Case Title: Liles v. Damon Corp.

Citation: 

Docket Number: S054734

State: oregon

Court: Oregon Supreme Court

Date: 2008-12-11T00:00:00Z

Document:
FILED: December 11, 2008
IN THE SUPREME COURT OF THE STATE OF OREGON
DALE L. LILES
and KAREN MARIE LILES,
husband and wife,
Petitioners on Review,
v.
DAMON CORPORATION,
an Indiana Corporation,
Respondent on Review.
(CC 033086; CA A129113; SC S054734)
On review from the Court of Appeals.*
Argued and submitted November 6, 2007.
Gary E. Norman, Albany, argued the cause and filed the brief for petitioners on
review.
William A. Drew, of Elliott, Ostrander and Preston PC, Portland, argued the cause and filed the briefs for respondent on review.
Brian S. Campf, of Brian S. Campf, PC, Portland, filed the brief for amicus curiae Oregon Trial Lawyers Association.
Before De Muniz, Chief Justice, and Gillette, Durham, Balmer, Kistler, and Walters,
Justices.**
DURHAM, J.
The decision of the Court of Appeals is reversed.  The judgment of the circuit
court is affirmed.
*Appeal from Linn County Circuit Court, John A. McCormick, Judge.  210 Or App 303, 150 P3d 432 (2006).
**Linder, J., did not participate in the consideration or decision of this case.
DURHAM, J.
Plaintiffs brought this action under ORS 646 A. 400 to ORS 646 A. 418, commonly known as Oregon's Lemon Law, (1) seeking replacement of a motor home that they had purchased.  The issue on review concerns the proper interpretation of ORS 646 A. 402, which we quote below in full.  Under that statute, a statutory remedy is "available to a
consumer" if, among other things, the manufacturer of a motor vehicle has
received "direct written notification" from the consumer and
"has had an opportunity to correct the alleged defect."  ORS
646A.402(3).
After a trial, the trial court found that plaintiffs had satisfied the statutory requirements and granted relief.  Specifically, the court rejected defendant's contention that ORS 646A.402(3) obligated plaintiffs to afford defendant the opportunity to
correct the alleged defect after sending written notification to
defendant and before filing their action.  In its judgment, the court
made the following finding of fact:
"The Court finds that the manufacturer did
receive adequate written notification of these defects from the Plaintiffs and
that the manufacturer also had ample opportunity to correct the defects."
On appeal, the Court of Appeals reversed.  The Court of Appeals concluded that the conditions in the statute applied in sequence:  that is, the delivery of the consumer's
"direct written notification" of the defect must occur before the
manufacturer has any "opportunity to correct" the defect under the
statute.  Moreover, the court determined that each statutory condition
"must be met before seeking a remedy under the Lemon Law[,]" meaning
that plaintiffs had to satisfy each condition before filing their
action.  Liles v. Damon Corp., 210 Or App 303, 314, 150 P3d 432 (2006). 
According to the Court of Appeals, plaintiffs had satisfied the written notice
requirement but, after doing so, had not provided defendant an opportunity to
correct the alleged defect before filing their action.  This court granted
review to determine whether the Court of Appeals had correctly construed the
requirements in Oregon's Lemon Law.
We view the evidence in the light most favorable to plaintiffs, who prevailed at trial.  On December 30, 2002, plaintiffs purchased a motor home from a dealer in Sandy,
Oregon.  Defendant manufactured the motor home.  According to the trial court's
finding, plaintiffs
"began contacting the factory representatives by phone
in April of 2003 regarding the water leak problems they were experiencing with
the unit.  They contacted the factory representative about the many problems
with the motor home numerous times between April 2003 and December 2003.  The
Plaintiffs also presented numerous times between April 2003 and December 2003. 
The Plaintiffs also presented numerous repair orders from the selling dealer
representing many unsuccessful attempts to repair the water leaks in this unit
during that same period [of] time."
The vehicle dealer performed most of the unsuccessful attempts to repair the leaks.  However, the trial court found that, on one occasion, defendant directed plaintiffs to
submit the vehicle for repair at a different repair shop.  That attempted
repair occurred on December 9, 2003, but it, too, was unsuccessful.  According
to the trial court, that attempted repair "was specifically authorized by
the manufacturer as their attempt to cure the defect[]" and "was an
opportunity to correct the defect before the lawsuit was filed even though
written notice wasn't given."
