*1 Arguеd January 20, and submitted Court of affirmed and trial court reversed 22, 1987 September al,
DUYCK et Review, Petitioners TUALATIN VALLEY DISTRICT, IRRIGATION Respondent on Review.
(TC 41-164; A32381; S33201) CA SC
Alfred the cause respondent on review. Peterson, Linde, Justice, Lent, Campbell,
Before Chief *2 Jones, Carson and Justices.
PETERSON, C. J. J., an Campbell, opinion. dissented and filed PETERSON, C. J. brought defendant against
The
this action
(TVID)
Valley Irrigation
alleging
Tualatin
District
negligently misrepresented
availability
irrigation
TVID
TVID
negligently
water
failed warn the
growing
that water would not be available for the 1978
season.
jury
returned a verdict in
On the
plaintiffs.
favor
appeal,
plain-
the Court of
held that the
tiffs’ аction was barred
the statute of limitations
Dist.,
Duyck
Valley Irrigation
reversed.
v. Tualatin
80 Or App
Appeals.
that the irrigation system completed would (June growing through season The August). Bureau Recla- expected system mation irrigation transfer TVID for operation February 1, interim of the project beginning 1978. TVID, May several newsletters and May between they expect told its members that could to receive water Reclamation, The between contract TVID and the Bureau of which was approved by district, provisions all the individual members of the contained holding any government the United States harmless for failure to water. deliver by-laws provision
TVID’s contain a states: similar duty “The shall district be under no and shall not be held liable for failure to during irrigаtion deliver water season when such failure occurs from a defi- ciency any beyond of water or from causes the control district.” other argued The defendant has not this or the Court that this before court provision plaintiffs’ negligence bars the claim. in touch kept The also plaintiffs service about June 1978. Torvend, their manager, Palmer to insure with TVID’s were based on an accurate crop final choice determinations occa- supplies. available water On numerous estimation of May 1978, plaintiffs Torvend assured the April sions 1,1978. Torvend, how- they would receive water June not be com- ever, that he knew that Unit Four would testified fall, May At as early 1978. least until late summer or pleted completed in knew that Unit Four would not be Torvend season, gave he no indication growing for the 1978 but time completion date or otherwise that Unit Four’s the newsletter units, date of other June projected be later than the 1978. be available for irrigation water would
Believing season, May 1978, plaintiffs planted growing the 1978 beans” on the on the Gun Club Farm and “290 Romano beans nor neces- water was neither available Gregg Irrigation Farm. However, even- sary crops. crops these plant these unavailability irrigation tually as a result of the damaged anticipated at the time. strawberry crop planned on also had required irrigation Farm, planting of which Gregg for the straw- pipeline Four branch irrigation water. The Unit Farm suffered substan- Gregg and the beans on berries 28,1978. knew May tial leak or a “blowout” not be available from TVID for point at this that water would con- They may incorrectly Farm June that, blowout, have arrived on water would cluded but May uncontradicted that even had the 1. The evidence is occurred, delivered water would not have been 28 leak not until late summer. they had believed that commit-
Because the strawberries, with cannery grow proceeded ments to They strawberry after the blowout occurred. planting pond as an alternate pеrmission neighbor’s to use obtained *4 30,1978, incurred costs May the plaintiffs source of water. On including neighbor’s pond, water from the transferring the system. On to install and labor pump, pipes costs for strawberries. planting commenced 2,1978, plaintiffs June not be water would plaintiffs believed that By mid-June the first week of weeks. In the at least two additional available for permission neigh- from a second July plaintiffs obtained resupply from the first pond bor to water a second pump inadequate alternative sources of water were pond. These crops. to the The beans prevent significant damage began summer early by the end of the damage July; show strawberry рlanting proved nearly complete to be failure. ponds from until plaintiffs pumped neighbors’ The water finally early from TVID in plaintiffs received water August Farm.
