THE VERDICT Amendment to ORCP 36 Coverage for Defective Workmanship Requests for Production School Districts and Social Media Court of Appeals Candidates

Oregon Association OADC of Defense Counsel Trial Lawyers Defending You in the Courts of Oregon Summer 2012 2012 OADC Practice Group Leaders

COMMERCIAL CONSTRUCTION COVERAGE EMPLOYMENT NEW LAWYERS

Daniel Larsen, Chair Nicholas Baldwin-Sayre, Chair Robert Sabido, Chair Todd Hanchett, Chair Ryan Boyle, Chair Ater Wynne LLP Cosgrave Vergeer Kester LLP Cosgrave Vergeer Kester LLP Stoel Rives LLP Schwabe Williamson 1331 NW Lovejoy St., #900 805 SW Broadway, #800 805 SW Broadway, #800 900 SW 5th Ave. #2600 1211 SW 5th Ave., #1500 Portland, OR 97209 Portland, OR 97205 Portland, OR 97205 Portland, OR 97204 Portland, OR 97204 503/226-1191 503/323-9000 503/323-9000 503/294-9454 503/796-2879 503/226-0079 (fax) 503/323-9019 (fax) 503/323-9019 (fax) 503/220-2480 (fax) 503/796-2900 [email protected] [email protected] [email protected] [email protected] [email protected]

Thomas Hutchison, Vice Chair Anne Cohen, Vice Chair Lloyd Bernstein, Vice Chair Allyson Krueger, Vice Chair Jamie Valentine, Vice Chair Bullivant Houser Bailey PC Smith Freed & Eberhard PC Gordon & Polscer Dunn Carney Keating Jones Hughes PC 888 SW 5th Ave., #300 111 SW 5th Ave., #4300 9755 SW Barnes Rd., #650 851 SW 6th Ave., 1500 1 SW Columbia, #800 Portland, OR 97204 Portland, OR 97204 Portland, OR 97225 Portland, OR 97204 Portland, OR 97258 503/228-6351 503/227-2424 503/802-9153 503/417-5461 503/222-9955 503/295-0915 (fax) 503/227-2535 (fax) 503/242-1264 (fax) 503/224.7324 (fax) 503/796-0699 (fax) [email protected] [email protected] [email protected] [email protected] [email protected]

Alan Galloway, Publications Brian Church, Publications Elizabeth Knight, Publications Karen Vickers, Publications Blair McCrory, Publications Davis Wright Tremaine LLP Davis Rothwell Earle & Xóchihua Dunn Carney Mersereau & Shannon Dunn Carney 1300 SW Fifth Ave., #2300 111 SW 5th Ave., #2700 851 SW 6th Ave., #1500 1 SW Columbia, #1600 851 SW 6th Ave., #1500 Portland, OR 97201 Portland, OR 97204 Portland, OR 97204 Portland, OR 97224 Portland, OR 97204 503/241-2300 503/222.4422 503/224-6440 503/226-6400 503/242-9610 503/778-5299 (fax) 503/222.4428 (fax) 503/224-7324 (fax) 503/226-0383 (fax) [email protected] [email protected] [email protected] [email protected] [email protected]

Jon Stride, Board Liaison David Auxier, Board Liaison Jay Beattie, Board Liaison Jeffrey Eberhard, Board Liaison Molly Jo Mullen, Board Liaison Tonkon Torp LLP Yturri Rose LLP Lindsay Hart Smith Freed & Eberhard PC Bodyfelt Mount 888 SW 5th Ave., #1600 PO Box “S” 1300 SW 5th Ave., #3400 111 SW 5th Ave., #4300 707 SW Washington St., #1100 Portland, OR 97204 Ontario, OR 97914 Portland, OR 97201 Portland, OR 97204 Portland, OR 97205 503/802-2034 541/889-5368 503/226-7677 503/227-2424 503/243-1022 503/972-3734 (fax) 541/889-2432 (fax) 503/226-7697 (fax) 503/227-2535 (fax) 503/243-2019 (fax) [email protected] [email protected] [email protected] [email protected] [email protected]

PRODUCT LIABILITY PROFESSIONAL LIABILITY TRANSPORTATION TRIAL PRACTICE

Joshua DeCristo, Chair Jonathan Bauer, Chair Eric Meyer, Chair Eric DeFreest, Chair Schwabe Williamson Parks Bauer Zipse Elkins & Mitchell Luvaas Cobb 1211 SW 5th Ave., #1500 570 Liberty St. SE #200 10200 SW Greenburg Rd., #700 777 High St. Portland, OR 97204 Salem, OR 97301 Portland, OR 97223 Eugene, OR 97401 503/796-2451 503/371-3502 503/245-3211 541/484-9292 503/796-2900 (fax) 503/371-0429 (fax) 503/245-3191 (fax) 541/343-1206 (fax) [email protected] [email protected] [email protected] [email protected]

Jennifer Durham, Vice Chair Molly Marcum, Vice Chair Kevin Crawford, Vice Chair Kelly Giampa, Vice Chair Hiefield Foster & Glascock LLP Keating Jones Hughes PC Law Office of Kevin Crawford PC Hart Wagner LLP 6915 SW Macadam Ave., #300 1 SW Columbia, #800 1193 Liberty St. SE 1000 SW Broadway, 20th Floor Portland, OR 97219 Portland, OR 97258 Salem, OR 97302 Portland, OR 97205 503/501-5430 503/222-9955 503/540-8106 503/222-4499 503/501-5626 (fax) 503/796-0699 (fax) 503/365-0374 (fax) 503/222-2301 (fax) [email protected] [email protected] [email protected] [email protected]

George Pitcher, Publications Clark Horner, Publications Matthew Ukishima, Publications Grant Stockton, Publications Williams Kastner & Gibbs PLLC Hart Wagner LLP Smith Freed & Eberhard PC Brisbee & Stockton LLC 888 SW 5th Ave., #600 1000 SW Broadway, 20th Floor 111 SW 5th Ave., #4300 PO Box 567 Portland, OR 97204 Portland, OR 97205 Portland, OR 97204 Hillsboro, OR 97123 503/944-6961 503/222-4499 503/227-2424 503/648-6677 503/222-72261 (fax) 503/222-2301 (fax) 503/227-2535 (fax) 503/648-1091 (fax) [email protected] [email protected] [email protected] [email protected]

Mary-Anne Rayburn, Board Gordon L. Welborn, Board Liaison John Bachofner, Board Liaison Michael Lehner, Board Liaison Liaison Hart Wagner LLP Jordan Ramis PC Lehner & Rodriques PC Martin Bischoff LLP 439 SW Umatilla Ave. 1498 SE Tech Center Pl. #380 1500 SW 1st Ave., #1150 888 SW 5th Ave., #900 Redmond, OR 97756 Vancouver, WA 98683 Portland, OR 97201 Portland, OR 97204 541/548-6044 360/567-3900 503/226-2225 503/224-3113 541/548-6034 (fax) 360/567-3901 (fax) 503/226-2418 (fax) 503/224-9471 (fax) [email protected] [email protected] [email protected] [email protected] OADC Summer Convention, June 2012 OADC BOARD OF DIRECTORS Photo courtesy of Steve Rickles of the Rickles Law Firm PC OFFICERS GREG LUSBY President Arnold Gallagher PO Box 1758 Eugene, OR 97440 541.484.0188 • 541.484.0536 (fax) [email protected] The Verdict MICHAEL (SAM) SANDMIRE President Elect A quarterly publication of OADC Ater Wynne LLP 1331 NW Lovejoy St., #900 Portland, OR 97209 503.226.1191 • 503.226.0079 (fax) [email protected]

DAN SCHANZ Secretary/Treasurer Spooner & Much PC 530 Center St., NE, #722 F E A T U R E S Salem, OR 97301 503.378.7777 • 503.588.5899 (fax) No “Accident”? Implications of the Amendment [email protected] 4 to ORCP 36 DIRECTORS Laura Althouse and Rick Lee, Bodyfelt Mount LLP DAVID AUXIER Yturri Rose LLP PO Box “S” coverage analysis for defective workmanship Ontario, OR 97914 6 541.889.5368 • 541.889.2432 (fax) Matt Hedberg, Bullivant Houser Bailey PC [email protected] John Bachofner Using a Request for Production to Win Your Jordan Ramis PC 9 1498 SE Tech Center Pl. #380 Vancouver, WA 98683 Case 360.567.3900 • 360.567.3901 (fax) Janet M. Schroer, Hart Wagner LLP and Ralph C. Spooner, Spooner & Much PC [email protected] Jay Beattie Tinker-Tailored Student Speech Lindsay Hart 12 1300 SW 5th Ave., #3400 Portland, OR 97201 Dennis G. Woods and Josh S. Baker, Scheer & Zehnder LLP 503.226.7677 • 503.226.7697 (fax) [email protected] Oregon Court of Appeals candidates: egan and Jeffrey Eberhard 14 Smith Freed & Eberhard PC volpert 111 SW 5th Ave., #4300 Portland, OR 97204 Dan Lindahl, Lindahl Law Firm PC 503.227.2424 • 503.227.2535 (fax) [email protected] Alan Galloway, Davis Wright Tremaine LLP

Michael Lehner Lehner & Rodrigues PC 1500 SW 1st Ave., #1150 Portland, OR 97201 D E P A R T M E N T S 503.226.2225 • 503.226.2418 (fax) [email protected] MOLLY JO MULLEN FROM THE PRESIDENT 2 Bodyfelt Mount 707 SW Washington St., #1100 Portland, OR 97205 503.243.1022 • 503.243.2019 (fax) RECENT CASE NOTES 18 [email protected] mary-anne rayburn Martin Bischoff LLP Council on Court Procedures Update 23 888 SW 5th Ave., #900 Portland, OR 97204 503.224.3113 • 503.224.9471 (fax) [email protected] PENDING PETITIONS FOR REVIEW 24 Jon Stride Tonkon Torp LLP 888 SW 5th Ave., #1600 ASSOCIATION NEWS Portland, OR 97204 25 503.802.2034 • 503.972.3734 (fax) [email protected] GORDON WELBORN ✔ PRACTICE TIPS 26 Hart Wagner LLP 439 SW Umatilla Ave. Redmond, OR 97756 541.548.6044 • 541.548.6034 (fax) [email protected] LEGISLATIVE UPDATE 28

ADMINISTRATIVE OFFICE SANDRA FISHER, CAE 147 SE 102nd Amicus Update 29 Portland, OR 97216 503.253.0527 • 503.253.9172 (fax) 800.461.6687 • [email protected] ▼ p r e s i d e n t ’ s m e s s a g e By g r e g l u s b y

