Sherwood v. ODOT

• Decision Date: 27 September 2000
• Parties: David SHERWOOD, Noralee Sherwood and David Sherwood, as Guardian Ad Litem of Nathan D. Sherwood, a Minor, Appellants, v. OREGON DEPARTMENT OF TRANSPORTATION, Respondent.
• Court: Oregon Court of Appeals

11 P.3d 664

170 Or. App. 66

David SHERWOOD, Noralee Sherwood and David Sherwood, as Guardian Ad Litem of Nathan D. Sherwood, a Minor, Appellants, v. OREGON DEPARTMENT OF TRANSPORTATION, Respondent.

(C950628CV; CA A98350)

Court of Appeals of Oregon.

Argued and Submitted June 1, 2000.

Decided September 27, 2000.

Ben Shafton argued the cause for appellants. With him on the brief was Morse & Bratt.

Jas. Adams, Assistant Attorney General, argued the cause for respondent. With him on the brief were Hardy Myers, Attorney General, and Michael D. Reynolds, Solicitor General.

Before De MUNIZ, Presiding Judge, and HASELTON and WOLLHEIM, Judges.

HASELTON, J.

Plaintiffs Noralee, David, and Nathan Sherwood¹ appeal from a judgment in favor of defendant Oregon Department of Transportation (ODOT), in a tort action arising out of an automobile accident. Plaintiffs assign error to the trial court's grant of ODOT's motion for summary judgment and argue, specifically, that the court erred in holding that: (1) Noralee's negligence claim was barred by both issue preclusion and claim preclusion; (2) David's loss of consortium claim was barred by issue preclusion; and (3) Nathan's claim for negligent infliction of emotional distress was insufficient as a matter of law. We conclude that the trial court erred in dismissing David's loss of consortium claim and Nathan's claim for emotional distress damages, see Saechao v. Matsakoun, 78 Or.App. 340, 717 P.2d 165, rev. dismissed 302 Or. 155, 727 P.2d 126 (1986), but correctly granted summary judgment against Noralee's claims. Accordingly, we reverse and remand David's loss of consortium claim and Nathan's claim for negligent infliction of emotional distress, but otherwise affirm.

For purposes of appeal, the following facts are undisputed. On November 9, 1993, Noralee and Nathan were driving on Canyon Road in Washington County. The Sherwoods' car struck a curb barrier and collided with a vehicle driven by Maria Mitchell. Noralee, Nathan, and Mitchell were all injured. On May 31, 1995, plaintiffs filed this action in Washington County Circuit Court alleging that ODOT had been negligent in its construction and placement of the raised curb that Noralee struck before colliding with Mitchell, as well as in failing to warn drivers of the curb.² Count One of the complaint sought damages for Noralee's injuries. Count 2 sought damages for Nathan's physical injuries. Count 3, which was captioned "Negligent Infliction of Emotional Distress," alleged in part:

"3.2 As a direct and proximate result of the negligence of Defendant [ODOT], NATHAN D. SHERWOOD, a minor, witnessed the injuries suffered by his mother, NORALEE SHERWOOD, thereby causing him severe emotional distress."

"3.3 As a direct and proximate result of the emotional distress referenced above, NATHAN D. SHERWOOD, a minor, has been damaged in an amount not less than ONE HUNDRED THOUSAND DOLARS AND NO/100s ($100,000)."

Finally, Count 4 sought loss of consortium damages for David.

On November 8, 1995, Mitchell filed suit against Noralee in Multnomah County Circuit Court but did not name ODOT as a defendant. Mitchell sought damages totaling $2,171,053.95³—exceeding the coverage limits of the Sherwoods' liability insurance policy with Safeco Insurance Company (Safeco). Safeco retained attorney Larry Brisbee as counsel to defend Mitchell's claims against Noralee. There is no indication in the record of any reservation of rights. In January 1996, Brisbee filed an Answer and Third Party Complaint, which sought contribution against ODOT based on ODOT's alleged negligence in constructing and placing the curb barrier and in failing to adequately warn drivers about the curb. Those allegations of comparative fault were similar to the allegations of negligence against ODOT in the Washington County action.

In July 1996, Mitchell's claims against Noralee settled, leaving the third-party contribution claim to be litigated. ODOT then moved for summary judgment against Noralee's contribution claim on the basis that, because Mitchell (not Noralee) had never served the state with a tort claim notice pursuant to ORS 30.275, ODOT could not be liable to Noralee for contribution. The court denied the motion, and the contribution action between Noralee and ODOT proceeded to trial. The Multnomah County jury returned a verdict finding Noralee 55 percent responsible for Mitchell's injuries and ODOT 45 percent responsible, and the trial court entered judgment accordingly.

