Case Title: Dept. of Transportation v. Stallcup

Citation: 

Docket Number: S51873

State: oregon

Court: Oregon Supreme Court

Date: 2006-06-22T00:00:00Z

Document:
FILED: June 22, 2006
IN THE SUPREME COURT OF THE STATE OF OREGON

STATE OF OREGON,
by and through its Department of Transportation,
Respondent on Review,
v.
WALTER B. STALLCUP,
Petitioner on Review,
and
FLEET BUSINESS CREDIT CORPORATION,
fka Sanwa Business Credit Corporation,
a Delaware corporation,
Respondent.
(CC 000242E2; CA A117839; SC S51873)
On review from the Court of Appeals.*
Argued and submitted May 9, 2005.
E. Michael Connors, Davis Wright Tremaine LLP, Portland,
argued the cause for petitioner on review.  With him on the brief
were Jeffrey J. Schick and Christopher P. Koback.
Jas. Jeffrey Adams, Assistant Attorney General, Salem,
argued the cause for respondent on review.  With him on the brief
were Hardy Myers, Attorney General, and Mary H. Williams,
Solicitor General.
Before Carson,** Chief Justice, and Gillette, Durham, Riggs,
De Muniz,*** Balmer, and Kistler, Justices.
CARSON, J.
The decision of the Court of Appeals is reversed.  The
judgment of the circuit court is affirmed.
*Appeal from Jackson County Circuit Court, G. Philip Arnold, Judge. 195 Or App 239, 97 P3d 1229 (2004).
**Chief Justice at the time of argument.
***Chief Justice at the time the decision was issued.
CARSON, J.
The issue in this condemnation case is whether
ORS 35.346(5)(b) requires the parties to a condemnation action to
disclose every written opinion of value prepared by an appraiser,
including draft appraisals and other preliminary reports. (1)
  After
the condemnation trial below, the state moved, pursuant to ORCP
71 B and C, to set aside the judgment based upon newly discovered
evidence that petitioner had not disclosed a certain report,
that, the state claimed, was an "appraisal" subject to mandatory
disclosure under ORS 35.346(5)(b).  The trial court denied that
motion, because it concluded that the report was not an
"appraisal" subject to mandatory disclosure.  The Court of
Appeals reversed that ruling, concluding that the report was an
"appraisal" for purposes of ORS 35.346(5)(b) because it was a
"written opinion by a qualified person regarding valuation of the
condemned property * * *."  Dept. of Transportation v. Stallcup,
195 Or App 239, 250, 97 P3d 1229 (2004).  We allowed review and
now reverse the decision of the Court of Appeals and affirm the
judgment of the trial court.
The following facts are undisputed.  Petitioner owns
property on which a fast-food restaurant is situated.  The state
sought to acquire part of petitioner's property for a road
improvement project.  The state and petitioner were unable to
agree upon the amount that the state should pay for the property
taken, and the state subsequently initiated a condemnation action
to acquire the property.  In its complaint, the state asserted
that the property that it sought to acquire had a value of
$70,800.  
Petitioner hired an appraiser who, after inspecting the
property, sent petitioner a report entitled "Complete Summary
Appraisal Report" and dated September 26, 2000.  The report was
unsigned; it lacked photographs, tables, and maps to which the
text of the report referred; and it had the word "draft"
handwritten on the cover sheet. (2)
  That report also provided two
different value estimates for the property.  The first estimate
set the value at $80,591, based upon the assumption that the
taking would not affect the restaurant's drive-through window. 
The second estimate set the value at $355,082, based upon the
assumption that the drive-through window would be affected. 
Petitioner did not disclose that report to the state.  The state
asserts, however, that petitioner did rely upon it in filing his
answer in the condemnation action, alleging that the property to
be condemned was worth $355,082.  
Petitioner's appraiser later produced two more reports. 
One was entitled "Complete Summary Appraisal Report" and dated
April 18, 2001; the other was entitled "Complete Appraisal
Summary Report" and dated November 13, 2001.  Unlike the
September 2000 report, however, both the later reports contained
the photographs, tables, and maps that were not present in the
September 2000 report; both were signed by the appraiser; and
neither was marked "draft."  The April 2001 report estimated the
value of the property to be condemned to be $345,082, and the
November 2001 report estimated the value of that property to be
$611,511.  Petitioner disclosed both the April 2001 and the
November 2001 reports.

