A couple of recent appellate decisions may be the type that only civil procedure nerds could love. But they offer important lessons about how to handle the beginning and the ending of litigation.
Yesterday the Ninth Circuit, in PAE Government Services, Inc. v. MPRI, Inc., addressed whether a plaintiff can be penalized for alleging facts in an amended complaint that contradict the original complaint. The district court judge found the amended allegations to be "sham pleadings," striking them and dismissing the complaint. The Ninth Circuit panel reversed, stating "there is nothing in the Federal Rules of Civil Procedure to prevent a party from filing successive pleading that make inconsistent or even contradictory allegations." While a bad faith filing could result in Rule 11 sanctions, no such sanctions are allowed unless the party is given an opportunity to respond. Because the district court did not invoke Rule 11's procedural safeguards, it had no grounds to strike the pleading.
And last week the Oregon Court of Appeals took a hard look at one of the last steps in litigation - designating the record on appeal following a trial. In Ferguson v. Nelson, plaintiffs contended that the trial court erred when it declined to give various proposed jury instructions. Reversal based on failure to give a jury instruction "is warranted only if the requested instruction both accurately states the law in question and is supported by the evidence when viewed in the light most favorable to the party requesting the instruction," the Court of Appeals stated. Plaintiffs had failed to designate most of the trial testimony when asking the court to prepare the record on appeal, making it impossible for the Court of Appeals to determine whether the evidence supported the requested instructions. On that basis, the court refused to consider whether the instructions were erroneous, and it affirmed the judgment for defendant.
When a residential tenant fails to pay rent in Washington, the landlord is entitled to file an unlawful detainer action for forfeiture of the lease, but only after giving notice to the tenant to pay rent or vacate the premises within three days - or four days if served by mail. RCW 59.12.040. Last Thursday the Washington Supreme Court held that the statutory three-day notice period is not extended by Civil Rule 6(a), which calculates time periods of less than seven days by excluding weekends and holidays.
In Christensen v. Ellsworth, the landlord on a Friday (which was also the Fourth of July holiday) mailed notice to the tenant to pay rent or vacate. Having received no response from the tenant, the landlord then served the summons and complaint for unlawful detainer after four calendar days, on a Wednesday. The tenant later argued that the landlord had served the summons and complaint too soon, because the computation of the statutory period should have excluded the weekend under Civil Rule 6(a). The Supreme Court held that the three-day notice provision - or four-day in this case, due to service by mail - is substantive law not subject to the procedural court rules. As such, the court concluded that Civil Rule 6(a) does not apply to a three-day notice in an unlawful detainer proceeding, and the tenant was properly evicted.
Under Oregon law, the firing of an at-will employee may be wrongful - and may entitle the employee to sue his former employer - if the firing results from the employee's exercise of some important public duty. On Wednesday, the Oregon Court of Appeals demonstrated again that not all 'whistle-blowers' fall within the 'important public duty' exception to the at-will employment doctrine.
In Lamson v. Crater Lake Motors, Inc., an employee of a car dealer claimed he was fired for, among other things, complaining to his supervisors about unlawful sales practices within the company. Earlier case law shows that an employee fired for 'whistle-blowing' may have a wrongful discharge claim if he complains about significant issues of workplace health and safety. But, according to the court, a complaint about sales tactics that may violate the Unlawful Trade Practices Act does not fulfill an important public duty and therefore does not give the employee a claim for unlawful discharge.
Following the winter storms earlier this week, Clatsop County Circuit Court is open but is handling only limited matters. The court has a generator providing electricity, but no telephone service. Updates are available on the Oregon Judicial Department web site.
On Monday, the Washington Court of Appeals, Division I, held that under Washington's Uniform Fraudulent Transfers Act, lack of an "actual intent to defraud" will not protect an asset transferee from liability to the transferor's creditors, where the assets were acquired for less than reasonable value.
In Thompson v. Hanson, the Court affirmed the trial court's decision to impose personal liability on a couple who acquired two real estate parcels from a construction company several months before the filing of a breach of contract lawsuit against the company. The evidence at trial showed that the transferred lots were worth $465,000, but the couple acquired them simply by assuming $325,000 in debt. Based on the evidence that the construction company did not receive "reasonably equivalent value" for the lots, and that the company's remaining assets were unreasonably small in relation to its business, the trial court concluded that the couple was liable for "constructive fraud" under the UFTA (to the extent of the equity they received), even though the plaintiffs had failed to prove actual intent to defraud.
In its decision, the Court noted that there are conflicts among divisions of the Court of Appeals regarding whether actual intent to defraud is required to impose liability on a transferee. For example, the Court expressly disagreed with the 1991 opinion from Division III of the Court of Appeals in Park Hill Corp. v. Sharp, which held that transferees cannot be held liable absent proof of actual intent to defraud. This issue now appears ripe for review by the Washington Supreme Court.
In January 2008, the Washington State legislature will hold hearings on legislation providing legal redress for workplace bullying, abuse, and harassment. According to supporters of House Bill 2142, between 16% and 21% of employees directly experience health-endangering workplace bullying, abuse, and harassment, and this behavior is four times more prevalent than sexual harassment. Sponsors of the legislation believe that existing workers' compensation plans and common law tort actions are inadequate to discourage this behavior or to provide adequate redress to employees.
House Bill 2142 would make it an unlawful employment practice to subject an employee to an abusive work environment or to retaliate in any manner against an employee because he or she has opposed any unlawful employment practice under the law.
The bill defines "abusive conduct" as conduct of an employer or employee in the workplace, with malice, that a reasonable person would find hostile, offensive, and unrelated to an employer's legitimate business interests. Abusive conduct may include repeated infliction of verbal abuse such as the use of derogatory remarks, insults, and epithets; verbal or physical conduct that a reasonable person would find threatening, intimidating, or humiliating; or gratuitous sabotage or undermining of a person's work performance.
The bill provides an affirmative defense for employers that exercise reasonable care to prevent and promptly correct the abusive conduct. This provision is meant to encourage employers to stop the bullying of employees by demonstrating what actions they took when they were informed of the bullying.