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Rains v. Stayton Builders Mart, Inc.

Court of Appeals of Oregon

September 25, 2013

KEVIN RAINS and MITZI RAINS, Plaintiffs-Respondents,
v.
STAYTON BUILDERS MART, INC.; JOHN DOE LUMBER SUPPLIER; JOHN DOE LUMBER MILL; and FIVE STAR CONSTRUCTION, INC., Defendants. STAYTON BUILDERS MART, INC., Third-Party Plaintiff-Respondent,
v.
RSG FOREST PRODUCTS, INC., et al., Third-Party Defendants, and WEYERHAEUSER COMPANY, Third-Party Defendant-Appellant. WEYERHAEUSER COMPANY, Fourth-Party Plaintiff,
v.
RODRIGUEZ & RAINS CONSTRUCTION, an Oregon corporation, Fourth-Party Defendant. WITHERS LUMBER COMPANY, Fourth-Party Plaintiff,
v.
SELLWOOD LUMBER CO., INC., an Oregon corporation; and WEYERHAEUSER COMPANY, Fourth-Party Defendants.
v.
BENITO RODRIGUEZ, KEVIN RAINS, and RODRIGUEZ & RAINS CONSTRUCTION, Fourth-Party Defendants. SELLWOOD LUMBER CO., INC., an Oregon corporation, Fifth-Party Plaintiff,
v.
SWANSON BROS. LUMBER CO., INC., an Oregon corporation, Fifth-Party Defendant.

Argued and submitted on May 01, 2013.

Marion County Circuit Court No. 06C21040 Dennis J. Graves, Judge.

Michael T. Stone argued the cause for appellant. With him on the opening brief was Grant D. Stockton. On the reply brief was Michael T. Stone.

Maureen Leonard and Thomas W. Brown argued the cause for respondents. With them on the joint brief were Brian Whitehead and J. Randolph Pickett.

Before Ortega, Presiding Judge, and Sercombe, Judge, and Hadlock, Judge.

HADLOCK, J.

In the trial court, third-party defendant Weyerhaeuser Company moved, under ORCP 71 B(1)(c) and ORCP 71 C, to set aside several judgments against it, asserting that the judgments had been obtained through fraud on the court. The trial court denied the motions, ruling that the motion under ORCP 71 B(1)(c) was untimely and that the court lacked jurisdiction to hear the motion under ORCP 71 C because of a pending appeal. Weyerhaeuser appeals, challenging those rulings. We agree with both of the trial court's challenged rulings and, therefore, affirm.

The facts material to our disposition of this appeal are not in dispute. Plaintiff Kevin Rains was a subcontractor on a project on which defendant Five Star Construction, Inc., was the general contractor. Rains was injured while working on that project when a board that he was walking on 16 feet above the ground broke, causing him to fall. Rains and his wife sued Five Star and Stayton Builders Mart, Inc. (Stayton), which had supplied the board.[1] Stayton then filed a third-party complaint against Weyerhaeuser for indemnity.[2] Plaintiffs later obtained default judgments against Five Star for a total of more than $18 million.

Plaintiffs' claims against Stayton went to trial. The verdict form instructed the jury to apportion the fault between Weyerhaeuser, Stayton, and Rains if it found that plaintiffs had been damaged. Five Star was not included on the verdict form, either in the caption or in the apportionment instruction. The jury found that plaintiffs had been damaged in amounts totaling more than $9 million. It apportioned 45 percent of the fault to Weyerhaeuser, 30 percent to Stayton, and 25 percent to Rains.

The trial court later found for Stayton on its indemnity claim against Weyerhaeuser. It awarded Stayton $2 million.

In May 2010, the court entered separate limited judgments on plaintiffs' claims and Stayton's indemnity claim. In July 2010, the court entered a limited judgment awarding plaintiffs their costs and disbursements, payable by Stayton and Weyerhaeuser. In January 2011, the court entered a general judgment in which it awarded Stayton its attorney fees in connection with the indemnity claim. Weyerhaeuser filed notices of appeal from each of those judgments, and the resulting appeal is pending in this court.

In February 2012--more than a year after it had received notice of each of the judgments--Weyerhaeuser filed motions to set aside the judgments under ORCP 71 B(1)(c) and ORCP 71 C. Weyerhaeuser asserted that, the month before, it had learned of an agreement between plaintiffs, plaintiffs' attorney, and Five Star that plaintiffs had not disclosed. That agreement included a covenant by plaintiffs not to execute upon their default judgments against Five Star. In exchange, Five Star had agreed to retain plaintiffs' attorney to prosecute any claims it might have relating to Five Star's liability insurance.[3] The agreement further provided that, if Five Star recovered any money as a result of those claims, it would pay its litigation expenses, its sole shareholder would receive 10 percent of the amount remaining after those expenses were paid, and plaintiffs would receive the remaining 90 percent as satisfaction of their judgments against Five Star.

Citing ORS 31.815, Weyerhaeuser asserted that its share of the liability likely would have been reduced had the agreement been disclosed.[4] In support of its motions to set aside the judgments against it, Weyerhaeuser contended that plaintiffs' failure to disclose the agreement constituted fraud on the court and the other parties.

The trial court denied the motions. It concluded that the motion under ORCP 71 B(1)(c) was untimely because more than one year had elapsed since Weyerhaeuser had received notice of the judgments. With respect to ORCP 71 C, the court concluded that, because the appeal from the ...


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