Espinosa v. Southern Pac. Transp. Co.

• Decision Date: 05 May 1981
• Docket Number: M,No. A7705-06426,No. 40,40,A7705-06426
• Parties: John ESPINOSA, Personal Representative of the Estate of Christina Marie Espinosa, Deceased, Respondent Cross-Respondent, Cross-Appellant, v. SOUTHERN PACIFIC TRANSPORTATION COMPANY, a Delaware Corporation, Respondent Cross-Appellant, and School DistrictcMinnville, Appellant Cross-Respondent. ; CA 12346. . *
• Court: Oregon Court of Appeals

Page 162

624 P.2d 162

50 Or.App. 561

John ESPINOSA, Personal Representative of the Estate of Christina Marie Espinosa, Deceased, Respondent Cross-Respondent, Cross-Appellant, v. SOUTHERN PACIFIC TRANSPORTATION COMPANY, a Delaware Corporation, Respondent Cross-Appellant and School District No. 40, McMinnville, Appellant Cross-Respondent.

No. A7705-06426; CA 12346.

Court of Appeals of Oregon, In Banc. ^*

Argued and Submitted June 11, 1980.

Resubmitted In Banc Feb. 12, 1981.

Decided Feb. 18, 1981.

Reconsideration Denied April 9, 1981.

Review Allowed May 5, 1981.

William H. Morrison, Portland, argued the cause for appellant cross-respondent. On the briefs were G. Kenneth Shiroishi and Morrison, Dunn, Cohen, Miller & Carney, Portland.

James H. Clarke, Portland, argued the cause for respondent cross-appellant. With him on the briefs were Laurence F. Janssen and Spears, Lubersky, Campbell & Bledsoe, Portland.

Raymond J. Conboy, Portland, argued the cause for respondent cross-respondent cross-appellant. With him on the briefs were Garry L. Kahn and Pozzi, Wilson, Atchison, Kahn & O'Leary, Portland.

The appeal filed by School Dist. No. 40, McMinnville, on October 23, 1978, was dismissed June 4, 1980.

BUTTLER, Judge.

This case requires us to examine for the first time the dollar limitations on tort liability of governmental agencies in ORS 30.270. Two related issues are presented. The first is whether the statutory dollar limitation is waived if it is not asserted before judgment. The second is whether the legislature intended that the ceiling on the amount of liability be held to be waived when a government exercises the authority contained in ORS 30.282 and purchases liability insurance in excess of the statutory limits. ¹

These questions are presented in the context of a wrongful death action which arose out of a collision between a school bus owned and operated by defendant School District No. 40, McMinnville (district) and a locomotive owned by defendant Southern Pacific Transportation Company (SP) on September 8, 1976. Plaintiff's decedent, his daughter, one of 44 passengers on the bus, was killed in the crash.

In August, 1978, plaintiff, as personal representative of the deceased and for the benefit of himself and his wife, brought this action, seeking damages in the amount of $500,000. The jury returned a verdict in favor of plaintiff and against both defendants in the amount of $302,139. The jury found SP to be 15 percent at fault and the district to be 85 percent at fault. The trial court entered a judgment against both defendants for the full amount of the verdict.

The district subsequently filed a motion to amend the judgment, raising for the first time the dollar limitation on governmental tort liability found in ORS 30.270(1)(b), and asked that the judgment against it be amended and reduced to $100,000 pursuant to that statute. The district was covered by a total of $1 million of insurance under three policies applicable to this accident. SP contended (1) that the district had waived the $100,000 limitation on liability by not asserting it before judgment and (2) that even if the limitation had been timely asserted, the purchase of insurance in excess of the $100,000 statutory limitation on liability had raised the ceiling on the district's liability to the extent of the coverage of its insurance policies. ²

The trial court ruled that the $100,000 limitation was jurisdictional and could not be waived by a failure to assert it before judgment or by the purchase of insurance. The court entered an amended judgment, awarding damages of $100,000 against the district and $302,139 against SP.

SP and plaintiff appeal, assigning as error the amendment of the judgment. SP also assigns as errors the admission of certain evidence at the trial, contending that it is entitled to a new trial. SP's and plaintiff's assignments of error are raised on their cross-appeals. The district brought the initial appeal in this case, attacking certain of the trial court's evidentiary rulings, but that appeal has been dismissed on the district's motion. ³

The questions presented require us to set forth some of the recent history of governmental tort liability in this state.