On December 23, 2003, an attorney representing plaintiffs sent a letter to defendant under Oregon's Lemon Law.  The letter described the water leak problems and
plaintiffs' unsuccessful efforts to resolve them through multiple repair
efforts and through several discussions with defendant's representatives,
including its president and "the field person for Damon in charge of
repairs."  The letter requested the replacement remedy under the Lemon Law,
ORS 646A.404(1)(a), which we quote below.  The letter also stated:
"Because of the timeline of the statute in this case, I
must file a Complaint under the Oregon Lemon Law within one year of the delivery
date, which was December 30, 2002. [(2)] Please let me hear from you right away."
Defendant received the letter described above on December 29, 2003.  Plaintiffs filed their action the next day, December 30, 2003.  In January 2004, plaintiffs informed
defendant that it could have access to the vehicle, but defendant took no
further action to assess or repair the rainwater leaks.  The case was tried to
the court sitting without a jury on February 24, 2005, and the court entered
judgment for plaintiffs on June 7, 2005.  As noted, the Court of Appeals
reversed, and we allowed plaintiffs' petition for review.
This case requires the interpretation of several statutory provisions in Oregon's Lemon Law.  We begin with the text and context of the statutes and endeavor to give meaning to
all parts of those statutes.
ORS 646 A. 402 provides:
"The remedy under the provisions of ORS
646 A. 400 to 646 A. 418 is available to a consumer if:
"(1) A new motor vehicle does not conform to
applicable manufacturer's express warranties;
"(2) The consumer reports each nonconformity
to the manufacturer, its agent or its authorized dealer, for the purpose of
repair or correction, during the period of one year following the date of
original delivery of the motor vehicle to the consumer or during the period
ending on the date on which the mileage on the motor vehicle reaches 12,000
miles, whichever period ends earlier; and
"(3) The manufacturer has received direct
written notification from or on behalf of the consumer and has had an
opportunity to correct the alleged defect.  'Notification' under this
subsection includes, but is not limited to, a request by the consumer for an
informal dispute settlement procedure under ORS 646 A. 408."
ORS 646A.404(1) describes the remedy that is available to a consumer:
"If the manufacturer or its agents or
authorized dealers are unable to conform the motor vehicle to any applicable
manufacturer's express warranty by repairing or correcting any defect or
condition that substantially impairs the use, market value or safety of the
motor vehicle to the consumer after a reasonable number of attempts, the
manufacturer shall:
"(a) Replace the motor vehicle with a new
motor vehicle; or
"(b) Accept return of the vehicle from the
consumer and refund to the consumer the full purchase or lease price paid,
including taxes, license and registration fees and any similar collateral
charges excluding interest, less a reasonable allowance for the consumer's use
of the vehicle."
ORS 646 A. 406 creates a presumption, potentially usable during litigation, about whether the vehicle manufacturer or dealer has undertaken a "reasonable number of
attempts" to conform the vehicle to applicable manufacturer's express
warranties.  That statute provides, in part:
"(1) It shall be presumed that a reasonable number of attempts have been undertaken to conform a motor vehicle to the applicable manufacturer's express warranties if, during
the period of one year following the date of original delivery of the motor
vehicle to a consumer or during the period ending on the date on which the
mileage on the motor vehicle reaches 12,000 miles, whichever period ends
earlier:
"(a) The same nonconformity has been subject
to repair or correction four or more times by the manufacturer or its agent or
authorized dealer, but such nonconformity continues to exist; or
"(b) The vehicle is out of service by reason
of repair or correction for a cumulative total of 30 or more business days.
"(2) A repair or correction for purposes of
subsection (1) of this section includes a repair that must take place after the
expiration of the earlier of either period.
"* * * * *
"(4) In no event shall the presumption
described in subsection (1) of this section apply against a manufacturer unless
the manufacturer has received prior direct written notification from or on
behalf of the consumer and has had an opportunity to cure the defect
alleged."
ORS 646A.412(1) describes additional remedies available to a consumer in a successful action
under the statute "against a manufacturer * * *."  ORS 646A.414(1)
confirms that the statute does not create an action against a vehicle dealer.
Several features of the statutory text are noteworthy.  The statutory remedy is "available to a consumer" under ORS 646.402 only if the consumer communicates certain
information to others.  First, under ORS 646A.402(2), the consumer must
"report[]" the defects to "the manufacturer, its agent or its
authorized dealer, for the purpose of repair or correction" within the
timeframe that the subsection describes.  The statute does not require that
communication to be in writing.  Second, the consumer or someone acting on the
consumer's behalf must give the manufacturer "direct written notification." 
The statute does not describe the information that the consumer's written
notice must contain beyond confirming that a consumer's request for an informal
dispute settlement procedure under ORS 646 A. 408 constitutes notification. 
There is no dispute here that plaintiffs satisfied both of the statutory notice
requirements described above.