The OADC Ripcord and the Obscenity Test “Jumping out of a perfectly good airplane is not a natural act.” — Gunnery Sgt. Tom “Gunny” Highway in ”Heartbreak Ridge”

he idea of leaving something definition for OADC membership. We have members doing commercial litigation behind that works is usually had concerns expressed over the content of has increased, it is no longer as simple as counterintuitive. Walking some members’ websites that appear to be looking at what side of the “v.” a lawyer T away from the beneficial or designed to market primarily for plaintiff most likely represents clients. For a com- helpful can defy common cases. Also, the OADC Listserv has been mercial litigator, the difference between sense. After all, if you get benefit and a source of concerns when members are representing a plaintiff or a defendant value there generally isn’t much reason to surprised to see an attorney they believed is often determined simply by who gets leave it behind. However, there are times to be primarily doing plaintiff work posting to the courthouse first. OADC members when making the jump and pulling the on the Listserv or having access to its con- who practice in the area of coverage also ripcord is the right thing to do even if it tent and discussions. However, the reality frequently find themselves representing is difficult. is that having so much information now the plaintiff. The fact that OADC members Since I joined the available to us with a few key strokes may are not always representing the defendant OADC Board in 2006, just allow members to see more easily the creates unique challenges for an organiza- we seem to have had an marketing materials and the nature of the tion that is growing while trying to remain upswing in the number work being performed by fellow members true to its origins. of concerns expressed that has really been going on for years. To assist with evaluating member con- by members about other Another area that causes concerns is cerns, a Board member is usually assigned members meeting the when the practice of a long-term member to call the subject member while main- requirements for OADC has been perceived to have moved away taining the confidentiality of the member Greg Lusby membership. To be eli- from civil defense work. Sometimes the who voiced the concern. Since joining the gible for a regular OADC transition is by choice but other times it Board, I have made a few of these calls membership, an attorney must be an ac- is the result of an important client mov- to discuss with the subject member their tive member of the Oregon State Bar and ing on. It is very tough when a concern eligibility to remain a part of OADC. To devote a substantial portion of their time is voiced about a longstanding member date, all of the calls I have made have been to the defense of civil litigation. As the who has been a strong supporter of OADC. positive and the member who is the subject membership of OADC has grown and the The concerns can be caused by a member’s of the concern usually understands why practices of its members have become more surprise when they see the longstanding the concern has been expressed. During varied, it has become increasingly difficult member still attending OADC CLEs despite most calls, we discuss the actual eligibility to describe an OADC member with a short the member more frequently being seen as language and whether the member does, sentence or two. The days of OADC being opposing counsel. in fact, “devote a substantial portion of comprised of a small group of attorneys When a concern about a member is their time to the defense of civil litiga- all doing primarily traditional insurance received, the OADC Board takes it very tion.” However, the discussion usually defense are gone. seriously and discusses the best way to leads to questions about what “substantial Technology seems to be a contribu- look into the concern while being mind- portion” means. Can a member do pri- tor to the upturn in voiced concerns that ful that the practices of OADC members marily plaintiff work in one practice area some members might no longer meet the differ greatly. As the percentage of OADC but still spend a large enough amount of

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2 The Verdict ■ Summer 2012 ▼ President’s Message continued from page 2

their time doing defense work in another of the total membership since I joined the I know I have said this many times, practice area? What if a member has more OADC Board. Actually, I see the voiced but OADC is one of the most robust State/ traditional plaintiff cases but has spent a concerns as a very positive indicator of Local Defense Organizations in the coun- large amount of time as defense counsel a healthy and active membership that try. The fact that so many lawyers value in a complex case? cares greatly about OADC. It is this same their OADC membership and feel strongly In Jacobellis v. Ohio, United States admiration for OADC that has resulted in about it is confirmation that OADC will Supreme Court Justice Potter Stewart some valued former members stepping keep flying high for years to come. At famously described obscenity with the fol- forward and voluntarily making the jump times it may be hard to describe OADC lowing words: “I know it when I see it.” At from OADC. with words, but we know a good thing A couple of years back, a well-known times, a variation of Justice Stewart’s words when we see it. seems to be the best way to identify an and long-time member resigned from Lastly, I want to acknowledge the OADC member. Though it has maybe got- OADC because he stated that as his practice fantastic job done by Dave Auxier, Molly ten tougher to describe an OADC member, shifted, he no longer felt comfortable hav- Jo Mullen and Gordy Welborn in planning we all still have a pretty good sense of an ing access to OADC benefits and resources. the 2012 OADC Annual Convention that OADC-eligible attorney when we see one. The resigning lawyer made it very clear that was held in June at Sunriver. Also, Sandra Justice Stewart recognized that in some he greatly enjoyed his years as an OADC and her staff, including Char, did their usu- situations words just don’t seem to work member and that resigning was a sad day and that you have to call it as you see it. for him – but it was time to pull the rip- al excellent job. Our Annual Convention However, an organization the size of OADC cord. Obviously, a member who decides was very well attended and the feedback needs clear eligibility requirements to on their own that resigning is best should from the attendees was overwhelmingly ensure the confidence of its membership. be applauded by all of us just as much as positive. On behalf of OADC, I want to Over the years, the OADC Board has the member who voices a concern, since it thank each of you who made the trip over spent many hours discussing the words all goes toward ensuring the objectives and to Sunriver and enjoyed the 2012 OADC used to define membership eligibility. The longevity of OADC. Annual Convention. goal is functional language that does not exclude potential members who would probably qualify for membership under the Justice Stewart test, such as attorneys illiam linn (541) 385-3177 representing Oregon businesses who are W E. F [email protected] currently spending a lot of time pursuing Mediation & arbitration amounts owed and judgments. However, 747 SW Mill View Way u Bend OR 97702 u http://www.flinnmediation.com/ the OADC membership eligibility language must also ensure that as our membership continues to grow, it acts as a gatekeep- u Member of OADC for 40 Years er—preventing individuals from utilizing u Past Member OADC Executive OADC benefits that makes our membership concerned or uncomfortable. Obviously, Committee we don’t want any single member to have u Over 250 jury trials a chilling effect that keeps the rest of the OADC membership from being able to u Trials in over half of Oregon’s 36 counties share and exchange information that helps u Will travel to all parts of Oregon and to improve our practices. Northwest Though OADC membership eligibil- ity is a significant issue, the great news is that the number of voiced concerns about No Travel Fees or Travel-Related Expenses another member is less than one percent

The Verdict ■ Summer 2012 3 FEATURES

No “Accident”? Implications of the Amendment to ORCP 36

Laura Althouse and Rick Lee Bodyfelt Mount LLP

n amendment to ORCP 36 tion—even though there was no hope dealing with reservations of recovery—because plaintiffs had no of rights became effective procedural means to learn if insurance January 1, 2012. The amend- was available.1 In considering a solution A ment states that, upon the to this problem, a Committee of the request of an adverse party, Council on Court Procedures looked to a party shall disclose “[t]he existence Washington rules. of any coverage denial or reservation Washington’s CR 26(b)(2)(ii) requires of rights, and identify production of any denial or reservation of the provisions in any rights letters. However, the Committee insurance agreement was concerned that production of actual or policy upon which letters (and at times, even the insurance such coverage denial provisions themselves) could require pro- or reservation of rights duction of information protected from is based.” ORCP 36B disclosure by the work product doctrine (2)(a)(ii). The new rule or privilege. The Committee noted that Laura Althouse is different than ORCP whether a party has coverage is likely 36B(2)(a)(i), which requires disclosure not protected from disclosure, but the of the “existence and contents” of any investigation undertaken by the insurer insurance agreement or policy that could to determine the reasons that coverage apply to liability owed. does not exist might indeed be so pro- sions of the policy.2 Thus, while the text of tected. Therefore, as the Committee’s The Committee was especially con- ORCP 36B(2) requires minutes indicate, if a party felt a letter cerned about the disclosure of the po- a party to disclose the contained privileged information, the tential application of an “intentional act” contents of an insur- party could state its objection and reveal or “intentionally caused harm” exclusion. ance policy, there is no only the existence of a reservation or de- The Committee thought this might fall corresponding obliga- nial letter, a compromise approach that under an aspect of coverage, rather tion to produce the would allow plaintiffs to learn of the ex- than a specific exclusion, because if an contents of a coverage istence of a coverage issue so they could intentional act is committed, or harm is Rick Lee denial or reservation conduct their own investigation and de- intentionally caused, there may not be an of rights. This distinction was not unin- termine whether pursuing litigation was “occurrence,” defined as an “accident,” tentional. worthwhile. In this respect, ORCP 36B(2) which is necessary to establish coverage The “legislative history” of the (a)(ii) may now function like a limited under most liability insurance policies. amendment to ORCP 36 shows it was a interrogatory: a respondent may simply The Committee’s minutes noted that response to complaints that parties were state that a denial or reservation of rights defense counsel could simply refer to the moving forward with expensive litiga- letter exists and list the applicable provi- policy provision discussing the need for

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4 The Verdict ■ Summer 2012 FEATURES

Implications of the Amendment to ORCP 36 continued from page 4 an “occurrence” (the coverage grant) if more than meets the eye with this “ac- of rights letters, to protect their insureds the insurer was relying on the lack of an cident.” This could expose the insured and comply with disclosure requirements occurrence and the intentional acts exclu- to civil liability of a much broader and under Oregon law. 3 sion. The Committee acknowledged that more severe nature, punitive damages, part of defense counsel’s role is to protect and potential criminal liability. Endnotes the insured’s best interests, which might Under this hypothetical, would de- 1. The legislative history for this amend- make it appropriate to craft an “obfus- fense counsel need to object to any ORCP ment is available at http://legacy. catory” response when necessary—as 36B(2)(a)(ii) request in its entirety? The lclark.edu/~ccp/. indicated in the Committee’s minutes. objection itself may be enough to alert 2. A careful practitioner will have to (Of course, counsel defending under an plaintiff’s counsel to the need for further consider how to handle catch-all res- acts, errors, and omissions policy cannot investigation. Arguably, the facts of the ervations that potentially invoke all simply refer to the coverage grant, since hypothetical might be discovered any- policy terms and conditions (“Nothing in this letter nor any investigation this type of policy does not require an way. But defense counsel will want to be undertaken by or for the Insurance “occurrence”; there, they are left solely careful that he or she is not in some way Company waives or is intended to with an exclusion and will need to be responsible for the discovery. waive any rights of any of the parties more creative.) Defense counsel are not the only to the Insurance Policy”). The Committee appropriately iden- parties who need to be wary of inadver- 3. The authors wish to express their tified the major red flag potentially tently harming their client by complying sincere thanks to John Bachofner and presented by the amendment—being with a request under ORCP 36B(2)(a)(ii). Insurers may also want to consider this Mark Peterson for taking the time to forced to reveal when the insured acted risk when drafting denial and reservation speak with them about this topic. intentionally. That said, are there cir- cumstances where revealing merely the existence of a reservation of rights or denial might compromise the insured’s defense? Consider the following ex- ample: A woman in a bar decides to in- tentionally run over another patron with her car. The subsequent collision leads to a lawsuit under the insured’s automobile policy. When this insurer conducts an investigation of the “accident,” it learns about the woman’s intent to run over the patron. The insurer subsequently issues a reservation of rights letter citing the lack of an occurrence and the “inten- tional acts” exclusion. Plaintiff’s counsel, thinking this is a run-of-the-mill auto case involving negligent driving, nonetheless issues a request for production under ORCP 36B(2)(a)(ii).  Quality Reports, On Time  Transparent Invoicing Arguably, the insurer’s investigation in this hypothetical is work product, and  Accepts Digital Records  Consultant Recruitment therefore the basis for the reservation of or Hard Copy Services rights may be protected. Nevertheless, under the amendment, the existence of  Preferred IME Vendor for  Flexible Scheduling to Meet Needs of All Parties the reservation must be disclosed. Under Multiple Law Firms these circumstances, merely revealing the existence of the reservation of rights let- Toll Free: 866.276.0505 | [email protected] ter under an automobile policy case could Corporate Office: 600 University St., Suite 2325, Seattle, WA 98101 clue plaintiff into the fact that there is

