Riley Hill General Contractor, Inc. v. Tandy Corp.

• Decision Date: 27 May 1987
• Citation: 303 Or. 390,737 P.2d 595
• Parties: Page 595 737 P.2d 595 303 Or. 390 RILEY HILL GENERAL CONTRACTOR, INC., an Oregon corporation, Petitioner on review, v. TANDY CORPORATION, a Delaware corporation, dba Radio Shack, Respondent on review. CC 8
• Court: Oregon Supreme Court

Page 595

737 P.2d 595

303 Or. 390

RILEY HILL GENERAL CONTRACTOR, INC., an Oregon corporation Petitioner on review v TANDY CORPORATION, a Delaware corporation, dba Radio Shack Respondent on review.

CC 84-02-19,378-L; CA A35863; SC S33551.

Supreme Court of Oregon, In Banc.

Argued and Submitted April 7, 1987.

Decided May 27, 1987.

Gary J. Ebert, of Yturri, Rose, Burnham, Ebert & Bentz, Ontario, argued the cause and filed the petition for petitioner on review.

Frank M. Parisi, of Spears, Lubersky, Campbell, Bledsoe, Anderson & Young, Portland, argued the cause for respondent on review.

JONES, Judge.

Plaintiff, Riley Hill General Contractor, Inc., sought compensatory and punitive damages on claims labeled "fraud," ¹ "breach of warranty" and "negligence" against defendant, Tandy Corporation, arising out of plaintiff's purchase of a computer that was manufactured and sold by defendant doing business as Radio Shack. Defendant answered with a general denial of the claims and raised an affirmative defense of contributory fault. The trial court instructed the jury that:

"You are instructed that the law recognizes a presumption against fraud and this presumption against fraud must be overcome by clear and convincing evidence.

"The Party alleging fraud must thus bring forth evidence to prove it, and may not rely upon mere suspicious circumstances or equivocal conduct.

"Thus, there must be a certain quality of evidence to overcome the presumption against fraud even though the burden of proof remains in this case as in all civil cases, proof by a preponderance of the evidence." (Emphasis added.)

Defendant excepted to these instructions. The jury returned a verdict for plaintiff. Defendant appealed, and the Court of Appeals reversed and remanded for a new trial because of the inconsistency in the trial court's jury instructions on the burden of proof. Riley Hill General Contractor v. Tandy Corp., 82 Or.App. 458, 728 P.2d 577 (1986). We allowed review to decide whether the burden of persuasion ² for common law deceit should be by "clear and convincing evidence," by a "preponderance of the evidence" or by a combination of both concepts. We hold that the burden of persuasion for common law deceit requires the proponent to prove each of the elements of deceit by clear and convincing evidence, but that general or punitive damages arising out of that deceit need be proved only by a preponderance of the evidence. The Court of Appeals is affirmed.

Riley Hill, the sole owner and operator of Riley Hill General Contractor, Inc., also owned a number of small businesses. He desired to acquire a computer system to assist in his bookkeeping and accounting to better enable him to conduct his businesses and to keep track of cash flow within his various businesses. Hill initially purchased a single-user computer system from Tandy Corporation. Because this system was slower than he desired, Hill decided to expand to a more complex computer system. He also acquired this system from Tandy Corporation.

Hill's experience with the new computer was unsatisfactory. After a number of complaints about the equipment and the computer programs and a number of attempts by Tandy Corporation to fix the computer, including replacement of all the hardware, Tandy Corporation offered to refund the purchase price. Hill refused and filed this civil action.

In this action, plaintiff alleged that Tandy Corporation had been warned by the company that tested the computer system before marketing that it was necessary to provide for file lock out within the accounting program to avoid corruption of the data being put in the computer file. It alleged that Tandy Corporation marketed this computer with the knowledge of the potential for such corruption to take place and with the knowledge that the defects could be corrected if Tandy Corporation had taken the time to do so. Plaintiff also alleged that he had considered other computers and relied completely on Tandy Corporation's representative's statements as to the reliability of the computer and programs and their suitability for Hill's intended business use.

At the conclusion of the trial, the judge gave the above-quoted instruction to the jury. The Court of Appeals reversed the trial court, holding that the instructions were inconsistent because the jury was told that the burden of proof in "fraud" cases is by both clear and convincing evidence and by a preponderance of the evidence. As mentioned, the Court of Appeals held that the instruction was reversible error, because it was not possible to tell from the verdict whether the jury used the correct clear and convincing evidence standard or the incorrect preponderance of the evidence standard. 82 Or.App. at 461, 728 P.2d 577.

