Goodyear Tire & Rubber Co. v. Tualatin Tire & Auto, Inc.

• Decision Date: 29 December 1995
• Citation: 322 Or. 406,908 P.2d 300
• Parties: The GOODYEAR TIRE & RUBBER COMPANY, an Ohio corporation, Respondent on Review, v. TUALATIN TIRE & AUTO, INC., an Oregon corporation, Petitioner on Review. CC C89-0099CV; CA A73536; SC S41806.
• Court: Oregon Supreme Court

Page 300

908 P.2d 300

322 Or. 406

The GOODYEAR TIRE & RUBBER COMPANY, an Ohio corporation Respondent on Review, v. TUALATIN TIRE & AUTO, INC., an Oregon corporation Petitioner on Review.

CC C89-0099CV; CA A73536; SC S41806.

Supreme Court of Oregon In Banc.

Argued and Submitted May 1, 1995.

Decided Dec. 29, 1995.

Mark E. Griffin, of Griffin & McCandlish, Portland, and Kim E. Hoyt, of Ferder, Brandt & Casebeer, Salem, argued the cause for petitioner on review. Mark E. Griffin filed the petition.

William H. Walters, of Miller, Nash, Wiener, Hager & Carlsen, Portland, argued the cause for respondent on review. With him on the brief was Linda L. Marshall.

Gary M. Berne and David C. Rees, of Stoll Stoll Berne Lokting & Shlachter P.C., Portland, filed a brief for amicus curiae Oregon Trial Lawyers Association.

GILLETTE, Justice.

This is a civil case involving a number of disputes between a franchisor, Goodyear Tire & Rubber Company (Goodyear), and a franchisee, Tualatin Tire & Auto, Inc. (Tualatin). We allowed review to determine two A detailed recital of the facts surrounding each of the numerous claims between Goodyear and Tualatin is not necessary to our review. It suffices to say that the litigation below was the result of a franchise relationship gone sour. Goodyear brought an action against Tualatin to evict Tualatin from Goodyear's franchise store and to recover sums due under the lease and on an open account. Tualatin counterclaimed for breach of contract, common law fraud, and violations of the California Franchise Investment Law (CFIL), ² the Oregon Franchise Act (OFA), ³ and the Oregon Unfair Trade Practices Act (UTPA). ⁴ Some of the claims were resolved on motions for summary judgment or directed verdict. The remaining claims--including Goodyear's claims for common law fraud, CFIL violations, and OFA violations--were tried to a jury.

                important issues of civil procedure.  The first is whether the "we can't tell" rule, described by this court in Whinston v. Kaiser Foundation Hospital, 309 Or. 350, 356-61, 788 P.2d 428 (1990), and Pavlik v. Albertson's, Inc., 253 Or. 370, 454 P.2d 852 (1969), 1 may, consistent with ORCP 63, be applied to require that there be a new trial in a case in which there was no motion for a new trial in the trial court.  The Court of Appeals held that the rule could be applied, even in the absence of a motion for a new trial.  Goodyear Tire & Rubber Co. v. Tualatin Tire and Auto, 129 Or.App. 206, 213, 879 P.2d 193 (1994).  The second issue is whether a right to trial by jury exists in actions filed under the remedies provision of the Oregon Franchise Act (OFA).  ORS 650.020.  The Court of Appeals held that there is no right to trial by jury under that statute.  Id. at 216, 879 P.2d 193.   For the reasons that follow, we reverse both those holdings
                

The core theory of Tualatin's case was that Goodyear had engaged in 13 instances of misrepresentation, which formed the bases for Tualatin's common law fraud claim and its claims under the CFIL and OFA. At the close of all the evidence, Goodyear moved to withdraw from the jury's consideration six of the 13 allegations, arguing that Tualatin had failed to introduce sufficient evidence to support them. The trial court rejected that motion and sent all 13 allegations of misrepresentation to the jury. Goodyear also moved to require the court to determine liability under the OFA claim. It argued that, in the absence of an express grant by the legislature, Tualatin did not have the right to a jury trial on that claim and that the only remedy permitted by the OFA was an equitable remedy. The court also denied that motion.

After deliberation, the jury returned verdicts for both parties. Pertinent to the questions on review, the jury returned general verdicts for Tualatin on the CFIL claim ($74,000), the OFA claim ($112,000), and the common law fraud claim ($260,000). Goodyear then moved to compel Tualatin to elect a remedy. The trial court granted the motion, and Tualatin elected to recover under the common law fraud claim. ⁵ The trial court also awarded Tualatin attorney fees and costs pursuant to the remedies provision of the OFA. ORS 650.020(3). On entry of the judgment, Goodyear moved for a judgment notwithstanding the verdict, again asserting, inter alia, that the six alleged instances of misrepresentation should not have been submitted to the jury. The court also denied that motion.

