S055192, Opinion — Boyer v. Salomon Smith Barney

583
Argued and submitted March 4, decision of Court of Appeals and judgment of
circuit court affirmed June 19, 2008
Robert J. BOYER,
Petitioner on Review,
v.
SALOMON SMITH BARNEY,
a Delaware corporation,
Dean Michael Howell, and Dean K. Morrell,
Respondents on Review.
(CC 0212- 12721; CA A123799; SC 8055 192)
188 P3d 233

584 Boyer v. Salomon Smith B arney
CJS, Agency § 268.
En Banc
On review from the Court of Appeals . *
* Appeal from .Multnomah County Circuit Court, Edward J . Jones, Judge. 2 1 3
Or App 560, 162 P3d 1 01 6 (2007).

Cite as 344 Or 583
George W. Kelly, Eugene, argued the cause and filed the
brief for petitioner on review .
Bruce L. C ampbell, of Miller Nash LLP, Portland, argued
the cause and filed the brief for respondents on review. With
him on the brief was Thomas C. Sand.
Erin C. Lagesen, Assistant Attorney General, Salem, filed
a brief for amicus curiae State of Oregon. With her on the
brief were Hardy Myers, Attorney General, and Mary H.
Williams, Solicitor General.
Robert S . Banks, Jr., Portland, filed a brief for amicus
curiae Public Investors Arbitration Bar Association.
N. Robert Stoll, Gary M. Berne, and Timothy S. DeJong, of
Stoll Stoll Berne Lokting & Shlachter P.C., Portland, filed a
brief for amicus curiae Oregon Trial Lawyers Association.
Thomas M. Christ, of Cosgrave Vergeer Kester LLP,
Portland, filed a brief for amicus curiae Oregon Association of
Defense Counsel.
GILLETTE, J.
The decision of the Court of Appeals and the judgment of
the circuit court are affirmed.

586 B oyer v. Salomon Smith Barney
GILLETTE, J.
Plaintiff Robert J. Boyer sued defendants Salomon
Smith Barney ( Smith Barney), Dean Michael Howell, and
Dean K. Morrell for negligence and breach ofcontract, assert
ing that defendants' handling of certain commodities trades
caused plaintiff to suffer significant financial losses. The trial
court granted defendants' motion for judgment on the plead
ings as to the negligence claim. The breach of contract claim
went to trial, where the jury returned a verdict for defen
dants. Plaintiff appealed, assigning as error only the trial
court's ruling granting j udgment on the pleadings as to the
negligence claim. The Court of Appeals affirmed by an
equally divided court. Boyer v. Salomon Smith Barney, 2 1 3
O r App 560, 162 P3d 1 0 1 6 (2007). W e allowed plaintiffs peti
tion for review, and now affirm the decision of the Court of
Appeals and the judgment of the trial court.
Judgment on the pleadings, which is authorized by
ORCP 2 1 B,1 "is only allowable when the pleadings [,] taken
together [,] affirmatively show that plaintiff has no cause of
action against the defendant(.] " Salem Sand v. City ofSalem ,
260 Or 630, 636, 492 P2d 2 7 1 ( 1971). I n ruling o n the motion,
the trial court cannot rule on issues of fact. Id. On review of a
judgment on the pleadings, an appellate court accepts as true
all well-pleaded allegations of the complaint. Slogowski v.
Lyness, 324 Or 436, 439, 927 P2d 587 ( 1996). We therefore
turn to the allegations of plaintiffs third amended
complaint.2
Plaintiff alleges that Smith Barney "holds itself out
to be a full service financial services firm, offering trained
Financial Consultants who will help earn money for their
customers." Plaintiff alleges that, based on those represen
tations, he opened an investment account with Smith Barney
and entered into an account agreement. " [D] efendant Howell
1 ORCP 21 B provides:
"After the pleadings are closed, but within such time as not to delay the trial,
any party may move for judgment on the pleadings."
Plaintiffs contract claim was tried under the allegations of his third
amended complaint, and his negligence case was disposed of under the pleadings in
that same complaint.

