Title: Sea-Air Handling Services, Inc. v. Reed

State: oregon

Issuer: Oregon Supreme Court

Document:

Filed: April 9, 1998

IN THE SUPREME COURT OF THE STATE OF OREGON

SEA-AIR HANDLING SERVICES, INC.

	Plaintiff-Adverse Party,

	v.

PAUL H. REED, by DONALD HARTVIG,
CHAPTER SEVEN BANKRUPTCY 
TRUSTEE,

	Defendant-Relator,

	and

BOB HODSON,

	Defendant.

(CC 9609-06691; SC S44721)

	Original proceeding in mandamus.

	Argued and submitted March 4, 1998.

	Donald A. Greig, of Landerholm, Memovich, Lansverk and
Whitesides, P.S., Vancouver, Washington, argued the cause and
filed the brief for plaintiff-adverse party.

	Christopher W. Angius, of Perkins Coie, Portland, argued the
cause and filed the brief for defendant-relator.

	Before Carson, Chief Justice, and Gillette, Van Hoomissen,
Durham, Kulongoski, and Leeson Justices.*

	LEESON, J.

	Alternative writ of mandamus dismissed.

	*Graber, J., resigned March 31, 1998, and did not
participate in this decision.

		LEESON, J.		

		This is an original action in mandamus.  ORS 34.120.
Bankruptcy trustee Hartvig (relator) contends that Multnomah
County Circuit Court Judge Marshall Amiton exceeded his authority
under ORCP 71 C in granting plaintiff-adverse party Sea-Air
Handling Services, Inc.'s (Sea-Air) requested relief and that
Judge Amiton misinterpreted the "two-dismissal rule" in ORCP 54
A(1).(1)  Consequently, he asks this court to issue a peremptory
writ of mandamus directing Judge Amiton to reverse his November
13, 1997, order granting Sea-Air's motion for entry of a
supplemental judgment of dismissal "without prejudice."  For the
reasons that follow, we deny relator's petition for a peremptory
writ of mandamus and dismiss the alternative writ of mandamus
issued by this court on December 16, 1997.

		The facts are undisputed.  On March 15, 1996, Sea-Air
filed a complaint in circuit court against Reed, one of its
former vice-presidents, and four others stating claims for
various business torts.  On April 1, 1996, Sea-Air filed a notice
of dismissal pursuant to ORCP 54 A(1), stating that its claims
against three of the parties named in the action, with whom Sea-Air had reached a settlement, were to be dismissed "with
prejudice," and that its claims against the two others, Reed and
Hodson, were to be dismissed "without prejudice."  The judgment
of dismissal was entered in the register on April 3.  The
document to which the judgment stamp was affixed identified which
of the dismissals were "with prejudice" and which were "without
prejudice."

		On September 3, 1996, after settlement negotiations
involving Sea-Air, Reed and Hodson broke down, Sea-Air filed a
second action in circuit court against Reed and Hodson, alleging
all the claims that it had asserted previously.  In November,
before answering Sea-Air's complaint, Reed filed a bankruptcy
petition in the United States Bankruptcy Court for the District
of Oregon.  Because of the automatic stay resulting from Reed's
bankruptcy filing, Sea-Air was unable to pursue its claims
against Reed and, on January 23, 1997, Sea-Air filed a second
notice of dismissal.  That notice, a copy of which was sent to
relator when it was submitted to the court, stated:

		"Pursuant to ORCP 54 A(1) [Sea-Air] does hereby
give notice of its dismissal of this action.  This
dismissal shall be without prejudice."

As it had done with the first notice of dismissal, the trial
court affixed a "Judgment of Dismissal" stamp to the second
notice of dismissal and directed that the judgment be entered in
the register.  The notice bore the date of January 27, 1997, and
was entered in the register the next day.

		On June 5, 1997, relator, in an effort to augment the
assets of Reed's bankruptcy estate and to assist in the payment
of Reed's creditors, filed an adversary complaint in the
bankruptcy court, alleging claims against Sea-Air in excess of
$250,000.  Sea-Air answered and counterclaimed, alleging in its
counterclaim the same claims that it had asserted against Reed in
the second state court action.  Relator moved for summary
judgment on the counterclaims, arguing that dismissal of the
state court claims against Reed on January 27 constituted a
dismissal "with prejudice," because the state court had not
"directed" that the dismissal be "without prejudice."  According
to relator, under ORCP 54 A(1), the January 27 dismissal acted as
an adjudication on the merits and barred Sea-Air's counterclaims
in relator's action against Sea-Air.  

		The bankruptcy court agreed and entered summary
judgment for relator.  The court explained:

	"I think the second dismissal [against Reed in state
court] was with prejudice, that it was incumbent upon
the moving party to get an express court order
directing otherwise which did not occur in this case. 
* * * [I]f [Sea-Air] can get relief from the state
court, under whatever the appropriate rule is, I may
have to revisit my summary judgment order * * *."

The bankruptcy court lifted the automatic stay so that Sea-Air
could "seek relief [in the state court] under the appropriate
rule."

