Title: Hamilton v. Paynter

State: oregon

Issuer: Oregon Supreme Court

Document:

FILED: December 7, 2006
IN THE SUPREME COURT OF THE STATE OF OREGON
BRENDA HAMILTON, 
Petitioner on Review,
v.
GEORGE PAYNTER,
dba Seahawk Seafood;
CARVALHO FISHERIES, INC.;
and WILLIAM CARVALHO, 
Respondents on Review.
(CC 03CV0551; CA A125029; SC S53276)
En Banc
On review from the Court of Appeals.*
Argued and submitted November 2, 2006.
David M. Hernandez, Hernandez & Associates, LLC, Bandon,
argued the cause and filed the briefs for petitioner on review.  
John L. Langslet, Martin, Bischoff, Templeton, Langslet &
Hoffman, LLP, Portland, argued the cause for respondent on review
George Paynter.  With him on the brief was Camille Tourje.
Robert A. Ford, Kurtz, Ford & Johnson, LLP, Eugene, argued
the cause and filed the brief for respondents on review Carvalho
Fisheries, Inc., and William Carvalho.
W. Eugene Hallman, Hallman & Dretke, Pendleton, argued the
cause and filed a brief on behalf of amicus curiae Oregon Trial
Lawyers Association.
DE MUNIZ, C. J.
The decision of the Court of Appeals is reversed.  The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.
*On appeal from Coos County Circuit Court, Michael J. Gillespie, Judge. 204 Or App 119, 129 P3d 203 (2006).
DE MUNIZ, C. J.
In this case, we consider whether a payment to an
injured party tolled the statute of limitations.  The trial court
dismissed the action, because it concluded that the payment did
not toll the statute.  The Court of Appeals affirmed.  Hamilton
v. Paynter, 204 Or App 119, 129 P3d 203 (2006).  We hold that the
payment did toll the statute of limitations, and we therefore
reverse the decision of the Court of Appeals and the judgment of
the circuit court.
Because the trial court granted a motion to dismiss the
complaint, we treat the allegations in the complaint as true. 
See Juarez v. Windsor Rock Products, Inc., 341 Or 160, 163, 144
P3d 211 (2006) (on motion to dismiss, court "assume[s] the truth
of all well-pleaded facts alleged in the complaint").  Brenda
Hamilton, the petitioner on review, filed an action against
defendants George Paynter, doing business as Seahawk Seafood;
Carvalho Fisheries, Inc.; and William Carvalho.  Hamilton's first
amended complaint alleged three facts relevant to this appeal. 
First, it alleged that Hamilton had been injured on August 19,
2001, when defendant Paynter rear-ended her vehicle with a
forklift owned by defendants Carvalho and Carvalho Fisheries. 
Second, the complaint alleged that, on November 2, 2001,
defendants paid Hamilton $1,000 as a "partial payment" for the
injuries that Hamilton had suffered in the accident.  And
finally, the complaint alleged that none of defendants ever gave
Hamilton written notice of when the statute of limitations would
expire on her cause of action. 
Hamilton did not file her action until November 28,
2003, two years and three months after the accident. 
Defendants moved to dismiss the complaint, contending
that it was barred by the two-year statute of limitations in ORS
12.110(1). (1)  Hamilton argued, however, that the $1,000
payment by defendants had tolled the statute of limitations.  She
relied on ORS 12.155 (quoted below), which tolls the statute of
limitations if a "person" makes an "advance payment" without
giving written notice of the expiration date of the statute of
limitations. 
Defendants responded that ORS 12.155 applied to only
insurers who made advance payments.  See Minisce v. Thompson, 149
Or App 746, 756, 945 P2d 582 (1997) (Court of Appeals concluded
that "the advance payment statutes do not toll the statute of
limitations outside the setting of third-party claims against
insurers").  Because defendants were not insurers, defendants
contended, ORS 12.155 did not toll the statute of limitations. 
The trial court ruled for defendants, and Hamilton
appealed.  The Court of Appeals' majority relied on Minisce and
affirmed.  Hamilton, 204 Or App at 120.  Judge Wollheim concurred
separately on stare decisis grounds; he suggested, however, that
Minisce incorrectly had interpreted ORS 12.155.  Id. at 120-28
(Wollheim, J., concurring).  We allowed review.
The question here involves the correct interpretation
of ORS 12.155, and we begin with the text of that statute.
