Sanford v. Hampton Res., Inc.

Citations: 447 P.3d 1192; 298 Or. App. 555Docket: A160739

Court: Court of Appeals of Oregon; July 31, 2019; Oregon; State Appellate Court

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Plaintiffs John Sanford and John M. Sanford, Inc. entered into a contract with Risseeuw Logging, Inc. to harvest timber on land owned by Hampton Resources, Inc. Sanford was injured when the feller buncher he operated fell off a bridge on the property. The plaintiffs filed suit against Risseeuw and Hampton, claiming negligence, breach of contract, intentional interference with economic relations (IIER), and relief under Oregon's Employer Liability Law (ELL). The trial court granted summary judgment for Hampton on the IIER and ELL claims. Following a trial, the jury found in favor of the defendants on the remaining claims, leading to a general judgment consistent with the verdict. The plaintiffs appealed, asserting five errors, all of which were rejected, resulting in the affirmation of the trial court's judgment.

The facts include that in August 2008, Hampton hired Risseeuw as a general contractor for timber harvesting, which involved subcontracting to Sanford, Inc. Sanford attempted to cross a wooden bridge over a railcar while operating the feller buncher, but the bridge collapsed, causing the accident. The plaintiffs’ second amended complaint included negligence claims against the defendants for providing a defective bridge and failing to ensure its safety, a breach of contract claim for not providing safe access to the job site, and an ELL claim based on inadequate maintenance of the bridge. Additionally, they alleged IIER against Hampton for making defamatory statements post-accident and instructing others not to work with the plaintiffs. Although Risseeuw moved for summary judgment on the negligence, breach of contract, and ELL claims, the court only granted summary judgment for Hampton on the IIER claim, denying it for the others.

In February 2015, Risseeuw and Hampton filed for summary judgment regarding the plaintiffs' claims, leading the trial court to grant summary judgment for Hampton on the ELL claim and one negligence specification while denying it on other aspects. In April 2015, plaintiffs sought to file a third amended complaint, which was partially granted—allowing amendments to align with prior court rulings and to update medical damages—but denied regarding the increase of noneconomic damages and new negligence theories. An August 2015 second motion to amend was denied. The case proceeded to trial in September 2015, resulting in a jury verdict favoring the defendants, followed by a general judgment in their favor.

On appeal, plaintiffs raised five assignments of error. The first two contested the trial court's summary judgment in favor of Hampton on the IIER and ELL claims. The third challenged the denial of their April 2015 motion to amend the complaint. The fourth and fifth assignments addressed trial-related rulings concerning the exclusion of evidence and the denial of a mid-trial motion to conform pleadings to evidence, both of which were rejected without discussion. The court then examined the remaining three assignments, starting with the IIER claim.

To establish an IIER claim, plaintiffs must demonstrate: 1) a professional relationship; 2) intentional interference by a third party; 3) use of improper means or purposes; 4) a causal link to damages. Plaintiffs alleged that Hampton interfered by instructing Risseeuw not to hire them unless they paid for a collapsed bridge and by advising contractors against subcontracting with them. Hampton's summary judgment motion argued plaintiffs failed to show intentional interference through improper means. The trial court sided with Hampton, concluding that the evidence did not support a finding of intentional interference as required for the IIER claim.

Plaintiffs had a long-standing logging relationship with Risseeuw, who primarily sourced work from Hampton. Following an accident, Risseeuw ceased hiring plaintiffs, leading to allegations of intentional interference by Hampton. Testimonies revealed that Hampton representatives, including David Hampton and forester Vroman, denied instructing contractors not to hire plaintiffs. Ken Risseeuw stated that the decision to stop hiring plaintiffs was his own and attributed it to coincidence. A conversation between Sanford and Ken revealed Sanford's concerns about rumors suggesting pressure from Hampton regarding the bridge situation, to which Ken acknowledged feeling "stuck in the middle." However, he emphasized that no explicit instructions were given by Hampton. Additional testimony from Stone, who had previously hired plaintiffs, indicated he felt a suggestion from a Hampton representative to avoid using plaintiffs, but he later clarified that he was not directly told to refrain from hiring them. The court will uphold a summary judgment if no genuine issues of material fact exist, meaning a reasonable juror could not favor the plaintiffs based on the evidence presented. Plaintiffs bear the burden of proof on any contested issue in the summary judgment motion.

Plaintiffs argued that evidence suggested Hampton threatened Risseeuw and other loggers about hiring Sanford unless he paid for the bridge and admitted fault. However, the court found this evidence insufficient to support a verdict for the plaintiffs on their claim of Intentional Interference with Economic Relations (IIER). To establish IIER, plaintiffs must prove that Hampton intentionally interfered with their economic relations through improper means or for an improper purpose. The relevant legal standard requires that interference must be wrongful beyond mere interference itself, necessitating proof of improper motives or means that violate identifiable standards. Examples of improper means include violence, threats, deceit, or defamation. 

