Litigation Practice Group Case Law Round-Up

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1 May 1, June 17, 2008 Litigation Practice Group Case Law Round-Up Compiled by Andrew T. Reilly Andrew T. Reilly is a senior associate at Black Helterline LLP. Mr. Reilly focuses his practice on litigation and dispute resolution, with a special and increasing emphasis on trust and estate litigation and commercial and business clients. Contacts: Andrew T. Reilly atr@bhlaw.com Michael B. Merchant mbm@bhlaw.com Black Helterline is committed to ensuring that our clients consistently receive legal counseling of the highest quality. As such, our attorneys closely follow and critically analyze the potential implications of the most up-to-date Oregon jurisprudence so that our clients can reap the benefits of our insights and expertise. Throughout the course of the year, the Oregon Judicial Department releases weekly, the most recent but yet unpublished opinions of the Supreme Court, Court of Appeals and Tax Court. These judicial opinions typically represent the very latest in legal thinking and theory. The following case law roundup provides a summary of those cases from the past several weeks, that our attorneys found most novel, innovative or otherwise compelling. Negligence Lowe v. Philip Morris USA, Inc. Plaintiff sued Philip Morris and others, alleging that their sales of cigarettes containing toxic substances (and her use of their products) resulted in the increased risk of her developing lung cancer, and the related economic harm of having to medically monitor her condition in future years. Plaintiff sought class certification. The trial court, Court of Appeals, and Oregon Supreme Court all concluded that the alleged harm (i.e., significant increase in the likelihood of developing lung cancer) was insufficient to give rise to a negligence claim, as the threat of future physical harm has never been enough under Oregon law to satisfy the damage element of a negligence claim. Similarly, the other type of alleged harm (i.e., the costs of increased and ongoing medical monitoring) was deemed insufficient as well, based largely on the economic loss doctrine (i.e., that one is ordinarily not liable for negligently causing another s purely economic losses in the absence of physical injury or property damage). Cite: 344 Or 403; 183 P3d 181 (2008).

2 Standing to Sue: Corporate or Business Entities Pacific Coast Recovery Svc., Inc. v. Johnston Plaintiff brought a collection action as the assignee of an entity that had failed to register its assumed business name with the Secretary of State. Defendant moved to dismiss, pursuant to ORS , citing plaintiff s failure to register as required by ORS Plaintiff s assignor subsequently registered as required by ORS and prior to commencement of the hearing on the motion to dismiss. The trial court dismissed the complaint but the Court of Appeals reversed, holding that the cure provisions in ORS allow cure by a noncomplying plaintiff at any time. Cite: 219 Or App 570; 184 P3d 1127 (2008). Evidence Wroncy v. Klemp A dispute between neighbors resulted in claims for assault, battery, and intentional infliction of emotional distress all related to physical and verbal confrontation over plaintiff s use of road on defendant s property. The trial court excluded evidence of defendant s prior violent behavior (i.e. having previously run over the foot of another neighbor during a similar argument) on relevance grounds. The Court of Appeals reversed, as evidence that defendant had previously run over another neighbor during similar confrontation was relevant to the question of plaintiff s fear of defendant, and consequently, whether the plaintiff or defendant had initiated the confrontation. Cite: 219 Or App 578; 184 P3d 1133 (2008). Medical Negligence, Minors, Statutes of Limitations, Ultimate Repose Christiansen v. Providence Health Systems of Oregon Corp. As conservator of her child s estate, roughly nine years after the child s birth, the mother brought a medical negligence action against the hospital and OBGYN. The claim alleged that negligent conduct during labor resulted in medical problems that had not been diagnosed or discovered until more than five years after birth. Notwithstanding the applicable two-year limitations period (from commencement of discovery, see ORS (4)), and the five-year extension of that period for minors (see ORS ), the Supreme Court held that ultimate repose-like five-year period (running from procedure see latter portion of ORS (4)) barred the mother s action. The limitations period in the second half of ORS (4) also does not violate Remedies Clause of Oregon Constitution just because it shortens the length by which a minor s right to bring an action is tolled, as tolling of minor s right to bring an action at statehood was result of tolling statute, and not common law. Cite: 344 Or 445; 184 P3d 1121 (2008). 2

