Walthers v. Gossett

• Jurisdiction: Oregon
• Parties: Julie WALTHERS, Appellant, v. Jessie W. GOSSETT, Defendant, and Ralph F. Fear, D.D.S., P.C., Respondent. CV 95-287; CA A92237.
• Citation: 148 Or.App. 548,941 P.2d 575
• Court: Oregon Court of Appeals
• Decision Date: 25 June 1997

Page 575

941 P.2d 575

148 Or.App. 548

Julie WALTHERS, Appellant, v. Jessie W. GOSSETT, Defendant and Ralph F. Fear, D.D.S., P.C., Respondent.

CV 95-287; CA A92237.

Court of Appeals of Oregon.

Argued and Submitted Dec. 19, 1996.

Decided June 25, 1997.

David Slader, Portland, argued the cause and filed the briefs for appellant.

Peter A. Ozanne, Portland, argued the cause for respondent. With him on the brief were Daniel Knox, Gregory A. Zafiris and Schwabe, Williamson & Wyatt.

Before DEITS, P.J., and De MUNIZ and HASELTON, JJ.

De MUNIZ, Judge.

Plaintiff appeals from a judgment entered after the trial court granted defendant's motions for failure to state a claim, ORCP 21 A, and judgment on the pleadings. ORCP 21 B. We reverse.

Plaintiff alleges that as a teenager she was sexually abused by her orthodontist, who practiced as the sole officer and shareholder of a professional corporation. Another dentist has since purchased and renamed the corporation, and plaintiff now seeks damages from both the renamed corporation and her original orthodontist.

On review of a dismissal pursuant to ORCP 21 A, we treat the non-moving party's factual allegations as true and accept all reasonable inferences in that party's favor. Hansen v. Anderson, 113 Or.App. 216, 218, 831 P.2d 717 (1992). In her second amended complaint, plaintiff alleged the following: Defendant Jess W. Gossett was the sole officer and shareholder of "Jess W. Gossett, D.M.D., M.S., P.C.," a professional corporation through which Gossett practiced orthodontia. Between December 1976 and November 1978, while plaintiff was a minor and a patient of the corporation, Gossett sexually molested her during dental exams at the corporation's office by touching her breasts and genitals without her consent. In 1979, Dr. Fear purchased the corporation and renamed it "Ralph F. Fear, D.D.S., P.C." (defendant). Plaintiff does not allege any wrongdoing by Dr. Fear.

In August 1995, plaintiff filed an action for battery against Gossett. ¹ In September 1995, she amended her complaint, joining defendant in the battery action under theories of direct and vicarious liability, and bringing a separate negligence claim based on defendant's failure to protect plaintiff and other patients from Gossett's abuse.

Under the theory of direct liability, plaintiff's complaint provides, in part:

"[The corporation] battered plaintiff by aiding and assisting Gossett's acts of sexual abuse as follows:

"a. [The corporation] allowed Gossett to remain in its employment and to conduct unsupervised dental examinations of plaintiff and other young girls despite the knowledge that Gossett would abuse plaintiff and others;

"b. [The corporation] provided Gossett with an examining room and equipment despite knowledge that Gossett used such space and equipment as a pretext to obtain access to plaintiff and to other young girls whom Gossett intended to molest; and

"c. [The corporation] made appointments for plaintiff and other young girls to be examined by Gossett despite knowledge that Gossett intended, or was likely, to molest plaintiff and others at such appointed time and place." ²

Under its claim of vicarious liability, plaintiff alleged:

"The acts of sexual abuse occurred while plaintiff was a dental patient of [the corporation], took place at [the corporation's] dental office and occurred in the course of dental treatments at appointments that had been arranged by [the corporation]. The appointments had been arranged with [the corporation's] knowledge that Gossett would, or was likely to, use the opportunity of the appointment and the facilities of [the corporation] to abuse plaintiff.

"Gossett's acts were within the course and scope of his employment by [the corporation] and were incidental in time and place to his dental treatment of plaintiff on behalf of [the corporation]."

Under her negligence claim, plaintiff alleged:

"[The corporation] was negligent in one or both of the following particulars that caused the abuse of plaintiff:

"a. Prior to the abuse of plaintiff, [the corporation] knew that Gossett intended to sexually molest, had a practice of sexually molesting, and had an uncontrollable urge to sexually molest [the corporation's] minor female patients. [The corporation], nonetheless, took no steps to protect its patients from such abuse by either terminating Gossett's employment, by supervising his treatment of [the corporation's] minor female patients, by notifying [the corporation's] minor female patients, or otherwise; and "b. [The corporation] knew that Gossett was molesting plaintiff and took no steps to prevent repeated acts of abuse."

