Schumann v. Crofoot
Jurisdiction | Oregon |
Parties | Kenneth SCHUMANN, Respondent, v. Emory J. CROFOOT, Conservator of the Estate of B. Glade Birch, Appellant. ; CA 12578. |
Citation | 43 Or.App. 53,602 P.2d 298 |
Docket Number | No. A7607-10020,A7607-10020 |
Court | Oregon Court of Appeals |
Decision Date | 05 November 1979 |
Margaret H. Leek Leiberan, Portland, argued the cause for appellant. With her on the briefs were Lang, Klein, Wolf, Smith, Griffith & Hallmark, Portland.
Barry L. Adamson, Portland, argued the cause for respondent. With him on the brief was Richard A. Uffelman, Portland.
Before SCHWAB, C. J., and THORNTON, BUTTLER and JOSEPH, JJ.
Plaintiff brought this action against defendant, as Conservator of the estate of B. Glade Birch, alleging in two counts that Birch, who had been plaintiff's attorney, committed professional negligence and also fraud in connection with a transaction in which plaintiff transferred $12,000 to Birch on the understanding that the sum was to be loaned to a third party. Plaintiff sought compensatory damages of $12,000 in both his negligence and his fraud counts, and sought punitive damages for the alleged fraud. The jury found in favor of plaintiff on both counts, awarding him $12,000 general damages and $12,500 punitive damages. Defendant appeals from the judgment entered on the verdict. We reverse and remand.
There was evidence that Birch was suffering from a psychotic disorder at the time he made the false representations which are the basis for plaintiff's allegation of fraud. Defendant contends that, as a matter of law, an "insane" person cannot be held liable for his torts, either negligent or fraudulent, and may be not assessed punitive damages.
With respect to liability for negligence, we accept the rule as stated in the Restatement (Second) of Torts § 283B (1965), which provides:
"Unless the actor is a child, his insanity or other mental deficiency does not relieve the actor from liability for conduct which does not conform to the standard of a reasonable man under like circumstances."
Among the bases for the rule set forth in comment b to that section are:
See also comment c to § 283B; and Alexander and Szasz, Mental Illness as an Excuse for Civil Wrongs, 43 Notre Dame Lawyer 24 (1967). The trial court did not err in instructing the jury that Birch's mental state was not a defense to the negligence count.
Defendant's contention with respect to the fraud count is more substantial: Birch was incapable of forming the requisite intent because of his mental illness, and having shown that Birch was mentally ill at the time in question defendant appears to contend that ended the matter. He relies, in part, on the following statement in 41 Am.Jur.2d 646, Incompetent Persons, § 109:
"Generally, an insane person is incapable of having an intent to defraud to the same extent as he is incapable of giving his assent to a contract, and hence he cannot be held in an action for fraud based on intent. * * *"
Such a proposition is too pat, too unequivocal, to be an acceptable basis for decision. Not only is the authority cited in its support meager, 1 but the use of the word "insanity" makes such a rule meaningless, at least under present day Oregon law. The fact that a conservator of Birch's estate was appointed shortly after the alleged wrongs to plaintiff occurred tells us only that Birch was an "incapacitated person" (ORS 126.003(4)) 2 and that, as such, he was a "protected person" (ORS 126.003(9)). 3 However, neither status necessarily means that Birch was incompetent or suffered from such degree of mental illness that he was incapable of committing an intentional tort. In fact, ORS 126.223 4 recognizes that a protected person may be mentally competent.
Furthermore, the statutes governing civil commitments of mentally ill persons (ORS ch. 426) do not use the word "insane," and define the term "mentally ill person" very broadly (ORS 426.005(2)). 5 Even though a person has been committed to a state hospital for treatment of a mental illness he is not automatically deemed to be incompetent; rather, a statutory procedure is provided to make that determination. ORS 426.295. 6
While the foregoing discussion is only peripheral to the issue here presented, it serves to make the point that authorities setting forth an unequivocal rule of nonliability based upon "insanity" of the defendant in a civil case are out of context in Oregon. The parties have cited no Oregon authorities, and we have found none, dealing with the question of whether a mentally ill person may be liable for an intentional tort such as fraud. However, Kirkpatrick v. U. S. National Bank, 264 Or. 1, 502 P.2d 579 (1972), stands for the general proposition that one under a legal disability (minority) may be held liable for a malicious tort; the Court indulged in the presumption that a minor who is 15 years old is capable of malice. 264 Or. at 7, 502 P.2d 579. It is fair to assume that the presumption could have been, but was not, rebutted in Kirkpatrick. In short, the disabled person's legal disability was not a defense as a matter of law; the question was one of fact.
We conclude that an evidential showing that Birch suffered from a mental illness at the time of the alleged tort does not, as a matter of law, preclude his being liable for the wrong. It is a question of fact whether his mental illness was such that he was incapable of committing fraud. Normally, it is up to the trier of fact to decide the question, although there may be cases where the evidence is such that the court may withdraw the issue from the jury because reasonable minds could not differ. The case at bar is not such a case.
The same thing may be said with respect to a mentally ill defendant's liability for punitive damages: it is a question of fact whether the defendant's mental state was such that punitive damages are appropriate. In McElwain v. Georgia-Pacific, 245 Or. 247, 249, 421 P.2d 957, 958 (1966), the Supreme Court said:
* * *." (Citations omitted.)
In Senn v. Bunick, 40 Or.App. 33, 41, 594 P.2d 837, 842-43 (1979), after quoting the foregoing language from McElwain, we said:
While we recognize that there is authority that "insanity" is an absolute defense to a claim for punitive damages, 41 Am.Jur.2d, Incompetent Persons, § 112, we reject that view for the same reasons we reject it with respect to "insanity" as a defense to a fraud action. In Kirkpatrick v. U. S. National Bank, supra, the Court said:
" * * * We have previously held that the legal justification for...
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