Title: Wallach v. Allstate Ins. Co.
Citation: N/A
Docket Number: S053702
State: Oregon
Issuer: Oregon Supreme Court
Date: March 20, 2008

FILED: March 20, 2008
IN THE SUPREME COURT OF THE STATE OF OREGON
MICHAEL E. WALLACH,
Petitioner on Review,
v.
ALLSTATE INSURANCE COMPANY,
an Illinois corporation,
aka Allstate Indemnity Company,
Respondent on Review.
(CC 99-3671-L4(7); CA
A124340; SC S053702)
En Banc
On review of the decision of the Court of
Appeals.*
Argued and submitted January 3, 2007.
G. Jefferson Campbell, Medford, argued the cause
and filed the brief for petitioner on review.
Edward H. Talmadge, of Frohnmayer, Deatherage,
Pratt, Jamieson, Clarke &amp; Moore, PC, Medford, argued the cause and filed
the brief for respondent on review.  With him on the brief was Bernard S.
Moore, Medford.
KISTLER, 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.
Durham, J., dissented and filed an opinion.
*Appeal from Jackson County Circuit Court, Mark
Schiveley, Judge. 206 Or 137, 135 P3d 404 (2006).
KISTLER, J.
Plaintiff
suffered injuries in three separate automobile accidents.  During the trial on
the first accident, the court instructed the jury that it could hold defendant
Allstate Insurance Co., responsible for any "enhancement or aggravation of
plaintiff's injuries caused by the subsequent accident[s]" if the
enhancement or aggravation would not have occurred but for the first accident. 
On appeal, the Court of Appeals held that the trial court erred in giving that
instruction, reversed the trial court's judgment, and remanded for a new
trial.  Wallach v. Allstate Ins. Co., 206 Or App 137, 135 P3d 404
(2006).  We allowed plaintiff's petition for review and now affirm the Court of
Appeals decision.  
Plaintiff
purchased automobile insurance from defendant Allstate.  Afterwards, plaintiff
was involved in three automobile accidents.  The first accident occurred on
October 24, 1997.  An unidentified truck (referred to as a "phantom
vehicle" in Allstate's policy) caused plaintiff's vehicle to swerve,
injuring plaintiff.  Because the person driving the truck was unidentified and
thus unavailable, plaintiff sought to recover his damages from Allstate under
both the uninsured motorist (UM) provision (1) and the personal injury protection (PIP) provision (2)of his policy. 
Allstate denied liability under both provisions, and plaintiff filed this
action against Allstate on October 22, 1999, alleging that Allstate had
breached those provisions.
The second
accident occurred on August 6, 1999, a few months before plaintiff filed this
action.  Plaintiff had stopped at a red light when another car
"rear-ended" his car.  The third accident occurred on August 2, 2002,
before the trial on this action began.  Plaintiff had stopped at a red light
when yet another car "rear-ended" his car.
At the
trial on the first accident, plaintiff contended that Allstate was liable for
the injuries resulting from the first accident and also for any aggravation of
those injuries resulting from the second and third accidents. (3)  Plaintiff submitted a special jury
instruction to that effect, (4)
and Allstate filed a written objection.  Among other things, Allstate contended
that the trial court should not give plaintiff's requested instruction because
"the subsequent motor vehicle accidents are not accidents which would have
occurred but for the original injury" and also because it was "not
foreseeable that a plaintiff would meet with subsequent motor vehicle
accidents."  Finally, Allstate argued that plaintiff's requested
instruction would make it "liable for injuries attributable to the second
motor vehicle accident for which [it] is not liable."
Despite
that objection, the trial court gave an instruction that repeats, in
substantial part, the special jury instruction that plaintiff had requested. 
The trial court instructed the jury:
"The contract entered into by the plaintiff
and the defendant sets forth that the defendant will provide coverage for all
the natural[,] direct and proximate consequences of the wrongful acts of the
driver of the phantom vehicle.
"If
you find that the plaintiff was injured by those acts in the accident of
October 24th, 1997 and then had a subsequent accident in which the plaintiff
suffered further injury which would not have occurred, but for the original
injury, the defendant may then be held liable for the enhancement or
aggravation of plaintiff's injuries caused by the subsequent accident.
"The defendant's liability would apply only
to the injuries you attribute to the accident of October 24th, 1997 and to any
enhancement or aggravation of those injuries, not to any new injuries suffered
by plaintiff in any subsequent accident."
After the court gave that
instruction, Allstate excepted to it, reasoning that "this is not the type
of case where the first accident caused the second and third accidents; and,
therefore, that instruction should not have been given[.]"  The jury
returned a verdict awarding plaintiff $50,000 in damages for Allstate's breach
of the UM provision and $25,000 in damages for Allstate's breach of the PIP
provision. 
Allstate
appealed from the resulting judgment, arguing, among other things, that the
trial court erred in instructing the jury that Allstate was liable to the
extent that the second and third accidents aggravated any injuries that
plaintiff sustained in the first accident.  The Court of Appeals agreed that
the instruction was erroneous.  It reasoned that the instruction was either
confusing or incorrect because it appeared to permit the jury to award damages
for injuries arising out of the second and third accidents if the jury found
"but for" causation only.  Wallach, 206 Or App at 144.  The
court also noted that the instruction referred to proximate cause when it
should have referred to foreseeability.  Id.  Because the court
concluded that those errors were not harmless, it reversed the trial court's
judgment and remanded for further proceedings.  Id. at 145.
On review,
plaintiff argues that the Court of Appeals erred in three respects.  He contends
initially that Allstate failed to preserve its objection to the instruction. 
Plaintiff recognizes that Allstate objected to the instruction.  He contends,
however, that Allstate did not object on the grounds on which the Court of
Appeals relied.  As noted above, however, Allstate filed a written memorandum
objecting to plaintiff's special requested jury instruction on the ground,
among other things, that the second and third accidents were not foreseeable. 
As also noted, the trial court's instruction tracked in substantial part the
special requested instruction to which Allstate objected, and Allstate renewed
its objection when it excepted to the instruction that the trial court gave. 
Allstate preserved the issues that it has raised on appeal and on review.  See Beall
Transport Equipment Co. v. Southern Pacific, 335 Or 130, 137, 60 P3d
530 (2002) (describing preservation requirements for jury instructions).
Having
concluded that Allstate preserved its objections to the instruction, we turn to
the question whether that instruction correctly stated the law.  The
instruction consists of three sentences.  The first sentence purports to recite
the terms of the insurance contract under which plaintiff's claims against
Allstate arise. (5)  The
second sentence sets out the operative legal principle; it tells the jury what
it must find before Allstate "may * * * be held liable."  That
sentence provides:
"If you find that the plaintiff was injured by those
acts in the accident of October 24th, 1997 and then had a subsequent accident
in which the plaintiff suffered further injury which would not have occurred,
but for the original injury, the defendant may then be held liable for the
enhancement or aggravation of plaintiff's injuries caused by the subsequent accident."
