S42855 Oak Crest Const. Co. v. Austin Mutual Ins. Co.

SUPREME COURT CASES

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State: Oregon

Docket No: CC93C13423

Case Date: 02/17/2000

Filed: February 17, 2000

IN THE SUPREME COURT OF THE STATE OF OREGON

OAK CREST CONSTRUCTION COMPANY,

Petitioner on Review,

AUSTIN MUTUAL INSURANCE COMPANY,

a Minnesota corporation,

Respondent on Review.

(CC 93C13423; CA A84861; SC S42855)

On review from the Court of Appeals.*

Argued and submitted May 7, 1999.

J. Michael Alexander, of Burt, Swanson, Lathen, Alexander, McCann & Smith, Salem, argued the cause and filed the brief for petitioner on review.

Carl Amala, of Harris, Wyatt & Amala, Salem, argued the cause and filed the brief for respondent on review.

Before Carson, Chief Justice, and Gillette, Van Hoomissen, Durham, and Kulongoski, Justices.**

GILLETTE, J.

The decision of the Court of Appeals and the judgment of the circuit court are affirmed.

*Appeal from Marion County Circuit Court.

137 Or App 475, 905 P2d 848 (1995).

**Leeson and Riggs, JJ., did not participate in the consideration or decision of this case.

GILLETTE, J.

This is an action for breach of a standard commercial liability insurance contract. Plaintiff, a general contractor, filed the action when its insurer refused to reimburse it for the cost of removing and replacing a subcontractor's painting work that had been applied during the construction of a custom home and had failed to cure properly. The trial court granted the insurer's motion for summary judgment. The Court of Appeals affirmed, holding that plaintiff's claim did not fall within the coverage terms of the policy, because the damage at issue had not been "caused by an occurrence," as the insurance contract required. Oak Crest Const. Co. v. Austin Mut. Ins. Co., 137 Or App 475, 479-80, 905 P2d 848 (1995). Plaintiff sought review by this court. We allowed review to consider whether the event at issue is one covered by the commercial liability policy. We conclude that it is not and affirm.

At the time of the relevant events, plaintiff was insured under a commercial liability policy issued by defendant. The policy contained two coverage provisions that plaintiff asserts are relevant. Coverage L, providing coverage for bodily injury and property damage liability, stated in part:

"We pay all sums which an insured becomes legally obligated to pay as damages due to bodily injury or property damage to which this insurance applies. The bodily injury or property damage must be caused by an occurrence."

(Emphasis added.) Coverage N, providing coverage for products and completed work, stated:

"We pay all sums which an insured becomes legally obligated to pay as damages due to bodily injury or property damage arising out of the Products/Completed Work Hazard to which this insurance applies. The bodily injury or property damage must be caused by an occurrence."

(Emphasis added.) The policy also included the following

definitions:

"Occurrence - This means an accident and includes repeated exposure to similar conditions.

"Property damage - This means:

"a. physical injury or destruction of tangible property; or

"b. the loss of use of tangible property whether or not it is physically damaged.

"Completed Work Hazard means bodily injury or property damage arising out of your work. It does not include work that has not been completed, or that has been abandoned."

Finally, the policy also included the following exclusions:

"We do not pay for bodily injury or property damage liability which is assumed under a contract or an agreement.[ (1)]

"* * * * *

"We do not pay for property damage to work performed by you if the damage is caused by the work or a part of the work and included in the Products/Completed Work Hazard. This exclusion does not apply if damage to the work or the part of the work out of which the damage arises is performed by a subcontractor on your behalf." (2)

While the foregoing policy provisions were in force, plaintiff entered into a contract to build a custom home and hired a subcontractor to paint the cabinets and other interior woodwork. After the subcontractor had completed the painting work, plaintiff turned the home over to the owners. It became apparent, at that time, that the paint that the subcontractor had used had not cured properly and that the deficiency would have to be corrected. Plaintiff thereafter expended approximately $10,000 for stripping and refinishing the cabinets and woodwork.

Plaintiff submitted a claim to defendant, seeking reimbursement of the $10,000 spent on the cabinets and woodwork. When defendant refused to pay, plaintiff filed the present action, alleging breach of the insurance contract and seeking $10,240.00 in damages, together with attorney fees. Defendant answered, denying that plaintiff's claim was covered by the policy.

