Classen v. Arete NW, LLC

• Jurisdiction: Oregon
• Parties: Kimberly CLASSEN, Plaintiff–Appellant, v. ARETE NW, LLC, Defendant–Respondent.
• Citation: 294 P.3d 520,254 Or.App. 216
• Docket Number: A147893.,101014202
• Court: Oregon Court of Appeals
• Decision Date: 19 December 2012

254 Or.App. 216

294 P.3d 520

Kimberly CLASSEN, Plaintiff–Appellant,

v.ARETE NW, LLC, Defendant–Respondent.

101014202; A147893.

Court of Appeals of Oregon.

Argued and Submitted Nov. 20, 2012.

Decided Dec. 19, 2012.

Erin K. Olson argued the cause for appellant. With her on the briefs was Law Office of Erin Olson, P.C.

Jonathan W. Henderson, Portland, argued the cause for respondent. With him on the brief were Paul R. Xochihua and Davis Rothwell Earle & Xochihua P.C.

Before ARMSTRONG, Presiding Judge, and BREWER, Judge, and DUNCAN, Judge.

BREWER, J.

Plaintiff appeals from a judgment dismissing with prejudice her complaint for intentional or negligent spoliation of evidence. The trial court entered the judgment after granting defendant's motion to dismiss plaintiff's complaint under ORCP 21 A(8) for failure to state facts sufficient to constitute a claim for relief and denying plaintiff's motion to amend her complaint to add a claim for negligent infliction of emotional distress. We affirm the dismissal of the original complaint but nevertheless reverse and remand because we conclude that the trial court improperly exercised its discretion by refusing to permit plaintiff to amend her complaint.

In her complaint, plaintiff alleged that she was referred by her physician to defendant for testing and monitoring to determine whether she had a sleep disorder. She scheduled an overnight video-recorded and monitored study at defendant's Gresham facility, and she appeared at the scheduled date and time in April 2008. One of defendant's employees advised plaintiff to take her regular sleep medication before commencing the study, and she did so. During the night, plaintiff awoke to find that her bra had been unclasped, her breasts were exposed, and one of defendant's employees was standing over her and staring at her. Plaintiff later told several other employees or agents of defendant what had occurred, and she made repeated verbal and written requests for a copy of the recording of the sleep study, beginning on the morning after the study. In May 2010, more than two years after the sleep study, plaintiff received a letter from defendant advising her that the recording of her study had not been retained and that defendant was unable to produce a copy.

Plaintiff filed this action in October 2010. In her complaint, plaintiff alleged that, as a result of defendant's intentional or negligent spoliation of the videotape evidence, the value of her claims against defendant for sexual battery, abuse of a vulnerable person, and intentional infliction of emotional distress, had been diminished.

Defendant moved pursuant to ORCP 21 A(8) to dismiss plaintiff's complaint on the grounds that plaintiff had failed to allege ultimate facts to constitute a claim for relief because Oregon does not recognize claims for the intentional or negligent spoliation of evidence and, even if it did, plaintiff would have no legally cognizable claim because the underlying tort claims to which the evidence applied were never brought and were time barred when plaintiff filed her complaint. Defendant further argued that the economic-loss doctrine foreclosed plaintiff's claim because there was no special relationship between plaintiff and defendant, and additionally, that plaintiff was not a “vulnerable person” within the meaning of ORS 124.100.

Plaintiff opposed defendant's ORCP 21 motion, asserting that Oregon law supported at least negligence-based claims for the destruction of evidence, and that defendant's negligence in failing to produce the recording of her sleep study had foreclosed her ability to bring her underlying claims against defendant. Plaintiff further argued that those claims were not time barred because defendant could not rely on a statute of limitations defense where its own actions had prevented plaintiff from bringing her underlying claims. Finally, plaintiff countered that, even if the sexual battery and intentional infliction of emotional distress claims were time barred when she filed this action for spoliation, the claim for abuse of a vulnerable person under ORS 124.100 was not time-barred because plaintiff was within the class of persons protected by that statute as she had been “incapacitated” during the sleep study, and, therefore, the seven-year statute of limitations for her claim had not expired. At the hearing on defendant's motion to dismiss, plaintiff orally sought leave to replead, as elaborated below.

After the hearing, the trial court granted defendant's motion without leave to amend or replead. The court explained its decision in a written opinion:

“Plaintiff asserted a claim for intentional and negligent spoliation of evidence, alleging that [d]efendant destroyed video evidence of a sleep study requested by her physician. I find that Oregon law does not recognize an independent tort of spoliation under the circumstances of this case. For that reason, I am granting [d]efendant's motion to dismiss.

