Lee v. Mitchell

• Decision Date: 21 January 1998
• Citation: 953 P.2d 414,152 Or.App. 159
• Court: Oregon Court of Appeals
• Parties: Darrell E. LEE and Vicki Lee, Appellants, v. Woodrow MITCHELL, John Doe # 1, John Doe # 2 and M. Bonnett, Defendants, and The Partnership Miller, Nash, Wiener, Hager & Carlsen, John Neupert, William Walters, Dave Brown, Brian Burton, J. Austin, H.E. "Gene" Ferryman and Brian Ferryman, Respondents. 9508-05546; CA A92786.

Page 414

953 P.2d 414

152 Or.App. 159

Darrell E. LEE and Vicki Lee, Appellants, v. Woodrow MITCHELL, John Doe # 1, John Doe # 2 and M. Bonnett Defendants and The Partnership Miller, Nash, Wiener, Hager & Carlsen, John Neupert, William Walters, Dave Brown, Brian Burton, J. Austin, H.E. "Gene" Ferryman and Brian Ferryman, Respondents.

9508-05546; CA A92786.

Court of Appeals of Oregon.

Submitted on Record and Briefs

July 23, 1997.

Decided Jan. 21, 1998.

[152 Or.App. 161-B] Darrell E. Lee and Vicki B. Lee filed the briefs pro sese.

Marjorie A. Speirs, Janet M. Schroer and Hoffman, Hart & Wagner, Portland, filed the brief for respondents Miller, Nash, Wiener, Hager & Carlsen, John Neupert, William Walters, Dave Brown, J. Austin, and M. Bonnett.

Darleen Darnall, John F. McGrory, Jr. and Davis Wright Tremaine, Portland, filed the brief for respondents H.E. "Gene" Ferryman and Brian Ferryman.

[152 Or.App. 161-C] Before WARREN, P.J., and EDMONDS and ARMSTRONG, JJ.

[152 Or.App. 162-C] WARREN, Presiding Judge.

This case arises from disputes between the owners of The New Portland Meadows ("TNPM"), an Oregon corporation that operates a race course in Portland, over the control and operation of the corporation and its business. Plaintiffs jointly own 50 percent of the shares of TNPM, ¹ while defendant H.E. "Gene" Ferryman (Gene) owns the other 50 percent. Defendant Brian Ferryman (Brian) is Gene's son. The other defendants involved in this appeal ("the attorneys") are a law firm and several lawyers who represented TNPM during the disputes. ²

This case comes to us from the trial court's grant of ORCP 21 A motions against plaintiffs' pleadings. It first granted Gene's motions under ORCP 21 A(3) (another action pending) to dismiss several of plaintiffs' claims in their amended complaint as to him. Thereafter, it granted a number of motions under ORCP 21 A(8) (failure to state a claim) by Brian and the attorney defendants against various claims in the third amended complaint. When plaintiffs failed to plead further, the court entered a judgment under ORCP 67 B dismissing all of their claims against defendants with prejudice. ³ Plaintiffs appeal; we affirm in part and reverse in part.

We will describe the facts in connection with our discussions of the various assignments of error, taking them from the relevant complaints and the material supporting the motions under ORCP 21 A(3). The underlying factual situation is the breakdown in the relationship between the owners of TNPM, as one result of which Gene and Brian became the sole directors of the corporation, Gene became the president, and plaintiffs lost both control and participation in the corporate business. ⁴

In their first assignment of error, plaintiffs assert that the trial court erred in granting Gene's motions to dismiss a number of claims from the amended complaint under ORCP 21 A(3). ⁵ In support of his motions, Gene relied on the trial court's ORCP 67 B judgment in the Multnomah County case of Ferryman v. The New Portland Meadows and Lee, aff'd. without opinion 145 Or.App. 603, 930 P.2d 902 (1997), ⁶ and on plaintiffs' fourth amended complaint in the Clark County, Washington, case of Lee and Lee v. Ferryman, No. 93 2 01095 1. Those documents contain the only information in the record about those cases.

ORCP 21 A(3) authorizes the court to dismiss a claim for relief when "there is another action pending between the same parties for the same cause[.]" The rule replaces the previous plea in abatement on the same ground. See Smith v. Morris, 112 Or.App. 217, 218, 827 P.2d 1370 (1992). The parties may present evidence outside the pleadings in support of or opposition to a motion under the rule. We review the trial court's actions for errors of law, first discussing the parties' arguments about the law and then considering the specific claims in issue. ⁷

The purpose of a plea in abatement for another action pending was to prevent the defendant from being harassed by the pendency "at the same time of two actions based on the same cause of action, at the instance of the same plaintiff, who has a complete remedy by one of them[.]" 1 CJS 49, Abatement and Revival § 16. The Supreme Court has identified as the essential requirement for abatement on that ground that there be " '[i]dentity of parties, causes of action, issues, and relief[.]' " Mursener v. Forte et al., 186 Or. 253, 274, 205 P.2d 568 (1949) (emphasis deleted; quoting 1 CJS 62, Abatement and Revival § 39). ⁸ Those statements continue to explain the purpose for ORCP 21 A(3).

