Providence Health & Services-Oregon v. Mancuso

573

Argued and submitted December 7, 2021, reversed in part and remanded

January 5, 2023

PROVIDENCE HEALTH & SERVICES–OREGON,

an Oregon nonprofit corporation,

dba Providence Portland Medical Center,

Plaintiff-Appellant,

v.

Sanjana Pahalad MANCUSO,

Personal Representative of

the Estate of Rattan Kumar Pahalad,

in her official and personal capacities,

Defendant,

and

ELAP SERVICES, LLC,

a Delaware limited liability company,

Defendant-Respondent.

Multnomah County Circuit Court

16CV38474; A173949

524 P3d 973

Plaintiff appeals from a judgment denying plaintiff’s claims after the trial

court granted defendant’s motion for summary judgment. Plaintiff assigns error

to the trial court’s rulings (1) that there was no evidence that defendant made the

alleged misrepresentations that constituted plaintiff’s Unlawful Trade Practices

Act (UTPA) claim; (2) that a portion of the UTPA claim was preempted by ERISA;

and (3) that the trial court lacked jurisdiction to adjudicate whether defendant

acted wrongfully in violating the Oregon Rules of Professional Conduct for attor-

neys, as a basis for plaintiff’s tortious interference with economic relations claim.

Defendant argues the trial court did not err, and alternatively argues for affir-

mance on the basis that plaintiff was not a consumer and thus not a person who

could bring a UTPA claim, and that plaintiff had not alleged any ascertainable

loss as contemplated by the UTPA. Held: The trial court erred in granting defen-

dant’s motion for summary judgment. There was a genuine issue of material fact

regarding whether defendant made the alleged misrepresentations that consti-

tuted the UTPA claim. The trial court’s order was overly inclusive with respect

to ERISA preemption. The trial court erred in concluding it did not have jurisdic-

tion to adjudicate plaintiff’s theory of tortious interference based on a violation

of the Oregon Rules of Professional Conduct. Defendant’s additional arguments

do not provide an alternative basis for affirming the grant of summary judgment

because a nonconsumer may bring an action under the UTPA and attorney fees

incurred in litigation against a third party may qualify as an ascertainable loss

for purposes of a UTPA claim.

Reversed in part and remanded.

574 Providence Health & Services-Oregon v. Mancuso

Eric J. Bloch, Judge.

J. Aaron Landau argued the cause for appellant. Also on

the opening brief was Harrang Long Gary Rudnick P. C.

Also on the reply brief were Susan Marmaduke, Arden J.

Olson, and Harrang Long Gary Rudnick P. C.

Kristopher R. Alderman argued the cause for respon-

dent. Also on the brief were Mary-Anne Rayburn, Robert

W. Kirsher, and Gordon & Polscer, L.L.C. and Thomas E.

Lavender, III, and FisherBroyles, LLP.

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

Powers, Judge.

SHORR, J.

Reversed in part and remanded.

Cite as 323 Or App 573 (2023) 575

SHORR, J.

Plaintiff appeals from a judgment denying plain-

tiff’s claims after the trial court granted defendant’s motion

for summary judgment. Plaintiff assigns error to the court’s

grant of summary judgment in favor of defendant on plain-

tiff’s claims for violation of the Oregon Unlawful Trade

Practices Act and tortious interference with economic rela-

tions. For the reasons set out below, we reverse in part and

remand for further proceedings.

I. FACTUAL AND PROCEDURAL BACKGROUND

In 2016, Rattan Kumar Pahalad sought care at

the hospital Providence Portland Medical Center. Plaintiff

Providence Health & Services-Oregon operates that hos-

pital. Upon admission, Pahalad signed a Conditions of

Admission form (the Agreement), agreeing to be financially

responsible for payment for services provided by the hospi-

tal at its Charge Master rates.1 Pahalad passed away after

spending 12 days in plaintiff’s hospital and undergoing qua-

druple bypass surgery. Plaintiff ultimately billed a total of

$740,263.46 for the services provided.

Prior to his death, Pahalad was covered by an

employer-funded health care plan (the Plan). The Plan was

administered by defendant ELAP Services,2 which func-

tioned as the “Designated Decision Maker.” Defendant’s

business model consists of auditing patients’ medical bills

by reviewing publicly available data from health service pro-

viders’ financial filings with the government and then set-

ting reimbursement rates based on defendant’s assessment

of the bills. Defendant will provide patients with legal rep-

resentation to defend against medical providers’ attempts

to recoup any unpaid balance. Based on defendant’s assess-

ment, the Plan paid plaintiff $304,761.29 for the billed ser-

vices, leaving $435,502.17 unpaid.

1

A hospital’s “Charge Master” is a comprehensive listing of billable items

and the rates for those items.

2

Though the litigation below included Pahalad’s estate’s personal repre-

sentative as a defendant, the dispute before us concerns only defendant ELAP

Services. Therefore, use of “defendant” in this opinion will refer only to ELAP

Services.

576 Providence Health & Services-Oregon v. Mancuso

Sanjana Pahalad Mancuso, Pahalad’s daughter, was

appointed the personal representative of Pahalad’s estate.

