Michael v. Pugel

• Decision Date: 05 January 2022
• Docket Number: A173482
• Citation: 316 Or.App. 786,504 P.3d 1231
• Parties: Deanna MICHAEL, Plaintiff-Appellant, v. Rochelle PUGEL, Defendant, and Michael Kurz and Kurz Construction, LLC, an Oregon domestic limited liability company, Defendants-Respondents.
• Court: Oregon Court of Appeals

316 Or.App. 786

504 P.3d 1231

Deanna MICHAEL, Plaintiff-Appellant,

v.Rochelle PUGEL, Defendant,andMichael Kurz and Kurz Construction, LLC, an Oregon domestic limited liability company, Defendants-Respondents.

A173482

Court of Appeals of Oregon.

Argued and submitted August 31, 2021.

January 5, 2022

Kevin T. Lafky, Salem, argued the cause for appellant. Also on the briefs were Christopher M. Edison and Lafky & Lafky.

Thomas M. Christ argued the cause for respondent Michael Kurz. Also on the brief was Sussman Shank LLP.

William D. Brandt argued the cause and filed the brief for respondent Kurz Construction, LLC.

Before Tookey, Presiding Judge, and Aoyagi, Judge, and Armstrong, Senior Judge.

ARMSTRONG, S. J.

Plaintiff appeals an order denying her motion under ORCP 71 B(1)(a)¹ for relief from a stipulated general judgment dismissing her tort claims with prejudice. We conclude that the trial court erred in denying the motion and reverse.

Plaintiff brought tort claims against her employer, defendant Kurz Construction, LLC; the company's owner, defendant Michael Kurz; and Kurz's girlfriend, defendant Rochelle Pugel, for personal injuries that plaintiff sustained in an altercation with Pugel. The trial court dismissed the claims under ORCP 21 for failure to state a claim but allowed plaintiff to replead.

During the period to replead, plaintiff settled her claims against Pugel. Pugel's counsel drafted a judgment of dismissal for the court's signature. The judgment was captioned "STIPULATED GENERAL JUDGMENT OF DISMISSAL. " (Uppercase and boldface type in original.) The judgment stated:

"Based upon the stipulation of the parties endorsed below, and it appearing to the court that this matter has been fully compromised and settled, it is hereby ORDERED that a judgment of dismissal be entered with prejudice and without costs to the parties."

Plaintiff's counsel inadvertently signed the document and allowed it to be filed, not realizing that it also dismissed plaintiff's claims against the Kurz defendants, with whom plaintiff had not settled. The court entered the judgment. Then, within the period allowed by the trial court to replead, plaintiff filed an amended complaint naming only defendants Kurz and Kurz Construction, LLC. The court rejected the filing because it had already entered the stipulated general judgment dismissing the action.

Less than a week after entry of the erroneous stipulated judgment, plaintiff moved under ORCP 71 to set the judgment aside. Accompanying her motion, plaintiff filed a declaration of counsel asserting that "[d]ismissal of this matter was the result of inadvertent error as to the Judgment entered October 18, 2019." Plaintiff submitted a draft order for the court's signature, which the court signed before becoming aware that defendants Kurz and Kurz Construction, LLC, opposed the motion.

When defendants made known their objection, the court set the matter for oral argument. At the hearing, defendant Kurz's counsel did not dispute that the stipulated general judgment had been signed by mistake but, citing the Supreme Court's opinion in McCarthy v. Oregon Freeze Dry, Inc ., 334 Or. 77, 46 P.3d 721 (2002) ( McCarthy III ) (2002), contended that an attorney's error cannot provide a basis for relief from a judgment.²

Plaintiff responded that the judgment was a "clerical mistake,"³ "not what anyone intended," and that the error was not the type of mistake that falls within the "general rule" described in McCarthy that professional mistakes, negligence, or inadvertence of an attorney do not constitute the "mistakes, inadvertence, surprise, or inexcusable neglect" that provide a basis to set aside a judgment.

Id . at 82, 46 P.3d 721.⁴ Plaintiff's counsel told the court that it had authority to grant relief based on mistake, inadvertence, surprise, or excusable neglect.

The court found that the signing of the general judgment "was clearly a mistake" and that the judgment "was intended to be a limited judgment of dismissal." The court speculated that counsel might not have proofread the judgment or caught the document's caption—"Stipulated General Judgment of Dismissal."⁵

There does not appear to be a serious dispute as to the facts or challenge to the trial court's findings. The record would certainly allow an inference that, as the trial court surmised, plaintiff's counsel did not proofread the document before signing it and inadvertently—that is, unintentionally—allowing it to be filed.⁶

The trial court then wondered aloud whether " ORCP 71 allow[s] me to set aside the general judgment of dismissal," focusing specifically on the question whether a lawyer's mistake can provide a cognizable basis for relief. Stating that the Supreme Court's opinion in McCarthy was "right on the money," the court concluded that the general judgment of dismissal should not have been vacated. The court did not explain what aspect of McCarthy the court believed to be controlling, but it is likely that the court was in agreement with defense counsel's contention that an attorney's mistake generally cannot provide a basis for relief under ORCP 71 B. In any event, as we understand the court's reasoning, although the court recognized the existence of a mistake, the court determined that it was not a mistake for which relief could be granted. The court vacated its order setting aside the general judgment and issued an order denying plaintiff's motion.

