Jensen v. Duboff

• Decision Date: 15 November 2012
• Docket Number: A144883.,090607833
• Citation: 291 P.3d 738,253 Or.App. 517
• Parties: Jens J. JENSEN, an individual, Plaintiff–Appellant, v. Leonard D. DUBOFF; and Duboff Law Group, LLC, an Oregon limited liability company, Defendants–Respondents, and W. Frank Elsasser and Levin and Stein, Defendants.
• Court: Oregon Court of Appeals

253 Or.App. 517

291 P.3d 738

Jens J. JENSEN, an individual, Plaintiff–Appellant,

v. Leonard D. DUBOFF; and Duboff Law Group, LLC, an Oregon limited liability company, Defendants–Respondents,andW. Frank Elsasser and Levin and Stein, Defendants.

090607833; A144883.

Court of Appeals of Oregon.

Argued and Submitted Nov. 8, 2011.

Decided Nov. 15, 2012.

Roger Hennagin argued the cause and filed the briefs for appellant.

Laurie R. Hager argued the cause for respondents. With her on the brief were Nena Cook, Elizabeth A. Semler, and Sussman Shank LLP.

Before ARMSTRONG, Presiding Judge, and HASELTON, Chief Judge, and DUNCAN, Judge.

DUNCAN, J.

Plaintiff Jens Jensen appeals the trial court's judgment dismissing his second amended complaint with prejudice.¹ Because we conclude that the court abused its discretion when it dismissed plaintiff's second amended complaint with prejudice without considering the content of his proposed third amended complaint, we reverse and remand.

This case stems from a business deal that took place in late 2004 and early 2005, in which plaintiff, who owned a sole proprietorship at the time, partnered with another individual to form a new corporation. Plaintiff alleges that Frank Elsasser of Levin and Stein committed legal malpractice in the course of representing him in that deal. One of plaintiff's key allegations against Elsasser and Levin and Stein is that Elsasser failed to review an asset list that was revised by either plaintiff's business partner or the partner's attorney before the closing date of the deal. According to plaintiff, the revised asset list injured him by adding assets to the new corporation from plaintiff's sole proprietorship that plaintiff had not intended to contribute and by eliminating liabilities that the new corporation was supposed to assume from plaintiff's sole proprietorship. In September 2005, plaintiff retained Leonard DuBoff of the DuBoff Law Group (DLG) to represent him in litigation relating to the business deal, including a potential malpractice action against Elsasser. Plaintiff now alleges that DuBoff and DLG committed malpractice by failing to file the malpractice action against Elsasser before the statute of limitations expired.

In 2009, plaintiff retained Paul Rundle to represent him in actions against Elsasser, Levin and Stein, DuBoff, and DLG. Rundle filed a complaint in Washington County that he voluntarily dismissed. He then filed a similar complaint in Multnomah County on June 8, 2009, alleging negligence and malpractice against Elsasser and DuBoff.² He filed an amended complaint on June 17, before withdrawing as plaintiff's attorney.

On September 15, 2009, defendants filed motions to dismiss, to strike, and to make more definite and certain under ORCP 21 A. (8), 21 D, and 21 E. Plaintiff hired Susanne Feigum to assist in preparing a response to those motions, which he filed pro se on October 6. After a hearing on October 22, at which plaintiff represented himself, the court denied without prejudice defendants' motion to dismiss; granted defendants' motions to strike; and granted defendants' motions to make more definite and certain, with leave to replead by November 5.

Plaintiff hired Roger Hennagin to draft a second amended complaint. After Hennagin filed the complaint on November 5, 2009, plaintiff retained Hennagin as counsel. On November 20, defendants filed a motion to dismiss the second amended complaint for failure to state a claim, pursuant to ORCP 21 A(8). Plaintiff filed his response to defendants' motion to dismiss on December 14 and sought to file a third amended complaint on December 23, attaching the proposed complaint. Plaintiff also filed a motion to expedite the hearing on his motion to amend, so that it would be heard at the same time as defendants' motion to dismiss, but the judge on the expedited motions docket denied that motion.

On January 5, 2010, the court held a hearing and granted defendants' motion to dismiss the second amended complaint with prejudice, “in light of the history of the case and the ample opportunity for the plaintiff to attempt to allege cognizable claims[.]” The order was entered on January 20. Although defense counsel insisted that the merits of the proposed third amended complaint were not at issue at the January 5 hearing because plaintiff's motion to expedite had been denied, defense counsel periodically referred to the substance of the proposed third amended complaint during that hearing. After the court granted defendants' motion to dismiss, Hennagin made a record of the contents of the proposed third amended complaint and explained how it would cure the defects of the second amended complaint. The court denied plaintiff's motion to file a third amended complaint on February 17.

