Opinion
3:20-cv-01370-AC
02-07-2022
LEXINGTON INSURANCE COMPANY and METRO, Plaintiffs, v. INSINKERATOR, a Division of Emerson Electric Co., Defendant.
FINDINGS AND RECOMMENDATION
JOHN V. ACOSTA United States Magistrate Judge.
Plaintiffs Lexington Insurance Company (“Lexington”) and its insured Metro (collectively “Plaintiffs”) bring this subrogation action against Defendant InSinkErator, a division of Emerson Electric Co. (“InSinkErator”). Plaintiffs allege that InSinkErator is liable for water damage caused by a defect in a water heater manufactured by InSinkErator. Plaintiffs previously asserted the identical claims in Lexington Ins. Co. v. InSinkErator, Case No. 3:19-cv-00250-AC (the “initial lawsuit”). On August 5, 2020, the court entered a Judgment dismissing the initial lawsuit because Plaintiffs failed to commence it within the applicable two-year statute of limitations. On August 13, 2020, Plaintiffs filed the instant action contending that Oregon's savings statute, OR. REV. STAT. (“ORS”) § 12.220, permits them to refile the instant action within the 180 days of dismissal. (Compl., ECF No. 1.) In a March 18, 2021 Findings and Recommendation (“March F&R, ” ECF No. 26), the court recommended that InSinkErator's motion to dismiss be granted, and in a July 15, 2021 Order (“July Order”), District Judge Michael H. Simon agreed with that recommendation, but gave Plaintiffs leave to amend (Order at 5-8, ECF No. 38). On July 23, 2021, Plaintiffs filed a First Amended Complaint (“FAC”). (FAC, ECF No. 40.)
InSinkErator moves motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) or, alternatively, to certify questions of law to the Oregon Supreme Court under Local Rule 83-14. For the following reasons, the court recommends InSinkErator's motions be denied.
Factual and Procedural Background
This instant action is premised on the same underlying facts as the initial lawsuit. Metro, a public agency operating in the Portland Metropolitan area, owned a commercial property at 600 Grand Avenue, Portland, Oregon (the “Property”), in which an InSinkErator water heater was installed. (FAC ¶¶ 27, 30.) On November 24, 2016, a welded seam on the water heater failed, causing severe water damage at the Property. (Id. ¶¶ 30-31.) Metro filed a claim with Lexington by which it sought indemnification and reimbursement for damages pursuant to a Lexington insurance policy. (Id. ¶ 33.)
On November 9, 2018, Plaintiffs filed their initial lawsuit against InSinkErator in Multnomah County Circuit Court, and on November 15, 2018, filed an amended complaint adding InSinkErator's parent company. (Id. ¶ 4.) Plaintiffs alleged the damage to the Property was caused by a manufacturing defect in InSinkErator's water heater and asserted claims for negligence, breach of implied warranty, and strict liability under state law. (Id. ¶¶ 30, 36-61.) On January 22, 2019, the state court issued a “63-day Notice” that the initial lawsuit would be dismissed unless proof of service was filed within twenty-eight days. (March F&R at 12.) InSinkErator was served with the Amended Complaint on January 23, 2019. (Id.) On February 19, 2020, InSinkErator removed the case to federal court, citing jurisdiction based on the diversity of the parties. (FAC ¶ 20.)
On February 26, 2019, InSinkErator moved to dismiss the initial lawsuit on two timeliness grounds: (1) Plaintiffs failed to timely commence the lawsuit within two years as prescribed for products liability actions under ORS § 30.905(1); and (2) Plaintiffs failed to timely “commence” the action by serving the complaint within sixty days of filing pursuant to ORS § 12.020. (Mot. to Dismiss, Case No. 3:19-cv-00250-AC, ECF No. 4.) On December 12, 2019, the court issued a Findings and Recommendation (“2019 F&R”) granting InSinkErator's motion. (2019 F&R, Case No. 3:19-cv-00250-AC, ECF No. 29.) On May 27, 2020, U.S. District Judge Marco A. Hernandez adopted the 2019 F&R in relevant part and dismissed the initial lawsuit. (Order, Case No. 3:13-cv-00250-AC, ECF No. 34.) A Judgment dismissing the case was entered on August 5, 2020. (Judgment, Case No. 3:19-cv-00250-AC, ECF No. 35.)