Defendant moved for summary judgment, appending a copy of the insurance policy and arguing, in rather general terms, that the policy did not allow for the recovery of plaintiff's costs in repairing the defective painting work. Plaintiff also moved for summary judgment, arguing that the repair costs were covered under the Completed Work Hazard provisions of Coverage N. In responding to plaintiff's motion, defendant argued, among other things, that plaintiff's costs in repairing the defective paint did not arise from an "accident," but, instead, arose from the requirements of its contract with the homebuyers:

"Basically, plaintiff * * * has alleged that because of its building contract with the [owners], it was necessary for the plaintiff to repair or replace defective painting work caused by its subcontractor. Plaintiff does not, and in good faith cannot, allege that this work was made necessary because of 'an accident.'" (3)

(Emphasis in original.) In reply, plaintiff cited the definition of "accident" that appears in Finley v. Prudential Ins. Co., 236 Or 235, 388 P2d 235 (1963), and argued that, because the result in this case was unintended by the insured, it was accidental. (4)

The trial court granted summary judgment for defendant. In a letter opinion to the parties, the court stated that there had been an "occurrence" under the facts of the case, but agreed with defendant that coverage was excluded because plaintiff's liability for the cost of repairing the defective paint was based in contract, rather than tort:

"This liability [for which plaintiff is seeking reimbursement from defendant] would [a]rise under a contract. * * * Plaintiff's liability is based upon contract and not tort or statute."

In the context of the arguments that preceded it, it appears that the trial court was speaking to the exclusion for "liability * * * assumed under a contract." (5)

Plaintiff appealed, arguing that its claim was covered under the policy's "completed work" provisions and that the various exclusions asserted by defendant, including the exclusion for "liability * * * assumed under a contract," were inapplicable. In response, defendant argued that the claimed damage was not "caused by an occurrence" within the meaning of the policy, because it did not result from accidental means. Defendant also continued to press its original point -- that plaintiff's costs in fulfilling its obligations under its contract were not covered:

"[P]laintiff Oak Crest repainted the woodwork in the [owners'] new home to comply with the interior 'painting' requirement of its building contract with the [owners]. * * * Plaintiff Oak Crest is not entitled to have the insurer pay for plaintiff's costs in simply completing its construction agreement with the [owners]."

In reply, plaintiff argued that defendant's "means/results" argument should not be considered, because defendant had failed to cross-assign that portion of the trial court's ruling as error. Plaintiff did not reply to defendant's latter argument. As noted, the Court of Appeals affirmed. That court based its decision on defendant's contention that there was no "occurrence," because the damage at issue did not arise from accidental means. In deciding the case on that ground, the court rejected plaintiff's suggestion that a challenge to the trial court's "occurrence" conclusion was precluded in light of defendant's failure to cross-assign error with respect to it. In that regard, the court noted that, under ORAP 5.57, a trial court's rulings, and not the various reasons that it gives in support of a ruling, are assignable as error. Defendant's "occurrence" argument, the court concluded, was merely an argument that the trial court was right for the wrong reason which, for the reasons discussed in Artman v. Ray, 263 Or 529, 532-34, 501 P2d 63 (1972), does not require a cross-assignment of error. Oak Crest, 137 Or App at 478 n 2.

Plaintiff challenges the Court of Appeals' decision on two grounds: First, plaintiff argues that the court had no authority to consider defendant's "occurrence" argument, because defendant failed to cross-assign as error the trial court's determination to the contrary. Second, plaintiff argues that the court erroneously focused on whether the cause of the damage, rather than the damage itself, was accidental.

Concerning plaintiff's first argument, we agree with the Court of Appeals: The requirement of cross-assignment in ORAP 5.57 applies to rulings (6)

and is not implicated when the respondent embraces the ruling and seeks only to challenge the trial court's reasoning.

As noted, plaintiff's second argument is directed at the means/results rationale used by the Court of Appeals to conclude that the asserted damage was not "caused * * * by an occurrence." We conclude, however, that we need not consider the correctness of that particular rationale because a different rationale -- one that defendant has pressed from the beginning -- supports the Court of Appeals' affirmance and its conclusion that the events at issue in this case did not amount to an "accident."

