Oregon State Bar Bulletin — NOVEMBER 2003

Altered Statutes
Ten legislative changes that affect your practice
By Mark B. Comstock

'No person or property is safe while the legislature is in session.' This adage, witticism or truth, depending on your vantagepoint, is often heard from those familiar with the legislative process, and bemoaned by those on the outside. As lawyers, we are one of the groups most directly affected by the changes enacted by the legislature in its biennial, or more recently, biannual gathering. In some legislative years the changes are relatively minor. In this legislative year, the most ink spread across the print media and sound bites concerned the process for the balancing of the budget and whose ideology was to reign supreme; however, sweeping changes to the process of the practice of law came in below the radar of the media.

While I was pleasantly surprised at the number of lawyers who attended the 2003 OSB Convention in Seaside, I was dismayed at the number of lawyers who chose not to listen to the CLE sessions about the new legislation in various practice areas. By my count, fewer than 10 percent of the licensed active lawyers availed themselves of these sessions. This doesn’t make much sense to me. I became active in legislative matters in the 1985 legislative session, primarily for selfpreservation, and have continued each session since. Knowing what is coming and possibly being able to shape the enactment has saved my posterior, allowing me to obtain a more efficient and effective result for my clients on more than one occasion.

My purpose in writing is a practical one. This article should serve as a warning of what has already been enacted, and what is or will become effective on Jan. 1, 2004, affecting the general practice of law for the litigator, transactional lawyer, general practitioner or specialist. The article is limited to 10 enactments that I think will affect the most Oregon lawyers. I urge each of you to get a copy of the 2003 Oregon Legislative Highlights for a more specific discussion of enactments by practice area, and read the enrolled bills available at the Oregon legislature’s website at www.leg.state.or.us/billsset.htm .

1. Judgments

The most far-reaching enactment was HB 2646, which substantially rewrote the statutes governing judgments and the enforcement of those judgments. Long an area of arcane rules, confusing references and unpredictable treatment by appellate courts, the Oregon Law Commission undertook a study and revision of (principally) ORS Chapters 18 and 23, through a broad-based workgroup of practitioners. HB 2646 was enacted and is effective Jan. 1, 2004. The highlights of the enactment include:

Decrees no longer exist. If the document is captioned as a 'decree,' it must be captioned as a 'judgment,' or a judge will probably not sign it, and a clerk will not enter it after Jan. 1, 2004.

The judgment docket no longer exists. A judgment will no longer be docketed; it will be entered in a record and a notation will indicate if the judgment is to create a lien. The clerk will maintain a record of judgments creating a lien for title search purposes.

The judgment document must be captioned as a general, limited or supplemental judgment. These labels - general judgment, limited judgment, or supplemental judgment – are extremely important for the effect. A general judgment decides all claims in the action, except claims that have previously been decided by a limited judgment or claims that will be decided by a supplemental judgment, such as attorneys’ fees. The general judgment replaces the 'final judgment' of the ORCP. Additionally, the general judgment will have the effect of dismissing with prejudice any claim that has not been decided by that general judgment, or a previous limited judgment.

A limited judgment is a judgment entered before the general judgment and disposes of at least one, but fewer than all claims in the action. This is similar to the ORCP 67 B treatment. The 'magic' language requirement of ORCP 67 B has been eliminated.

A supplemental judgment is one that may be rendered after a general judgment has been entered and affects a substantial right of a party, such as a judgment for attorneys’ fees under ORCP 68.

Any document captioned as a judgment is appealable, with the exception of limited judgments for support.

'Money award' replaces the portion of a judgment previously labeled as 'money judgment.' The requirements for the money award portion are essentially the same as previously provided for a money judgment.

A renewal of a judgment is now accomplished by a certificate of extension, effective upon filing, instead of a motion and order renewing a judgment. The effect of a certificate of extension is to prevent the expiration of judgment remedies.

Pertaining to judgment liens: The general rule that the money award portion of any general judgment, limited judgment or supplemental judgment creates a lien on real property of the judgment debtor upon entry is retained; however, the automatic expiration of the judgment lien upon the filing of a supersedeas bond in an appeal is eliminated. Under HB 2646, an appellant may make a motion for elimination of the lien on the filing of a supersedeas bond and on providing additional security as may be required by the court.

Regarding judgment remedies: HB 2646 clarifies that a judgment has effect for a perpetual duration after entry, but that the ability to enforce money award remedies expires unless extended by a certificate of extension. The 10-year period for civil judgments is retained for civil money awards, and the 20-year provision for criminal money awards is also retained. The 25-year period for child support is also retained and clarified to apply to spousal support awards.

HB 2646 also specifically allows a release of the judgment lien from specific property. Previously, there was no statutory authorization for such a procedure.

