Adelsperger v. Elkside Development LLC , 322 Or. App. 809 ( 2022 )

809
Argued and submitted January 10; judgment on elder financial abuse claim
reversed and remanded, otherwise affirmed November 30, 2022
Ron ADELSPERGER;
Sally Adelsperger;
Walter Arnold; Sandy Arnold;
Larry Brewer; Marilyn Brewer;
James Brown; Lonna Brown;
Bill Burgess; Jane Burgess; Shirley Calkins;
Jerry Christensen, aka Gerald Christenson;
Cindy Christensen, aka Cynthia Evans-Christenson;
Russell Cobb; Norma Cobb; Ron Ellis; Sallie Ellis;
Amy Flickenger Pierpoint, aka Amy Flickenger-Pierpoint;
Glen Pierpoint; Mike Fredrickson; Tresea Fredrickson;
David Fulcer; Sarah Fulcer;
Jack Gibson; Sharon Sue Gibson, aka Sue Gibson;
Mary Gray; Rudolph Hanna; Brenda Hanna;
Gerald Hastings, aka Jerry Hastings;
Shirley House; Michael Huntley; Gloria Huntley;
Rodney Hyde, aka Rod Hyde; Patricia Hyde;
Johnnie Issacs, aka Johnnie Isaacs;
Rowina Issacs, aka Rowena Isaacs;
Don Johnson, aka Donald Johnson; Linda Johnson;
Robert Kasmar; Linda Kasmar;
Kraig Knutson; Barbara Knutson;
Tom Kuntz; Brenda Kuntz;
Richard Mathis; Linda Mathis;
Gary McCord; Marie McCord; David McReynolds;
Joseph Moore; Geraldine Moore;
Adam Morgan; Vicky Morgan, aka Victoria Morgan;
Thomas Noel; William Oar;
Donald Partridge, aka Don Partridge;
Lucille Partridge, aka Lucy Partridge;
Craig Pedersen; Cheryl Pedersen;
David Smith; Carol Smith;
William Thomas, aka Bill Thomas; Jackie Thomas;
Fred Waidtlow; Linda Waidtlow;
Gary Wayman; Charlotte Wayman;
David Weberg; Jeanne Weberg;
Forrest Wheeler; and Jane Wheeler,
Plaintiffs-Respondents,
810 Adelsperger v. Elkside Development LLC
v.
ELKSIDE DEVELOPMENT LLC,
Successor in Interest to
Osprey Point RV Park, LLC et al.,
Defendants,
and
BARNETT RESORTS, LLC,
an Oregon Limited Liability Company,
dba Osprey Point RV Resort,
Defendant-Appellant.
Coos County Circuit Court
19CV14756; A174291
523 P3d 142
Plaintiffs, many of whom are aged 65 years or older, entered into membership
camping contracts with a campground operator between 1999 and 2017. After
the original campground operator sold the campground to defendant, defendant
notified plaintiffs that it would not honor the contracts with the prior owner.
Plaintiffs sued for breach of contract and elder financial abuse. The jury found for
plaintiffs on both claims. On appeal of the resulting judgment, defendant argues
that, as to each claim, the trial court erred in denying a directed verdict, because
the evidence was legally insufficient to support a verdict in plaintiffs’ favor.
Held: The trial court did not err in denying a directed verdict on the breach of
contract claim, on this record and given the arguments made. However, the court
erred in denying a directed verdict on the elder abuse claim, as the evidence was
legally insufficient to establish either of the pleaded theories of elder abuse.
Judgment on elder financial abuse claim reversed and remanded; otherwise
affirmed.
Andrew E. Combs, Judge.
Alicia M. Wilson argued the cause for appellant. Also on
the briefs was Frohnmayer, Deatherage, Jam Ieson, Moore,
Armosino & McGovern, P.C.
Dan G. McKinney argued the cause for respondents. Also
on the brief was DC Law.
Before Tookey, Presiding Judge, and Aoyagi, Judge, and
Armstrong, Senior Judge.
AOYAGI, J.
Judgment on elder financial abuse claim reversed and
remanded; otherwise affirmed.
Cite as 322 Or App 809 (2022) 811
AOYAGI, J.
This case involves a dispute over membership camp-
ing contracts. For nearly 20 years, Elkside Development,
LLC (Elkside) owned and operated the Osprey Point RV
Resort in Lakeside. Elkside sold memberships as part of its
business model. In exchange for payment of an initial fee
and annual dues, members received free use of the camp-
ground for a significant portion of the year and other ben-
efits. In April 2017, Elkside sold the property to defendant
Barnett Resorts, LLC. Two months later, defendant gave
notice to all members—including plaintiffs—that it would
not honor Elkside’s membership contracts. That led to the
filing of this action. Plaintiffs are 71 people who, collectively,
were party to 39 membership contracts with Elkside. Fifty-
six of the plaintiffs are aged 65 years or older. As relevant
here, a jury found that, in failing to honor the contracts,
defendant committed breach of contract, for which the jury
awarded $500,000 in damages, and elder financial abuse
under ORS 124.100, for which the jury awarded $900,000 in
damages, which was automatically trebled to $2.7 million.