ORS 12.155 provides:
"(1) If the person who makes an advance payment
referred to in ORS 31.560 or 31.565 gives to each
person entitled to recover damages for the death,
injury or destruction, not later than 30 days after the
date the first of such advance payments was made,
written notice of the date of expiration of the period
of limitation for the commencement of an action for
damages set by the applicable statute of limitations,
then the making of any such advance payment does not
suspend the running of such period of limitation.  The
notice required by this subsection shall be in such
form as the Director of the Department of Consumer and
Business Services prescribes.
"(2) If the notice required by subsection (1) of
this section is not given, the time between the date
the first advance payment was made and the date a
notice is actually given of the date of expiration of
the period of limitation for the commencement of an
action for damages set by the applicable statute of
limitations is not part of the period limited for
commencement of the action by the statute of
limitations."
The term "advance payment" is defined in ORS 31.550:
"As used in ORS 12.155 and 31.550 to 31.565,
'advance payment' means compensation for the injury or
death of a person or the injury or destruction of
property prior to the determination of legal liability
therefor."
ORS 12.155 cross-references two other statutes,
ORS 31.560 and ORS 31.565. (2)  The first statute, ORS 31.560,
provides that an advance payment on a personal injury or death
claim does not constitute an admission of liability:
"(1) Advance payment made for damages arising from
the death or injury of a person is not an admission of
liability for the death or injury by the person making
the payment unless the parties to the payment agree to
the contrary in writing.
"(2) For the purpose of subsection (1) of this
section, advance payment is made when payment is made
with or to:
"(a) The injured person;
"(b) A person acting on behalf of the injured
person with the consent of the injured person; or
"(c) Any other person entitled to recover damages
on account of the injury or death of the injured or
deceased person."
The second statute cross-referenced by ORS 12.155, ORS
31.565, similarly provides that an advance payment on a property
damage claim does not constitute an admission of liability:
"Any advance payment made for damages arising from
injury or destruction of property is not an admission
of liability for the injury or destruction by the
person making the payment unless the parties to the
payment agree to the contrary in writing."
In this case, the parties do not dispute that the
payment to Hamilton was an "advance payment" as defined in
ORS 31.550.  The dispute here turns on whether defendants were
"person[s] who [made] an advance payment" within the meaning of
ORS 12.155.  
The Oregon Revised Statutes specifically define the
word "person":
"As used in the statute laws of this state, unless
the context or a specially applicable definition
requires otherwise:
"* * * * *
"(5) 'Person' includes individuals, corporations,
associations, firms, partnerships, limited liability
companies and joint stock companies."
ORS 174.100.  All the defendants are "persons" within that
definition.  Defendants, then, must identify some statutory
context to show that the word "person," as used in ORS 12.155,
has a different and narrower definition.  See ORS 174.100 (its
definition of "person" applies "unless the context * * * requires
otherwise").
Defendants claim to find that context in the last
sentence of ORS 12.155(1).  That sentence requires that the
notice of the statute of limitations "be in such form as the
Director of the Department of Consumer and Business Services
prescribes."  Defendants note that the Department of Consumer and
Business Services (DCBS) oversees insurers, not the general
public. (3)  Thus, they contend, ORS 12.155 must apply to only
advance payments by insurers.
In our view, however, that sentence is entirely
consistent with the broad definition of "person" found in ORS
174.100.  The plain text of ORS 12.155 simply requires any
"person who makes an advance payment," whether an insurer or not,
to use the DCBS's form.  The sentence that mandates use of a DCBS
form does not "require[]" a narrower definition of the word
"person."  ORS 174.100.
Defendants do not identify any other context that would
limit the meaning of the word "person" to "insurer."  Defendants
claim, however, that two prior decisions of this court support
their argument.  We conclude that both decisions are
distinguishable and therefore give defendants no aid here.
Defendants first rely on Duncan v. Dubin, 276 Or 631,
556 P2d 105 (1976).  In that case, this court concluded that the
text and legislative history of ORS 12.155 and the related
advance payments statutes showed that
"the legislation had a two-fold purpose.  One was to
allow an insurer to make advance payments without
admitting liability for a claim and to encourage such
payments by eliminating any apprehension on the part of
the insurer that evidence of advance payments could be
admissible in court to prove liability.  The other
objective, which is clearly discernible, was to protect
an injured party from being misled into believing that
a limitation period upon his claim is no longer
applicable because the insurer has, in effect,
acknowledged that its insured is liable for the claim."
Id. at 636.  Duncan quoted the legislative testimony of a 
witness, the Insurance Commissioner, who discussed how ORS 12.155
would affect insurers.  Id. at 637. (4)
Duncan, however, did not involve the question whether
the term "person" in ORS 12.155 applied to noninsurers; the
payment there had come from an insurer.  Rather, the issue in
Duncan concerned whether that insurer's advance payments solely
for property damage had tolled the statutes of limitation for
both property damage and personal injury damage.  276 Or at 636. 
