S49988 Day v. Advanced M&D Sales

SUPREME COURT CASES

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State: Oregon

Docket No: none

Case Date: 03/25/2004

FILED: March 25, 2004

IN THE SUPREME COURT OF THE STATE OF OREGON

DAVID R. DAY,

Petitioner on Review,

ADVANCED M&D SALES, INC.,
an Oregon corporation,

Respondent on Review.

(CC 0005-04933; CA A112790; SC S49988)

En Banc

On review from the Court of Appeals.*

Argued and submitted January 12, 2004.

Robert A. Miller, Eugene, argued the cause and filed the brief for petitioner on review.

Lisa Lear, Bullivant Houser Bailey PC, Portland, argued the cause and filed the brief for respondent on review. With her on the brief were David R. Rocker, Ronald J. Clark and Bullivant Houser Bailey PC.

RIGGS, J.

The decision of the Court of Appeals is reversed. The judgment of the circuit court is reversed, and the case is remanded to the circuit court for further proceedings.

*Appeal from Multnomah County Circuit Court, Jeffrey M. Kilmer, Judge Pro Tempore. 184 Or App 260, 56 P3d 454 (2002).

RIGGS, J.

This case requires us to decide whether plaintiff is estopped from filing a complaint alleging common-law negligence and violations of the Employer Liability Law, ORS 654.305 to 654.335 (1999), after he applied for and received workers' compensation benefits. On defendant's motion for summary judgment, the trial court concluded that equitable and judicial estoppel prohibited plaintiff from denying that he was a covered worker under defendant's workers' compensation insurance and that the exclusive remedy provision of the Workers' Compensation Law, ORS 656.018, barred plaintiff's claims. Without reaching the issue of judicial estoppel, the Court of Appeals agreed that equitable estoppel applied and affirmed the trial court's decision. Day v. Advanced M&D Sales, Inc., 184 Or App 260, 56 P3d 454 (2002). For the following reasons, we reverse the decision of the Court of Appeals and the judgment of the trial court, and remand the case to the trial court for further proceedings.

FACTS AND PROCEDURAL BACKGROUND

We take the following facts from the Court of Appeals opinion and the record. We review the record in the light most favorable to plaintiff, the nonmoving party below, and we draw all reasonable inferences from the facts in his favor. Greene v. Legacy Emmanuel Hospital, 335 Or 115, 118, 60 P3d 535 (2002).

Defendant employed plaintiff in two capacities. First, defendant employed plaintiff as a salesperson and paid him on a commission-only basis. Defendant's workers' compensation policy covered plaintiff when he worked as a salesperson. Defendant also employed plaintiff as a floor installation contractor, paying him on a per-job basis to install floor products that defendant distributed. Plaintiff carried his own workers' compensation insurance for the time when he worked as an installation contractor.

In October 1998, plaintiff attended a seminar that a representative of a flooring products company conducted at defendant's facility. During the seminar, the representative partially installed a laminated floor in defendant's showroom for demonstration purposes. After the seminar ended, plaintiff and other attendees assisted in the completion of the unfinished floor. While cutting pieces of flooring for the demonstration floor, plaintiff injured his hand.

After plaintiff's injury, plaintiff and defendant's controller, Joe White, discussed the possibility of filing a workers' compensation claim under defendant's workers' compensation policy. The parties do not describe that discussion in detail. (1) Neither party disputes, however, that, on November 2, 1998, a notice of workers' compensation claim -- referred to as a Form 801 -- was completed and sent to defendant's private insurance carrier, Liberty Northwest ("defendant's insurer").

The Form 801 contains two sections, the "worker's" section and the "employer's" section. The worker's section includes information concerning the type of injury, the date and time of the injury, and the treating physician and hospital, but requests no information regarding the worker's employment. The employer's section contains questions regarding, for example, the worker's employment and wages, the date that the worker left work, and the circumstances surrounding the worker's injury. When it filled out that section in this case, defendant described plaintiff's occupation as "Salesperson" and answered "Yes" to the question, "Did injury occur during course of job?"

Approximately a week after the Form 801 was filed, plaintiff completed a "Work/Educational History" form that defendant's insurer sent to him. (2) Under the section entitled "Employment at the Time of Your Injury," plaintiff stated that his employer was Advanced M&D Sales; his job title was "Salesman"; and the specific duty that he performed was "selling."