On August 13, 2020, Plaintiffs filed the instant action specifically invoking Oregon's savings statute, ORS § 12.220, and the court's jurisdiction based on diversity of citizenship pursuant to 28 U.S.C. § 1332. (Compl. ¶ 8.) Plaintiffs served the Summons and Complaint on InSinkErator's registered agent the same day. (ECF Nos. 1, 4.) InSinkErator moved to dismiss Plaintiffs' claims as untimely and that ORS § 12.220 does not apply to product liability actions. In its March F&R, the court the court declined to address whether Oregon's savings statute applied to product liability actions and recommended that the case be dismissed because Plaintiffs failed to show that InSinkErator had actual notice. (March F&R at 8, 13.) There, the court determined the plain language of ORS § 12.220 required Plaintiffs to assert that InSinkErator received actual notice of the lawsuit, and was reluctant to infer actual notice based on the specific facts of the case. The court concluded that, at best, Plaintiffs had shown constructive notice to J. Ward Morrison, Jr., InSinkErator's attorney, and that under such circumstances, the savings statute does not apply. (March F&R at 14.)
In the July Order, Judge Simon agreed with this court that the “sparse Complaint does not allege that InSinkErator received actual notice of Plaintiff's original complaint within 60 days of Plaintiffs filing that complaint.” (July Order at 3.) However, Judge Simon concluded that amending the complaint may not be futile because under the Restatement (Third) of Agency, “an agent's knowledge of a fact may be imputed to a principal when the fact ‘is material to the agent's duty to the principal.'” (July Order at 6, citing RESTATEMENT (THIRD) OF AGENCY § 5.03(1) (2006) and § 5.03, cmt. a.) Judge Simon reasoned that it is possible “that telling a defendant's agent about a lawsuit against the defendant when knowledge of lawsuits against the defendant is material to the agent's duty to that defendant satisfies actual notice.” (July Order at 7.) In other words, Judge Simon concluded that under § 5.03(1) of the Restatement (Third) of Agency, where “an agent for whom knowledge of lawsuits against the principal is material to the agent's duty to the principal, ” that agent's knowledge may be imputed to the principal. (July Order at 8.) Discussing Ziniker and Raymond, the two most factually relevant cases to the instant dispute,
Judge Simon concluded that they do not foreclose “actual notice” in the factual scenario presented here:
Neither of these cases - nor any other case of which the Court is aware -has addressed directly whether actual notice would be satisfied in a situation like that imagined by Restatement (Third) of Agency § 5.03(1): an agent for whom knowledge of lawsuits against the principal is material to the agent's duty to the principal has knowledge of a lawsuit against the principal. Plaintiffs may be able to plead that precise scenario here. The Court thus concludes that it would not be futile to allow Plaintiffs to amend their Complaint.(July Order at 8.)
On July 23, 2021, Plaintiffs filed the FAC, including additional allegations concerning Morrison and his role as agent for InSinkErator. (FAC ¶¶ 5-20, ECF No. 40.) Defendant subsequently filed the instant motion to dismiss under Rule 12(b)(6) and alternative motion to certify questions to the Oregon Supreme Court under Local Rule 83-14.
Discussion
I. Motion to Dismiss
A. Standards
“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. “The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Mashiri v. Epstein Grinnell & Howell, 845 F.3d 984, 988 (9th Cir. 2017) (internal quotation marks omitted) (citing Iqbal, 556 U.S. at 678)). When reviewing a Rule 12(b)(6) motion to dismiss, the court must accept as true all well-pleaded material facts alleged in the complaint and construe them in the light most favorable to the non-moving party. Kwan v. SanMedica Int'l, 854 F.3d 1088, 196 (9th Cir. 2017); Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012).
B. Plaintiffs Have Adequately Pleaded Actual Knowledge
Plaintiffs include the following additional factual allegations in the FAC concerning InSinkErator's “actual knowledge”:
5. Plaintiff informed InSinkErator's counsel, W. Ward Morrison, Jr. about the suit on or about November 28, 2018.
6. Plaintiffs have worked with Mr. Morrison in his capacity as InSinkErator's counsel since May of 2017, and Mr. Morrison had been specifically retained to represent InSinkErator in this matter.
7. InSinkErator, its insurer, and Mr. Morrison participated in numerous site inspections, lab inspections, and testing and they had been involved integrally with the investigations of the underlying claim since shortly after the incident.
8. On October 15, 2018, Plaintiff's paralegal contacted Mr. Morrison, stating: “Our client has requested we file suit due to the impending statute in this matter. Please advise of the proper entity for service.”