The issue presented is whether defendant "has had an opportunity to correct the
alleged defect" under ORS 646A.402(3).  As noted, defendant contends that
the opportunity for correction must occur after it receives the
consumer's written notification under ORS 646A.402(3) but also before
the consumer files an action.  Defendant asserts that plaintiffs afforded it no
opportunity to correct the defect under the statute because only one day
elapsed between its receipt of plaintiffs' attorney's letter on December 29,
2003, and the filing of the action on December 30, 2003.
Defendant's contention that a single day did not afford a reasonable opportunity to correct
the vehicle's defects fails because it proceeds from an erroneous construction
of ORS 646A.402(3).  Notably, the statute does not state that the consumer's
written notification and the manufacturer's opportunity for correction are prefiling
requirements -- that is, required procedural steps that must occur before the
filing of the action.  Rather, ORS 646 A. 402 states that those requirements are
conditions that must exist if the statutory remedy is to be "available to
a consumer[.]"
Defendant contends that the word "alleged" in ORS 646A.402(3) indicates that the defect to which the manufacturer's opportunity to correct pertains must be a defect
that the consumer has "alleged" in the written notification.  According
to defendant, the term "alleged" suggests that the two procedural
conditions in ORS 646A.402(3) must apply in sequence.
Even if we were to accept defendant's point for the sake of argument, it would not support
defendant's further view that the conditions in ORS 646A.402(3) must be met
before the commencement of an action.  But it is not self-evidently true that
defendant is correct when it argues that the word "alleged" in the
phrase "alleged defect" refers solely to an aspect of the consumer's
written notification under ORS 646A.402(3).  The term "alleged" means
"asserted to be true or to exist."  Webster's Third New Int'l
Dictionary 55 (unabridged ed 2002).  That definition embraces both written
and oral assertions of a defect by the consumer.  In context, the term
"alleged" serves only to link the manufacturer's "opportunity to
correct" with the defect for which the consumer seeks a statutory remedy;
it does not create any additional notice requirement.
The "opportunity to correct" requirement in ORS 646.402(3) assures the
manufacturer that it will have a chance to repair or correct the nonconformity
of which the consumer complains before the court determines the availability of
the statutory remedies to the consumer.  The statute affords at least two
opportunities to the consumer to identify the nonconformity for that purpose: 
(1) the report to the manufacturer, its agent or its authorized dealer under
ORS 646A.402(2), and (2) the written notification under ORS 646.402(3).  As
noted, the first of those methods may be accomplished orally, in writing, or a
combination of both.
It is significant that ORS 646A.402(3) does not require the consumer's "direct written
notification" to include any specific contents, such as a particular
description of the vehicle's defects.  The written notification under
subsection (3) may consist of as simple a message as a request for an informal
dispute settlement procedure that might not include any "allegations"
of a vehicle's defects.
The terms of ORS 646 A. 402, viewed in their entirety, indicate that, when the court determines
whether a statutory remedy is available to the consumer, the consumer must have
(1) reported the vehicle's defect to the manufacturer, its agent, or authorized
dealer in a timely manner; and (2) given a direct written notification to the
manufacturer.  In addition, the manufacturer must have had an opportunity to
correct that defect, not some different defect.  The ordinary meaning of
the word "alleged" in ORS 646A.402(3) does not confine the
manufacturer's opportunity to repair solely to a defect that the consumer has
described in the written notification.
Finally, the legislature's intent becomes clear when we contrast the wording of ORS
646A.402(3) with that of ORS 646A.406(4), quoted above.  In the latter statute,
the legislature has assured manufacturers that the described presumption in
favor of the consumer will not apply against them "unless the manufacturer
has received prior direct written notification from or on behalf of the
consumer and has had an opportunity to cure the defect alleged." 
(Emphasis added.)  The term "prior" in that context confirms that,
for purposes of applying the presumption, the consumer notification must
precede the manufacturer's opportunity to cure the defect.
The legislature did not include the word "prior" in ORS 646A.402(3) and, if possible, we must accord legal meaning to that omission.  That task is not difficult in this
case.  In ORS 646A.406(4), the legislature determined that a manufacturer
should be protected from the operation of the evidentiary presumption unless it
had engaged in specific conduct:  failing to use an opportunity to cure the
vehicle defect after receiving direct written notification from the
consumer.  By contrast, under ORS 646A.402(3), the written notification is a
condition regarding the availability of the statutory remedy and it serves to ensure
that the manufacturer is aware of the consumer's dispute, but it need not
necessarily precede the manufacturer's opportunity to correct in order for the
statutory remedy to be available.
