Court Opinion

ID: 2924406
Source: CourtListenerOpinion
Date Created: 2015-09-11 15:10:47.578995+00
Date Added: 2024-06-11T12:46:12.312824
License: Public Domain

No. 33	                September 11, 2015	665

            IN THE SUPREME COURT OF THE
                  STATE OF OREGON

             GREENWOOD PRODUCTS, INC.,
                   an Oregon Corporation;
             and Jewett-Cameron Lumber Corp.,
                   an Oregon corporation,
                    Petitioners on Review,
                              v.
          GREENWOOD FOREST PRODUCTS, INC.,
                   an Oregon corporation;
                Jim Dovenberg, an individual;
                and Bill Lefors, an individual,
                   Respondents on Review.
          (CC 050302553; CA A135701; SC S062497)

   En Banc
   On review from the Court of Appeals.*
   Argued and submitted June 16, 2015.
   Kevin H. Kono, Davis Wright Tremaine LLP, Portland,
argued the cause and filed the briefs for petitioners on
review. With him on the briefs were Timothy Cunningham
and Robert D. Newell.
   Maureen Leonard, Portland, argued the cause for respon-
dents on review. Travis Eiva filed the brief. With him on the
brief was Maureen Leonard.
   BREWER, J.
   The decision of the Court of Appeals is reversed, and the
case is remanded to the Court of Appeals for further pro-
ceedings. The order of the circuit court denying defendants’
motion for a new trial is affirmed.

______________
	 * Appeal from Multnomah County Circuit Court, Jerry B. Hodson, Judge.
264 Or App 1, 330 P3d 662 (2014).
666	          Greenwood Products v. Greenwood Forest Products

     Case Summary: Defendants moved for a new trial pursuant to ORCP 64 (B)
(4) on the ground of newly discovered evidence in the form of a witness’s affidavit
that expanded upon material information that defendants knew before trial, but
did not fully obtain because the witness was subject to a criminal prosecution
regarding the matter. After defendants’ motion was denied, the Court of Appeals
reversed, holding that the affidavit contained information that was qualitatively
different than the information that defendants knew before trial, that defendants
could not with reasonable diligence have discovered and produced the informa-
tion before trial because the witness intended to assert his Fifth Amendment
privilege, and that the information probably would have affected the jury’s ver-
dict. Held: Defendants were not entitled to a new trial because they failed to use
reasonable diligence to discover and produce the evidence (1) by not requesting
a continuance of trial until the witness’s criminal sentencing was concluded; (2)
by not pursuing questioning of the witness on matters as to which the witness
may not have invoked the Fifth Amendment privilege; and (3) by not pursuing
questioning of the witness to the point of invocation of the privilege.
    The decision of the Court of Appeals is reversed, and the case is remanded
to the Court of Appeals for further proceedings. The order of the circuit court
denying defendants’ motion for a new trial is affirmed.
Cite as 357 Or 665 (2015)	667

	          BREWER, J.
	        The issue on review in this case is whether the trial
court erred in denying defendants’1 motion for a new trial
under ORCP 64 (B)(4),2 based on the asserted ground of
newly discovered evidence. The trial court determined that
defendants’ proffered evidence did not satisfy the legal stan-
dard for granting a new trial under that rule. The Court
of Appeals reversed, concluding that defendants’ post-trial
proffer qualified as newly discovered evidence, that the evi-
dence was material for defendants, and that defendants
exercised reasonable diligence in attempting to produce the
evidence at trial. Greenwood Products v. Greenwood Forest
Products, 264 Or App 1, 330 P3d 662 (2014) (Greenwood III).3
Because we conclude that, irrespective of whether the prof-
fered evidence was newly discovered and material for defen-
dants, defendants failed to exercise reasonable diligence to
produce the evidence at trial, we ultimately conclude that
the trial court did not err in denying defendants’ motion for
a new trial. Accordingly, we affirm the trial court’s order
denying a new trial, reverse the decision of the Court of
Appeals, and remand the case to that court.
      I.  FACTS AND PROCEDURAL BACKGROUND
	        This case has a complex procedural history that the
Court of Appeals thoroughly described in its opinion. For
the sake of brevity and clarity, we take a condensed version
of that history from the opinion of the Court of Appeals and
the record. Defendants were in the business of processing
	1
        Defendants are Greenwood Forest Products, Inc. and two of its principals,
Dovenberg and LeFors. For the sake of convenience, we refer to them collectively
throughout this opinion.
	2
        ORCP 64 provides, in part:
    	     “A former judgment may be set aside and a new trial granted in an action
    where there has been a trial by jury on the motion of the party aggrieved for
    any of the following causes materially affecting the substantial rights of such
    party:
    “* * * * *
    	 “B(4) Newly discovered evidence, material for the party making the
    application, which such party could not with reasonable diligence have dis-
    covered and produced at the trial.”
	3
        As explained below, the Court of Appeals’ decision under review is the third
published appellate decision in this case; hence, its designation as Greenwood III.
668	      Greenwood Products v. Greenwood Forest Products

and selling industrial wood products and maintained a
large inventory of such products at numerous distribution
centers throughout the United States. Id. at 3. In February
2002, defendants and plaintiffs entered into an asset pur-
chase agreement (PA), which provided that (1) by the closing
date, defendants would dismiss most of their employees who
would then be rehired by plaintiff; (2) over a two-year period,
plaintiffs would purchase defendants’ inventory in seven
geographically determined units for cost plus a two percent
premium; and (3) until plaintiffs’ purchase of an inventory
unit, plaintiffs, for a fee, would provide defendants with, in
the words of the PA, “all management and administrative
services associated with purchasing, processing, and main-
taining [defendants’] inventory.” Id. at 3-4.
	        Pursuant to the PA, plaintiffs took over defendants’
offices and equipment. Most of defendants’ employees and
managers became plaintiffs’ employees, holding the same
positions that they had held with defendants. Defendants
continued to exist side-by-side with plaintiffs—with defen-
dants being responsible, at least on paper, for maintaining
the inventory that plaintiffs’ employees sold. For the inven-
tory units that had not yet been purchased by plaintiffs,
plaintiffs’ employees sold wood products to outside custom-
ers, purchasing inventory to cover each sale from defendants
at cost plus two percent. The purchases and sales were
tracked automatically on two sets of books—one for each
company. Although defendants were responsible, during the
transition, for replenishing, processing, and maintaining
the supply of inventory that plaintiffs’ employees sold, plain-
tiffs’ employees actually performed all of that work, under
the “management and administrative services” provision of
the PA. Id. at 4.
	         After the closing in late February 2002, defendants
retained only two employees—Dovenberg and LeFors; defen-
dants’ remaining central staff went to work for plaintiffs.
Various key employees, including Fahey, the head book-
keeper, and Pattillo, the vice president, while working for
plaintiffs, spent part of their time attending to defendants’
accounts and overseeing that company’s operations. In prac-
tice, it was difficult to say which “hat” a given employee was
wearing at any particular time. Id. at 4-5.
Cite as 357 Or 665 (2015)	669

