Opinion ID: 1197794
Heading Depth: 1
Heading Rank: 2

Heading: is a jury trial available under the ofa?

Text: Resolution of this issue requires two steps. First, we determine whether the legislature intended by the Oregon Franchise Act to provide a trial by jury. Second, and only if we determine that the legislature did not intend to provide a jury trial, we determine whether a jury trial nonetheless is required by Article I, section 17, or Article VII (Amended), section 3, of the Oregon Constitution. See e.g., Zockert v. Fanning, 310 Or. 514, 520, 800 P.2d 773 (1990) (when a statute resolves the issue in the case, this court will not reach a constitutional claim). Unlike the Court of Appeals, we hold that the legislature intended to provide a trial by jury under the Oregon Franchise Act. We therefore do not reach the constitutional question. When interpreting a statute, this court's task is to discern the intent of the legislature. ORS 174.020; PGE v. Bureau of Labor and Industries, 317 Or. 606, 610, 859 P.2d 1143 (1993). The first level of analysis is to examine the text and context of the statute. The text is the principal evidence of the legislature's intention. The context of the statute includes other provisions of the same statute and other related statutes. If the legislature's intent is unclear from the text and context of the statute, the court proceeds to the next level of analysis, which is to consider the legislative history of the statute. Id. 317 Or. at 611-12, 859 P.2d 1143. What has become known as The Oregon Franchise Act, [10] ORS 650.005 through 650.085, regulates the sale of franchises in Oregon. ORS 650.020 delineates a private right of action for specific deceptive practices. It provides in part: (1) Any person who sells a franchise is liable as provided in subsection (3) of this section to the franchisee if the seller: (a) Employs any device, scheme or artifice to defraud; or (b) Makes any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading. (2) It shall be an affirmative defense to any action for legal or equitable remedies brought under subsection (1) of this section if the franchisee knew of the untruth or omission. (3) The franchisee may recover any amounts to which the franchisee would be entitled upon an action for a rescission, reasonable attorney fees at trial and on appeal and court costs. The text of ORS 650.020 does not expressly grant a right to trial by jury. This court has held that such express authority is not necessary, however, as long as a legislative intent is clear. See Clarkston v. Bridge, 273 Or. 68, 77-79, 539 P.2d 1094 (1975) (legislative intent with respect to jury trial for URESA claims determined by resort to parallel, but more specific, statutes granting the right). Cf. Cornelison v. Seabold, 254 Or. 401, 404, 460 P.2d 1009 (1969) (the statutory wording, shall be determined by the court as a matter of law, indicated a legislative intent that the issues be tried without a jury). Because some background is necessary to a proper understanding of the text of ORS 650.020, we address, briefly, the historical context of the statute. ORS 650.020 was originally enacted in 1973, before Oregon's adoption of the Oregon Rules of Civil Procedure (ORCP). Or.Laws 1973, ch. 509, § 4. At that time, Oregon maintained the distinctions between suits in equity and actions at law. One of those distinctions was the common law rule that suits in equity were tried to the court, while actions at law were triable to a jury. See Sealey v. Hicks, 309 Or. 387, 396 n. 11, 788 P.2d 435 (1990), cert. den. Sealey v. Toyota Motor Corp., 498 U.S. 819, 111 S.Ct. 65, 112 L.Ed.2d 39 (1990) (By `civil action' we mean what was once called an action at law. There is no right to a jury trial in equity.). The legislature's use of the terms, suits and actions, became an important indication of legislative intent with respect to procedure. See Buell v. Jefferson County Court, 175 Or. 402, 408, 152 P.2d 578 (1944) (illustrating proposition). On the adoption of the ORCP in 1979, the legislature abolished many procedural distinctions between suits and actions. ORCP 2 now provides: There shall be one form of action known as a civil action. All procedural distinctions between actions at law and suits in equity are hereby abolished, except for those distinctions specifically provided for by these rules, by statute, or by the Constitution of this state. Most references in the statutes to suits and actions also were eliminated as a matter of housekeeping. A staff comment by the Council on Court Procedures explained the process: [Rule 2] abolishes the last vestiges of procedural difference based upon a case being historically legal or equitable. Right to jury trial is not affected as it is a constitutional right. Different procedures are, of course, followed in cases tried to a jury and to a court. In the rules, where a `lawequity' or an `actionssuit' distinction was used to specify procedures appropriate to a jury trial or non-jury trial, this has been changed to a direct reference to cases tried to a court or a jury. Terminology such as `actions and suits' and `judgments and decrees' has been eliminated. Oregon Law Institute, 1980 Oregon Civil Procedure Rules, 5. See also Or.Laws 1979, ch. 284 (enacting changes). With that background in mind, we turn to the text of the statute in question. Like many other statutes, ORS 650.020 (1973) was amended in 1979 to eliminate references to law and equity. Sections (2) and (3) of ORS 650.020 (1973) provided: (2) It shall be an affirmative defense to any action or suit brought under subsection (1) of this section if the franchisee knew of the untruth or omission. (3) The franchisee may recover any amounts to which he would be entitled upon a suit in equity for a rescission, reasonable attorney fees at trial and on appeal and court costs. (Emphasis added.) Although use of the terms actions at law and suits in equity generally was deleted in 1979, the legislature's use of those terms of art indicates the legislature's original intent with respect to a right to trial by jury under the statute. Because the 1979 revisions to ORS 650.020 