Erlandson v. Pullen

• Decision Date: 04 March 1980
• Docket Number: No. A76-09-12875,A76-09-12875
• Parties: Ralf H. ERLANDSON, Appellant, v. Gerald R. PULLEN and Albert H. Troutman, Respondents. ; CA 11941.
• Court: Oregon Court of Appeals

Page 1169

608 P.2d 1169

45 Or.App. 467

Ralf H. ERLANDSON, Appellant, v. Gerald R. PULLEN and Albert H. Troutman, Respondents.

No. A76-09-12875; CA 11941.

Court of Appeals of Oregon.

Argued and Submitted Sept. 24, 1979.

Decided March 4, 1980.

Ralf H. Erlandson, Milwaukie, argued the cause and submitted the briefs for appellant Ralf H. Erlandson, pro se.

Gerald R. Pullen, Portland, submitted the brief for respondent Gerald R. Pullen, pro se.

Phillip R. Muir, Portland, argued the cause and submitted the brief for respondent Albert H. Troutman.

Before BUTTLER, P. J., and GILLETTE and ROBERTS, JJ.

GILLETTE, Judge.

Plaintiff brought this action against his former business partner, Troutman (hereafter "defendant"), and Troutman's attorney, Pullen, alleging, in four counts: wrongful initiation of a civil proceeding; intentional interference with a business relationship; outrageous conduct; and slander of title. The trial court dismissed the suit as to Pullen and granted a directed verdict for defendant after trial. The case went to the jury solely on defendant's first counterclaim, which alleged that plaintiff intentionally and willfully interfered with the contractual relationship between defendant and Pullen. The jury found for defendant and a judgment for damages was entered. Plaintiff appeals all of the judgments against him. We reverse.

The present action arose as a consequence of a fraud action brought in Clackamas County by defendant against plaintiff in October, 1975. That action related to certain land holdings, known as Ogden Farms, which had been a part of the Troutman-Erlandson partnership. Defendant alleged that plaintiff, from the beginning of their partnership, attempted to defraud him of his interest in Ogden Farms through various false and fraudulent misrepresentations. The fraud complaint was dismissed on the grounds that the proceeding was barred by res judicata, the trial court ruling that an earlier suit brought by defendant against plaintiff for dissolution of their partnership and an accounting could have settled the issues raised in the fraud complaint. That decision was affirmed on appeal. Troutman v. Erlandson, 287 Or. 187, 598 P.2d 1211 (1979).

The earlier dissolution of partnership decree ordered, among other things, that defendant was to receive the entire partnership interest in Ogden Farms. Plaintiff received an interest in the royalties to be derived from natural resources on that property subject to certain conditions. To secure payment of the royalties, he received a security interest in 150 acres of the farm. He also received an option to purchase one acre of the farm for $10,000, which option was to remain open until the first $10,000 in royalties were paid to him. ¹ Defendant was to pay the outstanding obligations on the farm. In the event he did not and plaintiff was required to make involuntary payments, plaintiff would receive a half interest in the farm for the payment of $140,000 against the farm's debts.

Plaintiff now alleges that defendant's intent in initiating the lawsuit for fraud was to interfere with and prevent him from perfecting his rights to Ogden Farms pursuant to the partnership dissolution decree. Plaintiff claims that he had the opportunity to raise the $140,000 through a business relationship with a Mr. Fackrell and others and, thus, to obtain a one-half interest in the farms. He maintains that the lawsuit brought by defendant dissuaded Fackrell and others from lending him the necessary money.

On appeal, plaintiff raises numerous assignments of error. We do not reach some of them because they are not properly preserved. The first, which we do reach, challenges the trial court's order sustaining defendant Pullen's demurrer.

Plaintiff's first count attempts to state a claim for wrongful initiation of a civil proceeding. Wrongful initiation of a civil proceeding is the civil counterpart to a malicious prosecution action. Kelly v. McBarron, 258 Or. 149, 153, 482 P.2d 187 (1971). The elements of that action are:

"1. Commencement and prosecution by the defendant of a judicial proceeding against the plaintiff;

"2. Termination of the proceeding in the plaintiff's favor;

"3. The absence of probable cause to prosecute the action;

"4. The existence of malice, or as is sometimes stated, the existence of a primary purpose other than that of securing an adjudication of the claim; and

"5. Damages."

Alvarez v. Retail Credit Ass'n, 234 Or. 255, 259-60, 381 P.2d 499, 501 (1963).

Count one fails to state a cause of action because nowhere in his complaint does the plaintiff allege that the prior proceeding terminated in his favor. The trial court was correct in sustaining Pullen's demurrer to this count.

