author: DEHOOG, P. J.

text:
    STATE of Oregon, Plaintiff-Respondent, v. Jeffrey Earl FULLER, Defendant-Appellant.
    A162334
    Court of Appeals of Oregon.
    Submitted December 5, 2017. March 6, 2019
    Ernest G. Lannet, Chief Defender, Criminal Appellate Section, and Anna Melichar, Deputy Public Defender, Office of Public Defense Services, filed the brief for appellant.
    Ellen F. Rosenblum, Attorney General, Benjamin Gutman, Solicitor General, and Robert M. Wilsey, Assistant Attorney General, filed the brief for respondent.
    Before DeHoog, Presiding Judge, and Egan, Chief Judge, and Aoyagi, Judge.
   DEHOOG, P. J.

Defendant appeals a judgment of conviction entered after a jury found him guilty of unlawfully transporting special forest products, ORS 164.813(3). Defendant assigns error to the trial court's denial of his motion to suppress, arguing that the court erred in concluding that the sheriff's deputy who stopped defendant as he was driving his truck reasonably suspected that he was committing that offense. We agree with defendant that the deputy lacked reasonable suspicion to detain him and, therefore, the trial court erred in denying defendant's motion to suppress. Accordingly, we reverse and remand.

We review a trial court's denial of a motion to suppress for legal error. State v. Maciel-Figueroa , 361 Or. 163, 165, 389 P.3d 1121 (2017). We are bound by the court's factual findings if there is constitutionally sufficient evidence in the record to support them. Id. at 165-66, 389 P.3d 1121. If the court did not enter express findings and there is "evidence from which the trial court could have found a fact in more than one way, we will presume that the trial court decided the facts consistently" with its ultimate legal conclusion. Id. at 166, 389 P.3d 1121.

At the suppression hearing, Deputy Childers of the Crook County Sheriff's Office testified that he had observed a truck driving through downtown Prineville at approximately 2:15 a.m. The truck was hauling approximately three-quarters of a cord of cut wood rounds. Childers saw that there were no landowner or government-issued firewood tags attached to the load, which he understood ORS 164.813(3) to require. Childers testified that, based on his training and experience, he knows that often individuals will cut firewood in the forest during the day but wait until later at night to retrieve it. Frequently those people are found to have removed that firewood from the forest without having a permit or other authority to transport the wood. Because defendant did not appear to have a permit posted on the firewood in the manner Childers associated with the lawful transport of forest products, Childers believed that he had reasonable suspicion to stop defendant's truck to investigate whether he had violated ORS 164.813(3).

Defendant was the driver and sole occupant of the truck. When Childers asked defendant about the wood in the back of his truck, defendant acknowledged that he had taken it from the forest. When asked whether he had a permit for the firewood, defendant said that he did, but that he had left the permit at home. After obtaining those responses, Childers ran a background check on defendant and discovered that he had been driving with a suspended license. As a result, Childers cited defendant both for driving while suspended and unlawfully transporting special forest products.

Before his trial on the unlawful transport charge, defendant moved to suppress the evidence obtained as a result of the stop, arguing that Childers had lacked reasonable suspicion to justify stopping him. During the suppression hearing, the trial court asked Childers whether he had been able to tell what kind of wood defendant had been hauling. As Childers began responding that it had not been juniper or tamarack, defendant interjected to say that it had been fir. Childers agreed, saying, "Yeah, I was going to say fir. It was good fir, not yellow fir."

The trial court ultimately denied defendant's motion to suppress. The court explained:

"In this case, it was 2 o'clock at night. The officer, with the help of the defendant, identified the wood as fir and indicated that that's what you get in the forest. So I'm going to deny the motion to suppress. I think he had reasonable suspicion to stop the vehicle. I think it was objectively reasonable."

A jury subsequently found defendant guilty, and the court entered a judgment of conviction. Defendant appeals.

As he did at the suppression hearing, defendant argues on appeal that Childers did not reasonably suspect that defendant had committed or was about to commit any specific crime. The stop, defendant argues, therefore violated Article I, section 9, of the Oregon Constitution. More specifically, defendant argues that Childers lacked a reasonable basis to suspect that he was transporting the firewood without a permit in violation of ORS 164.813(3). According to defendant, the text and context of that statute indicate that a permit is required only if "a person transports firewood directly away from a harvest or collection site and the person does not own the land from which the wood was harvested and removed." Thus, to reasonably suspect a violation of that statute, an officer must be aware of specific and articulable facts connecting the wood being transported with such a location and supporting an inference that the wood is being transported directly away from that site. In defendant's view, Childers's testimony supported neither belief, and, therefore, the trial court erred in concluding that Childers had had reasonable suspicion to detain him.

In response, the state argues that the trial court properly concluded that reasonable suspicion supported the stop. More specifically, the observations Childers described-the time of night, the type of wood, and the absence of a visible permit-were sufficient to render his suspicion that defendant was violating ORS 164.813(3) objectively reasonable.

Under Article I, section 9, an officer may stop a person to make a reasonable inquiry if the officer reasonably suspects that the person has committed or is about to commit a crime. Maciel-Figueroa , 361 Or. at 171-72, 389 P.3d 1121 (recognizing that the standards for reasonable suspicion under ORS 131.615 and ORS 131.605 inform Article I, section 9, analysis). "Reasonably suspects" means "a belief that is reasonable under the totality of the circumstances existing at the time and place the peace officer acts ***." ORS 131.605(4). Put differently,

"the established standard for reasonable suspicion supporting an investigatory stop of a defendant is met when an officer can point to specific and articulable facts that give rise to a reasonable inference that the defendant committed or was about to commit a specific crime or type of crime."

Maciel-Figueroa , 361 Or. at 165, 389 P.3d 1121. The articulated facts need not support certainty that a suspect is engaged in criminal activity; rather, based on those specific facts, "a reviewing court must [be able to] conclude that the officer's subjective belief could be true, as a matter of logic." Id. at 184, 389 P.3d 1121 (emphasis in original).

