Crouter v. United Adjusters, Inc.

• Decision Date: 22 July 1971
• Citation: 485 P.2d 1208,259 Or. 348
• Parties: Norman H. CROUTER, Appellant, v. UNITED ADJUSTERS, INC., Respondent.
• Court: Oregon Supreme Court

Page 1208

485 P.2d 1208

259 Or. 348

Norman H. CROUTER, Appellant, v. UNITED ADJUSTERS, INC., Respondent.

Supreme Court of Oregon.

Argued and Submitted April 8, 1971.

Decided June 10, 1971.

Rehearing Denied July 22, 1971.

Gerald R. Pullen and Howard R. Hedrick, Portland, argued the cause for appellant. With them on the brief were Hedrick & Fellows, Portland.

Alan L. Schneider, Portland, argued the cause for respondent. With him on the brief were Keane, Haessler, Harper & Pearlman and David W. Harper, Portland.

Before McALLISTER, P.J., and DENECKE, HOLMAN, TONGUE and HOWELL, JJ.

TONGUE, Justice.

This is an action for damages for what is alleged to have been a wrongful attachment of plaintiff's wages. Plaintiff appeals from a judgment for defendant notwithstanding a jury verdict in favor of plaintiff for $376 in special damages, $6,000 in general damages and $10,000 in punitive damages. Plaintiff also appeals from an alternative order for a new trial.

Among the questions presented for decision are questions going to the nature and required elements of an action for damages resulting from a wrongful attachment or garnishment, as well as the sufficiency of the evidence to establish some of such required elements.

Plaintiff, before moving to Portland, had rented a house in Yakima, Washington. He described his landlady as an 'eccentric' person who continually came into the house and got into arguments with his wife. He also testified that after three months he moved out, by 'mutual agreement' with his landlady, but that she then refused to return a deposit of $75, although he had paid all rent due before leaving.

Several months later defendant received a letter from a corresponding collection agency in Yakima asking defendant to collect $496 from plaintiff, who then lived in Portland, on behalf of his former landlady. Defendant then sent a letter to plaintiff demanding payment of $496. Two days later plaintiff's wife called defendant and said that they 'did not owe any money' and had left the house in 'good shape.'

A week later defendant sent plaintiff another demand letter. Plaintiff and his wife then went to see an attorney who called defendant, asked for copies of the bills claimed to be due and said that plaintiff did not owe anything except perhaps a portion of a telephone bill.

Bills were then sent by defendant to plaintiff's attorney for a telephone bill; $161.20 for labor and materials to repair a kitchen counter, and $20.80 for repairs to a desk. The attorney then wrote two letters to plaintiff asking for further information, apparently without success, and finally sent a bill for his own services to plaintiff.

After further demand letters, after waiting for over a year without receiving either any payment or any response to such letters, and after calling plaintiff's attorney, who also had received no further information from plaintiff, defendant then filed a complaint against plaintiff for $496 for alleged 'rental services rendered.' At the same time defendant filed an affidavit for attachment alleging that $496 was due 'upon an express contract for the payment of money, to-wit; as set forth in the complaint.' ¹ The next day plaintiff's employer was served with a notice of garnishment and withheld $105.13 from his wages for payment to the court. Plaintiff's attorney then requested a bill of particulars, which also showed substantially the same 'breakdown' of the claim as shown by the bills previously delivered to plaintiff's attorney. Plaintiff then filed an answer denying any indebtedness except $64.63 for telephone charges to be offset against the $75 deposit.

Before filing the complaint and affidavit for attachment defendant knew that part of the claim was for rent and telephone bills and that part was for claimed damage to the kitchen counter and desk. Defendant's president testified, however, that he had been told by the Yakima correspondent that it was a good and valid claim and that although it was his understanding that a claim for an attachment could not be made on a tort claim, it was also his understanding that failure to redeliver rented premises in good condition was subject to attachment (as a breach of contract).

Plaintiff offered testimony that the complaint filed by defendant against plaintiff was prepared in defendant's office by a secretary and then signed by defendant's attorney, who did not then know that it was an out-of-state claim or that part of the claim was for property damage and would not have signed it if he had known of such facts. Plaintiff also offered testimony that defendant filed a much higher percentage of attachments than other collection agencies and had been warned by its attorney about filing attachments on out-of-state claims because of difficulty in getting testimony from out-of-state witnesses. Defendant also encountered difficulty in securing the presence of the landlady to testify and, as a result, asked that the trial date be postponed. That request was granted, but on condition that the attachment of plaintiff's wages be released, which was then done.

