*1 affirmed, Argued submitted March decision of Court of part, of the circuit court affirmed reversed and remanded 9, 1990 August (Buck) A. R. HONEYWELL Honeywell, Sally Review, Petitioners on CO., STERLING FURNITURE Furniture, Fine dba M. Jacobs Respondent on Review.
(TC 16-87-09481; A50296; S36688) CA SC *2 Gary Albany, argued Norman, E. the cause and filed the petition petitioners behalf on review. Eugene, argued Moore,
Bruce C. the cause on behalf of respondent on review. Peterson,
Before Justice, Chief Carson, Jones,** Fadeley, Gillette, Hoomissen, Van Unis, Justices. GILLETTE, J. part part Unis, J., concurred in and dissented in and filed opinion.
an ** Jones, J., resigned April 30,1990.
GILLETTE, J. concern how much a questions this case an concerning should be told to whom distribution of plain- be made1 and whether will attorney’s a jury’s tiffs share attorney fees may be used a court’s award of to offset plaintiff may Oregon Trade Prac- receive under the Unlawful (UTPA). nothing tices Act hold that a should be told We concerning punitive damages, the distribution of an award of and that no of such used offset under the UTPA. otherwise awardable
FACTS 1979, plaintiffs dining In a new room July, purchased plan. family Because of “layaway” set from defendant on made their employment problems, illnesses not finish monthly payments only sporadically, pay- and did August, Throughout room set until 1987. ing dining period, parties expected plain- eight-year this entire both and take eventually paying finish the furniture tiffs would home. it *3 however, defendant
Upon completion payment, of the furniture. Instead of the furniture ordered wrong delivered shopworn table substituted used or by plaintiffs, defendant by quality Testimony and chairs. cheaper and much lower of plain- revealed that most employees former of defendant years and this missing tiffs’ furniture had been for number employees. and well to defendant fact was known by other was made defendant’s decision to substitute furniture owner. 1987, required by Laws Ch is Distribution of an award of 27, (effective 1987), September which now codified as ORS 18.540 section
provides: punitive damage portion as follows:
“The an award shall be distributed “(1) paid agreed attorney prevailing party shall the amount be attorney party. upon prevailing between the and the party.
“(2) paid prevailing to the remainder shall be the One-half of Injuries “(3) paid Com- be to the Criminal One-half of the remainder shall chapter purposes in ORS 147. pensation for set forth Account to be used the entity, payable However, party prevailing public if the is the amount otherwise general Compensation paid Injuries fund shall be to the Criminal Account to the public entity.” the against Plaintiffs initiated this action defendant alleging both conversion and unlawful trade practices and seeking compensatory punitive damages, in the $250,000, amount attorney fees.2 The trial pursuant instructed the to the uniform civil instruc- tion 35.01A, on UCJI No. but added the following paragraph: by you, awarded law
“[i]f requires First, they distributed as follows: the prevailing party paid agreed upon the shall be the amount prevailing party; secondly, between the the one- half of paid party; the remainder shall be the prevailing to third, paid the other half of the remainder shall be Injury Compensation Criminal Account to be used for [sic] purposes set forth in the law.” timely excepted Defendant to this instruction: you “When look at the remainder the instructions to the punitive damages, money’s going use of where the go to is never mentioned. It’s not one jury’s factors the to consider. I believe what that statute does it tells the Court administratively supposed how it’s to structure the against defendant, supposed how pay, he’s who it’s going go going to. position, That’s to be an administrative statute, is going Court to have to look at the decide how pay [counsel], much split up and then form judg- according ment jury’s going required that. The not to be — jury’s asked, make going ‘Okay, to be we want you ought to decide paid,’ how much to be and then [counsel] apply there, take half of this and it to take half of this and apply it over policy there. It doesn’t seem to me the behind anything statute jury’s has to do consideration whether to award it or not.
U* * * * *
“I’m asking Court to look at how are to be jury? They’re decided looking to be decided at conduct, the defendant’s against and as a measure nothing anybody. defendant. There’s mentioned about for open I And think we’ll *4 closing argument a Pandora’s box on ‘Well, with an specifically says, you get instruction that once done, you me let tell what the is going to do with what 2 damages may Oregon Punitive be awarded under the Unlawful Trade Practices sought punitive damages Act. ORS 646.638. Plaintiffs also under their conversion claim.
210
you’ve going give money I’m done’. to some to and [counsel] give plaintiffs.’ I going I’m to turn around and half to these helps jury see how that at all reach a determination don’t ought damages whether or not in as to to awarded this case.”
