Willms v. AmeriTitle, Inc.

687

Argued and submitted October 28, 2019; on appeal, reversed and remanded as

to plaintiffs’ ORICO claim, otherwise affirmed, cross-appeal dismissed as moot

September 22, 2021

Henry W. WILLMS

and Dolly G. Willms,

Plaintiffs-Respondents

Cross-Appellants,

v.

AMERITITLE, INC.,

a Delaware corporation,

converted from an Oregon corporation by

Articles of Conversion dated January 15, 2016,

Defendant-Appellant

Cross-Respondent.

Deschutes County Circuit Court

13CV0719; A165216

499 P3d 79

Defendant AmeriTitle, Inc., appeals from a judgment in favor of plaintiffs

Henry Willms and Dolly Willms for $3,225,000, which was entered after a

jury found for plaintiffs on their claims for fraud and violations of the Oregon

Racketeer Influenced and Corrupt Organizations Act (ORICO). Plaintiffs cross-

appeal a supplemental judgment that denied their request for attorney fees that

was made pursuant to the prevailing-party attorney fee provision in ORICO.

Defendant raises nine assignments of error involving the trial court’s denial of its

directed-verdict motion, the court’s jury instructions, the court’s award of puni-

tive damages, and the court’s statute of limitations rulings. Among numerous

arguments, defendant contends that the trial court erred in denying its directed-

verdict motion by mistakenly concluding that the six-year statute of limitations

in ORS 12.080(3) applied to plaintiffs’ fraud claim, and in rejecting defendant’s

arguments that plaintiffs had not presented evidence of a “pattern of racketeer-

ing” activity as required under ORICO because all of plaintiffs’ claims of illegal

conduct revolved around a single escrow transaction. Defendant also argues that

the trial court erred at the jury-instruction phase when it concluded that a six-

year statute of limitations applied to both plaintiffs’ fraud and ORICO claims.

Held: The trial court did not err in denying defendant’s directed-verdict motion

based on the contention that the statute of limitations had run on the fraud claim,

because plaintiffs presented a claim for interference with “any interest in prop-

erty” subject to the six-year limitations period in ORS 12.080(3). Likewise, the

trial court did not err in denying defendant’s directed-verdict motion that con-

tended plaintiffs had not presented evidence of a “pattern of racketeering” activ-

ity, because plaintiffs had presented such evidence. However, the trial court did

err in instructing the jury that a six-year statute of limitations applied to both

plaintiffs’ fraud and ORICO claims, because, in fact, a five-year limitation period

applied to plaintiffs’ ORICO claim. That error was not harmless. Plaintiffs’ cross-

appeal was dismissed as moot.

688 Willms v. AmeriTitle, Inc.

On appeal, reversed and remanded as to plaintiffs’ ORICO claim, otherwise

affirmed; cross-appeal dismissed as moot.

Stephen P. Forte, Judge.

Duane A. Bosworth argued the cause for appellant-cross-

respondent. Also on the briefs were Chris Swift and Davis

Wright Tremaine LLP.

Kathryn H. Clarke argued the cause for respondents-

cross-appellants. Also on the briefs was D. Zachary Hostetter.

Jon W. Monson and Cable Huston LLP filed the brief

amicus curiae for Oregon Land Title Association, Inc.

Before Ortega, Presiding Judge, and Shorr, Judge, and

James, Judge.

SHORR, J.

On appeal, reversed and remanded as to plaintiffs’

ORICO claim, otherwise affirmed; cross-appeal dismissed

as moot.

Cite as 314 Or App 687 (2021) 689

SHORR, J.

Defendant AmeriTitle, Inc., appeals from a judgment

in favor of plaintiffs Henry and Dolly Willms for $3,225,000,

which was entered after a jury found for plaintiffs on their

claims for fraud and violations of the Oregon Racketeer

Influenced and Corrupt Organizations Act (ORICO), ORS

166.715 to 166.735.1 Plaintiffs cross-appeal a supplemen-

tal judgment that denied their request for attorney fees

that was made pursuant to ORS 166.725(14), the prevail-

ing-party attorney fee provision in ORICO. Defendant raises

nine assignments of error. For the reasons discussed below,

we affirm the judgment on plaintiffs’ common law fraud

claim and reverse the judgment on plaintiffs’ ORICO claim

because the trial court erred when it prevented defendant

from arguing to the jury that plaintiffs’ claims were time

barred under the five-year limitations period provided by

ORS 166.725(11)(a).

In plaintiffs’ cross-appeal, they contend that the

trial court erred in failing to make findings of fact when

exercising its discretion to reject plaintiffs’ attorney-fee

request. Because we reverse the judgment in favor of plain-

tiffs on their ORICO claim, there is no basis for an award of

attorney fees on that claim. As a result, we dismiss plain-

tiffs’ cross-appeal as moot.

Because much of our opinion is directed at defen-

dant’s assignments of error relating to the trial court’s

denial of defendant’s motion for a directed verdict, we begin

our opinion by stating the facts of the underlying dispute in

the light most favorable to plaintiffs, the nonmoving parties.

See MAT, Inc. v. American Tower Asset Sub, LLC, 312 Or

App 7, 10, 493 P3d 14 (2021) (doing same in appeal involv-

ing multiple legal issues but focusing primarily on the trial

court’s denial of a directed verdict motion). Where additional

substantive or procedural facts relate to other assignments

of error, we state those facts separately below, consistently

with the corresponding standard of review.

1

Certain ORICO provisions have been amended since the relevant events in

this case. However, those amendments do not affect our analysis, and we cite to

the current statutory provisions throughout this opinion.

690 Willms v. AmeriTitle, Inc.

I. FACTS

A. The Facts Giving Rise to This Dispute

The disputes that gave rise to this lawsuit between

plaintiffs and defendant AmeriTitle, Inc., a title company,

arise from different sets of agreements, loans, and payments

that were made, or not made, under those agreements. There

are multiple individuals and entities involved in the various

agreements and loans, including several who are not parties

to this appeal. We parse those out as best we can to set the

stage for this dispute.

Plaintiff Henry Willms and his wife, plaintiff Dolly

Willms, acquired a 524-acre property in Anderson, California

(the Anderson property) that they intended to develop.

Mr. Willms was introduced to Rowe Sanderson, a developer

in Bend who had an interest in developing California prop-

erty. Sanderson was a principal in Sanderson Company, Inc.

(SCI) and a company called Sanderson Communities, Inc.

1. The original option agreement on the Anderson

property

In 2002, the Willms Family Trust and SCI entered

into an option agreement that gave SCI the option to pur-

chase the Anderson property. The agreement also effectively

permitted SCI to finance the development of the Anderson

property by taking loans out against the Anderson property.

In 2005 and 2006, SCI or Sanderson caused to be borrowed

nearly $8 million from a bank and opened a revolving line of

credit for $2 million more that were both either secured by

the Anderson property or guaranteed by Willms himself.

