Tenold v. Weyerhaeuser Co.

• Decision Date: 20 April 1994
• Citation: 873 P.2d 413,127 Or.App. 511
• Parties: Thomas TENOLD, Respondent, v. WEYERHAEUSER COMPANY, a corporation, and Larry Hoff, Appellants. 89-2198 CV; CA A72816. . *
• Court: Oregon Court of Appeals

Page 413

873 P.2d 413

127 Or.App. 511

Thomas TENOLD, Respondent, v. WEYERHAEUSER COMPANY, a corporation, and Larry Hoff, Appellants.

89-2198 CV; CA A72816.

Court of Appeals of Oregon In Banc. ^*

Argued and Submitted April 19, 1993.

Resubmitted In Banc Nov. 3, 1993.

Decided April 20, 1994.

[127 Or.App. 512-A] Jeffrey M. Batchelor, Portland, argued the cause for appellant Weyerhaeuser Co. Alan M. Scott argued the cause for appellant Larry Hoff. With them on the briefs were James H. Clarke and Lane, Powell, Spears, Lubersky, and Galton, Scott & Colett.

George W. Kelly, Eugene, argued the cause and filed the brief for respondent.

DURHAM, Judge Pro Tem.

Defendants appeal a jury verdict entered against them for $2,552,566. They make multiple assignments of error. We affirm.

Plaintiff filed three claims against defendant Weyerhaeuser Company (Weyerhaeuser): malicious prosecution, intentional infliction of severe emotional distress and defamation. The jury found for plaintiff and awarded $900,000 noneconomic damages, $2,566 economic damages and $1,500,000 punitive damages against Weyerhaeuser on those claims. The jury found defendant Hoff liable on plaintiff's claims of intentional infliction of severe emotional distress and defamation and awarded $100,000 noneconomic damages and $50,000 punitive damages against Hoff.

In its first two assignments of error, ¹ Weyerhaeuser argues that the trial court erred in denying its motions to withdraw from the jury the issue of its vicarious liability for Klamath County Sheriff Deputy Wilson's conduct. We review the evidence in the light most favorable to plaintiff to determine if there was sufficient evidence to submit the issue to the jury. Turman v. Central Billing Bureau, Inc., 279 Or. 443, 445, 568 P.2d 1382 (1977).

Weyerhaeuser owns and operates a railroad as part of its business in Klamath County. Plaintiff worked for Weyerhaeuser for 12 years as a member of a section crew on the railroad. Defendant Hoff is a security supervisor, whose duties include investigating thefts of company property. Weyerhaeuser and the Klamath County sheriff's office entered into a contract under which Klamath County provided "Forestry Patrol and field investigation on Weyerhaeuser's property." Klamath County Sheriff Deputy Wilson carried out the county's responsibilities under the contract. Weyerhaeuser also hired Green, a private security guard, to live on its property and to provide 24-hour security.

On July 6, 1988, plaintiff asked Hoff if he could "get some railroad ties." Hoff told him it was "no problem," and instructed him to inquire of the company how much they would cost. The next day, plaintiff asked Hoff if he could use some company equipment to pick up the ties, and Hoff said "that would be fine." On July 15, 1988, Green informed Hoff that plaintiff had delivered railroad ties to a cattle ranch. Hoff reported to Walt Barnes, his immediate supervisor, and to Steve Kirk, a security supervisor, that he suspected that plaintiff had stolen the ties delivered to the ranch. Kirk then contacted Wilson and asked him to investigate. While Wilson was interviewing the owner of the ranch, he told the owner that plaintiff had stolen 600 ties and sold them to others "around the country." While being interviewed by Hoff, two of plaintiff's co-workers said that they had helped plaintiff load some ties, and that plaintiff had told them that he intended to pay for the ties. Hoff did not tell his supervisor or Wilson about the information.

Shortly after his investigation began, Wilson went to plaintiff's home and told him that "it didn't look good" and that if he would admit guilt, he would not be arrested in front of his family. Plaintiff claimed that he had permission to take the ties. On August 1, plaintiff, Hoff, Barnes and a union representative met. Plaintiff admitted taking some ties but repeatedly maintained that Hoff had given him permission. After the meeting, Barnes met with his supervisor, McClure, and told him that plaintiff "had taken ties, and that he really offered no excuses or reasons for taking the ties without paying for them." Based on that information, Weyerhaeuser terminated plaintiff's employment.

At about the same time, Wilson issued plaintiff a criminal citation for theft in the second degree, and Kirk asked the district attorney to prosecute plaintiff. Wilson's report to the district attorney did not disclose plaintiff's contention that Hoff had given him permission to take the ties with the understanding that he would pay for them at a later time. Plaintiff was indicted by the Klamath County grand jury. Subsequently, the district attorney moved to dismiss the indictment after learning that some of the ties that plaintiff had been accused of stealing did not belong to Weyerhaeuser, and that plaintiff had paid for them.