Defendant moved for dismissal of the battery action for failure to state a claim, ORCP 21 A, arguing that a corporation cannot be held directly liable for the intentional torts of its employees, and that it was not vicariously liable under the facts alleged by plaintiff. On the negligence claim, it moved for judgment on the pleadings, ORCP 21 B, arguing that the extended limitations period for child abuse claims in ORS 12.117 did not apply to negligence actions. The trial court granted both motions.

On appeal, plaintiff first assigns error to the dismissal of her battery claim under ORCP 21 A, which we review as a question of law. Hansen, 113 Or.App. at 218, 831 P.2d 717. We begin by addressing whether defendant could be held directly liable for "aiding and assisting" Gossett's acts of sexual abuse.

"Battery" is defined as a voluntary act that is intended to cause the resulting harmful or offensive contact. Bakker v. Baza'r, Inc., 275 Or. 245, 249, 551 P.2d 1269 (1976); Brown v. Far West Federal, 66 Or.App. 387, 390, 674 P.2d 1183 (1984). To be liable for battery under an "aiding and assisting" theory, a defendant "must have participated in, aided, or procured the battery." Paur v. Rose City Dodge, 249 Or. 385, 389, 438 P.2d 994 (1968). Furthermore, the defendant must have acted with the requisite mental state--i.e., it must have intended the "harmful or offensive contact," Brown, 66 Or.App. at 390, 674 P.2d 1183, or at least understood "that a tort is being or will be committed by the other when he aids him," Gymnastics USA v. McDougal, 92 Or.App. 453, 458, 758 P.2d 881, rev. den. 307 Or. 77, 763 P.2d 731 (1988).

Defendant contends that a corporation cannot, as a matter of law, commit intentional torts such as battery. It reasons that a corporation can only act through its officers and employees, and Oregon courts have held corporations liable in tort only for employee acts committed in the course and scope of employment--i.e., under a theory of vicarious liability. See, e.g., Chesterman v. Barmon, 305 Or. 439, 753 P.2d 404 (1988). However, defendant does not explain why, as a matter of law or public policy, a corporation cannot be held directly liable for its employees' intentional torts.

Defendant's argument appears to rest on the notion that a corporation cannot directly engage in intentional tortious acts. However, under an "aiding and assisting" theory of battery, the corporation itself is not alleged to have committed the offensive or harmful contact. Rather, it is only alleged to have engaged in acts that facilitated another's torts, with the intent or knowledge that tortious conduct would occur. ³

We acknowledge the inherent difficulty in applying such a theory to a closely held corporation owned and operated by a single individual. As defendant asserts, a corporation can act only through its agents, Chesterman, 305 Or. at 445, 753 P.2d 404 (Peterson, C.J., concurring), and the corporation's sole agent in this case is Gossett, the tortfeasor whom the corporation is alleged to have assisted. The difficulty comes in sorting out which of Gossett's acts may be imputed to the corporation and which are entirely personal to Gossett himself. That difficulty, however, is not insurmountable.

The first question is whether the complaint states facts demonstrating that the corporation engaged in conduct that aided and assisted Gossett's sexual abuse. We conclude that it does. Plaintiff alleges that the corporation scheduled dental appointments for minor female patients, and that it furnished the examination room, facilities and equipment, providing Gossett with both his victims and the opportunity to molest them.

It is unclear whether Gossett himself, or another corporate employee, scheduled those appointments and provided the facilities. ⁴ However, even if it was Gossett, we have no difficulty in imputing that part of his conduct to the corporation, because those acts were clearly within the corporation's purpose of providing dental services.

The next question is whether the corporation aided Gossett with the requisite mental state--i.e., with the intent of subjecting plaintiff to sexual abuse, Brown, 66 Or.App. at 390, 674 P.2d 1183, or with the knowledge that such abuse was occurring or would occur, Gymnastics USA, 92 Or.App. at 458, 758 P.2d 881. Plaintiff alleges that defendant knew that Gossett intended, or was likely, to molest the corporation's patients during the scheduled examinations. Again, the problem is that Gossett was the sole corporate officer, and the corporation's knowledge must come from Gossett himself.

In Bingham v. Lipman, 40 Or. 363, 67 P. 98 (1901), the Oregon Supreme Court upheld the imposition of punitive damages against a corporation whose two sole officers and directors unlawfully detained an employee suspected of embezzlement. 40 Or. at 371-72, 67 P. 98. The court reasoned that

"there can be no room for controversy that where * * * the officers actually wielding the whole executive power of the corporation participated in and directed all that was planned and done, their malicious, wanton, or oppressive intent may be treated as the intent of the corporation itself, for which it is liable to answer in exemplary damages." Id. at 371-72, 67 P. 98.

Because Gossett was defendant's sole...