Cite as 344 Or 583 587
was [plaintiff's] Financial Consultant acting as his agent to
provide him with financial consultation and services[,]
including executing his commodities transactions." Plaintiff
further alleges that defendants gained plaintiff's trust and
confidence by providing him with accurate and timely infor
mation, and that defendant Howell called plaintiff several
times a day to give plaintiff research information, informa
tion about the commodities markets, and information about
plaintiff's investments, together with investment recom
mendations.
Plaintiff alleges that his investment account was
subject to trading limits or margin limits. Although plaintiff
began getting margin calls from Smith Barney, defendants
continued to give plaintiff margin credit and regularly
allowed plaintiff to trade beyond margin limits, as long as
plaintiff paid his margin calls.
On December 13, 2000, plaintiff received a margin
call for $6,422. That same day, he delivered $7 ,422 to Smith
Barney. Defendants, however, allegedly failed to properly
account for the $7 ,422 payment, and defendants Howell and/
or Morrell mistakenly believed that plaintiff had not made
the payment.
The next day, December 14, 2000, plaintiff placed
two orders with defendants-one for crude oil contracts, and
another for natural gas contracts. Defendants accepted both
orders. Plaintiff's order for crude oil contracts was filled that
same morning; however, defendant Howell canceled the
order for natural gas contracts before it was filled, without
plaintiff's authorization or consent. Plaintiff alleges that, if
the order for natural gas contracts had been filled, it would
have made money for him and helped reduce his margin debt.
One day later, on December 15, defendants liqui
dated plaintiff's crude oil contracts by forced sale. Plaintiff
alleges that the sale caused him immediate losses of $ 12,200,
which then resulted in additional forced sales from his
investment account.
Plaintiff alleges that defendants knew or should
have known that accepting the December 14 orders would
place plaintiff above his margin limits, that they would not

588 Boyer v. Salomon Smith B arney
fill both orders, that they would force plaintiff to liquidate the
order that they did fill within one day, and that such forced
liquidations create extraordinary risk for the investor. Plain
tiff further alleges that defendants also knew or should have
known how important it was for plaintiff to have timely and
accurate information in order to make informed decisions
about his investments. Nevertheless, he asserts, defendants
accepted both of the December 14 orders without telling
plaintiff that they would fill only one of them , and without
telling plaintiff that the one that they filled would be subject
to a forced sale the following d ay. Plaintiff alleges that, had
he been told that defendants would fill only one of the orders,
he would have chosen the natural gas order, which would
have been profitable and kept plaintiff within his margin
trading limits.
In his claim for negligence, plaintiff alleges that
defendants breached duties owed to him:
"a. By failing to timely inform [plaintiffl as to what
defendants were going to do with his December 14, 2000 [,]
orders;
"b. By failing to disclose to [plaintiff] that Smith
Barney was going to force him to trade the * * * Crude Oil
contracts within a day of his purchase on December 14,
2000;
"c. By failing to tell [plaintiff] in a timely manner that
Smith Barney would only fill one of his December 14,
2000 [,] commodities orders but not both;
"d. By failing to timely disclose to [plaintiff] on December
14, 2000 [,] that Smith Barney canceled his order for * * *
Natural Gas Contracts;
"e. By failing to timely inform [plaintiff] that Smith
B arney was going to cancel his December 14, 2000 [,]
Natural Gas contracts order [;)
"f. By failing to properly account for the $7 ,422 margin
call payment [plaintiftJ made on December 13, 2000;
"g. By accepting [plaintiffs) December 14, 2000[,]
orders;

Cite as 344 Or
"h. By placing [plaintiff's] Crude Oil order on December
14, 2000[,] without informing him that he would be forced
to sell his positions within a day."
Defendant's answer to the third amended complaint
incorporated the commodity client agreement between Smith
Barney and plaintiff.3 The commodity client agreement
includes two provisions that are relevant here:
"6. I understand you act as agent and not as principal
for your clients' commodity futures and commodity options
transactions which are effected on exchanges. * * *
"* * * * *
"9. In the event I fail to deposit sufficient funds to pay
for any coins, commodities , contracts for the future delivery
thereof, commodity options, or forward commodity and for
eign exchange contracts and/or satisfy any demands for
original and/or variation margin, or whenever in your dis
cretion you consider it necessary, you may without prior
demand or notice, when and if you deem appropriate based
upon your own business judgment notwithstanding any
rule of any exchange, liquidate the positions in my account,
hedge and/or offset those positions in the cash market or
otherwise, sell any property belong[ing] to me or in which I
have an interest, cancel any open orders for the purchase
and sale of any property, or borrow or buy any property
required to make delivery against any sales, including a
short sale, effected for me, all at my sole risk. * * *"
Defendants moved for judgment on the pleadings as
to ( among other things) plaintiffs negligence claim. Relying
on a line of cases beginning with this court's decision in
Georgetown Realty v. The Home Ins. Co. , 3 13 Or 97, 8 3 1 P2d
7 ( 1992), defendants argued that the extent of any duty of
care that they owed to plaintiff was that prescribed by the
contract with plaintiff (the commodity client agreement).
Hence, they argued, any liability to plaintiff was in contract,
" Ordinarily, of course, the content of the contract would not be before us on a
motion for judgment on the pleadings. But, as noted, defendants incorporated the
commodity client agreement into their answer, and plaintiff did not object to the
trial court (or the Court of Appeals, or this court) considering the terms of that
agreement in evaluating the merits of defendant's motion for judgment on the
pleadings. In this procedural posture, we treat the terms of the commodity client
agreement as having been admitted by plaintiff, the same as if plaintiff had alleged
those terms in his complaint.

