Bradley v. Oregon Trail Sav. & Loan Ass'n

• Decision Date: 18 August 1980
• Docket Number: No. A7703,A7703
• Citation: 617 P.2d 263,47 Or.App. 871
• Parties: Josephine BRADLEY, Appellant, v. OREGON TRAIL SAVINGS & LOAN ASSOCIATION, an Oregon Corporation, Respondent. 03760; CA 15155.
• Court: Oregon Court of Appeals

Page 263

617 P.2d 263

47 Or.App. 871

Josephine BRADLEY, Appellant, v. OREGON TRAIL SAVINGS & LOAN ASSOCIATION, an Oregon Corporation, Respondent.

No. A7703 03760; CA 15155.

Court of Appeals of Oregon.

Submitted on Record and Briefs May 16, 1980.

Decided Aug. 18, 1980.

Ivan J. Vesely and James Scudder, Portland, filed the brief for appellant.

Barbee B. Lyon, John E. Frohnmayer and Tonkon, Torp & Galen, Portland, filed the brief for respondent.

Before RICHARDSON, P. J., and THORNTON and BUTTLER, JJ.

BUTTLER, Judge.

Plaintiff failed to plead further after the trial court sustained defendant's demurrer to the fourth amended complaint in this action. Plaintiff appeals from the resulting judgment, contending that the sustaining of the demurrer was error. Plaintiff also appeals from the trial court's "supplemental judgment" which awarded attorney's fees to defendant. ¹ We reverse and remand the first judgment and vacate the supplemental judgment.

In 1975, plaintiff and her husband obtained a loan from defendant and executed a mortgage under which plaintiff and her husband were mortgagors and defendant was mortgagee. The disclosure statement which defendant provided plaintiff and her husband, pursuant to the Federal Truth in Lending Act (15 U.S.C.A. § 1601 et seq.) and implementing regulations, contained the following language:

"MORTGAGE CANCELLATION LIFE INSURANCE OR DISABILITY INSURANCE is not required. No charge is made and no such insurance is provided. If the BORROWER CHECKS the appropriate box below, we will submit an application on behalf of the Borrower requesting coverage at the price quoted."

The "appropriate box" was checked indicating the Borrower desired the insurance, and the disclosure form was signed by plaintiff's husband as "Borrower" and by plaintiff as "Borrower's Spouse." At the top of the form, however, both are named as "Borrowers," and the complaint alleges, and the mortgage attached to the complaint indicates, that plaintiff and her husband were "joint borrowers," that they were joint mortgagors and were jointly and severally liable on the note secured by the mortgage. Plaintiff's husband died in 1976. Plaintiff then "applied" to defendant to satisfy the unpaid balance of the loan with proceeds from the mortgage cancellation insurance on her husband's life and to cancel the mortgage. She "was informed by defendant that no such insurance coverage existed nor had such insurance been applied for by defendant."

The essence of plaintiff's claim in this action is that defendant agreed to apply for the mortgage cancellation life insurance, and that plaintiff sustained various damages because of defendant's failure to do so, including damages equal to the principal balance and interest which remained payable on the loan as of the time of plaintiff's husband's death.

Plaintiff's original and first three amended complaints were brought in her individual capacity as widow and surviving owner of the real property. Defendant demurred to each of those complaints on the grounds, among others, that plaintiff, as an individual, does not have legal capacity to sue and that any cause of action which might exist by reason of defendant's failure to procure the insurance belonged to the estate of plaintiff's husband. The demurrers were sustained. In her fourth amended complaint, plaintiff changed the caption of her pleading to indicate that she was suing in her capacity as personal representative of her husband's estate, as well as in her individual capacity. She also added an allegation that she was the duly appointed personal representative of the estate. The operative allegations of the complaint are set forth in the margin. ² Defendant demurred again on essentially the same grounds, and that demurrer was sustained. On June 25, 1979, the court entered a judgment which dismissed plaintiff's ³ "cause of action," and stated "that defendant's motion for attorney's fees shall be set for hearing on the regular motion calendar." Plaintiff filed her notice of appeal from that judgment on July 24, 1979. The trial court entered its supplemental judgment for attorney's fees on August 15, 1979, and plaintiff filed a notice of appeal from the supplemental judgment on September 14, 1979.

