Plaintiff, Riley Hill General Contractor, Inc., sought compensatory and punitive damages on claims labeled "fraud,"
Defendant excepted to these instructions. The jury returned a verdict for plaintiff. Defendant appealed, and the Court of Appeals reversed and remanded for a new trial because of the inconsistency in the trial court's jury instructions on the burden of proof. Riley Hill General Contractor v. Tandy Corp., 82 Or.App. 458, 728 P.2d 577 (1986). We allowed review to decide whether the burden of persuasion
Riley Hill, the sole owner and operator of Riley Hill General Contractor, Inc., also owned a number of small businesses. He desired to acquire a computer system to assist in his bookkeeping and accounting to better enable him to conduct his businesses and to keep track of cash flow within his various businesses. Hill initially purchased a single-user computer system from Tandy Corporation. Because this system was slower than he desired, Hill decided to expand to a more complex computer system. He also acquired this system from Tandy Corporation.
Hill's experience with the new computer was unsatisfactory. After a number of complaints about the equipment and the computer programs and a number of attempts by Tandy Corporation to fix the computer, including replacement of all the hardware, Tandy Corporation offered to refund the purchase price. Hill refused and filed this civil action.
In this action, plaintiff alleged that Tandy Corporation had been warned by the company that tested the computer system before marketing that it was necessary to provide for file lock out within the accounting program to avoid corruption of the data being put in the computer file. It alleged
At the conclusion of the trial, the judge gave the above-quoted instruction to the jury. The Court of Appeals reversed the trial court, holding that the instructions were inconsistent because the jury was told that the burden of proof in "fraud" cases is by both clear and convincing evidence and by a preponderance of the evidence. As mentioned, the Court of Appeals held that the instruction was reversible error, because it was not possible to tell from the verdict whether the jury used the correct clear and convincing evidence standard or the incorrect preponderance of the evidence standard. 82 Or. App. at 461, 728 P.2d 577.
Before we set forth the level of proof required in civil actions for deceit, we address the origins and meanings of the terms "preponderance of evidence" and "clear and convincing evidence."
THE ORIGINS AND MEANINGS OF "PREPONDERANCE" AND "CLEAR AND CONVINCING" EVIDENCE
"Preponderance" derives from the Latin word "praeponderare," which translates to "outweigh, be of greater weight." 8 Oxford English Dictionary 1289 (1933). With regard to the burden of proof or persuasion in civil actions, it is generally accepted to mean the greater weight of evidence. At one time in the history of English law, the translation received a literal interpretation, with heads of witnesses being counted on each side, and each item of testimony receiving a quantitative value or weight. See Millar, in Engelmann, History of Continental Civil Procedure 41-49 (1927); 9 Wigmore, Evidence 424-31, § 2498 (Chadbourn rev 1981); 1 Holdsworth, History of English Law 302-04 (3d ed 1922). The term suggests to the jury that the evidence should be weighed on a scale and, frequently, trial judges will speak of weights and scales in explaining to jurors under this standard that they cannot speculate or guess what happened but that a party with the burden of persuasion in a civil case must prove what probably occurred. Uniform Jury Instructions (Civil), Nos. 21.01, 21.02 (Oregon CLE 1986), read, respectively:
Mellinkoff, in his extensive work, The Language of the Law (1963), does not specifically trace the origins of the terms "preponderance of the evidence" or "clear and convincing evidence." However, he asserts that certain words, such as "plaintiff," "defendant," "fee simple" and "lessee," are terms of art with a specific meaning, id. at 17, but that other language of the law is better characterized as equivocal because "there is a deliberate choice of the flexible," id. at 21. Among a sample of words and phrases which are often used "because they are flexible or despite their flexibility," are the words "clear and convincing," id. at 21, and he lists among "the cats and dogs of law language, defined and redefined, but not more precise for all of that,"
We now examine why there are two somewhat parallel words, "clear" and "convincing," for a separate standard of proof. Mellinkoff traces this repetition of words to the origins of the English language. He explains that the English language started with the Celts when they entered the British Isles long before the birth of Christ and that Celtic was the dominant language of Britain until the Roman occupation in the first century A.D. The Latin interlude ended when the last Roman legions withdrew in 407 A.D.
