Holman Transfer Co. v. Pacific Northwest Bell Telephone Co.

• Jurisdiction: Oregon
• Court: Oregon Supreme Court
• Writing for the Court: Before DENECKE; LENT
• Citation: Holman Transfer Co. v. Pacific Northwest Bell Telephone Co., 599 P.2d 1115, 287 Or. 387 (Or. 1979)
• Decision Date: 18 September 1979
• Parties: HOLMAN TRANSFER COMPANY, Respondent, v. PACIFIC NORTHWEST BELL TELEPHONE COMPANY, Appellant. TC A7601 01148; SC 25398.

Page 1115

599 P.2d 1115

287 Or. 387

HOLMAN TRANSFER COMPANY, Respondent, v. PACIFIC NORTHWEST BELL TELEPHONE COMPANY, Appellant.

TC A7601 01148; SC 25398.

Supreme Court of Oregon.

Argued and Submitted Feb. 6, 1979.

Decided Sept. 18, 1979.

[287 Or. 388-B] E. Joseph Dean, Portland, argued the cause and filed the briefs for appellant. With him on the briefs were Davies, Biggs, Strayer, Stoel & Boley, Portland.

Edwin J. Peterson, Portland, argued the cause for respondent. With him on the brief was Paul R. Duden and Tooze, Kerr, Peterson, Marshall & Shenker, Portland.

Before DENECKE, C. J., and HOLMAN, HOWELL, LENT and LINDE, JJ.

LENT, Justice.

This is an action arising out of alleged overcharges which defendant Pacific Northwest Bell Telephone Company ("Bell") collected from plaintiff, a commercial telephone service customer, over a period of more than six years. During that time plaintiff used a PBX switchboard system furnished by Bell. The disputed charges came to light in 1974 when plaintiff hired John Ball, a former Bell employee who had established his own consulting firm, to study its telephone system and the company's needs in order to help determine whether plaintiff should change to some other type of system.

During his study Mr. Ball discovered that plaintiff had been charged for various items of equipment which had not been installed. He also came to the conclusion that Bell had knowingly provided plaintiff with more trunk lines than were required to serve plaintiff's needs. He further concluded that Bell had installed one trunk line in such a way that it was of no use to plaintiff unless plaintiff's personnel knew it was there and had failed to inform plaintiff of its presence. Plaintiff filed this action to recover damages for what it claimed were overcharges for each of these items, and the jury found in its favor. ¹ The trial court entered judgment for treble damages and attorney fees pursuant to ORS 756.185. Bell appeals.

Bell does not dispute its liability for charges which were mistakenly billed for equipment which it had not provided. It does, however, contend that it is not liable for the charges it collected for what plaintiff contends were unnecessary trunk lines (the "overtrunking" claim) or for the trunk line of which plaintiff was unaware ("lost trunk" claim). As to all three categories of overcharge claims, Bell contends that in any event the trial court erred in awarding treble damages and attorney fees. It further argues that some of plaintiff's claims are barred by the statute of limitations and that the jury should not have been permitted to find that Bell was estopped to rely on the statute. Finally, Bell challenges the trial court's award of prejudgment interest on the amounts of the overcharges.

We will examine first those assignments of error which are of general application to the entire case, and then proceed to contentions involving only specific items.

Estoppel to rely on the statute of limitations

Bell alleged in its answer that portions of plaintiff's claim are barred by the three- year period of limitations provided in ORS 12.100(2) ², or alternatively, by the six-year period provided in ORS 12.080(1) ³. In reply, plaintiff alleged that Bell was estopped to rely on the statute of limitations because Bell had falsely represented to plaintiff both that Bell had provided plaintiff with all of the services for which it was charged and that plaintiff required more service than was actually needed. Plaintiff further alleged that Bell made those representations with knowledge that they were false, that plaintiff was ignorant of their falsity, that Bell intended that they be acted upon, and that plaintiff was induced to act upon them. Bell demurred to the reply upon the ground that these allegations did not constitute an avoidance of the statute of limitations defense but were instead an attempt to allege estoppel as an additional theory of recovery. As such, Bell argued, the estoppel should have been pleaded in the complaint. The trial court overruled the demurrer.

On appeal Bell has shifted its ground. In support of its demurrer Bell now argues only that the allegations in the reply were insufficient to raise an estoppel because the elements of estoppel were pleaded in conclusory terms and without sufficient particularity. Bell did not file a motion to make more definite and certain or otherwise raise this issue in the trial court. We do not, therefore, consider it here.

