HTAIKE v. SEIN (2017)

POWERS, J.

This appeal is the latest chapter in a dispute between Thein Htaike and Naw Myint (plaintiffs) and Rosalind Sein, Victor Sein, Sanda Altman, and the Family Trust of Rosalind Sein (defendants). The underlying dispute involves claims that defendants made predatory loans to plaintiffs through loansharking practices. In an earlier appeal, we held that the trial court had incorrectly granted defendants summary judgment on a claim brought under the Oregon Racketeer Influenced and Corrupt Organization Act (ORICO) because the statute of limitations had not run. Accordingly, we reversed the judgment in that respect and remanded to the trial court. Htaike v. Sein, 269 Or App 284, 303, 344 P3d 527, rev den, 357 Or 595 (2015) (Htaike I). On remand, plaintiffs filed a motion to modify the general judgment asking the trial court, among other changes, to enter judgment on the ORICO claim in their favor without further proceedings, which defendants opposed. The trial court granted the motion. We reverse and remand because the trial court erred in entering the corrected general judgment without giving defendants the opportunity to be heard on the ORICO claim.

We summarized the facts of the underlying case in Htaike I:

“Plaintiffs filed *** action seeking recovery of over $200,000 on the general theory that defendants had secured a series of promissory notes at exorbitant interest rates from plaintiffs through loansharking. Over the years, plaintiffs paid substantial sums on those notes but, despite repeated requests from plaintiffs, defendants never gave them an accounting of how much they owed at any given time. Seven years after the first note was given, defendants issued past due notices, asserting that plaintiffs still owed more than $180,000 to defendants. At that point, plaintiffs stopped making payments, consulted an attorney, and brought an action alleging several claims for relief. Before trial, the trial court granted summary judgment to defendants on plaintiffs' claim for fraud and a claim brought under the Oregon Racketeer Influenced and Corrupt Organization Act (ORICO), ORS 166.715-166.735. After a bench trial, the court concluded that plaintiffs had proved claims for restitution, unjust enrichment, money had and received, and rescission, and entered judgment for plaintiffs awarding damages, prejudgment interest, attorney fees, costs, and an enhanced prevailing party fee.”

269 Or App at 286. After the trial, defendants appealed on a number of grounds, and plaintiffs cross-appealed, arguing that the trial court incorrectly granted defendants' motion for summary judgment on plaintiffs' ORICO claim. We affirmed on appeal and reversed on cross-appeal, holding that “[p]laintiffs alleged violations of ORICO that were based on conduct that occurred one year before they filed their action. Accordingly, the statute of limitations had not run against plaintiffs' ORICO claim, and the trial court erred in concluding otherwise.” Id. at 302.

On remand, plaintiffs filed a motion to modify the general judgment requesting that the court award plaintiffs treble damages in accordance with ORICO and add Sanda Altman, a named defendant, to the list of judgment debtors. In that motion, plaintiffs pointed to a comment that the trial court had made when it announced its factual findings during the bench trial that plaintiffs produced evidence “sufficient to support the ORICO claim and that the [c]ourt would have found the defendants liable but for the dismissal via summary judgment.” Further, plaintiffs noted that, in the general judgment, the court stated, “[d]espite prior [summary judgment] - evidence at trial was sufficient to support RICO.”

Defendants responded by arguing that the motion to modify the judgment should be denied because the ORICO claim had not been tried, they did not obtain discovery on the ORICO claim, and it would be improper for the trial court to enter judgment without trial or any evidentiary hearing on the ORICO claim. Defendants further argued that it would be procedurally incorrect for the trial court to enter a judgment on the ORICO claim “upon remand after appeal, where the claim was never before the court at trial or otherwise.”

Without holding any hearings, taking any addi-tional evidence, or issuing written findings, the trial court entered a “corrected general judgment and money award.” The corrected judgment was the same as the original judgment, except that it added Sanda Altman as a judgment debtor, modified the judgment amount to include treble damages, and discussed our remand. Specifically, the trial court stated that, “[i]n light of the remand and in light of the [c]ourt's prior finding that the evidence at trial was sufficient to support plaintiffs' claim pursuant to ORICO, had that claim not been dismissed prior to trial on the grounds that the statute of limitations had run, the court has modified this general judgment.”

On appeal, defendants raise four assignments of error, challenging the trial court's rulings on remand. Because it is dispositive, we address only the fourth assignment of error in which defendants assert that the trial court erred in entering the corrected general judgment without provid-ing defendants the opportunity to defend the ORICO claim. That is, the gravamen of defendants' assignment is that they are entitled to their day in court in order to “present both evidence and legal argument on [the] ORICO” claim. Plaintiffs, for their part, argue that the ORICO claim was proved during the five-day bench trial on plaintiffs' other claims. We agree with defendants.

After the trial court granted summary judgment on the ORICO claim, that claim was no longer before the court for the parties to develop either factually or legally. That is, the parties' evidence, evidentiary objections, if any, and legal arguments at the underlying court trial were all focused on claims other than the ORICO claim since that claim had been dismissed on summary judgment. It was only after we remanded the case in Htaike I that the parties were provided an opportunity to develop the ORICO claim factually and legally. Thus, although it is possible that plaintiffs wanted to rely solely on the evidence already in the record, defendants did not have an opportunity to chal-lenge that evidence based on the ORICO framework, nor did defendants have an opportunity to offer their own evidence on the ORICO claim. Similarly, the parties were deprived of the opportunity to make legal arguments based on the ORICO framework because that claim was not before the trial court. Simply put, by entering the corrected judgment, the trial court deprived defendants of any opportunity to make factual or legal arguments surrounding the ORICO claim. Accordingly, we reverse and remand to allow the parties the opportunity to litigate the ORICO claim.

Reversed and remanded.

POWERS, J.