The provisions of HB 2646 also clarify that the preconditions for issuance of an order requiring a debtor to appear for an examination include an unsatisfied execution, service of a demand for payment of judgment, and a nil return on a writ of garnishment.

The procedure for issuance of a writ of execution is also changed under HB 2646 to require the creditor to specifically identify the property to be seized in either the writ of execution or the instructions provided to the sheriff. No longer is a sheriff required to make an active search for property and make decisions about what property should be applied against the debt. Further, a creditor must file a certified copy of the writ of lien record abstract for the writ in the county clerk lien record if the writ requires the sale of real property. This replaces the required 'levy' on the property.

A debtor may challenge a writ of execution by using a challenge to execution form to be filed with the court for a summary hearing similar to a challenge to a writ of garnishment. The bill eliminates the antiquated sheriff’s jury to decide third-party claims.

Although the bill is approximately three inches thick, the definitional provisions of this bill are extremely important. A careful practitioner will either review the form of the bill or the statutes when they are printed to make sure there is not an unintended effect or delay in the entry of a judgment.

2. Revised Uniform Arbitration Act

HB 2279 repeals the provisions of ORS 36.300 through 36.365 and adopts the Revised Uniform Arbitration Act. This Act, which is effective Jan. 1, 2004, brings the arbitration statutes into conformity with modern practice.

Among the provisions is a mandatory alternative dispute resolution proceeding for medical malpractice cases within 270 days of the filing of the claim unless both parties waive the requirement in writing. An attorney must certify in a claim for damages against a health practitioner or health care facility based on negligence, unauthorized rendering of health care or product liability, that either the requirement of alternative dispute resolution has been waived, or the parties have complied with it.

3. Medical Malpractice Judgments

In a bill that was passed on the last day of the session, the interest rate on judgments in civil actions for professional negligence of a person licensed by the Board of Medical Examiners or the State Board of Nursing is changed to the lesser of five percent per annum or three percent in excess of the discount rate in effect at the Federal Reserve Bank in the Federal Reserve district where the injuries occurred.

All other civil judgments retain the statutory rates of interest of 82.010(1), which is either nine percent per annum, or the rate provided in a contract between the parties.

4. Health Care Records and HIPAA Privacy Provisions

HB 2305 was enacted by the legislature to bring Oregon practice into conformity with the provisions of the Health Insurance Portability and Accountability Act (HIPAA) privacy provisions. This bill not only defines terms such as 'health care provider' using HIPAA definitions, but also clarifies when a state health plan or health care provider may disclose protected health information without patient authorization and when authorization is required.

Two key functions of this bill are the replacement of the authorization form previously contained in ORS 192.525, with a HIPAA compliant form, also set out in the bill, and specification of a copy charge schedule for disclosures made pursuant to an authorization, $25 for the first 10 pages and $.25 for each page thereafter.

This bill also makes important changes to ORCP 55 H for the issuance of a subpoena for medical records. The bill provides that if a litigant seeks to obtain medical records through the use of a subpoena, the litigant must attach to the subpoena either a qualified protective order or an affidavit which certifies: (1) the litigant made a good faith effort to provide 14 days notice to the subject of the medical records prior to the release, (2) that the individual did not object, or all objections had been resolved, and that the information sought is consistent with the resolution and (3) that the litigant will promptly allow inspection and copying of the records received on request.

ORCP 55 I was repealed.

HB 2305 became effective May 24, 2003.

5. Definition of Independent Contractor

SB 232 was a bill that mainly dealt with property tax deferrals. However, a significant provision was added to this bill that attempted to bring the definition of an independent contractor into conformity with the federal Internal Revenue Service definition of an independent contractor. Often, practitioners found compliance with the federal definition was not compliant with the state definition.

Section 4 of SB 232 identified the following standards for identifying an independent contractor relationship:

The individual or business entity is free from direction or control over the means and manner of providing the labor or services, but subject to the recipient’s specification of the desired result.

Evidence that the individual or business entity is engaged in an independently established business by showing either: i) filing of a Schedule F as part of an income tax return or reporting farm labor or services on Schedule C of the income tax return, or ii) evidence establishing at least three of the six following requirements:

1. The individual or business entity has more than one person or entity as a source of customers and collects payment directly from the customer;

2. The individual or business entity assumes the risk of loss related to the fixed-price contracts, commission-based earnings, the responsibility to correct defective work, the responsibility for extension of warranties or negotiated indemnification agreements, or purchase of liability insurance, errors and omissions insurance, or performance bonds;

3. The individual or business entity performs contracted labor or services for two or more different persons or routinely engages in business advertising soliciting new contracts for labor and services;

4. The individual or business entity makes a significant investment for the purchase of tools or equipment, premises or facilities where labor or services are performed or provides for specialized training or licenses required to perform the services;

5. The individual or business has the authority to hire persons to assist in performing the labor and services; and

6. The individual or business entity is licensed if a license is required.

This bill also provides for an interim task force to study further changes to make the independent contractor definition more consistent with the federal definition of independent contractor for tax purposes.