Before we set forth the level of proof required in civil actions for deceit, we address the origins and meanings of the terms "preponderance of evidence" and "clear and convincing evidence."

THE ORIGINS AND MEANINGS OF "PREPONDERANCE" AND "CLEAR AND

CONVINCING" EVIDENCE

"Preponderance" derives from the Latin word "praeponderare," which translates to "outweigh, be of greater weight." 8 Oxford English Dictionary 1289 (1933). With regard to the burden of proof or persuasion in civil actions, it is generally accepted to mean the greater weight of evidence. At one time in the history of English law, the translation received a literal interpretation, with heads of witnesses being counted on each side, and each item of testimony receiving a quantitative value or weight. See Millar, in Engelmann, History of Continental Civil Procedure 41-49 (1927); 9 Wigmore, Evidence 424-31, § 2498 (Chadbourn rev 1981); 1 Holdsworth, History of English Law 302-04 (3d ed 1922). The term suggests to the jury that the evidence should be weighed on a scale and, frequently, trial judges will speak of weights and scales in explaining to jurors under this standard that they cannot speculate or guess what happened but that a party with the burden of persuasion in a civil case must prove what probably occurred. Uniform Jury Instructions (Civil), Nos. 21.01, 21.02 (Oregon CLE 1986), read, respectively:

"A party has the burden of proving by a preponderance of the evidence any claim made in that party's pleadings. In the absence of such proof, the party cannot prevail as to that claim."

" 'Preponderance of the evidence' means the greater weight of evidence. It is such evidence that, when weighed with that opposed to it, has more convincing force and is more probably true and accurate. If, upon any question in the case, the evidence appears to be equally balanced, or if you cannot say upon which side it weighs heavier, you must resolve that question against the party upon whom the burden of proof rests." ³

Mellinkoff, in his extensive work, The Language of the Law (1963), does not specifically trace the origins of the terms "preponderance of the evidence" or "clear and convincing evidence." However, he asserts that certain words, such as "plaintiff," "defendant," "fee simple" and "lessee," are terms of art with a specific meaning, id. at 17, but that other language of the law is better characterized as equivocal because "there is a deliberate choice of the flexible," id. at 21. Among a sample of words and phrases which are often used "because they are flexible or despite their flexibility," are the words "clear and convincing," id. at 21, and he lists among "the cats and dogs of law language, defined and redefined, but not more precise for all of that," the words "preponderance of the evidence," id. at 385. Thus, he tells us what we already know, that these terms are not precise standards but are words that do no more than characterize evidence. See Byers v. Santiam Ford, Inc., 281 Or. 411, 420 n 2, 574 P.2d 1122 (1978) (Lent, J., specially concurring).

We now examine why there are two somewhat parallel words, "clear" and "convincing," for a separate standard of proof. Mellinkoff traces this repetition of words to the origins of the English language. He explains that the English language started with the Celts when they entered the British Isles long before the birth of Christ and that Celtic was the dominant language of Britain until the Roman occupation in the first century A.D. The Latin interlude ended when the last Roman legions withdrew in 407 A.D. ⁴ The first Anglo-Saxon invaders in the middle fifth century encountered Celtic language, not Latin. Mellinkoff, supra at 37. He comments that, although the Celtic influence on the language of the law is slight, the period of the mingling of the Celts with their Anglo-Saxon conquerors does supply a clue to the origin of one peculiarity of our law language, which provides two words for one thought. He writes:

"One of the sources of tautology [that is, a needless repetition of words] is the prolonged presence of two languages side by side. England, for example, is peppered with place names which would read Hill-hill, or worse, except that the first hill is Celtic (bre or cruc or penn ) and the other Old English (hyll ), for instance, names like Breedon-on-the-Hill, Churchill, Penhill, Pendle Hill. It has been suggested that these formations indicate not knowledge but ignorance: a misunderstanding, in which the invader thinks penn is a place name, and adds his own hill for identification." Id. at 39.

He concludes that the repetition is simply the result of a collision of languages and that "[t]his penchant of English for coupling with foreign synonyms may be traced from Celtic through Scandinavian, Latin, and French." He concludes that "It is by no means a complete explanation of law tautology, but the pattern begins early and stays late." Id. Mellinkoff continues his history of the language of the law:

"A separate language called English gets its name from the invading Angles and dates from around 450 A.D. In that mid-century the Angles and other Teutonic raiders (Saxons and Jutes) left their...