		On October 20, 1997, Sea-Air filed a motion in circuit
court requesting entry of a supplemental judgment to reflect that
the January 27 judgment of dismissal in its action against Reed
was "without prejudice."  Sea-Air argued that, if the circuit
court needed to correct the register to reflect that the judgment
of dismissal was "without prejudice," the court had authority to
do so under ORCP 71 A.(2)  Alternatively, Sea-Air argued, if the
bankruptcy court was correct in its belief that the January 27
judgment had been entered "with prejudice," Sea-Air was entitled
to relief under ORCP 71 C.(3) 

		On November 13, 1997, over relator's objection, Judge
Amiton granted Sea-Air's motion for entry of a supplemental
judgment of dismissal, explaining:

		"Had [Sea-Air's] second request for dismissal been
presented to this court for a hearing, the court would
have found good cause to grant [Sea-Air] dismissal
without prejudice.  

		"Pursuant to ORCP 71 C, the court has inherent
power to modify a judgment within a reasonable time."  

The next day, relator filed a petition for a writ of mandamus,
seeking to direct Judge Amiton to vacate his November 13 order. 
This court issued an alternative writ of mandamus on December 16,
1997, ORS 34.250(5), and the mandamus proceeding advanced to
briefing and oral argument, ORS 34.250(7); ORAP 11.15(1).

		Before this court, relator contends that, under ORCP 54
A(1), notice of the second dismissal of the same claim against
the same party constitutes an adjudication on the merits, unless
the court "directs" otherwise.  A court can exercise its power
under the rule, relator argues, only if the plaintiff notifies
the court that a prior dismissal exists.  Sea-Air did not notify
the trial court that it previously had dismissed its claims
against Reed. Consequently, relator contends, Sea-Air failed to
comply with the rule's requirements, and Judge Amiton erred in
holding that Sea-Air was entitled to a supplemental judgment of
dismissal against Reed "without prejudice."  

		Sea-Air responds that ORCP 54 A(1) requires only that a
party notify the trial court that it is seeking a dismissal
"without prejudice."  In Sea-Air's view, it did all that was
required of it under ORCP 54 A(1) to obtain a second dismissal
against Reed "without prejudice."  Consequently, it argues, Judge
Amiton did not err in granting Sea-Air's motion for entry of a
supplemental judgment "without prejudice":

"Trial courts are busy enough without having to decide
issues which are not in dispute; only if [an opposing
party] objects to [the] second dismissal without
prejudice should the court be required to weigh the
merits of the request and rule on the objection."

		Whether ORCP 54 A(1) requires a party to notify the
court of a prior notice of dismissal -- so that the court can
"direct" whether the second dismissal is to be with or without
prejudice -- is a matter of statutory construction, calling for
analysis under the template prescribed in PGE v. Bureau of Labor
and Industries, 317 Or 606, 859 P2d 1143 (1993).  However, as
explained below, this case is not before us in a posture that
allows us to resolve the parties' dispute about the proper
interpretation of the "second dismissal" rule under ORCP 54 A(1).

		ORCP 70 B(1) provides that "all judgments * * * shall
be entered in the register by the clerk."  See also ORS 7.020(2)
(the clerk or court administrator shall enter in the register any
"order, judgment, ruling or other direction of the court in or
concerning [any] action, suit or proceeding").  It is uncontested
that the court clerk entered the second judgment of dismissal in
the register and that the document that appears in the register
states that the January 27 dismissal was "without prejudice."  In
the absence of anything to the contrary in the record, a judgment
entered in the register is regarded as stating an "absolute
verity."  Van Natta v. Columbia County, 236 Or 214, 220, 388 P2d
18 (1963).  In this case, nothing in the record suggests that the
court intended anything other than what the document in the
register declares:  The January 27, 1997, dismissal was "without
prejudice." 

		The bankruptcy court's conclusion that the January 27
judgment was entered "with prejudice" is contrary to the
principle that judgments entered in the register are presumed to
be correct.  In asking us to construe the "second dismissal" rule
in ORCP 54 A(1), relator asks us to do the same thing that he
persuaded the bankruptcy court to do:  disregard the register and
its unambiguous declaration that the January 27 notice of
dismissal of Sea-Air's claims against Reed was "without
prejudice."  We decline to do so. 

		The bankruptcy court's grant of relator's motion for
summary judgment led to a series of unnecessary acts, including
Sea-Air's motion for entry of a supplemental judgment of
dismissal "without prejudice" and Judge Amiton's granting of that
motion.  Even if we were to perpetuate those unnecessary acts by
issuing a peremptory writ of mandamus directing Judge Amiton to
vacate his November 13 order, relator would gain nothing, because
the January 27 judgment of dismissal would remain what it always
has been -- a judgment of dismissal "without prejudice."(4)

		Alternative writ of mandamus dismissed.

1. 	ORCP 54 A(1) provides, in part:

	"Unless otherwise stated in the notice of dismissal or
stipulation, [a] dismissal is without prejudice, except
that a notice of dismissal operates as an adjudication
upon the merits when filed by a plaintiff who has once
dismissed in any court of the United States or of any
state an action against the same parties on or
including the same claim unless the court directs that
the dismissal shall be without prejudice."

2. 	ORCP 71 A provides, in part:

		"Clerical mistakes in judgments, orders, or other parts
of the record and errors therein arising from oversight or
omission may be corrected by the court at any time on its
own motion or on the motion of any party and after such
notice to all parties who have appeared, if any, as the
court orders."

3. 	ORCP 71 C provides, in part:

		"This rule does not limit the inherent power of a
court to modify a judgment within a reasonable time   
* * *."

4. 	In the light of this disposition, we need not reach the
question of whether Judge Amiton abused his discretion under ORCP
71 C in granting Sea-Air's motion for entry of a supplemental
judgment of dismissal "without prejudice."