This court has indicated that there can be no "accident," within the meaning of a commercial liability policy, when the resulting damage is merely a breach of contract. In Kisle Fire v. St. Paul & Marine Ins., 262 Or 1, 495 P2d 1198 (1972), the plaintiff, a rancher, contracted with a company to repair his sprinkler system. The repair company failed to perform the repairs in a timely manner; plaintiff's alfalfa crop was damaged as a result. The defendant had issued a commercial liability policy to the repair company that contained a definition of "occurrence" that was analogous to the one at issue in the present case. When the plaintiff sued the repair company, the company tendered the defense to the defendant, which refused it. The plaintiff settled his action against the repair company and took an assignment of the company's claim against the defendant. The trial court entered judgment for the plaintiff.

In Kisle, this court considered whether, and when, an "accident" might arise out of a failure to perform a contract. The court first acknowledged that, in some circumstances, property damage that results from the negligent performance of a contract can qualify as being "caused by accident." But, as the court explained, "'accident' has a tortious connotation" and exists only when damage results, in some sense, from a tort, i.e., a breach of some duty imposed by law. Id. at 7. The court then explained that, although negligent performance of a contract might cause damage by "accident," there is no tort and no "accident" when the damage results solely from the complete failure of timely performance of a contract, generally actionable only as a breach of contract:

"We find [that] there is a significant distinction between negligent performance of a contract and a complete failure of timely performance. We hold that damage caused by the latter is not caused by accident.

"We do not need to definitely define 'accident'; however, we do hold that 'accident' has a tortious connotation. Damage solely caused by failure to perform a contract is not recoverable in tort. A tort is a breach of a duty created by law and not necessarily by the agreement of the parties. * * * Damage caused by the negligent performance of a contract can in certain instances be recoverable in tort. * * * This is because by contract the parties have entered into a relationship in which the law requires, apart from any obligation assumed by contract, that the obligor act with due care. For example, if a physician contracts to treat a patient and treats the patient negligently, he is liable in tort because the law, apart from contract, imposes a duty upon the physician to treat patients with due care. * * * [However], [d]amages caused by a failure to perform 'amount to mere breaches of contract, for which no tort action will lie.'"

Id. at 6-7 (citations omitted). (7)

We recognize, as we did in Kisle, that the same conduct might be actionable under both tort and contract theories. However, applying the foregoing principle to the facts in the summary judgment record in the present case, we conclude that, as alleged, plaintiff's claim arose solely from a breach of contract and, therefore, is not covered by the policy. Although the record establishes that plaintiff spent approximately $10,000 for the repair of a subcontractor's "deficient" painting work, it cannot support a conclusion that the problem with the cabinetry and woodwork painting resulted from the subcontractor's breach of a duty to act with due care. (8)

Had the facts demonstrated that the claimed problem with the cabinets and woodwork was the result of that kind of breach, or that plaintiff might be liable to the owners in tort for other damage, that might have qualified as an "accident" within the meaning of the commercial liability policy. But plaintiff here failed to establish that a question of fact existed in that regard, as plaintiff was required to do to show that there had been a covered event under the policy. For the foregoing reasons, we conclude that the Court of Appeals correctly held that the problem with the cabinetry and woodwork painting work at issue in this case was not "caused by accident" within the meaning of plaintiff's commercial liability policy.

The same reasoning defeats plaintiff's alternative argument that it was entitled to be indemnified under the policy's "completed work" provision: The property damage covered by that provision must have arisen out of an "accident." There is no proof of an accident in the record of this case on summary judgment. The trial court's grant of summary judgment to defendant therefore was proper.

The decision of the Court of Appeals and the judgment of the circuit court are affirmed.

1. This exclusion appears in a section of the policy entitled "Exclusions that Apply to all Coverages."

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2. This exclusion appears in a section of the policy entitled "Additional Exclusions that Apply to Property Damage Liability."

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3. Defendant also made a related argument that plaintiff's claim was excluded under the policy exclusion for "liability * * * assumed under a contract," set out above.

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4. Finley states that an "accident" is "an incident or occurrence that happened by chance, without design and contrary to intention and expectation." Finley, 236 Or at 245.

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5. We need not decide whether that exclusion might have been the wrong one on which to focus. The trial court's ruling on this summary judgment record was correct for the reasons discussed below.

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6. ORAP 5.57 provides:

"(1) A respondent must cross-assign as error any trial court ruling described in subsection (2) in order to raise the claim of error in the appeal.

