Larsen v. Credit Bureau, Inc. of Georgia

• Decision Date: 13 September 1977
• Citation: 568 P.2d 657,279 Or. 405
• Parties: Robert C. LARSEN and Joyce Larsen, husband and wife, Respondents, v. The CREDIT BUREAU, INC. OF GEORGIA, dba CBI Collections, Appellant, Standard Oil Company of California, Western Operation, Inc., dba Standard Oil of California, Defendant.
• Court: Oregon Supreme Court

Page 657

568 P.2d 657

279 Or. 405

Robert C. LARSEN and Joyce Larsen, husband and wife, Respondents, v. The CREDIT BUREAU, INC. OF GEORGIA, dba CBI Collections, Appellant Standard Oil Company of California, Western Operation, Inc. dba Standard Oil of California, Defendant.

Supreme Court of Oregon, Department 1.

Argued and Submitted July 6, 1977.

Decided Sept. 13, 1977.

Graham M. Hicks, Portland, argued the cause for appellant. With him on the briefs were Frederic A. Yerke, and Miller, Anderson, Nash, Yerke & Wiener, Portland.

Roger L. Hill, Tigard, argued the cause and filed a brief for respondents.

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

HOWELL, Justice.

Plaintiffs filed this action against the defendants alleging an abuse of process. The defendant credit bureau (CBI) appeals from a judgment based on a jury verdict awarding both general and punitive damages. Defendant Standard Oil Company was granted an involuntary nonsuit and is not involved in this appeal.

The facts are not generally disputed.

Plaintiff Robert Larsen owed $512.88 to Standard Oil for credit purchases. In July, 1972, Standard Oil, finding itself unable to collect the account, assigned it to CBI, which filed an action in district court to collect the debt. Larsen was served but did not appear. However, before a default judgment was entered, Larsen and CBI's agent began negotiations for a settlement. Larsen and the agent discussed a settlement for $400. The agent gave Larsen until November 22, 1974, to pay the $400. On November 21, Mrs. Larsen mailed CBI a check for $350 with a note that if it was not accepted by CBI the check would be sent to Standard Oil. CBI rejected the check and advised Larsen that it intended to secure a default judgment. When Larsen then told CBI he was going to send the check to Standard Oil, he was advised that any payment should be made to CBI and not to Standard Oil. However, Larsen did send the check to Standard Oil with a notation on the check that it constituted payment in full. The check was processed by Standard Oil, but apparently neither Standard Oil's collection department nor CBI was notified of its receipt. In December, 1974, a default judgment was entered against Larsen for $512.88, and an execution and garnishment was issued. The garnishment resulted in the collection of $186.42 from Larsen's bank account. Larsen then notified CBI of the $350 payment to Standard Oil, and, when CBI confirmed that payment with Standard Oil, the garnisheed funds were returned to Larsen and the judgment satisfied.

Defendant CBI's primary contention on appeal is that the trial court erred in denying its motions for a summary judgment and a directed verdict against plaintiff. We agree, and we reverse.

Abuse of process is "the perversion of legal procedure to accomplish an ulterior purpose when the procedure is commenced in proper form and with probable cause." Kelly v. McBarron, 258 Or. 149, 154, 482 P.2d 187, 190 (1971). Dean Prosser has...