Case Title: Barackman v. Anderson

Citation: 

Docket Number: S51462

State: oregon

Court: Oregon Supreme Court

Date: 2005-03-31T00:00:00Z

Document:
FILED:  March 31, 2005
IN THE SUPREME COURT OF THE STATE OF OREGON
DEANNA BARACKMAN,
Petitioner on Review,
v.
ANTHONY ANDERSON,
Respondent on Review.
(CC No. 9908-08315; CA A112472; SC S51462)
En Banc
On review from the Court of Appeals.*
Argued and submitted January 6, 2005.
Williard E. Merkel, of Merkel & Associates, Portland, argued
the cause and filed the petition for petitioner on review.
Thomas Christ, of Cosgrave, Vergeer & Kester LLP, Portland,
argued the cause and filed the briefs for respondent on review.
Meagan A. Flynn, Portland, filed briefs on behalf of amicus
curiae Oregon Trial Lawyers Association.
DE MUNIZ, J.
The decision of the Court of Appeals is affirmed.  The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.
*Appeal from Multnomah County Circuit Court, Robert W. Redding, Senior Judge. 192 Or App 176, 84 P3d 830 (2004).
DE MUNIZ, J.
The issue in this case is whether a decision in a
personal injury protection (PIP) arbitration should be given
preclusive effect in a subsequent civil action. (1)  Plaintiff
claimed dental injuries arising out of a vehicle collision and
sought PIP benefits from her own insurer.  An arbitration panel
concluded that the collision did not cause plaintiff's dental
injuries.  
Plaintiff later sought compensation for those injuries
in this civil action.  Defendant, however, raised as an
affirmative defense that the arbitration panel already had
determined that issue adversely to plaintiff.  The trial court
refused to give the arbitration decision any preclusive effect
and permitted the jury to determine liability and award damages
for plaintiff's dental injuries.  Defendant appealed.  The Court
of Appeals concluded that the trial court had erred in granting
plaintiff's summary judgment motion against defendant's
affirmative defense asserting issue preclusion.  We allowed
review and now affirm the decision of the Court of Appeals on the
limited grounds described below.
The material facts are undisputed.  Plaintiff and
defendant were involved in a collision in which defendant turned
his vehicle in front of plaintiff's vehicle in order to enter a
driveway.  Plaintiff maintained that, in the collision, she
injured her back and neck and fractured two teeth.  She sought
compensation two ways -- initially filing for PIP benefits from
her insurer and subsequently filing a personal injury action
against defendant.  After the insurer denied PIP benefits for the
dental injuries, plaintiff requested arbitration.  See ORS
742.520(6) (PIP disputes between insurers and beneficiaries shall
be decided by arbitration "if mutually agreed to at the time of
the dispute").  The arbitration panel concluded that the
collision was not the cause of plaintiff's dental injuries and
denied her PIP benefits for dental treatment. 
Later, during this civil action, defendant asserted as
an affirmative defense that the arbitration decision precluded
plaintiff from seeking compensation for the injury to her teeth. 
Plaintiff moved for summary judgment in response to that defense,
and the trial court granted the motion.  At trial, a jury awarded
plaintiff damages that included compensation for the injury to
her teeth.
Defendant appealed, arguing that the arbitration
decision should have been accorded preclusive effect in the
subsequent civil action.  Plaintiff responded that the
legislature did not intend issues decided in PIP arbitration
proceedings to have preclusive effect and that accordingly the
arbitration decision violated her right to a jury trial under
Article I, section 17, of the Oregon Constitution.  The Court of
Appeals disagreed with plaintiff's arguments and reversed the
judgment.  Barackman v. Anderson, 192 Or App 176, 84 P3d 830
(2004).  We allowed plaintiff's petition for review to address
the issue.
We begin with a brief discussion of the concept of
issue preclusion, as that concept is recognized as an aspect of
Oregon law.  "Issue preclusion arises in a subsequent proceeding
when an issue of ultimate fact has been determined by a valid and
final determination in a prior proceeding."  Nelson v. Emerald
People's Utility Dist., 318 Or 99, 103, 862 P2d 1293 (1993). 
Issue preclusion is a jurisprudential rule that promotes judicial
efficiency.  Id. (citing State v. Ratliff, 304 Or 254, 257, 744
P2d 247 (1987)).  In Nelson, the court identified five
requirements essential to the application of issue preclusion:
(1) "[t]he issue in the two proceedings is identical"; (2) the
issue actually was "litigated and was essential to a final
decision on the merits in the prior proceeding"; (3) "[t]he party
sought to be precluded has had a full and fair opportunity to be
heard on that issue"; (4) "[t]he party sought to be precluded was
a party or was in privity with a party to the prior proceeding";
and (5) "[t]he prior proceeding was the type of proceeding to
which this court will give preclusive effect."  Id. at 104. 
Ordinarily, a party resisting the application of issue
preclusion would attempt to do so based on the alleged absence of
