Opinion
3:21-cv-01733-JR
04-23-2024
MICHAEL RINTOUL, Plaintiff, v. OLD DOMINION FREIGHT LINE, INC., a foreign corporation, Defendant.
FINDINGS AND RECOMMENDATION
JOLIE A. RUSSO UNITED STATES MAGISTRATE JUDGE.
Plaintiff Michael Rintoul initiated this action against defendant Old Dominion Freight Line, Inc. alleging negligence. Defendant now moves for partial summary judgement pursuant to Fed.R.Civ.P. 56, as well as for sanctions under Fed.R.Civ.P. 11. For the reasons stated below, defendant's motion for summary judgment should be granted, and defendant's motion for sanctions should be denied.
BACKGROUND
This case concerns a delivery that one of defendant's agents, Mr. Sparrow, made to 30201 Carmel Road in Rainer, Oregon on November 5, 2019. Def.'s Mot. Summ. J. 2-3 (doc. 30). Plaintiff's business and residence are located at the delivery address. Id. at 3. Mr. Sparrow was an employee of defendant and operated a semi-tractor trailer on the date of the delivery. Id.
To access the delivery site, Mr. Sparrow had to traverse an uphill driveway that was approximately 150 feet long and 15 to 16 feet wide. Barton Decl. Ex. 1, at 4-5 (doc. 31-1). During the delivery, plaintiff and Mr. Sparrow had a disagreement about whether Mr. Sparrow would exit the property by driving down the driveway in reverse or headfirst. Id. at 6-7. Plaintiff requested that Mr. Sparrow exit the property by reversing his vehicle down the driveway, which Mr. Sparrow refused to do. Id. at 7. What occurred as Mr. Sparrow turned his vehicle around is the primary point of dispute between the parties.
Plaintiff filed this action on November 4, 2022, alleging that Mr. Sparrow drove his tractor trailer in a negligent manner that resulted in physical injury to plaintiff's “muscles, nerves, tendons, ligaments, bones and soft tissue of his shoulders, knees, back and hips,” and damage to the property. Compl. ¶ 8 (doc. 1-1). In particular, plaintiff claims that Mr. Sparrow “damage[d] the grass” and fencing on the property. Barton Decl. Ex. 1, at 8 (doc. 31-1).
On September 6, 2023, plaintiff was deposed as to the events of November 5, 2019, and testified as follows:
Q: What's your current residence address? . . .
A: 30201 Carmel Road[,] Rainier, Oregon, 97048.
Q: Okay. And do you own or rent that property?
A: Rent.
Q: And who's your landlord?
A: Brenda Stalcup . . .
Q: Okay. And how long have you rented from Ms. Stalcup?
A: 34; 33, 34 years.Barton Decl. Ex. 1, at 1 (doc. 31-1).
On February 2, 2024, defendant filed the present motion for partial summary judgement as to plaintiff's property damage claim on the basis that plaintiff did not own the underlying property. Briefing was completed in regard to that motion on March 18, 2024.
On April 8, 2024, defendant requested “an award of reasonable attorney's fees and costs that were incurred in litigating Plaintiff's legally and factually baseless property damage claim.” Def.'s Mot. Sanctions 1 (doc. 37). As of the date of this Findings and Recommendation, plaintiff has not filed a response to defendant's Rule 11 motion.
STANDARDS
Summary judgement is appropriate if the pleadings, depositions, answers to interrogatories, affidavits, and admissions on file, if any, show “that there is no genuine dispute as to any material fact and the [moving party] is entitled to judgement as a matter of law. Fed.R.Civ.P. 56(a). Substantive law on an issue determines the materiality of a fact. T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir 1987). Whether the evidence is such that a reasonable jury could return a verdict for the nonmoving party determines the authenticity of the dispute. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The moving party has the burden of establishing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party shows the absence of a genuine issue of material fact, the nonmoving party must go beyond the pleadings and identify facts which show a genuine issue for trial. Id. at 324.
