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Sanford v. Hampton Resources, Inc.

Court of Appeals of Oregon

July 31, 2019

John SANFORD and John M. Sanford, Inc., Plaintiffs-Appellants,
v.
HAMPTON RESOURCES, INC., an Oregon corporation, dba Hampton Affliates and Risseeuw Logging, Inc., an Oregon corporation, Defendants-Respondents.

          Argued and Submitted May 30, 2017

          Marion County Circuit Court 10C19963 Claudia M. Burton, Judge.

          Kim E. Hoyt argued the cause for appellants. Also on the briefs was Garrett Hemann Robertson P.C.

          Janet M. Schroer argued the cause for respondents. Also on the brief was Hart Wagner LLP.

          Before DeHoog, Presiding Judge, and Hadlock, Judge, and Powers, Judge. [*]

         Affirmed.

          [298 Or.App. 556] Case Summary: Plaintiffs John Sanford and John M. Sanford, Inc. contracted with defendant Risseeuw Logging, Inc. to cut timber on land owned by defendant Hampton Resources, Inc. Sanford sustained injuries when a piece of heavy equipment he was operating fell off of a bridge on Hampton's land. Plaintiffs then brought this action for, among other things, negligence, intentional interference with economic relations (IIER), and a claim for relief under Oregon's Employer Liability Law (ELL), ORS 654.305 to 654.336. The trial court granted summary judgment in favor of Hampton on plaintiffs' IIER and ELL claims. Then, after a trial, the jury returned a verdict in favor of defendants on plaintiffs' remaining claims and the trial court entered a general judgment consistent with that verdict. On appeal, plaintiffs raise five assignments of error, two of which are rejected without discussion. In their first assignment, plaintiffs contend that the trial court erred in granting summary judgment in favor of Hampton on the IIER claim. In the second assignment of error, plaintiffs assert that the court erred in granting summary judgment in favor of Hampton on the ELL claim. In their third assignment of error, plaintiffs argue that the trial court erred in granting their April 2015 motion to amend the complaint. Held: The trial court did not err in granting summary judgment in favor of Hampton on IIER claim because the evidence on summary judgment was insufficient to allow a jury to return a verdict in favor of plaintiff by finding that Hampton actually interfered or of interference by improper means or for an improper purpose. The trial court also did not err in granting summary judgment in favor of Hampton on the ELL claim. The risk-producing activity for purposes of an ELL claim includes both the worker's discrete task and the circumstances under which the worker must perform that task and, on summary judgment, there was no evidence that Hampton had a right to control the risk-producing activity as properly characterized. Finally, in light of all the circumstances, the trial court did not abuse its discretion when it denied plaintiffs' motion to file a third amended complaint.

         Affirmed.

          [298 Or.App. 557] HADLOCK, J.

         Plaintiffs, John Sanford (Sanford) and John M. Sanford, Inc. (Sanford, Inc.), contracted with defendant Risseeuw Logging, Inc. (Risseeuw) to cut timber on land owned by defendant Hampton Resources, Inc. (Hampton). Sanford sustained injuries when a piece of heavy equipment that he was operating fell off of a bridge on Hampton's land. Plaintiffs then brought this action against defendants, alleging claims for negligence, breach of contract, and intentional interference with economic relations (HER), [1] as well as a claim for relief under Oregon's Employer Liability Law (ELL), ORS 654.305 to 654.336. The trial court granted summary judgment in favor of Hampton on plaintiffs' HER and ELL claims. Then, after a trial, the jury returned a verdict in favor of defendants on plaintiffs' remaining claims and the trial court entered a general judgment consistent with that verdict. Plaintiffs appeal, raising five assignments of error. As explained below, we reject all of plaintiffs' assignments of error and, accordingly, we affirm the trial court's judgment.

         The general background facts are undisputed. In August 2008, Hampton hired Risseeuw as a general contractor to harvest timber on a particular parcel of land owned by Hampton and known as the "Peregoy property." Risseeuw, in turn, hired Sanford, Inc., which was owned, operated, and managed by Sanford, as a subcontractor to harvest the timber using a piece of heavy equipment known as a feller buncher. When going to the site where he was to harvest timber, Sanford came to a bridge that crossed over a stream on the Peregoy property. The bridge was constructed of wood over the top of a railcar. Sandford attempted to drive the feller buncher over the bridge, but when he was midway [298 Or.App. 558] across, he and the feller buncher fell from the bridge into the stream below.