9. On October 15, 2018, Mr. Morrison acknowledged that suit would be filed, thanked Plaintiffs for “the heads up” and inquired who would be named on the complaint.
10. On October 17, 2018, Mr. Morrison confirmed that the correct description of his client was “InSinkErator, a Division of Emerson Electric Co.”.
11. After Plaintiffs filed their complaint, Plaintiffs asked Mr. Morrison whether he was authorized to accept process on InSinkErator's behalf.
12. On December 1, 2018, Mr. Morrison replied via email that he was not authorized, but would ask InSinkErator for authorization.
13. On December 10, 2018, Mr. Morrison wrote to Plaintiffs stating that he had not received authorization and that he would, “understand if [Plaintiffs] decide to proceed with service [of Plaintiffs' original complaint] on the registered agent”.
14. On information and belief Mr. Morrison understood that Plaintiffs had filed their suit and their deadline to serve process was rapidly approaching.
15. Mr. Morrison had been retained by InSinkErator, to act as its agent and attorney and to defend he action. Mr. Morrison was informed of Plaintiffs' filing and was asked to accept service on his client's behalf - service which is only required after suit has been filed.
16. Knowledge of the lawsuit was material to Mr. Morrison's duty to his client, InsinkErator and knowledge held by Mr. Morrison in relation to that duty may be imputed to his client.
17. On information and belief, Mr. Morrison fulfilled his obligation under Oregon Rule of Professional Conduct 1.4 and kept his client reasonably informed about the status of the lawsuit, by informing InSinkErator that the lawsuit had been filed and service was being attempted.
18. On information and belief, because of Mr. Morrison's obligations under the rules of professional conduct and his representation that he would ask for authorization to receive service, Mr. Morrison did in fact inform his client between December 1 and December 10, 2018 that suit had been filed.
19. On information and belief, Defendant InSinkErator received actual notice of the lawsuit prior to the 60-day grace period expiring.(FAC ¶¶ 5-19.)
InSinkErator argues that the FAC fails to allege that Plaintiffs notified InSinkErator or Morrison that a lawsuit had been filed within the sixty-day grace period provided under ORS § 12.220. InSinkErator argues that Plaintiffs rely upon email communications and that none advised InSinkErator or Morrison that the lawsuit had been filed or attached a copy of the initial complaint, thereby failing to establish that the savings statute applies here. InSinkErator further argues that Plaintiffs' reliance on “information and belief” that Morrison learned of the lawsuit through his own efforts is insufficient to satisfy the statute.
Plaintiffs argue that their new allegations satisfy their obligation to identify facts from which it can be inferred InSinkErator had actual knowledge of their original lawsuit. Plaintiffs contend that they need not conclusively establish those facts at this stage of the litigation, and they have adequately pleaded that ORS § 12.220 applies to survive dismissal. Plaintiffs are correct.
Construing these allegations in the light most favorable to Plaintiffs, the court concludes Plaintiffs adequately allege defendants received “actual notice” under ORS § 12.220(1) sufficient to survive dismissal under Rule 12(b)(6). At this stage of the litigation, “Plaintiffs need not conclusively establish actual notice.” (July Order at 5 (citing Williford v. City of Portland, 320 Fed.Appx. 513, 515 (9th Cir. 2009).) “Instead, Plaintiffs need merely allege facts supporting a reasonable inference that InSinkErator had actual knowledge.” (Id. (citing Walter v. Brayson, 538 F.3d 1244, 1247 (9th Cir. 2008).) “To dismiss a claim as untimely on a motion to dismiss, it must be clear from the complaint and any adjudicative facts properly before the court on judicial notice that a plaintiff's claims are untimely.” Port of Portland v. Monsanto Co., Case No. 3:17-cv-00015-PK, 2017 WL 4236561, at *4 (D. Or. Sept. 22, 2017). Thus, a factual dispute about whether InSinkErator had actual notice precludes dismissal at this stage of the litigation. Id. (concluding that question of fact concerning when Port's tort claims accrued prevented dismissal on Rule 12(b)(6) motion, even if they ultimately are subject to statute of limitations).
