Bailey v. Lewis Farm, Inc.

• Jurisdiction: Oregon
• Parties: Jerome E. BAILEY, Petitioner on Review, v. LEWIS FARM, INC., an Oregon corporation; Paccar, Inc., a Delaware corporation, d/b/a Kenworth Motor Truck Company and/or Kenworth Truck Company, Defendants, and May Trucking Company, an Oregon corporation, Respondent on Review.
• Citation: 343 Or. 276,171 P.3d 336
• Docket Number: (CC 0211-11957; CA A124145; SC S53916).
• Court: Oregon Supreme Court
• Decision Date: 11 October 2007

171 P.3d 336

343 Or. 276

Jerome E. BAILEY, Petitioner on Review, v.LEWIS FARM, INC., an Oregon corporation; Paccar, Inc., a Delaware corporation, d/b/a Kenworth Motor Truck Company and/or Kenworth Truck Company, Defendants, and May Trucking Company, an Oregon corporation, Respondent on Review.

(CC 0211-11957; CA A124145; SC S53916).

Supreme Court of Oregon.

Argued and Submitted March 1, 2007.

Decided October 11, 2007.

On review from the Court of Appeals.^*

Gerald C. Doblie, Doblie & Associates, Portland, filed the briefs for petitioner on review.

Gordon T. Carey, Jr., Portland, argued the cause and filed the briefs for respondent on reviewMay Trucking Company.

Kathryn H. Clarke, Portland, argued the cause and filed the brief for amicus curiaeOregon Trial Lawyers Association.

Michael A. Lehner, Lehner & Rodriguez PC, Portland, filed the brief for amicus curiaeOregon Association of Defense Counsel.

Before DE MUNIZ, Chief Justice, and GILLETTE, DURHAM, BALMER, KISTLER, and WALTERS, Justices.^**

KISTLER, J.

The axle failed on a used tractor-trailer that May Trucking Company(defendant) had sold to another entity approximately a year earlier.As a result of the axle's failure, the tractor-trailer's wheels came off, bounced across the road, and hit plaintiff's vehicle in the oncoming lane of traffic, resulting in substantial injuries to plaintiff.Plaintiff sued, alleging that defendant's negligent maintenance of the axle during the time that it had owned the tractor-trailer was a substantial cause of the axle's failure.Defendant moved to dismiss plaintiff's complaint against it, reasoning that its sale of the tractor-trailer approximately a year before the accident occurred excused it from any responsibility for negligently maintaining the axle.The trial court agreed with defendant's position, dismissed plaintiff's negligence claim, and entered judgment in defendant's favor.The Court of Appeals affirmed the trial court's judgment by an evenly divided vote.Bailey v. Lewis Farm, Inc.,207 Or.App. 112, 139 P.3d 1014(2006).We allowed plaintiff's petition for review and now reverse the Court of Appeals decision and the trial court's judgment.

In reviewing the trial court's ruling dismissing plaintiff's complaint, we assume that the facts alleged in the complaint are true and draw all reasonable inferences in plaintiff's favor.SeeCurtis v. MRI Imaging Services II,327 Or. 9, 11, 956 P.2d 960(1998)(stating standard of review).The complaint alleges that defendant bought a 1993 Kenworth tractor-trailer when it was "new or nearly new."Defendant sold the tractor-trailer in November 1999, after driving it approximately 500,000 miles.Once during the time that defendant owned the tractor-trailer, on August 8, 1997, "maintenance work was performed on the rear axle shaft and the drive axle on the Kenworth truck, involving one or more spindle nuts."Otherwise, "[defendant] failed to perform any of the [manufacturer's] recommended services [on the axles] during more than 500,000 miles of use."Specifically, defendant failed to clean and repack the bearings every 25,000 miles and also failed, every 100,000 miles, to disassemble, clean, inspect, and refill or repack the bearings with clean lubricant, readjust the bearing play, and torque the rear axle flange nuts.

The complaint alleges that defendant was negligent in failing to follow the recommended maintenance regarding the rear axle assembly and bearings.The complaint also alleges that defendant was negligent "in that any maintenance to the rear axle shaft and/or drive axle [that defendant performed while it owned the tractor-trailer] failed to result in a truck that was safe to operate."

As noted, defendant sold the tractor-trailer in November 1999, which "was then owned by other non-parties prior to being sold to [Lewis Farm, Inc.(Lewis Farm)] in or about January, 2000."In November 2000, approximately a year after defendant sold the tractor-trailer, an employee of Lewis Farm was driving the tractor-trailer when the "left rear axle assembly separated from the tractor and the dual wheels and tires came off the 1993 Kenworth unit, bounced across the highway, hitting plaintiff's vehicle and causing [it] to careen down an embankment and become engulfed in flames."According to the complaint, defendant's negligent maintenance of the axle "was a substantial contributing cause of the failure of the rear axle" and the resulting injuries to plaintiff.

