects,’ it falls into the third category of Robertson. A law that falls into the third category can be challenged by arguing that the law ‘could not constitutionally be applied to [a person's] particular words or other expression.’ ”
State v. Babson, 355 Or. 383, 393-94, 326 P.3d 559 (2014) (internal citations omitted).
A “category one” law, which by its terms prohibits speech based on its substance, is unconstitutional unless it falls “wholly” within a historical exception such as perjury or fraud. The historical exceptions can be extended “to contemporary circumstances or sensibilities.” Robertson, 293 Or. at 433-34, 649 P.2d 569 (“If it was unlawful
to defraud people by crude face-to-face lies, for instance, free speech allows the legislature some leeway to extend the fraud principle to sophisticated lies communicated by contemporary means.”).
**13 A “category two” law is one that, “by [its] terms, purport[s] to proscribe speech or writing as a means to avoid a forbidden effect.” State v. Illig-Renn, 341 Or. 228, 235, 142 P.3d 62 (2006) (emphasis added); see also Robertson, 293 Or. at 415, 649 P.2d 569 (explaining that the coercion statute, which included the element of “mak[ing] a demand upon another person,” was “directed in terms against the pursuit of a forbidden effect” and that the statute falls in category two because “speech is a statutory element in the definition of the offense”); State v. Moyle, 299 Or. 691, 701-02, 705 P.2d 740 (1985) (holding that a harassment statute, which prohibited “subject[ing] another to alarm by conveying a telephonic or written threat,” was a category two law because verbal threats were an express element of the crime).
If a law falls in category two, then we analyze it for overbreadth. State v. Plowman,314Or.157,164,838P.2d558 (1992). A category two law is unconstitutionally overbroad if it “more than rarely” reaches protected expression and is not susceptible to a narrowing construction.” State v. Rangel, 328 Or. 294, 300, 977 P.2d 379 (1999) (“A ‘law is overbroad to the extent that it announces a prohibition that reaches conduct which may not be prohibited.’ ” (Quoting Robertson, 293 Or. at 410, 649 P.2d 569.)); Illig-Renn, 341 Or. at 232, 142 P.3d 62 (“[A] statute that *46 proscribes protected conduct only at its margins remains valid.”).
“Category three” laws, on the other hand, prohibit forbidden results without referring to expression. Plowman, 314 Or. at 164-65, 838 P.2d 558 (holding that a bias crime statute, prohibiting two or more persons from acting together based on their perception of the victim's race, color, religion, national origin, or sexual orientation to cause physical injury to the victim, is a category three law because the crime can be committed “without speaking a word” and without holding an opinion other than the perception of the victim's characteristics). Category three laws may be challenged only “as applied.” Id. at 164, 838 P.2d 558.
Defendants argue that both ORS 646.608(1)(b) and (1)(e), without an implied element of materiality, violate Article I, section 8, either facially or as applied to defendants’ conduct. As explained below, we reject defendants’ facial challenges,
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and we decline to address their as-applied arguments in this posture.
2. ORS 646.608(1)(e)
Paragraph (1)(e) provides that a person engages in an unlawful practice if the person
“[r]epresents that real estate, goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, quantities or qualities that the real estate, goods or services do not have or that a person has a sponsorship, approval, status, qualification, affiliation, or connection that the person does not have.”
Defendants argue that ORS 646.608(1)(e) is a category one law because it “expressly prohibits speech” about the attributes that goods have. The state agrees that paragraph (1) (e) is a direct restriction of speech that is properly analyzed under Robertson category one. However, the state argues that the statute is constitutional because it falls within the historical exception for fraud.
We agree that paragraph (1)(e) is a category one law because, by its terms, it prohibits speech based on its substance. The statute makes it unlawful to “represent” that a product has attributes that the product does not have. And *47 the UTPA defines a “representation” in terms of communication: “any manifestation of any assertion by words or conduct, including, but not limited to, a failure to disclose a fact.” ORS 646.608(2).Whethertherepresentationviolatesparagraph(1) (e) turns on the substance of the representation itself rather than on any resulting effect: False representations violate the statute, while true representations do not. Thus, ORS 646.608(1)(e) prohibits expression based on its substance.
**14 CategoryonelawsareunconstitutionalunderArticleI, section 8, unless they fall within a historical exception. To be within a historical exception, “the scope of the restraint [must be] wholly confined within some historical exception that was well established when the first American guarantees of freedom of expression were adopted and that the guarantees then or in 1859 demonstrably were not intended to reach.” Robertson, 293 Or. at 412, 649 P.2d 569. Examples of such exceptions are perjury, solicitation, forgery, extortion, and fraud. Id.
free expression to reach deceptive representations about the attributes of goods, services, or real estate. In other words, the statute falls within the historical exception for fraud. Defendants argue that the fraud exception is inapplicable becauseparagraph(1)(e)canbeviolatedwithoutanyshowing of materiality or that a misrepresentation was made with knowledge of its falsity or an intent to mislead, as is required for common-law fraud.11
The concept of fraud was “well established” when Oregon's free expression guarantee was adopted. See Robertson, 293 Or. at 433-34, 649 P.2d 569; see, e.g., Or. Laws 1854, ch. 4, § 30 (criminalizing the act of obtaining money, goods, or merchandise by false pretenses with intent to defraud); General Laws of Oregon, Crim Code, ch. III, § 565, p. 415 (Deady & Lane 1843-72) (providing for imprisonment and *48 civil damages for anyone convicted of “gross fraud or cheat at common law”).
This court has also held that, in determining whether a historical exception applies, an exact match is not required between a contemporary restriction on speech and the analogous restriction that would have been recognized in 1859. See Robertson, 293 Or. at 433-34, 649 P.2d 569 (“Constitutional interpretation of broad clauses locks neither the powers of lawmakers nor the guarantees of civil liberties into their exact historic forms in the 18th and 19th centuries, aslongastheextensionremainstruetotheinitialprinciple.”). Thus, not every element of common-law fraud must be present for a contemporary law to fall within the historical exception for fraud. Rather, the exception applies if the law fallswithin“thespiritofArticleI,section8,”by“remain[ing] true to the initial principle.” State v. Ciancanelli, 339 Or. 282, 318, 121 P.3d 613 (2005).
The state argues that ORS 646.608(1)(e) is permissible under Article I, section 8, because the framers of Oregon's constitution would not have understood the protection for
Defendants are correct that paragraph (1)(e) does not require a showing of culpability—it does not require an intent to deceive, nor does it require knowledge of the falsity of a representation. However, this court has already concluded thatthoseelementsofthecommon-lawtortarenotrequiredto bring a law within the historical fraud exception. In Vannatta v. Keisling, 324 Or. 514, 931 P.2d 770 (1997), overruled on other grounds, Multnomah County v. Mehrwein, 366 Or. 295, 462 P.3d 706 (2020), we considered whether a statutory provision that penalized a candidate for violating a pledge to abide by campaign expenditure limits violated Article I, section 8 Id. at 543-44, 931 P.2d 770. We explained that election laws that are “targeted at fraud” fit within the constitutional exception. Id. at 544, 931 P.2d 770. The fact
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that the statute at issue did not track all the elements of the common-law tort—e.g., it did not require a culpable mental state—did not prevent this court from concluding that the statutewasconstitutional,becausethestatutewaspermissibly aimed at “misleading conduct.” See id. at 544-45, 931 P.2d 770.Onthecontrary,wenotedthat“[t]hefactthatacandidate may have intended to abide by expenditure limitations when he or she made the pledge, and only later decided to ignore thatpromise,doesnotmakethefailuretoabidebythepromise any less a fraud *49 on the voters who have relied on the candidate's Voters’ Pamphlet statement to choose their candidate.” Id. at 544 n 28, 931 P.2d 770. The possibility that some voters could have relied on a candidate's pledge was sufficient to apply the fraud exception, irrespective of the candidate's mental state. See also State v. Moyer, 348 Or. 220, 234-38, 230 P.3d 7 (2010) (citing Vannatta for the rule that “a statute that prohibits fraud on the electorate need not include an intent element to come within a historical exception”).
**15 Thus, although defendants assert that the historical understanding of fraud “punishes only culpable speech,” this court has already recognized that the historical understanding wasmoreexpansive,atleastformisrepresentationsthoughtto affect the public interest. Our opinion in Moyer discussed the historicalrecognitionof“misrepresentationsthatcontribute[] to ‘public inconvenience.’ ” 348 Or. at 234, 230 P.3d 7 (citing William Blackstone, 4 Commentaries on the Laws of England 41-42 (1769)). We noted that “providing false identifying information to * * * public bodies” would have been recognized as such an actionable misrepresentation, id., andconcludedthatitwasunlikelythattheframersofOregon's constitution intended “false communication in connection with public records and matters of legitimate governmental concern to be protected by Article I, section 8’s guarantee of the free expression of opinion.” Id. at 236, 230 P.3d 7. In reaching that conclusion, we expressly rejected the defendants’ argument that an intent to deceive was required. Id. at 237, 230 P.3d 7 (citing Vannatta, 324 Or. at 544 n 28, 931 P.2d 770).12
*50 Though it did not address the fraud exception, our decision in Ciancanelli provides further support for the conclusion that the framers of Article I, section 8, would not have expected it to protect false representations of the sort described in ORS 646.608(1)(e). In Ciancanelli, we explained that, “among the various historical crimes that are ‘written in terms’ directed at speech, those whose real focus is on some underlying harm or offense may survive the adoption of Article I, section 8, while those that focus
on protecting the hearer from the message do not.” 339 Or. at 317, 121 P.3d 613 (emphasis in original); id. at 318, 121 P.3d 613 (explaining that framers were more likely to accept restrictions on speech that “have at their core the accomplishment or present danger of some underlying actual harm to an individual or group, above and beyond any supposed harm that the message itself might be presumed to cause to the hearer or to society”). Thus, where the direct prohibition on speech exists to prevent a nonspeech harm, such as fraud, the conflict between that objective and the fundamental free-speech principle enshrined in Article I, section8,islessstarkthanwherethelegislatureactstorestrict speechbasedonaperceivedharminherentinthespeechitself.
That understanding further persuades us that paragraph (1) (e) falls within the historical exception for fraud. Although paragraph (1)(e) is written in terms directed to the substance of speech, it is plain that the provision, like others in the UTPA, is aimed not at shielding people from supposedly detrimental messages or ideas themselves—an objective that would be anathema to Article I, section 8—but at the goal of protecting people from the economic harm that, in the legislature's judgment, arises from deceptive conduct in the market for goods, services, and real estate. That principle was familiar to the common law, as evidenced by, among other things, the law of trademarks. See Amoskeag Manufacturing Company v. Spear, 2 Sand Ch 599, 605-06 (NY Ch 1849) (explaining the “nature of the wrong” of trademark infringement as a combination of deceiving the public and diverting profits from another business); Avery & Sons v. Meikle & Co., 81 Ky. 73, 87 (1883) (describing the harm caused by deceiving consumers by copying the appearance of the plaintiff's goods as including “the inculcation of truth and honor in the *51 conduct of trade and commerce”); see also Restatement (Third) of Unfair Competition § 2 comment b (1995) (explaining the historical development of common law aimed at preventing economic harm caused by deceptive marketing).
**16 In short, ORS 646.608(1)(e) is a restriction on speech that serves a purpose—avoidance of economic harm based on deceptive commercial practices—that was recognized when Article I, section 8, was drafted and is consistent with how the framers would have conceived of fraud. The statute has “at [its] core” the prevention of an “underlying actual harm to an individual or group, above and beyond any supposed harm that the message itself might be presumed to cause to the hearer or to society,” Ciancanelli, 339 Or. at 318, 121 P.3d613,whichmakesitunlikelythattheframerswouldhave
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viewed it as incompatible with the free speech guarantee that they enshrined in the constitution. Accordingly, we conclude that paragraph (1)(e)’s prohibition on false representations aboutthe“sponsorship,approval,characteristics,ingredients, uses, benefits, quantities or qualities” of a good, service, or real estate, made in the course of business, is not facially unconstitutional.
3. ORS 646.608(1)(b)
Paragraph (1)(b) provides that a person engages in an unlawful trade practice if the person “[c]auses likelihood of confusion or of misunderstanding as to the source, sponsorship, approval, or certification of real estate, goods or services.” ORS 646.608(1)(b). Defendants argue that that provision is unconstitutional either because it is a Robertson category one law that does not fall within a historical exception, or because it is a Robertson category two law that is overbroad. The state argues that paragraph (1)(b) is a Robertson category three law that is not subject to a facial challenge;alternatively,thestatearguesthattheprovisionisa categorytwolawthatisreviewedforoverbreadth,andthatthe statute is not overbroad. For the reasons that follow, we agree with the state that paragraph (1)(b) is a category three law.
Onitsface,paragraph(1)(b)doesnotregulatespeech.Rather, the statute prohibits a result—“caus[ing] *52 a likelihood of confusion or of misunderstanding.” By its terms, the statute neither prohibits expression based on its substance (categoryone)noridentifiesexpressionasaproscribedmeans of producing the specified result (category two). If paragraph (1)(b) is properly understood not to directly regulate speech at all, then it is not susceptible to a facial challenge; rather, a person who contends that the statute has been applied in a manner that unconstitutionally burdens protected expression is limited to bringing an as-applied challenge. Illig-Renn, 341 Or. at 232, 142 P.3d 62.