He concludes that the repetition is simply the result of a collision of languages and that "[t]his penchant of English for coupling with foreign synonyms may be traced from Celtic through Scandinavian, Latin, and French." He concludes that "It is by no means a complete explanation of law tautology, but the pattern begins early and stays late." Id. Mellinkoff continues his history of the language of the law:
As examples of the law's habit of doubling words, Mellinkoff, at 121, lists:
French Englishdevise bequeath infant child larceny theft marriage wedding property goods pledge borrow
He then comments that, sometimes for clarity, sometimes for emphasis and sometimes in keeping with the bilingual fashion of the day, English lawyers joined synonyms. A sampling of bilingual synonyms coupled in the law are:
Id. at 122.
Such a combination of languages is found in the "clear and convincing" standard of proof, although this pair of words does not repeat a single concept. Outside the law, a proposition may be very clear but unconvincing, and murky statements may be persuasive in the absence of criticism or contrary assertions. In short, "clear" describes the character of unambiguous evidence, whether true or false; "convincing" describes the effect of evidence on an observer.
"Clear" is a Norman French word which means "of words, statements, explanations, meanings: Easy to understand, fully intelligible, free from obscurity of sense; of a vision, concept, notion, view, memory, etc.; Distinct, unclouded, free from confusion." 2 Oxford English Dictionary, supra at 475. The use of the term "clear" by itself after the Norman Conquest could have created great confusion due to its close association with the native English word "clean," which meant "without anything left or omitted, without any exception that may vitiate the statement, without qualification wholly, entirely, quite absolutely." Id. at 482.
"Convincing" is an English word derived from the Latin "convincere." It means "to overcome, to conquer, convict; to overcome (a person) in argument, to prove wrong, confute; to cause (a person) to admit, as establish to his satisfaction, that which is advanced in argument; that which convinces, that convicts, proves guilty, that which brings conviction to the mind." Id. at 950-51.
The use of similar terms, one Norman French, one English, arose in English history around the time of William the Conqueror and the Norman Conquest in 1066. King William I encouraged and maintained the loyalty and obligations system which had bound subjects to the kings of England. He made great use of certain trusted Norman followers, but these prelates were required to rule within a native English framework of law and custom. William I, a Norman, recognized that the defeated English people were much more likely to accept their defeat and accept the new social order imposed by the conqueror if the defeated were not the only ones making adjustments. So successful was he in this endeavor that, in the last serious revolt of his reign, it was the Normans who rebelled and Englishmen who fought for the king. 23 Encyclopaedia Britannica 530-32 (1971).
William I wanted to keep the affairs of church and state separate. He was determined, as a matter of policy, that in his dominions the church would be subordinate to the state. While he was compelled to concede ample room to "the canons of the episcopal law," he insisted that the ecclesiastical courts assume no rights in England that they had not exercised in Normandy. Thus, he created a system of ecclesiastical and common law courts which used both the Norman French and English languages. Reppy, Ordinance of William the Conqueror 1-5 (1954).
William sent commissioners to hold his local courts. Not only did these men bring the king's authority more directly than ever before into the shire courts of England but, in their conduct of the cases over
In trying to understand the Norman French and English terms, of course, we need to examine not only their origins but also the usage given to them by judicial decisions.
THE USE OF THE TERMS
Historically, the "clear and convincing" standard of proof
The author of the above-quoted law review article notes that in jury trials of civil actions at law, the clear and convincing rule was applied to actions for fraud or deceit as well as to equitable defenses based on fraud or mistake. He concludes that one method of enforcing the demand for clear and convincing evidence available in appeals from jury verdicts is the approval of a charge to the jury which directs them to apply that level of proof or reversal for error where the charge does not incorporate it. Id. at 116-17, nn 43 & 44 (citing Fidelity & Casualty Co. of N.Y. v. Genova, 90 F.2d 874 (C.C.A. 6th 1937); Kuhn v. Chesapeake & Ohio Ry., 118 F.2d 400 (C.C.A. 4th 1941)).
