Opinion ID: 1317777
Heading Depth: 1
Heading Rank: 2

Heading: Liability of corporation.

Text: An answer to plaintiffs' complaint and a motion for judgment n.o.v. was filed on behalf of defendant Pacific Land Management, Inc. The corporation's attorney did not, however, actively participate in the trial and has filed no brief as a respondent on this appeal. We must nevertheless consider the assignments of error in plaintiffs' brief insofar as they relate to the corporation as a defendant. In doing so we must consider the evidence in the light most favorable to plaintiffs, including all inferences which may be reasonably drawn from such evidence in favor of the plaintiffs. Cf. Cronn v. Fisher, 245 Or. 407, 416, 422 P.2d 276 (1966). To summarize the evidence in detail would serve no useful purpose. Upon examination of the record, however, we find that there was evidence from which the jury could have properly found that representations were made to the plaintiffs that defendant would gravel the access road so as to meet or exceed the quality of the adjacent county road and would dam the creek along the property and that plaintiffs reasonably relied upon these representations. As to the representation relating to the gravel road, we find no evidence from which, in our opinion, the jury could properly find that defendant did not then intend to perform that promise. There was evidence that the road was not subsequently gravelled in such a manner as to meet or exceed the quality of the adjacent county road, but such evidence alone was not sufficient to prove that defendant did not intend to perform that promise when the representation was made. Butte Motor Co. v. Strand, 225 Or. 317, 321, 358 P.2d 279 (1960). The allegation in Count II of plaintiffs' complaint that the representation was made recklessly without regard to its truth or falsity was stricken by the trial court and that ruling is not assigned as error. Accordingly, we hold that the trial court did not err in withdrawing from the jury the representation relating to the gravelling of the access road. As to the representation that defendant would dam the creek along the property, there was evidence from which the jury could properly find that at the time of the representation defendant had previously been informed of a geologic report of a government agency that [u]nless all of the unstable soil in the channel area is removed from beneath the dam, no further consideration should be given to construction of a dam on this site. Considerable evidence was offered on behalf of defendant to the effect that the construction of the dam was still possible; that it was, in fact, partially constructed; and that it was not completed because of other reasons not known at the time of the representation. There was other testimony, however, that it would cost a substantial amount of money to remove all the unstable soil in the channel, which was at least 10 feet deep, and that no application was made for a permit, apparently required by law, to build the dam. We believe the jury could have disbelieved defendant's evidence and could reasonably have found from the testimony relating to the geologic report, the cost involved, and the absence of a permit application, that defendant, at the time it represented that it would dam the creek along the property, did not intend to do so. It follows, in our opinion, that the trial court was in error in allowing the motion for judgment n.o.v. by defendant corporation and in setting aside the jury verdict against the defendant corporation, that verdict having been based upon the submission to it of the evidence relating to the representation that defendant would build a dam on the creek. Plaintiffs' remaining assignment of error is that the trial court erred in withdrawing the issue of punitive damages from the jury. Assuming, as we have held, that there was sufficient evidence from which the jury could have properly found: (1) that defendant represented to plaintiffs that it would dam the creek along the property so as to create a pond in front of the property and (2) that defendant made that representation with knowledge that the construction of such a dam was not feasible and that it did not intend to build that dam, the jury could also find, in our opinion, that such conduct by the developer of a residential subdivision in the course of promoting the sale of a house and lot to an unsuspecting purchaser was so contrary to societal interests as to be of the kind that an award of punitive damages would tend to prevent. Cf. McGill v. Huling Buick Company, 259 Or. 413, 419, 487 P.2d 656 (1971). [2] It follows, in our judgment that the trial court erred in withdrawing from the jury the issue of punitive damages. For all of these reasons, the judgment of the trial court in favor of defendants Mala and Jenner is affirmed and the judgment in favor of defendant Pacific Land Management, Inc., is reversed and the case is remanded for further proceedings not inconsistent with this opinion.