THE TM VERDICT

Oregon Association Defense-Directed Investigations of Defense Counsel Loss of Chance Trial Lawyers Defending You Insurance Defense Developments in the Courts of Oregon Defending Injuries Caused by Dogs 2017 • Issue 4 2017 OADC Practice Group Leaders

COMMERCIAL CONSTRUCTION COVERAGE EMPLOYMENT GOVERNMENT LIABILITY

Alan Galloway, Chair Allen Eraut, Chair Tessan Wess, Chair Brenda Baumgart, Chair Christopher Bell, Chair Davis Wright Tremaine Rizzo Mattingly Bosworth Chock Barhoum Stoel Rives Deschutes County Legal Counsel 1300 SW Fifth Ave., #2400 1300 SW 6th Ave., #330 121 SW Morrison St., #415 760 SW 9th Ave., #3000 1300 NW Wall St., #200 Portland, OR 97201 Portland, OR 97201 Portland, OR 97204 Portland, OR 97205 Bend, OR 97701 503/241-2300 503/229-1819 503/223-3000 503/224-3380 541/330-4683 [email protected] [email protected] [email protected] [email protected] [email protected]

Patrick Rowe, Vice Chair Christine Reinert, Vice Chair Kirsten Curtis, Vice Chair Colin Geiger, Vice Chair David Landrum, Vice Chair Sussman Shank MacMillan Scholz and Marks Thenell Law Group Tonkon Torp Portland City Attorney’s Office 1000 SW Broadway, #1400 900 SW 5th Ave., #1800 12909 SW 68th Pkway., #320 888 SW 5th Ave., #1600 1221 SW 4th Ave., #430 Portland, OR 97205 Portland, OR 97204 Portland, OR 97223 Portland, OR 97204 Portland, OR 97204 503/227-1111 503/224.2165 503/372.6450 503/802-2091 503/823-4047 [email protected] [email protected] [email protected] [email protected] [email protected]

Chad Colton, Publications Jamison McCune, Publications Jacqueline Mitchson, Publications Kjersten Turpen, Publications Blake Fry, Publications Markowitz Herbold Bodyfelt Mount Bullivant Houser Bailey PC Gordon Rees Scully Mansukhani Mersereau Shannon 1211 SW 5th Ave., #3000 319 SW Washington St., #1200 888 SW 5th Ave., #300 121 SW Morrison St., #1575 1 SW Columbia St., #1600 Portland, OR 97204 Portland, OR 97204 Portland, OR 97204 Portland, OR 97204 Portland, OR 97258 503/295-3085 503/243.1022 503/228-6351 503/222-1075 503/226-6400 [email protected] [email protected] [email protected] [email protected] [email protected]

Anne Talcott, Board Liaison Katie Smith, Board Liaison Lloyd Bernstein, Board Liaison Allyson Krueger, Board Liaison Karen Vickers, Board Liaison Schwabe Williamson Law Office of Katie Smith Bullivant Houser Bailey Dunn Carney Mersereau Shannon 1211 SW 5th Ave., #1500 18840 SW Boones Ferry Rd., 310 888 SW Fifth Ave., #300 851 SW 6th Ave., #1500 1 SW Columbia St., #1600 Portland, OR 97204 Tualatin, OR 97062 Portland, OR 97204 Portland, OR 97204 Portland, OR 97258 503/796-2991 Phone: 503/994-9225 503/228.6351 503/224-6440 503/226.6400 [email protected] Email: [email protected] [email protected] [email protected] [email protected]

NEW LAWYERS PRODUCT LIABILITY PROFESSIONAL LIABILITY TRANSPORTATION TRIAL PRACTICE

Megan Cook, Chair Nicholas Kampars, Chair Heather Bowman, Chair Stacy Tela-Kerber, Chair Timothy Heinson, Chair Bullivant Houser Bailey Davis Wright Tremaine Bodyfelt Mount Elkins Zipse & Mitchell Heinson & DeDobbelaere 888 SW 5th Ave., #300 1300 SW Fifth Ave., #2400 319 SW Washington St., #1200 4380 SW Macadam Ave., #350 9200 SE Sunnybrook Blvd., #335 Portland, OR 97204 Portland, OR 97201 Portland, OR 97204 Portland, OR 97239 Clackamas, OR 97015 503/228.6351 503/241.2300 503/243-1022 503/892-2088 503/479-6223 [email protected] [email protected] [email protected] [email protected] [email protected]

Jason Poss, Vice Chair Nicholas Wheeler, Vice Chair Peter Tuenge, Vice Chair Greg Lockwood, Vice Chair Laura Taylor, Vice Chair Hart Wagner Cosgrave Vergeer Kester Keating Jones Hughes Gordon Rees Scully Mansukhani Bullivant Houser Bailey 1000 SW Broadway #2000 888 SW Fifth Ave., #500 1 SW Columbia Street, #800 121 SW Morrison St., #1575 888 SW 5th Ave., #300 Portland, OR 97205 Portland, OR 97204 Portland, OR 97258 Portland, OR 97204 Portland, OR 97204 503/222.4499 503/323-9000 503/222-9955 503/382.3855 503/228-6351 [email protected] [email protected] [email protected] [email protected] [email protected]

Jessica Wilcox, Publications Brandon Stuber, Publications Donna Lee, Publications Katie Eichner, Board Liaison Patrick Wylie, Publications Smith Freed & Eberhard Davis Rothwell Earle & Xóchihua Hart Wagner Lindsay Hart Davis Rothwell Earle & Xóchihua 111 SW 5th Ave., #4300 200 SW Market St., #1800 1000 SW Broadway, #200 1300 SW 5th Ave., #3400 200 SW Market St., #1800 Portland, OR 97204 Portland, OR 97201 Portland, OR 97205 Portland, OR 97201 Portland, OR 97201 503/734.1587 503/222-4422 503/499-4499 Ext. 1195 503/226-7677 503/222-4422 [email protected] [email protected] [email protected] [email protected] [email protected]

George Pitcher, Board Liaison Elizabeth Lampson, Board Liaison Grant Stockton, Board Liaison John Pollino, Board Liaison Lewis Brisbois Bisgaard & Smith Davis Rothwell Earle & Xóchihua Brisbee & Stockton Garrett Hemann Robertson 888 SW 5th Ave., #600 200 SW Market St., #1800 PO Box 567 1011 Commercial St. NE Portland, OR 97204 Portland, OR 97201 Hillsboro, OR 97123 Portland, OR 97301 971/712-2803 503/222-4422 503/648-6677 503/581-1501 [email protected] [email protected] [email protected] [email protected]

The VerdictTM ■ 2017–Issue 3 OADC BOARD OF DIRECTORS OFFICERS Mary-Anne Rayburn President Gordon & Polscer 9755 SW Barnes Road, Suite 650 Portland, OR 97225 Phone: 503/242-2922 Email: [email protected]

TM Vicki Smith The Verdict President Elect Photo Courtesy of Dan Lindahl, Bullivant Houser Bailey Bodyfelt Mount 319 SW Washington St., #1200 Portland, OR 97204 Phone: 503/243-1022 Email: [email protected]

George Pitcher Lewis Brisbois Bisgaard & Smith 888 SW 5th Ave., #600 F E A T U R E S Portland, OR 97204 Phone: 971/712-2803 Email: [email protected] 4 Is an Investigation Conducted at the Direction of DIRECTORS Counsel Privileged? The Answer May Surprise You Lloyd Bernstein Breanna L. Thompson, Garrett Hemann Robertson Bullivant Houser Bailey 888 SW Fifth Ave., #300 Portland, OR 97204 Statistics Means Never Having to Say You’re Certain: Phone: 503/228-6351 8 Email: [email protected] Smith v. Providence and Loss of Chance katie eichner Melissa Bushnick, Lindsay Hart and Mike Stone, Brisbee & Stockton Lindsay Hart 1300 SW 5th Ave., #3400 Portland, OR 97201 Defense Conflicts: Recent Developments for Phone: 503/226-7677 10 Email: [email protected] Insurance Defense Counsel in the Northwest Allyson Krueger Dunn Carney Mark J. Fucile, Fucile & Reising 851 SW 6th Ave., #1500 Portland, OR 97204 In the DogHouse: Defending Injuries Caused by Dogs Phone: 503/224-6440 14 Email: [email protected] Jamison McCune, Bodyfelt Mount Elizabeth Lampson Davis Rothwell Earle & Xóchihua 200 SW Market St., #1800 Portland, OR 97201 Phone: 503/222-4422 Email: [email protected] D E P A R T M E N T S John pollino Garrett Hemann Robertson 1011 Commercial St. NE Salem, OR 97301 2 Phone: 503/581-1501 FROM THE PRESIDENT 2 Email: [email protected] katie smith Law Office of Katie Smith 18840 SW Boones Ferry Rd., 310 RECENT CASE NOTES Tualatin, OR 97062 16 Phone: 503/994-9225 Email: [email protected]

Grant Stockton Brisbee & Stockton PETITIONS FOR REVIEW 22 PO Box 567 Hillsboro, OR 97123 Phone: 503/648-6677 Email: [email protected] LEGISLATIVE UPDATE Anne Talcott 24 Schwabe Williamson 1211 SW 5th Ave. #1500-2000 Portland, OR 97204 Phone: 503/796-2991 THE SCRIBE’S TIPS FOR BETTER WRITING Email: [email protected] 25

Karen Vickers Mersereau Shannon 1 SW Columbia, #1600 Portland, OR 97258 ASSOCIATION NEWS 26 Phone: 503/226-6400 Email: [email protected] ADMINISTRATIVE OFFICE SANDRA FISHER, CAE JUDGE’S BIOS 27 147 SE 102nd 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 mary-anne rayburn

Final Musings and Thank You

homas Jefferson wrote, “The issues and the consequences of decisions courage to care about and act boisterous sea of liberty is made. In other words, people need to for the benefit of our clients, never without a wave.” You listen and learn through reasoned and our peers, our careers, and the T may recognize the quote—it respectful debate, to better understand public good. Because we are is engraved near the entrance why others think differently, to exhibit committed to professionalism, to our federal courthouse in Portland. Our more willingness to compromise, and we will conduct ourselves in a liberty, indeed our democracy, is founded, finally, to find common ground to reach way consistent with the follow- in part, upon our right to freedom of acceptable solutions. Otherwise, our ing principles in dealing with speech. Regardless of political affiliation, right to discourse is nothing more than our clients, opposing parties, individuals can voice a lot of meaningless noise. The result is opposing counsel, the courts, their opinions with deadlock. and the public. As lawyers, we are uniquely passion and conviction. As the Statement of Professionalism positioned to educate, lead, and Those who disagree states further, we agree, among other contribute to society. As stated by Janet can also express their things, to “promote the integrity of our Reno, attorney general under President dissenting opinions profession and legal system,” to “avoid Clinton, “Being a lawyer is not merely with equal vehemence. all forms of unlawful and unethical a vocation. It is a public trust, and each Just as Jefferson noted, discrimination,” to “ensure access to of us has an obligation to give back to Mary-Anne Rayburn the sea of liberty can justice for all segments of society,” to our communities.” Lawyers are trained become choppy and the cacophony can “educate the public about our legal to critically analyze issues and propose be deafening. system,” to “improve the image of the solutions. We can debate and dissect any As other more seasoned and legal system in the eyes of the public,” topic. Generally, we are good listeners. experienced commentators have to “promote respect for the courts,” and We can mediate positions. We are observed, we have become a more to “explore all legitimate methods and leaders. polarized nation. People are less tolerant opportunity to resolve disputes at every Indeed, the Oregon State Bar of viewpoints and positions that differ stage.” Statement of Professionalism adopted from their own. People “speak” their Besides using our skills to assist in pro on December 12, 2011, recognized our views without much thought or concern bono activities (see President’s Message profession’s obligations and commitment: about the potential consequences on in last issue), we can and should use our policy or others. While not dead, common As lawyers, we belong to a pro- vast skills to help society become a better civility and respect are harder to find. fession that serves our clients educated electorate. In other words, There are many reasons why many and the public good. As officers we can help bridge our differences and people feel isolated or disengaged. The of the court, we aspire to a become focused instead on those issues prospects are troubling. Our nation’s professional standard of con- that we can agree upon. founders counted on an educated duct that goes beyond merely The task can be daunting and the electorate to make democracy work. complying with the ethical challenges are great. It may take time The electorate needs to understand the rules. Professionalism is the to get where you want to go. Does