	         Units of inventory were purchased and sold as the
parties had envisioned for some 13 months after closing, at
which point the parties agreed to “finish it off” in a single
transaction. Plaintiffs issued two promissory notes, dated
March 18, 2003, for the remaining inventory. In June 2003,
plaintiffs issued another promissory note and paid about
$100,000 in cash for “an accumulation of payable for prior
purchases of inventory that were due for payment.” The
amounts of the notes and cash payment were based on inven-
tory figures provided by traders’ assistants and other higher
level “accounting people,” including Fahey and Pattillo. At
the time of the final payments and transfers, the transac-
tion set out in the PA appeared to be essentially completed.
Id. at 5.
	         In August 2003, plaintiffs’ books were audited by a
certified public accountant, Schmidt. Schmidt found unusual
entries in the books—an unexplained account with a bal-
ance of nearly $1.2 million and many entries that did not
appear to be related to normal inventory activity. Schmidt
suspected that there was a problem with the accounting of
sales of inventory between plaintiffs and defendants. On
the theory that any inventory transactions by plaintiffs
also should be reflected in defendants’ accounting records,
Schmidt asked for, and obtained, permission to review those
records. While comparing defendants’ records with plain-
tiffs’ records, Schmidt found hundreds of entries that did
not match. Schmidt eventually decided that, to accurately
determine what had happened with the inventory, he would
have to reconstruct both plaintiffs’ and defendants’ books
from scratch, using “invoices and purchase orders and all
the underlying documentation that would happen on a day-
to-day basis in a business.” When Schmidt completed that
work, the figures led him to the conclusion that plaintiffs
had paid defendants for $819,731.68 of inventory that they
never had received. Id. at 5-6.
	        After Schmidt completed his work on defendants’
books, Dovenberg approached him about some inconsistencies
in Dovenberg’s own personal accounts. Schmidt attempted
to help Dovenberg sort out the problem. Ultimately, the two
determined that Fahey, the bookkeeper who was employed
by plaintiffs but was providing inventory-related services
670	       Greenwood Products v. Greenwood Forest Products

to defendants, had embezzled at least $360,000 from defen-
dants’ accounts between February and December of 2002.
Id. at 6.
	        Three legal actions—including this case—ensued.
First, in 2004, defendants brought a conversion action
against Fahey. Second, in March 2005, plaintiffs brought
this action against defendants asserting breach of contract
and equitable claims for reformation or rescission of the
promissory notes, and defendants asserted counterclaims,
including a claim based on plaintiffs’ failure to pay the entire
face value of the promissory notes to defendants. Third, in
April 2005, after being contacted by defendants, the district
attorney brought criminal charges for theft against Fahey.
Id.
	        In January 2006, Fahey pleaded guilty to 10 counts
of theft. Fahey’s sentencing initially was scheduled for
May 2, 2006, approximately one week before trial was set
to begin in this case. In resolving his criminal case, Fahey
agreed to cooperate with defendants’ efforts to locate missing
assets, including its efforts in this action. On May 1, Fahey’s
sentencing hearing was postponed, in Dovenberg’s words,
so that “[Fahey] could help in trying to find out what hap-
pened to” the missing assets. Thereafter, plaintiffs’ attorney
learned about the postponement of Fahey’s sentencing and
that defendants had subpoenaed Fahey to testify at trial in
this case. On Friday, May 5, plaintiffs’ attorney had a sub-
poena served on Fahey for a deposition that was scheduled
to begin the next morning. Although plaintiffs’ attorney
served defendants’ attorney with notice of the deposition, he
did not notify Fahey’s criminal defense attorney that he had
subpoenaed Fahey. As a result, lawyers for the parties in
this action were present the following morning, but Fahey’s
attorney was not. Id. at 6-7.
	       At the beginning of his deposition, Fahey made the
following statement:
   “For the record, I was served yesterday evening at 6:35 p.m.
   I have not had a chance to contact my counsel. As there is a
   pending criminal case on this in Washington County, [on]
   anything alluding to any of those areas I will be taking the
   Fifth Amendment.”
Cite as 357 Or 665 (2015)	671

Id. at 7. During the deposition, plaintiffs’ attorney asked
Fahey questions about his work for defendants, as well as
questions about the criminal action, including questions
about the amount of money that Fahey had taken—an issue
that was central both to this action and also to the crimi-
nal charges against Fahey. In response to many questions,
Fahey asserted his Fifth Amendment privilege. In addition,
he did not respond to some questions because he thought
that a protective order precluded him from answering. Id.
at 8.
	         Nevertheless, Fahey answered many of plaintiffs’
questions. In doing so, Fahey indicated that plaintiffs may
not, in fact, have paid for more inventory than they had
actually received. That was so based on Fahey’s theory con-
cerning the activities of Pattillo, plaintiffs’ vice president
and Fahey’s supervisor, in manipulating inventory amounts
reflected in defendants’ computer system. According to
Fahey, Pattillo “may have phantomly * * * purchased” inven-
tory, placed it on defendants’ books, and “then [had it] taken
off the books prior to those locations being sold to [plain-
tiffs].” Id. Fahey testified that Pattillo had instructed him
to remove inventory from defendants’ books on several occa-
sions and that he “always requested a note or something
signed or initialed” from Pattillo before doing so. According
to Fahey, he placed the documentation from Pattillo in a
file with other miscellaneous documents at the end of each
month. Id.
	       Plaintiffs’ attorney also asked Fahey about his prior
discussions with defendants’ attorneys in this case and in
the conversion action. With respect to this action, Fahey
indicated that he did not recall talking about Pattillo but
explained that his “attorney * * * was present at the time
and our subject was incredibly limited [as] to what we would
talk about.” With regard to his discussions with defendants’
attorneys in the conversion action, Fahey said that he had
not “really told [those attorneys] anything yet.” Instead,
Fahey explained:
   “I suggested that they get copies of cancelled checks. I sug-
   gested that they go to certain vendors and locations and get
   copies of any inventory records they might have. I mentioned
672	          Greenwood Products v. Greenwood Forest Products