The third sentence limits the
second.  It clarifies that Allstate is liable for the injuries resulting from
the first accident and for "any enhancement or aggravation of those
injuries, [but] not [for] any new injuries suffered by plaintiff in any subsequent
accident."
The trial
court's instruction is erroneous in two separate but related respects.  First,
the instruction is at odds with the general rule that a defendant is liable
only for the foreseeable consequences of his or her negligence.  See Fazzolari
v. Portland School Dist. No. 1J, 303 Or 1, 17, 734 P2d 1326 (1987) (holding
that, unless a status,  relationship, or standard of conduct "creates,
defines, or limits the defendant's duty, the issue of liability for harm
actually resulting from [the] defendant's conduct properly depends on whether
that conduct unreasonably created a foreseeable risk to a protected interest of
the kind of harm that befell the plaintiff"). (6)   Under the trial court's
instruction, the jury could hold Allstate liable for all aggravation damages
that were causally connected to the first driver's negligence no matter how
unforeseeable those damages were.  Such unlimited liability is contrary to
Oregon negligence law.
Not only is
the trial court's instruction contrary to the general rule on negligence, but
it is also inconsistent with the specific application of that rule in Ferrante
v. August, 248 Or 16, 432 P2d 167 (1967).  In Ferrante, the
plaintiff had injured her back in an automobile accident as a result of the
defendant's negligence.  Id. at 17.  Several months later, as her back
was improving, she "felt a very sharp pain in her back as she was getting
out of her chair."  Id. at 18.  The plaintiff's doctor testified
that the injury had weakened the plaintiff's back and that the later injury she
experienced on getting out of the chair was a foreseeable consequence of her
weakened back and thus the earlier accident.  Id.
On that
evidence, this court held that the plaintiff could recover both for the injury
that she originally suffered as a result of the accident and also for the later
back sprain.  Id. at 22-23.  The court reasoned that, given the doctor's
testimony, the jury reasonably could find that "but for the original
injury the [later] back sprain * * * would not have occurred and that the
latter injury was the natural and probable consequence of the former."  Id.
at 22; see also Restatement (Second) of Torts § 460 (1965) (stating
similar rule). (7) 
Although we would now use the phrase "foreseeable consequence" rather
than "natural and probable consequence," see Fazzolari, 303 Or
at 14 (explaining that foreseeability rather than proximate cause is the
measure of a defendant's liability), the important point is that the court in Ferrante not
only required a causal connection between the original negligent act and the
later injury that resulted in increased pain but it also required that the
later injury be a foreseeable consequence of the original negligence.  The
trial court's instruction in this case erroneously omitted that limitation.
The
instruction was incorrect in a second, related respect.  Under Oregon law, a
tortfeasor is responsible to the extent that his or her negligence aggravates a
preexisting condition.  See Stubbs v. Mason, 252 Or 547, 551, 450
P2d 773 (1969) (so holding); Dodson v. Lemon, 197 Or 444, 449, 253 P2d
900 (1953) (same).  It follows that, in this case, if the second tortfeasor
aggravated a preexisting condition and if the second accident was not a
foreseeable consequence of the first, then the law allocates responsibility for
any aggravation of plaintiff's preexisting condition to the second tortfeasor,
not the first.  The trial court's instruction, however, told the jury that it
could hold the first tortfeasor liable for any aggravation damages that the
second accident caused without regard to whether the second accident was a
foreseeable consequence of the phantom driver's negligence.
Plaintiff
has not argued that either the second or third accident was a foreseeable
consequence of the phantom driver's negligence, nor is there any evidence in
the record that would permit a reasonable juror to draw that inference. 
Accordingly, we agree with Allstate that, on this record, the trial court
should not have instructed the jury that it could hold Allstate liable for any
aggravation damages resulting from the second and third accidents.  We note
that the other courts that have considered this issue agree that, when the
second accident is not a foreseeable consequence of the first, the defendant involved
in the first accident is not liable for any aggravation of the plaintiff's
injuries that the second accident causes.  See, e.g., Hashimoto
v. Marathon Pipe Line Co., 767 P2d 158, 160-61 (Wyo 1989); Bruckman v.
Pena, 29 Colo App 357, 487 P2d 566 (1971); Armstrong v. Bergeron,
104 NH 85, 178 A2d 293 (1962) (all so holding). (8)
The final
issue is whether the erroneous instruction substantially affected Allstate's
rights.  See ORS 19.415(2) (providing that "[n]o judgment shall be
reversed or modified except for error substantially affecting the rights of a
party").  On that issue, we note that the trial court's instruction gave
the jury the wrong legal rule to apply.  The instruction told the jury that it
could hold Allstate liable for damages for which the jury could not, on this
record, hold it legally responsible.  Allstate observes that, when an
instruction tells the jury to apply the wrong legal rule and the erroneous
instruction permits the jury to reach an incorrect result, this court
consistently has held that the error substantially affects the party's rights. 
See, e.g., Honeywell v. Sterling Furniture Co., 310 Or
206, 211-12, 797 P2d 1019 (1990) (instructing jury that part of a punitive
damages award could go to a crime victim's fund encouraged jury to award
damages for the wrong reason); Fairbrother v. Rinker, 274 Or 525,
529-30, 547 P2d 605 (1976) (instruction that erroneously permitted jury to
consider defendant's financial condition in assessing damages was reversible
error because it could have prejudiced plaintiff's chance of recovery); Waterway
Terminals v. P. S. Lord, 256 Or 361, 370, 474 P2d 309 (1970) (stating
general principle).
Plaintiff
responds that this court's decision in Shoup v. Wal-Mart Stores, Inc.,
335 Or 164, 61 P3d 928 (2003), altered that longstanding rule.  Plaintiff
contends that, after Shoup, an appellate court must affirm a jury's
verdict unless the party who objected to the instruction can demonstrate that
the erroneous instruction affected the verdict.  In that connection, plaintiff
notes that the jury could have based its damages award in this case solely on
the injuries resulting from the first accident without including any
aggravation damages from the second and third accidents.  Plaintiff contends
that, because Allstate cannot show otherwise, this court must affirm the jury's
verdict even though the court told the jury to apply an incorrect legal rule in
determining the amount of plaintiff's damages.
The holding
in Shoup is not as far reaching as plaintiff perceives.  The plaintiff
in Shoup alleged three specifications of negligence.  335 Or at 166-67. 
The trial court submitted all three specifications to the jury, even though it
should have granted the defendant's motion to withdraw one of those
specifications.  Id. at 167-68.  The trial court then correctly
instructed the jury on negligence, after which the jury returned a general
verdict finding the defendant negligent.  Id. at 167.