A jury compensatory awarded in $1795 $20,000 punitive damages. did damages The award not to purport distinguish between two theories recovery; verdict, so far as from the appears compen- both satory were awarded under both theo- ries. reversed, appeal, Appeals holding
On the Court of instruct how its award will be distributed “[t]o proper injects into its deliberation factors that are not consid- and, deciding whether to award erations awarded, Honeywell Sterling v. Fur they the amount.” (1989). However, Co., App 94, 97, 99 niture Or to how did then instruct trial court as Appeals Court of not the trial proceed to on not made clear whether retrial. It was receives it is not to consider who court should tell the not should mention punitive damage simply question was the subject Equally at all. unclear compensatory what issues are to be retried. Does the intact? appeal, remain challenged which was not Finally, the consider defendant’s Court declined alleged an assignment relating double second error issues, these review to address fees. We allowed instruc- of the trial court’s reviewing propriety addition tion. DAMAGES
PUNITIVE punish “Punitive are allowed deter that willful, wrongdoer wanton or malicious like conduct in similarly and others situated wrongdoer P Cambas, 257, 293 601 v. future. Martin 420, Hospitals, Noe accord v. Kaiser Foundation Crookham, 61, (1967).” Young rel State ex “are a sub (1980). P2d Punitive against litiga awards nor offset compensatory stitute for Lines, 303 Or Id.; v. United Air expense.” tion see also Andor 516-17, nothing 511-13, There history language legislative or the we have found in *5 the indicating legislature change ORS 18.540 the intended to damage a purposes punitive behind awards when it enacted proceeds new mandate for distribution of the of such awards. instructing a agree Appeals We with the Court jury punitive damage that a be used portion any award will pay worthy to the a plaintiffs to contribute cause, crime, for help nothing such as victims of does to fur proper goals ther or even to inform the as to jury the Instead, punitive damage awards. the instruction distracts the jury from appropriate analysis line of this Court has said a should follow in awards of jury involving potential cases punitive damages: finder of punitive fact must determine what
“[t]he any, proper premise to award based on the deterring future similar misconduct defendant or oth- end, relevant, ers. To this a number of factors includ- ing the public, seriousness of the hazard to the the attitude wrongdoer upon hazard, and learning conduct position employees number and in causing involved or cov- ering up misconduct, the duration of the misconduct and/ cover-up, or its wrongdoer, financial condition of the prior punishment potential similarly plain- situated or other tiffs sources.” Crookham,
State ex rel Young v. supra, 290 Or at The trial 72. court erred in as instructing required to how the law damages to be distributed.3
The fact that it was error to give the instruction does not complete our inquiry, however. There still remains question whether the error was reversible error. We hold that it agree was. We of Appeals potential the Court that the effect of the instruction was to “[permit] to consider as a part of its deliberations damages that a should money and, receive certain amount of in order does, ensure that he pay add additional amounts for contributions Injuries Criminal Com Co., Honeywell Sterling pensation Furniture Account.” supra, App another, at 98. We also think there is per haps problem even more serious with the instruction: It encouraged for purpose, holding suggests Oregon Jury Our that the State Bar’s Civil Instruction Com mittee take a fresh look UCJI at No. 35.01A and related instructions. Compensation
viz., Injuries of the Criminal enhancement Account, awarding punitive for is not a reason construed, the instruction law. So under erroneous. petition true, argue in their
It is as the as Appeals made Court of review, assumption that the — speculative somewhat instruction is to the effect of the make of other, jury might uses the benign more there could be instruction, although we in the provided information likely is a Court of posited by the think the result spec- not so the instruction is separate reading of result. Our *6 additional, inappropriate an ulative, Offering a however. harmed the defendant. awarding basis for giving that the instruc- warned specifically The trial in so Appeals was correct error. The Court tion would be Fabrics, 289 Or v. Discount See State ex rel Redden holding. 375, 388-89,
THE FEE AWARD ATTORNEY double ruling purported eliminated Because Court of plaintiff, fees to attorney error. assignment second consider defendant’s declined to may it recur however, this issue because We, elect to consider upon remand. attorney fees in the awarded sought
Plaintiff and was fees 646.638(3), attorney to ORS pursuant trial court contends that UTPA.4 Defendant provision rendered, and that damages is “once an award of obli contractual sufficiently large plaintiffs is to cover satis mandatory distribution attorney, their gation pay portion fees attorney fies the We stage.” the cost bill cannot be awarded at
further ORS relationship between interpretation that of the reject 646.638(3). 18.540 and and deter punish
Punitive are intended of ORS provision fees distribution wrong-doers. attorney The 646.638(3) provides: ORS award, section, may by person brought the court under this “In action section, attorney trial and provided fees at reasonable the relief in this addition to may prevails, reasonable appeal If the defendant and costs. appeal be frivolous.” attorney finds the action to and costs if it fees at trial and on merely 18.540 a legislative recognition attorneys is that often contractually entitled to a share of a punitive damage award, should there be such an award. ORS 18.540 clarifies attorney gets that money split his share before the plaintiff. words, between state and In other the state must bear its compensating share of the cost of the attorney who obtained the if a judgment, contractual exists to obligation compensate attorney. hand,
On attorney the other fees awarded in an unlawful trade practices case to ORS pursuant serve an entirely availability different function: Their assures wronged consumers prosecute can obtain counsel claims might impractical that otherwise pursue because such claims require expenditure would time the value of greatly which goods exceeded the value of the question. services in availability particular case be problematical. availability of basic compensation counsel, however, be problematical cannot consumers are going to be bring able to UTPA actions against dishonest and unscrupulous merchants.