Special rules of construction apply when evaluating a summary judgement motion: (1) all reasonable doubts as to the existence of genuine issues of material fact should be resolved against the moving party; and (2) all inferences to be drawn from the underlying facts must be viewed in the light most favorable to the nonmoving party. T.W. Elec., 809 F.2d at 631.
Pursuant to Fed.R.Civ.P. 11, sanctions in the form of attorney fees may be imposed when a court document is frivolous, legally unreasonable, without factual foundation, or filed for an improper purpose. Fed.R.Civ.P. 11(c). Sanctions are an “extraordinary remedy, one to be exercised with extreme caution.” Operating Eng'rs Pension Tr. v. A-C, Co., 859 F.2d 1336, 1345 (9th Cir. 1988).
DISCUSSION
To establish a claim for negligence, the plaintiff must show: (1) the defendant owed the plaintiff a duty, (2) the defendant's conduct created a foreseeable and unreasonable risk of legally cognizable harm to the plaintiff, and (3) the defendant's conduct in fact caused that kind of harm to the plaintiff. Sloan on behalf ofEst. of Sloan v. Providence Health Sys.-Or., 364 Or. 635, 642, 437 P.3d 1097 (2019) (citing Fazzolari v. Portland Sch. Dist. No. 1J, 303 Or. 1, 17, 734 P.2d 1326 (1987)).
Under Oregon law, “actual, present harm or injury” is a “fundamental prerequisite of negligence liability.” Lowe v. Philip Morris USA, Inc., 207 Or.App. 532, 544, 142 P.3d 1079 (2006), aff'd, 344 Or. 403, 183 P.3d 181 (2008). Purely economic losses are generally not compensable; there must be an injury to plaintiff's person or property. Paul v. Providence Health Sys.-Or., 351 Or. 587, 593, 273 P.3d 106 (2012); see also Or. Laborers-Emps. Health & Welfare Tr. Fund v. Philip Morris, Inc., 17 F.Supp.2d 1170, 1175 (D. Or. 1998) (to recover, including under a negligence theory, the plaintiff must be amongst “those most directly injured by a defendant's conduct”).
However, economic losses may be recoverable absent a physical injury where the defendant has a special duty to guard against the economic losses that occurred. Onita Pac. Corp. v. Trs. of Bronson, 315 Or. 149, 159 (1992). Such a heightened duty must come from the “defendant's particular status or relationships, or from legislation, beyond the generalized standards that the common law of negligence imposes on persons at large.” Fazzolari, 303 Or. at 10. Contractual relationships alone are insufficient to support a heightened duty of care and overcome the economic loss rule. Kahut v. J.P. Morgan Chase Bank, N.A., 2013 WL 1131059, at *1 (D. Or. Feb. 5), adopted by 2013 WL 1131053 (D. Or. Mar. 12, 2013).
Defendant argues summary judgment is warranted because plaintiff cannot satisfy the damages element of his property related claim since he does not “have an ownership interest in the allegedly damaged property.” Def.'s Mot. Summ. J. 8 (doc. 30). This Court agrees. Regardless of whether Mr. Sparrow's driving was careless, plaintiff cannot prevail on his property damage claim unless he can establish that he suffered the type of foreseeable harm that would impose a duty on Mr. Sparrow. Plaintiff has submitted an exhibit to support the $27 in costs he incurred to repair the damaged fence. Pl.'s Resp. to Mot. Summ. J. Ex. 4, at 5-16 (doc. 34-4). But it is undisputed that plaintiff does not own the damaged property and has instead rented it for the past “33 or 34 years.” Barton Decl. Ex. 1, at 3 (doc. 31-1). It is likewise undisputed that plaintiff has not put forth the rental agreement or any other evidence of his responsibilities in relation to the leased property. Rather, plaintiff's response advances several unavailing arguments, characterizing defendant's motion as two separate challenges, standing and damages, despite their necessary connection. Pl.'s Resp. to Mot. Summ. J. 6 (doc. 34).