Section 12.220 does not require that InSinkErator receive a copy of the complaint; rather it requires notice only of “the filing of the action.” OR. REV. STAT. § 12.220 (1). “It does not require the defendant to be served with, or given a copy of, the Complaint or even to be notified of the substance of the action. The only notice required is ‘actual notice' that the action has been filed.” Ziniker v. Waldo, Case No. CV-06-1042-ST, 2007 WL 445558, at *8 (D. Or. Feb. 6, 2007). Actual notice is “notice that fulfills the basic purpose of the limitations period by alerting defendants that a plaintiff asserts claims against them.” Raymond v. Anheuser-Busch, LLC, Case No. 6:15-cv- 01191-MC, 2015 WL 8492455, at *3 (D. Or. Dec. 10, 2015).
The allegations provide that Plaintiffs worked with Morrison as counsel for InSinkErator beginning in May 2017, and that he assisted Plaintiffs in naming the correct legal entity for the lawsuit. Plaintiffs filed the initial action in Multnomah County Circuit Court on November 9, 2018 and an Amended Complaint on November 15, 2018, adding the name of InSinkErator's parent company. (Id. ¶ 4.) On November 28, 2018, after they filed the initial action, Plaintiffs emailed Morrison to inquire whether he was authorized to accept process on InSinkErator's behalf. On December 1, 2018, Morrison offered to check with his client. (Id. ¶ 12.) Several days later, he wrote to Plaintiffs stating that he had not received authorization and would “understand if [Plaintiffs] decide to proceed with service” on the registered agent. (Id. ¶ 13.) And, Plaintiffs further allege that based on this email exchange, it can be inferred that Morrison understood that the initial action had been filed, and that in his capacity as InSinkErator's counsel, he informed InSinkErator that the action had been filed and service was being attempted. (Id. ¶¶ 14-18.)
As Judge Simon discussed and the Ziniker and Raymond courts observed, the proper inquiry under ORS § 12.220 is whether a defendant received actual notice of the filing of the action, not his agents. Ziniker, 2007 WL 445558, at *9-10; Raymond, 2015 WL 8492455, at *3; July Order at 7. Yet, Ziniker and Raymond provide that actual notice can be accomplished orally and suggest that such notice could be accomplished through an agent. See Ziniker, 2007 WL 445558, at *10 (“Waldo would have received ‘actual notice' had either the insurer or the lawyer notified him that the lawsuit had been filed”).
In Ziniker, the court concluded that defendant Waldo received actual notice within the sixty-day period because the record contained an affidavit from the Plaintiff's lawyer, Dvorak, stating that he informed Waldo a lawsuit had been filed during a telephone call within the sixtyday period, a fact not directly contradicted by Waldo. Ziniker, 2007 WL 445558, at *10-11 (“Even though Waldo may have misunderstood what he was told by Dvorak, the fact remains that Dvorak gave oral notice to Waldo of the filing of the lawsuit.”).
And in Raymond, the court concluded that the defendants did not receive actual notice because both Defendants submitted declarations attesting that they had no notice that the action was filed until they were served with the complaint after the sixty-day grace period lapsed. Raymond, 2015 WL 8492455, at *2. There, the plaintiff suggested that the defendants might have learned about the lawsuit because “many lawyers subscribe to services that provide notice of filings in the District of Oregon.” Id. (ellipses and internal quotation omitted). The Raymond court was not convinced that Plaintiff's unsupported assertion that the defendants learned of the lawsuit from a subscription service created an issue of fact concerning actual notice. The court also observed that receiving notice from a subscription service would amount to constructive or imputed notice, which would be insufficient under the savings statute. Id. at *3. Therefore, the Raymond court concluded that because there was no issue of fact that the defendants did not have notice during the sixty-day period, ORS § 12.220 did not apply and the case was untimely.
Here, dismissal is inappropriate at this stage because there are materially disputed facts about what information Morrison relayed to InSinkErator. Examining the facts in the light most favorable to Plaintiffs, they have sufficiently alleged that it is reasonable to infer that Morrison knew the initial action had been filed in the relevant timeframe. Additionally, under the Restatement (Third) of Agency § 5.03(1), Plaintiffs assert that between December 1 and 10, Morrison informed InSinkErator that the lawsuit was filed and service was being attempted, thereby creating a factual dispute concerning whether InSinkErator had actual notice. The court finds the reasonableness of this factual dispute bolstered by the absence of declarations from any InSinkErator representatives or Morrison disavowing actual knowledge until service of the initial action on January 23, 2019. See Supermail Cargo, Inc. v. United States, 68 F.3d 1204, 1207 (9th Cir. 1995) (providing a “complaint cannot be dismissed unless it appears beyond doubt that the plaintiff can prove no set of facts that would establish the timeliness of the claim”).