590 Boyer v. Salomon Smith Barney
not in tort. They disputed plaintiffs contention that pl aintiff
had a special or confidential relationship with defendants,
arising out of but different and more extensive than the con
tract, that would permit an action for negligence.
The trial court agreed with defendants and granted
judgment on the pleadings as to the negligence claim. As
noted, plaintiffs claim for breach of contract proceeded to
trial, where the jury returned a verdict for defendants.
Plaintiff appealed to the Court of Appeals, challeng
ing only the judgment on the pleadings as to the negligence
claim. After the appeal was heard by a three-judge panel, the
Court of Appeals resubmitted the case en bane and affirmed
the j udgment of the trial court by an equally divided court.
Both the concurring opinion and the dissenting opinion in the
Court of Appeals agreed that the relevant legal question was
whether plaintiff and defendants had a "special relationship"
that would support an action in tort, or whether plaintiff was
limited to contract remedies. Boyer, 213 Or App at 564-65
( concurring opinion); id. at 573 (dissenting opinion). But the
concurrence and dissent disagreed-as do the parties-about
whether such a special relationship could be shown here and,
if it could, whether defendants could be liable in negligence
under it. We do not further spell out the competing views in the
Court of Appeals, because such an exercise seems unnecessary.
Instead, we state our own view: ( 1 ) The relationship between
plaintiff and Smith Barney was that of principal and agent;
(2) such a relationship can-and often will-be a "special" one;
but (3) the particular provisions of the contract between the
parties in this case prevented the parties' relationship from
being a "special" one that would permit imposition of tort liabil
ity on the allegations of the third amended complaint.
This court has produced a number of decisions
involving the concept of a "special relationship" between con
tracting parties that could give rise to negligence claims. In
doing so, the court has attempted to establish boundaries
between those cases that must be brought in contract and
those cases that (because of the existence of a "special rela
tionship") may be brought in tort. The first major effort of this
court to address that problem was Georgetown Realty , 3 13 Or
97. The issue in that case was whether a liability insurer

Cite as 344 Or 583 (2008) 591
could be liable in tort for its negligence in defending its
insured against a third-party lawsuit. This court first noted
that, since 1900, parties to certain types of contracts-con
tracts with "physicians, lawyers, real estate brokers, archi
tects, engineers, and landlords"-had been permitted to sue
in tort. Id. at 103. After an extensive review of the holdings of
those cases, id. at 102-06, this court concluded that an action
in negligence was permitted only when the law imposed a
standard of care beyond the contract terms:
"When the relationship involved is between contracting
parties, and the gravamen of the complaint is that one
party caused damage to the other by negligently perform
ing its obligations under the contract, then, and even
though the relationship between the parties arises out of
the contract, the injured party may bring a claim for negli
gence if the other party is subject to a standard of care inde
pendent of the terms of the contract. If the plaintiffs claim
is based solely on a breach of a provision in the contract,
which itself spells out the party's obligation, then the rem
edy normally will be only in contract, with contract meas
ures of damages and contract statutes of limitation. That is
so whether the breach of contract was negligent, inten
tional, or otherwise. In some situations, a party may be able
to rely on either a contract theory or a tort theory or both."
Id. at 106 (citation omitted). This court concluded that liabil
ity insurers were subject to "a standard of care that exists
independent of the contract and without reference to the spe
cific terms of the contract," id. at 1 10- 1 1, because the insured
relinquishes control of the defense-and, derivatively, of the
insured's liability-to the liability insurer. Id. at 1 10.
The present case is one in which a principal is suing
his agent for negligence, alleging a "special relationship." As
such, the case does not involve a novel claim. Instead, it falls
into one of the already recognized categories-principal
agent-that may give rise to liability for negligence. Plain
tiffs third amended complaint specifically alleged the defen
dant's agency; the commodity client agreement specifically
recognized that agency; defendant does not now dispute it.
The law of agency imposes duties on the agent; those duties
"exist [ ] independent of the contract and without reference to
the specific terms of the contract." Georgetown Realty, 3 13 Or