2. The LPV property and LPV note

Separately, in late November 2005, SCI sold real

property in central Oregon (the LPV property) to LaPine

Village LLC (LPV). As part of that transaction, LPV agreed

to pay $1.5 million to SCI by making a promissory note (the

LPV note) payable to SCI. The LPV note was secured by

a trust deed to the LPV property and named defendant as

the trustee. The LPV note was signed by LPV’s managing

member, Dominic Chan. Payments were to be made directly

to SCI’s office in Bend. The LPV note contemplated a quick

Cite as 314 Or App 687 (2021) 691

repayment with monthly payments commencing in January

2006 and the balance paid in full by November 2006.

3. SCI borrows $500,000 from plaintiffs in October 2006

and provides them with the LPV note as security

In the fall of 2006, Sanderson approached

Mr. Willms for a $550,000 loan, stating that he was in need

of operating capital. In October 2006, SCI issued a note (the

SCI note) in which it promised to pay plaintiffs $550,000

with 10 percent interest. Although not memorialized in the

SCI note, Mr. Willms testified that plaintiffs ended up loan-

ing only $500,000 to SCI because plaintiffs did not have

the other $50,000 available. Mr. Willms understood from

Sanderson that SCI was due to be paid back on the LPV

note in late November 2006 and that plaintiffs would be

paid out of those loan proceeds.

SCI provided a formal security agreement by which

plaintiffs were given a security interest in the LPV note

and could enforce the LPV note. As security for the loan,

SCI agreed to transfer the LPV note to plaintiffs upon their

request. The agreement provided that, upon the request of

plaintiffs, “Sanderson will * * * assist [plaintiffs] in taking

possession of the LPV Note” and deliver the note “with one

or more assignments indorsed in blank.” The LPV note was

transferred to Mr. Willms, although it was not indorsed.

The security agreement also stated that the LPV note was

secured by a deed of trust. As noted, the LPV note was, in

fact, secured by a trust deed to the LPV property in central

Oregon.

4. The security agreement is placed in escrow with

defendant

As part of the loan from plaintiffs to SCI, plaintiffs

required that the security agreement, granting plaintiffs

an interest in the LPV note, be placed in escrow. SCI’s con-

troller delivered the security agreement to Libby Hervey at

defendant in November 2006. The SCI controller included

a cover note with the delivery that stated, “Hi Libby, here

is the Security Agreement for the [SCI] Note. So we owe

Hank [Willms] $500,000 plus interest @ 14% when the

[LPV] Note from Dominic [Chan at LPV] is paid in full.”

692 Willms v. AmeriTitle, Inc.

The correspondence, which attached the security agree-

ment, caused Hervey to open up the escrow file. Hervey

knew Sanderson because he was a client for whom she had

closed numerous transactions over the years. Hervey also

knew Mr. Willms through a prior escrow transaction.

Significant to this dispute, Mr. Willms testified

that he had informed Hervey that he was in possession of

the LPV note.2 Mr. Willms believed that he had had that

conversation with Hervey “more than once.” Mr. Willms and

his daughter, Catherine Locke, also testified that they dis-

cussed with Hervey that plaintiffs were to be paid funds

from the payments made by LPV into escrow. Mr. Willms

understood from Hervey that she would pay plaintiffs out of

that escrow.

Mr. Willms also spoke with Hervey around the time

that the LPV note was due at the end of November 2006.

Hervey stated that Chan, LPV’s principal, was sick and that

LPV could not pay back the note. When the Willms’s daugh-

ter followed up later in March 2007, Hervey again stated

that Chan was sick, that the escrow had not closed, and that

Hervey understood that plaintiffs were anxious. Hervey fur-

ther stated that she would “definitely let [plaintiffs] know

the minute she had heard anything different.”

5. The increasing SCI debt and the modified option

agreement between SCI and plaintiffs

Following the opening of the escrow, Sanderson bor-

rowed additional money directly from plaintiffs, including

additional loans of $125,000 and $375,000 in December 2006.

By July 2007, plaintiffs faced a threat of foreclosure of the

Anderson property due to the unpaid loans that Sanderson

or SCI had caused to be incurred against the property. To

avoid foreclosure, plaintiffs were required to obtain a $10.2

million loan to refinance the debt that encumbered plaintiffs’

property. As a result, in July 2007, plaintiffs and Sanderson

entered into a modified option agreement. Among other

things, the modified option agreement provided for certain

2

At trial there was a factual dispute regarding this point. However, we must

state the facts in the light most favorable to plaintiffs. MAT, Inc., 312 Or App at

10.

Cite as 314 Or App 687 (2021) 693

payments to be made in July and August 2007 and beyond.

On August 27, 2007, Sanderson Communities, Inc., made

a payment of $507,117.33 to Mr. Willms. Mr. Willms testi-

fied that this was a “benchmark payment[ ]” that had been

made under the modified option agreement. Mr. Willms tes-

tified that this was not a payment for the SCI note.3 The

modified option agreement and correspondence from Locke

to Sanderson anticipated a payment due of over $500,000

on August 25, 2007, that would be applied against the

“Willms debt.” The Willms debt was defined in the modi-

fied option agreement to encompass several different loans

from plaintiffs to Sanderson including the October 2006

loan of $500,000 and the December 2006 loans of $125,000

and $375,000, respectively. Locke also wrote that the LPV

note would not be returned until plaintiffs were “free of the

Bank’s lien on our property.”

6. LPV’s delayed payment of the LPV note and defen-

dant’s representations made during escrow

As set out above, the LPV note was due in November

2006, but defendant had informed Mr. Willms and Locke, as

late as March 2007, that LPV could not pay the LPV note.

Mr. Willms later learned that Chan was, in fact, having

LPV make payments during this period through Hervey to

pay down the LPV note and that she had been arranging

to pay SCI with those funds. In January 2007, LPV made

a payment of $250,000 to SCI, which was handled through

an escrow by defendant and acknowledged by Hervey. Two

more payments of $205,000 and $300,000 were made to SCI

in March 2007 through a similar escrow process. On August

27, 2007, a subsequent payment of $500,000 was made by

LPV through the escrow handled by defendant and Hervey

and paid to SCI.

On October 26, 2007, LPV was prepared to pay off

the LPV note. Defendant did not have the original LPV

note to return to LPV and did not have the LPV trust deed.

Hervey drafted a Letter of Indemnity for SCI that stated,

3

Defendant contends that the August 2007 payment paid off the $500,000

SCI note, which was secured by the LPV note. Although that is a reasonable

inference from the evidence, we must view the evidence in the light most favor-

able to plaintiffs. MAT, Inc., 312 Or App at 10.

694 Willms v. AmeriTitle, Inc.

incorrectly, that the original LPV note and trust deed had

been “Lost/Misplaced/Destroyed.” It further provided that

SCI held defendant harmless for any and all loss resulting

from the reconveyance of the trust deed to LPV. As men-

tioned earlier, Mr. Willms testified that he had told Hervey

that he, in fact, had possession of the LPV note.

Defendant reconveyed the LPV trust deed to LPV

in late October or early November 2007. Defendant did

not request any instructions from Mr. Willms regarding

the trust deed. A year later in October 2008, plaintiffs

requested information from defendant about the LPV escrow.

Mr. Willms learned from defendant that defendant had no

instructions from Sanderson to pay any funds to plaintiffs.

In November 2008, Willms also learned from defendant that

the LPV trust deed had been reconveyed to LPV.