To determine whether Childers reasonably suspected defendant of violating ORS 164.813(3), we must first determine what that statute requires. Specifically, we must construe the meaning of "transport" under that statute, applying the principles set out in State v. Gaines , 346 Or. 160, 206 P.3d 1042 (2009), and PGE v. Bureau of Labor and Industries , 317 Or. 606, 859 P.2d 1143 (1993). See State v. Lively , 294 Or. App. 377, 380, 430 P.3d 1120 (2018) (analyzing the meaning of "remove" under ORS 164.813 by applying Gaines and PGE ). That is, we first consider the text of the statute in context; then, to the extent that we might find it helpful, we may consider any relevant legislative history that the parties provide or that we discover ourselves. Gaines , 346 Or. at 171-72, 206 P.3d 1042.

The special forest products statute, ORS 164.813, makes certain conduct illegal if the person engaging in that conduct does not possess a permit. The subsection under which defendant was cited provides, in relevant part:

"[I]t is unlawful for a person to transport special forest products without possessing a permit *** or a document of sale showing title to the special forest products."

ORS 164.813(3). The statute also provides a number of definitions. For example, ORS 164.813(1)(b) defines "Special forest products" as including "Firewood[.]" Pertinent to our discussion, ORS 164.813(1)(d) defines "Transportation," in part, as

"the physical conveyance of special forest products away from a harvest or collection site and includes, but is not limited to, transportation in or on *** [a] motor vehicle[.]"

Defendant asserts, based on that statutory text, that a permit is required only when a person is moving special forest products directly away from a harvest or collection site, rather than at any time a person moves those products from one place to another. Thus, for an officer to reasonably suspect a violation of the statute, the officer must be aware of specific and articulable facts (1) connecting a load of wood to a harvest or collection site for which a permit is required and (2) indicating that the person is hauling that load directly away from such a site.

The plain text of ORS 164.813 supports defendant's interpretation, and nothing about the statute's context suggests otherwise. That is, the statutory definition of "transportation" in ORS 164.813(1)(d) does not refer to all conveyances of special forest products, but only "the physical conveyance of special forest products away from a harvest or collection site [.]" (Emphasis added.) To be sure, "harvest" is defined rather broadly and is not expressly limited to gathering forest products from a forest. Furthermore, the permit required under ORS 164.813(3) must include a "description of the premises from which the special forest products were taken," which, in appropriate instances, may be the street address of a "woodlot or fuel dealer or dealer in other special forest products." ORS 164.813(3)(e). However, the apparent purpose of the permit requirement is to ensure that special forest products are not removed from their location without authorization from the owner of the products or the premises from which they are removed. See ORS 164.813(2) (prohibiting the harvest or removal of "special forest products from a place unless the person has in possession a written permit to do so from the owner of the land from which the wood is cut or the special forest products taken"). Thus, the most natural understanding of ORS 164.813(3) is that it requires a permit to convey special wood products away from their owner's premises, but not from a place other than the location from which they were acquired.

We have not been made aware of any legislative history suggesting an alternative understanding of the statute, nor, at least for purposes of this appeal, does the state advocate for an alternative understanding. Rather, the state suggests to us-as it explicitly argued to the trial court-that, under ORS 164.813, a permittee must visibly display, rather than merely possess, the required permit. The state does not, however, develop that argument or identify any source of law for that proposition-indeed, the only expressly applicable laws suggest that no such requirement exists. See, e.g. , ORS 164.813(3) (it is "unlawful for a person to transport special forest products without possessing a permit" (emphasis added)); OAR 629-028-0025(1) (the "[p]ermittee shall have the permit in possession when cutting or removing firewood" (emphasis added)). Accordingly, we do not further consider Childers's stated belief that ORS 164.813 requires a person transporting special forest products to visibly display a permit.

Thus, in determining whether the trial court erred in concluding that Childers reasonably suspected that defendant had violated ORS 164.813(3), we must determine whether the specific and articulable facts known to Childers gave rise to a reasonable inference that defendant was transporting the firewood "away from a harvest or collection site." In denying defendant's motion to suppress, the trial court did not consider that precise question. Rather, the court determined, based, in part, on the following express findings of fact, that Childers had reasonably suspected a violation of the statute: (1) the encounter occurred at 2:00 a.m.; (2) the wood defendant was transporting was fir; and (3) fir is "what you get" in the forest. We are bound by those findings so long as there is constitutionally sufficient evidence in the record to support them. Maciel-Figueroa , 361 Or. at 165-66, 389 P.3d 1121. And, at least as to the time of the stop and the type of wood defendant was hauling, we conclude that the record supports the trial court's findings. That is, Childers testified to the time at which he had encountered defendant, and, although his testimony on the point was aided by defendant, Childers ultimately identified the wood defendant had been hauling as fir. The state presented no evidence, however, that fir is "what you get" in the forest. Contrary to the trial court's recitation of the evidence, Childers did not testify to that fact at the suppression hearing, nor has the state identified any other evidence in the record supporting that inference or suggesting that Childers would have been aware of that fact as a matter of common knowledge. Thus, to the extent that the ostensible association of fir and forests might otherwise have suggested that defendant was transporting wood from a harvest or collection site, i.e. , a site for which a removal permit would be required, the court erred in relying on that fact in assessing whether Childers had reasonable suspicion.

That leaves us with the question whether the trial court's other express findings, together with the other evidence in the record, support the conclusion that Childers reasonably suspected that defendant was unlawfully transporting special forest products in violation of ORS 164.813(3). As they did at the suppression hearing, both parties focus their arguments on our decision in State v. Crites , 151 Or. App. 313, 948 P.2d 757 (1997), rev. den. , 327 Or. 82, 961 P.2d 216 (1998), a case that, like this one, involved the investigatory stop of a driver under the unlawful transport of special forest products statute. We turn to that decision.

