Schutz v. La Costita Iii, Inc.

364 Or. 536

436 P.3d 776

Ashley SCHUTZ, Respondent on Review,

v. LA COSTITA III, INC., Defendant,andO'Brien Constructors, LLC, and Keeley O'Brien, Petitioners on Review.

CC 10127338 (S065638 (Control), S065639)

Supreme Court of Oregon.

Argued and submitted November 1, 2018.

March 14, 2019

Tracy J. Frazier, Chock Barhoum LLP, Portland, argued the cause for petitioners on review. Andrew D. Glascock, Glascock Street Waxler LLP, Portland, and John R. Barhoum, Chock Barhoum LLP, jointly filed the briefs.

J. Randolph Pickett, Pickett Dummigan McCall LLP, Portland, argued the cause and filed the brief for respondent on review. Also on the brief were Kristen W. McCall, Kimberly O. Weingart, and Ron K. Cheng.

Susan Marmaduke, Harrang Long Gary Rudnick P.C., Portland, filed the brief for amicus curiae Oregon Liability Reform Coalition.

Nadia H. Dahab, Stoll Stoll Berne Lokting & Shlachter P.C., Portland, filed the brief for amicus curiae Oregon Trial Lawyers Association. Also on the brief was Kathryn H. Clarke, Portland.

Jeffrey D. Eberhard, Smith Freed Eberhard, P.C., Portland, filed the brief for amici curiae American Insurance Association, National Association of Mutual Insurance Companies, and Smith Freed Eberhard, P.C.

Before Walters, Chief Justice, and Balmer, Nakamoto, Flynn, Duncan, Nelson, and Garrett, Justices.^**

WALTERS, C. J.

Plaintiff brought a civil action for negligence against her employer and its agent, alleging that she had been seriously injured in an auto accident after she was pressured to attend a work-related event where she had become intoxicated. The trial court granted summary judgment for the defendants, concluding that they were entitled to statutory immunity under ORS 471.565(1) and that that grant of immunity did not violate the remedy clause of Article I, section 10, of the Oregon Constitution. The Court of Appeals disagreed with the trial court's remedy clause analysis and reversed. Schutz v. La Costita III, Inc. , 288 Or. App. 476, 406 P.3d 66 (2017), rev. allowed , 362 Or. 794, 416 P.3d 1096 (2018) ( Schutz II ).

On review, we conclude, for the reasons that follow, that defendants were not entitled to statutory immunity under ORS 471.565(1). Accordingly, this case presents no opportunity for us to address the remedy clause issue. We affirm the Court of Appeals, but on other grounds. We reverse the trial court's grant of summary judgment and remand for further proceedings.

I. FACTS AND PROCEDURAL POSTURE

A. Facts

As did the Court of Appeals, we take the following undisputed facts from the record on summary judgment. Defendant O'Brien Constructors is a construction firm. Defendant Keeley O'Brien was a project manager with the firm and the son of the firm's owner. Plaintiff was hired to work for O'Brien Constructors as a front desk receptionist.

In the three months that plaintiff had worked for the firm, she had declined four to five invitations by Keeley O'Brien to join him and other coworkers for drinks after work. Plaintiff nevertheless felt pressured to accept an invitation so that she would advance in the firm.

On December 12, 2008, Keeley O'Brien invited plaintiff to leave work early and join him and other coworkers at La Costita, a nearby restaurant and bar. Plaintiff agreed. At the bar, Keeley O'Brien encouraged the coworkers to drink, teasing another coworker for attempting to leave after only two beers. Plaintiff became severely intoxicated and has no further memory of that night. She later drove the wrong way down the interstate and was severely injured in an auto accident.

B. Trial Court Proceedings

Plaintiff filed this civil action against La Costita, Keeley O'Brien, and O'Brien Constructors. The trial court determined that La Costita was entitled to immunity under ORS 471.565(1) and entered a limited judgment of dismissal in its favor. The Court of Appeals affirmed that judgment on appeal. Schutz v. La Costita III, Inc. , 256 Or. App. 573, 302 P.3d 460, rev. den. , 354 Or. 148, 311 P.3d 525 (2013) ( Schutz I ). We will discuss Schutz I in more detail shortly.