Plaintiff notified Mancuso of the unpaid balance under the

Agreement and filed a claim against the estate. Mancuso

conferred with her probate attorney and contacted defen-

dant. Following its business model, defendant connected

Mancuso with the law firm FisherBroyles to defend

against plaintiff’s claim on the estate. Mancuso signed an

Attorney-Client Representation Agreement with the firm on

September 7, 2016.3 Mancuso subsequently filed a “Notice of

Disallowance” on behalf of the estate on October 21, 2016,

denying plaintiff’s claim and stating in part:

“[Plaintiff] has already been paid fully and properly for

the goods and services it provided to the decedent between

March 23, 2016, and April 4, 2016. Through your claim,

you seek to collect excessive, unreasonable charges that

neither the decedent nor the estate ever agreed to pay. As

you admitted, [plaintiff] has already been paid $304,761.29

for these goods and services. Medicare would have paid

and [plaintiff] would have accepted just $184,179.25 for the

same goods and services. Thus, [plaintiff] has already been

paid 165% of the amount routinely paid and accepted for

these services. In 2015, [plaintiff] collected only about half

of its total charges. Accordingly, to [plaintiff’s] self-reported

cost-to-charge ratios, the charges it seeks to collect from

the estate are nearly three times its fully allocated costs to

provide the goods and services to the decedent. [Plaintiff’s]

charges are grossly in excess of both the amounts typically

paid for such goods and services and the costs incurred to

provide them. The estate is not liable to pay such exces-

sive, unreasonable charges. [Plaintiff] has already been

paid properly for the goods and services provided to the

decedent.”

Plaintiff subsequently filed suit against Mancuso,

claiming she breached a contract and her fiduciary duties

as the representative of the estate by both failing to pay the

outstanding hospital bill and denying plaintiff’s resulting

3

The Attorney-Client Representation Agreement stated that if she chose to

pursue an appeal of the payment determination under the Plan, the law firm did

not represent her in that matter. She filed a pro se appeal of the payment deter-

mination on October 19, 2016.

Cite as 323 Or App 573 (2023) 577

claim against the estate.4 Plaintiff also named defendant

in the litigation, alleging that defendant provided Mancuso

with false information that led Mancuso to wrongly deny

plaintiff’s claim against the estate.

The trial court bifurcated the proceedings. Mancuso

was ultimately found liable for breach of contract, and a

jury awarded plaintiff $170,684.88 of the $435,502.17 it

had sought from the estate.5 Defendant moved for summary

judgment on the claims against it for unlawful trade prac-

tices and tortious interference with economic relations. The

trial court granted defendant’s motion for summary judg-

ment, ruling that there was no evidence that defendant

made the alleged misrepresentations to Mancuso; a portion

of the claim was preempted by federal law; and that the trial

court lacked jurisdiction to adjudicate the wrongfulness of

defendant’s actions that were the basis for the tortious inter-

ference claim. Plaintiff appeals those rulings and the grant

of summary judgment.

II. ANALYSIS

A. Unlawful Trade Practices Act

Plaintiff’s first claim against defendant alleged that

defendant engaged in unlawful trade practices. Before turn-

ing to the specifics of that claim, we provide some background

regarding Oregon’s Unlawful Trade Practices Act (UTPA).

As we recently discussed in Bohr v. Tillamook County

Creamery Assn., 321 Or App 213, 228, 516 P3d 284 (2022),

Oregon’s UTPA was enacted as a comprehensive statute for

the protection of consumers from unlawful trade practices.

It contains an extensive list of practices declared unlawful.

As relevant to the current matter, ORS 646.608(1)(h) states

that it is an unlawful practice if in the course of a person’s

business, vocation, or occupation the person “disparages the

real estate, goods, services, property or business of a cus-

tomer or another by false or misleading representations of

fact.” The UTPA further provides that “a person that suffers

an ascertainable loss of money or property, real or personal,

4

Plaintiff amended its complaint a number of times. The Third Amended

Complaint is the subject of the current proceedings.

5

Plaintiff withdrew the breach of fiduciary duty claim.

578 Providence Health & Services-Oregon v. Mancuso

as a result of another person’s willful use or employment

of a method, act or practice declared unlawful under ORS

646.608” may bring suit to recover actual or statutory dam-

ages. ORS 646.638.

In its Third Amended Complaint, plaintiff claimed

defendant employed unlawful trade practices when it made

false and misleading representations of fact to Mancuso

regarding plaintiff’s charges for services, inducing her to

wrongly deny payment under the Agreement. Specifically,

plaintiff claimed that defendant made the following false

statements to Mancuso:

“(a) That [plaintiff] had already been paid fully and

properly for the goods and services that it provided to

Pahalad between March 23, 2016, and April 4, 2016;

“(b) That [plaintiff] through its claim under the

Agreement was seeking to collect excessive and unreason-

able charges;

“(c) That historic Medicare cost to charge ratio data

were relevant to what Pahalad had agreed to pay under

the Agreement or to what [defendant] was obliged to pay

Pahalad’s estate under the Plan;

“(d) That [plaintiff] had been paid by the Plan 165% of

the amount routinely paid and accepted for such services;

and

“(e) That [plaintiff’s] Charge Master rates are grossly

in excess of the amounts typically paid for such goods and

services and of the costs incurred to provide those goods

and services.”

In its motion for summary judgment, defendant argued that

there was no evidence that it engaged in the conduct alleged,

that plaintiff had not suffered any ascertainable loss to form

a basis for a UTPA claim, that plaintiff could not bring a

UTPA claim because it was not a consumer, and that por-

tions of the claim were preempted by federal law.