In Crites , an officer stopped the defendant's vehicle after observing him hauling what appeared to be cedar products after dark. Id. at 315, 948 P.2d 757. At the time of the stop, the officer was aware of a large cedar theft problem in the immediate area, which consisted mostly of state forest land. Id . The officer also knew that the State Forestry Department did not issue permits to harvest cedar. Id. Thus, unlike the officer in this case, that officer did not merely see the defendant transporting wood after dark and draw the inference that he was doing so without a required permit. The officer in Crites also recognized the wood being transported as cedar, which he knew to be the subject of a significant theft problem in the area, and knew that most of the cedar in the immediate area was on state-owned land, for which the defendant could not have had a permit. Id . Viewed in light of the officer's training and experience, those facts supported the reasonable inference that the defendant was transporting the wood from a nearby harvest or collection site without the required permit to do so. Id . at 316, 948 P.2d 757.

Here, on the other hand, even when viewed in light of Childers's training and experience, the specific and articulable facts known to him could not support a nonspeculative inference that defendant was transporting wood in violation of ORS 164.813(3). That is, like the officer in Crites , Childers saw defendant hauling a specific type of wood-fir-well after dark without a visible permit to do so. However, no other facts articulated by Childers and specific to defendant suggested that he was engaged in the unlawful transport of special forest products. Although Childers evidently recognized the type of wood in the back of defendant's truck to be fir, no evidence presented at the suppression hearing suggested that defendant was conveying the fir from a nearby forest such that a permit would be required, that fir was a common subject of theft (and so commonly transported without a permit), or that it was likely to have come from a harvest or collection site from which no permit would have been available. And, although Childers testified that, in his training and experience, individuals who remove wood from forests without the required permits often do so at night, nothing about that knowledge was specific to defendant or otherwise suggested that he was engaged in that activity. Rather, the only specific information Childers knew about defendant was that he was conveying firewood in the early morning hours, a practice Childers evidently knew to be common among wood thieves. And while that information may have contributed to reasonable suspicion that defendant was hauling the wood without a required permit, in our view, that information standing alone gave rise to nothing more than a mere speculation that defendant was unlawfully transporting special forest products. The trial court therefore erred in denying defendant's motion to suppress based on its determination that Childers had reasonable suspicion to support his investigatory stop of defendant.

Reversed and remanded.

      ORS 164.813(3) provides, in relevant part:
      "Subject to subsection (6) of this section, it is unlawful for a person to transport special forest products without possessing a permit as described in subsection (2) of this section or a document of sale showing title to the special forest products."
      Additional provisions of ORS 164.813 are set out and discussed below. 296 Or. App. at 429-30, 431 P.3d at 434.

      As noted, under ORS 164.813(3), a person subject to the requirements of that statute must either possess a permit "or a document of sale showing title to the special forest products." For ease of discussion, we refer to both qualifying documents simply as "permits."

      ORS 164.813(1)(a) defines "Harvest" as "to separate by cutting, digging, prying, picking, peeling, breaking, pulling, splitting or otherwise removing a special forest product from: (A) Its physical connection or point of contact with the ground or vegetation upon which it was growing; or (B) The place or position where it lay." The statute does not define "collection."

      The state does not argue that, even if defendant was not required to visibly display a permit, his failure to do so nonetheless supported reasonable suspicion that he was otherwise violating ORS 164.813, such as by not having the required permit in his possession while transporting special forest products. Thus, we do not attach any significance to the fact that defendant did not visibly display a permit.

      After Childers testified at the suppression hearing, the trial court asked him whether he could "tell what kind of wood it was based on following it?" Then the following exchange took place:
      "[Childers]: You know, it wasn't-it wasn't juniper or tamarack wood. It looked like it was-
      "[Defendant]: Fir.
      "[Childers]: Yeah, I was going to say fir. It was good fir, not yellow fir."
      Although it is somewhat unclear from that exchange whether Childers intended to convey to the court that he had known that the wood was fir before the stop, defendant does not contend that there is insufficient evidence in the record to support the court's apparent finding to that effect.


source: Caselaw Access Project

author: SHORR, J.

license: Public Domain

text:
    David J. SMITH, Plaintiff-Appellant, v. CENTRAL POINT PAWN, LLC, Defendant-Respondent.
    A165608
    Court of Appeals of Oregon.
    Submitted March 2, 2018. February 27, 2019
    David J. Smith filed the brief pro se.
    Kendell H. Ferguson and Sorenson, Ransom, Ferguson & Clyde, LLP, Grants Pass, filed the brief for respondent.
    Before Armstrong, Presiding Judge, and Tookey, Judge, and Shorr, Judge.
   SHORR, J.

Plaintiff sued defendant, Central Point Pawn, LLC (CPP), after CPP failed to repay a loan from plaintiff that was arranged by a member-manager of CPP, without the knowledge or approval of the other member-managers. CPP moved for summary judgment, maintaining that it was not responsible for repaying the loan because it was not made in the ordinary course of business and not approved by a majority of CPP's member-managers. The trial court granted CPP's motion. For the reasons explained below, we reverse and remand.

In reviewing a trial court's summary judgment ruling, we view the evidence in the light most favorable to the nonmoving party, here plaintiff, to determine whether there is a genuine issue of material fact that precludes summary judgment. Rush v. Corvallis School District 509J , 291 Or.App. 252, 253, 419 P.3d 746 (2018). There is no genuine issue of material fact if, "based upon the record before the court viewed in a manner most favorable to the adverse 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. We state the facts and apply the law consistently with that standard.

CPP is a member-managed limited liability company (LLC) that owns and operates a pawn shop in Oregon. Under its operating agreement, the purpose of CPP is to "engage in any Pawnbroker act or activity for which a limited liability company may be organized under the laws of the state of Oregon." The operating agreement does not specify any procedures for borrowing money that will be used for CPP's business operations.

In early 2011, plaintiff met with Bogart, a member-manager and CPP's registered agent, and proposed to extend a line of credit to CPP. Bogart accepted the loan on behalf of CPP and borrowed $ 48,800 over the next six months. In a declaration submitted to the trial court, Bogart averred that the loan was "needed for and used in the operation of CPP's pawn shop." Based on the summary judgment record, plaintiff and Bogart did not memorialize the loan agreement in a written contract, but evidence of the loan was furnished to CPP's tax preparer. Undisputed evidence in the summary judgment record shows that Bogart did not consult with CPP's other member-managers regarding the loan, and the other member-managers only learned of the loan when plaintiff brought this action against CPP to recover the balance due.

