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FILED: February 02, 2011

IN THE COURT OF APPEALS OF THE STATE OF OREGON

THOMAS W. MOSSBERG, PH.D.,

Plaintiff-Appellant,

v.

UNIVERSITY OF OREGON,
a public body of the State of Oregon,
and DAVISON SOPER,
in his individual capacity,

Defendants-Respondents,

and

MELINDA W. GRIER,
RICHARD LINTON,
and

JOHN DOES 1-5,
in their individual capacities,

Defendants.

Marion County Circuit Court
05C20721
A135714

Joseph C. Guimond, Judge.

Argued and submitted on October 27, 2009.

Thomas M. Christ argued the cause for appellant. With him on the briefs were Julie A. Smith and Cosgrave Vergeer Kester LLP, and J. Channing Bennett and Garrett Hemann Robertson PC.

Erin C. Lagesen, Assistant Attorney General, argued the cause for respondents. With her on the brief were John R. Kroger, Attorney General, and Rolf C. Moan, Acting Solicitor General.

Before Ortega, Presiding Judge, and Rosenblum, Judge, and Landau, Judge pro tempore.

ORTEGA, P. J.

Judgment on claims for conversion and breach of contract reversed and remanded; otherwise affirmed.

ORTEGA, P. J.

This appeal involves a dispute between the University of Oregon (the University) and plaintiff, who is a former faculty member of the University, over certain personal property. Following his resignation, plaintiff asserted claims against the University for conversion, inverse condemnation, and breach of contract. The trial court dismissed the conversion claim and granted summary judgment to the University on the inverse condemnation and breach of contract claims. For the reasons set forth below, we conclude that, although the trial court properly granted summary judgment in favor of the University with respect to the inverse condemnation claim, it erred in its disposition of plaintiff's conversion and breach of contract claims. We therefore reverse and remand.

The following facts are undisputed. Plaintiff was employed as a physics professor at the University for approximately 17 years. Before that, he was employed as a professor at Harvard University, where certain laboratory equipment was acquired for his use. He brought at least some of that equipment with him when he joined the University faculty.

In 1986, during the process of negotiating the terms and conditions of plaintiff's employment with the University, the University provost sent plaintiff a document captioned "Revised Conditions of Offer to [plaintiff]," which stated, in part:

"If you leave the University of Oregon, you will be able to take with you, at no cost, all equipment purchased on grants for which you were Principal Investigator. The University of Oregon would also recommend to the General Services Department of the State of Oregon that you be allowed to purchase at a fair market value any other equipment obtained to support your research."

Additional equipment was purchased with federal grant funds for plaintiff's use during his employment with the University.

When plaintiff resigned his position with the University in late September 2004, a dispute arose between the parties over plaintiff's entitlement to the laboratory equipment. The University and plaintiff engaged in weeks of negotiations regarding disposition of the equipment but were unable to reach an agreement. Eventually, University employees disassembled the laboratory equipment in the course of moving it which, according to plaintiff, rendered the equipment worthless. Plaintiff subsequently filed a complaint against the University alleging, among other things, that the equipment that he brought from Harvard was his personal property and that the University converted that property following his resignation. The trial court granted the University's motion to dismiss that claim on the ground that plaintiff was required to assert such a claim via the University's faculty grievance process.

Thereafter, plaintiff filed an amended complaint against the University. This time he alleged, among other things, that the equipment that he brought with him from Harvard was his personal property and that, by virtue of the "Revised Conditions of Offer," the University was contractually obligated to allow him to remove the Harvard equipment and any equipment purchased with federal grants for which he was the principal investigator during his tenure with the University.(1) Plaintiff asserted an inverse condemnation claim against the University on the basis that the University's handling of the laboratory equipment following his resignation amounted to an uncompensated taking for public use in violation of Article I, section 18, of the Oregon Constitution. Plaintiff also asserted that the University breached its contractual obligation by refusing to allow him to take the laboratory equipment following his resignation. The parties filed cross-motions for summary judgment on both those claims. The trial court granted summary judgment to the University, denied plaintiff's motion, and entered judgment for the University. Plaintiff appeals, assigning error to the trial court's dismissal of his conversion claim and grant of the University's motion for summary judgment on his inverse condemnation and breach of contract claims.