Defendant appeals the resulting judgment, raising
four assignments of error. First, defendant challenges the
denial of its motion for summary judgment on the breach of
contract claim. We conclude that that ruling is unreviewable.
Second, defendant challenges the denial of its motion for a
directed verdict on the breach of contract claim. We reject
that claim of error and, accordingly, affirm the judgment as to
the breach of contract claim. Third, defendant challenges the
denial of its motion for a directed verdict on the elder finan-
cial abuse claim. We agree that the trial court erred in that
regard and, accordingly, reverse and remand for dismissal of
the elder financial abuse claim. Fourth, defendant challenges
the denial of its motion for a directed verdict on a claim
for intentional interference with economic relations (IIER),
which was pleaded in the alternative to the claim for breach
of contract. Our resolution of the second assignment of error
obviates the need to address the fourth assignment of error.
I. FACTS
In reviewing the denial of a motion for a directed ver-
dict, we consider the evidence and all reasonable inferences
812 Adelsperger v. Elkside Development LLC
from that evidence in the light most favorable to the non-
moving party, which in this case was plaintiffs. York v.
Bailey, 159 Or App 341, 349, 976 P2d 1181, rev den, 329 Or
287 (1999). We state the facts accordingly.
From 1999 until April 2017, Elkside operated the
Osprey Point RV Resort on real property that it owned in
Lakeside.1 As part of its business model, Elkside sold camp-
ing memberships, which were effectuated through mem-
bership contracts. People paid an initial fee to purchase a
membership (such as $5,900) and annual dues to maintain
the membership (such as $325 per year). As members, they
were entitled to use the campground for free for a signifi-
cant portion of the year (such as 265 days), including free
utilities, and at a reduced rate for the rest of the year. They
also received other on-site benefits at a reduced cost. The
contracts generally provided for “lifetime” memberships and
transfer rights.
Plaintiffs purchased their memberships between
1999 and 2016, entering into a total of 39 membership con-
tracts with Elkside. Those 39 contracts vary in their details
but are generally as described above. The contracts do not
address what will happen in the event that the property is
sold.2
Around 2005, Elkside began trying to sell the prop-
erty, and it was on the market for most of the next 12 years.
From the beginning, it was important to Mike Smalley—
one of the members of Elkside—to try to sell the property to
someone who would honor the existing campground mem-
berships, and several possible buyers dropped out over the
years because of the membership contracts. The property
was initially listed at $5.9 million. Elkside later reduced the
price to $3.3 million, then to $2.65 million in 2012, then to
$1.995 million in 2013.
1
Elkside is the successor of Osprey Point RV Park, LLC. Each entity had
as its members Mike Smalley and one or more of his family members. Like the
parties, we do not distinguish between the two entities. We use “Elkside” to refer
to both entities. References to “Smalley” are to Mike Smalley.
2
In 2001, Elkside gave a document to then-members to “certify” and “guar-
antee” resort privileges, including stating, “If Osprey Point RV Resort should be
sold the above membership will continue in force under the direction of the new
manager.” It is unclear how many of plaintiffs were members in 2001.
Cite as 322 Or App 809 (2022) 813
On April 28, 2017, defendant—an LLC whose mem-
bers are Chris and Stefani Barnett—purchased the real
property from Elkside, along with certain personal property
and the business name, for $1.995 million. The closing doc-
uments did not list the membership contracts as an encum-
brance or otherwise mention them. The executed bill of sale
provided that the property was “free and clear of and from
all encumbrances, security interests, liens, mortgages and
claims whatsoever.” Defendant was aware of the member-
ship contracts, however, when it purchased the property.
Before closing, defendant had requested a list of active mem-
berships, reviewed copies of some or all of the membership
contracts, and begun talking to people about whether the
contracts would be binding on defendant if it purchased the
property. Defendant also was aware that Smalley wanted
the contracts to be honored after the sale; for example, in an
email to Chris Barnett on February 26, 2017, attaching the
“requested info on members,” Smalley had stated, “I believe
that honoring the remaining contracts is worth the effort.
It is an income and will not create negative reviews around
the industry.”
There is conflicting evidence as to whether, at
the time of closing, defendant intended to honor Elkside’s
membership contracts. In any event, there is no evidence
that defendant ever promised or otherwise represented to
Elkside that it would honor the contracts.3
On May 14, 2017, defendant sent a letter to people
who had “purchased a Membership prior to the new owner-
ship.” The letter explained that defendant was not accept-
ing any new memberships and announced “some immedi-
ate changes that will be in effect” relating to memberships.