Prior to trial, the state offered to settle the
condemnation action by paying petitioner $117,500 for the
property at issue.  Petitioner rejected that offer and proceeded
to trial, where the jury found that he was entitled to $135,000. 
Because the amount awarded at trial exceeded the state's highest
settlement offer, petitioner was entitled to recover his
reasonable attorney fees and expenses as provided in ORS
35.346(7). (3)
  To obtain those fees, petitioner filed a fee
petition and supporting documentation.  
While reviewing petitioner's fee petition, the state
discovered that petitioner's appraiser had billed petitioner for
four "complete summary appraisal reports," while petitioner had
produced only two appraisals. (4)
  ORS 35.346(5)(b) requires each
party to a condemnation action to produce "a copy of every
appraisal obtained by the party[.]"  Citing ORS 35.346(5)(b), the
state moved to set aside the judgment under ORCP 71 B and C, (5) alleging that newly discovered evidence showed that petitioner
had failed to produce "every appraisal."  Consistently with that
position, the state argued that the September 2000 report was an
"appraisal" subject to mandatory disclosure under ORS
35.346(5)(b).  The trial court rejected that argument, concluding
that ORS 35.346(5)(b) did not require disclosure of documents
that were merely drafts.  The trial court further concluded that
the September 2000 report was a draft and not an "appraisal"
subject to mandatory disclosure; therefore, the trial court
denied the state's motion to set aside the judgment. (6)
 