The verdict
form did not identify which specification or specifications the jury relied on
in finding the defendant negligent, and the question before this court was
whether it could say that the trial court's error in submitting one of three
specifications of negligence to an otherwise correctly instructed jury
substantially affected the defendant's rights.  Faced with that question, this
court held that, without some basis for saying that a correctly instructed jury
had relied solely on the invalid specification of negligence, it could not say
that the error had substantially affected the defendant's rights; that is, the
court could not say that the jury had not based its verdict on the other two
specifications of negligence that were properly before it.  Id. at 176,
179. (9)
This court
was careful in Shoup to distinguish instructional error from the
particular species of error that was at issue in that case.  In reviewing prior
cases, this court observed that, although its earlier decision in Hernandez
v. Barbo Machinery Co., 327 Or 99, 957 P2d 147 (1998), may have stated the
standard for reversible error too broadly, the decision had correctly held that
the instructional error in that case had substantially affected the plaintiff's
rights.  Shoup, 335 Or at 172 n 2.  After questioning the way in which
the court had articulated the legal standard in Hernandez, the court
stated in Shoup:  "We do not, however, question the conclusion
reached by this court in Hernandez.  The error in jury instructions at
issue in Hernandez was 'reversible' under ORS 19.415(2)."  Id.
Because the
instructional error in Hernandez marks the limit of Shoup's
holding, we describe that case briefly.  Hernandez was a products
liability case.  The defendant in that case raised the affirmative defense of
comparative fault, alleging that the plaintiff had been negligent in ten
respects.  327 Or at 102-03.  The plaintiff requested an instruction that would
have told the jury that certain types of negligence are not sufficient to
establish comparative fault in a products liability case.  Id. at
103-04.  Specifically, the instruction would have told the jury that negligence
that consists of an "unobservant, inattentive, ignorant, or awkward
failure to discover or to guard against the defect that goes toward making the
product dangerously defective" is not sufficient to establish comparative
fault.  Id. at 104.
The trial
court refused to give the requested instruction, and the jury returned a
verdict finding that the plaintiff was 50.5 percent and the defendant 49.5
percent at fault.  Id. at 104-05.  On review, this court held that the
trial court erred in refusing to give the requested instruction and that the
error substantially affected the plaintiff's rights.  Id. at 112-13.  On
the latter point, the court observed that nine of the ten allegations of
negligence alleged that the plaintiff had "knowingly encountered" a
risk of injury and that those allegations, if proved, would be sufficient to
establish comparative fault.  Id. at 110-11.  One specification,
however, alleged only that the plaintiff had acted negligently in standing on a
slippery surface (sawdust) when he used the defendant's product, and the court
observed that a properly instructed jury could have found that the plaintiff's
negligence in standing on the sawdust consisted only of an "unobservant,
inattentive, ignorant or awkward failure" to discover or guard against the
defective product.  Id. at 112.
Because the
trial court refused to give the plaintiff's requested instruction, the jury
applied an incomplete and thus inaccurate legal rule to the facts, which
permitted the jury to reach an erroneous result.  That was sufficient, this
court held in Hernandez and reaffirmed in Shoup, to say that the
instructional error substantially affected the plaintiff's rights and required
reversal.  Hernandez, 327 Or at 112-13; Shoup, 335 Or at 172 n
2.  That was true even though the jury in Hernandez properly could have
based its verdict on the other allegations of negligence and the plaintiff in Hernandez
could have memorialized the effect of the trial court's refusal to give his
requested instruction by asking the jury to specify which, if any, of the
defendant's allegations of negligence it relied on in determining the parties'
respective fault.
In State v. Pine, 336 Or 194, 82 P3d 130 (2003), the court confirmed the distinction
that it noted in Shoup.  In Pine, this court held that a
defendant could be held liable for third-degree assault only if he or she
"caused" physical injury to the victim; that is, the "defendant
either must have inflicted physical injury directly himself or herself, or must
have engaged in conduct so extensively intertwined with infliction of the
injury that such conduct can be found to have produced the injury."  Id.
at 207.  The trial court, however, had instructed the jury that a defendant
could be guilty of third-degree assault if the defendant merely had aided
another person who caused physical injury to the victim.  Id. at 209. 
Under the trial court's instruction, the jury could have found the defendant in
Pine guilty of third-degree assault without finding the direct causal
connection that the third-degree assault statute required.
On review,
the state argued that, under Shoup, this court should affirm even though
the statute required that the defendant cause the physical injury.  Id.
at 199.  The state reasoned that there was evidence from which the jury could
have found that the defendant had directly inflicted the injury rather than
merely aiding another person who inflicted the injury.  Id.  It followed
from Shoup, the state reasoned, that the defendant could not establish
that the erroneous instruction had substantially affected his rights.  Id.
In
rejecting the state's argument, this court declined to rely on "procedural
differences between civil and criminal proceedings."  Id. at 200. 
Rather, it relied on "a more fundamental reason" to distinguish the
effect of the error in Shoup from the effect of the instructional error
before it.  Id.  The court reasoned that, if the jury had believed the
defendant's version of the facts rather than the state's, the instruction
permitted the jury to convict the defendant in violation of the statute
defining the crime of third-degree assault.  Id.  Accordingly, the court
held that the instructional error required reversal.  Id. at 210.
The
instruction in Pine, like the instruction in this case, was too broad. 
It permitted the jury to find the defendant in Pine guilty for
conduct that did not constitute the charged crime, as well as for conduct that
did. (10)  In holding
that the instructional error in Pine substantially affected the
defendant's rights, this court did not specify how the instructional error in Pine
differed from the error in Shoup.  The answer seems apparent, however: 
We presume that a jury follows a trial court's instructions, DeMaris v.
Whittier, 280 Or 25, 31, 569 P2d 605 (1977), and giving the jury an
erroneous legal rule (11)
to decide an element of the state's case in Pine substantially
affected the defendant's rights.  To be sure, it was possible that the jury in Pine
might have landed on a legally permissible answer despite having been given an
incorrect instruction.  But that possibility was too slight for this court to
say in Pine that the error did not substantially affect the
defendant's rights.  No other conclusion explains this court's holdings in Pine,
Hernandez, and an unbroken line of cases holding that an erroneous
instruction substantially affects a party's rights, all of which were decided
in light of the standard currently codified in ORS 19.415(2). (12)
The dissent
reasons that this court's decision in Lyons v. Walsh &amp; Sons Trucking
Co., Ltd., 337 Or 319, 96 P3d 1215 (2004), requires a different
conclusion.  We do not read Lyons as broadly as the dissent does.  Lyons
arose out of an automobile accident in which a police officer died.  337 Or at
321.  There was evidence that the police car in which the officer had been a
passenger had turned in front of the defendant's oncoming truck.  Id. at
322.  The plaintiffs submitted three proposed jury instructions, each of which
would have told the jury essentially that it "should not 'weigh or
consider' [the] conduct [of the other officer who drove the police car] unless
the jury found that the accident had been the 'sole and exclusive' result of
that [officer's] conduct."  Id. at 323.  The trial court declined
to give that instruction, instructed the jury that it could not compare the
officer's and the defendant's negligence, if any, and submitted a special
verdict form to the jury that asked:
"Was defendant * * * negligent in one or more of the
ways claimed by the plaintiff and, if so, was such negligence a cause of damage
to the plaintiffs?"
Id.  The jury answered that
question "no," resulting in a judgment in the defendant's favor.  Id.