6. Residential Real Property Disclosure

HB 3539, signed by the governor Sept. 17, 2003, requires a seller of a new residence, or a residence on which $50,000 or more in construction occurred within 90 days prior to the sale, to notify the purchaser of any unpaid bills, disputes, notices of right to lien or other information that might lead to the perfection of a construction lien after the date of sale.

The seller additionally has an affirmative obligation to protect the buyer by purchasing extended title insurance, holding back 25 percent of the sale price in escrow until the lien period has expired, or providing a bond or letter of credit, or, alternatively, obtaining lien waivers from all suppliers or subcontractors or obtaining a waiver from the purchaser.

This bill provides for substantial civil penalties and for criminal penalties of a $2,000 fine, six-month imprisonment or both. The bill has an emergency clause, making it effective Sept. 17, 2003.

7. Disclosures in Motor Vehicle Accidents

HB 2309, effective May 24, 2003, provides that a health care provider providing medical care after a motor vehicle accident is required, within five days, to disclose to authorities whether a treated person’s blood-alcohol level meets or exceeds the amount specified in ORS 813.010.

The health care provider providing notice is not considered to have breached any duty and is entitled to good faith immunity from any liability for the notification.

8. Public Contracting Statutes

HB 2341, the product of a judiciary interim workgroup on public contracting, substantially repealed ORS Chapter 279 and replaced the provisions with ORS Chapters 279A, 279B and 279C to clarify and amend the Public Contracting Code. Chapter 279A contains the general provisions for the Public Contacting Code and are applicable all public contracting entities and transactions. ORS Chapter 279B sets forth the provisions for public procurements. ORS Chapter 279C sets forth the provisions applicable to public improvements and architectural, engineering and land-surveying and related service contracts.

These provisions are a substantial rewriting of the public contracting laws. A practitioner practicing in this area is urged to review enrolled House Bill 2341 carefully, as the effective dates and provisions are simply too complex and situation-specific to adequately discuss in this limited article.

The more substantive changes include criminal liability for violation of the hours of labor provisions of a public contract, including a fine of not more than $1,000 for a violation, or imprisonment in the county jail for not less than five days nor more than one year. Violation of the prevailing wage law is also punishable by a fine of not more than $1,000, or by imprisonment in the county jail for not more than six months.

9. Statutes of Limitations

HB 2284 amended ORS 12.220 to allow the refiling of a timely filed civil action that was involuntarily dismissed without prejudice, if there was no adjudication of the merits to relate back to the originally filed action, as long as it is filed within 60 days of the original action filing date and the defendant had actual notice of the original action.

10. Clarification of Time Limit for Notice of Appeal
after Motion for JNOV or New Trial

HB 2761 amends ORS 19.255 to clarify that a Notice of Appeal must be filed within 30 days of the entry of an order disposing of a motion for judgment NOV or a motion for a new trial, or within 30 days after the motion is deemed denied under ORCP 63 D or 64 F. The time period for filing the notice of appeals runs from the later of the entry of a final judgment or a decision on a motion for a new trial or a judgment NOV.

Revisions to the Oregon Rules of Civil Procedure

Although not a legislative enactment this session, among the revisions to the Oregon Rules of Civil Procedure was an amendment to ORCP 47 C to provide that motions for summary judgment must be served and filed at least 60 days before the date set for trial. This rule becomes effective Jan. 1, 2004.

The Oregon Council on Court Procedures was also not funded for the 2003-05 biennium, although a special provision allows it to remain in existence. In following years, the legislature will have the authority to enact and amend the ORCP.

CONCLUSION

This list and abbreviated discussion of some of the bills enacted by the 2003 Oregon legislature seeks to point out some significant changes affecting the practice of law in Oregon. I again urge each of you to get a copy of the 2003 Oregon Legislative Highlights for a more detailed discussion of the enactments by practice area and to refer to the enrolled bills available at the Oregon legislature website.

Many of these bills were reviewed and had substantive input and changes as a result of bar members and bar sections and committee involvement. Individual lawyers can make a difference. One of the OSB missions is to promote the rule of law as the best means to resolve conflict and achieve equality. The bar strives for continuous improvement in its law improvement functions. If any bar group seeks to introduce legislation, the deadline for submission of legislative concepts to the Public Affairs Committee of the Board of Governors for pre-session filing is May 1, 2004, for the 2005 legislative session.

Remember, no person or property is safe while the legislature is in session.

ABOUT THE AUTHOR
Mark Comstock is shareholder with Garrett, Hemann, Robertson, Jennings, Comstock & Trethewy, Salem, and is a member of the OSB Board of Governors. He sits on the board ’s Public Affairs Committee.

© 2003 Mark B. Comstock


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