In describing those changes, the letter at least implied
that defendant intended to honor the existing membership
contracts, albeit perhaps on their narrowest terms, while
3
There is evidence that Elkside wanted the membership contracts honored,
may have even believed that a new owner would find it legally difficult to avoid
them, and had that in mind when pricing the property (initially at $5.9 million,
then at $3.3 million, then at $1.995 million). However, plaintiffs do not contend
that defendant made any actual promises to Elkside, and, on this record, it would
require improper speculation and stacking of inferences to find that defendant
actually promised or otherwise represented to Elkside that it would honor the
contracts.
814 Adelsperger v. Elkside Development LLC
disavowing any “verbal or handshake agreements” with the
previous owner.4 Only 10 days later, however, on May 24,
defendant sent an email to its staff that instructed them
not to accept any new reservations from people who bought
memberships from the previous owner, explaining that an
attorney was reviewing the contracts and that it would be
“too confusing for the resort to conduct business as usual”
while that happened. The email went on to state that, if
anyone with a membership asked what to do, “please kindly
tell them they cannot stay for Free and must pay regular
resort prices.” The email then reiterated that all future res-
ervations should be booked at the current season rates, that
“[a]nyone can still stay at the resort but only under regular
rates,” and that “there are no special fees or free stays until
further notice.”
On June 20, 2017, defendant sent a letter to every-
one with a membership contract. The upshot of the letter
was that defendant would not be honoring the contracts.
Defendant explained that it was the new owner, that it had
purchased the resort but not the contracts, that defendant
had “started fresh as a regular RV Park with nightly stays,”
and that defendant did not consider it financially feasible
to honor memberships that were purchased from the previ-
ous owner. Plaintiffs identify June 20, 2017, as the date on
which the contracts were breached.
In April 2019, two years after defendant purchased
the property, plaintiffs filed this action, asserting claims
against Elkside, defendant, Chris Barnett, and Stefani
Barnett. Plaintiffs obtained a default judgment against
Elkside, which was not appealed and is not at issue. Plaintiffs’
claims against the Barnetts individually were dismissed
on summary judgment and are the subject of a separate
appeal. See Adelsperger v. Elkside Development LLC, 317 Or
App 666, 504 P3d 1, rev allowed, 370 Or 56 (2022). As for
plaintiffs’ claims against defendant, three claims went to
the jury and are the subject of this appeal: breach of con-
tract, elder financial abuse under ORS 124.100, and IIER.
4
Chris Barnett felt that membership holders were “trying to take advantage
of” him by constantly requesting “freebies”—such as free fishing lessons, free
boat rides, free massages, free use of the event center, free pinball machines,
etc.—based on alleged handshake deals and verbal agreements with Smalley.
Cite as 322 Or App 809 (2022) 815
The parties stipulated to certain facts, including that none
of the plaintiffs had entered into a contract with defendant,
that defendant had not received membership dues from any
of the plaintiffs, and that all of the plaintiffs were “mone-
tarily damaged” by their contracts not being honored “to the
extent that membership dues were less than the fair market
value of the services received.”
At the close of plaintiffs’ case-in-chief, defendant
moved for directed verdicts on all three claims. The trial
court denied the motion.
Ultimately, the jury found for plaintiffs on all three
claims submitted to it. On breach of contract, the jury
found that plaintiffs’ membership contracts were binding
on defendant, presumably as covenants running with the
land given how the jury was instructed; that defendant had
breached those contracts; and that such breach had resulted
in $500,000 in damages. On elder financial abuse under
ORS 124.100, the jury found for the elderly plaintiffs and
awarded $900,000 in damages, which the court trebled to
$2.7 million as a matter of law. See ORS 124.100(2)(a) (requir-
ing the court to award “three times all economic damages”
to a prevailing plaintiff); ORS 124.100(2)(b) (requiring the
court to award “three times all noneconomic damages” to a
prevailing plaintiff). The court entered a general judgment
and money award for plaintiffs on the breach of contract and
elder financial abuse claims. The jury also found for plain-
tiffs on the IIER claim, but that claim was pleaded in the
alternative to the breach of contract claim—applying only if
it was determined that defendant was not bound by Elkside’s
contracts—so no judgment was entered on the IIER claim.
Plaintiffs’ other claims against defendant—for declaratory
relief, appointment of a trustee, and specific performance—
also were not reduced to judgment, for various reasons, and
are not at issue on appeal.
II. BREACH OF CONTRACT CLAIM
Defendant’s first two assignments of error pertain
to the breach of contract claim. Defendant argues that the
trial court erred, first, by denying defendant’s motion for
816 Adelsperger v. Elkside Development LLC
summary judgment and, second, by denying defendant’s
motion for a directed verdict.
