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| January 23, 2004
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| Cases decided January 23, 2004
The full text of these opinions can be found at http://www.publications.ojd.state.or.us
State of Oregon v. Jeffery Dana Sparks, (TC CR98326) (SC S46773)
On automatic and direct review of a judgment of conviction and sentence of death imposed by the Yamhill County Circuit Court, John W. Hitchcock, Judge. The judgment of conviction and the sentence of death are affirmed. Opinion of the Court by Justice Robert D. Durham.
Today, in an unanimous decision, the Oregon Supreme Court affirmed the judgment of conviction and the sentence of death against Jeffery Dana Sparks.
In April 1998, defendant sexually assaulted and murdered a 12-year-old girl in Lafayette, Oregon. The state charged defendant with 15 counts of aggravated murder and five noncapital offenses in connection with those crimes. A Yamhill County jury found defendant guilty of all the charged offenses, and, after a separate penalty-phase proceeding on the counts of aggravated murder, the trial court entered a sentence of death. On review, defendant raised 33 assignments of error. The Court concluded that none of defendant's assignments of error was well taken and, consequently, affirmed the judgment of conviction and the sentence of death.
Of the assignments of error that the Court decided to address in detail, the Court first considered defendant's argument that the trial court should have granted his pretrial motion for change of venue. The Court concluded that the trial court did not abuse its discretion by denying that motion because defendant had failed to establish that there existed such a level of prejudice against him in Yamhill County so as to preclude a fair and impartial trial.
The Court next addressed defendant's assertion that the trial court erred in admitting post-mortem photographs of the victim. Defendant had argued that, because he had offered to stipulate to the facts that the photographs would tend to show as true, the photographs were inadmissible as irrelevant and unfairly prejudicial. The Court held that defendant's offer to stipulate did not have the effect of making the otherwise relevant photographic evidence irrelevant. The Court also held that the trial court did not abuse its discretion in admitting the photographic evidence, because defendant's offered stipulations did not tip the balance in favor of excluding that evidence as unfairly prejudicial.
The Court also considered defendant's assertion that the trial court erred in allowing non-family members of the victim to present victim impact evidence. The Court determined that ORS 163.150(1)(a) does not limit the witnesses who may present victim impact evidence; rather, the statute limits the scope of that evidence. Because defendant did not argue that the witnesses presented evidence outside the scope of permissible victim impact evidence, the Court concluded the trial court did not err.
The Court next addressed defendant's argument that, during the penalty phase of his trial, the trial court erred in admitting certain evidence about violence in prison and the weapons that inmates make in prison. The Court rejected defendant's arguments, concluding that the evidence was relevant to the jury's determination of defendant's future dangerousness.
Having rejected each of defendant's assignments of error, the Court affirmed defendant's judgment of conviction and sentence of death.
Oregon Steel Mills, Inc. v. Coopers & Lybrand, LLP,
(TC 9708-06108) (CA A107366) (SC S48978)
On review from the Court of Appeals in an appeal from the Multnomah County Circuit Court, Robert W. Redding, Judge. 176 Or App 317, 31 P3d 1092 (2001). The decision of the Court of Appeals is reversed. The judgment of the circuit court is affirmed. Opinion of the Court by Justice Thomas A. Balmer. Justice Susan M. Leeson resigned January 31, 2003, and did not participate in the decision of this case. Justice Rives Kistler did not participate in the consideration or decision of this case.
Today, the Supreme Court held that, under state tort law, an accounting firm may not be held liable for damages suffered by its client due to changes in the market price of the client's stock that were not caused by the accounting firm's negligent conduct, even though the accounting firm may have breached its duty to the client by failing to provide competent accounting services.
The Supreme Court took its facts from the summary judgment record and viewed them in the light most favorable to the plaintiff, as the nonmoving party. In 1994, plaintiff Oregon Steel Mills, Inc., a company whose stock is traded on the New York Stock Exchange, retained defendant Coopers & Lybrand, LLP, to provide accounting and auditing services in regard to a transaction that involved the sale of stock in one of plaintiff's subsidiaries. Defendant advised plaintiff that the transaction should be reported as a gain on plaintiff's financial statements and reports, and plaintiff followed that advice. In early 1995, defendant audited plaintiff's 1994 financial statements and gave its opinion that those statements fairly represented plaintiff's financial position in accordance with generally accepted accounting principles.
During late 1995 and early 1996, plaintiff planned to make a public offering of its stock and debt. Defendant had been aware of those plans since at least 1994 and provided plaintiff with accounting advice in connection with the planned offering; among the documents to be filed with the Securities Exchange Commission (SEC) were the 1994 financial statements. Plaintiff anticipated that, barring unforeseen difficulties in the SEC process, the securities would be priced and sold on or about May 2, 1996.