Many courts have recognized that the intermediate standard of "clear and convincing" evidence is applicable in appropriate civil cases. Then Chief Justice Warren Burger, in Addington v. Texas, 441 U.S. 418,
Application of this intermediate standard permeates a line of United States Supreme Court decisions declaring that "clear and convincing" evidence is required in various quasi-criminal proceedings or where the proceedings threaten the individual involved with a significant deprivation of liberty or with a stigma.
THE LEVELS OF PROOF IN OREGON
Since the time of the first Deady Code, Oregon statutes have set forth the level of proof required in civil and criminal actions. See General Laws of Oregon, ch. 9, § 835, pp. 355-56 (Deady 1845-1864). Those standards are now codified at ORS 10.095(5) and (6), as follows:
Plaintiff contends that, under ORS 10.095(5), in a civil action, a plaintiff's burden can never be more than a preponderance of the evidence. We disagree.
In Cook v. Michael, 214 Or. 513, 526-27, 330 P.2d 1026 (1958), this court stated that there are three standards of proof: "a preponderance," "clear and convincing" and "beyond a reasonable doubt." Proof by a "preponderance of the evidence" means that the jury must believe that the the facts asserted are more probably true than false. To be "clear and convincing," evidence must establish that the truth of the facts asserted is "highly probable." "Beyond a reasonable doubt" means that the facts asserted are almost certainly true. This part of the Cook opinion has been endorsed repeatedly by this court. See, e.g., Mutual of Enumclaw Ins. v. McBride, 295 Or. 398, 405-06, 667 P.2d 494 (1983); State ex rel. Redden v. Discount Fabrics, 289 Or. 375, 383, 615 P.2d 1034 (1980); Barkins v. Stuyvesant Ins. Co., 255 Or. 222, 224, 465 P.2d 696 (1970); Bausch v. Myers, 273 Or. 376, 379, 541 P.2d 817 (1975); Sheets v. B & B Personnel Systems, 257 Or. 135, 145, 475 P.2d 968, 476 P.2d 920 (1970).
In Mutual of Enumclaw Ins. v. McBride, supra, this court signaled that
Acknowledging that "skepticism [is] often voiced regarding the practical importance of an intermediate measure of proof,"
One reason for imposing the higher "clear and convincing" standard in a claim based on deceit is that the defendant is branded with something akin to guilt. In Mutual of Enumclaw, after conceding that setting the clear and convincing standard for "fraud" was dictum in Cook v. Michael, an assault case, this court said:
Prior to this court's decision in Cook v. Michael, the formulation of the "clear and convincing" language in this state ranged from the statement in Elfelt v. Hinch, 5 Or. 255, 259 (1874), that "fraud cannot be presumed" and may only be deduced "from circumstances affording a strong presumption," through many reformulations of similar adjectives, such as "satisfactory evidence," "a clear preponderance," "clear and distinct" proof, "clear and conclusive" proof, "a preponderance of clear and satisfactory proof," "clear and explicit" proof, "clear, satisfactory and convincing" proof, "definite" proof, "clear and satisfactory" proof, proof that indicated "nothing short of cogency," "clear and convincing" proof, and "a clear and satisfactory preponderance."
Out of this mishmash of legal standards, the trial court in this case latched onto wording from the 1935 case of Metropolitan Cas. Ins. Co. v. Lesher, 152 Or. 161,
Lesher, 152 Or. at 164-65, 52 P.2d 1133; Wilkerson, 187 Or. at 638, 213 P.2d 209.
Both justices concluded that while proof of fraud must be clear and convincing, issues of fact in civil cases are nevertheless determined by a preponderance of the evidence. Those most learned and highly respected justices may have been enamored with this distinction, but we doubt that any jury then or now could follow an instruction that encompasses such legal double talk. Cook v. Michael partially overruled Lesher insofar as the applicability to civil cases of ORS 41.110 (defining "satisfactory evidence") is concerned. Cook, 214 Or. at 524, 330 P.2d 1026. We now overrule the balance of the statements in Lesher and Wilkerson which imply that a clear and convincing proof standard can co-exist with a preponderance standard on the issue of burden of persuasion.
