Thursday, November 30, 2023

May I Have The Envelope Please?

The Oregon Supreme Court reversed and remanded a decision of the Court of Appeals in a claim brought by Pricewaterhousecoopers against their former law firm

In this action, which was filed in 2017, plaintiffs alleged that defendant law firm had negligently advised plaintiffs—in 2003—regarding potential tax ramifications of a proposed business transaction. Plaintiffs also alleged that, as a result of that negligent advice, they had incurred over $2 million in legal fees defending an Internal Revenue Service claim for back taxes related to the transaction and that they expected to incur approximately $20 million in liability for back taxes, penalties, and interest. Defendant moved to dismiss plaintiffs’ negligence claim, contending that the pleadings showed that the claim was time-barred under ORS 12.115(1). See ORCP 21 A(1)(i) (providing that a defendant may raise by motion a defense “that the pleading shows that the action has not been commenced within the time limited by statute”). The trial court granted defendant’s motion and entered a limited judgment, from which plaintiffs appealed.

The Court of Appeals reversed the limited judgment, concluding that the statutory phrase “negligent injury to person or property” does not encompass plaintiffs’ claim because the injury alleged was for purely financial losses. Marshall v. PricewaterhouseCoopers, LLP, 316 Or App 416, 432, 441, 505 P3d 40 (2021). We allowed review and now conclude that the trial court correctly concluded that ORS 12.115(1) applied to the type of claim alleged by plaintiffs. Accordingly, we reverse the decision of the Court of Appeals and remand for that court to address plaintiffs’ remaining assignment of error.


Based on the text, context, and helpful legislative history, we are persuaded that the legislature did not intend to spare actions for negligent injury to economic interests from the ultimate cut-off date that it prescribed in ORS 12.115(1) for “any action for negligent injury to person or property.” Thus, the trial court correctly rejected plaintiffs’ argument that ORS 12.115(1) does not bar claims for negligent injury to economic interests. Because the Court of Appeals held otherwise, it did not address plaintiffs’ alternative, second assignment of error, which challenged the trial court’s conclusion that ORS 12.115(1) bars plaintiffs’ claims. Our contrary construction of the statute makes it appropriate to remand to Court of Appeals, for that court to now consider plaintiffs’ second assignment of error.

There are two dissents. (Mike Frisch)

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