When water from irrigate no was available TVID to beans, plaintiffs up the Gun Club Farm tilled half first plantings planting made another beans at the end of July 24, June. TVID water arrived at the Gun Club Farm on plantings 1978. the first Although damaged water, lack of the third in a planting crop. resulted good plaintiffs
The filed this action on June complaint Their theory contained and a contract recovery. plaintiffs alleged The negli- the defendant represented gently that irrigation water would be available to their farms for growing the 1978 sеason and that the defen- dant negligently failed to warn plaintiffs might that water not be available. The alleged also that TVID was in breach of contract failure to 1,1978. deliver water The defendant asked for summary and received judgment on contract claim.2
On negligence claims, the defendant contended the claim was not filed within the two-year statute 30.275(8). limitations of ORS The trial court denied summary motions for judgment and for a directed verdict the negligence claims. The trial court also refused present the statute of jury, stating limitations issue to the that “reasonable people disagree my could not if followed * * * begins is, instructions as to when the harm it 1, suprа. See The note trial court concluded that the was “entitled to defendant * * * partial summary judgment exculpatory provision because of the of the defendant by-laws district’s and the uncontroverted fact no that defendant had control over question.” project argued at the time in has court defendant not before this Appeals provision plaintiffs’ negligence the Court that this bars the claim. cross-appeal ruling. did from this The Court of ruled against cross-appeal, App on the them at and the petitioned ruling. review of that *5 156 * * timely jury filed *.” The returned verdict
was plaintiffs. reversed, holding
The Court of App agreed was 80 Or at 608. That court action time-barred. latest, plaintiffs’ contention that “at the with the defendant’s irrigation system early for the alternative in arrangement June, 1978, years than two before the action was more the statute.” Id. at 606. running initiated the brought, II tried, upon rely, and the case was 552(1) liability described in section of the Restate- theory (Second) (1977),3 provides: Torts which ment
“(1) who, business, profession in the course of his or One any employment, or in in which he has a other transaction interest, supplies guidance pecuniary false information for the transactions, subject liability in of others their business is to pecuniary justifiable them their reliance loss caused to information, if upon fails exercise reasonable care or he to competence obtaining communicating in or information.” yet tort of recognize “negligent
This court has to below, and we do not do so misrepresentation,” as will be seen herein, we case the statute of limitations because decide the on question to be issue. We deem the statute limitations issue, shall assume the purpose, threshold this we so, in to Oregon. such a tort in Even order decide existence of issue, necessary nature it is to examine the tort in Section determine whether the tort defined Restatement 552(1) or in deceit. arises for economic case involves claim
This
why
parties
a claim
should
do not elaborate as to
such
should or
We note that
recognized
Oregon;
arguments
their
this issue to
rather
devote
not be
plaintiff
pleaded
proved
in the
has
the elements stated
Restatement
whether the
be,
(1977).
not,
purport
(Second) Torts,
is
nor does it
section 552
Restatement
Erwin,
12, 600
435, 455
Brewer v.
any
n
P2d
287 Or
the law of this state or
other state.
independent
(1979).
to the Restatement does not “substitute for
an
Mere reference
make,
make,
presentation
analysis
defendants liable
the elements that
or should
theory
liability
law,
Oregon
elements to
under
when the relevance ofsomeofthe
Fought,
v.
National Bank
open question
this state.” U.S.
an
(1981) (Linde, J., concurring).
P2d 337
upon rep-
allegedly
loss
sustained from
reliance
plain-
negligently
resentations
made
the defendant
long
had
though
English
tiffs.
courts
England,
recognized
negligence,
the forms
action of deceit and
Lords,
House of
held that an action for deceit could
by a
plaintiff
not be
had been induced
maintained
who
enter
into a
or
venture
disfavorable commercial
financial
relied
unless
false statement
which the
(3)
“(1)
truth,
made
belief in its
knowingly,
without
Peek,
recklessly,
Derry
careless whether it be true or false.”
