Union Lumber Co. v. Miller, 360 Or. 767

Background

Union Lumber sued Ron and Linda Miller (2010) for unpaid building-supply charges allegedly incurred by their son, Ean; Linda was personally served in Wisconsin.
Defendants executed powers of attorney authorizing Ean to "answer the complaint;" Ean filed an answer (signed “Ean Miller P.O.A.”) that listed a La Grande, OR address as defendants’ address.
The case was sent to court-annexed arbitration; the arbitrator and plaintiff mailed hearing notices, the arbitration award, and proposed judgment to the La Grande address listed in the answer. Neither defendants nor Ean appeared at arbitration.
Arbitrator struck the answer (because Ean was not a licensed attorney), entered an award for plaintiff, and a general judgment was entered; Ean received notice of entry of judgment mailed to the La Grande address.
After learning of the judgment, defendants obtained counsel and moved to set aside the judgment under ORCP 71 B(1) for excusable neglect and mistake, arguing (1) they reasonably relied on Ean only to file the answer and expected future notices at their Wisconsin residence, and (2) service was improper because ORCP 9(B) requires mailing to the party’s last known address (their Wisconsin home).
The trial court denied relief (finding defendants’ reliance on an unlicensed son and failure to check the case were unreasonable); the Court of Appeals reversed as to mistake based on ORCP 9(B). The Oregon Supreme Court granted review.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether defendants’ failure to defend was "excusable neglect" under ORCP 71 B(1)	Defendants were served at the address they provided in the answer; they failed to diligently protect their interests by relying on their son and not contacting the court.	They reasonably relied on Ean to file and assumed notices would reach either him or them; his failure to receive mail excused their nonappearance.	Not excusable: relying on an unlicensed son and failing to monitor the case over 11 months was unreasonable.
Whether mailing post-summons documents to the La Grande address violated ORCP 9(B) ("last known address")	The La Grande address was defendants’ last known mailing address because it was designated in the answer; plaintiff complied with ORCP 9(B) by mailing there.	The Wisconsin residence (where substituted service of summons was later perfected) was defendants’ last known address; mailing to La Grande was a service mistake requiring relief.	"Last known address" means the most recent place another party knows the person can be found/communicated with; the La Grande address qualified. No mistake by plaintiff or arbitrator.
Whether a mailing error by plaintiff or arbitrator—if any—would mandate setting aside judgment under ORCP 71 B(1)	If La Grande were not the last known address, mailing to it would be mistake and require relief.	Mailing errors deprived defendants of notice and opportunity to be heard; relief should follow.	Even if mailing were mistaken, defendants facilitated it by authorizing Ean to file an answer that listed La Grande; the trial court would not have abused its discretion in denying relief.

Key Cases Cited

Wagar v. Prudential Ins. Co., 276 Or. 827 (trial court erred in denying relief where reliance on mail-forwarding system was reasonable)
Hiatt v. Congoleum Industries, 279 Or. 569 (reasonable but unexplained failure of mail forwarding found excusable neglect)
Lowe v. Institutional Investors Trust, 270 Or. 814 (denial of relief upheld where recipient had duty to forward service and no records supported forwarding)
Newbern v. Gas-Ice Corporation, 263 Or. 250 (setting aside judgment for reasonable mistake by counsel)
McFarlane v. McFarlane, 45 Or. 360 (liberal policy favoring trials on the merits when reasonable grounds excuse default)
Federal Reserve Bank of S.F. v. Weant, 113 Or. 1 (mistake of law about parallel proceedings justified relief)
King v. Mitchell, 188 Or. 434 (trial court has no discretion to deny relief where moving party shows no fault and a clear meritorious defense)
Rogue Valley Memorial Hosp. v. Salem Ins., 265 Or. 603 (legal standards for ORCP 71 review)