B. The Relevant Procedural Facts

Plaintiffs proceeded to file a claim against Sanderson,

although Sanderson was in bankruptcy proceedings. Plain-

tiffs also sued LPV for $500,000 plus interest and obtained

a default judgment of over $721,000. Plaintiffs allege that

they were not successful in recovering any of this money.

On May 9, 2013, plaintiffs filed this lawsuit against

defendant. The relevant complaint at the time of trial

alleged one claim for fraud and one claim for various vio-

lations of ORICO. As will be significant later, plaintiffs’

initial complaint was filed more than five years after LPV

had been expected to pay off the LPV note and had, in fact,

paid off the LPV note, but less than five years from when

Mr. Willms learned that the funds to pay off the LPV note

had been paid to SCI.

As noted, a jury found for plaintiffs on their fraud

and ORICO claims. It awarded plaintiffs $721,095.89 in eco-

nomic damages and $278,904.11 in noneconomic damages,

together equaling exactly $1 million. The damages for the

ORICO claim were trebled under the relevant ORICO pro-

vision to $3 million, effectively adding $2 million in addi-

tional damages. The jury also awarded $750,000 in punitive

Cite as 314 Or App 687 (2021) 695

damages, $525,000 of which was directed to the Department

of Justice under ORS 31.735(1).

We do not further describe here the many motions

and legal issues that arose before, during, and after trial.

Instead, we address relevant motions and issues below when

we address particular legal issues raised by defendant’s

assignments of error.

II. ANALYSIS

A. The Trial Court’s Denial of Defendant’s Directed Verdict

Motion

We turn to defendant’s first through fourth assign-

ments of error in which defendant contends in a combined

argument that the trial court erred in denying its motion for

a directed verdict.4 In reviewing the denial of defendant’s

directed-verdict motion, “we consider the evidence, includ-

ing any inferences, in the light most favorable to the party

that obtained a favorable verdict”—here, plaintiffs. Najjar v.

Safeway, Inc., 203 Or App 486, 489-90, 125 P3d 807 (2005).

“[W]e will not set aside a jury verdict ‘unless we can affirma-

tively say that there is no evidence from which the jury could

have found the facts necessary to establish the elements of

[plaintiffs’] cause of action.’ ” Conway v. Pacific University,

324 Or 231, 235, 924 P2d 818 (1996) (quoting Brown v. J. C.

Penny Co., 297 Or 695, 705, 688 P2d 811 (1984)).

Within its first four assignments of error, defendant

raises a slew of arguments to support its contention that the

trial court erred in denying its directed-verdict motion. We

conclude that only four of those specific arguments were pre-

sented to the trial court and preserved for our review, and

do not address those arguments that were not preserved.

In two of the four preserved arguments, defendant contends

4

Defendant also contends that the trial court erred in denying its motion

for a new trial and, “[i]n an abundance of caution,” assigns error to the denial

of its motion for judgment notwithstanding the verdict. After trial, defendant

moved both for judgment notwithstanding the verdict and a new trial. The trial

court denied both. We recently reiterated that “orders that deny both new trial

and [judgment notwithstanding the verdict] motions are not appealable.” Golik

v. CBS Corp., 306 Or App 202, 223, 472 P3d 778 (2020); see also Boers v. Payline

Systems, Inc., 141 Or App 238, 247, 918 P2d 432 (1996) (“As a general rule, a party

may not assign the denial of a motion for new trial as error.”).

696 Willms v. AmeriTitle, Inc.

that no reasonable juror could find that plaintiffs presented

clear and convincing evidence to support (1) the elements of

plaintiffs’ fraud claim or (2) their claim for punitive dam-

ages. Having reviewed the record under the appropriate

standard of review, we conclude that there is sufficient evi-

dence from which the jury could have found for plaintiffs on

their fraud and punitive damage claims, and we reject those

arguments without further discussion.

We turn to defendant’s two preserved arguments

that we substantively address. Defendant contends that the

trial court should have granted it a directed verdict because

the statutes of limitations had run on plaintiffs’ ORICO and

fraud claims. It also contends that plaintiffs failed to pres-

ent evidence to support “a pattern of racketeering activity”

because, at most, plaintiffs had presented evidence relat-

ing to a single escrow transaction. As explained below, we

conclude that the court applied the correct statutes of lim-

itations to plaintiffs’ claims at the directed-verdict stage of

trial and, thus, did not err in denying defendant’s directed-

verdict motion on that basis. Further, with respect to plain-

tiffs’ ORICO claim, we conclude that plaintiffs presented

sufficient evidence to survive a directed verdict.

1. Statutes of limitations issues

We first address defendant’s arguments regarding

the statutes of limitations in the context of its directed-

verdict motion. Defendant contends that the trial court

erred in denying its directed-verdict motion by mistakenly

concluding that a six-year statute of limitations applied to

plaintiffs’ claims. Instead, defendant contends, the court

should have applied a two-year statute of limitations to

plaintiffs’ fraud claim and a five-year statute of limita-

tions to plaintiffs’ ORICO claim. Defendant argues that

the escrow transaction that gave rise to plaintiffs’ claims

fully concluded on or before October 30, 2007, and that

plaintiffs filed their complaint on May 9, 2013, which was

more than five years later. Defendant maintains that the

court applied an incorrect six-year statute of limitations

to both the ORICO and fraud claims, which prevented

defendant from prevailing on its statutes of limitations

defenses.

Cite as 314 Or App 687 (2021) 697

Plaintiffs initially respond with procedural argu-

ments that they contend barred the trial court’s review and

subsequently bar our review of the underlying statutes of

limitations issues. We reject those arguments without fur-

ther discussion. On the merits, plaintiffs contend that the

court did not err in denying the directed-verdict motion and

applied the proper statutes of limitations to the relevant

claims. As we discuss below, we agree with plaintiffs and

conclude that the court did not err in denying defendant’s

directed-verdict motion by applying the wrong statutes of

limitations to plaintiffs’ claims.5

The record of defendant’s directed-verdict motion

is muddled, in part, because defendant’s arguments to the

trial court were sometimes inconsistent. Regardless, there is

no support for defendant’s contention that the court applied

a six-year limitations period to plaintiffs’ ORICO claim at

the directed-verdict stage. In moving for a directed verdict,

defendant argued that the ORICO statute of limitations

was either four or five years and ran from the last claimed

racketeering conduct. Plaintiffs responded that the ORICO

limitations period was five years and ran from the date of

plaintiffs’ reasonable discovery of any racketeering conduct.

No one argued for a six-year ORICO limitations period,

and, at the directed-verdict stage of the proceedings, the

court never referenced a six-year ORICO limitations period.

We reject defendant’s argument that the court applied an

improper six-year limitations period to the ORICO claim

when it denied defendant’s directed-verdict motion.

With respect to plaintiffs’ fraud claim, the trial

court applied, as it had at summary judgment, the six-year

limitations period in ORS 12.080(3). As we discuss below,

we conclude that the six-year limitations period does apply

to plaintiffs’ fraud claim, because plaintiffs maintained that

defendant committed a fraud that interfered with or injured

plaintiffs’ interest in real property under ORS 12.080(3).