The Verdict ■ Summer 2012 5 FEATURES

Coverage Analysis for Defective Workmanship

Matt Hedberg Bullivant Houser Bailey PC

irst-party insurance—often tion analysis to determine whether loss “efficient proximate cause” rule, as will referred to in the property or damage is the result of a covered or be discussed below. insurance context as “fire uncovered peril. Sometimes, two or Faulty Workmanship/Design F insurance”—provides cov- more independent events or perils will erage for the owner of a occur either concurrently or successively The faulty workmanship/design ex- property right from risks of to produce a loss. Coverage disputes clusion is an area of coverage litigation loss to that property. Property insurance may arise where both covered and un- that highlights the importance of deter- is frequently written covered perils may have caused the loss. mining the cause of loss. Generally, the on an “all-risk” basis, In circumstances where two or faulty workmanship/design exclusion ex- which generally means more distinct perils operate to cause cludes “faulty, inadequate, or defective” the policy insures a loss, Oregon, like most other United design, specifications, workmanship, against loss caused by States jurisdictions, generally employs etc. in their entirety. This is an absolute any risk to the covered the “efficient proximate cause” rule exclusion of all faulty workmanship and property, unless the risk (also known as the “efficient cause” consequent losses. is specifically excluded Matt Hedberg or “efficient moving cause” rule) to Often, the contested issue in the in the policy. determine whether a loss is covered context of a faulty workmanship ex- One exclusion that frequently leads or excluded. Under Oregon law, the clusion will be whether the damages to litigation is the faulty workmanship/ “‘efficient proximate cause’ of a loss is claimed were caused by faulty work- design exclusion. The faulty workman- the active and efficient cause that sets manship, or instead by some other ship/design exclusion limits the scope of in motion a train of events which bring (not excluded) peril. Courts differ as to coverage for property damage that is about a result without the interven- whether a faulty workmanship exclusion available to insureds. However, it may tion of any force, starting and working excludes only “process,”1 only “results,”2 not preclude recovery of all damages actively and efficiently from a new and or both.3 In jurisdictions where faulty flowing from a contractor’s faulty work independent source.” Naumes, Inc. v. workmanship means only “results,” an or architect’s bad design. This article Landmark Ins. Co., 119 Or App 79, 82, insured may still recover for damages identifies some important considerations 849 P2d 554 (1993). Therefore, the dis- caused by a contractor’s negligent acts confronting counsel for the insurer and during the construction process despite the insured when coverage is sought pute in first-party cases often revolves for damages caused by defective work- around determining the efficient proxi- the presence of a “faulty workman- 4 manship. mate cause of the loss in the given case ship” exclusion. A policy’s ensuing loss (a fact-based inquiry). In addition, poli- exception may also provide coverage Causation cyholders and carriers sometimes claim for a covered cause of loss despite the Every jurisdiction employs a causa- that that parties contracted around the presence of faulty workmanship.

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Insurance Coverage for Defective Workmanship continued from page 6

Ensuing Loss Provisions and a resulting investigation concluded Ensuing loss, also referred to as re- that the kettle failure was principally sulting loss, is an exception to a policy due to poor welding techniques to the exclusion. Ensuing loss provisions are seams that suspended the kettle. Acme’s often interpreted as applying when a policy included the following exclusion: loss happens that is not covered under 13. Inherent vice, latent de- the policy, but covered damage caused fect, wear and tear, marring by or resulting from the non-covered and scratching, gradual dete- loss results. The ensuing/resulting loss rioration, moths, termites or is covered under the policy, even if the other insects or vermin, unless triggering event (or depending on the loss by a peril not otherwise language, the triggering damage) is not. excluded ensues and the It requires first that the policy exclusion Company shall be liable include an ensuing loss provision. The suing loss” clauses tend to focus on the only for such ensuing loss. dispute between policyholders and car- separation between the non-covered riers typically comes down to whether, The insured argued that even if the incident and the resulting damage. to be covered, the “ensuing loss” must kettle rupture was caused by a latent Courts have generally developed two be the result of a separate, independent defect, the equipment that was de- interpretations of “ensuing loss.” One peril which is itself covered. This area stroyed by the discharge of the molten interpretation is that “ensuing loss” is of first-party coverage is generally one zinc was an “ensuing loss” and therefore something that occurs as a consequence of the most heavily contested, because was not excluded from coverage. The of or follows an initial loss. Under this Acme court disagreed, holding that the of the variety of factual circumstances definition, the loss which follows does “ensuing loss” provision only applied to in which these disputes arise and the not have to be separate or distinct from resulting perils that were separate and many ways in which carriers have written the initial loss; it just has to follow as a independent of the original excluded these clauses. As an example, consider result. This interpretation allows for re- peril. The court reasoned that the dam- the following: covery in a greater variety of situations. age to the equipment from the faulty We will not pay for “loss” The second interpretation of “ensuing welding and kettle rupture was part of caused by or resulting from ... loss” requires there to be a separate and the loss directly caused by the excluded [f]aulty, inadequate, or defec- independent loss, apart from the initial peril, “not a new hazard or phenom- tive materials, or workman- excluded loss. Policyholders and carriers enon.” The court later stated that if ship.... But if loss by any of debate whether Oregon courts follow the molten zinc had ignited a fire or the Covered Causes of Loss this second interpretation. caused an explosion which destroyed the results, we will pay for that While not an Oregon case, Acme plant, the “ensuing loss” clause would resulting loss. Galvanizing Co. Inc. v. Fireman’s Fund Ins. Co., 221 Cal App 3d 170, is an oft- likely apply. The Policy Excludes: “Cost of quoted case concerning how courts At least one Oregon federal trial making good faulty or defec- treat “ensuing loss.” In Acme, the court has followed Acme. In Wal-Mart tive workmanship, material, welded seam of a suspended steel kettle Stores, Inc. v. Gulf Ins. Co., 2005 WL construction or design, but this containing several tons of molten zinc 1231076 (D Or 2005), Wal-Mart’s Herm- exclusion shall not apply to failed, the kettle ruptured, and the mol- iston distribution center’s floors began the damage resulting from ten metal escaped. The zinc damaged curling, causing damage to the wheels such faulty or defective and destroyed surrounding equipment of equipment and eventually requiring workmanship, material, con- including furnace burners and a refrac- that the floor be repaired and replaced. struction or design.” tory system in the plant. The insured Wal-Mart’s insurance policy included the The litigation issues concerning “en- submitted a claim to Fireman’s Fund, following exclusion:

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The Verdict ■ Summer 2012 7 FEATURES

Insurance Coverage for Defective Workmanship continued from page 7

This policy does not insure: [] forklifts, due to the curling floor, was be analyzed. Another important issue is separate and independent of the defec- whether the policy contains an “ensuing b. against the cost of mak- tive floor and was thus recoverable under loss” exception. “Ensuing loss” cases il- ing good defective design or the policy. The Ninth Circuit affirmed, lustrate the challenge courts encounter specifications, faulty material, or acknowledging that “the great weight in determining the cut-off point between faulty workmanship; however, of authority” prevents insureds from re- the damage done by the excluded peril this exclusion shall not apply covering under an “ensuing loss” clause and the resulting damage that may be to loss or damage resulting for faulty or defective construction. Wal- covered under the “ensuing loss” clause. from such defective design or Mart Stores, Inc. v. Gulf Ins. Co., 250 Fed specifications, faulty material or Endnotes faulty workmanship. Appx 221 (9th Cir 2007) (unpublished). 1 E.g., Kroll Constr. Co. v. Great Am. The court held that a majority of the Conclusion Ins. Co., 594 F Supp 307, 307-08 (ND damages claimed under the policy, includ- When faulty workmanship or design Ga 1984). ing the costs associated with repairing is a contributing factor to a loss for which 2 E.g., City of Barre v. N.H. Ins. Co., 396 and replacing the concrete floors and the policyholder seeks first-party insur- A.2d 121, 122-23 (Vt 1978). associated structures, were directly re- ance coverage, the careful practitioner 3 City of Oak Harbor v. St. Paul Mercury lated to the faulty construction and were should first consider the specific policy Ins. Co., 139 Wn App 68, 74, 159 P3d therefore excluded. The court then went language contained in the insurance 422 (2007). on to note that the damage to Wal-Mart’s policy at issue. Causation is one issue to 4 City of Barre, 396 A2d at 122-23.

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8 The Verdict ■ Summer 2012 FEATURES

Using a Request for Production to Win Your Case

Janet M. Schroer Hart Wagner LLP Ralph C. Spooner Spooner & Much PC

s defense attorneys, we rou- the Oregon Supreme Court affirmed a had “inherent general power” to order tinely draft and serve re- decision of the Court of Appeals and the that a plaintiff in a personal injury action quests for production on op- judgment of the circuit court excluding submit to a physical exam by medical A posing counsel. Often, the the testimony of a psychologist who had experts selected by the defendant. The task of drafting the request examined the plaintiff for psychological defendant had to provide any defense for production is delegated injuries following alleged sexual abuse. medical report to plaintiff, but there was to new associates or paralegals, and tem- The basis for excluding the testimony was no reciprocal obligation for a plaintiff to plates are typically used plaintiff’s failure to produce the psycholo- provide any medical reports on plaintiff’s as the starting point for gist’s reports in response to defendant’s condition to defendant. The Guitron drafting requests for request for production. court emphasized that the purpose of production. Frequently, The Supreme Court first reviewed ORCP 44C was to move away from the the drafter of the re- the history of ORCP 44C which provides: “sporting theory of justice” and games- quests is not closely in- manship that the court’s interpretation of volved in the handling In a civil action where a claim is prior discovery rules had promoted, and of the case and may made for damages for injuries to toward early disclosure of all relevant Janet M. Schroer not fully appreciate the the party ***, upon the request facts. After a thorough discussion of importance of a properly drafted plead- of the party against whom the the legislative history and purpose of the ing. This article will discuss how to draft claim is pending, the claimant rule, the court concluded that the “search an effective request for shall deliver to the request- for truth and justice” is paramount and production of medical ing party a copy of all written required plaintiff to produce, on request, reports in a personal reports and existing notations the reports of the expert whose examina- injury case and how to of any examinations relating tion of the plaintiff related to injuries for use it to win your case. to injuries for which recovery which recovery was sought. is sought unless the claimant History of Orcp 44C The Supreme Court then reviewed shows inability to comply. and recent Supreme the facts of the Guitron case. The defen- Ralph C. Spooner Court decision Prior to the adoption of ORCP 44, dant, Aerobic and Dancewear Shoppe, In a recent case, A.G. v. Robert Guit- and in the absence of a statute or rule, LLC, dba Lake Oswego Academy of ron, et al., 351 Or 465, 268 P3d 589 (2011), Oregon courts held that the trial court Dance, had served plaintiff with a broad

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The Verdict ■ Summer 2012 9 FEATURES