Defendants argue that, although ORS 646.608(1)(b) is not expressly written in terms directed at speech, it must nevertheless be evaluated under Robertson category one or category two as an example of a “creatively worded” law that can only be violated through expression. Defendants’ argument has its roots in several of this court's cases but ultimately fails.
As discussed earlier in this opinion, the fundamental difference between Robertson categories one and two, on the one hand, and category three, on the other, is that a category three law is not written in terms directed to expression at
all. The general rule of Robertson is that, to trigger scrutiny under categories one or two, a law must expressly prohibit expression based on its substance or as a means of producing a targeted result—that is, expression must be a “statutory element.” Illig-Renn, 341 Or. at 235, 142 P.3d 62 (reiterating that we have limited facial overbreadth challenges to statutes that “more or less expressly identify protected speech as a statutory element of the offenses that they define”). The critical distinction is that “between making speech the crime itself, or an element of the crime, and using speech to prove the crime. * * * [A] defendant who makes a facial challenge to a statute under Article I, section 8, must demonstrate the former—that the legislature intended to punish the speech itself.” Plowman, 314 Or. at 167, 838 P.2d 558 (emphasis added).
**17 This court has, however, observed a theoretical exception to the rule that expression must be an “element” of the law to allow for a facial challenge. That exception recognizes the possibility that laws can be creatively drafted to avoid prohibiting speech as such, while making it *53 nonetheless clear that objectionable speech is the focus of the law. We first addressed that possibility in Moyle, in which we explained that “[t]he constitutional prohibition against laws restraining speech or writing cannot be evaded simply by phrasing statutes so as to prohibit ‘causing another person to see’ or ‘to hear’ whatever the lawmakers wish to suppress.” Moyle, 299 Or. at 699, 705 P.2d 740. We noted that, in principle, the legislature has plenary power to protect persons from whatever conduct the legislature regards as harmful, subject to constitutional limits. “A difficulty arises, however, when a statute defines a crime in terms of causing a kind of harm which necessarily results only from speech or writing, sothatthestatutorydefinitionisonlytheothersideofthecoin of a prohibition of the speech or writing itself.” Id.
We proceeded to explain that the statute in that case was not such a law. In Moyle, the statute prohibited harassment, “defined as alarming another person by conveying a telephonic or written threat to inflict serious physical injury or commit a felony.” Id. at 693, 705 P.2d 740. This court held that the effect described—causing fear of injury to persons or property—did not “merely mirror[ ] a prohibition of words themselves” because it could be caused by means other than expression. Id. at 701, 705 P.2d 740. Thus, the statute was not a Robertson category one law. However, because the statute expressly addressed the use of words to cause the forbidden effect, it required scrutiny for overbreadth (category two).
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Similarly, in Illig-Renn, we considered the constitutionality ofthethen-extantversionofORS162.247(1)(b),whichmade it a crime to “refuse[ ] to obey a lawful order by [a] peace officer,” and held that the statute was not subject to a facial challenge. 341 Or. at 230, 142 P.3d 62. We reiterated that,
“in the context of challenges under Article I, section 8, of the Oregon Constitution, this court has limited facial overbreadth analysis to statutes that more or less expressly identify protected speech as a statutory element of the offenses that they define, or that otherwise proscribe constitutionally protected speech ‘in [their] own terms.’ And, more to the point, we have stated specifically that, whenastatutedoes not refertoprotectedspeech‘interms,’ it is not an appropriate subject for overbreadth analysis and may only be challenged ‘as applied.’
*54 “The foregoing does not mean that we will ignore a clear case of facial unconstitutionality or overbreadth merely because the statute manages to avoid any direct reference to speech or expression. As this court acknowledged in [Moyle], ‘[t]he constitutional prohibition againstlawsrestrainingspeechorwritingcannotbeevaded simply by phrasing statutes so as to prohibit “causing another person to see” or “to hear” whatever [speech or expression] the lawmakers wish to suppress.’ But, in general, we will not consider a facial challenge to a statute on overbreadth grounds if the statute's application to protected speech is not traceable to the statute's express terms.”
341 Or. at 235-36, 142 P.3d 62 (emphasis in original; internal citations omitted). As to the statute challenged in that case, this court rejected the defendant's argument that the statute expressly restrains expression because the refusal to obey a police officer's order “conveys a message of opposition or dissent whether by verbal means or an expressive act.” We reasoned that the statute is concerned with the “act” of refusing to obey an order, and the fact that such an act might also be intended to convey a message was not relevant. Id. at 237, 142 P.3d 62. In short, we applied the general rule that where a statute is not expressly aimed at restricting speech, analysisforfacialoverbreadthwasinappropriate,irrespective of the statute's foreseeable effect on expression.
**18 Our most recent discussion of these issues was in Babson. In that case, the defendants argued that a legislative ruleregulatingtheuseofthestepsofthestateCapitolbetween 11p.m.and7a.m.requiredanalysisunder Robertson category two because it had an “ ‘obvious and foreseeable’ application
tospeech”—i.e.,itwouldpreventthedefendantsfromstaging an around-the-clock political protest. 355 Or. at 398, 326 P.3d 559. This court rejected that argument. In doing so, we explained:
“When expression is a proscribed means of causing the harm prohibited in a statute, it is apparent that the law will restrict expression in some way because expression is an element of the law. For that type of law, the legislature must narrow the law to eliminate apparent applications to protected expression. However, if expression is not a proscribed means of causing harm, and is not described in the terms of the statute, the possible or plausible application of *55 the statute to protected expression is less apparent. That is, in the former situation, every time the statute is enforced, expression will be implicated, leading to the possibility that the law will be considered overbroad; in the latter situation, the statute may never be enforced in a way that implicates expression, even if it is possible, or even apparent, that it could be applied to reach protected expression. When a law does not expressly or obviouslyrefertoexpression,thelegislatureisnotrequired toconsiderallapparentapplicationsofthatlawtoprotected expression and narrow the law to eliminate them.”
Id. at 400, 326 P.3d 559 (emphasis in original; internal citations omitted). We then discussed our previous holdings in Moyle and Illig-Renn and reaffirmed that, as a general rule, towarrantreviewforfacialoverbreadth,alawmustexpressly restrain speech; a statute that does not directly refer to speech is not subject to overbreadth analysis, even though it may have “obvious” applications to speech. The legislative rule in Babson did not expressly restrict speech, nor was it “simply a mirror of a prohibition on words,” 355 Or. at 403, 326 P.3d 559, of the sort that Moyle and Illig-Renn cautioned would still subject a statute to a facial challenge.
In sum, this court in Moyle, Illig-Renn, and Babson has described a theoretical category of laws that do not expressly restrict speech but that, nonetheless, are appropriately reviewed for facial overbreadth because they are functionally indistinguishable from such express restrictions—they “mirror” a prohibition on the words themselves. As we noted in Moyle, a law that makes it unlawful to cause someone to “see” or “hear” something is nothing but an alter-native way of prohibiting expression. We refer to that category as “theoretical” because this court has notyetdecidedacaseinwhichalawwasheldtofallwithinit. Rather, as the foregoing cases illustrate, even laws that have obviously foreseeable applications to speech are not properly
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viewed as facial restrictions of speech without an indication that “the legislature intended to punish the speech itself.” Plowman, 314 Or. at 167, 838 P.2d 558
With that background, we return to ORS 646.608 (1)(b) The statute prohibits a person, in the course of the person's business,from“caus[ing]alikelihoodofconfusionorof *56 misunderstanding as to the source, sponsorship, approval, or certification of real estate, goods or services.” Unlike many of the other prohibitions that immediately follow it in the UTPA, which use terms such as “represent,” “solicit,” “disparage,” and “advertise” to describe what a person may not do, paragraph (1)(b) is written without any reference to communication. It may be, of course, that speech is the means through which the forbidden result—the causation of a likelihood of confusion—will often come about. It may even be said that paragraph (1)(b) has obvious and foreseeable applications to speech. But that was also true of the laws in Moyle, Illig-Renn, and Babson. Here, the text and context suggest that, far from desiring to “punish the speech itself,” Plowman, 314 Or. at 167, 838 P.2d 558, the legislature was indifferent as to whether the likelihood of confusion is brought about by speech or by some other, nonexpressive means. The fact that paragraph (1)(b) does not mention expression, while so many other prohibitions in subsection (1) do, tends to suggest that, when it came to paragraph (1) (b), the legislature contemplated that speech is not the only means by which a likelihood of confusion might be created, and that the legislature intended to forbid that result whether caused by speech or not. Thus, paragraph (1)(b) is not the sort of “mirror of a prohibition on words” that we have said would trigger overbreadth analysis.
**19 In arguing to the contrary, defendants contend that paragraph (1)(b) can only be violated through speech. Even assuming that that premise would justify analysis under Robertson categories one or two, 13 we are not persuaded by defendants’ bare assertion that “expressive communication is the only way that a person could cause confusion as to goods’ approval or certification.” Although this court has previously recognized that “selling is a form of communicative behavior,” that statement came in a case that involved door-to-door solicitation. City of Hillsboro v. Purcell, 306 Or. 547, 555, 761 P.2d 510 (1988). We have never held that all conduct *57 associated with the sale of goodsandservicesisexpressive.Here,thestatutecouldreach such things as the manner in which products are packaged, the location at which they are sold, or even where they are placed on a store shelf, if a likelihood of confusion or
misunderstandingwerelikelytoresult.Suppose,forexample, a person sets up a sales booth at a location where the public could infer, based on signage created by other sellers, that all productsbeingsoldatthatlocationsharecommon“approval” or “certification.” If the person's product lacks such approval orcertification,alikelihoodofconfusionormisunderstanding could be created simply by the person's choice of location.
For the foregoing reasons, we conclude that ORS 646.608(1) (b) is a category three law under Robertson that is not subject to a facial challenge.
4. Defendants’ remaining “as-applied”
challenges
Defendants alternatively argue that, if paragraphs (1)(b) and (1)(e) are not unconstitutional on their face, they are unconstitutional as applied to defendants’ conduct. Neitherpartyhaspresentedwell-developedargumentsonthat question, and we decline to reach it. As explained earlier in this opinion, the trial court found in defendants’ favor on multiple grounds, which the state separately challenged on appeal. Having concluded that materiality is a required elementofthestatutoryclaimsthatthestatedidnotprove,the Court of Appeals did not reach all of the state's assignments of error. Thus, our conclusion today that materiality is not a required element does not mean that the state will ultimately prevail on any of its claims. The Court of Appeals on remand will have the opportunity to consider the other bases for the trial court's judgment in defendants’ favor (including its conclusions regarding the legal standard for willfulness, the legal standard for false representation under paragraph (1) (e), and the legal standard for likelihood of confusion or misunderstanding under paragraph (1)(b)). Depending on the resolution of those issues, the trial court judgment could be affirmedonothergrounds,whichwouldrenderitunnecessary to consider defendants’ argument that paragraphs (1)(b) and (1)(e), as applied to their conduct, violate *58 Article I, section 8, of the Oregon Constitution. Accordingly, it is premature for this court to consider that issue.
B. The First Amendment to the United States Constitution
We now turn to defendants’ argument that, without a requirement of materiality, paragraphs (1)(b) and (1) (e) violate the First Amendment to the United States Constitution.
Under the First Amendment, states may regulate false or deceptive commercial speech. Friedman v. Rogers, 440 U.S. 1, 10 n 9, 99 S Ct 887, 59 L Ed 2d 100, reh'g
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den, 441 U.S. 917, 99 S.Ct. 2018, 60 L.Ed.2d 389 (1979)
(“By definition, commercial speech is linked inextricably to commercial activity: while the First Amendment affords such speech ‘a limited measure of protection,’ it is also true that ‘the [s]tate does not lose its power to regulate commercial activity deemed harmful to the public whenever speech is a component of that activity.’ ”). The Supreme Court has held that commercial speech receives “a different degree of protection” than other types of speech. Va. Pharmacy Bd. v. Va. Consumer Council, 425 U.S. 748, 771 n 24, 96 S Ct 1817, 48 L Ed 2d 346 (1976). It has explained that commercial speech is more objective and verifiable than other types of speech, and that commercial speech is less at risk of being “inhibited by proper regulation.” Friedman, 440 U.S. at 10, 99 S.Ct. 887
**20 The test for determining whether a regulation of commercialspeechviolatestheFirstAmendmentcomesfrom Central Hudson Gas & Elec. v. Public Serv. Comm'n, 447 U.S. 557, 566, 100 S Ct 2343, 65 L Ed 2d 341 (1980). That four-part test first examines whether the speech at issue is protectedbytheFirstAmendment:thatis,whetheritconcerns lawful activity and is not misleading. If, under that prong, the speech concerns unlawful activity or is “more likely to deceive the public than to inform it,” the government can prohibit it as unprotected speech. Id. at 563, 100 S Ct 2343 However, if the communication concerns lawful activity and is not misleading, “the government's power is more circumscribed.” Id. at 564, 100 S Ct 2343. In that scenario,
the speech is protected, and we analyze the other three steps: whetherthegovernmenthasasubstantialinterest,whetherthe regulation directly *59 advances that interest, and whether the regulation is not more extensive than necessary to serve that interest. Id.
