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| October 5, 2006
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| Cases decided October 5, 2006
The full text of these opinions can be found at http://www.publications.ojd.state.or.us
Oregon Telecommunications Association et al. v. Oregon Department of Transportation, (TC CCV0208620) (SC S50709)
On appeal from Clackamas County Circuit Court, Harl H. Haas, Senior Judge. The judgment of the circuit court is affirmed. Opinion of the Court by Justice Robert D. Durham. Justice William R. Riggs retired September 30, 2006, and did not participate in the decision of this case.
Today, the Oregon Supreme Court affirmed the circuit court's decision holding that Article IX, section 3a, of the Oregon Constitution authorizes the Oregon Department of Transportation (ODOT) to use state highway funds to pay administrative expenses that ODOT incurs in requiring the relocation of utility facilities within a public highway right-of-way.
Plaintiffs Colton Telephone Company, Canby Telephone Association, and Cascade Utilities, Inc., (plaintiff utilities) are Oregon corporations that provide telecommunications services in part through utility facilities installed, with the permission of ODOT, in the rights-of-way of roads and highways over which ODOT has supervision. They are members of a trade association, plaintiff Oregon Telecommunications Association (OTA), that represents local exchange telecommunication companies serving customers in Oregon. ODOT began several projects to improve certain roads that it supervises. In connection with those projects, ODOT required plaintiff utilities to relocate their utility facilities buried in the rights-of-way of the affected roads. When ODOT requires the relocation of utility facilities, it incurs expenses in conducting planning activities concerning the relocation process. To recover those expenses, ODOT established by rule a schedule of fees that it charged to plaintiff utilities.
Plaintiffs filed this action to challenge the authority of ODOT to charge those fees to the plaintiff utilities. They argued that the Oregon Constitution authorized ODOT to use highway funds to recover its expenses incurred in requiring the relocation of utility facilities. In response, ODOT argued that it had no authority to use state highway funds for that purpose and that state law authorized ODOT to recover its expenses from plaintiff utilities pursuant to administrative rules. The trial court rejected ODOT's argument and granted summary judgment for plaintiffs. ODOT appeals from that judgment.
The focus of this case is the Oregon Constitution, Article IX, section 3a, which dedicates highway funds exclusively to the "construction, reconstruction, improvement, repair, maintenance, operation and use of public highways, roads, streets, and roadside rest areas." ODOT may only charge a permit fee if its costs do not fall within Article IX, section 3a. Previously, the Oregon Supreme Court held that Article IX, section 3a, requires a narrow construction based on its legislative history and that expenditures of highway funds "must be limited exclusively to expenditures on highways, roads, streets and roadside rest areas themselves and for other projects or purposes within or adjacent to a highway, road, street or roadside rest area right-of-way that primarily and directly facilitate motorized vehicle travel." Here, the Court declined to follow that test because its previous analysis focused on legislative history, rather than the text of Article IX, section 3a.
Based on the text of the constitutional provision, the Court determined that the administration of planning activities by ODOT regarding the required relocation of utility facilities was an important aspect of the "reconstruction" and "improvement" of the public highways within the meaning of Article IX, section 3a. The Court held, therefore, that ODOT had no statutory authority to charge a permit fee to the utilities, because the costs to ODOT of issuing the permit to relocate utility facilities and to administer its terms could legally be paid from the highway funds.
State of Oregon v. Isaac Jerome Lane, (TC 02FE0143) (CA A119122) (SC S52697)
On review from the Court of Appeals in an appeal from Crook County Circuit Court, Daniel Ahern, Judge. 198 Or App 173, 108 P3d 20 (2005). 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 William R. Riggs retired September 30, 2006, and did not participate in the decision of this case.
Today, the Supreme Court affirmed a trial court judgment convicting defendant of second-degree escape, because the courtroom from which defendant fled after a judge revoked his pretrial release was a place of confinement, and therefore a "correctional facility," for purposes of the second-degree escape statute.
After his arrest for burglary, defendant was released from jail pending trial when he signed a release agreement. Defendant failed to maintain contact with his counsel as required by the release agreement, and, at a status hearing on the burglary charges, the judge revoked the release agreement and remanded defendant to jail, informing defendant that he had been "reduced to custody." Shortly thereafter, defendant left the courtroom by a side door. Court staff notified the local police, and defendant was apprehended several blocks from the courthouse.
Defendant's indictment charged him with escape in the second degree, ORS 162.155, for escaping from a correctional facility, and escape in the third degree, ORS 162.145, for escaping from custody. Following a bench trial, the trial court convicted defendant of second-degree escape on the theory that the courtroom was a "correctional facility." The Court of Appeals reversed, holding that the state had failed to prove that defendant had the requisite mental state to sustain a conviction for escape from a correctional facility.
