Opinion ID: 835882
Heading Depth: 1
Heading Rank: 5

Heading: Ratification and Shoup

Text: Based on our holding above that the agency instruction was erroneous, we ordinarily would consider next whether that error required us to reverse the judgment and remand for a new trial. Plaintiff, however, argues that, even if the agency instruction was erroneous, this court should affirm International's liability because the trial court also instructed the jury that it could find International liable on the alternative ground that International had ratified Local's actions regarding plaintiff's termination. We first describe and then evaluate plaintiff's argument, with which we agree in part. Plaintiff rests her argument on three assertions. First, plaintiff notes that the trial court's instruction, quoted above, stated that International could be held liable if Local had been the agent of International and had acted within the scope of its agency  or if the International [had] ratified Local 49's actions. (Emphasis added.) Second, she points out that International did not object to the ratification portion of that instruction and, moreover, that ratification was one of the grounds for imposing liability set out in International's own proposed instruction on agency. Third, she asserts that the verdict form, to which International did not object, simply asked the jury whether International was liable for the reduction in plaintiff's hours or the termination of her employment by Medley and Local; it did not ask the jury whether it found International liable because Local had been International's agent or because International had ratified Local's actions. From the foregoing factual and procedural premises, each of which is correct, plaintiff argues that this court's recent decision in Shoup v. Wal-Mart Stores, Inc., 335 Or. 164, 61 P.3d 928 (2003), requires that the judgment be affirmed. In Shoup, this court considered whether a judgment based on a general verdict should be affirmed when multiple claims were submitted to the jury and one of the claims was invalid, but there was evidence to support another, valid claim. 335 Or. at 176, 61 P.3d 928. This court held that, in those circumstances, the party appealing the judgment could not show that the jury had based its verdict on the invalid claim, rather than on the valid claim. Id. at 179, 61 P.3d 928. That party therefore was unable to meet the statutory requirement that an appellate court may reverse or modify a trial court judgment only for error substantially affecting the rights of a party. ORS 19.415(2). Plaintiff is correct that Shoup applies to one aspect of the judgment here. In Shoup, several specifications of negligence were submitted to the jury, one of which erroneously was submitted and two of which properly were submitted. The verdict form did not require the jury to identify which specification was the basis for its verdict in favor of the plaintiff. Here, the jury instructions gave the jury two possible grounds for imposing liability on International: agency and ratification. International objected to the agency instruction, and, as discussed above, we agree that that instruction was erroneous. International did not, however, object to the ratification instruction. [6] As noted previously, the verdict imposing liability on International did not distinguish between ratification and agency as the basis for the verdict. For that reason, International cannot demonstrate that the verdict was based on the erroneous instruction on agency, rather than on the correct (or at least unchallenged) instruction on ratification. Having found that ratification could provide an alternative basis to support the jury's finding that International was liable for Local's conduct, under Shoup, we next would consider whether the record contains sufficient evidence to support liability on that alternative basis. Here, however, as to the noneconomic damages, we do not reach that issue. Although at trial International moved unsuccessfully for a directed verdict and for judgment notwithstanding the verdict on plaintiff's claim for noneconomic damages, International did not challenge that award on appeal. Accordingly, we affirm the portion of the judgment awarding noneconomic damages. As to the award of punitive damages, however, International did argue on appeal that the record contained no evidence to support liability on the basis of ratification. We address that argument below.