The different aims of the two statutes show recovery” defendant’s “double argument is chimerical. Allow- ing to be compensated under each statute fur- thers the statutory statute; purpose allowing recovery only under partially one object thwarts the of the other. We *7 note particularly that, itself, even within the UTPA there is no requirement any offset of fee earned under ORS 646.638(1) (punitive damages) against those earned under (reasonable attorney compensatory fees for punitive damages).
Because we are remanding this for a partial case retrial, we must vacate the of attorney fees itas relates punitive (Plaintiffs the award of damages. entitled discretionary attorney award of their for the compensatory damages UTPA.) under the retrial, After the plaintiffs may again request once attorney costs and fees in connection with punitive award of damages and the trial appropriate consider an award at that time.
SCOPE OF RETRIAL The sole remaining scope issue is the of retrial. As noted, the Court of Appeals did not address point. this As also noted, jury’s finding of liability and its ensuing award of compensatory damages in this case was not challenged appeal. Because the error that occurred in this case affects only the availability punitive amount of it is appropriate to remand the case for only retrial on those issues. See Nordstrom, 828, 835-36, Wolf
CONCLUSION The decision of the Court Appeals is affirmed. The judgment of the circuit court awarding compensatory damages is affirmed. The award punitive damages is reversed and the case is remanded to the circuit court for a new trial on the issue damages. The award attorney fees and costs is vacated and remanded for further proceedings consis- tent with opinion.
UNIS, J., concurring dissenting part. Today, this court reverses a damages, because the trial his instructions to the jury correctly stated how requires law damages, made, if to be agree distributed.11 majority the trial judge should not have given the instruction. I believe, however, the error was harmless when the instructions are considered as a whole in the context of the circumstances of this I would, case. therefore, reverse the deci- sion of the Court and affirm the judgment of the circuit court.
The standard that this court ought apply in eval- uating an alleged error in a jury instruction in a civil case should be the same standard that employ we in evaluating an evidentiary (1) error. That standard is whether error was com- and, so, (2) mitted whether that requires error reversal. The provides: ORS 18.540 punitive damage portion
“The of an award shall be distributed as follows: “(1) prevailing party paid agreed shall be the amount upon prevailing party. between the and the
“(2) paid One-half of the remainder prevailing party. shall be “(3) paid One-half of the remainder Injuries shall be Criminal Com- pensation purposes chapter Account to be used for the set forth ORS 147. However, party prevailing public entity, if the payable is a the amount otherwise *8 Injuries Compensation paid to the general Criminal Account shall be to the fund public entity.” of the
215
evidentiary
reversal
is made
requires
decision whether
error
Similarly,
the
presuming
prejudicial.2
without
error is
that an error in an instruction
presume
court should
party against
whom it was committed.
prejudicial
effect, see, e.g.,
ex
expressions
Prior
this court to that
State
Fabrics,
375, 388,
rel Redden v. Discount
289 Or
ORS
that not
establishes
error
Moore,
“prejudicial”
“reversible” or
error. See
also State v.