The initial question is whether we have jurisdiction over the appeal from the first judgment. Defendant argues that we do not, because that judgment left the issue of attorney's fees undecided and was therefore not a final order disposing of all issues in the case. Consequently, according to defendant, plaintiff's notice of appeal from the first judgment was premature, and her later notice of appeal from the supplemental judgment did not specify that the first judgment as well as the supplemental judgment was the subject of the appeal. Plaintiff's argument is essentially the converse of defendant's: she reasons that the original judgment was final and appealable as of the time it was entered, that she took an appeal from it, and that once her notice of appeal had been filed jurisdiction over the matter was in this court, and therefore the trial court had no authority to award attorney's fees. ORS 19.033.

Plaintiff's argument is in accord with our decision in Bank of Oregon v. Hiway Products, Inc., 41 Or.App. 223, 598 P.2d 318 (1979), where we stated:

"Finally, plaintiff assigns as error the award of attorney fees in a supplemental decree entered after plaintiff's notice of appeal to this court had been filed. The trial court, in its original decree, explicitly left for later determination the issue of attorney fees to be awarded to Hiway.

"ORS 19.033(1) provides, in pertinent part:

" 'When the notice of appeal has been served and filed * * *, the Supreme Court or the Court of Appeals shall have jurisdiction of the cause, * * * but the trial court shall have such powers in connection with the appeal as are conferred upon it by law.'

"Here, the action of the trial court was not within the limited range of matters relating to appeal listed in Gordon Creek Tree Farms v. Layne, et al., 230 Or. 204, 209, 358 P.2d 1062, 368 P.2d 737 (1962). See also Valley Pipe Co. v. City of Albany, 215 Or. 666, 300 P.2d 411, 303 P.2d 503 (1959). * * * "

"* * *

"* * * We assume, without deciding, that the supplemental decree in the present case was otherwise correct. It must, however, be reversed as beyond the trial court's jurisdiction with respect to awarding attorney fees once a notice of appeal was filed. * * * " 41 Or.App. at 231-32, 598 P.2d at 322.

Defendant suggests that our decision in Hiway Products is inconsistent with the Supreme Court's decision in David M. Scott Construction v. Farrell, 285 Or. 563, 592 P.2d 551 (1979). Hiway Products was decided after Farrell and we find no inconsistency; in fact, the Court in Farrell stated that the mere reservation of jurisdiction to determine the question of attorney fees may not, by itself, be sufficient to render a judgment not final. It was the combined reservations in the Farrell judgment which led the Court to conclude that there were too many acts for the trial court to perform to treat the judgment as final until the supplemental judgment was entered. Neither is the holding in Hiway Products affected by Shipler v. Van Raden, 288 Or. 735, 608 P.2d 1162 (1980), which the Supreme Court decided after defendant's brief in the present case was filed. As it had in the earlier case of Gorman v. Boyer, 274 Or. 467, 547 P.2d 123 (1976), the court in Shipler "indicated a preference for awaiting the trial judge's identification of the 'prevailing party' before requiring evidence on the matter of fees," 288 Or. at 745, 608 P.2d at 1167, at least in equity cases where attorney's fees are awarded pursuant to contract or to ORS 20.096(1). The court stated in Shipler that the better practice is for attorney's fees to be determined after the prevailing party has been identified, but before judgment is entered, so that any award of attorney's fees can be made through the same judgment which determines other issues in the case. Shipler does not indicate that the appealability of a judgment is affected by the fact that it does not determine the issue of attorney's fees.

Defendant contends that we should overrule Hiway Products. The difficulty with defendant's position is that if its contention is correct, there is no way plaintiff could appeal the judgment on the demurrer. If it was not appealable and the supplemental judgment did not incorporate the earlier judgment, the only appealable judgment would be the supplemental one awarding attorney fees. Even if we were inclined to overrule Hiway Products, which we are not, to avoid the obvious injustice urged by defendant we would construe the supplemental judgment as incorporating the earlier judgment.

The realities of trial practice in this state are such that the prevailing party has substantial control over whether a judgment on other issues will be entered before the issue of attorney's fees is decided or vice versa. The principal benefit of Hiway Products and similar holdings is to prevent exactly the type of procedural problems which the present case illustrates. In our view, Hiway Products poses a much smaller risk of the "piecemeal appeals" to which defendant argues it is conducive than does the alternative which was followed below of entering piecemeal judgments, which generally should not occur. We adhere to Hiway Products. It follows that the first judgment was final and appealable, and we turn to the merits of plaintiff's appeal from it. ⁴

In her first cause of action, plaintiff bases her claim for relief on defendant's alleged violation of the Truth in Lending Act. The facts in Burgess v. Charlottesville Savings and Loan Ass'n, 477 F.2d 40 (4th Cir. 1973), were materially indistinguishable from those here. The court concluded that the gravamen of the action in Burgess was

* * * an alleged contract or agreement to procure...