Count two alleges an intentional interference with a business relationship. In order to state a valid claim under this theory, it must be alleged that the defendant intentionally interfered with the plaintiff's business relationship, that he interfered for an improper purpose or used improper means and that, as a result, the plaintiff was injured beyond just the fact of the interference itself. Straube v. Larson, 287 Or. 357, 361, 600 P.2d 371 (1979); see also Top Service v. Allstate, 283 Or. 201, 582 P.2d 1365 (1978).

The plaintiff's complaint states the necessary elements. He alleges that he had a reasonable expectancy of entering into a valid business relationship with Fackrell; that the defendant and Pullen had knowledge of this developing relationship; that they intentionally interfered with it by instituting the fraud action maliciously and without probable cause; and that, as a result, the relationship was destroyed and plaintiff was prevented from perfecting his rights to Ogden Farms. The trial court should not have sustained Pullen's demurrer to this count.

Count three alleges outrageous conduct. To state a claim for outrageous conduct, it must be alleged that the conduct was outrageous in the extreme and produced severe emotional distress. Davis v. Bostick, 282 Or. 667, 671, 580 P.2d 544 (1978); see also Turman v. Central Billing Bureau, 279 Or. 443, 568 P.2d 1382 (1977); Rockhill v. Pollard, 259 Or. 54, 485 P.2d 28 (1971); Pakos v. Clark, 253 Or. 113, 453 P.2d 682 (1969).

The plaintiff states the necessary allegations but,

"in order to meet the criteria for a cause of action for intentional infliction of emotional distress * * * the complaint must allege facts that, if proven, would show defendant's conduct was outrageous in the extreme." Graf v. Don Rasmussen Co., 39 Or.App. 311, 322, 592 P.2d 250, 256, rev. den. 286 Or. 521 (1979).

We conclude that the factual allegations in the plaintiff's complaint do not allege conduct which would support a cause of action for outrageous conduct. Without necessarily suggesting that it could never be so, we note that it would be a rare case in which the bringing of a lawsuit would fit the definition of outrageous conduct. This tort has been reserved for "intentional acts of a flagrant character under most unusual facts and circumstances * * *" Melton v. Allen, 282 Or. 731, 736, 580 P.2d 1019, 1022 (1978). The bringing of the lawsuit as alleged is not such a case. Pullen's demurrer was properly sustained as to this count.

Count four attempts to state a claim for slander of title. The necessary elements are:

"1. Uttering and publication of slanderous words by the defendant;

"2. Falsity of the words;

"3. Malice; and

"4. Special damages, (usually an allegation that the plaintiff had ready, willing and able buyers.)"

Shenefield v. Axtell, 274 Or. 279, 282-283, 545 P.2d 876, 877 (1976).

Assuming without deciding that plaintiff's amended complaint adequately alleges the first three elements of this cause of action, we hold that it does not adequately allege the fourth, viz., special damages. Plaintiff's allegations of damage are found in paragraph III and IV of Count 4:

"Said derogatory matter was maliciously published pursuant to a plan calculated to prevent third parties from dealing with plaintiff as regards said property.

" * * * (The damage to plaintiff) resulted from the loss of plaintiff's ability to deal with third parties to perfect his rights (to Ogden Farms) * * *".

While great precision is not required, a complaint for slander of title still must allege that some person or persons were prepared to purchase some part of plaintiff's interest in the property. Here, plaintiff's allegations concerning "third parties" are totally abstract; they do not posit the actual existence of anyone. Plaintiff has failed to adequately allege the fourth element of his cause of action for slander of title. See Shenefield v. Axtell, supra. The trial court properly sustained Pullen's demurrer to Count 4.

The judgment of the trial court with respect to Pullen is reversed as to Count 2 of plaintiff's complaint.

The next and all subsequent assignments of error by plaintiff deal with the dispute between plaintiff and defendant. Plaintiff assigns as error the trial court's order sustaining the defendant's motion for a directed verdict. The trial judge found that the claim of wrongful initiation of a civil suit was unsupported either by proof of special injury or by lack of probable cause to bring the prior lawsuit; that there was no evidence to support the claims of interference with a business relationship and slander of title; and that the outrageous conduct claim was not made out by the facts of this case. Plaintiff makes no argument concerning the slander of title and outrageous conduct counts. He argues that there was sufficient evidence to submit the other two counts to the jury.

We turn first to the count alleging wrongful initiation of a civil suit. The elements of this cause of action are set out at page 3, supra. The evidence in support of them is as follows:

1. There is no dispute that Troutman brought a prior lawsuit for fraud against Erlandson.

2. There is no dispute that the proceeding...