Continued on next page

2 The VerdictTM ■ 2017–Issue 4 ▼ president’s message continued from page 2

this mean everyone should run for to do things. Leadership does gracious nonetheless. any elected office? No, not necessarily. not need to be a dramatic, fist I firmly believe that OADC’s next 50 Leadership is manifested in many ways. in the air and trumpets blaring, years will be as successful as its first. Your Participation in neighborhood, local, activity. OADC officers in 2018 are Vicki Smith, regional, or national, non-profit or civic Whatever leadership path taken, be President; George Pitcher, President Elect; organizations is equally important. The good at it. Or as Abraham Lincoln wrote, and Lloyd Bernstein, Treasurer/Secretary. important thing is that we are engaged, “Whatever you are, be a good one.” Tim Heinson, Peter Tuenge, and Jay Chock that we listen, debate, and, if necessary, My term as OADC President ends are the newest Board members. The be prepared to compromise to obtain an soon. It has been my privilege to serve OADC has many new and young lawyer acceptable solution. Scott Berkun, noted during the organization’s 50th anniversary members who bring fantastic enthusiasm American author and speaker, observed: year. The programming was superb. I and commitment to the organization. I think leadership comes from thank the Board, Committee Chairs, The OADC leadership is dedicated to integrity—that you do whatever Practice Group leaders, and Sandra ensuring that the OADC is relevant to you ask others to do. I think Fisher (and her staff) for making this your practice needs, and the Board is there are non-obvious ways to a successful year. I also thank Jeanne reviewing expanding opportunities for lead. Just by providing a good Loftis and Stephanie Wilken, who are your OADC participation. To help the example, as a parent, a friend, ultimately responsible for publishing OADC better serve you, speak up, join a neighbor makes it possible for The VerdictTM. I confess I never made the Practice Group(s) best suited to your other people to see better ways the submission deadline, but they were practice, and become involved!

OREGON CHAPTER TheThe followingfollowing attorneysattorneys areare recognizedrecognized forfor ExcellenceExcellence inin thethe fieldfield ofof AlternativeAlternative DisputeDispute ResolutionResolution

William GIBSON Susan HAMMER Jim HUTCHINSON Richard SPIER Met WILSON CLACKAMAS PORTLAND PORTLAND PORTLAND PORTLAND Check Detailed Bios & Available Dates Online at www.ORMediators.org

As approved by local members of the national plaintiff (AAJ) and defense (DRI) bar associations*

* The National Academy of Distinguished Neutrals (www.NADN.org) is an invitation-only professional association of over 900 litigator-rated mediators & arbitrators throughout the US and a proud sponsor of the AAJ and DRI. For more info, please visit www.NADN.org/about

The VerdictTM ■ 2017–Issue 4 3 FEATURES

Is an Investigation Conducted at the Direction of Counsel Privileged? The Answer May Surprise You

Breanna L. Thompson Garrett Hemann Robertson

hile in the context of client confidences. would be shielded.”3 Likewise, on May 3, employment disputes Case law has led many to assume 2017, a Multnomah County Circuit Court attorneys might, in certain that investigations are protected if judge rejected an employer’s assertion W circumstances, want to conducted under the direction of an that an investigation into an employee’s disclose the results of a attorney. For example, in 2006, the harassment complaint was protected defendant’s internal investigation to Oregon Court of Appeals held in Klamath by the attorney–client privilege or the establish a Faragher-Ellerth1 affirmative County School District v. Teamey that work-product doctrine even though defense, more often they would prefer reports made by a private investigator the investigation was conducted at to withhold those at the direction of an attorney, so that the direction of counsel and was used results in litigation, the attorney could advise the client on to advise a board of directors on as protected by the ways to resolve problems uncovered personnel decisions and litigation 4 attorney–client by the investigation, were confidential exposure. That order required the privilege or the work- communications within the meaning of defendant to produce all investigatory product doctrine. As OEC 503, and were therefore exempt materials, and to allow the investigator defense counsel, we from disclosure under the public records to be deposed, but protected the 2 verbal communications between the Breanna L. Thompson often assume that if statutes. The fact that litigation was our clients perform an not anticipated at the time of the investigator and the attorney. In both these instances, the courts investigation at our request and under investigation had no bearing on the strictly construed the attorney–client our direction, the documents generated court’s analysis. privilege, and were careful to distinguish as a result of such an investigation However, in some circumstances, between the lawyer’s role as a legal will be protected against disclosure. courts in employment cases have begun advisor and as a business advisor. Both However, in recent years, there has been ordering investigative reports to be courts found that the investigatory a trend whereby courts are ordering produced. In a discovery order dated materials were discoverable because defendants to produce investigatory September 14, 2016, the U.S. District they were not privileged and were not materials and reports if the defendants Court for the District of Oregon ruled covered by the work-product doctrine had an independent obligation to that “an internal investigation and since they were not made in anticipation conduct the investigation, regardless employment decision cannot be turned of litigation. of whether the investigations were into attorney work product merely by directed by an attorney. This article the ‘generalized fear’ that termination In What Circumstances May Disclo- explores ways to ensure that your clients of an employee could lead to litigation,” sure Become an Issue? perform thorough (and often legally noting that, “[i]f that were the case, An employer’s investigation may mandated) investigations, while also every single employment decision follow complaints of harassment, protecting essential work product and made…with input from an attorney discrimination, allegations of a

Continued on next page

4 The VerdictTM ■ 2017–Issue 4 FEATURES

Privileged investigation continued from page 4

violation of law, policy, procedures, or to disclosure, and one privileged want an investigation to be expanded a supervisor’s directives. The employer investigation prepared in anticipation in order to identify concerning behavior may have an obligation to conduct of litigation. so that it can be corrected, and to an investigation that may stem from, Take, for example, an employee evaluate possible claims. Under these among other things, a federal or state who reports sexual harassment in circumstances, the investigation reports statute, regulation, collective bargaining the workplace. The employer must may not be considered protected by the agreement, or even an internal policy or investigate the complaint according work-product doctrine.5 procedure. to its policy. At the same time, it must When an employer has an Where there is an independent receive advice from its attorney as to independent obligation to conduct obligation to conduct an investigation, whether there is ongoing harassment an investigation, counsel should attorneys should assume that the results in the workplace, investigate rumors carefully analyze what the independent of the investigation will not be protected of other instances of harassment, investigation requirements are, whether by the attorney–client privilege or the and evaluate exposure both for the litigation is expected to result, and how work-product doctrine. Therefore, alleged harassment and for any the investigation should be conducted if the employer has an independent proposed discipline that results. A policy in order to best protect the client. If requirement to conduct an investigation, might require that the complaint be litigation is expected, then counsel and the employer expects a possible investigated to determine whether it should consider splitting the part of the claim from the complainant or from is founded or not. It probably will not, investigation that falls outside the scope any employee who might be disciplined however, require that the investigation of what is dictated by the employer’s as the result of the investigation, an be expanded to cover allegations not policy into a separate investigation. Of attorney should determine whether two included in the complaint or reported course, given the time, resources, and separate investigations are warranted: to the employer directly, or to make any cost of conducting two investigations, one internal investigation subject risk-assessment. Yet an attorney might the risks and benefits of doing so should

SAVE THE DATE! oregon association of defense counsel Annual Convention June 14-17, 2018 | Sunriver Resort | Sunriver, Oregon

Mark your calendars to attend the 2018 convention in Sunriver! The convention is going to be a weekend full of exciting activities and education at Sunriver Resort! The convention will feature outstanding CLE credit, social/networking activities and more. Mark your calendars now and plan to attend!

Questions? Contact OADC at [email protected] or 503.253.0527 or 800.461.6687

Continued on next page

The VerdictTM ■ 2017–Issue 4 5 FEATURES

Privileged investigation continued from page 5 be discussed with the client to determine the employer could have anticipated will most likely be considered protected whether the additional protections of a litigation was after the employee was from disclosure. But the strength of the second investigation are necessary. If the notified of the employer’s intent to second investigation may be affected attorney decides a second investigation terminate him. The determination of if witnesses’ memories are not fresh, is warranted, then the attorney should whether materials were prepared in or if witnesses contradict statements carefully consider the timing of the anticipation of litigation is a question of given in the first, internal investigation. investigation, the scope, and its purpose. fact, and there is no bright-line rule to These consequences of delaying a determine whether the materials were second investigation must be weighed Timing of Investigation and Work prepared in anticipation of litigation, against the risk of an earlier, second Product Generated especially if they were prepared prior investigation causing the court to find The work-product doctrine protects to receiving a demand letter or tort that it was not conducted in anticipation documents prepared in anticipation claim notice.7 of litigation. of litigation. Of course, investigation Internal investigations into In addition, the risk of having to reports may be prepared in the ordinary misconduct should be performed in disclose the parts of an investigation course of business.6 The key factor a timely manner, and the findings that are beyond the scope of that in determining whether the results appropriately and promptly commu- which is imposed by a policy or another of an investigation were prepared in nicated. However, if a second independent source can be mitigated by anticipation of litigation as opposed to investigation is warranted and is done limiting the work-product generated. the ordinary course of business is when parallel to the first, the timing of the First, understand the typical protocol the employer reasonably could have second investigation may weigh against of the investigator. Ask questions: Do anticipated litigation. In the discovery an argument that it was conducted in you record interviews? Do you take order from the U.S. District Court for anticipation of litigation. If the second notes? Do you keep any audio or video the District of Oregon mentioned investigation is conducted later, like recordings? What types of reports are above, the court found that the earliest following receipt of a demand letter, it generated? If there is a chance that an investigation will not be considered protected work product, then consider instructing the investigator not to prepare a written report regarding (541) 385-3177 the investigative findings, and instead William E. Flinn [email protected] Mediation & arbitration discuss the findings in person or by phone, since verbal communications are u u 747 SW Mill View Way Bend OR 97702 http://www.flinnmediation.com/ more likely to remain protected under the attorney–client privilege.8 u Arbitrations Sole Arbitrator or Panel Member Additional Concerns for Public Em- Anywhere in Oregon ployers u Mediations Public employers should be Eugene Salem Bend especially mindful of this development. u Experience Public employers generally have more Auto/Truck Product Liability stringent obligations to investigate Employment Law Insurance Law employee complaints than do private Premises Liability Discrimination employers. In the future, it is likely that Professional Liability Defamation the plaintiff’s bar will continue trying to force public employer’s investigative No Travel Fees or Travel-Related Expenses reports through public records requests or by arguing that the attorney-client

