McCormick v. City of Portland
| Decision Date | 14 January 2004 |
| Citation | 82 P.3d 1043,191 Or. App. 383 |
| Parties | William C. McCORMICK and Jani McCormick, Plaintiffs, v. CITY OF PORTLAND, Defendant. George Spada and Marietta Spada, Appellants-Cross-Respondents, v. City of Portland, Respondent-Cross-Appellant, and William C. McCormick, Defendant. |
| Court | Oregon Court of Appeals |
Mark C. McClanahan, Portland, argued the cause for appellants-cross-respondents George Spada and Marietta Spada. With him on the briefs was Mark C. McClanahan, P.C.
Harry M. Auerbach, Senior Deputy City Attorney, argued the cause and filed the briefs for respondent-cross-appellant City of Portland.
Douglas G. Schaller and Michele C. Smith, Eugene, filed the brief amicus curiae for Oregon Trial Lawyers Association.
Before EDMONDS, Presiding Judge, and WOLLHEIM and SCHUMAN, Judges.
Plaintiffs George and Marietta Spada received a judgment of $62,173.44 against the City of Portland for damage to their property caused by a landslide and exacerbated, according to the jury, by the city's negligence and trespass. The trial court denied the city's motion to reduce the damages pursuant to ORS 30.270(1)(a), which imposes a $50,000 per-claimant cap on property damage awards against public bodies. On appeal, the Spadas assign error to the amount and form of the damage award, contending principally that they should receive compensation not only for the cost of repairing their property but also for its lost fair market value. On cross-appeal, the city assigns error to the trial court's ruling that the damage cap in ORS 30.270(1)(a) cannot constitutionally be applied against Spadas in this case. On the appeal, we modify the judgment and affirm as modified; on the cross-appeal, we affirm without reaching the constitutionality question.
The Spadas own an unimproved lot on Southwest Council Crest Drive in Portland next to a lot owned by the McCormicks. On February 9, 1996, in the aftermath of record rains, a landslide flowed over both properties. The McCormicks brought this action against the Spadas for property damage. The Spadas filed counterclaims against the McCormicks. They also filed cross-claims against the City of Portland for negligence, trespass, inverse condemnation, restitution, nuisance, and violation of federal civil rights. These claims were based on allegations that the city had failed to build and maintain curbs on the McCormick property, failed to enforce against the McCormicks various provisions of the Portland City Code pertaining to curb construction, failed adequately to construct and maintain sewage and storm water management pipes on plaintiffs' property, and negligently mismanaged the storm water drainage system in the Southwest Council Crest Drive vicinity.
The McCormicks dismissed their claims before trial, at which point the court realigned the parties, making the Spadas plaintiffs against the McCormicks and the city as defendants. Ms. McCormick was dismissed as a party because her husband was the sole owner of the property, thus establishing the case as it appeared in Multnomah County Circuit Court: George and Marietta Spada, plaintiffs, against the City of Portland (city) and William McCormick, defendants. In the course of the trial, the court granted summary judgment against plaintiffs on the inverse condemnation, nuisance, and civil rights claims and directed a verdict against plaintiffs on the restitution claim. The negligence and trespass claims went to the jury, which found in favor of plaintiffs, apportioning 63 percent of the fault to the city and 37 percent to McCormick. The trial court, finding no just reason for delay, directed entry of an ORCP 67 B judgment awarding plaintiffs a total of $98,688 in damages: $62,173.44 (63 percent) against the city and $36,514.56 (37 percent) against McCormick. The judgment did not refer to the summary judgment orders or directed verdict order against plaintiffs on their other claims; it resolved only the trespass and negligence claims. After the notice of appeal was filed, plaintiffs and McCormick settled; the city is the sole respondent on appeal and the sole appellant on cross-appeal.
Plaintiffs' appeal contains eight assignments of error and one cross-assignment of error. Four of the assignments and the cross-assignment challenge the trial court's various summary judgment and directed verdict orders adverse to plaintiffs. Those rulings have not been reduced to judgment and are not appealable. ORS 19.205; ORCP 70 A; City of Portland v. Carriage Inn, 296 Or. 191, 194, 673 P.2d 531 (1983) ("order" not appealable); Ensley v. Fitzwater, 293 Or. 158, 160, 645 P.2d 1062 (1982).1 The remaining assignments relate to the negligence and trespass claims and assert that the trial court should have awarded damages for loss in market value in addition to remediation costs, should have charged the city with all of the damages instead of a proportional share, should have awarded prejudgment interest, and should have awarded half the damages to each of the two plaintiffs. We agree with plaintiffs only as to the last assignment.
In their first assignment of error, plaintiffs take issue with the trial court's decision to limit their award to repair costs. According to plaintiffs, the trial court should have awarded both repair costs and loss of fair market value or, if not both, then only fair market value.2
Plaintiffs' argument stems from the following portion of the special verdict form submitted by the jury:
According to plaintiffs, those questions and answers demonstrate that the jury found that plaintiffs, at the time of trial, had already spent a significant amount of money to repair their property, but it remained worthless. Thus, they argue, to be restored to their pre-slide position, they need to recapture the out-of-pocket money already spent on repair and the full loss in market value.
Plaintiffs' theory has merit, however, only if the answer to question 10 refers to money that the plaintiffs had already spent at the time of trial and if the answers to questions 7 and 9 imply that the damage to property was permanent. In that case, we could infer that the jury found the property, once worth $175,000 (question 7), is and always will be worthless (question 9), despite expenses already incurred in a futile attempt to remedy the damage caused by defendants (question 10). If, however, the answer to question 10 refers to the total repair costs, past and future, necessary to restore the property to its pre-slide condition, then the answers to questions 7 and 9 do not mean that the property was destined to remain worthless forever, and plaintiffs' theory is untenable: at the conclusion of restoration funded by the money they receive for repair costs, they will have a lot worth $175,000 plus, as a windfall, the $175,000 they received for lost market value. The proper measure of damages for injury to property is that which will provide "just compensation without enrichment." Millers Mut. Fire Ins. Co. v. Wildish Const. Co., 306 Or. 102, 117, 758 P.2d 836 (1988). Unless the answers to questions 7, 9, and 10 mean that the jury found plaintiffs had already spent a large sum of money in a futile attempt to restore their property's market value, then an award of repair costs and lost market value would be unjust enrichment.
That is not, in fact, what the jury intended. Had question 10 been phrased, "What was the cost" of repairing the damages defendants caused, we could infer that the amount referred to past damages. The question, however, asks, "What is the cost," which more logically would produce an answer referring to total costs. Further, plaintiffs themselves confirm that the jury's answer to question 10—"$240,000"—is a finding of total expenditures, derived from an engineer's testimony estimating "what the rational purchaser-developer and rational engineer could anticipate that they might have to expend in order to build on the lot." (Emphasis in original.)
Nor do the jury's answers to questions 7 and 9 establish that the damage to plaintiffs' property was permanent. One witness, as noted above, testified that the damage could be repaired for $240,000. Another testified that whatever stigma attached to the property due to the slide would dissipate in the future. Thus, the jury's answers more logically signify that, with a total expenditure of $240,000, plaintiffs could restore the property to its pre-slide value, despite the fact that, at the time of trial, it could not be sold at all.
The parties apparently recognized that the jury's answers did not establish that the damages were permanent, as indicated by the following exchange:
(Emphasis added.) Pursuant to the stipulation, the trial court made the following finding:
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