Willamette Quarries, Inc. v. Wodtli

• Decision Date: 26 October 1989
• Citation: 308 Or. 406,781 P.2d 1196
• Parties: WILLAMETTE QUARRIES, INC., an Oregon corporation, Petitioner on review, v. Allen WODTLI and Ruth L. Wodtli, husband and wife, J.C. Compton Contractor, Inc., an Oregon corporation, dba J.C. Compton Contractors, and Morse Brothers, Inc., an Oregon corporation, Respondents on review, and Cascade Crushing, Inc., an Oregon corporation, Defendant. CC 84-1138, CA A42921, SC S35695.
• Court: Oregon Supreme Court

Page 1196

781 P.2d 1196

308 Or. 406

WILLAMETTE QUARRIES, INC., an Oregon corporation, Petitioner on review, v. Allen WODTLI and Ruth L. Wodtli, husband and wife, J.C.

Compton Contractor, Inc., an Oregon corporation, dba J.C.

Compton Contractors, and Morse Brothers, Inc., an Oregon

corporation, Respondents on review,

and

Cascade Crushing, Inc., an Oregon corporation, Defendant.

CC 84-1138, CA A42921, SC S35695.

Supreme Court of Oregon,

In Banc.

Argued and Submitted May 3, 1989.

Decided Oct. 26, 1989.

Ray Fechtel, of Ray Fechtel, P.C., Eugene, argued the cause and filed the petition for petitioner on review.

Thomas J. Reuter, of Morley, Thomas, Kingsley, Reuter & McHill, Lebanon, argued the cause for respondents on review Wodtli.

Dean M. Quick, of Weatherford, Thompson, Brickey & Quick, P.C., Albany, argued the cause for respondents on review J.C. Compton Contractor, Inc., and Morse Brothers, Inc.

PETERSON, Chief Justice.

The plaintiff filed this action after discovering that rock had been removed from a quarry from which the plaintiff by contract had an exclusive right to remove a certain type of rock. After the plaintiff rested, the trial court granted a directed verdict. The Court of Appeals affirmed in part and reversed in part. Willamette Quarries v. Wodtli, 93 Or.App. 306, 761 P.2d 1356 (1988). We affirm the Court of Appeals.

ANALYSIS OF THE EVIDENCE

This being an appeal from a directed verdict, we consider the evidence in the light most favorable to the plaintiff, giving the plaintiff the benefit of every reasonable inference supported by the record. Foster v. Schnell Refrigeration Co., 280 Or. 411, 414, 571 P.2d 497 (1977). In 1962, the plaintiff's predecessors in interest, L.P. and Jesse Stubblefield, signed a quarry agreement with the defendants Allen and Ruth Wodtli. This contract would have expired in 1982. After succeeding to the Stubblefields' interest, the plaintiff, Willamette Quarries, entered into a new quarry agreement with the Wodtlis on March 31, 1966. This contract superseded the 1962 contract and expired on March 31, 1986.

The contract between Willamette Quarries and the Wodtlis defined with precision a 40-acre tract of land owned by the Wodtlis. The contract granted the plaintiff two rights. First, it allowed the plaintiff to establish a quarry for the purpose of severing and removing "revetment and/or riprap rock." It provided that this quarry "shall be located upon and confined to a tract not to exceed five (5) acres in said 40 acre subdivision, which has heretofore been agreed upon by the parties." Second, it stated that the plaintiff had the exclusive right to remove "revetment and/or riprap rock from the premises" and that "no rock of this type shall be removed from the other quarries or quarry sites on the property of Vendors without the written consent of the Vendees." The contract stated that the plaintiff would pay the Wodtlis ten cents per cubic yard for the rock. The ten-cent-per-yard figure was based on the fact that the plaintiff expected to sell the rock for $1.80 per cubic yard. The contract also stated that the plaintiff had already paid a $50 exploration fee and would pay an additional $500 to the Wodtlis before commencing its quarrying operation.

The plaintiff thereafter constructed a road to its quarry site, removed the soil over the rock and dumped it in a waste area, and commenced quarry operations. It also stockpiled 1390 cubic yards of rock described by one witness as "riprap rock."

In 1981 the defendant Morse Brothers entered into an agreement with the defendants Wodtli which allowed Morse Brothers to remove rock and gravel from this same 40-acre tract. This contract states that Morse Brothers shall respect the contractual rights of the plaintiff, Willamette Quarries, and it erroneously states that the plaintiff's contract with the Wodtlis "expires in 1982." ¹ Between 1981 and 1983, Morse Brothers extracted rock from the 40-acre tract, including rock from the plaintiff's quarry, some of which it sold to defendant J.C. Compton Contractors.

The plaintiff alleged and introduced evidence tending to prove that Morse Brothers severed and removed rock from the plaintiff's quarry and also removed 1390 cubic feet of rock previously stockpiled by the plaintiff. The plaintiff's complaint alleged breach of contract by the Wodtlis, intentional interference with contractual relations by Morse Brothers, and trespass and conversion by all the defendants. The

trial court granted a directed verdict but did not specify the ground on which it was granted. The Court of Appeals reversed only that part of the conversion claim against Morse Brothers and J.C. Compton Contractors pertaining to the 1390 cubic-yard stockpile. Willamette Quarries v. Wodtli, supra, 93 Or.App. at 311-12, 761 P.2d 1356.