In a unanimous opinion written by Justice Thomas A. Balmer, the Supreme Court concluded that the courthouse was a correctional facility within the meaning of the second-degree escape statute. The court also concluded that sufficient evidence existed in the record from which the trial court could have concluded that defendant knowingly had escaped from a correctional facility. The state was not required to prove that defendant understood the statutory definitions of "correctional facility," and the evidence was sufficient to prove that the defendant knew that he was escaping from a location that was deemed to be a correctional facility.
Robbie T. Davis v. Board of Parole and Post-Prison Supervision, (CA A120534) (SC S52803)
On review from the Court of Appeals on review from a Board of Parole and Post-Prison Supervision (board) order. 200 Or App 366, 114 P3d 1138 (2005). The decision of the Court of Appeals and the order of the Board of Parole and Post-Prison Supervision are affirmed. Opinion of the Court by Justice Rives Kistler. Justice William R. Riggs retired September 30, 2006, and did not participate in the decision of this case.
Today, the Supreme Court affirmed the decision of the Court of Appeals and the order of the Board of Parole and Post-Prison Supervision denying petitioner release on parole.
Petitioner was sentenced as a dangerous offender. At his parole consideration hearing, the board did not set a release date for petitioner, because it found by a preponderance of the evidence that the condition that made him dangerous was not absent or in remission. The board stated that it bore the burdens of persuasion and production. Petitioner argues that due process requires the board to set a release date unless it finds by clear and convincing evidence that the condition that made him dangerous is present. The Court of Appeals held that due process requires only proof by a preponderance of the evidence and affirmed the board's order.
On review, the Supreme Court concluded that the dangerous offender statute, ORS 144.228(2), does not make the board a party to parole consideration hearings or place a burden of persuasion on it. The Court also determined that, under ORS 144.228, if the board is not persuaded that the condition that made the prisoner dangerous is absent or in remission, then the board may not set a release date. The prisoner thus bears the risk of nonpersuasion. The Court accordingly concluded that it need not reach petitioner's due process argument, because petitioner has no interest in having the board use a clear-and-convincing standard of proof, rather than proof by a preponderance of the evidence, to determine whether the condition that made him dangerous is absent or in remission. In addition, the board had evinced no interest in applying a higher standard of proof than proof by a preponderance of the evidence. Therefore, the Court affirmed the Court of Appeals decision and the order of the Board of Parole and Post-Prison Supervision.
On October 3, 2006, the Supreme Court:
1. Allowed petitions for review in*:
North Marion School District #15 v. Acstar Insurance Co., S53662, A119438. Petitioners, North Marion School District #15, for the use and benefit of Gonzalo Aranda Trejo, et al. (plaintiffs below) seek review of a Court of Appeals decision that affirmed a judgment of the trial court in favor of defendants (Acstar, et al.).
Plaintiffs are employees on a public works project, and defendants are the general contractor (OC America Construction, Inc.), the subcontractor (Vander Kley d/b/a Vander Kley & Co., who employed plaintiffs), and their respective sureties (American Home Assurance Company and Acstar Insurance Company). After work on the project had begun, the subcontractor became financially insolvent and could no longer pay its employees. The general contractor sent a letter to Acstar, the subcontractor's surety, informing it of the situation. In addition, plaintiffs sent notices to the general contractor and subcontractor, purportedly pursuant to ORS chapter 279, which indicated that plaintiffs had claims on their bonds for labor performed because they were not paid wages at the prevailing wage rate when those wages were due. Acstar delivered paychecks to plaintiff on May 25, 2000, approximately 26 days after the scheduled payday and 17 days after the notices of claims. Acstar later made additional payments to some plaintiffs after it was determined that the subcontractor had misclassified them.
Plaintiffs filed suit, bringing claims for statutory penalty wages under ORS 652.150, for civil penalties under ORS 653.055 for failure to pay the prevailing state minimum wage rate when due, for liquidated damages under ORS 279.356 for failure to pay the prevailing wage rate as required by ORS 279.350, and for attorney fees. Plaintiffs and defendants each filed motions for summary judgment. The trial court concluded, among other things, that the sureties could not be liable for penalty wages, that plaintiffs failed to comply with the notice provisions of ORS chapter 279, and that plaintiffs' claims against subcontractor Vander Kley were barred by his discharge in bankruptcy. Accordingly, the trial court granted defendants' motions for summary judgment on all claims and denied plaintiffs' motions.