   that before[,] at the meeting in February [2006]. But up to
   this point in time[,] I can’t give any specific information to
   them regarding anything.”
Id. at 8-9.
	        On May 8, 2006, two days after plaintiffs took
Fahey’s deposition, trial in this case began. Before Fahey
was scheduled to testify, Fahey’s criminal defense counsel
appeared on his behalf and filed a motion to seal the depo-
sition transcript. Nothing in the record before us suggests
that defendants objected to that motion. The hearing that
followed was not transcribed for this proceeding. Ultimately,
the trial court granted Fahey’s motion and sealed the depo-
sition transcript; however, the court did not preclude Fahey
from testifying at trial. Id. at 9.
	        Thereafter, defendants called Fahey as a witness
outside the presence of the jury, and defendants’ attorney
asked the following question: “Was there a time within
[February 25, 2002 until December 31, 2002,] when you
were instructed to remove inventory off the books of [defen-
dants]?” Id. At that point, Fahey’s counsel interjected, “Judge,
I’d advise my client to invoke the Fifth Amendment on that
question.” Id. In the ensuing colloquy, defendants’ position
was that the Fifth Amendment privilege was unavailable
to Fahey because the statute of limitations had run as to
the conduct referred to in the question. Id. Fahey’s counsel
disagreed that the privilege was unavailable, particularly
in that Fahey had not yet been sentenced for the crimes to
which he had pleaded guilty. Id. Ultimately, the trial court
indicated, “I’m not going to make any findings with regard
to statutes of limitation[.]” Id. at 10. Defendants’ counsel
sought clarification, after which the following exchange
occurred:
   “THE COURT:  So [Fahey’s counsel is] going to advise his
   client to invoke the Fifth in areas where he’s uncomfort-
   able because he doesn’t know whether or not the statute
   has run.
   “[DEFENDANT’S COUNSEL]:  And I’m going to invite
   you to tell [Fahey] they don’t have a Fifth Amendment
   right to do that.
Cite as 357 Or 665 (2015)	673

   “THE COURT:  And I’m not going to do that. If he invokes
   his Fifth Amendment, then he’s going to invoke his Fifth
   Amendment, and he won’t testify in that area.
   “[DEFENDANT’S COUNSEL]:  Okay. * * *
   “THE COURT:  So do you want to proceed with that wit-
   ness or not?
   “[DEFENDANT’S COUNSEL]:  No, I am not proceeding
   with that witness.”
Id. Accordingly, Fahey did not testify before the jury.
	         Plaintiffs, however, called Pattillo as a witness
during their rebuttal case. Pattillo testified that, in light of
the “checks and balances” that were in place in defendants’
accounting system, it would have been “virtually impossi-
ble” for inventory to come in and then be removed from the
books. On cross-examination, Pattillo testified that he had
been unaware of Fahey’s embezzlement. Pattillo further tes-
tified that (1) he was responsible for reconciling the inven-
tory as reflected in the computer system with the inventory
reflected in the traders’ spreadsheets on a monthly basis;
(2) he occasionally instructed Fahey to make adjustments
to inventory; and (3) he usually gave Fahey information
concerning where the adjustment needed to be made, which
“probably had [his] initial on it.” Id.
	         As framed by the parties, the jury’s determina-
tion of the breach of contract claim reduced to the question
whether plaintiffs had paid for inventory that they did not
receive from defendants. Plaintiffs asserted that Schmidt’s
reconstruction of both companies’ books revealed that plain-
tiffs had paid defendants for $819,731.68 in inventory that
they had not received and that the overpayment resulted
from Fahey’s manipulation of the books to hide his embez-
zlement from defendants. According to plaintiffs, although
Fahey was plaintiffs’ employee, Fahey’s actions were attrib-
utable to defendants because they had the right to control
his actions. For their part, defendants posited that plain-
tiffs’ overpayment, if any, was caused by the misconduct of
plaintiffs’ own employees—Fahey and Pattillo—who had
performed accounting services for defendants under the
management and administrative services provision of the
674	      Greenwood Products v. Greenwood Forest Products

PA and whose misconduct could not be attributed to defen-
dants. Id. at 11.
	        On May 15, 2006, the jury returned a verdict for
plaintiffs on the breach of contract claim, which included
damages in the amount of $819,731.68 for the overpayment
of inventory. The jury also found in favor of defendants on
their counterclaim for nonpayment on the promissory notes
in the amount of $1,043,757.00. Id.
	        Sixteen days later, on May 31, 2006, Fahey was
sentenced in the criminal action. At his sentencing, Fahey
executed an affidavit that was witnessed by the sentencing
judge, which defendants then submitted in support of their
motion for a new trial in this case. In that affidavit, Fahey
described in detail Pattillo’s conduct in instructing Fahey
to remove phantom inventory from defendants’ books before
it was sold to plaintiffs. That information supported defen-
dants’ position that plaintiffs had not, in fact, overpaid for
inventory; that is, plaintiffs received exactly what they had
paid for. Id. at 11-12.
	        In sum, Fahey’s affidavit asserted the following:
After the closing date of the PA in February 2002, Pattillo
directed Fahey to manipulate inventory in defendants’ com-
puter system in a way that “was not in accordance with reg-
ulations governing accounting practices and procedures”
and gave Fahey documents “sign[ing] off” on those inven-
tory manipulations. Because plaintiffs were subject to pub-
lic accounting and auditing requirements, a physical count
was required before a unit of inventory was sold to plain-
tiffs. When the physical count was less than the inventory
reflected in the computer system, Pattillo instructed Fahey
to remove the excess inventory from the inventory record
as it existed on the computer system. Moreover, based on
Fahey’s review of the system itself, he described the specific
search queries that could be used to isolate entries result-
ing in the removal of inventory, and he substantiated that
defendants had issued checks to suppliers for the inventory
that had been removed. Defendants used a different com-
puter database to track what occurred after the issuance
of the checks, and Pattillo—not Fahey—had the ability to
make entries in that database. Id. at 12-14.
Cite as 357 Or 665 (2015)	675

