Union Lumber Co. v. Miller

• Court: Oregon Supreme Court
• Writing for the Court: BREWER, J.
• Citation: Union Lumber Co. v. Miller, 360 Or 767, CA A152241, CC 10-07-46539, No. 2 (Or. Jan 20, 2017)
• Decision Date: 20 January 2017
• Docket Number: CA A152241,SC S062459,No. 2,CC 10-07-46539,2
• Parties: UNION LUMBER CO., an Oregon corporation, dba Bronson Lumber Company, Petitioner on Review, v. Ron R. MILLER and Linda Miller, Respondents on Review.

360 Or 767

UNION LUMBER CO., an Oregon corporation,dba Bronson Lumber Company, Petitioner on Review, v. Ron R. MILLER and Linda Miller, Respondents on Review.

No. 2

CC 10-07-46539

CA A152241

SC S062459

SUPREME COURT OF THE STATE OF OREGON

Argued and submitted September 23, 2016

January 20, 2017

En Banc

On review from the Court of Appeals.^*

Jonel K. Ricker, Joseph and Ricker, LLC, filed the brief for petitioner on review.

Philip Wasley, Wasley Law Office, PC, LaGrande, argued the cause and filed the brief for respondents on review.

BREWER, J.

The decision of the Court of Appeals is reversed. The order of the circuit court denying defendants' motion to set aside the general judgment and the supplemental judgment awarding costs and attorney fees to plaintiff are affirmed.

BREWER, J.

The question in this case is whether the trial court erred in denying defendants' motion under ORCP 71 B(1) to set aside a general judgment entered against them on grounds of excusable neglect and mistake. The Court of Appeals reversed the trial court's ruling, concluding that the judgment was entered as a result of mistakes made by plaintiff and a court-appointed arbitrator with respect to the service of case-related documents on defendants. Union Lumber Co. v. Miller, 263 Or App 619, 625, 328 P3d 1284 (2014). Because we conclude that defendants were not entitled to relief from the judgment on the grounds asserted, we reverse the decision of the Court of Appeals and affirm the trial court's order denying defendants' motion to set aside the judgment.¹

I. FACTS AND PROCEDURAL HISTORY

On review of an order denying a motion to set aside a judgment, we set out the undisputed facts in the light most favorable to the moving party. See Wershow v. McVeety Machinery, 263 Or 97, 103, 500 P2d 696 (1972) (so viewing facts on review of motion to set aside default judgment). However, we accept the trial court's findings of disputed fact, if there is evidence to support those findings. See Hiatt v. Congoleum Industries, 279 Or 569, 576, 569 P2d 567 (1977) ("If grounds are apparent which could cause the trial court to suspect the uncontradicted statements in the affidavit, the trial court does not need to accept such statements as correct.").

In June 2002, defendant Ron Miller entered into an open account agreement with plaintiff, the owner and operator of building supply stores, for the purchase of building supply materials. In July 2010, plaintiff filed an action for breach of contract and unjust enrichment against Ron Miller and his spouse Linda Miller, seeking $17,865 as the unpaid balance on the account. The complaint alleged that defendants' son, Ean Miller, had purchased buildingmaterials from plaintiff, charging those materials to the Miller account with his father's authority. The complaint further alleged that the materials that Ean purchased were delivered to properties that defendants owned and were used to improve those properties and that, for several years, defendants had paid the charges that Ean had made on the account.

Plaintiff personally served Linda Miller with summons and complaint at defendants' residence in Wisconsin, on August 3, 2010. After Linda was served with the summons and complaint, defendants each signed powers of attorney authorizing Ean "to answer the complaint filed in [this case]." On August 30, 2010, Ean filed an answer for defendants, attaching the two powers of attorney as exhibits. The answer denied that Ean had authority to charge building materials to his father's account and denied that the materials that Ean had purchased were used to improve defendants' properties. The answer affirmatively alleged that Ean had purchased the materials and incurred the charges for work done on other people's property. In a counterclaim, the answer further alleged that collection of the account was stayed by Ean's voluntary bankruptcy petition. The answer was signed "Ean Miller P.O.A." and it designated defendants' address as "2816 N 2nd St., La Grande, OR 97850." Ean filed the answer in the circuit court, and the case was assigned to court-annexed arbitration pursuant to ORS 36.405(1)(a).²

Ron was served with summons and complaint by substitute service on Linda at their Wisconsin residence address in November 2010. In April 2011, the court appointed an arbitrator, copying the notice of appointment to "Jonel Ricker [plaintiff's attorney], Ron Miller, etal [sic]." The arbitrator then sent notices of potential hearings dates,his arbitration rates, and a hearing date and location to plaintiff's counsel and to "Ean Miller POA" at the La Grande address. Plaintiff's counsel sent a prehearing statement of proof to defendants at the La Grande address as well.