On appeal, plaintiff contends that the trial court's belief that McCarthy was controlling was incorrect. Plaintiff contends that an attorney's professional mistake can be a basis for relief under ORCP 71 B, and that counsel's inadvertence or mistake in signing and allowing entry of the stipulated judgment of dismissal is distinguishable from "the typical default-type cases or situations associated with a motion to set aside." Plaintiff reminds us that courts liberally construe ORCP 71 B(1)(a) so as to avoid depriving a party of its day in court. Wagar v. Prudential Ins. Co ., 276 Or. 827, 833, 556 P.2d 658 (1976).⁷ Plaintiff asserts that she has presented "facts and evidence" demonstrating a "reasonable excuse" for why relief is appropriate under ORCP 71 B based on "mistake."

Defendants respond that an attorney's error is not generally a basis for relief under ORCP 71 B, citing our opinion in McCarthy v. Oregon Freeze Dry, Inc. , 158 Or. App. 654, 658, 976 P.2d 566 (1999). Defendants contend, further, that the record here does not support the limited circumstances under which relief might be available for an attorney's errors, noting that plaintiff has not offered any explanation or "reasonable excuse" for the attorney's error in signing the document.

As the court explained in Union Lumber Co. v. Miller , 360 Or. 767, 778, 388 P.3d 327 (2017), the question whether a party has stated a cognizable basis for relief under ORCP 71 B is a legal question that we review for legal error. Id. at 769, 388 P.3d 327. The first question raised by the trial court's ruling is whether an attorney's mistake or inadvertence can provide a basis for relief under ORCP 71 B. Clearly, it can. See McCarthy , 334 Or. at 90, 46 P.3d 721 (rejecting this court's conclusion that an attorney's error can never provide a basis for relief from a judgment); Newbern v. Gas-Ice Corporation , 263 Or. 250, 254, 501 P.2d 1294 (1972) (relief from judgment granted when, on advice of counsel, plaintiff failed to contest motion for judgment on the pleadings); McFarlane v. McFarlane , 45 Or. 360, 363, 77 P. 837 (1904) (relief granted when defendant's attorney specially appeared to challenge jurisdiction but did not file an answer); see also Union Lumber Co. , 360 Or. at 777, 388 P.3d 327 (noting case law involving attorney error in which relief has been granted). Indeed, ORCP 71 B(1)(a) so states: "On motion and upon such terms as are just, the court may relieve a party or such party's legal representative from a judgment for the following reasons: (a) mistake, inadvertence[.]" (Emphasis added.) We therefore conclude that the trial court's rejection of plaintiff's motion for the reason that an attorney's mistake or inadvertence cannot provide a basis for relief under ORCP 71 B(1)(a) was error.

We turn to defendants’ contention that the attorney's mistake or inadvertence in this case did not present a cognizable basis for relief. Viewing the undisputed facts, as we must, in the light most favorable to plaintiff, Union Lumber Co. , 360 Or. at 769, 388 P.3d 327 ("On review of an order denying a motion to set aside a judgment, we set out the undisputed facts in the light most favorable to the moving party."); Terlyuk v. Krasnogorov , 237 Or. App. 546, 553, 240 P.3d 740 (2010), rev. den. , 349 Or. 603, 249 P.3d 124 (2011) (so stating), we conclude that the record supports only the finding that plaintiff's counsel's mistake was that he did not notice that the judgment drafted by Pugel's counsel was not a limited judgment dismissing only plaintiff's claim against Pugel but a general judgment dismissing plaintiff's claims against all defendants. It was, in short, inadvertence. See Government Emp. Ins. Co. v. Herring , 257 Or. 201, 206, 477 P.2d 903 (1970) (citing the definition of "inadvertence" from Webster's Third New Int'l Dictionary 1139 (1963) as "lack of heedfulness; oversight or mistake"). Inadvertence is a type of error for which a court can provide a remedy under ORCP 71 B(1)(a).

Defendants nonetheless assert that inadvertence in and of itself is not a cognizable basis for relief under ORCP 71 B(1)(a) and that, under our caselaw, plaintiff was required and failed to establish a reasonable excuse for her lawyer's inadvertence. Defendants’ argument would be correct if the judgment in this case were of the sort that typically becomes subject to a motion for relief under ORCP 71 B(1)(a)—viz ., one which the party was lawfully entitled to have the court enter as a consequence of a default or some analogous procedural failing or...