Court Opinion

ID: 9851172
Source: CourtListenerOpinion
Date Created: 2023-09-24 05:08:27.716937+00
Date Added: 2024-06-11T09:20:50.453081
License: Public Domain

*278BUTTLER, J.,
dissenting.
I believe that the judgment must be reversed in its entirety, because the Statute of Limitations had run against plaintiffs.
The majority correctly points out that the period of limitation begins to run when three requirements are met: (1) harm has occurred, (2) it appears reasonably probable that the harm was caused by defendant’s negligence, and (3) the negligence was or should have been discovered. U.S. Nat’l Bank v. Davies, 274 Or 663, 548 P2d 966 (1976); Jacquith v. Ferris, 64 Or App 508, 669 P2d 334 (1983); aff’d 297 Or 783, 687 P2d 1083 (1984). There is no dispute but that in July, 1976, after defendant had paid Ruhle approximately $48,000 of the policy limits, defendant advised plaintiffs to retain their own attorney to evaluate the Ruhle claim, and that they did so. There would have been no occasion for plaintiffs to have retained an attorney at that time if the Ruhle claim was not likely to exceed the $100,000 policy limits, or if there was any indication that Ruhle would settle the claim within the policy limits. In May, 1977, defendant offered Ruhle the balance (approximately $52,000) of the policy limits; the offer was rejected summarily, and Ruhle filed an action against plaintiffs within a very short time thereafter. When that action was filed, plaintiffs continued to incur attorney fees in their defense of the Ruhle lawsuit.
Plaintiffs admit that, prior to April 1, 1977, they knew that defendant had been making payments to Ruhle, and that during the latter part of June, 1977, they were advised of the exact amount that had been paid. They also knew before April 1, 1977, that Ruhle would not accept plaintiffs’ policy limits of $100,000 to settle his claim.
It is clear that plaintiffs, no later than April 1, 1977, had all of the information on which they now rely in their claim against defendant, except for the amount of their damage, which was determined finally on June 29,1979, when they paid Ruhle $35,000 in excess of their policy limits. The trial court, relying on U.S. Nat’l Bank v. Davies, supra, ruled that plaintiffs were not harmed until they had paid Ruhle; therefore plaintiffs’ action against defendant, which was filed April 25, 1980, was not barred by the Statute of Limitations. The majority agrees; I disagree.
*279This court went through the same discussion in Jacquith v. Ferris, supra, and resolved the question contrary to the majority opinion in this case. In that case, the plaintiff had signed a listing agreement with the defendant real estate broker to sell a parcel of real property. Acting on the defendants’ advice, she signed an earnest money agreement obligating her to convey the property to a third party for $164,325. Before that transaction was closed, she discovered that the property was worth $400,000 and refused to close the transaction covered by the earnest money agreement.
The buyer under the earnest money agreement filed an action for specific performance; the plaintiff counterclaimed for rescission. The trial court ruled for plaintiff on her counterclaim and this court ultimately reversed; the Supreme Court denied review. The plaintiff then conveyed the property to the purchaser and, within one year after Supreme Court review was denied, filed suit against the defendant for damages for his having negligently appraised the property.
The trial court in Jacquith v. Ferris, supra, held that the action was barred by the Statute of Limitations. We affirmed in banc, by a six to four vote. Like the majority in this case, the dissenters in Jacquith, relied on U.S. Nat’l Bank v. Davies, supra, in concluding that the plaintiff had not been damaged until the extent of her damage had been finally determined, that is, when she was required by this court to convey the property pursuant to the earnest money agreement. The majority, on the other hand, held that the Statute of Limitations had commenced to run when she discovered defendant’s negligence and incurred the expense of defending the action for specific performance. We pointed out that the plaintiff could have filed an action against the defendants at that time, because she knew all of the relevant elements of her action and that, if the full extent of her damages were unknown, she could have requested a stay in order to await the outcome of the specific performance suit. For that reason, we said, that case was materially different from Davies, where ascertainment of the element of causation had to await the outcome of the action against the plaintiff.
The Supreme Court, in affirming our opinion, stated:
«* * * Plaintiffs argument that she sustained no harm until the extent of her damage was ascertained, or, in this *280case, until an appellate decision finally forced her to convey the property, mixes two discrete concepts, the occurrence of harm and the extent of damages. We have stated that ‘[i]t is immaterial that the extent of damages could not be determined at the time of the [tort]’ for purposes of determining when the statute of limitation commenced to run. Industrial Plating Co. v. North, 175 Or 351, 354, 153 P2d 835 (1944). * * *” 297 Or at 788.
Accordingly, it held that the Statute of Limitations commenced to run when she assumed the legal costs to resist her contractual duty to convey the property, because she knew of the defendant’s negligence and incurred some harm at that time.
This case falls squarely within Jacquith v. Ferris, supra. It is distinguishable from U.S. Nat’l Bank v. Davies, supra, for the same reason that Jacquith was. In Davies, the controlling issue was when did the plaintiff become aware, or should have become aware, of the cause of his damage, not when the harm occurred. Because the cause of his damage, if any, could not have been determined until the prior action was terminated, the court held that the Statute of Limitations did not commence to run until that determination had been made. Here, as in Jacquith, the resolution of the prior action was determinative of the extent of the damages, not the cause.
If defendant’s having made regular, periodic advance payments to Ruhle was negligent, plaintiffs were aware of the full extent of that negligence no later than late June, 1977. They also knew that Ruhle would not accept plaintiffs policy limits of $100,000 to settle his claim, and that they were exposed to probable excess liability. Actually, they knew of the possibility of that exposure in July, 1976, at which time they employed an attorney, incurring expenses as a result. The majority states that, because plaintiffs’ hiring an attorney was for “a different concern than suing defendant, the act of doing so does not carry with it Statute of Limitation implications.” 76 Or App at 272. However, that was the precise situation in Jacquith.
If the cause of Ruhle’s refusal to accept a settlement within plaintiffs’ policy limits was defendant’s making advance payments to him, that was just as true in April, 1977, as it was when this action was filed in April, 1980.
*281Plaintiffs have been represented by the same attorney throughout this matter. There is no evidence that between April, 1977, and April, 1980, plaintiffs learned that Ruhle would have accepted $100,000 if defendant had not advanced money to him. Accordingly, if defendant’s conduct was negligent, and if that negligence was the cause of plaintiffs’ damage, plaintiffs knew all of that and were damages more than three years before this action was filed, and they could have filed an action against defendant. There is no reason why they could not have asserted a third-party claim in the Ruhle action. Therefore, the Statute of Limitations had run before they filed this action.
Accordingly, I would reverse and, therefore, dissent.
Joseph, C. J., joins in this dissent.