Theregulationsatissueaffectspeechthat“[c]auseslikelihood of confusion or of misunderstanding” and “representations” that a product has certain characteristics that it does not have. Because ORS 646.608(1)(b) and (1)(e) concern misleading commercial speech, they are permissible under Central Hudson.
IV. CONCLUSION
From the text, context, and legislative history, we conclude that violation of ORS 646.608(1)(b) and (1)(e) may be established without proof that a defendant's conduct was material to consumer purchasing decisions. We further concludethatneitherprovisionisfaciallyunconstitutional.14
The decision of the Court of Appeals is reversed, and the case is remanded to the Court of Appeals for further proceedings. All
Footnotes
* On appeal from the Multnomah County Circuit Court, Kelly Skye, Judge. 313 Or App 176, 497 P.3d 730 (2021)
** Nelson, J., resigned February 25, 2023, and did not participate in the decision of this case. Bushong and James, JJ., did not participate in the consideration or decision of this case.
1 This case was brought in 2014. ORS 646.608, ORS 646.607, and ORS 646.605, which are all part of the UTPA, have been amended since then. However, those amendments did not affect the provisions at issue in this case, and they do not affect our analysis. Therefore, all references in this opinion to chapter 646 of the Oregon Revised Statutes are to the current version of the statute unless stated otherwise.
2 The state alleged other UTPA violations that are not at issue on review.
3 The UTPA provides that a showing of a “willful” violation is required for the imposition of civil penalties whether an action is brought by a private party, ORS 646.638(1), or by a public prosecuting attorney, ORS 646.642(3). Willfulness is not an element of a violation of ORS 646.608(1), however. Thus, the trial court's ruling on
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Citations
--- P.3d ----, 371 Or. 23, 2023 WL 3242843
willfulness is not pertinent to the questions we address on review, which concern whether ORS 646.608(1) (b) and (1)(e) require a showing of materiality to consumer purchasing decisions and, if they do not, whether those provisions are unconstitutional.
4 The Court of Appeals also addressed defendants’ cross-appeal, which challenged the trial court's denial of attorneyfees.BecausetheAVCpromisedtopay$250,000tothestatefor“restitution,”amongotherpurposes, and it stated that defendants would comply with Oregon law, the Court of Appeals concluded that the AVC was satisfactory as a matter of law. Accordingly, the court reversed the trial court's denial of attorney fees and remanded to the trial court for a determination of the amount of fees due to defendants.
5 Neither party develops an argument explaining whether this element, if it existed, would refer to a reasonable consumer, a specific consumer, or a group of consumers. Because we reject defendants’ argument regarding materiality altogether, we need not address that question.
6 Those definitions include “overthrow” and “defeat” as in the fall of a city; “a situation or condition marked by lack of order, system, arrangement”; and the legal definition of “a merging of two rights in one or of two apparently or really antagonistic interests in one.” Webster's at 477.
7 Related definitions include “3 a : an act of confusing, of mixing, pouring, blending, or heaping together in disorder with identities and distinctions blended <the ~ of tongues at the tower of Babel> <a ~ of history and poetry in his work> b : an act of mistaking one thing for another, of failing to note distinctions, and of falsely identifying <a formal ~ of poetry and painting –Irving Babbitt> <~ between public and private morality –D.W. Brogan>.” Webster's at 477. However, those definitions, which focus on an “act” rather than an effect, fit poorly in the context of ORS 646.608(1)(b) and the UTPA as a whole, which are concerned with effects on consumers.
8 A digitized version of that tape recording is available at http://records.sos.state.or.us/ORSOSWebDrawer/ Record/7812750 (accessed Apr. 25, 2023).
9 The UTPA was based on more than one model statute, but it appears clear that the list of prohibited practices came in part from the UDTPA. Tape Recording, Senate Committee on Consumer Affairs, SB 50, Feb. 3, 1971 (statement of Sen. Willner), available at http://records.sos.state.or.us/ORSOSWebDrawer/ RecordHtml/7359889 (accessed Apr. 25, 2023) (discussing the three sources of model consumer legislation, which were the Council of State Governments, the Federal Trade Commission's model act, and the National Consumer Law Center's “Consumer Act”). When considering House Bill (HB) 1088, the legislature had a copy of the commentary to the UDTPA, annotated with the paragraph designations in the bill that corresponded to the 13 practices listed in the UDTPA. See Exhibit 5, House Committee on Judiciary, Subcommittee on Consumer Protection, HB 1088, Apr. 5, 1971 (annotated excerpt from UDTPA). The other model consumer legislation statutes did not contain a specific list of prohibited practices, but prohibited “deceptive practices” generally. See 15 USC §§ 41-58 (1970) (Federal Trade Commission Act) (“[U]nfair or deceptive acts or practices in commerce, are declared unlawful.”); Carolyn L. Carter & Jonathan Sheldon, Unfair and Deceptive Acts and Practices §§ 3.4.2.1 - 3.4.2.2, 193 (8th ed 2012) (explaining that the FTC and the Council of State Governments collaborated to develop a model law that had options for states to either adopt the general “deceptive practices” prohibition from federal law or the list of trade practices in the UDTPA).
10 Additionally, the UTPA does not include any express instruction from the legislature to apply and construe the UTPA in a way that promotes uniformity with the uniform law. See ORS 646.605 - 646.656. When the legislature intends to maintain a uniform interpretation, it can say so. E.g., ORS 646.475(1) (stating that the Uniform Trade Secrets Act “shall be applied and construed * * * to make uniform the law * * * among states
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enacting [the act]”). The absence of such an instruction makes it even more difficult for legislative history to overcome the evident meaning of the text in context.
11 A claim for fraud requires a plaintiff to prove falsity, materiality, knowledge of falsity, intent to deceive, and reliance, in addition to the representation, injury, and causation elements. Discount Fabrics, 289 Or. at 384-85, 615 P.2d 1034 (comparing the elements of common-law fraud to the UTPA).
12 Contemporaneous dictionaries also distinguished between forms of fraud based in part on whether a person had acted with scienter. Bouvier's Law Dictionary 546-47 (1860) distinguished between forms of fraud as follows:
“An actual or positive fraud is the intentional and successful employment of any cunning, deception, or artifice, used to circumvent, cheat, or deceive another.
“By constructive fraud is meant such a contract or act, which, though not originating in any actual evil design or contrivance to perpetrate a positive fraud or injury upon other persons, yet, by its tendency to deceive or mislead them, or to violate private or public confidence, or to impair or injure the public interests, is deemed equally reprehensible with positive fraud, and therefore, is prohibited by law, as within the same reason and mischief as contracts and acts done malo animo.”
(Italics in original.)
13 As noted above, this court has held that a statute that is written to “mirror” a prohibition of words should be treated as an express restriction on speech. That is not the same thing as saying that a law should be viewed as a restriction on speech just because all or most of its foreseeable applications are to speech. As we said in Plowman, there must be an indication that the legislature intended to punish the “speech itself.” 314 Or. at 167, 838 P.2d 558
14 In light of our decision, it is unnecessary to reach the parties’ arguments concerning attorney fees and the AVC. Resolution of those issues will depend on how the merits are resolved on remand.
State ex rel Rosenblum v. Living Essentials, LLC, --- P.3d ---- (2023) 371 Or. 23 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 18
End of Document © 2023 Thomson Reuters. No claim to original U.S. Government Works.
325 Or.App. 37
Court of Appeals of Oregon.
Eric C. BUSH, an individual, Plaintiff-Respondent, v.
CITY OF PRINEVILLE, a political subdivision of the State of Oregon, and Michael Boyd, an individual, Defendant-Appellants, and
League of Oregon Cities and Association of Oregon Counties, dba Local Government Personnel Institute, Defendants.
Eric C. Bush, an individual, Plaintiff-Respondent, v.
City of Prineville, a political subdivision of the State of Oregon, and Michael Boyd, an individual, Defendants, and
League of Oregon Cities and Association of Oregon Counties, dba Local Government Personnel Institute, Defendants-Appellants.
A175868 (Control), A175907
Argued and Submitted June 10, 2022.
March 29, 2023
Holdings: The Court of Appeals, Pagán, J., held that:
trialcourt'sawardofdamagestochiefinanamountexceeding the limitation on liability under Oregon Tort Claims Act (OTCA) did not preclude him from seeking reasonable attorney fees;
chief was entitled to prelitigation attorney fees;
trial court was not required to apportion between city and LGPI fees from before date judgment was entered against the city;
trial court was required to apportion between the city and LGPI fees from date after judgment was entered against the city; and
trial court did not abuse its discretion with regard to amount of attorney fees awarded.
Reversed and remanded with instructions.
Mooney, J., filed dissenting opinion.
Procedural Posture(s): On Appeal; Motion for Attorney's Fees.
Synopsis
Background: Former city police chief brought action against city, Local Government Personnel Institute (LGPI), and police captain for discrimination against a uniformed service member, wrongful discharge, intentional infliction of emotional distress, and defamation, stemming from his termination after LGPI's investigation of chief's use of leave fromhispolicedutiestoperformNationalGuardduties.After parties agreed to stipulated judgments, the Circuit Court, Crook County, A. Michael Adler, Senior Judge, entered supplemental judgment awarding chief $639,932 in attorney fees and entered second supplemental judgment denying chief's request for “fees on fees.” Defendants appealed from first judgment and chief appealed from second judgment. The Court of Appeals, 301 Or.App. 674, 457 P.3d 324; 301 Or.App. 697, 456 P.3d 334, reversed and remanded both judgments. On remand, the Circuit Court, Crook County, Adler, Senior Judge, entered third supplemental judgment, awarding $623,484.83 in attorney fees. City and LGPI appealed.
Crook County Circuit Court, 14CV08987, 14CV08987; A. Michael Adler, Senior Judge.
Attorneys and Law Firms
Robert E. Franz, Jr., Springfield, argued the cause for appellants, City of Prineville and Michael Boyd. Also on the briefs was the Law Office of Robert E. Franz, Jr.
LindsayH.Duncan,Portland,arguedthecauseforappellants, LeagueofOregonCitiesandAssociationofOregonCounties. Also on the briefs were Janet M. Schroer and Hart Wagner LLP.
Roxanne L. Farra, Bend, argued the cause for respondent. Also on the brief were R. Kyle Busse, Roxanne L. Farra, P. C. and Markowitz Herbold PC.
Before Shorr, Presiding Judge, and Mooney, Judge, and Pagán, Judge.
Bush v. City of Prineville, --- P.3d ---- (2023)
Or.App. 37 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 1
325
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Opinion
PAGÁN, J.
**1 *39 Thiscasecomesbeforeusforthethirdtime,aswe againaddresssupplementaljudgmentsawardingattorneyfees to plaintiff. In the first appeal, we reversed a supplemental judgmentawardingplaintiff$639,932inattorneyfeesandwe remanded for further proceedings. Bush v. City of Prineville, 301 Or App 674, 676, 457 P.3d 324 (2020) (Bush I). In the second appeal, without reaching the merits, we reversed and remanded. Bush v. City of Prineville, 301 Or App 697, 698, 456 P.3d 334 (2020) (Bush II). On remand, the trial court entered its third supplemental judgment, awarding plaintiff attorneyfeesof$623,484.83againsttheCityofPrineville(the city) and the Local Government Personnel Institute (LGPI), jointly and severally.
On appeal, the city and LGPI (collectively, defendants) raise several assignments of error. They argue that plaintiff is not entitled to attorney fees because of the limitations on liabilityintheOregonTortClaimsAct,ORS30.260to30.300 (OTCA). We agree with the trial court that ORS 30.272(2) (f) does not preclude an award of attorney fees because its limitation on liability applies to damages. 1 However, we reverse the third supplemental judgment and remand for the trial court to apportion fees between the city and LGPI after December 2, 2014, and to determine whether plaintiff incurred reasonable fees from December 3, 2014 to September 10, 2015.2
violation of ORS 659A.082. The first claim for relief also asserted a count against LGPI for aiding and abetting discriminationinviolationofORS659A.030(1)(g).Plaintiff's second and third claims against the city were for wrongful discharge and intentional infliction of emotional distress. Plaintiff's fourth claim, filed against the city's police captain, was for defamation.
**2 Less than three months later, in early October 2014, the city and its police captain made an ORCP 54 E offer of judgment, offering to allow judgment to be entered against them in the amount of $667,701, “plus reasonable attorney fees, costs and disbursements as determined pursuant to ORCP 68.” On October 8, 2014, plaintiff accepted the offer, and, on December 2, 2014, the trial court entered an amended stipulated limited judgment against the city and its policecaptain.Thejudgmentawardedplaintiff$666,701,and reasonable attorney fees, “with the amount of same to be determined by this Court at a later date pursuant to ORCP 68.” In May 2015, LGPI made an ORCP 54 E offer of judgment which plaintiff accepted. On August 13, 2015, the trial court entered a stipulated general judgment against LGPI on plaintiff's claim for aiding and abetting discrimination. The judgment awarded plaintiff $250,001 against LGPI, and reasonable attorney fees, “with the amount of same to be determinedbythisCourtatalaterdatepursuanttoORCP68.”