         Plaintiffs later filed this action against defendants. The operative complaint (plaintiffs' second amended) included claims against Risseeuw and Hampton for negligence, breach of contract, and damages under the ELL, alleging that, as a result of the accident, Sanford had sustained serious personal injuries, emotional stress, and other damages. In particular, the complaint alleged that the bridge had collapsed when Sanford attempted to drive over it. In their claim for negligence, plaintiffs alleged that defendants were negligent in furnishing a defective bridge, failing to design and maintain an adequate bridge, and in representing that the bridge was adequate. Plaintiffs' claim for breach of contract alleged that defendants violated an "implicit" agreement to provide a "safe and adequate means of travel" to and from the job site. And, with respect to the ELL claim, plaintiffs alleged that defendants had a right to control the roads and bridges on the Peregoy property and that, in "failing to adequately design, inspect, maintain or otherwise improve the condition of the bridge in question," defendants "failed to use every device, care and precaution that was practicable for the protection and safety" of Sanford. In addition to seeking damages for Sanford's injuries, plaintiffs' complaint included a claim against Hampton for HER, alleging that, after the accident, Hampton had made disparaging statements regarding plaintiffs to third parties and had instructed Risseeuw and others not to work with plaintiffs.[2]

         In May 2012, Risseeuw moved for summary judgment on the negligence, breach of contract, and ELL claims. Hampton joined in that motion and, in addition, moved for summary judgment on plaintiffs' HER claim. After a hearing, the trial court granted summary judgment in favor of Hampton on plaintiffs' HER claim, but denied summary judgment on the remaining claims. In February 2015, Risseeuw again sought summary judgment on plaintiffs' claims. Hampton again joined the motion for summary [298 Or.App. 559] judgment. This time, after a hearing, the trial court entered an order granting summary judgment as to the ELL claim against Hampton and with respect to one specification of negligence in the second amended complaint. It otherwise denied summary judgment.

         Meanwhile, in April 2015, plaintiffs moved to file a third amended complaint. Defendants opposed the motion and, after hearing argument, the court granted the motion in part and denied it in part. In particular, the court permitted plaintiffs to amend their complaint to conform to the court's rulings to date and to include updated medical damages, but it did not allow plaintiffs to increase the amount of their claim for noneconomic damages or to add new theories of negligence. In August 2015, plaintiffs moved a second time for leave to amend the complaint and the court denied that motion. Eventually, in September 2015, the case went to trial and, ultimately, the jury returned a verdict in favor of defendants on all of plaintiffs' remaining claims. Based on the jury's verdict, the court later entered a general judgment in favor of defendants.

         As noted, plaintiffs raise five assignments of error on appeal. In their first assignment, plaintiffs contend that the trial court erred in granting summary judgment in favor of Hampton on the HER claim. In their second assignment, they assert that the court erred in granting summary judgment in favor of Hampton on the ELL claim. Plaintiffs next argue, in their third assignment of error, that the trial court erred in denying their April 2015 motion to amend the complaint. Finally, plaintiffs assign error to two of the court's trial-related rulings: In their fourth assignment, plaintiffs contend that the trial court erred in excluding particular evidence as outside the scope of the pleadings and, in their fifth assignment, they argue that the court erred in denying their mid-trial motion to conform the pleadings to the evidence pursuant to ORCP 23 B. We reject plaintiffs' fourth and fifth assignments of error without discussion, and address each of plaintiffs' remaining three assignments of error in turn.

         We begin with plaintiffs' contention that the trial court erred in granting summary judgment in favor of Hampton on the HER claim. As the Supreme Court has [298 Or.App. 560] explained, to succeed on an HER claim, a plaintiff must show

"(1) the existence of a professional or business relationship (which could include, e.g., a contract or a prospective economic advantage), (2) intentional interference with that relationship, (3) by a third party, (4) accomplished through improper means or for an improper purpose, (5) a causal effect between the interference and damage to the economic relationship, and (6) damages."

McGanty v. Staudenraus, 321 Or. 532, 535, 901 P.2d 841 (1995).