The court concluded that it had.  Id. at 637-38.  That holding
neither explicitly nor implicitly controls the result here.
Defendants note that the legislative history of ORS
12.155 quoted in Duncan -- the testimony of the Insurance
Commissioner in favor of the act -- speaks of only advance
payments by insurers.  See 276 Or at 637 (setting out testimony)
(quoted above, ___ Or at ___ n 4 (slip op at 7 n 4)).  But the
statutory text shows that, even if the legislature had a
particular problem in mind, it chose to use a broader solution. 
As this court previously has observed, 
"Statutes ordinarily are drafted in order to address
some known or identifiable problem, but the chosen
solution may not always be narrowly confined to the
precise problem.  The legislature may and often does
choose broader language that applies to a wider range
of circumstances than the precise problem that
triggered legislative attention. * * *  When the
express terms of a statute indicate such broader
coverage, it is not necessary to show that this was its
conscious purpose."
South Beach Marina, Inc. v. Dept. of Rev., 301 Or 524, 531, 724
P2d 788 (1986) (footnote omitted).
In sum, Duncan did not hold that ORS 12.155 applies to
only insurers, and the court's discussion in Duncan of
legislative history does not justify the narrow reading of the
text for which defendants argue.  Duncan does not control the
outcome of this case.
Defendants also argue that this court's decision in Ben
Rybke Co. v. Royal Globe Insurance Co., 293 Or 513, 651 P2d 138
(1982), controls the result here.  It is true, as defendant
Paynter asserts, that the court in Ben Rybke did state that ORS
12.155 and the related advance payment statutes "make more sense
if read to refer to claims against the insured."  Id. at 519.  We
conclude that Ben Rybke does not control here, however, because
that opinion dealt only with what constituted a "statute of
limitations" under ORS 12.155.  To explain why, we must explore
the decision in some detail.
In Ben Rybke, the plaintiff was the insured on two fire
insurance policies.  See id. at 515 (plaintiff sought recovery
from two insurers); id. at 517 (particular statute applied to
only fire insurance policies).  By statute (ORS 743.660), all
fire insurance policies had to include a provision that required
any action on the policy to be brought within one year of the
date of loss.  Id. at 517.  After plaintiff's business had been
damaged by fire, the insurers made advance payments.  Id. at 515. 
Plaintiff, however, did not file an action against the insurers
until more than one year after the fire.  Id.  The trial court,
concluding that the statute of limitations barred the action,
entered judgment for the insurers.  Id. 
On appeal, the Court of Appeals affirmed.  Ben Rybke
Co. v. Royal Globe Insurance Co., 55 Or App 833, 640 P2d 620
(1982).  Based on the legislative history quoted in Duncan, the
Court of Appeals concluded that the legislature had intended ORS
12.155 to apply to advance payments "made by an insurer to a
person making a claim against its insured," not to advance
payments between insurer and its own insured.  Id. at 839-40. 
But, having said that, the Court of Appeals recognized that
legislative purpose alone could not resolve the question before
it:  "The issue then is whether the words used will sustain a
broader application of the statute."  Id. at 840.  The Court of
Appeals concluded that the text of the statute did not support a
broader application because ORS 12.155 and its related statutes
repeatedly used terms that sounded in tort, while the dispute
between the insurer and its insured in Ben Rybke sounded in
contract.  Id. at 841; see, e.g., ORS 12.155(1) (advance payment
to "person entitled to recover damages for the death, injury or
destruction").  "Plaintiff's action here is an action on the
insurance contract; it is not an action 'for damages arising from
injury or destruction of property' as between this plaintiff and
its insurer."  55 Or App at 841 (emphasis in original; quoting
renumbered version of ORS 31.565).
This court granted review and affirmed on other
grounds.  Ben Rybke, 293 Or at 513.  While the Court of Appeals
had affirmed because an action on an insurance contract was "not
an action 'for damages arising from injury or destruction of
property' as between this plaintiff and its insurer," 55 Or App
at 841, this court affirmed because the one-year time limit was
not a "statute of limitations" within the meaning of ORS 12.155. 
293 Or at 520.  Although ORS 743.660 required every fire
insurance policy to include that one-year time limit, that
statute
"is not a statute of limitations.  It requires a
particular contractual arrangement between the parties
to insurance policies.  It applies to those parties by
operation of contract, whereas a statute of limitations
applies to all plaintiffs by operation of statute."
