523 P.3d 142
Or. Ct. App.2022Background
- Elkside operated Osprey Point RV Resort and sold lifetime-style membership contracts (initial fee + annual dues) from 1999–2016; contracts did not specify what happens on sale.
- In April 2017 Barnett Resorts, LLC (Barnett) purchased the resort; Barnett knew of memberships, reviewed lists/contracts pre-closing, but closing documents did not list memberships as encumbrances.
- Barnett sent notices in May–June 2017 declining to honor prior memberships; plaintiffs (71 people, 56 aged 65+) sued for breach of contract, elder financial abuse (ORS 124.100/124.110), and intentional interference with economic relations (IIER).
- Plaintiffs obtained a default judgment against Elkside; claims against the Barnetts individually were dismissed separately; three claims against Barnett went to the jury.
- The jury awarded $500,000 for breach of contract and $900,000 for elder financial abuse (trebled by statute to $2.7M); IIER was found but not entered because it was pleaded in the alternative.
- On appeal the court: declined to review the denial of summary judgment (as it turned on facts); affirmed the denial of directed verdict on breach (permitting common-law servitude/covenant theory via implied amendment); reversed and remanded the elder financial abuse judgment for insufficiency of evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Reviewability of trial-court denial of summary judgment | Denial was erroneous because facts undisputed supported liability | Denial should be reviewable on appeal | Denial unreviewable post-trial because motion depended on adjudicative facts, not purely legal issues |
| Breach of contract — directed verdict | Membership rights run with the land as an equitable servitude/covenant; Barnett is bound (pleadings implicitly conformed to evidence) | Complaint did not plead covenant/servitude; insufficient evidence to show covenants run with the land | Denial of directed verdict affirmed; court treated pleadings as implicitly amended and found evidence sufficient to go to jury on common-law covenant/servitude theory |
| Elder financial abuse under ORS 124.110(1)(b) (trust‑type withholding) | Barnett acquired or stood in the place of owner and wrongfully withheld membership benefits; plaintiffs requested transfer of their property/rights | Bates controls: contractual benefits are not "money or property" acquired from plaintiffs for ORS 124.110(1)(b) purposes | Reversed: plaintiffs failed to show the statute’s first element—Barnett did not acquire plaintiffs’ money/property in the trust-like sense required by Bates |
| Elder financial abuse under ORS 124.110(1)(a) (wrongful taking/appropriation) | Barnett wrongfully appropriated plaintiffs’ property rights (conversion or improper means/motive) by excluding them | No evidence of independently wrongful means (fraud, deceit, threats, etc.) or an improper motive to specifically injure elders; business judgment about contracts is not wrongful | Reversed: plaintiffs failed to show improper means or improper motive; conversion theory rejected because conversion applies only to chattels |
| IIER (alternative claim) | IIER preserved as alternative if Barnett not bound by contracts | Barnett challenged sufficiency | Court did not reach independently because breach-of-contract ruling resolved the dispute in plaintiffs’ favor |
Key Cases Cited
- Bates v. Bankers Life & Cas. Co., 362 Or 337 (Oregon Supreme Court 2018) (ORS 124.110(1)(b) requires that the defendant have acquired ownership or control of the claimant’s money/property; contractual benefits are not the same as funds transferred)
- Church v. Woods, 190 Or App 112 (Or. Ct. App. 2003) (interpreting "wrongful" in ORS 124.110(1)(a) to require improper motive or improper means beyond mere injury)
- Hemstreet v. Spears, 282 Or 439 (Or. 1978) (conversion applies to chattels/personal property, not to rights in real property)
- Northwest Natural Gas Co. v. Chase Gardens, Inc., 328 Or 487 (Or. 1999) (to show improper purpose the actor must intend to injure the plaintiff)
- York v. Bailey, 159 Or App 341 (Or. Ct. App. 1999) (directed-verdict standard: view evidence and all reasonable inferences in light most favorable to nonmoving party)