         Here, as relevant on appeal, plaintiffs had alleged that Hampton improperly interfered with their economic relations by improper means by instructing Risseeuw that, if plaintiffs did not pay for the collapsed bridge, plaintiffs could not be hired for any additional jobs involving Hampton projects or property and by instructing other contractors not to subcontract with plaintiffs for logging work on Hampton projects or property. In its motion for summary judgment on the HER claim, Hampton asserted that plaintiffs could not establish that Hampton had intentionally interfered with any relationship or advantage of plaintiffs through improper means or for an improper purpose. Plaintiffs responded that the evidence created a question of fact on those issues. The trial court agreed with Hampton. According to the court, even when viewed in the light most favorable to plaintiffs, the record on summary judgment did not contain evidence that Hampton "intentionally interfered with plaintiffs' relationship with contractors, accomplished by Hampton through improper means or for an improper purpose." Accordingly, the court granted Hampton's motion for summary judgment.

         In addition to the facts already recounted, the facts on summary judgment are as follows. For a number of years before the accident, plaintiffs did a significant amount of logging work for Risseeuw. In turn, the vast majority of Risseeuw's work came from Hampton. After the accident, Risseeuw did not hire plaintiffs again.

         The parties presented deposition testimony regarding whether Hampton had intentionally interfered with [298 Or.App. 561] plaintiffs' economic relationships by causing Risseeuw and other logging companies not to hire Sanford or Sanford, Inc. following the accident. David Hampton, one of Hampton's principals, testified that Hampton never told its contractors not to hire plaintiffs. Vroman, a forester for Hampton, similarly said that he was not aware of anyone from Hampton telling contractors that Hampton did not want plaintiffs used on Hampton projects.

         Ken Risseeuw, one of Risseeuw's principals, testified that no one from Hampton ever told him that he should not hire plaintiffs to work on Hampton projects and that the decision not to hire Sanford or Sanford, Inc. after the date of the accident was "[his] decision alone." According to David Risseeuw, the company's other principal, Risseeuw's decision to no longer hire plaintiffs after the accident was "a coincidence."

         In a recorded conversation with Ken Risseeuw following the accident, Sanford told Ken that he had "heard a couple rumors and heard a couple things" and felt that he was "getting shoved under the bus a little bit by Hampton." After some general discussion about the bridges on the site, and who might be responsible for their condition, Sanford informed Ken that he had "heard that, you know, I either * * * take responsibility for the bridge and pay or I don't work for Hampton or [Risseeuw] anymore." Asked by Sanford if that was true, Ken responded that he was "basically *** stuck in the middle." He further stated, "all I know is what, you know, what kind of, you know, pressure I'm getting, *** and, you know, I'm not really getting much pressure other than the fact that, you know, how we want to handle the situation." But, Ken said, "I can read between the lines pretty easy." Asked again by Sanford about the rumors that he "either pay or [not] work for [Hampton]," Ken responded that that was "probably the gray area or the * * * unwritten sentence" but, according to Ken, it had "never been said."

         Plaintiffs also presented evidence on summary judgment from Stone, who ran another logging company that had hired Sanford and Sanford, Inc. in the past. Stone's company received approximately 25 percent of its logging contracts from Hampton. Stone initially testified, "I think [298 Or.App. 562] [a Hampton representative] said not to use [plaintiffs] if I didn't have to or he wished [I] wouldn't." Stone followed up however, by asserting twice that the representative did not tell him not to use plaintiffs' services, and "the best [Stone could] come up with" was to explain that he had a "feeling" that Hampton would "just as soon [Stone] didn't use [Sanford]." After that conversation, Stone did not hire plaintiffs for any Hampton projects.

         We will affirm a trial court's ruling granting a defendant's motion for summary judgment if there is no genuine issue of material fact and the defendant is entitled to judgment as a matter of law. ORCP 47 C. No genuine issue as to a material fact exists if, based on the record before the trial court, viewed in the light most favorable to the plaintiff, no objectively reasonable juror could return a verdict for the plaintiff on the matter that is the subject of the motion for summary judgment. Id. A plaintiff has the burden of producing evidence on any issue raised in the motion as to which the plaintiff would have the burden of persuasion at trial. Id.