	        After Fahey executed his affidavit—but before
defendants filed their motion for new trial—the trial court
decided plaintiffs’ equitable claims for rescission and refor-
mation of the notes in defendants’ favor and entered a judg-
ment awarding damages according to the jury’s verdicts.
The court, by order, also unsealed Fahey’s deposition tran-
script. Id. at 15.
	         Defendants then filed a motion for a new trial under
ORCP 64 B, raising a variety of grounds. As pertinent here,
defendants sought a new trial under ORCP 64 B(4), relying
primarily on Fahey’s affidavit as newly discovered evidence
that warranted a new trial under the rule. Specifically, defen-
dants contended that “most of the information” in Fahey’s
affidavit “was neither discussed nor disclosed in his deposi-
tion.” In particular, unlike Fahey’s deposition testimony, his
affidavit “specifically identif[ied], on a step-by-step basis,
exactly how manipulation of the inventory occurred” at
Pattillo’s instruction. Defendants explained that, although
“it was generally known” to their counsel that Pattillo had
knowledge of Fahey’s embezzlement, “the exact method of
how this was accomplished, and the resulting manipulation
of the inventory, was neither known nor capable of discov-
ery.” According to defendants, the jury’s consideration of
Fahey’s affidavit “would have significant effect.” Id.
	        During the hearing on defendants’ motion, the
trial court indicated that, to obtain a new trial, defendants
had “a pretty heavy standard burden that [they] need[ed]
to meet” and that defendants “[had not] met that burden.”
Nevertheless, the trial court did not enter a timely order
denying defendants’ motion for a new trial, and, as a result,
the motion was deemed denied pursuant to ORCP 64 F(1).
Id. at 15-16.4
	       Thereafter, the trial court entered a supplemen-
tal judgment awarding plaintiffs their attorney fees on the
breach of contract claim and awarding defendants their

	4
      The Court of Appeals reviewed the trial court’s denial of a new trial for
errors of law, in part, because it concluded that defendants’ motion was deemed
denied by operation of law. Id. at 20. Plaintiffs challenge that conclusion on
review. In light of our determination that the applicable standard of review is for
errors of law in any event, see 357 Or at 679-80, we need not address that issue.
676	       Greenwood Products v. Greenwood Forest Products

attorney fees on the counterclaim for nonpayment of the
promissory notes. However, the court denied defendants
their claimed expert expenses. Id. at 16.

	        Defendants appealed the general judgment and
the supplemental judgment for attorney fees, raising seven
assignments of error, and plaintiffs cross-appealed. Id. On
appeal, the Court of Appeals concluded that defendants were
entitled to a directed verdict on plaintiffs’ breach of contract
claim. Greenwood Products v. Greenwood Forest Products,
238 Or App 468, 480-82, 242 P3d 723 (2010) (Greenwood I).
That disposition obviated the need to consider defen-
dants’ third through sixth assignments of error. Id. at 482.
However, the Court of Appeals addressed defendants’ sev-
enth and final assignment of error pertaining to the trial
court’s supplemental judgment. Id. at 482-85. Because it had
reversed the judgment on the breach of contract claim, the
Court of Appeals reversed the trial court’s award of attorney
fees to plaintiffs on that claim and remanded for a deter-
mination of defendants’ entitlement to fees. Id. at 482-83.
The Court of Appeals also concluded that defendants—who
had prevailed on their counterclaim for nonpayment of the
promissory notes—were entitled to recover expert expenses
and remanded for the trial court to award reasonable expert
expenses to defendants. Id. at 483-85. Finally, the court
rejected as unpreserved plaintiffs’ sole contention on cross-
appeal concerning the trial court’s denial of plaintiffs’ claim
for rescission as to the promissory note issued in June 2003.
Id. at 485-86.

	        On review, this court held that “the trial court in
this case properly rejected each of the grounds that defen-
dant[s] raised at trial for granting their motion for a directed
verdict on plaintiffs’ breach of contract claim.” Greenwood
Products v. Greenwood Forest Products, 351 Or 604, 620, 273
P3d 116 (2012) (Greenwood II). As a result, we reversed the
Court of Appeals’ decision and remanded to that court to
consider several assignments of error that had been obvi-
ated by that court’s disposition in Greenwood I or that it
needed to readdress because its decision had been predi-
cated on defendants’ entitlement to a directed verdict. Id. at
620-21.
Cite as 357 Or 665 (2015)	677

	         On remand, the Court of Appeals held that defen-
dants were entitled to a new trial on plaintiffs’ breach of con-
tract claim. Greenwood III, 264 Or App at 20. The court gave
three reasons for its decision. First, even though defendants’
motion relied, in part, on Fahey’s deposition testimony, the
primary basis of the motion was Fahey’s post-trial affidavit,
which, according to the Court of Appeals, “presented quali-
tatively different information than did the deposition tran-
script.” Id.
	        Second, the Court of Appeals concluded that defen-
dants could not with reasonable diligence have discovered
and produced the evidence contained in Fahey’s affidavit
at trial. Id. The court noted that, before trial, defendants’
attorney had “had the occasion to have conversations with
[Fahey] in the presence of his criminal attorney” and that
“[s]ubstantial limitations were placed upon the questions
[he] was able to ask [Fahey] by his criminal attorney, as
a result of the then pending criminal charges.” Id. at 21.
Further, the court noted, at the time of trial, “a signifi-
cant amount of information” in Fahey’s affidavit “was not
know[n] to [defendants’ attorney],” and he did not believe
that he “would have been permitted to inquire into the sub-
ject matter during [his] various conversations with [Fahey],
because [of Fahey’s] pending criminal prosecution.” Id.
	        The Court of Appeals observed that, but for plain-
tiffs’ improper procurement of Fahey’s deposition, defen-
dants would not have discovered information about Fahey’s
thesis concerning Pattillo’s purported inventory manipu-
lation.5 Id. Further, the court stated, Fahey’s successful
efforts at the time of trial in this case to seal Fahey’s depo-
sition testimony, which alerted defendants to Fahey’s the-
sis concerning Pattillo’s inventory manipulation scheme—
demonstrated that Fahey’s counsel would not have permit-
ted defendants to inquire into this subject matter either
before or during trial. Id. Indeed, the court observed, when
defendants called Fahey as a witness outside the presence of

