Watson v. Meltzer
247 Or. App. 558
Or. Ct. App.2011Background
- Watson sold Brookdale Dodge after negotiating with Luther to form an alpha dealership.
- Meltzer at Greensley firm took over the file; withdrawal-liability issue arose post-drafting of the asset purchase agreement.
- The asset purchase agreement misrepresented withdrawal liability as $0; substantial liability ($1.9M) existed.
- Watson sought to renegotiate post-signing; Luther declined; sale closed; liability payments expected to exceed $2.9M.
- Plaintiffs sued for legal malpractice alleging negligent failure to discover the liability; defendants argued causation required but-for proof.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Causation standard for transactional malpractice? | Case-within-a-case not applicable to transactions | Causation follows but-for rule; instruction correct | Uniform 45.02 proper; but-for causation applies. |
| Preservation under ORCP 59 H? | Error preserved via particular objections | Objections insufficiently specific | Preservation satisfied; appellate review permitted. |
| Chocktoot guidance vs. transactional context? | Should be different standard for transactions | Chocktoot supports case-by-case determination | But-for causation applies consistently; not limited to litigation. |
Key Cases Cited
- Chocktoot v. Smith, 280 Or. 567 (1977) (distinguishes litigation vs. legal-malpractice causation framework on outcome.)
- Harding v. Bell, 265 Or. 202 (1973) (negligence action elements; causation required.)
- Joshi v. Providence Health Sys., 198 Or. App. 535 (2005) (but-for causation in medical negligence context.)
- Drollinger v. Mallon, 350 Or. 652 (2011) (case-within-a-case reference in litigation malpractice.)
- Stevens v. Bispham, 316 Or 221 (1993) (establishes general duty and causation framework for negligence.)