Plaintiff brought the underlying lawsuit when CPP failed to repay the loan. CPP argued that it was not bound by the loan agreement between Bogart and plaintiff. In its motion for summary judgment, CPP maintained that the debt owed to plaintiff was not incurred in the ordinary course of business-because, as CPP put it, pawnbrokers are "in the business of loaning money-not being debtors"-nor was the loan approved by a majority of the member-managers. During the summary judgment hearing, CPP took the position that a loan from a bank or other "standard lender" would "probably" be in the ordinary course of business but a loan from "an unsecured private party" like plaintiff would not.

The trial court granted CPP's motion with a ruling that did not explain the bases for its decision. During the summary judgment proceedings, the parties primarily focused their arguments on whether CPP borrowed money from plaintiff in the ordinary course of its business. In light of the arguments presented at summary judgment, we understand the court's ruling to mean that the court concluded that CPP did not, as a matter of either fact or law, borrow money from plaintiff in the ordinary course of business, and, therefore, that CPP was not obliged to repay plaintiff.

ORS 63.140 governs whether a member of an LLC can bind the LLC to agreements with third parties. Under that statute,

"(a) Each member [of an LLC] is an agent of the limited liability company for the purpose of its business, and an act of a member, including the signing of an instrument in the limited liability company's name, for apparently carrying on in the ordinary course the business of the limited liability company, or business of the kind carried on by the limited liability company, binds the limited liability company unless the member had no authority to act for the limited liability company in the particular matter and the person with whom the member was dealing knew or had notice that the member lacked authority.
"(b) An act of a member that is not apparently for carrying on in the ordinary course the business of the limited liability company, or business of the kind carried on by the limited liability company, binds the limited liability company only if the act was authorized by the other members."

ORS 63.140(1).

On appeal, plaintiff argues, as he did below, that there is at least a triable issue of fact whether the loan to CPP was arranged by Bogart in the ordinary course of CPP's business. CPP, for its part, did not argue at summary judgment or on appeal that Bogart lacked authority to bind CPP to any and all loan agreements. Nor did CPP contend that plaintiff knew or had notice that Bogart lacked authority to bind CPP to the loan in question. Rather, CPP argues only that the debt was not incurred in the ordinary course of business, because CPP operated "a pawnshop in the business of loaning money to others in exchange for possession of collateral," and "was not in the business of borrowing money in the form of handshake, paperless, unsecured loans with individuals who happened to walk through the door." Essentially, CPP contends that this particular loan was so unusual that it could not possibly have been taken on in the ordinary course of business and, therefore, required authorization by the other member-managers, which Bogart neither sought nor secured.

The key question on appeal, therefore, is whether a reasonable juror could find that CPP incurred the debt from plaintiff's loan in the ordinary course of business as provided in ORS 63.140(1)(a). Only if that predicate inquiry is answered in the negative does the subsequent inquiry-whether CPP's indebtedness was nevertheless approved by a majority of the member-managers under ORS 63.140 (1)(b) -become relevant.

"Ordinary course" of business is not a defined statutory term under Oregon law. When we encounter an undefined statutory phrase, we assume, at least at first, its "plain, natural, and ordinary" meaning. DCBS v. Muliro , 359 Or. 736, 745-46, 380 P.3d 270 (2016). When the phrase is a legal term of art, however, we initially "turn to legal dictionaries to understand the established legal meaning." State v. McNally , 361 Or. 314, 322, 392 P.3d 721 (2017). We "potentially also consider the overall statutory scheme in which a legal term appears, as well as the meaning that the term has for regulators who oversee the field." Comcast Corp. v. Dept. of Rev. , 356 Or. 282, 296, 337 P.3d 768 (2014). Further, we can also look to other provisions of related statutes and opinions (existing at the time of the statute's enactment) interpreting the pertinent statutory phrase. Polacek and Polacek , 349 Or. 278, 284, 243 P.3d 1190 (2010).

The phrase "ordinary course" of business is a legal term of art that is commonly used in the law governing business transactions and commercial disputes. At the time that ORS 63.140 was enacted, "ordinary course of business" was defined as follows:

"The transaction of business according to the common usages and customs of the commercial world generally or of the particular community or (in some cases) of the particular individual whose acts are under consideration. * * * In general, any matter which transpires as a matter of normal and incidental daily customs and practices in business."

Black's Law Dictionary 1098 (6th ed. 1990). That definition supports a broad construction that encompasses routine and expected business activity both directly related and ancillary or incidental to a company's primary business purpose. Further, an act or transaction can be in the "ordinary course" even if it only occurs occasionally, so long as the act or transaction is sufficiently related or incidental to maintaining or performing normal, everyday business operations. For example, as CPP acknowledged to the trial court, a business can, in the ordinary course of business, occasionally borrow money from a bank to be used for business operations.

Oregon case law provides additional insight into the meaning of the phrase "ordinary course" of business. While we have found no case law construing the phrase "ordinary course" under ORS 63.140 or other sections governing LLCs, there is Oregon case law examining the same or very similar terms in the context of corporations and commercial law. In Sailer v. Land-Livestock-Rec., Inc. , 268 Or. 531, 534-35, 522 P.2d 214 (1974), for example, the Supreme Court examined a similar phrase-"usual and regular course of business"-in former ORS 57.511 (1973), repealed by Or Laws 1987, ch. 52, § 181, which governed corporations organized under that chapter and those doing business in this state. The court determined that it was in the "usual and regular" course of business for a commercial development company to mortgage property because "it is a matter of common business practice" for a commercial landowner who wishes to develop property to "mortgage the property in order to secure the necessary financing for the overall project." Sailer , 268 Or. at 535, 522 P.2d 214. Based on our analysis, we conclude that the legislature, by using the legal term of art "ordinary course" of business in ORS 63.140 when describing the powers of the members of an LLC, intended to encompass transactions that are part of the normal or customary routine-even if only occasional-of the commercial world generally, or of businesses of the same kind, or of a particular business. Whether any particular transaction is in the ordinary course of business is necessarily a fact-intensive inquiry that will turn on the nature of the transaction and the broader context in which the transaction occurred.