Shortly before the initial SEC filing in February 1996, defendant advised plaintiff that the 1994 transaction might have been reported incorrectly and that defendant would not approve the audit of plaintiff's 1995 financial statements or allow use of the 1994 audit unless the SEC approved the accounting treatment of the 1994 transaction. The SEC subsequently concluded that that accounting treatment was incorrect and required plaintiff to restate its 1994 financial statements. Because of the time required to make the necessary corrections, the public offering did not occur until June 13, 1996. On that date, the price of plaintiff's stock was $13.50, which, coincidentally, was the same price it had been in February when the accounting error was discovered. However, on May 2, 1996, the date that plaintiff alleges the stock sale would have taken place but for defendant's negligent conduct, plaintiff's stock sold for $16 per share.
In 1997, plaintiff brought suit against defendant, alleging that the delay caused by defendant's negligent conduct resulted in the stock being offered at the lower share price. Plaintiff sought $35 million in damages for the difference between what it actually received for its stock and debt and what it alleged it would have received if the offering had occurred on May 2, 1996. Defendant moved for summary judgment, which the trial court granted. The Court of Appeals reversed the trial court's summary judgment.
In an opinion by Justice Thomas A. Balmer, the Supreme Court reversed the Court of Appeals decision. The Court noted that it previously had rejected "proximate cause" as a means of expressing the limits of the harm for which a negligent defendant can be liable. Rather, if, as here, a plaintiff proves factual causation, then whether the defendant is legally responsible for the plaintiff's harm depends on what constitutes negligence in a particular case.
The Court noted that, because plaintiff sought damages for purely economic losses, it therefore was required to allege the existence of a special relationship with defendant to state a claim for relief, which plaintiff had done. However, although the Court found that a special relationship did exist between defendant and plaintiff and that relationship established that defendant owed a duty of care to plaintiff, the scope of that duty was limited to harms to plaintiff that were reasonably foreseeable.
The Court then considered whether plaintiff's losses, which were based solely on a decline in the price of plaintiff's stock during the delay that defendant caused in getting the offering to market, were reasonably foreseeable. The Court found that the price decline was unrelated to defendant's accounting errors and the record did not support plaintiff's contention that defendant knew that plaintiff intended to enter the market and sell its securities at a specific, favorable time. Thus, the Court held that the decline in plaintiff's stock price in June 1996 was not a reasonably foreseeable consequence of defendant's negligent conduct in 1994 and early 1995 and, consequently, plaintiff could not recover damages measured by that decline.
On January 21, 2004, the Supreme Court:
1. Allowed a petition for review in*:
Boothby v. D.R. Johnson Lumber Co., S50142, A110786. Petitioner Marilu Boothby (plaintiff below), individually and as the personal representative of Winston Boothby’s (decedent’s) estate, seeks review of a Court of Appeals decision reversing the trial court’s denial of motions for directed verdict by D.R. Johnson Lumber Co. (defendant below).
Defendant entered into a contract with the State of Washington to purchase and remove timber from certain state-owned land. Defendant then contracted with Intermountain Forest Management (Intermountain) to perform the logging work. Decedent, who worked as a member of Intermountain’s logging crew, was crushed to death under a log loader at the job site. Plaintiff brought an action against defendant for violation of the Employer Liability Law (ELL), ORS 654.305 to ORS 654.336, and for common law negligence.
The ELL provides that “all owners, contractors or subcontractors and other persons having charge of, or responsibility for, any work involving a risk of danger to * * * employees” must exercise every precaution that is practicable for the protection of life and limb. The ELL has been interpreted to apply to “indirect” employers if any of three conditions apply: (1) the plaintiff’s direct employer and the defendant engaged in a “common enterprise”; (2) the defendant retained the right to control the manner or method in which the risk-producing activity was performed; or (3) the defendant actually controlled the manner or method in which the risk-producing activity was performed. See Miller v. Georgia-Pacific Corp., 294 Or 750, 755 (1983) (reiterating the three tests for indirect ELL liability).
According to plaintiff, defendant either engaged in a common enterprise with Intermountain, or it retained the right to control Intermountain by virtue of its contract with the State of Washington, which provided that defendant “shall comply with all applicable statutes, regulations and laws” and that although defendant “may perform any duty through a delegate, [defendant] is not thereby relieved of any duty to perform or any liability.”
At trial, defendant moved for a directed verdict on both claims. The trial court denied the motion and sent the case to the jury, which returned a verdict for plaintiff, awarding substantial economic and non-economic damages. The trial court reduced the damages under ORS 18.560(1) and by the percentage of decedent’s comparative fault. Plaintiff appealed regarding the calculation of damages, and defendant cross-appealed regarding, among other things, its claim of entitlement to directed verdicts.