14 App
According
Prosser,
Cas
the English
*6
that,
fiduciary
rule was
“in the
of some
relation
absence
remedy
between the parties,
merely negligent
there was no
for
believed,
misreрresentation,
honestly
where the harm that
Prosser,
loss,”
resulted to the
only pecuniary
was
Parties,
Misrepresentations
231,
L
Third
19 Vand Rev
(footnote
omitted).
The best known statement
for
lia-
recognizing
bility for economic
arising
misrepresen-
loss
from negligent
causing only
tation
appears in
economic loss
Ultramares
Touche,
170,174
441,
(1931).
255 NY
NE
York
Glanzer v.
Shepard, 233 NY
135 NE
(1922),
ALR 1425
public weigher
which a
of beans was held
—
buyer
liable to a
for an
weight
erroneous
statement
even
—
though the
was
weighing
at the seller’s
request
because
weight
weigher
buyеr
rely
knew that
state-
The Ultramares
on the
distinguished
ment.
court
Glanzer
ground
weight
“primarily”
statement was
buyer,
benefit
while the audit statement
Ultramares
“incidently”
parties.
for the use of third
many
Today
recognize
American courts
the tort of
scope
recovery for eco-
negligent misrepresentation, but the
recovery
limit
widely.
nomic loss varies
The New York courts
in which the nexus between the
is direct or
parties
to cases
Co.,
Corp.
close. Credit Alliance
v. Arthur Anderson &
65 NY
(1985) (“there
2d
2d
493 NYS
Oregon permits
deceit, a
must more
clear that to be held liable for
defendant
“merely
deceiving”
plaintiff;
plain
negligent
than
“intended to
plead
prove
tiff must
the defendant
in reckless
for the truth.”
disregard
deceive the victim acted
Riley
Tandy Corporation,
Hill General Contractor v.
*7
(1987).
P2d
Accord U.S. National Bank v.
737
595
201,
(1981);
Umpqua
Or
P2d
Dizick v.
Fought, 291
630
337
303,
(1979);
P2d 444
Bausch v.
Community College, 287 Or
599
Lentz,
376,
(1975);
v.
Myers,
Or
to 30.300. The statute of limitations is ORS 30.275(3) (1980). ORS 30.275 has been amended significantly 30.275(3) since 1980. See Or Laws ch 1. ORS § (1980) provided at the time that this case was filed: “No action * ** shall maintained unless the action is commenced years within two after date of such accident or occur- rence.”5 12.110(1) provides: ORS assault, battery, imprisonment, any injury “An action for false or for
person
rights
another,
contract,
arising
especially
not
enumerated
chapter,
provided,
years;
in this
shall be commenced within two
that in an action
deceit,
at law based
fraud or
the limitation shall be deemed to commence
only
discovery
from the
fraud
or deceit.”
actions,
We have stated
fraud
deceit
the statute of limitations does not
known,
begin
plaintiff
run until
should have
in the exercise of reasonable
See,
diligеnce,
e.g.,
Hoeck,
that the
defendant’s conduct was tortious.
Mathias v.
539, 544,588
(“defendant
(1978)
P2d 1
no evidence to show that
offer[ed]
diligence”);
could have discovered this fraud
the exercise
Forest Grove
of reasonable
Strickland,
86-87,
(remanded
(1977)
Brick v.
Moreover, the Restatement itself states that negligence. The first of Commеnt a to claim is sentence in this 552 states that “the rule stated Section is based Section failing negligence of the actor in to exercise reasonable * * competence supplying care direct information or choosing negli courts, between deceit Other gence, negligence of limitations is held that statute applicable Romero, standard. Hall v. 141Ariz 1984) question (App There, P2d is illustrative. representations plaintiffs’ negligent claim was whether governed negligence fraud of limitations. The or statute negligence limitations Arizona court held that statute of applied, reasoning Ariz on similar to that set forth above. 141 123, 126. at stated, asserted, here, in
As have not 12.110(1), Appeals court, in the or trial ORS Court damage applies. Though limitations, the deceit statute of misrepresen- misrepresentation negligent claim for involves a theory recovery tation, is in we believe that rather than deceit. incapacity.”
