Marshall v. PricewaterhouseCoopers, LLP
| Docket Number | SC S069442 |
| Decision Date | 28 November 2023 |
| Parties | John M. MARSHALL and Karen M. Marshall, individuals; Patsy L. Marshall, an individual; Patsy L. Marshall,as Personal Representative of the Estate of Richard L. Marshall, Deceased; and Marshall Associated, LLC,an Oregon limited liability corporation, Respondents on Review, v. PRICEWATERHOUSECOOPERS, LLP, a limited liability partnership, Defendant, and SCHWABE WILLIAMSON & WYATT, P.C., an Oregon professional corporation, Petitioner on Review. |
| Court | Oregon Supreme Court |
1
371 Or. 536
John M. MARSHALL and Karen M. Marshall, individuals; Patsy L. Marshall, an individual; Patsy L. Marshall,as Personal Representative of the Estate of Richard L. Marshall, Deceased; and Marshall Associated, LLC,an Oregon limited liability corporation, Respondents on Review,
v.
PRICEWATERHOUSECOOPERS, LLP, a limited liability partnership, Defendant,
and SCHWABE WILLIAMSON & WYATT, P.C., an Oregon professional corporation, Petitioner on Review.
No. SC S069442
Supreme Court of Oregon
November 28, 2023
Argued and submitted November 29, 2022
On review from the Court of Appeals. [*] (CC 17CV11907) (CA A169635)
Janet M. Schroer, Hart Wagner, LLP, Portland, argued the cause and fled the briefs for petitioner on review. Also on the briefs was Matthew J. Kalmanson, Portland.
Scott F. Hessell, Sperling & Slater, P.C., Chicago, Illinois, argued the cause for respondents on review. John J. Dunbar, Dunbar Law LLC, Portland, fled the brief for respondents on review. Also on the brief was Scott F. Hessell, Chicago.
Kristen G. Williams, Williams Weyand Law, LLC, McMinnville, fled the brief for amicus curiae Oregon Trial Lawyers Association.
[371 Or. 537] Laura E. Coffn, Luvaas Cobb, Eugene, fled the brief for amicus curiae Professional Liability Fund.
Before Flynn, Chief Justice, and Duncan, Garrett, James and Masih, Justices, and Kistler and Walters, Senior Judges, Justices pro tempore. [**]
The decision of the Court of Appeals is reversed, and the case is remanded to the Court of Appeals for consideration of plaintiffs' second assignment of error.
James, J., dissented and fled an opinion. Masih, J., dissented and fled an opinion.
[371 Or. 538] FLY NN, C.J.
Under ORS 12.115(1), "[i]n no event shall any action for negligent injury to person or property of another be commenced more than 10 years from the date of the act or omission complained of." At issue in this case is whether that statute applies to actions in which the plaintiffs allege that their attorney negligently caused injury consisting solely of financial loss-here, the cost to plaintiffs of attempting to defend themselves against a claim for unpaid federal taxes and the anticipated cost of paying that tax liability. As we will explain, we conclude that the legislature intended the phrase "negligent injury to person or property" in ORS 12.115(1) to include negligence claims seeking to recover for the kind of injury to economic interests that plaintiffs have alleged.
BACKGROUND
In this action, which was filed in 2017, plaintiffs alleged that defendant law firm had negligently advised plaintiffs-in 2003-regarding potential tax ramifications of a proposed business transaction.[1] Plaintiffs also alleged that, as a result of that negligent advice, they had incurred over $2 million in legal fees defending an Internal Revenue Service claim for back taxes related to the transaction and that they expected to incur approximately $20 million in liability for back taxes, penalties, and interest. Defendant moved to dismiss plaintiffs' negligence claim, contending that the pleadings showed that the claim was time-barred under ORS 12.115(1). See ORCP 21 A(1)(i) (providing that a defendant may raise by motion a defense "that the pleading shows that the action has not been commenced within the time limited by statute").[2] The trial court granted defendant's motion and entered a limited judgment, from which plaintiffs appealed.[3]
The Court of Appeals reversed the limited judgment, concluding that the statutory phrase "negligent injury
[371 Or. 539] to person or property" does not encompass plaintiffs' claim because the injury alleged was for purely financial losses. Marshall v. PricewaterhouseCoopers, LLP, 316 Or.App. 416, 432, 441, 505 P.3d 40 (2021). We allowed review and now conclude that the trial court correctly concluded that ORS 12.115(1) applied to the type of claim alleged by plaintiffs. Accordingly, we reverse the decision of the Court of Appeals and remand for that court to address plaintiffs' remaining assignment of error.[4]
ANALYSIS
Defendant challenges the conclusion of the Court of Appeals that plaintiffs' claim for negligent legal representation is not subject to the time limitation imposed by ORS 12.115(1), a so-called statute of ultimate repose. As we have explained, statutes of repose are enacted by the legislature to supplement statutes of limitation. Statutes of limitation "limit the time a party has to initiate an action once a claim has accrued"-a concept that means that a statute of limitations "[g]enerally * * * does not begin to run until the injured party knows or should know that it has been injured." Shasta View Irrigation Dist. v. Amoco Chemicals, 329 Or. 151, 161, 986 P.2d 536 (1999) (internal quotation marks and brackets omitted; emphasis added). And statutes of repose supplement that somewhat unpredictable approach to the time that a party will have to initiate an action, by setting "maximum times to file a claim, regardless of the date of discovery of an injury or other circumstances that may affect the expiration of a statute of limitations." Id. at 162. We have described statutes of repose as reflecting "the public policy of allowing people, after the lapse of a reasonable time, to plan their affairs with a degree of certainty, free from the disruptive burden of protracted and unknown potential liability." Johnson v. Star Machinery Co., 270 Or. 694, 701, 530 P.2d 53 (1974).