	5
       As the Court of Appeals noted, this court issued a decision reprimanding
plaintiffs’ attorney for communicating with Fahey, whom he knew was repre-
sented by a lawyer, regarding that subject of representation. In re Newell, 348 Or
396, 234 P3d 967 (2010).
678	          Greenwood Products v. Greenwood Forest Products

the jury and attempted to inquire about Pattillo’s purported
inventory manipulation, Fahey’s attorney advised Fahey to
assert his Fifth Amendment privilege—and, notwithstand-
ing defendants’ protests, the trial court effectively precluded
defendants from eliciting testimony from Fahey about that
manipulation. Id. In sum, the court concluded:
    “[U]nder the totality of the circumstances in this case,
    defendants, in the exercise of reasonable diligence, could not
    have discovered and presented Fahey’s putative testimony,
    which, as set out in his post-trial affidavit, coherently and
    precisely detailed and substantiated how Pattillo’s manip-
    ulation occurred in a way that did not result in [plaintiffs’]
    overpaying for the inventory that [they] received from
    [defendants].”
Id. at 21-22.
	        Third, the Court of Appeals concluded that, if
believed, Fahey’s affidavit demonstrated that plaintiffs had
not overpaid defendants for inventory or at least substan-
tially controverted plaintiffs’ evidence to the contrary. Id. at
22. That evidence, the court opined, if believed, “would prob-
ably lead a reasonable person to a different decision from
that reached by the jury.” Id.
	         In sum, the Court of Appeals agreed with defen-
dants that, as required by ORCP 64 (B)(4), the evidence
in Fahey’s affidavit was newly discovered evidence, mate-
rial for defendants, which they could not with reasonable
diligence have discovered and produced at trial. Id. at 24.
Accordingly, the court concluded that defendants are enti-
tled to a new trial on plaintiffs’ breach of contract claim, and
it reversed and remanded on that basis.6 Id. at 24-25. On
review, plaintiffs challenge all three grounds on which the
Court of Appeals relied in reaching its decision.
                              II. ANALYSIS
A.  Standard of Review
	       Our standard of review of a trial court’s denial of a
motion for a new trial depends on the nature of the alleged
	6
       In light of its conclusion that defendants are entitled to a new trial on the
breach of contract claim, the Court of Appeals reversed the attorney fee award to
plaintiffs on that claim. Id. at 24.
Cite as 357 Or 665 (2015)	679

error. This court sometimes has stated that it reviews a trial
court ruling on a motion for new trial for abuse of discre-
tion. See, e.g., Oberg v. Honda Motor Co., 316 Or 263, 272,
851 P2d 1084 (1993), rev’d on other grounds, 512 U.S. 415,
114 S. Ct. 2331, 129 L. Ed. 2d 336 (1994). That standard is
used, for example, in reviewing a trial court’s determina-
tion of whether an irregularity was sufficiently prejudicial
to warrant a new trial based on juror misconduct “because
the trial judge is usually in a better position to evaluate the
circumstances of each case and the prejudicial effect, if any,
of any claimed irregularity.” Moore v. Adams, 273 Or 576,
579, 542 P2d 490 (1975). However, “[w]hen the trial court’s
order of a new trial is based on an interpretation of the law,
we review that order for errors of law.” Bennett v. Farmers
Ins. Co., 332 Or 138, 151, 26 P3d 785 (2001).7 See also State
v. Sundberg, 349 Or 608, 624, 247 P3d 1213 (2011) (same).
	        As noted, the trial court in this case concluded that
defendants’ purported newly discovered evidence did not
authorize a new trial under the applicable legal standard.
The Court of Appeals concluded that, in making that deter-
mination, the trial court did not correctly apply that legal
standard. Accordingly, we review the conclusions of the trial
court and the Court of Appeals for legal error. Cf. State v.
Arnold, 320 Or 111, 122, 879 P2d 1272 (1994) (holding that
post-trial discovery of asserted newly discovered evidence
did “not satisfy the requirement that the evidence must be
such as, with reasonable diligence, could not have been dis-
covered and produced at trial”).
B.  Newly Discovered Evidence
	        The threshold issue that the parties present is
whether the information in Fahey’s affidavit qualified as
newly discovered evidence under ORCP 64 (B)(4). According
to defendants, Fahey’s testimony was newly discovered
within the meaning of the rule because, as a consequence
of his invocation of his Fifth Amendment privilege against
self-incrimination, Fahey’s testimony could not be produced
	7
     In Arthur v. Parish, 150 Or 582, 588, 47 P2d 682 (1935), this court said:
   “Some loose expressions may be found in various opinions of this court rel-
   ative to the exercise of discretion in granting new trials, but we think no
   discretion is involved concerning positive rules of law.”
680	             Greenwood Products v. Greenwood Forest Products

at trial.8 Defendants assert that the conjunctive use of “and”
between “discovered” and “produced” in the text of the rule
means that evidence known before trial but not available
for use at trial can qualify as newly discovered evidence.
Defendants rely on the six-part standard that this court
enunciated in Arnold for the proposition that newly discov-
ered evidence need not be discovered after trial if it was dis-
covered before or during trial but, in the exercise of reason-
able diligence, it could not be produced at trial.
	        Plaintiffs disagree with that proposition. Relying
on the text of the rule and this court’s decisions interpreting
it, including Arnold, plaintiffs assert that evidence cannot
be “newly discovered” if it was known to the moving party
before or during trial. According to plaintiffs, the trial court
did not err in denying defendants’ motion for a new trial
because defendants had identified Fahey as a witness before
trial, and the information in his post-trial affidavit did no
more than elaborate on evidence that defendants knew
about before trial.
	        As will soon be apparent, in view of internal tension
both within the text of the rule and in this court’s case law
interpreting it, the parties’ dispute is a vexing one. Although,
as explained below, we ultimately need not resolve the issue
in this case, we nevertheless explore it in some detail to set
the stage for its careful consideration in a future case.
	          As noted, ORCP 64 provides, in part:
    	 “A former judgment may be set aside and a new trial
    granted in an action where there has been a trial by jury
    on the motion of the party aggrieved for any of the following
    causes materially affecting the substantial rights of such
    party:
    “* * * * *
    	 “B(4)  Newly discovered evidence, material for the
    party making the application, which such party could not
    with reasonable diligence have discovered and produced at
    the trial.”
	8
       Defendants also assert that the Court of Appeals correctly concluded that
the information contained in Fahey’s affidavit was newly discovered because it
was qualitatively different from the information that defendants had before trial.
In light of our disposition on review, we need not reach that argument.
Cite as 357 Or 665 (2015)	681