Bell also assigns as error what it calls the trial court's ruling that Bell was, in fact, estopped to rely on the statute of limitations. Although the jury found estoppel in answer to special interrogatories, Bell contends, citing ORS 16.460(2), ⁴ that because estoppel is an equitable defense the issue should have been decided by the court, that the jury's finding was therefore advisory only, and that we should review the evidence on this issue de novo as we are required to do in equity cases. ORS 19.125(3). ⁵

Bell's position is not correct. Although the concept of estoppel is equitable in origin, it may be relied upon in an action at law without the interposition of a court of equity. In Sink v. Raptor, 220 Or. 601, 349 P.2d 1104 (1960) the defendant relied upon an estoppel pleaded in the answer. Over defendant's objection that he was entitled to a jury trial on this issue, the trial court required him to proceed to trial before the court alone, sitting in equity. We reversed and remanded, saying:

"It cannot be seriously contended that the defendant's answer did allege facts that 'required' the interposition of a court of equity as required by ORS 16.460. 'The estoppel claimed is an estoppel in pais, sometimes called an estoppel by conduct, or an equitable estoppel, which, of course, is as fully available in law as in equity. Bigelow on Estoppel (6 Ed.) p. 604.' State v. Claypool (1934), 145 Or. 615, 620, 28 P.2d 882, 884. Comer v World Insurance Co., 1957, 212 Or. 105, 121, 318 P.2d 916." 220 Or. at 603, 349 P.2d at 1105-1106.

It was, therefore, proper for the trial court to submit the issue to the jury if there was any evidence to support a finding of estoppel. In the trial court Bell did not object to submission of the issues on that ground, so there is no ruling on the sufficiency of the evidence before us for review. Because the jury found, with respect to each alleged overcharge, that Bell was estopped to rely on the statute of limitations, we need not consider the question of which statute would be applicable.

Applicability of statutory provision for treble damages

ORS 756.185 provides:

"(1) Any public utility * * * which does, or causes or permits to be done, any matter, act or thing prohibited by ORS chapter 756, 757, 758, 760, 761, 763, 764, 767 or 773 or omits to do any act, matter or thing required to be done by such statutes, is liable to the person injured thereby in treble the amount of damages sustained in consequence of such violation together with a reasonable counsel's or attorney fees, to be fixed by the court in every case of recovery. Such attorney fees shall be taxed and collected as part of the costs in the case."

Pursuant to this statute, the trial court awarded plaintiff treble the amount of the overcharges which the jury found it was entitled to recover, and included attorney fees in the judgment as part of the costs.

Bell contends that the statute does not apply in this case because none of the overcharges, or of Bell's actions upon which the claims were based, constituted the violation of any of the statutes listed in ORS 756.185(1). We will consider that contention later in this opinion in connection with our examination of each of the three categories of overcharge which is at issue. Bell also contends, however, that the statute does not apply in this case for two additional reasons.

It first argues that treble damages cannot be recovered because Bell's conduct was not shown to be "wilful, wanton, or malicious." In other words, Bell argues, something more than simple negligence must be shown. Plaintiff contends that the statute does not require such a showing. Certainly the statutory language itself requires only a showing that the public utility has violated a regulatory statute and that the violation has resulted in injury. Defendant argues, however, that the treble damage provision is clearly punitive and that a statute providing for a penalty should be construed as including a Mens rea requirement unless it is very clear that the legislature intended that none be required.

In their briefs both parties discuss our cases involving the timber trespass statutes, but those cases are not particularly helpful with respect to the issue of statutory construction which is now before us. Those statutes by their own terms provide for treble damages for certain "wilful" acts, ORS 105.810, and for double damages for otherwise similar acts which are "casual or involuntary," or done with "probable cause" to believe they were not trespassory. ORS 105.815. In Kinzua Lbr. Co. v. Daggett, 203 Or. 585, 281 P.2d 221 (1955) we held that ORS 105.810, the double damage statute, did not provide for a penalty but merely for a form of liquidated compensatory damages which could, unlike a penalty, be awarded by a court of equity. In Ashcraft v. Saunders, 251 Or. 139, 444 P.2d 924 (1968), we held that ORS 105.815, the triple damage statute, was penal in character and that liability thereunder could not be enforced against the estate of a deceased wrongdoer. See also, Gordon Creek Tree Farms v. Layne, 230 Or. 204, 237, 358 P.2d 1062, 368 P.2d 737 (1962).

The issue now before us is not whether to characterize ORS 756.185(1) as penal or compensatory but whether, regardless of its proper characterization for other purposes, the legislature intended that it be applicable only when the violation was, in Bell's words, "wilful, wanton, or malicious." The legislature may, and...