Rains v. Stayton Builders Mart, Inc.

Citation264 Or.App. 636,336 P.3d 483
Decision Date13 August 2014
Docket NumberA145916.,06C21040
PartiesKevin RAINS and Mitzi Rains, Plaintiffs–Respondents, v. STAYTON BUILDERS MART, INC. ; John Doe Lumber Supplier; John Doe Lumber Mill; and Five Star Construction, Inc., Defendants. Stayton Builders Mart, Inc., Third–Party Plaintiff–Respondent, v. RSG Forest Products, Inc., et al., Third–Party Defendants, and Weyerhaeuser Company, Third–Party Defendant–Appellant. Weyerhaeuser Company, Fourth–Party Plaintiff, v. Rodriguez & Rains Construction, an Oregon corporation, Fourth–Party Defendant. Withers Lumber Company, Fourth–Party Plaintiff, v. Sellwood Lumber Co., Inc., an Oregon corporation; and Weyerhaeuser Company, Fourth–Party Defendants. Western International Forest Products, Inc., Fourth–Party Plaintiff, v. Benito Rodriguez, Kevin Rains, and Rodriguez & Rains Construction, Fourth–Party Defendants. Sell Wood Lumber Co., Inc., an Oregon corporation, Fifth–Party Plaintiff, v. Swanson Bros. Lumber Co., Inc., an Oregon corporation, Fifth–Party Defendant.
CourtCourt of Appeals of Oregon

Michael T. Stone, Hillboro, argued the cause and filed the briefs for appellant.

Maureen Leonard argued the cause for respondents Kevin and Mitzi Rains. With her on the brief were Brian Whitehead and J. Randolph Pickett.

Thomas W. Brown, Portland, argued the cause for respondent Stayton Builders Mart, Inc. With him on the brief were Nicholas E. Wheeler, Julie A. Smith, and Cosgrave Vergeer Kester LLP.

Before ORTEGA, Presiding Judge, and SERCOMBE, Judge, and HADLOCK, Judge.



Plaintiffs Kevin and Mitzi Rains filed an action against several parties seeking damages for injuries sustained by Kevin when a board on which he was standing broke, causing him to fall 16 feet to the ground. Kevin, who was working as a subcontractor on a construction project, sustained a thoracic T12 vertebrae burst fracture that resulted in paraplegia

. Kevin brought claims against a number of parties for negligence and strict products liability. Mitzi also brought a claim for loss of consortium. Eventually, after several rounds of third-party practice and a partial settlement agreement between plaintiffs and Stayton Builders Mart (the company that supplied the board to the job site), the case proceeded to trial on Kevin's strict products liability claim and Mitzi's loss of consortium claim against Stayton, and claims against Weyerhaeuser Company (the third-party defendant that had provided lumber to Stayton). The jury returned a verdict for plaintiffs, and the trial court determined that Stayton was entitled to indemnity from Weyerhaeuser. The trial court also awarded Stayton its defense costs from Weyerhaeuser. Weyerhaeuser appeals the judgments that resulted from the litigation.


The relevant background facts are undisputed and mostly procedural. Kevin originally brought his action for negligence and strict products liability against Five Star Construction, Inc.1 (the general contractor), Stayton, and the John Doe company that sold the defective board to Stayton. Mitzi filed a claim for loss of consortium against those same parties. Sometime later, Stayton filed a third-party complaint against Weyerhaeuser for common-law indemnity and contribution, alleging that Weyerhaeuser had provided the defective board to Stayton.2 Shortly before trial, plaintiffs entered into a partial settlement agreement with Stayton that dismissed plaintiffs' negligence claims against Stayton and limited Stayton's financial exposure on the strict products liability claim, but left Stayton in the litigation as a defendant.

The case proceeded to trial and the jury returned a verdict against Stayton and Weyerhaeuser. In addition, the jury applied the comparative fault statute, ORS 31.600(2), and designated Stayton 30 percent at fault, Weyerhaeuser 45 percent at fault, and Kevin 25 percent at fault. The jury awarded Kevin $5,237,700 in economic damages and $3,125,000 in noneconomic damages, and Mitzi $1,012,500 in noneconomic damages. After reducing the judgment to account for Kevin's comparative fault, the trial court entered a limited judgment for plaintiffs in the sum of $7,031,400.

In a subsequent hearing, the trial court ruled in favor of Stayton on its indemnity claim and entered a limited judgment for Stayton against Weyerhaeuser for $2,000,000. Later, the court entered a general judgment against Weyerhaeuser awarding Stayton its defense costs in the amount of $265,458.70. Weyerhaeuser appeals the limited judgments and the general judgment.