The legislature enacted the statute of repose in ORS 12.115(1) in 1967. Or Laws 1967, ch 406, § 2. The new
[371 Or. 540] statute was a reaction to this court's 1966 decision in Berry v. Branner, 245 Or. 307, 421 P.2d 996 (1966), which held that a cause of action for medical malpractice involving a foreign object left in the body did not "accrue," for purposes of the statute of limitations in ORS 12.010 (1965), "until the patient knew or, in the exercise of reasonable care, should have known of the injury inflicted upon her." See Josephs v. Burns & Bear, 260 Or. 493,496-99,491 P.2d 203 (1971), abrogated on other grounds by Smothers v. Gresham Transfer, Inc., 332 Or. 83, 23 P.3d 333 (2001) (describing Berry v. Branner and history of ORS 12.115(1)). ORS 12.115(1), which has remained unchanged since being enacted in 1967, provides:
"In no event shall any action for negligent injury to person or property of another be commenced more than 10 years from the date of the act or omission complained of."
It is undisputed that plaintiffs' claim is based on conduct that occurred more than 10 years before plaintiffs commenced the present action. It also is undisputed that plaintiffs have alleged a negligence claim against defendants. Thus, the only aspect of ORS 12.115(1) that is in dispute before us is whether plaintiffs' allegations of solely financial loss describe the kind of "injury to person or property" to which that statute applies. We resolve the parties' dispute about the meaning of the statute by employing the analytical framework described in PGE v. Bureau of Labor and Industries, 317 Or. 606, 859 P.2d 1143 (1993), and modified in State v. Gaines, 346 Or. 160, 206 P.3d 1042 (2009). As with all questions of statutory construction, our "paramount goal" is to ascertain the intent of the legislature that enacted the disputed provision, and we determine that intent by examining the text, in context, as well as legislative history "where that legislative history appears useful to the court's analysis." Gaines, 346 Or at 171-72. The dispute here turns on what types of negligence claims the legislature intended to describe with the phrase "negligent injury to person or property" in ORS 12.115(1).
In considering what the legislature intended a statutory term to mean, it is helpful to understand how the term is used. When considering the meaning of terms of common usage, we ordinarily presume that the legislature intended
[371 Or. 541] be given their plain, natural, and ordinary meaning"). But if the context or legislative history of a statute indicate that the legislature intended a term to have a meaning "drawn from a specialized trade or field," so-called "terms of art," we consider "the meaning and usage of those terms in the discipline from which the legislature borrowed them." Comcast Corp. v. Dept. of Rev., 356 Or. 282, 296, 337 P.3d 768 (2014). When a term is drawn from the legal field, we often "look to its established legal meaning as revealed by, for starters at least, legal dictionaries." Id. (internal quotation marks omitted).
Here, both parties assert that the phrase "negligent injury to person or property" has an established meaning when used in the context of a legal action, and they presume that the legislature intended the phrase to have its established legal meaning. But they offer competing versions of what the legislature understood that phrase to mean as a legal "term of art." According to defendant, in 1967, "injury to person or property" was defined by contemporary legal dictionaries as referring to civil injuries, generally-including injury consisting of financial loss. Thus, defendant contends that the legislature intended the phrase "negligent injury to person or property" to reach negligence claims for injury consisting of financial loss. According to plaintiffs, however, Oregon case law gives the phrase "negligent injury to person or property" a more specialized meaning that encompasses "bodily injuries including their psychic consequences, and physical damage to existing tangible property, but not financial losses." (Emphases added.) They point to a concept that has developed in this court's case law to distinguish between the types of injury for which everyone ordinarily is liable in negligence and the type of injury for which liability depends on a "source of duty outside the common law of negligence." See Hale v. Groce, 304 Or. 281,...
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