CROUTER, Appellant, v. UNITED ADJUSTERS, INC., Respondent.
Supreme Court of Oregon
Argued April 8, reversed and remanded June 10, 1971
petition for rehearing denied July 22, 1971
485 P.2d 1208 | 259 Or. 348
CROUTER, Appellant, v. UNITED ADJUSTERS, INC., Respondent.
485 P2d 1208
Alan L. Schneider, Portland, argued the cause for respondent. With him on the brief were Keane, Haessler, Harper and Pearlman and David W. Harper, Portland.
Before MCALLISTER, Presiding Justice, and DENECKE, HOLMAN, TONGUE and HOWELL, Justices.
TONGUE, J.
This is an action for damages for what is alleged to have been a wrongful attachment of plaintiff‘s
Among the questions presented for decision are questions going to the nature and required elements of an action for damages resulting from a wrongful attachment or garnishment, as well as the sufficiency of the evidence to establish some of such required elements.
Plaintiff, before moving to Portland, had rented a house in Yakima, Washington. He described his landlady as an “eccentric” person who continually came into the house and got into arguments with his wife. He also testified that after three months he moved out, by “mutual agreement” with his landlady, but that she then refused to return a deposit of $75, although he had paid all rent due before leaving.
Several months later defendant received a letter from a corresponding collection agency in Yakima asking defendant to collect $496 from plaintiff, who then lived in Portland, on behalf of his former landlady. Defendant then sent a letter to plaintiff demanding payment of $496. Two days later plaintiff‘s wife called defendant and said that they “did not owe any money” and had left the house in “good shape.”
A week later defendant sent plaintiff another demand letter. Plaintiff and his wife then went to see an attorney who called defendant, asked for copies of the bills claimed to be due and said that plaintiff did not owe anything except perhaps a portion of a telephone bill.
Bills were then sent by defendant to plaintiff‘s attorney for a telephone bill; $161.20 for labor and
After further demand letters, after waiting for over a year without receiving either any payment or any response to such letters, and after calling plaintiff‘s attorney, who also had received no further information from plaintiff, defendant then filed a complaint against plaintiff for $496 for alleged “rental services rendered.” At the same time defendant filed an affidavit for attachment alleging that $496 was due “upon an express contract for the payment of money, to-wit; as set forth in the complaint.”1 The next day plaintiff‘s employer was served with a notice of garnishment and withheld $105.13 from his wages for payment to the court. Plaintiff‘s attorney then requested a bill of particulars, which also showed substantially the same “breakdown” of the claim as shown by the bills previously delivered to plaintiff‘s attorney. Plaintiff then filed an answer denying any indebtedness except $64.63 for telephone charges to be offset against the $75 deposit.
Before filing the complaint and affidavit for attachment defendant knew that part of the claim was for rent and telephone bills and that part was for claimed damage to the kitchen counter and desk. Defendant‘s president testified, however, that he had been told by the Yakima correspondent that it was a good and valid claim and that although it was his
Plaintiff offered testimony that the complaint filed by defendant against plaintiff was prepared in defendant‘s office by a secretary and then signed by defendant‘s attorney, who did not then know that it was an out-of-state claim or that part of the claim was for property damage and would not have signed it if he had known of such facts. Plaintiff also offered testimony that defendant filed a much higher percentage of attachments than other collection agencies and had been warned by its attorney about filing attachments on out-of-state claims because of difficulty in getting testimony from out-of-state witnesses. Defendant also encountered difficulty in securing the presence of the landlady to testify and, as a result, asked that the trial date be postponed. That request was granted, but on condition that the attachment of plaintiff‘s wages be released, which was then done.
That case later came to trial and resulted in a jury verdict and judgment in favor of Mr. Crouter (the plaintiff in this case, but defendant in that case). An appeal was then taken from the district court to the circuit court, but was dismissed. A further appeal was also taken to this court, but was also dismissed.