I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
Plaintiff served as the city's police chief, and he also served in the Oregon National Guard. Bush I, 301 Or App at 676, 457 P.3d 324. In 2013, the city retained LGPI to investigate plaintiff's *40 use of leave from his police duties to perform National Guard duties. Id. On September 3, 2013, the city placed plaintiff on administrative leave. On July 15, 2014, based on the results of LGPI's investigation, the city terminated plaintiff.
One day later, on July 16, 2014, plaintiff filed a complaint against the city, LGPI, and the city's police captain. Plaintiff's first claim for relief asserted a count against the city for discrimination against a uniformed service member in
OnSeptember10,2015,plaintifffiledastatementforattorney fees. Defendants filed objections and the trial court held a hearing in May 2016. In April 2017, the trial court issued a letter ruling and order awarding plaintiff all of his requested attorney fees. On August 7, 2017, the trial *41 court entered a supplemental judgment awarding plaintiff attorney fees of $639,932. On appeal, we concluded that the trial court erred in awarding fees for claims other than the claims relating to wrongful discrimination under ORS 659A.082. Bush I, 301 Or App at 683-84, 457 P.3d 324. We reversedthesupplementaljudgmentandremandedforfurther proceedings. Id. at 684, 457 P.3d 324. On the same day, we reversed a second supplemental judgment, which had denied plaintiff's request for “fees on fees.” Bush II, 301 Or App at 698, 456 P.3d 334
On remand, plaintiff deducted fees for work associated with the wrongful discharge, intentional infliction of emotional distress, and defamation claims. Plaintiff deducted $15,670.00 from his request, resulting in a new fee and cost request of $625,916.88. The city and LGPI filed objections. The city argued, among other things, that the award of
Bush v. City of Prineville, --- P.3d ---- (2023) 325 Or.App. 37 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 2
attorney fees exceeded the limitation on liability in ORS 30.272. The city also objected to the amount of fees. LGPI objected, arguing that plaintiff failed to separate and identify the fees relating to his aiding and abetting claim. In October 2020, the trial court held a hearing and requested that the parties submit proposed findings of fact and conclusions of law.
On February 26, 2021, the trial court adopted plaintiff's proposed findings of fact and conclusions of law. The trial court found that plaintiff's acceptance of the city's offer of judgment formed “a global settlement contract of his claims.” (Emphasis in original.) The court found that the limitationsonliabilityintheOTCAdidnotapply.Addressing apportionment, the trial court found that plaintiff was not requiredtoseparatefeesrelatingtoLGPI'saidingandabetting claim. In its third supplemental judgment, entered on April 16, 2021, the trial court awarded attorney fees of $623,484.83 against the city and LGPI, jointly and severally. The city and LGPI appeal.
2015.”3 Thekeywordhereis“liability,”whichisnotdefined in the OTCA. See ORS 30.260
Dictionary definitions of the term “liability” available in 2009 included “an amount that is owed whether payable in money, other property or services,” and “an *43 obligation or duty which is owed by one person to another * * * and for breach of which the law gives a remedy to the latter (as damages, restitution, specific performance, injunction).” Webster's Third New Int'l Dictionary 1302 (unabridged ed. 2002). Liability was defined as “[t]he quality or state of being legally obligated or accountable; legal responsibility to another or to society, enforceable by civil remedy or criminal punishment,” and as “[a] financial or pecuniary obligation.”
Black's Law Dictionary 997 (9th ed. 2009). Liability was also defined as “[t]hat for which one is liable, * * * [especially] the debts or pecuniary obligations of a person or company.” 8 The Oxford English Dictionary 877-78 (2nd ed. 1989).
II. ANALYSIS
We begin with the city's second assignment of error. It presentsaquestionofstatutoryconstruction,whichwereview forerrorsoflaw. OR-OSHA v. CBI Services, Inc., 356Or.577, 585, 341 P.3d 701 (2014). LGPI joins in the argument.
*42 A. The limitation on liability in ORS 30.272(2)(f) applies to damages, not attorney fees. Based on the judgment entered against the city in the amount of $667,701, the city claims that the limitation on liability in ORS 30.272(2)(f) has been exceeded. Therefore, according to the city and LGPI, the trial court erred in awarding any attorney fees to plaintiff. That argument requires us to construe ORS 30.272(2)(f), which we do by applying the principles set forth in State v. Gaines, 346 Or. 160, 206 P.3d 1042 (2009). We attempt to discern the meaning of the statute intended by the legislature, examining the text in context, any relevant legislative history, and pertinent rules of interpretation. Id. at 171-72, 206 P.3d 1042
Relying in part on definitions of “liability” as a “duty to pay money” or “an amount that is owed,” the Supreme Court has construed the word broadly to mean “the duty or legal responsibility to pay money on a tort claim.” Griffin v. TriMet, 318 Or. 500, 508, 870 P.2d 808 (1994). So construed, the Supreme Court held that a $100,000 limitation on liability in former ORS 30.270(1)(b) (1985),4 included attorney fees. Griffin, 318 Or. at 508-09, 870 P.2d 808. As explained below, that statute was amended and later repealed. Ultimately, we conclude that the legislature did not intend for the word “liability” in ORS 30.272 to be understood in the same way as construed in Griffin.
2. Context
**4 Turning from text to context, other provisions in the OTCA suggest that the term “liability” in ORS 30.272 *44 refers to an obligation to pay damages, not attorney fees. Indeed, the OTCA contains only one reference to attorney fees in ORS 30.285. In that provision, which addresses indemnification, ORS 30.285 refers in its title to a public body's “obligation for judgment and attorney fees.” 5 That provision identifies circumstances under which a public body's officers, employees, or agents “shall be indemnified against liability and reasonable costs of defending the claim.”
**3 ORS 30.272(2)(f) provides, in part, that the “liability of a local public body” may not exceed “$666,700, for causes of action arising on or after July 1, 2014, and before July 1,
ORS 30.285(5).6 If the “reasonable costs of defending the claim” include attorney fees, then “liability,” as used in that section of the OTCA, does not. Otherwise, the legislature's reference to the “reasonable costs of defending the claim” would be mere surplusage. See Crystal Communications, Inc.
Bush v. City of Prineville, --- P.3d ---- (2023) 325 Or.App. 37 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 3
1. Text
v. Dept. of Rev., 353 Or. 300, 311, 297 P.3d 1256 (2013) (“As a general rule, we construe a statute in a manner that gives effect, if possible, to all its provisions.”).
By contrast, there are numerous references to damages in the OTCA. For example, ORS 30.265(3) refers to “the damagesallowedunderORS30.271,30.272or30.273.”ORS 30.265(4) addresses “the limitations on damages imposed under ORS 30.271, 30.272 or 30.273.” ORS 30.269(1) explainsthatpunitivedamagesmaynotbeawarded,andORS 30.269(4)providesthat“[t]helimitationsimposedunderORS 30.271(2)and30.272(2)onsingleclaimantsincludedamages claimedforlossofservicesorlossofsupportarisingoutofthe same tort.” ORS 30.298(4)(b) addresses the liability of foster parents and indicates that the liability “is limited to economic damages.”
As already noted, in Griffin, the Supreme Court held that the limitation on liability in former ORS 30.270(1)(b) (1985) included attorney fees. The Supreme Court pointed out that the provision, which stated that the “liability” of a public body could not exceed specified amounts, contained no qualificationindicatingthatthelimitappliedonlytodamages. Griffin, 318 Or. at 508, 870 P.2d 808. The Supreme Court stated *45 that, “[h]ad the legislature intended the limit on ‘liability’ to apply only to liability for tort damages, it could havesaidso.” Id. at508-09,870P.2d808.TheSupremeCourt noted that “[o]ne obvious purpose of the OTCA was to allow public bodies to insure against potential liability for their torts.” Id. at509,870P.2d808.“Ifamountsawardedagainsta publicbodyasattorneyfeesandcosts,ratherthanasdamages, were excluded from the liability limits in the OTCA, the ability of a public body to determine with any certainty its potentialliabilityforitstortswouldbediminished.” Id. at510, 870 P.2d 808. However, the Supreme Court recognized that the statute was amended in 1987, and the amended version expressly referred to damages. Id. at 509 n 7, 514 n 12, 870 P.2d 808
The amended statute, former ORS 30.270(1)(b) (1987), referred to the liability of a public body as consisting of “special and general damages,” and it provided that the total award of special damages could not exceed $100,000.7 The Supreme Court determined that the plaintiff could not take advantage of those amendments because his claim accrued beforetheybecameeffective. Griffin,318Or.at506,870P.2d 808. The court expressed no opinion on the effect of the 1987 amendments. Id. at 514 n 12, 870 P.2d 808.
**5 Based on those amendments, in Anglin v. Dept. of Corrections, 160 Or App 463, 478, 982 P.2d 547, rev. den., 329 Or. 357, 994 P.2d 124 (1999), we concluded that a different analysis applied to former ORS 30.270(1)(b) (1987), which expressly referred to the liability limitation as consisting of general and special damages.8 As we explained in *46 Anglin, 160 Or App at 478, 982 P.2d 547, “[i]n order for defendants to prevail on their argument that attorney fees must be included within the liability limitation of that statute, theywouldneedtodemonstratethateither‘generaldamages,’ or ‘special damages,’ or both, as those terms are used in that statute, include attorney fee awards.” Anglin continued, “There is no basis to conclude from the text, the context, or even the legislative history, that the legislature intended the phrase ‘general and special damages’ to mean ‘general and special damages and attorney fee awards.’ ” Id. at 479, 982 P.2d 547.
Despite Anglin'sholding,ourqueryisnotconcluded.In2009, thelegislaturerepealedORS30.270andreplaceditwithORS 30.272. Or. Laws 2009, ch. 67, §§ 4, 20. The new provision, which addresses the liability limits of local public bodies, no longer refers to general and special damages. Instead, it simply provides that for causes of action accruing from July 2014 to July 2015, the “liability” of a local public body may not exceed $667,700. ORS 30.272(2)(f). Because the statute no longer refers to damages, defendants claim that attorney fees are once again included in the liability limits of the OTCA.
In support of their position, defendants cite Burley v. Clackamas County, 313 Or App 287, 496 P.3d 652, rev. den., 369 Or. 69, 499 P.3d 1281 (2021). In Burley, we affirmed the trial court's reduction of the plaintiff's requested attorney fees to conform to the limitation on liability in ORS 30.272(2)(f) Id. at 288, 496 P.3d 652. However, in that case, the plaintiff didnotdisputethetrialcourt'sdecisiontoincludeherattorney feeswithintheOTCAlimits. Id. at289,496P.3d652.Instead, she argued that the statutory cap did not apply because her whistleblower-retaliation claim did not arise out of a “single accident or occurrence.” Id. We rejected that argument and thereforeaffirmedthetrialcourt'sdecision. Id. But,in Burley, we were not asked to address whether attorney fees should havebeenincludedwithintheliabilitylimitofORS30.272(2) (f) 9
*47 The key question, then, is whether the repeal of former ORS 30.270, and its replacement with ORS 30.272, which no longer refers to damages, indicates that the legislature
Bush v. City of Prineville, --- P.3d ---- (2023) 325 Or.App. 37 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 4
intended to return to Griffin's broad interpretation of “liability.” Ordinarily, we “assume that, when the legislature adopts wording from earlier versions of statutes, it intends to adopt any judicial construction that has been given that wording at the time of enactment.” Haynes v. Adair Homes, Inc., 231 Or App 144, 153, 217 P.3d 1113 (2009), rev. den., 348Or.414,233P.3d817(2010).Butthatassumptionapplies when there is “no evidence that the legislature adopted the same wording from the predecessor statute, but nevertheless intended to imbue that wording with meaning different from what the courts had given it.” Id.
**6 Here, as discussed below, there is evidence regarding why the legislature removed the distinction between economicandnoneconomicdamageswhenitrepealed former ORS 30.270 and replaced it with ORS 30.272. Based on that evidence, we cannot simply assume that the legislature intendedtoreturnto Griffin'sbroadconstructionof“liability” as including attorney fees.
3. Legislative history 10
At the public hearings on Senate Bill (SB) 311 (2009), the bill that led to the enactment of ORS 30.272, former Representative Greg MacPherson explained that the new legislationwasproposedtoaddresstheimpactof *48 Clarke v. OHSU,343Or.581,175P.3d418(2007).AudioRecording, Senate Committee on Judiciary, SB 311, Jan. 22, 2009, at 0:01:23 (comments of former Rep. Greg MacPherson); Audio Recording, House Committee on Judiciary, SB 311 A, Mar. 25, 2009, at 0:02:05 (comments of former Rep. Greg MacPherson), https://olis.oregonlegislature.gov (accessed Dec. 23, 2022).
Clarke held that provisions of the OTCA, as applied to the facts of the case, violated the remedy clause in Article I, section 10, of the Oregon Constitution Clarke, 343 Or. at 610, 175 P.3d 418. The injured plaintiff brought an action against Oregon Health Sciences University (OHSU), and the individuals who treated him. 11 Id. at 586, 175 P.3d 418. He sought economic damages of about $12 million and noneconomic damages of $5 million. Id. The trial court entered judgment against OHSU in the amount of $200,000, the limit on liability at the time. Id. at 587, 175 P.3d 418. The Supreme Court held that that remedy was inadequate. Id. at 610, 175 P.3d 418. Clarke contains no discussion of whether the limitation on liability included or could include attorney fees.