Following an investigation, defendant's insurer determined that plaintiff was a covered worker and entitled to benefits. Defendant's insurer accepted plaintiff's claim and, over the course of the next year, paid out $24,817 in benefits for his injury.

In December 1999, plaintiff's attorney informed defendant's insurer by letter that:

"It is our belief that [plaintiff] was not an employee of Advanced M&D Sales at the time of the injury and that he should not have a workers' compensation claim, despite the previous correspondence to you from his previous attorney. * * * Our claim is not a third party claim under the statute but we do acknowledge that Liberty Northwest has paid certain benefits to Mr. Day for which [it] should be reimbursed out of any settlement or judgment."

In February 2000, defendant's insurer replied that it was unaware of any authority allowing plaintiff to withdraw a claim after the insurer accepted it, and indicated that it would continue to process the claim. The insurer also requested suspension of plaintiff's benefits based on plaintiff's failure to attend a scheduled medical examination.

The record does not include a notice of acceptance, a notice of closure, or any further information regarding activity on plaintiff's claim. In addition, the record does not include any correspondence or order from, or information concerning any action by, the Workers' Compensation Division of the Department of Consumer and Business Services regarding plaintiff's claim.

In May 2000, plaintiff filed a complaint alleging that defendant's negligence and failure to comply with the Employer Liability Law caused his injury. Defendant moved for summary judgment, arguing that the doctrines of equitable and judicial estoppel precluded plaintiff from claiming that he was not a "worker" subject to the workers' compensation system. As a result, defendant argued that the exclusive remedy provision of the Workers' Compensation Law barred plaintiff's claims for his work-related injuries. The trial court granted defendant's motion.

Plaintiff appealed, and the Court of Appeals affirmed on the ground that equitable estoppel barred plaintiff's claim. The court explained that equitable estoppel requires, in part, a false representation of existing material fact upon which the other party relies. Day, 184 Or App at 264-66 (citing Coos County v. State of Oregon, 303 Or 173, 180-81, 734 P2d 1348 (1987)). Here, the court emphasized plaintiff's conduct in response to his injury. The court noted that plaintiff had discussed the matter with defendant and that plaintiff decided to file a claim following that discussion. In the court's view, plaintiff's decision to treat himself as an employee of defendant and his subsequent acceptance of workers' compensation benefits represented an implicit promise to abandon his right to pursue a civil claim against defendant. The court determined that plaintiff's present change of mind satisfied the "misrepresentation" element of equitable estoppel. After finding that the other elements of equitable estoppel also were satisfied, the court concluded that the trial court properly had precluded plaintiff from arguing in his civil action against defendant that he was not a worker subject to the provisions of the Workers' Compensation Law.

DISCUSSION

The Workers' Compensation Law guarantees compensation to subject workers for certain injuries that arise out of, and in the course of, their employment, regardless of any fault or negligence on the part of the employer. Martelli v. R.A. Chambers and Associates, 310 Or 529, 533, 800 P2d 766 (1990). In exchange for that coverage, the Workers' Compensation Law limits the extent of complying employers' liability and restricts the rights of subject workers to seek other remedies for workplace injuries. To that end, ORS 656.018 provides:

"(1)(a) The liability of every employer who satisfies the duty required by ORS 656.017(1) is exclusive and in place of all other liability arising out of injuries, diseases, symptom complexes or similar conditions arising out of and in the course of employment that are sustained by subject workers, the workers' beneficiaries and anyone otherwise entitled to recover damages from the employer on account of such conditions or claims resulting therefrom, specifically including claims for contribution or indemnity asserted by third persons from whom damages are sought on account of such conditions, except as specifically provided otherwise in this chapter.

"* * * * *

"(2) The rights given to a subject worker and the beneficiaries of the subject worker under this chapter for injuries, diseases, symptom complexes or similar conditions arising out of and in the course of employment are in lieu of any remedies they might otherwise have for such injuries, diseases, symptom complexes or similar conditions against the worker's employer under ORS 654.305 to 654.336 or other laws, common law or statute, except to the extent the worker is expressly given the right under this chapter to bring suit against the employer of the worker for an injury, disease, symptom complex or similar condition."