Plaintiff testified that the garnishment of his wages by defendant was the second such garnishment; that he was then “struggling along,” but that after that garnishment he did not have sufficient funds to pay other creditors and later had two more garnishments. Although regarded by his employer as a good
At that time plaintiff was “grossing” approximately $600 per month, not including $200 to $250 per month from week end work as a musician. He also testified that after defendant‘s attachment he tried to get an extension of credit from a finance company, but was refused. This was shortly after defendant had called the finance company to inquire about plaintiff, at which time defendant told the finance company that plaintiff owed the Yakima bills. Some months later, however, plaintiff‘s credit was renewed by the finance company, apparently to protect itself, but based also upon some apparent improvement in his credit rating at that time. Meanwhile, plaintiff had “panicked” and had assigned his wages to “Debt Reducers” to pay some of his bills.
After being discharged from his job, plaintiff went to work full time as a musician and by 1969 was again “grossing” about $600 per month, but with perhaps heavier travel and other expenses. The testimony of his earnings during 1967 and 1968 was quite indefinite. During that period, however, he also had trouble with other creditors, including support payments for children by a previous marriage and served ten days in jail for contempt of court for failure to make such payments.
The testimony to support plaintiff‘s claims of $368.40 for special damages for expenses incurred in releasing the attachment was also indefinite. $352.40 of that amount was for attorney fees, to cover plaintiff‘s visits to his attorney and his work to “set up the defense,” not including the “actual trial.”
The principal problem in this case arises from plaintiff‘s contention that this is an action for wrongful attachment and that in such an action the plaintiff is not required to prove either malice or want of probable cause. This contention is denied by defendant, which contends that there is no separate action for wrongful attachment, but that the remedies for a wrongful attachment are limited to (1) an action on the attachment bond, (2) an action for abuse of process, and (3) an action for malicious prosecution, in which malice and want of probable cause must both be proved.2
Plaintiff relies primarily upon our previous decision in Mills v. Liquidators, 206 Or 212, 288 P2d 1060 (1956), in which we said (at p 217):
“An action for wrongful attachment is in the nature of an action in trespass for conversion of personal property; ‘malice and want of probable cause are not essential elements of an action for damages for wrongful garnishment, * * *.‘”
Indeed, plaintiff‘s counsel frankly stated on argument that he must “stand or fall” on that case.3
In Mitchell v. Silver Lake Lodge, 29 Or 294, 45 P 798 (1896), plaintiff‘s complaint alleged that an attachment of his property by defendant was wrongful and without probable cause, but did not allege malice. This court reversed a judgment for plaintiff, holding (at p 304) that in an action for damages resulting from a wrongful attachment “it was necessary to allege and
Perhaps the principal reason for the adoption of such a rule in Mitchell appears from the following statement by this court in that case (at pp 296-7):
“Courts are ever open to litigants for the adjudication of their rights, and, although a party may have been induced by malice to institute an action, so long as he does not cause the arrest of the defendant, or his property to be attached, the costs awarded upon the dismissal of the proceedings are deemed by the legislative assembly suitable compensation for the injury suffered by the defendant in consequence of the action, and the law affords him no other remedy. * * * If, however, the defendant has been arrested or his property attached in an action which terminates in his favor, he has sustained a special injury, which cannot be compensated by the costs and disbursements prescribed by statute, and, if such action were instituted through malice, and prosecuted without probable cause, upon the common-law theory that wherever there is an injury there is also a remedy, the defendant may maintain an action of malicious prosecution to recover the damages sustained.”
This court subsequently approved its prior decision in Mitchell in McKinney v. Nayberger, 138 Or 203, 209, 2 P2d 1111, 6 P2d 228, 229 (1931), and Carnation Lbr. Co. v. McKenney, 224 Or 541, 544, 356 P2d 932 (1960), although Mitchell was held not applicable to those cases, which did not involve wrongful attachments. Apparently, however, Mitchell was not called to the attention of the court in Mills, although that
In Alvarez v. Retail Credit Ass‘n, 234 Or 255, 381 P2d 499 (1963), defendant, a collection agency, had levied execution on plaintiff‘s wages under a default judgment for a bill which plaintiff had denied that he owed. After that action had been dismissed and the money returned to plaintiff, he filed an action for malicious prosecution against the collection agency, alleging malice and demanding both actual and punitive damages. This court reversed a jury verdict and judgment of $1,152.45 for the plaintiff on the ground that malice had not been proved. In so holding, this court said (at p 262):
“Equal in importance to a plaintiff‘s proof of a want of probable cause in a case of this character is the necessity that he prove malice on the part of the defendant * * *.”