or other 30.275(8), which Tort Claims Act The Court of cited ORS current It was at the time the filed their action. statute of limitations. effect 30.275(8) provides: ORS escape] “Except provided 12.120 and 12.135 [action as ORS [action construction, property], repair improvement real from alteration or any provision chapter notwithstanding 12 or other statute but other of ORS action, arising providing an from a limitation on the commencement an action body officer, public employe agent any public of a an or act omission body scope to 30.300 shall be commenced within within the ORS 30.260 years alleged injury.” after the loss or 30.275(8) express opinion application the facts of the of ORS We no as to case. *9 IV then, When does begin the statute of limitations to 30.275(3) (1980)? run under requires ORS statute years action be commenced “within after the date of accident or In occurrence.” Dowers Farms v. Lake [the] County, 669, 680-81, (1981),
288 Or P2d 1361 we stated past our first logic interpretations of of the clause of 12.110(1) 30.275(3) equally (1980). to applicable ORS is ORS
Normally, a
a
stаtute of limitations
tort action
begins to run
instant
the claim cause of action accrues.
party
A cause of action accrues when
it
owning
right
has a
Aurelia,
(1904).
to sue on it. The
45 Or
“
necessary
is
what is
consider
meant
a cause of
‘[I]t
every
action.
the best known definition it
consists
fact
necessary
plaintiff
which it
versed,
prove,,
would
if
tra-
support
right
judgment.
order to
When
his
these
* * *,
facts have occurred
a cause
action is said to accrue to
plaintiff
the
tively.’
prosecute
he
because
can then
an
effec-
action
”
Ferris,
783,
See also
Or
Jaquith
788,
But we have recognized heretofore a number of situa- tions in which statute begin of limitations does run. They include these: plaintiff identity
1. The is unaware of the of the Police, v. Oregon tort-feasor. Adams State (1980), P2d 1153 held that the statute of limitations does not begin plaintiff to run a opportunity “until has reasonable * * * * * identity party responsible discover plaintiff
2. The
is unaware of injury. Dowers Farms
supra,
680-81,
v. Lake
County,
288 Or at
is such
case. The
there
negligent application
issue
was whether
claim for
of an
upon
adjacent county
herbicide
an
road ran
the date
from
application or the date “the plaintiff discovered that
potato
681.
young
plants
deformed.” 288 Or at
We held
the statute
limitations does not
to run until
begin
(It
discovery
important
of harm.
is
to note
did not hold
that we
plaintiff
began
that the statute of limitations
to run when the
spraying
or should have known that the
was the
knew
cause
Farms,
though expressed
harm. Dowers
in terms
“harm
—
defendant,” really
knowledge
caused
is Class 2
— case.)
injury
is unaware of the
his
injury.
3. The
cause of
(1978),
is
Corp.,
Schiele v. Hobart
Or
On June knew availability representations regarding defendant’s they predicament into a in which placed water had them may It needed an alternative source of water. been clear to whether the defendant was at “fault” them date available. incorrect forecast of the that water would be (This key pleaded factor had the might have been claim.) nonetheless, existed, a causal link deceit There damages and the defendant’s conduct. plaintiffs’ between the by money plaintiffs, expended June had representations, the defendant’s which were upon reliance terms, In for” the known to untrue. law sсhool “but then plaintiffs’ reliance representations defendant’s and the thereon, damages on not have incurred 1, 1978, the On June knew availability representations regarding “misrepresentations,” i.e., water were assertions not in (5th Dictionary facts, accordance with the Black’s Law ed 1979) they and that had a loss caused to them their reliance misrepresentations, they on the defendant’s might for which then damage have filed a action. Co.,
Bollam v. Fireman’s Fund Insurance
Jacquith
supra, support
Ferris,
ing
legal
liability through
incurred
fees and excess
negligent handling
against
defendant insurer’s
of a claim
them.