one or more of the five Nelson requirements.  However, plaintiff
in this case does not address in this court the five requirements
that Nelson identified as essential to the application of issue
preclusion.  In fact, the trial court record does not contain the
PIP arbitration record or the arbitration decision. (2) 
Neither party cites any statutes that disclose the requirements,
nature, or character of PIP arbitration proceedings, generally. 
The trial court record discloses only that, before trial,
plaintiff moved for summary judgment in response to defendant's
affirmative defense based on issue preclusion.  Both parties
treated the preclusion question raised in plaintiff's summary
judgment motion as a legal one, framed solely by plaintiff's
legal arguments against according the PIP arbitration decision
preclusive effect.  Specifically, plaintiff asserted that the
legislature did not intend for issues decided in a PIP
arbitration to be accorded preclusive effect in a subsequent
civil action, and to permit preclusion would unconstitutionally
deprive plaintiff of a jury trial on the issue decided in the PIP
arbitration.  Thus, this case does not present questions
concerning whether the PIP arbitration authorized in ORS
742.520(6) (3) provides an outcome that would meet the five
Nelson factors.  We therefore limit our discussion to those
arguments that plaintiff raised in her summary judgment motion
and that she continues to assert in this court.  We now turn to
those arguments.
Plaintiff first maintains that, as a matter of
statutory construction, the legislature did not intend that
issues decided in a PIP arbitration proceeding be accorded
preclusive effect in a subsequent civil action.  That argument
relies solely on an interpretation of the words of ORS
742.522(1), which provides:  "Arbitration under ORS 742.520(6) is
binding on the parties to the arbitration."  
This court's inquiry regarding the meaning of a statute
must be undertaken according to the methodology set out in PGE v. Bureau of Labor and Industries, 317 Or 606, 610-12, 859 P2d 1143 (1993).  In accordance with that methodology, we first examine
the text and context of the statute, giving words of common usage
"their plain, natural, and ordinary meaning."  Id. at 611.  If the legislative intent is clear from the text and context of the
statute, then further analysis is unnecessary.  Id.  
Examining the words of ORS 742.522(1), they indicate
that an arbitration is binding with respect to the parties'
dispute, as opposed to advisory or nonbinding.  Plaintiff,
however, offers a different meaning.  According to plaintiff, the
issues determined in a PIP arbitration are binding only as to the
parties' dispute, but cannot be asserted as preclusive in a
subsequent proceeding by any person or entity not a party to the
PIP proceedings.  It is true that the arbitration decides only
the dispute between the parties.  In this case, the arbitration
determined that the collision in question did not cause the
injuries to plaintiff's teeth and, according to the plain text of
ORS 742.522(1), that determination is binding as between
plaintiff and her insurer.  That, however, is as far as the
statutory directive extends.  
This court must respect the separate roles assigned to
the legislature and to the courts.  The legislature created the
statutory arbitration process for the determination of PIP
benefit disputes.  It did not, however, expressly specify how a
court must treat PIP arbitration findings in subsequent
proceedings.  Indeed, the statutory context demonstrates that the
legislature has known for some time how to prevent arbitration
proceedings from having a preclusive effect in a subsequent civil
action and did so in arbitrations between insurers.  See ORS
742.534(4) (findings and awards made in arbitration proceedings
between insurers "are not admissible in any action at law or suit
in equity").
In this instance, plaintiff has failed to demonstrate
that the words of ORS 742.522(1) reflect a legislative intent to
prohibit courts of this state from applying the doctrine of issue
preclusion to arbitration decisions. (4)  It is true of course,
that the statute also does not indicate that the legislature
intended to authorize the preclusive use of PIP arbitrations. 
But that fact only establishes that the statute is neutral on the
issue.  Plaintiff had to show something more.  We reject
plaintiff's argument that the legislature intended ORS 742.522(1)
to prevent judicial application of the doctrine of issue
preclusion to PIP arbitration proceedings.
Plaintiff argues next that she had little incentive to
contest the dispute over dental treatment in the arbitration,
because the amount of damages was less than or merely a subset of
what plaintiff could obtain in a subsequent civil action.  At the
outset, we observe that that argument is not related to the third
consideration under Nelson, viz., whether the party sought to be
precluded had a full and fair opportunity to be heard on that
issue.  Here, plaintiff does not argue that she lacked a full and
fair opportunity to litigate her claim in the PIP arbitration,
but instead maintains that the arbitration was less important or