At the directed-verdict stage of trial, defendant

contended that the statute of limitations for fraud is two

5

As we discuss below, however, the court erred later in the trial when it con-

cluded, before instructing the jury, that a six-year statute of limitations period,

rather than a five-year period, applied to plaintiffs’ ORICO claim.

698 Willms v. AmeriTitle, Inc.

years, which is the limitations period provided under ORS

12.110(1), and that that period began to run from when

plaintiffs discovered any fraud. Defendant argued that

plaintiffs conceded that they discovered any claimed fraud

no later than November 2008, meaning that the statute of

limitations ran, at the latest, as of November 2010, which

was long before plaintiffs filed their initial complaint in

May 2013. In response, plaintiffs argued that their fraud

claim alleged that defendant had made a misrepresentation

that damaged or interfered with plaintiffs’ interest in real

property, namely misrepresentations regarding the LPV

note and the reconveyance of the LPV trust deed that was

security for the LPV note. Accordingly, plaintiffs contended,

the correct statute of limitations was six years, which is

the period provided by ORS 12.080(3) “for interference with

or injury to any interest of another in real property.” As

the parties understand it, and we agree with their under-

standing, the trial court denied defendant’s directed-verdict

motion because it concluded that the six-year limitations

period under ORS 12.080(3) applied.

On appeal, the parties reprise their arguments

made in the trial court. Defendant contends that the court

erred in applying the six-year limitations period in ORS

12.080(3) because, as a matter of law, any misrepresenta-

tions made by defendant in connection with defendant’s

reconveyance of the LPV trust deed was not an interference

with or injury to any interest of plaintiffs in real property.

Defendant contends that ORS 12.080(3) “applies to common

law torts arising from invasions of interests in real prop-

erty, such as waste, trespass, nuisance, and inverse condem-

nation” and not to claims of fraud that allege damage to

an interest in a trust deed. Thus, the legal issue before us

is whether interference with or injury to a party’s interest

in a trust deed is “interference with or injury to any inter-

est of another in real property.” ORS 12.080(3). This raises

an issue of statutory interpretation for which we apply our

usual rules of interpretation. State v. Gaines, 346 Or 160,

171-72, 206 P3d 1042 (2009).

We start with the relevant text in the context of

the statute. The “catch-all” limitations period for actions

that are neither contract actions nor actions “especially

Cite as 314 Or App 687 (2021) 699

enumerated” in ORS chapter 12 is two years. ORS 12.110(1);

see also Goodwin v. Kingsmen Plastering, Inc., 359 Or 694,

700, 375 P3d 463 (2016) (stating same). That catch-all cap-

tures claims for fraud generally, and further provides that

the limitations period for fraud or deceit “commence[s] only

from the discovery of the fraud or deceit.” ORS 12.110(1); see,

e.g., Burgdorf v. Weston, 259 Or App 755, 768, 316 P3d 303

(2013), rev den, 355 Or 380 (2014) (applying ORS 12.110(1)

to a claim of fraud based on the defendant’s misrepresenta-

tions that induced the plaintiff to loan the defendant money

and pay expenses associated with real property).

ORS 12.080, however, defines one of the especially

enumerated limitations periods for other particular actions.

It provides a six-year limitations period for contract actions,

ORS 12.080(1), among other actions, and further states that

“[a]n action for waste or trespass upon or for interference

with or injury to any interest of another in real property,

excepting those mentioned in [certain statutes not relevant

here] shall be commenced within six years.”

ORS 12.080(3), (4) (emphasis added). The statute expressly

applies to claims for interference with or injury to “any inter-

est of another in real property.” (Emphasis added.) Because

the Supreme Court in Goodwin addressed the meaning of

the term “interest” in that statute, we turn to that case for

guidance.

In Goodwin, the Supreme Court noted the distinc-

tion between an action for injury to an interest in real prop-

erty and an action for injury to the property itself; although

the former is covered by ORS 12.080(3), the latter is not. 359

Or at 701. “[A]n injury to an ‘interest’ in property would be

something distinct from an injury or damage to the prop-

erty itself.” Id. Goodwin noted that an “interest” in real

property is a legal term of art, which was defined in Black’s

Law Dictionary at the time that language was added to the

statute as “ ‘a right to have the advantage accruing from

anything; any right in the nature of property, but less than

title; a partial or undivided right; a title to [a] share.’ ” Id.

(quoting Black’s Law Dictionary 950 (4th ed 1968)). Goodwin

ultimately concluded that a claim for negligent construc-

tion that damaged a home was not a claim for injury to an

700 Willms v. AmeriTitle, Inc.

interest in real property subject to the six-year limitations

period in ORS 12.080(3), but was a claim for damage to the

property itself covered by the two-year limitations period in

ORS 12.110(1). Id. at 703.

The court’s conclusion in Goodwin was compatible

with its conclusion in Beveridge v. King, 292 Or 771, 773,

643 P2d 332 (1982). In Beveridge, the plaintiffs entered into

a contract to purchase a residential home that the defendant

was building on the property. Id. After completion of the

home, the defendant retained title to the property as secu-

rity for the payment of the purchase price. Id. at 778. The

plaintiffs brought a complaint more than two years later

that alleged that the defendant failed to “construct the house

in a workmanlike manner,” and listed 18 particular exam-

ples of that failure. Id. at 773. The defendant contended that

either the two-year limitations period under ORS 12.135(1)

(1971),6 which applied to construction defect claims, or the

two-year limitations period under ORS 12.110(1), applying

to fraud claims generally, barred the plaintiffs’ claim. Id. at

774-76. The Supreme Court concluded that ORS 12.135(1)

(1971) did not apply, because that statute applied to physical

injury to property, among other things, but not to financial

losses resulting from the inadequate services described in

that statute. Id. at 775. The court further concluded that,

even assuming that the plaintiffs had not alleged a claim

for breach of contract, ORS 12.110(1) did not apply, because

the plaintiffs had alleged an injury to their interest in real

property—namely, the contractual interest that the plain-

tiffs had in purchasing the property—and therefore the

especially enumerated six-year limitations period under

ORS 12.080(3)7 applied to the plaintiffs’ claim. See id. at

778-79 (stating that “[a]n action for damages for injury to

any interest of plaintiffs in the real property which was

the subject of this sale is ‘especially enumerated’ in ORS

12.080(3)”). In Goodwin, the court summarized Beveridge:

6

ORS 12.135(1) has been amended numerous times since Beveridge. See Or

Laws 1983, ch 437, § 1; Or Laws 1991, ch 968, § 1; Or Laws 2009, ch 715, § 1.

7

ORS 12.080(3) has also been amended a number of times since Beveridge.

See ORS 12.080(3) (1973), amended by Or Laws 1983, ch 437, § 2; Or Laws 1987,

ch 705, § 3; Or Laws 1991, ch 968, § 2. Those amendments do not affect our dis-

cussion of Beveridge or our analysis of the instant case.

Cite as 314 Or App 687 (2021) 701

“The court noted that [ORS 12.080(3)] applied when an

action is one for interference or injury to ‘any interest of

another in real property.’ In Beveridge, the court observed,

the plaintiffs did not have title to the property, but they

nevertheless had an ‘interest’ in the property by virtue of

their contract [to purchase the property].”

