Stafford v. Garrett, A7708-11127
| Decision Date | 23 June 1980 |
| Docket Number | No. A7708-11127,A7708-11127 |
| Citation | 613 P.2d 99,46 Or.App. 781 |
| Parties | Stanley L. STAFFORD, Appellant, v. James O. GARRETT, Richard A. Seideman and John L. Hemann, dba Garrett, Seideman and Hemann, a partnership, Respondents. ; CA 13495. |
| Court | Oregon Court of Appeals |
Gerald R. Pullen, Portland, argued the cause and filed the brief for appellant.
William L. Hallmark, Portland, argued the cause for respondents. William L. Hallmark and William A. Davis, Portland, filed the brief for respondents. With them on the brief was Lang, Klein, Wolf, Smith, Griffith & Hallmark, Portland.
Before GILLETTE, P. J., ROBERTS and CAMPBELL, JJ., and TONGUE, J. Pro Tem.
This is a law action for malpractice wherein the complaint alleged that the defendant law firm was negligent in advising the plaintiff to settle a case against a third party. The trial court tried the case without a jury and found that the plaintiff did not establish that the defendants were negligent by a preponderance of the evidence. We affirm.
Prior to November 26, 1973, the plaintiff had been employed by Roderick Enterprises, Inc. On that date R. V. Roderick, as president of that corporation, wrote a letter to the Oregon State Board of Health. The letter stated that when the plaintiff was employed by the corporation he either borrowed or took some money belonging to the welfare patient trust account and that he did not deserve an administrator's license. In January 1974 Roderick had a telephone conversation with one Catherine M. Plantz of Health Care Facility Consultants of Aberdeen, South Dakota. Roderick told Plantz that the plaintiff had been discharged for misuse of company funds.
In May 1974 the plaintiff entered into a contract with the defendant law firm to pay it an hourly fee plus costs to bring an action against R. V. Roderick and Roderick Enterprises, Inc. (Roderick) for damages because of "certain libelous statements * * * concerning the alleged theft from patient trust funds of approximately $1,100 * * *."
Pursuant to this agreement the defendants prepared and, on behalf of the plaintiff, filed a complaint against Roderick. The complaint alleged three causes of action. Roderick demurred to the complaint on the ground "* * * that the facts set forth therein do not state a cause of action against defendants for the reason that the allegedly slanderous and libelous statements are absolutely privileged." The demurrer was overruled.
The plaintiff filed an amended complaint alleging only two causes of action. The first cause was based on the letter of November 26, 1973, to the Oregon State Board of Health. The second cause was based on the Plantz telephone conversation in January 1974. Roderick did not demur to the amended complaint, but filed an answer admitting the execution of the letter and the telephone conversation with Plantz. The answer further alleged that the statements in both the letter and telephone conversation were true and were of "mutual concern" to the participants.
The plaintiff's defamation case against Roderick was tried to a jury. At the close of the testimony Roderick moved for a directed verdict on the ground that the letter to the Oregon State Board of Health was absolutely privileged. The motion was denied. The jury returned a verdict in favor of the plaintiff for $2,000 general damages and $50,000 punitive damages on the first cause of action and $100 general damages and $300 punitive damages on the second cause of action.
Roderick moved for a judgment NOV or, in the alternative, for a new trial. The motion for a new trial set forth four separate grounds. The motion for judgment NOV was denied. The trial court granted the motion for a new trial, but the order did not recite upon which ground.
The defendant law firm advised the plaintiff that the case should be settled. Their advice was that even if the trial court's order for a new trial was error, Roderick could cross-appeal from the order overruling the demurrer and prevail because in their opinion the letter to the Oregon State Board of Health was absolutely privileged. After a number of conferences and considerable correspondence between the plaintiff and the defendants, the case was settled for the sum of $10,000. 1
In May 1977 the plaintiff filed the complaint in this case alleging the defendants were negligent in advising the plaintiff to settle the Roderick case. The plaintiff sought damages for the difference between the verdict and the amount of the settlement, plus a judgment for the amount of the attorney fees previously paid. The case was tried without a jury. Members of the bar testified as expert witnesses for both the plaintiff and defendants. 2 The trial judge found in favor of the defendants:
" 'The Court finds generally that the plaintiff has not established by a preponderance of the evidence that the services rendered by the defendants, in recommending settlement under all of the circumstances then existing, failed to meet the standards required of reasonably competent attorneys in the community, and therefore finds in favor of the defendants and against the plaintiff * * *.' "
The plaintiff has appealed to this court setting out a sole assignment of error:
"The court erred in failing to find the defendant negligent as a matter of law in giving his client negligent advice on appellate practice and procedure."
The defendants in their brief in this court state that the plaintiff must (1) establish that he would have in fact prevailed on appeal; and (2) prove that defendant's advice was not reasonable under the circumstances. We agree. Whether or not the plaintiff would have prevailed on an appeal is a question of law. Whether or not the defendants' advice was reasonable is a question of fact. Chocktoot v. Smith, 280 Or. 567, 571 P.2d 1255 (1977).
It is the plaintiff's position that on an appeal to the Oregon Supreme Court 3 in the Roderick case, the order for a new trial would have been set aside and Roderick could not have successfully cross-appealed from orders overruling the demurrer and denying the motion for a directed verdict. 4 Thus, the plaintiff contends the Oregon Supreme Court would have reinstated his verdict.
The defendants counter by saying that in any event Roderick could have again demurred to the plaintiff's complaint on appeal on the ground that a cause of action was not stated because the letter of November 26, 1973, was absolutely privileged. Thus, the defendants contend that the plaintiff as a net result would have a judgment against Roderick only on his second cause of action on the Plantz telephone conversation for $100 general damages and $300 punitive damages or a new trial on only the second cause of action.
The defendants are correct that Roderick could have demurred to the plaintiff's complaint on appeal on the ground that it did not state facts sufficient to constitute a cause of action. Shires v. Cobb, 271 Or. 769, 534 P.2d 188 (1975). This ground for a demurrer is not waived by answering over and may be asserted on appeal. Fulton Ins. v. White Motor Corp., 261 Or. 206, 493 P.2d 138 (1972). However, when the complaint is tested on appeal by demurrer on this ground it will be liberally construed in favor of the plaintiff. Sherrod v. Holzshuh, 274 Or. 327, 546 P.2d 470 (1976).
Roderick's letter to the State Board of Health was attached to and by reference made a part of the amended complaint. The first cause of action was based upon it. Roderick's demurrer on appeal to the first cause of action would have been sustained if the statements in the following letter were absolutely privileged:
No cause of action exists when the defamatory statements are absolutely privileged even though...
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