3 Jury Instructions, Negligence & Emergency Bjorndal v. Weitman Interesting legal discussion regarding potential redundancy of and conflict between negligence jury instruction in UCJI (basically, behave reasonably under all the circumstances) and emergency instruction in UCJI (basically, reasonably prudent people may be absolved of liability for injuries resulting from their actions in emergency situations, even if their conduct was not based on the wisest choice). Supreme Court deemed emergency instruction inapplicable to automobile negligence cases, as it misstates the law of negligence by introducing concept of wisest choice rather than keeping focus on reasonable care under all the circumstances. Cite: 344 Or 470; 184 P3d 1115 (2008). Personal Injury Protection Benefits, Presumptions Ivanov v. Farmers Ins. Co. of Oregon Plaintiffs incurred medical bills after auto accidents, and submitted same to Farmers for payment under Personal Injury Protection ( PIP ) coverage. Farmers denied claims and did not make payment. Plaintiff s challenged Farmers PIP claims review process as essentially bogus and arbitrary. Farmers moved for and obtained summary judgment at trial court, on grounds that plaintiffs produced no evidence that services and related bills were medically reasonable and necessary. Supreme Court disagreed with trial court and Court of Appeals, holding that under ORS (1)(a), medical bills incurred after accident and submitted under PIP coverage are presumed reasonable and necessary, shifting burden to insurer to prove claims were for unreasonable and unnecessary services. In short, insurers must have statutorily sufficient methods of investigating PIP claims prior to denying the same. Cite: 344 Or 421; 185 P3d 417 (2008). Attorneys Fees Hale & Wroncy v. Klemp Feuding neighbors at it again (see above). Plaintiffs filed suit against defendant for declaratory, injunctive, and monetary relief arising out of defendant s alleged trespass caused by overspray of herbicides. Defendant alleged that purported overspray arose out forest practice on forest land, as defined in ORS Plaintiffs dismissed action, and defendant sought attorney fees under ORS ( [i]n any action... alleging nuisance or trespass and arising from a practice that is alleged by either party to be a farming or forest practice, the prevailing party shall be entitled to judgment for reasonable attorney fees.... ). Trial court awarded defendant attorney fees based on plaintiffs voluntary dismissal (see ORCP 54 A(3)), despite lack of any evidence that practice in question was, in fact, a forest or farming practice as defined in ORS Trial court failed to make specific findings as to reasonableness of amounts of attorney fee award. Court of Appeals affirmed finding that attorney fees recoverable and properly awarded, as statute merely requires allegation of farming or forest practice, not proof. Court of Appeals reversed award of attorney fees and remanded for further proceedings, holding that ORS requires a trial court to explain the factors supporting its findings as to the amount of a reasonable attorney fee award. Cite: 220 Or App 27; 184 P3d 1185 (2008). 3

4 Evidence, Summary Judgment Perman v. C.H. Murphy/ Clark-Ullman, Inc. Decedent s personal representative sued for wrongful death, arising out of decedent s exposure to asbestos allegedly found in gloves used by him in occupation as welder. Defendant obtained summary judgment on grounds that there was no admissible evidence to suggest it had ever made or supplied such gloves to decedent or decedent s employer. The only evidence on the issue in question consisted of decedent s perpetuation deposition testimony to effect that defendant had supplied decedent s employer with, among other things, silver gloves consisting of material that looked to decedent like asbestos, and a declaration of one of decedent s co-workers, which stated that based on past conversations with defendant s agents this co-worker believed that defendant had supplied gloves to decedent s employer in years past. Trial court granted summary judgment based on perceived inadmissibility of evidence. Court of Appeals reversed. Decedent s lay witness opinion or inference testimony as to composition of gloves was admissible under OEC 701, as it was rationally based on the perception of the witness and helpful to a clear understanding of testimony of the witness. Decedent s co-worker s testimony as to defendantas-supplier was also admissible, and not hearsay, as it was based on statements allegedly made by defendant (through its agents or employees) and therefore is excluded from the definition of hearsay. See OEC 801(4)(b)(D). Cite: 220 Or App 132; 185 P3d 519 (2008). Recoverability of Attorneys Fees Dess Prop., LLC v. Sheridan Truck & Heavy Equip., LLC The case interprets ORS , which allows recovery of prevailing party attorney fees in contract actions where a party obtains a favorable judgment by establishing that a contract itself is void or unenforceable. Plaintiff sued for specific performance of a purported purchase and sale agreement, and sought attorney fees under provisions of purported contract. Defendant answered and counterclaimed for attorney fees under ORS Trial court determined that parties never actually had a sufficient meeting of the minds to create an enforceable contract, and thus found no evidence of a contract for the sale of real property. The trial court ultimately denied defendant s request for attorney fees under ORS , as it distinguished between situations contemplated by the statute (i.e., those where otherwise extant contract deemed void or unenforceable) and that there at issue (i.e., no contract at all void or not). Court of Appeals affirmed. Cite: 220 Or App 336; 185 P3d 1113 (2008). 4

5 Attorneys Fees and Proof Thereof Morgan v. Goodsell Multiple defendants prevailed against plaintiff s claims, some of which carried prevailing party attorney fee right, some of which did not. Trial court initially failed to apportion fees between those claims that allowed for prevailing party fees, and those that did not. Court of Appeals remanded for further consideration of any necessary apportionment. On remand, trial court held hearing on apportionment issue. Defendants attorney failed to offer any evidence of a reasonable apportionment, but handed a note to the judge regarding what he felt was a decent proposal as to the apportionment required. Trial court eventually issued a decision reducing defendants recoverable fees by roughly 8%, apparently based on court s own review of petition. Court of Appeals vacated the attorney fee award, and remanded for further proceedings based on fact that trial court failed to conduct an evidentiary hearing (i.e., took no evidence) on the apportionment issue. Cite: 220 Or App 329; 185 P3d 1117 (2008). 5