held that the
We
claim accrued
when
defendant’s conduct caused harm and resulted in
plaintiffs through
expenditure
legal
fees to defend a
*11
against
point
claim
them.
resulting from their reliance mation, they not had determine whether to sue or within statutory the period, precisely judgment the “which is same tort claimants must make.” United States v. other Kubrick, 111, 124,100 352, 62 L US S Ct Ed 2d 259 States, (9th 1981). 328, 331 F2d Cir Accord Davis v. United plaintiffs the made an incorrect determina initially Even if available, no why tion water was not there “is sound reason visiting сonsequences the such error on the defendant claim” the the until the are oth delaying accrual of as informed or make correct determination to the erwise Kubrick, 444 (incompetent of a claim. See US at 124 existence to the existence of claim does not toll or mistaken advice as statute). not await Accrual of claim does knowledge negligence. Accrual occurs with awareness plaintiffs’ facts to the claim. The claim was com giving rise brought early and their action could have been plete filing years more than two before date 30.275(3) (1980). complaint. ORS
V espoused by final argument, which is dissent, separate claims for and that there is no statute of limitations issue two farms plaintiffs argue Club Farm. The respect with Gun for the Gun Club Farm accrued later than that for claims temporary because the source of water was Gregg Farm not not for the Gun Club Farm and that water was used July argu on that farm until reject needed We parcels had but one claim. That different ment. involved, or did need property parcels that other time, result separate water until later did not in either causes suspension of the statute of limitations as to of action parcels Gregg other than the Farm.
True, separate them as two pleaded being them objected claims and thе defendants never Nevertheless, as claims. the claims that pleaded separate two farms are based plaintiff pleaded both misrepresentations or failure to warn negligent is, season. That the same tortious act growing before the 1978 damage first in to the Farm and then or acts resulted A as the Gun Club Farm. separate parcel of land known *12 arose acts or when claim from these omissions damages Gregg incurred for alternate sources of water on the Farm, despite the that the full damages fact extent from yet known, defendants acts or omissions was not or that damages would from the on a separate par result samе cause act may cel of land. The same or acts cause to more damage property points than one item of at two distinct time. Sim for ply splitting omitting damages prop claim or a claim point at an erty occurring earlier in time will not suffice the effect of avoid the statute limitations. To do so would be mix “two concepts, discrete the occurrence of harm and the Ferris, damages.” extent of Jacquith supra, See v. atOr Co., Consistent 788. with Bollam v. Fund Fireman’s Insurance above, discussed we have consistently stated that “[i]t immaterial the extent of could not be deter mined at the time determining when [tort]” statute of limitation commenced to run. Industrial Co. Plating North, v. quoted P2d 835 in Jac Ferris, quith supra, 297 at 788.
The decision of the Court of Appeals is affirmed. The trial court is reversed.
CAMPBELL, J., dissenting. I original dissent. The complaint this case filed on June purposes this dissent it is year assumed that a two statute applies of limitations and that recognizes Oregon misrepresentation the tort of negligent (Second) Torts, under Restatement § plaintiffs’ The third complaint amended contains two causes action and each cause contains two counts. This concerns only review the second count of each cause of action alleges which that the defendant a negligent acted in manner оne more of the following particulars:
“(1) representing irrigation water plaintiffs’ crops available for growing knew, when season defendant or in the exercise of reasonable care, irrigation should have known would not be available.
“(2) In failing irrigation warn water for crops might not be available.”
