In State v. Deford, No. A99706 (Oct. 31, 2001), the Oregon Court of Appeals reviewed a juveniles arson conviction. The youth appealed from a juvenile court judgment finding him within the jurisdiction of the court for acts that, if committed by an adult, would constitute first-degree arson, felony murder, and criminally negligent homicide. The youth, who was 11 years old at the time of the incident, confessed to starting a fire in which eight people died. The youth challenged the denial of his motion to dismiss, arguing that the state failed to demonstrate that he burned property of "value," as required to prove the charges of first-degree arson and felony murder. For the reasons that follow, the court affirmed the negligent homicide charge but reversed the arson and felony murder charge and remanded for entry of an amended order of commitment.

Eight residents of the Oakwood Park Apartment complex in Aloha died on June 28, 1996, when an early morning fire destroyed a portion of the complex. Fire investigators determined that the fire originated in the stairwell near the laundry room and that it was intentionally set using some type of accelerant.

Based on several contacts with the youth, officers began to suspect that the youth started the fire. The youth was first interviewed by Detective O'Connell on the morning after the fire, as part of the initial investigation into the fire's cause. The youth said that the smell of smoke woke him, and he escaped. The youth told O'Connell that he believed that the fire was intentionally set, that whoever started the fire had probably destroyed any evidence, and that the person may have used rubbing alcohol or lighter fluid.

The adequacy of the evidence on both offenses turns on whether the state's proof of first-degree arson sufficed, because the felony murder charge depends on the youth's commission of acts that would constitute that underlying offense. Significantly, the state did not allege that the property that the youth intended to burn was the apartment building. The petition instead alleged that the youth intentionally damaged "certain property, to wit: newspapers" and that, by starting that fire, the youth "recklessly" placed "protected property, to wit: a dwelling * * * in danger o[f] damage." (Emphasis added.) The petition also alleged eight counts of felony murder, relying on the first-degree arson charge as the underlying felony.

The state's theory of the case was that the small stack of newspapers burned by the youth was property because it had "recycling value." The particular newspapers burned by the youth were issues of This Week, a free publication of The Oregonian. Copies of that publication were delivered weekly to the apartment building and usually were placed in the laundry room for the residents. The bulk of the publication consisted of advertisements and coupons. At trial, the apartment manager testified that she cleaned the laundry room regularly, at which time she would remove any leftover editions and place them in a recycling bin. The recycling bins eventually were emptied by Aloha Garbage Disposal (Aloha), which would in turn deliver the recycled paper to Far West Fibers, Inc. (Far West), a large-scale paper recycling company that purchases paper, sorts and bundles it, and resells it to "repulp mills."

Far West derives its business from garbage services, including Aloha, and from various organizations and other members of the public. When a seller delivers a truckload of paper to Far West, the truck is weighed, emptied, then weighed again to determine the weight of the load itself. If an individual comes into the business with a smaller amount of paper, the Far West staff uses a smaller scale. That scale is kept inside the office and weighs paper in one-half pound increments.

Richard Paul, Far West's business manager, testified at trial that, at the time this incident occurred, he was purchasing newspaper for one penny per pound. Because a daily edition of a newspaper weighs approximately one pound, that makes each newspaper worth approximately one penny. On direct examination, the state showed Paul a stack of approximately a half dozen This Week papers--which was substantially more than the youth burned--and asked:

"[State:] And if I were to walk into your business, sight unseen, without an appointment, and say, 'Mr. Paul, here's my newspapers. What will you give me for them? What process would you undertake? "[Paul:] Initially I'd try to encourage you to donate this amount to me, because it's almost more hassle than anything else. If you insisted, I would send you back to the small scale. I would send an employee with you, who would then weigh them, * * * and we would then, out of our petty cash fund, pay you the value of that."

Paul said that he would pay a minimum of five cents, because he does not generally keep pennies in the petty cash fund. If a child came in with a small amount, however, he would probably give the child a quarter, "to encourage young people to be in the resource conservation mode." On cross-examination, Paul conceded that he would not be willing to go to someone else's house to purchase a small quantity of newspaper because he is not in the business of collecting or hauling paper. He noted, additionally, that he is aware of other paper recycling companies that impose 40- or 50-pound minimum purchase requirements. He also acknowledged that he is sometimes willing to pay people for paper, even if it is not profitable, and that his willingness to purchase in small quantities reflects his desire to "promote the conservation effort."

At the close of the state's case, the youth moved for a dismissal on the charges of arson and felony murder, arguing that the state did not demonstrate that the newspapers were property because it did not prove that they had "value." The state responded that the newspapers had "recycling value" and that the coupons in the papers also had value. The trial court agreed with the state and, consequently, denied the youth's motion. The youth assigns error to that ruling. The Appellate court's review was de novo, the question presented on appeal was--at least, as a threshold matter--one of law: did the state's evidence as to the newspapers' "recycling value" satisfy the statutory definition of "property." The court concluded that it did not.