The Oregon cases cited in this section of this opinion intertwine the terms "fraud," "deceit" and "misrepresentation" or refer to fraud without specific definition. As cogently described by Prosser & Keeton, Torts 727, § 105 (5th ed 1984), "[t]he law of misrepresentation is * * * considerably broader than the action for deceit," and the confusion over terms is compounded by the use of the word "fraud," "a term so vague that it requires definition in nearly every case." These noted authors state:
Prosser & Keeton list the elements of the tort action in deceit as follows:
Plaintiff in this case alleged each of these elements, and the trial court instructed
The unique element in the tort of deceit is "the intent to deceive." Prosser & Keeton, supra at 741, § 107. As demonstrated by Prosser & Keeton, the presence of the intent to deceive makes deceit a much more serious offense than many other torts:
In this case, plaintiff alleged that the representations were made intentionally or were made recklessly. Of course, there is no difficulty in finding an intent to deceive in a case where it is apparent that the speaker believes his statement to be false, but what if the representation is made recklessly? We agree with Prosser & Keeton that the tort of deceit may still be proven if the representation is made without any belief as to its truth, or with reckless disregard whether it be true or false, and in cases where representations are made by one who is conscious that he has no sufficient basis of information to justify them. Id. at 741-42; see Dizick v. Umpqua Comm. College, 287 Or. 303, 306, 599 P.2d 444 (1979); Elizaga v. Kaiser Found. Hospitals, 259 Or. 542, 546-47, 487 P.2d 870 (1971).
A party who is found "guilty" of deceit is not found merely negligent in deceiving the victim. That party must have intended to deceive the victim or acted in reckless disregard for the truth. The type of interest protected by the law of deceit is the interest in formulating business judgments without being misled by others — in short, in not being cheated. See U.S. National Bank v. Fought, supra, 291 Or. at 220, 630 P.2d 337. A person who has been found "guilty" of deceiving or cheating someone certainly has been found "guilty" of conduct which carries the same stigma of guilt whether the conduct is a criminal or civil act of deceit.
As mentioned in Mutual of Enumclaw v. McBride, supra, ORS 10.095 is not cast in absolute terms. It requires the jury be instructed to apply the "preponderance" standard "on all proper occasions," thus leaving some discretion for this court to decide which cases are proper for such an instruction and which are not.
We conclude that the standard of proof in a civil action for common law deceit must be "clear and convincing." As our discussion above of the origins of the words points out, the evidence must be free from confusion, fully intelligible, distinct and establish to the jury that the defendant intended to deceive the plaintiff or did so with a reckless disregard for the truth. To be both clear and convincing, the truth of the facts asserted must be highly probable. Cook v. Michael, supra, 214 Or. at 527, 330 P.2d 1096. A trial judge should not tell a jury in a deceit case that it must be convinced by clear and convincing evidence. This misuse of parallel words would thrust us back to the dark ages. As Justice
However, as this court held in Dizick v. Umpqua Comm. College, supra, 287 Or. at 311, 599 P.2d 444, even though "fraud" must be proved by "clear and convincing evidence," the extent of damages need only be proved by a preponderance of the evidence. See also Byers v. Santiam Ford, Inc., supra, 218 Or. at 418, 574 P.2d 1122 (Lent, J., specially concurring).
In sum, in a common law deceit action the trial judge, when referring to the basic elements of the claim, should tell the jury that proof by clear and convincing evidence is required, which means that the truth of the facts is highly probable. However, when considering the issue of damages, be they general or punitive, the judge should instruct the jury that the proponent need only prove those damages by a preponderance, or greater weight of the evidence.
We agree with the Court of Appeals' disposition as to defendant's assignment of error in the submission of the jury verdict form, which inferred that punitive damages could be allowed for simple negligence. Other assignments of error raised by defendant are not meritorious.
The Court of Appeals is affirmed, and the case is remanded to the trial court for a new trial only on the deceit claim and punitive damages issues; the trial court is otherwise affirmed.
Rudyard Kipling's Verse 744 (Inclusive ed 1926).
"NORMAN AND SAXON (A.D. 1100)
Rudyard Kipling's Verse, supra n. 4 at 749-50 (emphasis in original).
The legislative commentary to OEC 308 reads in part:
Evidence 4-8 to 4-9, § 4.13 (Oregon CLE 1986) (emphasis in original; citations omitted).
"Punitive Damages: $