The trial court granted defendant’s motion for sum-

mary judgment on the UTPA claim. The court found portions

of plaintiff’s claim were preempted by ERISA, the federal

law governing the administration of Pahalad’s health insur-

ance plan. Regarding the remainder of the UTPA claim that

Cite as 323 Or App 573 (2023) 579

was not preempted by ERISA, the trial court found that

there was no evidence that defendant (or the attorneys of

FisherBroyles on behalf of defendant) made the misrepre-

sentations alleged by plaintiff. The court found that the only

way to conclude that defendant made the misrepresenta-

tions to Mancuso was through improper inference stacking

and speculation. The court therefore found that there was

insufficient evidence in the record to create a jury question

as to whether the alleged misrepresentations were made by

defendant, and thus granted defendant’s motion for sum-

mary judgment.

Plaintiff assigns error to the trial court’s decision

on both grounds. Defendant argues that the trial court did

not err, and alternatively asks us to affirm based on argu-

ments that it raised in its summary judgment motion below

that the trial court did not rule on. We address each in turn.

1. Genuine issue of material fact

On appeal of a grant of summary judgment, we will

affirm the trial court’s judgment if we agree that there is

no genuine issue of material fact, and the moving party is

entitled to a judgment as a matter of law. ORCP 47 C; Two

Two v. Fujitec America, Inc., 355 Or 319, 324, 325 P3d 707

(2014). No issue of material fact exists if, viewing the evi-

dence in the light most favorable to the nonmoving party,

“no objectively reasonable juror could return a verdict for

the adverse party on the matter that is the subject of the

motion for summary judgment.” ORCP 47 C. “The nonmov-

ing party * * * has the burden of producing evidence on any

issue raised in the motion as to which it would have the bur-

den of persuasion at trial.” Hagler v. Coastal Farm Holdings,

Inc., 354 Or 132, 140, 309 P3d 1073 (2013). Thus, here, to

defeat defendant’s motion for summary judgment, plaintiff

was required to come forward with specific facts demon-

strating a genuine issue for trial regarding whether defen-

dant made the alleged false and misleading representations

to Mancuso. We conclude plaintiff has met that burden.

Plaintiff presented evidence regarding defendant’s

business model, including that its evaluations of medical

bills and the amounts it pays are based in part on data that

healthcare providers supply to the government. Defendant

580 Providence Health & Services-Oregon v. Mancuso

then supplies patients with legal representatives who will

dispute the remainder of the bill as excessive. Plaintiff also

submitted evidence that Mancuso had engaged defendant’s

attorneys, at defendant’s expense, with the express agree-

ment that plaintiff had already been paid fairly for the ser-

vices rendered.6 The Notice of Disallowance Mancuso filed

contained statements strikingly similar to those included in

defendant’s promotional materials, language included in the

Plan regarding calculation of benefits, and correspondence

between defendant and plaintiff regarding the billing. For

example, the Notice of Disallowance referred to Medicare

rates, plaintiff’s past collections rates, and cost-to-charge

ratios; text from the Plan and defendant’s promotional mate-

rials refer to cost ratios and Medicare and Medicaid allowed

amounts. At her deposition, Mancuso was unable to recall

where she obtained the information included in the Notice

of Disallowance, and acknowledged she was not an expert

in Medicare reimbursements. The Notice of Disallowance

also contained language mirroring defendant’s letter to

plaintiff regarding the balance bill, referring to the charges

as “grossly excessive” or “grossly in excess” of actual costs.

It would be reasonable for a factfinder to infer from that

evidence that defendant, which regularly engages in

audits of medical bills and review of publicly available data

regarding reimbursement rates, made the representations

to Mancuso for her to ultimately include in her Notice of

Disallowance.7

The trial court found that there was no evidence

that defendant (or the attorneys of FisherBroyles on behalf

6

The Attorney-Client Representation Agreement reads, in part:

“The Medical Provider may claim that the Client, ELAP, the Client’s health

benefit plan, and/or the third party administrator owe additional payment to

the Medical Provider. It is the position of the Firm that the Medical Provider

has been paid fair and reasonable reimbursement for the medical care and

services rendered to Client upon the Medical Provider’s receipt of the monies

owed to it as described in the Explanation of Benefits for the medical care at

issue. Although the Client has the option to appeal the payment determina-

tion made by Client’s health benefits plan, the Firm does not intend to pursue

such appeal on behalf of Client, and Client hereby acknowledges and agrees

with that course of action by the Firm.”

7

We do not mean to suggest that the evidence must be interpreted this way,

simply that it would be a reasonable inference for a factfinder to draw, thus cre-

ating a genuine issue of fact regarding a material element of the claim.

Cite as 323 Or App 573 (2023) 581

of defendant) made the statements at issue to Mancuso,

reasoning that the only way to reach that conclusion was

through inference stacking and speculation. However, affir-

mative indirect or circumstantial evidence can provide a

basis from which a jury could properly draw an inference.

Wagner v. Kaiser Foundation Hospitals, 285 Or 81, 89-90,

589 P2d 1106 (1979). Indeed, there are numerous situ-

ations where plaintiffs must rely on circumstantial evi-

dence because the defendant is the only witness to an act.

