Johnson v. Sunriver Resort Ltd. Partnership
252 Or. App. 299
| Or. Ct. App. | 2012Background
- Plaintiff sues defendant for injuries from a store incident; insurer Zurich North America received notice in 2008 and assigned to claims adjuster Lorene Smith.
- In early 2009 Smith denied liability; in 2010 plaintiff obtained new representation and warned of a complaint; CT Corporation served defendant June 11, 2010.
- Shortly after service, Zurich employees forwarded documents and arranged for defense counsel, with Spivey directing transfer to Ohara and noting the case’s litigated status.
- Ohara, an experienced claims representative, was assigned to the case but did not refer it to defense counsel within five days as procedures required.
- Default was entered July 22, 2010; defendant moved for relief from default under ORCP 71 B(1) on September 30, 2010, contending excusable neglect.
- Trial court granted relief, finding the default the result of excusable neglect; plaintiff appeals seeking reversal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the default was excusable neglect | Ohara's failure to refer to counsel was not excusable neglect due to his experience. | Multiple Zurich employees followed procedures; Ohara's later neglect was excusable neglect. | Yes; default deemed excusable neglect. |
| Burke v. Rachau applicability and standard | Burke dictates higher standard for insurer agents, making neglect inexcusably defaulting. | Burke limits to agents who assume attorney-like roles; not applicable here. | Burke does not control; standard not higher here. |
| Role of insurer employees vs. registered agent | Downstream neglect by Ohara should erase protections when others failed. | Reasonable steps by multiple personnel kept timely response; Ohara's lapse was excusable. | Yes; كال; downstream neglect does not defeat excusable neglect when others acted reasonably. |
Key Cases Cited
- Terlyuk v. Krasnogorov, 237 Or App 546 (2010) (excusable neglect framework for default relief; substantial admissible evidence standard)
- Wood v. James W. Fowler Co., 168 Or App 308 (2000) (focus on responsible person, subordinate neglect may be excusable)
- Saldivar v. Roberts, 240 Or App 371 (2011) (no excusable neglect where response ignored despite service; importance of timely action)
- Stull v. Ash Creek Estates, LLC, 187 Or App 63 (2003) (attorney's failure to respond can defeat excusable neglect unless explained)
- Mount v. Massachusetts Mut. Life Ins. Co., 103 Or App 156 (1990) (no excusable neglect where agent cannot explain handling of summons)
- Burke v. Rachau, 262 Or 323 (1972) (agent taking attorney-like actions can defeat excusable neglect defense)
- Alliance Corp. v. HBE Corp., 149 Or App 593 (1997) (lawyer forgetting to respond can be inexcusable neglect when lawyer was responsible)