"(2) A cross assignment of error is appropriate:

"(a) If, by challenging the trial court ruling, the respondent does not seek to reverse or modify the judgment on appeal; and

"(b) If the relief sought by the appellant were to be granted, respondent would desire reversal or modification of an intermediate ruling of the trial court."

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7. Courts in other jurisdictions have made similar observations in terms of the risks covered by commercial liability policies. See, e.g., Knutson Const. v. St. Paul Fire & Marine Ins., 396 NW2d 229, 235-37 (Minn 1986) (distinguishing faulty workmanship that causes business expense of repairing work from faulty workmanship that results in tort liability); Weedo v. Stone-E-Brick, 81 NJ 233, 405 A2d 788 (1979) (same). See also the following much quoted passage from Roger C. Henderson, Insurance Protection for Products Liability and Completed Operations -- What Every Lawyer Should Know, 50 Neb L Rev 415, 441 (1971):

"The insured, as a source of goods or services, may be liable as a matter of contract law to make good on products or work which is defective or otherwise unsuitable because it is lacking in some capacity. This may even extend to an obligation to completely replace or rebuild the deficient product or work. This liability, however, is not what the coverages in question are designed to protect against. The coverage is for tort liability for physical damages to others and not for contractual liability of the insured for economic loss because the product or completed work is not that for which the damaged person bargained."

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8. We draw our conclusion from the affidavit filed by plaintiff's principal. The affidavit recites that plaintiff's subcontractor painted cabinets and other woodwork in the home, and that the following events then occurred:

"Thereafter, for a period of approximately 2-3 weeks the remaining construction was completed, and the home [was] turned over to the [owners], who moved in. At that time any work that would have been remaining would have only been such tasks necessary to correct or repair any defect or deficiency in the construction.

"After the [owners] took possession of the home it became apparent that the painting work performed by [subcontractor] was not properly curing, and would require additional expense to correct any deficiency. I therefore incurred expense in the amount of $10,240.00 to correct the deficiencies in the work."

Attached to the affidavit was a bill that showed that those work "deficiencies" were corrected by stripping and refinishing the cabinets and woodwork.

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Filed: June 30, 2011 IN THE SUPREME COURT OF THE STATE OF OREGON In Re: Complaint as to the Conduct of J. MARK LAWRENCE, Accused. (OSB 08-115; SC S058778) En Banc On review of the decision of a trial panel of the Disciplinary Board. Argued and submitted May 2, 2011. Paula Lawrence, McMinnville, argued and cause and filed the briefs for accused. Stacy Hankin, Assistant Disciplinary Counsel, Tigard, argued the cause and filed the brief for the Oregon State Bar. PER CURIAM The complaint is dismissed. PER CURIAM The issue in this lawyer disciplinary proceeding is whether the accused, by releasing a partial transcript of a juvenile hearing to the press, violated Rule of Professional Conduct (RPC) 8.4(a)(4), which prohibits a lawyer from engaging in conduct that is prejudicial to the administration of justice. A trial panel found the accused guilty of violating RPC 8.4(a)(4) and suspended him for 60 days. We review the decision of the trial panel de novo. ORS 9.536(2); BR 10.6. Because we conclude that

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the Bar failed to prove by clear and convincing evidence that the accused's conduct caused prejudice to the administration of justice, we dismiss the complaint. The facts are straightforward and largely undisputed. In 2007, the accused represented a juvenile male who, along with another male friend, allegedly had touched or swatted several female classmates on the buttocks and had danced in front of the females in a lascivious manner. The incident occurred at the students' middle school. After being informed of the youths' behavior, the vice principal and a police officer interviewed the victims. Based on those interviews, the accused's client and his friend were arrested by a McMinnville Police Officer on February 22, 2007. On February 23, the Yamhill County Juvenile Department filed a delinquency petition alleging that the accused's client had committed acts that, if done by an adult, would have constituted five counts of first-degree sexual abuse and five counts of third-degree sexual abuse. At an initial detention hearing that same day, the court ordered the youths to remain in custody. The events giving rise to this disciplinary action arose out of a second detention hearing held on February 27, 2007, before Judge John Collins. The accused called two of the victims to testify on behalf of his client. The female victims testified that the youths were their friends and that they did not find the youths to be threatening in any way. Regarding the alleged sexual abuse, the female victims testified that the touching or swatting was not sexual in nature but rather was mere horseplay. The victims also testified that they felt pressured by the vice principal and the police officer to make the touching sound hurtful and uncomfortable when it was not. By the second detention hearing, the case was receiving substantial media 2

