47 Trial Lawyer • Spring 2022 had the plaintiffs’ argument “evolved” on appeal from the arguments made below, the plaintiffs now “argue categorically that the substantial-factor jury instruction should be given in every case where ‘a preexisting condition * * * makes the plaintiff more subject to injury [because such condition] itself is ipso facto a causative factor.’” The court rejected that argument, finding no legal authority to support “that proposition.” Instead, the court turned to workers’ compensation law to conclude there is a legal distinction between underlying conditions that increase susceptibility to injury and those that “actively contribute[] to causing a person’s injury.” The court adopted that approach and concluded a plaintiff must prove in negligence cases that any underlying condition actively contributed to causing the alleged injury before that condition can be considered a cause of harm. Judge James specially concurred with the majority, primarily because the plaintiff had asked for both the substantialfactor and the but-for causation instructions, rather than object to the latter. In Judge James’ view, “the giving of the substantial factor instruction is simply the more elegant, accurate and understandable way to instruct jurors.” Additionally, Judge James opined there should be no legal distinction made between a “susceptibility” to injury, and its “cause.” Moreover, Judge James disagreed with the majority’s reliance on workers’ compensation law to graft onto tort cases a distinction between “susceptibility” and “cause.” The “economic loss rule” bars the plaintiff’s negligent supervision claim against the county and its probation officer, which resulted in probationer embezzling significant sums from the plaintiff’s business. Diamond Heating, Inc. v. Clackamas County, 316 Or App 579 (2021), Ortega, P.J. Kathryn Clarke and Jess Glaeser represented plaintiffs. The plaintiff hired as its financial manager and bookkeeper a woman who, at the time of hiring and without the plaintiff’s knowledge, was then on probation for prior convictions of embezzlement. After more than three years of her employment, the plaintiff discovered that the woman had embezzled significant sums from the company. The plaintiff thereafter learned of her prior convictions and that she was under the probationary supervision of Clackamas County. The plaintiff filed this negligence action against Clackamas County and the woman’s probation officer alleging the “defendants failed to take reasonable steps to monitor and enforce [the probationer’s] compliance with court-ordered special conditions of probation.” Those conditions included prohibiting the probationer from taking employment that involved handling money. On defendant’s motion and argument, the trial court dismissed the plaintiff’s action as barred by the “economic loss rule.” The plaintiff appealed that judgement and the Court of Appeals affirmed. The “economic loss rule” requires a plaintiff to allege “facts sufficient to establish that the defendants owed a duty of care to the plaintiff beyond the common law duty to exercise reasonable care.” The Court of Appeals concluded that prohibiting the probationer from taking jobs handling money imposes duties only on the probationer and does not impose a special duty on defendants to protect potential employers, such as the plaintiff. Judge James dissented from that opinion. Judge James noted the “economic loss rule” was created specifically to prevent “unbounded liability” and, before a court concludes that rule applies, it must first determine whether there is some factual or circumstantial “limiter” that removes the case from such concern. Because the law considers “purely economic losses” as losses to intangibles such as “lost profits, lost insurance proceeds, lost market share, etc.,” Judge James would conclude the actual theft or conversion of money alleged here is a proper “limiter” to which the “economic loss rule” does not apply. Attorney’s inadvertent mistake is a legally cognizable basis for relief from judgment under ORCP 71B(1)(a). Michael v. Pugel, 316 Or App 786 (2022), Armstrong, S.J. Kevin Lafky and Christopher Edison represented the plaintiff. The plaintiff brought this action against her employer, the employer’s owner (“Kurz defendants”) and the owner’s girlfriend (“Pugel”), who allegedly had injured the plaintiff in an altercation. After the plaintiff and Pugel had settled their dispute, Pugel’s attorney drafted a Stipulated General Judgment dismissing all claims with prejudice and as fully compromised and settled. Even though this should have been a Limited Judgment dismissing only the claim against Pugel, the plaintiff ’s attorney signed the judgment and allowed it to be filed. Within one week, however, the plaintiff moved the trial court under ORCP 71 B(1)(a) to set aside the judgment due to counsel’s mistake, inadvertence, surprise or excusable neglect in failing to notice the actual substance of the form judgment. The Kurz defendants objected and convinced the trial court that the Supreme Court had concluded in McCarthy v. Oregon Freeze Dry, Inc., 334 Or 77 (2002) that an attorney’s error cannot provide a basis for relief from judgment. On appeal, the Court of Appeals disagreed. First, the court determined that the record sufficiently supports the finding that the plaintiff ’s counsel’s mistake in failing to notice the erroneous breadth of the judgment drafted by Pugel’s lawyer was inadvertent. Second, the court concluded ORCP 71 B(1)(a) restores litigation to the prejudgment posture the parties intended and expected. The Kurz defendants neither expected nor were entitled to a judgment dismissing claims against them as fully See Sheets 48
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