I. CONVERSION CLAIM

We begin by addressing the conversion claim. "To state a claim for conversion, a party must establish the intentional exercise of dominion or control over a chattel that so seriously interferes with the right of another to control it that the actor may justly be required to pay the full value of the chattel." Emmert v. No Problem Harry, Inc., 222 Or App 151, 159-60, 192 P3d 844 (2008). Plaintiff alleged in his original complaint that the laboratory equipment that he brought with him from Harvard was his personal property and that the University converted that property when it refused to return it following his resignation.

The University moved to dismiss the conversion claim pursuant to ORCP 21 A(1), contending that the trial court lacked subject matter jurisdiction because "plaintiff's exclusive remedy is under the Administrative Procedure Act, ORS 183.310-690." According to the University, the exclusive administrative remedy available to plaintiff was the faculty grievance process set forth in OAR chapter 571, division 3. Plaintiff argued in response that, because he was no longer an employee of the University when it converted his property, he was not eligible to participate in the University's faculty grievance process.

The trial court entered an order granting the University's motion to dismiss. In a letter ruling, the court explained:

"Unfortunately for plaintiff, this claim relates to a condition of his employment with the University. Plaintiff's demand and the alleged later conversion are all related to a condition of his employment that existed while he was employed by the University. Consequently, although plaintiff was not an employee at the time of the alleged conversion, because the claim relates to and stem[s] from a condition of his employment with the University, it remains subject to the provisions of the APA. Because the APA provides for review of the University's action, it is the exclusive means for obtaining review of that action. See Bay River, Inc. v. Envtl. Quality Comm'n, 26 Or App 717 (1976). This court lacks jurisdiction over this claim and, accordingly, dismisses this claim with prejudice."

We review the trial court's determination that it lacked jurisdiction over plaintiff's conversion claim for legal error, Longstreet v. Liberty Northwest Ins. Corp., 238 Or App 396, 400, ___ P3d ___ (2010), and conclude that the trial court erred.(2)

The University has adopted grievance procedures to address certain complaints by individuals associated with the University. See OAR ch 571, div 3. With regard to complaints brought by faculty members, a grievance is defined as "a complaint by an academic employee that the employee was wronged in connection with compensation, tenure, promotion, or other conditions of employment or the employee's rights were denied as to reappointment." OAR 571-003-0001(1). "Other conditions of employment" include, but are not limited to, "violations of academic freedom, discriminatory employment practices and nondiscriminatory employment practices, and laws, rules, policies and procedures under which the University of Oregon operates." OAR 571-003-0001(2). The University contends that plaintiff's complaint about its treatment of the Harvard equipment qualifies as a complaint that he was wronged in connection with one of the "other conditions of [his] employment" within the meaning of OAR 571-003-0001(2). We assume, without deciding, that the University's characterization is correct.(3) However, plaintiff was not eligible to participate in the grievance process described in OAR chapter 571, division 3, because he was not an employee of the University at the time of the alleged conversion.

The rules applicable to statutory interpretation also apply to the interpretation of administrative rules. Tye v. McFetridge, 199 Or App 529, 534, 112 P3d 435 (2005) aff'd, 342 Or 61, 149 P3d 1111 (2006). To discern the intent behind an administrative rule, "[w]e begin by examining the text of the rule within its context. Unless defined otherwise in the rule, we give the words of the rule their ordinary meanings." Id. OAR 571-003-0001(1) defines a grievance to be a complaint by an "employee" that the "employee" has been wronged in certain ways. The term "employee" is not defined, so we give it its common meaning.

An employee is commonly understood to be a person who is employed by another. See Webster's Third New Int'l Dictionary 743 (unabridged ed 2002). If the drafters of OAR chapter 571, division 3, had intended to make the grievance process available to persons other than current employees, they would have stated that the process also was available to a "former" employee or would have replaced the word "employee" with "person" or some other term that is not intrinsically connected to current employment status. In interpreting a rule, we are constrained by the wording actually used and may not insert terms that have been omitted. City of Keizer v. Lake Labish Water Control Dist., 185 Or App 425, 431, 60 P3d 557 (2002), rev den, 336 Or 60 (2003).

