Hamilton v. Silven

• Decision Date: 23 December 2011
• Docket Number: Case No.: 09-cv-01094-SU
• Court: U.S. District Court — District of Oregon
• Parties: ALLEN HAMILTON and LOIS HAMILTON, Plaintiffs, v. SILVEN, SCHMEITS & VAUGHAN, P.C. and ALAN J. SCHMEITS, Defendants.

ALLEN HAMILTON and LOIS HAMILTON, Plaintiffs,

v.SILVEN, SCHMEITS & VAUGHAN, P.C. and ALAN J. SCHMEITS, Defendants.

Case No.: 09-cv-01094-SU

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON PORTLAND DIVISION

Dated: December 23, 2011

OPINION AND ORDER ADOPTING

FINDINGS AND RECOMMENDATIONS

SIMON, District Judge,

On October 19, 2011, Magistrate Judge Patricia Sullivan issued findings and recommendations ("F&R"), Dkt. #64, in the above captioned case and referred them to this court.Dkt. #65.Judge Sullivan recommended that the court deny in part and grant in part Defendants' motion for summary judgment, Dkt. #30.

Under the Federal Magistrates Act, the court may "accept, reject or modify, in whole or in part, the findings or recommendations made by the magistrate."Federal Magistrates Act, 28 U.S.C. § 636(b)(1).If a party files objections to a magistrate's findings and recommendations, "the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made."Id.;Fed. R. Civ. P. 72(b)(3).

For those portions of an F&R to which neither party has objected, the Magistrates Act does not prescribe any standard of review: "There is no indication that Congress, in enacting [the Magistrates Act], intended to require a district judge to review a magistrate's report[.]"Thomas v. Arn, 474 U.S. 140, 152(1985);see alsoUnited States, v. Reyna-Tapia, 328 F.3d 1114, 1121(9th Cir.)(en banc),cert. denied, 540 U.S. 900(2003)(the court must review de novo magistrate's findings and recommendations if objection is made, "but not otherwise").Although in the absence of objections no review is required, the Magistrates Act"does not preclude further review by the district judge[]sua sponte . . . under a de novo or any other standard."Thomas, 474 U.S. at 154.Indeed, the Advisory Committee Notes to Fed. R. Civ. P. 72(b) recommend that "[w]hen no timely objection is filed,"the court review the magistrate's findings and recommendations for "clear error on the face of the record."

Plaintiffs Allen and Lois Hamilton("Plaintiffs") and DefendantsSilven, Schmeits & Vaughan, P.C. and Alan J. Schmeits("Defendants") each filed objections to portions of Judge Sullivan's F&R.Dkt. #66-68.The court has reviewed de novo the portions of Judge Sullivan's F&R to which the parties object.As discussed below, the court finds that Judge Sullivan correctly evaluated the facts and law.The court has reviewed the remaining portions of the F&R for clear error; no error is apparent.Accordingly, the court adopts Judge Sullivan's F&R.

DISCUSSION

A.Background

Edward and Patricia Elms("the Elmses") owned two parcels of adjacent property in Baker County, Oregon.On December 10, 1992, they sold the southern parcel to Joe and Lisa Emery("the Emerys").Dkt. #29-6.The Elmses continued to reside on the northern parcel.On May 4, 2001, the Emerys executed a deed-in-lieu-of-foreclosure in favor of American GeneralFinance, Inc.("American Finance").¹Eight months later, on January 14, 2002, Plaintiffs Allen and Lois Hamilton purchased the property from American Finance.The deed in each transaction described the property as:

Lot 1, 2, and the South 10 feet of Lot 3, Block 7, McCRARY'S ADDITION TO BAKER CITY, in Baker City, Country of Baker and State of Oregon; TOGETHER WITH those portions of the vacated alley to the West, and vacated Sixth Street to the East, EXCEPTING the Eastern 15 feet of said vacated Sixth Street, inurring thereto by reason of the vacation thereof under OrdinanceNos. 2740and2747 of the City of Baker.

Plaintiffs made the property their primary residence.Dkt. #49.

In 2006, a dispute arose between Plaintiffs and the Elmses, who still owned the adjacent property to the north.The Elmses contended that Plaintiffs had encroached approximately three feet onto their property.In August of that year, the Elmses filed suit for quiet title, ejectment, and trespass.Dkt. #29-2.In their complaint, filed in Baker County Circuit Court, the Elmses alleged that Plaintiffs had erected a fence and planted a garden on a three-foot strip ("fence line strip") on the southern portion of the Elmses' property.