On appeal,
the Court of Appeals affirmed the trial court's judgment, holding that the
plaintiffs' requested instructions had not correctly stated the law.  Id.
at 324.  On review, this court affirmed but on a different ground.  This court
noted that the special verdict form asked a compound question and that the
jury's answer could have reflected its conclusion either that the defendant had
not been negligent or that the defendant's negligence had not caused the
plaintiff's harm.  Id. at 325.  The plaintiffs did not argue that the
trial court had instructed the jury incorrectly on negligence; they only
challenged its instructions on causation.  Id.
The instructions
thus provided two alternate paths by which the jury could have answered
"no" to the question on the special verdict form.  One was a correct
statement of the law; the other was an incorrect statement of the law, in the
plaintiffs' view.  Because the jury could have based its answer on the special
verdict form on the correct instructions regarding negligence, this court held
that it could not say that any error in instructing the jury on causation had
substantially prejudiced the plaintiffs' rights.  As the court explained in Lyons,
"[w]hat this court stated in Shoup applies equally to the narrow
problem that the form of jury verdict used in the present case poses."  Id. at
326.
The court
was careful in Lyons to distinguish the "narrow problem" that
the jury verdict form posed in that case from "other kinds of asserted
trial error, such as a faulty jury instruction."  Id.  The court
explained:
"This was not a case in which the plaintiff advanced a
single factual theory of liability that the form of jury verdict reflected. 
Nor did this case involve other kinds of asserted trial error, such as a faulty
jury instruction, that may call for a different analysis of whether the error
'substantially affect[s] the rights of a party' under ORS 19.415(2).  The jury
verdict could have been based on one of two different rationales that the jury
verdict form identified; it is impossible to tell which the jury used. 
Plaintiffs' claims of error may or may not be well taken, but they depend on an
assumption that the jury's verdict was based on one rationale only."
Id. (brackets in original). 
The foregoing explanation makes clear that the court in Lyons understood
that the jury verdict form in that case and a faulty jury instruction present
distinct issues for the purposes of ORS 19.415(2).  Nothing in Lyons
suggests that the court intended to overrule sub silentio its holding in
Pine less than a year earlier, its reaffirmation of Hernandez
in Shoup, or an unbroken line of cases before Shoup holding
that an incorrect instruction substantially prejudices a party's rights.
The dissent
reasons that, despite what this court said in Lyons, the underlying
problem in Lyons was the jury instruction and that, if the court applied
Shoup to the instructional error in Lyons, we should apply it to
the instructional error here as well.  In essence, the dissent reasons that the
distinction that the court drew in Lyons does not withstand scrutiny and
that Lyons' holding cannot be limited to the "narrow problem that
the form of jury verdict used in [that] case pose[d]."  We need not decide
whether Lyons was correct in positing that the jury verdict form in that
case and instructional error present distinct issues for the purposes of ORS
19.0415(2).  This case does not involve a jury verdict form similar to the one
in Lyons; it thus provides no occasion for us to decide whether the
distinction that the court articulated in Lyons was correct.  Rather, it
is sufficient for the purposes of this case to reaffirm the general rule stated
in Pine, Hernandez, and an unbroken line of cases that, when a
trial court incorrectly instructs the jury on an element of a claim or defense
and when that incorrect instruction permits the jury to reach a legally
erroneous result, a party has established that the instructional error
substantially affected its rights within the meaning of ORS 19.415(2).
In
this case, the trial court incorrectly instructed the jury on the damages for
which Allstate was liable.  That error substantially affected Allstate's
rights.  Although the trial court's judgment must be reversed, the question
that remains is whether the erroneous instruction affected only the jury's
award for the breach of the UM provision or whether it also affected the jury's
award for the breach of the PIP provision.  We turn to that issue.
As noted,
plaintiff sued Allstate for breach of contract.  He alleged that Allstate had
failed to pay sums that it owed him under both the PIP and the UM provisions of
his insurance policy.  Ordinarily, one might expect that any aggravation
damages that plaintiff experienced as a result of the second and third
accidents, which occurred two and five years respectively after the first
accident, would not be included within any award of PIP damages.  (The
insurance policy, for instance, limits PIP coverage for medical expenses to
certain reasonable and necessary medical expenses incurred within one year of the
accident.)  However, in defining plaintiff's rights under the PIP and UM
provisions of his policy, the trial court instructed the jury generally that
plaintiff had a right to recover up to $25,000 in economic damages under the
PIP provision and up to $100,000 in noneconomic damages under the UM provision;
that is, the trial court instructed the jurors that they should allocate any
damages between the two breaches based on the nature of the damages. (13)
Given those
instructions and the instruction on aggravation damages, the jury could have
included medical costs that plaintiff incurred after the second accident in the
award of PIP damages; that is, the trial court's instructions erroneously
permitted the jury to find that the second accident aggravated injuries that
plaintiff sustained in the first accident and to assess PIP damages against
Allstate for the medical costs that plaintiff incurred to treat those
aggravated injuries.  Because the trial court's erroneous instruction on
aggravation affected both the jury's award of damages for breaching the PIP
provision and its award for breaching the UM provision, neither damages award
can stand.
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.
DURHAM, J., dissenting.
The legal
question that divides the majority and this dissent is straightforward:  If the
trial court has delivered an arguably erroneous jury instruction, should this
court grant a new trial if the appellant can show only that the challenged
instruction might have affected the appellant's rights but cannot show
that the instruction did affect those rights?  In my view, an appellant
fails to show the requisite harm from instructional error by demonstrating only
that the jury might have applied the instruction in returning its verdict. 
Because the majority grants a new trial here even though the appellant can show
only that the jury might have used the challenged instruction in returning its
verdict, I dissent.
This case
requires this court to apply ORS 19.415(2), which provides that "[n]o
judgment shall be reversed or modified except for error substantially affecting
the rights of a party." (14) 
This court has held, recently and repeatedly, that a trial error does not
amount to an "error substantially affecting the rights of a party"
under ORS 19.415(2) if the record demonstrates only that the error might
have affected the appellant's rights.
In Shoup v. Wal-Mart Stores, Inc., 335 Or 164, 61 P3d 928 (2003), the court devoted
an extensive analysis to the then-extant court-created rule that allowed the
reversal of a judgment if the appellate court could not determine ("we
can't tell") whether the particular trial error had lead the jury to
return an erroneous verdict.  Following that analysis, the court held that
awarding a new trial on appeal when the record showed only that the assigned
error might have affected the outcome was not consistent with ORS
19.415(2).  Rather, the court decided that that statute requires this court to
grant a new trial if, but only if, the record shows that an error occurred and
that the error did affect the outcome:
"The words of ORS 19.415(2) demonstrate that an error
must cause something more than the 'possibility' of a different result before
the appellate court may reverse a judgment.  * * * Thus, an error 'affecting' a
party's rights is an error that can be said to 'produce a material
influence' or 'to have a detrimental influence' on those rights, and not
merely one that 'might' have changed the outcome of the case.  The use of the
adverb 'substantially' further limits the type of error that can result in
reversal of a judgment.  'Substantially' means 'in a substantial manner,' and
the relevant definition of 'substantial' is 'being of moment:  IMPORTANT,
ESSENTIAL.'  [Citation omitted.]