         In plaintiffs' view, the evidence viewed in the light most favorable to them was that, after the accident, "Hampton made it known to Risseeuw and at least one other logger that unless Sanford paid for the bridge and admitted fault, anyone who hired Sanford risked future contracts with Hampton." But the evidence here does not permit that conclusion. Instead, we agree with the trial court that, viewed in the light most favorable to plaintiffs, the evidence was insufficient to allow a juror to return a verdict in favor of plaintiffs on the HER claim.

         As noted, to establish HER, plaintiffs must demonstrate, among other things, that Hampton intentionally interfered with economic relations or a prospective economic advantage, and that that intentional interference was accomplished through improper means or for an improper purpose. McGanty, 321 Or at 535. The tort of intentional interference with economic relations "serves as a means from protecting contracting parties against interference in their contracts from outside parties." Id. at 536 (emphasis omitted). A claim "is made out when interference resulting [298 Or.App. 563] in injury to another is wrongful by some measure beyond the fact of the interference itself. Defendant's liability may arise from improper motives or from the use of improper means." Top Service Body Shop v. Allstate Ins. Co., 283 Or. 201, 209, 582 P.2d 1365 (1978); see Straube v. Larson, 287 Or. 357, 361, 600 P.2d 371 (1979) (To prevail, a plaintiff must establish "not only *** that defendant intentionally interfered with his business relationship but also that defendant had a duty of non-interference; i.e., that [defendant] interfered for an improper purpose rather than for a legitimate one, or that defendant used improper means which resulted in injury to plaintiff. Therefore, a case is made out which entitles plaintiff to go to a jury only when interference resulting in injury to another is wrongful by some measure beyond the fact of the interference itself." (Internal quotation marks omitted.)).

         Thus, interference in another party's contractual or other economic relations is tortious only if it is "wrongful by some measure beyond the fact of the interference itself." Northwest Natural Gas Co. v. Chase Gardens, Inc., 328 Or. 487, 498, 982 P.2d 1117 (1999) (internal quotation marks omitted). That wrongfulness may take the form of the use of improper means, or the pursuit of an improper purpose. Id. "If liability is based on improper means, 'then the means must violate some objective, identifiable standard, such as a statute or other regulation, or a recognized rule of common law, or, perhaps, an established standard of a trade or profession.'" Sharma v. Providence Health & Services-Oregon, 289 Or.App. 644, 668, 412 P.3d 202, rev den, 363 Or. 283 (2018) (quoting Northwest Natural Gas Co., 328 Or at 498). "Examples of improper means include violence, threats or other intimidation, deceit or misrepresentation, bribery, unfounded litigation, defamation, or disparaging falsehood." Grimstad v. Knudsen, 283 Or.App. 28, 57, 386 P.3d 649 (2016), rev den, 360 Or. 350 (2017) (internal quotation marks omitted). And if liability "is to be based on [the defendant's] purpose, then the purpose must be to inflict injury on the plaintiff as such." Northwest Natural Gas Co., 328 Or at 498 (internal quotation marks omitted); see also Top Service Body Shop, 283 Or at 212 (evidence of acts that were "wholly consistent" with the defendant's "pursuit of its own business purposes as it saw them" did "not suffice [298 Or.App. 564] to support an inference of the alleged improper purpose to injure" the plaintiff).