With the foregoing in mind, we conclude that the summary judgment record in this case contains evidence legally sufficient to at least raise a triable issue of fact whether CPP incurred the debt from plaintiff's loan in the "ordinary course" of its business. First, the fact that CPP's business primarily involves loaning money in exchange for physical possession of collateral does not foreclose the possibility that it is ordinary practice for CPP, or businesses similar to CPP, to borrow money to sustain business operations. Whatever the meaning of "ordinary course" of business, it is not so limited as to refer only to actions directly derived from a company's primary purpose as defined in its articles of organization or operating agreement. Indeed, few businesses, if any, exist primarily to borrow money, but nothing in our statutes or case law suggests that an LLC, regardless of its principal business purpose, cannot incur debt in the ordinary course of business, including by accepting loans from third parties for business operations. It appears axiomatic that a company that is in the business of loaning money must have a source of funds from which to loan, and those funds may be themselves borrowed from another source.

Second, Bogart's declaration includes a statement that the loan was "needed for and used in the operation of CPP's pawn shop." Although the record does not contain evidence of exactly how the loan was used, there is evidence that CPP recorded the loan in its ledgers and provided information regarding the loan to its tax preparer, which at least raises a fact issue of whether the borrowed money was used for ordinary business purposes.

Third, CPP contends that the informal nature of the loan means that CPP did not incur the debt in the "ordinary course" of its business. But, at least on this record, the formality of the loan as it relates to whether CPP incurred debt in the ordinary course of business is a fact issue from which the jury can draw its own conclusions. Certainly, the absence of loan documents or more extensive evidence in the record confirming the loan are facts in CPP's favor, but there is at least a fact issue created by the declarations of plaintiff and CPP's member-manager Bogart regarding the existence and purpose of the loan and the accounting for the loan in CPP's records.

Finally, ORS 63.140(1)(a) provides that an LLC will not be bound by the acts of its members-even if those acts are apparently for the LLC carrying on in the ordinary course of its business-if the member lacks authority to so act and the person with whom the member was dealing knew or had notice that the member was acting outside the scope of his or her authority. See Synectic Ventures I, LLC v. EVI Corp. , 353 Or. 62, 80-81, 294 P.3d 478 (2012) (discussing the "knew or had notice" requirement in ORS 63.140(1)(a) ). Under ORS 63.034(2), a person has notice of a fact if the person "(a) knows of it; (b) has received a notification of it; or (c) has reason to know it exists from all the facts known to the person at the time in question." Plaintiff, for his part, contended at summary judgment that he was unaware that CPP had an operating agreement and that he did not otherwise know or have notice that Bogart might not be authorized to accept plaintiff's loan offer on CPP's behalf. As noted, CPP did not contest this issue below, and CPP has not pointed to evidence refuting plaintiff's assertion.

In sum, the trial court erred when it granted defendant's motion for summary judgment. Based on the evidence in the summary judgment record, there is a genuine issue of material fact as to whether CPP incurred the debt from plaintiff's loan in the "ordinary course" of business.

Reversed and remanded.

      The trial court's ruling consisted of one line: "Defendant's Motion for Summary Judgment is allowed. See ORS 63.130(4)(g)." The parties had raised arguments under both ORS 63.130(4)(g) and ORS 63.140(1), and do so again on appeal. ORS 63.130 describes the rights of LLC members and managers with respect to the management and operation of the LLC. ORS 63.140, by contrast, describes the power of members and managers with respect to the LLC's relationships with third parties. Given the nature of plaintiff's action against CPP, we conclude that ORS 63.140 provides the appropriate statutory framework, and we rely on that statute alone to resolve this appeal.

      Under ORS 726.010(1), a pawnbroker is defined as
      "a person, copartnership, association or corporation that:
      "(a) Lends money at a rate of interest greater than 10 percent per annum on the deposit or pledge of personal property;
      "(b) Purchases personal property on the direct or implied condition of selling the personal property back at a stipulated price that would amount to paying interest or consideration in excess of 10 percent per annum; or
      "(c) Does business as a storage warehouse operator and lends money at a rate of interest greater than 10 percent per annum upon goods, wares, merchandise or personal property pledged or deposited as collateral security."

      Plaintiff did not seek to recover from Bogart, the member-manager who arranged the loan.

      ORS 63.140(1)(a) refers to "carrying on in the ordinary course the business of the [LLC]." We conclude that there is no meaningful difference between that phrase and the phrase "ordinary course of business."

      ORS 63.140 was enacted as Oregon Laws 1993, chapter 173, section 30.

      At least in the context of this appeal, we understand "usual and regular course of business" to be synonymous with "ordinary course" of business. See Black's at 1097 (defining "ordinary" as "regular; usual; normal; common").

      We note that CPP's operating agreement suggests that $ 125,000 in capital was loaned to the LLC by two of its member-managers, Richard and Pamela Bennett. Nothing indicates that the Bennetts' loan was to be the only loan or capital to be received by the LLC.


author: ORTEGA, P. J.

text:
    Lowell E. PATTON, Plaintiff-Respondent, v. MUTUAL OF ENUMCLAW INSURANCE COMPANY, a Washington corporation, Defendant-Appellant, and Hopp Insurance Agency, Inc., an Oregon corporation, and Randy W. Hopp, Defendants.
    A162134
    Court of Appeals of Oregon.
    Argued and submitted March 28, 2018. February 27, 2019
    Thomas M. Christ argued the cause for appellant. Also on the briefs were Julie A. Smith and Cosgrave Vergeer Kester LLP, Portland.
    Kathryn H. Clarke argued the cause and filed the brief for respondent.
    Before Ortega, Presiding Judge, and Powers, Judge, and Brewer, Senior Judge.
   ORTEGA, P. J.

