## Facts

- Riley Hill General Contractor, Inc. purchased a Radio Shack (Tandy) computer system intended to handle bookkeeping and accounting for several small businesses.
- After an initial single-user system proved too slow, Hill bought a more complex multi-user system from Tandy.
- Hill alleged Tandy personnel misrepresented the system’s ability to perform required functions and failed to disclose defects and performance limits, inducing reliance.
- Performance problems persisted; Tandy offered a refund, which Hill refused.
- Hill sued for common-law deceit (fraud), breach of warranty, and negligence, seeking compensatory and punitive damages.
- At trial, the court instructed the jury using conflicting formulations: fraud must be overcome by “clear and convincing evidence,” yet the “burden of proof remains … preponderance of the evidence,” including a hybrid phrase (“preponderance of clear and convincing evidence”).
- The jury returned a verdict for Hill, including punitive damages; Tandy objected to the burden-of-proof instructions.

## Issues

1. What burden of persuasion applies to the elements of common-law deceit in Oregon: clear and convincing evidence, preponderance of the evidence, or a combination?
2. Whether internally inconsistent jury instructions on the burden of proof for deceit constitute reversible error requiring a new trial.

## Decision

- The Oregon Supreme Court affirmed the Court of Appeals’ reversal and remand for a new trial on the deceit and punitive-damages claims.
- The court held that the elements of common-law deceit must be proved by clear and convincing evidence.
- The court held that the amount of general and punitive damages resulting from deceit need be proved only by a preponderance of the evidence.
- The trial court’s blended and contradictory instructions on the standard of proof were erroneous and sufficiently confusing to require a new trial.

## Legal Principles

- A plaintiff must prove the elements of common-law deceit by clear and convincing evidence.
- “Clear and convincing” requires evidence establishing a high probability of the truth of the facts constituting deceit and sufficient to overcome the presumption against fraud.
- Once deceit liability is established, the amount of general damages and punitive damages arising from that deceit is proved by a preponderance of the evidence.
- Jury instructions on the burden of persuasion must be coherent; mixing “preponderance” and “clear and convincing” in a way that suggests a hybrid standard is reversible error when it could affect the verdict.

## Conclusion

The court required clear and convincing proof for deceit liability but only a preponderance for the amount of resulting general and punitive damages, and it ordered a new trial because the jury was given contradictory burden-of-proof instructions.


Riley Hill Gen. Contractor, Inc. v. Tandy Corp., 303 Or. 390, 737 P.2d 595 (Or. 1987)