Duckworth v. Duckworth

327 Or.App. 219

534 P.3d 1076

Duane DUCKWORTH and Kathy Duckworth, Plaintiffs-Appellants,

v.Ruth DUCKWORTH, Individually and as Trustee of the Ruth Duckworth Living Trust u/a/d (March 21, 2006), Defendant-Respondent.

A176530

Court of Appeals of Oregon.

Submitted November 28, 2022

July 26, 2023

Michael W. Franell filed the briefs for appellants.

Charles F. Lee and Charles F. Lee P.C. filed the brief for respondent.

Before Aoyagi, Presiding Judge, and Joyce, Judge, and Jacquot, Judge.

AOYAGI, P. J.

Plaintiffs Duane and Kathy Duckworth appeal a judgment dismissing their civil claims against defendant Ruth Duckworth.¹ The parties’ dispute centers around a motel property in Medford that was originally purchased by Paul Duckworth, now deceased, who was Duane's father and Ruth's husband. For many years, plaintiffs lived at the property and managed the motel. Defendant ended that arrangement in 2016 and evicted plaintiffs in a forcible entry and detainer (FED) action. Plaintiffs later brought this action for breach of contract, fraud, quiet title, and wages. The trial court granted summary judgment for defendant on the first three claims, based on the FED judgment being preclusive that Duane and his father did not have an enforceable oral agreement regarding ownership of the property. The court dismissed the wage claim under ORCP 54 B(2). Plaintiffs challenge those rulings on appeal. We affirm.

I. FACTS

Paul Duckworth purchased the Bear Creek Motel in Medford in the 1980s. The property was put into trust around 1987. Starting in approximately 1992, Duane managed the motel and lived at the property. Duane later married Kathy, who moved onto the property and assisted with managing the motel. Paul died in 2005. After Paul's death, the property was transferred by deed from the Paul L. Duckworth Trust to the Ruth Duckworth Living Trust. Things otherwise continued as they were until 2016, when the parties got into a dispute over the property being cited for an environmental violation. Defendant sent a letter to plaintiffs terminating Duane as manager of the motel and terminating their work-related occupancy of the premises.

When plaintiffs did not vacate the premises, defendant filed an FED action under ORS 91.120, which allows for the use of FED proceedings to evict an "employee described in ORS 90.110(7)," that is, "an employee of a landlord whose right to occupancy is conditional upon employment in and about the premises." Plaintiffs immediately filed a civil action to quiet title to the property and moved to abate the FED action pending resolution of the quiet-title litigation. Defendant objected to abatement. While the motion was pending, plaintiffs answered in the FED action, including asserting as an "affirmative defense" that Duane owned the motel property under an oral agreement with his father and therefore could not be evicted. The FED court denied the abatement motion. At the FED trial, Duane testified to an oral agreement with his father (the terms of which changed over time), and plaintiffs also offered evidence of property tax payments, utility payments, and business records to try to prove partial performance.

The FED court ultimately entered a judgment for defendant. In support of that judgment, the FED court found that defendant was the title owner of the property by deed. It further found that Duane was the motel manager and lived at the property with his wife Kathy; that defendant had terminated Duane as motel manager and terminated his and his family's work-related occupancy of the property in March 2016; and that plaintiffs failed to vacate the premises. The FED court rejected on multiple alternative grounds plaintiffs’ "affirmative defense" that Duane owned the property under an oral agreement with his father. It found that Paul lacked authority to agree to sell the property; that Duane's testimony was not credible; that the terms of the alleged oral agreement were "so uncertain that, if true, they are unenforceable"; and that any oral agreement was void under the statute of frauds in any event.

Plaintiffs did not appeal the FED judgment. Instead, they filed this civil action, asserting claims for quiet title, breach of contract, fraud, and wages.² Plaintiffs alleged that Duane owned the motel property under an oral agreement with his father (quiet title); that defendant breached the oral agreement (breach of contract); that defendant was a party to fraud to the extent that Paul lacked authority to enter into the oral agreement (fraud); and that, if the oral agreement was unenforceable, then plaintiffs were at least entitled to unpaid wages for their work at the motel.

Defendant moved for summary judgment on the quiet title, breach of contract, and fraud claims. As relevant here, defendant argued that the FED court had already decided that there was no enforceable agreement between Duane and his father and that such finding was entitled to preclusive effect under the doctrine of issue preclusion. Plaintiffs opposed summary judgment, arguing that issue preclusion did not apply because an FED court has no authority to resolve title disputes. The trial court agreed with defendant that issue preclusion applied and, on that basis, granted summary judgment for defendant on plaintiffs’ first three claims.