ORS 656.018 applies if the injured person is a "subject worker" at the time of the injury. See ORS 656.005(28) (defining "subject worker"); ORS 656.005(30) (defining "worker"). If the injured person is not a "subject worker" or "worker" within those definitions, then ORS 656.018 does not bar that person from filing an action seeking other remedies for the injury against the alleged tortfeasor. See S-W Floor Cover Shop v. Nat'l Council on Comp. Ins., 318 Or 614, 623, 872 P2d 1 (1994) (stating that first determination is whether one is "worker" under ORS 656.005(28)); Bell v. Hartman, 289 Or 447, 452, 615 P2d 314 (1980) ("The key term in the statutory scheme is 'subject worker.' An employer is bound to assure payment of compensation only for 'subject workers[.]'").

Although plaintiff cannot prevail if he is a worker subject to a workers' compensation remedy, in its present posture, this case does not require us to determine whether plaintiff was a "worker" or "subject worker" at the time of his injury. The trial court did not decide that question; the parties did not address it below or in the briefs to this court; and we express no opinion on that issue. (3) We face a different question: whether, under the circumstances of this case, plaintiff's conduct in filing a workers' compensation claim with his employer and his acceptance of workers' compensation benefits from defendant's insurer estops him from alleging in the present action that he was not a worker subject to the Workers' Compensation Law at the time of his injury.

As to that question, the parties first address equitable estoppel. Plaintiff contends that the Court of Appeals erred by relying on equitable estoppel to preclude him from asserting that he was not defendant's employee at the time of his injury. He argues that he made no false representation of material fact either directly to defendant or in the forms filed with defendant's insurer. Rather, plaintiff argues, the filing of the workers' compensation claim was based on a mutual, and erroneous, conclusion of law from facts that were known to both parties.

Defendant adopts the Court of Appeals' analysis of equitable estoppel. Defendant asserts that, with knowledge that he was covered by defendant's workers' compensation coverage only if he was injured in his capacity as a salesperson, plaintiff represented that he was injured in that capacity by filing a workers' compensation claim. Defendant contends that it relied on that representation and would be harmed by plaintiff's present attempt to withdraw his claim.

Under the doctrine of equitable estoppel, "a person may be precluded by his act or conduct, or silence when it was his duty to speak, from asserting a right which he otherwise would have had." Marshall v. Wilson, 175 Or 506, 518, 154 P2d 547 (1944). Equitable estoppel has five elements:

"'To constitute estoppel by conduct there must (1) be a false representation; (2) it must be made with knowledge of the facts; (3) the other party must have been ignorant of the truth; (4) it must have been made with the intention that it should be acted upon by the other party; (5) the other party must have been induced to act upon it[.]'"

Coos County, 303 Or at 180-81 (quoting Oregon v. Portland Gen. Elec. Co., 52 Or 502, 528, 95 P 722 (1908)); accord Bennett v. City of Salem et al., 192 Or 531, 541, 235 P2d 772 (1951). For equitable estoppel to apply, the false representation "must be one of existing material fact, and not of intention, nor may it be a conclusion from facts or a conclusion of law." Welch v. Washington County, 314 Or 707, 716, 842 P2d 793 (1992) (internal quotations omitted).

Reading the record in the light most favorable to plaintiff, as we do when reviewing a summary judgment in favor of defendant, defendant's argument founders at the first Coos County element. As we explain below, considered separately or together, plaintiff's conduct and statements do not amount to a misrepresentation of material fact sufficient to invoke equitable estoppel.

As an initial matter, defendant does not allege that plaintiff misrepresented when the injury occurred, what he was doing when he was injured, or how he came to be working on the demonstration floor at the time of his injury. Moreover, we disagree with defendant's view of plaintiff's conduct leading up to the filing of his claim. Defendant appears to argue that plaintiff made a misrepresentation of fact during his discussion with White, after which he completed the Form 801. As previously noted, however, defendant does not detail how plaintiff and White reached the conclusion that plaintiff was entitled to file a workers' compensation claim under defendant's insurance policy, and the record, which on this point consists solely of two paragraphs from White's affidavit, does not indicate that plaintiff made any misrepresentation regarding his employment status during the course of that discussion. In particular, defendant does not identify evidence in the record demonstrating that plaintiff was aware of, or intended to abandon, his right to file a complaint seeking other remedies for his injury, or that, by approaching and discussing the matter with White, plaintiff entered into an agreement to abandon his civil claim. In this procedural posture, we will not infer from White's affidavit that plaintiff made any particular misrepresentation of material fact concerning his employment status or other facts bearing on his right to pursue other remedies.

