Kirkpatrick v. U.S. Nat. Bank

• Decision Date: 10 November 1972
• Citation: 264 Or. 1,502 P.2d 579
• Parties: Ronald L. KIRKPATRICK and Eulah J. Kirkpatrick et ux., Respondents, v. UNITED STATES NATIONAL BANK of Oregon, guardian of the estate of Ernest Nolan Lotches, Appellant.
• Court: Oregon Supreme Court

Page 579

502 P.2d 579

264 Or. 1

Ronald L. KIRKPATRICK and Eulah J. Kirkpatrick et ux., Respondents, v. UNITED STATES NATIONAL BANK of Oregon, guardian of the estate of Ernest Nolan Lotches, Appellant.

Supreme Court of Oregon.

Argued and Submitted Sept. 8, 1972.

Decided Nov. 10, 1972.

Glenn D. Ramirez, Klamath Falls, argued the cause for appellant. With him on the brief were Ramirez & Hoots, Klamath Falls.

Alan M. Lee, Klamath Falls, argued the cause for respondents. With him on the brief were Smith & Lee, Klamath Falls.

Before O'CONNELL, C.J., and DENECKE, HOLMAN, TONGUE, HOWELL and BRYSON, JJ.

TONGUE, Justice.

This is an action against defendant, as guardian of the estate of Ernest Nolan Lotches, a minor, for property damage in the vandalizing of plaintiff's home in Klamath county.

After a trial before a jury a verdict and judgment was entered against defendant for $2,056.72 as general damages and $5,000 as punitive damages. Defendant appeals.

1. Contention that evidence insufficient.

Defendant contends that the evidence that Ernest Lotches was responsible for the damage to plaintiffs' house was insufficient. When Lotches was picked up by the police shortly after plaintiffs' house had been vandalized he was intoxicated and was covered with blood from cuts on his body. He said that he had been pushed through 'a window.' The bedroom window in plaintiffs' house was broken. His shoes were covered with a pink substance. Pink cake icing was found to be tracked into the bedroom of the house. His shoe tracks also matched tracks found outside the house.

In addition to the broken window, the front of a television set, a fireplace screen, and a bedroom mirror were broken and a sewing machine was damaged, among other things. There was cake and cake icing 'all over' and the floors, walls and ceilings had to be cleaned.

Lotches was 'advised of the charge,' after being informed of his constitutional rights. He then 'made no attempt to deny the charge' and admitted being in the house. He claimed, however, that he could not remember what he did in the house or who else (if anyone) was with him.

After examining the entire record, we hold that the evidence, including the circumstantial evidence and the inferences which the jury could reasonably have drawn from such evidence, was sufficient to sustain a finding by the jury in a civil action that Ernest Lotches either committed the acts of vandalism or was jointly responsible for the resulting damage.

2. Contention that punitive damages not payable from spendthrift trust.

Defendant contends that '(i)n the case of Kirk v. Kirk, 254 Or. 44, 456 P.2d 1009 (1969), it was held by this Court that the spendthrift trust provision (of the agreement) between the (United States) Department of Interior and the United States National Bank made the income and trust not subject to execution against the individual Indian and therefore these assets cannot be used for the purpose of assessing punitive damages.' Plaintiffs' response is that '(t)here was no evidence of Spendthrift trust property in this case * * *.'

If defendant had offered evidence to show that it was a trustee for this minor under the terms of a spendthrift trust, as well as the terms of that trust, the question might have been presented whether such trust funds can be held liable for any claim based on tort, whether for general damages or punitive damages. The few court decisions on this question hold that they cannot, but legal writers contend that provisions of a spendthrift trust which would prohibit recovery from trust funds for torts committed by the beneficiary are invalid as against public policy. See 2 Scott on Trusts (3d ed 1967) 1230, § 157.5, and Griswold, Spendthrift Trusts (2d ed 1947) 442, § 365. Cf. Restatement of Trusts 2d § 157.

In Kirk v. Kirk, Supra, plaintiffs sought to enforce payment of a tort judgment for general and punitive damages by the attachment of moneys payable to defendant under the terms of a spendthrift trust. This court, after considering the specific provisions of that trust, held (at pp. 45--46, 456 P.2d 1009) that spendthrift trusts have been held to be valid in Oregon and that although an exception has been recognized for the obligation of a beneficiary to pay alimony and child support, plaintiff's judgment in Kirk was not shown to be based upon such a claim, with the result that defendant's income from the trust was not subject to execution prior to its receipt by him.