Continued on next page

6 The VerdictTM ■ 2017–Issue 4 FEATURES

Privileged investigation continued from page 6 privilege has been waived. The former are necessary to best protect the client 3 Order, Wenzel v. Klamath Co. situation may arise when a report is from liability exposure, strategically Fire Dist., ecf.ord.uscourts.gov/ generated but not protected by the consider timing of the investigation, doc1/15115982590 (D Or Sept. 14, work-product doctrine. The latter and have a clear understanding of the 2016) (No. 1:15-cv-01371-CL, avail- may arise if the employer releases the work product generated given the risk able on PACER); see also Order, results of an investigation because of of disclosure. Wenzel, 2017 WL 980556 (D Or substantial public pressure. Doing so Mar. 14, 2017) (commenting on the Endnotes may constitute a waiver of the privilege earlier order). 1 See Faragher v. City of Boca Raton, in subsequent litigation.9 524 US 775 (1998) and Burlington 4 Order Compelling Production of Documents, Madtson V. Reynolds Conclusion Industries, Inc. v. Ellerth, 524 US School District, Multnomah Co. Cir. The evolving case law and trial court 742 (1998) (establishing affirmative Ct. No. 16CV98064 (May 3, 2017). decisions regarding the discoverability defense by which an employer can of investigative reports conducted avoid liability or reduce damages 5 See Lewis v. Wells Fargo & Co., 266 at the direction of an attorney— if the employer shows that it ex- FRD 433, 440 (ND Cal 2010). ercised reasonable care to prevent previously thought to be privileged— 6 United Pac. Ins. Co. v. Trachsel, 83 and promptly correct harassing be- currently create more questions than Or App 401, 404 (1987). answers. Until there is clearer guidance, havior, and the employee unreason- 7 Id. defense attorneys should carefully ably failed to avail himself of these frame the issues being investigated, opportunities). 8 ORS 40.225. determine whether two investigations 2 207 Or App 250, 262 (2006). 9 ORS 40.280.

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: The Oregon Association of Defense • Changes in civil • The judiciary and trial Counsel has a compre­hensive practice and the court court funding government affairs pro­gram, system which includes providing effective • Tort reform legislative advocacy in Salem. • Access to justice We need your help and support to Your contribution to the Oregon continue this important work. All Association of Defense Counsel donations to the OADC State PAC State PAC will support OADC’s go to directly support our efforts efforts in legislative activities to protect the inter­ests of the Civil and government affairs. Defense Lawyer.

To make a contribution please contact the OADC office to receive a donation form at 503.253.0527 or 800.461.6687 or [email protected]

The VerdictTM ■ 2017–Issue 4 7 FEATURES

Statistics Means Never Having to Say You’re Certain: Smith v. Providence and Loss of Chance Melissa Bushnick Lindsay Hart Mike Stone Brisbee & Stockton

n Smith v. Providence Health an eye doctor. Plaintiff followed up on failure to act.4 & Services—Oregon, the Monday with defendant family practice Supreme Court Holding Oregon Supreme Court physician, who ordered an MRI. When The Oregon Supreme Court I formally recognized the loss the MRI was performed at the end of the distinguished Joshi and reversed the of chance theory of injury in week, it allegedly showed that plaintiff Court of Appeals, holding that loss of a medical negligence cases.1 This article will had suffered substantial and permanent substantial chance of a better medical address whether Smith brain damage from a stroke. outcome can be a cognizable injury changes Oregon law Plaintiff’s complaint alleged that in a common law claim for medical regarding causation and “[a]s a result of the negligence of [the malpractice.5 will make suggestions defendants], on a more probable than not In Joshi, the plaintiff brought a to defense attorneys for basis, [plaintiff] lost a chance for treatment wrongful death action alleging medical taking advantage of the which, 33 percent of the time, provides a providers failed to timely diagnose limitations established much better outcome, with reduced or no and treat her husband’s stroke.6 At by the Court on loss of stroke symptoms.”2 Defendants filed ORCP trial, plaintiff’s expert testified that chance claims. 21A(8) motions to dismiss, arguing plaintiff administration of medications would have Melissa Bushnick failed to state a claim on two grounds. Background and Pro- First, relying on Joshi v. Providence Health increased the decedent’s chance of survival cedural Posture 7 System, defendants argued plaintiff had by, at most, 30 percent. Joshi upheld the In Smith, the plaintiff went to the not alleged a recognized harm because directed verdict in favor of defendants defendant emergency department on a Oregon does not permit recovery for loss because the wrongful death statute Friday complaining of visual difficulties, of chance. Second, defendants argued requires that “the death of a person is confusion, slurred that plaintiff’s theory would subvert the caused by the wrongful act or omission speech, and headache. requirement in medical malpractice cases of another,” and plaintiff’s expert could A CT scan showed no that a plaintiff must plead and prove a not testify to a reasonable probability bleeding in his brain, causal connection between the defendant’s that defendants’ conduct had caused the and it was alleged that breach of duty and plaintiff’s injuries. The death.8 the defendant physician trial court granted defendants’ motions to Smith was thus differentiated from discharged plaintiff with dismiss and the Court of Appeals affirmed, Joshi because the plaintiff was not bound the conclusion that concluding plaintiff’s claim that he lost a by a statute requiring him to prove Mike Stone plaintiff’s symptoms 33 percent chance for a better outcome that the defendants caused a specific were caused by a sleep medication. was insufficient to allege that “there is a injury. Smith argued that loss of chance The next day, plaintiff presented to reasonable probability that defendants’ was not an aspect of causation but was the emergency room complaining of a alleged negligent omissions resulted in rather a discrete injury: defendants worsening headache. It was alleged he his injury.”3 In a footnote, the Court of caused him to lose a 33 percent chance at was diagnosed with headache and visual Appeals declined to recognize loss of recovering from the stroke. Still, the Court disturbance, and was encouraged to see chance as an injury caused by a negligent found that Joshi’s causation test could be

Continued on next page

8 The VerdictTM ■ 2017–Issue 4 FEATURES loss of chance continued from page 8 applied to a loss-of-chance case: when the of the pleading standards discussed in Conclusion “lost chance” is the injury in a medical Smith, which require plaintiff to plead Smith has no doubt created a new malpractice action, the plaintiff still bears the percentage and quality of the loss injury in the limited context of medical the burden to prove that, more likely than of chance. Based on this ruling, it is not malpractice claims, ostensibly in the not, the defendant’s negligence caused the enough for a plaintiff to simply allege a interest of fairness. Plaintiffs now have plaintiff to lose the chance of a favorable lost chance at a better outcome; instead, two options: if they can prove their medical outcome.9 a plaintiff must set forth how the outcome outcome was more likely than not caused Ultimately, the Court found that would have been different but for the by the defendant’s conduct, they can “a limited loss-of-chance theory” of alleged negligence. bring a conventional medical malpractice recovery should be recognized in medical To prove causation in a case of this claim where the medical outcome is the malpractice cases with three caveats.10 First, nature, the plaintiff must demonstrate, plaintiff’s injury. If a plaintiff cannot meet a plaintiff “must plead the percentage and through expert testimony, the statistical the “more likely than not” causation test, quality of his or her loss of chance, which likelihood of a better medical outcome a medical malpractice action may still be in turn must be based on the plaintiff’s but for the negligent conduct.15 This area viable as a loss of chance claim where the experts and relevant scientific evidence is ripe for Rule 104 hearings to challenge lost chance at a better outcome functions that meets the standard of reasonable the plaintiff’s experts—is the statistical as the plaintiff’s injury. Time will tell 11 medical probability.” Second, a plaintiff’s evidence reliable and peer reviewed? Has it whether plaintiffs will attempt to bring damages for “the physical harm that been challenged in that particular medical loss of chance claims given the pleading he might well have avoided had he field? Would an epidemiologist have the and damages requirements set out in received proper medical care” shall be experience, training, and education to Smith and the procedural and evidentiary calculated proportionate to the adverse opine on the statistical probability of a challenges that will no doubt be brought 12 medical outcome. Thus, a plaintiff must better outcome for a particular plaintiff, by defense counsel. show actual injury and shall recover or can epidemiology consider only broad Endnotes damages “only to the possible extent” populations of individuals? 1 Smith v. Providence Health & Services of the lost chance, i.e., 33 percent of Practically speaking, it is difficult to —Oregon, 361 Or 456 (2017). the damages resulting from the adverse imagine how a judge will instruct a jury on medical outcome.13 Third, the Court damages in a case of this nature and how a 2 Id., at 460. suggested that a plaintiff may need to jury will determine how much a lost chance 3 Smith v. Providence Health & Services show a “substantial” loss of chance. at a better outcome is worth. The Court —Oregon, 270 Or App 325, 332 (2015). However, the Court did not reach that indicates a plaintiff should recover “only 4 Id., at n. 3. issue in Smith because they concluded “as to the extent” of the lost chance, thereby 5 361 Or at 485. a matter of law that, whether required limiting the damages recoverable, but 6 Joshi v. Providence Health System of or not, plaintiff has alleged the loss of a what does that mean in practice? Based 14 Oregon Corp., 342 Or 152 (2006). substantial chance.” on this ruling, an expert may be required 7 Id., at 156. Implications for the defense bar? to opine on the damages sustained and 8 ORS 30.020; Joshi, at 164. Although Smith opens the door for a to what extent the negligently caused new type of injury in a medical negligence lost chance is applicable to plaintiff’s 9 361 Or at 479. case, the Court provides little guidance damages. What evidence suggests that this 10 Id., at 482. on how such a claim could actually be particular plaintiff would have fallen into 11 Id., at 483. tried to a jury. As an initial matter, it is the 33 percent who experienced a better 12 Id. unclear whether the lost chance must be outcome? What injuries and damages, if 13 Id., at 483-484. “substantial” and what percentage would any, would that plaintiff have sustained qualify if substantiality is required. Based regardless of the alleged negligence, 14 However, note that the court closed on Smith, it appears that a 33 percent loss and how are those distinguished from the opinion stating “we conclude of chance or better will pass muster, but the “lost chance” damages? A motion in that a loss of a substantial chance of a if a plaintiff alleges less than a 33 percent limine or Rule 104 hearing could be used better medical outcome can be a cog- loss, the complaint could be challenged to challenge the testimony regarding nizable injury in a common-law claim in a motion to dismiss. A motion to damages to limit the evidence in a manner of medical malpractice in Oregon.” dismiss could also be used in the context consistent with Smith. 15 Id., at 474.