ANALYSIS OF THE ISSUES

Statute of Frauds

The contract provision conferring the right to extract rock from the Wodtlis' property grants the plaintiff a profit a prendre, which "is the right to acquire, by severance or removal from another's land, some thing or things previously constituting a part of the land." Jackson County v. Compton, 289 Or. 21, 24, 609 P.2d 1293 (1980). We have stated that "[a] grant of a profit a prendre is a grant of an interest in the land itself, and within the statute of frauds." High v. Davis, 283 Or. 315, 322, 584 P.2d 725 (1978).

ORS 41.580, the statute of frauds, provides in pertinent part:

"In the following cases the agreement is void unless it, or some note or memorandum thereof, expressing the consideration, is in writing and subscribed by the party to be charged, or by the lawfully authorized agent of the party; evidence, therefore, of the agreement shall not be received other than the writing, or secondary evidence of its contents in the cases proscribed by law:

" * * * * *

"(5) An agreement for the leasing for a longer period than one year, or for the sale of real property, or of any interest therein."

The defendants maintain that the entire contract violates the statute of frauds because the location of the five-acre tract is not described in the contract.

Although the failure to define the five-acre tract might prevent enforcement of the contract were the contract not performed, the general rule is that the statute of frauds "only applies to executory, as distinguished from [performed] contracts; if an oral contract, otherwise within the Statute, is completely executed or performed it is taken out of the operation of the Statute." 3 Williston, Contracts 725-26, § 528 (3d ed 1961). Full performance of a promise by one party removes that part of the contract from the operation of the statute. Id. 584 P.2d at 732. Thus, in Wiggins v. Barrett & Associates, Inc., 295 Or. 679, 681, 669 P.2d 1132 (1983), the plaintiffs granted an easement across their property to the defendants on which the defendants were to build a sewer line. In return the defendants orally promised to provide sewer hook-ups for the plaintiffs. The defendants failed to provide these hook-ups and the plaintiffs sued for breach of contract. The defendants interposed the statute of frauds. The court held that the plaintiffs' full performance took the oral promise out of the statute of frauds. 295 Or. at 684-86, 669 P.2d 1132.

Grover v. Sturgeon, 255 Or. 578, 581-82, 469 P.2d 617 (1970), involved a claim for breach of an oral promise by the plaintiff to pay a $12,000 bonus to the defendant if the defendant continued to manage the plaintiff's car dealership until it was sold. After the defendant performed his promise, the plaintiff reneged, asserting that the statute of frauds barred enforcement. We declared that "the statute has no application where the oral promise has been performed." 255 Or. at 584, 469 P.2d 617. See also Kneeland v. Shroyer, 214 Or. 67, 88, 328 P.2d 753 (1958) (statute of frauds no bar to enforcement of oral promise fully performed by one party within one year); Malzer v. Schisler, 67 Or. 356, 357, 136 P. 14 (1913) (oral contract taken out of the statute of frauds when one party fully performs).

When this case went to trial on December 15, 1986, the twenty-year term of the contract had expired. Both parties had fully performed with respect to the five-acre-extraction provision. The plaintiff also paid royalties for the rock that it removed from the defendants' property. The plaintiff was not impeded from severing and removing as much rock as it wished.

Having been fully performed, this provision of the contract is taken out of the statute of frauds. ²

Breach of Contract

The plaintiff claims that the Wodtlis breached the quarrying contract by allowing Morse Brothers to remove riprap rock from the 40-acre tract. The plaintiff alleged that it had been "damaged by loss of profits and sales of its rock products in the sum of not less than $191,250." In an effort to prove these damages, the plaintiff introduced evidence that Morse Brothers removed over 100,000 yards of riprap rock from the Wodtlis' property and that the market price for such rock was between $1.80 and $2.00 per yard. The Court of Appeals held that this was insufficient to prove damages with reasonable certainty. Willamette Quarries v. Wodtli, supra, 93 Or.App. at 310-11, 761 P.2d 1356. We agree.

We have stated that to recover for lost profits or sales, a plaintiff must prove these damages with "reasonable certainty." Buck v. Mueller, 221 Or. 271, 282-83, 351 P.2d 61 (1960). See also Welch v. U.S. Bancorp., 286 Or. 673, 704-05, 596 P.2d 947 (1979). Loss of future profits may be established by proof of past profits of an established business, Buck v. Mueller, supra, 221 Or. at 282-83, 351 P.2d 61, or by expert projections based upon tests performed under substantially similar conditions. Hardwick v. Dravo Equipment Company, 279 Or. 619, 622-25, 569 P.2d 588 (1977). Lost profits or sales, however, are not proved merely by testimony of unverifiable expectations of profits. Meader v....