Requests for Production continued from page 9 request for production, seeking: to grant the sanction of excluding 3. During trial, be sure to ask Copies of any and all detailed the expert’s testimony at trial. In the plaintiff’s attorney for an op- written narrative reports of all Guitron, the defendant’s request for portunity to review all experts’ files treatments and examinations production was intentionally broad. before the expert is called to testify of the plaintiff which have been It used the language “health care as a witness. It is fairly common for conducted by any health care professional” to avoid a situation attorneys to agree before the start professional, setting forth the where reports are withheld because of a trial on a timeframe for making examiner’s findings, including the request used limiting words such the experts’ files available for review results of all tests made, diag- as “medical doctor.” (Some plaintiff in advance of their testimony. Do not nosis and conclusions, together attorneys would argue that a psy- wait until the break between direct with like reports of all earlier chologist is not a medical doctor and and cross-examination to review the treatments and examinations therefore a request for reports of expert’s file. for the same condition which medical doctors would not encompass 4. Carefully review the expert’s relate to the plaintiff’s claimed a report from a psychologist.) The file to determine whether the expert injuries. Guitron request also encompassed ever examined the plaintiff; usually both narrative reports and, arguably, Despite this broad request, the plain- the file will contain chart notes, test chart notes. The request could include tiff refused to produce the reports of its results, etc. that will confirm whether a specific designation requesting testifying psychologist, arguing that the the expert actually examined the chart notes. The key language in psychologist’s purpose in examining the plaintiff. If the expert only reviewed the rule that should trigger the trial plaintiff was for litigation, not treatment. plaintiff’s medical records and did not court to grant the sanction of exclud- However, at trial, the court excluded the examine the plaintiff, the plaintiff’s ing an expert’s testimony is that the litigation psychologist’s testimony as a attorney will undoubtedly argue that defendant requested reports of “any sanction for plaintiff’s failure to produce the rule only requires the plaintiff to examinations relating to injuries for the psychologist’s reports in discovery. provide defendant with reports or re- which recovery is sought.” The plaintiff did not call any other medi- cords of examinations of the plaintiff’s cal or mental health witnesses, and at 2. Consider adding the following injuries for which recovery is sought, the end of the plaintiff’s case, the court language in the general preamble to and will argue that the expert only granted a directed verdict in favor of de- the Request for Production of Docu- performed a record review. This type fendant on the grounds that the plaintiff ments, or at the end of specific re- of expert is a “true” litigation expert. failed to offer competent evidence of quests: “This is a continuing request.” In this situation, the court will likely causation. This language is not technically nec- not exclude the expert’s testimony. Based upon the court’s interpreta- essary, because the responsibility to In Guitron, the expert’s file contained tion of the history and purpose of ORCP supplement responses is incorporated a written report to the plaintiff’s at- 44D, discussed above, the Supreme Court in the rule, but it provides further torney confirming that the expert met upheld the trial court’s sanction of strik- support for an argument to exclude the plaintiff, conducted a psychologi- ing the testimony of the psychologist. testimony at trial. In addition, it is cal interview of the plaintiff, and ad- good practice to send a letter to the ministered tests to the plaintiff. Given Practice Tips plaintiff’s attorney shortly before the fact that the purpose of ORCP 44 The Guitron case highlights strate- trial requesting any updated reports. is to search for truth and justice, it gies that practitioner should bear in mind If a plaintiff’s attorney is specifically logically follows that the plaintiff’s when drafting a request for production, asked to update discovery before trial attorney should have provided this including the following: and fails to do so, a trial judge should information to the defendant’s at- 1. Choose your language care- allow the sanction of excluding the torney prior to trial. fully. The Request for Production testimony of an expert whose report 5. After you have determined must have the right language in order and records were not furnished to the that the expert’s file confirms that to provide a basis for the trial court defendant’s attorney prior to trial. an examination took place relating

10 The Verdict ■ Summer 2012 FEATURES

Requests for Production continued from page 10 to the plaintiff’s injuries for which 6. After the jury is excused, you that a timely request for production recovery is sought, you must raise the should begin making a record. You was served on the plaintiff’s attorney matter with the court before the ex- should offer the court a copy of your and that the plaintiff’s attorney knew pert offers opinion testimony in front request for production marked as a about the examination by the expert Defendant’s Exhibit. Next, you should of a jury. Some defense attorneys will but failed to provide copies of the state on the record that you have in- bring the matter to the attention of expert’s documents prior to trial. You spected the expert’s file prior to the the court before the expert even takes should state that you are relying upon expert’s testimony, and also identify the stand. Others will allow the plain- ORCP 44C, 44D and the holding in the for the record the information in the tiff’s attorney to call the expert and file that confirms the expert conduct- Guitron case. You should be familiar lay a foundation concerning the ex- ed an examination of the plaintiff’s with the Guitron opinion and should pert’s qualifications. When the latter injuries for which recovery is sought. If emphasize to the trial judge that in course is followed, the jury is aware there is a report in the expert’s file or Guitron, the trial judge granted the of the involvement of the expert in chart notes or test results that confirm sanction of excluding the expert’s tes- the case and the jury is left with a bad an examination took place, you can timony, and that the Oregon Supreme impression of the plaintiff’s attorney ask the court for an opportunity to Court affirmed that decision. when the expert is not allowed to have copies made; those copies can provide expert opinion. Regardless of be marked as an exhibit and offered With a little bit of careful prepara- the timing, you need to ask that the as another court exhibit. Finally, you tion and knowledge, you can win your jury be excused when you make your need to make a motion to exclude the case using a carefully drafted request for argument to the trial judge. expert from testifying on the grounds production. May the force be with you!

The Oregon Association of Defense Counsel State Political Action Committee (PAC) The Voice of the Civil Defense Lawyer The Oregon Association of Defense Counsel works to protect the interests of its members before the Oregon legislature, with a focus on:

Your contribution to the Oregon Association of Defense Counsel State PAC will support OADC’s efforts in legislative activities and government affairs.

The Oregon Association of Defense We need your help and support to Counsel has a compre­hensive continue this important work. All government affairs pro­gram, donations to the OADC State PAC which includes providing effective go to directly support our efforts • Changes in civil practice legislative advocacy in Salem. to protect the inter­ests of the Civil and the court system Defense Lawyer. • The judiciary and trial court funding To make a contribution please contact the OADC • Tort reform office to receive a donation form at 503.253.0527 or 800.461.6687 or [email protected] • Access to justice

The Verdict ■ Summer 2012 11 FEATURES

Tinker-Tailored Student Speech

Dennis G. Woods and Josh S. Baker Scheer & Zehnder LLP

ocial media has revolution- ized the way we communi- cate and interact with oth- S ers. Practitioners who rep- resent schools and school districts should be aware of the unique challenges posed by this communication revolution in order to 4 represent their clients sent per day. court held that schools cannot suppress well. For better or worse, we are now con- student expression unless the school Compared with nected in ways that simply did not exist reasonably concludes that it will “ma- current technology, a few decades ago, and that connec- terially and substantially disrupt the 6 communication meth- tion has led to a number of challenges. work and discipline of the school.” It is against this backdrop that we fast- ods for past genera- School districts in particular, which are forward forty-plus years and attempt tions were akin to two the focus of this article, are one of the primary institutions responsible for the to apply the principles of Tinker to the Dennis G. Woods cans and a string. In digital age. today’s world, a single well-being of today’s students. With the Currently there is a split among the communication can be delivered almost advent of social media, school districts circuits regarding a student’s constitu- instantaneously to an audience of mil- have landed at the center of many legal tional rights of free speech and expres- lions. The scope and speed with which issues concerning the balance between a sion and the level of protection afforded a communication can be disseminated student’s freedom of speech/expression to comments made through social media has been compared to a virus, i.e. go- and a school’s obligation to provide an off of school grounds. Two cases high- ing “viral.” Consider the following appropriate learning environment while lighted below illustrate the divergent statistics: as of March 2012, there were ensuring the well-being of its students. opinions of the various circuits. approximately 901 million active users Most lawyers have heard the saying on Facebook alone and 526 million of that “students do not shed their consti- Layshock v. Hermitage School Dis- those users were active tutional rights to freedom of speech or trict7 daily.1 Additionally, 300 expression at the schoolhouse gate.” Layshock, a high school senior, cre- million photos were This quote comes from Justice Abe ated a MySpace profile of his principal. uploaded daily and Fortas’ opinion in the 1969 Supreme Layshock created the profile while at 3.2 billion “likes” or Court Case Tinker v. Des Moines Indep. his grandmother’s house, on his grand- comments were posted Community Sch. Dist.5 The Tinker case mother’s computer, and during non- on Facebook—again, involved students wearing black arm- school hours. In creating the profile, daily.2 In addition to bands to school in protest of the Viet- Josh S. Baker Layshock copied a photo of the principal Facebook, there are nam War. The students were disciplined, from the school district’s website to use other social media platforms such as and the Supreme Court subsequently as a profile picture. On the webpage, Twitter, Instagram, and MySpace. Cur- determined that the discipline violated Mr. Layshock answered a number of rently there are over 100 million active the students’ constitutional rights of survey questions for the principal in a Twitter users and 230 million “tweets”3 freedom of speech and expression. The defamatory manner.

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12 The Verdict ■ Summer 2012 FEATURES

Tinker-Tailored Student Speech continued from page 12

Layshock then afforded access to dismissal of Kowalski’s claims, holding attention on preventing bullying.] other students by listing them as friends that Kowalski’s speech caused school • Did the speech cause disruption in on the website. Soon, nearly the entire disruption as described in Tinker and the school (classroom disruptions or student body was aware of the princi- that said speech was immune from student confrontations)? pal’s fraudulent profile, and additional First Amendment protection. The court • What was the scope of dissemina- profiles of the principal were created by addressed the issue that Kowalski’s con- tion—to whom and how many? other students. duct occurred outside the school house • What discipline is being considered? The school suspended Layshock for gate by finding that it was foreseeable 10 days and banned him from participat- that her conduct would reach the school For now, schools must shape their ing in extracurricular activities, includ- via computers and the like, given that a policy around the Tinker case. Prudent ing his graduation. Layshock sued the majority of the intended audience were schools will ensure—prior to taking any school, alleging that his First Amend- students of the high school. In short, adverse action against a student—that ment rights were violated. Kowalski’s conduct outside the school they have a reasonable basis to conclude The Third Circuit found that Lay- created a reasonably foreseeable and that the student’s conduct materially shock’s conduct did not result in a sub- substantial disruption inside the school- disrupted the classwork of the school, 8 stantial disruption of the school and house gates. caused disorder in the school environ- occurred outside of the school context. Layshock and Kowalski—two cases ment, or infringed on another’s rights. As such, the court found that Layshock’s presenting similar facts, yet resulting in That said, the cases discussed above First Amendment rights had been vio- very different outcomes—illustrate the are perfect examples of the difficulty lated. The court did note that speech/ difficulty schools face in determining schools face when determining what expression that occurs outside of school when it is permissible to discipline stu- conduct falls under the principles of may be subject to school discipline but dents for inappropriate and/or offensive Tinker. It is certain that tailored student only under very limited circumstances speech conveyed through social media. speech will continue to be a fluid dy- (threat of harm, encouraging in-school The Ninth Circuit Court of Appeals has namic in the age of social media. disruption). not yet addressed this issue and the Supreme Court recently declined to Kowalski v. Berkley County Schools9 Endnotes address the divergent opinions of the Using her home computer during 1 http://www.facebook.com/press/ lower courts. Schools and their counsel, non-school hours, high school senior info.php.statistics then, must tread carefully in deciding Kowalski created a MySpace profile 2 Id. when a student can be disciplined for with an offensive title. The profile was 3 A “tweet” is a 140 character or less off-campus internet speech. When con- dedicated to ridiculing a fellow student. statement often utilizing phrases templating whether a student should Kowalski then invited approximately such as OMG and LOL or the infa- be disciplined for off-campus speech 100 people on her list of MySpace mous J. or expression, one should consider the friends to join the group. Students following factors: 4 http://techland.time. then began uploading pictures of the com/2011/09/09/twitter-reveals- targeted student and also posting de- • How was the communication dis- active-user-number-how-many- rogatory messages. covered? actually-say-something/ The targeted student’s parents • Was the forum private or public? 5 393 US 503, 89 S Ct 733, 21 L Ed 2d lodged a complaint with the school • Was it password-protected? 731 (1969). the following morning. Kowalski was • Was parental consent obtained? 6 Tinker, 393 US at 513, 89 S Ct 733. suspended for five days and kicked off • Were school resources used in creat- rd the cheerleading squad, among other ing the at-issue speech? 7 650 F 3d 205 (3 Cir 2011). things. Kowalski filed suit against the • Was the content of the speech lewd 8 The district court found that Lay- school, alleging that her constitutional or offensive? shock’s conduct did not disrupt rights were violated as a result of the • Was the speech directed at students the school and the school did not discipline. or staff? [This question is particu- appeal that finding. The Fourth Circuit affirmed the larly relevant with recent increased 9 652 F 3d 565 (4th Cir 2011).