Neither defendants nor Ean participated in the arbitration proceeding. At the hearing, plaintiff orally moved to strike defendants' answer on the ground that Ean was not licensed to practice law in the state of Oregon and, therefore, lacked authority to represent defendants in the action. The arbitrator granted that motion, then received plaintiff's evidence and heard testimony from plaintiff's witnesses.³

The next day, the arbitrator issued a decision and award, which was mailed to plaintiff's counsel and to defendants at the La Grande address. In the decision and award, the arbitrator determined that plaintiff was entitled to recover the amount sought on its claims, and the arbitrator directed plaintiff's counsel to prepare a general judgment in accordance with findings of fact and conclusions of law that the arbitrator made in support of his decision. Plaintiff's counsel filed a proposed general judgment and money award, attorney fee statement, and statement of costs and disbursements with the court on June 16, 2011. Plaintiff's counsel mailed copies of those documents to defendants at the La Grande address. The court entered the general judgment and money award on July 14, 2011. On July 18, 2011, Ean received a notice of entry of judgment that the court had mailed to the La Grande address.

After receiving the notice of entry of judgment, Ean contacted defendants, who then obtained counsel and filed a motion to set aside the judgment under ORCP 71 B(1).⁴ Inthe motion, defendants generally asserted that the judgment should be set aside due to mistake, inadvertence, surprise, or excusable neglect that resulted in defendants' failure to defend the action.⁵ More particularly, defendants argued that they "should be excused from failing to appear" because (1) case-related documents were mailed to Ean's address, not defendants; (2) Ean had moved his residence and had not received his mail; and (3) Ean was authorized only to file the answer on defendants' behalf, not to otherwise defend them in this action. Because they had given Ean authority only to file the answer, defendants argued that case-related documents should have been mailed to them at their residence address in Wisconsin.

In support of their motion, defendants each filed declarations stating that they did not know that Ean could not lawfully file an answer for them. They further averred that the authority that they had granted to Ean under the powers of attorney extended only to filing the answer and that they otherwise had intended to personally defend the action. Defendants also stated that they had not received any case-related communications from Ean, plaintiff, or the court until Ean notified them that the judgment had been entered. Ron also declared that he and Ean had discussed the case weekly and that they had wondered why they had not heard anything about the case. In addition, Ron described a phone call in which an employee of plaintiff had told him that she was aware that the allegations againsthim were false. Because of that phone call, Ron stated that he had assumed that the action would be dropped.

In a separate declaration, Ean stated that, after he had filed the answer on behalf of his parents, he had moved but had not notified the court or plaintiff's counsel of his new address, although he had filed a forwarding address notice with the post office. Ean further declared that he had not received any case-related documents from anyone until he received the notice of entry ofjudgment on July 18, 2011. Ean also confirmed Ron's declaration that the two had discussed the matter regularly and that they both had wondered why they had not received any case-related information. According to Ean, he had assumed, like his father, that the matter had been dropped. In addition, Ean stated that he had had a separate account with plaintiff, that he had charged the subject building materials to his own account, that the materials he had purchased were not used to improve his parents' properties, and that his debt had been discharged in bankruptcy.

At the hearing on their motion to set aside the judgment, defendants focused on two arguments that were intertwined. First, defendants argued that the judgment should be set aside on the ground that they were excusably unaware of the existence of the arbitration proceeding and the subsequent general judgment on the arbitrator's award because they had not been properly served with case-related documents beyond the summons and complaint.⁶ Second,defendants asserted that the judgment should be set aside because plaintiff's counsel had not served defendants with case-related documents, despite knowing that Ean was not an attorney. According to defendants, because plaintiff knew that Ean was not an attorney, plaintiff was required to serve all documents on defendants at their own residence address pursuant to ORCP 9.

In response, plaintiff argued that defendants were not entitled to relief because (1) all notices were mailed to the address designated in the answer that defendants had authorized Ean to file; (2) no documents that were mailed to that address were ever returned to plaintiff's counsel, the court, or the arbitrator, making it implausible to believe that Ean had not received...