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Allison v. Smoot Enterprises, Inc.

United States District Court, D. Oregon, Pendleton Division

April 12, 2019

MATTHEW ALLISON, individual; and TIM NAY as the personal representative for the ESTATE OF SARA E. ALLISON, Plaintiffs,



         There are two motions before me: Plaintiffs' Motion for Partial Summary Judgement and defendant Horizon Transport's and Mr. Hogaboom's (“Horizon-Defendants”) Motion to Bifurcate Punitive Damages. Mr. Decou, Mr. Barnes, and Smoot Enterprises (“Smoot-Defendants”) have not filed any responsive pleadings with respect to these motions.

         For the following reasons, the Court GRANTS Plaintiffs' Partial Motion for Summary Judgment (Docket No. 50) and DENIES Horizon-Defendants' Motion to Bifurcate Punitive Damages (Docket No. 58). Thus, the Court does not need oral argument from the parties.

         I. Partial Motion for Summary Judgement

         Plaintiffs have filed a Motion for Partial Summary Judgment (Docket No. 50) on the issue of whether Horizon is vicariously liable for the negligence of Hogaboom, its employee. Horizon-Defendants stipulate that Horizon will be vicariously liable for any compensatory damage award against Hogaboom but dispute whether vicarious liability extends to punitive damages. Since Horizon-Defendants concede vicarious liability for the purposes of establishing compensatory damages, the only remaining issue on summary judgement is whether vicarious liability should extend to punitive damages.

         Summary judgment is appropriate if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The moving party has the burden of establishing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party shows the absence of a genuine issue of material fact, the nonmoving party must go beyond the pleadings and identify facts which show a genuine issue for trial. Id. at 324. “Summary judgment is inappropriate if reasonable jurors, drawing all inferences in favor of the nonmoving party, could return a verdict in the nonmoving party's favor.” Diaz v. Eagle Produce Ltd P'ship, 521 F.3d 1201, 1207 (9th Cir. 2008).

         Horizon-Defendants argue that, in Oregon, the mere existence of an agency relationship is not sufficient to establish principal liability with respect to punitive damages-they are only appropriate if the principal authorized or ratified the tortious acts of the agent. Plaintiffs disagree and point to two cases in support of the proposition that vicarious liability can exist for punitive damages as long as the employee was acting within the scope of their employment-even without proving ratification or authorization.

         Plaintiffs' first case is Stroud v. Denny's Restaurant, Inc. 532 P.2d 790 (Or. 1975). Plaintiffs cite that case for the proposition that an employer is vicariously liable for punitive damages arising from the wrongful actions of its employee if the employee acts within the scope of his employment. 532 P.2d. at 793. Defendants seemingly concede that Stroud's holding indicates that ratification or authorization are not prerequisites for vicarious liability. But they argue that Stroud conflicts with the clear language of the applicable statutes, is distinguishable in a way that supports Horizon, and is inconsistent with previous and subsequent case law.

         I agree with Plaintiffs. In Johannesen v. Salem Hospital, the Oregon Supreme Court revisited Stroud's holding. 336 Or. 211, 219 (2003). In that case, the defendant argued it could not be vicariously liable for punitive damages based on the conduct of another without evidence of fault on its part. Id. The court noted that it had “considered and rejected that theory” in Stroud and “perceive[d] no reason to revisit [Stroud] in this case.” Id. It is irrelevant whether Stroud conflicts with previous case law. The Oregon Supreme Court is free to depart from prior precedent and the fact that Stroud was again considered in Johannesen and left intact is probative. While Horizon-Defendants state that Stroud is inconsistent with case law that came after it, they cite no cases subsequent to Johannesen, a 2003 case, which evidences a departure from Stroud's rule.

         Horizon-Defendants also argue that Stroud's holding is inconsistent with the language of the relevant punitive damages statutes: ORS 31.725 and 31.730. Specifically, they argue that under subsection (1) of ORS 31.730, punitive damages are not recoverable unless the plaintiff establishes that the party against whom they are sought has acted with the requisite degree of culpability. But that statute says nothing of vicarious liability for punitive damages, and thus provides no support for the rule that Horizon-Defendants want this court to embrace, i.e., that vicarious liability for punitive damages requires evidence of authorization or ratification on the principal's part.

         The Court is therefore left to apply the rule in Stroud to the present case. Namely, that if an agent commits a tort within the scope of his employment that renders a corporation liable for compensatory damages, and if the agent's act renders him liable for punitive damages, then the corporation is likewise liable for punitive damages. Stroud, 532 P.2d at 793. Horizon-Defendants concede that they would be vicariously liable for any compensatory damages, and under Stroud, this makes them potentially vicariously liable for any punitive damages. There is no evidence that the Oregon Supreme Court has departed from the rule in Stroud so this Court is left with no choice but to apply it faithfully. Plaintiffs' motion is therefore granted.

         II. Motion to Bifurcate

          Horizon-Defendants have filed a Motion to Bifurcate Punitive Damages (Docket No. 58).

         The decision on whether to bifurcate a trial is subject to the discretion of the district court. See Hangarter v. Provident Life & Accident Ins. Co., 373 F.3d 998, 1021 (9th Cir. 2004). The Federal Rules of Civil Procedure allow district courts to order a separate trial of one or more separate issues, claims, crossclaims, counterclaims, or third-party claims for convenience, to avoid prejudice, or to expedite and economize the trial. Fed.R.Civ.P. 42(b). The moving party has the burden to prove that bifurcation is appropriate. Benson Tower Condo. Owners Ass'n v. Victaulic Co.,150 F.Supp.3d 1184, 1208 (D. Or. 2015) (citing Clark v. I.R.S., 772 ...

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