Sutherland v. Brennan

• Citation: 883 P.2d 1318,131 Or.App. 25
• Parties: George SUTHERLAND, Conservator for Helen B. Sutherland, Appellant, v. Enda BRENNAN, Respondent. 9210-07134; CA A80719.
• Decision Date: 27 December 1994
• Court: Court of Appeals of Oregon

Page 1318

883 P.2d 1318

131 Or.App. 25

George SUTHERLAND, Conservator for Helen B. Sutherland, Appellant, v. Enda BRENNAN, Respondent.

9210-07134; CA A80719.

Court of Appeals of Oregon,

In Banc.

Argued and Submitted April 29, 1994.

Resubmitted In Banc Aug. 8, 1994.

Decided Oct. 26, 1994.

Review Allowed Dec. 27, 1994.

Frank H. Hilton, Jr., Portland, argued the cause for appellant. With him on the briefs were Scott Howard, Maureen J. Michael and Schwab, Hilton & Howard.

Gregory B. Snook, Portland, argued the cause for respondent. With him on the brief was Kilmer, Chenoweth, Voorhees & Laurick, P.C.

ROSSMAN, Judge.

Plaintiff appeals from a judgment that dismissed the case on the ground that defendant is not within the personal jurisdiction of the Oregon courts. We affirm.

Plaintiff, an Oregon resident, is the conservator for the estate of his elderly sister, Helen. Defendant is an attorney who resides and is licensed to practice law in California. He is not licensed to practice in Oregon. At the time of the events underlying this action, defendant had a client by the name of Steven Morrow.

On May 12, 1992, plaintiff traveled to California to escort Helen on a trip to Oregon. He learned that his sister was, in his words, "being kept from him" by Morrow, and also learned that she had signed over a check to Morrow in the amount of $40,000. Plaintiff contacted a local police department and Morrow was called in for questioning. On May 28, 1992, Morrow delivered the $40,000 check to his attorney, defendant, for safe keeping. Defendant opened a client trust account in California and deposited the check in it.

Local police officers notified defendant that a criminal investigation was being conducted into the circumstances surrounding Morrow's receipt of the $40,000 check from Helen. Defendant forwarded to the police department a copy of the trust account passbook showing the $40,000 deposit.

In June and July, 1992, defendant made several telephone calls to plaintiff's attorney in Portland, Oregon. The parties offer conflicting accounts of the content of the telephone conversations. According to plaintiff, defendant told plaintiff's attorney that defendant was aware that the $40,000 belonged to Helen. Defendant acknowledged that an Oregon conservatorship was being established, and he promised not to release the $40,000 to Morrow; he also promised that he would hold the funds and, once the conservatorship was established, he would release them to plaintiff for deposit into the conservatorship account. According to defendant, he did not initiate contact with plaintiff's attorney, except to respond to demands, made by that attorney to Morrow, to have Morrow's attorney call plaintiff's attorney. Defendant denies that he ever told plaintiff's attorney that he believed the money was Helen's, and denies that he said that he would hold the money indefinitely or that he would hold it for the conservatorship. He states that his only promise was that, if there was a court order requiring transfer of the funds to the Oregon conservatorship, he would "attempt to get" his client to comply.

In October, 1992, Morrow requested that the $40,000 be returned to him, and defendant complied with that request. Defendant has not delivered any funds to plaintiff.

Plaintiff brought this action, alleging breach of contract, breach of fiduciary duty, conversion, and money had and received. He seeks $40,000 in compensatory damages and $20,000 in punitive damages. Defendant filed, inter alia, a motion to dismiss the action for lack of personal jurisdiction, ORCP 21 A(2), and the trial court granted that motion. The case was dismissed with prejudice. Plaintiff appeals.

In reviewing the granting of a motion to dismiss for lack of personal jurisdiction, we assume the truth of all well pleaded allegations and any facts that may be adduced as proof of those allegations. Marvel v. Pennington GMC, Inc., 98 Or.App. 612, 615, 780 P.2d 760 (1989). Plaintiff bears the burden of alleging and proving the facts necessary to establish jurisdiction. State ex rel Sweere v. Crookham, 289 Or. 3, 7, 609 P.2d 361 (1980); Showalter v. Edwards and Associates, Inc., 112 Or.App. 472, 476, 831 P.2d 58, rev. den. 314 Or. 391, 840 P.2d 709 (1992). In making findings as to the existence of those facts, the trial court may base its determination on the allegations contained in the pleadings and affidavits that are submitted by both parties. Management Recruiters v. Harold Moore & Assoc., 118 Or.App. 614, 616, 848 P.2d 644, rev. den. 317 Or. 162, 856 P.2d 317 (1993); see also Industrial Leasing Corp. v. Miami Ice Machine Co., 126 Or.App. 80, 84, 867 P.2d 548 (1994); ORCP 21 A. We construe those documents liberally, in favor of jurisdiction. Sunrise Express v. Rhett Votaw & Co., 118 Or.App. 722, 724, 848 P.2d 1255 (1993). Where, as here, the trial court made no express findings, we assume that the court found facts consistent with its judgment. Management Recruiters v. Harold Moore & Assoc., supra, 118 Or.App. at 616, 848 P.2d 644. We review the court's assumed factual findings to determine whether they are supported by "any competent evidence," Industrial Leasing Corp. v. Miami Ice Machine Co., supra, 126 Or.App. at 85, 867 P.2d 548, and we review its legal conclusion for errors of law. See Horn and Horn, 97 Or.App. 177, 180, 775 P.2d 338, rev. den. 308 Or. 465, 781 P.2d 1214 (1989).