The Verdict ■ Summer 2012 13 FEATURES Oregon Court of Appeals Candidates: Egan and Volpert

Linn County Judge James Egan and appellate attorney Tim Volpert are competing for the position that will become open when Court of Appeals Chief Judge David Brewer moves to the Oregon Supreme Court. Below, The Verdict provides profiles of the candidates and describes the strengths that each believes he would bring to the Court of Appeals.

handled several appeals. More recently, Profile of Candidate he served as a pro tem judge in the Court Egan believes of Appeals. James Egan his experience Egan grew up in Tangent, Oregon and attended West Albany High School, R. Daniel Lindahl in the courtroom is where he was a classmate with Rick Lindahl Law Firm PC Haselton, who is now the Chief Judge of the greatest asset he the Oregon Court of Appeals. He earned James Egan, currently a judge in would bring to the an undergraduate degree in economics Linn County Circuit Court, finished first and political science from Willamette in the May 2012 primary with 45 percent Court of Appeals. University, then joined the United States of the vote and won 35 of Oregon’s 36 Marine Corps. After three years in the “I’ve been in the Marines, Egan attended the University counties, losing only Multnomah County. of Oregon law school, earning his law Tim Volpert finished second with 33 per- arena, trying cases degree in 1985. cent of the vote. Because none of the as a lawyer and a Egan’s professional activities have three candidates on the primary ballot included serving in the Oregon State received a majority, Egan and Volpert judge,” he said. “That Bar House of Delegates and as a board will compete in a runoff in the November member and president of the Oregon general election. is a perspective that Trial Lawyers Association. Egan was appointed to the court in will be completely Egan would like to see changes 2010 by Governor Kulongoski. Before lost on the Court of that allow the Court of Appeals to issue his appointment, Egan practiced for 25 more opinions. “When I served as a pro years as a trial lawyer in Albany, primar- Appeals with Judge tem judge [on the Court of Appeals], we ily representing claimants in worker’s reviewed 50 cases and issued only four compensation and personal injury cases. Brewer going to the opinions,” he said. “It is important for ap- Egan believes his experience in the Supreme Court.” pellate judges to issue opinions because courtroom is the greatest asset he would lawyers and trial judges need guidance bring to the Court of Appeals. “I’ve been as to the changes that are always hap- in the arena, trying cases as a lawyer and pening.” a judge,” he said. “That is a perspective the Supreme Court.” According to Egan, the key to more that will be completely lost on the Court Although his time in private prac- opinions is reducing the number of cases of Appeals with Judge Brewer going to tice focused on trial work, Egan said he each appellate judge handles. Accord-

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14 The Verdict ■ Summer 2012 FEATURES

Oregon Court of Appeals Candidates continued from page 14

ingly, Egan supports the current proposal ceived endorsements from The Oregonian, to expand the court to 13 judges. “The the Salem Statesman Journal, the Bend Oregon Court of Appeals is the most Identifying his Bulletin, the Medford Mail Tribune, the heavily tasked court in the United States,” Daily Astorian, and the Eugene Register- said Egan. “We need to get 13 bodies on qualifications, Guard. Notable among the endorsements the Court of Appeals as soon as possible.” he received are those of Governor Barbara He also believes there are ways to adjust Volpert points to his Roberts, former Multnomah County Dis- internal protocols to reduce the case-per- time working at the judge ratio. trict Attorney Mike Schrunk, former At- As for the campaign, Egan said it has Court of Appeals with torney General Hardy Myers, and former been both interesting and entertaining, Justice Gillette. and that he is working hard “hitting the future Justice Gillette, For 13 years, Volpert has shared his bricks, raising money.” He said he plans knowledge of constitutional law with to run television advertisements in the Justice Betty Rob- high-school students, helping to establish Portland market because “that’s where and coach the Grant High School Constitu- the votes are.” erts and Chief Judge tion Team, which has won eight state titles George M. Joseph, and earned seven top-ten finishes in the national “We the People” competition Profile of Candidate and his subsequent in Washington, D.C. Volpert emphasizes Tim Volpert experience handling what he has learned through that volun- teer work. “Co-coaching that high school Alan Galloway more than 100 appeals team along with 10 other prominent Davis Wright Tremaine LLP Oregon attorneys has been a 13-year ad- in state and federal vanced seminar in Constitutional Law,” he For 23 years, Tim Volpert has been said, “not to mention the crash course in an appellate litigation partner at Davis appellate courts. advanced adolescent psychology!” Wright Tremaine LLP. His campaign for the Volpert draws on his courtroom and Court of Appeals seat, if successful, would classroom experience in addressing how place him on the bench at an institution Volpert’s experience is his successful argu- the Court of Appeals might be improved. where he has argued dozens of appeals, ment before the United States Supreme “It is hard to imagine how the judges could and where he served as a judicial clerk for Court in Vernonia School District v. Acton. work any harder than they do already,” W. Michael Gillette in the early days of his Volpert emphasizes breadth of experience, Volpert says, “but the distinct possibility legal career. Prior to joining what became which has included both appellate and of the legislature appropriating funds for Davis Wright Tremaine LLP, Volpert worked trial work, and included a diverse subject an additional three judges might make it as a civil litigator at the insurance defense matter encompassing complex commercial possible for the court to hear more oral firm then known as Cosgrave, Kester, litigation, class actions, personal injury, argument and write more opinions.” Cit- Crowe, Gidley and Lageson. real estate, employment, tax, telecommu- Identifying his qualifications, Volpert nications, patents, and constitutional law. ing the importance of citizens seeing the points to his time working at the Court of “If elected, I will encounter very few cases judicial process first-hand, Volpert says Appeals with future Justice Gillette, Justice at the court involving areas of the law that that he would like to see the court acquire Betty Roberts and Chief Judge George M. I have not encountered at some point in the resources to hear many oral arguments Joseph, and his subsequent experience my 31-year legal career.” outside of Salem, especially in schools.“In handling more than 100 appeals in state During the primary season, Volpert my experience, that kind of outreach is a and federal appellate courts. Prominent in won the bar preference poll, and also re- great public service.”

The Verdict ■ Summer 2012 15 OADC 2012 ▼

OADC Board Member Gordy Welborn

Jack Pessia and Hon Mark Clarke

Panelists Hon. David Brewer and Hon. Mark Clarke

Golf Tournament Winners

Due to unusual weather circumstances of thunder and lightning and severe rain during part (ok, most) of the golf tournament, most of our golfers were unable to complete the round of golf and the tournament. Congratulations go to the team of Eric DeWeese, Todd Foster, Carl Rodrigues and Brian Talcott for being the only OADC Past Presidents Drake Hood and team to finish with a score of 68! Bill Sime

16 The Verdict ■ Summer 2012 Convention Highlights ▼

Dawn Davis and Jennifer Hood

Fun Run

Frank Lagesen, OADC Past President

Fun Run Winners Fun Run Winners - 2.5 Mile Run 1st Place Men’s - Joe Rayburn 15:19 2nd Place Men’s - Dan Borbon 15:32 3rd Place Men’s - Jack Pitcher 16:55

1st Place Women’s - Eva Marcotrigiano 20:50 2nd Place Women’s - Megan Cavanagh 21:20 3rd Place Women’s - Morgan Harrison 24:11

And special congratulations to Klarice Benn for being the only runner to do the 5 mile run and completing it at 54:13!

Ryan Hunt, Mike Lehner and Steve Rickles

Photos courtesy of Steve Rickles of the Rickles Law Firm PC

The Verdict ■ Summer 2012 17 RECENT CASE NOTES Recent Case Notes

Matthew J. Kalmanson, Hart Wagner LLP Case Notes Editor

PLEADINGS that, because all transactions were fi- amend under ORCP 21A, which provides nanced through Key Bank, the bank knew that if “the court grants a motion to or should have known that single boats dismiss, the court may enter judgment ORCP 23, where a dismissal were being sold multiple times. in favor of the moving party or grant isn’t really a dismissal Key Bank filed a motion to dismiss leave to file an amended complaint.” In for failure to state a claim, which the response, the plaintiff cited ORCP 23A, In Lamka v. Key Bank, 250 Or App trial court granted. The court entered which states that a “pleading may be 486, 281 P3d 639 (2012), the Court of an order of dismissal that did not specify amended by a party once as a matter of Appeals held that when a complaint has course at any time before a responsive been dismissed under Rule 21, a party may whether it was with or without prejudice, pleading is served * * *.” Key Bank had amend the complaint once as of right, and did not expressly grant the plaintiff not filed a responsive pleading. The trial even when the dismissal order does not the right to amend under ORCP 21A. court agreed with Key Bank and dismissed specifically permit amendment. Within 10 days after the court filed the amended complaint. This case was brought against a boat and served the order of dismissal, the On appeal, the court harmonized dealer and Key Bank by a customer of the plaintiff filed an amended complaint. the apparent conflict between ORCP boat dealer. The plaintiff alleged that the Key Bank moved to dismiss the amended 21A and ORCP 23A by concluding that boat dealer was selling the same boat to complaint on the ground that the court a “party may amend a complaint once multiple customers. Plaintiff also alleged had not granted the plaintiff leave to as a matter of right before a responsive pleading is served, even if the court has Northwest, National & International dismissed the complaint. It is only if the Civil & Criminal Investigations & trial court grants a motion to dismiss after the plaintiff has already filed an amended Insurance Claims Handling complaint or the defendant has filed a re- sponsive pleading, that, under ORCP 21A, “Satisfying the community with Diligence, Integrity, & the plaintiff must file a motion for leave Fidelity, Since 1989” to file an amended complaint.” The court NORTHWEST INVESTIGATIONS & CONSULTING, LLC also pointed to ORCP 15 B(2), which pro- Professional Investigations & Insurance Claims Handling Since 1989 vides: “If the court grants a motion and an nwinvestigation.com amended pleading is allowed or required, such pleading shall be filed within 10 days after service of the order, unless the order

We offer the following services: Mention this advertisement & we otherwise directs.” Because Key Bank had will reduce your first service not filed a responsive pleading, and the Skip Trace/ Locate Workman's Comp. invoice by 15%! Background Checks Interviews plaintiff had filed an amended complaint Trial Preparation Property / Casualty within 10 days of service of the order, the AOE COE PO Box 90576 Portland, OR 97290 Inland Marine Court of Appeals held that the trial court Corporate Investigations tele 503.710.4414 fax 503.262.6800 Damage Appraisals erred when it dismissed the amended Asset Checks Motor Truck Cargo Missing Persons General Liability email: [email protected] complaint. J Post-conviction Relief web: nwinvestigation.com — Submitted by Grant Stockton, Brisbee & Stockton LLC

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18 The Verdict ■ Summer 2012 RECENT CASE NOTES Recent Case Notes