Worman v. Columbia County, 223 Or App 223, 233 n 6, 195

P3d 414 (2008). Reviewing the evidence in the light most

favorable to plaintiff, and drawing all reasonable inferences

in plaintiff’s favor, we conclude that there was a genuine

issue of material fact, and thus summary judgment was

inappropriate.

Defendant argues that the uncontradicted testi-

mony of defendant’s corporate representative establishes

that defendant did not have any substantial communication

with Mancuso, did not provide the information to Mancuso,

and had no knowledge of what the attorneys of FisherBroyles

may have communicated to Mancuso. However, a factfinder

is not required to believe the testimony of an interested

party. Worman, 223 Or App at 232-33. To be sure, “[w]hen

evaluating the evidence, uncontradicted testimony cannot

be controverted on summary judgment simply by asserting

that it should not be believed.” Hayes Oyster Co. v. DEQ, 316

Or App 186, 193, 504 P3d 15 (2021), rev den, 369 Or 507

(2022). But “flat disbelief” of defendant’s evidence does not

create the genuine issue of material fact here; rather, plain-

tiff has set forth other facts that, when viewed in the light

most favorable to plaintiff, establish a different version of

what transpired.

Ultimately, “in determining whether to withdraw

an allegation from consideration by the jury it is not the

function of the court to weigh conflicting evidence. If an

allegation is supported by any competent evidence, * * * it

is the exclusive function of the jury to decide whether to

believe that [evidence.]” Wagner, 285 Or at 84. Because the

evidence submitted by plaintiff created a genuine issue of

material fact regarding whether defendant made the alleged

582 Providence Health & Services-Oregon v. Mancuso

misrepresentations to Mancuso, the trial court erred in

granting defendant’s motion for summary judgment.8

2. ERISA preemption

The parties agree that the Plan that partially cov-

ered Pahalad’s medical care was an employee benefit plan

subject to the Employee Retirement Income Security Act of

1974 (commonly known as ERISA). ERISA includes a pre-

emption clause, which supersedes state laws and claims inso-

far as they “relate to any employee benefit plan” governed by

ERISA. 29 USC § 1144 (a).9 Federal courts have explained

that a claim “relates to” a plan governed by ERISA “if it has

a connection with or reference to such a plan,” looking at

“whether the claim is premised on the existence of an ERISA

plan, and whether the existence of the plan is essential to

the claim’s survival” and “the impact that the action has on

a relationship governed by ERISA, such as the relationship

between the plan and a participant.” Providence Health Plan

v. McDowell, 385 F3d 1168, 1172 (9th Cir 2004), cert den, 544

US 961 (2005). The trial court found that one of the bases for

plaintiff’s UTPA claim and the requested injunctive relief

were preempted by ERISA. Whether a state claim is pre-

empted by ERISA is a matter of law that we review for legal

error. Liberty Northwest Ins. Corp. v. Kemp, 192 Or App 181,

186-87, 85 P3d 871, rev den, 337 Or 34 (2004).

As noted above, plaintiff’s UTPA claim alleged

that defendant made a number of misrepresentations of

fact to Mancuso, including “(c) [t]hat historic Medicare cost

to charge ratio data were relevant to what Pahalad had

agreed to pay under the Agreement or to what [defendant]

was obliged to pay Pahalad’s estate under the Plan[.]” The

8

As discussed above, defendant argues on appeal that we should affirm the

trial court’s summary judgment against plaintiff’s UTPA claim because there

was no evidence in the record from which a reasonable factfinder could infer that

defendant made the alleged misrepresentations to Mancuso. We reject that argu-

ment. We note that defendant does not develop any argument on appeal that the

claimed misrepresentations cannot, as a matter of law, amount to disparagement

under ORS 646.608(1)(h). Further, outside of a passing mention in a one-sentence

footnote, defendant also does not develop any argument that plaintiff failed to

create a genuine issue of fact that the claimed misrepresentations were false. As

a result, we do not reach those issues here.

9

Some exemptions apply to the preemption clause, which are not applicable

to this situation.

Cite as 323 Or App 573 (2023) 583

trial court found that all of the other alleged misrepresen-

tations in plaintiff’s UTPA claim required no interpretation

of the Plan to determine falsity, but that alleged misrepre-

sentation (c) was different, and required interpretation of

the terms of the Plan to determine its falsity. Thus, the trial

court found misrepresentation (c) was preempted by ERISA.

On appeal, the parties do not dispute that the sec-

ond half of misrepresentation (c) requires an interpretation

of the terms of the Plan. Whether historic Medicare cost

to charge ratio data were relevant to what defendant was

obliged to pay under the Plan clearly requires interpretation

of the Plan, and thus was correctly found to be preempted

by ERISA. Additionally, the parties agree that the first half

of misrepresentation (c), concerning whether that same data

was relevant to what Pahalad had agreed to pay under the

Agreement with Plaintiff, was not preempted by ERISA, as

it did not require any interpretation of the Plan. The parties

merely disagree about what portion of misrepresentation (c)

the trial court actually found to be preempted.

The trial court’s Opinion and Order for summary

judgment stated the following:

“[A]lleged misrepresentation (c) appears to be different.