The VerdictTM ■ 2017–Issue 4 9 FEATURES

Defense Conflicts: Recent Developments for Insurance Defense Counsel in the Northwest

Mark J. Fucile Fucile & Reising

nsurance defense counsel and defense work, and Opinion 121 in Oregon and Washington outlines the duties of defense counsel have long had a relatively in the reservation of rights context. All I stable set of court decisions three in their original 1991 versions, and ethics opinions they however, were prefaced on the view could look to when navigating conflict that an insurance defense lawyer had issues arising from the tripartite two clients: the insured and the carrier. relationship among This “two-client” approach has had insurance carriers, important implications for conflicts. insureds, and their For example, since its original version lawyers. Recently, in 1991, Opinion 77 has counseled that however, there have a lawyer cannot simultaneously advise been important a carrier on coverage while defending developments in these the insured in the same matter. Similarly, conflict “navigation since its original version in 1991, Opinion Mark J. Fucile aids” for both states. 121 has advised that an insurance This article surveys developments in defense counsel defending a reservation both. of rights case cannot take actions that would benefit the carrier over the Oregon insured without creating a nonwaivable Since the Oregon State Bar conflict. comprehensively updated its ethics At the same time, other Oregon opinions in 1991, insurance defense authority, such as the Oregon State Bar’s lawyers in Oregon have primarily looked Ethical Oregon Lawyer treatise, noted to a trio of opinions in working through to the current Rules of Professional that nothing in these ethics opinions conflict issues. They were originally Conduct. Despite the continued “2005” precluded altering Oregon’s two-client issued as OSB Formal Opinions 1991-30, numerator in each, all three opinions approach by agreement so that a lawyer 1991-77, and 1991-121. Their current were updated and re-issued in 2016 to represented the insured only. The 2006 counterparts are now numbered OSB reflect a key development. revision to the Ethical Oregon Lawyer, Formal Opinions 2005-30, 2005-77, and All three opinions have always for example, included a “practice tip” to 2005-121, reflecting a general update focused on different conflict areas for this effect1 citing a leading ABA ethics to the Oregon State Bar ethics opinion insurance defense counsel: Opinion 30 opinion recognizing this caveat.2 library in 2005 when Oregon moved that addresses subrogation issues, Opinion In 2013, the federal district court year from the former Disciplinary Rules 77 discusses the intersection of coverage in Portland confirmed the ability of

Continued on next page

10 The VerdictTM ■ 2017–Issue 4 FEATURES insurance defense developments continued from page 10

Oregon lawyers to alter Oregon’s client in the environmental litigation coverage and defend it in the matter “default” two-client approach by and not the carrier.5 involved, however, Evraz and the revised agreement and, in the process, also In the wake of Evraz, all three of Oregon State Bar opinions now provide illustrated a primary reason for doing the OSB ethics opinions were updated clear authority for doing so.7 so: to allow a client’s long-time counsel in 2016 to include a lead footnote citing to both advise the client on coverage Evraz and Weidner for the proposition Washington while also defending the client in that Oregon’s “two-client” approach Like Oregon, Washington has a the matter involved. Evraz, Inc., N.A., to insurance defense “can be overcome long-defined approach to insurance v. Continental Ins. Co., No. 3:08-cv- by the specific facts and circumstances defense: an insurance defense counsel in 8 00447-AC, was a coverage case that in a particular matter.”6 As in Evraz, Washington represents only the insured followed on the heels of environmental this is most often accomplished by and not the carrier, under Tank v. State 9 litigation.3 The plaintiff corporation an engagement agreement with the Farm Fire & Cas. Co. and Washington was seeking reimbursement of defense client and a separate letter to the State Bar Association Advisory Opinion 10 costs incurred in the environmental carrier limiting the representation to 195 (1999). Washington’s “one-client” litigation. The corporation’s law firm the insured. approach can present its own issues. had represented it in the environmental Varying Oregon’s two-client model There have been significant recent litigation and later moved to substitute is not necessary in many instances developments in three areas. in as counsel for the corporation in because there are no coverage issues First, the Washington Supreme the subsequent coverage case. The and because the insured and the Court in Stewart Title Guar. Co. v. Sterling defendant insurers, in procedural effect, carrier’s interests are aligned fully. Sav. Bank, reaffirmed Washington’s attempted to disqualify the plaintiff’s Where a corporate client wants its “one-client” approach in holding that law firm, arguing that by virtue of law firm available to both advise on a carrier could not sue a law firm for Oregon’s two-client approach the law firm had also implicitly represented the insurers in the environmental case and, www.robsonforensic.com | 206.262.7919 therefore, supposedly had a conflict in representing the corporation in the later coverage case against the carriers. The court refused to disqualify the law firm. The court acknowledged the three ethics opinions but concluded that whether an attorney-client relationship exists in a particular instance is governed Admiralty / Maritime Equine Science Product Liability by a test established by the Oregon Aquatics Fire & Explosion Questioned Documents Supreme Court in In re Weidner that Architecture GPS Forensics Sports & Recreation looks at both the subjective belief Aviation Healthcare Structural Engineering of the putative client and whether Biomechanics Highway Engineering Supervision & Education Building Systems Human Factors Tire Failure Analysis that subjective belief is objectively Civil Engineering Mechanical Engineering Toxicology reasonable under the circumstances.4 Construction Metallurgy Tree Forensics The court found the defendant insurers Dram Shop Meteorology Trucking & Warehousing could not meet the Weidner test Electrical Engineering Police Practices Vehicle Engineering because the law firm had informed the Elevator & Escalator Premises Safety & Security Workplace Safety lead insurer on multiple occasions that it was only representing the corporate

Continued on next page

The VerdictTM ■ 2017–Issue 4 11 FEATURES insurance defense developments continued from page 11 asserted malpractice in defending one Company v. Premera Blue Cross, No. Specialty highlights the importance of its insureds.11 Relying on established C15-1927-TSZ, disqualified a law firm of using engagement agreements to, Washington precedent generally from representing the defendant among other things, specify the client limiting claimants in legal malpractice corporation in a Washington coverage represented in an environment where cases to current or former clients of the dispute because the law firm was also carriers often have multiple affiliates. lawyer or firm involved, the Washington representing an affiliate of the plaintiff Third, the Washington Supreme Supreme Court in Stewart Title held carrier in a separate coverage case in Court in Arden v. Forsberg & Umlauf addressed disclosure obligations when that the carrier failed to meet this Oregon.12 The law firm had not used a law firm is defending an insured required element in light of Tank. The an engagement agreement defining under a reservation of rights and also Washington Supreme Court also found the client in the Oregon case. Instead, does unrelated coverage work for the that the carrier was not an intended the carrier in the Oregon case sent the same carrier.13 Arden involved claims beneficiary of the law firm’s work law firm case-handling guidelines that for legal malpractice and breach of under Washington’s narrow exception defined the client broadly to include fiduciary duty stemming from the governing nonclient claims for legal the carrier’s entire family of related defense of a reservation of rights case. malpractice. entities—including the one on the other The defendant law firm in Arden had Second, the federal district court in side in the Washington case. Although limited its representation to the insureds Seattle in Atlantic Specialty Insurance not an insurance defense case, Atlantic in the underlying matter but had not informed them that it did unrelated coverage work for the carrier that had issued the reservation. The underlying case resolved, but the insureds pursued a malpractice claim against the law firm on the theory that it should have disclosed that it did unrelated coverage work for the carrier. The Washington Supreme Court unanimously affirmed the dismissal of the claims against the law firm because the insureds had not been damaged. A five-member majority also addressed the asserted conflict.14 While declining to draw a bright line, the majority observed that a law firm in this position might have a “material limitation” conflict under Washington RPC 1.7(a)(2) if its relationship with a carrier created a significant risk that its professional judgment would be skewed in favor of the carrier to the detriment of the insured. The majority found that this was ultimately a fact question and did not reach a firm conclusion in the face of dueling expert opinions. Arden suggests that, at least as a matter of risk management, firms defending a case for an insured under a reservation of rights

Continued on next page

12 The VerdictTM ■ 2017–Issue 4 FEATURES insurance defense developments continued from page 12 should disclose any other relationship for by the carrier but only repre- rules apply. with the carrier concerned and should senting the insured. See Siltronic 9 105 Wn2d 381, 715 P2d 1133 (1986). obtain an appropriate waiver from the Corporation v. Employers Insur- insured. ance Company of Wausau, 176 F 10 WSBA Advisory Op 195 was updated Supp3d 1033, 1047-54 (D Or 2016) in 2009. Summing Up (discussing ORS 465.483 and the “in- The recent updates to Oregon 11 178 Wn2d 561, 311 P3d 1 (2013). dependent counsel” requirement); ethics opinions and developments in see also Schnitzer Steel Industries, 12 2016 WL 1615430 (WD Wash Apr 22, Washington case law discussed above Inc. v. Continental Casualty Com- 2016) (unpublished). have not altered the states’ respective pany, No. 3:10-cv-01174-MO, 2013 “two-client” and “one-client” default 13 193 Wash App 731 (2016). WL 12212732 (D Or Dec 17, 2013) approaches to insurance defense. (unpublished) (also discussing the 14 A four-member concurrence rea- However, these developments highlight legislation leading to ORS 465.483). soned that it was unnecessary to important nuances in insurance law that address the alleged conflict in light defense counsel practicing in this area 8 Under choice-of-law provisions in of the unanimous conclusion on the should be aware of. the respective versions of RPC 8.5(b) in Oregon and Washington, the law lack of damages. The concurrence Endnotes of the forum in litigation generally described the majority’s discussion 1 See Oregon State Bar, Ethical Or- controls which state’s professional of the conflict issue as dicta. egon Lawyer § 5.8 at 5-11 (2006 rev 3d ed). 2 ABA Formal Op 96-403 at 2 (1996) (“The insurer, the insured, and the lawyer may agree on the identity of the client or clients the lawyer is to represent at the outset”). 3 2013 WL 6174839 (D Or Nov 21, 2013) (unpublished). 4 310 Or 757, 801 P2d 828 (1990). 5 Reconsideration was denied in Evraz at 2014 WL 2093838 (D Or May 16, 2014) (unpublished). 6 Similar footnotes were added to other ethics opinions touching on other aspects of insurance defense practice. See, e.g., OSB Formal Op 2005-166 (rev 2016) (addressing insurance defense guidelines). 7 ORS 465.483, which as enacted in 2013, now provides as a matter of insurance law that an insured in an environmental case with either a reservation of rights or excess exposure must be provided with “independent counsel” paid

The VerdictTM ■ 2017–Issue 4 13 FEATURES

In the Doghouse: Defending Injuries Caused by Dogs

Jamison McCune Bodyfelt Mount

ou’ve heard the saying surgery was needed after a bite. only that a dog showed prior signs of a thousand times: “Dogs ORS 31.360 creates strict liability for aggression, but also that the owner knew are man’s best friend.” owners by removing the requirement about the dog’s aggressive behavior. This Y Unfortunately, our furry that a plaintiff prove foreseeability. effectively gave owners “one free bite” friends can cause injury Conversely, the owner is precluded by their dogs.3 to other people. Dogs sometimes bite from asserting lack of foreseeability as Courts have also applied this rule people or inadvertently knock them over. a defense. ORS 31.360 allows an owner to cases where the plaintiff was injured Lawyers and dog owners alike should to argue that a bite was caused by their by being knocked down by a dog.4 In know the law applicable to such injuries, dog being provoked. This should include those cases, a plaintiff would need to and the potential insurance implications. a dog provoked by a person or another prove the defendant knew the dog acted animal. “rambunctiously” around other people.5 ORS 31.360: Imposing Strict Liability Keep in mind, ORS 31.360 only Merely playing rough with other dogs for Dog Bites provides for the recovery of economic was insufficient to later impose liability ORS 31.360 creates a form of strict damages. These damages include medical against the owner.6 liability for economic damages caused bills and lost wages. ORS 31.360 does not Kathren v. Olenik7 is illustrative of by dog bites. A dog provide for pain and suffering damages. the high bar this rule set for plaintiffs. does not need to be In order to recover noneconomic In Kathren, the defendant’s dog bit the abnormally dangerous damages, a plaintiff must prove that minor plaintiff. The defendant’s dog had for ORS 31.360 to apply. an owner knew of the dog’s dangerous bitten another dog 10 days prior, and ORS 31.360 applies to propensities before the plaintiff was then bit an animal control officer on the all dogs, no matter the bitten. In the alternative, the plaintiff day after it bit the plaintiff. At trial, the size or breed. can recover noneconomic damages if the plaintiff produced expert testimony that Further, the statute plaintiff proves that the owner violated Jamison McCune the defendant’s dog was likely acting is phrased broadly. an applicable law and was negligent per viciously for least three to five months By its terms, it applies to “an action se. In this regard, cases decided before before the plaintiff’s injury. Despite arising from an injury caused by a dog.” ORS 31.360 was enacted in 2007 are still these facts, the court held the defendant Conceivably, this could encompass a highly relevant. host of injuries, and a creative plaintiff had no knowledge or basis to know may argue that it applies to property One-Bite Rule of the dog’s dangerous propensities. damage caused by dogs. The legislative At common law, Oregon followed The defendant testified that he had history makes clear, however, that ORS the so called “one-bite rule.”1 An owner neither seen nor been informed of any 31.360 was enacted to address dog bites was only liable for a dog bite if the owner vicious behavior by his dog. The trial specifically. Legislators were concerned knew of the dog’s propensity to bite court granted a nonsuit in favor of the about the amount of medical bills in or act aggressively.2 In order to prove defendant, and the Court of Appeals dog bite cases, especially where cosmetic negligence, a plaintiff had to prove not affirmed.