Here, the state put on evidence that the newspapers that the youth burned could have been redeemed at Paul's recycling facility for somewhere between five and twenty-five cents, depending on the age of the seller. The state relies on that testimony to supply the necessary proof of market value that was lacking in Whitley. In doing so, the state implicitly assumes that, because Paul is a willing purchaser of small quantities of paper, such quantities have a "market value." As the court explained below, however, the notion of market value requires the existence of both a willing buyer and a willing seller to demonstrate that there is an actual market in which the good has value in trade. In this case, the state never established that willing sellers of such small amounts of newspapers exist.

Recall the evidence-Paul testified that other paper recycling companies in the Portland metropolitan area impose minimum purchase requirements of 40 or 50 pounds. In his individual case, he might be willing to purchase a small quantity of newspaper, if someone were to bring him such an amount. Before purchasing it, he would first encourage any person in that situation to donate the paper because, to him, "it's almost more hassle than anything else." His willingness to purchase small quantities of newspaper is not motivated by his business or economic interests but by his desire "to promote the conservation effort." Paul, moreover, acknowledged that he would not purchase such a small quantity off-site, and thus he would not be willing to go to the apartment complex, collect the newspapers from the apartment complex's laundry room, and pay anyone for them. As a result, any payment he would make for a quantity of newspaper as small as that burned by the youth would depend on someone bringing the newspaper to him.

That evidence, rather than suggesting a true recycling "market" for such small quantities of newspaper, tends to establish the opposite. According to the state's evidence, recycling businesses generally pay only for much larger quantities of newspaper; they are not willing to deal in small quantities such as the amount burned by the youth in this case. The situation is thus analogous to that in Ward v. Department of Revenue, 293 Or 506, 650 P2d 923 (1982). There, the Supreme Court declined to use the value of a large piece of property as a basis for establishing the value of smaller parcels, because the smaller ones were more readily marketable. Likewise, here, the existence of an actual market for large quantities of recyclable newspaper does not establish a general market for smaller quantities, because the evidence shows that the demand for smaller quantities is substantially less and, indeed, all but nonexistent.

Paul, with his willingness to pay value for minimal quantities of recyclable newspaper, is an exception in the recycling market in Portland. He is willing to buy small amounts not because of a business motivation, but because he has a personal willingness to do so for social policy reasons (i.e., to promote conservation ethics). For present purposes, we are willing to assume that proof of a single, uniquely motivated buyer can satisfy the requirement to show the existence of a willing buyer in an arm's length market transaction. But there still needs to be proof of a willing seller. Paul did not describe so much as one instance of a person collecting a nickel's worth of newspaper and bringing it to him, nor did the State ask if such transactions ever take place. Rather, as quoted earlier, the prosecutor asked only hypothetically what Paul would do if the prosecutor were to walk into Paul's business with the quantity of newspaper burned by the youth, and Paul answered hypothetically that he would first try to get the prosecutor to donate it, but then would weigh it and pay the prosecutor a penny a pound. That testimony did not tend to establish that, in fact, willing sellers of such small quantities exist.

The omission is significant. Where market value is concerned, it "takes two to make a bargain," and a willing seller as well as a willing buyer is required. Highway Comm. v. Superbilt Mfg. Co., 204 Or 393, 420, 281 P2d 707 (1955). Necessarily, then, for an actual trade to occur, there must be sellers willing to sell on a willing buyer's terms. Here, the state needed to show the existence of someone willing to take the small quantity of newspaper involved, transport it whatever distance would be involved, and collect a nickel (or, in the case of a child, a quarter). The state did not do so. It would be purely speculative to infer the existence of someone willing to sell on the terms on which Paul was willing to buy. For that reason, the evidence did not establish the existence of a market for the small quantity of newspaper burned by the youth in this case, and thus that the property burned had "market value." See Taber, 146 Or App at 740 (market value requires a market for an item).

The state's reliance on the value of the coupons in the newspapers suffers from the same shortcoming. As to the coupons, the only testimony presented by the state was that of the apartment manager, who merely stated that the newspaper contained coupons but did not discuss or describe them further. The state also placed into evidence some of the This Week newspapers that were in the laundry room and that were not destroyed in the fire. At trial, as on appeal, the State argued only that the coupons have value because consumers can save money purchasing the items for which the coupons can be redeemed. The trial court agreed, concluding that the coupons "have value to most families" and that such value, in addition to the recycling value, satisfied the statutory definition of property.

That is not the same as the coupons having market value of their own, and it is not a kind of value that satisfies the statute. See Whitley, 295 Or at 459 ("symbolic value" or "value in use" does not satisfy statutory definition of property). Rather, the evidence had to establish a market for coupons in the sense that willing sellers exchange them for value from willing buyers in arm's length transactions. The record simply was devoid of any such evidence.

Because the state failed to present legally sufficient evidence of the newspaper's "value," the state failed to prove the "property" element of first-degree arson under ORS 164.325(1)(b). Because the state could not prove all of the elements of first-degree arson, the state could not prove felony murder. Consequently, the trial court erred in denying the youth's motion to dismiss the charges of first-degree arson and felony murder.