Plaintiffs argue both that the requirements for a plea in abatement continue to control an ORCP 21 A(3) motion and that, under those requirements, the claims at issue in this case are not the same as those involved in the other cases. ⁹ In doing so they insist that "cause of action," as the Supreme Court used the term in Mursener, continues to have its traditional meaning, without regard to more recent cases that have greatly expanded that concept for the purposes of claim preclusion. See Peterson v. Temple, 323 Or. 322, 330-32, 918 P.2d 413 (1996) (describing former and current meanings of the term). Gene argues, in contrast, that ORCP 21 A(3) is unrelated to the former plea in abatement and that the court should focus on the broader, more recent, criteria for defining a claim for relief in deciding whether there is another action pending in this case.

We have previously treated a decision on a plea in abatement as good law on the same issue under ORCP 21 A(3). Smith, 112 Or.App. at 218, 827 P.2d 1370 (applying the rule established in Owen J. Jones & Son, Inc. v. Gospodinovic, 46 Or.App. 101, 610 P.2d 1238 (1980)). We see nothing in the text, context, or history of the rule to suggest that the legislature intended it to have a different meaning from the plea that it replaced. We therefore agree with plaintiff to that extent. On the other hand, there has always been a close connection between abatement for another action pending and the claim preclusion doctrines of merger and bar, and that connection supports using the same definition of "cause of action" or "claim for relief" in both contexts.

The purposes of claim preclusion are to provide finality to the conclusion of a dispute and to prevent splitting a single dispute into separate controversies. Drews v. EBI Companies, 310 Or. 134, 141, 795 P.2d 531 (1990). It prevents requiring a party to litigate the same claim twice on the merits, either as a plaintiff or a defendant. Ladd v. General Insurance Co., 236 Or. 260, 265, 387 P.2d 572 (1963); see also Ditton v. Bowerman, 117 Or.App. 483, 486, 844 P.2d 919 (1992), rev. den. 316 Or. 527, 854 P.2d 939 (1993). Claim preclusion thus comes into play after the entry of a judgment in the first case. In contrast, dismissal under ORCP 21 A(3) is available before judgment in the first case, if that judgment would have a preclusive effect on the second case.

The purposes of claim preclusion and dismissal for another action pending are thus similar, and determining whether either applies involves similar considerations. ¹⁰ The differences in the application of the two concepts arise primarily from when the concepts operate on the second claim, something that generally does not affect determining what constitutes a claim. For these reasons, we hold that "cause of action" in the older abatement cases should be understood as having undergone the same change in meaning that the term has experienced in the more recent claim preclusion cases. There is no reason to give a single phrase different meanings in similar contexts.

The heart of the change in claim preclusion principles over the last twenty years, beginning with Dean v. Exotic Veneers, Inc., 271 Or. 188, 531 P.2d 266 (1975), is to shift the focus from the traditional concept of a "cause of action" that generally derived from the common law forms of action to the broader concept of a "claim for relief" that derives from more modern procedural rules. Under current cases, the focus is on the transaction at issue in the plaintiff's claim, with claim preclusion applying to all claims against the defendant that were available to the plaintiff arising from that transaction, whether or not the plaintiff actually asserted them. Rennie v. Freeway Transport, 294 Or. 319, 324, 656 P.2d 919 (1982). A "transaction," for claim preclusion purposes, is a group of facts that entitles the plaintiff to relief, with its precise boundaries determined pragmatically in the particular case, emphasizing considerations of practical trial convenience. Dean, 271 Or. at 192-94, 531 P.2d 266.

One additional consideration is relevant to this case. There are no compulsory counterclaims in Oregon, Buck v. Mueller, 221 Or. 271, 277, 351 P.2d 61 (1960), and as a result claim preclusion does not apply when the plaintiff in the second case failed, as a defendant in the first case, to raise the claim. Burlington Northern v. Lester, 48 Or.App. 579, 583, 617 P.2d 906 (1980). That rule has two exceptions: (1) if the first case necessarily adjudicated the claim that the plaintiff pleads in the second case, that claim is precluded, Gwynn v. Wilhelm, 226 Or. 606, 610, 360 P.2d 312 (1961), and (2) if the plaintiff in the second case actually asserted a counterclaim or otherwise sought affirmative relief as a defendant in the first case, claim preclusion applies in the same way that it would to a plaintiff filing a claim. Perkins v. Conradi, 151 Or.App. 585, 950 P.2d 380 (1997); Conner v. Delon Oldsmobile Co., 66 Or.App. 394, 397-98, 674 P.2d 1180 (1984).

These rules concerning claim preclusion apply to determining whether plaintiffs' claims in this case are subject to dismissal under ORCP 21 A(3) on the ground that plaintiffs should have asserted them in another pending action. If entry of a judgment ¹¹ in the other pending actions would preclude plaintiffs from asserting any claims in this case, the court should...