	        On its surface, the text of the rule imposes three
separate requirements: (1) the proffered evidence must be
“newly discovered;” (2) it must be “material” for the moving
party; and (3) it must be such that the moving party could
not, in the exercise of reasonable diligence, have discovered
and produced it at trial. The first requirement is our ini-
tial focal point. The ordinary meaning of the verb “discover”
is “to make known something secret, hidden, unknown, or
previously unnoticed” or “to obtain for the first time sight
or knowledge of.” Webster’s Third New Int’l Dictionary 647
(unabridged ed 2002). That ordinary meaning, together
with the fact that the “newly discovered evidence” require-
ment is stated separately from, and cumulatively to, the
other requirements in the rule, suggests that, to qualify,
proffered evidence must have been discovered after trial.
	         That said, as defendants observe, the reasonable
diligence requirement of ORCP 64 (B)(4) refers to evidence
that, in the exercise of reasonable diligence, could not be
“discovered and produced” at trial. The use of the conjunctive
“and” between “discovered” and “produced” arguably sug-
gests that evidence that could not be produced at trial can
be “newly discovered evidence” even if it was known before
or during trial. Stated differently, the phrase “discovered
and produced” suggests that, even if newly discovered evi-
dence must—as a general rule—have been discovered after
trial, an exception exists for known evidence that could not
be produced at trial. Viewed accordingly, tension arguably
exists between the ordinary meaning of the term “newly
discovered evidence” and the further requirement that, to
qualify, the evidence must be such that in the exercise of
reasonable diligence it could not be discovered and produced
at trial.
	        The rule’s context, including this court’s previous
interpretation of it, also is relevant. Oregon’s newly discov-
ered evidence rule has existed in the same form—first as a
statute, and now as a rule of civil procedure—for more than
a century.9 It was first mentioned by this court in State v.
	9
      ORCP 64 (B)(4) is materially identical to former Hill’s Annotated Laws of
Oregon § 235 (1887), former OCLA § 5-802(4)(1940), and former ORS 17.610(4)
(1977).
682	       Greenwood Products v. Greenwood Forest Products

Hill, 39 Or 90, 65 P. 518 (1901), where, relying on common
law authorities on which the statute was based, this court
described its requirements as follows:
   “A verdict may be set aside and a new trial granted, on
   the motion of the party aggrieved, on the ground of new-
   ly-discovered evidence material to the party making the
   application, and which could not with reasonable diligence
   have been discovered and produced at the trial. Newly dis-
   covered evidence which will justify a court in setting aside
   a verdict and granting a new trial must fulfill the following
   requirements: ‘(1) It must be such as will probably change
   the result if a new trial is granted; (2) it must have been
   discovered since the trial; (3) it must be such as could not
   have been discovered before the trial by the exercise of due
   diligence; (4) it must be material to the issue; (5) it must
   not be merely cumulative to the former evidence; (6) it
   must not be merely impeaching or contradicting the former
   evidence.”
Id. at 94-95 (citations omitted).
	        This court consistently used identical formulations
of the standard for the next 92 years. See Oberg, 316 Or at
272-73 (citing State of Oregon v. Davis, 192 Or 575, 579, 235
P2d 761 (1951)); see also Larson v. Heinz Const. Co. et al, 219
Or 25, 71, 345 P2d 835 (1959) (same); State v. Edison, 191
Or 588, 595, 232 P2d 73 (1951) (same). That formulation of
the standard has its roots in the instinctive caution with
which Oregon courts historically have regarded motions
for a new trial based on newly discovered evidence. Among
other expressions of that caution, this court has stated
that such motions “are not favored.” Lane County Escrow v.
Smith, Coe, 277 Or 273, 288, 560 P2d 608 (1977). The rea-
sons are practical. First, “[e]fficient judicial administration
dictates that motions for new trials because of newly discov-
ered evidence be granted sparingly. Otherwise, there would
never be any finality to judicial proceedings.” Marshall v.
Martinson, 264 Or 470, 477, 506 P2d 172 (1973). Second, a
relaxed application of the rule would encourage a party to
withhold favorable evidence, as a hedge, while gambling on
the outcome of a trial. See Territory of Oregon v. Latshaw,
1 Or 146, 147 (1854) (“In deciding motions for new trials,
on account of newly discovered evidence, courts have found
Cite as 357 Or 665 (2015)	683

it necessary to apply somewhat stringent rules, to prevent
the almost endless mischief which a different course would
produce.”).
	        That preliminary discussion brings us to Arnold.
In that case, this court applied ORCP 64 (B)(4) to a circum-
stance where the defendant in a child sexual abuse prosecu-
tion had learned facts during her trial that, if made known
to the jury, would have damaged the credibility of an expert
witness for the state. At trial, the witness had testified
about her background in child development and about state-
ments made to her by the victim regarding the defendant’s
alleged inappropriate touching. Arnold, 320 Or at 113. On
cross-examination, defense counsel questioned the witness
extensively about her educational qualifications. Id. at 114.
After the witness testified, the defendant’s investigator con-
tacted the college that the witness said she had attended
and learned that it had no record of her attendance. Id.
Although defense counsel was aware of that information, he
did not bring it to the attention of the trial court, nor did
he ask for a continuance or call the investigator as a rebut-
tal witness. Id. at 115. After being convicted, the defendant
moved for a new trial, asserting that, after a full investiga-
tion had been completed, it was apparent that the witness
had lied about her educational background. Id. at 115-16.
The trial court denied the defendant’s motion because her
counsel had failed to raise the matter during trial. Id. at
116-17. On appeal, the Court of Appeals reversed. State v.
Arnold, 118 Or App 64, 71, 846 P2d 418 (1993).
	        On review, this court reversed the Court of Appeals
decision. Arnold, 320 Or at 119-22. Because this court’s pre-
vious decisions had not involved “the question of how ORCP
64 (B)(4) would operate for evidence discovered and produc-
ible during trial,” this court undertook to address “for the
first time [the] defendant’s argument that ORCP 64 (B)(4)
does not apply to evidence first discovered during trial.”
Arnold, 320 Or at 119. In addressing that argument, this
court restated the Hill/Oberg test as follows:
   	 “Consequently, and consistent with Oberg, we hold that
   evidence that may justify a court in granting a new trial
   must meet the following requirements:
684	          Greenwood Products v. Greenwood Forest Products

   	 “(1)  It must be such as will probably change the result
   if a new trial is granted;
   	 “(2)  It must be such as, with reasonable diligence,
   could not have been discovered before or during the trial;
   	 “(3)  It must be such that it cannot, with reasonable
   diligence, be used during trial;
   	   “(4)  It must be material to an issue;
   	   “(5)  It must not be merely cumulative;
   	 “(6)  It must not be merely impeaching or contradicting
   of former evidence.”
Arnold, 320 Or at 120-21 (footnote omitted).
	        This court in Arnold concluded that the defendant’s
post-trial proffer did not meet the requirements of ORCP 64
B(4) and, therefore, that the trial court had no authority to
grant the defendant’s motion for a new trial. Id. at 121-22.
The court pointed out that, before the case was submitted to
the jury, defense counsel had specific information that the
college that the witness said she had attended denied that
she had ever attended there, and counsel knew that that
evidence could be obtained through a subpoena. Id. at 121.
Moreover, defense counsel never asked for a continuance
or for the opportunity to issue a subpoena to procure the
evidence. This court held that the evidence “was not ‘newly
discovered’ after the trial within the meaning of ORCP 64
B(4),” id. at 118 n 8, and further explained:
   “This case is a dispute over how much evidence had to be
   known and had to be usable during trial to make the bal-
   ance of the evidence not such as would justify the award of
   a new trial. Even if some additional evidence is discovered
   after trial, it does not justify the award of a new trial if
   the evidence that was known during trial could have been
   used during trial for substantially the same purpose as the
   additional evidence that is not discovered until after trial.”
Id. at 121.
	       Different understandings of this court’s decision
in Arnold lie at the heart of the parties’ dispute in this
case. According to defendants, in restating the Hill/Oberg
standard, this court in Arnold consciously eliminated the
requirement that newly discovered evidence must have been
Cite as 357 Or 665 (2015)	685

