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Ashley Shearer

Breach of contract claims commonly arise in civil litigation. An interesting question arises when one party to a contract is an elderly person, defined by Oregon law as a person 65 years of age or older, and thus a vulnerable person. ORS 124.100(a); (e)(A). ORS 124.110 defines financial abuse subject to under Oregon’s elder abuse statutes, ORS 124.100 to 124.140. In Oregon a plaintiff alleging a statutory claim for financial elder abuse must prove four elements: (1) a taking or appropriation (2) of money or property (3) that belongs to an elderly or incapacitated person, and (4) the taking must be wrongful. Church v. Woods, 190 Or App 112, 117,77 P3d 150 (2003). While there is some guidance, this issue has not yet been clearly adjudicated in Oregon. To be liable under ORS 124.110(a), there must be evidence that a person “wrongfully” took or appropriated the money or property of a vulnerable person. Conduct is “wrongful” in the context of ORS chapter 124 if it is carried out in pursuit of an improper motive or by improper means. Church v. Woods, 190 Or App at 118. To be considered improper, a party’s means “must be independently wrongful by reason of statutory or common law, beyond the mere fact of the injury complained of.” Id. This gives rise to a variety of potential arguments on this issue. For instance, if a plaintiff not only alleges breach of contract, but also alleges a defendant committed an independent statutory violation during the transaction leading to a breach of contract claim, is that separate independent act grounds for finding financial elder abuse? 

The question of whether breach of contract constitutes financial elder abuse under ORS 124.110 was most recently addressed in Adelsperger v. Elkside Development LLC. Adelsperger v. Elkside Dev. LLC, 322 Or App 809, 827, 523 P.3d 142, 154 (2022). Adelsperger involved a dispute over membership camping contracts. Plaintiffs purchased annually renewable memberships in a lakeside campground from Elkside Development, LLC. Elkside Development subsequently sold the campground to defendant Barnett Resorts, LLC. Barnett refused to honor Elkside’s membership contracts after the sale. The Adelsperger plaintiffs argued that Barnett’s refusal to honor the membership contracts after accepting plaintiffs’ membership dues constituted breach of contract and elder abuse. At trial, Barnett moved for directed verdict on the breach of contract and elder abuse claims. The trial court denied both motions and the jury found for plaintiffs on both counts. Barnett challenged the trial court’s denial of its motions for directed verdict on appeal.

The Court of Appeals found reversible error in the trial court’s denial of Barnett’s motion for directed verdict on the financial elder abuse claim. The court based its finding, in part, on the fact that the Adelsperger plaintiffs did not seek return of their annual dues but rather the benefit of their contractual bargain - access to the resort and other benefits provided in their contracts. Id. Citing to Bates v. Bankers Life & Cas. Co., the Adelsperger court held that ORS 124.110(1)(b) was not violated where plaintiffs did not seek the return of property or money, but rather the benefit of a contractual bargain that they made. Bates v. Bankers Life & Cas. Co., 362 Or 337, 408 P.3d 1081 (2018). Adelsperger held that even if defendant breached the contract, and even if it was “wrongful” to do so, no claim existed under ORS 124.110(1)(a) for financial elder abuse. Adelsperger, 322 Or App at 824.

The Adelsperger court found that “a defendant acting in its own business interests, based on its own understanding of its legal obligations, is not an improper motive for refusing to honor contracts” and “while it put defendant at risk of a breach of contract claim if plaintiffs took a different view, it is not a viable basis for an elder financial abuse claim under ORS 124.110(1)(a).” Adelsperger, 322 Or App at 827. Arguably, following Adelsperger, Oregon law does not support a finding of elder financial abuse based in breach of contract alone because breach of an enforceable contract is not a taking and, therefore, cannot be wrongful as required for a successful statutory claim. However, Adelsperger did not involve a separate statutory claim of wrongfulness in addition to the alleged breach of contract. Therefore, it remains to be seen how Oregon courts will interpret such cases in the future.