On appeal, the state argued that the trial court had
erred in concluding that the September 2000 report was not an
"appraisal" subject to mandatory disclosure under
ORS 35.346(5)(b) and in failing to grant the state's motion to
set aside the judgment.  In evaluating the validity of the
state's argument, the Court of Appeals sought to discern the
legislature's intended meaning of the term "appraisal" as it is
used in ORS 35.346(5)(b).  The Court of Appeals first looked to
the dictionary definition of the term "appraisal" and noted that
"appraisal" is defined as "a valuation of property by the
estimate of an authorized person[.]"  Stallcup, 195 Or App at 249
(quoting Webster's Third New Int'l Dictionary 105 (unabridged ed
1993)).  The Court of Appeals further noted that, in its view,
there were no related statutory definitions or other contextual
sources that defined the term "appraisal."  Id.  However, to
quell any remaining uncertainty regarding the intended meaning of
"appraisal," the Court of Appeals examined the legislative
history of ORS 35.346(5)(b).  Id.  From that history, the Court
of Appeals reasoned that the legislature, by amending ORS 35.346
in 1997, had intended to facilitate "full reciprocal pretrial
disclosure of expert reports regarding valuation."  Id. 
Therefore, the Court of Appeals determined that the
legislative history of ORS 35.346(5)(b) supported using the broad
dictionary definition of "appraisal" in interpreting that
statute.  Id. at 250.  The Court of Appeals concluded that an
"appraisal" was "any written opinion by a qualified person
regarding valuation" and that the September 2000 report "fell
within the scope of that definition."  Id.  Based upon that
conclusion, the Court of Appeals held that the trial court had
erred in deciding that the September 2000 report was not an
"appraisal" and in denying the state's motion to set aside the
judgment.  Id. at 251-54.   
On review, our task is to determine the correct
interpretation of the term "appraisal" in ORS 35.346(5)(b).  In
interpreting a statute, this court must give effect to the
legislature's intent.  PGE v. Bureau of Labor and Industries, 317
Or 606, 610, 859 P2d 1143 (1993).  To do so, we begin our
analysis by considering the text and context of the statute in
question.  Id. at 610-11.  We give "words of common usage their
plain, natural, and ordinary meaning[s]," and we give words that
have well-defined legal meanings those meanings.  Norden v. Water
Resources Dept., 329 Or 641, 645, 996 P2d 958 (2000).  Statutory
context "includes other provisions of the same statute and other
related statutes, as well as the preexisting common law and the
statutory framework within which the law was enacted[.]"  Denton
and Denton, 326 Or 236, 241, 951 P2d 693 (1998) (internal
citations omitted).  In construing a statute, "we do not look at
one subsection of a statute in a vacuum; rather, we construe each
part together with the other parts in an attempt to produce a
harmonious whole."  Lane County v. LCDC, 325 Or 569, 578, 942 P2d
278 (1997).  Furthermore, the "use of the same term throughout a
statute indicates that the term has the same meaning throughout
the statute[.]"  PGE, 317 Or at 611 (internal citation omitted). 
As stated previously, ORS 35.346(5)(b) provides, in
part:
However, we do not agree with the Court of Appeals'
sole reliance on the dictionary definition of the term
"appraisal" to determine the legislature's intended meaning. (7)
  In doing so, the Court of Appeals failed to consider the context in
which the legislature used the term "appraisal."  Specifically,
several provisions of ORS chapter 674 provide context that sheds
light on the meaning of the term "appraisal," because ORS chapter
674 regulates the practice of real estate appraisal activity
within Oregon.  See ORS 674.020(1) (stating that a purpose of
chapter 674 is to require that all real estate appraisals be
performed in accordance with uniform standards).  Furthermore,
other subsections of ORS 35.346 provide additional context. 
Viewing the text of ORS 35.346(5)(b) in its proper context
reveals facets to the definition of the term "appraisal" that are
significant to our interpretive task.   
ORS 674.100(1)(a) (1999), amended by Or Laws 2005, ch
254, § 3, provides that "[n]o person shall engage in, carry on,
advertise or purport to engage in or carry on real estate
appraisal activity within this state without first obtaining
certification or licensure as provided in ORS 674.310." (8)
  ORS
674.100(1)(b) provides that "[r]eal estate appraisal activity is
the preparation, completion and issuance[ (9)] of an opinion as to
the value on a given date or at a given time of real property
* * *."  (Emphasis added.)  Given that an "appraisal" is the
product of "real estate appraisal activity" under ORS
674.100(1)(a) (1999), only a licensed or certified person may
produce an opinion of value that is an "appraisal" for purposes
of Oregon law.  Also, under ORS 674.100(1)(b), the licensed or
certified person must prepare, complete, and issue the opinion of
value to the party seeking the valuation for the opinion to be an
"appraisal."  Therefore, when considered within the context of
ORS 674.100(1)(a) (1999) and ORS 674.100(1)(b), an "appraisal" is
a prepared, completed, and issued opinion of value made by a
person certified or licensed to issue such opinions.
An examination of ORS 35.346(2) lends further support
to that interpretation of the term "appraisal." (10)
  If the
property to be purchased or condemned is worth less than $20,000,
then the second sentence of ORS 35.346(2) allows "the condemner,
in lieu of a written appraisal," to give the property owner "a
written explanation of the bases and method by which the
condemner arrived at the specific valuation of the property." 
Because subsection (2) also contains the term "appraisal," we
must interpret that term in a way that applies consistently in
all subsections of ORS 35.346.  PGE, 317 Or at 611.  
Had the legislature intended the term "appraisal" to
include all opinions of value, the "written explanation" allowed
in ORS 35.346(2) would be an "appraisal"; it would not be "in
lieu of" one.  Such a construction would ignore the legislature's
use of a different term within the same statute.  See State v.
Keeney, 323 Or 309, 316, 918 P2d 419 (1996) (holding that
legislature intends different meanings when it uses different
terms in a statute).  That erroneous construction also would
relegate the entire second sentence of ORS 35.346(2) to
surplusage, in contravention of "this court's stated goal of
giving effect to every provision of a statute."  Quintero v.
Board of Parole, 329 Or 319, 324, 986 P2d 575 (1999).       
Finally, ORS 674.310(1)(a) (1999), amended by Or Laws
2005, ch 254, § 7, and former ORS 674.305(8) (1999), renumbered
as ORS 674.305(7) (2005), add additional context.  ORS
674.310(1)(a) (1999) authorizes the Appraiser Certification and
Licensure Board (the board) to "do all things necessary and
convenient to carry into effect the provisions of [chapter 674]
* * * and to regulate the activities of state licensed appraisers
and state certified appraisers to ensure that all real estate
appraisals conform to the law in effect on the date of the real
estate appraisal activity."  The board also has authority to
"adopt rules necessary for the administration of [chapter
674]." (11)
  Former ORS 674.305(8).  Pursuant to those grants of
authority, the board adopted OAR 161-025-0060(1) (2001),
requiring that "[a]ll appraisal reports shall be prepared in
accordance with * * * the Uniform Standards of Professional
Appraisal Practice [USPAP]."  Additionally, OAR 161-002-0000(37)
(2001) defines the USPAP as "the standards adopted and published
by the Appraisal Standards Board of the Appraisal Foundation
dated April 27, 1987, as amended January 1, 2000."
 (12)