After Clarke, public entities worried that they had “moved into an uncapped environment” for tort liability, and they faced significantly increased costs for insurance. Testimony, Senate Committee on Judiciary, SB 311, Jan. 22, 2009, Ex. 2 (statement of Steve Stadum, OHSU). At the same time, there was a recognition that “the current $200,000 cap—which has been ruled unconstitutional by the Supreme Court—is too low and should be raised.” Id. To address those problems, the leadership of the House and the Senate appointed a task force. Audio Recording, Senate Committee on Judiciary, SB 311, Jan. 22, 2009, at 0:03:52, 0:17:34 (comments of former Rep. Greg MacPherson), https://olis.oregonlegislature.gov (accessed Dec. 23, 2022). It was comprised of members from the House and Senate, as well as representatives from OHSU, the Oregon Trial Lawyers Association (OTLA), and local governments. Id. The task *49 force produced SB 311, which sought to balance the interests of providing an adequate remedy to injured parties while also ensuring that public entities could obtain affordable insurance. Audio Recording, Senate Committee on Judiciary, SB 311, Jan. 22, 2009, at 0:22:50 (statement of Steve Stadum, OHSU), https:// olis.oregonlegislature.gov (accessed Dec. 23, 2022).
**7 SB 311 proposed two tiers of new limits; one set of tort caps for state government and OHSU, and a lower set for local public bodies. Audio Recording, Senate Committee on Judiciary, SB 311 A, Mar. 25, 2009, at 0:06:55 (comments of former Rep. Greg MacPherson), https://olis.oregonlegislature.gov (accessed Dec. 23, 2022); Testimony, Senate Committee on Judiciary, SB 311, Jan. 22, 2009, Ex. 1 (Recommendation of the Oregon Tort Claims Task Force), Ex. 2 (statement of Steve Stadum), Ex. 3 (letter from Bill Blair). Despite extensive negotiations, there was no discussion of including attorney fees within the new limits. Instead, a staff measure summary referred to the new caps as “damage limits.” Staff Measure Summary, Senate Committee on Judiciary, SB 311 A, Feb. 12, 2009. 12 And a fiscal analysis described the bill as increasing the “per claim and per occurrence damage limits.” Fiscal Analysis of Proposed Legislation, Legislative Fiscal Office, SB 311 A, Feb. 12, 2009. Those repeated references to the limitations on liability as “damage limits” are inconsistent with including attorney fees within the statutory caps.
The OTCA task force members and participants operated underasharedassumptionthattheywereproposingincreased limits for damages. For example, Bill Blair, *50 a task force member representing local governments,13 described the limits on liability as consisting of property damage,
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economic damages, and noneconomic damages, but he did notincludeattorneyfeeswithinthelimits.Ex.C,JointInterim OTCA Task Force Hearing, Sept. 25, 2008. Mark Rauch, the general counsel for the City County Insurance Services Trust (CIS),14 described the OTCA's liability limits as a “cap on damages” that had been “crucial to our ability to successfully cover those exposures as a ‘pool’ and obtain affordable reinsurance above the pool's self-insured retention level ($500,000 per occurrence).” Ex. H, Joint Interim OTCA Task Force Hearing, June 19, 2008.
Similarly, representatives of OHSU and the OTLA approached the caps as “damage limitations.” Ex. A, Joint Interim OTCA Task Force Hearing, Sept. 25, 2008. Their memorandum of understanding referred to their new proposed liability limits as “tort claims damage cap[s].” Id. They proposed “no separate sub-limit for non-economic damages. Previously, non-economic damages were capped as a sub-limit of $100,000 within the $200,000 tort cap limit.” Id. Their initial proposal, as reflected in a memorandum of understanding, was to raise the “per claim” limit to $1.5 million for all public bodies, and to raise the “per occurrence” limit to $3 million. Id.
Local governments balked at that proposal and instead proposed a “two-tiered cap structure,” with lower limits for local governments. Ex. C, Joint Interim Task Force Hearing, Sept. 25, 2008. Initially, local governments were reluctant to jettison the sublimit on noneconomic damages. Ex. A, Joint Interim OTCA Task Force, Oct. 30, 2008. As explained by Blair, “[i]t is critically important to the stability and success of local government risk management that ‘blue sky’ damage claims be effectively and separately capped. While a very good public policy case can be made for a cap high enough to assure that the overwhelming majority of injured claimants will be compensated for the economic *51 cost that comes with their injuries, the ‘noneconomic’ element of pain and suffering, is not capable of mathematical computation and subjects the public body defendant to emotionally loaded verdicts.” Ex. C, Joint Interim OTCA Task Force, Sept. 25, 2008.
**8 Ultimately,representativesoflocalgovernmentsagreed that the new legislation did not have to distinguish between economic and noneconomic damages so long as it included a two-tiered structure that involved higher caps for the state and OHSU and lower caps for other local government entities. Ex. A, Joint Interim OTCA Task Force Hearing, Oct. 30, 2008; Ex. A, Joint Interim OTCA Task Force
Hearing,Nov.17,2008.Blairexplainedthat,althoughOHSU could adjust to increased insurance costs by increasing fees for services, most local government entities did not have that flexibility. Ex. D, Joint Interim OTCA Task Force Hearing, Oct. 30, 2008. Blair estimated that increasing local government limits to $1 million would result in a 14 percent increase in insurance costs.15 Id. Blair described the new proposed limits as “[c]ombining and raising economic and non-economic damage caps.” Id. Based on descriptions of that kind, we cannot reasonably infer an intention to return to Griffin's broad construction of “liability” as including both damages and attorney fees.
AtthepublichearingsonSB311,therewasfurtherdiscussion about the proposal to eliminate the distinction between economicandnoneconomicdamages.MacPhersonexplained that the “key driver” in eliminating the distinction was the increase in medical costs and a recognition that those costs are economic damages that can “dwarf any other category of damage.” Audio Recording, Senate Committee on Judiciary, SB 311, Jan. 22, 2009, at 0:16:10 (comments of former Rep. Greg MacPherson), https://olis.oregonlegislature.gov (accessed Dec. 23, 2022). According to *52 MacPherson, the distinction was eliminated to simplify litigation and “up to the $1.5 million and $3 million new caps, a claimant could present their case with either category of damage.” Id. at 0:17:15. MacPherson understood that claimants could pursue damages “up to” the new limits, so it is reasonable to infer that MacPherson did not view the new limitations on liability as applying to attorney fees.
Similarly, for Richard Lane of the OTLA, who was a member of the task force, eliminating the reference to economic and noneconomic damages meant providing a more adequate remedy for injured persons. Audio Recording, House Committee on Judiciary, SB 311 A, Mar. 25, 2009, at 0:24:10 (comments of Richard Lane), https:// olis.oregonlegislature.gov (accessed Dec. 23, 2022). As explained by Lane in a written submission to the task force, “we also feel it is absolutely imperative that we increase the capasawhole,notbreakingintoeconomicandnon-economic losses. When someone is injured by another in a negligent way, we should not be deciding whose life is worth more—a CEOofadowntownPortlandbusiness,achild,astayathome mom, a steelworker, a retired senior citizen. When we limit non economic damages that is exactly what we are doing. We are telling the child, the stay at home mom, the senior that because they have no ‘on paper’ wages, they are not worth as much.” Ex. A, Joint Interim Oregon Tort Claims Act Task
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Force, Sept. 25, 2008. For the OTLA, then, a main concern was to permit injured plaintiffs to recover more noneconomic damages. That reasoning cuts against the assumption that the new limitations on liability were intended to consist of both damages and attorney fees.
At a work session on SB 311, Senator Alan Bates described the new proposed limits as “universal caps” that did not differentiate between economic and noneconomic damages. Audio Recording, Senate Committee on Judiciary, SB 311, Feb. 11, 2009, at 0:19:01 (comments of Sen. Alan Bates), https://olis.oregonlegislature.gov (accessed Dec. 28, 2022). And on the House floor, Representative Jeff Barker referred to SB 311 as increasing “the per claim damage limits recoverable” under the OTCA. Audio Recording, House Floor Debate, SB 311, Apr. 6, 2009, at 0:26:01 (comments of *53 Rep. Jeff Barker), https://olis.oregonlegislature.gov (accessed Dec. 23, 2022). He also referred to increases in the “per occurrence damage limits.” Id. at 0:26:28. Barker noted that the bill provided for direct appeal to the Supreme Court for challenges to the constitutionality of the “damage limits.” Id. at 0:28:17.
**9 Accordingly, what the legislative history reveals about the repeal of former ORS 30.270, and its replacement with ORS 30.272, is that some parties were interested in eliminating the sublimit on economic damages to more adequately compensate injured plaintiffs who required expensive, long-term medical care, while others were interested in eliminating the sublimit on noneconomic damages to more adequately compensate injured parties with less earning potential. But both justifications undermine the assumption that the legislature intended to return to Griffin's interpretation of “liability.” Griffin's interpretation would mean less compensation for injured plaintiffs at a time when stakeholders from both sides recognized the need for new, higher limits.
At the same time, there was also a concern about the increased costs of insurance, and, as a result, there were extensive negotiations about what the new, higher limitations on liability should be, about how they should differ for different kinds of public entities, and about how they could increase over time. Statements made during those discussions indicate that many participants understood the new limits as capsondamages.Thus,althoughthelegislatureusedthesame word “liability” that was construed in Griffin, and although it eliminated the reference to economic and noneconomic damages, we conclude that the legislature “intended to
imbue” the word “liability” with a meaning that differed from theSupremeCourt'searlierconstruction. Haynes,231OrApp at 153, 217 P.3d 1113 16
*54 In Horton v. OHSU, 359 Or. 168, 376 P.3d 998 (2016), the Supreme Court analyzed the legislative history of the 2009 amendments to the OTCA in a manner that supports our construction. According to the Supreme Court:
“The legislature recognized that the increased damages available under the revised Tort Claims Act would not provide a complete recovery to everyone injured as a result of the state's tortious acts. However, those increased limits provide a complete recovery in many cases, greatly expand the state's liability in the most egregious cases, and advance the purposes underlying the doctrine of sovereign immunity while ensuring that a solvent defendant is available to pay a plaintiff's damages up to the amount of the Tort Claims Act limit. Given the legislature's efforts to accommodate the state's constitutionally recognized interest in sovereign immunity and a plaintiff's constitutional right to a remedy, we cannot saythatthe$3,000,000tortclaims limit on damages against state employees is insubstantial in light of the overall statutory scheme, which extends an assurance of benefits to some while limiting benefits to others.”
**10 Horton, 359 Or. at 223-24, 376 P.3d 998 (emphasis added). Horton indicates that a plaintiff can pursue damages up to the limits on liability, and there is no indication that the limits were also intended to encompass attorney fees.
17
See Busch v. McInnis Waste Systems, Inc. 366 Or. 628, 638, 468 P.3d 419 (2020) (“The Oregon Tort Claims Act waives the state's sovereign immunity up to the damages limits.”). It follows that the legislature had a cognizable intent when it changed the language of the statute, and, based on the text, context, and legislative history, we conclude that the legislature did not *55 intend for the limitation on liability in ORS 30.272(2)(f) to include attorney fees.18
4. Additional considerations regarding the OTCA DefendantsarguethatiftheliabilitylimitsintheOTCAdonot includeattorneyfees,then“therearenofixedmonetarylimits of the liability of a city, because the limits will change with every award of attorney fees.” We recognize that the liability limits in the OTCA help public entities control costs. See Burley, 313 Or App at 292, 496 P.3d 652 (“[T]he limitation on liability under the OTCA was enacted to protect the
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financial stability of public bodies and to enable them to obtaininsurance.”).Wealsorecognizethatincludingattorney fees with the limitations on liability creates more uncertainty regarding public entities' potential exposure. Griffin, 318 Or. at 510, 870 P.2d 808. But what spurred the 2009 amendments was a concern to provide an adequate, but not unlimited, remedy for injured plaintiffs, and we cannot ignore the repeatedreferencestotheproposedstatutorycapsas“damage limits.” Furthermore, not every party who prevails on a tort claim against a public entity is entitled to attorney fees. In the instant case, plaintiff is entitled to reasonable attorney fees because he prevailed on fee-bearing claims of discrimination and aiding and abetting discrimination. See Bush I, 301 Or App at 683-84, 457 P.3d 324
Finally, it is worth noting the inherent contradiction between defendants' position and the underlying settlement. The city agreed to pay plaintiff $667,701, “plus reasonable attorney fees, costs and disbursements as determined pursuant to ORCP 68.” That settlement offer was for exactly one dollar over the amount which defendants claim shields them from further exposure, and the offer appears to contemplate a motion for attorney fees that would be considered separately from the settlement. Now defendants argue that plaintiff is not entitled to any attorney fees because the award exceeded a limitation on liability in the OTCA. Plaintiff argues that settling for one dollar over the cap waives the argument that the cap applies in this *56 case, regardless of what we might hold otherwise. Although our holding that the cap does not extend to attorney fees obviates the need to address plaintiff's waiverargument,weagreewithplaintiffthatdefendantshave taken what appears to be an inherently inconsistent position. In the instant case, the trial court's award of damages to plaintiff in an amount exceeding the limitation on liability in ORS 30.272(2)(f) did not preclude him from seeking reasonable attorney fees from the city and LGPI.