On appeal, Weyerhaeuser raises thirteen assignments of error. We reject three assignments—numbered eight, nine, and eleven—without discussion. The first four assignments relate to the partial settlement agreement between plaintiffs and Stayton. For the reasons explained below, we reject Weyerhaeuser's first and second assignments of error, and conclude that its third and fourth assignments were not preserved. Weyerhaeuser's fifth and sixth assignments challenge the verdict form used at trial. We conclude that the fifth assignment was not preserved, and reject the sixth assignment on the merits. Weyerhaeuser's seventh assignment contends that the trial court should have reduced each plaintiff's noneconomic damages award to $500,000 under ORS 31.710. We agree that the trial court should have applied the statutory cap to Kevin's strict products liability claim, and reverse plaintiffs' limited judgment for correction of that error. However, we conclude that the trial court correctly determined that the cap, as applied to Mitzi's loss of consortium claim, would violate Article I, section 17, of the Oregon Constitution, and affirm the judgment on that issue. In its tenth assignment, Weyerhaeuser contends that the court erroneously entered a judgment for Stayton on its indemnity claim because Stayton failed to prove that it had discharged Weyerhaeuser's liability to plaintiffs. We agree, and reverse Stayton's limited judgment. Finally, in its twelfth and thirteenth assignments of error, Weyerhaeuser contends that the trial court erred by awarding Stayton its defense expenses. Stayton concedes that $1,512 of appeal-related fees should not have been awarded by the trial court. We accept that concession, and reverse the general judgment for correction of that error, but otherwise reject Weyerhaeuser's twelfth and thirteenth assignments of error.


We divide our discussion of Weyerhaeuser's assignments of error into five groups and discuss any additional relevant facts as necessary within each group. First, we address assignments one through four, which involve the partial settlement between plaintiffs and Stayton. Second, we address assignments five and six, which challenge the verdict form used by the court. Third, we address assignment seven relating to the $500,000 cap on noneconomic damages. Fourth, we address Weyerhaeuser's tenth assignment, which relates to the validity of the limited judgment on Stayton's indemnity claim. And finally, we address the twelfth and thirteenth assignments involving the trial court's award of defense costs to Stayton.3

A. The agreement: first through fourth assignments of error

Weyerhaeuser's first through fourth assignments relate to the partial settlement agreement between Stayton and plaintiffs. We begin with the relevant text of that agreement.4 The agreement provided that if the parties did not mutually resolve their claims against Weyerhaeuser and proceeded to trial:

“1. In the event of a verdict, net of plaintiffs' comparative fault, in favor of plaintiffs against Stayton Builders Mart in an amount less than $1.5 million, or in the event of a defense verdict, Stayton Builders Mart will pay plaintiffs the sum of $1.5 million. Stayton Builders Mart will be free to collect any amount it is awarded in its contribution or indemnity claims from third-party defendant.
“2. In the event of a net verdict in excess of $ 1.5 million, Stayton Builders Mart will pay the amount of the verdict up to $2 million. Any excess over $2 million that is recovered by Stayton Builders Mart on its indemnity or contribution claims against third-party defendant Weyerhaeuser, if any, shall be paid to the plaintiffs.
“3. In exchange for the defendant entering into this High–Low Agreement, the plaintiffs agree to dismiss their negligence claims against Stayton Builders Mart, Inc.
“4. Both plaintiffs and Stayton Builders Mart agree not to appeal the jury verdict on plaintiffs' claim against Stayton Builders Mart. Stayton Builders Mart retains the right to appeal the jury verdict on its third-party indemnity and contribution claims.
“5. Stayton Builders Mart agrees to pursue its indemnity claim based upon strict liability against third-party defendant through trial to verdict.
“6. In the event of an appeal by third-party defendant that could affect Stayton Builders Mart's obligations under this Agreement, Stayton Builders Mart and its insurer will pay the sum of $1.5 million within 60 days after the jury verdict. The potential obligation of Stayton Builders Mart and its insurer for the remaining $500,000 will then be determined by the ultimate outcome of the appeals process, pursuant to the terms of this Agreement.”

As a preliminary matter, the parties dispute whether the agreement should be labeled a Mary Carter agreement”5 or a “high-low agreement.”6 As its terms demonstrate, the agreement has aspects consistent with each label. In the end, however, the precise label is not material in this case; it is the substance of the agreement that drives our analysis. Accordingly, we simply refer to it as “the agreement.”7

After Stayton and plaintiffs entered into the agreement, Weyerhaeuser moved to dismiss Stayton from the action as a defendant, arguing that there was no longer a justiciable controversy between plaintiffs and Stayton because the agreement eliminated any adversity between them. The trial court's denial of that motion is the subject of...

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  • Rains v. Stayton Builders Mart, Inc.
    • United States
    • Court of Appeals of Oregon
    • August 13, 2014
    ...264 Or.App. 636336 P.3d 483Kevin RAINS and Mitzi Rains, Plaintiffs–Respondents,v.STAYTON BUILDERS MART, INC.; John Doe Lumber Supplier; John Doe Lumber Mill; and Five Star Construction, Inc., Defendants.Stayton Builders Mart, Inc., Third–Party Plaintiff–Respondent,v.RSG Forest Products, Inc......

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