592 Boyer v. Salomon Smith Barney
at 1 1 1 . This court has expressly recognized that the principal
agent relationship is one type of special relationship under
Georgetown Realty and that the agent therefore may be liable
in negligence for breach of the agent's duties. Hampton Tree
Farms, Inc. u. Jewett, 320 Or 599, 6 16-18, 892 P2d 683 ( 1995).
See also Berki v. Reynolds Securities, Inc. , 277 Or 335, 342,
560 P2d 282 ( 1977 ) ("A broker's duty is complete and his
authority ceases when a purchase or sale in accordance with
the agreement is made and he has fully accounted" ( citation
omitted)); Williams v. Pilgrim Turkey Packers, Inc. , 264 Or
36, 43-44, 503 P2d 7 10 ( 1972) (noting that agent has fiduci
ary duty as to matters within the scope of agency, but not
necessarily as to matters in which agent is not employed). We
must consider, then, whether the specific breaches of duty
asserted by plaintiff in the third amended complaint are
within the scope of the relationship shown here.4
In this case, plaintiff offered eight specific allegations
of negligence. Of those eight allegations, six asserted, in one
way or another, that defendant had failed to provide plaintiff
with timely information.5 As to those allegations, the issue is
Defendants argue that, under Berki, a stockbroker has no fiduciary duty
unless the stockbroker exercises some discretion in controlling the investments in
the investor's account. The stockbroker in Berki had no such discretion, 277 Or at
341, and this court stated: "The agreement was at best an agreement by the broker
to buy and sell at the direction of the plaintiff. A stockbroker acting as here is not a
fiduciary." Id. at 342. We think, however, that the foregoing quotation serves only
to explain that that agent in that case was not liable in tort to that principal. It in
no way suggested that an agent could not be so liable in negligence to a principal.
Again, those six allegations are:
"a. By failing to timely inform [plaintiff] as to what defendants were going
to do with his December 14, 2000[,] orders;
"b. By failing to disclose to [plaintiff] that Smith Barney was going to force
him to trade the * * Crude Oil contracts within a day of his purchase on
December 14, 2000;
"c. By failing to tell [plaintiff] in a timely manner that Smith Barney
would only fill one of his December 14, 2000[,] commodities orders but not both;
"d. By failing to timely disclose to [plaintiff] on December 14, 2000[,J that
Smith Barney canceled his order for * * * Natural Gas Contracts;
''e. By failing to timely inform [plaintiff] that Smith Barney was going to
cancel his December 14, 2000[,] Natural Gas contracts order[;]
"h. By placing [plaintiffs] Crude Oil order on December 14, 20001,] with·
out informing h im that he would be forced to sell his positions within a day.�
(Emphases added.)

Cite as 593
whether an agent has a duty under an agreement such as the
one between the present parties, to provide to a principal
information of the kinds described.
It is a general principle of agency law that an agent
does have a duty to provide the principal with information
relevant to the matters entrusted to the agent. This court
expressly recognized as much in Lindland v. United Business
Investments, 298 Or 3 1 8, 693 P2d 20 ( 1984), where this court
quoted, with approval, the following from the Restatement
(Second) ofAgency § 381 ( 1 958):
" 'Unless otherwise agreed, an agent is subj ect to a duty
to use reasonable efforts to give his principal information
which is relevant to affairs entrusted to him and which, as
the agent has notice, the principal would desire to have and
which can be communicated without violating a superior
duty to a third person.' "
298 Or at 325. That specific duty to provide information
arises from the agent's general duty to exercise care on behalf
of the principal. See Lindland, 298 Or at 324 (citing case).
"The extent of the duty [to provide information] depends
upon the kind of work entrusted to him [the agent] , his pre
vious relations with the principal, and all the facts of the sit
uation." Restatement at § 381 comment a.
That duty to provide information, however, is not
absolute; it applies only "[u]nless otherwise agreed." Restate
ment at § 381. That qualification to the Restatement rule
means that we must consider paragraph 9 of the commodity
client agreement, which, as noted, states:
"In the event I fail to deposit sufficient funds to pay for
any coins, commodities, contracts for the future delivery
thereof, commodity options, or forward commodity and for
eign exchange contracts and/or satisfy any demands for
original and/or variation margin, or whenever in your dis
cretion you consider it necessary, you may without prior
demand or notice, when and ifyou deem appropriate based
upon your own business judgment notwithstanding any
rule of any exchange, liquidate the positions in my account,
hedge and/or offset those positions in the cash market or
otherwise, sell any property belong[ing] to me or in which I
have an interest, cancel any open orders for the purchase
and sale of any property, or borrow or buy any property