significant than the subsequent civil action and that she had
little economic incentive to pursue the matter.  In support of
that argument, plaintiff asserts that PIP arbitration is supposed
to be "quick and inexpensive."  We do not quarrel with
plaintiff's description.  Plaintiff does not suggest, however,
that, because of the quick and inexpensive nature of PIP
arbitration proceedings, she was legally prevented from offering
greater or different kinds of proof or argument at the
arbitration proceeding.  What plaintiff chose to do was her
choice, nothing more.  Plaintiff simply has not demonstrated that
the forum somehow prevented her from offering the proof that she
needed to show to prevail on her PIP claim. 
Finally, plaintiff argues that according preclusive
effect to the arbitration findings would deprive her of her right
to a jury trial under Article I, section 17, of the Oregon
Constitution, even though she voluntarily chose to arbitrate her
claim to dental benefits.  Article I, section 17, provides that
"[i]n all civil cases the right of Trial by Jury shall remain
inviolate."  Constitutional rights may be waived, however, and
the right to a jury trial is one of those rights that may be
waived.  When a party agrees to arbitration, the state has not
deprived that party of a jury trial, because the party
"voluntarily has agreed to forego one."  Carrier v. Hicks, 316 Or
341, 352, 851 P2d 851 (1993); Molodyh v. Truck Ins. Exch. et al.,
304 Or 290, 299, 744 P2d 992 (1987).  At one time, the
legislature mandated arbitration of PIP disputes; as a result,
this court treated PIP arbitration findings as nonbinding,
because to do otherwise would force a party to waive its
constitutional right to a jury trial.  See Foltz v. State Farm
Mutual Auto. Ins. Co., 326 Or 294, 302, 952 P2d 1012 (1998) (so
stating).  The legislature, however, changed the law to make PIP
arbitration voluntary.  Id. at 298 n 2.  Here, plaintiff
voluntarily chose to arbitrate and thus waived her right to a
jury trial as to the issues disputed in the arbitration.
As earlier suggested, at this juncture, one issue
ordinarily would remain, viz., the issue whether, in the absence
of a legislative choice one way or the other respecting the
availability of issue preclusion in these circumstances, this
court should declare as a matter of common law whether issue
preclusion is available.  We say "ordinarily," because we would
anticipate that the parties also would have addressed that issue. 
However, this was not the ordinary case.  The parties' apparent
assumption before both the trial court and the Court of Appeals
was that, unless one of plaintiff's two arguments that we already
have addressed is well taken, issue preclusion would apply.  That
assumption was incorrect.  For issue preclusion to apply to PIP
arbitrations as a matter of law, all the Nelson requirements must be satisfied.  However, as previously noted, not all of the
Nelson requirements can be determined on the record before us. It follows that the Court of Appeals had no legal basis for
ruling as a matter of law that issue preclusion did apply in this case.  To the extent that court's opinion can be read to do so, such a holding is beyond the scope of the legal questions framed by plaintiff's summary judgment motion and defendant's response. The question whether, under Nelson, issue preclusion was available to defendant in this case as a matter of law was not properly before the Court of Appeals and is not now properly before us.  We therefore express no opinion respecting the issue.
The foregoing notwithstanding, and in light of
plaintiff's limited arguments and the limited record before this
court, we conclude that the Court of Appeals did not err in
reversing the trial court's order that struck defendant's
affirmative defense based on issue preclusion.  That decision is
affirmed, albeit on different and more limited grounds than those
the Court of Appeals stated.
The decision of the Court of Appeals is affirmed.  The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.
1. PIP benefits include payments for medical and medically
related expenses, loss of income, and loss of essential services
as the result of a motor vehicle accident.  ORS 742.520(3).  An
insurer is required to pay PIP benefits promptly after a proof of
loss is submitted to the insurer, and the potential existence of
a tort action does not excuse the insurer's duty to pay such
benefits.  ORS 742.520(4) and (5).
2. The record in this case does not inform us whether in the
arbitration witnesses were sworn before testifying, whether
witnesses testified in person, whether the proceeding was
recorded and/or transcribed, or whether written findings were
made.
3. ORS 742.520(6) provides:
"Disputes between insurers and beneficiaries about
the amount of personal injury protection benefits, or
about the denial of personal injury protection
benefits, shall be decided by arbitration if mutually
agreed to at the time of the dispute."
4. We note that, in general, arbitration proceedings have
been accorded preclusive effect in subsequent civil actions for
decades.  See Rueda v. Union Pacific Railroad Co., 180 Or 133,
162-73, 175 P2d 778 (1946).