For all these reasons, the court concludes that Plaintiffs adequately have alleged InSinkErator had “actual notice” under ORS § 12.220. Accordingly, InSinkErator's motion to dismiss on this basis should be denied.
C. Oregon's Savings Statute Applies to Products Liability Actions
Under ORS § 12.220, if a claim is dismissed because a plaintiff failed to effect service within the time allowed and the statute of limitations has expired, “the plaintiff may commence a new action based on the same claim or claims against a defendant in the original action” within 180 days “after the judgment dismissing the original action.” OR. REV. STAT. §§ 12.220(1), (2). If the plaintiff meets these requirements, “the new action is not subject to dismissal by reason of not having been commenced within the time allowed by statute.” Id.
InSinkErator argues that ORS § 12.220 cannot “save” a products liability action that was not served within the sixty-day grace period. InSinkErator contends that the court should strictly apply ORS § 30.905, suggesting that this court's 2019 F&R implies such an outcome. InSinkErator argues that because Plaintiffs failed to timely commence the initial action within the sixty-day grace period provided in Chapter 12, the same logic should prevent application of the savings statute to the instant action. The court disagrees for three reasons.
First, the court did not address in the March F&R the legal issue whether ORS § 12.220 applies to products liability actions. (March F&R at 8 (“The court declines to address whether § 12.220 applies to products liability actions; even if it applied, it would not save Plaintiffs' action because they have not shown InSinkErator had actual notice.”). Judge Simon's July Order likewise did not address this specific issue, and the court did not address the issue in the 2019 F&R. (2019 F&R, Case No. 3:19-cv-00250-AC, ECF No. 29.) There, Plaintiffs contended they were exempt from the two-year statute of limitations because Metro is a government entity under ORS § 12.250. InSinkErator argued that Plaintiffs were not exempt because their claims fall within Oregon's definition of a products liability action, to which ORS § 12.250 does not apply. The court also determined that because the action was not “commenced” within the statute of limitations, defined under Oregon law as filing the complaint and serving the summons within sixty days, the action was untimely and recommended dismissal. (Id. at 13-14.) Judge Hernandez adopted the 2019 F&R in relevant part, agreeing that the action was time-barred. (2020 Order at 3-4, Case No. 3:19-cv-00250-AC, ECF No. 34.) Thus, the court has not previously addressed whether Oregon's savings statute applies to product liability actions.
Second, Oregon courts have concluded that the savings statute is not a statute of limitation, but instead is “an extension statute.” Davis v. State, 267 Or.App. 264, 271 (2014). In Davis, the court examined whether ORS § 12.220 applied to claims brought against public bodies under ORS § 30.275(9), which provides a two-year statute of limitations. Davis, 267 Or.App. at 269. The Davis court concluded that “[t]he savings statute parallels ORS 12.020(2), the ‘relation back' provision on commencement of a claim[.]” Id. at 270. The Davis court examined the text of the savings statute, specifically the language which provides that if the “complaint is filed initially within a governing statute of limitations” and other conditions are met, “the new action is not subject to dismissal by reason of not having been commenced within the time allowed by statute.” Davis, 267 Or.App. at 270 (citing OR. REV. STAT. § 12.220(2)) (emphasis in original). The Davis court explained that the savings statute makes the “date of filing of the initial action the critical date for the later action, ” and that “for purposes of whatever statute of limitation may apply, the later action is deemed to be commenced at the time of the filing of the initial complaint.” Id. at 270-71 (“In that way, ORS 12.220 functions like ORS 12.020(2).”). Examining ORS § 12.220, the Davis court determined that “under the right circumstances, it offers to extend the time in which to file the claim.” Id. at 271. Thus, because savings statute is not a statute of limitations, the Davis court concluded that ORS § 12.220 “is not rendered inapplicable by ORS 30.275(9).” Id. at 271-72.
There can be no dispute that applying the savings statute in this action demonstrates Plaintiffs filed the instant action within the 180-day savings period. Plaintiffs' initial action was dismissed on August 5, 2020, and they filed the instant action on August 13, 2020.