"Those definitions indicate how far defendant's proposed
'outcome might have been different' standard is from the standard set out in
ORS 19.415(2).  The possibility that an error might have resulted in a
different jury verdict is insufficient under the statute."
Id. at 173 (emphasis in
original).
In Lyons
v. Walsh &amp; Sons Trucking Co., Ltd., 337 Or 319, 96 P3d 1215 (2004), the
plaintiffs in a wrongful death case appealed from a judgment for the defendant
based on a special jury verdict.  The plaintiffs sought a new trial, claiming
on appeal that the trial court, in instructing the jury, had misinterpreted former
ORS 18.470 (2001), renumbered as ORS 31.600 (2003), regarding
comparative fault.  This court, however, independently examined the record and
determined that it could not reach the plaintiffs' instructional error issue. 
Instead, this court determined that the jury had simply answered "no"
to a compound question on the special verdict form regarding the subjects of
negligence and causation and that, as a result, the court could not tell if the
jury's defense verdict rested on a permissible or an arguably impermissible
ground.  This court stated:
"Our inability to determine which ground led the jury to
decide as it did is important, because plaintiffs have focused all their
arguments in this court on the second part of the question.  That is,
plaintiffs assert that the instructions that the trial court gave and the
evidence that it admitted improperly permitted the jury to consider [police
officer] Rector's conduct in assessing whether [defendant] Walsh's conduct was
a substantial factor in causing the accident.  But such errors by the trial court,
if errors they were, are irrelevant if the jury decided the case instead on the
pristine proposition that Walsh was not negligent."
Id. at 325 (footnote
omitted).  The court quoted ORS 19.415(2) and recounted that Shoup had
"explained that that statute requires more than speculation concerning
whether an alleged error affected a jury's verdict[.]"  Id.  Then,
in a passage that has particular relevance to this case, the court stated:
"The jury verdict could have been based on one of two
different rationales that the jury verdict form identified; it is impossible to
tell which the jury used.  Plaintiffs' claims of error may or may not be well
taken, but they depend on an assumption that the jury's verdict was based on
one rationale only.  The present record does not support plaintiffs'
assumption, and, because they are asserting error, the consequences of the
inadequacy of the record in that respect fall on plaintiffs. * * *  That is,
plaintiffs cannot show, on this record, that any of the alleged errors about
which they complain 'substantially affect[ed]' their rights.  Plaintiffs thus
cannot prevail here."
Id. at 326 (citation
omitted).  I will return to the rationale in Lyons later in this
opinion.
With the
foregoing review of the court's current interpretation of ORS 19.415(2) in
mind, I turn to a review of the pertinent facts of this case.  It is necessary
to do so, because the majority opinion discusses the facts in a manner that
downplays or ignores certain facts that undermine its stated result, thus
impeding rather than aiding this court's assessment of the underlying legal
question.
We must
review the record in the light most favorable to the party who prevailed below,
plaintiff.  This is an action for breach of the uninsured motorist (UM) and personal
injury protection (PIP) provisions of the automobile insurance policy that
defendant sold to plaintiff.  Defendant's automobile insurance policy provided
coverage for injuries caused by a "phantom" vehicle, which is one
type of "uninsured" vehicle.  In particular, the policy provides
coverage for wrongful acts of the driver of an uninsured vehicle.  Plaintiff
may recover damages for breach of contract against defendant by demonstrating,
among other things, that defendant refused to pay the benefits of the policy,
and that plaintiff had a viable tort claim against the phantom vehicle driver
and could have obtained a favorable judgment against him.  Vega v. Farmers
Ins. Co., 323 Or 291, 306, 918 P2d 95 (1996).
Plaintiff
suffered serious personal injuries and incurred significant medical expenses as
the result of an automobile accident with an unidentified "phantom"
truck on October 24, 1997.  I refer in this opinion to that event as the
"first accident."
Plaintiff
had a second automobile accident, and also suffered personal injuries, on
August 6, 1999.  Plaintiff had a third automobile accident on August 2, 2002,
and suffered additional personal injuries.  Those accidents occurred before
this case went to trial.  Plaintiff developed the theory, and later claimed in
court, that the damages that he suffered in the second and third accidents were
the natural, direct, and foreseeable consequences of the first accident and,
thus, defendant was liable under its UM "phantom vehicle" coverage
for the damages that plaintiff suffered in the second and third accidents.  I
refer to those damages, as does the majority, as "aggravation"
damages.  Defendant asserted that it had no liability for any damages,
including aggravation damages arising from the second and third accidents.
The trial
court, prior to trial, had granted a partial summary judgment in plaintiff's
favor on the question whether a "phantom vehicle," within the meaning
of defendant's policy, had caused plaintiff's injuries in the first accident. 
That decision narrowed the questions that the jury was required to determine at
trial.  We may summarize those issues as follows:
1. What were plaintiff's monetary damages resulting from the first accident
on October 24, 1997, if any?
2. Were the damages that plaintiff suffered in the second and/or third
accidents a consequence of the acts of the driver of the phantom vehicle?  If
so, what is the amount of those aggravation damages?
Each party
submitted proposed jury instructions on those subjects.  The trial court
rejected the jury instructions submitted by the parties and, instead, drafted
its own, as follows:
"SUBSEQUENT ACCIDENTS -- AGGRAVATION OF PRIOR INJURIES
"The contract entered into by the plaintiff and the
defendant sets forth that the defendant will provide coverage for all the
natural, direct and proximate consequences of the wrongful acts of the driver
of the phantom vehicle.  If you find that the plaintiff was injured by those
acts in the accident of October 24, 1997, and then had a subsequent accident in
which the plaintiff suffered further injury which would not have occurred but
for the original injury, the defendant may then be held liable for the
enhancement or aggravation of plaintiff's injuries caused by the subsequent
accident.
"Defendant's liability would apply only to the injuries
you attribute to the accident of October 24, 1997, and to any enhancement or
aggravation of those injuries, not to any new injuries suffered by plaintiff in
any subsequent accident."
It is clear that the court's instruction
authorized the jury to award damages for injuries that plaintiff
suffered in the first accident.  The instruction additionally authorized
the jury to award aggravation damages if the jury found that, during the
second and third accidents, plaintiff suffered "further injury which would
not have occurred but for the original injury" received in the first
accident.  The last sentence of the court's instruction emphasized, to the
point of redundancy, the compound nature of the jury's authority:  the jury
could find defendant liable only for injuries incurred in the first accident. 
Separately, the jury also could find defendant liable for "any enhancement
or aggravation of those injuries" in the second and third accidents, but
could not award damages for "any new injuries suffered by plaintiff"
in the later accidents.  It is important to recognize that the jury instruction
correctly did not require the jury to award damages for any of plaintiff's
accidents, and correctly permitted the jury, if it so desired, to award damages
solely for the first accident and to refuse to award any aggravation damages
for the second and third accidents.