The case proceeded to a bench trial on the wage claim. At the close of plaintiffs’ evidence, defendant moved to dismiss. The court granted the motion under ORCP 54 B(2), stating that plaintiffs had failed to prove that they worked as employees rather than copartners or independent contractors, had failed to prove a right to payment at a fixed rate, and had failed to prove damages cognizable in a wage claim action.³

Plaintiffs appeal, challenging both the summary judgment ruling and the involuntary dismissal ruling.⁴

II. SUMMARY JUDGMENT RULING (ISSUE PRECLUSION)

Plaintiffs contend that the trial court erred in granting summary judgment on their quiet title, breach of contract, and fraud claims. They argue that the FED court lacked jurisdiction or authority to decide the title dispute and that, consequently, it was error to give preclusive effect to the FED court's finding that no enforceable agreement existed between Duane and his father. Defendant responds that FED courts can resolve ownership disputes attendant to deciding possession and that such findings are entitled to preclusive effect in a civil action such as this one.

"We review a trial court's grant of summary judgment for errors of law and will affirm if there are no genuine disputes about any material fact and the moving party is entitled to judgment as a matter of law." Beneficial Oregon, Inc. v. Bivins , 313 Or App 275, 277, 496 P.3d 1104 (2021) (internal quotation marks omitted); see also Berg v. Benton , 297 Or App 323, 327, 443 P.3d 714 (2019) ("We review whether the trial court erred in applying issue preclusion for errors of law.").

A. General Overview of Oregon FED Law

We begin our discussion with a brief general overview of FED law in Oregon, as a basic understanding of this area of the law and its history provides a helpful foundation for understanding the specific legal issue that we address in this opinion.

FED procedures have existed in Oregon since territorial days, and they are purely a creature of statute. Thompson v. Wolf , 6 Or. 308, 308 (1877). At common law, "the only means of trying the right to the possession of property" was an ejectment action, wherein the court could "determine the question of which party has the paramount legal title to the premises for the purpose of determining who has the right to possession." Olds Bros. Lumber Co. v. Rushing , 64 Ariz. 199, 203-04, 167 P.2d 394, 397 (1946) (citing 28 C.J.S., Ejectment §§ 4, 5, 7 - 10 at 850-58 ); see also Thompson , 6 Or. at 311 (in a common-law ejectment action, "it is necessary that the plaintiff set forth the nature of his estate in the property, whether it be in fee, for life, or for a term of years, thereby enabling the courts to settle the question of title, which is the great end of the action of ejectment" (internal citation omitted)).

As discussed more below, FED laws were first enacted in feudal England to stem violent land disputes, and they appeared among the earliest American statutes. Like all FED laws, the purpose of Oregon's FED procedure "is to provide an orderly means of obtaining possession of premises without an actual breach of the peace." Crossen v. Campbell , 102 Or. 666, 676, 202 P. 745 (1921) ; see also Friedenthal v. Thompson , 146 Or. 640, 643, 31 P.2d 643 (1934) (explaining that FED "was intended as an expeditious method to obtain possession of real property that was being withheld from the owner by force * * * and provided a special procedure for the trial of such causes").

FED actions are currently governed by ORS 105.105 to 105.168. An FED action may be maintained against a person who unlawfully entered premises, or against a person who lawfully entered premises but now holds possession unlawfully by force. ORS 105.110. "Unlawful holding by force" is statutorily defined and, modernly, does not require physical force or threat thereof. ORS 105.115(1) (describing what constitutes "holding by force"); see also Twiss v. Boehmer , 39 Or. 359, 362, 65 P. 18 (1901) (recognizing the principle of "constructive" force in connection with FED).

Historically, the concept of unlawful holding by force (as distinct from unlawful entry) was limited to landlord-tenant relationships. Schroeder v. Woody , 166 Or. 93, 97, 109 P.2d 597 (1941) (stating that "unlawful holding by force" in FED statute "refers only to cases where the relation of landlord and tenant exists"). Basically, the quick procedure of FED could be used to evict a person who entered premises unlawfully or a tenant who entered lawfully but held the premises unlawfully; otherwise, disputes over possession of real property had to be resolved in a common-law ejectment or trespass action. Purcell v....