Negligence

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The law of unintended consequences theorizes that the actions of people – especially government – often have effects that are surprising or unplanned. The idea of unintended consequences is generally traced back to English philosopher John Locke. In 1692, in a letter to Sir John Sommers, a member of England’s Parliament, Locke counseled the defeat of a parliamentary bill designed to regulate interest rates. Locke argued that instead of benefiting borrowers, as the bill intended, it would hurt them because creditors would find ways to circumvent the law, and those related costs would be borne by the borrowers, namely “widows, orphans and all those who have their estates in money.” John Locke, Some Considerations of the Consequences of the Lowering of Interest and the Raising the Value of Money (1691). Oregon House Bill 2661 (“HB 2661”) should be considered with unintended consequences in mind.

HB 2661’s goal is to curtail or reduce the spiraling costs of new residential construction in order to make housing more affordable. While that is an admirable and laudable goal, the key features of this bill remind me of Locke’s letter to Sommers and his concerns about that century’s old bill to regulate interest rates.

HB 2661’s key features include:

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Last month’s Oregon Supreme Court decision in Ransom v. Radiology Specialists of the Northwest, 363 Or 552 (2018) will likely have far-reaching impacts on how discovery is conducted in construction defect cases in Oregon. Ransom involved a plaintiff’s claim for alleged medical negligence case against two of the plaintiff’s former radiologists for alleged failure to properly read her imaging scans, which the plaintiff further alleged led to misdiagnosing her cancer as Stage II instead of Stage IV. Id. at 555-56. At issue on appeal was whether the plaintiff’s attorney could seek an answer from the radiologists about their current interpretation of the imaging scans for the plaintiff. Id. During the deposition the radiologists both testified that they did not have an independent memory of interpreting certain scans back at the time they reviewed such scans. Id. When the plaintiff’s attorney thereafter asked the radiologists to review those same scans during their deposition and answer questions about certain markings identified on the scan, defense counsel objected and instructed the radiologists not to answer on the grounds the questions impermissibly sought expert testimony and/or called for information protected by attorney-client privilege. Id. A trial court later concurred with the defense’s objection and prohibited the radiologists from answering the questions about the present-day interpretations of the scans. Id. at 557. On a writ of mandamus filed by the plaintiff, the Oregon Supreme Court reversed the trial court’s decision. Id. at 572-73.

After reviewing the history surrounding Oregon’s prohibition on expert discovery as discussed in two prior cases, Stevens v. Czerniak, 336 Or 393 (2004) and Gwin v. Lynn, 344 Or 65 (2008), the Supreme Court held that “under ORCP 36B, a participating expert can be asked any questions relevant to his or her direct involvement in the events at issue.” Ransom, 363 Or at 567. The Court further found that because the questions did not ask the radiologists to provide information regarding the content of any attorney-client privileged communications, evidentiary rules on attorney-client privilege did not apply. Id. at 572.

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Last week, the Oregon Supreme Court held in Goodwin v. Kingsmen Plastering (June 16, 2016), that a property owner must sue a contractor for negligent construction, if at all, within two years of when the property owner “knew or should have known of the injuries or damage that form the basis of their claims” under ORS 12.110(1). The ruling highlights the issue of “discovery,” and appears to be at odds with the Supreme Court’s ruling in Rice v. Rabb, 354 Or 721 (2014), which held that a claim for conversion or replevin must be brought within six years of the time “plaintiff knows or reasonably should know of the elements of such claims[.]” What does it take for a property owner to “discover” its claim?

Historically, the Supreme Court has written that claims accrue only after the potential plaintiff discovers “harm (i.e., injury), causation, and tortious conduct.” Gaston v. Parsons, 318 Or 247, 255-256 (1994). The Oregon Supreme Court has held that such language requires not only knowledge of “injury” in a vacuum, but also knowledge of tortious conduct and causation for that damage. Gaston.…
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Earlier this year, the Supreme Court issued Eclectic Investment, LLC v. Patterson, 357 Or 25, 346 P3d 468, modified, 357 Or 327 (2015). Eclectic has fundamentally affected pleadings and third-party practice in multi-party tort actions. Previously, it was standard for third-party defendants without a contractual relationship to sue each other for common law indemnity and contribution. Where liability was closely related or possibly overlapping, this was a negotiation tool and a potentially valuable claim. Not anymore. By confirming the elimination of common law indemnity for negligence claims in Oregon, the decision has prompted much argument and motion practice. Parties are now seeking to extend the reach of the several liability statute, ORS 31.610, to eliminate common law indemnity and contribution claims in other contexts.

Of recent note is Wyland v. W. W. Grainger, Inc., No. 3:13-CV-00863-AA, 2015 WL 3657265 (D Or June 11, 2015). There, the plaintiff, a mechanic, was injured on the job when a grinder broke apart. The plaintiff sued the distributor for negligence and strict products liability, and the distributor sought indemnity from the suppliers. The suppliers moved for summary judgment, arguing that Eclectic precluded the distributor from recovering common law indemnity. The Court held that Eclectic did preclude the claim as to negligence, but not as to strict liability. The holding raises at least two issues of note.…
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