State v. Ramos, 358 Or. 581

Background

Defendant Ramos set fire to her leased restaurant and filed a fraudulent insurance claim with Oregon Mutual.
Oregon Mutual investigated, hired counsel and private investigators/forensic experts, and ultimately denied the claim; the State charged Ramos with arson and attempted aggravated theft.
After conviction, the trial court ordered restitution under ORS 137.106 in the amount Oregon Mutual incurred (including attorney and investigator fees for the investigation and for grand jury/trial testimony).
Ramos appealed, arguing those insurer expenses were not "economic damages" recoverable as restitution because (a) civil-law limits (reasonable foreseeability) apply and (b) attorney fees/litigation costs are barred by the American Rule.
The Court of Appeals affirmed; the Oregon Supreme Court granted review to decide whether (1) restitution under ORS 137.106 is limited by civil-law foreseeability and (2) attorney fees/litigation costs may be recovered as "economic damages."
The Supreme Court affirmed: it held that reasonable foreseeability limits recoverable economic damages, but attorney fees and litigation costs can, in appropriate circumstances, be recovered as economic damages that "result from" the defendant’s criminal activity.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether ORS 137.106 requires civil-law reasonable foreseeability for "economic damages"	State: "Result from" requires but-for causation; only a narrow remoteness exclusion applies, not the civil foreseeability test	Ramos: "Economic damages" should be limited as in civil cases to damages that are reasonably foreseeable	Held: Reasonable foreseeability is a limiting concept that applies; damages must "result from" the crime and be reasonably foreseeable (factual inquiry)
Whether insurer's investigation and post-denial investigative expenses are recoverable as restitution	State: These are objectively verifiable monetary losses that "but-for" the fraud would not have been incurred	Ramos: Post-denial expenses (grand jury/trial investigation) were not reasonably foreseeable or recoverable as a matter of law	Held: Trial record supports foreseeability; court may award such expenses if they are factually reasonably foreseeable; cannot be excluded as matter of law here
Whether attorney fees and investigation costs are excluded from "economic damages" by the American Rule	State: The civil American Rule does not bar recovery here; statutory definition governs	Ramos: Attorney fees and litigation costs are not damages in civil cases and thus not recoverable as restitution	Held: The American Rule does not categorically bar recovery; attorney fees/litigation costs may be recoverable as economic damages when they result from and are reasonably foreseeable consequences of the defendant's crime
Whether restitution here exceeded permissible scope of ORS 137.106	State: Award conforms to statutory definition and causation requirements	Ramos: Award improperly included types of costs not intended by statute	Held: Affirmed — trial court did not err in awarding restitution to Oregon Mutual for the claimed investigatory and witness-related expenses

Key Cases Cited

Fazzolari v. Portland School Dist. No. 1J, 303 Or 1 (discussing foreseeability as limitation on liability in negligence)
Knepper v. Brown, 345 Or 320 (discussing but-for causation in intentional tort context)
Osborne v. Hay, 284 Or 133 (American Rule does not bar recovery of fees incurred in separate litigation with a third party)
Montara Owners Assn. v. La Noue Dev., LLC, 357 Or 333 (discussing limits on recovery of attorney fees in civil context)
Paroline v. United States, 571 U.S. _, 134 S. Ct. 1710 (proximate-cause/remoteness discussion in criminal restitution context)
Wright v. Turner, 354 Or 815 (defining proximate cause/legal sufficiency and foreseeability)
State v. Algeo, 354 Or 236 (background on restitution statutory changes)