Third, applying ORS § 12.220 is consistent with its purpose, which “is to assure claimants their ‘day in court.'” Porter v. Veenhuisen, 302 Or.App. 480, 484 (2020) (quoting Belinskey v. Clooten, 237 Or.App. 106, 111 (2010) (stating that ORS § 12.220 was enacted to get more cases “decided on their merits” and ensure more injured parties “get their day in court”)). Moreover, the court finds no undue prejudice to InSinkErator in permitting this action to move forward, because it has appeared and vigorously defended this action at every step.
For all these reasons, the court concludes that ORS § 12.220 applies to this action and, consequently, InSinkErator's motion to dismiss on timeliness grounds should be denied.
II. Motion to Certify
A. Standards for Certifying Questions to Oregon Supreme Court
The Oregon Supreme Court may answer a certified question of law from a U.S. District Court if the question “may be determinative of the cause pending in the certifying court and as to which it appears to the certifying court there is no controlling precedent in the decisions of the Supreme Court and the intermediate appellate courts of this state.” OR. REV. STAT. § 28.200. A certified question must satisfy five criteria:
(1) The certification must come from a designated court; (2) the question must be one of law; (3) the applicable law must be Oregon law; (4) the question must be one that may be determinative of the cause; and (5) it must appear to the certifying court that there is no controlling precedent in the decisions of this court or the Oregon Court of Appeals.W. Helicopter Servs., Inc. v. Rogerson Aircraft Corp., 311 Or. 361, 364 (1991) (internal quotation omitted); see also Buero v. Amazon.com Servs., Inc., 21 F.4th 623, 626 (9th Cir. 2021) (certifying wage and hour question to Oregon Supreme Court). “Even if the question meets these five criteria, the decision to certify a question to a state supreme court ‘rests in the sound discretion of the district court.'” Ferguson v. Smith, Case No. 3:18-cv-372-SB, 2021 WL 4330851, at *1 (D. Or. Sept. 23, 2021) (quoting Freyd v. Univ. of Oregon, 990 F.3d 1211, 1223 (9th Cir. 2021) (simplified). Where the court encounters unclear questions of state law, certification is “not obligatory.” Riordan v. State Farm Mutl. Auto. Ins. Co., 589 F.3d 999, 1009 (9th Cir. 2009). Federal courts sitting in diversity must “predict how the state high court would resolve a question in published decision” and “regularly decide issues of state law without certifying questions to the state's highest court.” U.S. Bank, N.A., v. White Horse Estates Homeowners Ass'n, 987 F.3d 858, 867 (9th Cir. 2021).
B. Analysis
InSinkErator asks the court to certify two questions the Oregon Supreme Court:
1. After a plaintiff's original lawsuit is dismissed with prejudice for failing to properly effect service of summons within the 60-day period allowed under ORS 12.020, can a plaintiff invoke Oregon's savings statute if during this period the plaintiff never told the defendant that a lawsuit had been filed but alleges that the defendant or its counsel learned this information on their own?
2. Does Oregon's savings statute found in the general provisions of ORS Chapter 12 apply to product liability actions filed under the specific provisions of ORS Chapter 30?(Def.'s Mot. Dismiss at 12.) InSinkErator argues that all statutory and discretionary criteria are satisfied for both questions. Plaintiffs respond that certification is unwarranted, and alternatively proposes that the questions be rephrased and a third question be certified. The court concludes that certification is not appropriate here.
InSinkErator's first proposed question mischaracterizes Plaintiffs' allegations. Plaintiffs do not allege that InSinkErator learned of the lawsuit on its own through a subscription service. Rather, Plaintiffs contend that InSinkErator received actual notice of their original lawsuit within the relevant sixty-day window when its agent, Morrison, was directly told of the lawsuit by counsel representing Plaintiffs.
