45 Trial Lawyer • Spring 2022 See Sheets 46 The plaintiffs obtained a judgment against RPD, a limited liability company owned and managed by three members of the Opsahl family. The plaintiffs then served writs of garnishment on the Opsahls. The plaintiffs contended the Opsahls intentionally kept RPD in a judgment-proof state by periodically scraping out all of its cash assets, thereby depriving RPD’s creditors of recovery. They asserted the Opsahls owed obligations to RPD for unlawful distributions and fraudulent transfers at the time of garnishment and that those obligations constituted garnishable property. Regarding unlawful distributions, the plaintiffs relied on ORS 63.229(1), which prohibits an LLC from making distributions to members if the LLC is insolvent, and ORS 63.235(1), which imposes personal liability in favor an LLC against LLC members who receive or approve unlawful distributions. The trial court found RPD had been consistently insolvent at all relevant times and yet had made a distribution of $106,000 to Erik Opsahl during the two-year statute of limitations imposed by ORS 63.235(4) — a distribution which all three Opsahls had approved. The court thus awarded garnishment of that amount against all three Opsahls. Regarding fraudulent transfers, the plaintiffs relied on the Uniform Fraudulent Transfer Act (UFTA), ORS 95.200 to 95.310. The Twiggs presented evidence that RPD’s lease of a building owned by the Opsahls was essentially a sham, such that the rent payments were fraudulent transfers as defined by the UFTA. The trial court did not determine whether the rent arrangement was fraudulent because it concluded it could not grant a remedy under the UFTA in a garnishment proceeding where the money had since been spent. On appeal, the Court of Appeals affirmed the garnishment award for the unlawful distribution. The court recognized the plaintiffs may assert previously unlitigated claims within a garnishment proceeding, that the unlawful distribution statutes can create a garnishable obligation, and that, while the usual plaintiff in an unlawful distribution claim is the LLC itself (not its creditors), garnishment provides a mechanism for creditors to stand in the shoes of a debtor and pursue a debtor’s claims against third parties — in this case, an LLC’s claim against its members for unlawful distributions. The Court of Appeals also reversed the trial court’s ruling regarding the fraudulent transfers, holding that while the UFTA itself does not provide for garnishment as a remedy, it does not displace other legal remedies such as garnishment. Violation of the unfair claim settlement practices statute, ORS 746.230, gives rise to negligence per se claim for emotional distress damages. Moody v. Oregon Community Credit Union, 317 Or App 233 (2022); Landau, S.J. The plaintiff was represented by Travis Eiva. After the plaintiff’s husband died, she filed a claim with defendant, which had contracted to provide $3,000 in life insurance for him. The defendant denied the claim, asserting that although the husband had been accidentally shot and killed by a third party, he was high on marijuana at the time. The plaintiff sued for negligence per se, seeking emotional distress damages based on the defendant’s alleged violation of ORS 746.230, which prohibits unfair claim settlement practices, including refusing to pay claims without conducting a reasonable investigation and failing to settle claims in good faith. The trial court dismissed the claim. The Court of Appeals reversed, holding that ORS 746.230 creates a standard of care independent of the terms of the insurance contract, that the plaintiff, as a member of the insurance buying public, was within the class of people
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