61, 66,
(1928) (ORS
19.125(2),
presumed prejudicial. 103[,]” 585, 597, Cheeley, to be v. OEC Powers 307 Or Officer (1989); Carr, Miller, 20, 27, (1986); 771 P2d State 302 Or State v. 203, 220, 709 (1985), harmless, Co., P2d 225 or Van Gordon v.PGE 813, 670 Cheeley, supra, Powers v. n also Or at 597 13. See Officer (2d Kirkpatrick, Oregon 1989). Evidence 16-17 ed 19.125(2) provides: ORS judgment except substantially shall “No be reversed or modified for error affecting rights party.” of a Compare 103(1), 40.025(1). ORS with OEC in codified ORS OEC 103(1), evidentiary case, occurring which deals with error in the trial of a reads: “Evidentiary presumed prejudicial. predi- error is not Error not be upon ruling right cated which admits or excludes unless substantial evidence party added.) (Emphasis is affected.” appellate judg- Before error be the can basis for or reversal modification of a 19.125(2), substantially rights party against ment under ORS it must affect the of the cpmmitted. hand, 103(1) provides evidentiary whom it was On the other OEC grounds setting reversing judgment errors at trial are not appeal aside the or verdict on right party “unless a substantial of the is affected.” (Amend), provides pertinent VII Article section in Constitution part: “* * * Supreme opinion, If the Court shall be after careful consideration submitted, appealed judgment of all thus the matters that the the court case, judgment was such as should have in been rendered such shall be affirmed, any notwithstanding trial; if, during error committed respect, judgment appealed Supreme changed, from should be and the Court opinion judgment shall be that it can determine what should have been entered below, it shall direct such to be entered in the same manner equity appeal like as effect decrees are now entered cases Supreme Court.” 1A, Although generally provides limited trial 12B courts ORCP ORCP In the present case, the trial court erred when it *9 instructed the awarded, how damages, are to be distributed. proper inquiry is whether that error requires reversal. In deciding question, that we should con- sider the instruction in context. The judge told the that prove punitive must damages by clear convincing evidence. He charged then the jury: may be awarded “Punitive be in assessed punish compensatory
addition wrongdoer to the damages, discourage and to the engaging others in defendant wanton misconduct. In considering punitive damages, you must first determine whether the guilty defendant was wanton misconduct damage plaintiffs. caused that to the Wanton misconduct is amounting conduct particularly to a aggravated, disregard deliberate rights you of the If of others. against defendant, decide this issue you may the punitive damages, although you so, required are not to do punitive damages because discretionary. In the exercise of discretion, you may importance that society consider the in deterring similar (Emphasis misconduct in the future.” added.) That instruction is consistent with numerous statements this court purpose is punish See, defendant and deter others who are similarly situated. e.g., Lines, Inc., Andor v. United Air 505, 517, 303 Or 739 P2d 18, 35 (1987); Noe v. Kaiser Found. Hosp., 420, 425, 435 Cambas, Martin v. 257, 261, P (1930). trial also jury: instructed you
“If you decide to may properly following consider the fixing items in the amount: The char- conduct; motive; acter of the defendant’s the defendant’s money required sum of discourage that would be the defen- dant and engaging future; others from in such conduct and the income and assets of the defendant. The amount of punitive damages may $250,000.” not exceed the sum of That instruction in harmony likewise guidelines pertinent part: shall, every stage action, disregard any “The of an error or defect in the * * * proceedings rights substantial the adverse which does not affect
party.” (Emphasis added.) court has for determining appropri- that this established size of a award in a lia- non-products ate Crookham, 61, 72, bility Young case.4 State ex rel charge Finally, language the court added jury: by you, “If requires are awarded law they First, as distributed follows: prevailing party paid agreed upon shall be the amount prevailing party; secondly, between the one- paid party; half of the remainder prevailing shall be to the third, paid the other half of the remainder shall be injury compensation purposes criminal account to be used for set law.” forth passage
It is that
majority’s
is the basis
conclusion
*10
that a retrial
in this
is necessary
case
on the
and
availability
amount of
damages. Although the majority recog-
spec-
nizes that “the effect
of
instruction is somewhat
* * *
ulative” and that “there could
benign
jury
be
uses the
might
instruction,”
make of the information
provided
212,
310 Or at
it nevertheless
that
concludes
the instruction
additional,
harmed the
“[offering
jury
defendant
* *
inappropriate
basis for awarding
310
Or at 212. According
potential
“the
of
majority,
effect
jury
the instruction
to ‘[permit]
to consider as a
on punitive damages
deliberations
a plaintiff
that
should
and,
receive a
money
certain amount of
in order
to ensure
does,
he
to add
pay
additional amounts to
and
Injuries Compensation
contributions
the Criminal
”
instruction,
at
states,
Account.’ 310 Or
211. The
the majority
“encouraged
jury
punitive damages
to award
for a purpose,
viz.,
Compensation
enhancement
the Criminal
Injuries
Account,
awarding punitive damages
is not a reason for
under
law.”