It may be that there was also a trust in this case with spendthrift provisions substantially similar to those involved in Kirk and that, if so, our decision on that same question, if properly presented in this case, should be controlled by Kirk.

In this case, however, defendant did not offer in evidence the provisions of any spendthrift trust and this court cannot properly take judicial notice of any such provisions. In addition, it apppears that the trust fund involved was separate from the guardianship and that the moneys involved were those in the hands of the guardian after disbursement by the trustee. As a result, we cannot properly consider in this case the validity and effect of any such trust provisions.

3. Contention that punitive damages not allowable against guardian of minor.

Defendant also contends that punitive damages are not allowable against the guardian of a minor's estate when the minor is not made a party and no willfulness, malice or wrongful acts are charged to the guardian. Defendant says that it has found no authority on this question, but that '(t)he Oregon declared policy is that punitive damages are not favored and should not be extended past the point to which previous presidents (sic) commit the court.' ¹

ORS 126.311, adopted in 1961, provides:

'Claims against ward's estate. A guardian of the estate shall pay from the guardianship estate all just claims against the ward, the estate or the guardian as such, whether accruing before or after the appointment of the guardian and whether arising in contract or in tort or otherwise, as provided in ORS 126.316 to 126.331.'

Although this court has not previously passed on the question, we hold that in the absence of statutory provisions to the contrary, a 'just claim(s) against the ward * * * arising * * * in tort' may include a claim for both general and punitive damages. Under ORS 126.331(1)(b) such a claim, when established, 'shall be satisfied only from property of the ward.'

It has been held that a child who is too young to form an evil intention is not subject to punitive damages, but a minor who is 15 years of age, as in this case, is presumed to be capable of malice. See Annot., 67 A.L.R.2d 570, 575--576. See also McCormick on Damages 282, § 79. We have previously held that the legal justification for punitive damages is determent and that such damages will only be allowed when the violation of societal interests is sufficiently great and the conduct involved is of a kind that sanctions would tend to prevent. See Osborn v. Gene Teague Chevrolet Co., 254 Or. 486, 489--490, 459 P.2d 988 (1969); Dorn v. Wilmarth, 254 Or. 236, 239, 458 P.2d 942 (1969); Douglas v. Humble Oil & Refining Co., 251 Or. 310, 314--315, 445 P.2d 590 (1968); Sumrell v. Household Finance Corp., 250 Or. 381, 383, 443 P.2d 179 (1968); and Noe v. Kaiser Foundation Hospitals, 248 Or. 420, 425, 435 P.2d 306 (1967).

We hold that the vandalizing of a house by a minor who is old enough to know better, as in this case, falls within this rule.

4. Contention that claim as filed with guardian was defective.

Defendant also contends that the claim filed by plaintiffs with the defendant, as guardian, was defective in that it did not correspond with the complaint as filed in this case because it did not include a claim for punitive damages (but was limited to $2,056.72 in actual damages) and because it was signed and submitted by plaintiffs notwithstanding the fact that they had previously been paid for their actual damages by an insurance company and had subrogated their claim for such damages to it.

ORS 126.321 requires that claims submitted to a guardian must 'describe the nature and amount thereof, if ascertainable.' Punitive damages by their very nature, are not previously 'ascertainable' in amount for the purposes of filing such a claim. Plaintiffs' claim, however, did state the nature of the claim and that the damage was done 'with force and malice,' thus putting the guardian on notice that punitive damages might be claimed if the claim were rejected and plaintiffs elected to commence an action at law, rather than to file a 'like claim' in the guardianship proceedings, as provided by ORS 126.331. See also Annot., 25 A.L.R.3d 1356.

As for the fact that the claim was signed and submitted by plaintiffs, rather than by the insurance company, it appears that in that respect the claim corresponded with the complaint in this case, which was also filed in the name of plaintiffs Kirkpatrick, rather than by the insurance company. Whether the existence of the subrogation agreement rendered the claim defective is substantially the same as the question whether that agreement also rendered plaintiffs' complaint and cause of action in this case defective, as next discussed.

5. Contention that addition of insurance company as plaintiff precludes recovery.

The complaint in this case was filed by plaintiffs Kirkpatrick, owners of the vandalized house, as the named plaintiffs. At the beginning of the trial, and in discussions in chambers, reference was made to the existence of a subrogation agreement. It appears from the trust receipt that...