Mabin v. Tualatin Development Co.

616 P.2d 1196, 48 Or. App. 271, 1980 Ore. App. LEXIS 3482
CourtCourt of Appeals of Oregon
DecidedSeptember 22, 1980
DocketNo. A7809-15614, CA 16230
StatusPublished
Cited by1 cases

This text of 616 P.2d 1196 (Mabin v. Tualatin Development Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mabin v. Tualatin Development Co., 616 P.2d 1196, 48 Or. App. 271, 1980 Ore. App. LEXIS 3482 (Or. Ct. App. 1980).

Opinion

RICHARDSON, P.J.

Plaintiffs complaint alleged two causes of action: (1) common law fraud and (2) violation of Oregon’s Unlawful Trade Practices Act, ORS 646.605 et seq., involving their purchase of a home. The jury awarded them $2,500 compensatory damages and $12,500 punitive damages against both defendants on their second claim.1 Defendants appeal, contending the trial court erred in denying their motions to strike plaintiffs’ punitive damages claim; in denying their motions for judgment notwithstanding the verdict; and by failing to clearly instruct the jury regarding plaintiffs’ second cause of action.

Defendant Tualatin Development Co., Inc. (TDC) was the developer of a Portland area subdivision known as Quail Park. Defendant King City Realty Co. dba Prestige Properties (Prestige) handled the sales of TDC’s properties located there. At the time of this action, the two defendants were separate legal entities but shared a common president and generally the same shareholders.

In early 1978, plaintiffs became interested in a residence in Quail Park. They were attracted to one of the "ridge houses” which afforded a view of Mt. St. Helens and the surrounding area. On January 28, 1978, they signed an earnest money agreement for that home and moved in later that spring.

TDC owned the lots across from and below plaintiffs’ property. One residence had been constructed on one of those lots at the time plaintiffs viewed the property. The house was built so that its roofline did not obstruct the view from the ridge houses. In January 1978, TDC sold two of these lots to an outside builder. Construction began on homes there later that spring. In June 1978, plaintiffs discovered the construction would block their view. Upon completion, their view was impaired.

[274]*274Plaintiffs’ second claim was based on ORS 646.608(l)(e).2 They specifically alleged the defendants represented that the lots across the street were subject to suitable height restrictions which were sufficient to protect their view. They sought punitive damages as provided in ORS 646.638.3

Defendants moved at the close of trial to strike the punitive damages claim. The court denied their motions. Plaintiffs were awarded the punitive damages noted above. The court’s denial is assigned by defendants as error.4

Plaintiffs prevailed at trial. We view all evidence and all reasonable inferences which may be drawn from such evidence in the light most favorable to the plaintiffs and we resolve any conflicts in the evidence in their favor. Davis v. Portland General Electric Co., 286 Or 195, 197, 593 P2d 1135 (1979); Jacobs v. Tidewater Barge Lines, 277 Or 809, 811, 562 P2d 545 (1977); Hansen v. Bussman, 274 Or 757, 759, 549 P2d 1265 (1976).

[275]*275The evidence showed that prior to their completion in late 1977, the ridge houses were inspected and a determination was made as to how the homes should be priced for ultimate sale. The inspection was attended by Mr. Luton, president of both TDC and Prestige, Mr. Dunn, broker for Prestige, and Mr. Adams, TDC’s designer. It was decided that because of the view from the homes, a higher price would be set. To preserve the view, it was apparent some control over the height of homes built below had to be maintained. No restrictions were placed on the property by TDC at that time since TDC owned the lots and intended to handle any future construction. View protection was left to an "in house” agreement which would restrict the height of future homes built across from the ridge lots. Within a very short time two lots below plaintiffs’ were sold. No restrictions regarding height or view protection were included by TDC in the deeds to these lots.

Plaintiffs were shown the ridge homes by Jim Hendryx, Prestige’s top salesman. There was testimony to the effect that Hendryx was well aware of the factors which went into the pricing of the homes. Plaintiffs testified that they were specifically told the houses were more expensive because of the view. They asked Hendryx if there were any restrictions in effect to protect the view and were told that there were. They were told no home across the street would be higher than the roofline of the one existing structure.

By the time of these discussions, Hendryx had reviewed the subdivision public report. The report included all applicable restrictions and covenants for the subdivision. The jury could reasonably have concluded that he knew there were no easements, restrictions, covenants or anything else concerning view protection. Hendryx testified that even with this knowledge, he gave plaintiffs oral assurances that height restrictions existed and that their view would be protected. In June, 1978, when plaintiffs became concerned about construction on the lower lots, Hendryx again assured them the view would be protected. Plaintiffs [276]*276subsequently contacted both Adams and Luton at TDC but were unsuccessful in eliminating the problem.

The test to determine whether punitive damages are recoverable under ORS 646.638 is identical to that applied in a claim based upon common law fraud. Crooks v. Payless Drug Stores, 285 Or 481, 592 P2d 196 (1979). Such damages are proper to deter similar future conduct and when conduct is particularly aggravated. The basis for such damages was stated in Noe v. Kaiser Foundation Hosp., 248 Or 420, 435 P2d 306, 27 ALR3d 1268 (1967):

"Punitive damages can only be justified on the theory of determent. See Hodel, The Doctrine of Exemplary Damages in Oregon, 44 Or L Rev 175 (1965). It is only in those instances where the violation of societal interests is sufficiently great and of a kind that sanctions would tend to prevent, that the use of punitive damages is proper. Regardless of the nomenclature by which a violation of these obligations is described (grossly negligent, willful, wanton, malicious, etc), it is apparent that this court has decided that it is proper to use the sanction of punitive damages where there has been a particularly aggravated disregard * * * [of the rights of the victim].” 248 Or at 425.

Defendant Prestige argues that Hendryx’s actions were the result of a lack of communication between TDC and Prestige. It contends Hendryx believed at the time plaintiffs purchased their home that TDC’s "internal policy” would protect plaintiffs and that neither he nor anyone else at Prestige knew TDC could not or did not protect plaintiffs when it sold the lots across from plaintiffs’ property.

This argument is not persuasive. Hendryx was an experienced and highly successful real estate salesman. The evidence showed he was aware that plaintiffs were particularly concerned about preserving the view; that he knew the view was a prime reason for the price plaintiffs paid for the house; that notwithstanding, he gave plaintiffs unfounded and unsupportable assurances that they would be protected. The assurances were specifically excluded from the [277]

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Bluebook (online)
616 P.2d 1196, 48 Or. App. 271, 1980 Ore. App. LEXIS 3482, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mabin-v-tualatin-development-co-orctapp-1980.