Hancock v. Pioneer Asphalt, Inc.

Issue preclusion may not be applied to dismiss a claim where, in the prior action, the claim was dismissed without prejudice without being actually litigated and essential to a final decision on the merits.

Plaintiff appealed from a judgment dismissing his personal injury action against Defendant as barred by the statute of limitations. This second action was filed after the first action was also dismissed as barred by the statute of limitations; presently, Plaintiff argued the trial court incorrectly applied the doctrine of issue preclusion to litigate an issue of timeliness also raised in the first action. The first case arose when Plaintiff was injured while driving over an unmarked speed bump on a private road. Plaintiff did not know which company had constructed the speed bump, and so in the complaint Plaintiff identified the potential Defendants as “John Does 2 and 3.” Plaintiff sent a copy of the complaint to Defendant and other area construction companies. Over two years later Plaintiff learned Defendant had been one of the companies liable for negligent construction of the speed bump, and amended his complaint. Defendant moved to dismiss under ORCP 21A(9) (allowing for dismissal when action is not commenced within the time limited by statute). Plaintiff argued Defendant had notice when the complaint was provided to Defendant and that the filing date of the amended complaint should relate back to the filing date of the original complaint under ORCP 23 C. Defendant argued that, at the time it received the original complaint naming “John Does 2 and 3,” it had searched its records and had been unable to determine whether it was responsible for construction of the speed bump. The trial court found ORCP 23 C did not apply and dismissed Plaintiff’s claim against Defendant without prejudice. Within the appropriate time limit, Plaintiff filed the second action against Defendant, who then sought summary judgment based on its statute of limitations defense. Plaintiff argued, under ORS 12.220, the second action was timely because it was filed within 180 days of dismissal of the first timely action that had been dismissed without prejudice and had not been decided on the merits of the claim. Additionally, Plaintiff again argued the filing date of the first action should relate back to the date of the original complaint under ORCP 23 C. Defendant argued issue preclusion barred Plaintiff from relitigating his relation-back argument. Plaintiff argued he did not have a full and fair hearing on the claim; therefore, the doctrine of issue preclusion should not apply. After an in-depth analysis, the Court held Defendant failed to establish the relation back issue was actually litigated and essential to a final decision on the merits in the first action; the trial court determined ORCP 23 C did not apply and the first action was dismissed without prejudice, meaning the merits were never reached, and no final order or judgment was ever issued that established the ORCP 23 C ruling was essential to a final decision on the merits in the prior proceeding. Reversed and remanded.