Products Liability Law Daily Application of Oregon’s non-economic damages cap to loss of consortium, strict liability claims must be revisited
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Tuesday, May 31, 2016

Application of Oregon’s non-economic damages cap to loss of consortium, strict liability claims must be revisited

Application of Oregon’s non-economic damages cap to loss of consortium, strict liability claims must be revisited

By Pamela C. Maloney, J.D.

Rulings on the applicability of Oregon’s statutory cap on non-economic damages were remanded for reconsideration of parties’ assignments of errors following a recent Oregon Supreme Court ruling that the state’s constitution does not independently restrict the legislature’s ability to impose a statutory damage cap on specific claims. The manufacturer of an allegedly defective piece of lumber challenged rulings by an Oregon Court of Appeals that the statutory cap did not apply to a construction worker’s wife’s claims for loss of consortium and the construction worker challenged the application of the cap to his strict liability claim (Rains v. Stayton Builders Mart, Inc., May 26, 2016, Brewer, D.).

A construction worker and his wife brought claims for negligence, strict liability, and loss of consortium against several parties seeking damages for injuries the worker sustained when an allegedly defective board on which he had been standing broke, causing him to fall 16 feet to the ground and resulting in paraplegia. After a partial settlement agreement was reached between the couple and Stayton Builders Mart (the company that sold the board to the job site), the case proceeded to trial only on the strict liability claims against Stayton and Weyerhaeuser Company (the third-party defendant that had manufactured the board). The jury returned a verdict for the couple, awarding the worker $5,237,700 in economic damages and $3,125,000 in noneconomic damages and awarding the wife $1,012,500 in noneconomic damages. After reducing the judgment to account for the worker’s comparative fault, the trial court entered a limited judgment for the couple in the amount of $7,031,400. The trial court also determined that Stayton was entitled to indemnity from Weyerhaeuser and awarded Stayton its defense costs from Weyerhaeuser.

On appeal, the Oregon Court of Appeals ruled that the trial court erred in not applying the state’s statutory cap on noneconomic damages to the worker’s strict products liability claim against Stayton, but upheld the trial court’s determination that the cap did not apply to the loss of consortium claim. The appellate court further ruled that the trial court erred in refusing to require Stayton to discharge its liability to the couple before it could prevail on its indemnity claim against Weyerhaeuser. However, the court of appeals rejected the remainder of Weyerhaeuser’s objections to the trial court’s rulings [see Products Liability Law Daily’s August 14, 2014 analysis]. Both the couple and Weyerhaeuser petitioned the state supreme court to review the decision.

Statutory cap on non-economic damages. In their respective petitions, the couple challenged the application of the statutory cap on non-economic damages to the worker’s strict liability claims, while Weyerhaeuser challenged the decision that the cap did not apply to loss of consortium claims. The Oregon high court vacated the appellate court’s rulings on these issues in light of its 2016 decision in Horton v. OHSUIn that case which was decided after the parties in this case had briefed the issues, the Oregon Supreme Court concluded that the state constitution does not independently restrict the legislature’s ability to impose a statutory damage cap on specific claims. Thus, the parties’ assignments of error relating to the application of the statutory cap to the noneconomic damages awards were remanded to the court of appeals for reconsideration in light of the Horton decision.

Indemnity claim and defense costs. Although the court of appeals had reversed the trial court’s ruling that Stayton was entitled to indemnity, Weyerhaeuser challenged that portion of the order directing the trial court to reduce the amount of the defense costs awarded to Stayton. The trial court’s limited judgment establishing that Stayton had prevailed on its indemnity claim related to the award of attorney fees and costs in the general judgment, the court of appeals reversal of the limited judgment meant that the general judgment awarding Stayton defense costs must also be reversed, not reduced. Thus, the state high court reversed the court of appeals decision to the extent it intended for the trial court to reduce its calculation of Stayton’s defense costs and award that amount in a judgment that is immediately enforceable or to reduce its calculation of Stayton’s defense costs that would be awarded should Stayton ever establish its claim for common-law indemnification.

Effect of settlement agreement on justiciability. The Oregon high court did uphold the appellate court’s finding that the partial settlement agreement between Stayton and the couple did not render the claims against Stayton non-justiciable. Stayton still retained an interest in establishing its liability in order to prove its indemnity claim against Weyerhaeuser and Stayton also had an interest in maximizing the couple’s recovery so it could recover the maximum amount against Weyerhaeuser as part of its indemnity claim, thereby limiting its liability.

Admissibility of settlement agreement. The high court also upheld the lower courts’ rulings that the settlement agreement was not admissible. Although Weyerhaeuser argued that it should have been admitted for the purpose of showing Stayton’s bias toward the couple, thereby undermining the credibility of Stayton’s witnesses, Weyerhaeuser failed to preserve this argument, making the trial court focus exclusively on the relevance of the agreement’s insurance information. Because insurance information was not relevant to or admissible on the issue of Stayton’s fault, the trial court’s refusal to admit the agreement was proper.

The case is No. S062959.

Attorneys: Maureen Leonard (Maureen Leonard Attorney at Law) for Kevin Rains. Thomas W. Brown (Cosgrave Vergeer Kester LLP) for Stayton Builders Mart, Inc. Michael T. Garone (Schwabe Williamson & Wyatt P.C.) for Weyerhaeuser Co.

Companies: Stayton Builders Mart, Inc.; Weyerhaeuser Co.

MainStory: TopStory DamagesNews DefensesLiabilityNews BuildingConstructionNews OregonNews

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