We can discern the legislature's intent from an examination of the statutory text in context.  In doing so, we have given effect to every part of the pertinent statutes,
including the legislature's omission of the word "prior" in ORS
646A.402(3), as noted above.  Because the legislature's intent is clear from
our inquiry into text and context, further inquiry is unnecessary.
In this case, before the trial court adjudicated the availability of the statutory remedy to
plaintiffs under ORS 646 A. 402, defendant had an opportunity to correct the
defect that was the subject of plaintiffs' action.  On December 9, 2003,
plaintiffs, acting on defendant's instructions, submitted their vehicle for
repair at a facility selected by defendant.  That attempted repair was
unavailing.  A separate opportunity to repair occurred when plaintiffs made the
vehicle available to defendant in January 2004, after plaintiffs filed this
action.  Defendant took no action in response to that opportunity to repair the
vehicle.  The filing of the action did not cut off defendant's opportunity to
correct the defects in plaintiffs' vehicle.  We are satisfied that defendant
had an ample opportunity to cure the vehicle's alleged defects before the trial
court determined that the statutory remedy was available to plaintiffs under
ORS 646.402.
The decision of the Court of Appeals is reversed.  The judgment of the circuit court is
affirmed.
1. Plaintiffs brought their action in 2003 under the statutes then in
effect.  In the interim, the legislature renumbered the statutes that comprise
Oregon's Lemon Law but did not change their substantive terms.  We refer in
this opinion to the renumbered statutes.
2. The Court of Appeals concluded that plaintiffs' attorney's
interpretation of the applicable statute of limitations was mistaken.  Liles,
210 Or App at 305 n 2.  We agree with the Court of Appeals.  Under
ORS 646 A. 416, plaintiffs had to file their action within one year after
whichever of the following time periods ended earlier:
"(1) The period ending on the date on which
the mileage on the motor vehicle reaches 12,000 miles; or
"(2) The period of one year following the
date of the original delivery of the motor vehicle to the consumer."
3. ORS 20.080(1) provides:
"In any action for damages for an injury or
wrong to the person or property, or both, of another where the amount pleaded
is $5,500 or less, and the plaintiff prevails in the action, there shall be
taxed and allowed to the plaintiff, at trial and on appeal, a reasonable amount
to be fixed by the court as attorney fees for the prosecution of the action, if
the court finds that written demand for the payment of such claim was made on
the defendant not less than 10 days before the commencement of the action or
the filing of a formal complaint under ORS 46.465, or not more than 10 days
after the transfer of the action under ORS 46.461. However, no attorney fees
shall be allowed to the plaintiff if the court finds that the defendant
tendered to the plaintiff, prior to the commencement of the action or the
filing of a formal complaint under ORS 46.465, or not more than 10 days after
the transfer of the action under ORS 46.461, an amount not less than the
damages awarded to the plaintiff."
(Emphasis added.)
4. ORS 105.445(2) provides:
"Notwithstanding any other provision of law
or any purchase money security interest, the issuance of the notice under ORS
105.430(2) shall constitute a default under the purchase money security
interest, and if the violations of the building or housing codes listed in
the notice are not corrected within 30 days after the mailing of the notice,
the vendor, mortgagee or beneficiary under the purchase money security interest
may commence proceedings to exercise the remedies set forth in the purchase
money security interest."
(Emphasis added.)
ORS 105.430(2) provides:
"At least 60
days prior to the filing of an application for appointment of a receiver
pursuant to ORS 105.420 to 105.455, the city or county shall give written
notice by regular mail to all interested parties of its intent to file the
application and information relative to:
"(a) The identity of the property;
"(b) The violations of the building or housing codes giving rise to the application for the receiver;
"(c) The name, address and telephone number
of the person or department where additional information can be obtained
concerning violations and their remedy; and
"(d) The city or county which may seek the appointment of a receiver pursuant to ORS 105.420 to 105.455 unless action is taken within 60 days by an interested party."
5. ORCP 32 H provides:
"H(1) Thirty days or more prior to the
commencement of an action for damages pursuant to the provisions of sections A
and B of this rule, the potential plaintiffs' class representative shall:
"H(1)(a) Notify the potential defendant
of the particular alleged cause of action; and
"H(1)(b) Demand that such person correct
or rectify the alleged wrong.
"H(2) Such notice shall be in writing and shall be sent by certified or registered mail, return receipt requested, to the place where the transaction occurred, such person's principal place of business within this state, or, in the case of a corporation or limited partnership not
authorized to transact business in this state, to the principal office or place
of business of the corporation or limited partnership, and to any address the
use of which the class representative knows, or on the basis of reasonable
inquiry, has reason to believe is most likely to result in actual notice."
(Emphasis added.)