ATTORNEY FEES plaintiff failed to comply with ORCP 68 C. traceable to the putative principal’s con- As such, the trial court lacked authority to duct or representations, that the medical award the attorney fees. J professional was the principal’s employee If they’re not in your plead- — Submitted by Grant Stockton, or was otherwise subject to the principal’s ings, you don’t have a prayer Brisbee & Stockton LLC right of control in providing the medical services causing the injury. In Anderson v. Dry Cleaning To-Your- Plaintiff suffered injuries as a result Door, 249 Or App 104 (March 28, 2012), the AGENCY of a surgeon’s negligence. The surgeon’s court held that a failure to assert a right office was in a building leased to medi- to attorney fees in a pleading or motion Supreme Court establishes test cal providers by an LLC (the “landlord”). prohibits a successful party in a contempt Plaintiff sued the surgeon for negligence, proceeding from recovering such fees. for vicarious liability based and the landlord on an apparent agency The underlying dispute concerned on apparent agency theory for theory. Plaintiff alleged that the landlord a failed business franchise agreement. injuries negligently inflicted had created the appearance that the The parties dissolved their business re- by medical professionals building housed a group medical entity, lationship through an arbitration. The for which the surgeon was an agent. The arbitration judgment included various In Eads v. Borman, Case No. S058445 trial court granted summary judgment noncompetition terms. The circuit court (April 26, 2012), the Oregon Supreme for the landlord and the Court of Appeals confirmed the arbitration award in a gen- Court held that, in order to establish affirmed. eral judgment. vicarious liability on an apparent agency On review, the Supreme Court ana- After dissolution, the defendant initi- theory for injuries negligently inflicted by lyzed agency principles and how they ated a contempt proceeding against the a medical professional, the plaintiff must apply in the medical malpractice context. plaintiff for purported violations of the have dealt with the negligent medical The court described the “key questions” noncompetition terms in the general judg- professional based on a reasonable belief, as “(1) whether the putative principal held ment. The plaintiff responded to the order of show cause and filed a hearing brief, neither of which requested attorney fees. Creating Optimal Structured Settlement Solutions The trial court found for the plaintiffs, who then submitted a proposed supple- mental judgment that included an award of attorney fees. The trial court entered the proposed judgment over defendant’s objection. The Court of Appeals reversed. The court noted that, pursuant to ORCP 68 C, a court can award attorney fees only if a party first asserts an entitlement to fees www.epssg.com in a pleading or motion that identifies Kathy Osler Jayne Gurley the basis for the fees. Here, the plaintiffs [email protected] 800-444-4362 [email protected] asserted their entitlement to fees for the first time in their proposed judgment submitted after the contempt hearing. The court held that, because a proposed Still the Right Choice – Secure, Tax-Exempt, Guaranteed Return! judgment is not a pleading or a motion,

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The Verdict ■ Summer 2012 19 RECENT CASE NOTES Recent Case Notes itself out, either expressly or implicitly, as a Following a verdict in favor of a for- ing the names of victims of sexual abuse direct provider of medical care so as to lead mer Boy Scout who had alleged sex abuse from the exhibits that were released. J a reasonable person to conclude that the by his former scout leader, plaintiffs moved — Submitted by George S. Pitcher of negligent actor who delivered the care was to vacate a protective order that required Williams Kastner the principal’s employee or agent in doing the parties to keep confidential certain so; and (2) whether the plaintiff relied on “ineligible volunteer files” kept by the Boy EVIDENCE those representations by looking to the Scouts of America (“BSA”) over a 20-year putative principal, rather than to a specific period. The files were introduced into physician, as the provider of the care and evidence at trial and identified alleged per- Email must meet business not just as the situs in which a physician of petrators of abuse, as well as victims. The records exception to be admis- the plaintiff’s choosing provided the care.” trial court granted the motion, subject to sible The court then examined the evidence redaction of the victims’ names. Six media and concluded that the plaintiff had failed entities (the “intervenors”) also requested In Rogers v. Oregon Trail Electric, to meet both parts of the test. The court that the unredacted files be released. United States District Court for the District held that there was insufficient evidence Intervenors filed a mandamus petition of Oregon No. 3:10-cv-1337-AC (May 8, for a jury to find that the landlord had held in the Oregon Supreme Court seeking to 2012), the court adopted a test to deter- itself out as a provider of medical services require the trial court to release the unre- mine whether emails constitute business delivered through agents who were sub- dacted exhibits for public inspection. BSA records within the meaning of FRE 803(6). ject to the landlord’s control. The court opposed the petition and filed its own pe- Rogers involved a summary judgment also concluded there was no evidence to tition challenging the trial court’s decision motion in an employment case in which support a conclusion that plaintiff had to vacate the protective order. defendant had submitted several emails as actually and reasonably relied on the The intervenors argued that Article exhibits to a declaration. Plaintiff moved landlord’s representations in selecting the I, section 10—the “Open Courts” provi- to strike these exhibits as inadmissible. surgeon. J sion—required the release of the exhibits. The court adopted the following test to — Submitted by George S. Pitcher of BSA argued that the Open Courts provision determine whether the emails were admis- Williams Kastner does not create a public right to obtain tri- sible under the business records hearsay al exhibits and that the trial court abused exception: (1) the email must have been its discretion by releasing the ineligible sent or received at or near the time of the TRIAL EXHIBITS volunteer files. The court addressed the events recorded in the email; (2) the email BSA’s petition first, holding that nothing must have been sent by someone with Trial Courts Have Discretion in Article I, section 10 prohibits trial courts knowledge of the events documented in to Provide Public Access to from releasing exhibits to the public. The the email; (3) the email must have been Trial Exhibits court then analyzed the facts and deter- sent or received in the course of a regular mined that the trial court had not abused business activity, which requires a case- In Doe v. Boy Scouts of America, Case its discretion, pursuant to ORCP 36 C, to by-case analysis of whether the produc- No. S058634 (June 14, 2012), the Oregon issue and vacate the protective order. ing defendant had a policy or imposed a Supreme Court held that Article I, section The court then extensively analyzed business duty on its employees to report or 10 of the Oregon Constitution neither the language and history of Article 1, record the information within the email; compels nor prohibits a trial court from section 10 and determined that it did not (4) it must be the producing defendant’s providing public access to trial exhibits, provide an absolute right to the public re- regular practice to send or receive the and trial courts can exercise their discretion lease of all exhibits admitted as evidence in type of events documented in the email; in determining whether to allow access to trials. Further, the court held that the trial and (5) a custodian of records or qualified trial exhibits. court did not abuse its discretion in redact- witness must attest that these conditions

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20 The Verdict ■ Summer 2012 RECENT CASE NOTES Recent Case Notes have been fulfilled, which requires an sponsible for managing vendors, includ- was not a third party to the contract be- email-by-email inquiry. ing the plaintiff. In 2002, the defendant tween PCC and the plaintiff. The court Applying that test, the court granted compiled a report of indiscretions by noted that the tort of IIER is meant to plaintiff’s motion to strike the emails plaintiff during their business interactions. protect contracting parties from interfer- because the declarant did not articulate In response, PCC created a policy to limit ence in their contracts from outside par- whether the individual sending the email plaintiff’s work to the Small Structures ties. The court found that the defendant had personal knowledge of the events de- Business Office (“SSBO”). Defendant was not an outside party because she was scribed herein, did not put forth evidence also told employees that plaintiff was a acting within the time and space limits of a policy that imposed a business duty “crook” and “to never do business with authorized by her employment, she was on the defendant’s employees to send and plaintiff.” These actions, along with SSBO motivated—at least in part—by a purpose retain emails, and did not analyze the ap- policy infractions, led to the termination to serve her employer, and her actions plicability of the test on an email-by-email of plaintiff as a vendor for PCC. were of the kind she was hired to perform. basis. J The plaintiff then sued the defendant, Thus, the Court of Appeals affirmed sum- — Submitted by Karen M. Vickers of alleging claims of IIER and defamation. mary judgment on this claim. Mersereau Shannon LLP The trial court granted summary judgment Contrary to the trial court’s ruling, to the defendant on both claims finding the Court of Appeals then suggested the TORTS that the plaintiff did not produce sufficient defamation claim might have survived evidence that the defamatory statements summary judgment because a reasonable caused injury to the plaintiff or that the in- juror could find that the defendant’s state- Manager finds safety from terference was carried out by a third party. ments were the cause of damage to the within: Court of Appeals af- With respect to the IIER claim, the plaintiff. However, the court held that the firms summary judgment on Court of Appeals held that the defendant defendant’s statements were qualifiedly intentional interference with economic relations and defa- Oregon Association mation claims of Defense Counsel In Mannex Corp. v. Bruns, 250 Or App OADC 50, 279 P3d 278 (2012) the Oregon Court of Appeals affirmed summary judgment for Oregon Association of Defense Counsel the defendant on a claim of intentional Fall Seminar interference with economic relations (“IIER”) because the plaintiff could not November 8, 2012 show that the defendant was a third party Hilton Portland to the contract between the plaintiff and the defendant’s employer. The court also Portland, Oregon held that the defendant’s communications were qualifiedly privileged because they Mark your calendars to attend the OADC Fall Seminar on Thursday, were made by the defendant-employee November 8th! The seminar will be filled with great speakers on a variety to protect the interests of her employer. of topics and valuable CLE credits. Between 1999 and 2008 the plaintiff provided custom metal fabrication to PCC Fall Seminar Registration: Information will be available in , September check Structural, Inc. (“PCC”). The defendant our website, www.oadc.com. at that time for more information. was a purchasing manager at PCC re-

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The Verdict ■ Summer 2012 21 RECENT CASE NOTES Recent Case Notes privileged because they were made by investor, reducing the plaintiff’s percent- patient could not establish a violation the defendant either to protect the inter- age ownership. After a jury trial on plain- of the standard of care that governs est of defendant’s employer or because tiff’s direct claims for breach of fiduciary surgeons; and (2) the doctrine of res ipsa they were made to the employer on a duty, the trial court awarded plaintiff $40 loquitur did not apply because the case matter of mutual interest. Furthermore, million against Carpenter and Hateley. presented complex medical issues outside the court found insufficient evidence of On appeal, Carpenter argued that of common knowledge. abuse of the privilege, which might have the breach of fiduciary duty claim should The plaintiff was a patient who sued resulted in waiver, because insufficient evi- have been tried in equity, and was really a her physician for medical malpractice in dence existed of a “rumored grudge” and derivative claim designed to redress inju- performing surgery to fuse three verte- “vendetta.” Thus, the Court of Appeals ries to the company. The Court of Appeals brae in plaintiff’s neck using a titanium affirmed the trial court’s grant of summary rejected both arguments, explaining that plate. At trial, the plaintiff presented judgment on the defamation claim, albeit “[t]he nature of the relief sought gener- expert testimony from a biomechanical on different grounds. J ally determines whether a claim is based engineer who testified that the surgeon — Submitted by Allyson S. Krueger on law or equity.” Because the action was had failed to adhere to the plate manu- & Stephen M. Scott of Dunn Carney for money damages, it was a legal action. facturer’s installation guidelines. The Allen Higgins & Tongue LLP The court also held that plaintiff had plaintiff did not present testimony from brought a direct claim, not a derivative a surgical expert to opine on the standard claim, because he had suffered a unique CORPORATE LAW of care. Defendant moved for a directed harm by being excluded from meaning- verdict arguing that plaintiff had failed ful participation in the company’s affairs. to provide evidence of the applicable Breach of fiduciary duty Moreover, if it were a derivative claim, the standard of care and its breach, and that claim for money damages was court observed, then the result would be res ipsa loquitur did not apply to the type a direct legal action, not a de- perverse—any recovery would go to the investor who had benefited from the of injury alleged. The trial court granted rivative equitable action breach of fiduciary duty. J the motion. The Court of Appeals affirmed. On In Kollman v. Cell Tech Interna- — Submitted by Robbie Manhas of the expert testimony issue, the court held tional, Inc., Oregon Court of Appeals No. Davis Wright Tremaine LLP that the engineer’s testimony failed to es- A126612 (May 31, 2012), the court held tablish, “from a medical standpoint,” that that a shareholder’s breach of fiduciary EVIDENCE/ “an ordinarily careful surgeon exercising duty claim for money damages was a di- NEGLIGENCE the degree of care, skill, and diligence” rect action at law, not a derivative claim would have installed the plate as rec- in equity. ommended by the manufacturer. With Plaintiff, a shareholder of defen- To establish medical negli- dant Cell Tech (the “company”), sued gence, plaintiff must provide respect to res ipsa loquitur, the court held that the case was unlike “foreign object” the company, its CEO Carpenter, and its expert testimony on the stan- Chairman Hateley. Cell Tech was owned cases because it “involve[d] a complex jointly by plaintiff and Carpenter but, dard of care from a doctor medical issue requiring the assistance of after the company suffered setbacks, with appropriate experience expert medical testimony,” which was Carpenter and Hateley arranged for a outside of a juror’s common knowledge. reverse-merger that terminated plain- In Trees v. Ordonez, Oregon Court The court held that plaintiff failed to tiff’s employment and his participation of Appeals No. A139893 (May 31, 2012), show that the type of injury ordinarily in management. Then, without plaintiff’s the court held: (1) the testimony of a bio- does not occur without negligence. J knowledge, Carpenter and Hateley sold mechanical engineer about the improper — Submitted by Alan J. Galloway of ten percent of the company’s stock to an installation of a cervical spine plate in a Davis Wright Tremaine LLP

22 The Verdict ■ Summer 2012 ▼ Council on Court Procedures Update

The Council on Court Procedures continues to evaluate a number of proposals and rule changes. The following is a list of committees that have been formed to review issues that will likely result in rule changes.

