336 P.3d 483
Or. Ct. App.2014Background
- Kevin Rains, a subcontractor, fell 16 feet when a defective board broke, causing paraplegia.
- Mitzi Rains asserted loss of consortium; Kevin pursued negligence and strict products liability against Stayton Builders Mart and others.
- Stayton settled partially with plaintiffs, staying in the case and maintaining indemnity/contribution claims against Weyerhaeuser.
- A jury awarded damages to Kevin and Mitzi; court reduced for Kevin’s comparative fault and entered limited judgments.
- The trial court later ruled Stayton could recover indemnity from Weyerhaeuser and Stayton’s defense costs; Weyerhaeuser appealed on multiple grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Effect of Mary Carter/high-low agreement on justiciability | Rains remained adverse; agreement left range of Stayton's liability | Agreement eliminated genuine adversity, structuring incentives to Stayton | Adversity remained; case not moot; trial could proceed with settlement terms considered |
| Admission of the Mary Carter agreement into evidence | Agreement relevant to credibility and settlement context | Insurance aspect and terms should be admitted under Grillo | Exclusion proper under OEC 411; entire agreement not admitted; no preserved alternate use |
| Application of ORS 31.710 cap to noneconomic damages | Cap should apply to Kevin’s strict products liability as a form of damages cap | Cap violates Article I, section 17 for Mitzi’s loss of consortium and treats actions differently | Cap applies to Kevin’s noneconomic damages; unconstitutional as to Mitzi's loss of consortium, affirmed on that point |
| Validity of Stayton’s indemnity judgment | Discharge element satisfied by settlement/bought peace or payment | Discharge not proven; ORCP 22 C cannot bypass discharge requirement | Indemnity judgment reversed; discharge element not proven; conditional judgment may be appropriate |
| Award of defense expenses to Stayton | Costs recoverable if incurred defending the indemnity claim and related litigation | Arguments about timing, post-verdict disputes, and appellate costs control recovery | Remanded to reduce $1,512; other defense-cost rulings sustained or left intact; overall reversal/remand as stated |
Key Cases Cited
- Grillo v. Burke’s Paint Co., 275 Or 421 (1976) (Mary Carter-like agreements; safeguards exist rather than invalidation)
- Stephens v. Bohlman, 138 Or App 381 (1996) (adversity may be extinguished in some settlements)
- Dew v. City of Scappoose, 208 Or App 121 (2006) (settlement may not moot open liability if interest remains in dispute)
- Nolan v. Mt. Bachelor, Inc., 317 Or 328 (1993) (verdict form must align with instructions; not automatically erroneous)
- Hughes v. PeaceHealth, 344 Or 142 (2008) (constitutional limits on noneconomic-damages cap in 1857-context)
- Klutschkowski v. PeaceHealth, 354 Or 150 (2013) (Article I, §17; 1857-era right-to-jury scope for damages)
- Heaton v. Ford Motor Co., 248 Or 467 (1967) (origin of strict liability in Oregon; origins vs common law)
- State ex rel Western Seed v. Campbell, 250 Or 262 (1968) (damages and product liability distinctions under early cases)
- City of Medford v. Budge-McHugh Supply Co., 91 Or App 213 (1988) (product liability and damages considerations in Oregon after 1857)
- Savelich Logging v. Preston Mill Co., 265 Or 456 (1973) (discharge element and indemnity principles)
- Kahn v. Weldin, 60 Or App 365 (1982) (ORCP 22 cross-claims; timing vs substance of indemnity)
- Freeport Investment Co. v. R. A. Gray & Co., 94 Or App 648 (1989) (ORCP 22 C; accelerated determination of contingent liability)