The court did not, however, discuss the question whether an action for “wrongful attachment” was an independent remedy in which neither malice nor probable cause are “essential elements.” No such contention was made by the plaintiff in Alvarez and the Mills case was not cited to the court.
1. After reviewing our prior decisions on this subject and after also considering the law in other jurisdictions, we reaffirm what we previously held in Mitchell and Alvarez to the effect that in an action for damages against a creditor resulting from a wrongful attachment of a debtor‘s property, both want of probable cause and malice must be pleaded and proved.4
It follows that since the first cause of action as pleaded in plaintiff‘s third amended complaint makes no attempt to allege either want of probable cause or malice, plaintiff is not entitled to recovery under that cause of action.
2. Plaintiff‘s second cause of action, however, is claimed to allege a cause of action for malicious prosecution and alleges both that the attachment was levied without probable cause and that defendant‘s conduct was malicious. Thus, contrary to defendant‘s contentions, we also hold that plaintiff‘s second cause of action sufficiently alleged a want of probable cause. Drake v. Anderson, 215 Or 291, 295, 334 P2d 477 (1959), leaving for consideration defendant‘s further contention that the evidence of lack of probable cause and malice was not sufficient to take the case to the jury.
2. Plaintiff offered sufficient evidence of want of probable cause and malice.
3. On the issue of probable cause, plaintiff offered testimony that although defendant knew that $182 of the $496 claim was for damage to the kitchen counter and to a desk in the rented house it nevertheless prepared and filed the affidavit of attachment for the entire $496 as due “upon an express contract for the payment of money, to-wit; as set forth in the complaint” and that the complaint alleged that $496 was payable for “rental services rendered.”
“An action upon a contract, expressed or implied, for the direct payment of money, * * *”
Defendant contends that there is an implied covenant in every lease that the tenant will return the premises unharmed and that
In Ruby v. Whitten, 117 Or 271, 243 P 559 (1926), we held that attachment will not lie under the provisions of this statute for damages claimed for breach of a lease covenant requiring defendant to return the premises in good condition, based upon the law as “settled” by Neilson v. Title Guaranty & Surety Co., 101 Or 262, 199 P 948 (1921). In Neilson, although not involving a lease covenant, it was held (at p 274) that attachment is only proper to recover upon “an actual and bona fide debt” and that a “debt” must be liquidated in amount. In State ex rel Bethke v. Bain, 193 Or 688, 240 P2d 958 (1952), the most recent of the cases cited by defendant in support of its contention that attachments will lie on implied contracts, the claim involved was not for failure of a tenant to return premises in good condition and this court specifically noted (at p 701) that “In the instant case no uncertainty exists as to the amount of money plaintiff
It follows, under the undisputed evidence and as a matter of law,7 that since a substantial portion of defendant‘s claim was for damages to the premises, an unliquidated claim, defendant did not have probable cause for the issuance of the attachment in the total sum of $496.
Defendant also contends that since the amount actually attached (the sum of $105.43) was less than the amount of that portion of the claim which was properly subject to attachment (the sum of $314), the attachment is not invalid because it “joined” an additional claim for damages that was not subject to attachment. In support of that contention defendant cites cases holding that the joinder in a complaint of a cause of action upon which an attachment will lie with a cause of action upon which an attachment will not lie will not invalidate an attachment issued for the amount claimed under the first cause of action. See Stotland v. Mobile Homes Engineering Corp., 197 Cal App 2d 815, 17 Cal Rptr 591, 594 (DC App 1962). See also Samuels v. Superior Court of Los Angeles County, 276 Cal App 2d 264, 81 Cal Rptr 216 (CA 1969), and Bradford v. Eden, 47 Misc 2d 482, 262 NYS2d 788 (Sup Ct App Div 1965).
4. But where, as in this case, the affidavit of attachment stated a single claim for an amount which, in fact, consisted in part of a claim for damages not
Although this court has not previously decided this question, we adopt the rule as stated in these cases as consistent with the established policy of this court that strict compliance with the attachment statutes must be pleaded and proved. Banker‘s Discount Corp. v. Noe, 116 Or 570, 577, 242 P 610 (1926). Accordingly, we hold that not only did defendant have no probable cause for issuance of the attachment, but that the attachment was invalid.