There was also evidence in the record that Hoff and other employees at Weyerhaeuser had ill will toward plaintiff. An employee testified that Hoff told him, sometime in 1986, that "there's more than one way to get rid of [plaintiff]." Kirk testified that a Weyerhaeuser manager who was involved in the investigation said, "I don't care what the court system does or anything else, that I--I will have the man's job." Kirk also recalled in his testimony that Hoff had come to him after the charges against plaintiff were dropped and said that he had caught plaintiff in possession of marijuana a couple of years ago, that plaintiff was a drug addict, and that he wanted plaintiff "gone." Hoff's foster son testified that he overheard Hoff tell his wife that plaintiff was a drug user who had a methamphetamine lab in his house, and that he was always drunk at work. Plaintiff denied those allegations at trial.

Weyerhaeuser asserts that the trial court erred when it submitted the issue to the jury of whether Wilson was "its agent when he engaged in the conduct the jury ultimately found to be tortious." Weyerhaeuser's vicarious liability for Wilson's conduct depends on whether Wilson was an "employee" of Weyerhaeuser and committed the alleged tortious acts within the scope of his employment. ² Stanfield v. Laccoarce, 284 Or. 651, 654, 588 P.2d 1271 (1978). Although the parties agree that Wilson was an employee of the county, in addition, he could be a "loaned" employee of Weyerhaeuser, if Weyerhaeuser had the right to exercise control over the manner and means by which Wilson performed his duties. See Penrose v. Mitchell Bros., 246 Or. 507, 512, 426 P.2d 861 (1967); Nordling v. Johnston, 205 Or. 315, 332, 283 P.2d 994, 287 P.2d 420 (1955); Nichols v. Baggarley, 79 Or.App. 505, 508, 719 P.2d 914 (1986).

The contract between Klamath County and Weyerhaeuser says:

"[Weyerhaeuser] may increase, decrease or alter work to be done and materials furnished hereunder, and any changes occasioned thereby in amounts to be paid hereunder shall be agreed to in writing prior to performance of such work or furnishing such materials. * * * All work or materials furnished hereunder shall at all times be subject to the inspection and approval of [Weyerhaeuser]."

That language could be construed to indicate that the parties intended that Wilson was the employee of Klamath County only and Weyerhaeuser is not liable vicariously for Wilson's conduct, as defendants argue. However, because the provision says that Weyerhaeuser has the right to "increase, decrease or alter the work to be done and the materials furnished" and the right to inspect and approve the work, it is also subject to the interpretation that Weyerhaeuser had the right to control the manner and means that Wilson used to accomplish the results sought by Weyerhaeuser. Those alternative interpretations demonstrate the ambiguity in the agreement, and the meaning of an ambiguous contract is an issue to be decided by the trier of fact. David M. Scott Const. v. Roush, 273 Or. 877, 880, 544 P.2d 162 (1975).

Also, what the parties intended under the contract often is discernible by their conduct in carrying out the terms of the contract. See Tarlow v. Arntson, 264 Or. 294, 300, 505 P.2d 338 (1973). Wilson testified that Kirk asked him to investigate and told him who to contact. Wilson also testified that he kept Kirk updated on the progress of his investigation and gave him a copy of his report. Kirk testified that Weyerhaeuser had "control" of the investigation and that, whenever it had a problem to investigate, the deputy was at his "disposal." There was also a handwritten statement by Wilson that said that the "reason [the criminal prosecution] was dropped was per Steve Kirk's decision." We conclude that from the entire evidentiary record, the jury could have found that Weyerhaeuser had the right of control over Wilson's conduct such as to constitute a master-servant relationship. See Meskimen v. Larry Angell Salvage Company, 286 Or. 87, 592 P.2d 1014 (1979).

In their third and fourth assignments of error, both defendants contend that the trial court erred in denying their motions for directed verdict on plaintiff's claims for intentional infliction of severe emotional distress. They argue that plaintiff did not present any evidence to prove that defendants' conduct was an extraordinary transgression of the bounds of socially tolerable conduct. To prove a claim for intentional infliction of severe emotional distress, plaintiff must prove that:

"(1) the defendant intended to inflict severe emotional distress on the plaintiff, (2) the defendant's acts were the cause of the plaintiff's severe emotional distress, and (3) the defendant's acts constituted an extraordinary transgression of the bounds of socially tolerable conduct." Sheets v. Knight, 308 Or. 220, 236, 779 P.2d 1000 (1989).

It is a question of law whether, viewing the evidence in the light most favorable to plaintiff, defendants' conduct constitutes "extraordinary conduct which a reasonable jury could find beyond the farthest reaches of socially...