Goodwin, 359 Or at 706 (quoting Beveridge, 292 Or at 777-78).

Keeping in mind that law regarding the meaning

of “any interest of another in real property” under ORS

12.080(3), we return to the question of whether plaintiffs’

claim that defendant misrepresented the payments on the

LPV note and the circumstances regarding the reconvey-

ance of the LPV trust deed is an action that falls within the

six-year statute of limitations in ORS 12.080(3). Applying

Beveridge and Goodwin, we conclude that it is.

Here, in their case-in-chief, plaintiffs presented

evidence that Sanderson physically transferred the LPV

note to plaintiffs as security for the SCI note. Sanderson

also provided plaintiffs with a security agreement that

granted plaintiffs a security interest in the LPV note and

expressly provided that the LPV note was further secured

by a deed of trust. In fact, the LPV note was secured by

a trust deed to real property. As a result, plaintiffs had a

perfected security interest in the LPV deed of trust under

the provisions of ORS chapter 79.8 In addition, the security

agreement between Sanderson and plaintiffs demonstrates

that it was the intent of Sanderson and plaintiffs for plain-

tiffs to have a security interest in the LPV deed of trust.

The security agreement provided that, upon the request of

plaintiffs, “Sanderson will * * * assist [plaintiffs] in taking

possession of the LPV Note” and deliver the note “with one

8

See ORS 79.0109 (ORS chapter 79 applies to a security interest given in a

note, secured by a deed of trust or mortgage, as security for another obligation);

ORS 79.0203(7) (“The attachment of a security interest in a right to payment

or performance secured by a security interest or other lien on personal or real

property is also attachment of a security interest in the security interest, mort-

gage or other lien.”); ORS 79.0313(1) (“Except as otherwise provided in subsection

(2) of this section, a secured party may perfect a security interest in tangible

negotiable documents, goods, instruments, money or tangible chattel paper by

taking possession of the collateral.”); ORS 79.0308(5) (“Perfection of a security

interest in a right to payment or performance also perfects a security interest in

a security interest, mortgage or other lien on personal or real property securing

the right.”).

702 Willms v. AmeriTitle, Inc.

or more assignments indorsed in blank” (although the note

was ultimately never indorsed). Through the security agree-

ment, plaintiffs held an interest in the LPV note that was

secured by the LPV deed of trust, and it gave the right to

plaintiffs to, upon request, obtain possession of the indorsed

note, which would have also transferred the LPV deed of

trust directly to plaintiffs for enforcement. See Deutsche

Bank Trust Co. Americas v. Walmsley, 277 Or App 690,

696-97, 374 P3d 937 (2016) (stating conditions under which

the holder of a negotiable note may enforce the note and

deed of trust, even though that person was not the original

payee on the note, if they are a holder of an indorsed note).

Although not a direct ownership of real property, it is “any

interest” in real property that is at least comparable to the

Beveridge plaintiffs’ contractual interest in acquiring real

property that was not title but was still an interest in real

property. We need not define precisely what plaintiffs’ inter-

est is, because, in any event, it is “any right in the nature

of property.” Goodwin, 359 Or at 701 (citing Black’s at 950).

Plaintiffs claimed and presented evidence of interference

with that interest by pointing to defendant’s misrepresenta-

tions that LPV had not been making payments on the LPV

note, and misrepresentations to effect the reconveyance of

the LPV deed of trust, that prevented plaintiffs from seek-

ing payment from Sanderson of those loan proceeds, or from

seeking an indorsement on the LPV note from Sanderson

and then enforcing the note and deed of trust against LPV

directly, before the trust deed was returned to LPV.

Defendant nevertheless contends that the statute

of limitations in ORS 12.080(3) does not apply because, it

argues, “purely economic harm does not fall within the scope”

of that statute. For that proposition, defendant relies upon

case law from our court, including Morrison v. Ardee Pest

Control, 62 Or App 506, 661 P2d 576 (1983), and Riverview

Condo. Assn. v. Cypress Ventures (A150586), 266 Or App 574,

339 P3d 447 (2014). With regard to Morrison, defendant mis-

reads that case. In that case, we held that ORS 12.080(3)9

did not apply, because the plaintiffs’ claim did not allege a

harm to their interest in real property. Morrison, 62 Or App

9

As in our discussion of Beveridge, amendments to ORS 12.080(3) since our

decision in Morrison are not relevant here.

Cite as 314 Or App 687 (2021) 703

at 510. The claimed negligence—an improperly conducted

inspection of a residence that failed to find dry rot while the

plaintiffs were under contract to purchase the residence—

did not cause harm to the plaintiffs’ interest in the real

property, because that interest remained the same both

before and after the inspection: an interest in a property

with dry rot. Id. That case does not stand for the proposi-

tion that physical harm to real property is required for ORS

12.080(3) to apply.

Our application of ORS 12.080(3) in Riverview

Condo. Assn., on the other hand, was clearly rejected by

the Supreme Court in Goodwin. Our opinion in Goodwin

expressly relied upon our decision in Riverview Condo.

Assn., which held that ORS 12.080(3) applied to a construc-

tion defect claim. Goodwin v. Kingsmen Plastering, Inc., 267

Or App 506, 510, 340 P3d 169 (2014), aff’d on other grounds,

359 Or 694, 375 P3d 463 (2016). The Supreme Court then

rejected that proposition. Goodwin, 359 Or at 703. Thus, in

any event, to the extent that either Morrison or Riverview

Condo. Assn. stand for the proposition advanced by defen-

dant, they are clearly inconsistent with the Supreme Court’s

decision in Goodwin and are no longer good law. See id. at

696 (concluding that ORS 12.080(3) “does not apply to actions

for damage to property itself, which are subject to the two-

year statute of limitations”).

To the extent that defendant argues that our case

law requires proof of damage to a property and not solely

to the plaintiff’s “pocketbook” for the statute of limitations

in ORS 12.080(3) to apply, that law has been set aside by

Goodwin. We conclude that plaintiffs presented a claim for

“interference with or injury to any interest of another in real

property” subject to the six-year limitations period in ORS

12.080(3). Defendant makes no attempt to argue that, if that

period applies, the trial court erred in denying its directed-

verdict motion argument that the statute of limitations had

run on the fraud claim. As a result, we conclude that the

trial court did not err on that basis.

2. ORICO pattern of racketeering issue

We turn to defendant’s argument that the trial

court erred when it denied its directed-verdict motion that

704 Willms v. AmeriTitle, Inc.

contended plaintiffs had not presented evidence of a “pat-

tern of racketeering activity” as required under ORICO.10

Defendant contended in the trial court and contends now

again before us that, as a matter of law, plaintiffs did not

present evidence of a “[p]attern of racketeering activity”

under ORS 166.715(4) because all of plaintiffs’ claims of ille-

gal conduct involved a single escrow transaction. Plaintiffs

respond that there were multiple separate incidents that

formed a pattern of racketeering throughout that escrow

transaction. Plaintiffs claimed, among other things, that

defendant’s misrepresentations to plaintiffs hid the fact

that LPV had been making payments during the escrow

period in January and March 2007. Plaintiffs also claimed

that defendant’s representative later prepared documents in

October 2007 that falsely stated that the LPV note had been

lost, misplaced, or destroyed. Plaintiffs alleged that that

conduct was “racketeering activity” under ORS 166.715(6)(a)

including, among other subsections, ORS 166.715(6)(a)(TT)

(relating to crimes under the statutes governing escrow),

ORS 166.715(6)(a)(B) (a violation of ORS 162.065, the crime

of perjury in providing a knowingly false sworn statement),

and ORS 166.715(6)(a)(P) (a violation of ORS 165.042, the

crime of fraudulently obtaining a signature).