As evidence that the grievance process is available to former employees, the University points to OAR 571-003-0001(1), which defines a grievance to include a complaint that an "employee's rights were denied as to reappointment." The problem with the University's argument is that, as the University conceded during oral argument, the rules contemplate that decisions to deny reappointment will be made before the expiration of the term of appointment. See, e.g., OAR 580-021-0305 (describing notice requirements for non-renewal of appointment of tenured academic staff). Thus, a grievance related to a decision to deny reappointment could be filed while the grievant is still a University employee.

At least two other provisions of OAR chapter 571, division 3, lend contextual support to our determination that the faculty grievance process was not available to plaintiff because he was no longer an employee of the University at the time of the alleged conversion. First, OAR 571-003-0005(1) requires that the written statement by which a faculty member initiates a formal grievance "shall include" the grievant's campus address and campus telephone number. Given that former faculty members do not have campus addresses and phone numbers, the rule clearly contemplates that the faculty grievance process is available only to those individuals who are employed by the University when the pertinent dispute arises.

Second, OAR 571-003-0000(6) provides that prejudicial action shall not be taken against an employee during the time in which a grievance is pending. However, the implementation of any administrative action that is the subject of the grievance, specifically including the "termination or non-renewal of an employee," is deemed not to be a prejudicial act. In the event of such action, OAR 571-003-0000(6)(a) clarifies that, if a timely grievance has been filed, "it shall continue to be processed under these rules regardless of the fact that the grievant may no longer be employed[.]" OAR 571-003-0000(6). That clarification would not be necessary if a former employee was otherwise eligible to initiate a grievance.

Accordingly, for the reasons set forth above, the trial court erred in dismissing plaintiff's conversion claim.

II. INVERSE CONDEMNATION CLAIM

We turn to plaintiff's claim for inverse condemnation, which was disposed of on summary judgment. We review a grant of summary judgment viewing "the facts and all reasonable inferences that may be drawn from the facts in favor of * * * the nonmoving party." Outdoor Media Dimensions Inc. v. State of Oregon, 331 Or 634, 638, 20 P3d 180 (2001).

"Summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. ORCP 47 C. A genuine issue of material fact is lacking when 'no objectively reasonable juror could return a verdict for the adverse party on the matter that is the subject of the motion for summary judgment.' Id."

Outdoor Media Dimensions Inc., 331 Or at 638-39.

Plaintiff contends that the laboratory equipment that he brought from Harvard is his private property. He also maintains that he has a contractual right to any equipment obtained with federal grant money for which he was the principal investigator during the time that he was employed by the University. As explained in more detail below, plaintiff alleges that, after his resignation, the University dismantled the entire laboratory without properly documenting the disassembly process, thereby entirely destroying the value of the equipment. According to plaintiff, the University's action amounts to an uncompensated taking for public use in violation of Article I, section 18, of the Oregon Constitution.

Article I, section 18, of the Oregon Constitution provides, in part, that "[p]rivate property shall not be taken for public use * * * without just compensation[.]" An action, such as this one, "to recover the value of private property that the government has taken without first filing condemnation proceedings is referred to as an action for 'inverse condemnation.'" Vokoun v. City of Lake Oswego, 335 Or 19, 26, 56 P3d 396 (2002). A plaintiff asserting a claim for inverse condemnation must show that the governmental act alleged to constitute a taking was done with the intent to take the property for public use. Id. at 27; Worman v. Columbia County, 223 Or App 223, 234, 195 P3d 414 (2008); see also Willard v. City of Eugene, 25 Or App 491, 494, 550 P2d 457 (1976) (an inverse condemnation action is proper only where the government has taken property for a public use).

