Praegitzer Industries, Inc. v. Rollins Burdick Hunter of Oregon, Inc.

JurisdictionOregon
PartiesPRAEGITZER INDUSTRIES, INC., an Oregon corporation, Appellant, v. ROLLINS BURDICK HUNTER OF OREGON, INC., an Oregon corporation, Respondent. A8905-02646; CA A74255. . *
Citation880 P.2d 479,129 Or.App. 628
CourtOregon Court of Appeals
Decision Date24 August 1994

David L. Slader, Portland, argued the cause for appellant. With him on the briefs were Charles R. Markley and Greene & Markley, P.C.

Shand S. Stephens, San Francisco, CA, argued the cause for respondent. With him on the brief were John R. Faust, Jr., Mildred J. Carmack, Schwabe, Williamson & Wyatt, Portland, and Bronson, Bronson & McKinnon, San Francisco, CA.

LANDAU, Judge.

In this tort action, plaintiff asserts that defendant insurance broker failed to procure adequate fire insurance for plaintiff's manufacturing business. Following a judgment entered on a verdict for defendant, plaintiff appeals. We affirm.

Plaintiff is engaged in the business of manufacturing electronic circuit boards. Defendant, an insurance brokerage firm and a licensed insurance agent, served as plaintiff's insurance broker for a number of years. While acting in that capacity, defendant procured a business interruption policy for plaintiff. That policy was in effect when a fire substantially destroyed plaintiff's Dallas, Oregon, manufacturing plant, closing plaintiff's business for nearly a year.

Plaintiff filed this action against defendant in Polk County, alleging that it had suffered large uninsured losses because it had followed defendant's advice to purchase only $9 million in business interruption coverage. Plaintiff's complaint alleged multiple claims for relief, including common law negligence, negligence per se and statutory tort. On defendant's motion, the Polk County Circuit Court changed venue to Multnomah County, citing the convenience of the parties, the witnesses and the parties' attorneys, and the court's belief that because none of the Polk County judges would hear the case, transfer "would be more convenient from a judicial administration point of view."

Defendant then moved to dismiss plaintiff's negligence and statutory tort claims on the ground that those claims relied on a statute, ORS 744.650, that did not apply to defendant. The trial court granted that motion, leaving intact plaintiff's common law negligence claims and several other claims that are not at issue on appeal.

In its answer to the remaining negligence claim, defendant alleged that plaintiff was contributorily negligent in failing to equip its plant with a fire suppression sprinkler system and in violating certain building code requirements (hereinafter "the sprinkler defense"). Plaintiff moved to strike those allegations from defendant's answer. The trial court denied that motion. It also denied several other motions brought by plaintiff regarding the sprinkler defense--a motion for partial summary judgment on that issue, a motion in limine to exclude evidence on that issue, and motion for a directed verdict on the same issue.

At the close of the trial, the jury was presented with a special verdict form that first asked, "Was defendant negligent, and, if so, was that negligence a cause of damage to plaintiff?" Because the jury answered "no" to that question, it never reached a later question regarding plaintiff's contributory negligence. Judgment was entered on that verdict.

In his first two assignments of error, plaintiff argues that the trial court erred in dismissing his negligence per se and statutory tort claims. Both claims were based on defendant's alleged violation of former ORS 744.650, which at the relevant time provided:

"(1) An insurance consultant shall furnish to each client and prospective client a written disclosure statement containing such information as the director requires by rule. The director shall require that at least the following information be included in a disclosure statement:

"(a) The applicable occupational and educational background of the insurance consultant.

" * * * * *

"(2) An insurance consultant shall disclose to each client information required by the director by rule in the course of providing insurance consultant services to the client and before the insurance consultant makes any final insurance recommendation to the client. The director shall require an insurance consultant to disclose at least the following information.

" * * * * *

"(c) Assumptions contributing to insurance recommendations for the client." 1

Plaintiff argues that defendant is an "insurance consultant" for purposes of ORS 744.650, that defendant failed to disclose its agent's occupational and educational background and the assumptions underlying its recommendations to plaintiff, that defendant therefore violated the statute, and that plaintiff was damaged by defendant's violation. Plaintiff further argues that ORS 744.650 is the kind of statute that can support both statutory tort and negligence per se claims. Defendant responds that it is not subject to the disclosure requirement of ORS 744.650.

Whether a complaint was properly dismissed for failure to state a claim is a question of law; we treat the facts alleged in the complaint as true. Hansen v. Anderson, 113 Or.App. 216, 218, 831 P.2d 717 (1992). We begin, then, by briefly reviewing the law regarding statutory tort and negligence per se claims.

In general, an individual has no private remedy for a statutory violation unless the statute expressly provides one. In some cases, a statute may define the standard of care expected of a reasonably prudent person under the circumstances, and a violation of that statute establishes a rebuttable presumption of negligence. Barnum v. Williams, 264 Or. 71, 74-79, 504 P.2d 122 (1972). A plaintiff may proceed on such a negligence per se theory when the statute violated "so fixes the legal standard of conduct that there is no question of due care left for a factfinder to determine." Shahtout v. Emco Garbage Co., 298 Or. 598, 601, 695 P.2d 897 (1985). In other cases, a statute may impliedly create a separate claim, and violation of the statute is itself a "statutory tort." Such an implied private right of action will be inferred only if the plaintiff is able to show

"that [the] statute grants him, as a member of the class the statute is designed to protect, the right to recover damages if noncompliance with the statute results in harm of the kind the statute was designed to prevent." Dunlap v. Dickson, 307 Or. 175, 179, 765 P.2d 203 (1988).

In both cases, a violation of the relevant statute is an essential element.

Although plaintiff states in his complaint the legal conclusion that defendant violated ORS 744.650, we find no basis for reaching that conclusion under the facts as alleged. ORS 744.650 requires insurance consultants to provide a disclosure statement that includes "such information as the director [of the Department of Insurance and Finance] requires by rule," and to disclose additional "information required by the director by rule." Even assuming that defendant was an "insurance consultant" subject to the requirements of ORS 744.650, plaintiff's complaint does not allege the existence of any Department of Insurance and Finance rules requiring insurance consultants to make disclosures. In fact, no such rules existed at the time of defendant's purportedly tortious conduct. In the absence of such rules, ORS 744.650 could neither be enforced nor violated. See Megdal v. Board of Dental Examiners, 288 Or. 293, 305, 605 P.2d 273 (1980); Ortiz v. Adult & Family Services Division, 45 Or.App. 925, 609 P.2d 1309 (1980). Because plaintiff has not shown that defendant has violated ORS 744.650, his statutory tort and negligence per se claims were properly dismissed.

Plaintiff next assigns as error the trial court's decision to grant defendant's motion to change venue from Polk County to Multnomah County. Plaintiff contends that venue in Multnomah County was no more convenient to the witnesses and parties, and that other reasons cited in the trial court's order--specifically, the convenience of the lawyers and the courts--were not proper reasons under the statute governing change of venue.

We review a ruling granting or denying a venue motion only for abuse of discretion. State ex rel. Stephens v. Londer, 311 Or. 385, 388, 811 P.2d 1375 (1991); Walti v. Willamette Industries, Inc., 86 Or.App. 479, 483, 739 P.2d 611 (1987). Under ORS 14.110(1)(c), the convenience of the parties and witnesses is a proper reason for changing venue. After...

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    ...has no private remedy for a statutory violation unless the statute expressly provides one." Praegitzer Indus., Inc. v. Rollins Burdick Hunter of Oregon, Inc., 880 P.2d 479, 481 (Or. App. 1994). If a statute does not expressly provide a remedy, however, a statute still may permit liability w......
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