We initially note that we do not decide here whether

the conduct that plaintiffs contend amounted to racketeering

activity was, in fact, racketeering activity, because defendant

did not adequately preserve that argument in its directed-

verdict motion. Therefore, we assume without deciding that

plaintiffs presented evidence of at least some racketeering

activity consistent with its allegations in the trial court.11

10

Defendant raises other arguments on appeal that contend that plaintiffs

did not present sufficient evidence to survive defendant’s directed-verdict motion

against plaintiffs’ ORICO claim. Again, those arguments were not raised in the

trial court or sufficiently preserved for our review.

11

ORS 166.715 defines “[r]acketeering activity” to include committing,

attempting to commit, conspiring to commit, soliciting, coercing, or intimidating

another person to commit “[a]ny conduct that constitutes a crime, as defined in

ORS 161.515, under any of the following provisions * * *.” ORS 166.715(6), (6)(a).

That statute then lists various specific provisions, including criminal statutes

and, among others, the real estate and escrow statutes in ORS chapter 696. ORS

166.715(6)(a)(TT). Plaintiffs argue that violations of those real estate and escrow

statutes give rise to criminal liability under ORS 696.990(3), which provides that

“[a] violation of any one of the provisions of ORS 696.505 to 696.590 is a Class A

Cite as 314 Or App 687 (2021) 705

We conclude that defendant adequately preserved only its

contention that plaintiffs had not presented sufficient evi-

dence of a “[p]attern of racketeering activity” under ORS

166.715(4) necessary to survive a directed-verdict motion.

(Emphasis added.) The issue before us is whether multiple

incidents of racketeering activity can constitute a “[p]attern

of racketeering activity” under ORS 166.715(4), even if those

incidents occurred within a single escrow transaction that

damaged two victims. As we discuss below, we conclude that

they can.

The issue is again one of statutory interpretation

for which we apply our usual methodology. See Gaines, 346

Or at 171-72. We start with the text in the context of the

statute. Id. ORS 166.715(4) defines a “[p]attern of racketeer-

ing activity” and provides, in relevant part:

“ ‘Pattern of racketeering activity’ means engaging in at

least two incidents of racketeering activity that have the

same or similar intents, results, accomplices, victims or

methods of commission or otherwise are interrelated by

distinguishing characteristics, including a nexus to the

same enterprise, and are not isolated incidents, provided

at least one of such incidents occurred after November 1,

1981, and that the last of such incidents occurred within

five years after a prior incident of racketeering activity.”

We note a few significant aspects of that text within

the overall statute. First, a pattern does not require proof

of a long string of incidents; just “two incidents of racke-

teering activity” are necessary. Second, those two incidents

can have, as is the case here, “the same * * * victims,” or be

“interrelated by distinguishing characteristics, including a

nexus to the same enterprise,” among other characteristics.

Third, the incidents may not be “isolated incidents.” That

particular phrase does not require proof of continuity of the

incidents or any particular temporal element. Computer

Concepts, Inc. v. Brandt, 310 Or 706, 721, 801 P2d 800

(1990); see also Penuel v. Titan/Value Equities Group, 127

Or App 195, 205, 872 P2d 28, rev den, 319 Or 150 (1994)

misdemeanor.” Plaintiffs contended that defendant violated, among other stat-

utes, various provisions of ORS 696.535, which refer to the power of the state real

estate commissioner to discipline escrow agents for various improper conduct,

misrepresentations, and conditions.

706 Willms v. AmeriTitle, Inc.

(stating that the phrase “does not have a temporal element”

but describes the relationship among the predicate acts of

racketeering). Rather, the Supreme Court has “read the

phrase ‘not isolated’ to describe the relationship between or

among the predicate acts, including their nexus to the same

enterprise.” Computer Concepts, Inc., 310 Or at 721.

In Computer Concepts, Inc., the Supreme Court

examined the legislative history of ORICO and, particu-

larly, the phrase “pattern of racketeering activity.” Id. at

720. It noted that, “[b]oth in committee hearings and in

floor debates, the participants stated that ‘pattern of rack-

eteering activity’ was defined by the statute; they referred

only to the words of the statute to define what a pattern

is.” Id. The court also noted that the only reference to time

occurred when one committee witness stated that the stat-

ute was focused on “the relationship between this crime this

day and this crime the next day. That is, this crime is part

of a pattern.” Id. The court stated that the legislative history

indicated that the phrase “pattern of racketeering activity”

should be “ ‘liberally construed’ in favor of plaintiffs.” Id.

(quoting ORS 166.735(2)).

From those points, we can reject defendant’s con-

tention that a “pattern of racketeering activity” cannot con-

sist of two or more different incidents of racketeering activ-

ity taking place in connection with a single escrow file that

resulted in damage to two victims—e.g., a defendant mak-

ing fraudulent statements regarding the receipt of escrow

payments (ORS 166.715(6)(a)(TT)) and months later provid-

ing a knowingly false sworn statement (ORS.715(6)(a)(B)) or

fraudulently obtaining a signature (ORS 166.715(6)(a)(P))

as part of the same escrow file. Presuming these incidents

occurred, as we must in the posture of this appeal, there

were more than two incidents with the same victims that

were not isolated in occurrence, as they were related to each

other and had a nexus to the claimed enterprise.12

12

Plaintiffs alleged that there was an association between and among

Sanderson, SCI, defendant, and defendant’s representative, Hervey. Plaintiffs

also alleged that this association was an ORICO enterprise. Defendant did not

challenge in its directed-verdict motion the existence of this enterprise or claim

plaintiffs failed to present evidence of such an association.

Cite as 314 Or App 687 (2021) 707

Defendant, relying primarily on two federal cases

from the United States District Court for the District of

Oregon, nevertheless contends that, because the alleged

predicate acts all involved a single escrow file, that the acts

and the overall escrow transaction as a whole must be a sin-

gle incident under ORICO. Of course, those cases, although

they can be relied upon for their persuasive reasoning, are

not binding on our court. Respectfully, we disagree with

each.

In Newman v. Comprehensive Care Corp., 794 F Supp

1513, 1527 (D Or 1992), one district court judge concluded

that, even assuming that the plaintiffs had alleged multi-

ple predicate acts of racketeering within a failed merger

of two corporate entities, “[t]he predicate acts alleged are

not related; the failed merger was an isolated incident.”