Although neither party addresses this issue in their briefing, Oregon negligence law does permit lessees and bailees to recover for damages to property they do not own if they have a sufficient “proprietary” interest. See JH Kelly, LLC v. Quality Plus Serv., Inc., 305 Or.App. 565, 578, 472 P.3d 280 (2020) (economic loss rule did not foreclose a fabricator from recovering for negligence in relation to tangible physical property it was responsible for and had possession and control over “for welding purposes”).
Defendant does, however, cite to cases from the Fifth Circuit and Eastern District of California in support of the proposition that “recovery for economic losses cannot be obtained from a tortfeasor whose negligence damaged property unless the plaintiff had a proprietary interest in the property.” Def.'s Mot. Summ. J. 9 (doc. 30) (citations and internal quotations omitted). Yet neither of those cases concerned Oregon negligence law. See Hyundai Merch. Marine Co., Ltd. v. Stockton Port Dist., 2014 WL 2575488, at *7 (E.D. Cal. June 9, 2014) (discussing California and maritime law); Wiltz v. Bayer Crop Science, Ltd. P'ship, 645 F.3d 690, 695 (5th Cir. 2011) (recognizing the “general inhibition in negligence law against compensation for purely economic loss not the result of either bodily harm to the claimant or physical injury to property in which claimant has a proprietary interest”). The same is true in regard to the precedent that defendant references in latter portions of its brief. See, e.g., Def.'s Mot. Summ. J. 13-14 (doc. 30); see also CHMM, LLC v. Freeman Marine Equip., Inc., 2014 WL 6610007, at *3 (D. Or. Nov. 20, 2014) (discussing “standing to recover for alleged negligent damage to property” in regard to a maritime claim); Lamb v. United States, 2010 WL 5158550, at *2 (D. Or. Dec. 13, 2010) (addressing economic losses as they relate to claims against the United States under the Federal Tort Claims Act); Ross Dress for Less, Inc. v. Makarios-Or., LLC, 2018 WL 2452957, at *9 n.4 (D. Or. May 31, 2018) (rejecting the application of tort principles to the plaintiff's breach of contract claim).
Courts apply a “functional test” that asks whether the “claimant has control of the property and is responsible for its maintenance and repair.” Id. (citation and internal quotations omitted); see also Taison Commc'ns, Inc. v. Ubiquiti Networks, Inc., 2013 WL 4530470, at *4-6 (N.D. Cal. Aug. 26, 2013) (economic loss rule did not bar the plaintiff's claim for property damage to radios under California negligence law where the plaintiff plead “a clear connection to, and responsibility for, the radios” and replaced them at its own expense). This test does “not allow recovery by a claimant who occupies or holds property under a license that confers less extensive powers and responsibilities.” JH Kelly, LLC, 305 Or.App. at 578 (citation and internal quotations omitted). Thus, to prove a property damage claim in this context, the plaintiff must but forth some evidence of their control and maintenance duties, which is lacking in this case.
Moreover, plaintiff reliance on the Restatement (Second) of Property: Landlord & Tenant § 12.2 cmt. g (1977); Uniform Jury Instruction 70.09; Weinman v. De Palma, 232 U.S. 571 (1914); Or. Rev. Stat. § 90.300(7)(a)(B) (“Security deposits”); and Or. Rev. Stat. § 90.325(2)(b) (“Reasonable use of premises; cleanliness; smoke detectors; behavior”) is misplaced. Pl.'s Resp. to Mot. Summ. J. 7, 9, 11-12 (doc. 34). None of these authorities address whether, under Oregon law, a tenant may maintain an action against a third party to recover the cost to repair the owner's property.