Plaintiffs appealed, and the Court of Appeals affirmed. The court first declined to address the issue of whether plaintiffs' notice was sufficient, noting that even if it was, plaintiffs still would not be entitled to recover. The court then determined that penalty wages are not "earned" in the sense that they compensate an employee for work actually performed, and therefore concluded that, as a matter of law, penalty wages cannot be payment for "labor," as authorized under ORS 279.526. The court next agreed with defendants that plaintiffs could not seek liquidated damages because Acstar paid plaintiffs the prevailing wage rate, and disagreed with plaintiffs that the delay in payment violated the prevailing wage rate. Finally, because plaintiffs were entitled to proceed directly against the bond and did not need a judgment against the subcontractor to recover, the court concluded that the trial court correctly granted summary judgment for Vander Kley on the basis of his discharge in bankruptcy. The decision of the Court of Appeals is reported at 205 Or App 484, 136 P3d 42 (2006).
On review, the issues are:
(1) Whether an employee on a public works project is entitled to receive penalty wages under ORS 652.150 as "labor" costs under ORS 279.526.
(2) Whether a surety is liable for payment of penalty wages under ORS 652.150.
(3) Whether a surety is liable for liquidated damages under ORS 279.356 if the surety fails to pay wages on payday.
Clarke v. Oregon Health Sciences University, S53868, A124560. Petitioners, Oregon Health Sciences University (OHSU), et al. (defendants below), seek review of a Court of Appeals decision that reversed and remanded a decision of the trial court granting a judgment on the pleadings in favor of the individual defendants after substituting OHSU as the sole defendant.
Plaintiff (Jordaan Michael Clarke), by his guardian ad litem (Sari Clarke), brought suit against OHSU and the individuals who treated him, for damages he sustained during his recovery from successful surgery to repair a congenital defect. Plaintiff suffered prolonged oxygen deprivation, apparently as the result of problems with the endotracheal tube supplying him with oxygen, and as a result is permanently and profoundly brain damaged. Plaintiff sought damages for permanent total life and health care in the amount of $11,073,506, damages for lost earning capacity in the amount of $1,200,000, and noneconomic damages in the amount of $5,000,000.
OHSU moved to substitute itself as the sole defendant in place of the individual defendants pursuant to ORS 30.265(1), which permits such substitution in actions filed against officers, employees, and agents of the public body. The trial court granted the motion, and plaintiff then filed a second amended complaint naming only OHSU as a defendant.
OHSU filed an answer admitting that it was negligent, admitting that plaintiff suffered permanent injury as a result, and admitting that plaintiff sustained damages in excess of the monetary limitations in the Oregon Tort Claims Act (OTCA). (The OTCA in effect constitutes a partial waiver of the governmental immunity enjoyed by the states and its instrumentalities in 1857, but contains limitations on the amount of damages that can be recovered.) Along with its answer, OHSU filed a motion for judgment on the pleadings under ORCP 21 B, arguing that because it had admitted its negligence as well as its maximum liability under the OTCA, all matters could be resolved on the pleadings. Plaintiff opposed the motion and asked the court to reconsider its earlier ruling, arguing that limiting his recovery under the OTCA to a claim against OHSU would violate his constitutional rights. The trial court rejected plaintiff's arguments, granted OHSU's motion, and entered judgment in favor of plaintiff and against OHSU in the amount of $200,000, the maximum award under the limits of the OTCA.
Plaintiff appealed. The Court of Appeals affirmed in part as to plaintiff's claim against OHSU, but reversed and remanded on plaintiff's claims against the individuals who treated him. First, the court determined that OHSU is a state-created public corporation performing governmental functions on behalf of the state, and, as such, would have been immune at common law for its negligent acts. For that reason, the court concluded that application of the damage limits in the OTCA as to defendant OHSU violates neither Article I, section 10 (remedy clause), nor Article I, section 17 (jury trial guarantee), of the Oregon Constitution.
However, as to the individual defendants, the court noted that recovery of $200,000 from only OHSU would provide plaintiff with less than two percent of his claimed economic damages, and considered that to be an "emasculated remedy" that was "incapable of restoring the right that has been injured." For that reason, the court concluded that application of the OTCA to the individual defendants, as applied to plaintiff's claim at the pleadings stage of the proceeding, violated the remedy clause. Because the court reversed and remanded as to the individual defendants, it declined to decide whether substitution of OHSU for the individual defendants also violated the right to a jury trial. The decision of the Court of Appeals is reported at 206 Or App 610, ___ P3d ___ (2006).