In this case, the evidence presented did not demonstrate intentional interference by Hampton. Although there was a history of collaboration between the plaintiffs and other companies, no direct evidence showed Hampton instructed contractors against hiring the plaintiffs or that future contracts would be jeopardized. Stone's testimony indicated a vague impression of Hampton's preference against using the plaintiffs but did not amount to a clear directive or intentional interference. Thus, the court concluded that even when viewing the evidence favorably to the plaintiffs, it did not create a factual issue regarding Hampton's intentional interference.

The recorded telephone conversation between Ken Risseeuw and Sanford, cited by plaintiffs as evidence against summary judgment, reveals only Ken’s personal interpretation of Hampton's wishes, which he inferred rather than directly observed. Ken stated he felt "not really getting much pressure," which fails to establish a factual dispute regarding intentional interference. While there may be an inference that some believed Hampton preferred not to collaborate with plaintiffs, there is no direct evidence of actual interference from Hampton that would substantiate this belief. The case Miller v. State of Oregon is referenced to illustrate that a strong impression without concrete evidence does not support a discrimination claim.

Even if a jury could find that Hampton suggested Risseeuw or Stone avoid working with plaintiffs, there is insufficient evidence to support that Hampton acted with an improper purpose or by improper means. Plaintiffs argue that Hampton indicated that hiring Sanford would jeopardize future contracts, but this assertion lacks evidence of a threat to terminate relationships with contractors. Additionally, the plaintiffs' claim about Hampton’s economic power does not establish tort liability, as no duty of non-interference has been demonstrated. Lastly, a statement by David Hampton regarding potential control over subcontractor choices, which plaintiffs argue indicates improper interference, does not suffice to create a genuine factual dispute without evidence of a violation of industry standards.

David Hampton asserted that he does not instruct contractors like Risseeuw Logging, Incorporated, on which subcontractors to hire, believing such interference would be improper. He confirmed that the hiring decisions are entirely at the contractor's discretion and that Hampton Resources, Incorporated has never advised any contractors against hiring specific individuals, including the plaintiffs. Hampton views such an action as outside their role. The plaintiffs' reliance on this deposition was deemed flawed, as it did not align with any established industry standard, and it reflected Hampton’s personal opinion rather than a professional benchmark. Consequently, this testimony did not suffice to counter Hampton's motion for summary judgment on the Intentional Interference with Economic Relations (IIER) claim.

Regarding the plaintiffs' second assignment of error concerning the Employer Liability Law (ELL) claim, Oregon law holds various parties liable for workplace safety. A defendant may be deemed an indirect employer if they engage with the direct employer in a common enterprise, retain the right to control, or actually control the risk-producing activity. It was agreed that Hampton designed and constructed the bridge involved in the incident and that the bridge type was standard in the logging sector. The contract between Hampton and Risseeuw allowed for shared control over the roads on the Peregoy property. Testimony indicated that Sanford, responsible for workplace safety at Sanford, Inc., was aware of practices for ensuring safe equipment passage, including requesting temporary crossings if necessary. Prior to the accident, discussions occurred between Sanford and Ken Risseeuw regarding equipment access to the site, and David Risseeuw instructed Sanford to use the bridge. The court ultimately found that the arguments presented by the plaintiffs did not establish any error in the trial court's decision to grant summary judgment in favor of the defendants on the IIER and ELL claims.

Sanford planned to take a feller buncher across a previously unseen bridge to cut timber, following instructions from Dave Risseeuw, who directed him the night before. In the context of the plaintiffs' Employer Liability Law (ELL) claim, defendants argued that the relevant inquiry is whether the indirect employer had control over the specific risk-producing activity, which they defined as Sanford's decision to drive across the bridge. They contended that the bridge itself could not be considered a risk-producing activity and that plaintiffs retained full control over it.

Plaintiffs argued against summary judgment for Hampton, claiming that Hampton exercised control over the bridge, thus bearing responsibility under the ELL. The trial court granted summary judgment in favor of Hampton but denied it for Risseeuw, stating there was a triable issue of material fact since Sanford testified that Risseeuw instructed him to cross the bridge. The court expressed difficulty in classifying Hampton as an indirect employer, noting that while Hampton is the party whose logs were being cut, Risseeuw was the one who hired Sanford. 

On appeal, plaintiffs contended that the court erred by not recognizing Hampton as an indirect employer due to its ownership and control over the bridge's design, installation, and maintenance. They argued that the trial court misidentified the risk-producing activity, asserting that the bridge's raised travel surface significantly increased danger and should have been the focus of the analysis for the ELL claim.

Hampton is claimed by the plaintiff to be liable as an indirect employer because it designed, built, and controlled the bridge involved in a risk-producing activity. However, defendants argue that the actual risk-producing activity was the act of driving a feller-buncher across the bridge, over which Hampton had no control, as that was directed by Risseeuw, not Hampton. The trial court concluded that Hampton was not an indirect employer under the Employer Liability Law (ELL) because it did not retain control over the driving activity. 