The Court of Appeals reversed and remanded for entry of judgment for defendant. The court determined that defendant neither retained a right of control nor engaged in a common enterprise with Intermountain, and concluded that because defendant did not meet any of the tests for application of the ELL, the trial court erred in denying defendant’s motion for directed verdict. The court also determined that defendant “had bargained for, and was entitled to rely on, Intermountain’s exercise of its own specialized knowledge and expertise in the performance of the logging operations, including the implementation of appropriate safety measures for the conduct of those operations.” The court, therefore, concluded that defendant was entitled to a directed verdict on the negligence claim because “there was no evidence from which a jury could find that [defendant] owed a ‘duty’ to Intermountain’s employee, Boothby[.]” The decision of the Court of Appeals is reported at 184 Or App 138, 55 P3d 1113 (2002).
On review, the issues are:
(1) Whether, as a matter of law, an owner or contractor can satisfy the duty of care imposed by ORS 654.305 by delegating responsibility for that duty to another;
(2) Whether, in a negligence action, questions of fact can be resolved against the plaintiff by the terms of a contract to which the plaintiff was not a party; and
(3) Whether one can satisfy the obligation to exercise reasonable care to prevent foreseeable harm to workers on a job site by contractually assigning that obligation to the party employing the workers.
2. In State v. Watson, S50944, A115328, the petition for review was allowed, the decision of the Court of Appeals was vacated, and the case was remanded to the Court of Appeals for further consideration in light of State v. Cox, 336 Or 284 (2003).
3. Denied petitions for review in:
State v. Caldwell, S50776, A112043
Hess v. Board of Parole, S50779, A117906
Kerivan v. Oregon Water Resources Commission, S50814, A112936
Kopp v. Hill, S50822, A119522
American Medical Response v. Gavlik, S50845, A118712
Darling v. Johnson Controls Battery Group, Inc., S50855, A115889
State v. Cowan, S50879, A115751
Curtis v. Board of Parole, S50881, A119028
Palmquist v. Flir Systems, Inc., S50893, A114514
Taylor v. Board of Parole, S50898, A115898
State ex rel Department of Human Services v. Salo, S50899, S50923, A121142
State v. Hitz, S50920, A116050
State v. Johnston, S50922, A116562
State v. Price, S50933, S50933, A112540
State v. Ornelas, S50934, A111746
Staley v. Board of Parole, S50935, A119445
Oakleaf Mobile Home Park v. Mancilla, S50937, A118023
Matott v. Palmateer, S50940, A120868
State ex rel Department of Human Services v. Staggs, S50951, A120551
State v. Hutt, S50953, A118498
Mujadzic v. Employment Department, S50954, A119864
State v. Bond, S50956, A118471
State v. White, S50958, A117537
State v. Hill, S50960, A115915
State ex rel Department of Human Services v. O’Neill, S50965, A120976
State v. Russo, S50982, A116336
State v. Jauregui, S50988, A116064
State v. Hamman, S50989, A115981
Walters v. Lampert, S50990, A118125
State ex rel Juvenile Department of Multnomah County v. Grenawalt, S50991, A119440
Gomez v. Czerniak, S50995, A116759
Ash v. Ash, S51001, A119415
State v. Holt, S51009, A113952
State v. Feil, S51020, A113901
State v. Sherrod, S51022, A114769
Green v. Board of Parole, S51028, A120312
State v. Harrison, S51030, A112647
State v. Burgess, S51045, A120042
State ex rel Department of Human Services v. Johnson, S51051, A121129
4. Denied petitions for reconsideration in:
State ex rel Poddar v. Oregon State Bar, S50839 (Order denying petition for writ of mandamus issued November 25, 2003)
Stull v. Lewis & Clark College, S50788, A113089 (Order denying petition for review issued November 5, 2003)
5. Dismissed petitions for writ of mandamus as moot in:
State v. Voth, S50886
Voth v. Schiedler, S51034
6. Denied petitions for writ of mandamus in:
McCoy v. Santos, S50909
Payne v. Community Blood Center, S50973
Drollinger v. Lampert, S51017
Webber v. Hall, S51012
Pucci v. Rent-A-Center, Inc., S51032
7. Accepted the resignation of Salem attorney Thomas E. Knapp from the practice of law during the pendency of disciplinary proceedings.
8. Reinstated attorney David Lorin Peyerwold to the active practice of law.
9. Admitted the following persons to the practice of law in Oregon under Rule of Admission 15.05 relating to reciprocal admission:
Robin Dale
Kent Michael Fandel
Daryl Lynn Graves
Robert Holden Lavitt
James Harvey Simon
James Walter Sinclair
James Keith Woods
*These summaries of cases in which the Supreme Court has allowed review are prepared for the benefit of members of the media to assist them in reporting the court's activities to the public. Parties and practitioners should not rely on the summaries, or the statement of issues to be decided in the summaries, as indicating the questions that the Supreme Court will consider on review. Regarding the questions that the Supreme Court may consider on review, see Oregon Rule of Appellate Procedure 9.20.
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