ODOT appealed the Multnomah County judgment to this court and argued that, because Mitchell had not given ODOT tort claim notice, contribution was precluded as a matter of law. Mitchell v. Sherwood, 161 Or.App. 376, 985 P.2d 870, rev. den. 329 Or. 479, 994 P.2d 127 (1999). We ultimately agreed, and remanded the case to the trial court for entry of judgment in favor of ODOT. Id. at 383, 985 P.2d 870.

In March 1997, following the jury verdict in the Multnomah County contribution action but before we reversed that judgment, ODOT moved in the Washington County litigation for summary disposition of plaintiffs' pending tort claims. Specifically, ODOT argued that: (1) Noralee's personal injury claim (Count 1) was precluded under the doctrines of claim and issue preclusion; (2) David's loss of consortium claim (Count 4) was precluded under the doctrine of issue preclusion; (3) ODOT was entitled to partial summary judgment on Nathan's personal injury claim (Count 2) on the issue of ODOT's and Noralee's proportional fault in causing the ensuing accident; and (4) Nathan had failed to state a claim for negligent infliction of emotional distress (Count 3).

In response, plaintiffs raised three main arguments. First, plaintiffs asserted that the Multnomah County judgment should not be given any claim- or issue-preclusive effect because Noralee was merely a "nominal" party to the Multnomah County litigation in that Safeco, not Noralee, was the real party in interest. In a related sense, they asserted that Noralee did not have a "full and fair opportunity" to litigate the issue of her negligence in the Multnomah County litigation because Safeco controlled that litigation, and, thus, it would be "unfair" to give that judgment any preclusive effect. Second, plaintiffs argued, in passing, that the Multnomah County judgment could be reversed on appeal and that the effect of such a reversal would be to obviate any preclusive effect of the possibly vacated judgment. Finally, Nathan argued that his emotional distress claim was actionable under the "impact rule" articulated in Saechao.

In April 1997, the trial court allowed partial summary judgment dismissing Noralee's and David's claims, as well as Nathan's claim for negligent infliction of emotional distress. The court further determined, with respect to Nathan's personal injury claim, that issue preclusion applied to the Multnomah County jury's allocation of fault between Noralee and ODOT. Nathan subsequently settled his personal injury claim with ODOT.⁴

On appeal, plaintiffs raise two assignments of error. First, they assert, the trial court erred in concluding that issue preclusion and claim preclusion barred Noralee's personal injury claim and David's claim for loss of consortium. Second, the court erroneously failed to apply the "impact rule" of Saechao v. Matsakoun in dismissing Nathan's emotional distress claim. We address each assignment in turn.

In challenging the trial court's application of issue preclusion and claim preclusion, Noralee and David essentially reiterate the arguments they made in opposing summary judgment. In addition, they raise a bevy of new, and substantively different, contentions not made to the trial court. Because the latter were not preserved, see ORAP 5.45(7); J. Arlie Bryant, Inc. v. Columbia River Gorge Comm., 132 Or.App. 565, 568, 889 P.2d 383, rev. den. 321 Or. 47, 892 P.2d 1024 (1995) (describing "comity" and "anti-sand-bagging" rationales for the preservation requirement), we consider only the former.⁵

We begin with issue preclusion. Noralee and David argue that the jury's apportionment of comparative fault in the nowvacated Mitchell contribution judgment cannot be the basis for issue preclusion in this case. Specifically, they argue that our holding in Mitchell establishes that the issue of comparative fault should never have been submitted to the jury and, thus, any determination of comparative fault not only was not "essential to a final judgment on the merits in the prior proceeding," Nelson v. Emerald People's Utility Dist., 318 Or. 99, 104, 862 P.2d 1293 (1993) (citations omitted),⁶ but was contrary to the final determination, following remand, in Mitchell:

"Obviously, if the trial court had granted the motion for summary judgment, as this Court ruled it should have, there would have been no trial. If there had been no trial, there would have been no jury verdict finding Ms. Sherwood's degree of fault to be greater than that of ODOT. In the absence of that finding, there would have been nothing to support ODOT's claim of issue preclusion in this case."

We agree.

In No. Pacific SS v. Guarisco, 49 Or.App. 331, 619 P.2d 1306 (1980), we considered whether a prior judgment, ultimately reversed on appeal for lack of personal jurisdiction, could "collaterally estop" the plaintiffs in a second related case. We noted that the effect of reversal was to render the companion case a "nullity" and that, "[t]herefore, there can be no collateral estoppel effect on this case, and the entry of summary judgment cannot stand." Id. at 333, 619 P.2d 1306; see also Community Bank v. Vassil, 280 Or. 139, 144, 570 P.2d 66 (1977)

("Had the trial court in this case given collateral estoppel effect to the circuit court judgment * * * we would have reversed that holding because of our reversal in [an earlier related case]. Any error by the trial court in this respect cannot, therefore, be prejudicial under the present circumstances....