The portion of Restatement (Second) that plaintiff cites states that landlords and tenants may recover for “their respective interests in the leased property” but, as denoted above, plaintiff has not demonstrated his interest extends to the damaged fence. Id. at 7 (quoting Restatement (Second) of Property: Landlord & Tenant § 12.2 cmt. g (1977)) (emphasis added). Weinman concerned damage to business assets that the plaintiff owned, and the reasonably certain loss of the plaintiff's future profits, not costs the plaintiff incurred while repairing their landlord's property. Weinman, 232 U.S. at 573, 575.
And the Oregon statues that plaintiff cites are inapposite; they state a landlord may recover for damages beyond normal wear and tear that were “caused by the tenant,” but are silent as to damages caused by third parties. Or. Rev. Stats. § 90.300(7)(a)(B) (emphasis added). Simply put, these statues do not apply because plaintiff is not the landlord of the property and defendant is not his tenant. While plaintiff's landlord may maintain a claim for negligent property damage against defendant, plaintiff does not automatically assume that right merely because he chose to complete repairs. And, as defendant observes, plaintiff's own “duty to prevent damage to his rental property has no bearing on his property damage claim.” Def.'s Reply to Mot. Summ. J. 5 (doc. 36).
This Court is also unpersuaded by plaintiff's reliance on the Uniform Civil Jury Instructions to support his assertion that the cost of repairs “affect a tenant's interest and, therefore, may be compensable.” Pl.'s Resp. to Mot. Summ. J. 7, 11-12 (doc. 34). Uniform jury instructions are not independent sources of law, but practice tools that attorneys may use as templates to write their own instructions. Further, as defendant correctly notes, plaintiff has omitted a key component of this instruction, which clearly states that, in order to be recoverable, damages must be to the “plaintiff's personal property.” Def.'s Reply to Mot. Summ. J. 9 (doc. 36) (quoting Uniform Jury Instruction 70.09).
Plaintiff's argument that he “need only show that he suffered ‘foreseeable' harm to prevail on summary judgement” conflates the elements of foreseeability and actual damages. Pl.'s Resp. to Mot. Summ. J. 10 (doc. 34). Plaintiff must show duty, breach, causation, and damages as separate elements. Sloan, 364 Or. at 643. When plaintiff does discuss damages, he concedes that purely economic losses are “not recoverable in tort,” but asserts the economic loss rule does not apply because he “is presenting a claim connected to physical damages to the property.” Pl.'s Resp. Mot. Summ. J. 13 (doc. 34). However, the economic loss rule does not formalistically constrain tort actions to disputes that merely happen to involve physical damage. Rather, the economic loss rule is a limitation on the scope of duty. JH Kelley, LLC, 305 Or.App. at 572 (“[t]he economic loss doctrine is a common-law doctrine created by courts in response to pragmatic concerns over unbounded liability”). It is well-established that economic losses include the “costs of repair” to third party property. Blue Heron Farm LLC v. Norcal Nursery, Inc., 2022 WL 2612130, at *8 (D. Or. May 5), adopted by 2022 WL 2805484 (D. Or. Jul. 18, 2022); see also Hale v. Groce, 304 Or. 281, 284, 744 P.2d 1289 (1987) (“one is not liable for negligently causing a stranger's purely economic loss without injuring his person or property”).
The issue here is simply that plaintiff has not shown damage to his own property, or any responsibility for the maintenance and repair of his landlord's property. As such, plaintiff's assertion that he repaired physical damages to property does not overcome the economic loss rule, and he has failed to demonstrate a special relationship that would create the necessary duty. Onita Pacific Corp., 315 Or. at 159. The Court is sympathetic to plaintiff's common-sense argument that he should receive damages because “he or his family . . . made [$27 worth of] repairs” to the property's fence. Pl.'s Resp. to Mot. Summ. J. 14 (doc. 34). Nevertheless, the fact plaintiff accrued nominal costs in association with the repair of the landlord's property is insufficient to demonstrate damages within the purview of Oregon negligence law.
