Court: Court of Appeals of Oregon; May 16, 2018; Oregon; State Appellate Court
Plaintiff appeals a judgment dismissing his claims for fraud, breach of fiduciary duty, and violation of the Oregon Racketeering Influence and Corrupt Practices Act against Ticor Title Company of Oregon and Fidelity National Title Group, Inc. Defendants cross-appeal a supplemental judgment that denied their request for attorney fees, which is affirmed without further discussion. The appellate court rejects plaintiff's argument related to the law of the case doctrine, clarifying that it applies only to appellate court rulings, not trial courts. The court affirms the summary judgment for defendants, concluding plaintiff failed to provide sufficient evidence of damages resulting from alleged tortious actions.
The relevant facts indicate that plaintiff sought to purchase real property in Astoria, Oregon, and obtained a preliminary title report from defendants, which omitted a first-position trust deed held by Envoy Carob Tree, LLC. Plaintiff purchased the property in March 2010 for $125,000, receiving a title insurance policy for the same amount. After spending approximately $110,000 on renovations, plaintiff halted work in November 2010 when Envoy initiated foreclosure proceedings. Plaintiff filed a claim with defendants, who assigned an in-house lawyer to represent him. In subsequent litigation against Envoy, the court ruled in favor of Envoy, allowing the foreclosure to proceed. Envoy ultimately purchased the property for $650,000 in January 2012 and notified plaintiff to vacate. Envoy later sued defendants for interference with the trust deed and foreclosure sale, leading to a global settlement that excluded plaintiff from negotiations.
Envoy agreed to return the title of the property to the plaintiff in the Astoria case, free of its trust deed. Cleverly attempted to discuss the settlement with the plaintiff and his attorney, Snow, but received no response. By this time, the plaintiff no longer desired the property and sought only monetary damages. Cleverly ultimately signed a stipulated judgment restoring title to the plaintiff and dismissing the case, which the trial court entered in April 2012. Subsequently, the plaintiff filed a lawsuit against the defendants for fraud, breach of fiduciary duty, and violation of ORICO, claiming various damages: loss of $125,000 in purchase money for over two years, $110,000 in improvements to the property, lost economic opportunities due to defendants' actions, a decline in the property's market value during litigation, and incurred attorney fees.
The defendants moved for summary judgment, arguing that the plaintiff could not substantiate his claimed damages. In response, the plaintiff provided deposition testimony and a letter that outlined his expenditures and potential property values. Despite this, the trial court granted summary judgment in favor of the defendants, dismissing all claims. On appeal, the plaintiff argued that he provided sufficient evidence to create a genuine issue of material fact regarding damages. Under Oregon law, a party is entitled to summary judgment when there is no triable issue, and the plaintiff bore the burden to produce evidence supporting his claims.
Plaintiff's claims for damages were assessed individually, and it was determined that he did not provide adequate evidence to establish a genuine issue of material fact regarding damages caused by defendants. Even assuming he could claim damages related to a decrease in property market value or payments made to Snow, the summary-judgment record lacked sufficient evidence for a reasonable juror to determine any damage amounts in these categories. The law requires damages to be established with reasonable certainty; if the determination relies on speculation, the claim fails.
Plaintiff's assertion of lost economic opportunity due to defendants' alleged fraud was also rejected. Although he indicated he could have completed renovations for $35,000 and believed he could sell the property for $300,000 to $500,000, he provided no market evidence to support these beliefs, rendering his profit claims speculative. Furthermore, a valid claim for lost profits must be substantiated with concrete evidence, not just unverifiable expectations.
The argument about lost use of funds expended on purchasing and renovating the property was dismissed as well. Despite the title issues that existed from March 2010 to April 2012, plaintiff achieved clear title, and failed to demonstrate economic harm from the settlement in the related case, which was necessary to claim damages.
Lastly, plaintiff's claim for lost rental income was rejected because he had not included this theory in his original complaint, which meant defendants were not adequately informed of this potential damage claim. The court reinforced that damages cannot be awarded based on unpleaded theories. Ultimately, the trial court's award of noneconomic damages was deemed erroneous as plaintiff only sought statutory liquidated damages in his pleadings.
In Northwest Marketing Corp. v. Fore-Ward Investments, the court ruled that a plaintiff cannot recover damages for future lost profits in a breach of contract claim if such damages were not specifically alleged. Additionally, in Belgarde v. Marlia, it was established that defendants cannot claim damages based on unpleaded theories or those not tried by consent. Consequently, a plaintiff is also barred from opposing a summary judgment motion with evidence supporting an unpleaded damage theory. In this case, the trial court affirmed the grant of summary judgment to the defendants because the plaintiff failed to provide sufficient evidence for a reasonable jury to determine damages. The court noted that it need not address additional assignments of error related to damages and the law of the case doctrine. The defendants had issued title insurance to a bank without disclosing a previously undiscovered trust deed that had priority over the insured deed. Although the plaintiff claimed to have incurred $200,000 in expenses related to this issue, he could not substantiate this amount during his deposition, and relevant documents were not included in the summary-judgment record.