We note that, although the Oregon Administrative Rules
in question were not promulgated until after ORS 35.346(5)(b) was
enacted, those rules did exist at the time that the relevant
conduct occurred in this case.  As such, they can –- and, in this
case, do –- provide relevant context to aid in our interpretive
task.  The Court of Appeals thought otherwise, rejecting the use
of those Oregon Administrative Rules based upon a
misinterpretation of this court's decision in Stull v. Hoke, 326
Or 72, 79-80, 948 P2d 722 (1997).  See Stallcup, 195 Or App at
249 n 7 (asserting that holding in Stull prohibits use of
subsequently enacted provisions as context in construing
statute).  The Court of Appeals concluded that, under Stull, it
could not consider those rules because they were "not promulgated
until 1999, two years after the enactment of ORS 35.346(5)(b)." 
Id.   
We do not agree that the Court of Appeals was
handcuffed in that way.  The later-enacted rules do not (and do
not purport to) explain the legislature's intent in enacting ORS
35.346(5)(b); rather, they present a separate, valid source of
law that supports the trial court's ruling here.  Because no one
argued, and nothing in those rules suggests independently, that
the rules impermissibly altered the scope or meaning of ORS
35.346(5)(b), the Court of Appeals should have applied the rules
in its determination of what the law requires to make an
"appraisal" an "appraisal." 
As explained above, various sources of law combine to
define the term "appraisal."  In light of all that relevant
context, we hold that the term "appraisal," as used in
ORS 35.346(5)(b), means a completed and issued opinion of value
that complies with the requirements of the applicable Oregon
Administrative Rules and is made by a person certified or
licensed to issue such opinions. 
We now apply that law to the facts of this case.  As
stated previously, OAR 161-025-0060(1) mandates that an
"appraisal" conform with the requirements of the USPAP.  Relevant
provisions of the USPAP require, in part: 
"* * * * *
"(xii) include a signed certification in
accordance with Standards Rule 2-3." 
Appraisal Standards Board of the Appraisal Foundation, Uniform
Standards of Professional Appraisal Practice 23, 26 (2000). 
USPAP Standards Rule 2-3 states, "Each written real property
appraisal report must contain a signed certification * * *."
 (13)
  Id. at 28.
The September 2000 report was labeled "Complete Summary
Appraisal Report" but was not signed by petitioner's appraiser. 
According to the USPAP, the report was not complete, because it
was unsigned and not certified.  As such, the report did not
comply with OAR 161-025-0060(1).     
Furthermore, the September 2000 report lacked
photographs, tables, and maps to which the text of the report
referred.  The omission of that information illustrates that the
report was not complete.   
Thus, as a matter of law, the September 2000 report was
not an "appraisal" under ORS 35.346(5)(b), because it was not
complete and because it did not comply with the requirements of
the Oregon Administrative Rules.  As such, it was not subject to
mandatory disclosure under ORS 35.346(5)(b).
 (14)
  
The decision of the Court of Appeals is reversed.  The
judgment of the circuit court is affirmed.
1. ORS 35.346(5)(b) provides: 

		"In the event the owner and condemner are unable to reach agreement and proceed to trial or arbitration as provided in subsection (6) of this section, each party to the proceeding shall provide to every other party a copy of every appraisal obtained by the party as part of the condemnation action."


2. Petitioner asserts in this court, as he did in the Court of Appeals, that the copy of the report that he received from the appraiser had the word "draft" stamped in red ink on multiple pages and that the copy that the appraiser retained had the word "draft" handwritten on it.  Petitioner further asserts that the trial court viewed the stamped copy in deciding that the report was only a draft and was not subject to mandatory production.  However, the trial court does not state specifically which copy it based its decision upon.  The record in this case contains only the copy of the report with the word "draft" handwritten on the cover sheet.  We base our decision upon the copy contained in the record.  

3. ORS 35.346(7) provides, in part:

		"If a trial is held or arbitration conducted for the fixing of the amount of compensation to be awarded to the defendant owner or party having an interest in the property being condemned, the court or arbitrator shall award said defendant costs and disbursements including reasonable attorney fees and reasonable expenses as defined in ORS 35.335(2) in the following cases, and no other:

		"(a) If the amount of just compensation assessed by the verdict in the trial exceeds the highest written offer in settlement submitted by condemner to those defendants appearing in the action at least 30 days prior to commencement of said trial[.]"  