On September 8, 2012, the Council on Court Procedures • ORCP 19 (replacing the historic affirmative defense of res met for a final review of proposed rule changes and to vote judicata with the more modern and specific concepts of on each potential amendment. The following is a list of rule claim preclusion and issue preclusion) changes that will be published to the bench and bar for re- • ORCP 27 (substantially revising the rule to better protect view. OADC Members are encouraged to give careful review persons alleged to be lacking legal capacity) and comment regarding these potential ORCP amendments. • ORCP 39 (requiring that the deponent’s identity be dis- Rule changes under consideration: closed in advance of an organizational deposition) • ORCP 17 (modernizing the technical requirements for signatures as the court system transitions to electronic • ORCP 55 (objecting party to medical records subpoena filing) shall specify in detail the grounds for objection)

• ORCP 46 (a technical change resulting from the changes to ORCP 55)

• ORCP 57 (providing that alternate jurors not be discharged until the verdict is given such that, if a juror becomes un- able to continue during the deliberations, the alternate juror(s) will be available to deliberate with the remaining jurors and reach a verdict)

• ORCP 59 (providing a bet- ter means to make a con- OADC members are cern with a jury instruction encouraged to contact OADC members on known to the trial court, the Council with any which is not unduly tech- comments, questions, nical, so that the court can or concerns. We consider giving or modi- encourage your Words can’t describe how it feels losing fying the proposed in- participation. to a better argument. There’s just not a lot to struction and the issue is say. “Better luck next time?” No, next time make sure preserved for appeal if the court does not give or modify the proposed instruction) you have the better argument. • ORCP 68 (revisions to procedures for requesting and objecting to attorney fees, costs and disbursements; also addresses when the court may rule on requests without Markowitz Herbold the need for a hearing) Glade & Mehlhaf pc Detailed information can be found at www.councilon- t r i a l l a w Y e r S courtprocedures.org.

— Submitted by Kristen David of Bowerman & David PC p o r t l a n d I 5 0 3 . 2 9 5 . 3 0 8 5 I w w w . m h g m . c o m

The Verdict ■ Summer 2012 23 PETITIONS FOR REVIEW Pending Petitions For Review

The following is a brief summary of cases for which petitions for review have been filed with the Oregon Supreme Court. These cases have been selected for their possible significance to OADC members; however, this summary is not intended to be an exhaustive listing of the matters that are currently pending before the court. For a complete itemization of the petitions and other cases, the reader is directed to the court’s Advance Sheet publication. Petitions for Review That Have Been Allowed

NEGLIGENCE FED n Jack Stewart v. Kids Incorporated of Dallas, OR (S059979) n Elk Creek Mgmt. Co. v. Harold Gilbert (S060187) (A143348) (A139501) (opinion reported at 245 Or App 267, 261 P3d (opinion reported at 244 Or App 382, 260 P3d 686 (2011), 1272 (2011)) (scheduled to be argued before the Supreme modified on recons, 247 Or App 572, 270 P3d 362 (2012)) Court on November 6, 2012). (scheduled to be argued before the Supreme Court on The plaintiff is the guardian ad litem for Jane Doe, a minor January 7, 2013). who alleged that she was sexually assaulted by a third party in Defendants were tenants who were subject to an FED action defendant Dairy Queen’s bathroom while attending a car-wash by their landlord, who alleged that their eviction was improper fundraiser in the parking lot put on by the non-profit defendant retaliation under ORS 90.385. The question on review concerns Kids Incorporated. The trial court dismissed the plaintiff’s second the evidence necessary to establish “retaliation” under ORS amended complaint because it did not allege facts sufficient 90.385. to show that the sexual assault was the foreseeable result of conduct by defendants. The Court of Appeals affirmed. EXPERT DISCOVERY On review, the issue is whether plaintiff pleaded sufficient n Aliya Boles v. Patricia Jett, M.D. (S060282) (original manda- facts to show that the sexual assault by the third party was the mus proceeding involving an order from Jackson County foreseeable result of defendant’s failure to do more to prevent Circuit Court). the assault. In this mandamus proceeding, the issue is whether it is a violation of ORCP 44 C for the plaintiff to produce reports from EMPLOYMENT examining physicians while redacting their names and other n Michael Cocchiara v. Lithia Motors, Inc. (S060100) (A146452) identifying information. (opinion reported at 247 Or App 545, 270 P3d 350 (2011)) (scheduled to be argued before the Supreme Court on November 8, 2012). NEGLIGENCE n Plaintiff alleged that the defendant failed to keep its Keri Hagler v. Coastal Farm Holdings, Inc. (S059895) promise to give him a corporate job that would accommodate (A142965) (opinion reported at 244 Or App 675, 260 P3d his special needs, after he had rejected another job in reliance 764 (2011)) (scheduled to be argued before the Supreme on that promise. The trial court granted summary judgment to Court on November 5, 2012). the employer, and the Court of Appeals affirmed. In this premises liability action, the Court of Appeals af- On review, the issues are: firmed a trial court’s grant of summary judgment to a hardware (1) Does a prospective employee have a fraud claim based store, after a post pounder fell off the defendant’s shelf and on a broken promise for “at will” employment? landed on the plaintiff’s foot. The court held that the plaintiff (2) Does a prospective employee have a promissory estoppel had failed to provide sufficient evidence that the defendant’s claim if he relies on the promise to his detriment? actions presented an unreasonable risk of harm to the plaintiff. (3) Is the job offer subject to a protected status if it is to On review, the question is whether the Court of Appeals cor- accommodate a disability? rectly examined the record on summary judgment.

24 The Verdict ■ Summer 2012 PETITIONS FOR REVIEW

PREMISES LIABILITY INSURANCE n Billie Charles Towe v. Sacagawea, Inc. (S059896) (A142775) n Sara Marie Zimmerman v. Allstate Property and Casualty (opinion reported at 246 Or App 26, 264 P3d 184 (2011) Ins. Co. (S060011)(A146460) (246 Or App 680, 267 P3d 203 (scheduled to be argued before the Supreme Court on (2011)) (scheduled to be argued before the Supreme Court November 5, 2012). on September 21, 2012). The plaintiff in this case was injured when he drove his Petitioner Allstate Property and Casualty Insurance Com- pany (Allstate) was granted review of a Court of Appeals deci- motorcycle on private property, and hit a wire that crossed sion affirming a judgment that awarded plaintiff Sara Marie the road. He sued both the landowner and the real-estate Zimmerman attorney fees under ORS 742.061 on her action company that had placed a sign directing people to the road for underinsured motorist (UIM) benefits. across which the wire was strung. The Court of Appeals grant- On review, the issues are: ed summary judgment to the defendants after finding that (1) When does an insurer receive “proof of loss” under the plaintiff was a trespasser. The Supreme Court will review: ORS 742.061? (1) whether plaintiff was a licensee, a trespasser or a (2) Can an insured file a “proof of loss” of UIM benefits constant trespasser; before any UIM benefits are due? (2) whether plaintiff submitted sufficient evidence to es- (3) Does an insurer who has offered to arbitrate fault and tablish defendant’s negligence in the light of his legal status; damages become liable for attorney fees if it admits the fault (3) whether the trial court erred when it decided that of the underinsured motorist at the time of trial, leaving only plaintiff was 100 percent at fault for his injury. damages in dispute? Association News OCTO Deadline New Members Contributions for The Verdict are al- OADC welcomes the following new and returning ways welcome. For our next edition, members to the association: please send your articles to: Jeanne Loftis, Editor in Chief Lisa Amato Emily Fox Bullivant Houser Bailey PC Wyse Kadish LLP Markowitz Herbold 888 SW 5th Ave., #300 Klarice Benn Aaron Johnson Portland, OR 97204 503/499-4601 Abbott Law Group PC Drazkowski & Pilkenton [email protected] William Edgar John Laherty Please email your articles in Word Hart Wagner LLP Deschutes County, Oregon format. ✪ Michael Estok Joyce Wan Lindsay Hart Schwabe Williamson Calendar Lawson Fite Elizabeth Wright Markowitz Herbold Bullivant Houser Bailey PC OADC Fall Seminar November 8, 2012 Portland, OR OADC Annual Convention June 13-16, 2013 Sunriver Resort - Sunriver, OR All programs are subject to change

The Verdict ■ Summer 2012 25 ✔✔PRACTICE TIPS Practice Tips You Don’t Say: The No-Win Quandary When Your Opponent Violates An In Limine Ruling

Eric Meyer Zipse, Elkins & Mitchell

here are very few absolutes plaintiff attorneys have long employed thinking of that bear, I will give you my in the practice of law, but this a number of devices for eliding the rule, house and my car. is one: If you try cases before among others by requesting that the jury In objecting to UCJI 16.01, I always T juries, you will regularly find be given Uniform Civil Jury Instruction point out that I have not suggested, or yourself in the position of 16.01, the “Ability to Pay” instruction, will not suggest (depending on the stage having to make split-second which provides as follows: of the trial at which the discussion on decisions about whether, and how, to jury instructions between the judge and The jury is not to consider respond when—you’ll note that I didn’t counsel is occurring) to the jury that my whether any of the parties in say if—your opponent violates the client will be unable to satisfy an award this action has insurance or the court’s order that she or he not discuss a or that a money judgment will render ability to pay for any liability, particular matter in the presence of the her or him destitute, noting that to do so loss, damage, or injury. Whether jury through a ruling in your favor on a would be both untruthful and unethical. any party has insurance or the motion in limine. In my experience, judges are more or less ability to pay has no bearing on If your practice, like evenly split on the issue; approximately the issues that you are to decide. mine, is devoted pri- half will give the instruction and half will marily to the defense To the best of my recollection, in over disallow it. of personal injury suits 70 jury trials, I have never had a plaintiff There are some defense attorneys arising out of auto- attorney not request this instruction. who feel that it is not necessary to submit mobile accidents, this When I object to the instruction (which I a motion in limine on the matter of insur- scenario will arise most always do), my opponent usually makes ance, as evidence related to it is already Eric Meyer often with respect to the Trojan horse argument that giving barred by law pursuant to OEC 411(1), the dreaded I-word: In- UCJI 16.01 is actually to my advantage, as noted above, but I do not share that surance. Every attorney worth her or his as it expressly commands the jury not view. I believe it is important to make a salt knows that it is, at least theoretically, to speculate as to whether or not my record so that there is no question that grounds for mistrial if the jury is made client is insured. (This obviously begs your opponent is aware of the rule and aware that some or all of its award will the question of why my opponents are that you intend to hold her or him to it. be paid by an insurance company. OEC so apparently eager to help me.) If you Even if the court decides not to give 411(1)/ORS 40.205(1) directs that, “Except believe that the way to keep people from the UCJI 16.01 instruction, plaintiff at- where lack of liability insurance is an thinking about a particular thing is to tell torneys will occasionally broach the issue element of an offense, evidence that a them not to, let me offer you a simple during voir dire by saying, “In this case, person was or was not insured against proposition: For the next ten minutes, go we’re not going to talk about whether or liability is not admissible upon the issue stand in a corner by yourself and think not the defendant has insurance,” con- whether the person acted negligently or about anything except a polar bear. If tradicting themselves by talking about otherwise wrongfully.” you can honestly tell me that you went that very thing. Sometimes a member of Notwithstanding this, however, ten consecutive minutes without once the jury pool will even tee up the issue