We do not address the first assignment of error. “[A]n
order denying summary judgment is not reviewable follow-
ing a full trial on the merits, unless the motion rests on
‘purely legal contentions’ that do not require the establish-
ment of any predicate facts.” York, 159 Or App at 345. “[T]he
denial of a motion for summary judgment that is based on
facts, even undisputed facts, is not reviewable.” Staten v.
Steel, 222 Or App 17, 26, 191 P3d 778 (2008), rev den, 345
Or 618 (2009); see also Farnsworth v. Meadowland Ranches,
Inc., 321 Or App 814, 819-20, 519 P3d 153 (2022) (emphasiz-
ing the difference between the summary judgment standard
and reviewability). Because defendant’s summary judgment
motion “turned on the significance of adjudicative facts
(albeit, facts that defendant asserted to be undisputed),”
York, 159 Or App at 346, the trial court’s ruling denying
that motion is unreviewable on appeal.
As for the second assignment of error, considering
the particular arguments made to the trial court and on
appeal, we conclude that the trial court did not err in deny-
ing defendant’s motion for a directed verdict.
In their complaint, plaintiffs alleged that, when
defendant purchased the campground from Elkside in April
2017, defendant, as “successor” to Elkside, “became obligated
to honor the membership camping contracts,” while Elkside’s
own obligations to honor the contracts also remained in
force. With respect to the breach of contract claim, plaintiffs
alleged that Elkside, as the original contracting party, had
breached the contracts either “by assigning its obligations”
to defendant without plaintiffs’ permission or “by divesting
itself of the resort such that it can no longer perform” its
contractual obligations. Plaintiffs alleged that defendant,
“if found to be successor in interest to [Elkside], was also
obligated to honor the membership camping contracts and
by refusing to do so breached the membership camping con-
tracts between Plaintiffs and [Elkside].”
It is fair to say that the complaint is unclear as
to what legal theory or theories plaintiffs were relying on
Cite as 322 Or App 809 (2022) 817
to assert that defendant was liable on Elkside’s contracts.
“[M]erely to say that a party has succeeded to a predeces-
sor’s interest in land does not say enough to explain why
the successor should somehow be bound by a predecessor’s
agreement.” Sander v. Nicholson, 306 Or App 167, 185, 473
P3d 1113, rev den, 367 Or 290 (2020). The only theory that
the complaint actually mentions is assignment—a theory
that was abandoned, in that no evidence of assignment was
offered at summary judgment or trial. Additional theories
were raised, however, during the pretrial summary judg-
ment proceedings. Without getting into unnecessary detail,
the record suggests that, by the time trial began, there
were two theories on the table as to how defendant could
be liable on Elkside’s contracts, despite not having assumed
them voluntarily. In defendant’s view, it would be liable on
the contracts only if plaintiffs proved that Elkside’s mort-
gage holder had executed, delivered, and recorded a non-
disturbance agreement in accordance with the statutory
procedure for “membership camping contracts” provided in
ORS 94.986(1). That, in defendant’s view, “would prioritize
plaintiffs’ interests above blanket encumbrances then exist-
ing and provide for the mechanism to allow the contracts
to run with the land and be enforceable on a subsequent
purchaser.” In plaintiffs’ and the trial court’s view, defen-
dant also could be liable on the contracts if the common-law
requirements for an equitable servitude or covenant run-
ning with the land were met.
When the trial court denied defendant’s directed
verdict motion, it made clear that it viewed the evidence as
sufficient to allow a finding that the contracts ran with the
land as a matter of common law. Specifically, when defen-
dant argued that Elkside’s noncompliance with ORS 94.986
meant that the contracts did not bind defendant, the court
asked why “this can’t be something other than a membership
camping contract under ORS [chapter] 94” and why there
was not a “common law issue here.” Defendant responded
that “that’s not what Plaintiffs pled,” that plaintiffs’ use
of the term “membership camping contracts” in their com-
plaint necessarily invoked ORS chapter 94, and that “any
sort of equitable servitude” was “simply not what they
pled.”
818 Adelsperger v. Elkside Development LLC
The trial court was unpersuaded. It considered the
evidence sufficient to go to the jury on a common law theory.5
As for defendant’s pleading argument, the court explained
that when there is evidence to support a theory not origi-
nally pleaded, “the pleadings can conform to the evidence.”
Because of how the issue developed below, the exact amend-
ments made to the complaint to conform to the evidence are
unclear, so we necessarily can only assume that they were
consistent with how the court ultimately submitted the case
to the jury.6
On appeal, as in the trial court, defendant empha-
sizes that the complaint did not mention equitable servi-
tudes (or covenants running with the land). That is cer-
tainly true. However, the trial court viewed the evidence
as sufficient to support such a theory and treated the com-
plaint as having been implicitly amended to conform to the
evidence. See ORCP 23 B (providing for amendment of the
pleadings to conform to the trial evidence, including implicit
amendment). To the extent that defendant indirectly sug-
gests on appeal that the court should not have allowed
implicit amendment of the complaint to conform to the evi-
dence, that issue is unpreserved for appeal, as defendant
never argued to the trial court that implicit amendment was
5
The court referred to the “common law” generally, and it ultimately
instructed the jury on covenants running with the land. Compare Johnson v.