594 Boyer v. Salomon Smith Barney
required to make delivery against any sales, including a
short sale, effected for me, all at my sole risk. * * *"
(Emphases added.)
The issue is whether paragraph 9 establishes that
plaintiff and defendants had "otherwise agreed" that defen
dants were not "subject to a duty to use reasonable efforts to
give [plaintiff] information which [was] relevant to affairs
entrusted to [defendants] ." Restatement at § 381. We con
clude that there was such an agreement. Paragraph 9 says
that defendants "may" act without notice, "when and if you
deem appropriate based upon your own b usiness judgment."
(Emphasis added.) Read as a whole, paragraph 9 allows
defendants to act to protect their interests; plaintiffs inter
ests clearly are subordinate. That is, paragraph 9 lets defen
dants protect their interests, without giving plaintiff the kind
of notice that he asserts would have been necessary to protect
his own interests.6
Our disposition of plaintiffs six "notice" allegations
leaves two other allegations to be addressed. Plaintiff alleged
in allegation f. that defendants had "fail[ed] to properly
account for the $7,442 margin call payment [plaintiff] made
on December 13, 2000." But plaintiff offers no explanation of
how that obligation or its breach is tortious, as opposed to
arising from and constituting a breach of contract. Plaintiff
was therefore not entitled to pursue a tort claim under alle
gation f.
Finally, in allegation g., plaintiff asserted that defen
dants harmed him "[b]y accepting [his] December 14, 2000[ ,]
orders." But plaintiff points to no duty on defendants' part
either in contract or in tort-to refuse to accept plaintiffs
order, and we know of none. Moreover, plaintiff has not
alleged any facts that show, either directly or by inference,
6 Plaintiff does specify in paragraph 33 of his third amended complaint that
"nobody informed [plaintiff] that Smith Barney had canceled his Natural Gas order
until almost five hours after [plaintiff] placed this order." This allegation possibly
could be construed as a claim that, paragraph 9 of the commodity client agreement
notwithstanding, Smith Barney at least had a duty to inform plaintiff that his
order had not been acted upon. But none of plaintiffs allegations respecting dam
ages is attributable to that narrow, five-hour period.

Cite as 344 Or 583 595
how the act of acceptance, qua acceptance, caused him dam
age. (Any connected allegation concerning defendants' failure
to tell plaintiff about the defendants' choice has been
addressed elsewhere. ) Thus, plaintiff was not entitled to pur
sue his tort claim under allegation g.7
In reaching our conclusions today, we note that
plaintiff does not rely on any outside source of law-such as
statutes, regulations, or the rules of various licensing agen
cies and commodity exchanges-in any respect. That is
important, because industry standards, statutes, or regula
tions could, in a particular case, provide a basis in law for lia
bility on defendants' part that cannot be made out from plain
tiffs relatively narrow allegations in this case.
Based on the foregoing, we conclude that the trial
court properly granted j udgment on the pleadings against
plaintiff on plaintiffs negligence claim. The pleadings "show
that plaintiff has no cause of action against the defendant[.] "
Salem Sand, 260 Or at 636.8
The decision of the Court of Appeals and the judg
ment of the circuit court are affirmed.
7 Although plaintiff alleges elsewhere (but not as a specification of negligence)
that, in choosing to fill one order but not another, Smith Barney chose to fill the
order that profited it the most, plaintiff does not allege that, in doing so, Smith
Barney breached some duty to him (whether denominated a duty of "loyalty" or
otherwise).
8 Our disposition of this case is not a holding that other plaintiffs could not
recover from other defendants under facts slightly different than those alleged
here. Moreover, and in view of our disposition of this case on the ground stated, we
are not obliged to consider whether and to what extent plaintiffs failure to prove
his contract claims to a jury might also limit or eliminate his ability to recover in
tort, based on theories of issue preclusion.