Plaintiffs hired Defendants to defend the suit.Defendants filed an answer on Plaintiffs' behalf.In their answer, Plaintiffs raised eight affirmative defenses and counterclaims, disputing the Elmses' ownership of the fence line strip and claiming, in addition, an easement across a portion the Elmses' property ("Sixth St. access").Specifically, Plaintiffs asserted: (1) an easement by implication for the Sixth St. access; (2) ownership by estoppel for both the fence line strip and Sixth St. access; (3) easement by prescription for the Sixth St. access; (4) adverse possession for the fence line strip; (5) trespass for the Sixth Street access and damages caused by pesticide spraying; (6) trespass causing personal injury from the spraying of pesticide; (7)easement by ordinance for the Sixth St. access; and 8) fraud in the sale of the property.Dkt. #29-3.

The Elmses moved to dismiss and for summary judgment.The Baker County Circuit Court granted the Elmses' motions and entered judgment in favor of the Elmses.One and a half years later, Plaintiffs filed a complaint in Baker County Circuit Court claiming that Defendants' representation was professionally negligent.²Dkt. #1.Defendants removed to federal court on diversity jurisdiction, 28 USC § 1332(a).³Defendants moved for summary judgment.Dkt. ##30-31.

Under Oregon law, an "action for negligence by an attorney" requires the plaintiff to prove the same elements as in "typical actions for negligence": duty, breach of duty, causation, and damages.Harding v. Bell, 265 Or. 202, 204(1973)."To show causation in a legal malpractice action, a plaintiff must demonstrate that she would have obtained a more favorable result in the earlier action if the attorney had not been negligent."Jeffries v. Mills, 165 Or. App. 103, 122(2000);Harding, 265 Or. at 205("In pleading a legal malpractice action, the client must allege facts sufficient to show the existence of a valid cause of action or defense which, had it not been for the attorney's alleged negligence, would have brought about a judgment favorableto the client in the original action.").When "the 'more favorable result' depends on how a factfinder would have resolved the case but for the attorney's negligence, causation is a factual issue in the malpractice case."Jeffries, 165 Or. App. at 122.

In their motion for summary judgment, Defendants addressed only the causation element."Defendants will establish,"they argued, that "Plaintiffs[] lack sufficient evidence to prove their case.It necessarily follows that Plaintiffs cannot prove that, but for the alleged negligence of Defendants, a reasonable judge would have ruled differently . . . in the underlying case."Def.'sMot. Sum. J. 8-9.Following oral argument, Judge Sullivan issued an F&R recommending that the court grant in part and deny in part Defendants' motion.Judge Sullivan found that Defendants had successfully shown that Plaintiffs failed to raise a genuine issue for trial with respect to the counterclaims contending that Plaintiffs had acquired title to the fence line strip and the Sixth St. access (the first, second, third, fourth, seventh, and eight counterclaims.)Judge Sullivan also found, however, that Plaintiffs had adduced sufficient evidence of causation with respect to the counterclaims asserting damages resulting from trespass (the fifth and sixth counterclaims).

Both Plaintiffs and Defendants filed objections to Judge Sullivan's F&R.Dkt. #s 66-68.Plaintiffs object to Judge Sullivan's recommendation that the court grant in part the motion for summary judgment; Defendants object to her recommendation that the court deny in part the motion for summary judgment.On de novo review on those portions of Judge Sullivan's opinion to which the parties object, the court adopts Judge Sullivan's findings and recommendations.

B.Plaintiffs' Objections

1.Boundary by estoppel / fraud

Plaintiffs object to Judge Sullivan's findings that the underlying counterclaims for ownership by estoppel and fraud were meritless.Plaintiffs state that "the claim that was initially drafted as 'fraud' is subsumed in the 'boundary by estoppel' claim."Pl.'s Obj.at 3.The court agrees and addresses the boundary by estoppel and fraud claims together.

The doctrine of boundary by estoppel provides that where "a seller represents a particular line to be the boundary between the property that he is selling and the property that he is retaining and he induces a buyer to buy up to the purported boundary, the seller is estopped from later denying the accuracy of his representation of the boundary."Neff v. Sandtrax, Inc., 243 Or. App. 485, 491(2011).Judge Sullivan found that Plaintiffs had no claim for boundary by estoppel with respect to the fence line strip on two bases: First, because the "Elms were not the sellers" to Plaintiffs and second, because the "Elms never made any representation to [P]laintiffs during the purchase of the Property."F&R 29.

Plaintiffs object to both of Judge Sullivan's bases.They first contend that "boundary by estoppel applies" even though Plaintiffs did not purchase the property "directly from the Elms."Pl.'sObj. 6.Citing to Neff, 243 Or. at 494, they argue that the doctrine of boundary by estoppel applies to successive purchasers of the property: "American Finance was a successor in interest to Elms (Elms sold to Emery, who conveyed to American Finance). . . .Thus, Elms's representations regarding the boundaries is [sic] binding on American Finance."Pl.'sObj. 6.In other words, Plaintiffs appear to contend that the Emerys had a valid claim for boundary by estoppel against the Elmses and because Plaintiffs are "successor[s] in interest" to the Emerys, they may assert that claim.

The court d...