Defendants petitioned for review. Plaintiff filed a response, urging the court to deny review, but indicating that if review were allowed, it intended to raise certain issues. On review, the issues as framed by the parties are as follows:
Defendants' issues:
(1) What is the standard for determining whether a statute that modifies a common law remedy is constitutional under Article I, section 10, of the Oregon Constitution?
(2) Whether a court determines whether or not a statute modifying a common law remedy violates Article I, section 10, by comparing the amount of damages available under that statute with the amount available at common law.
(3) Whether recovery against a public body, backed by the full faith and credit of the state but limited in amount, provides a constitutionally adequate substitute remedy for a common law claim against the public body’s employee for unlimited damages but where recovery from the individual employee is uncertain.
(4) Whether the Court of Appeals erred in invalidating the substitution provisions of ORS 30.265(1) and reversing the judgment below, when the remedy available to the plaintiff against the individual defendants is identical to the substitute remedy against OHSU.
Plaintiff's issues:
(5) Whether OHSU, as a public corporation, can invoke the liability limitation in the OTCA without violating either Article I, section 17 (jury trial guarantee) or Article I, section 10 (remedy clause), of the Oregon Constitution.
(6) Whether the individual defendants who treated plaintiff were acting as agents of a private corporation when they provided medical care to him, and if so, whether they are entitled to invoke the OTCA.
(7) Whether the tort claim limit contained in the OTCA, as applied to plaintiff's claim against the individual defendants, violates the right to a jury trial under Article I, section 17, of the Oregon Constitution.
2. Allowed a petition for writ of mandamus in:
State v. Luna-Benitez, S53965 (order issued September 27, 2006). In this mandamus proceeding, Gerardo Luna-Benitez (defendant in the underlying criminal case, relator in the mandamus proceeding) challenges a trial court order in the criminal case denying his motion to quash the state's subpoena to his trial lawyer, thus requiring his lawyer to testify at relator's criminal trial.
Relator owns a company, Alpha Building Maintenance, that collects money from parking meters on behalf of the City of Portland. A grand jury indicted relator on two counts of aggravated theft in the first degree and two counts of criminal conspiracy to commit aggravated theft in the first degree. Relator's lawyer wrote a letter to the Portland City Attorney's Office, in which the lawyer set out his understanding of the discrepancy in parking meter revenue. The letter also included a check, referenced an attached chart detailing parking meter revenue loss, and requested additional information (including documents relied on by the chart's author).
The state filed a pretrial motion seeking admission of parts of the letter into evidence. A trial court judge ruled that the letter and its attachments were admissible. Subsequently, the state served a subpoena on relator's lawyer and filed a motion to remove the lawyer as counsel for relator. Relator’s lawyer filed a motion to quash the subpoena. Circuit Court Judge Janice Rose Wilson denied the motion to quash. However, Judge Wilson did not rule on the state's motion to remove relator's lawyer as defense counsel because relator's lawyer conceded that, if the order denying the motion to quash ultimately is upheld, he could not continue to represent relator and would withdraw.
Relator filed a petition for an alternative writ of mandamus. Relator asserts, in part, that the testimony sought by the state is protected by the lawyer-client privilege and the work product doctrine, and that the subpoena of relator's lawyer effectively disqualifies the lawyer from representation of relator, in violation of relator's constitutional right to choice of retained counsel under Article I, section 11, of the Oregon Constitution, and under the Sixth Amendment to the United States Constitution.
The Court granted the petition and issued an alternative writ of mandamus commanding The Honorable Janice Rose Wilson to vacate her order denying the motion to quash, or to show cause why not.
The issues are whether the letter and its attachments are admissible and whether relator's lawyer can be compelled to testify regarding the contents of the letter.
3. Denied petitions for review in:
State v. Griffin, S53671, A118150
Johnson v. Babcock, S53688, A124778
State v. Howell, S53784, A115558
Arts v. Santos, S53803, A126283
State v. Tweed, S53857, A121921
State v. Hosack, S53880, A126642
State v. Moore, S53885, A130736
State v. Simons, S53892, A126943
State v. Chapman, S53893, A120618
State v. Naegl, S53899, A124627
State v. Chappue, S53906, A128438
State v. Nunez, S53922, A124855
State v. Chali-Garcia, S53931, A121519
State v. Dickerson, S53936, A121983
Cutler v. Hill, S53938, A126577
State v. Ketchum, S53946, A120917
State v. Volage, S53949, A126641
State ex rel Department of Human Services v. Meyers, S53957, A130450
4. Reinstated attorney Mark L. Cushing to the active practice of law.
*These summaries of cases 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. Regarding the questions that the Supreme Court may consider, see Oregon Rule of Appellate Procedure 9.20.
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