It states: ‘[t]hat historic Medicare cost to charge ratio

data were relevant to what Pahalad agreed to pay under

the Agreement or to what [defendant] was obliged to pay

Pahalad’s estate under the Plan[.]’ It is unclear how the

falsity of such a statement could be properly determined

without the court reviewing and interpreting the terms

in the Plan. As such, allegation (c) sufficiently ‘refers to’

an ERISA plan and, as such, Plaintiff’s UTPA claim, as it

relates to the misrepresentation alleged in (c), is, indeed,

‘conflict preempted.’ ”

Although the rationale of the court’s opinion and order cor-

rectly found the alleged misrepresentations in the Third

Amended Complaint to not be preempted insofar as they do

not relate to the Plan, the above-quoted paragraph is overly

inclusive of the entire scope of misrepresentation (c). Only

the second half of misrepresentation (c) relates to the Plan,

and thus, as the parties agree, only the second half of mis-

representation (c) is preempted by ERISA. On remand, the

584 Providence Health & Services-Oregon v. Mancuso

trial court should modify its order to clarify that ERISA

only preempts plaintiff’s claim that defendant violated the

UTPA when it allegedly misrepresented to Mancuso that

historic Medicare cost to charge ratio data were relevant to

what defendant was obliged to pay Pahalad’s estate under

the Plan. As with allegations (a), (b), (d), and (e), plaintiff’s

claim that defendant violated the UTPA by falsely misrep-

resenting that such data were relevant to what Pahalad had

agreed to pay under the Agreement is not preempted by

ERISA.

Additionally, in its prayer for relief in the Third

Amended Complaint, plaintiff requested an injunction

under ORS 646.638(1) barring defendant from taking any

of the following actions in the future with respect to any

patient of plaintiff or any of plaintiff’s affiliates:

“(a) Directly or through its administrator GPA, repre-

senting to [plaintiff] or its affiliates’ patients that appeal

rights under the patients’ plans ‘also apply to providers of

services’;

“(b) Directly or through its administrator GPA, rep-

resenting to [plaintiff] or its affiliates’ patients that those

providers’ charges ‘exceed the plan’s allowable claim limits’;

“(c) Directly or through its administrator GPA, repre-

senting to patients or to their employers that patients are

not liable for such charges because of [defendant’s] conten-

tion that [plaintiff] or its affiliates’ charges are ‘excessive,’

‘unreasonable,’ ‘arbitrary,’ or words to that effect;

“(d) Directly or through its administrator GPA, impos-

ing arbitrary reductions in payments to or on behalf of

[plaintiff’s] or its affiliates’ patients which are not actually

supported by the terms of the plan and which have not

been clearly made known to the patient before [plaintiff’s]

services are rendered; and

“(e) Directly or through its administrator GPA, con-

tending to patients or to employers that historic cost report

data filed with the U.S. Centers for Medicare and Medicaid

services serve as a basis for limiting any obligation to pay

[plaintiff’s] or its affiliates’ Charge Master rates.”

The trial court found that a determination of what, if any,

of plaintiff’s requested injunctive relief was appropriate

Cite as 323 Or App 573 (2023) 585

would require a determination of which of the representa-

tions plaintiff sought to have enjoined were actually false,

which would necessitate the court interpreting the terms

of an ERISA plan, which it was “conflict preempted” from

undertaking under federal law. The court therefore granted

defendant’s motion for summary judgment to the extent

plaintiff sought injunctive relief.

On appeal, plaintiff asserts that not all of the

requested injunctive relief relates to an ERISA plan. We

agree. The requested relief in paragraph (c) does not relate

to and is not premised on the existence of any ERISA plan:

A patient’s financial liability for medical services received is

not premised on or related to the administration of a plan

subject to ERISA. Similarly, the requested relief in para-

graph (e) could include a patient’s contractual obligations to

pay charges separate from such a plan. To the extent that

the requested injunctive relief does not relate to an ERISA

plan, it is not preempted.

We remand for the trial court to modify and nar-

row its ruling regarding what portions of the claim are pre-

empted under ERISA.

3. Plaintiff’s ability to bring a UTPA action

We turn now to defendant’s alternative argument

for affirmance, namely that plaintiff cannot avail itself of the

UTPA because it is not a consumer of defendant’s services.

Though this was not a basis for the trial court’s summary

judgment ruling, it is purely a matter of law that we can and

should resolve. See Diens v. Bonome, 314 Or App 364, 371,

499 P3d 846 (2021) (“[A]lternative bases for summary judg-

ment that were raised but not decided below are generally

well-suited to resolution on appeal, insofar as the propriety

of summary judgment presents purely a question of law.”).

Defendant argues that the underlying purpose of the UTPA

is to protect solely consumers from unlawful trade practices,

and that a business cannot seek to avail itself of the UTPA’s

protections. Plaintiff argues that defendant’s assertion is

contrary to the plain text of the UTPA.

The parties’ arguments require us to engage in

statutory interpretation under our familiar methodology of

586 Providence Health & Services-Oregon v. Mancuso

examining the statutory text, in context, along with

any legislative history that is helpful to our analysis. State

v. Gaines, 346 Or 160, 171-72, 206 P3d 1042 (2009). ORS

646.638 states that “a person” that suffers an ascertain-

able loss as a result of unlawful trade practices may bring

an individual action. The act defines “person” as “natural

persons, corporations, trusts, partnerships, incorporated

or unincorporated associations and any other legal entity

except bodies or officers acting under statutory authority

of this state or the United States.” ORS 646.605(4).