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attention. Judge Collins allowed the press to attend the detention hearing, but prohibited the press from recording the proceedings. The parties dispute whether the judge prohibited only video recordings or also prohibited audio recordings.1 A number of newspaper and television stories reported the events and testimony at the hearing. After the hearing, the accused obtained a copy of the official audio recording of the hearing and had a partial transcript prepared that contained the victims' testimony. In March 2007, a reporter contacted the accused about the February 27 hearing. The reporter, who was not present at the hearing, expressed disbelief that the female victims had felt pressured by the vice principal and the police officer to make the youths' actions seem sexual. The accused offered to give the reporter a copy of the partial transcript when it was available. The accused believed that it would have been improper to give the reporter the official audio recording of the hearing but thought that the transcript could be released. The accused contacted Deborah Markham, the deputy district attorney handling the case, to see if she objected to releasing the transcript. Markham told the accused that she believed that the court would have to consent. The accused then released the transcript to the reporter without obtaining permission from Judge Collins. Deputy District Attorney Deborah Markham testified that Judge Collins prohibited video recording. Judge Collins testified that he might have prohibited the press from recording the detention hearing, but that he did not remember whether he did so or not. He did remember allowing video recording at a later hearing in the proceeding. The accused testified that Judge Collins prohibited video recording but that he could not remember if the judge prohibited audio recording.
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When Judge Collins learned that the transcript had been released -following news reports that cited the transcript -- he called a meeting with Markham and the accused and told them to release no other transcripts. The testimony from the accused, Markham, and Judge Collins differs regarding that meeting. The accused described the meeting as relaxed and said that Judge Collins had stated that the release of the transcript was permissible. Markham testified that Judge Collins was "very concerned" about the release of the transcript and that Judge Collins said that the accused's disclosure violated the law. Judge Collins testified that the accused did not get his consent to release the transcript, but that he was not sure if the accused needed to do so under the circumstances of the case, particularly given the presence of the press at the hearing. In Judge Collins's description, the meeting was not contentious; although he requested that the parties refrain from releasing any additional transcripts, he did not "feel like [he] needed to be firm" and so did not issue an order barring further releases. In April 2008, several months after the juvenile case was resolved, Tim Loewen, director of the Yamhill County Juvenile Department, reported the accused's action of releasing the transcript to the Bar. After investigating the matter, the Bar charged the accused with violating RPC 8.4(a)(4)2 by releasing to the press "information
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RPC 8.4(a) provides, in relevant part: "It is professional misconduct for a lawyer to: "* * * * * "(4) engage in conduct that is prejudicial to the administration of

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appearing in the record" of a juvenile case without court consent, in violation of ORS 419A.255(1) and (3).3 The Bar alleged that the accused had "usurped" Judge Collins's authority to control the proceeding by not seeking the court's consent before releasing the transcript, and thereby had caused prejudice to the administration of justice. In the proceeding before the trial panel, the accused argued that his release of the transcript did not violate ORS 419A.255 for each of three independent reasons: (1) the transcript that he had prepared was not a part of the record of the case and so was not subject to ORS 419A.255; (2) Judge Collins had consented to the release of the information contained in the transcript when he allowed the press to attend and report on

justice[.]"
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ORS 419A.255 provides, in relevant part:

"(1) The clerk of the court shall keep a record of each case, including therein the summons and other process, the petition and all other papers in the nature of pleadings, motions, orders of the court and other papers filed with the court, but excluding reports and other material relating to the child, ward, youth or youth offender's history and prognosis. The record of the case shall be withheld from public inspection but is open to inspection by the child, ward, youth, youth offender, parent, guardian, court appointed special advocate, surrogate or a person allowed to intervene in a proceeding involving the child, ward, youth or youth offender, and their attorneys. The attorneys are entitled to copies of the record of the case. "* * * * * "(3) Except as otherwise provided in subsection (7) of this section, no information appearing in the record of the case or in reports or other material relating to the child, ward, youth or youth offender's history or prognosis may be disclosed to any person not described in subsection (2) of this section without the consent of the court * * * ."