I The minds are jurors empty not like upon tablets which the and all judges lawyers record 4 30.925(1), products plaintiff liability may Under ORS in a recover action punitive damages proves disregard he when or she the defendant acted with “wanton health, safety and welfare of others.” ORS sets criteria forth determining prevailing used the amount of to be awarded to a products liability in a action.
218 jury may deciding
data that use in the case. The experience to use its store of accumulated permitted knowledge deciding Wright Graham, issues of fact. and Procedure Federal Practice 5102. As Justice Met § (2 Peckham, Gray) calf wrote Commonwealth v. 68 Mass (1854): “Jurors are not presumed ignorant to be everybody they else And to act upon what knows. allowed their testi- general knowledge, matters within without mony Railway, on those matters.” See Rostad v. Portland Co., (1921) Light 569, 581, & Power 101 Or P2d 184 cannot, in (“[t]riers things, of fact the nature of be divested of affairs.”); practical Wigmore on Evi- general knowledge (Chadbourn 1970). case, dence, in this jurors rev § It people, litigants like other know that incur fees. they plain- aware that seems reasonable assume were her in this compensate representing tiff must her counsel for knowledge action and well have taken that into consid- determining appropriate eration in amount of with or without the instruction.5 challenged that the is under oath to follow the Recognizing them trial stated given judge, law court has followed the several occasions that it assumes that Miller, 138, 144, 504 Chopp instructions. See 264 Or Bohlke, 320, 328, 486 (1971); Despain v. Portland, 28, 33-34, City Sedillo v. (x).6 assume, should 311(l)(j) See also OEC We therefore, plain- jury’s that the and deter oth- properly imposed punish tiff was defendant to assume similarly ers who are situated. Absent a reason assume, does, that otherwise, majority as the we should *11 it trial instructions as to when jury disregarded judge’s 5 plaintiffs’ Although theory jurors in fees for counsel as are not to award jurors apparently compensation, suggest fees in their often discuss several studies occasionally adjust damage awards with this factor mind. deliberations and their Greene, Damage Decisionmaking, The 52 Law and On Juries and Awards: Process of 224,241-42 (1989). Contemporary Problems
6 pertinent part: provides in OEC 311
“(1) following presumptions: The performed.
“(j) duty regularly Official as been [*] * * [*]
“(x) obeyed.” The law has been
219
punitive damages
could award
and instead
them on
awarded
Moreover,
inappropriate
an
basis.
we should assume that
fixing
did
it
jury
apply
given
the criteria
the trial
awarded
punitive damages
plaintiff.
amount
entirety,
are to be
in their
Instructions
considered
is
more
piecemeal,
it
immaterial
one or
of them
criticism,
separately may
subject
considered
if from the
charged
instructions
as a
correctly
whole
as
Mitchell,
See
Klebaum v.
application
law in
the facts.
246
Ranson,
196, 198, 424
Parmentier v.
(1967);
P2d 219
179 Or
(1946); Hornby
v. Wiper,
24, 169
211,
17,
203,
823
155 Or
White,
See also
v.
(1936).
607,
Anderson
This
has
stated on more than one occasion that
unnecessary
instruction
is a
correct statement of the
mislead,
law is not the
basis
reversal unless it did
See,
misled,
appellant.
have
prejudice
Cortman,
State
e.g.,
v.
566,
573,
251 Or
446 P2d
Townsend,
v.
State
See
530,
527,
237 Or
It is to note that neither attor- ney nor defendant’s mentioned argument distributed, how would be if awarded. only reference to how damages would be dis- tributed, awarded, was in the challenged instruction. The absence of argument possibility minimizes the misused or unduly focused on that passage. one sum,
In the instruction concerning to whom the dis- tribution of an damages will be made is unnecessary and should not have given. been It cannot be said case, however, the record in this the instruction substantially affected the rights the defendant. In the light of the instructions damages, considered as a whole, the trial giving court’s the instruction was harmless error and does not warrant reversal of parties the verdict. The to a perfect They lawsuit not entitled to a trial. are entitled to a fair trial. Nothing the trial record demonstrated the verdict in this case prejudice passion. result of No good purpose would be served sending it back for a new trial. I put would an end to this costly litigation by reversing the decision of the Court of affirming the verdict of the jury and the of the trial court. That conclu- sion is consistent (Amend), with Article VII section provides, essence, Constitution which judg- that no ment should be reversed for technical error when substantial justice had been done a jury judgment.7 verdict and opinion
I concur in the majority respect to attor- ney fees. 3, supra. See note