To establish indirect employer liability under the ELL, a defendant must have the right to control the manner in which a risk-producing activity is performed. The Supreme Court has defined risk-producing activities to encompass both specific tasks and the surrounding circumstances. In this case, the relevant risk-producing activity was identified as the transportation of heavy equipment across the bridge, not the bridge itself. The plaintiffs failed to provide evidence that Hampton retained the right to control this activity, focusing instead on the bridge's design and construction. Although there was evidence that Risseeuw directed the crossing of the bridge, there was no legal authority or inferred evidence indicating Hampton’s control over the overall activity.

Consequently, the trial court correctly granted summary judgment for Hampton regarding the plaintiffs' ELL claim. Additionally, the plaintiffs claimed the trial court erred in denying their motion to amend their complaint to substantially increase the damages sought, which was filed close to the trial date.

The proposed amendment aimed to introduce a new specification of negligence regarding a bridge collapse incident involving Sanford and a feller buncher. This new allegation suggested that the bridge failed to remain balanced during Sanford's traversal. The plaintiffs sought to include claims of negligence against the defendants for failing to inspect the bridge after seven years, neglecting to assess the impact of the absence of a concrete or rock abutment when loaded with heavy logging equipment, and for not warning plaintiffs about the bridge's potential for tipping or collapsing. Additionally, the plaintiffs intended to assert that defendants' negligence demonstrated a reckless disregard for safety. 

Defendants opposed the amendments, noting the case had been pending for five years and that the new allegations required expert analysis. They argued that they had built their case based on existing pleadings, conducting depositions and site visits under the assumption that discovery was closed. The trial court ultimately denied the proposed amendments, citing the age of the case and the potential need to reopen discovery and motion deadlines, which would delay the upcoming trial. The court expressed concern over the fairness of allowing significant changes at this late stage, emphasizing the necessity to conclude the case without further delays. The court deemed most of the requested amendments unnecessary, as they largely duplicated existing negligence allegations.

Amendments to the plaintiffs' complaint were denied by the court based on several critical factors. The court deemed that introducing new allegations of negligence and increasing noneconomic damages at this stage would be unfairly prejudicial to the defense, especially given the lengthy duration of the case, which has spanned five years and involved multiple attorneys and judges. Although the court allowed for amendments to remove certain claims that had been resolved and to adjust past and future economic damages in line with medical records, it rejected any changes that would significantly alter the case's nature, such as adding new negligence specifications or substantially increasing damages. 

Under Oregon law (ORCP 23 A), a plaintiff can amend their complaint only with court permission or written consent from the opposing party, and such requests are generally granted when justified by justice. The trial court's ruling on amendment motions is reviewed for abuse of discretion, and its decision must align with reason and evidence. The court's denial was justified as the proposed amendments could have required the defense to undertake additional discovery efforts, which would be burdensome given the case's history and the impending trial. The ruling reflects careful consideration of the proposed amendment's impact on existing pleadings, potential prejudice to the defendants, timing, and the merit of the amendments.

The court decided against allowing an amendment to the plaintiffs' claim due to potential prejudice to the defendants and the timing of the motion. The court's rationale was deemed justified and consistent with the evidence presented, leading to the rejection of the plaintiffs' third assignment of error. The plaintiffs referred to their claim as "intentional interference with economic opportunities," while the court identified it as "intentional interference with economic relations" (IIER). The trial court had dismissed the IIER claim against Risseeuw, which is not contested on appeal. The defendants highlighted that the contract between Hampton and Risseeuw allowed Hampton to disapprove subcontracting at its sole discretion, suggesting that an IIER claim cannot stand if a defendant acted within their contractual rights. However, this argument was not presented in their summary judgment motion, leaving open the possibility that the record might have differed had it been raised earlier. The plaintiffs also argued that the trial court should have deferred to a previous ruling on a different claim, but the court found that the plaintiffs failed to preserve this procedural argument for appeal, thus it would not be considered. Additionally, ORS 654.305 outlines the responsibilities of owners, contractors, and subcontractors to ensure safety in work involving risks to employees or the public.

Plaintiffs relied on Hampton's admission that both it and Risseeuw had control over the roads and bridges in their summary judgment motion. They presented evidence indicating that Risseeuw, as the logger, was typically responsible for bridge management during a logging contract. However, the court found insufficient evidence to establish that Hampton was liable under the "actual control" test of the ELL, which requires actual control over how the risk-producing activity is performed. The record did not demonstrate Hampton's active involvement in the risk-producing activity. Additionally, the court postponed the trial to September 2015 at plaintiffs' request, noting that a key witness had experienced cognitive decline and would be unable to testify. This unavailability was a factor in the court's decision to deny the plaintiffs' amendment requests in August 2015, emphasizing the incident's age from 2008 and the loss of witness testimony.