Plaintiff is a corporation, and therefore qualifies as a “per-

son” under the plain text of the statute.10 Thus, a corpora-

tion can be a person that suffers an ascertainable loss as

a result of an unlawful trade practice and assert a UTPA

claim under ORS 646.638, at least to the extent that

the corporation is able to allege an individual UTPA

violation.

Furthermore, our conclusion is consistent with the

legislative history of the individual UTPA cause of action.

When the UTPA was originally passed in 1971 as part of a

collection of consumer protection measures, the individual

action was available only to “any person who purchases or

leases goods or services and thereby suffers any ascertain-

able loss” due to another’s use of unlawful acts. Or Laws

1971, ch 744, § 13. Significantly, in 1975, the statute was

amended to eliminate the requirement that the person

must have purchased or leased goods or services. Or Laws

1975, ch 437, § 4. In a summary of the bill proposing the

change, the Oregon Attorney General, who introduced the

bill, described the amendment:

10

We acknowledge that the federal District Court of Oregon has held other-

wise. In CollegeNET, Inc. v. Embark.com, Inc., 230 F Supp 2d 1167, 1173 (D Or

2001), that court noted that courts interpreting the UTPA had almost uniformly

recognized that it first and foremost was a consumer protection statute. Based

on that fact, the court held that the use of the word “person” in ORS 646.638 was

ambiguous because “[i]t could reasonably be interpreted to include only those

persons who have purchased or contracted for goods or services.” CollegeNET,

230 F Supp 2d at 1173. Federal courts’ interpretations of Oregon laws may be

persuasive but are not controlling. Wedgwood Homes v. Lund, 294 Or 493, 502

n 11, 659 P2d 377 (1983). The rationale in CollegeNET is not convincing. Given

the statutory definition of the word “person,” we do not see how the term could

be found to be ambiguous or held to mean anything other than what is explicitly

stated in the Act.

Cite as 323 Or App 573 (2023) 587

“Section 4 amends the private remedy under the [Unlawful]

Trade Practices Act. Presently the only person who can

recover damages is a consumer who suffers damages. The

amendment would provide that any person who suffers

damages could recover. The principal situation is where a

competing businessman is injured as a result of an illegal

practice by his competitor.”

Appendix F, Senate Committee on Consumer and Business

Affairs, SB 37, Jan 22, 1975 (letter of Oregon Attorney

General Lee Johnson). Other than minor grammatical

changes and the addition of exceptions that do not apply to

the current matter, ORS 646.638(1) has not substantively

changed since the 1975 amendment. The legislative history

supports our understanding of the UTPA that a business

that is not a consumer may bring an action if it can other-

wise state a substantive UTPA violation.

While defendant is correct that past cases have

noted the primary purpose of the UTPA is to protect con-

sumers, our holding today is not contrary to that pur-

pose. Consumers are protected through the prevention or

remedying of false and misleading representations of fact

being made in the course of business. See Pearson v. Philip

Morris, Inc., 358 Or 88, 116 n 17, 361 P3d 3 (2015) (noting

the public enforcement option under the UTPA can be used

to protect consumers from many of the unlawful practices

that may not result in ascertainable losses, including ORS

646.608(1)(h)).

Plaintiff thus is not barred from bringing a UTPA

action simply because it is a corporation and not a consumer

in this situation.

4. Ascertainable loss

Defendant also argued in its summary judgment

motion before the trial court, and raises again on appeal,

the theory that the attorney fees plaintiff incurred in pur-

suing litigation do not qualify as an ascertainable loss as

contemplated by the UTPA. As with the previous issue, the

trial court did not rule on that argument, but the argument

raised is purely a matter of law that we should resolve.

Diens, 314 Or App at 371.

588 Providence Health & Services-Oregon v. Mancuso

In the Third Amended Complaint, plaintiff alleged

that defendant’s misrepresentations to Mancuso inter-

fered with satisfaction of the balance of the charges, caus-

ing an ascertainable loss to plaintiff due to the “costs,

delay, expenses, and attorney fees of bringing this action.”

Defendant raises three arguments why those amounts are

not recoverable. It asserts first that plaintiff cannot recover

any of the unpaid bill because the litigation against Mancuso

resolved the amount that plaintiff was legally owed; second,

that attorney fees and litigation expenses are not the kind

of ascertainable loss contemplated by the UTPA; and, third,

that the UTPA provides for recovery of attorney fees for

pursuing an action under the UTPA, so those fees would

not be contemplated as a separate loss. Plaintiff responds

by emphasizing that it was only seeking the fees and costs

incurred in pursuing the litigation against Mancuso, which

was necessary because defendant’s unlawful trade practices

induced Mancuso to breach the original Agreement.11

ORS 646.638 states that any person “that suffers an

ascertainable loss of money or property, real or personal” as

a result of another person’s engagement in an unlawful trade

practice may bring an individual action under the UTPA.

“Ascertainable” loss has been interpreted to mean “capable

of being discovered, observed or established.” Scott v. Western

Int. Sales, Inc., 267 Or 512, 515, 517 P2d 661 (1973). The

Oregon Supreme Court has further explained that:

“[T]he loss must be objectively verifiable, much as economic

damages in civil actions must be. But unlike general eco-

nomic damages in a civil action, the loss required for a

UTPA claim must be specifically of ‘money or property, real

or personal.’ An ascertainable loss of some other kind—

such as loss of physical ability due to a personal injury—is

not cognizable in a UTPA claim. Likewise, noneconomic

losses cognizable in a civil action—such as physical pain,

emotional distress, or humiliation—will not satisfy a pri-

vate UTPA plaintiff’s burden.”