Highway Division, 27 Or App 581, 584, 556 P2d 724 (1976), rev den, 277 Or 99(1977) (“Before a covenant may be said to run with the land and be binding upon
a promisor’s successors in interest, four requirements must be met: (1) there must
be privity of the estate between the promisor and his successors; (2) the promisor
and promisee must intend that the covenant run; (3) the covenant must touch and
concern the land of the promisor; and (4) the promisee must benefit in the use of
some land possessed by him as a result of the performance of the promise.”) with
Ebbe v. Senior Estates Golf, 61 Or App 398, 405, 657 P2d 696 (1983) (A “promise is
binding as an equitable servitude if (1) the parties intend the promise to be bind-
ing; (2) the promise concerns the land or its use in a direct and not a collateral
way; and (3) the subsequent grantee has notice of the covenant, either actual or
constructive.” (Internal quotation marks omitted.)).
6
By contrast, in Sander, 306 Or App at 185-86, it was error to direct a verdict
in the plaintiffs’ favor on a breach of contract claim, based on breach of an ease-
ment agreement, given how the claim was pleaded. And, in LDS Development,
LLC v. City of Eugene, 280 Or App 611, 614, 618 n 8, 622, 382 P3d 576 (2016),
rev den, 361 Or 100 (2017), the trial court erred by granting summary judgment
on an unpleaded theory. Here, the way the issue evolved makes it difficult to
discern the court’s exact thinking—and also precludes our saying that the court
erred.
Cite as 322 Or App 809 (2022) 819
improper in these circumstances. Defendant argued only
that the existing pleadings did not raise the matter. The
issue also is not properly before us on appeal, because defen-
dant has assigned error only to the ruling on the motion for
a directed verdict. It has not assigned error to the denial of
any objection to allowing implicit amendment, to admitting
the underlying evidence, or the like. Indeed, as in the trial
court, defendant has not even acknowledged the principle
of implied amendment to conform to the evidence, let alone
developed an argument as to how or why it was improper to
recognize an implied amendment in these circumstances.
It therefore would be improper for us to consider,
as a basis for potential reversal of the judgment, the propri-
ety of the trial court treating plaintiffs’ complaint as hav-
ing been amended to conform to the evidence. Accordingly,
we proceed with the understanding that the complaint
was implicitly amended to assert an equitable servitude or
a covenant running with the land, as the basis by which
the membership contracts (or at least some parts of them)
became binding on defendant when it purchased the land.
With that understanding, we cannot conclude that the trial
court erred in denying a directed verdict on the breach of
contract claim. In moving for a directed verdict, defendant
did not make any substantive argument to the trial court as
to why the evidence was insufficient to prove an equitable
servitude (or a covenant running with the land), asserting
only that it was “not what [plaintiffs] pled.” On appeal, defen-
dant has similarly focused on the alleged pleading defect,
rather than the evidence. The only time that it addresses
the evidence is in its reply brief. For example, as to whether
the membership contracts directly touch and concern the
land, in its reply brief, defendant points for the first time to
a provision in the contracts that would have allowed Elkside
to transfer the memberships to “a substitute property in the
same general area” that was as or more desirable for camp-
ing and outdoor recreation. Those belated arguments raise
interesting issues, but they were not raised in the trial court
in arguing the directed verdict motion, or in the opening
brief on appeal. See Clinical Research Institute v. Kemper
Ins. Co., 191 Or App 595, 609, 84 P3d 147 (2004) (regarding
new theories raised in a reply brief).
820 Adelsperger v. Elkside Development LLC
In sum, on this record and given the arguments
that were made, we reject the second assignment of error,
challenging the court’s denial of a directed verdict on the
breach of contract claim. Our conclusion as to the common
law theory obviates the need to address defendant’s argu-
ments under ORS 94.986, the statute regarding membership
camping contracts. Our disposition of the second assign-
ment of error also obviates the need to address the fourth
assignment of error, as previously mentioned, because the
IIER claim was pleaded in the alternative to the breach of
contract claim.
III. ELDER FINANCIAL ABUSE CLAIM
Defendant’s third assignment of error pertains to
the claim for elder financial abuse asserted by the 56 plain-
tiffs who are aged 65 years or older. ORS 124.100(4) provides
for an action “for financial abuse described in ORS 124.110.”
ORS 124.110(1) in turn provides that “[a]n action may be
brought under ORS 124.100 for financial abuse” in either of
two circumstances:
“(a) When a person wrongfully takes or appropriates
money or property of a vulnerable person, without regard
to whether the person taking or appropriating the money or
property has a fiduciary relationship with the vulnerable
person.