4. The Court of Appeals, apparently relying upon those billing entries, incorrectly found that petitioner's appraiser, in fact, had sent petitioner four reports.  However, only three reports appear in the record.  Furthermore, the trial court and both parties state that there were only three reports.  Given that record, the trial court reasonably could have found that there were only three reports:  a September 2000 report, an April 2001 report, and a November 2001 report.  Petitioner's appraiser explained that the four billing entries did not refer to additional final appraisal reports, but rather all billed time related to the project had the "tag-line" "complete summary appraisal report" as a result of the appraiser's billing system.   

5. ORCP 71 B allows a court, upon motion by a party, to relieve that party from a judgment because of, among other reasons, "newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 64 F[.]"  ORCP 71 C provides that a court retains inherent power "to modify a judgment within a reasonable time, or * * * to entertain an independent action to relieve a party from a judgment[.]"

6. The trial court also granted petitioner's petition for attorney fees.  


7. In common parlance, an "appraisal" is "a valuation of property by the estimate of an authorized person[.]"  Webster's Third New Int'l Dictionary 105 (unabridged ed 2002).  The Court of Appeals, relying upon the same dictionary definition, interpreted the term "appraisal" to mean "any written opinion by a qualified person regarding valuation."  Dept. of Transportation v. Stallcup, 195 Or App 239, 250, 97 P3d 1229 (2004). 

8. We apply the 1999 version of ORS 674.100(1)(a) because that is the provision that was in effect when petitioner's appraiser prepared and sent petitioner the September 2000 report.  The 2005 amendments to ORS 674.100(1)(a) did not alter materially the substance of that statute.

9. We note that, in this context, the term "issuance" means "the act of officially putting forth or getting out or printing * * * or promulgating * * *."  See Webster's at 1201 (defining word "issuance" by reference to word "issue").  Use of that term indicates that the opinion of value must be officially released in its final form for the opinion to be an "appraisal."  Use of such a term is inconsistent with reference to a mere draft.   

10. ORS 35.346(2) provides:

		"The [condemner's] offer [to purchase the property] shall be accompanied by any written appraisal upon which the condemner relied in establishing the amount of compensation offered.  If the condemner determines that the amount of just compensation due is less than $20,000, the condemner, in lieu of a written appraisal, may provide to the owner or other person having an interest in the property a written explanation of the bases and method by which the condemner arrived at the specific valuation of the property.  The amount of just compensation offered shall not be reduced by amendment or otherwise before or during trial except on order of the court entered not less than 60 days prior to trial.  An order for reduction of just compensation offered, pleaded by the condemner in the complaint or deposited with the court for the use and benefit of the owner pending outcome of the condemnation action, may be entered only upon motion of the condemner and a finding by clear and convincing evidence that the appraisal upon which the original offer is based was the result of a mistake of material fact that was not known and could not reasonably have been known at the time of the original appraisal or was based on a mistake of law." 

11. As noted previously, a stated purpose of ORS chapter 674 is to require that all real estate appraisals be performed in accordance with uniform standards.  ORS 674.020(1). 

12. We consider the 2001 editions of OAR 161-002-0000(37) and OAR 161-025-0060(1) because those were the provisions that were in effect when petitioner's appraiser prepared and sent petitioner the September 2000 report.  See Oregon Bulletin, Volume 39, No 4, p 43-45 (April 2000) (stating that 2001 edition of OAR 161-025-0060 and OAR 161-002-0000(37) became effective February 29, 2000).   

13. Standards Rule 2-3 requires the appraiser to certify the following: 

		"[T]he statements of fact contained in this report are true and correct.
	
		"[T]he reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions.
	
		"I have no (or the specified) present or prospective interest in the property that is the subject of this report and no (or the specified) personal interest with respect to the parties involved.

		"I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. 
	
		"[M]y engagement in this assignment was not contingent upon developing or reporting predetermined results.
	
		"[M]y compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.
	
		"[M]y analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.
	
		"I have (or have not) made a personal inspection of the property that is the subject of this report. (If more than one person signs this certification, the  certification must clearly specify which individuals did and which individuals did not make a personal inspection of the appraised property.)
	
		"[N]o one provided significant real property appraisal assistance to the person signing this certification. (If there are exceptions, the name of each individual providing significant real property appraisal assistance must be stated.)"

Appraisal Standards Board of the Appraisal Foundation, Uniform Standards of Professional Appraisal Practice 28 (2000) (footnote omitted).

14. This case does not require us to decide whether the September 2000 report would have been subject to discovery pursuant to a request for production of documents under ORCP 43 or would have been protected against discovery as trial preparation material, attorney work product, or material to which the attorney client privilege applied.