We turn to plaintiff's decision to complete the Form 801. Although defendant argues that the decision to file a claim amounts to a misrepresentation of fact, the completion of that form at most represented plaintiff's assertion that he was legally entitled to workers' compensation benefits. That assertion was not one of fact; rather, it was a conclusion of law based on a factual context. Rubalcaba v. Nagaki Farms, Inc., 333 Or 614, 619, 43 P3d 1106 (2002) (determination of claimant's status as "worker" is conclusion of law, not finding of fact). That type of representation may not serve as the basis for equitable estoppel. Coos County, 303 Or at 181; see also Welch, 314 Or at 717 (refusing to apply equitable estoppel when statements by county tax official were, at most, "a conclusion from facts or a conclusion of law"); Bennett, 192 Or at 541 (declining to apply estoppel when statements were "mere expressions of opinion").

Johnson v. Dave's Auto Center, 257 Or 34, 476 P2d 190 (1970), demonstrates that principle as it applies to the filing of a workers' compensation claim. In Johnson, an injured worker filed a workers' compensation claim for injuries resulting from a car accident involving a coemployee and a truck that his employer owned. The injured worker also filed an action against both the coemployee and his employer, alleging that he was injured as a result of the coemployee's negligence. In the workers' compensation proceeding, the employer stated that the worker was not an employee, and the Workers' Compensation Board denied the claim. Before the administrative review ended, the worker and the State Compensation Department settled the claim for medical costs and attorney fees "without any admission of liability by either party as to the status of employment or nonemployment." Id. at 37 (internal quotations omitted). Then, in their answers to the worker's complaint, both the coemployee and the employer argued that the worker's pursuit of workers' compensation benefits and settlement of his claim estopped him from filing a civil action against them.

This court reversed the trial court's judgment in favor of both defendants. In doing so, the court first addressed the effect of the filing of a workers' compensation claim in light of the worker's uncertain employment status:

"From all that appears from the record in this case, plaintiff may have been mistaken, in good faith, as to the ultimate question of law or fact whether or not he was an employee, based upon all of the evidentiary facts. Thus, based upon this record, we hold that the filing by plaintiff of his claim with the Workmen's Compensation Board for compensation which would be payable only if he was an employee, did not, of itself, bar plaintiff by the doctrine of election of remedies or estoppel from later filing his complaint in this case."

Id. at 41 (emphasis in original).

Under Johnson, a worker may file a workers' compensation claim, in the good faith belief that he is an employee, without being estopped from later filing a complaint claiming negligence on the part of his alleged employer. Similarly, in this case, the decision to file a workers' compensation claim necessarily reflected plaintiff's belief that he was an employee at the time of his injury, but that decision was not a misrepresentation of material fact that estops him from taking a contrary position in a later civil complaint.

Plaintiff's statements in the claim forms and his later acceptance of benefits do not alter our conclusion. Plaintiff made no representation on the Form 801 regarding his employment status, and plaintiff's statements in the Work/Educational History form responded to general queries about plaintiff's "job title" and the specific duties performed in his job. Those answers -- on a form that sought information to aid the determination of benefits and eligibility for vocational assistance -- were not misrepresentations of material fact regarding plaintiff's employment status at the moment of his injury. In addition, plaintiff's receipt of benefits did not amount to a misrepresentation of fact. As with the initial filing of the claim, the acceptance of benefits merely reflected plaintiff's conclusion from the available facts that his employment status entitled him to benefits.