B. The Arguments Regarding When Attorney Fees Were Incurred and the Failure to Apportion Attorney Fees Between the City and LGPI
**11 Next, we consider various assignments of error that relate to the trial court's decision to award attorney fees against the city and LGPI jointly and severally from September 3, 2013 to September 10, 2015.
In its third and fourth assignments of error, the city claims that the trial court erred in awarding attorney fees for work performed before plaintiff filed his lawsuit on July 16, 2014, and after judgment was entered against the city on December
2, 2014.19 In its fifth assignment, the city claims that the trial court erred in awarding attorney fees against the city that relatedsolelytoLGPI.Initssecondassignmentoferror,LGPI argues that the trial court erred in awarding fees against LGPI that were not incurred in the prosecution of plaintiff's aiding and abetting claim. And in its third assignment, LGPI argues thatplaintiffshouldnothavebeenawardedattorneyfeesafter judgment was entered against LGPI on August 13, 2015.
“Whether a party is entitled to attorney fees presents a question of law, but whether fees are reasonable is a factual determination that we review for abuse of discretion.” Makarios-Oregon, LLC v. Ross Dress-for-Less, Inc., 293 Or App 732, 739, 430 P.3d 142, adh'd to as modified on *57 recons., 295 Or App 449, 430 P.3d 1125 (2018). “[W]hen a statute authorizes a trial court to award attorney fees to a plaintiff who prevailed in litigation, the court is not limited to awarding only those fees incurred after the plaintiff filed her complaint.” Fadel v. El-Tobgy, 245 Or App 696, 709, 264 P.3d 150 (2011), rev. den., 351 Or. 675, 276 P.3d 1123 (2012).
In the instant case, the trial court awarded attorney fees for work done before the case was filed. The trial court made detailed findings regarding the extensive work performed between September 3, 2013, when the city placed plaintiff on administrative leave, and July 16, 2014, when plaintiff filed his lawsuit. Only three months later, the city made an offer of judgment, which supports plaintiff's claim that the fees incurred before the lawsuit helped to achieve the success that plaintiff enjoyed. See Fadel, 245 Or App at 710, 264 P.3d 150 (plaintiff was entitled to an award of prelitigation fees); see also Bearden v. N.W.E., Inc., 298 Or App 698, 708-09, 448 P.3d 646 (2019) (plaintiff was entitled to an award of attorney fees incurred during an administrative proceeding that preceded the litigation). We find no error in the trial court's award of prelitigation attorney fees.
However, a different analysis applies to the trial court's award of post-judgment attorney fees and its decision not to apportion fees between the parties. Judgment was entered against the city on December 2, 2014. Yet, implicit in the trial court's third supplemental judgment is its determination that both the city and LGPI remained jointly and severally responsible for all attorney fees until September 10, 2015. We recognize that a party may be entitled to reasonable postjudgment fees if they are related to the prosecution of the action. See ORCP 68 A(1) (Attorney fees are “the reasonable value of legal services related to the prosecution or defense of an action.”); see also TriMet v. Aizawa, 277 Or App 504,
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510-11, 371 P3d 1250 (2016), aff'd, 362 Or. 1, 403 P.3d 753 (2017) (collecting cases discussing recovery of fees for work done after entry of judgment). But here, the trial court did not explain why both the city and LGPI should be jointly and severallyresponsibleforplaintiff'sattorneyfeesincurredafter December 2, 2014, when the sole remaining defendant in the case was LGPI.
**12 *58 When there are common issues, apportionment of attorney fees among different claims or parties may not be required. Village at North Pointe Condo. Assn. v. Bloedel Constr., 278 Or App 354, 369-71, 374 P.3d 978, adh'd to on recons., 281 Or App 322, 383 P.3d 409 (2016). Here, plaintiff sued the city for discrimination against a uniformed service member, ORS 659A.082, and he sued LGPI for aiding and abetting the city's discrimination, ORS 659A.030(1)(g). The trial court indicated that, to prevail on his aiding and abetting claim against LGPI, plaintiff was required to prove the city's underlying discrimination. Based on that determination, we cannot say that there was an abuse of discretion in the trial court's decision to award attorney fees against the city and LGPI jointly and severally up to December 2, 2014. See Village at North Pointe Condo. Assn., 278 Or App at 369, 374 P.3d 978 (apportionment decisions reviewed for abuse of discretion).
But, after December 2, 2014, LGPI was the sole remaining defendant. Yet the trial court's third supplemental judgment holds the city responsible for attorney fees that plaintiff continued to incur until September 10, 2015. The trial court provided no explanation for why both parties were jointly and severally responsible for those fees. For that reason, we reverse the third supplemental judgment and remand for the trial court to apportion fees between the city and LGPI from December 3, 2014 to September 10, 2015. In addition, plaintiff must explain the reasonableness of the fees he incurred during that time. See ORS 659A.885(1) (“the court may allow the prevailing party costs and reasonable attorney fees”); ORCP 68 A(1) (defining attorney fees as “the reasonable value of legal services”); ORS 20.075 (the factors courts shall consider include the objective reasonableness of the parties during the proceedings and in pursuing settlement of the dispute). The trial court's findings “need not be lengthy or complex, but they must describe the relevant facts and legal criteria underlying the court's decision in terms that are sufficiently clear to permit meaningful appellate review.”
Makarios-Oregon, 293 Or App at 741, 430 P.3d 142
In its first assignment of error, the city argues that the trial court'sfindingonremandofaglobalsettlement *59 contract was contrary to the law of the case. But there is no indication that the city made that argument below. We conclude that the argument was not preserved, and we decline to address it. See Willamette Oaks, LLC v. City of Eugene, 295 Or App 757, 767-68, 437 P.3d 314, rev. den., 365 Or. 192, 443 P.3d 1156 (2019) (concluding that the appellant's assignment of error was unpreserved because the argument based on the law of the case doctrine was not made in the lower tribunal).
In the city's sixth assignment of error, and in LGPI's fourth assignment, they raise challenges to the amount of attorney fees awarded. Whether fees are reasonable is a factual determination that we review for abuse of discretion. Makarios-Oregon, 293 Or App at 739, 430 P.3d 142. Here, the trial court observed that the case was complicated. For example, the trial court found that there was “a mountain of information at issue. * * * LGPI's investigation of [p]laintiff covered a six-year period, and took more than 300 days to complete. The LGPI investigator interviewed plaintiff for four days. The transcript of that interview is 541 pages long. There were tens of thousands of pages of potentially relevant information.” Findings of that nature support the trial court's determination that most of the attorney fees plaintiff incurred were reasonable.
In challenging those findings, the city objects to work performedbyaparalegal,andthecitycomplainsaboutblockbilling and vague time entries. However, the city provides no specific examples. Based on its failure to do so, we cannot conclude that the trial court abused its discretion. See Quick Collect, Inc. v. Higgins, 258 Or App 234, 243, 308 P.3d 1089 (2013)(findingnoabuseofdiscretionintheamountofthefee award because the appellant's objections lacked specificity).
**13 Regarding work that it claims was duplicative, the city provides examples, which relate to tasks performed by an attorney with the assistance of a paralegal. But it is not unusual for a paralegal to assist an attorney, especially in a complicated case. Having reviewed the examples of alleged duplicative billing, we find no abuse of discretion in the trial court's award. Finally, LGPI provides examples of time entries from March to September 2015 that it claims were *60 vague and excessive. Because we reverse and remand for the trial court to apportion fees between the city and LGPI after December 2, 2014, and to assess the reasonableness of the fees sought after that date, the trial court will be in a better position to address that argument on remand.
C. The Remaining Arguments
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We reiterate that we find no error or abuse of discretion in the trial court's decision to award fees against the city and LGPI, jointly and severally, from September 3, 2013 to December 2, 2014. For that period of time, the trial court may simply enter an award of attorney fees against the city and LGPI, jointly and severally, that is consistent with this opinion and with the trial court's prior findings. However, from December 3, 2014 to September 10, 2015, the trial court must apportion fees between the city and LGPI and explain how it assessed whether the fees sought were reasonable. We reverse and remand the third supplemental judgment for the trial court to make the appropriate findings.
Reversed and remanded.
MOONEY, J., dissenting.
The Oregon Tort Claims Act (OTCA) “waives the state's sovereign immunity,” but only to the extent waived by the “express terms” of the OTCA. Sherman v. Dept. of Human Services, 368 Or. 403, 418, 492 P.3d 31 (2021) The OTCA carefully balances the purposes underlying the state's constitutionally recognized interest in sovereign immunity embodied in Article IV, section 24, of the OregonConstitution,withaninjuredperson'sconstitutionally recognized right to a remedy by due course of law embodied in Article I, section 10, of the Oregon Constitution. As the majority acknowledges, the legislature amended the specific OTCA language at issue in this case at least once in response to appellate court opinions. That suggests that our tripartite system of government, with its built-in checks and balances, is working—not only to prevent the misuse of power, but also to encourage the branches of government to work together for the good of the people. The legislature, in its policy and law-making role, struck a balance between the competing constitutional interests of immunity and remedy. In striking and re-striking that balance, the legislature has shown that it is aware of Oregon's appellate court opinions and that *61 it will modify state law in response to those opinions when it deems it necessary to do so. The majority assumes a legislative role today by modifying ORS 30.272(2)(f) to waive the state's immunity to liability for attorney fees. In doing so, the majority crosses a line that I am not willing to go over.
Iwoulddecidethiscasebyapplying Griffin v. TriMet,318Or. 500, 870 P.2d 808 (1994), to the OTCA language in question because the current language is, in all material respects, the
same as the language that was before the Supreme Court in Griffin. The statutory language at issue in Griffin was the pre-1989 version of ORS 30.270(1), that is, as relevant:
“Liability of any public body *** shall not exceed:
“* * * * *
“(b) $100,000 to any claimant for all other claims ***.”
The court in Griffin held that the $100,000 liability limit of the pre-1989 OTCA provision applied to attorney fees and costs awarded against a public body. 318 Or. at 503, 870 P.2d 808. The Griffin court acknowledged that ORS 30.270(1)(b) had since been amended, but it applied the version that was in effectatthetimethecauseofactionarose. Id. at504,870P.2d 808. It mentioned in a footnote that the then-current (1989) version of ORS 30.270(1)(b), which did not apply to the case before it, was different insofar as it added the words “general and special damages,” as follows:
**14 “Liability of any public body *** shall not exceed:
“(b) $100,000 to any claimant as general and special damages for all other claim ***.”
Id. at 509 n 7, 870 P.2d 808 (quoting ORS 30.270(1)(b) (1989); emphasis omitted; formatting altered). A few years later, we relied on Griffin, and in particular footnote 7 in Griffin, to conclude that “[t]he OTCA damages limitation of ORS 30.270 (1)(b) explicitly applies to ‘general and special damages,’ ” and we found no basis to conclude that the legislature intended that phrase to include attorney fees. Anglin v. Dept. of Corrections,160OrApp463,479,982P.2d 547, rev. den., 329 Or. 357, 994 P.2d 124 (1999).
*62 In 2009, the legislature repealed ORS 30.270 and replaced it with ORS 30.272. Or. Laws 2009, ch. 67, §§ 1, 4. The parallel provision then provided:
“(2) [L]iability of a local public body *** may not exceed:
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“*
*
* * *
“(f) $666,700, for causes of action arising on or after [certain dates].”
Thelanguagethatcausedthiscourttodistinguish Anglin from Griffin was no longer part of the statute. The legislature has not modified that language since 2009. Because the language is the same in all essential respects now as it was in the prior version of the statute applied in Griffin, we should follow the Supreme Court's holding in Griffin. I do not share the majority's reluctance to assume that “when the legislature adopts wording from earlier versions of statutes, it intends to adopt any judicial construction that has been given that wording at the time of enactment.” Haynes v. Adair Homes, Inc., 231 Or App 144, 153, 217 P.3d 1113 (2009), rev. den., 348Or.414,233P.3d817(2010).Onecannotread Griffin and Anglin without clearly understanding that the words “general and special damages” changed the meaning of former ORS 30.270(1)(b), later reenacted as ORS 30.272(2)(f). Without those words, the OTCA's limit on liability includes attorney fees. With those words, it does not.
We recently affirmed a trial court's reduction of attorney fees to comply with the liability limit of ORS 30.272(2) (f) in Burley v. Clackamas County, 313 Or App 287, 496 P.3d 652, rev. den., 369 Or. 69, 499 P.3d 1281 (2021). The majority discounts the importance of Burley to the issue before us because the parties there did not question the propriety of including attorney fees within the OTCA limit of ORS 30.272(2)(f). I agree that the issue was not raised in Burley.Atthesametime,whenweconstrueastatute,wehave a responsibility to do so correctly “whether or not asserted by theparties.” Stull v. Hoke,326Or.72,77,948P.2d722(1997) I would add that it is inconsistent for the majority to discount Burley but to then rely on Horton v. OHSU, 359 Or. 168, 376 P.3d 998 (2016), to support its position that attorney *63 fees are not included in the liability limit of ORS 30.272(2)(f) when that issue was also not raised or addressed in Horton.