This insurance coverage case is before us for a third time. In the first appeal, we reversed a judgment that awarded plaintiff damages on his breach of contract claim, and remanded for a new trial. Patton v. Mutual of Enumclaw Ins. Co. , 238 Or. App. 101, 242 P.3d 624 (2010), rev. den. , 349 Or. 654, 249 P.3d 542 (2011) ( Patton I ). In the second appeal, we reversed and remanded the case again because the trial court erred in granting a motion for summary judgment by defendant Mutual of Enumclaw Insurance Company (MOE). Patton v. Mutual of Enumclaw Ins. Co. , 266 Or. App. 154, 337 P.3d 874 (2014), rev. den. , 337 Or. 874 (2015) ( Patton II ). On that second remand, the case proceeded to trial, and the jury returned a verdict in favor of plaintiff, awarding him $ 2.556 million in damages. The court entered a judgment awarding damages in that amount, along with $ 1.023 million in prejudgment interest and $ 1.382 million in attorney fees.

MOE appeals and raises four assignments of error, all of which challenge the award of prejudgment interest and attorney fees. We reject, without written discussion, MOE's third and fourth assignments of error-that is, its challenges to the court's award of attorney fees and costs-and write only to address MOE's first two assignments of error. MOE first asserts that the trial court erred in ruling that issue preclusion barred it from challenging plaintiff's entitlement to prejudgment interest. Second, MOE argues that the trial court erred in concluding that plaintiff was entitled to prejudgment interest under ORS 82.010(1)(a) because the amount owed and the date from which interest should run were not easily ascertainable. We agree, based on the circumstances of this case, that the trial court erroneously applied the doctrine of issue preclusion. Further, in reviewing the court's award of prejudgment interest for legal error, Tasaki v. Moriarty , 233 Or. App. 51, 55, 225 P.3d 68 (2009), we conclude that the trial court lacked a basis on this record for an award of prejudgment interest because the record does not establish a readily ascertainable date from which such interest should run. Accordingly, we reverse the award of prejudgment interest and otherwise affirm the judgment.

We offer a limited description of the relevant procedural and background facts for purposes of this appeal, but a more detailed recitation of the facts can be found in Patton I and Patton II . Patton I , 238 Or. App. at 101, 242 P.3d 624 ; Patton II , 266 Or. App. at 154, 337 P.3d 874.

Plaintiff's house burned down on November 8, 2001. Patton I , 238 Or. App. at 105, 242 P.3d 624. He notified MOE that he intended to take advantage of the policy's replacement cost endorsement and that he was considering rebuilding. Id. That endorsement stated, in part, that, in the event of loss, MOE agreed to pay

"not more than the lesser of:
"1. The replacement cost of that part of the building damaged for like construction and use on the same premises; or
"2. The necessary amount required to repair or replace the damaged building."

Id. at 104, 242 P.3d 624. The policy further explained how covered losses were to be settled:

"(4) We will pay no more than the actual cash value of the damage unless:
"(a) actual repair or replacement is complete; or
"(b) the cost to repair or replace the damage is both:
"(i) less than 5% of the amount of insurance in this policy on the building; and "(ii) less than $ 2,500.
"(5) You may disregard the replacement cost settlement provisions and make claim under this policy for loss or damage to buildings on an actual cash value basis."

Id.

Plaintiff received several replacement cost estimates-between $ 1.544 million and $3.858 million-but MOE reminded plaintiff that, under the policy, he could not recover the replacement cost until the reconstruction was complete and that plaintiff had two years from the date of loss to bring action against MOE. Id. at 105-06, 242 P.3d 624. Nevertheless, MOE paid plaintiff $ 1.14 million on February 27, 2003-in addition to the $ 600,000 that MOE paid plaintiff after he reported the fire-and notified plaintiff that if the replacement cost exceeded that amount after reconstruction was completed, it would reevaluate plaintiff's claim to determine if MOE should pay the difference based on the terms of the policy. Id. at 109, 242 P.3d 624.

Plaintiff entered into a construction contract to rebuild the home for an estimated cost of $ 3.8 million and, right before the second anniversary of the fire, he filed a complaint alleging, among other things, that MOE breached the contract when it failed to pay the replacement cost beyond the $ 1.7 million that MOE had already advanced. Id. at 110, 242 P.3d 624. Because construction had not yet begun, the court put the case into abatement. Id. at 112, 242 P.3d 624. Two years later, the case proceeded to trial even though plaintiff had not fully completed the construction. Id. In ruling on some of the parties' pretrial motions, the court limited trial "to the question of whether the new house was of like construction and use [and] *** exclude[d] evidence of the amount that plaintiff had paid for the house that burned[.]" Id .

During the trial, plaintiff sought a directed verdict, arguing that there " 'is no evidence in the record that this house is not like construction and use,' " and the court allowed the motion after concluding that the replacement cost endorsement in the policy had been modified by letters MOE sent to plaintiff. Id. at 116, 242 P.3d 624. The court entered a judgment in favor of plaintiff for an award of $ 3.23 million, the amount that plaintiff spent to rebuild the house at that time, less the $ 1.7 million that MOE had already advanced, and included an award of prejudgment interest and attorney fees and costs. Id. at 116-17, 242 P.3d 624. MOE appealed, raising several assignments of error, but only challenged the damage award. In reversing and remanding this case, we concluded that

"the policy's provisions relating to the recovery of replacement costs are straightforward and not ambiguous. *** Thus, the completion of construction is a condition for recovery of replacement costs."

Id. at 120, 242 P.3d 624.

On remand, MOE filed a motion for summary judgment, arguing that plaintiff's claim was untimely because " 'the terms of the insurance policy operated collectively to require completion of reconstruction before the end of the second year following the date of loss.' " Patton II , 266 Or. App. at 164, 337 P.3d 874. MOE acknowledged that the policy did not specifically " 'say that in *** so many words,' " but maintained that " 'that is the plain import of what it does say.' " Id. (Emphases in original.) The court granted MOE's motion, and, on appeal, we reversed and remanded, concluding that "MOE's policy does not specify an express limit *** within which repair or replacement must be completed[.]" Id. at 169, 337 P.3d 874. (Emphasis in original.) On remand, the case proceeded to trial where the jury was asked to determine the cost to rebuild the same house that burned.