Pearson, 358 Or at 117 (internal citations omitted).

11

Though the complaint referred to the costs of bringing “this action,” the

action included both the claims against Mancuso for breach of the Agreement

and those against defendant for violation of the UTPA and tortious interference

with economic relations. The claims were bifurcated by the trial court.

Cite as 323 Or App 573 (2023) 589

We have held at times that attorney fees identified

as losses in UTPA claims did not satisfy the “ascertain-

able loss” requirement. See Hedrick v. Spear, 138 Or App

53, 57-58, 907 P2d 1123 (1995) (party did not refer to any

loss sustained as a result of the alleged unlawful trade

practices; attorney fees were separately recoverable under

the UTPA attorney fee provision if the party prevailed);

C.A.R. Tow, Inc. v. Corwin, 76 Or App 192, 195-96, 708 P2d

644 (1985) (attorney fees incurred by a customer in defend-

ing a car repair shop’s lawsuit for defamation and fraud

did not stem from the alleged unlawful trade practices and

were not an ascertainable loss within the meaning of the

UTPA). Furthermore, the Oregon Supreme Court has held

that the expenditure of money to prevent or mitigate possi-

ble future harm was “not the kind of loss compensable under

the UTPA, because the expenditure [was] not based on any

present harm to [the] plaintiff’s economic interests.” Paul v.

Providence Health System-Oregon, 351 Or 587, 603, 273 P3d

106 (2012).

However, we conclude that the present claim is

distinguishable. Plaintiff here has identified the ascertain-

able loss as those fees and expenses incurred in its litiga-

tion against Mancuso to recover the monies owed under the

contractual agreement that defendant allegedly induced

Mancuso to breach. That is an economic damage that is

objectively verifiable. It was not merely an expenditure to

prevent a future harm, as in Paul; rather, here, plaintiff was

attempting to remedy the present harm of Mancuso’s failure

to pay the amount owed under the Agreement. Plaintiff’s the-

ory is that defendant’s actions resulted in the need to pursue

litigation against Mancuso, which caused plaintiff to suffer

ascertainable losses in the form of attorney fees and other

litigation expenses.12 That is not an expenditure to prevent

future harm. Furthermore, that is not a claim for attorney

12

We acknowledge that the “American Rule” is that, as a general rule, each

litigant pays their own attorney fees absent a right to recover attorney fees pro-

vided by a contract or statute. See State v. Ramos, 358 Or 581, 600-01, 368 P3d

446 (2016). However, there are some exceptions to the American Rule, including

that expenses incurred in third-party litigation to remedy a party’s harms are

recoverable as “economic damages.” As the Supreme Court recently held:

“ ‘A person who through the tort of another has been required to act in the

protection of his interests by bringing or defending an action against a third

590 Providence Health & Services-Oregon v. Mancuso

fees in pursuit of the UTPA action against defendant, which

are otherwise recoverable under ORS 646.638(3).

Because we conclude as a matter of law that attor-

ney fees incurred as a result of litigation against a third-

party to remedy an alleged violation of the UTPA may qual-

ify as an ascertainable loss, defendant has not presented

an alternative basis upon which to affirm the trial court’s

grant of summary judgment.13

B. Tortious Interference with Economic Relations Claim

Plaintiff’s second claim against defendant alleged

tortious interference with plaintiff’s economic relations,

based on defendant’s interference with plaintiff’s contract

with Pahalad (and his estate upon his death). To prevail on

a claim for tortious interference with economic relations, a

plaintiff must prove

“(1) the existence of a professional or business relationship

(which could include, e.g., a contract or a prospective eco-

nomic advantage); (2) intentional interference with that

relationship or advantage; (3) by a third party; (4) accom-

plished through improper means or for an improper pur-

pose; (5) a causal effect between the interference and the

harm to the relationship or prospective advantage; and

(6) damages.”

Allen v. Hall, 328 Or 276, 281, 974 P2d 199 (1999). With

respect to the fourth element, a plaintiff may demonstrate

the means utilized “ ‘violate some objective, identifiable

standard, such as a statute or other regulation, or a recog-

nized rule of common law, or, perhaps, an established stan-

dard of a trade or profession.’ ” Ride PDX v. Tee & B, LLC,

322 Or App 165, 168, 519 P3d 870 (2022) (quoting Northwest

Natural Gas Co. v. Chase Gardens, Inc., 328 Or 487, 498, 982

P2d 1117 (1999)).

person is entitled to recover compensation for the reasonably necessary loss

of time, attorney fees and other expenditures thereby suffered or incurred.’ ”

State v. Fox, 370 Or 456, 466-67, 521 P3d 151 (2022) (quoting Ramos, 358 Or at

601).

13

We express no opinion on whether defendant actually caused the loss or as

to the amount of damages that would be due as those issues are not before us.

Cite as 323 Or App 573 (2023) 591

Plaintiff advanced two theories regarding improper

means: (1) defendant engaged in improper means when it

falsely disparaged plaintiff’s business as set forth in the

UTPA claim; and (2) defendant engaged in improper means

when it induced Mancuso to accept legal representation

from defendant’s counsel under circumstances constituting

a legal conflict of interest that is impermissible under the

Oregon Rules of Professional Conduct (ORPC) for attorneys.