“That leaves the question of whether plaintiff should be allowed leave to amend to allege a negligence claim, similar to the one alleged in Simpkins v. Connor, 210 Or.App. 224 (2006). In order to determine whether such an amendment should be allowed, two issues need to be addressed: first, whether a Simpkins-type claim still exists under Oregon law, and second, whether plaintiff is able to adequately allege causation.

“In order to pursue a claim for purely economic loss on a negligence theory, a plaintiff must allege the existence of a special relationship or a duty found in Oregonlaw. Plaintiff relies on a duty [she] believes exists under Oregon statute. In Simpkins, the Court of Appeals held that plaintiff was entitled to seek economic loss for the negligent failure to produce medical records because of the duty found in ORS 192.525, which read: ‘a health care provider must disclose a patient's medical records.’ The court found that the legislature imposed this duty precisely for the purpose of addressing personal injury claims such as the one at issue in that case.

“The statute addressed in Simpkins,ORS 192.525, was repealed in 2003, and replaced with the statute relied upon by Plaintiff in this case, ORS 192.518(1)(b), which says that ‘an individual has * * * [t]he right to access and review protected health information of the individual.’ Plaintiff says that [d]efendant breached this duty by failing to preserve medical records that she could have used in pursuing a claim against [d]efendant.

“Defendant argues that the repeal of ORS 192.525 evidences a legislative intent to eliminate the duty discussed in Simpkins. Plaintiff argues that the language in ORS 192.518(1)(b) shows an intent to maintain that duty. Both the language of the statutes and the legislative history [are] less than enlightening in this regard, but on the whole, support[ ] [p]laintiff's position. Therefore, in theory, I believe a plaintiff can still allege the type of negligence theory alleged in Simpkins, despite the repeal of ORS 192.525.

“I say ‘in theory’ because in this case [p]laintiff needs to surmount at least one more hurdle in order to be able to plead such a claim, namely, causation. Plaintiff argues that [d]efendant's conduct in allegedly destroying critical evidence caused her underlying claims to have a diminished value. However, the underlying claims are time-barred, and therefore, there is no value that can be diminished. In other words, [p]laintiff cannot establish that [d]efendant's conduct caused her loss because the claims were time-barred.

“Plaintiff further argues that the statute of limitations did not run on one of her possible theories, a statutory vulnerable person claim under ORS 124.100, et seq., because the limitations period is seven years. ORS 124.130. Plaintiff is not a vulnerable person within the meaning of that Act, and therefore, [p]laintiff cannot gain the benefit of its longer statute of limitations.”

Plaintiff appeals from the ensuing general judgment that dismissed her complaint with prejudice. On appeal, the parties reprise the multi-tiered arguments and counter-arguments that they advanced before the trial court. Rather than address those arguments seriatim, we discuss only those issues that are necessary to explain our decision.

Whether plaintiff has a legally cognizable claim under the facts pleaded is an issue of law. SFG Income Fund, LP v. May, 189 Or.App. 269, 272, 75 P.3d 470 (2003). In determining the sufficiency of a complaint, we accept as true all well-pleaded allegations in the complaint and give plaintiff the benefit of all favorable inferences that may be drawn from the facts alleged. Granewich v. Harding, 329 Or. 47, 51, 985 P.2d 788 (1999).

The parties vehemently dispute whether, or to what extent, a claim for spoliation of evidence is cognizable under Oregon law. Compare Boden v. Ford Motor Co., 86 Or.App. 465, 739 P.2d 1067 (1987) (reversing ORCP 21 A(8) dismissal of claim for economic damages, for diminished value of product liability claim, resulting from third party's negligent destruction spoliation of allegedly defective part; concluding that such a claim was cognizable under the foreseeability principles of Fazzolari v. Portland School Dist. No. 1J, 303 Or. 1, 734 P.2d 1326 (1987)), with Simpkins v. Connor, 210 Or.App. 224, 150 P.3d 417 (2006) (disavowing Boden's foreseeability-based analysis as a basis for recovery of purely economic damages but reversing ORCP 21 A(8) dismissal of the plaintiff's claim that, because of the defendant's negligence in failing to timely produce certain medical records, violating a statutory duty prescribed under former ORS 192.525(2), the plaintiff was deprived of the ability to pursue a medical malpractice or wrongful death claim against the defendant).

We need not, and do not, address the precise contours of a cognizable claim for spoliation under Oregon law because, by all accounts, plaintiff has not alleged sufficient facts to...