In sum, plaintiff has failed to demonstrate any obligation to repair or maintain the leased property, and therefore cannot recover the $27 in losses associated with those repairs. Cf. In re Chinese-Mfd. Drywall Prod. Liab. Litig., 2020 WL 4470883, at *4 (E.D. La. Aug. 3, 2020) (plaintiff who did not have an ownership interest in the subject residence could not maintain an action for negligence, as he “cannot recover for damage to property he does not own” and otherwise “has not demonstrated an interest in”) (citing Benoit v. Saint-Gobain Perf. Plastics Corp., 2017 WL 3316132, at *6 (N.D. N.Y. Aug. 2, 2017)); see also Celotex, 477 U.S. at 322-23 (summary judgement must be entered “against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which they will bear the burden of proof at trial”).
Finally, the Court notes the parties have necessitated judicial intervention for routine matters, including motions for extensions of time and multiple lengthy discovery disputes.In this context, the propriety of plaintiff's opposition, which does not address many of defendant's salient arguments, is dubious, generating legal fees that far outweigh the $27 worth of damages at issue. This Court understands that monetary incentives are not the sole or even primary motivator behind all litigation, but economics are often a strong indicator of where parties should direct their focus. The hours devoted by all involved, including the Court, are disproportionately high given the scope of damages (even if proven).
See, e.g., Order (Feb. 23, 2024) (doc. 29). This Court previously encouraged “the parties to work together,” warning that court intervention “is both costly and time-consuming” and that further breakdowns in communication “may result in the referral of all discovery disputes to a Special Master at the parties' expense.” Id.
And, to that end, defendant has now filed a motion for Rule 11 sanctions. As discussed herein, defendant, as the moving party, neglected to identify the applicable Oregon rule surrounding lessees alleging negligence in regard to third-party property. In other words (and contrary to defendant's assertion), plaintiff's lack of an ownership interest in the allegedly damaged property does not automatically dispose of his claim. Plaintiff merely failed to carry his evidentiary burden regarding his responsibilities and duties in relation to the leased property in opposing summary judgment, which does not, in-and-of-itself, qualify as an extraordinary circumstance.
Furthermore, defendant has not put forth any evidence of bad faith or dilatory practices. See, e.g., Def.'s Mot. Sanctions 18 (doc. 37); see also Operating Eng'rs Pension Tr., 859 F.2d at 1344 (“Rule 11 must not be construed so as to conflict with the primary duty of an attorney to represent his or her client zealously” and “[t]he simple fact that an attorney's legal theory failed to persuade the district court does not demonstrate that counsel lacked the requisite good faith”) (citations and internal quotations and brackets omitted). Given these circumstances, the Court cannot conclude that Rule 11 sanctions are appropriate. See Khalfa v. Or. Health & Sci. Univ., 2023 WL 8602123, at *8 n.14 (D. Or. Dec. 12, 2023) (denying the plaintiff's motion for Rule 11 sanctions because, among other reasons, the “actions of which [he] complains do not reveal any improper motive or any abuse of the judicial process by defense counsel”) (citing Montrose Chem. Corp. of Cal. v. Am. Motorists Ins. Co., 117 F.3d 1128, 1136 (9th Cir. 1997)).
RECOMMENDATION
For the foregoing reasons, defendant's Partial Motion for Summary Judgement (doc. 30) should be granted, and defendant's Motion for Sanctions (doc. 37) should be denied. Defendant's requests for oral argument are denied as unnecessary.
This recommendation is not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any notice of appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not be filed until entry of the district court's judgment or appealable order. The parties shall have fourteen (14) days from the date of service of a copy of this recommendation within which to file specific written objections with the court. Thereafter, the parties shall have fourteen (14) days within which to file a response to the objections. Failure to timely file objections to any factual determination of the Magistrate Judge will be considered as a waiver of a party's right to de novo consideration of the factual issues and will constitute a waiver of a party's right to appellate review of the findings of fact in an order or judgment entered pursuant to this recommendation.