The alleges first cause the Gun damages on Club farm on the Farm. alleges damages Gregg the second cause apart. farms are more than one mile Gun Club farm is two and the Farm is 112 acres. The 39 acres size Four of farms are served different branches Unit system. April 18, 1978, the irrigation On defen- *13 plaintiffs by “Pipeline may dant informed the mail: users 1978, 1, a expect to receive water service about June with testimony of the trial there was interruption.” minimum At irrigation Gregg the water was needed on the Farm on the Farm on of July.1 first of June and on the Gun Club the first points out, As the on majority May sub- in the irrigation pipeline stantial leak “blowout” occurred Gregg By which served the Farm. June 2nd the pond irrigate from pumping neighbor’s started water the Farm. crops Gregg expenditure on the This involved an of and Later pump, pipes costs for labor. the neighbor’s from required pump pond. water a second None ponds from pumped neighbors’ of the water was used to It crops on the Gun Farm. not until the irrigate Club was plaintiffs plowed up end of June that the one-half bean and on Gun Club Farm it.2 crop replanted $17,273.74 awarded jury $59,255.78 damages first cause for to the Gun Club Farm and damages on the second cause for to the Farm. summary of the and pleadings From the above (1) this writer reaches two conclusions: The two causes facts apart are and from each and the harm separate of action other causes; complained of did not occur at the same time in both 1 Duyck, Lloyd plaintiffs, one of the testified: property “On Gun we did need water and had not asked for it and Club not approximately July Gregg place until 1. On we would not needed it * * May, possible gotten if it were *. like to have around the 20th Definitely I had it should have been available no reason believe that just approximately like it was stated.” crop damages. They plaintiffs only sought did not to recover for seek to expenditures pump associated with it. Nor did ask to recover the cost up crop. Judge See repaid plowing the cost Newman’s dissent be bean Dist., Duyck Valley Irrigation App v. Tualatin Appeals, 80 Or Court of analysis support Judge this case is correct. Instead of P2d 1043 Newman’s cause, majority ing Judge losing has elected to show that Newman his this writer wrong particular theory under its own of when causes of in this court is in this case accrued. action in both and, (2) bеgan when the of limitations to run statute should remanded questions causes are of fact the case trial to the court for retrial.3 669, 680, 607 County,
In Dowers v. Lake 288 Or Farms (1980), P2d 1316 we said: legislative history legisla- us
“There is no to tell that the apply respect ture intended the courts to different rules with period fixing point in time when the limitations com- mences to run in of action for causes under the Tort Act than in causes Claims such outside the Act. We had occasion to discuss some detail the time from period which the limitation run in should commence to Davies, Nat’l such a cause in U.S. 666-668, Bank v. that ‘in negli- P2d 966 concluded
gence case the
statute
limitations should never start to run
until
ocсurrence
the harm.’ 274
at 668. We went on
aware,
to hold that the
occurred
harm
when the
was
aware,
or should have been
that the
harm
caused
added;
omitted.)
(Emphasis
footnote
defendant”
question
There is a
of fact in
case
this
as to when the
*14
plaintiffs
aware,
aware,
were
been
should have
the
had
crops
Gregg
harm
occurred to the
on the
Farm
of
because
the
alleged negligent misrepresentations.
opinion in
majority
question
effect concedes that
there is a
of
fact. In
at
it is stated: “They [plaintiffs] may have
incorrectly
that,
blowout,
concluded
but for the
water would
* *
arrived
By
on June 1.
*.
mid-June
believed that water
would
bе available for at least
majority
additional weeks.” Then the
in
Reasonable could have drawn different inferences reached different conclusions as to when aware, aware, should have been negligent misrepresentation causing damage defendants’ was crop Gregg on Farm. While in the normal out, majority points present the trial As court refused the statute question jury. limitаtions to the events, might gained by knowledge
course of such have been 1,1978, June because when that was water was unavailable, needed “blowout” masked defen- responsibility in this case until dant’s later.
Likewise, jurors reasonable could have drawn differ- different ent inferences reached conclusions as when majority the harm first occurred on the Gun farm. If the Club is holding expense obtaining supply that the an alternate Farm, triggered running of the statute on the should follow the statute on the triggered then it Gun expense up farm the first one-half of the plowing Club crop. jury bean A reasonable could reach a conclusion that the 18,1978. after act occurred For these reasons both causes should be remanded to as the proper running the trial court retrial instructions statute of limitations.