Defendant
objected to the instruction.  Significantly, defendant did not object to the
instruction insofar as it permitted the jury to hold defendant liable for
injuries incurred by plaintiff during the first accident.  Rather,
defendant contended that the instruction should not grant the jury the
additional authority to award aggravation damages on the basis of any injuries
suffered by plaintiff during the second and third accidents.  It is only
the latter contention regarding the court's instruction that defendant pursues
before this court.  I assume without deciding that defendant's latter
contention about the court's instruction is correct.
The parties
and the court submitted a form of general verdict to the jury.  The jury
returned the general verdict, awarding plaintiff $50,000 and $25,000 in damages
for breach of the UM and PIP insurance provisions, respectively.  Because the
parties and the court employed a general verdict only, the record does not
indicate whether the jury based its award solely on the injuries plaintiff
suffered during the first accident or, instead, on some combination of those
original injuries plus other injuries suffered by plaintiff during the second
and third accidents (or either of them).  That is, nothing in the record
signals whether the jury actually awarded any damages for any aggravation of
plaintiff's injuries that the second or third accidents may have caused.  What
is clear from the record is that the jury had before it sufficient evidence to
return its entire general verdict award in plaintiff's favor on the basis of
the injuries that plaintiff suffered in the first accident alone, and no party
argues to the contrary.  That fact is central to any proper consideration of
the assigned error on appeal, yet the majority fails to acknowledge it.
The
majority states that "the trial court's instruction gave the jury the
wrong legal rule to apply.  The instruction told the jury that it could hold
Allstate liable for damages for which the jury could not, on this record, hold
it legally responsible."  Wallach v. Allstate Ins. Co., ____ Or
____, ____, ____ P3d ____ (2008) (slip op at 9).  That statement addresses the
first step in any instructional error inquiry:  Did the challenged instruction
state the law erroneously?  However, the instructional error dispute here
concerns only the instruction regarding aggravation damages that plaintiff allegedly
suffered in the second and third accidents discussed above.  As noted, I assume
for purposes of discussion that the instruction permitting the jury to award
aggravation damages for the second and third accidents was erroneous.  The
majority commits error in failing to acknowledge that the instructional error
dispute here concerns only the authorization to award aggravation damages for
the second and third accidents.
The
majority then proceeds to the second analytical step: Did the arguably
erroneous instruction affect the outcome of the case?  The correct rule in that
regard appears in Waterway Terminals v. P. S. Lord, 256 Or 361, 370, 474
P2d 309 (1970), a case that the majority cites but fails to quote:
"As a result, cases should not be reversed upon
instructions, despite technical imperfections, unless the appellate court can
fairly say that the instruction probably created an erroneous impression of the
law in the minds of the jurymen which affected the outcome of the case."
(Emphasis added.)  The emphasized
portion of that rule does not permit reversal of a jury's verdict for
instructional error if the appellant shows only that the error might have
affected that party's rights.
Instead of
asking the correct question -- whether the instruction regarding aggravation
damages affected the verdict in this case -- the majority, quoting Allstate's
arguments, twists the applicable legal standard to allow reversal if the
challenged instruction merely "permits" an erroneous result:
"Allstate observes that, when an instruction tells the
jury to apply the wrong legal rule and the erroneous instruction permits the
jury to reach an incorrect result, this court consistently has held that the
error substantially affects the party's rights."
Wallach, ___ Or at ___ (slip
op at 10).  For that proposition, the majority cites three cases, none of which
support the majority's altered rule, and one of which, Waterway Terminals,
contradicts it. 
The
majority's alteration of the correct rule is misleading and distorts the proper
application of ORS 19.415(2) in this case.  We must assume, of course, that the
jury carefully listened to and followed all the court's instructions, and
awarded damages in conformity with its view of the evidence.  However, it did
so only to the extent that the instructions permitted it to do so.  Because the
jury returned only a general verdict and because the challenged jury
instruction stated the jury's authority to award damages in a compound manner,
as described above, we can only speculate about whether the jury's award
includes any sum for aggravation damages due to the second and third
accidents.  The majority errs in refusing to acknowledge that the record does
not demonstrate that the jury awarded any sum for aggravation damages in response
to the portion of the court's instruction that defendant challenges.
Can this
court, on the present record, reach and decide defendant's claim that the
court's instruction erroneously permitted the jury to consider awarding
aggravation damages for plaintiff's injuries received in his second or third
accidents?  This court's extensive analysis in Shoup and Lyons of
the meaning of ORS 19.415(2) indicates that the answer is "no."  Lyons,
in particular, illuminates the proper analytical path here.  According to Lyons,
because neither the general verdict nor any other part of the record here shows
that the jury's damages award includes aggravation damages for the second and
third accidents, defendant's challenge to the instruction rests entirely on an
unproven assumption that the jury did award aggravation damages. 
Defendant is the party who is asserting error and requesting relief from the
judgment below.  As Lyons held, "the consequences of the inadequacy
of the record in that respect fall on the appealing party," here,
defendant. (15) Defendant
cannot demonstrate, as ORS 19.415(2) requires, that the error of which it
complains "substantially affect[ed]" its rights.  Thus, ORS 19.415(2)
prevents this court from granting affirmative relief to defendant.
Lyons
recognized that this court's rationale in Shoup, which concerned the
submission to a jury of both permissible and impermissible claims of injury,
also applies when a jury verdict form reports a valid jury verdict but provides
an unclear answer about how the jury resolved the case.  Specifically, the Lyons
court, on its own motion, declined to reach the claimed instructional error
because the jury's verdict form did not demonstrate with clarity that the jury
had based its verdict on the assertedly erroneous portion of the challenged
instruction.  In the course of its discussion, the court included the following
sentence:
"Nor did this case involve other kinds of
asserted trial error, such as a faulty jury instruction, that may call for a
different analysis of whether the error 'substantially affect[s] the rights of
a party' under ORS 19.415(2)." 
Lyons, 337 Or at 326. (16) That sentence
recognizes the obvious:  different kinds of asserted trial error may call
for different analysis.  That includes, of course, asserted errors in a jury
instruction.  However, that sentence is not a holding that the court will not
apply ORS 19.415(2) in cases, like Lyons and this case, where an
appealing party's claim of harm from an allegedly erroneous jury instruction is
not shown clearly in the record.
The
majority also attempts to distinguish Shoup on the ground that Shoup
categorically differentiated other cases involving asserted errors in jury
instructions, citing the court's analysis, in a footnote, of Hernandez v.
Barbo Machinery Co., 327 Or 99, 957 P2d 147 (1998).  Shoup, 335 Or
at 172 n 2.  Hernandez, decided five years before Shoup, had
applied the then-accurate standard under ORS 19.415(2), that a party's rights
were substantially affected by a trial error -- there, an erroneous jury
instruction -- if the outcome either would have or may have been different had
the error not occurred.  The correctness of Hernandez's application of
that standard in 1998 was not an issue before the court in Shoup. 
Nevertheless, this court stated in the footnote in question:  "We do not,
however, question the conclusion reached by this court in Hernandez. 