“(b) When a vulnerable person requests that another
person transfer to the vulnerable person any money or
property that the other person holds or controls and that
belongs to or is held in express trust, constructive trust
or resulting trust for the vulnerable person, and the other
person, without good cause, either continues to hold the
money or property or fails to take reasonable steps to make
the money or property readily available to the vulnerable
person when:
“(A) The ownership or control of the money or property
was acquired in whole or in part by the other person or
someone acting in concert with the other person from the
vulnerable person; and
“(B) The other person acts in bad faith, or knew or
should have known of the right of the vulnerable person
to have the money or property transferred as requested or
otherwise made available to the vulnerable person.”
Cite as 322 Or App 809 (2022) 821
A “vulnerable person” includes any person aged 65 years
or older. ORS 124.100(1)(e) (“vulnerable person” includes an
“elderly person”); ORS 124.100(1)(a) (“elderly person” means
a person 65 years of age or older).
In their complaint, the subset of plaintiffs aged 65
years or older alleged that defendant had acquired owner-
ship of the resort and taken over the responsibility to honor
the membership camping contracts and, thereby, “acquired
a property right of the Elderly Plaintiffs (ORS 124.110(a))
or hold in trust the annual dues and property rights of the
Elderly Plaintiffs (ORS 124.110(b)).” They further alleged
that defendant had “acted in bad faith in refusing to honor
the property rights”; that defendant “[knew] or should have
known that the Elderly Plaintiffs had the rights in the mem-
bership camping contracts and the rights to use the Resort”;
and that defendant had committed elder financial abuse
“by denying the elderly Plaintiffs access to the Resort, by
breaching the membership camping contracts and the addi-
tional benefits purchased by Elderly Plaintiffs, and by deny-
ing the property rights of the Elderly Plaintiffs.”
At the close of plaintiffs’ case-in-chief, defendant
moved for a directed verdict on the elder financial abuse
claim, citing Bates v. Bankers Life and Casualty Co., 362
Or 337, 408 P3d 1081 (2018), for the proposition that a con-
tract dispute does not give rise to liability for elder financial
abuse.
In ruling on the motion, the court described the
legal standard and summarized plaintiffs’ evidence. The
court stated that it “didn’t really see” any evidence of wrong-
ful conduct, noting that “it’s not against Oregon law for a
business person to decide that they want to cancel a contract
with a vulnerable person.” The court also voiced concern that
“[i]f you start making that the law, no person would want
to * * * have contracts with people who are over the age of
65, because every time they get into a squabble with them,
they’re going to get sued for treble damages.” Ultimately,
however, the court concluded that there was enough to go to
the jury, on the theory that defendant deprived plaintiffs of
their property insofar as plaintiffs had common law rights
822 Adelsperger v. Elkside Development LLC
running with the land, arising from their membership con-
tracts, and were being excluded from the campground.
Defendant assigns error to that ruling, arguing
that the evidence was legally insufficient to support a ver-
dict under either ORS 124.110(1)(a) or ORS 124.110(1)(b).
A. ORS 124.110(1)(b)
We begin with ORS 124.110(1)(b), which applies
when a “vulnerable person entrusts his or her money or
property to the other person and later requests its return,
but the other person in bad faith refuses to return it.” Bates,
362 Or at 344. In Bates, the Supreme Court answered a
question certified to it by the United States Court of Appeals
for the Ninth Circuit, in connection with an insurance dis-
pute: “ ‘Does a plaintiff state a claim under [ORS] 124.110
(1)(b) for wrongful withholding of money or property where
it is alleged that an insurance company has in bad faith
delayed the processing of claims and refused to pay bene-
fits owed under an insurance contract?’ ” Id. at 339 (quoting
Bates v. Bankers Life & Cas. Co., 849 F3d 846, 847 (9th Cir
2017)).
The elderly plaintiffs in Bates contended that their
payment of insurance premiums to the defendant insur-
ance company constituted a transfer of money or property
and that, when the defendant failed to pay policy benefits
in bad faith, it was not only a breach of the insurance con-
tract but also a refusal to return their money or property
and thus elder financial abuse under ORS 124.110(1)(b).
Id. at 341-42. The plaintiffs “essentially s[ought] to bring
themselves within the words of the elder financial abuse
statute by arguing that the insurance benefits that Bankers
was contractually obligated to pay them constituted ‘money
or property’ that ‘belong[ed] to’ them.” Id. at 341 (quoting
ORS 124.110(1)(b) (second brackets in original)).