Oregon's "long-arm statutes" are contained in ORCP 4. Subsections B through K of ORCP 4 describe several categories of activities that provide bases for the exercise of personal jurisdiction. If a case falls within one of those categories, "there is no need to litigate [the] more involved issues of due process" that arise under ORCP 4 L, the rule that extends Oregon jurisdiction to the farthest limits allowed by the constitution. State ex rel Hydraulic Servocontrols v. Dale, 294 Or. 381, 384, 657 P.2d 211 (1982).

Plaintiff first relies on ORCP 4 C, which provides that Oregon courts have personal jurisdiction over the defendant in "any action claiming injury to person or property within or without this state arising out of an act or omission within this state by the defendant." (Emphasis supplied.) The "injury" in this case is the conservatorship's non-receipt of the $40,000, or, construing the pleadings liberally, the defendant's earlier failure to release those funds to the conservatorship. Both "acts" were the result of defendant's relinquishment of the $40,000 to his client, and both acts took place in California, not in Oregon.

Plaintiff also argues that jurisdiction is proper under ORCP 4 C because the conservatorship was "injured" when defendant's telephone assurances caused plaintiff not to seek interim judicial remedies that might have preserved or protected the funds. Plaintiff relies on Marvel v. Pennington GMC, Inc., supra, for the proposition that personal jurisdiction extends to an out-of-state defendant whose false representations in Oregon are detrimentally relied on by an Oregon resident. In Marvel, a Colorado-based defendant placed an advertisement in a circular that was published and distributed in Oregon. The advertisement, which sought to sell a truck, contained misrepresentations that were relied on by plaintiff, an Oregon resident who purchased the truck.

There are two important differences between Marvel and the case at bar. First, the negotiations between the parties in this case were not initiated by defendant. See Neptune Microfloc v. First Nat. Util., 261 Or. 494, 495 P.2d 263 (1972). Even if defendant placed the first call, it is undisputed that that call, and the subsequent telephone conversations, took place only at the behest of plaintiff's attorney. Second, the record is devoid of any evidence of action or inaction by plaintiff in reliance on defendant's representations, and devoid of any declaration that such reliance would have been reasonable. That is the type of evidence that plaintiff had the burden of providing, given his allegation that injury was caused by reliance on defendant's promises. See State ex rel Sweere v. Crookham, 289 Or. 3, 9, 609 P.2d 361 (1980) (no evidence of reliance). The record is also devoid of evidence that would allow the inference that defendant contacted plaintiff in an effort to lull plaintiff into the mistaken belief that no legal remedies needed to be pursued.

Next, plaintiff relies on ORCP 4 A(4), which provides that Oregon courts may exercise personal jurisdiction over a defendant who is "engaged in substantial and not isolated activities within this state[.]" Plaintiff points to the fact that defendant owns several parcels of real property in Oregon. Although plaintiff alleges that, as a result of the property ownership, defendant's "conduct in Oregon has been and continues to be extensive," he provides no specifics regarding the nature of that conduct. To carry the burden of proving facts sufficient to establish jurisdiction, plaintiff cannot rest on "conclusory allegations." Showalter v. Edwards and Associates, Inc., supra, 112 Or.App. at 476, 831 P.2d 58. In any event, it is well established that the bare fact of real estate holdings, without more, cannot serve as the basis for establishing personal jurisdiction in an action that neither arises out of, nor relates to, defendant's property ownership. Shaffer v. Heitner, 433 U.S. 186, 209, 97 S.Ct. 2569, 2582, 53 L.Ed.2d 683 (1977); see also ORCP 4 F. ORCP 4 A(4) is inapplicable to this case.

Finally, plaintiff relies on ORCP 4 L, "which extends the personal jurisdiction of Oregon courts to the maximum permitted by the federal and state constitutions," Horn and Horn, supra, 97 Or.App. at 179-80, 775 P.2d 338, and also relies on the related case of State ex rel White Lumber v. Sulmonetti, 252 Or. 121, 448 P.2d 571 (1968), which set out the three "requirements for the constitutional exercise of jurisdiction in a case involving a single transaction[.]"...