355 P.3d 132
Or. Ct. App.2015Background
- Hadley (inventor) disclosed a novel "Catapult Riser" bow prototype to Extreme Technologies (BowTech) under a written nondisclosure agreement (NDA) dated Feb 23, 2005. The NDA barred use/disclosure of disclosed information and listed six exceptions, including one stating obligations cease "after two (2) years from receipt of the Information."
- Hadley alleged BowTech used his information to develop center-pivot bows; BowTech released products ~1 year 8 months after the meeting and later obtained a patent assigned to it. Hadley sued for breach of the NDA, unjust enrichment, and sought equitable relief.
- At trial the jury found contract formation and breach but answered that the breach did not cause Hadley any damages; the jury did not record how it interpreted the disputed two-year clause. The court then entered judgment for BowTech and later awarded BowTech attorney fees.
- Key contested legal question at trial: whether the two-year clause was ambiguous and, if so, whether its interpretation was a jury question. BowTech argued the clause could be read to bar liability or claims after two years; Hadley argued it was an unambiguous sunset on confidentiality/nonuse only.
- The trial court submitted the clause’s meaning to the jury as ambiguous; on appeal the court of appeals reviewed that legal determination and whether the error substantially affected Hadley’s rights under ORS 19.415.
Issues
| Issue | Hadley’s Argument | BowTech’s Argument | Held |
|---|---|---|---|
| Whether the NDA’s two‑year clause is ambiguous | The clause unambiguously sunsets BowTech’s nondisclosure/nonuse obligations after two years (so breaches during the two years remain remediable). | The clause is reasonably susceptible to an alternate meaning (e.g., that liability or the right to sue expires after two years). | The clause is unambiguous as a matter of law; it limits obligations after two years (Court reverses trial court’s ambiguity ruling). |
| Whether submitting the clause to the jury was reversible error under ORS 19.415 | Sending an implausible interpretation to the jury permitted a legally incorrect causation analysis and thus likely affected Hadley’s substantial rights. | Any error was harmless; Hadley didn’t request a special verdict and the jury found breach and never reached damages. | Error in submitting the clause to the jury likely affected the outcome; reversal is required under ORS 19.415 and case is remanded for a new trial on all issues. |
| Scope of remand (limited to damages vs. full retrial) | Hadley asked retrial limited to damages. | BowTech urged retrial on liability as well. | Full retrial on all issues; court declines to limit retrial to damages. |
| Effect of jury procedure (verdict form, jury questions) on harmlessness | Hadley argued the jury instruction and the court’s answer to juror questions linked contract interpretation to causation, increasing likelihood of harm. | BowTech argued the record (verdict form/jury answers) shows no prejudice. | Court found record shows a "some likelihood" the erroneous instruction influenced causation; claimant need not have requested special verdict form to obtain reversal. |
Key Cases Cited
- Williams v. R.J. Reynolds Tobacco Co., 351 Or. 368 (court determines contract interpretation is a question of law when clause is unambiguous)
- Purdy v. Deere & Co., 355 Or. 204 (framework for assessing whether trial error "substantially affected" a party’s rights under ORS 19.415)
- Shoup v. Wal‑Mart Stores, Inc., 335 Or. 164 (pre‑Purdy application addressing role of special verdicts in harmless‑error review)
- Timberline Equip. v. St. Paul Fire & Marine Ins. Co., 281 Or. 639 (contract interpretation as matter of law when unambiguous)
- Sunset Coatings Co. v. Dep’t of Transp., 62 Or. App. 53 (same principle on unambiguous contract terms)
- Edwards v. Merle West Medical Ctr., 147 Or. App. 71 (standard for reviewing a trial court’s ambiguity determination)
- Brown v. Bonesteele, 218 Or. 312 (authority for remanding only part of issues in appropriate circumstances)
- Klutschkowski v. PeaceHealth, 354 Or. 150 (discusses special verdicts and when absence affects appellate harmless‑error review)