5. It does not follow, however, that the lack of probable cause was of itself sufficient evidence from which the jury could properly infer that defendant acted with malice in the attachment of plaintiff‘s wages. Alvarez v. Retail Credit Association, supra, (at 264). Nevertheless, as stated in Alvarez (at p 264):
“* * * What the courts have said, however, is that the law will permit the jury to draw an inference of malice in most cases where a want of probable cause is found.”
See also Prosser, Torts (3d ed) 868, § 113, and 1 Harper and James, The Law of Torts 321-322, § 4.6, and cases cited therein.
In Alvarez we also said (at p 266) that in an action for malicious prosecution in the bringing of a
“Had there been in the case before us some evidence of wanton or reckless failure to exercise any care in learning the facts, or evidence of some oppressive and flagrant disregard for the rights of Alvarez, there might have been some justification for submitting the issue of malice to the jury. * * * ”
6. In this case, there was evidence on the issue of malice in addition to the fact that defendant knew that a substantial part of the claim was for damages to the rented premises and had not probable cause for issuance of the attachment for $496. Thus, there was evidence that the complaint and affidavit for attachment in this case were prepared by a secretary in defendant‘s office and were then signed by defendant‘s attorney in a perfunctory manner, without any reliable knowledge of the facts, and that if he had known the facts he would not have approved these documents. These documents included an affidavit that the entire $496 was owed under an “express contract for the payment of money,” which was not true, and a complaint alleging that the $496 was for “rental services rendered,” which was a statement of dubious veracity, to say the least. In fairness to present counsel, it should be noted that the attorneys who represented defendant in the attachment proceedings were not the same as those who represent defendant in this case.
We hold that from the evidence in this case the jury could have properly found that defendant was guilty of “wanton or reckless failure to exercise any care in learning the facts,” as well as an “oppressive
3. Plaintiff‘s claim of general, special and punitive damages.
In Carnation Lbr. Co. v. McKenney, 224 Or 541, 356 P2d 932 (1960), also an action for malicious prosecution, this court reaffirmed the rule that exemplary or punitive damages are not recoverable in the absence of proof of actual damages and held that this rule is also applicable in an action for malicious prosecution, contrary to the rule in some jurisdictions.8
Indeed, the effect of that decision was to adopt (at p 545) the rule of those jurisdictions which hold that there can be no recovery in an action for malicious prosecution in the absence of either some special damage to a defendant or some interference with his person or property.
Later, in Alvarez v. Retail Credit Association, supra (at 259), we also distinguished that case on this question by pointing out that:
“* * * In due course, execution was levied upon Alvarez’ wages. The case at bar is thus taken out
7. The effect of such a rule is that when there has been interference with the property of a plaintiff by a wrongful attachment, and the other elements of an action for malicious prosecution have been proved, plaintiff is entitled to have his case submitted to the jury for an award of punitive damages without pleading or proof of special damages for the reason that the law assumes that some actual damage necessarily follows from an attachment of plaintiff‘s property.9
8. In this case, of course, there was such an interference with the property of the plaintiff by wrongful attachment of $105.13 in wages, resulting at the least in his loss of use of that amount for a period of seven months until the attachment was dissolved. Thus, since there was also sufficient evidence of lack of probable cause and malice, plaintiff was entitled to have the case submitted to the jury, under proper instructions, on the issue of what, if any, punitive damages should be awarded.10
It does not follow, however, under the evidence in this case that plaintiff was also entitled to have submitted to the jury his claims for $376.40 in special damages and $15,000 for general damages.
9. Of the claim of $376.40 for special damages,
10. Plaintiff‘s next claim, for $15,000 in general damages, includes claims for alleged injury to credit reputation and general reputation and termination of employment. Plaintiff‘s evidence in support of his claim of injury to his credit reputation and general reputation was clearly insufficient. Only six months before this attachment plaintiff‘s wages had been garnished by another collection agency. Also, his credit had been rated at the time of this second attachment as only “poor” to “good” by the loan company with which he did business and did not subsequently fall to any substantially lower rating. He had also twice previously been required to appear in court for nonpayment of child support obligations.
