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Maley v. Palanuk

January 25, 1973

MALEY ET UX, RESPONDENTS,
v.
PALANUK, APPELLANT



Appeal from Circuit Court, Polk County. Darrell J. Williams, Judge.

Norman K. Winslow, Salem, argued the cause and filed a brief for appellant.

Wayne R. Harris, McMinnville, argued the cause and filed a brief for respondents.

In Banc. Bryson, J.

Bryson

This is an action for fraud. Plaintiffs alleged that during their negotiations for the purchase of defendant's house and lot in Polk County, Oregon, defendant represented that a septic tank could be installed on the lot, knowing that this would not be permitted by the county sanitation officials because of the lot's small size. A jury returned a verdict for plaintiffs for $830 as general damages and $3,200 as punitive damages. Defendant appeals.

Defendant owned a house and lot in Polk County and advertised it for sale. Defendant had been advised during 1970 that the Polk County Sanitarian would not permit a septic tank to be installed on the property

due to the small size of the lot. Plaintiffs responded to one of defendant's advertisements and asked whether a septic tank could be installed on the lot. Plaintiff James E. Maley testified the defendant told him they could put a septic tank on the rear of the lot. Defendant testified that he told plaintiffs that they would not be allowed to put a septic tank on the property. It is evident there was a conflict in the testimony.

The parties executed a document evidencing the sale on January 9, 1971. Plaintiffs' efforts to obtain a septic tank permit were unsuccessful, and this litigation followed.

Defendant assigns as error the denial of defendant's motion to withdraw from the jury the issue of punitive damages. Defendant argues that there was evidence only of "simple" fraud and not "aggravated" or "malicious" fraud such as would justify an award of punitive damages, citing Cays v. McDaniel, 204 Or 449, 283 P2d 658 (1955).

In Lewis v. Worldwide Imports, Inc., 238 Or 580, 395 P2d 922 (1964), this court disapproved Cays v. McDaniel for its refusal to recognize that intentionally deceptive conduct which achieves its purpose, whether pleaded as "malicious" or not, is conduct sufficiently aggravated to support an allowance of punitive damages.

"* * * [T]he legal justification for punitive damages is determent and * * * such damages will only be allowed when the violation of societal interests is sufficiently great and the conduct involved is of a kind that sanctions would tend to prevent. * * *" ...


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