293 Or at 518.  Furthermore, "[t]he effect of ORS 743.660 is not
to displace the statute of limitations, but only to take from
insurers the power to contractually impose a shorter limitation
of less than 12 months."  Id. 
The sentence in Ben Rybke upon which defendants rely in
this case fell within the following paragraph (with the sentence
emphasized):
"Arguably, the general purpose of ORS 12.155 might
best be advanced by reading the phrase 'statute of
limitations' to include alternative contractual
provisions.  If ORS 12.155 refers to insureds[,] it
would be anomalous to permit an insurer to relieve
itself of notice responsibilities under ORS 12.155 by
the simple expedient of contractually reducing the
limitation.  That argument fails, however, because, as
the Court of Appeals held, the terms of ORS 12.155 and
the responsibilities imposed by it apply to third party
claimants rather than to insureds.  ORS 12.155 applies
only to advance payments made pursuant to ORS [31.560]
and [31.565].  If the ORS 12.155 phrase 'each person
entitled to recover damages for the death, injury or
destruction' is deemed ambiguous for failure to exclude
insured persons absolutely, the constructional scales
are tipped by reference to the latter two statutes. 
Their terms, while also not entirely immune from a
larger construction, also make more sense if read to
refer to claims against the insured.  The elaborate
constructional analysis in the opinion of Chief Judge
Joseph for the Court of Appeals is apt on this point.
We find simple reference to the sense of the words of
ORS 12.155, [31.560] and [31.565] to be most
persuasive.  Moreover, the legislature could reasonably
conclude that written advice of the applicable statute
of limitations is desirable for the protection of a
claimant other than the insured, but not as necessary
for an insured who has already been given written
advice of the contractual limitation in the policy
itself.  Those considerations reinforce our conclusion
that the ORS 12.155 phrase 'statute of limitations' is
to be given its plain meaning."
293 Or at 518-19 (footnote omitted; emphasis added).
In context, the sentence that defendants emphasize does
not support a narrow interpretation of the statutory term
"person."  As in Duncan, this court in Ben Rybke discussed ORS
12.155 in the insurance context, but without deciding whether
that statute reached other types of cases as well.  The quoted
paragraph from Ben Rybke explains why ORS 12.155 does not apply
to claims between an insurer and its insured.  The paragraph says
little or nothing about when ORS 12.155 does apply.
To the extent that the parties and the Court of Appeals
concluded that Duncan and Ben Rybke limited ORS 12.155 to
insurers, they read too much into those opinions.  Each of those
cases involved a dispute between an insurance company and an
insured; neither case suggested -- much less held -- that the
term "person" in the statute extended to only insurance
companies.  
We thus agree with Hamilton.  Defendants qualify as
"person[s] who [made] an advance payment" under ORS 12.155(1),
but, under the allegations of the complaint, they did not give
timely written notice of the statute of limitations.  ORS
12.155(2) thus tolled the statute of limitations.  The trial
court erred when it dismissed the complaint.
The decision of the Court of Appeals is reversed.  The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.
1. ORS 12.110 provides, in part:
"(1) An action * * * for any injury to the person
or rights of another, not arising on contract, and not
especially enumerated in this chapter, shall be
commenced within two years * * *."
2. Both of those statutes have been renumbered twice.  ORS
31.560 was originally numbered as ORS 41.960 and later renumbered
as ORS 18.520.  ORS 31.565 was originally numbered as ORS 41.970
and later renumbered as ORS 18.530.  The opinions quoted below
often refer to those statutes by one or the other set of those
numbers.  To avoid confusion, we have altered those references 
to use the current statutory numbers.
3. The Department of Consumer and Business Services is
responsible for, among other things, administering the insurance
laws.  See, e.g., ORS 731.016 ("The Insurance Code * * * shall be
administered and enforced by the Director of the Department of
Consumer and Business Services to give effect to the policy
stated in ORS 731.008.").
4. Duncan quoted the following from the legislative history:
"Insurance Commissioner Bateson testified before the
Senate Judiciary Committee on May 10, 1971, as follows:
"'Section 5 deals with a problem
inherent in a complicated and extensive
personal injury case where the insurance
company makes advance disability payments. 
In that situation it would be entirely
possible for the statute to run and then the
company could say, "That's too bad; you
didn't file suit and the statute of
limitations has expired."  House Bill 1299
therefore required that[,] within 30 days
after advance payment is made, there must be
a notification to the payee that the statute
may be running and the making of the advance
payment does not suspend it.  If there is no
such notice, the statute is tolled between
the time of the first payment and the time
the first notice is actually given.'"
276 Or at 637.