         Here, the evidence on summary judgment was not sufficient to create an issue of fact regarding HER. Although there was evidence that plaintiffs had worked with Risseeuw and with Stone's company over the years, but were not hired after the accident, there was no evidence of intentional interference by Hampton. That is, there was no testimony that Hampton directly instructed its contractors that it did not want plaintiffs working on Hampton projects, or that future contracts with Hampton were at risk for contractors who hired plaintiffs. Stone did initially testify that he thought that a Hampton representative had said not to use plaintiffs if Stone "didn't have to" or suggested that the representative wished that Stone would not do so. However, Stone immediately clarified that the representative had not told him not to use plaintiffs' services, but had only given Stone a "feeling" about Hampton's preference. When that deposition testimony is considered as a whole, even viewing it in the light most favorable to plaintiffs, such evidence of a "feeling" about what Hampton wanted is insufficient to create an issue of fact regarding whether Hampton intentionally interfered. Similarly, the recorded telephone call between Ken Risseeuw and Sanford, which plaintiffs point to as evidence "sufficient to defeat summary judgment," reflected only that Ken had an impression regarding Hampton's wishes based on Ken's reading "between the lines" to intuit Hampton's position, even though it had "never been said." However, the content of the telephone call, which included Ken's statement that he was "not really getting much pressure," does not create an issue of fact on summary judgment with respect to intentional interference. Although the record on summary judgment might support an inference that certain individuals believed that Hampton did not want them to work with plaintiffs, there are no facts regarding acts or statements-that is, actual interference- from Hampton that would support those beliefs. See Miller v. State, 298 Or.App. 70, 93-96, ___ P.3d ___ (2019) (plaintiffs "strong impression" that employer treated her differently based on her gender was insufficient to support a discrimination claim); Deberry v. Summers, 255 Or.App. 152, 167, 296 [298 Or.App. 565] P.3d 610 (2013) (explaining that, "[a]lthough the line between reasonable inference and impermissible speculation is not always easy to draw, in certain respects, the line is a bright one," and concluding that, on summary judgment, one person's belief about another's intent was insufficient to "permit a trier of fact to engage in any deductive process other than pure speculation"). Instead, viewing the record on summary judgment in the light most favorable to plaintiffs, there was not evidence from which a jury could conclude that Hampton intentionally interfered with a prospective economic advantage of plaintiffs.

         Moreover, even if the evidence would have allowed a jury to find that Hampton implicitly communicated a desire that Risseeuw or Stone not work with plaintiffs on Hampton projects, the record would not support a determination that Hampton did so for an improper purpose or by improper means, as plaintiffs argue. Plaintiffs essentially contend that Hampton's conduct was improper for three reasons. First, they assert that the evidence was sufficient to support a finding that Hampton communicated to Risseeuw and Stone that "anyone who hired Sanford risked future contracts with Hampton." We disagree. Even if the evidence discussed above was sufficient to create a genuine dispute of fact about whether Hampton communicated a desire that contractors not subcontract with plaintiffs, there is no evidence that would support a finding that Hampton threatened to cut off relationships with those contractors if they did so. Cf. Uptown Heights Associates v. Seafirst Corp., 320 Or. 638, 654, 891 P.2d 639 (1995) (for a defendant to be liable under this kind of HER theory, the defendant "must have used its own refusal to deal [with an entity in the same position as the contractors in this case] as a form of' affirmative inducement, compulsion or pressure' to make [the entity] break its contract with" the plaintiff).

         Second, plaintiffs point to "the hierarchical structure of the logging industry" and evidence that Hampton was a powerful company that could put significant economic pressure on the individuals and entities with whom it contracted. That argument does not, however, establish a basis for tort liability because it does not establish that Hampton's economic power gave it "a duty of non-interference," as [298 Or.App. 566] required to establish improper means or purpose. Northwest Natural Gas Co., 328 Or at 498 (internal quotation marks omitted). That is, plaintiffs have not explained how the record or the law would support a determination that Hampton's economic power was, by itself, something that made its conduct "wrongful by some measure beyond the fact of the interference itself." Id. (internal quotation marks omitted); cf. Eusterman v. Northwest Permanente, P.C., 204 Or.App. 224, 238, 129 P.3d 213, rev den, 341 Or. 579 (2006) (it is not improper for a company to act to maximize its profits, nor is it improper for a company to interfere with another's economic relations "in a manner 'wholly consistent with [the company's] pursuit of its own business purposes'"; (quoting Top Service Body Shop, 283 Or at 212)).

         Third, plaintiffs point to a deposition statement by David Hampton that they characterize as an admission that Hampton would be exerting "improper" control and interference over general contractors if it told them which subcontractors to hire (which he denied that Hampton had done). Plaintiffs argue that David Hampton's statement is sufficient to create a genuine dispute of fact regarding whether "Hampton's control over its contractor's selection and use of subcontractors was contrary to industry standard," implicitly relying on statements in the case law that "perhaps" improper means can be established through evidence of violation of "an established standard of a trade or profession." Top Service Body Shop, 283 Or at 209.

         Indeed, David Hampton did state, after denying that Hampton told its contractors which subcontractors to hire, that he ...


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