At the second trial, plaintiff asserted that the cost to rebuild the same house could not be known but maintained that it would have cost more than he spent to rebuild the home of like construction and use-that is, more than the $ 3.23 million that plaintiff spent. One of plaintiff's witnesses stated that he could not "put a dollar figure on the cost to rebuild the [same] house." Another witness for plaintiff concluded that no one "can look at the materials available [to rebuild the house] *** and actually come up with a number to reconstruct the same house[;] it would always be wrong." In contrast, defendant presented evidence that the estimated cost to rebuild the exact same house was $ 1.88 million and, therefore, the cost to rebuild or replace the same home was less than the cost of rebuilding one of like construction.

The jury concluded that "the necessary amount required to replace the damaged house [would not] have been equal to or greater than the [$ 3.23 million] that [plaintiff] spent to build the house that was actually built." Instead, the jury determined that the amount to rebuild the same house would have been $ 2.556 million. Plaintiff prepared and filed a proposed judgment, which included an award of damages for $ 816,831 (the difference between what the jury awarded and what MOE had already paid) and an award of prejudgment interest of $ 1.23 million, dating back to February 27, 2003.

To provide context for the parties' contentions in this appeal from the ensuing judgment, we pause briefly to explain how prejudgment interest is awarded. " '[I]n the absence of an agreement to pay interest, interest can be recovered only in those circumstances authorized by statute.' " Strawn v. Farmers Ins. Co. , 353 Or. 210, 239, 297 P.3d 439 (2013) (quoting Dowling v. Albany Planing Mill , 238 Or. 425, 431, 395 P.2d 143 (1964) ). Here, the trial court relied on ORS 82.010(1)(a), which authorizes an award of interest on "all moneys after they become due[.]" Whether a court can award prejudgment interest "usually reduces to whether the amount due was readily ascertainable." Strawn , 353 Or. at 239, 297 P.3d 439. That generally means that prejudgment interest is only awarded when "the exact amount is ascertainable or easily ascertainable by simple computation or by reference to generally recognized standards * * * and where the time from which interest should run is also easily ascertainable." Strader v. Grange Mutual Ins. Co. , 179 Or. App. 329, 338, 39 P.3d 903, rev. den. , 334 Or. 190, 47 P.3d 485 (2002).

Returning to the conclusion of the second trial, after plaintiff filed the proposed judgment, MOE objected in a written motion, arguing that plaintiff was not entitled to prejudgment interest. MOE asserted that, "because the exact amount of damages [was] not easily ascertainable by simple computation and because the time from which interest should run is not easily ascertainable, plaintiff was not entitled to an award of prejudgment interest." In doing so, MOE invoked the "Loss Payment" provision of the policy to argue that the contract provided the basis to determine when money becomes due for prejudgment interest calculations. That provision states that

"(10) *** [l]oss will be payable 60 days after [MOE] receives your proof of loss and:
"(a) reach[es] an agreement with you;
"(b) there is an entry of final judgment; or
"(c) there is a filing of an appraisal award with [MOE]."

In other words, MOE contended that, based on "the terms of the contract, no monies became due and owing until entry of final judgment" and, therefore, the "contract did not authorize an award of prejudgment interest." Alternatively, MOE argued that plaintiff could not be entitled to prejudgment interest because he failed to specifically plead foundational facts-that is, plaintiff failed to plead the amount owed or the date interest became due.

Plaintiff responded by arguing that MOE was precluded from challenging the award of prejudgment interest because it had a chance to do so in 2006 when the case was appealed after the first trial. Alternatively, plaintiff argued that, as of February 27, 2003 (the last time that MOE tendered payment to plaintiff to begin construction on his replacement home), the amount due and when interest would run were easily ascertainable even though the exact amount was still in dispute. Additionally, plaintiff argued that, by pleading that he "is entitled to an award of interest at the legal rate upon the amount owed to plaintiff under the Policy, from the date that it is due until it is paid," he satisfied the pleading requirement.

At the hearing on the motion, MOE argued that issue preclusion did not apply because the issues from the two trials were not "identical." However, the court disagreed and concluded that MOE was "foreclosed by issue preclusion from asserting [that] *** prejudgment interest doesn't apply." The court further concluded that the prejudgment interest was appropriate "for reasons set forth in plaintiff's written submission" and awarded $ 1.023 million in prejudgment interest-dating back to February 27, 2003, up until the judgment in the second trial in 2016. This appeal followed.

In challenging the trial court's application of issue preclusion in its first assignment of error, MOE reprises its argument from below. Specifically, MOE asserts that, because the measure of damages was different between the first and second trial, the prejudgment interest issue was not identical and, therefore, issue preclusion did not apply. After reviewing the court's application of issue preclusion for errors of law, City of Portland v. Huffman , 264 Or. App. 312, 315, 331 P.3d 1105 (2014), we agree that issue preclusion does not apply to foreclose MOE's arguments.

Under the doctrine of issue preclusion, "[i]f one tribunal has decided an issue, the decision on that issue may preclude relitigation of the issue in another proceeding if five requirements are met[.]" Nelson v. Emerald People's Utility Dist. , 318 Or. 99, 104, 862 P.2d 1293 (1993). One of those requirements is that the "issue in the two proceedings is identical," id ., and generally the party invoking issue preclusion "bears the responsibility of placing into evidence the prior judgment and sufficient portions of the record *** to enable the court to reach that conclusion with the requisite degree of certainty." Barackman v. Anderson , 214 Or. App. 660, 666, 167 P.3d 994 (2007), rev. den. , 344 Or. 401, 182 P.3d 200 (2008). That requirement has not been met in this case.

Whether or not plaintiff was entitled to prejudgment interest depends on when the amount owed to him became "due." See ORS 82.010(1)(a). That legal and factual question differed between the first and second trial; in the first trial, the court determined that plaintiff rebuilt a home of like construction and use and concluded that the amount owed to him was $ 3.23 million, the basis of the award of prejudgment interest, whereas in the second trial, the jury determined that the cost to rebuild the same home (an entirely different determination) would have been $ 2.556 million. In other words, before the jury returned a verdict in the second trial, the court's determination of prejudgment interest had been solely based on the cost to rebuild a home of like construction and use and, consequently, the facts and the legal question necessary to determine when that $ 3.23 million became due for an award of prejudgment interest, although similar, were not "identical" to the prejudgment interest determination in the second trial. Therefore, without more evidence to support a conclusion that the issues from the first and second trial were "identical," we conclude that the trial court erred in applying the doctrine of issue preclusion.