The error in jury instructions at issue in Hernandez was 'reversible'
under ORS 19.415(2)."  Shoup, 335 Or at 172 n 2.
Those two
sentences may be debated from several viewpoints.  However, it is not debatable
that they are quite conclusory and provide no analysis whatever to support
their accuracy.  Moreover, the second sentence constitutes only dictum and does
not represent an authoritative holding of the court.  Again, the majority
overblows the significance of the two sentences in a footnote by stating that
the instructional error in Hernandez "marks the limit of Shoup's
holding[,]" Wallach, ___ Or at ____ (slip op at 12), and that Shoup
"reaffirmed" the Hernandez court's conclusion that
instructional error alone substantially affects a party's rights under ORS
19.415(2) if the error "may have" led to a different outcome.  Id.
at ___ (slip op at 13).
Finally,
the majority cites State v. Pine, 336 Or 194, 82 P3d 130 (2003).  In Pine,
the defendant appealed from a criminal conviction for third-degree assault
under ORS 163.165(1)(e).  He argued that the trial court had erred in
instructing the jury by allowing a conviction without proof that the defendant
himself had caused any physical injury to the victim but, instead, merely had
aided another in causing the injury.  After the parties briefed the case, but
before oral argument, the state brought Shoup, which this court decided
earlier the same year, to the court's attention.  The state contended that
there was some evidence in the record that defendant in fact had personally
caused physical injury to the victim.  Thus, according to the state, the
defendant could not establish that he had been prejudiced by the alleged
instructional error in the trial court.  This court distinguished Shoup,
responding that, even if the jury had believed defendant's version of the
facts, the instructional error would have led to a conviction for a non-existent
crime.  Id. at 200.  After examining the statute in question in light of
the defendant's version of the facts, the court said, inconsistently, that the
instructional error "would have affected the outcome of the case. 
That is so, because the jury could have convicted defendant of
third-degree assault under the instruction even if it found that he had not
caused physical injury to [the victim] * * *."  Id. at 210
(emphasis added).  The opinion in Pine did not confront the
inconsistency of its conclusions that, on the one hand, the instructional error
affected the outcome of the case and, on the other hand, the error could have
affected the outcome.
Apart from
that analytical inconsistency, the Pine opinion must be viewed in
context.  The criminal trial in Pine occurred long before Shoup
was decided, and the steps that the defendant's trial counsel took to preserve
the error at the trial were sufficient under the rules of criminal procedure
that existed at that time.  Had Shoup pre-dated the trial, competent
counsel with notice of that case might have taken additional steps to confirm
the existence of prejudice from the court's instruction.
However,
even if we conclude that Pine's "possibility of prejudice"
discussion did reflect the court's view in that criminal case, that establishes
only that this court has written inconsistently in deciding Pine, Shoup,
and Lyons.  There are good reasons to follow the more explicit
discussion of the issue by this court in Shoup and Lyons.
As Lyons
in particular emphasized, the core problem in cases of this kind does not
concern the allegedly erroneous instruction.  Instead, the problem concerns the
deficiencies and ambiguities in an appellate record that simply fails to show
that the challenged instruction affected the outcome of the case.  Shoup
and Lyons hold that the appealing party has the responsibility to make
an adequate record regarding the existence of genuine prejudice from the
asserted trial error or suffer the consequences.  In this case, the majority
simply ignores the consequence that it imposed in Lyons.  It is
illogical for the majority to claim that its result here is consistent with the
rationale in Lyons.
In a final
confusing twist, the majority purports to distinguish the Lyons
case on the ground that it involved a form of jury verdict, not a claimed
faulty jury instruction, as here.  But the problem in Lyons was not that
the form of the jury verdict contained an error  -- indeed, the special jury
verdict format was not erroneous -- but instead that neither the verdict form
nor any other part of the record demonstrated that the jury in fact had applied
the challenged jury instruction in reaching its verdict (i.e., that the
challenged instruction affected the outcome of the jury's verdict).  That is precisely
the argument that plaintiff makes in this case, and the court should give the
same answer here that it gave in Lyons.  Thus, the majority relies on a
distinction without a real difference.
By
asserting that Lyons is distinguishable, rather than explaining or
overruling the holding in Lyons, the majority asserts to the trial bench
and bar that both this case and Lyons, despite their logically
inconsistent results, are the law of Oregon.  The majority's response will lead
to needless and expensive litigation about whether, under the conflicting
results in this case and in Lyons, an appellate court can decide that an
asserted error in part of a compound jury instruction warrants a new trial.
In a
challenge to only a part of a jury's compound authority to return a verdict,
ORS 19.415(2) requires a showing on review that the challenged aspect of the
jury's authority affected the verdict.  In assessing whether such an error
requires reversal, it should not matter to the court whether the trial court explained
the jury's compound authority in a jury instruction (as here) or in a special
verdict form (as in Lyons) . This court should not have two opposite
standards for reversible error that depend only on the particular procedural
device that the trial court selected in describing the jury's compound
authority.  Yet that is precisely the import of the majority's assertion that Lyons
is distinguishable from this case.
This court
should not have two substantively different standards for granting relief under
ORS 19.415(2):  one for cases involving claimed errors in jury instructions, in
which a showing of potential prejudice to the appellant's rights will
suffice, and a different one for cases involving other claimed trial errors, in
which only a showing of actual prejudice will suffice. (17)  Defendant stands in the same
position, as a matter of legal analysis, as the plaintiffs in Lyons who
sought review of an allegedly erroneous instruction regarding comparative
negligence.  The appealing party in each case asks this court to make the same
unwarranted assumption that the jury in fact employed the challenged part of
the jury instructions in rendering its verdict.  This court refused to address
the asserted instructional error in Lyons because the record did not
show that the jury actually based some part of its verdict on the challenged
instruction.  This court, as noted, should give the same answer to defendant
here that it gave to the appealing parties in Lyons.  ORS 19.415(2) has
the same meaning for both cases.  Because the majority fails to apply ORS
19.415(2) in the same way that it applied that statute in Lyons, I
respectfully dissent.
1. Under the UM provision,
Allstate promised to pay plaintiff "those damages which an insured person
is legally entitled to recover from the owner or operator of [a phantom
vehicle] because of bodily injury sustained by an insured person."  
2. Under the PIP provision,
Allstate promised to pay plaintiff certain specified expenses that either were
incurred within a year of the accident or for a limited period of time.
3. On review, Allstate does not
dispute that it was liable under the UM and PIP provisions for the injuries
that plaintiff suffered as a result of the first accident.  The only issue is
whether Allstate is responsible for aggravation damages resulting from the
second and third accidents.
4. Plaintiff's
requested jury instruction number 10 stated:
"In an action to recover damages for
personal injuries the person wrongfully causing the personal injuries of
another is liable for all the natural, direct and proximate consequences of his
wrongful act or omission.  When the injured person meets with a subsequent
accident which would not have occurred but for the original injury, the
defendant may be held liable for the enhancement of plaintiff's damages caused
by the subsequent accident.  In this case, therefore, if you determine that any
of the Plaintiff's injuries resulting from any subsequent motor vehicle
accident after October 24, 1997 would not have occurred but for the Plaintiff's
original injuries sustained in the October 24, 1997 accident, then you may
award Plaintiff damages for any such enhancement or aggravation to the
Plaintiff caused by any such subsequent accident."