The University argued, in part, that it was entitled to summary judgment on plaintiff's inverse condemnation claim because it did not take the laboratory equipment with the intent to put that property to public use. The trial court assumed that plaintiff could show that he owned the equipment and "that it was a type of property that could be 'taken' pursuant to the takings clause[.]" The court concluded, however, that summary judgment was appropriate because there was no evidence that the University intended to take plaintiff's property for a public use. We agree.(4)

Very shortly after his resignation, plaintiff and various University employees began negotiating the ultimate disposition of his laboratory equipment. Although it is clear that plaintiff consistently represented that he believed that he was entitled to all of the equipment, he also proposed donating the majority of it (approximately 95 percent) to the University in return for certain consideration. To be sure, plaintiff's enthusiasm to do so fluctuated over time as a result of his apparent frustration with the progress of the negotiations. However, those negotiations were ongoing, and both parties entertained the possibility of a donation, as late as the first part of December 2004.

In early November 2004, more than a month after plaintiff's resignation, certain members of the physics department faculty and student body began the process of disassembling plaintiff's laboratory equipment. Davison Soper, who was the head of the University's physics department, decided that plaintiff's equipment needed to be moved so that a new physics department faculty member could occupy the laboratory space in which plaintiff's equipment was located. Soper did not receive permission from anyone in the University's administration office before he authorized moving plaintiff's equipment. In fact, Richard Linton, the Vice President for Research and Graduate Studies at the University, had previously instructed Soper, among others, that none of the equipment should be removed pending the conclusion of the donation negotiations between plaintiff and the University.(5)

At Soper's instruction, Michael Raymer, a physics department professor, supervised, but did not participate in, moving plaintiff's laboratory equipment from the larger portion of the room in which it had been located to a smaller adjacent space. The uncontroverted evidence is that Raymer and at least some of the other faculty members participating in the disassembly process were operating under the assumption that plaintiff had decided to donate the majority of the equipment to the University. Accordingly, they disassembled the laboratory equipment into its component parts, without documenting the process so as to permit reassembly of the laboratory as it was originally constituted. The majority of the component parts of the laboratory were placed in the smaller space designated for short-term storage of plaintiff's equipment. However, unbeknownst to Linton, Grier, or even Soper, Raymer allowed some small number of the component pieces to be distributed to or to be used by other faculty members.(6)

Plaintiff contends that the University intended to take his property for public use because Soper decided to move the equipment to advance a public purpose--that is, freeing up laboratory space for the new professor. We disagree. The notion that "public use" equates to "public benefit" in the context of a claim under Article I, section 18, of the Oregon Constitution has been rejected. Port of Umatilla v. Richmond et al, 212 Or 596, 610, 321 P2d 338 (1958); Foeller v. Housing Authority of Portland, 198 Or 205, 233, 256 P2d 752 (1953). The term "public use" in this context "means a more intimate relationship between the public and an item of property which has been acquired * * * than is denoted by terms such as 'public benefit' and 'public utility'. 'Public use' demands that the public's use and occupation of the property must be direct." Foeller, 198 Or at 233. A plaintiff asserting an inverse condemnation claim must show that the government took private property intending to put that property to public use. Here, to the extent that the decision to disassemble plaintiff's laboratory equipment resulted in a taking of his property, the intent was to make use of the physical space formerly occupied by plaintiff's laboratory equipment. That physical space is public property, not plaintiff's private property. We conclude that the University's goal of freeing up laboratory space for use by another professor does not constitute a public use sufficient to support an inverse condemnation claim under Article I, section 18, of the Oregon Constitution.(7)

Plaintiff also argues that the University intended to take his property for public use because "some pieces of equipment were distributed to other university professors" and used by them. The problem with that argument is that plaintiff does not identify, and we are not aware of, any evidence to support plaintiff's contention that the University took his property with the intent to improve the laboratories of its other professors. The University, through Linton, directed that plaintiff's laboratory equipment remain untouched pending resolution of the parties' negotiations regarding a possible donation. Neither the disassembly of plaintiff's laboratory nor the limited distribution of its component parts was authorized by University administration. Indeed, there is no evidence that a single member of the University's administration was even aware of any such activity until after plaintiff initiated this lawsuit.

It is true that Soper authorized moving the laboratory equipment, but he did so in contravention of Linton's directive. Consequently, we are not persuaded that Soper's authorization can be attributed to the University for purposes of analyzing whether the University intended to take plaintiff's property for public use. See Eminent Domain, 27 Am Jur 2d