Finally, on this issue, plaintiff‘s evidence was also insufficient to prove that the termination of his employment and the “elimination” of his opportunities for advancement were caused by defendant‘s attachment of his wages. He was not discharged for more than a year and one-half after defendant‘s attachment of his wages and after two subsequent wage garnishments. Also, while it is true that his employer had a general policy of discharging employees after four wage garnishments, the decision to terminate any particular employee was “discretionary” and plaintiff‘s employment record showed that he was discharged because of his inability “to perform work satisfactorily because of constant financial obligations, garnishments, etc.” During the interval between defendant‘s attachment and plaintiff‘s discharge he was also brought into court twice more on charges of nonsupport and spent ten days in jail for contempt of court.
Under these facts we hold that while the attachment of plaintiff‘s wages in October 1966 may have contributed to a deterioration in plaintiff‘s “paying habits,” as he contends on this appeal, it was too remote, both in point of time and otherwise, to be prop
It follows that under the record in this case plaintiff was not entitled to have his claims of either special or general damages submitted to the jury. For reasons previously stated, however, we hold that because of the wrongful attachment of his wages plaintiff was entitled to have his claim to punitive damages submitted to the jury.11
4. Defendant is entitled to a new trial because of errors recognized in the order granting a new trial.
Plaintiff also contends that the trial court erred in its alternative order for a new trial, which was entered because the trial court held that it had erred in not withdrawing from the jury plaintiff‘s claim of general damages for alleged termination of employment and “elimination” of his opportunities for advancement and also in instructing the jury, in effect, that when there has been an attachment which was proper in itself, but the ultimate verdict on the merits of the case has been against the party obtaining the attachment, such an attachment must then be considered as having been wrongful as a matter of law.
For reasons previously stated, the trial court erred in not withdrawing from the jury plaintiff‘s claim of damages for alleged termination of employ
Similarly, for the reason (as previously stated) that want of probable cause for the attachment is a necessary element in such an action, it also follows that the trial court erred in giving an instruction which had the effect of eliminating any such requirement.13
For all of these reasons, we hold that the trial court did not err in its alternative order for a new trial, but that it was error for the trial court to enter judgment for defendant and against plaintiff.14
Reversed and remanded for new trial.
HOLMAN, J., dissenting.
The majority opinion states that
“It follows, under the undisputed evidence and as a matter of law, that since a substantial portion of defendant‘s claim was for damages to the premises, an unliquidated claim, defendant did not have probable cause for the issuance of the attachment in the total sum of $496.”
I will grant that there was not probable cause for the issuance of an attachment in the total sum of
The only basis for holding that defendant should be responsible in damages is that the protection of the public from wrongful attachments requires the attachment statutes to be construed so strictly that, upon the inclusion of an item for which there is no probable cause, not only is the attachment held invalid, but damage is presumed regardless of whether such inclusion can be shown to have caused any actual harm. This flies in the face of the almost universally recognized rule that in malicious prosecution cases arising out of civil proceedings, it is necessary to show that actual damages are caused. Prosser, Torts 875, § 114 (3d ed 1964). The majority opinion has illustrated that the only actual damage which plaintiff suffered was the loss of the use of the attached sum of $105.13. The attachment of this amount did not result from the inclusion of the improper additional amount in the affidavit. As stated before, had it been left out, the result would have been the same.
I would affirm the judgment of the trial court.
Notes
“In this case it seems that Morrison was liable to Crawford for a sum of money at the time of the levying of the first attachment, which was due and ought to have been paid. Crawford, by mistake, either of fact or law, committed some error in the first proceeding, which made his attachment a nullity and made him a trespasser in taking the goods. He then became liable to Morrison for a conversion of the goods, and to pay him their value. Morrison had his option either to claim the specific property and replevin the goods, or to insist on a conversion and bring trover or trespass.”
In Morrison v. Crawford, supra note 3, however, the attachment was not made upon property of the wrong person, but apparently had been dissolved as a void attachment. Thus, the appropriateness of the remedy of conversion in such a case was apparently not in issue, but only the right of the defendant to mitigation of damages or setoff as the result of a subsequent valid attachment.