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| June 17, 2004
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| Cases decided June 17, 2004
American Bankers Ins. Co. v. State of Oregon et al,
(CC 0006-05848) (CA A115183) (SC S50816)
On review from the Court of Appeals in an appeal from the Multnomah County Circuit Court, Jan Wyers, Judge. American Bankers Ins. Co. v. State, 188 Or App 606, 72 P3d 666 (2003). The decision of the Court of Appeals is reversed. The judgment of the circuit court is reversed, and the case is remanded to the circuit court for further proceedings. Opinion of the Court by Justice Thomas A. Balmer.
Today, in an interpleader action, the Oregon Supreme Court held that a private party who had loaned money to a third party through an agreement with a licensed mortgage broker could assert a claim against a bond that the mortgage broker had posted under the Oregon Mortgage Lender Law.
Robert and Sandra Graf loaned funds to Karl and Linda Keener through an agreement with a mortgage broker, Mortgage One, Inc. Oregon law required Mortgage One to obtain a bond, which American Bankers Insurance Company, Inc. supplied. After the Keeners defaulted on the loan, the Grafs alleged that Mortgage One had made misrepresentations in connection with the loan transaction and sought to recover on the bond. Because other claimants against Mortgage One also sought to recover on the bond, American Bankers filed an interpleader action and deposited the amount of the bond with the trial court so that the court could determine the validity of the competing claims to the funds. The trial court determined that the Grafs could not recover against the bond because they did not belong to the class of parties that the legislature intended to protect through the bonding requirement. The Court of Appeals agreed, and the Grafs sought review.
In an unanimous decision, the Supreme Court first held that ORS 59.925(2) provides that, if a mortgage broker engages in a misrepresentation in a residential mortgage transaction, then the mortgage broker is liable to any person who suffers a loss in that transaction as a result of that misrepresentation. Next, the Court determined that ORS 59.925(6) plainly states that a person who has a right of action against a mortgage banker or mortgage broker also has a right of action under the bond that ORS 59.850 requires.
As applied to this case, because the Grafs had alleged that they suffered a loss after a mortgage broker's misrepresentations induced them to lend funds in a residential mortgage transaction, that claim fits squarely within the text of ORS 59.925(2)(b). As a result, the Court determined that the Grafs have a right of action both against Mortgage One under ORS 59.925(3) and under the bond. In so holding, the Court expressed no opinion as to the merits of the Graf's misrepresentation allegations.
In the Matter of the Marriage of David Henry Kunze and Nola Maxine Kunze, (CC DO99-1014) (CA A112487) (SC S46172)
On review from the Court of Appeals in an appeal from the Yamhill County Circuit Court, John W. Hitchcock, Judge. Kunze and Kunze, 181 Or App 606, 47 P3d 489 (2002). The decision of the Court of Appeals is modified in part and, as modified, affirmed. The judgment of the trial court is modified in part and, as modified, affirmed. Opinion of the Court by Chief Justice Wallace P. Carson, Jr. Justice W. Michael Gillette did not participate in the consideration or decision of this case. Justice R. William Riggs did not participate in the decision of this case.
In an unanimous decision authored by Chief Justice Wallace P. Carson, Jr., the Supreme Court held that, although the husband to this dissolution action was not entitled to any of the disputed marital assets by virtue of the statutory presumption of equal contribution under ORS 107.105(1)(f), the husband nevertheless was entitled to a share of one of the disputed marital assets because the husband had established that the wife had converted that asset into a joint asset of the marital partnership through commingling.
The husband filed for dissolution after nearly twenty years of marriage. At trial, the primary issue was the appropriate division of the marital property. The trial court divided most of the property equally between the parties, but excluded certain assets from property division after determining that the wife had proved that the husband had not contributed to them. The trial court also awarded $22,616 as a property award to the wife for the husband's enhanced earning capacity based upon the wife's contributions in supporting the husband to earn a college degree during the marriage.
On the husband's subsequent appeal, the Court of Appeals modified the property division as to two of the disputed assets, concluding that, although the wife's separate funds had purchased those assets, the wife had failed to rebut the presumption of equal contribution by the husband under ORS 107.105(1)(f) because the wife had commingled those assets with the joint financial affairs of the marital partnership. The Court of Appeals also eliminated the property award to the wife for the husband's enhanced earning capacity because it concluded that there was no evidence that the husband had or would derive any economic benefit from his degree.
On review, the Supreme Court held that the trial court correctly determined that the husband is not entitled to any of the disputed properties by virtue of the statutory presumption of equal contribution under ORS 107.105(1)(f). The Supreme Court further concluded that the trial court satisfied the requirement of a "just and proper" division of property under ORS 107.105(1)(f) by awarding to the wife separately two of the disputed properties. As to the third disputed property, however, the Supreme Court determined that the trial court erred by awarding that property to the wife separately because, although the husband had not contributed to that property, the husband had established that the wife had converted that asset into a joint asset of the marital partnership through commingling. The Supreme Court also concluded that the trial court's property award to the wife for her contributions to the husband's enhanced earning capacity was in error because the wife failed to show that the husband's degree resulted, or likely would result, in higher earnings for the husband.