That case later came to trial and resulted in a jury verdict and judgment in favor of Mr. Crouter (the plaintiff in this case, but defendant in that case). An appeal was then taken from the district court to the circuit court, but was dismissed. A further appeal was also taken to this court, but was also dismissed.

Plaintiff testified that the garnishment of his wages by defendant was the second such garnishment; that he was then 'struggling along,' but that after that garnishment he did not have sufficient funds to pay other creditors and later had two more garnishments. Although regarded by his employer as a good employee, except for financial worries, he was then discharged (over a year and one-half after defendant's garnishment) because of a policy by his employer to discharge employees after four wage garnishments.

At that time plaintiff was 'grossing' approximately $600 per month, not including $200 to $250 per month from week end work as a musician. He also testified that after defendant's attachment he tried to get an extension of credit from a finance company, but was refused. This was shortly after defendant had called the finance company to inquire about plaintiff, at which time defendant told the finance company that plaintiff owed the Yakima bills. Some months later, however, plaintiff's credit was renewed by the finance company, apparently to protect itself, but based also upon some apparent improvement in his credit rating at that time. Meanwhile, plaintiff had 'panicked' and had assigned his wages to 'Debt Reducers' to pay some of his bills.

After being discharged from his job, plaintiff went to work full time as a musician and by 1969 was again 'grossing' about $600 per month, but with perhaps heavier travel and other expenses. The testimony of his earnings during 1967 and 1968 was quite indefinite. During that period, however, he also had trouble with other creditors, including support payments for children by a previous marriage and served ten days in jail for contempt of court for failure to make such payments.

The testimony to support plaintiff's claims of $368.40 for special damages for expenses incurred in releasing the attachment was also indefinite. Three hundred fifty-two dollars and forty cents of that amount was for attorney fees, to cover plaintiff's visits to his attorney and his work to 'set up the defense,' not including the 'actual trial.'

1. Both want of probable cause and malice must be proved in an action for damages resulting from a wrongful attachment of a debtor's property.

The principal problem in this case arises from plaintiff's contention that this is an action for wrongful attachment and that in such an action the plaintiff is not required to prove either malice or want of probable cause. This contention is denied by defendant, which contends that there is no separate action for wrongful attachment, but that the remedies for a wrongful attachment are limited to (1) an action on the attachment bond, (2) an action for abuse of process, and (3) an action for malicious prosecution, in which malice and want of probable cause must both be proved. ²

Plaintiff relies primarily upon our previous decision in Mills v. Liquidators, 206 Or. 212, 288 P.2d 1060 (1956), in which we said (at p. 217, 288 P.2d at p. 1063):

'An action for wrongful attachment is in the nature of an action in trespass for conversion of personal property; 'malice and want of probable cause are not essential elements of an action for damages for wrongful garnishment, * * *'.'

Indeed, plaintiff's counsel frankly stated on argument that he must 'stand or fall' on that case. ³ Admittedly, the law on this subject in Oregon is in a state of confusion and plaintiff was justified in his reliance on Mills. In that case, however, the wrongful attachment was not made upon property of the debtor, but upon property belonging to a third person--the plaintiff in that case. Although it does not appear from the opinion in that case, it appears upon reading the briefs submitted by counsel that plaintiff in Mills was relying upon authorities to the effect that when an attachment is levied 'upon property which does not belong to the party sued,' the remedy of conversion was available in such a case, citing 91 A.L.R. 922 (at pp. 934--936), and Sabin v. Chrisman, 90 Or. 85, 175 P. 622 (1918), in which the remedy of conversion had been recognized in such a case (at p. 88, 175 P. 622). ⁴

In Mitchell v. Silver Lake Lodge, 29 Or. 294, 45 P. 798 (1896), plaintiff's complaint alleged that an attachment of his property by defendant was wrongful and without probable cause, but did not allege malice. This court reversed a judgment for plaintiff, holding (at p. 304, 45 P. at p. 800) that in an action for damages resulting from a wrongful attachment 'it was necessary to allege and prove that the...