In Vendrell v. School District No. 26C et al, 226 Or. 263, 360 P.2d 282 (1961), decided six years before the passage of the Tort Claims Act, Oregon Laws 1967, chapter 627, ORS 30.260 et seq, the Supreme Court discussed the effect of the purchase of liability insurance on sovereign immunity. Vendrell was an action brought by a student who was injured while participating in a school-sponsored football game. The complaint alleged that the school district had an insurance policy covering its liability, purchased pursuant to former ORS 332.180, which then provided:

"Any district school board may enter into contracts of insurance for liability covering all activities engaged in by the district, for medical and hospital benefits for students engaging in athletic contests and for public liability and property damage covering motor vehicles operated by the district, and may pay the necessary premiums thereon. Failure to procure such insurance shall in no case be construed as negligence or lack of diligence on the part of the district school board or the members thereof."

The court, after noting that if free to do so it would eliminate the doctrine of sovereign immunity as applied to school districts, concluded that its power to effect the law of tort immunity was limited by constitution and statute.

"Our Constitution is framed on the premise that the state is immune from suit and that if immunity is lifted it shall be done so by the action of the legislature. Article IV, § 24 provides as follows:

" 'Provision may be made by general law, for bringing suit against the State, as to all liabilities originating after, or existing at the time of the adoption of this Constitution; but no special act authorizeing (sic) such suit to be brought, or making compensation to any person claiming damages against the State, shall ever be passed.' "

" * * *

"To determine, then, that a school district in this state may incur tort liability we must find that a provision waiving sovereign immunity has been 'made by general law.' " (Emphasis supplied.) 226 Or. at 278-9, 360 P.2d 282.

Vendrell held that in enacting former ORS 332.180, the legislature had intended to lift the immunity of school districts "to the extent that insurance is actually provided." 226 Or. at 282, 360 P.2d 282. That holding was based on the language permitting the purchase of insurance "for liability covering all activities engaged in by the district," which was held to be a "general law" within the meaning of Article IV, section 24. Subsequently in Hale v. Smith, 254 Or. 300, 460 P.2d 351 (1969), and Elmore v. Aloha Sanitary Service, 256 Or. 267, 473 P.2d 130 (1970), which both arose before the Tort Claims Act, the Supreme Court made it clear that the purchase of insurance was not a waiver of statutory immunity unless there was some "general law" authorizing that purchase; i. e., only the legislature could waive immunity. ⁴

In 1967, the legislature passed the Tort Claims Act, Oregon Laws 1967, chapter 627, making governments generally liable for torts, with more or less specific exceptions. See ORS 30.265. ⁵ Conceptually the 1967 legislature's approach to governmental tort immunity was based on a policy decision totally different from that found to exist in Vendrell. See Dowers Farms v. Lake County, 288 Or. 669, 680, 607 P.2d 1361 (1980). The act also provided for a $50,000 ceiling on liability to any one claimant and a $300,000 ceiling for any number of claims arising out of a single incident. ⁶ ORS 30.270, the relevant statute here, was amended in 1975 ⁷ and now provides in pertinent part:

"(1) Liability of any public body or its officers, employes or agents acting within the scope of their employment or duties on claims within the scope of ORS 30.260 to 30.300 shall not exceed :

"(a) $50,000 to any claimant for any number of claims for damage to or destruction of property, including consequential damages, arising out of a single accident or occurrence.

"(b) $100,000 to any claimant for all other claims arising out of a single accident or occurrence.

"(c) $300,000 for any number of claims arising out of a single accident or occurrence." (Emphasis supplied.)

The $100,000 limit found in section (1)(b) above was in effect when this cause of action arose.

Former ORS 30.280, which was a part of the original 1967 Act, ⁸ provided for the purchase of insurance as follows:

"(1) The governing body of any public body may procure insurance against liability of the public body and its officers, employes and agents.

"(2) Such insurance may include coverage for the claims specified in subsection (2) of ORS 30.265. ( ^8a ) The procurement of such insurance shall not be deemed a waiver of immunity.

"(3) If the public body has authority to levy taxes, it may include in its levy an amount to pay the premium costs for such insurance." (Emphasis supplied.)

This provision was repealed in 1975, ⁹ and ORS 30.282 was enacted:

"The governing body of any local public body may procure insurance against liability of the public body and its officers, employes and agents acting within the scope of their employment or duties, or may establish a self-insurance fund against such liability of the public body and its officers, employes and agents and if the public body has authority to levy taxes, it may include in its levy an amount sufficient to establish and maintain such a fund on an actuarially sound basis. ¹⁰

Against this historical background, we examine first the question whether the district waived the dollar limitation on liability by not asserting it prior to judgment. We hold that it did not. Because sovereign immunity enjoys constitutional status in Oregon, Vendrell v. School Dist. No. 26C et...