Indeed, this court previously has rejected an attempt to manufacture a misrepresentation of fact from the receipt of benefits in similar circumstances. In Frasure v. Agripac, 290 Or 99, 619 P2d 274 (1980), the claimant sustained a back injury while working for Agripac, and he filed an aggravation claim with his first employer, Permaneer, and Permaneer's insurance carrier. After the claimant had received time-loss and medical benefits under that claim, the claimant's doctors reversed their earlier opinion and concluded that the claimant had suffered a new injury and not an aggravation. The claimant promptly filed a new claim against Agripac. On review from the Workers' Compensation Board, the Court of Appeals held that, by voluntarily accepting and processing the aggravation claim and by voluntarily accepting benefits pursuant to that claim, Permaneer, its insurance carrier, and the claimant each were estopped from taking contrary positions and were "bound by the consequences of their respective actions." Id. at 103 (internal quotations omitted). (4)

This court reversed, stating that "[t]here is no estoppel in this case." Id. at 105. Although Permaneer and its insurance carrier had accepted the claim and had paid benefits to the claimant for approximately 17 months, the court in Frasure rejected the notion that the employer and its insurance carrier's conduct in processing and accepting the claim were the type of representations normally associated with equitable estoppel. Id. at 107 ("[N]either Agripac nor Chubb Pacific are 'guilty' of making the type of representations normally associated with estoppel. They made (1) no false representations (2) with knowledge of the facts (3) with the intention that the other party rely upon it."). Here, Frasure is inconsistent with defendant's view that, by applying for and accepting workers' compensation benefits, plaintiff misrepresented a material fact. Given the present state of this record and this court's previous case law, we conclude that equitable estoppel does not bar plaintiff from alleging in his complaint that he was not defendant's employee at the time of his injury.

The Court of Appeals and the parties also discuss estoppel by acceptance of benefits (more commonly known as quasi-estoppel). (5) By invoking that doctrine, defendant relies on plaintiff's decision to file a workers' compensation claim and to accept workers' compensation benefits -- which defendant's insurer voluntarily paid -- before filing the present action. Echoing its arguments with respect to equitable estoppel, defendant contends that plaintiff is bound by his decision to accept the benefits of the Workers' Compensation Law and is precluded from pursuing other remedies. Plaintiff responds that he is not estopped from asserting the present claim in light of his mistaken conclusion regarding his employment status.

Assuming, without deciding, that quasi-estoppel is available to a litigant in Oregon, we decline to apply it in the present case, because the workers' compensation statutory scheme counsels against giving the acceptance of workers' compensation benefits an estoppel effect. The Workers' Compensation Law encourages the swift and voluntary payment of workers' compensation benefits. ORS 656.262(4)(a) requires the first installment of temporary disability compensation to be paid no later than the fourteenth day after the subject employer has notice or knowledge of the claim. That requirement need not be triggered at the request of the worker, as ORS 656.005(6) defines "claim" as "a written request for compensation from a subject worker or someone on the worker's behalf, or any compensable injury of which a subject employer has notice or knowledge." (Emphasis added.) In addition, ORS 656.262(10) allows employers to provide compensation and then to challenge their liability for the injury. Similarly, that section also states that a worker's "mere acceptance of such compensation [shall not] be considered a waiver of the right to question the amount thereof." Id. Also, even after the insurer provides written acceptance or denial of a claim, the insurer may revoke the claim acceptance and deny the claim "if such revocation of acceptance and denial is issued no later than two years after the date of initial acceptance." ORS 656.262(6)(a).

By establishing a rapid "pay now, litigate later" approach, the Workers' Compensation Law encourages the voluntary payment and acceptance of benefits, and allows for the possibility that new information later will affect a party's view regarding the compensability of the claim. By contrast, applying estoppel upon a worker's acceptance of benefits would preclude any opportunity to contest coverage thereafter, even if the payment of benefits by private insurance carriers and nonsubject employers later turned out to be erroneous. Given the statutory background, we decline to estop plaintiff from filing the present action on the ground that he accepted workers' compensation benefits from defendant's private insurer. See Stovall v. Sally Salmon Seafood, 306 Or 25, 757 P2d 410 (1988) (refusing to apply equitable estoppel to workers' compensation claim in part due to the statutory background involved); Frasure, 290 Or at 106-07 (refusing, in light of the policy and purpose of the Workers' Compensation Law, to estop employer or insurer from denying aggravation claim after employer previously accepted claim).