Continued on next page

14 The VerdictTM ■ 2017–Issue 4 FEATURES

Defending injuries cause by dogs continued from page 14

There are cases to the contrary. In canine animals. Oregon law reflects these Medlyn v. Armstrong,8 the court held competing viewpoints in cases where that the plaintiff presented sufficient dogs cause injury. evidence to show the plaintiff’s injury was foreseeable by the defendant dog Endnotes owners. The plaintiff presented evidence 1 See Kathren v. Olenik, 46 Or App that the owners knew their dog became 713, 719 (1980) (“Negligent failure more aggressive when eating and that to control or confine a dog must be the dog was eating a few minutes before analyzed in terms of the knowledge the plaintiff was bitten. Similarly, in on the part of the owner that the Harrington v. Dederer,9 the court held dog will cause the injury actually that the owner’s admission that his dog had previously lunged at two people was incurred by plaintiff if it is not con- sufficient to create a question of fact on trolled or confined”). foreseeability. Insurance Coverage 2 Id. at 720. Clearly, these cases are very fact Finally, many insurance policies 3 Westberry v. Blackwell, 282 Or 129 specific. In defending a dog owner, exclude losses for injuries caused by defense counsel should investigate (1978) (holding that dog’s prior animals or certain breeds of dogs. Courts whether a dog showed signs of superficial bite of plaintiff was suf- have held that such exclusions are valid potentially dangerous behavior (e.g., ficient to create question of fact and enforceable.13 Thus, there may not biting, lunging, viscous barking) prior regarding owner’s knowledge). be coverage for a dog-related injury to the plaintiff’s injury. Defense counsel under an owner’s home insurance policy. 4 See Van Zanten v. Van Zanten, 190 should also evaluate whether the owner Policies should be carefully reviewed Or App 73, 77-78 (2002). knew or should have known of this with this in mind. potentially dangerous behavior. If 5 Id. Other insurance policies contain neither element is present, the plaintiff’s sub-limits for dog-related injuries. These 6 Newport v. Moran, 80 Or App 71, 73 recovery may be limited to economic sub-limits are often much lower than the (1986). damages under ORS 31.360. face value of the policy. For example, 7 46 Or App 713 (1980). Negligence Per Se in American Modern Select Insurance In the alternative, an owner may be Company v. Humphrey,14 a Tennessee 8 49 Or App 829 (1980). liable for noneconomic damages if the district court held that a plaintiff’s claim 9 58 Or App 236 (1982). plaintiff proves the owner was negligent was subject to a $10,000 sub-limit, even 10 Lange v. Minton, 303 Or 484 (1987). per se.10 Typically, this arises when a though the plaintiff was bitten 147 plaintiff alleges an owner violated a times by seven different dogs in one 11 Id. at 487 (discussing Salem ordi- city or country animal code ordinance. occurrence. Although the facts of that nance). Many counties, for example, prohibit case are startling, defense counsel and 12 Id. animals from running at large.11 The dog owners should be aware of the Oregon Supreme Court has held that potential for an excess verdict even in 13 See, e.g., Villa v. Pac. Specialty Ins. the purpose of such ordinances is “to cases with relatively minor injuries. Co., 2010 Cal App Unpub LEXIS 7350 prevent persons from exposure to the (Cal App Sept. 16, 2010) (unpub- risk of injury from dogs running at large, Conclusion lished) (enforcing animal liability whether from being knocked down or In many households (including exclusion as written). from being bitten.”12 If a dog is at large the author’s), a dog is part of the when an injury occurs, its owner may be family. On the other hand, many people 14 2012 US Dist LEXIS 20800 (ED Tenn on the hook for noneconomic damages. justifiability view dogs for what they are, Feb. 17, 2012).

The VerdictTM ■ 2017–Issue 4 15 RECENT CASE NOTES Recent Case Notes Sara Kobak, Schwabe Williamson & Wyatt Case Notes Editor

Whistleblower particular HR manager did not enjoy alleged intoxication—ODOT would whistleblower status, the case reminds be “at risk” because a last-chance Act us that HR managers have unique agreement was “premature” and access to protected whistleblower status “extreme.” Plaintiff never informed How to heed your pragmatic because they are often reporting or ODOT that a last-chance agreement HR manager’s advice (and disclosing illegal behavior in the course would be illegal or in violation of any get sued anyway) of their employment. laws. ODOT agreed with plaintiff and Plaintiff, an HR manager for the altered the discipline of the employee In Folz v. State of Oregon, 287 Or Oregon Department of Transportation accordingly. App 667 (Sept. 7, 2017), the Oregon (ODOT), warned management Two months later, plaintiff’s Court of Appeals held that a human that having an employee sign a supervisor was terminated, and plaintiff resources (HR) manager who raised “last chance” before termination was reassigned to a different position valid concerns about a proposed agreement was too severe a punishment within ODOT with the same salary discipline of another employee had for an uninvestigated incident of and benefits. Plaintiff considered her not “disclosed” or “reported” actions “intoxication” at work. Plaintiff pointed new supervisor as a colleague, not a that she believed were violations out that, without an investigation supervisor, and she objected to the of law as required to qualify as a into whether the employee required reassignment. After an unsuccessful whistleblower under ORS 659A.199 medication as a result of a disability—a appeal to the Employee Relations and ORS 659A.203. Even though this potential source of the employee’s Board, plaintiff filed suit asserting whistleblower claims. On appeal, the Court focused on the requirement under ORS 659A.199 and ORS 659A.203 that a whistleblower must “disclose” or “report” information that she believed to be “evidence” of a violation of law. When plaintiff voiced concerns about the response to the allegations of intoxication against the employee, she did not disclose or report an act that she believed was a violation

CORRECTION The case note on Baker v. Maricle Industries on page 21 of this issue was previously published in The VerdictTM 2017 Issue 3 and attributed to the incorrect author. We regret the error.

Continued on next page

16 The VerdictTM ■ 2017–Issue 4 RECENT CASE NOTES Recent Case Notes of law. Rather, she was performing her reversed, holding that the “advance Oregon Court of Appeals duty as an HR manager to alert her payment” statutes, specifically ORS applies current statute of employer to potential issues with the 12.155 and ORS 31.550, tolled the statute proposed course of action. Had plaintiff of limitations, because defendants had limitations to claim that reported her concerns differently, or not provided plaintiff written notice was time barred prior to its more forcefully asserted a belief that of the expiration of the statute of passage the proposed discipline was illegal, limitation at the time they waived the result would likely have been very and provided reduced cost medical In Doe v. Silverman, 287 Or App 247 (August 16, 2017), the Oregon Court of different. J care. The Court held that plaintiff’s Appeals determined that the current — Submitted by Jonathan Rue, allegations that she complained about Hart Wagner version of ORS 12.117, which sets the the bad results and insisted she would statute of limitations for child-abuse not pay for either initial procedure claims, applies to all claims arising Statute Of or for subsequent remedial care were before the effective date that have not sufficient to place her claim within the Limitations proceeded to final judgment. advance pay statute for purposes of ORS In Doe, the plaintiff appealed a limited Forgiveness or reduction of 12.155’s tolling provision. The Court was judgment entered in the defendant’s not persuaded by the fact that plaintiff medical/dental bills tolls the favor on his claims for negligence, sexual never asserted or articulated any actual battery, and intentional infliction of statute of limitations despite claim for legal liability or obligation on emotional distress. The plaintiff sued the the lack of a formal claim which an “advance payment” could be defendant when he was 30 years old for made. sex abuse that he sustained when he was In Humphrey v. OHSU, 286 Or App This case was decided under the a minor. At the time the abuse occurred, 344 (June 21, 2017), plaintiff experienced Oregon Tort Claims Act Statute of ORS 12.117 required that claims for child severe complications following an Limitations in ORS 30. 275. The case did abuse must “be commenced not more oral surgery performed by medical not present the question of whether the than six years after that person attains professionals at OHSU, necessitating statute of repose in ORS 12.110(4) would 18 years of age.” Applying this statute, additional surgeries and medical also be tolled by a write-down or write- the trial court ruled that the plaintiff’s procedures. Plaintiff did not assert a claims were time barred, because he off; the repose provision in ORS 12.100(4) claim of legal liability or threaten to filed his lawsuit roughly six years beyond expressly trumps the statutory tolling for sue, but alleged that she complained to the limitations period. The plaintiff minors and disabling mental conditions, OHSU about her belief that the surgery appealed, arguing that the current but does not except tolling based on the had “gone bad” and that she was not version of ORS 12.117, which was enacted advance pay statute, ORS 12.155. This going to pay for her subsequent care. in 2009, should apply. The current statute decision may also be asserted to support Allegedly, one OHSU provider told her, provides that a child-abuse action must tolling of the statute of limitations in “Don’t worry about it; we’ll take care be commenced “before the [plaintiff] of it.” Thereafter, defendants provided non-medical malpractice settings where turns 40 years of age.” plaintiff additional medical care at little professionals reduce or write off bills After analyzing the legislative or no cost. Well over two years after for clients who express unhappiness history, the Oregon Court of Appeals the allegedly negligent care occurred, with a result, without providing written accepted the plaintiff’s arguments, plaintiff brought suit. Defendants notice of the expiration of the statute of holding that the current version of ORS prevailed on a motion to dismiss in the limitations. J 12.117 applied and, as a result, did not trial court. — Submitted by Janet Schroer, bar the plaintiff’s claims. To make its The Oregon Court of Appeals Hart Wagner determination, the Court looked to the Continued on next page