Furthermore, the court finds the first question does not satisfy ORS § 28.200 because the crux of the issue presented here - whether InSinkErator had actual notice - turns on unresolved questions of fact and does not present a clear question of law. As discussed above, Plaintiffs allege that Morrison knew that the lawsuit had been filed in the relevant timeframe and believe he informed his client of that fact. The absence of definitive statements from either Morrison or InSinkErator representatives that they learned of the lawsuit outside the sixty-day window or from a non-affiliated source bolsters the court's conclusion that this question is fact-driven. Discovery will shed light on the actual notice issue presented here, which makes certification inappropriate. See W. Helicopter, 311 Or. at 364 (noting certification “is not appropriate if disputed facts make questions of law unclear”); Keyes v. Johnson, Case No. 3:15-cv-01987-AC, 2017 WL 6328151, at *4-5 (concluding that factual issues precluded certification); Allstate Ins. Co. v. Breeden, No. Civ. 01-1686-AS, 2008 WL 3200803, * 11 (D. Or. Aug. 6, 2008) (denying certification “[b]ecause factual issues still exist[ed], [thus, the] questions [we]re not questions of law”). Additionally, the first question does not appear to present the type of broad legal consequences that are appropriate for certification, but instead, the first question appears to involve a narrow factual circumstance. Cf. E.J.T. ex rel Intrustment N.w., Inc. v. Jefferson Cnty., Case No. 3:20-cv-01990-JR, 2021 WL 3046707, at *10-11 (D. Or. June 15, 2021), adopted 2021 WL 3038865 (July 16, 2021) (certifying issues concerning violations of mandatory child abuse reporting law to Oregon Supreme Court). Accordingly, these factors weigh heavily against certification of the first question.
Although Oregon appellate courts have not addressed the first question, the court predicts they would find Plaintiffs have adequately alleged that the savings statute applies here, given the savings statute's overarching goal of promoting more cases being decided on the merits. See, e.g, Belinskey, 237 Or.App. at 111 (providing the savings statute was enacted to get more cases decided on their merits).
The court notes that the Oregon Court of Appeals has embraced utilizing the Restatement (Third) of Agency § 5.03 to impute to a principle knowledge gained by an attorney under circumstances where it is equitable to do so. Atkeson v. T & K Lands, LLC., 258 Or.App. 373, 384 (2013). In Atkeson, the court addressed agency principles in an arms-length real estate transaction where the plaintiff hired an attorney specifically to perform due diligence prior to purchasing the property, and brought a rescission action when certain material conditions were discovered post-sale. Id. The court noted that “[e]verybody involved in the transaction was entitled to rely on the existence of that principal-agent relationship.” Id. The Atkeson court found that it was reasonable to expect that the agent would “pass on all pertinent information to his principal - even if he did not transmit the information - the principal would be charged with that knowledge.” Id. Thus, the Atkeson court acknowledged that it is equitable in some situations to impute knowledge gained by an agent to a principal, particularly where the agent is hired for a specific purpose. Id. at 384-85.
The court recognizes that imputed knowledge and constructive knowledge are not the same as “actual notice” under the savings statute. See Raymond, 2015 WL 8492455, at *3 (noting that “constructive notice is insufficient” under the savings statute); Ziniker, 2007 WL 445558 at *9 (“By using the word ‘actual,' the type of notice required is different than mere constructive or imputed notice.”). Here, however, there is a factual dispute based on an agent's duty to convey material information to his client and whether that agent - Morrison - in fact conveyed that information to InSinkErator. Atkeson, 258 Or.App. at 384 (finding it reasonable that the agent would “pass on all pertinent information to his principal”). Discovery will allow the parties to learn whether or not “actual notice” exists, but at the pleading stage Plaintiffs' allegations are plausible where they have alleged they communicated with Morrison about service of the complaint during the relevant sixty-day period, and where Morrison had been specifically retained on the case for over a year and half.
InSinkErator's second question is similarly unsuitable for certification because Oregon appellate courts have addressed application of the savings statute in a similar situation. As discussed above, the Davis court found that the savings statute applied to claims brought pursuant to ORS § 30.275(9). InSinkErator does not address why Oregon appellate courts would not follow the sound rationale provided in Davis if presented with the question in this case. Therefore, the court finds that Oregon appellate courts would conclude that ORS § 12.220 applies to products liability actions in ORS § 30.905(1) and that certification of the second issue is unwarranted.
In summary, the court finds that InSinkErator has not demonstrated the statutory and discretionary criteria are satisfied, and recommends that the court decline to exercise it discretion to certify questions to the Oregon Supreme Court. Accordingly, InSinkErator's motion on this basis should be denied.
Conclusion
Based on the foregoing, InSinkErator's Motion to Dismiss for Failure to State a Claim and Motion to Certify Two Questions to the Oregon Supreme Court (ECF No. 42) should be DENIED.
Scheduling Order
The Findings and Recommendation will be referred to U.S. District Judge Simon. Objections, if any, are due within 14 days. If no objections are filed, then the Findings and Recommendation will go under advisement on that date.
If objections are filed, then a response is due within 14 days after being served with a copy of the objections. When the response is due or filed, whichever date is earlier, the Findings and Recommendation will go under advisement.