The court first analyzed the plaintiffs’ federal RICO claim,

which has different requirements and higher standards for

proof of temporal “continuity” of the pattern of racketeer-

ing activity, before it concluded in one sentence and without

textual analysis of the Oregon statute that the plaintiffs’

ORICO claim failed because it related to a single failed

merger. Id. A different District of Oregon judge later fol-

lowed the conclusion in Newman in an unpublished opinion

that concluded that a complaint had not alleged an ORICO

pattern of racketeering activity when it alleged multiple

predicate acts connected to a single real estate transaction.

Altamont Summit Apartments LLC v. Wolff Properties LLC,

No CV 01-1260-BR, 2002 WL 31972359 at *9 (D Or Aug 21,

2002).

With respect, those cases add an element to the stat-

ute that does not exist. They require not just that plaintiffs

prove a pattern of racketeering activity comprised, under

the statute, of “at least two incidents of racketeering activity

that have the same or similar * * * victims * * * or otherwise

are interrelated by distinguishing characteristics, includ-

ing a nexus to the same enterprise, and are not isolated inci-

dents.” ORS 166.715(4). Those cases also require that plain-

tiffs prove that that pattern of racketeering activity occur

within two separate overarching financial transactions.

Although defendant’s position is not without some appeal,

we conclude that a pattern of racketeering activity under

708 Willms v. AmeriTitle, Inc.

ORS 166.715(4) can consist of separate incidents of racke-

teering activity that have the same victims and a nexus to

the same enterprise and are not isolated, in that those inci-

dents are related in the way set forth in Computer Concepts,

Inc., but that still occur over the course of one larger over-

arching financial transaction. See Burley v. Clackamas County,

298 Or App 462, 467, 446 P3d 564, rev den, 365 Or 721 (2019)

(stating that we are not bound by United States District

Court opinions nor do we follow opinions that do not rely on

our rules of statutory interpretation).

Our conclusion is consistent with Penuel, where we

concluded that the defendants’ misrepresentations in con-

nection with the sale of unsuitable limited partnerships to

18- and 15-year old girls, sales which a jury could find were

criminal violations of the securities laws, were not isolated

incidents even though they occurred “within a very short

time” and were “consummated within a few minutes.” 127 Or

App at 204-05. We noted that, even though such incidents of

racketeering might seem isolated “in common parlance,” the

Supreme Court in Computer Concepts, Inc., had concluded

that “isolated incidents” did not have a temporal element

and instead “describes the relationship between or among

the predicate acts, including their relationship to the same

enterprise.” Id. The federal case law noted above requires

reading into the term “isolated incidents” a temporal ele-

ment that our Supreme Court has rejected. For that reason

and those discussed above, we conclude that the trial court

did not err in denying defendant’s motion for a directed ver-

dict that contended that plaintiffs had not demonstrated an

ORICO “[p]attern of racketeering activity.”

B. The Trial Court’s Jury Instructions and Related Issues

In its fifth through ninth assignments of error,

defendant raises assignments of error relating to the jury

instructions and, separately but relatedly, to the punitive

damages award.

We very briefly address and reject defendant’s fifth

through seventh assignments of error. In its fifth and sixth

assignments of error, defendant raises a number of argu-

ments that the trial court erred in instructing the jury on

Cite as 314 Or App 687 (2021) 709

punitive damages and in failing, post-trial, to reduce the

jury’s $750,000 punitive damage award. We reject those

arguments without extended discussion. We note only

that the bulk of defendant’s arguments contend that it vio-

lated defendant’s due process rights under the Fourteenth

Amendment to the United States Constitution for the jury

to award $750,000 in punitive damages, given that plain-

tiffs also recovered treble damages under ORICO that effec-

tively added another $2 million to the $1 million damages

award. Defendant contends that the combination of puni-

tive and trebled statutory damages results in an improper

“ratio” of 2.75:1 under the relevant punitive-damage case

law when comparing the punitive and statutory multiplier

damages to the compensatory damages award. We note that

we do not need to address that particular argument—and

we express no opinion on it—because, as we discuss below,

we are reversing the judgment on the ORICO claim and,

accordingly, the ORICO treble damages award. However, to

the extent that defendant would continue to maintain that it

violates due process for the jury to award punitive damages

of $750,000 when the jury awarded $1 million in damages

on the fraud claim, we reject that argument without further

discussion.

We turn to defendant’s eighth and ninth assign-

ments of error, which contend that the trial court erred

with respect to the jury instructions on plaintiffs’ fraud and

ORICO claims. We first address defendant’s ninth assign-

ment of error, which contends that the court erred at the jury-

instruction phase when it concluded that a six-year statute

of limitations applied to both plaintiffs’ fraud and ORICO

claims. As we discussed above in the directed-verdict sec-

tion, the court correctly concluded that the six-year limita-

tions period under ORS 12.080(3) applied to plaintiffs’ fraud

claim. The court concluded the same at the jury-instruction

phase and that, again, was correct.

At the directed-verdict stage, as we discussed above,

there was no support for the contention that the trial court

applied a six-year statute of limitations period to plain-

tiffs’ ORICO claim. For some reason, that changed when

the court decided the jury instruction issues. We recount

710 Willms v. AmeriTitle, Inc.

the arguments at the jury-instruction phase relating to the

ORICO statute of limitations.

As in the directed-verdict motion, the arguments

were a bit muddled. Defendant’s primary counsel, Sieving,

asked the court to instruct the jury on the appropriate stat-

ute of limitations that applied to each claim. Defendant

wanted instructions on the appropriate statutes so that

it could argue to the jury that the limitations period had

passed on each of plaintiffs’ claims. As to the fraud claim,

defendant continued to maintain that the court should

instruct the jury that a two-year statute of limitations

applied. Defendant further contended that

“we need a determination from the Court as to which stat-

ute applies to the two claims that are pending. Otherwise,

we get into a mixed question of law and fact as to whether

the six-year applies or whether the two-year applies or

whether the—the five-year applies.”

Defendant’s counsel Sieving later stated, “[a]nd if the court

would instruct them that there’s two or four years on these

two remaining claims, I can argue that they’re time barred.”

Sieving’s later reference to a four-year statute of limitations

appears to have been a casual mistake as he had just refer-

enced a five-year statute, which is the ORICO limitations

period under ORS 166.725(11)(a). No statute of limitations

at issue before the trial court had a four-year limitations

period. Indeed, as discussed below, Sieving’s co-counsel later

explicitly contended to the court that the ORICO limitations

period was, in fact, five years.

Plaintiffs responded by asking for a six-year statute

of limitations to apply, seemingly, to both claims. Plaintiffs’

counsel contended that, “if the Court’s going to give an

instruction as to which one applies, I’d ask for the six-year

statute.” Shortly after, the following exchange occurred:

“THE COURT: So the Court determines that it is the

six-year * * * statute of limitations, and so we’re going to

proceed on that. And so as a result of that, is there any

reason we need a statute of limitations instruction?

“MR. SIEVING: Just for the record, to clarify, Your

Honor, the Court’s determining that there’s a six-year stat-

ute of limitations to both pending claims?

Cite as 314 Or App 687 (2021) 711

“THE COURT: Yes.

“MR. SIEVING: All right. Then we don’t need it.

We—we won’t withdraw it, but for the record—

“THE COURT: You’re withdrawing it based on the

Court’s ruling. You’re objecting to my determination. I got

it.”