The VerdictTM ■ 2017–Issue 4 17 RECENT CASE NOTES Recent Case Notes

2009 enacting legislation, which states to the procedural time bar of the prior Insurance that the current statute applies “to all iteration of the statute. Additionally, causes of action, whether arising before, the Court found that the legislature’s The UM “safe harbor” provi- on or after the effective date” of the expansive intent as expressed in the act. The Court rejected the defendant’s enacting legislation militated toward the sion does not require an insurer argument that statutory “revival” application of the current version of the to stipulation that it owes some wording was required, because the statute, to preserve claims that would plaintiff’s claims had extinguished in 2007 amount of damages have been procedurally time barred or 2008, prior to the enactment of the In Spearman v. Progressive Classic under the prior version of the statute. J current version of ORS 12.117. The Court Insurance Company, 361 Or 584 (June 22, — Submitted by Michael Jacobs, reasoned that plaintiff’s claims had not 2017), the Oregon Supreme Court upheld “extinguished” but, rather, were subject Hart Wagner an arbitrator’s denial of attorney fees to an insured plaintiff in an uninsured motorist (UM) arbitration pursuant to the “safe harbor” under ORS 742.061(1). Under the safe-harbor provision, an insured is not entitled to recover attorney fees if, within six months of the filing of a proof of loss, the insured states in writing that it has accepted coverage, that it agrees to binding arbitration, and that the only remaining issues are the liability of the uninsured motorist and the “damages due the insured.” Plaintiff was injured in an automobile accident with an uninsured motorist. Within six months after plaintiff filed a proof of loss for UM benefits, the insurer sent a safe-harbor letter that included language reserving the right to challenge • Customized Options the nature and extent of damages. • Expert Advice Plaintiff challenged the adequacy of the • Track Record of safe-harbor letter, arguing that an insurer does not qualify for the safe harbor unless Excellence it agrees that it owes some amount of • Wide Array of Experts damages above zero. • Flexible Locations In rejecting plaintiff’s argument, the Supreme Court first considered the plain “Machaon medical evaluations: text of the statute and found nothing a classic return to service” suggesting that the “damages due the 1-888-303-6224 insured” language had to be some amount above zero. The Court next found that the Celebrating 20 years in the IME Business legislative purpose of the statute was consistent with this plain meaning because

Continued on next page

18 The VerdictTM ■ 2017–Issue 4 RECENT CASE NOTES Recent Case Notes in a UM arbitration, unlike a claim for the time of the accident, defendant doctrine—namely, that it permits injured personal injury protection (PIP) benefits, only had a learner’s permit, and plaintiff third parties to collect from the owner of the liability of the uninsured motorist was the sole passenger in the car. After a family vehicle negligently driven by a remains a litigated issue, so damages plaintiff filed suit against her defendant family member. According to the Court, of zero remain a possibility during the minor son for her injuries, defendant those rules do not support the imputation litigation. The Court further explained raised the family-purpose doctrine as an of liability where the owner is the injured that the purpose of the UM statute was affirmative defense and argued that its party. Although plaintiff would have to put the insured motorist in the same application barred plaintiff’s recovery. been responsible for defendant’s torts position that she or he would have been in After a hearing on the issue, the trial if defendant had injured a third party, had the tortfeasor been insured. Contrary court granted summary judgment for the Court held that the family-purpose to this purpose, requiring the insurer to defendant, agreeing with defendant’s doctrine did not preclude plaintiff from stipulate to an award of some damages contention that defendant’s negligence recovering for her injuries caused by her might put the insured in a better position is attributable to plaintiff under the son’s negligence. The Court reasoned that in those situations where no damages family-purpose doctrine, thereby negating the policy of protecting third parties is should be awarded. The Court additionally plaintiff’s ability to make a claim against irrelevant and does not justify vicarious highlighted the legislative history showing her own family member because she liability where the principal is the injured that the purpose of the current UM law was legally responsible for defendant’s party. J was to avoid creating an incentive for negligence. — Submitted by Roland Lau, insureds to rush to the courthouse in an Plaintiff appealed, and the Court of Davis Rothwell Earle & Xóchihua attempt to generate recoverable attorney Appeals reversed. In holding that the trial fees. J court erred in granting summary judgment Attorney Fees — Submitted by Patrick Wylie, to defendant, the Court began its analysis Davis Rothwell Earle & Xóchihua by looking at the traditional application of the family-purpose doctrine. Under that Court of appeals rejects need Negligence doctrine, if a vehicle is maintained for the for service of ORS 20.080 use of a family, any family member using demands on a defendant’s The family-purpose doctrine the vehicle with the consent of the owner “potential” liability insurers is treated as an agent of the owner, and does not apply to claims the owner is the liable responsible for the In Marandas Family Trust v. Pauley, 286 brought by a vehicle owner family member’s negligence. The policy Or App 381 (June 28, 2017), the Oregon against the owner’s family- behind the family-purpose doctrine is to Court of Appeals rejected the trial court’s member drivers hold the owner of a vehicle responsible broad construction of ORS 20.080 that for any family members driving the would require plaintiff to serve the written In Adams v. Presnell, 286 Or App 390 vehicle given the potential dangers from demand for payment on all of defendant’s (June 28, 2017), the Court of Appeals held negligence operation of vehicles. After liability insurers potentially affording that, as a matter of law, the negligence reviewing the family-purpose doctrine, coverage for the claim as a prerequisite of a family-member driver is not imputed the Court then analyzed two agency cases to attorney fee entitlement. to the vehicle owner under the family- and extracted the rule that an agent’s Plaintiff was the owner of a cabin purpose doctrine when the vehicle owner negligence normally is not imputed to near Mt. Hood and hired defendants brings an action for negligence against the principal where the principal brings to repair the roof in 2006. In 2011, the family-member driver. a negligence action against an agent. plaintiff discovered water damage to Plaintiff was injured in a single-car The Court opined that application of this the cabin caused by the faulty repair accident while defendant, plaintiff’s rule was in agreement with the “practical work. Plaintiff sent a written demand minor son, was driving her vehicle. At necessity” underlying the family-purpose for payment pursuant to ORS 20.080 Continued on next page

The VerdictTM ■ 2017–Issue 4 19 RECENT CASE NOTES Recent Case Notes to the defendants, two of defendant’s “potential” source of coverage for the of the demand to insurers that the plaintiff liability insurers, and to defendant’s claim, and plaintiff was aware of the third is aware have a coverage obligation, insurance broker. ORS 20.080 requires the insurer at the time of the demand, plaintiff not to insurers that might have such an plaintiff to serve the demand on both the had failed to comply with the statute. obligation. Because plaintiff’s counsel defendant and the defendant’s insurer, Plaintiff filed exceptions to the testified that he believed one or more if known to the plaintiff, not less than arbitrator’s ruling with the trial court, of the other two policies covered the 30 days before commencing the action. and the trial court agreed with the claim, but did not believe the third policy The matter proceeded to court-annexed arbitrator. The trial court pointed out that applied, the Court of Appeals concluded arbitration, and plaintiff prevailed, but construction-defect litigation routinely that he was not required to serve it with the arbitrator rejected plaintiff’s attempt presents coverage challenges and that the written demand for payment in order to collect attorney fees under ORS 20.080. “multiple [insurance] policies are the to comply with ORS 20.080. Plaintiff had served the written demand rule, rather than the exception.” The trial The Marandas decision eases the on the insurer providing liability coverage court reasoned that ORS 20.080 requires burden on plaintiffs in ORS 20.080 cases, at the time of defendants’ negligent plaintiffs “to provide notice to all the at least those in which multiple liability repair work, and on the current liability potential insurers that they are aware policies are potentially implicated. The insurer providing coverage at the time of of, and not just those [that] the plaintiff decision does beg the question whether plaintiff’s discovery of the damage, but thinks are most likely to be responsible a plaintiff can avoid the insurer notice had neglected to serve the demand on a for coverage.” obligation altogether in situations where third liability insurer providing coverage On appeal, the Court of Appeals he or she is aware of multiple liability during the interim period beginning two reversed. In doing so, the Court rejected insurers, but unaware of which policies years after the work was performed. The the reasoning of both the arbitrator and actually cover the claim. So long as the arbitrator reasoned that, because the the trial court, and construed the statute plaintiff does not actually know that policy issued by the third insurer was a narrowly: ORS 20.080 only requires notice a policy provides coverage, Marandas appears to conclude that plaintiff need not serve that insurer with the demand. This could effectively eliminate the insurer notice obligation in many multi-policy cases. J — Submitted by Brandon Stuber, Davis Rothwell Earle & Xóchihua

Condemnation

Property Owners May Recover Attorney Fees Incurred in Determining Amount of Fee Award after Offer of Compromise in Condemnation Proceeding

In TriMet v. Aizawa, 362 Or 1 (Oct. 5, 2017), the Oregon Supreme Court confirmed that a property owner accepting Continued on next page

20 The VerdictTM ■ 2017–Issue 4 RECENT CASE NOTES Recent Case Notes an offer of compromise under ORS and statutory context, including ORCP 68 about his PTSD. Shortly thereafter, 35.300(2) in a condemnation proceeding is and longstanding case law recognizing plaintiff met with the president and his entitled to recover both pre-offer attorney the availability of attorney fees incurred manager, and plaintiff’s employment fees incurred in litigating the merits of the as part of a fee application. The Court ended, although a dispute existed as to condemnation action, as well as post-offer also considered other subsections of ORS whether the separation was voluntary or attorney fees incurred in determining the 35.300, as well as the statute’s legislative involuntary. proper fees award. history. The Court concluded that the Plaintiff sued the company alleging, TriMet filed this condemnation action context and history of ORS 35.300 did not inter alia, disability discrimination in to acquire certain property in the course support TriMet’s reading of the statutory violation of the Americans with Disabilities of constructing the Portland-Milwaukie text, and it held that “fees on fees” are Act as well as state law. Plaintiff also light-rail line. Approximately a year and a available under ORS 35.300. J sued the company president under ORS half after it filed the condemnation action, — Submitted by Sara Kobak, 659A.030(1)(g), alleging that the president TriMet made a formal offer of compromise Schwabe Williamson & Wyatt aided and abetted the discrimination. to the property owner under 35.300(1). Defendant moved to dismiss the aiding The property owner accepted the offer, and abetting claim against the president, and the parties entered a stipulated Employment judgment with a money award for the citing extensive precedent establishing property. The judgment also provided that A supervisor may be liable that an executive acts directly on behalf the property owner could petition for her for aiding-and-abetting its of a company and a defendant cannot attorney fees pursuant to ORCP 68 and aid and abet itself. In response, plaintiff ORS 35.300. own conduct if acting outside analogized the situation to McGanty v. In petitioning for attorney fees, the of the scope of employment Staudenraus, 321 Or 532 (1995), where the property owner sought to recover both Oregon Supreme Court found a corporate In Baker v. Maricle Industries, Inc., dba her pre-offer fees and her fees incurred president could be a third party to the Servicemaster Cleaning Specialists et al., in determining the amount of her fees employment relationship for purposes of 2017 WL 1043282 (D Or March 17, 2017) award. TriMet took the position that the a claim of intentional interference with the Oregon District Court broadened “fees on fees” are not recoverable under economic relations where the president’s a plaintiff’s ability to establish a viable 35.300(2). The trial court disagreed and “sole purpose is one that is not for the aiding-and-abetting claim against an awarded both types of fees. The Oregon benefit of the corporation.” individual under ORS 659A.030(1)(g). Court of Appeals affirmed, and the In denying summary judgment for Supreme Court granted review. The Court held that a company president the employer, the district court held that a On review, TriMet argued that “fees that was the decision-maker in an adverse corporate president could be individually on fees” are not recoverable under ORS employment action could be found liable liable for aiding and abetting under ORS 35.300(2) based on the plain text of the for aiding and abetting his own conduct 659A.030(1)(g) when the president acted statute. In examining the meaning of if he was acting outside the scope of in a personal capacity, not as an agent of ORS 35.330(2), the Supreme Court agreed employment. the corporation, and was thus a third party that ORS 35.300(2) precluded a court Plaintiff was employed by defendant to the employment relationship. The court from awarding post-offer fees incurred in as a water technician. Prior to his litigating the merits of a condemnation employment, plaintiff was a reservist with further found that whether the president action. The Court concluded, however, the United States Air Force and had served acted outside the scope of his employment that ORS 35.300(2) did not preclude the in Afghanistan. Following his military is a question of fact and, thus, summary recovery of other types of post-offer service, plaintiff was diagnosed with judgment was inappropriate. J attorney fees, including fees incurred to PTSD. Plaintiff claimed that he overheard — Submitted by Mitch Cogen, determine the proper amount of a fees his project manager and the company Bullard Law award. The Court first considered text president making disparaging comments Continued on next page

