Rice v. Rabb

• Decision Date: 30 January 2014
• Docket Number: (CC CV091445,SC S060790).,CA A145606
• Citation: 354 Or. 721,320 P.3d 554
• Court: Oregon Supreme Court
• Parties: Joan RICE, Petitioner on Review, v. MARY RABB, Respondent on Review, and R–UP & Happy Canyon Hall of Fame, Defendant.

354 Or. 721

320 P.3d 554

Joan RICE, Petitioner on Review,

v. MARY RABB, Respondent on Review,andR–UP & Happy Canyon Hall of Fame, Defendant.

(CC CV091445; CA A145606; SC S060790).

Supreme Court of Oregon.

Argued and Submitted Sept. 16, 2013.

Decided Jan. 30, 2014.

On review from the Court of Appeals.^*

Cody Hoesly, Larkins Vacura LLP, Portland, filed the brief and argued the cause for petitioner on review.

No appearance contra.

Meagan A. Flynn, Preston Bunnell & Flynn, LLP, Portland, filed the brief for amicus curiae Oregon Trial Lawyers Association.

Before BALMER, Chief Justice, and KISTLER, WALTERS, LINDER, LANDAU, and BALDWIN, Justices.^**

BALDWIN, J.

This case requires us to decide whether the six-year statute of limitations applicable to conversion and replevin claims under ORS 12.080(4) incorporates a discovery rule to determine when such claims “accrue” pursuant to ORS 12.010. The Court of Appeals concluded that the limitation prescribed by ORS 12.080(4) begins to run at the time of the wrongful taking of personal property and that the provision does not incorporate a discovery rule. Rice v. Rabb, 251 Or.App. 603, 284 P.3d 1178 (2012). Thus, it affirmed the trial court's judgment dismissing plaintiff's complaint as time-barred because plaintiff's complaint was filed more than six years from the time of the alleged taking of plaintiff's personal property. On review, we hold that plaintiff's allegations adequately invoke a discovery rule as recognized in Berry v. Branner, 245 Or. 307, 421 P.2d 996 (1966), and we reverse.

Because the trial court decided this case on a motion to dismiss, we take the facts, and all favorable inferences that can be drawn from those facts, as alleged in plaintiff's second amended complaint. See Huff v. Great Western Seed Co., 322 Or. 457, 460, 909 P.2d 858 (1996) (stating standard of review).

Lois McIntyre was the 1930 “Queen of the Pendleton Round–Up.” In that role, she acquired a “Queen Outfit” that consisted of a white satin shirt, a white leather vest and riding skirt with black and white fringe, and a black scarf. In 1964, plaintiff's husband, who was McIntyre's son, inherited the outfit from McIntyre. Shortly after inheriting the outfit, plaintiff and her husband were approached by Lieuallen, who requested that she be given the outfit. However, plaintiff and her husband declined the request.

Plaintiff and her husband later decided to display the outfit at the Pendleton Round–Up and Happy Canyon Hall of Fame (Hall of Fame). They delivered the outfit to Lieuallen for her to deliver to the Hall of Fame for that purpose, but did not gift or transfer ownership of the outfit to Lieuallen. Lieuallen delivered the outfit to the Hall of Fame as directed. In 1972, while the outfit was still on display at the Hall of Fame, plaintiff's husband passed away, and plaintiff inheritedthe outfit.¹

In April 2000, defendant, who is an heir of Lieuallen, went to the Hall of Fame and demanded return of the outfit on behalf of Lieuallen. The Hall of Fame promptly complied with defendant's request, and defendant gained possession of the outfit. Plaintiff, who is legally blind, was unaware that the outfit had been removed from the Hall of Fame.² Plaintiff did not learn of the transfer until June 2007, when the Hall of Fame displays were moved to a new building. Plaintiff then demanded that defendant return the outfit, and defendant refused.³

In October 2009, plaintiff brought an action against defendant for conversion and replevin.⁴ Plaintiff sought return of the outfit or, in the alternative, an award of damages. Defendant responded by filing a motion to dismiss plaintiff's complaint pursuant to ORCP 21 A(9), which permits a trial court to dismiss an action that “has not been commenced within the time limited by statute.” Defendant argued that the six-year limitation period prescribed under the applicable statute, ORS 12.080(4),⁵ began to run when defendant removed the outfit from the Hall of Fame in April 2000 and that plaintiff's action was time-barred because she filed her complaint more than six years thereafter. Plaintiff replied that ORS 12.080(4) incorporates a discovery rule by application of ORS 12.010, which provides that, for purposes of calculating the period of limitation, causes of actions shall be deemed commenced “after the cause of action shall 11 have accrued.” ⁶ Plaintiff contended that her cause of action did not “accrue” until she had actual or constructive knowledge that defendant had removed the outfit from the Hall of Fame. Plaintiff asserted that she had obtained that knowledge in 2007 and, therefore, her action filed in 2009 was brought within the time limit prescribed by ORS 12.080(4).