On appeal to the Court of Appeals, Goodyear asserted 10 assignments of error. In its first six assignments, Goodyear argued that the trial court erred in not withdrawing each of the six "unsupported allegations" of misrepresentation from the jury's consideration. The Court of Appeals determined that the record failed as a matter of law to support four of the six allegations. ⁶ Because it could not tell whether the jury had relied on the deficient allegations in rendering the verdicts below, the Court of Appeals remanded each claim for a new trial. Goodyear Tire & Rubber Co., 129 Or.App. at 213-14, 879 P.2d 193. In its ninth assignment, Goodyear argued that the trial court had erred in submitting the OFA claim to the jury. The Court of Appeals held that, because the remedy provided under the OFA was "historically equitable in nature," Tualatin's OFA claim should be tried to the court on remand. Id. at 216, 879 P.2d 193. Goodyear's seventh, eighth, and tenth assignments were resolved by the Court of Appeals and are not before this court on review. ⁷ We now address each of the two issues on review.

I. IS GOODYEAR ENTITLED TO A NEW TRIAL?

The Court of Appeals relied on a longstanding practice of this court, dubbed the "we can't tell" rule in Whinston. Tualatin does not disagree with the rule but argues that, under ORCP 63 and 64, ⁸ the court may not grant a new trial-- the remedy ordered by the Court of Appeals--unless the party seeking a new trial also moves for that relief in the trial court. The record is clear that Goodyear did not move for a new trial after judgment was entered in the trial court; it moved only for judgment notwithstanding the verdict (j.n.o.v.). For reasons that follow, we agree with Tualatin.

The pivotal rule relating to this issue is ORCP 63 C, which provides:

"A motion in the alternative for a new trial may be joined with a motion for judgment (Emphasis added.)

notwithstanding the verdict, and unless so joined shall, in the event that a motion for judgment notwithstanding the verdict is filed, be deemed waived."

A party that has lost a jury trial and believes that the trial court may have committed one or more reversible errors with respect to the conduct of that trial has a variety of remedies available. If the party believes that the trial court has made a legal error to which the party timely objected, without which the other side would not be entitled to prevail at all, then the party may move for a judgment notwithstanding the verdict. If the trial court grants the motion, judgment will be entered for the party. If the trial court denies the motion, the moving party has the same clear issue for appeal.

But it may be that a party either is uncertain of its entitlement to a clear win, or asserts legal errors that, even if well taken, would justify only a new trial, rather than a judgment in its favor. In such circumstances, it may be prudent to join a motion for a new trial with a motion for a judgment notwithstanding the verdict. But that choice does not follow automatically. A party may, for example, be unwilling to undergo the expense of a retrial, even if it would be entitled to one. Under such circumstances, it could well instruct its counsel to place all its eggs in the single basket of a motion for a j.n.o.v.

The wording of ORCP 63 C is a recognition of the foregoing range of practical possibilities, and it would be difficult for a rule to be much clearer. The party that has lost the jury trial may join a motion for a j.n.o.v. with a motion for a new trial, but the rule imposes a price on the choice to file only the motion for a j.n.o.v.--the alternate remedy of a new trial no longer is available. We would nullify the policy choice represented by ORCP 63 C were we to permit the court-made "we can't tell" rule to override it. The reason for the "we can't tell" rule--judicial necessity--is inapplicable if the party that invokes that rule has waived the right to a new trial. Having chosen to hazard its fortune solely on its motion for a j.n.o.v., Goodyear waived any claim to a new trial. ORCP 63 C.

The only other argument that might be made for the disposition made by the Court of Appeals would arise under ORS 19.130(1), which states that a reviewing court in a civil appeal "may, if necessary and proper, order a new trial." However, such an order would not be "proper," as the statute uses that term, where a party has waived its right to such a remedy under ORCP 63 C. The contrary conclusion of the Court of Appeals was error. ⁹

At first blush, it might appear that our disposition of this first issue also necessarily disposes of the case. As noted, Tualatin had a jury verdict in its favor on three different claims. Tualatin then was required after trial to elect the theory under which it would recover. It chose the common law theory, which gave it the largest recovery. Nonetheless, Goodyear's appeal to the Court of Appeals necessarily challenged the verdict on all three claims; to do less would have involved conceding Tualatin's right to recover the amount assessed by the jury as to any unchallenged claim. Because all the claims were based on the same factual allegations, the Court of Appeals ordered a new trial on all three. And, because it had ordered a new trial as to all three, that court was required to rule whether the retrial of the OFA claim should be to the court or to a jury. As noted, it held that the issue should have been tried to the court.

Our ruling on the "we can't tell" issue...