It was not necessary for the majority to engage in its legislativehistoryexercise.TheSupremeCourtaddressedthe exact same issue as is before us now in Griffin and stated that the “statute does not refer to ‘damages’ at all. Had the legislature intended the limit on ‘liability’ to apply only to liability for tort damages, it could have said so.” Griffin, 318 Or.at508-09,870P.2d808.Infact,thelegislaturedidsowhen it amended the statute to add “general and special damages” in 1989. When it again amended the statute to remove that same phrase, we must assume it did so fully cognizant of Griffin and Anglin See Haynes, 231 Or App at 153-54, 217 P.3d 1113 (explaining that “we ordinarily assume that, when the legislature adopts wording from earlier versions of statutes, it intends to adopt any judicial construction that has been given that wording at the time of enactment”). The majority improperly attributes significance to the absence of any mention of “including attorney fees within the new limits” in the legislative history that it culled. 325 Or App at 49, ––– P.3d at ––––. But the “absence of legislative history on the subject of attorney fee awards tells us nothing.” Anglin, 160 Or App at 479, 982 P.2d 547. But if there is anything to be gleaned from the legislative history as to the legislative intention in amending the statute in 2009, it is the concern that cities not be exposed to unlimited potential liability. Testimony, Senate Committee on Judiciary, SB 311, Jan. 22, 2009, Ex. 2 (statement of Steve Stadum, OHSU) (expressing concern that, after Clarke v. OHSU, 343 Or. 581, 175 P.3d 418 (2007), public entities worried that they had “moved into an uncapped environment” for tort liability, and they faced significantly increased costs for insurance). The majority opinion runs contrary to that intention.
**15 I dissent from the majority opinion because it is, for the reasons I have stated, inconsistent with current statutory language and existing judicial construction of that language. I would hold that the limitation on “liability” contained within ORS 30.272(2)(f) includes the attorney fees awarded to plaintiff in this case. All
Footnotes
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Citations
P.3d ----, 325 Or.App. 37, 2023 WL
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2671693
1 ORS 30.272 was added to the OTCA in 2009. Or. Laws 2009, ch. 67, § 4. The statute was amended in 2019 in a way that is not material to our analysis. Or. Laws 2019, ch. 12, § 2. For that reason, we will refer to the current version of the statute.
2 The third supplemental judgment does not address plaintiff's supplemental requests for attorney fees. Those requests are not mentioned in the trial court's findings of fact and conclusions of law, or in its third supplemental judgment. We express no opinion regarding plaintiff's requests, if any, for attorney fees incurred after September 10, 2015.
3 In its entirety, ORS 30.272(2) provides:
“Theliabilityofalocalpublicbody,andtheliabilityofthepublicbody'sofficers,employeesandagentsacting within the scope of their employment or duties, to any single claimant for claims described in subsection (1) of this section may not exceed:
“(a) $500,000, for causes of action arising on or after July 1, 2009, and before July 1, 2010.
“(b) $533,300, for causes of action arising on or after July 1, 2010, and before July 1, 2011.
“(c) $566,700, for causes of action arising on or after July 1, 2011, and before July 1, 2012.
“(d) $600,000, for causes of action arising on or after July 1, 2012, and before July 1, 2013.
“(e) $633,300, for causes of action arising on or after July 1, 2013, and before July 1, 2014.
“(f) $666,700, for causes of action arising on or after July 1, 2014, and before July 1, 2015.
“(g) The adjusted limitation provided by subsection (4) of this section, for causes of action arising on or after July 1, 2015.”
4 Former ORS 30.270(1) (1985) was amended in 1987. Or. Laws 1987, ch. 19, § 13. The statute was repealed by Oregon Laws 2009, chapter 67, section 20. The 1985 version of the statute provided, in part:
“Liability of any public body or its officers, employes or agents acting within the scope of their employment or duties on claims *** shall not exceed:
“(a) $50,000 to any claimant for any number of claims for damage to or destruction of property, including consequential damages, arising out of a single accident or occurrence.
“(b) $100,000 to any claimant for all other claims arising out of a single accident or occurrence.
“(c) $300,000 for any number of claims arising out of a single accident or occurrence.”
“Employes” is an alternative spelling for “employees.” Webster's Third New Int'l Dictionary 743 (unabridged ed. 2002). “Employe” was once the common spelling of the word. Byran A. Garner, Garner's Dictionary of Legal Usage, 314 (3d ed. 2011).
5 Of course, captions and headings are provided by Legislative Counsel and they are not part of the statute as enacted by the legislature. ORS 174.540; Church v. Grant County, 187 Or App 518, 526 n 4, 69 P.3d 759 (2003)
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6 ORS 30.285 was last amended in 2009. Or. Laws 2009, ch. 67, § 11. That set of amendments are the same ones that added ORS 30.272. Or. Laws 2009, ch. 67, § 4.
7 Former ORS 30.270(1)(b) (1987) provided, in part:
“(1) Liability of any public body or its officers, employees or agents acting within the scope of their employment or duties on claims *** shall not exceed:
“(b) $100,000 to any claimant as general and special damages for all other claims arising out of a single accident or occurrence unless those damages exceed $100,000, in which case the claimant may recover additional special damages, but in no event shall the total award of special damages exceed $100,000.”
8 Today, we use the terms “economic” and “noneconomic” damages rather than special and general damages
See Clarke v. OHSU, 343 Or. 581, 608 n 17, 175 P.3d 418 (2007) (“General damages, as noted above, now are described as noneconomic damages and encompass nonmonetary losses, including damages for pain and suffering, emotional distress, injury to reputation, and loss of companionship. *** Special damages now are described as economic damages and refer to the verifiable out-of-pocket losses, including medical expenses, loss of income and future impairment of earning capacity, and costs to repair damaged property.”).
9 The dissent suggests that we “discount[ ] the importance of Burley to the issue before us.” 325 Or App at 62, ––– P.3d at –––– (Mooney, J., dissenting). But Burley is distinguishable because it does not address whether the limitation on liability in ORS 30.272(2)(f) includes attorney fees. Our opinion thus does not affect Burley's precedential mooring.
10 The dissent considers it unnecessary to analyze the statute's legislative history. 325 Or App at 63, ––– P.3d at –––– (Mooney, J., dissenting). However, “a party is free to proffer legislative history to the court, and the court will consult it after examining text and context, even if the court does not perceive an ambiguity in the statute's text, where that legislative history appears useful to the court's analysis.” Gaines, 346 Or. at 172, 206 P.3d 1042. Here, plaintiff proffered the statute's legislative history, and, because we are attempting to discern what the legislature intended when it used the word “liability” in ORS 30.272(2), and whether it intended to return to Griffin's broad interpretation of the word or adhere to Anglin's narrower interpretation, we consider ourselves obliged to examine why the legislature repealed former ORS 30.270 and replaced it with ORS 30.272(2), which no longer distinguishes between economic and noneconomic damages. Even if the same word “liability” is used, Haynes endorses an examination of why the legislature chose to use the word and what it intended. 231 Or App at 153, 217 P.3d 1113
11 The plaintiff was born in February 1998, and he was admitted to OHSU for heart surgery in May 1998. Clarke, 343Or.at586,175P.3d418.Whileinasurgicalintensivecareunit,hesufferedprolongedoxygendeprivation causing permanent brain damage. Id. OHSU's name changed from Oregon Health Sciences University to Oregon Health & Science University in 2001.
12 As explained in the summary, the measure “[i]ncreases the per claim damage limits recoverable under the *** [OTCA] from the current $200,000 to $1.5 million for the state of Oregon and *** [OHSU], and to $500,000 for all other public entities. Increases the per occurrence damage limits under the *** [OTCA] from the current $500,000 to $3 million for the state of Oregon and OHSU, and to $1 million for all other public entities. Increases the state of Oregon and OHSU per claim limits by $100,000 per year until 2015. Increases the state of Oregon and OHSU per occurrence limits by $200,000 per year until 2015. Increases the per claim limits for all other government entities by $33,333 per year until 2015. Increases the per occurrence limits for all other government entities by $66,666 per year until 2015. Increases all property damage limits from the current $50,000 per claim to $100,000 per claim and $500,000 per occurrence.” Staff Measure Summary,
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Senate Committee on Judiciary, SB 311 A, Feb. 12, 2009. That detailed summary of the new “damage limits,” and their gradual increase over time, contains no reference to attorney fees.
13 Bill Blair was a Senior Assistant County Counsel for Washington County. Testimony, Senate Committee on Judiciary, SB 311, Jan. 22, 2009, Ex. 3.
14 CIS was formed in 1981 “as a trust to ‘pool’ the liability exposures of cities, counties, and related public entities in Oregon.” Ex. H, Joint Interim OTCA Task Force Hearing, June 19, 2008.
15 Based on information provided by CIS, Blair noted that over 20,000 “general liability claims have been filed againstCISmemberssince1981.Only106claims(0.5%)haveexceeded$100,000incost.Those106claims account for 32% of the $74.8 million paid out for general liability claims by the Trust over the 26 years of its existence.” Ex. D, Joint Interim OTCA Task Force Hearing, Oct. 30, 2008. Nevertheless, Blair also noted that “[t]he impact of Clarke was felt in a 25% increase in reinsurance premium[s] billed to CIS in 2008-09.” Id.
16 In Haynes, 231 Or App at 153, 217 P.3d 1113, the court considered language that “was carried over into the new statute unchanged.” When that occurs, it makes sense to assume that the legislature intended to adopt prior judicial constructions of the language. But here, the legislature did not simply carry over unchanged language. Although the same word “liability” is used in former ORS 30.270 (1985), in former ORS 30.270 (1987), and in ORS 30.272, it is a much greater logical leap to assume that by repealing former ORS 30.270 (1987), which referred to “liability” as consisting of general and special damages, and by replacing it with ORS 30.272, which eliminated the reference to those categories of damages, the legislature intended to return to Griffin's construction of “liability” as used in former ORS 30.270 (1985). Given the repeated references in the legislative history of the 2009 amendments to the new statutory caps as “damage limits,” we cannot assume that the legislature intended to return to Griffin's broad construction of “liability” as including attorney fees.
17 As the dissent correctly points out, in Horton, the Supreme Court did not address the issue of whether attorney fees are included in the liability limit of ORS 30.272(2)(f). 325 Or App at 62-63, ––– P.3d at –––– (Mooney, J., dissenting). But if, as the Supreme Court states, a plaintiff can pursue “damages up to the amount of the Tort Claims Act limit,” Horton, 359 Or. at 224, 376 P.3d 998, then that does not suggest including attorney fees within the limit.
18 Because our examination of text, context, and legislative history resolves the question, we do not resort to maxims of statutory construction. Gaines, 346 Or. at 172, 206 P.3d 1042
19 The city also suggests that attorney fees should not have been awarded against it after October 8, 2014, when it made its offer of judgment, but the record shows that the parties incurred fees after that date relating to negotiating the form of the judgment. Indeed, a stipulated general judgment was entered on November 24, 2014, and the amended stipulated limited judgment was not entered until December 2, 2014.
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of Document © 2023 Thomson Reuters. No claim to original U.S. Government Works.
326 Or.App. 132 Court of Appeals of Oregon.
In the MATTER OF the COMPENSATION OF Karista D. PEABODY, Claimant. Karista D. Peabody, Petitioner, v.
SAIF Corporation and OHSU - Oregon Health & Science University, Respondents.
A176055 |
Argued and submitted December 22, 2022. | May 24, 2023
Workers’ Compensation Board, 1602309
Attorneys and Law Firms
JuleneM.Quinn,Albany,arguedthecauseandfiledthebriefs for petitioner.
Daniel Walker argued the cause and filed the brief for respondents.
BeforeShorr,PresidingJudge,andLagesen,ChiefJudge,and Mooney, Judge.
Opinion
LAGESEN, C. J.
*133 Before the Workers’ Compensation Board (board), claimant prevailed against SAIF's denial of her claim for compensation. The board awarded attorney fees under ORS 656.386(1) for prevailing against the denial, but claimant contested the reasonableness of the amount of the award on reconsideration before the board, before this court, and then on remand, a process that ultimately resulted in a higher award of fees. The question before us is whether, after a claimant has prevailed over a denial at the board level, ORS 656.386(1) authorizes an award of attorney fees to a workers’ compensation claimant's counsel for subsequent work performed litigating the reasonableness of an attorney fee award on reconsideration before the board, before our court, and on remand. On that point, we agree with claimant that, under the Supreme Court's decision in Shearer's Foods v. Hoffnagle, 363 Or. 147, 156, 420 P.3d 625 (2018), she is entitled to a reasonable fee award for fees incurred in
determining the proper fee award for prevailing against the denial at the board level, and that the board erred in concluding otherwise. We therefore reverse and remand.