We turn to MOE's second assignment of error, i.e. , its challenge to the prejudgment interest award. As we understand MOE's argument on appeal, it disputes that both the amount due and the date from which interest ran were ascertainable. First, in MOE's view, the exact amount was not due until the jury returned a verdict because, up until that point, it did not know how the losses were to be calculated and, as a result, the amount was not ascertainable. Second, MOE contends that the time from which interest should run was not ascertainable because the "loss payable" clause in the policy dictated when interest began to run-that is, only after final judgment was entered in the second trial. MOE also argues that, because we stated in Patton I that replacement of the house is a condition precedent to recovering replacement-cost benefits, prejudgment interest cannot run from February 27, 2003, the date the trial court chose. Alternatively, MOE contends that plaintiff cannot be entitled to prejudgment interest because plaintiff failed to plead the exact amount and the date that amount was due.

In response, plaintiff appears to argue that the amount due was readily ascertainable because both parties had the ability to determine the replacement cost under the policy given the amount that plaintiff spent to rebuild the home of like construction. In other words, plaintiff contends that, even if the exact amount was unknown until the second trial, the amount was still ascertainable when the parties had a basis to determine the replacement cost. Further, plaintiff asserts that the policy does not dictate when the amount owed becomes due for purposes of calculating prejudgment interest given the fact that the court relied on ORS 82.010(1)(a) to make that determination. Additionally, plaintiff contends that, because MOE "did not articulate any problem with the date selected, nor suggest any alternative," February 27, 2003 is the date from which interest should run. And, in response to MOE's pleading challenge, plaintiff contends that MOE "never voiced any prejudice stemming from the absence of these specific allegations in the complaint," and that plaintiff thus met the pleading requirement. We conclude that the trial court lacked a basis on this record to determine the date at which prejudgment interest would accrue.

As previously stated, a trial court awards prejudgment interest when "the exact amount is ascertainable or easily ascertainable *** and where the time from which interest should run is also easily ascertainable." Strader , 179 Or. App. at 338, 39 P.3d 903. However, even when the exact amount of damages is "not ascertainable until issues of fact have been decided [by the jury], prejudgment interest is proper." Id. (internal quotation marks omitted). In other words, " '[a]lthough there are questions of fact about the amounts owed, that does not mean that defendant did not owe sums certain at dates certain.' " Farhang v. Kariminaser , 230 Or. App. 554, 557, 217 P.3d 218, adh'd to on recons. , 232 Or. App. 353, 222 P.3d 712 (2009) (quoting Hazelwood Water Dist. v. First Union Management , 78 Or. App. 226, 231, 715 P.2d 498 (1986) ).

Here, as plaintiff correctly points out, the fact that the exact amount owed to him was not pleaded or definitively established until the jury returned its verdict does not bar a prejudgment interest award. As we explained in Strader and as relevant to this dispute, the fact that the amount plaintiff pleaded differed from the amounts both parties presented at trial, and that both those amounts differed from what the jury decided, does not mean that the amount due was not readily ascertainable for these purposes. See Strader , 179 Or. App. at 339, 39 P.3d 903. Once the jury determined that the cost to rebuild the same home was less than the replacement cost of a home of like construction, prejudgment interest on that award was appropriate. See id. at 339-40, 39 P.3d 903 (concluding that once the jury resolved the factual dispute and awarded plaintiff damages on his breach of contract claim, an award of prejudgment interest was appropriate); see also Miller v. C. C. Meisel Co., Inc. , 183 Or. App. 148, 182, 51 P.3d 650 (2002) (concluding that trial court did not err in awarding prejudgment interest even though the amount owed was in dispute because "it was always within the ability of the parties to ascertain the amount of compensation owed under the agreement").

However, the time from which interest should run is not easily ascertainable on the record before us. See Farhang , 230 Or. App. at 558, 217 P.3d 218 (noting that in the absence of a jury determination of the factual issue regarding when interest should accrue, there must be sufficient evidence in the record designated on appeal for us to conduct meaningful review of whether the trial court erred in its resolution of that issue). Here, plaintiff contends that MOE's failure to "articulate any problem with" February 27, 2003, or to "suggest any alternative" date forecloses its challenge to the date that prejudgment interest should run. To the contrary, MOE's only burden as defendant is to demonstrate that a factual dispute existed about the date that interest should run, a dispute that the jury was not asked to resolve because it arose only after plaintiff prepared the proposed judgment. See Farhang , 232 Or. App. at 356, 222 P.3d 712 (explaining that, where interest began to accrue when the defendant made his last payment to the plaintiff but the jury was not asked to resolve that disputed issue, and the appellate record did not demonstrate a clear resolution to it, we lacked a basis to conclude that the trial court erred in declining to award prejudgment interest). In this case, the burden was on plaintiff, as the party requesting an award of prejudgment interest, to provide evidence to support the trial court's finding that interest should accrue from February 27, 2003, the date of MOE's last voluntary payment to plaintiff-i.e. , that an award of prejudgment interest was readily ascertainable as of that date. See generally Farhang , 230 Or. App. at 556, 217 P.3d 218. Here, that date was simply included in the proposed final judgment and accepted by the trial court without explanation, although MOE contested it and proposed alternative legal theories for when any interest would accrue, and there is no other evidence (nor, indeed, any legal support) suggesting the date the trial court chose was "the time from which interest should run." Strader , 179 Or. App. at 338, 39 P.3d 903.

With that in mind, we cannot determine from this record when "the time from which interest should run is *** easily ascertainable." Id . Therefore, we reverse the award of prejudgment interest.

Award of prejudgment interest reversed; otherwise affirmed.

      We reject without written discussion plaintiff's arguments that MOE failed to preserve its arguments regarding prejudgment interest.