Court Opinion

ID: 6934204
Source: CourtListenerOpinion
Date Created: 2022-07-24 00:22:07.429216+00
Date Added: 2024-06-11T16:07:22.215768
License: Public Domain

NEWMAN, J.,
dissenting on the appeal; concurring on the cross-appeal.
The majority misunderstands the nature of plaintiffs’ claims and, therefore, misanalyzes the Statute of Limitations questions that they present. Accordingly, I dissent on the appeal.
Plaintiffs have two claims. They allege that defendant 1) negligently represented to them that water would be *610available for the growing season and 2), subsequently, negligently failed to warn them that water would not be available as promised. Plaintiffs do not claim that defendants were negligent in failing to deliver water. The pleaded claims must be analyzed separately. In support of the first claim (for negligent misrepresentation), plaintiffs produced evidence sufficient to create a jury question whether defendant negligently informed them that they would have water by June 1, 1978, whether in reliance on that information they planted crops and whether, as a result of having planted crops, they were damaged. See McDonald v. Title Insurance Co. of Oregon, 49 Or App 1055, 1058, 621 P2d 564 (1980), rev den 290 Or 727 (1981); Prosser and Keeton, Law of Torts 746, §107 (5th ed 1984). Under this theory, plaintiffs could only recover damages if they suffered a net loss by planting in reliance on the misrepresentations. If they made money from the crops planted, even if it was less than they would have made if the water had arrived as represented, they were not damaged by the misrepresentation. Restatement (Second) Torts, §552B.1
Plaintiffs were entitled only to recover damages caused by defendant’s negligence, that is, the loss which they suffered by planting in reliance on its misrepresentations. Accordingly, they could not have known that they were harmed by defendant’s negligence until well after June 18, 1978, and within the two-year period of the Statute of Limitations. There is no evidence in the record from which a jury could have found that, as early as June 18, 1978, plaintiffs knew or should have known that their farming operations on the two farms would result in a net loss for the season. Had they sold their crops for a profit, even if the profit was less than expected because of expenditures for another source of water or because of lack of water, they would have suffered no harm attributable to defendant’s negligent misrepresentation and would have had no claim against defendant.2 If plaintiffs *611had filed the action on or before June 18, 1978, they would have started it in anticipation of losses that might never have materialized.3 See U.S. Nat’l Bank v. Davies, 274 Or 663, 670, 548 P2d 966 (1976); see also Bollam v. Fireman’s Fund Ins. Co., 76 Or App 267, 273, 709 P2d 1095 (1985), rev allowed 300 Or 545 (1986). Contrary to the majority’s position, the statute had not run when plaintiffs filed the action on June 18, 1980.
The flaw in the majority’s reasoning is that it asserts that plaintiffs were “damaged” when they built the alternative irrigation system in early June. That analysis would be correct if plaintiffs’ claims were for negligent failure to deliver water. Under plaintiffs’ negligent misrepresentation theory, however, the cost of the irrigation system is not damage independent of the loss suffered by plaintiffs by planting in reliance on defendant’s misrepresentation. If they had not suffered a net loss on the crops for the season, they could not have recovered the cost of the irrigation system.
Duncan v. Augter, 62 Or App 250, 661 P2d 83, rev den 295 Or 122 (1983), on which the majority relies, is inapposite. As we stated in Duncan (and as quoted by the majority):
“The general policy behind the ‘discovery rule’ is to delay the running of the statute of limitations until an injured person knows or should know that she has a cause of action so that the law does not strip her of a remedy before she could know she has been wronged.” 62 Or App at 258.
Because plaintiffs did not and could not know before June 18, 1978, that they were going to be damaged by defendant’s misrepresentations, i.e., that they were going to suffer a loss by planting in reliance on defendant’s representations that it would deliver water, they could not have brought this action before that date.
Furthermore, the majority ignores plaintiffs’ second claim of negligent failure to warn. Plaintiffs allege that defendant had an affirmative duty to warn them that water would not be available for the 1978 growing season. The duty allegedly arose out of their “special relation” with defendant as members of the district, Cramer v. Mengerhausen, 275 Or *612223, 227, 550 P2d 740 (1976); Prosser and Keeton, supra, at 377, §56, and out of defendant’s prior misrepresentations. The majority fails to recognize that this duty continued throughout the growing season. The jury could have found that defendant breached this duty after June 18, 1978, and thereby injured plaintiffs.4 Nevertheless, the majority also dismisses this claim on Statute of Limitations grounds.
Accordingly, I dissent on the appeal.5 I concur on the cross-appeal.

The measure of damages is not the “benefit of the bargain” measure that often appears in fraud cases. See Selman v. Shirley, 161 Or 582, 85 P2d 384, 91 P2d 312 (1939). The majority overlooks this crucial distinction.

The damages were awarded under the fraud standard. The amount that the jury awarded here is not necessarily the net loss that plaintiffs suffered from defendant’s negligence. Moreover, the record does not show whether plaintiffs planted other crops in other fields in reliance on defendant’s representations and made a net profit thereon. Defendant, however, does not argue that the jury applied an incorrect measure of damages or assert that the court misinstructed the jury on the question of how to compute plaintiffs’ damages.

If, for example, it had been a rainy summer and plaintiffs had made a profit on the crops they planted in reliance on the misrepresentations, defendant’s negligence would not have harmed them.

The damage issue under this claim could be complicated, but that is not a basis on which defendant attacks the judgment.

The majority does not reach defendant’s other assignments of error on the appeal. Accordingly, I do not discuss them.