The trial court granted defendant’s motion for sum-

mary judgment on the tortious interference claim. The trial

court concluded that, for the same reasons it granted the

summary judgment motion with respect to the UTPA claim,

the record was “devoid of evidence sufficient to support a

jury finding that [defendant] employed ‘improper means’

by the making of false representations to Mancuso[.]” The

trial court further concluded that it was without authority

to determine whether a violation of the ORPC had occurred,

because enforcement and adjudication of the ORPC is

reserved to the Oregon Supreme Court and the Disciplinary

Board of the Oregon State Bar. Because it lacked the author-

ity to determine whether a conflict of interest was proven,

the trial court further determined that plaintiff could not

establish “improper means,” a necessary element of the tor-

tious interference claim.

Plaintiff challenges both conclusions. For the rea-

sons articulated above, we reverse with respect to the UTPA

claim, as we have concluded that there was a genuine issue of

material fact regarding whether defendant made the alleged

misrepresentations to Mancuso. As we explain below, we

further conclude that the trial court erred in determining

that it did not have the authority to find “improper means”

based on a violation of the ORPC.

We review for legal error the trial court’s determi-

nation that defendant was entitled to judgment as a mat-

ter of law. Bank of America, N. A. v. Carlson, 298 Or App

505, 507, 447 P3d 507 (2019). Below, the trial court relied

primarily on VavRosky MacColl Olson v. Employment Dept.,

212 Or App 174, 187, 157 P3d 312 (2007), in concluding that

it did not have authority to decide the merits of the alleged

violation of the ORPC. In that case, an employer law firm

592 Providence Health & Services-Oregon v. Mancuso

terminated an attorney employee following his development

of a medical condition that rendered him unable to perform

his job tasks. VavRosky MacColl Olson, 212 Or App at 176-78.

The employee was awarded unemployment benefits and the

employer appealed, arguing that, even though the attorney

retained his bar license, he was unable to comply with the

rules of professional conduct, and therefore was unable to

satisfy a job prerequisite required by law, making him inel-

igible for unemployment benefits. Id. at 178. We held that

the Supreme Court and the Oregon State Bar had exclusive

jurisdiction to enforce the rules of professional conduct. We

explained that there would have to be an adjudication by

one of those bodies suspending or revoking the attorney’s

license to entitle the employer to relief from unemployment

charges on that basis. Id. at 187. In the present matter, the

trial court concluded that the issue regarding the existence

and effect of an ORPC violation was substantively and

procedurally nearly identical to that in VavRosky MacColl

Olson. In other words, the trial court concluded that, with-

out an actual adjudication by the Oregon State Bar or the

Oregon Supreme Court of a violation of the ORPC by defen-

dant, the trial court could not determine if defendant had

acted improperly by violating the conflict-of-interest rules.

We disagree. In VavRosky MacColl Olson, the actual

adjudication of a violation of the ORPC was a predicate to

the claimed relief. Here, an adjudication or finding of a vio-

lation of the ORPC was not a necessary predicate for the

trial court to find defendant to have engaged in improper

conduct. In Kidney Association of Oregon v. Ferguson, 315 Or

135, 843 P2d 442 (1992), the Oregon Supreme Court noted

that trial courts, while lacking the authority to determine

disciplinary rule violations, as such, or to impose a sanction

for the violation thereof, did have the authority to consider,

in determining appropriate attorney fees, whether an attor-

ney had breached a fiduciary duty owed to a client, such as a

violation of the conflict-of-interest rules. Kidney Association,

315 Or at 143-44. Further, we have noted that “outside the

context of disciplinary proceedings—and particularly in

breach of contract and malpractice actions—disciplinary

rules may define the scope of duties, including fiduciary

duties, that an attorney owes to a client.” Frost v. Lotspeich,

Cite as 323 Or App 573 (2023) 593

175 Or App 163, 187-88, 30 P3d 1185 (2001). Because an

official finding of a violation of the ORPC or some actual

discipline of an attorney was not a predicate to a finding

of “improper means,” the trial court did not lack authority

to proceed on plaintiff’s theory in the tortious interference

claim.14

In sum, we conclude that the trial court erred

when it granted defendant’s motion for summary judg-

ment. There was a genuine issue of material fact regard-

ing whether defendant made the alleged misrepresentations

that allegedly caused Mancuso to breach the Agreement,

constituting a potential violation of the UTPA. The trial

court’s order was overly inclusive with respect to ERISA

preemption and extended to matters that did not relate to

the Plan. Defendant’s additional arguments do not provide

an alternative basis for affirming the trial court’s grant of

summary judgment, because we conclude a business may

bring an action under the UTPA and attorney fees incurred

in litigation against a third party to remedy harm caused

by unfair trade practices may qualify as an ascertainable

loss for purposes of a UTPA claim. The trial court also erred

in concluding that it did not have jurisdiction to adjudicate

plaintiff’s theory of tortious interference based on a viola-

tion of the Oregon Rules of Professional Conduct.

Reversed in part and remanded.

14

As with the additional elements of the UTPA claim, we take no position

on whether defendant’s actions actually constituted improper means. We also

decline to address defendant’s additional arguments regarding other elements of

the tortious interference claim, including causation and damages, as they involve

questions of fact to be determined by a factfinder on remand.