The VerdictTM ■ 2017–Issue 4 21 PETITIONS FOR REVIEW Petitions For Review Sara Kobak, Schwabe Williamson & Wyatt Case Notes Editor

The following is a brief summary of cases for which petitions for review have been granted by 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.

n Int’l Longshore & Warehouse the municipal corporation’s tax revenue impacts under ORS 215.296, need a Union v. Port of Portland, S064608. to satisfy the municipal corporation’s county only consider the cumulative Argument took place on November program obligations?” impacts of multiple insignificant impacts 9, 2017. on individual farms, or must the county n Stop the Dump Coalition v. Yamhill consider the effect of multiple impacts County, 284 Or App 470 (March This case is before the Oregon across two or more farms?” Supreme Court on a certified question 22, 2017). Argument took place on from the Ninth Circuit Court of Appeals. November 13, 2017. n Behrle v. Taylor, 283 Or App 629 (Feb. In the underlying case, the International 8, 2017). Argument scheduled for In this case, the Oregon Court of Longshore and Warehouse Union January 16, 2018. Appeals affirmed a decision of the Land (“ILWU”) alleged that the defendants Use Board of Appeals (“LUBA”) on Port of Portland et al. (“the Port”) In this post-conviction proceeding, actions taken by a county that would violated Article XI, section 9, of the the Oregon Court of Appeals dismissed authorize expansion of an existing Oregon Constitution when the Port the petitioner’s notice of cross-appeal landfill on land zoned for exclusive farm adopted certain short-term programs as untimely. On review before the use. On review before the Supreme to continue the operations of the Port’s Oregon Supreme Court, one of the Court, the issues are: (1) ”In support container terminal. The district court issues is: “Does an appellate court of a proposed nonfarm use in an granted summary judgment to the Port, violate the Due Process Clause of the Exclusive Farm Use (EFU) zone under ORS Fourteenth Amendment to the United and the ILWU appealed to the Ninth 215.296, is it sufficient for an applicant States Constitution if it announces a Circuit. The certified question asks: “Does to show and a county to find that the new rule of appellate procedure and a municipal corporation that holds its tax proposed use will not significantly applies that new rule to a petitioner if and non-tax revenues in the same bank decrease the supply of agricultural land, the petitioner had no prior notice that a account but that segregates the revenues the profitability of affected farms, or court would apply such a rule?” through financial management and the provision of food?”; (2) ”Can the accounting techniques violate Article statutory requirements be satisfied by n Aline L. Miller v. Ford Motor XI, section 9, of the Oregon Constitution conditions requiring the farmer to adopt Company, S065010. Argument when the municipal corporation uses its new farm practices, or requiring an scheduled for January 16, 2018. funds to finance programs that benefit applicant to pay or reimburse a farmer private enterprise if the programs for additional costs incurred as a result This case is before the Oregon contain neither, one, or both of the of the nonfarm use?”; (3) “If the local Supreme Court on a certified question following two contractual provisions: (1) government record demonstrates that a from the Ninth Circuit Court of Appeals. the municipal corporation certifies that proposed nonfarm use will significantly The certified question concerns the it will not use tax revenue to fund the reduce the price received for a crop, is interpretation of ORS 30.905(2), Oregon’s programs; (2) the program beneficiaries this cognizable under ORS 215.296(1)?”; statute of repose for products liability waive any right to make a claim against and (4) “In evaluating cumulative farm actions, which provides. in part, that a Continued on next page

22 The VerdictTM ■ 2017–Issue 4 PETITIONS FOR REVIEW

civil action “must be commenced before connecting Coos Bay with that slip. On that “gross receipts from broadcasting” the later of … ten years …. or … the review, the issues are: (1) “In evaluating must include all gross receipts derived expiration of any statute of repose for an application for a fill/removal permit from an interstate broadcaster’s overall an equivalent civil action in the state in under ORS 196.825, is DSL required to business activities (except those from which the product was manufactured consider all of the aquatic impacts of the sales of real or tangible personal …[.]” The question asks: “If the state project as a whole (including the impacts property) in determining how much of manufacture has no relevant statute of the project’s existence, construction, of its income is apportioned to Oregon of repose, is a plaintiff entitled to an and operation), or should DSL limit its under ORS 314.680 to 314.690 and is unlimited period [under ORS 30.905(2)] analysis to the removal or fill component subject to Oregon’s corporation excise (subject to the statute of limitations) in of the project?”; and (2) “If DSL’s analysis tax. On review before the Oregon which to bring suit in Oregon court?” of the project’s adverse aquatic impacts is Supreme Court, the question presented limited to the removal or fill component n Cynthia Raynor v. United of Omaha of a project, is DSL allowed to weigh is: “If a corporate taxpayer is considered Life Insurance Company, S065032. the economic benefits of the project as an ‘interstate broadcaster’ under ORS Argument scheduled for January 18, a whole?” 314.680(3) because it engages in some 2018. activity that meets the definition of n Comcast Corporation and ‘broadcasting’ under ORS 314.680(1), are The Oregon Supreme Court Subsidiaries v. Department of all of that taxpayer’s receipts subject to accepted certified questions from the Revenue, S064698. Argument Ninth Circuit Court of Appeals in this the audience ratio under ORS 314.684(4) scheduled for January 18, 2017. insurance dispute. The questions ask: for purposes of computing the taxpayer’s (1) “If the Director of the Department of The Oregon Tax Court entered a Oregon sales factor numerator, including Consumer and Business Services approves limited judgment in favor of the Oregon service-related receipts that were not a contractual limitations provision in an Department of Revenue after concluding derived from broadcasting activity?” insurance policy under [ORS] 742.021, does the language of the policy always control or do the standard provisions of the Oregon Insurance Code apply if the standard provisions are more favorable than the approved insurance policy provision?”; and (2) “If the Oregon standard provisions do apply, when does ‘the period for which the insurer was liable’ under [ORS] 743.429 end?” n Coos Waterkeeper v. Port of Coos Bay Oregon, 284 Or App 620 (April 5, 2017). Argument scheduled for January 18, 2018.

The Court of Appeals affirmed a decision of the director of the Department of State Lands (“DSL”) that authorized the issuance of a fill/removal permit to dredge part of Coos Bay to create a new multipurpose slip and marine terminal, along with an access channel

The VerdictTM ■ 2017–Issue 4 23 legislative update Legislative Update

By Rocky Dallum, Tonkon Torp OADC Lobbyist

The Oregon Legislature convenes in referral to voters. With a special election frequently ask questions about various February 2018 for a month-long session. coming in January on “Ballot Measure proposals past and present. Several bills The 2018 session will likely be shaped by 101,” Oregonians will decide whether in 2017 aimed at increasing caps on a special election in January to determine to affirm the assessments/tax on health non-economic damages, but none were the fate of a Medicaid funding proposal, insurance premiums, or to reject it. successful. Certainly, given the history political posturing leading into the 2018 The outcome of the special election and recent case law, it is likely that the election, and several significant changes could create new budgetary challenges, legislature will take the issue up in 2018. in legislative membership. and the debate over funding Oregon’s The faces in Salem are also changing Oregon’s Legislature meets annually, Medicaid program would likely dominate as we approach the 2018 session. Two although during even-numbered years, the February session if BM 101 fails. influential legislators are leaving the only meets for 35 days. Legislators will Incidentally, the measure comes on State Senate. In October, Governor Brown make tweaks to the the heels of several major news stories appointed Senate Republican Leader Ted budget passed in 2017 regarding the Oregon Health Authority Ferrioli (R-John Day) and Ways & Means and introduce a limited and Medicaid delivery organization that Co-Chair Richard Devlin (D-Tualatin) to the number of bills. Each receive federal funding and administer Northwest Power & Conservation Council. member of the Senate Oregon’s Medicaid program. Both are long-time legislators with will only be allowed Since its inception earlier this particularly strong knowledge of state to draft one bill, decade, the even-year “short” sessions government and a track record of working Rocky Dallum while House members have become increasingly political. We with Senate leadership. Senator Jackie can draft two. With the addition of expect this trend to continue in 2018. Winters (R-Salem) replaces Ferrioli as the committee-sponsored bills, we expect less Legislators have convened work groups Senate Republican Leader, and has become than 300 bills overall. Still, most observers on a controversial carbon “cap and invest” the first Black person to lead a caucus in expect several controversial issues and program. Whether a program passes the Oregon legislature. Finally, Senator challenges, but overall, the limit on in 2018 is uncertain, but the proposal Jeff Kruse (R-Roseburg) is facing mounting drafting legislation and the duration of will certainly generate controversy. In allegations of improper conduct, has been the session creates significantly less drama recent cycles, the February session has stripped of all committee assignments, than the long sessions in odd-numbered been a testing ground for bills that and will undoubtedly face increasing years. may also appear in similar form on the pressure to resign his seat. In the House Prior to the legislative session, November ballot. Some groups will of Representatives, several experienced Oregonians will weigh in on recent use the threat of the initiative process Republican legislators have resigned to legislation to fund Medicaid. In 2017, to get a bill passed in February. This accept other appointments or to move the legislature passed HB 2391 on a year may not be an exception, and into the private sector. nearly party-line vote. HB 2391 places OADC is closely following several filed The significant changes in leadership “assessments” on health insurance measures that could impact civil defense are certain to be a factor in February, premiums to partially fund Oregon’s practice—particularly measures related to particularly as legislators negotiate Medicaid program. Anticipating a vaccination that inadvertently impact the controversial bills and a potential major challenge to the new funding mechanism, use of independent medical examinations. Medicaid funding shortage, and position the legislature designated a special OADC closely monitors discussions themselves for re-election or other elected election in January 2018 for any potential on tort reform as well, and members offices in November.

24 The VerdictTM ■ 2017–Issue 4 The scribe’s tips

The Scribe’s Tips for Better Writing

By Dan Lindahl Bullivant Houser Bailey

Not so long ago, supra reigned supreme as the Oregon appellate courts’ preferred form of short citation. For a long time, virtually every Oregon appellate decision was generously sprinkled with the term, which is Latin for “above.” Supra was used for short citations of cases, alerting the reader that the cited case had been cited somewhere earlier in the decision, and the reader, if sufficiently patient and interested, could riffle back through the opinion and discover Dan Lindahl the citation. There was some inconsistency about how Oregon’s appellate courts used supra. Sometimes it was just a case name plus supra, like this: “In Fazzolari, supra, years, used supra eight times. be used to refer to cases, statutes, the court addressed the relationship But as with so many things, supra’s constitutions, legislative materials between duty and foreseeability.” golden age was destined to end. Usage (other than hearings), restatements, Other times the courts combined remained robust through 1994 (413 model codes, or regulations, except supra with additional citation cases using supra), but a short decade in extraordinary circumstances, such information, like this: “In Fazzolari, later, only six Oregon appellate decisions as when the name of the authority is supra, 303 Or at 4, 734 P2d 1326, the 2 included supra. extremely long.” court addressed duty in the context of It was, presumably, during this It can be difficult to abandon old a claim for common-law negligence.” ways, but those practitioners who It is hard to say precisely when supra time that the Oregon Appellate still cling to supra should consider hit its peak usage. In 1984, the year your Courts Style Manual forbade using jettisoning it as the anachronism it has Scribe joined the Oregon State Bar, 459 supra, as it continues to do today. become. Oregon appellate decisions included The manual is blunt: “NOTE: The supra. That was a significant increase appellate courts do not use ‘supra’ as Endnotes from the 317 cases that used supra just a substitute for short citations.”1 Even 1 Oregon Appellate Courts Style a decade earlier. Fazzolari, perhaps the the stodgy Bluebook has eschewed Manual (2017) at 27. most noted case decided in the past 30 supra, directing that it “should not 2 The Bluebook, § 4.2 (20th Ed. 2015).