Plaintiff brought this action against defendant, Lewis Farm, and Paccar, Inc., which had manufactured the Kenworth tractor-trailer.Plaintiff's claims against Lewis Farm and Paccar have been resolved, and only his negligence claim against defendant remains.Defendant moved to dismiss that claim because it failed to state a claim for which relief could be granted.Among other things, defendant argued that, because it had not owned the truck for approximately a year before the accident occurred, the accident and the resulting injury to plaintiff were not a foreseeable consequence of its alleged negligence.The trial court agreed and entered an order "dismissing plaintiff's claim with prejudice and without leave to re-plead on the ground that it fails to state a claim upon which relief can be granted."The trial court entered judgment accordingly.

As noted, the Court of Appeals affirmed the trial court's judgment by an evenly divided vote.Bailey,207 Or App. at 112, 139 P.3d 1014.Judge Ortega wrote an opinion concurring in the judgment, which four other members of the court joined.¹That opinion would have held that "the injuries to plaintiff were not a reasonably foreseeable consequence of [defendant's] alleged failure to maintain the Kenworth."Id. at 120, 139 P.3d 1014(Ortega, J., concurring).The concurrence reasoned that, as a result of the sale, defendant had lost ownership and, more importantly, control of the tractor-trailer for a year before the accident occurred.Id. at 121, 139 P.3d 1014.It followed, the concurrence reasoned, that defendant's negligence was not the immediate cause of plaintiff's injuries.Rather, "those who drive and maintain a vehicle at the time of an accident—those who exercise the ability, to the extent possible, to assess the vehicle's road-worthiness—form the intervening harm-producing force behind any injuries that result from the unsafe condition of the vehicle."Id.In essence, the concurrence would have held that Lewis Farm's opportunity to correct the result of defendant's earlier negligence absolved defendant of any liability.

The five dissenting judges filed three separate opinions.Those opinions yield two central propositions.First, the dissenting judges reasoned that "the harm alleged is exactly the type of harm that a person would expect to be caused by defendant's negligence: the complaint alleges that a truck axle negligently maintained by defendant broke off and caused an accident that resulted in the injuries for which plaintiff seeks to recover."Id. at 139, 139 P.3d 1014(Rosenblum, J., dissenting).Second, the dissenting judges explained that Lewis Farm's failure to remedy the consequences of defendant's negligence does not excuse defendant from liability.Id. at 124, 139 P.3d 1014(Haselton, J., dissenting).In their view, the contrary position stated in the concurring opinion finds no support in this court's decisions.Id. at 124-26, 139 P.3d 1014(Haselton, J., dissenting).We allowed review to consider the issue that divided the Court of Appeals.

Because this case arises on defendant's motion to dismiss, we assume, as the complaint alleges, that defendant negligently maintained the axle that later failed.²We also assume, as the complaint alleges, that defendant's negligent maintenance of the axle "was a substantial contributing cause of the failure of the rear axle * * * and of plaintiff's damages."In light of those allegations, if defendant had continued to own and operate the tractor-trailer at the time of the accident, there can be little dispute that plaintiff's complaint would state a claim for negligence against defendant.The type of harm that plaintiff suffered fell squarely within the scope of the risk that defendant's negligence created; it was reasonably foreseeable that defendant's failure to maintain the axle would cause the axle to fail and that the failed axle would result in the type of injury that occurred in this case.SeeFazzolari v. Portland School Dist. No. 1J,303 Or. 1, 17, 734 P.2d 1326(1987)(discussing limits of negligence liability).

According to the complaint, the only factual basis for mounting an argument that defendant is not liable for the foreseeable consequences of its negligence derives from the allegation that defendant sold the tractor-trailer approximately a year before the injury occurred.In assessing the legal effect of that fact, it is important to remember that the complaint also alleges that defendant's negligent maintenance of the axle was a substantial contributing cause of the axle's failure and the resulting injuries to plaintiff.Indeed, the claim for relief against defendant does not allege that anything else caused the axle to fail; that is, the claim for relief against defendant does not allege that anything that the subsequent owners did or did not do during the year that they owned the tractor-trailer caused the axle to fail.³According to the allegations before us, the only factual basis that defendant can invoke for saying that it is not responsible for the consequences of its negligence is that it sold the tractor-trailer approximately a year before the axle failed and the wheels came off the tractor-trailer.

In arguing that its lack of ownership at the time of the accident provides a sufficient basis to avoid liability, defendant observes that this court explained in Fazzolari:

"unless the parties invoke a status, a relationship, or a particular standard of conduct that creates,...