do not purport to change the legislature's original intent with respect to jury trials, we examine the original wording to gain any insight that it may provide. From its wording, section (3) of ORS 650.020 (1973) might be construed to limit actions under the statute to suit[s] in equity for a rescissiona type of proceeding for which a jury trial was not available. On the other hand, that section might be construed as a limitation on damages. Under the latter interpretation, a defrauded franchisee could bring an action at law, but would only be entitled to recover  amounts to which [the franchisee] would be entitled upon a suit in equity for a rescission   . ORS 650.020(3) (1973) (emphasis added). The latter interpretation is consistent with section (2) of ORS 650.020. That section provides an affirmative defense against equitable or legal claims made under the OFA. If the legislature had intended to permit only equitable claims for rescission, then the provision of an affirmative defense to claims at law would not have been necessary. Given the two foregoing interpretations, which are reasonable but antithetical, it is not clear, from the text and context of ORS 650.020, whether the legislature intended to provide the right to a trial by jury for claims under the OFA. It is necessary therefore to consult the legislative history of that statute for an indication of legislative intent. The OFA was introduced to the legislature on behalf of the Department of Commerce, Corporation Division, as Senate Bill 329. The small amount of discussion that occurred with respect to that bill took place, for the most part, in the Senate Committee on Consumer and Business Affairs. There, Frank Healy, the Corporation Commissioner, presented a written summary of the measure. That summary stated in part: This bill closely parallels the disclosure requirements and civil liability sections of the Oregon Securities Law but does not burden franchisors with the registration requirements. Testimony, Senate Committee on Consumer and Business Affairs, SB 329, February 27, 1973, (Exhibit 1, Appendix D) p 1. Healy's oral testimony was to the same effect. It began: [T]he purpose of this bill is to adapt the securities laws [ORS 59.115] to the sale of franchisees; We think there is some analogies between the sale of franchises [and the sale of securities]. Committee on Consumer and Business Affairs, February 27, 1973, Tape 2, side 1, at 496. The Senate floor debate provided little more in terms of legislative intent. Senator Heard carried the bill: Mr. President, in the past few years there has been a significant growth in the sale of franchises in the state of Oregon. Certain types of sales programs and techniques in the sale of franchises are the subject of real abuse. The purpose of this legislation is not to require the registration of all franchises, as in the sale of stock, [but] rather to require the seller of franchises to make a full disclosure to the purchaser of all the things he should know to make an intelligent business determination. In furtherance of the objectives in this legislation, the corporation commissioner would be entitled to make investigations and, in appropriate instances, seek an injunction to prevent the improper practices of the franchisor and its salesmen. This bill closely parallels the disclosure requirements and civil liability sections of the Oregon Securities Law. I urge passage of senate bill 329. (Emphasis added.) Senate Floor Proceedings, June 23, 1973, Tape 28, side 2, at 0127. There was no other debate before the bill was passed unanimously. Id. The bill later was approved unanimously in the House, without amendment, and signed by the Governor. From the legislative history of ORS 650.020, we know that the legislature intended by that statute to extend certain of the protections afforded by Oregon's existing securities laws to the purchase and sale of franchises. ORS 59.005 through 59.445 (formally titled the Oregon Securities Law but better known as the blue sky law) then provided liability for the sale of a security by means of an untrue statement of a material fact or an omission to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading. ORS 59.115(1)(b) (1973). ORS 59.115(2) (1973) provided two possible remedies. The purchaser of securities could recover: (a) Upon tender of the security, the consideration paid for the security, and interest from the date of payment at the rate of six percent per annum, or at the rate provided in the security if the security is an interest bearing obligation, less any amount received on the security; or (b) If he no longer owns the security, damages in the amount that would be recoverable upon a tender, less the value of the security when the purchaser disposed of it and less interest on such value at the rate of six per cent per annum from the date of disposition. Both subsections provide the same result as the legislature provided in ORS 650.020(3), viz., restitution damages. The legislature's intent to parallel the protections and liabilities in the blue sky laws provide us with an indication as to the legislature's intent with respect to jury trials. The protection afforded by Oregon's securities laws includes the right to a jury trial. See, e.g., Badger v. Paulson Investment Co., Inc., 311 Or. 14, 17-18, 803 P.2d 1178 (1991) (securities fraud claims tried to jury); Adams v. American Western Securities, 265 Or. 514, 524-31, 510 P.2d 838 (1973) (task on review was to determine whether to reverse an involuntary nonsuit and send the case back to be tried to a jury); Adamson v. Lang, 236 Or. 511, 517, 389 P.2d 39 (1964) (finding evidence to support jury verdict). Because the legislative history of ORS 650.020 indicates that the legislature intended by that statute to extend the same broad protections and remedies to purchasers of franchises, we conclude that the original wording of ORS 650.020(3) concerning suits in equity was not intended to prevent a franchisee from obtaining a trial by jury. It was, instead, intended to limit the amount of damages that could be recovered. The Court of Appeals' ruling to the contrary was error.