5. The first sentence recites that
Allstate and plaintiff entered into a contract under which Allstate promised to
"provide coverage for all the natural[,] direct and proximate consequences
of the wrongful acts of the driver of the phantom vehicle."  It is unclear
from the court's instructions whether the first sentence refers to the UM
provision, the PIP provision, or both.  The instruction does not refer
specifically to either provision, and neither provision contains the promise
that the instruction recites.
6. Plaintiff does not argue that a
status, relationship, or standard of conduct permitted the jury to hold
Allstate liable for any aggravation damages that resulted from the second and
third accidents without regard to whether those damages were a foreseeable
consequence of the first accident.
7. Section 460 of the Restatement
provides:
"If the negligent actor is liable for an injury which
impairs the physical condition of another's body, the actor is also liable for
harm sustained in a subsequent accident which would not have occurred had the
other's condition not been impaired, and which is a normal consequence of such
impairment."
8. This case is a relatively
common successive accident case in which the two accidents are not causally
related.  As explained above, in such cases, the first tortfeasor ordinarily
will be responsible for the damages that the first accident causes, and the
second tortfeasor will be responsible for the damages that the second accident
causes (including damages for aggravating a preexisting injury).  When there is
a disputed issue of fact, the jury will have to determine which injuries each
accident caused.  When, in the less frequent successive accident case, the
second accident is a foreseeable consequence of the first, the first tortfeasor
will be responsible for all the damages that both accidents cause (not just
aggravation damages), subject to whatever statutory or common-law rights of
contribution the first tortfeasor might have against the second tortfeasor.  See
Fowler V. Harper, Fleming James, Jr., and Oscar S. Gray, 4 Harper, James and
Gray on Torts § 20.3, 138 (3d ed 2007) (stating general rule).
9. The court framed its holding in Shoup
narrowly.  It stated:
"[W]e hold today that appellate
courts, to act within statutory limitations, may not apply the 'we can't tell'
rule to order a new trial in a case involving a judgment on a general verdict
based on multiple specifications, one of which is invalid, if there is evidence
to support another, valid specification."
10.  Similarly, the
instruction in this case permitted the jury to find Allstate liable for damages
for which it was not liable, as well as damages for which it was liable.
11.  In deciding
whether an instruction is erroneous, a court must consider the challenged
instruction in the context of all the other instructions.  See, e.g.,
State v. Oatney, 335 Or 276, 290, 66 P3d 475 (2003), cert den,
540 US 1151 (2004) (stating proposition).  In referring to an "incorrect
instruction" or "erroneous legal rule," we refer to an
instruction that, when read in the context of the other instructions,
inaccurately states the law regarding an element of a claim or defense.
12.  The standard
currently codified in ORS 19.415(2) has been a part of this state's civil and
criminal law since the Deady Code.  See General Laws of Oregon, Civ
Code, ch VI,  § 533, p 284 (Deady 1845-1864) (providing that, in
civil appeals, the judgment "shall only be reversed or modified for errors
substantially affecting the rights of the appellant"); General Laws of
Oregon, Crim Code, ch XXIII, § 246, pp 482-83 (Deady 1845-1864)
(providing that, in criminal appeals, the court "must give judgment,
without regard to * * * technical errors, defects or exceptions which do not
affect the substantial rights of the parties").
13.  Neither party
assigned error to these instructions, even though they do not appear to reflect
accurately plaintiff's rights under the PIP and UM provisions.  We do not
commend these instructions.  We note them only to explain our conclusion that
the effect of the trial court's erroneous instruction on aggravation damages
was not limited to the jury's award of damages for the breach of the UM
provision.  
14. This court must give a consistent interpretation to the legal
requirement in ORS 19.415(2) that a legal error have a substantial effect on
the rights of any party that wishes to challenge the error because
substantially the same requirement appears in several other areas of Oregon
law.  ORS 40.025(1), which codifies OEC 103(1), provides:
"Evidentiary error is not presumed to be
prejudicial.  Error may not be predicated upon a ruling which admits or
excludes evidence unless a substantial right of the party is affected[.]"
(Emphasis added.)
ORCP 12 B provides, in part:
"The court shall, in every stage of an
action, disregard any error or defect in the * * * proceedings which does
not effect the substantial rights of the adverse party."
(Emphasis added.)
Finally, Article VII
(Amended), section 3, of the Oregon Constitution provides, in part:
"If the supreme court shall be of opinion,
after consideration of all the matters thus submitted, that the judgment of the
court appealed from was such as should have been rendered in the case, such
judgment shall be affirmed, notwithstanding any error committed during the
trial; or if, in any respect, the judgment appealed from should be changed, and
the supreme court shall be of opinion that it can determine what judgment
should have been entered in the court below, it shall direct such judgment to
be entered in the same manner and with like effect as decrees are now entered
in equity cases on appeal to the supreme court."
Under settled Oregon law,
those quoted provisions require a showing that legal error actually affects a
substantial right of a party before the court will grant relief from the
error.  See, e.g., Scanlon v. Hartman, 282 Or 505, 511,
579 P2d 851 (1978) ("To warrant reversal the ruling of the trial court
must be not only erroneous, but prejudicial[]" (citing Edward, Guardian,
v. Hoevet, 185 Or 284, 200 P2d 955 (1949)).  However, the majority's new
standard, requiring a new trial where there is only a possibility that
the error affected the appellant's rights, places that settled Oregon law in
doubt.
15.      The
following passage from Shoup, quoted in Lyons, is especially
pertinent here:
"The rule embodied in ORS 19.415(2) is neutral as
between plaintiffs and defendants; it places the burden to make a record that
demonstrates prejudicial error on whichever party loses in the trial court and
then seeks reversal or modification of the judgment on appeal."
Lyons, 337 Or at 326
(quoting Shoup, 335 Or at 174).
16. The
quoted sentence from Lyons is ambiguous and probably erroneous and
misleading.  Contrary to that sentence, the plaintiff in Lyons did seek
to challenge an assertedly erroneous jury instruction.  The court declined to
address that assigned error because the record on appeal, including the special
verdict returned by the jury, failed to demonstrate that the allegedly faulty
instruction in fact affected the jury's verdict.  Thus, properly analyzed, Lyons
does identify a circumstance in which this court, in applying ORS 19.415(2),
should decline to address a challenge to an arguably erroneous jury
instruction.
17. The
confusion resulting from the conflicting results here and in Lyons
should lead prudent trial counsel to protect their appellate records wherever
possible by requesting the use of special verdict interrogatories that identify
precisely a jury's possible application of any challenged jury instruction in
reaching a verdict.  Additionally, trial counsel should carefully examine
proposed special jury verdict forms, and revise or eliminate passages that
express in a compound manner the jury's authority to determine issues surrounding
liability, damages, or affirmative defenses.