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the hearing; and (3) the information in the transcript could be released under ORS 419A.255(5)(b) and (d), which list certain exceptions to the confidentiality of juvenile records. Even assuming that he did violate ORS 419A.255, the accused asserted, he did not violate RPC 8.4(a)(4), because his conduct was not prejudicial to the administration of justice. That was so, according to the accused, because the defendant and the victims supported releasing the transcript and because the information contained in the transcript had already been made public as a result of the press attending and reporting on the hearing. Thus, in the accused's view, no harm -- actual or potential -- resulted from his conduct. The trial panel found by clear and convincing evidence that the accused had violated RPC 8.4(a)(4) and suspended the accused from the practice of law for 60 days. The trial panel first determined that ORS 419A.255(3) prohibited the accused from releasing the partial transcript to the press without the consent of the trial court and that the accused had violated the statute in doing so. With little discussion, the trial panel then found that the evidence that the accused had violated the statute also was sufficient to show prejudice to the administration of justice and thus that the accused had violated RPC 8.4(a)(4). The accused sought review in this court. To prove a violation of RPC 8.4(a)(4), the Bar must prove (1) that the accused lawyer's action or inaction was improper; (2) that the accused lawyer's conduct occurred during the course of a judicial proceeding; and (3) that the accused lawyer's conduct had or could have had a prejudicial effect upon the administration of justice. See In re Kluge, 335 Or 326, 345, 66 P3d 492 (2003) (citing In re Haws, 310 Or 741, 746-48, 6

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801 P2d 818 (1990)) (so stating for identically worded former DR 1-102(A)(4)). Because we find the issue to be dispositive, we begin by examining the third element -- whether the accused's conduct had or could have had a prejudicial effect on the administration of justice -- and assume, without deciding, that the accused's conduct violated ORS 419A.255(3) and otherwise satisfied the test set out in Kluge and Haws. Prejudice to the administration of justice "may arise from several acts that cause some harm or a single act that causes substantial harm to the administration of justice." Kluge, 335 Or at 345. This court has identified two components to the "administration" of justice: "1) The procedural functioning of the proceeding; and 2) the substantive interest of a party in the proceeding." Haws, 310 Or at 747. "A lawyer's conduct could have a prejudicial effect on either component or both." Id. The Bar argues that the accused's conduct, a single act, resulted in prejudice to the administration of justice because it had the potential to cause substantial harm to the procedural functioning of the court. The Bar asserts, "Substantial potential harm to the administration of justice occurs whenever a lawyer interferes in or usurps the court's ability to do its job in a proceeding pending before it." The Bar states that the accused "usurped" the court's authority by not seeking Judge Collins's consent prior to releasing the transcript. The Bar cites three disciplinary cases to support its position that the accused's conduct resulted in substantial potential harm to the administration of justice. First, in In re Eadie, 333 Or 42, 36 P3d 468 (2001), this court found a violation of former DR 1-102(A)(4) where the accused lawyer submitted a proposed order containing a 7

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misrepresentation that was intended to influence the judge in changing the trial date. Id. at 58. That conduct substantially harmed the procedural functioning of the court because it resulted in the judge acquiescing to a trial date preferred by the accused and made it necessary for the judge to resolve a dispute resulting from the accused's misrepresentation and to redraft an order. Id. Second, in In re Morris, 326 Or 493, 953 P2d 387 (1998), this court concluded that the accused lawyer had engaged in a single act of conduct that had the potential to cause substantial harm, either to the procedural functioning of the court or to the substantive interests of the parties, when she knowingly filed a notarized document that she had altered. Id. at 502-03. Third, in In re Thompson, 325 Or 467, 940 P2d 512 (1997), this court found a violation of former DR 1-102(A)(4) where the accused lawyer physically confronted a judge after receiving an adverse decision. That conduct caused substantial harm to the administration of justice because the accused's ex parte communication with the judge "unfairly attack[ed] the independence, integrity, and respect due a member of the judiciary." Id. at 475. The conduct also had the potential to cause substantial harm, because it could have influenced the judge to change her decision or to recuse herself from the case. Id. In each of the preceding cases, the accused lawyer engaged in conduct that had the potential to disrupt or to improperly influence the court's decision-making process, Thompson, 325 Or at 475; that created unnecessary work for the court, Eadie, 333 Or at 58; or that had the potential to mislead the court, Morris, 326 Or at 503. Moreover, in Eadie and Morris, the accused lawyers made knowing misrepresentations to the court. Similarly, in Kluge, the accused lawyer's conduct in knowingly filing an 8