discovered since the trial. Relying on this court’s statement
of the question before it as whether ORCP 64 (B)(4) “applies
to evidence discovered during trial,” id. at 113, defendants
assert that, “in Arnold[,] this [c]ourt * * * explained that evi-
dence discovered before the end of trial could be considered
in support of a motion for a new trial.” As support for that
proposition, defendants point to the court’s statement in
Arnold that the reasonable diligence requirement of ORCP
64 (B)(4) “does not focus on whether the evidence was dis-
covered before trial.” Id. at 119.
	        For several reasons, the validity of defendants’
characterization of the court’s holding in Arnold is question-
able. First, it is unclear what this court in Arnold meant by
describing the issue before it as whether ORCP 64 (B)(4)
“appl[ies]” to evidence first discovered during a trial. The
defendant in Arnold specifically relied on that rule in her
motion for a new trial. Id. at 115. Thus, it makes little sense
for her to have argued (as the court understood it) that the
rule did not apply to the evidence that she asserted was
newly discovered.
	        Moreover, other passages in Arnold are irreconcil-
able with the proposition that defendants advance. As set
out above, the second requirement of the standard adopted
in Arnold is that, to justify a new trial, evidence must be
such that, with the exercise of reasonable diligence, could
not have been discovered before or during trial. The most
plausible understanding of that requirement is that evidence
discovered before or during trial is not “newly discovered.”
That understanding is reinforced by this court’s statement
in Arnold that its reformulation of the Hill/Oberg standard
was “consistent with Oberg.” Id. at 120. As discussed, that
standard expressly required that newly discovered evidence
must have been discovered since trial. See Edison, 191 Or
at 595 (preexisting and known impotency of defendant not
“newly discovered” evidence and insufficient for new trial
on charge of rape that resulted in childbirth). Finally, to
punctuate the point, in affirming the trial court’s denial
of the defendant’s motion for a new trial in Arnold, this
court stated: “[W]e hold that the evidence on which defen-
dant relies was not ‘newly discovered’ after the trial within
the meaning of ORCP 64 B(4).” Arnold, 320 Or at 118 n 8
686	       Greenwood Products v. Greenwood Forest Products

(emphasis added). In combination, those passages suggest
that, consistently with this court’s longstanding jurispru-
dence, the phrase “newly discovered evidence,” as used in
ORCP 64 (B)(4), refers to evidence that was discovered after
trial.
	        That said, yet other passages in Arnold support
defendants’ argument that this court interpreted ORCP 64
(B)(4) to provide that evidence discovered before or during
trial would qualify as newly discovered evidence if it could
not, in the exercise of reasonable diligence, be produced at
trial. First, as defendants note, the court in Arnold did not
include the requirement that newly discovered evidence must
have been discovered since the trial in its reformulation of
the Hill/Oberg standard. In light of its conspicuousness, it
seems improbable that that omission was inadvertent.
	        Second, as defendants also note, the court in Arnold
stated that “[t]he ‘reasonable diligence’ inquiry under ORCP
64 B(4) does not focus on whether the evidence was discov-
ered before trial; rather, it focuses on whether the party could
not with reasonable diligence have discovered and produced
the evidence at the trial.” Id. at 119-20. Even though its pri-
mary focus was on the reasonable diligence requirement,
that passage suggests that the court may have believed that
a party’s inability to produce evidence at trial was relevant
to whether the evidence was “newly discovered.” After all,
if known but unavailable evidence cannot be “newly dis-
covered,” there is little point to considering whether, in the
exercise of reasonable diligence, such evidence could have
been produced at trial.
	        Moreover, as noted, the third Arnold requirement
states that the proffered evidence “must be such that it can-
not, with reasonable diligence, be used during trial.” Id. at
120. That requirement also would seem to be inapposite
unless evidence discovered before or during trial would qual-
ify as newly discovered evidence if, with reasonable diligence,
it could not be used at trial. The court went on to apply that
requirement, describing the ultimate question before it as
“how much evidence had to be known and had to be usable
during trial to make the balance of the evidence not such as
would justify the award of a new trial.” Id. at 121.
Cite as 357 Or 665 (2015)	687

	        Finally, in a vigorous dissent, Justice Durham
challenged the court’s failure in Arnold to simply adhere
to and reiterate the Hill/Oberg standard. See id. at 123-30
(Durham, J., dissenting) (observing that “under the tra-
ditional standard expressed in Oberg, unless evidence is
discovered since the trial, it cannot be newly discovered”).
That is, the dissent in Arnold understood the court to have
broadened—erroneously, in the dissent’s view—the mean-
ing of “newly discovered” evidence to include evidence dis-
covered before or during trial that could not be used at trial.
	        In light of the cross-currents in Arnold, the parties’
divergent understandings of its holding are unsurprising.
As noted, the parties’ arguments merit further consideration
in the proper case. Here, however, we need not resolve their
dispute because, even if evidence that is known but asserted
to be unavailable at trial could be considered “newly discov-
ered,” to qualify the evidence as such, a party must have
exercised reasonable diligence to produce it at trial. As we
now explain, defendants failed to satisfy that requirement.
C.  Reasonable Diligence
	        As this court indicated as long ago as 1868, where
known evidence cannot be produced at trial, the most obvious
recourse in the exercise of reasonable diligence is to request
a postponement of trial. See Lander v. Miles, 3 Or 40, 44-45
(1868) (in seeking a new trial based on newly discovered
evidence, “[a] party should be free from laches in not hav-
ing moved for a continuance”).10 In this case, a continuance
would have afforded defendants more time to investigate the
	10
        See also Warner et al v. Mitchell Bros. Truck Lines, 221 Or 544, 552, 352
P2d 156 (1960) (upholding denial of new trial, where, in face of new evidence
discovered at trial, moving party made no “application * * * to delay the trial or
for a continuance to permit investigation”); State of Oregon v. Payne, 195 Or 624,
639, 244 P2d 1025 (1952) (where party seeking new trial on ground of newly dis-
covered evidence obtained knowledge of evidence by date of trial, “counsel should
have sought to obtain the testimony of these people, and, if such was not available
at that time, he should have asked for a continuance, all of which he failed to do”);
Edison, 191 Or at 596 (upholding denial of new trial in rape case where, among
other reasons, if “there was not sufficient time to make [blood tests] before the
date set for trial, the court, upon a proper showing, would no doubt have granted
a reasonable continuance for that purpose. No such showing was made, and no
continuance was asked for.”); Cox v. Rand, 155 Or 258, 264, 61 P2d 1240 (1936)
(“It will also be observed that plaintiff did not ask for any further continuance of
time in which to have the witnesses brought into court.”).
688	         Greenwood Products v. Greenwood Forest Products