Finally, we address whether judicial estoppel applies. Parties invoke judicial estoppel "under certain circumstances to preclude a party from assuming a position in a judicial proceeding that is inconsistent with the position that the same party has successfully asserted in a different judicial proceeding." Hampton Tree Farms, Inc. v. Jewett, 320 Or 599, 609, 892 P2d 683 (1995). Judicial estoppel is "primarily concerned with the integrity of the judicial process and not with the relationship of the parties[.]" Hampton Tree Farms, 320 Or at 612 (emphasis added).

The focus of that doctrine on acceptance of an earlier position and harm to the judicial system defeats defendant's effort to invoke judicial estoppel here. As noted previously, the record is devoid of any indication that an administrative or judicial tribunal made a final determination regarding plaintiff's status as a subject worker at the time of his injury. (6) Therefore, in the present posture, plaintiff's attempt to take a contrary position in his complaint does not implicate the type of harm to the judicial system for which judicial estoppel is designed. See Hampton Tree Farms, 320 Or at 609-10 (describing applications of judicial estoppel to prevent litigants from playing "fast and loose with the courts," or to preclude parties from taking inconsistent positions when they benefitted from successful assertion of previously taken position).

The decision of the Court of Appeals is reversed. The judgment of the circuit court is reversed, and the case is remanded to the circuit court for further proceedings.

1. White's affidavit states:

"8. Subsequent to Mr. Day's accident, he approached me about the possibility of submitting a workers' compensation claim to Advanced M&D Sales, Inc.'s workers' compensation carrier, Liberty Northwest.

"9. Following discussions with Mr. Day, Mr. Day and I concluded that he was injured within his capacity as a commission only salesperson, and was therefore an employed [sic] of Advanced M&D Sales, Inc. entitled to workers' compensation coverage."

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2. The Court of Appeals stated that the Work/Educational History form "was then attached to the 801 form." Day, 184 Or App at 263. The record indicates, however, that the Form 801 was completed and sent to defendant's insurer about one week before November 9, 1998, when plaintiff completed the Work/Educational History form.

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3. In addition, at this stage of the proceedings, plaintiff does not argue that any statutory exception to the limitation on a subject worker's right to seek other remedies applies. See ORS 656.154 (allowing injured worker to elect to seek remedy against third person, not in same employ, whose negligence or wrong caused injury); ORS 656.156 (allowing worker to pursue action against employer if worker's injury or death results from deliberate intention of employer).

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4. Although the court did not specify the type of estoppel on which it relied, the referee declined to apply equitable estoppel, and the board adopted the referee's finding. Id. at 104 n 4.

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5. The Court of Appeals discussed plaintiff's acceptance of benefits under the general heading of equitable estoppel. Day, 184 Or App at 265 (stating that court was examining case "in the context of an alleged estoppel in pais based on the acceptance of benefits"); id. at 267-68 (summarizing court's conclusion in light of Coos County factors). The Court of Appeals, however, also cited an earlier case from that court that referred to "estoppel by acceptance of benefits," which is a distinct doctrine. Id. at 265 (citing Hess v. Seeger, 55 Or App 746, 762, 641 P2d 23 (1982)). In their briefs in this court, the parties addressed estoppel by acceptance of benefits separately from equitable estoppel.

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6. Workers' compensation cases that defendant cites from other jurisdictions each involved a favorable decision by a previous tribunal or, at a minimum, approval of a settlement by a previous tribunal. See Dush v. Appleton Elec. Co., 124 F3d 957 (8th Cir 1997) (after adversarial hearing, state workers' compensation court determined temporary total disability and awarded plaintiff benefits); Risetto v. Plumbers and Steamfitters Local 343, 94 F3d 597 (9th Cir 1996) (state workers' compensation appeals board approved parties' settlement of workers' compensation claim); Niles-Robinson v. Brigham & Women's Hosp., 47 Mass App Ct 203, 711 NE2d 940 (1999) (state Department of Industrial Accidents found plaintiff disabled); Drain v. Betz Laboratories, Inc., 69 Cal App 4th 950, 81 Cal Rptr 2d 864 (1999) (workers' compensation referee approved parties' compromise and settlement); Jackson v. County of Los Angeles, 60 Cal App 4th 171, 70 Cal Rptr 2d 96 (1997) (workers' compensation judge issued award based on parties' stipulations).

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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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