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untimely motion to disqualify the trial judge and then failing to serve the motion on opposing counsel caused prejudice to "the procedural functioning of the judicial system by imposing a substantial burden upon both opposing counsel and [the trial judge] to undo the accused's actions." 335 Or at 346. In this case, the Bar has made no showing, as required by Kluge and Haws, that the accused's conduct harmed the procedural functioning of the judicial system, either by disrupting or improperly influencing the court's decision-making process or by creating unnecessary work or imposing a substantial burden on the court or the opposing party. Nor has the Bar shown that his conduct had the potential to result in any of the above. Certainly, Judge Collins did not testify that the accused's actions interfered with Judge Collins's conduct of the juvenile proceeding. Although the Bar correctly asserts that ORS 419A.255 gives the trial court control over the release of protected information in a juvenile record -- and, as noted, we assume without deciding that the accused acted improperly in not seeking the trial court's consent -- the Bar's theory fails to take into account the fact that the information contained in the partial transcript that the accused released was presented in open court and had already been reported by the press.4 It is difficult to see how the accused's release of the same information, in the context of this case, had the potential to cause any harm to the proceeding, much less substantial harm.

Article I, section 10, of the Oregon Constitution grants members of the public, including the press, the right to attend juvenile hearings. State ex rel Oregonian Pub. Co. v. Deiz, 289 Or 277, 284-85, 613 P2d 23 (1980).

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See Kluge, 335 Or at 345 (prejudice to the administration of justice may arise from "several acts that cause some harm or a single act that causes substantial harm"). Indeed, the Bar makes no effort to show that the accused's conduct could have resulted in new information being made public or that the release of the partial transcript itself had any potential impact on the proceeding. In fact, after the press attended the hearing and the accused released the transcript, Judge Collins allowed members of the press to listen to the official audio recording of the hearing. Nevertheless, the Bar asserts that Judge Collins was sufficiently "concerned" about the release of the information to call the accused and Markham to his chambers to discuss the incident. The fact that Judge Collins was "concerned" and met with the accused and Markham does not, by itself, demonstrate the potential for substantial harm to the procedural functioning of the court. Judge Collins himself stated that, although "in a perfect world," he probably would not have wanted the transcript released, in the context of this case and the open court provision of Article I, section 10, of the Oregon Constitution, the release of the partial transcript was likely permissible without his consent because "if [the press is] * * * going to know the information and report the information, at least get it right." Judge Collins's testimony, then, does not demonstrate that the accused's conduct impacted the procedural functioning of the court, even if the accused's conduct was cause for "concern." Nor does the Bar offer any evidence to prove that the release of the partial transcript harmed the substantive interests of the accused's client, the victims, or the state. The accused released the transcript, with the support of his client, in response to an 10

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inquiry from the media and in order to respond to inaccuracies appearing in some media reports. The accused maintained the confidentiality of the victims' names in the transcript, referring to them by their initials, consistent with an earlier order by Judge Collins. In this proceeding, the accused also submitted letters from the two victims who testified (and their parents) that stated their support for the release of the partial transcript. Finally, there was no testimony from the Yamhill County Juvenile Department that the release of the partial transcript had any effect on its substantive interests or its ability to prosecute the case. The Bar appears, instead, to take the position that virtually any violation of a statute, rule, or court order that occurs during the course of a court proceeding and relates to the conduct or any procedural aspect of that proceeding necessarily is prejudicial to the administration of justice. The Bar asserts, in effect, that "substantial potential" harm is implicit in the accused's conduct. Our cases, however, require proof by clear and convincing evidence that an accused's conduct in a specific judicial proceeding caused actual or potential harm to the administration of justice and, when only one wrongful act is charged, that actual or potential harm must be "substantial." Kluge, 335 Or at 345; Haws, 310 Or at 748. Here, the Bar's evidence did not prove that substantial harm resulted or could have resulted from the accused's conduct. We conclude that the Bar has not proved by clear and convincing evidence that the accused violated RPC 8.4(a)(4). The accused's conduct did not result in such prejudice, because there is no evidence that the release of the partial transcript, which contained solely information already presented in open court and reported by the press, 11

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harmed the procedural functioning of the judicial system. Nor is there any evidence that the substantive rights of the accused's client, the other juvenile defendant, the victims, or the state were harmed. "Prejudice to the administration of justice" requires such a showing. Haws, 310 Or at 747-48. The complaint is dismissed.

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