After considering the parties' arguments, the trial court granted defendant's motion to dismiss. Plaintiff appealed that ruling, and the Court of Appeals affirmed the trial court's judgment. It held that ORS 12.080(4) does not incorporate a discovery rule and that plaintiff's action was, therefore, not timely filed. We allowed plaintiff's petition for review to determine whether ORS 12.080(4) incorporates a discovery rule. For the reasons stated below, we conclude plaintiff's allegations adequately invoke a discovery rule.

The parties agree that the appropriate statute of limitations for plaintiff's action is ORS 12.080(4). However, they disagree whether that statute incorporates a discovery rule by way of ORS 12.010. The discovery rule is “a rule of interpretation of statutes of limitation that has the effect of tolling the commencement of such statutes under certain circumstances.” FDIC v. Smith, 328 Or. 420, 428, 980 P.2d 141 (1999). Under the discovery rule, the period of limitations is deemed to have commenced from the earlier of two possible events: “(1) the date of the plaintiff's actual discovery of injury; or (2) the date when a person exercising reasonable care should have discovered the injury, including learning facts that an inquiry would have disclosed.” Greene v. Legacy Emanuel Hospital, 335 Or. 115, 123, 60 P.3d 535 (2002) (emphasis in original); see also Kaseberg v. Davis Wright Tremaine, LLP, 351 Or. 270, 278, 265 P.3d 777 (2011) (“The discovery rule applies an objective standard—how a reasonable person of ordinary prudence would have acted in the same or a similar situation.”).

The existence of a discovery rule cannot be assumed, but rather must be embodied in the applicable statute of limitations. See Gladhart v. Oregon Vineyard Supply Co., 332 Or. 226, 230, 26 P.3d 817 (2001). Thus, we apply the statutory methodology established in State v. Gaines, 346 Or. 160, 171–72, 206 P.3d 1042 (2009), to determine whether the legislature intended to incorporate a discovery rule in the pertinent statute of limitations. See Gladhart, 332 Or. 226, 26 P.3d 817 (no discovery rule incorporated in two-year statute of limitation for products liability claims under ORS 30.905(2), which runs from when harm “occurs” as expressly provided in statute). Accordingly, we begin by examining the text and context of the applicable statutes, and our cases previously interpreting those statutes.

ORS 12.010 and ORS 12.080(4) have been part of Oregon law for more than a century and have remained largely the same. See General Laws of Oregon, Civ Code, ch 1, §§ 3, 6, p. 140–141 (Deady 1845–1864).⁷ORS 12.010 provides generally that actions “shall only be commenced within the periods prescribed” in ORS chapter 12, “after the cause of action shall have accrued, except where a different limitation is prescribed.” As relevant to plaintiff's claims for conversion and replevin, ORS 12.080(4) provides a six-year limitation on the commencement of “[a]n action for taking, detaining or injuring personal property, including an action for the specific recovery thereof.”

We first note that the text of ORS 12.080(4) does not expressly state that a discovery rule may be applied to toll the commencement of the six-year limitation prescribed therein. Plaintiff argues, however, that the text of ORS 12.010 stating that actions shall be commenced “after the cause of action shall have accrued,” must be read in tandem with ORS 12.080(4). When read together, according to plaintiff, the applicable statutes, ORS 12.080(4) and ORS 12.010, require an action for conversion or replevin to be commenced within six years after the cause of action has accrued. Plaintiff therefore submits that the threshold question to determine the timeliness of the filing of an action is when a cause of action has “accrued.” Plaintiff argues that this court's decision in Berry, 245 Or. 307, 421 P.2d 996, in which the court construed the meaning of “accrued,” directly answers that question.

In Berry, a medical malpractice case, a needle was left in the plaintiff's abdomen during a surgical procedure but was not found, and the cause of action was not brought, until after the applicable two-year statute of limitations had run. SeeORS 12.110(1) (providing a two-year limitation for medical malpractice claims except in cases involving undiscovered fraud or deceit). The defendant moved to dismiss the action as time-barred, arguing that, in the absence of any fraud or deceit, the plaintiff's cause of action had accrued at the time of the negligent act— i.e., during the surgery—and not at the time that the plaintiff discovered or might reasonably have discovered the negligent act.

This court examined the text of ORS 12.110(1) and noted that, in providing an undiscovered fraud exception in that provision, the legislature did not clarify the time of accrual in cases that did not involve undiscovered fraud or deceit. The court reasoned that the legislature could have intended the discovery principle to apply when it specified in ORS 12.010 that, unless otherwise indicated, the period of limitation begins to run “after the cause of action shall have accrued.” The court defined the meaning of the word “accrued” in the context of that statute as...