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On June 15, 2004, the Supreme Court:
1. Allowed a petition for review in*:
State v. Smith, S51233, A110289. Petitioner Rocky Devon Smith (defendant) seeks review of a Court of Appeals decision, on reconsideration by the full court, that the proper remedy for the trial court’s failure to inquire into defendant’s complaints about his trial counsel was a remand for the trial court to make that inquiry, rather than remand for a new trial.
Defendant was convicted of robbery in the first degree, assault in the second and third degrees, and related firearms charges. Before trial, defendant asked for the appointment of different counsel, complaining that his existing counsel had failed to investigate the case and interview potential witnesses. The trial court did not inquire into those complaints. Instead, the court stated that it had great respect for defendant’s attorney and accepted the attorney’s representation that he was ready to proceed.
Defendant appealed. Initially, the Court of Appeals held that the trial court’s failure to inquire into defendant’s complaints about his trial counsel constituted reversible error, and reversed and remanded for a new trial. The state sought reconsideration of that decision, arguing that the proper remedy was a remand so that the trial court could inquire into defendant’s complaints about his counsel. The state contended that such a review for prejudice was mandatory under Article VII (Amended), section 3, of the Oregon Constitution, which provides, in part:
“If the supreme court shall be of the opinion, after consideration of all the matters thus submitted, that the judgment of the court appealed from was such as should have been rendered in the case, such judgment shall be affirmed, notwithstanding any error committed during the trial[.]”
The Court of Appeals, acting as a full court, agreed that the constitutional text is mandatory, and determined that the correct remedy is a remand for the trial court for an inquiry whether the trial court should have agreed to defendant’s request for a different attorney. In holding that the proper remedy was a remand for an inquiry rather than a new trial, the Court of Appeals nullified several of its earlier decisions. State v. Coffey, 158 Or App 112, 972 P2d 1219 (1999); State v. Grcich, 148 Or App 337, 939 P2d 649 (1997); and State v. Heaps, 87 Or App 489, 742 P2d 1188 (1987). The decision of the Court of Appeals is reported at 187 Or App 562, 69 P3d 787, modified, 190 Or App 576, 80 P3d 145 (2003).
Defendant raises seven issues on review, which may be summarized as follows:
(1) Whether Article VII (Amended), section 3, of the Oregon Constitution, either requires or permits an appellate court to remand to a trial court to determine whether an error prejudiced a defendant, when that determination could not be made by the appellate court based on the appellate record;
(2) Whether a remand to a trial court to determine whether an error prejudiced a defendant violates ORS 14.210(1);
(3) Whether an appellate court should presume prejudice when a trial court fails to make an inquiry into a defendant’s request for substitute counsel;
(4) Whether an appellate court should order a new trial court judge to conduct the inquiry on remand when the trial court’s statements show bias and a reliance on information outside the records;
(5) Whether a new trial should be ordered if a new judge must conduct the inquiry on remand;
(6) Whether the inquiry on remand must be conducted outside the presence of the district attorney and in the judge’s chambers; and
(7) Whether the scope of the inquiry should include a determination of whether the defendant would have elected to proceed without counsel or would have retained counsel as a result of the inquiry that the trial court should have conducted.
2. Denied petitions for review in:
State v. Roth, S49237, A106746
Adamson and Adamson, S51226, A118091
Davidson v. Clatsop County, S51284, A115059
Medlyn and Medlyn, S51310, A118268
State v. Rolfe, S51311, A118014
State v. Beason, S51321, A116386
Jenkins v. Bouchard, S51331, A111052
State v. January, S51335, A111214
Hutson v. Palmateer, S51343, A114705
1000 Friends of Oregon v. Clackamas County, S51344, A123907
Jett v. Ford Motor Company, S51348, A111123
State v. Nguyen, S51349, A116696
Conley v. Orman, S51357, A119894
State v. Zastera, S51359, A114282
Franklin v. Lampert, S51363, A116207
Dauven v. Walker, S51369, A121134
Jeld-Wen, Inc. v. Cooper, S51379, A119838
State ex rel Dept. of Human Services v. Payne, S51381, A121954
State v. Green, S51384, A117163
State v. Miller, S51385, A118273
Wilhite v. Czerniak, S51391, A117921
State v. Jenkins, S51392, A112291
Tuy v. Schiedler, S51394, A119497
State v. Carruthers, S51399, A116415
State v. Tanner, S51401, A111473
State ex rel Juvenile Dept. of Curry Co. v. Anthony, S51407, A117767
Stanfield v. Stanfield, S51428, A117576
3. Denied petitions for reconsideration in:
Clackamas County v. McManama, S51142, A122356 (Order denying petition for review issued April 20, 2004)
Clark and Clark, S51139, A119219 (Order denying petition for review issued April 20, 2004)
Gueorguieva v. Liberty Northwest Insurance Corp., S51068, A122778 (Order denying petition for review issued April 6, 2004)
4. Denied petitions for writ of mandamus in:
State v. Neese, S51432
State v. Barnum, S51441
Paulson v. Aiello, S51447
State v. Holiday, S51489
5. Denied a petition for writ of habeas corpus in:
Cunningham v. State, S51450
6. Accepted the resignation of Eugene attorney Candice G. Singer during the pendency of disciplinary proceedings.
Accepted the resignation of Portland attorney Charles Douglas Oliver during the pendency of disciplinary proceedings.
7. Reinstated attorney Margaret Parker Washburn to the practice of law and placed her on probation for non-payment of student loans (order issued June 9, 2004).
*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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