Equitable Life Assur. Soc. of the U.S. v. McKay

• Decision Date: 30 August 1988
• Docket Number: CV-84-1356-FR
• Citation: 760 P.2d 871,306 Or. 493
• Parties: The EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, Plaintiff, v. Harlan David McKAY, Jr., Dana Williford, and Marjorie N. McKay, as guardian for Sean Michael McKay, Oregon residents, Defendants/Appellees, and Carolyn McKay, a Washington resident, Defendant/Appellant. USDC Civil; 9th Cir. 86-3614; SC S34788.
• Court: Oregon Supreme Court

Page 871

760 P.2d 871

306 Or. 493

The EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, Plaintiff, v. Harlan David McKAY, Jr., Dana Williford, and Marjorie N.

McKay, as guardian for Sean Michael McKay, Oregon

residents, Defendants/Appellees,

and

Carolyn McKay, a Washington resident, Defendant/Appellant.

USDC Civil CV-84-1356-FR; 9th Cir. 86-3614; SC S34788.

Supreme Court of Oregon,

In Banc.

Argued and Submitted June 7, 1988.

Decided Aug. 30, 1988.

James A. Trujillo, Bellevue, Wash., argued the cause on behalf of defendant/appellant Carolyn McKay. With him on the brief was Trujillo & Peick, P.C., Bellevue, Wash.

Daniel E. McCabe, Aloha, filed the brief and argued the cause on behalf of defendants/appellees.

GILLETTE, Justice.

Pursuant to ORS 28.200 to 28.230, this court accepted certification of the following question from the United States Court of Appeals for the Ninth Circuit: "Under Oregon law, is the Washington Deadman's Statute, Wash.Rev.Code § 5.60.030, substantive or procedural?" With the explanation that follows, we answer that this court would regard the Washington statute as "procedural."

This case originated as an interpleader action in the United States District Court for the District of Oregon. Equitable Life Assurance Society filed the action to settle conflicting claims to the proceeds of two life insurance policies issued to David McKay, Sr., who died on November 17, 1983. The complaint named as defendants the decedent's widow and his children from a previous marriage. Although the policies themselves named the decedent's children as the sole beneficiaries, the widow claimed that the decedent actually had intended that she be named as the beneficiary. The record suggests that the only evidence to support her claim was her own testimony and that of the insurance agent concerning transactions with the decedent.

The district court granted the children's motion for summary judgment on the ground that Washington's "Deadman's Statute" precluded the widow and the insurance agent from testifying about their transactions with the decedent. ¹ The parties had stipulated that Washington's "substantive" law applied to the action. The district court found that the Washington statute in question was "substantive" in nature and, therefore, that it applied to this action.

The widow appealed to the United States Court of Appeals for the Ninth Circuit, 837 F.2d 904. As noted above, that court requested a determination whether, under Oregon law, the statute in question is considered "substantive" or "procedural." We understand the question to be a shorthand way of asking whether a trial court in this state would apply Oregon law to the issue of a witness' competency to testify to a decedent's transactions or statements, even though Washington law governs other issues in the case. We rephrase the question to make it clear that characterizing a statute as "substantive" or "procedural" merely states a conclusion. There is no litmus test for determining into which category a statute falls. See e.g., Cook, "Substance" and "Procedure" in the Conflict of Laws, 42 Yale LJ 333 (1932). The determination whether another state's laws should be applied in this state's courts requires more than a classification of those laws as "substantive" or "procedural."

This court has addressed the issue presented here in two previous cases. In each case the statement was, strictly speaking, a dictum, but both statements are instructive as to how questions like the present one have been viewed in Oregon. The later of these cases was Lilienthal v. Kaufman, 239 Or. 1, 395 P.2d 543 (1964), an action to collect on two promissory notes that had been executed and delivered in California by a maker who previously had been placed under guardianship by an Oregon court as a spendthrift. Under Oregon law, the notes were void; California law did not treat a spendthrift as incapable of executing such notes. In determining that it should apply Oregon law based on a "significant contacts" choice-of-law analysis, this court noted,

"[d]efendant contends that the law of California should not be applied in this case by the Oregon court because the invalidity of the contract is a matter of remedy, rather than one of substance. Matters of remedy, procedure, are governed by the law of the forum. * * * Stumberg states the distinction as follows: ' * * * procedural rules should be classified as those which concern methods of presenting to a court the operative facts upon which legal relations depend; substantive rules, those which concern the legal effect of those facts after they have been established.' Stumberg, Principles of Conflict of Laws (3rd ed), 133."

Id. at 6, 395 P.2d 543.

The earlier case was McGirl v. Brewer, 132 Or. 422, 280 P. 508, 285 P. 208 (1930), in which this court applied Montana law to a mortgage executed in Montana. This court said concerning the problem we face today:

"Whilst our court in such cases will apply the law of the sister state when applicable, yet the remady [sic] is governed by the law of the forum which relates more directly to the procedure in the local court. For instance, the rules governing the trial, the settlement of the pleadings, questions as to the admissibility of evidence, and many like subjects, are of the lex fori * * *."

Id. at 443, 280 P. 508, 285 P. 208.

As already noted, while both of our former cases dealt with matters which the courts in each case regarded as "substantive," both also purported to place questions of evidence--of what was admissible and through whom--in the category of matters governed by the lex fori.

The rule found in the Restatement (Second) of Conflict of Laws (1971) accords with the dicta in the two Oregon cases. Under the Restatement rule, matters concerned primarily with judicial administration are governed by the law of the forum state. Section 122 of the Restatement states:

"A court usually applies its own...