disclosures that Fahey made before trial. More importantly,
it would have allowed time to conclude Fahey’s sentencing,
which would have removed the only posited impediment to
his testimony in this action. As noted, sentencing had been
delayed so that Fahey could continue to work with defen-
dants and the prosecutor to provide evidence with respect
to the missing assets. Indeed, Fahey executed his affidavit
immediately following sentencing and barely three weeks
after the start of trial in this case.
	        Defendants assert that requesting a continuance
would have been futile because “sentencing on the unrelated
conduct would have had no effect on Fahey’s right to claim
a Fifth Amendment privilege to decline testimony on the
fraudulent inventory deletion conduct.” According to defen-
dants, that possibility absolved them of any responsibility to
request a continuance to obtain Fahey’s testimony. For two
reasons, we reject that argument. First, even though Fahey’s
criminal case involved a different set of transactions than
those at issue here, Fahey agreed to cooperate with defen-
dants’ attorneys in connection with the inventory manipu-
lation scheme at issue in this case. In short, the connection
between the two matters was obvious at the time of trial in
this case, and defendants had a good faith basis to seek a
brief continuance to secure Fahey’s testimony. Second, and
moreover, we need not speculate about the effect of Fahey’s
sentencing. As defendants acknowledge: “After the trial,
Fahey was sentenced and was then willing to provide tes-
timony.” Indeed, Fahey executed his affidavit in front of the
sentencing judge immediately after sentencing. Defendants
cannot plausibly argue that requesting a continuance until
sentencing would have had only a speculative bearing on
Fahey’s willingness to testify when, in fact, he provided his
testimony immediately afterwards. Their failure to do so
demonstrated a lack of reasonable diligence.11
	       Reasonable diligence also required defendants
actually to question Fahey further to determine whether he
	11
       Although the trial court made no express findings with respect to the rea-
sonable diligence requirement, in the absence of express findings, we generally
presume that the court decided disputed factual issues in a manner consistent
with the ultimate conclusion that it reached. Ball v. Gladden, 250 Or 485, 487,
443 P2d 621 (1968).
Cite as 357 Or 665 (2015)	689

would give any testimony that would have supported defen-
dants’ theory of the case. At the beginning of trial, defen-
dants represented that Fahey had information as to which
he would testify:
   	 “I’m sure he’s going to probably assert some Fifth
   Amendment on some areas. He was—He’s able to testify as
   to a lot of stuff, and he did in his deposition, until you get to
   the specific acts of embezzlement. He has a lot of relevant
   knowledge that doesn’t—and he actually talks somewhat
   about the embezzlement.”
   	 “I have never heard him not invoke the Fifth Amendment
   when you get to the very specific acts of his embezzlement,
   although—And I can’t answer this question. He may very
   well waive that Fifth Amendment right and talk about that
   in this trial. I don’t know the answer to that question.”
Defendants’ counsel stated that he was trying to “antici-
pate problems” and that he “basically [had] it worked out
on the testimony that [could be elicited] from this witness”
but that there were “two questions” where he had been
told that the witness would invoke the Fifth Amendment.
Further, defendants believed that the statute of limitations
had run on those matters. Those statements notwithstand-
ing, defendants never asked about the “lot of stuff” to which
Fahey could testify and that defendants believed they could
elicit.
	        Instead of pursuing that strategy, defendants’ coun-
sel asked Fahey a single question outside the presence of
the jury: “Was there a time within [February 25, 2002 until
December 31, 2002] when you were instructed to remove
inventory off the books of [defendants]?” Fahey’s attorney
then advised Fahey to invoke his Fifth Amendment priv-
ilege. A colloquy with the trial court followed, and Fahey
never actually invoked the privilege. Reasonable diligence
required pursuing the evidence at least up to an actual
invocation of the privilege. Cf. OEC 804 Commentary (1981)
(“unavailability” “requires an affirmative ruling by the
court that a privilege exists, which presupposes a claim”
(emphasis added)). Thus, defendants also failed to exercise
reasonable diligence by not pursuing lines of questioning as
to which Fahey might not have invoked his privilege and by
690	          Greenwood Products v. Greenwood Forest Products

not actually pursuing his assertion of privilege to the point
of invocation.12
                          III. CONCLUSION
	        To summarize: Irrespective of whether evidence
that is known before or during trial but is unavailable for
use at trial can qualify as newly discovered evidence, defen-
dants were not entitled to a new trial under ORCP 64 (B)(4)
because: (1) defendants failed to exercise reasonable dili-
gence by not requesting a continuance until Fahey had been
sentenced in his criminal proceeding, wherein he had agreed
to cooperate with defendants in this action; and (2) defen-
dants failed to exercise reasonable diligence by not pursuing
lines of questioning at trial as to which Fahey might not
have invoked his privilege and by not actually pursuing his
assertion of privilege to the point of invocation.13
	        Because the trial court did not err in applying the
requirements set out in ORCP 64 (B)(4), we reverse the deci-
sion of the Court of Appeals, affirm the trial court’s order
denying defendants’ motion for a new trial, and remand to
the Court of Appeals for consideration of defendants’ remain-
ing assignments of error.
	       The decision of the Court of Appeals is reversed,
and the case is remanded to the Court of Appeals for further
proceedings. The order of the circuit court denying defen-
dants’ motion for a new trial is affirmed.

	12
       Plaintiffs argue that defendants also failed in other ways to exercise rea-
sonable diligence to make Fahey available to testify at trial. We do not address
those arguments in reaching our conclusion.
	13
       Our analysis and conclusions make it unnecessary to address plaintiffs’
additional challenges to the grounds for the Court of Appeals decision.