After the trial court dismissed La Costita, plaintiff filed an amended complaint against Keeley O'Brien and O'Brien Constructors. In the posture that this case reaches us, we assume, without deciding, that the allegations in that amended complaint state a claim for negligent injury. In her amended complaint, plaintiff alleged that Keeley O'Brien and O'Brien Constructors had purchased alcohol for her but not that they had been negligent in so doing. Instead, plaintiff alleged, in her first claim for relief, that Keeley O'Brien had been negligent in three respects:

"a) In organizing, arranging, and supervising an employee function at defendant La Costita's facility, knowing that excessive amounts of alcoholic beverages would be purchased for, served to, and consumed by the employees attending the function;

"b) In pressuring plaintiff to attend the function, in spite of her previous refusals of previous invitations, by creating the impression that her advancement in the company depended on defendant Keeley O'Brien liking her, and that if she refused this invitation, after refusing prior invitations, that she would be less likely to retain her position or obtain desired promotions within the company;

"c) In failing to warn plaintiff that excessive amounts of alcoholic beverages would be purchased for, served to, and expected to be consumed by the employees attending the function."

Plaintiff's complaint also included a second claim for relief against O'Brien Constructors, consisting of two counts. Count one asserted that O'Brien Constructors was vicariously liable for the negligence of its agent, Keeley O'Brien. In that count, plaintiff repeated her allegations that Keeley O'Brien had been negligent and alleged that he "was at all times acting within the scope of his employment and/or agency relationship with defendant O'Brien Constructors." Count two asserted that O'Brien Constructors was liable for its own negligent acts. In that count, plaintiff alleged that O'Brien Constructors had been negligent in two ways:

"a) In permitting defendant Keeley O'Brien to organize, arrange, and supervise work-related activities away from the work site at establishments where alcoholic beverages were served, such as defendant La Costita's bar and restaurant, when defendant O'Brien Constructors knew, or in the exercise of reasonable care should have known, that excessive amounts of alcoholic beverages would be consumed;

"b) In failing to adequately train defendant Keeley O'Brien in terms of proper methods of enhancing and improving work and employee relationships, and that such methods should not involve leaving work early, proceeding to establishments where alcoholic beverages would be served, purchasing excessive amounts of alcoholic beverages for employees, and encouraging employees to actively participate in those types of activities."

Both defendants moved for summary judgment.¹ Among other things, defendants asserted that, as social hosts, they, like La Costita, were entitled to statutory immunity under ORS 471.565(1). That statute provides, in part:

"A patron or guest who voluntarily consumes alcoholic beverages served by a person licensed by the Oregon Liquor Control Commission, a person holding a permit issued by the commission or a social host does not have a cause of action, based on statute or common law, against the person serving the alcoholic beverages, even though the alcoholic beverages are served to the patron or guest while the patron or guest is visibly intoxicated. The provisions of this subsection apply only to claims for relief based on injury, death or damages caused by intoxication and do not apply to claims for relief based on injury, death or damages caused by negligent or intentional acts other than the service of alcoholic beverages to a visibly intoxicated patron or guest."

Plaintiff argued that her claims were not barred by the statute, because they were claims for "negligent *** acts other than the service of alcoholic beverages." Plaintiff explained that she had alleged that defendants had acted negligently before she went to the bar where alcohol was served.

Alternatively, plaintiff asserted that, even if defendants were entitled to statutory immunity, the statute that granted that immunity was unconstitutional. The remedy clause of the Oregon Constitution, Article I, section 10, provides in part that "every [person] shall have remedy by due course of law" for injury to "person, property, or reputation." Plaintiff argued that if ORS 471.565(1) eliminated her right to a remedy for injury to her person, it violated the remedy clause, therefore rendering the statute invalid.

The trial court rejected plaintiff's arguments and granted summary judgment for both defendants. The court expressly concluded that both defendants were entitled to statutory immunity under ORS 471.565(1) ; the court's ruling implicitly rejected plaintiff's constitutional argument. Plaintiff appealed.

C. Court of Appeals Ruling

In Schutz II , the Court of Appeals agreed with the trial court's conclusion that defendants were entitled to immunity under ORS 471.565(1). In doing so, it relied on its interpretation of ORS 471.565(1) in Schutz I . Before proceeding, we offer the following brief summary of Schutz I .

As noted, in Schutz I, the Court of Appeals considered the trial court's dismissal of plaintiff's claims against La Costita. In her claims against that defendant, plaintiff had alleged that it had been negligent in (1) serving her alcohol, (2) "abandoning" her by allowing her to leave the bar when in a state of acute alcohol intoxication, and (3) failing to arrange safe transportation home. Id . at 576-77, 302 P.3d 460. The Court of Appeals concluded that ORS 471.565(1) barred all three claims. The court explained:

"The second sentence of ORS 471.565(1) permits causes of action that are not caused by the service of alcoholic beverages, and there is nothing in plai

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