The Supreme Court rejected that argument and
answered “no” to the certified question. Id. at 340. The
court explained that a claim for elder financial abuse under
ORS 124.110(1)(b) has four elements. “The first element in
time (although it appears in the middle of the provision) is
that ‘[t]he ownership or control of the money or property
Cite as 322 Or App 809 (2022) 823
was acquired in whole or in part by the other person * * *
from the vulnerable person.’ ” Id. at 344 (quoting ORS
124.110(1)(b)(A) (ellipses and brackets in Bates)).7 There need
not be any wrongful conduct in the initial acquisition of the
money or property. Id. The second element is “the vulnerable
person’s request to the other person that the other person
‘transfer’ to the vulnerable person any money or property
that ‘belongs to’ the vulnerable person.” Id. (quoting ORS
124.110(1)(b)). The third element is “that the other person
‘without good cause’ continue to hold the money or property
that ‘belongs to’ the vulnerable person.” Id. (quoting ORS
124.110(1)(b)). The fourth element is “that the other per-
son have acted ‘in bad faith, or knew or should have known
of the right of the vulnerable person to have the money
or property transferred as requested.’ ” Id. (quoting ORS
124.110(1)(b)(B)).
The elderly plaintiffs’ position in Bates that the
defendant violated ORS 124.110(1)(b) by failing to honor the
insurance contracts ran “into an initial, and fatal, textual
barrier.” Id. at 344. It “essentially read[ ] out of the statute
the first element of the claim—that [the defendant] have
acquired ‘ownership or control of the money or property from
[plaintiffs].’ ” Id. at 344-45 (final brackets in original). The
court disagreed with the plaintiffs that “their contractual
right to receive insurance benefits under the policies” was
money or property that the defendant acquired from them.
Id. at 345. Rather, the court explained, the “plaintiffs paid
insurance premiums to Bankers in exchange for insurance
policies.” Id. The plaintiffs were “not seeking the return of
the money they transferred to Bankers in the form of pre-
mium payments, but instead the contractual benefits they
are entitled to under Bankers’ insurance policies, which are
not the same thing.” Id.
Although a contractual right to receive benefits
“might be considered ‘property’ in the broadest sense of the
word,” the first element of ORS 124.110(1)(b) was not met,
7
In the interests of completeness, we note that ORS 124.110(1)(b)(A) also
applies when ownership or control of the money or property is acquired by “some-
one acting in concert with the other person.” That aspect of the statute was not at
issue in Bates, but it is another way to satisfy the first element.
824 Adelsperger v. Elkside Development LLC
because “the money or property” that the plaintiffs had
given to the defendant—insurance premiums—was not the
same “money or property” that they had requested from
defendant—the benefits to which they were entitled under
their contracts. Id. at 347. Even if it was “wrongful” for the
defendant to fail to pay benefits under the contract terms,
it was not a violation of ORS 124.110(1)(b). Id. In reaching
that conclusion, the court acknowledged that its construc-
tion of the statute limits liability under ORS 124.110(1)(b)
to “trust-like situations—and not simply to any failure to
pay a contractual or other debt owed to a vulnerable person
as a result of an arms-length consumer transaction.” Id. at
346-47. That construction was dictated by the unambiguous
text and context of the statute. Id. at 347.
Applying Bates, we reach the same conclusion here,
i.e., that the first element for liability under ORS 124.110
(1)(b) was not proved. Plaintiffs argue that their rights
under the camping contracts were “money or property” that
they “requested” that defendant “transfer” to them. That is
directly analogous to the plaintiffs’ position in Bates and
fails for the same reasons. Plaintiffs did not seek return of
the fees and dues that they paid to Elkside, so, even if defen-
dant stands in Elkside’s shoes, what plaintiffs requested
from defendant—access to the resort and other benefits pro-
vided in their membership camping contracts—is “not the
same thing” as what they transferred. Id. at 345. In short,
plaintiffs are not asking for the return of money or property
that they transferred in a trust-like situation; rather, they
are seeking the benefit of a contractual bargain that they
made. As in Bates, even if defendant breached the contract,
and even if it was “wrongful” to do so, no claim exists under
ORS 124.110(1)(b).
B. ORS 124.110(1)(a)
We next consider ORS 124.110(1)(a), which applies
“[w]hen a person wrongfully takes or appropriates money or
property of a vulnerable person.” As used in ORS 124.110
(1)(a), “wrongful” refers to conduct that “is carried out in pur-
suit of an improper motive or by improper means.” Church
v. Woods, 190 Or App 112, 118-19, 77 P3d 1150 (2003) (con-
cluding that the legislature intended “wrongful” in ORS
Cite as 322 Or App 809 (2022) 825
124.110(1)(a) to have that term’s “well-understood meaning
in the law of torts with regard to interference with legal
interests”).
To be considered improper, a party’s means “must
be independently wrongful by reason of statutory or com-
mon law, beyond the mere fact of the injury complained of.”