The VerdictTM ■ 2017–Issue 4 25 ASSOCIATION NEWS

The VerdictTM Editors Association News EDITOR IN CHIEF Jeanne Loftis Bullivant Houser Bailey PC 888 SW 5th Ave., #300 Calendar Portland, OR 97204 503/499-4601 2018 Annual Convention Sunriver Resort, OR [email protected] All programs are subject to change June 14-17, 2018 Register at www.oadc.com Feature Articles Editor Stephen Yoshida MB Law Group LLP 117 SW Taylor St, #200 Portland OR 97204 New Members 503/914-2015 [email protected] OADC welcomes the following new and returning members to the association: CASE NOTES EDITOR Taryn Basauri Tomas Osborne Sara Kobak Bullivant Houser Bailey Hitt Hiller Monfils Williams Schwabe Williamson & Wyatt PC 1211 SW 5th Ave., #1900 Cassie Bow Davis Christine Sargent Portland OR 97204 Rothwell Earle & Xóchihua Bullivant Houser Bailey 503/796-3735 Tara Costanzo Richard Williams [email protected] Lindsay Hart Bullivant Houser Bailey Defense Victory! Editor Kathryn Kelly Eric Meyer Schwabe Williamson & Wyatt Elkins Zipse & Mitchell 4380 SW Macadam Ste 350 Portland OR 97239 503/245-3211 OADC Past Presidents [email protected] Michael Lehner...... 2016 Ronald E. Bailey...... 1991 JUDGES BIO EDITOR Gordon Welborn...... 2015 John H. Holmes...... 1990 Julie A. Smith Dan Schanz...... 2014 John Hart...... 1989 Cosgrave Vergeer Kester LLP Michael (Sam) Sandmire...... 2013 Carl Burnham, Jr...... 1988 888 SW 5th Ave., #500 Greg Lusby...... 2012 James H. Gidley ...... 1987 Portland OR 97209 Jeanne Loftis...... 2011 Ralph C. Spooner...... 1986 503/219-3821 Drake Hood...... 2010 G. Marts Acker...... 1985 [email protected] Julie Elkins...... 2009 James L. Knoll...... 1984 Bill Sime...... 2008 Walter H. Sweek...... 1983 The Scribe’s Tips EDITOR Chris Kitchel...... 2007 James F. Spiekerman...... 1982 Dan Lindahl Robert Barton...... 2006 Hon. Malcolm F. Marsh...... 1981 Bullivant Houser Bailey PC Hon. Mark Clarke...... 2005 Austin W. Crowe, Jr...... 1980 888 SW 5th Ave., #300 Martha Hodgkinson...... 2004 Richard E. Bodyfelt...... 1979 Portland, OR 97204 James Edmonds...... 2003 Robert T. Mautz...... 1978 503/499-4431 Stephen Rickles...... 2002 Douglas G. Houser...... 1977 Steven Blackhurst...... 2001 Hon. Rodney W. Miller...... 1976 [email protected] Jonathan Hoffman...... 2000 David C. Landis...... 1975 Chrys Martin...... 1999 William V. Deatherage...... 1974 EDITORIAL ASSISTANT Thomas H. Tongue...... 1998 Frederic D. Canning...... 1973 Stephanie Wilken Paul Fortino...... 1997 Wayne Hilliard...... 1972 Bullivant Houser Bailey PC Larry A. Brisbee...... 1996 Roland (Jerry) F. Banks...... 1971 888 SW 5th Ave., #300 Frank E. Lagesen...... 1995 Jarvis B. Black...... 1970 Portland, OR 97204 Robert E. Maloney, Jr...... 1994 Thomas E. Cooney...... 1969 503/499-4490 Keith J. Bauer...... 1993 James B. O’Hanlon...... 1968 [email protected] Michael C. McClinton...... 1992 Hon. Robert Paul Jones...... 1967

26 The VerdictTM ■ 2017–Issue 4 ▼

Judge’s Bio

Hon. James L. Fun Washington County Circuit Court

For the Honorable Jim Fun, the Willamette University College of Law. “But they also expect and deserve to expression “be the change you wish to He chose Oregon after reading in a be treated fairly and with respect.” see in the world” is not just inspirational; magazine that the rivers were “filled When people treat someone unfairly or it’s aspirational. with salmon” and the forests “filled discourteously, he cautions, we all risk Born and raised in Rock Springs, with elk.” not having a second chance to earn their Wyoming, Judge Fun grew up spending Judge Fun describes law school as an trust and respect. time in his family’s Chinese American amazing experience. He found Oregon For the past eight years, Judge Fun restaurant. His family dined regularly to have lawyers who were committed has parked his car ten blocks from the in the restaurant, and they welcomed to helping students and young lawyers courthouse. Five days a week—rain or people of every race, age, and religion succeed. It was these early mentors who shine—he walks the remaining distance to take a seat and share their wisdom helped diversify the legal profession, to the courthouse in his suit, signature at their family and their legacy lives on in the Oregon bow tie, and tennis shoes. He has made table. In addition to State Bar’s current mentoring program. it a point to meet the people in the learning the value of After a year at an insurance defense neighborhood, many of whom have community, Judge Fun firm, Judge Fun joined the Washington never come into contact with a judge also learned the value County District Attorney’s office. He or a lawyer before meeting him. Now of hard work. He took started in the juvenile court and later he knows many of them by name and on a variety of roles in prosecuted juvenile offences. At that counts several as close friends. Hon. James L. Fun the restaurant over time, he saw very little diversity among Judge Fun also makes a habit of the years, working as a bus boy, a the judges. Now, there are three female, leaving the building during lunch to dishwasher, a cook, a bartender, and a three Hispanic, and two Asian-American take a step back and reflect. Work handyman. judges on the Washington County as a judge can be challenging and Judge Fun first became interested in bench. demanding. Faced with life-changing law in high school, when his hometown Judge Fun’s docket currently decisions every day, he says he tries became center stage to the high- includes domestic relations and to make sure his personal mood or profile murder trial of Ed Cantrell, criminal matters. He serves on the bar’s emotions don’t influence his decisions. represented by well-known criminal Professionalism Commission and has Judge Fun met his wife of 26 years defense attorney Gerry Spence. Having come to believe that unprofessional on a blind date. They live in Tigard, never been exposed to lawyers or and unethical behavior has a highly where they raised a daughter, now a judges, Judge Fun was eager to skip corrosive influence on the public’s views freshman at Oregon State. When not school to attend the trial. He was deeply of the profession. He expects lawyers spending time with his family or serving impressed by the lawyers and the judge, appearing in his courtroom to be on the board of the National Alliance on finding them articulate, composed, and professional and ethical. “It is important Mental Illness, you might see Judge Fun self-confident; it was then and there for attorneys to be prepared,” he says, riding his bike through Portland. “A car that he decided he wanted to be an “but effective advocacy does not occur can move you from point A to point B,” attorney. without being professional and ethical.” he says, “but a bike moves your soul.” After graduating from the University He adds, “People understand there — Submitted by Kirsten Curtis, of Wyoming, Judge Fun enrolled in the will be winners and losers in court.” Thenell Law Group

The VerdictTM ■ 2017–Issue 4 27 ▼

Judge’s Bio

Hon. William D. Cramer Jr. 24th Judicial District

Oregon’s 24th Judicial District has two on their taxes. He enjoyed the varied multiple days per week, often in winter county seats, but only one judge. The practice that being a small-town lawyer conditions. Judge Cramer has adapted Honorable William D. Cramer Jr. presides brings, and he found that the small-town by keeping a tight rein on his calendar over cases in Harney and Grant Counties environment lent itself to community and by occasionally keeping parties and with courthouses 68 miles apart. involvement—for example, serving jurors into the night to reach a verdict. Judge Cramer was born and raised as a church deacon and a coach—and He needs to keep the docket moving and in Burns, Oregon, one of six siblings. gave him access to his favorite outdoor is therefore reluctant to set cases over He was a three-sport letterman at activities. once a trial date has been set, absent a Burns Union High School until he was After more than a decade of practice, compelling reason. sidelined by an injury and his father, a Judge Cramer decided to run for the Judge Cramer views his 20 years on local attorney, handed newly created 24th Judicial District. In the bench as important public service. He him an application to 1997, he was sworn in, with his father strives to ensure that parties feel heard Harvard. administering the oath of office. He and respected and that they understand In 1973, he left views impartiality as a paramount quality that he works to serve justice in every his hometown for for a judge. As an example, once sworn decision he reaches. He recommends Cambridge, intending into office, he sat his four children down that attorneys and litigants show grace neither to return nor to and told them that, if they were ever to to judges, especially when the result Hon. William D. Cramer become a lawyer. But, do anything illegal, he would not bail they see as just is one the judge cannot after majoring in history, he realized he them out but instead would advocate legally render—as, for example, in cases was on the road to law school. In May for the most severe punishment. He did where the mandatory minimum sentence 1981, Judge Cramer graduated from not want to be seen as biased. appears harsh in light of the crime. the University of Oregon School of Law, Judge Cramer estimates that, on On a relevant, but personal, note: received his diploma while carrying average, he presides over six trials as his son, I have watched Judge Cramer his newborn son across the stage at a month. The majority are criminal, agonize over difficult decisions he had commencement, and celebrated his probate, family law, or commitment to make, humbly deal with the backlash first wedding anniversary with his wife, proceedings. Most civil cases settle or are of unpopular decisions, and wrestle Robin. Shortly thereafter, he began work subject to mandatory arbitration, so few with the heartbreak of seeing people at his father’s firm, Cramer & Pinkerton, make it to trial. He views the vanishing he knows personally come before him where he tried his first case during his civil jury trial as a growing problem, as for sentencing (one of the disadvantages first week in practice. In 1983, he was fewer attorneys develop civil trial skills. of being a small-town judge). I know my made a partner. This is especially problematic in Eastern father treats each case with the utmost As an attorney, Judge Cramer spent Oregon, where Judge Cramer also sees a sense of responsibility, knowing that his quite a bit of time in court over the years, growing need for young litigators. choices will have long-lasting effects. You representing criminal defendants and Being the lone judge in two counties could not ask for more in a judge, and if personal-injury plaintiffs. He litigated presents many challenges, including it serves as any kind of endorsement, I’m cases arising from car accidents (often navigating different cultures, working proud of the job he has done. involving cattle) and plane crashes. He with separate staffs and district attorneys, — Submitted by David Cramer, prepared estate plans and advised clients and traveling nearly 140 miles roundtrip Gordon Rees Scully Mansukhani

28 The VerdictTM ■ 2017–Issue 4 ▼

OADC Thanks our 2017 Sponsorship Partners

The VerdictTM ■ 2017–Issue 4 29 Trial Lawyers Defending You in the Courts of Oregon prsrt STD Oregon Association U.S. POSTAGE OADC of Defense Counsel PAID Portland, OR 147 S.E. 102nd Permit No. 3664 Portland, Oregon 97216