On appeal, plaintiff assigns error to the trial court's dismissal with prejudice of his second amended complaint. We review a court's decision to dismiss a case with prejudice for abuse of discretion. Dean v. Guard Publishing Co., 73 Or.App. 656, 660, 699 P.2d 1158 (1985). Under that standard, we affirm the trial court's ruling unless it is not within the range of lawful alternatives. Gilbert v. Stancorp Financial Group Inc., 233 Or.App. 57, 61, 225 P.3d 71 (2009), rev. den.,348 Or. 218, 230 P.3d 20 (2010). In reviewing a trial court's judgment of dismissal pursuant to ORCP 21 A(8), we assume the truth of all factual allegations in a plaintiff's complaint and all reasonable inferences that may be drawn from it. Anderson v. Evergreen International Airlines Inc., 131 Or.App. 726, 728 n. 1, 886 P.2d 1068 (1994), rev. den.,320 Or. 749, 891 P.2d 659 (1995).

A trial court has discretion to dismiss a case with prejudice, but “judicial discretion is always to be exercised in furtherance of justice.” Speciale v. Tektronix, 38 Or.App. 441, 445, 590 P.2d 734 (1979). In Speciale, the trial court sustained the defendant's demurrer to the plaintiff's complaint for failure to state a claim and denied the plaintiff an opportunity to replead. On the plaintiff's appeal, we explained that, “[i]n order to assess the trial court's exercise of discretion, we must examine the procedural moves prior to the trial court's judgment for defendant.” Id. at 444, 590 P.2d 734. Applying that principle, we held that the trial court properly sustained the demurrer but abused its discretion in denying plaintiff at least one opportunity to replead after it held that the complaint did not state a claim. Id. at 444, 446, 590 P.2d 734.

Here, the dismissal of the second amended complaint with prejudice also effectively denied plaintiff's pending motion for leave to file a third amended complaint. Therefore, it is appropriate for us to consider the proper standard for reviewing a trial court's decision whether to grant a motion to amend a pleading. ORCP 23 A provides that “leave [to amend] shall be freely given when justice so requires,” and we review a court's decision to grant or deny leave to amend for abuse of discretion. Safeport, Inc. v. Equipment Roundup & Mfg., 184 Or.App. 690, 698, 60 P.3d 1076 (2002), rev. den.,335 Or. 255, 66 P.3d 1025 (2003).

Ramsey v. Thompson, 162 Or.App. 139, 143, 986 P.2d 54 (1999), rev. den.,329 Or. 589, 994 P.2d 130 (2000), describes how a trial court should exercise its discretion when deciding whether to grant leave to amend a pleading. In Ramsey, the defendant moved to strike certain allegations in the petitioner's first amended petition for post-conviction relief on October 31, 1997, approximately five weeks before the scheduled trial. On November 18, 17 days before the trial date, the petitioner responded to the motion to strike and, in so doing, moved for leave to file a second amended petition that would address the defendant's objections to the first amended petition. Id. The trial court granted the defendant's motion to strike, denied the petitioner's motion for leave to amend, and subsequently entered judgment against the balance of the petitioner's allegations. Id. at 144, 986 P.2d 54.

On appeal, the petitioner argued that the trial court had abused its discretion in denying him leave to amend his petition. We agreed, noting that, “while the trial court has ‘broad discretion’ with respect to amendment of post-conviction pleadings, the exercise of that discretion should comport with ORCP 23 A's directive that leave to amend ‘shall be freely given when justice so requires.’ ” Id. (quoting Temple v. Zenon, 124 Or.App. 388, 390, 862 P.2d 585 (1993)). Analyzing prior cases, we extracted four considerations that bear on a trial court's appropriate exercise of discretion when determining whether to grant or deny a motion to amend: “(1) the nature of the proposed amendments and their relationship to the existing pleadings; (2) the prejudice, if any, to the opposing party; (3) the timing of the proposed amendments and related docketing concerns; and (4) the colorable merit of the proposed amendments.” Id. at 145, 986 P.2d 54.

Applying those considerations to the facts in Ramsey, we held that the trial court had “exceeded the bounds of reasonable discretion” for the following reasons. Id. at 147, 986 P.2d 54. First, the proposed amendments “were not the product of some unilateral effort by petitioner to interject entirely new claims into the litigation. Rather, the amendments were proffered in direct response to defendant's motion to strike.” Id. Second, the defendant identified no prejudice he would suffer if the amendments were allowed, aside from the “generic assertion” that, because the defendant had not believed that certain of petitioner's claims were viable, he had not expended resources preparing a defense to those claims. Id. Third, the proposed amendments were requested 17 days before trial, and there was no indication that they would have necessitated a set-over, much less one that would have materially affected the trial court's docket management. Id at 148, 986 P.2d 54. Fourth, although the...