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26 The Verdict ■ Summer 2012 PRACTICE TIPS ✔✔

PRACTICE TIPS continued from page 26 by responding to questions regarding tone of voice, ask to approach the bench, is proven beyond a reasonable doubt, whether or not anyone has ever sued at which time you can request that your but the judge was similarly unpersuaded them in relation to an auto accident by opponent be instructed outside earshot by that argument. As such, it is not saying, “My insurance company took care of the jurors to play by the rules. But inconceivable that a judge might find of it,” or words to that effect, enabling again, to the jury you should appear as a blatant violation of OEC 411(1) to be your opponent to exclaim with ostenta- if the matter you’re bringing up is some a quasi-harmless error easily remedied tious concern for keeping the record relatively unimportant procedural mat- through a curative instruction to the jury. clean, “Well, we’re not going to talk ter you regard as almost too tedious to One hopes, of course, that that will not about insurance in this case!” mention. prove to be the case, as it would surely Along the same lines, I have heard Although I have had opponents constitute to some in the plaintiffs’ bar opponents ask prospective jurors during attempt to suggest the involvement of voir dire if they had ever made “claims” insurance in trials obliquely with a wink an invitation to treat the rule as if it did for personal injury, leaving out the word and a nod to juries more times than I can not exist. “insurance” but making it more than count, I have never had one blatantly an- In fairness to the judge who ruled on clear by implication. nounce that any award would be covered my motion to sever the UIM claim, one The question, then, becomes this: by an insurer or that I was being paid for interesting change I have noted over the What should you do when your opponent my work on the defendant’s behalf by course of my two decades trying cases is has laid the issue of insurance before an insurance company, so I have never that, early in my career, jurors would al- those who will be deciding your case? (yet) had to take the extraordinary step most always send out a note during their The correct answer flies in the face of of moving for a mistrial on that basis. As deliberations asking whether or not their all we have ever been taught about be- surprising as this may sound, however, I award would be covered by insurance, ing zealous advocates for of our clients: do not take it as a given that a mistrial making it (obviously) necessary at that NOTHING. While you are in the presence would be granted in such a situation. In a point to instruct them not to consider of the jury, do not react visibly or audi- somewhat analogous situation, I recently that, whereas today they virtually never bly at all to any mention of insurance. brought a motion to sever claims that a ask that question, even when the “Abil- Instead, appear poker-faced, impassive, plaintiff attorney had brought simultane- ity to Pay” instruction is not given. Per- even bored. ously in a lawsuit against my client and haps this is, in fact, evidence that jurors Put yourself in the place of the jurors: the plaintiff’s own underinsured motorist Regardless of what you may suspect or (“UIM”) carrier based on the allegation now take the existence of insurance for wonder, no one has actually confirmed that my client’s policy limits were insuf- granted. Assuming for sake of argument or denied that any award in favor of the ficient to compensate the plaintiff for her that that is the case, however, it has been plaintiff will be paid by an insurer. Now injuries. Leaving aside the arguments I my heartening experience that it gener- imagine that the plaintiff attorney makes made about the fact that no UIM claim ally appears to have little or no effect what sounds like a passing reference to yet existed or would ever exist until and on jurors’ evaluations of cases. They are insurance, at which point defense counsel unless the plaintiff first obtained an ex- generally still willing to issue reasonable leaps to her feet, shouting an objection cess judgment against my client or settled awards in admitted-liability cases when and requesting that you and your fellow for the limits of his liability coverage, I I am able to present them with evidence jurors be instructed to disregard what pointed out that allowing the plaintiff that plaintiffs are overreaching, and you have just heard. Is there now any to sue my client and the UIM carrier even to award nothing when I can dem- remaining question in your mind as to simultaneously would tell the jury that onstrate that a plaintiff has lied about a whether or not the defendant has insur- my client had insurance, as underinsur- significant matter. ance? Of course you will in good faith ance coverage is obviously not triggered In the end, there is little to gain and discharge your duty by disregarding the unless there is first underlying insurance. much to lose by allowing jurors to see plaintiff attorney’s purported faux pas Somewhat to my surprise and disappoint- you react dramatically to your opponent’s if the judge instructs you to do so, but ment, the judge was unimpressed by this, as the old cliché goes, you can’t un-ring as, in his words, “Most jurors assume “inadvertent” reference to inadmissible a bell. the defendant has insurance anyway.” evidence. It is when your opponent vio- If your opponent is especially auda- I replied that, while it may also be true lates the court’s in limine ruling in front cious in ignoring the court’s in limine that many jurors assume that any criminal of the jury that the wisdom of Abraham orders by doing so repeatedly or in a par- defendant put on trial is likely guilty, that Lincoln rings especially true: “Better to ticularly egregious manner, you should does not change the fact that their legal remain silent and be thought a fool than at that point, in a casual, non-emotional duty is to presume innocence until guilt to speak out and remove all doubt.”

The Verdict ■ Summer 2012 27 ▼ Legislative Update

Health Care Reform and Your Practice

By Inga Deckert and Jack Isselmann, Jr.

Now that the U.S. Supreme Court that: (1) improves patient safety; (2) ing to join them in Salem and will be has ruled on the constitutionality of the more effectively compensates individu- on the ballot in November. The new Federal Patient Protection and Afford- als who are injured as a result of medi- attorney candidates are: able Care Act, many states, including Or- cal errors; and (3) reduces the collateral • Shemia Fagan, Ater Wynne, running egon, are moving full steam ahead with costs associated with the medical liabil- in House District 51 (Damascus, Bor- implementation. Not only is Oregon ity system, including the costs associated ing & Happy Valley) developing a health insurance exchange with insurance administration, litigation under the Affordable Care Act, it is also and defensive medicine. • John Davis, McEwen Gisvold, run- undertaking efforts to transform the In advance of the formation of ning in House District 26 ( Wilson- way health care is delivered to Medicaid the SB 1580 work group, Governor ville) recipients. This article highlights one Kitzhaber assembled a small group of • Brent Barton, former state repre- aspect of this work that may impact the physicians and plaintiff attorneys who sentative, now running in House practice of many OADC members. are members of the Oregon Medical District 40 (Gladstone & rural Clack- Association and Oregon Trial Lawyers amas County) Medical Liability Reform Association, respectively—two groups • Kathy Graham, Professor, Willa- Earlier this year, during the February who have a history of battling one legislative session, the legislature passed mette University College of Law, another in previous liability reform ef- running in House District 20 (Salem) Senate Bill 1580, granting approval for forts. At the time of print, the recom- the State to move forward with efforts mendations of this group have not been • Jennifer Williamson, running in to transform the health care delivery made public (although it is thought to House District 36 (SW Portland) system for Medicaid recipients. Section require mediation for certain injuries 17 of SB 1580 creates the Patient Safety and if neither party is satisfied they may and Defensive Medicine Work Group. access the court system) and the SB 1580 The law requires the work group be work group has not yet held its first comprised of four legislators (one from meeting. We will continue to follow each caucus in both chambers) and four the work of these groups and keep the members appointed by the Governor, at OADC Government Affairs Committee least one of which must be a physician and membership at-large informed and and at least one of which must be a trial prepared to weigh in if necessary. lawyer. The work group is charged with recommending legislation for introduc- Attorney Legislative Candidates tion in the 2013 Legislative Session to Attorneys are invaluable members “improve health care delivery in this of the Oregon Legislative Assembly. The state and to reduce medical errors.” The current legislative assembly has several work group must prioritize legislation attorney members. Five more are hop-

28 The Verdict ■ Summer 2012 ▼ Amicus Update Michael A. Lehner OADC Amicus Committee Member and Board Liaison Lehner & Rodrigues PC The OADC board has determined that the interests of the membership are served by an active Amicus Committee.

A “Friend of the Court”— that’s what filed amicus briefs, Lindell v. Kalugin and Committee, it is helpful to suggest the we purport to be when we file a brief as Countryside Construction and Kohring v. special contribution you believe can be amicus curiae. The brief should therefore Ballard. Both cases are on review from a made by an amicus brief. This may include provide information helpful to the ap- mandamus petition. The Lindell case will the precedential impact of the decision pellate court’s decision-making process. address the restrictions the trial court may or the social or economic effects of the Although we may advance arguments impose on an independent examination decision. The amicus brief may provide to convince the court our point of view by a neuropsychologist. The Kohring case more extensive legislative history to assist is correct, we should not merely repeat will address the proper determination the court with statutory construction, or arguments already made by parties. of residence for a corporation for venue may address the broad implications of the As stated in the U.S. Supreme Court purposes under ORS 14.080(2). It examines potential resolution. Rules: the phrase “regular sustained business Referrals to the Amicus Committee activity” in that statute. may be made through any of the Com- An amicus curiae brief that The Committee elected not to submit mittee members: Lindsey Hughes (Chair), brings to the attention of the amicus briefs in two other cases submitted Janet Schroer, Tom Christ, Joel Devore, court relevant matters not al- to the Committee because it was deter- Mike Stone, Susan Marmaduke and Mi- ready brought to its attention mined we could not add anything of sig- chael Lehner (Board Liaison). by the parties may be of con- nificance to assist the court. An additional Directions for submitting requests to siderable help to the court. An case is currently under consideration. the OADC Amicus Committee can be found amicus brief that does not serve When referring a case to the Amicus on the OADC website. this purpose burdens the court, and its filing is not favored. Rule 37(1). For 30 years we’ve helped bring Although the Oregon Rules of Appel- peace of mind to over 20,000 clients late Procedure do not contain this explicit during one of life’s toughest times. Respected guidance, an amicus brief will generally be given more attention by the court if it pro- vides perspective or insight not contained in the other briefs. The Amicus Committee of the OADC is cognizant of this principle and therefore limits its participation to cases where it can offer helpful material to the court. We note that the Oregon Trial Lawyers Association, to the contrary, occasionally submits amicus briefs which simply parrot the view of the plaintiff. Our Committee strives to garner greater credibility with the appellate courts by providing amicus briefs only when they are deemed helpful to the court. We hope to live up to the OREGON ◆ S.W. WASHINGTON title “Friend of the Court.” 503.227.1515 360.823.0410 GevurtzMenashe.com There are currently two cases pend- Divorce ■ Children ■ Support ing in the Oregon Supreme Court in which the OADC Amicus Committee has

The Verdict ■ Summer 2012 29 Trial Lawyers Defending You in the Courts of Oregon FIRST CLASS Oregon Association MAIL OADCof Defense Counsel U.S. POSTAGE PAID 147 S.E. 102nd Portland, OR Portland, Oregon 97216 Permit No. 2175