Defendant’s other counsel, McLure, then correctly

noted that, “on the RICO statute, the question was we con-

cede that it is a five-year statute, but the question is, is it—

with the discovery rule or—no?” Sieving then contended

that the ORICO limitations period began as of the last pred-

icate racketeering act but acknowledged that the court was

determining that a six-year statute of limitations applied.

The court concluded the colloquy by stating, “we’re moving

you all down the road. That’s what we’re doing. And I under-

stand you’re objecting to that, so that’s preserved for the

record.”

From that somewhat muddled colloquy, we can

make some concrete observations. Defendant objected to

the trial court’s application of a six-year limitations period

to plaintiffs’ ORICO claim and contended that a five-year

limitations period applied. Despite that objection, the court

concluded that a six-year limitations period applied to the

ORICO claim. The trial court was incorrect. The ORICO

statute of limitations provides, in relevant part:

“Notwithstanding any other provision of law, a criminal or

civil action or proceeding under ORS 166.715 to 166.735

[the ORICO statutes] may be commenced at any time

within five years after the conduct in violation of a provi-

sion of ORS 166.715 to 166.735 terminates or the cause of

action accrues.”

ORS 166.725(11)(a). The court erred in concluding that a six-

and not a five-year limitations period applied to plaintiffs’

civil ORICO claim.

Plaintiffs argue, among other things, that, despite

defendant’s contention that it was prevented from arguing

to the jury that plaintiffs’ ORICO claim was time barred,

defendant “never proposed to make any such showing” and

incorrectly argued that the ORICO limitations period should

712 Willms v. AmeriTitle, Inc.

commence from the last predicate racketeering act and not

from plaintiffs’ discovery of any misconduct. It is unclear if

plaintiffs are contending that defendant failed to preserve

its argument or that any error in failing to instruct the jury

is harmless. Regardless, we conclude based on the unique

record before us that the issue is preserved and the error is

not harmless.

Addressing preservation first, defendant asked the

trial court to conclude that a five-year statute of limitations

period applied to plaintiffs’ ORICO claim and, if the court

did so, asked the court to instruct the jury on the five-year

ORICO statute of limitations. Defendant preserved its argu-

ment that it had a right to argue the five-year statute of

limitations to the jury. See Beall Transport Equipment Co.

v. Southern Pacific, 335 Or 130, 141, 60 P3d 530 (2002) (con-

cluding that, by requesting an instruction, the party pre-

served for appeal the argument that the trial court erred

in failing to give the instruction). The court then asked

if defendant still wanted to present that instruction, and

excused it from doing so after defendant stated that it would

not further pursue the instruction if the court concluded

that the limitations period was six years. The court specif-

ically noted that it understood defendant’s argument and

that the objection to the court’s ruling was preserved. After

defendant’s co-counsel correctly noted that ORICO had a

five-year statute of limitation, but that the court had not

addressed whether there was a discovery rule within the

statute, the court cut off the entire colloquy with the parties

by stating “we’re moving you all down the road. That’s what

we’re doing. And I understand you’re objecting to that, so

that’s preserved for the record.” Under these unique circum-

stances where the trial court asked if defendant wanted to

pursue the instruction, stated that it understood defendant

was preserving its objection, and then cut off further dis-

cussion about the instruction, we conclude that defendant’s

assignment of error was preserved. Cf. State v. Martinez,

275 Or App 451, 459-60, 364 P3d 743 (2015), rev den, 358

Or 611 (2016) (concluding that the preservation rules did not

require the party to make ongoing specific objections within

an exhibit where the party’s general objection to the entire

exhibit was already rejected).

Cite as 314 Or App 687 (2021) 713

We also conclude that the trial court’s error was

not harmless. See Or Const, Art VII (Amended), § 3; ORS

19.415(2) (“No judgment shall be reversed or modified except

for error substantially affecting the rights of a party.”). The

court, based on a misunderstanding of the applicable limita-

tions period, prevented defendant from presenting its stat-

ute of limitations defense to the jury. As noted, the statute of

limitations for civil ORICO claims under ORS 166.725(11)(a)

is five years, but the action can be brought either five years

“after the conduct in violation [of ORICO] terminates” or

within five years after the action “accrues.” Accrual occurs

when plaintiffs “discovered or, in the exercise of reason-

able diligence, should have discovered that they have been

damaged and the cause of the damage.” Penuel, 127 Or App

at 200. That question is “normally a question for the jury

unless only one conclusion can reasonably be drawn from

the evidence.” Loewen v. Galligan, 130 Or App 222, 236, 882

P2d 104, rev den, 320 Or 493 (1994) (stating same in context

of the accrual of a securities claim). Having reviewed the

record, we cannot say that a factfinder presented with the

evidence could only find that plaintiffs’ claims were timely

under the ORICO statute of limitations. Defendant was pre-

vented from raising its ORICO statute-of-limitations argu-

ment to the jury when the court ruled that a six-year statute

of limitations applied. We conclude that that error was not

harmless because we cannot say that there is “little likeli-

hood that the particular error affected the verdict”; in other

words, there is at least some likelihood that, had defendant

been able to argue the five-year limitations period to the

jury, it could have affected the jury’s result. Purdy v. Deere

and Company, 355 Or 204, 226, 324 P3d 455 (2014).

We turn to defendant’s eighth assignment of error,

in which it contends, among other things, that the trial

court erred in instructing the jury on the definition of “pat-

tern of racketeering activity” because the court omitted the

concluding phrase “and are not isolated incidents” from the

statutory definition. See ORS 166.715(4) (“ ‘Pattern of racke-

teering activity’ means engaging in at least two incidents of

racketeering activity that have the same or similar intents,

results, accomplices, victims or methods of commission * * *

and are not isolated incidents * * *.” (Emphasis added.)).

714 Willms v. AmeriTitle, Inc.

Although plaintiffs claim that there was no reversible error,

it is at least undisputed that the trial court adopted plain-

tiffs’ incomplete instruction over defendant’s written objec-

tion. In light of our reversal on defendant’s ninth assignment

of error, we need not decide if that instruction amounted to

reversible error. However, because we remand the case for

further proceedings, we note that the trial court incorrectly

instructed the jury by omitting the phrase “and are not iso-

lated incidents” from the statutory definition.

C. Plaintiffs’ Cross-Appeal

Plaintiffs cross-appeal and assign error to the trial

court’s denial of their request for attorney fees. Plaintiffs

sought their attorney fees under ORS 166.725(14), which

provides that the court may award attorney fees to certain

prevailing parties in an ORICO action. Because we reverse

the judgment for plaintiffs on the ORICO claim, plaintiffs’

arguments on cross-appeal, which are premised on their

having prevailed on their ORICO claim, are now moot.

Accordingly, we dismiss the cross-appeal.

III. CONCLUSION

In sum, we affirm the judgment in favor of plain-

tiffs on their fraud claim, reverse the judgment on plaintiffs’

ORICO claim because the trial court erred in preventing

defendant from raising their argument regarding the five-

year limitations period to the jury, and dismiss plaintiffs’

cross-appeal as moot.

On appeal, reversed and remanded as to plaintiffs’

ORICO claim, otherwise affirmed; cross-appeal dismissed

as moot.