Myron Dale PAYNE, individually, and as Trustee of the Payne Living Trust, Plaintiff-Appellant,
Lee D. KERSTEN, Defendant-Respondent.
and submitted September 27, 2016
County Circuit Court 161224041; Josephine H. Mooney, Judge.
Terrence Kay argued the cause and fled the briefs for
M. Schroer argued the cause for respondent. With her on the
brief were Ruth C. Rocker and Hart Wagner LLP.
DeHoog, Presiding Judge, and Hadlock, Judge, and Aoyagi,
Summary: Plaintiff, individually and as trustee of the Payne
Living Trust, fled an action against defendant, his former
attorney, for negligence and breach of fiduciary duty. The
trial court granted summary judgment in favor of defendant.
The trial court applied issue preclusion to conclude that the
judgment in a separate action between plaintiff and his son
established that, even if defendant was negligent, he did not
cause any damages to plaintiff. The trial court also ruled
that plaintiff could not pursue claims on behalf of the trust
or its beneficiaries. On appeal, plaintiff assigns error to
both aspects of the court's ruling. Held: The
trial court erred in granting summary judgment on
plaintiff's individual claims based on issue preclusion
because the summary judgment record did not conclusively
establish that the court's findings and conclusions in
the first action entirely foreclosed plaintiff from proving
damages in this action. The trial court did not err in
dismissing plaintiff's claims to the extent they were
brought on behalf of the trust and its beneficiaries.
Or.App. 437] AOYAGI, J.
legal malpractice case, plaintiff, individually and as
trustee of the Payne Living Trust, filed an action against
his former attorney for alleged negligence and breach of
fiduciary duty. The trial court granted summary judgment in
favor of defendant. The court applied issue preclusion to
conclude that the judgment in a separate action between
plaintiff and his son established that, even if defendant was
negligent, he did not cause any damages to plaintiff. The
court also ruled that plaintiff could not pursue claims on
behalf of the trust or its beneficiaries. Plaintiff assigns
error to both aspects of the court's ruling. For the
reasons that follow, we agree with plaintiff that the record
is inadequate to conclusively establish issue preclusion and,
accordingly, reverse and remand the judgment in that regard.
Otherwise, we affirm.
state the facts, which are largely undisputed, in the manner
most favorable to plaintiff as the party who opposed summary
judgment. Wyers v. American Medical Response Northwest,
Inc., 360 Or. 211, 214, 377 P.3d 570 (2016).
to filing this action, plaintiff filed an action against his
son Clayton (the Clayton action). Plaintiff and his son had
been business partners and, upon dissolution of their
partnership, distributed their partnership assets, including
certain real property. At the time, plaintiff was the trustee
of the Payne Living Trust, which "includes" the
Family Trust. Plaintiff filed the Clayton action both
individually and in his capacity as trustee of the Payne
Living Trust. Essentially, plaintiff took issue with the
distribution of property upon dissolution of the partnership
with his son and alleged, among other things, that certain
property should have been distributed to him personally
rather than transferred to the Family Trust. Plaintiff's
[291 Or.App. 438] son counterclaimed that plaintiff had
breached his fiduciary duties to the Family Trust by failing
to fund the trust properly, keep adequate records, and use
the trust assets properly.
bench trial in the Clayton action, the trial court denied
plaintiff's claims against his son, declared the value of
the Family Trust's assets, and concluded that the
partnership had been dissolved and wound up. As to the
counterclaims, the court ruled that plaintiff had failed to
act impartially in inventorying, managing, and distributing
the property of the Family Trust and had failed to keep
adequate records. Consequently, it removed plaintiff as
trustee of the Family Trust, but otherwise denied the
son's counterclaims. The court did not award damages to
either party but authorized the Family Trust to pay up to
$50, 000 in attorney fees to each party.
meantime, plaintiff filed this action against defendant. As
he in the Clayton action, plaintiff brought his claims both
individually and as trustee of the Payne Living Trust. He
asserted two claims against defendant-(1) legal malpractice,
and (2) breach of fiduciary duty-based on legal advice that
defendant gave plaintiff regarding personal matters and trust
matters. Plaintiff alleged that defendant negligently advised
him on a variety of topics, including the ownership of real
property as among him, his son, and three trusts; the value
of certain real and personal property; the division and
deeding of real property; the administration of the Family
Trust and related real property issues; and an agreement
between plaintiff and his son regarding plaintiff's home.
the trial court issued its decision in the Clayton action,
defendant moved to amend his answer in this action to add the
defense of issue preclusion, which motion the court granted.
Defendant also moved for summary judgment. Defendant argued
that plaintiff, who had been removed as trustee, lacked
authority to pursue claims on behalf of the trust. As for the
claims brought in plaintiff's individual capacity,
defendant argued that the outcome of the Clayton action
conclusively established that, regardless of any alleged
negligence or breach of fiduciary duty on [291 Or.App. 439]
defendant's part, plaintiff had not suffered any damages
and therefore could not prevail against defendant as a matter
trial court granted defendant's motion. As stated in the
court's written order, "The Court and counsel agreed
that Defendant's pending Motion for Summary Judgment
(filed May 7, 2014) is to be ruled upon as if it ...