The facts are procedural and not disputed. SAIF denied claimant'soccupationaldiseaseclaimforarightcubitaltunnel syndrome condition. Claimant challenged that denial at a hearing before an administrative law judge (ALJ) and again on review before the board, after failing to prevail at the hearing. In her briefing to the board, claimant requested $31,000inattorneyfees,shouldsheprevailagainstthedenial. The board found in favor of claimant and reversed the ALJ's decision upholding SAIF's denial. The board further found that $12,500 was a reasonable attorney fee for claimant's counsel's services at the hearing and the board review. Claimantsoughtreconsideration,contendingthatthe$12,500 attorney-fee award was not reasonable. The board adhered to its decision.
Claimant petitioned for judicial review, challenging the board'sdecisiontoaward$12,500inattorneyfees,ratherthan the $31,000 claimant had requested. Peabody v. SAIF, 297 Or App 704, 705, 441 P.3d 258 (2019). We concluded that the board's attorney-fee order was not adequately explained *134 and, therefore, was not supported by substantial reason. Id. at 705-06, 441 P.3d 258. Accordingly, we reversed and remanded for reconsideration. Id
On remand, the board reconsidered its prior attorney-fee decision. In so doing, it applied amended criteria for fee awards that it had adopted following its initial attorney-fee decision in this case. Having considered the case under those criteria,itdeterminedthat$21,280wasareasonablefeeaward forclaimant'scounsel'sservicesatthehearinglevelandboard review.
Claimant then sought reconsideration of that order, asserting that she was entitled to additional attorney fees for counsel's serviceslitigatingattorneyfees,thatis,thefees(1)onseeking reconsideration of the board's initial attorney-fee award; (2) on the initial judicial-review proceeding before us; and (3) on remand before the board. The board issued a second order on remand, rejecting claimant's request. Adhering to board precedent, the board concluded that “we do not find an ORS 656.386(1) attorney fee to be awardable where the sole issue presented was the amount of a reasonable attorney fee award.” The board rejected claimant's argument that the Supreme Court's decision in Shearer's Foods displaced its prior precedent and required a different outcome. In
Matter of Compensation of Peabody, --- P.3d ---- (2023) 326 Or.App. 132 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 1
particular, although the board recognized that in Shearer's Foods the Supreme Court concluded that ORS 656.386(1) authorizes a prevailing claimant to recover fees incurred in litigating the correct amount of fees, it declined to extend that reasoning to the circumstances present here. The board explained that it did not view ORS 656.386(1) to allow for an award of fees incurred in litigating the reasonableness of a fee award subsequent to an initial award, where the only issue is the proper amount of the fee award, because, during suchsubsequentstagesoflitigation,aclaimantdoesnotagain prevail against a denial.
**2 Claimant has again petitioned us for judicial review. On review, she asserts that the board's take on Shearer's Foods cannot be squared with the Supreme Court's decision. Claimant points out that, in concluding that the claimant in Shearer's Foods was entitled to recover fees for litigating the proper amount of a fee award under ORS 656.386(1), the *135 court relied on TriMet v. Aizawa, 362 Or. 1, 3, 403 P.3d 753 (2017), citing it for what is the general rule in Oregon: “ ‘[A] party entitled to recover attorney fees incurred in litigating the merits of a fee-generating claim also may receive attorney fees incurred in determining the amount of the resulting fee award.’ ” Shearer's Foods, 363 Or. at 156, 420 P.3d 625. Under Aizawa, that principle applies where the source of entitlement to fees is statutory, unless the statutory provision authorizing fees demonstrates that “the legislature intended to depart from that accepted practice.” Aizawa, 362 Or.at3,403P.3d753.LookingtothetextofORS656.386(1), claimant asserts that nothing in it suggests that the legislature intendedtodisplacethegeneralruleinOregonthatalitigantis entitledtoreasonablefeesincurredindeterminingtheamount of the fee award.
Weagreewithclaimant'sreadingof Aizawa, Shearer's Foods, and ORS 656.386(1). Specifically, in light of Aizawa, and the Supreme Court's application of Aizawa in Shearer's Foods, we conclude that when the board is authorized to award attorney fees under ORS 656.386(1) to a claimant who “[in] such cases involving denied claims * * * prevails finally * * * in a review by the Workers’ Compensation Board,” the board must also award the claimant reasonable fees incurred in determining the amount of fees to which the claimant is entitled for prevailing over the denied claim.
ORS 656.386 provides, in relevant part:
“In all cases involving denied claims where a claimant finally prevails against the denial in an appeal to the Court of Appeals or petition for review to the Supreme Court,
the court shall allow a reasonable attorney fee to the claimant's attorney. In such cases involving denied claims where the claimant prevails finally in a hearing before an Administrative Law Judge or in a review by the Workers’ Compensation Board, then the Administrative Law Judge orboardshallallowareasonableattorneyfee.Insuchcases involving denied claims where an attorney is instrumental in obtaining a rescission of the denial prior to a decision bytheAdministrativeLawJudge,areasonableattorneyfee shall be allowed.”
ORS656.386(1)(a).Inthiscase,itisundisputedthatclaimant finally prevailed against SAIF's denial on board review, and that claimant is entitled to her attorney fees under the *136 second sentence of (1)(a); the question is whether and to what extent those fees include the fees incurred in litigating the amount of the attorney fee award, in addition to those fees incurred in prevailing against the denial. That question, we conclude, is answered by Aizawa and Shearer's Foods
We start with Aizawa. In that case, the Supreme Court held that “[o]rdinarily, a party entitled to recover attorney fees incurred in litigating the merits of a fee-generating claim also may receive attorney fees incurred in determining the amount of the resulting fee award.” Aizawa, 362 Or. at 3, 403 P.3d 753. That “normal rule[ ]” applies, absent an indication in the statute that “the legislature intended to depart from that accepted practice[.]” Id. at 3, 14, 403 P.3d 753. Accordingly, under Aizawa, claimant is entitled to recover reasonable fees incurred in litigating the amount of fees to which she is entitled for prevailing against SAIF's denial before the board, unless the legislature has signaled otherwise.
We turn to Shearer's Foods. That case, on its face, would appear to confirm that the legislature has not, in the words of Aizawa, “intended to depart from [the] accepted practice” of allowing the recovery of reasonable fees incurred in litigating the amount of an attorney fee award. There, the issue was whether the claimant had “finally” prevailed against a denial on a “petition for review to the Supreme Court,” within the meaning of the first sentence of ORS 656.386(1), when the Supreme Court denied the insurer's petition for review. Shearer's Foods, 363 Or. at 148-49, 420 P.3d 625. The court concluded that the answer was yes, allowing the claimant to recover attorney fees in connection with the petition for review. Id. at 154-55, 420 P.3d 625. Citing Aizawa, the court also concluded that “it is reasonable to compensate counsel for an additional 2.5 hours of time spent litigating the fee award,giventheextenttowhichclaimant'swrittenarguments
Matter of Compensation of Peabody, --- P.3d ---- (2023) 326 Or.App. 132 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 2
assisted the court in determining the fee award.” Id. at 156, 420 P.3d 625
**3 Taken together, Aizawa and Shearer's Foods stand for the proposition that claimant is entitled to reasonable fees incurred in litigating the amount of the fee award to which she is entitled for prevailing against SAIF's denial before the board. It is undisputed that this is a case involving a denied claim and that claimant “prevail[ed] finally *137 *** in a review by the Workers’ Compensation Board.” ORS 656.386(1). That means that claimant is entitled to a reasonable fee award:
“In such cases involving denied claims where the claimant prevails finally in a hearing before an Administrative Law Judge or in a review by the Workers’ Compensation Board, then the Administrative Law Judge or board shall allow a reasonable attorney fee.”
ORS 656.386(1)(a). That fee award, under the reasoning of Aizawa and Shearer's Foods, should include the reasonable fees incurred in litigating the amount of the fee award to which claimant is entitled for finally prevailing against the denial. There is no indication in the text and context of ORS 656.386(1) that the legislature intended to depart from the general Oregon practice of allowing fees for litigating the amount of a fee award, and Shearer's Foods affirmatively applied the principle in the context of an ORS 656.386(1) fee award.
SAIF nevertheless urges us to conclude otherwise.
Initially, SAIF argues that ORS 656.36(1) “as relevant to this case, only authorizes a fee for services related to prevailing overa‘deniedclaim.’”Thatargumentcannotbesquaredwith Aizawa and Shearer's Foods, which stand for the proposition that a statute authorizing a fee award necessarily authorizes an award of reasonable fees incurred in determining the amount of a fee award, absent a contrary indication from the legislature. There is no contrary indication here.
SAIF also argues that “the board correctly concluded that ORS 656.386(1) does not provide a statutory basis for an attorney fee award for services on appeal solely in pursuit of an increased fee award.” SAIF is correct that the plain terms of the first sentence of ORS 656.386(1)(a), which governs fee awards for claimants who finally prevail in either this court or the Supreme Court, do not authorize an award of fees from this court for prevailing on an appeal in which only attorney fees are at issue. Thus, for example, claimant would
nothavebeenentitledtoanattorneyfeeawardfromthiscourt under the first sentence of *138 ORS 656.386(1)(a) in her first appeal because she did not finally prevail against the denial in this court. See ORS 656.386(1) (a) (“In all cases involving denied claims where a claimant finally prevails against the denial in an appeal to the Court of Appeals or petitionforreviewtotheSupremeCourt,thecourtshallallow a reasonable attorney fee to the claimant's attorney.”).
But that is not the question in this case. In this case, the second sentence of ORS 656.386(1) is the source of authority for claimant's fee award because claimant finally prevailed before the board. That sentence undisputedly authorizes an award of fees to claimant for finally prevailing against SAIF's denial on board review. At issue is the scope of the board's authority to award claimant fees incurred in litigating the amount of fees, not this court's authority to award fees to a party who prevails before us in a judicial-review proceeding in which the only issue is the amount of an attorney fee award. Under the reasoning of Aizawa and Shearer's Foods, the board's authority under ORS 656.386(1)(a) extends to awarding reasonable fees incurred in determining the amount of the fee award to which claimant is entitled for prevailing againstSAIF'sdenialbeforetheboard.Totheextenttheboard determines that the fees incurred by claimant in litigating the final amount of the fee award, including fees incurred litigating before our court, were ones that were reasonably incurred,ithastheauthoritytoawardthemand,undertherule in Aizawa, must award them.
**4 Finally, SAIF argues that fees for litigating over fees may be awarded only where entitlement to fees is at issue, not where, as here, entitlement is not at issue and only the amount is disputed. Along the same lines, SAIF argues that fees may only be awarded for work preparing the initial fee petition, and not for subsequent work litigating the amount of fees. See Friends of Columbia Gorge v. Energy Fac. Siting Coun., 367 Or. 258, 269, 477 P.3d 1191 (2020) (citing Aizawa for the proposition that parties were entitled to attorney fees for the time spent “preparing their fee petition”).
We acknowledge that the parameters of Oregon's rule allowing for an award of attorney fees incurred in *139 determining the amount of an attorney fee award are not well defined. The rule is largely the product of case law, not statute. The clearest articulation of it is Aizawa’s formulation: “[o]rdinarily,apartyentitledtorecoverattorneyfeesincurred in litigating the merits of a fee-generating claim also may receive attorney fees incurred in determining the amount of
Matter of Compensation of Peabody, --- P.3d ---- (2023) 326 Or.App. 132 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 3
the resulting fee award.” Aizawa, 362 Or. at 3, 403 P.3d 753. That formulation, which we view as controlling, does not suggest the limits that SAIF asks us to impose. Instead, it broadly contemplates that a reasonable fee award will include any fees reasonably incurred in the process of setting the amount of the award. Under that broad formulation, the board was authorized to award, and claimant was entitled to receive, reasonable fees incurred in determining the amount of the fee award to which claimant was entitled for prevailing against SAIF's denial of her claim on board review. Those feesnecessarilyincludeamountsreasonablyincurredafterthe board determined on review that claimant prevailed against the denial, including amounts that the board determines were reasonably incurred litigating in this court.
In sum, in view of Aizawa and Shearer's Foods, we conclude that the board erred when it determined that it was not
authorized to award claimant the fees that she incurred litigating over the amount of the fee award following the board's initial award. Further, under those cases, to the extent the board determines that the fees incurred by claimant in litigating the final amount of the fee award, including fees incurredlitigatingbeforeourcourt,werereasonablyincurred, it has the authority to award them and, under the rule in Aizawa, must award them. In view of that error, we reverse and remand.
Reversed and remanded.
All Citations --- P.3d ----, 326 Or.App. 132, 2023 WL 3606553 End
Matter of Compensation of Peabody, --- P.3d ---- (2023) 326 Or.App. 132 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 4
of Document © 2023 Thomson Reuters. No claim to original U.S. Government Works.
Motions on the Pleadings
PRESENTED BY:
Judge Benjamin Souede, Multnomah County Circuit Court
June 17, 2023
10:45am – 11:45am
2023 OADC ANNUAL CONVENTION CONTINUING LEGAL EDUCATION GUIDEBOOK OADC Oregon Association of Defense Counsel
Jeanne Loftis Martha Hodgkinson
Stephen Bushong
Matthew J . Kalmanson
by Edward Burkley & Darshon Anderson
Tom Spiegler