Church, 190 Or App at 119; see also Ride PDX v. Tee & B,
LLC, 322 Or App 165, 168, 519 P3d 870 (2022) (“If liabil-
ity is based on the use of improper means, then the means
must violate some objective, identifiable standard, such as
a statute or other regulation, or a recognized rule of com-
mon law, or, perhaps, an established standard of a trade or
profession.” (Internal quotation marks omitted.)). “Improper
means, for example, include violence, threats, intimidation,
deceit, misrepresentation, bribery, unfounded litigation, def-
amation and disparaging falsehood.” Church, 190 Or App
at 119 (internal quotation marks omitted); see also Bates,
362 Or at 344 (referring to “fraud, conversion, or theft” as
wrongful means of acquiring a vulnerable person’s money
or property); Allen v. Hall, 328 Or 276, 286, 974 P2d 199(1999) (making fraudulent misrepresentations to an elderly
person’s attorney and care providers to prevent execution of
a new will would qualify as using improper means to inter-
fere with a prospective inheritance).
In the trial court, plaintiffs did not identify any
“improper means” that they were claiming defendant used
to take or appropriate plaintiffs’ property. On appeal, plain-
tiffs’ only argument as to improper means is “conversion”—
that defendant converted plaintiffs’ “lifetime right to occupy
specific portions of the resort property” to defendant’s own
use. That theory is untenable, because conversion relates
only to chattels. See Hemstreet v. Spears, 282 Or 439, 444,
579 P2d 229, appeal dismissed, 439 US 948 (1978) (“[C]on-
version is an intentional exercise of dominion or control
over a chattel which so seriously interferes with the right
of another to control it that the actor may justly be required
to pay the other the full value of the chattel.”); Black’s Law
Dictionary 268 (9th ed 2009) (defining “chattel” as “[m]ovable
or transferable property; personal property; esp. a physical
object capable of manual delivery and not the subject matter
826 Adelsperger v. Elkside Development LLC
of real property”); see also Rapacki v. Chase Home Fin. LLC,
797 F Supp 2d 1085, 1092 (D Or 2011) (citing Hemstreet
and Black’s Law Dictionary and concluding that real prop-
erty subject to a trust deed was not a chattel and, accord-
ingly, plaintiff’s claim could not be “construed as a claim for
conversion”).
As for improper motive, we have never addressed
improper motive in the specific context of ORS 124.110, but,
under Church, we understand it to have its usual “well-
understood meaning” in tort law. Church, 190 Or App at
118. Therefore, to be liable for elder financial abuse based
on acts committed with an improper motive, the defendant’s
“purpose must be to inflict injury on the plaintiff ‘as such.’ ”
Northwest Natural Gas Co. v. Chase Gardens, Inc., 328 Or
487, 498, 982 P2d 1117 (1999) (quoting Top Service Body Shop
v. Allstate Ins. Co., 283 Or 201, 211, 582 P2d 1365 (1978)); see
also Ride PDX, 322 Or App at 174 n 5 (“[T]o be actionable
under the ‘improper purpose’ prong, the purpose must be to
inflict injury on the plaintiff.” (Emphasis in original.)).
For example, a defendant acting “with the sole design
of injuring [the plaintiff] and destroying his business”
would have an improper motive. Top Service Body Shop,
283 Or at 201-11. Conversely, a defendant acting in “pur-
suit of its own business purposes as it saw them” would not
have an improper motive. Id. at 212; see also Eusterman v.
Northwest Permanente, P.C., 204 Or App 224, 238, 129 P3d
213, rev den, 341 Or 579 (2006) (a defendant’s desire to maxi-
mize profits is not an improper motive). In Ride PDX, 322 Or
App at 174 n 5, for example, we concluded that, even if the
plaintiffs proved that the defendants’ motive for complain-
ing to their mutual landlord about noise from the plaintiffs’
business was to obtain rent concessions for the defendants’
own benefit, that would not prove an improper purpose.
Here, defendant notified plaintiffs on June 20, 2017,
that it would no longer honor the membership contracts.
Even assuming arguendo that not honoring the contracts
would qualify as a taking or appropriation of plaintiffs’
money or property—an issue that we need not decide—
plaintiffs have not pointed to any evidence in support of
their assertion that defendant had an “improper purpose”
Cite as 322 Or App 809 (2022) 827
in deciding not to honor the contracts, i.e., that defendant’s
intent was specifically to injure plaintiffs as such. As the
trial court noted in discussing the directed verdict motion,
the evidence was that defendant decided not to honor the
contracts based on Chris Barnett’s conclusion that they
were not valid or binding on defendant. Defendant acting in
its own business interests, based on its own understanding
of its legal obligations, is not an improper motive for refus-
ing to honor contracts. It put defendant at risk of a breach of
contract claim if plaintiffs took a different view, but it is not
a viable basis for an elder financial abuse claim under ORS
124.110(1)(a).
In sum, on this record, plaintiffs failed to prove
elder financial abuse under ORS 124.110(1). It follows that
the trial court erred when it denied defendant’s motion for a
directed verdict on that claim.
Judgment on elder financial abuse claim reversed
and remanded; otherwise affirmed.